EX-10.1.3 2 exhibit1013.htm EXHIBIT 10.1.3 exhibit1013.htm
Exhibit 10.1.3






FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF

 
CBL & ASSOCIATES LIMITED PARTNERSHIP


 
 


 
November 2, 2010



 
 

 

 

1.1
3
 
3
 
4
 
4
 
4
 
4
 
4
 
ADJUSTED CAPITAL ACCOUNT DEFICIT
4
 
4
 
5
 
5
 
5
 
5
 
5
 
6
 
6
 
6
 
6
 
7
 
7
 
7
 
7
 
8
 
8
 
8
 
8
 
9
 
10
 
10
 
10
 
10
 
11
 
11
 
11
 
11
 
11
 
12
 
12
 
12
 
13
 
13
 
13
 
13
 
13
 
 
 

 
 
FIRST RESTATED AGREEMENT
13
 
FLOOR DISTRIBUTION
13
 
GENERAL PARTNER
13
 
GROSS ASSET VALUE
13
 
GROSS INCOME
14
 
IMMEDIATE FAMILY
15
 
INCENTIVE OPTION
15
 
INCENTIVE OPTION AGREEMENT
15
 
JACOBS LIMITED PARTNER REPRESENTATIVE
15
 
JACOBS PROPERTY
15
 
JOINT VENTURE PARTNERSHIP
15
 
JRI
15
 
K-SCUS
15
 
K-SCU BASIC DISTRIBUTION AMOUNT
15
 
LIENS
16
 
LIMITED PARTNER REPRESENTATIVES
16
 
LIMITED PARTNERS
16
 
LIQUIDATING TRANSACTION
16
 
LIQUIDATING TRUSTEE
16
 
L-SCUS
16
 
L-SCU BASIC DISTRIBUTION AMOUNT
17
 
MAJOR DECISIONS
17
 
MAJORITY-IN-INTEREST OF THE LIMITED PARTNERS
17
 
MANAGEMENT AGREEMENT
17
 
MANAGEMENT COMPANY
17
 
MASTER CONTRIBUTION AGREEMENT
17
 
MINIMUM GAIN ATTRIBUTABLE TO PARTNER NONRECOURSE DEBT
17
 
NET CAPITAL GAIN
18
 
NET CASH FLOW
18
 
NET FINANCING PROCEEDS
18
 
NET INCOME OR NET LOSS
19
 
NET SALE PROCEEDS
20
 
NONRECOURSE DEDUCTIONS
20
 
NONRECOURSE LIABILITIES
20
 
OFFERED UNITS
20
 
OFFICE BUILDING
20
 
OWNERSHIP LIMIT
20
 
PARTNER NONRECOURSE DEBT
20
 
PARTNER NONRECOURSE DEDUCTIONS
21
 
PARTNERS
21
 
PARTNERSHIP
21
 
PARTNERSHIP MINIMUM GAIN
21
 
PARTNERSHIP UNITS
21
 
PERSON
21
 
PREFERRED CONTRIBUTED FUNDS
21
 
PREFERRED DISTRIBUTION REQUIREMENT
21
 
PREFERRED DISTRIBUTION SHORTFALL
21
 
PREFERRED REDEMPTION AMOUNT
21
 
PREFERRED REDEMPTION PRICE
22
 
 
 

 
 
PREFERRED STOCK
22
 
PREFERRED UNIT DESIGNATION
22
 
PREFERRED UNIT ISSUE PRICE
22
 
PREFERRED UNITS
22
 
PROPERTIES OR PROPERTY
22
 
PROPERTY PARTNERSHIPS
22
 
QUALIFIED INDIVIDUAL
22
 
RECEIPTS
22
 
REDUCTION FACTOR
23
 
REGISTERED AGENT
23
 
REGISTERED OFFICE
23
 
REGULATIONS
23
 
REGULATORY ALLOCATIONS
23
 
REIT
23
 
REIT EXPENSES
23
 
REIT REQUIREMENTS
24
 
REQUESTING PARTY
24
 
RELATED ISSUE
24
 
RESPONDING PARTY
24
 
RIGHTS
24
 
SAFE HARBOR RATE
24
 
SCUS
24
 
SEC
24
 
SECOND RESTATED AGREEMENT
24
 
SECURITIES ACT
24
 
SERIES J EXCHANGE NOTICE
24
 
SERIES J EXCHANGE RIGHTS
24
 
SERIES J OFFERED UNITS
24
 
SERIES K EXCHANGE NOTICE
24
 
SERIES K EXCHANGE RIGHTS
24
 
SERIES K OFFERED UNITS
24
 
SERIES L EXCHANGE NOTICE
24
 
SERIES L EXCHANGE RIGHTS
24
 
SERIES L OFFERED UNITS
24
 
SERIES S EXCHANGE NOTICE
24
 
SERIES S EXCHANGE RIGHTS
24
 
SERIES S OFFERED UNITS
25
 
S-SCUS
25
 
S-SCU BASIC DISTRIBUTION AMOUNT
25
 
STOCK INCENTIVE PLAN
25
 
SUBSTITUTED LIMITED PARTNER
25
 
TAX ITEMS
25
 
THIRD RESTATED AGREEMENT
25
 
TRADING DAY
25
 
TRANSFER
26
     
1.2.
EXHIBITS, ETC.
26
1.3.
LIMITED PARTNER ACCEPTANCE
26
 
 
 

 
     
   
     
2.1.
CONTINUATION
27
2.2.
NAME
28
2.3.
CHARACTER OF THE BUSINESS
28
2.4.
LOCATION OF THE PRINCIPAL PLACE OF BUSINESS
29
2.5.
REGISTERED AGENT AND REGISTERED OFFICE
29
     
   
     
3.1.
COMMENCEMENT
29
3.2.
DISSOLUTION
29
     
   
     
4.1.
PARTNERS
30
4.2.
GENERAL PARTNER CAPITAL CONTRIBUTION
30
4.3.
LIMITED PARTNER CAPITAL CONTRIBUTIONS
31
4.4.
ISSUANCE OF ADDITIONAL UNITS
32
4.5
ADMISSION OF ADDITIONAL PARTNERS
35
4.6.
STOCK INCENTIVE PLAN
36
4.7.
NO THIRD PARTY BENEFICIARY
36
4.8.
NO INTEREST; NO RETURN
36
4.9.
ADJUSTMENT UPON CONVERSION OF PREFERRED STOCK
36
     
   
     
5.1.
REPRESENTATIONS AND WARRANTIES
37
5.2.
COVENANTS
38
     
   
     
     
6.1.
ALLOCATIONS
38
6.2.
DISTRIBUTIONS
39
6.3.
BOOKS OF ACCOUNT
46
6.4.
REPORTS
47
6.5.
AUDITS
47
6.6.
TAX ELECTIONS AND RETURNS
47
6.7.
TAX MATTERS PARTNER
48
     
   
     
     
7.1.
EXPENDITURES BY PARTNERSHIP
49
7.2.
POWERS AND DUTIES OF GENERAL PARTNER
49
7.3.
MAJOR DECISIONS
53
 
 
 

 
7.4.
ACTIONS WITH RESPECT TO CERTAIN DOCUMENTS
53
7.5.
RELIANCE BY THIRD PARTIES
54
7.6.
COMPANY PARTICIPATION
54
7.7.
PROSCRIPTIONS
55
7.8.
ADDITIONAL PARTNERS
55
7.9.
TITLE HOLDER
55
7.10.
COMPENSATION OF THE GENERAL PARTNER
55
7.11.
WAIVER AND INDEMNIFICATION
56
7.12.
LIMITED PARTNER REPRESENTATIVES
57
7.13.
OPERATION IN ACCORDANCE WITH REIT REQUIREMENTS
58
7.14.
TRANSACTIONS WITH AFFILIATES
58
7.15.
OTHER MATTERS CONCERNING THE GENERAL PARTNER
59
     
   
     
8.1.
ACCOUNTING
60
8.2.
DISTRIBUTION ON DISSOLUTION
60
8.3.
TIMING REQUIREMENTS
61
8.4.
SALE OF PARTNERSHIP ASSETS
61
8.5.
DISTRIBUTIONS IN KIND
61
8.6.
DOCUMENTATION OF LIQUIDATION
62
8.7.
LIABILITY OF THE LIQUIDATING TRUSTEE
62
     
   
     
9.1.
GENERAL PARTNER TRANSFER
62
9.2.
TRANSFERS BY LIMITED PARTNERS
63
9.3.
RESTRICTIONS ON TRANSFER
66
     
   
     
10.1.
NO PARTICIPATION IN MANAGEMENT
69
10.2.
BANKRUPTCY OF A LIMITED PARTNER
70
10.3.
NO WITHDRAWAL
70
10.4.
DUTIES AND CONFLICTS
70
10.5.
LIMITED LIABILITY
71
     
   
     
11.1.
GRANT OF RIGHTS
71
11.2
TERMS OF RIGHTS
72
     
   
     
12.1.
INDEMNIFICATION OF THE LIMITED PARTNERS
72
12.2
INDEMNIFICATION OF THE GENERAL PARTNER, THE COMPANY
 
 
AND OTHERS
73
 
 
 

 
     
   
     
13.1.
ARBITRATION
73
13.2.
PROCEDURES
73
13.3.
BINDING CHARACTER
75
13.4
EXCLUSIVITY
75
13.5
NO ALTERATION OF AGREEMENT
75
     
   
     
14.1.
NOTICES
75
14.2.
SUCCESSOR
75
14.3.
EFFECT AND INTERPRETATION
76
14.4.
COUNTERPARTS
76
14.5.
PARTNERS NOT AGENTS
76
14.6.
ENTIRE UNDERSTANDING, ETC.
76
14.7.
AMENDMENTS
76
14.8.
SEVERABILITY
77
14.9.
PRONOUNS AND HEADINGS
77
14.10.
ASSURANCES
77
14.11.
EXPENSES
78
14.12.
WAIVER OF PARTITION
78
     
 
ATTACHMENTS:

1-A, 1-B, 1-C AND 1-D – LIMITED PARTNER ACCEPTANCE FORMS

EXHIBITS
 
A
LIST OF PARTNERS, PERCENTAGE INTERESTS, SHARE EQUIVALENTS

B
CERTIFICATES OF DESIGNATIONS - PREFERRED UNITS

C
ALLOCATIONS

D
RIGHTS TERMS

E
TERMS OF SERIES J SPECIAL COMMON UNITS (SCUS)
 
F
EXCHANGE RIGHTS OF COMMON UNITS ISSUED IN EXCHANGE FOR OR UPON REDEMPTION OF SERIES J SPECIAL COMMON UNITS (SCUS)

G
JACOBS LIMITED PARTNER REPRESENTATIVE

H
TERMS OF SERIES S SPECIAL COMMON UNITS (S-SCUS)

I
EXCHANGE RIGHTS OF COMMON UNITS ISSUED IN EXCHANGE FOR OR UPON REDEMPTION OF SERIES S SPECIAL COMMON UNITS (S-SCUS)

 
 

 
J
TERMS OF SERIES L SPECIAL COMMON UNITS (L-SCUS)

K
TERMS OF SERIES K SPECIAL COMMON UNITS (K-SCUS)


 
 

 


THE PARTNERSHIP UNITS REFERRED TO IN THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, NO PARTNERSHIP UNITS MAY BE RESOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND UNLESS THE OTHER TRANSFER RESTRICTIONS CONTAINED HEREIN HAVE BEEN SATISFIED. REFERENCE IS MADE TO ARTICLE IX OF THIS AGREEMENT FOR PROVISIONS RELATING TO VARIOUS RESTRICTIONS ON THE SALE OR OTHER TRANSFER OF THESE PARTNERSHIP UNITS.

FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
CBL & ASSOCIATES LIMITED PARTNERSHIP

THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is made and entered into as of the 2nd day of November, 2010 by and among CBL Holdings I, Inc., a Delaware corporation, and those certain Persons identified on Exhibit A attached hereto as a Limited Partner.

W I T N E S S E T H:

WHEREAS, CBL & Associates Limited Partnership (the “Partnership”) was formed by that certain Agreement of Limited Partnership dated October 29, 1993, as amended and restated in its entirety by that certain Amended and Restated Agreement of Limited Partnership dated November 3, 1993, and further amended by that certain Modification No. One to the Amended and Restated Agreement of Limited Partnership dated March 31, 1997 and by that certain Modification No. Two to the Amended and Restated Agreement of Limited Partnership dated February 19, 1998, (together, the “First Restated Agreement”); and
WHEREAS, the First Restated Agreement was amended in its entirety and the parties entered into the Second Amended and Restated Agreement of Limited Partnership of CBL & Associates Limited Partnership dated June 30, 1998, which was then amended by the First
 
Amendment dated January 31, 2001, the Second Amendment dated February 15, 2002, the Third Amendment dated July 28, 2004 and the Fourth Amendment dated June 1, 2005 (all of the foregoing constituting and being herein referred to as the “Second Restated Agreement”); and
WHEREAS, on May 10, 2005, the board of directors of CBL & Associates Properties, Inc., a Delaware corporation (herein referred to as the “Company”) declared a two-for-one stock split of the Company’s common stock (the “6/15/05 Stock Split”) and declared a stock dividend of one share of common stock for each outstanding share of the Company’s common stock as the means through which to effect the 6/15/05 Stock Split and such stock dividend was paid to the Company’s common shareholders on June 15, 2005; and
WHEREAS, on June 15, 2005 and due to the structure of the Partnership and the 6/15/05 Stock Split, the Partnership distributed to its Partners holding Common Units, SCUs, S-SCUs and L-SCUs an additional Partnership Unit corresponding to the type of Partnership Unit held by such Partner at the time; and
WHEREAS, the General Partner determined to amend the Second Restated Agreement in its entirety and the General Partner amended and restated the Second Restated Agreement by entering into the Third Amended and Restated Agreement of Limited Partnership of CBL & Associates Limited Partnership dated June 15, 2005 for the purposes of (i) reflecting the 6/15/05 Stock Split and corresponding distribution of Partnership Units as described above and (ii) incorporating the terms and provisions of the documents constituting the Second Restated Agreement into one agreement as set forth therein (the “Third Restated Agreement”); and
WHEREAS, the Third Restated Agreement was amended by that certain First Amendment to Third Amended and Restated Agreement of Limited Partnership of CBL & Associates Limited Partnership dated November 16, 2005 (the “First Amendment to Third
 
Restated Agreement”) to reflect certain transactions involving the contribution of certain properties to the Partnership and the creation of the K-SCUs (as defined and described therein and herein); and
WHEREAS, Section 14.7 of the Third Restated Agreement provides that the General Partner shall have the power, without consent of any Limited Partner, to amend the Third Restated Agreement as may be required to facilitate or implement, inter alia, any change that does not adversely affect the Limited Partners in any material respect, to cure any ambiguity, to correct or supplement any defective provision in the Third Restated Agreement, or to make other changes with respect to matters arising under the Third Restated Agreement that will not be inconsistent with any other provision of the Third Restated Agreement; and
WHEREAS, the General Partner has determined to amend and restate the Third Restated Agreement to incorporate the provisions of the First Amendment to Third Restated Agreement into one agreement as set forth herein (the “Fourth Restated Agreement”) and to correct certain typographical errors in the Third Restated Agreement.

NOW, THEREFORE, the General Partner hereby amends and restates the Third Restated Agreement in its entirety as follows:

Definitions, Etc.

1.1. Definitions. Except as otherwise herein expressly provided the following terms and phrases shall have the meanings set forth below:
“6/15/05 Stock Split” shall mean the stock split referred to in the Whereas clauses above as declared by the Company’s board of directors on May 10, 2005 and effected on June 15, 2005.
 
“Accountants” shall mean the firm or firms of independent certified public accountants selected by the General Partner on behalf of the Partnership to audit the books and records of the Partnership (and, to the extent provided under the applicable Joint Venture Partnership agreement, the Joint Venture Partnerships) and to prepare statements and reports in connection therewith.
“Acquisition Cost” shall have the meaning set forth in Subsection 4.2(b) hereof.
“Act” shall mean the Revised Uniform Limited Partnership Act as enacted in the State of Delaware, and as the same may hereafter be amended from time to time.
“Additional Partner” shall have the meaning set forth in Subsection 4.4(a) hereof.
“Additional Units” shall have the meaning set forth in Subsection 4.4(a) hereof.
“Adjusted Capital Account Deficit” shall mean with respect to any Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:
(i) Such Capital Account shall be deemed to be increased by any amounts which such Partner is obligated to restore to the Partnership (pursuant to this Agreement or otherwise) or is deemed to be obligated to restore pursuant to the second to last sentence of Regulation Section 1.704-2(g)(i) and Section 1.704-2(i)(5) (relating to allocations attributable to nonrecourse debt); and

(ii) Such Capital Account shall be deemed to be decreased by the items described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Deficit is intended to comply with the provisions of Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied consistently therewith.
“Administrative Expenses” shall mean (i) all administrative and operating costs and expenses incurred by the Partnership, (ii) all administrative, operating and other costs and expenses including any deficits incurred by the Property Partnerships and to be paid, advanced or
 
reimbursed by the partnership pursuant to the partnership agreements of such Property Partnerships, (iii) those administrative costs and expenses of the Company and the General Partner, including salaries paid to officers of the Company and the General Partner, and accounting and legal expenses undertaken by the Company and the General Partner on behalf or for the benefit of the Partnership, (iv) all amounts paid or advanced by the Partnership to the Management Company pursuant to the Management Agreement, and (v) to the extent not included in clause (iii) above, REIT Expenses.
“Affiliate” shall mean, with respect to any Partner (or as to any other Person the affiliates of whom are relevant for purposes of any of the provisions of this Agreement), (i) any member of the Immediate Family of such Partner; (ii) any Entity in which such Person owns of record and beneficially a majority of the capital or economic interests; or (iii) any Entity which directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Partner.
“Agreement” shall mean this Fourth Amended and Restated Agreement of Limited Partnership, as originally executed and as hereafter amended, modified, supplemented or restated from time to time as the context requires.
“Assignee” shall mean a Person to whom one or more Partnership Units have been transferred, but who has not become a Substituted Limited Partner.
“Assumed Liability” shall mean any liability of a Limited Partner or an Affiliate thereof assumed by the Partnership pursuant to Section 13.1 of the First Restated Agreement.
“Audited Financial Statements” shall mean financial statements (balance sheet, statement of income, statement of partners’ equity and statement of cash flows) prepared in accordance with generally accepted accounting principles and accompanied by an independent auditor’s report containing an opinion thereon.
 
“Bankruptcy” shall mean, with respect to any Person, (i) the commencement by such Person of any proceeding seeking relief under any provision or chapter of the federal Bankruptcy Code, U.S.C. §101 et. seq., as the same may be amended from time to time, or any other federal or state law relating to insolvency, bankruptcy or reorganization, (ii) an adjudication that such Person is insolvent or bankrupt, (iii) the entry of an order for relief under the federal Bankruptcy Code with respect to such Person, (iv) the filing of any such petition or the commencement of any such case or proceeding against such Person, unless such petition and the case or proceeding initiated thereby are stayed or dismissed within ninety (90) days from the date of such filing, (v) the filing of an answer by such Person admitting the allegations of any such petition, (vi) the appointment of a trustee, receiver or custodian for all or substantially all of the assets of such Person unless such appointment is stayed, vacated or dismissed within ninety (90) days from the date of such appointment, (vii) the execution by such Person of a general assignment for the benefit of creditors, (viii) the levy, attachment, execution, or other seizure of substantially all of the assets of such Person where such seizure is not discharged within thirty (30) days thereafter, (ix) the admission by such Person in writing of its inability generally to pay its debts as they mature or that it is generally not paying its debts as they become due, or (x) the taking of any corporate or partnership action in connection with any of the foregoing.
“Basic Distribution Amount” shall mean $0.725625 (but shall mean $0.3628125 after the 6/15/05 Stock Split); provided, however, that such amount will be adjusted appropriately to account for any further unit splits, combinations or other similar events with respect to the SCUs.
“Beneficial Ownership” shall have the meaning set forth in the certificate of incorporation of the Company.
“Capital Account” shall mean, with respect to any partner, the separate “book” account
 
which the Partnership shall establish and maintain for such Partner in accordance with Section 704(b) of the Code and Section 1.704-1(b)(2)(iv) of the Regulations and such other provisions of Section 1.704-1(b) of the Regulations that must be complied with in order for the Capital Accounts to be determined in accordance with the provisions of said Regulations. In furtherance of the foregoing, the Capital Accounts shall be maintained in compliance with Section 1.704-1 (b)(2)(iv) of the Regulations; and the provisions hereof shall be interpreted and applied in a manner consistent therewith. In the event that a Partnership Unit is transferred in accordance with the terms of this Agreement, the Capital Account, at the time of the transfer, of the transferor attributable to the transferred interest shall carry over to the transferee.  For the avoidance of doubt, distributions pursuant to an exercise for an option set forth in a JRI Option Agreement entered into in connection with the Master Contribution Agreement shall not result in any reduction in Capital Accounts.
“Capital Contribution” shall mean, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property other than money contributed to the Partnership with respect to the Partnership Units held by such Partner (net of liabilities to which such property is subject).
“Capital Stock” means Common Stock, Preferred Stock and other classes and series of capital stock issued from time to time by the Company.
“Certificate of Limited Partnership” shall mean the Certificate of Limited Partnership establishing the Partnership, filed with the office of the Secretary of State of the State of Delaware on July 16, 1993, as it may be amended from time to time in accordance with the terms of this Agreement and the Act.
“Claim” shall have the meaning set forth in Section 12.1 hereof.
“Closing Price” on any date shall mean the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Common Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the Common Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock as such person is selected from time to time by the General Partner.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Common Stock” shall mean the shares of common stock, par value $0.01 per share, of the Company.
“Common Stock Amount” shall mean, with respect to any number of Common Units, SCUs, S-SCUs, L-SCUs or K-SCUs, the number of shares of Common Stock equal to such number of Common Units, SCUs, S-SCUs, L-SCUs or K-SCUs, as the case may be, multiplied by the Conversion Factor; provided, however, that in the event that the Company issues to all holders of Common Stock rights, options, warrants or convertible or exchangeable securities
 
entitling the shareholders to subscribe for or purchase additional Common Stock, or any other securities or property of the Company, the value of which is not included in the first sentence of the definition of Closing Price of the shares of Common Stock (collectively, “Additional Rights”), other than a right to receive a dividend or other distribution of Common Stock that corresponds to Common Units issued to the Company pursuant to a Distribution of Common Units in Lieu of Cash, then the Common Stock Amount shall also include, other than with respect to any Common Units, SCUs, S-SCUs, L-SCUs or K-SCUs “Beneficially Owned” by an “Acquiring Person” (as such terms are defined in the Company’s Rights Agreement, dated as of April 30, 1999, as amended and as it may be further amended from time to time, and any successor agreement thereto), such Additional Rights that a holder of that number of shares of Common Stock would be entitled to receive.
“Common Unit Conversion Factor” shall mean 1.0, provided, that, in the event that the Partnership (i) makes a distribution to all holders of its Common Units in Common Units (other than a distribution of Common Units pursuant to an offer to all holders of Common Units, SCUs S-SCUs, L-SCUs, and K-SCUs permitting each to elect to receive a distribution in Common Units in lieu of a cash distribution (such a distribution of Common Units is referred to herein as a “Distribution of Common Units in Lieu of Cash”)), (ii) subdivides or splits its outstanding Common Units (which shall expressly exclude any Distribution of Common Units in Lieu of Cash), or (iii) combines or reverse splits its outstanding Common Units into a smaller number of Common Units (in each case, without making a comparable distribution, subdivision, split, combination or reverse split with respect to the SCUs, S-SCUs, L-SCUs or K-SCUs), the Common Unit Conversion Factor in effect immediately preceding such event shall be adjusted by multiplying the Common Unit Conversion Factor by a fraction, the numerator of which shall
 
be the number of Common Units issued and outstanding on the record date for such distribution, subdivision, split, combination or reverse split (assuming for such purposes that such distribution, subdivision, split, combination or reverse split occurred as of such time), and the denominator of which shall be the actual number of Common Units (determined without the above assumption) issued and outstanding on the record date for such distribution, subdivision, split, combination or reverse split.  Any adjustment to the Common Unit Conversion Factor shall become effective immediately after the record date for such event in the case of a distribution or the effective date in the case of a subdivision, split, combination or reverse split.
“Common Unit Distribution Amount” shall mean the product of (i) the quarterly distribution paid with respect to one Common Unit for that quarter pursuant to Subsection 6.2(a)(v) hereof multiplied by (ii) Common Unit Conversion Factor.
“Common Units” shall mean the ownership interest of a Partner in the Partnership from time to time, which entitles a Partner to the allocations specified in Section 6 hereof and all distributions from the Partnership, and its rights of management, consent, approval, or participation, if any, as provided in this Agreement.  The number of Common Units held by each Partner as of the date hereof and the percentage of the total number of outstanding Units represented thereby is as set forth opposite such Partner’s name on Exhibit A hereto.  Common Units do not include Preferred Units.  As the context may require herein, Common Units may include the SCUs, S-SCUs, L-SCUs and K-SCUs.
“Company” shall mean CBL & Associates Properties, Inc., a Delaware corporation, and any successor entity thereto.
“Consent of the Limited Partners” shall mean the written consent of a Majority-In-Interest of the Limited Partners, which consent shall be obtained prior to the taking of any action
 
for which it is required by this Agreement and may be given or withheld by a Majority-In-Interest of the Limited Partners, unless otherwise expressly provided herein, in their sole and absolute discretion.
“Constructive Ownership” shall have the meaning set forth in the certificate of incorporation of the Company.
“Contributed Property” shall have the meaning set forth in Subsection 4.2(b) hereof.
“Contributing Partner” shall have the meaning set forth in Subsection 4.4(b) hereof.
“Control” shall mean the ability, whether by the direct or indirect ownership of shares or other equity interests, by contract or otherwise, to elect a majority of the directors of a corporation, to select the managing partner of a partnership or otherwise to select, or have the power to remove and then select, a majority of those persons exercising governing authority over an Entity.  In the case of a limited partnership, the sole general partner, all of the general partners to the extent each has equal management control and authority, or the managing general partner or managing general partners thereof shall be deemed to have control of such partnership and, in the case of a trust, any trustee thereof or any Person having the right to select any such trustee shall be deemed to have control of such trust.
“Conversion Factor” shall mean 1.0, provided that in the event that the Company (i) pays a dividend on its outstanding shares of Common Stock in shares of Common Stock or makes a distribution to all holders of its outstanding Common Stock in shares of Common Stock (in either case other than a dividend or other distribution of shares of Common Stock that corresponds to Common Units issued to the Company pursuant to a Dividend of Common Units in Lieu of Cash), (ii) subdivides or splits its outstanding shares of Common Stock, or (iii) combines or reverse splits its outstanding shares of Common Stock into a smaller number of
 
shares of Common Stock (in each case, without making a comparable dividend, distribution, subdivision, split, combination or reverse split with respect to the Common Units, the SCUs, S-SCUs, L-SCUs or K-SCUs), the Conversion Factor in effect immediately preceding such event shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of shares of Common Stock issued and outstanding on the record date for such dividend, distribution, subdivision, split, combination or reverse split (assuming for such purposes that such dividend, distribution, subdivision, split, combination or reverse split occurred as of such time), and the denominator of which shall be the actual number of shares of Common Stock (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision, split, combination or reverse split.  Any adjustment to the Conversion Factor shall become effective immediately after the record date for such event in the case of a dividend or distribution or the effective date in the case of a subdivision, split, combination or reverse split.
“Current Per Share Market Price” on any date shall mean the average of the Closing Price for the five consecutive Trading Days ending on and including such date (or if such date is not a Trading Day, ending on the immediately preceding Trading Day).
“Demand Notice” shall have the meaning set forth in Section 13.2 hereof.
“Depreciation” shall mean, with respect to any asset of the Partnership for any fiscal year or other period, the depreciation, depletion or amortization, as the case may be, allowed or allowable for federal income tax purposes in respect of such asset for such fiscal year or other period; provided, however, that if there is a difference between the Gross Asset Value and the adjusted tax basis of such asset, Depreciation shall mean “book depreciation, depletion or amortization” as determined under Section 1.704-l(b)(2)(iv)(g)(3) of the Regulations.
 
“Distribution of Common Units in Lieu of Cash” shall have the meaning and use of such term as provided in the definition of “Common Unit Conversion Factor” above.
“Entity” shall mean any general partnership, limited partnership, corporation, joint venture, limited liability company, trust, business trust, cooperative or association.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time (or any corresponding provisions of succeeding laws).
“Exchange Notice” shall have the meaning set forth in Schedule 1 to Exhibit D.
“Expenditures” shall have the meaning and use of such term as provided in the definition of “Net Cash Flow” below.
“First Restated Agreement” shall have the meaning set forth in the preamble to this Agreement.
“Floor Distribution” shall mean, with respect to any quarter, $0.4375 (but shall mean $0.21875 after the 6/15/05 Stock Split).
“General Partner” shall mean CBL Holdings I, Inc., a Delaware corporation, its duly admitted successors and assigns and any other Person who is a general partner of the Partnership at the time of reference thereto.
“Gross Asset Value” shall mean, with respect to any asset of the Partnership, such asset’s adjusted basis for federal income tax purposes, except as follows:
(a)  the Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset as determined under Article IV;

(b)  if the General Partner reasonably determines that an adjustment is necessary or appropriate to reflect the relative economic interests of the Partners, the Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as reasonably determined by the General Partner, as of the following times:


(i)  a Capital Contribution (other than a de minimis Capital Contribution) to the Partnership by a new or existing Partner as consideration for Partnership Units;

(ii)  the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for the redemption of Partnership Units; and

(iii) the liquidation of the Partnership within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations;

(c) the Gross Asset Values of Partnership assets distributed to any Partner shall be the gross fair market values of such assets (taking Section 7701(g) of the Code into account) as reasonably determined by the General Partner as of the date of distribution; and

(d) the Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations; provided, however, that Gross Asset Values shall not be adjusted pursuant to this Section to the extent that the General Partner reasonably determines that an adjustment pursuant to Subsection (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this Subsection (d).

At all times, Gross Asset Values shall be adjusted by any Depreciation taken into account with respect to the Partnership’s assets for purposes of computing Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership property shall require an adjustment to the Partners’ Capital Accounts; as for the manner in which such adjustments are allocated to the Capital Accounts, see Subsection (c) of the definition of Net Income and Net Loss in the case of adjustment by Depreciation, and Subsection (d) of said definition in all other cases.
“Gross Income” shall mean, for each fiscal year or other applicable period, an amount equal to the Partnership’s gross income for such year or period as determined for federal income tax purposes with the following adjustments: (a) by including as an item of gross income any tax-exempt income received by the Partnership; (b) gain resulting from any disposition of
 
Partnership property with respect to which gain recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of such property rather than its adjusted tax basis; (c) in the event of an adjustment of the Gross Asset Value of any Partnership asset which requires that the Capital Accounts of the Partnership be adjusted pursuant to Regulation Section 1.704 l(b)(2)(iv)(e), (f) or (m), the amount of such positive adjustment is to be taken into account as additional Gross Income pursuant to Exhibit C; and (d) excluding any items specifically allocated pursuant to Section 2 of Exhibit C.
“Immediate Family” shall mean, with respect to any Person, such Person’s spouse, parents, or descendants by blood or adoption.
“Incentive Option” means an option to purchase Common Stock granted under the Stock Incentive Plan.
“Incentive Option Agreement” means the form of Incentive Option Agreement to be used under the Stock Incentive Plan.
“Jacobs Limited Partner Representative” shall have the meaning set forth in Section 7.12 hereof.
“Jacobs Property” shall have the meaning set forth in Subsection 6.2(e)(1) hereof.
“Joint Venture Partnership” shall mean any Property Partnership in which the Partnership and the Company do not own, directly or indirectly, 100% of the ownership interests in the aggregate.
“JRI” shall mean Jacobs Realty Investors Limited Partnership, a Delaware limited partnership.
“K-SCUs” shall have the meaning set forth in Exhibit K.
 
“K-SCU Basic Distribution Amount” shall mean, with respect to a K-SCU, $0.7125/quarter and, commencing with the fifth full calendar quarter following the issuance of the K-SCUs, $0.7422/quarter; provided, however, that such amount will be adjusted appropriately to account for any unit splits, combinations or other similar events with respect to the K-SCUs.
“Liens” shall mean any liens, security interests, mortgages, deeds of trust, charges, claims, encumbrances, pledges, options, rights of first offer or first refusal and any other similar encumbrances of any nature whatsoever.
“Limited Partner Representative” shall mean, with respect to any Limited Partner, the representative appointed by such Limited Partner pursuant to the first sentence of Section 7.12 or, if none, such Limited Partner.
“Limited Partners” shall mean (i) those Persons listed under the heading “Limited Partners” on Exhibit A hereto in their respective capacities as limited partners of the Partnership, their permitted successors and assigns and (ii) all Additional Partners and Substituted Limited Partners.
“Liquidation Transaction” shall mean any sale of assets of the Partnership in contemplation of, or in connection with, the liquidation of the Partnership.
“Liquidating Trustee” shall mean the General Partner or, if the General Partner is unable or unwilling to serve in such capacity, such other individual or Entity which, with the Consent of the Limited Partners or otherwise under the Act, shall be charged with winding up the Partnership.
“L-SCUs” shall have the meaning set forth in Exhibit J.
 
“L-SCU Basic Distribution Amount” shall mean, with respect to an L-SCU, $1.5144 (but shall mean $0.7572 after the 6/15/05 Stock Split); provided, however, that such amount will be adjusted appropriately to account for any further unit splits, combinations or other similar events with respect to the L-SCUs.
“Major Decisions” shall have the meaning set forth in Section 7.3 hereof.
“Majority-In-Interest of the Limited Partners” shall mean Limited Partner(s) who hold in the aggregate more than fifty percent (50%) of the voting rights associated with the then outstanding Partnership Units which are entitled to vote on the matter with respect to which such calculation is made, as a class.
“Management Agreement” shall mean the Management Agreement dated November 3, 1993 between the Management Company and the Partnership, as such may be amended or supplemented.
“Management Company shall mean CBL & Associates Management, Inc., a Delaware corporation, or its permitted successors or assigns.
“Master Contribution Agreement” shall mean the Master Contribution Agreement dated as of September 25, 2000, among the Company, the Partnership, JRI and certain other persons named therein as amended by the Letter Agreement, dated November 13, 2000, and the Amendment to the Master Contribution Agreement, dated as of December 19, 2000, and as the same may be further amended, modified or supplemented.
“Minimum Gain Attributable to Partner Nonrecourse Debt” shall mean “partner nonrecourse debt minimum gain” as determined in accordance with Regulation Section 1.704-2(i)(2).
 
“Net Capital Gain” shall mean, for any taxable year, the excess of recognized gains with respect to dispositions of Property over recognized losses with respect to dispositions of Property, in each case as determined by reference to Gross Asset Value.
“Net Cash Flow” shall mean, with respect to any fiscal period of the Partnership, the excess, if any, of “Receipts” over “Expenditures.” For purposes hereof, the term “Receipts” means the sum of all cash receipts of the Partnership from all sources for such period (including Net Sale Proceeds and Net Financing Proceeds but excluding Capital Contributions) and any amounts held as reserves as of the last day of such period which the General Partner reasonably deems to be in excess of necessary reserves as determined below. The term “Expenditures” means the sum of (a) all cash expenses of the Partnership for such period, (b) the amount of all payments for such period of principal, prepayment premium (if any), and interest on any indebtedness of the Partnership including payments for such period of principal, prepayment premium (if any), and interest on loans made by a Partner to the Partnership, and (c) such additions to cash reserves as of the last day of such period as the General Partner deems necessary or appropriate for any capital, operating or other expenditure, including, without limitation, contingent liabilities, but the term “Expenditures” shall not include any expense paid from a cash reserve previously established by the Partnership.
“Net Financing Proceeds” shall mean the cash proceeds received by the Partnership in connection with any borrowing or refinancing of borrowing by or on behalf of the Partnership or by or on behalf of any Property Partnership (whether or not secured), after deduction of all costs and expenses incurred by the Partnership or the Property Partnership in connection with such borrowing, and after deduction of that portion of such proceeds used to (i) acquire the Property with respect to which any such borrowing was specifically incurred, and (ii) repay any other indebtedness of the Partnership or Property Partnerships with respect to which any such refinancing or borrowing was specifically incurred, or any interest or prepayment premium thereon. For this purpose, cash proceeds received by a Joint Venture Partnership shall not be
 
deemed to be received or available to the Partnership until (i) the distribution of such proceeds is actually received by the Partnership, or (ii) under the terms of the Joint Venture Partnership’s partnership agreement, the Partnership controls the timing of the Joint Venture Partnership’s distributions and then only to the extent of the partnership’s entitlement to such distributions.
“Net Income or Net Loss” shall mean, for each fiscal year or other applicable period an amount equal to the Partnership’s net income or loss for such year or period as determined for federal income tax purposes by the Accountants, determined in accordance with Section 703(a) of the code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a) of the Code shall be included in taxable income or loss), with the following adjustments:  (a) by including as an item of gross income any tax-exempt income received by the Partnership; (b) by treating as a deductible expense any expenditure of the Partnership described in Section 705(a)(2)(B) of the Code (including amounts paid or incurred to organize the Partnership, unless an election is made pursuant to Code Section 709(b) or to promote the sale of interests in the Partnership and by treating deductions for any losses incurred in connection with the sale or exchange of Partnership property disallowed pursuant to Section 267(a)(i) or Section 707(b) of the Code as expenditures described in Section 705(a)(2)(B) of the Code; (c) in lieu of depreciation, depletion, amortization, and other cost recovery deductions taken into account in computing total income or loss, there shall be taken into account Depreciation; (d) gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of such property rather than its adjusted tax basis; (e) in the event of an adjustment of the Gross Asset Value of any Partnership asset which requires that the Capital Accounts of the Partnership be adjusted pursuant to Regulation Section 1.704-l(b)(2)(iv)(e), (f) and (m), the amount of such adjustment is to be taken into account as additional Net Income or Net Loss pursuant to Exhibit C; and (f) excluding any items specially allocated pursuant to Section 2 of Exhibit C.  Once an item of income, gain, loss or deduction has been included in the initial computation of Net Income or Net Loss or is subject to the
 
special allocation rules in Exhibit C, Net Income or Net Loss shall be recomputed without regard to such item.
“Net Sale Proceeds” means the cash proceeds received by or available to the Partnership in connection with a sale or condemnation of, or casualty of or other capital event with respect to any asset by or on behalf of the Partnership or by or on behalf of a Property Partnership, after deduction of any costs or expenses incurred by the Partnership or a Property Partnership with respect to, or payable specifically out of the proceeds of, such transaction (including, without limitation, any repayment of any indebtedness required to be repaid as a result of such sale together with accrued interest and prepayment premium, if any, thereon and any sales commissions or other costs and expenses due and payable to any Person in connection with a sale, including to a Partner or its Affiliates).  For this purpose, cash proceeds received by a Joint Venture Partnership shall not be deemed to be received or available to the Partnership until (i) the distribution of such proceeds is actually received by the Partnership, or (ii) under the terms of the Joint Venture Partnership’s partnership agreement, the Partnership controls the timing of the Joint Venture Partnership’s distributions and then only to the extent of the Partnership’s entitlement to such distributions.
“Nonrecourse Deductions” shall have the meaning set forth in Sections 1.704-2(b)(1) and (c) of the Regulations.
“Nonrecourse Liabilities” shall have the meaning set forth in Section 1.704-2(b)(3) of the Regulations.
“Offered Units” shall have the meaning set forth in Exhibit D.
“Office Building” shall mean the office building known as CBL Center located at 2030 Hamilton Place Boulevard, Chattanooga, Tennessee 37421.
“Ownership Limit” shall have the meaning set forth in the certificate of incorporation of the Company, as the same may be modified by the board of directors of the Company as permitted therein.
“Partner Nonrecourse Debt” shall mean any nonrecourse indebtedness of the Partnership
 
that is loaned or guaranteed by any Partner and/or is treated as “partner nonrecourse debt” under Section 1.704-2(b)(4) of the Regulations.
“Partner Nonrecourse Deductions” shall have the meaning set forth in Section 1.704-2(i)(2) of the Regulations.
“Partners” shall mean the General Partner and the Limited Partners, their duly admitted successors or assigns or any Person who is a partner of the Partnership at the time of reference thereto.
“Partnership” shall mean the limited partnership hereby constituted, as such limited partnership may from time to time be constituted.
“Partnership Minimum Gain” shall have the meaning set forth in Section 1.704-2(b)(2) of the Regulations.

“Partnership Units” shall mean the Common Units, the Preferred Units, the SCUs, the S-SCUs, the L-SCUs and the K-SCUs.
“Person” shall mean any individual or Entity.
“Preferred Contributed Funds” shall have the meaning set forth in Subsection 4.4(b) hereof.
“Preferred Distribution Requirement” shall have the meaning set forth in Subsection 4.4(b) hereof.
“Preferred Distribution Shortfall” shall have the meaning set forth in Subsection 6.2(a)(i).
“Preferred Redemption Amount” shall mean, with respect to any class or series of Preferred Units, the sum of (i) the amount of any accumulated Preferred Distribution Shortfall with respect to such class or series of Preferred Units, (ii) the Preferred Distribution Requirement with respect to such class or series of Preferred Units to the date of redemption, and (iii) the Preferred Redemption Price indicated in the Preferred Unit Designation with respect to such class or series of Preferred Units.
 
“Preferred Redemption Price” shall have the meaning set forth in Subsection 4.4(b) hereof.
“Preferred Stock” shall mean any class of equity securities of the Company now or hereafter authorized or reclassified, other than the Common Stock, having dividend rights that are superior or prior to dividends payable on the Common Stock.
“Preferred Unit Designation” shall have the meaning set forth in Subsection 4.4(b) hereof.
“Preferred Unit Issue Price” shall mean the amount of the funds contributed or deemed to have been contributed by the relevant Partner, in exchange for the preferred Units.
“Preferred Units” shall mean interests in the Partnership issued pursuant to Section 4.4 hereof. The holder of Preferred Units shall have such rights to the allocations of Net Income or Net Loss as specified in Section 6.1 hereof and to distributions pursuant to Section 6.2 hereof, but shall not, by reason of its ownership of such Preferred Units, be entitled to participate in the management of the Partnership or to consent to or approve any action which is required by the Act or this Agreement to be approved by any or all of the Partners.
“Properties” or “Property” shall mean any real property in which the Partnership, directly or indirectly, holds or acquires ownership of a fee, mortgage or leasehold interest.
“Property Partnerships” shall mean and include any partnership or other Entity in which the Partnership is or becomes a partner or other equity participant and which is formed for the purpose of acquiring, developing or owning a Property or a proposed Property.
“Qualified Individual” shall have the meaning set forth in Subsection 13.2(b) hereof.
“Receipts” shall have the meaning and use of such term as provided in the definition of “Net Cash Flow” above.
 
“Reduction Factor” shall mean the lesser of (i) the quotient of the Common Unit Distribution Amount for such quarter divided by the Floor Distribution and (ii) one.
“Registered Agent” shall have the meaning set forth in Section 2.5 hereof.
“Registered Office” shall have the meaning set forth in Section 2.5 hereof.
“Regulations” shall mean the final, temporary or proposed income tax regulations promulgated under the Code; as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“Regulatory Allocations” shall have the meaning set forth in Section 2 of Exhibit C.
“REIT” shall mean a real estate investment trust as defined in Section 856 of the Code.
“REIT Expenses” shall mean (i) costs and expenses relating to the formation and continuity of existence of the Company and the General Partner, including taxes (other than the Company’s and the General Partner’s federal and state income and franchise taxes), fees and assessments associated therewith, any and all costs, expenses or fees payable to any director or trustee of the Company, the General Partner or any subsidiary of either the Company or the General Partner, (ii) costs and expenses relating to any offer or registration of securities by the Company and all statements, reports, fees and expenses incidental thereto, including underwriting discounts and selling commissions applicable to any such offer of securities, (iii) costs and expenses associated with the preparation and filing of any periodic reports by the Company under federal, state or local laws or regulations including filings with the SEC, (iv) costs and expenses associated with compliance by the Company and the General Partner with laws, rules and regulations promulgated by any regulatory body, including the SEC, and (v) all other operating or administrative costs of the Company and the General Partner incurred in the ordinary course of its business on behalf of the partnership.
 
“REIT Requirements” shall have the meaning set forth in Subsection 6.2 (e)(1) hereof.
“Requesting Party” shall have the meaning set forth in Subsection 13.2(a) hereof.
“Related Issue” shall mean, with respect to a class or series of Preferred Units, the class or series of Preferred Stock the sale of which directly or indirectly provided a Partner with the proceeds to contribute to the Partnership in exchange for such Preferred Units.
“Responding Party” shall have the meaning set forth in Subsection 13.2(b) hereof.
“Rights” shall have the meaning set forth in Section 11.1 hereof.
“Safe Harbor Rate” shall have the meaning set forth in Subsection 6.2(g) hereof.
“SCUs” shall have the meaning set forth in Exhibit E.
“SEC” shall mean the Securities and Exchange Commission.
“Second Restated Agreement” shall have the meaning set forth in the preamble to this Agreement.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Series J Exchange Notice” shall have the meaning set forth in Exhibit E.
“Series J Exchange Rights” shall have the meaning set forth in Exhibit E.
“Series J Offered Units” shall have the meaning set forth in Exhibit E.
“Series K Exchange Notice” shall have the meaning set forth in Exhibit K.
“Series K Exchange Rights” shall have the meaning set forth in Exhibit K.
“Series K Offered Units” shall have the meaning set forth in Exhibit K.
“Series L Exchange Notice” shall have the meaning set forth in Exhibit J.
“Series L Exchange Rights” shall have the meaning set forth in Exhibit J.
“Series L Offered Units” shall have the meaning set forth in Exhibit J.
“Series S Exchange Notice” shall have the meaning set forth in Exhibit H.
“Series S Exchange Rights” shall have the meaning set forth in Exhibit H.
 
“Series S Offered Units” shall have the meaning set forth in Exhibit H.
“S-SCUs” shall have the meaning set forth in Exhibit H.
“S-SCU Basic Distribution Amount” shall mean, with respect to an S-SCU, $1.269125 (but shall mean $0.6345625 after the 6/15/05 Stock Split) and, commencing with the first full calendar quarter following the fifth anniversary of the issuance of the S-SCUs, $1.464375 (but shall mean $0.7321875 after the 6/15/05 Stock Split); provided, however, that such amount will be adjusted appropriately to account for any further unit splits, combinations or other similar events with respect to the S-SCUs.
“Stock Incentive Plan” shall mean the Company’s 1993 Stock Incentive Plan as adopted on October 27, 1993 and amended by Amendment No. 1 dated May 1, 1996 and Amendment No. 2 on May 3, 2000 and Amendment No. 3 on May 7, 2002, then amended and restated and renamed the “Amended and Restated CBL & Associates Properties, Inc. Stock Incentive Plan” on May 5, 2003 as amended by Amendment #1 on October 29, 2003 and by Amendment #2 on November 4, 2004 and then again amended and restated and renamed the “Second Amended and Restated CBL & Associates Properties, Inc. Stock Incentive Plan” on May 4, 2010 and as may be further amended.
“Substituted Limited Partner” shall mean any Person admitted to the Partnership as a limited partner pursuant to the terms of Section 9.2.
“Tax Items” shall have the meaning set forth in Exhibit C.
“Third Restated Agreement” shall have the meaning set forth in the preamble to this Agreement.
“Trading Day” shall mean a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business
 
or, if the Common Stock is not listed or admitted to trading on any national securities exchange, shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.
“Transfer” as a noun, shall mean any sale, assignment, conveyance, pledge, hypothecation, gift, encumbrance or other transfer, including, without limitation, a transfer by operation of law or through the laws of inheritance and succession, and, as a verb, shall mean to sell, assign, convey, pledge, hypothecate, give, encumber or otherwise transfer, including, without limitation, by operation of law or through the laws of inheritance and succession.
1.2.           Exhibits, Etc.  References to “Exhibit” or to a “Schedule” are, unless otherwise specified, to one of the Exhibits or Schedules attached to this Agreement, and references to an “Article” or a “Section” are, unless otherwise specified, to one of the Articles or Sections of this Agreement. Each Exhibit and Schedule attached hereto and referred to herein is hereby incorporated herein by reference.
1.3           Limited Partner Acceptance.         Pursuant to Section 4.5 and 7.8 of the Agreement, upon execution of a Limited Partner Acceptance of the Partnership Agreement in the form attached hereto as Attachment 1-A (the forms attached as Attachment 1-A, 1-B, 1-C and 1-D being individually referred to as a “Limited Partner Acceptance”) or by causing a Limited Partner Acceptance to be executed on its behalf, each initial holder of SCUs automatically will be admitted as an Additional Partner of the Partnership, without any further action or approval and the General Partner hereby agrees to cause the names of such recipients to be recorded on the books and records of the Partnership on the date of such admission.  In addition, upon the transfer by an initial recipient of SCUs to its designated holding entity as contemplated by the Master Contribution Agreement, and upon execution of a Limited Partner Acceptance by or on behalf of such designated holding entity, such designated holding entity automatically will be admitted as a Substituted Limited Partner of the Partnership with respect to the transferred SCUs
 
(and all of the conditions set forth in Section 9.2 of the Agreement for such admission will be deemed satisfied), without any further action or approval, and General Partner hereby agrees to cause the name of such designated holding entity to be recorded on the books and records of the Partnership on the date of such admission.
Pursuant to Sections 4.5 and 7.8 of the Agreement, upon execution of a Limited Partner Acceptance of the Partnership Agreement in the form attached hereto as Attachment 1-B or by causing a Limited Partner Acceptance to be executed on its behalf, each initial holder of S-SCUs automatically will be admitted as an Additional Partner of the Partnership, without any further action or approval and the General Partner hereby agrees to cause the names of such recipients to be recorded on the books and records of the Partnership on the date of such admission.
Pursuant to the Sections 4.5 and 7.8 of the Agreement, upon execution of a Limited Partner Acceptance of the Partnership Agreement in the form attached hereto as Attachment 1-C or by causing a Limited Partner Acceptance to be executed on its behalf, the initial holder of L-SCUs automatically will be admitted as an Additional Partner of the Partnership, without any further action or approval and the General Partner hereby agrees to cause the name of such recipient to be recorded on the book and records of the Partnership on the date of such admission.
Pursuant to the Sections 4.5 and 7.8 of the Agreement, upon execution of a Limited Partner Acceptance of the Partnership Agreement in the form attached hereto as Attachment 1-D or by causing a Limited Partner Acceptance to be executed on its behalf, the initial holder of K-SCUs automatically will be admitted as an Additional Partner of the Partnership, without any further action or approval and the General Partner hereby agrees to cause the name of such recipient to be recorded on the book and records of the Partnership on the date of such admission.
Organization
2.1.           Continuation.  The parties hereto do hereby continue the Partnership as a limited
 
partnership pursuant to the provisions of the Act, for the purposes and upon the terms and conditions hereinafter set forth.  The Partners agree that the rights and liabilities of the Partners shall be as provided in the Act except as otherwise herein expressly provided.  Promptly upon the execution and delivery hereof, the General Partner shall, to the extent required under the Act or otherwise deemed Necessary or appropriate by the General Partner, cause an amendment to the Certificate of Limited Partnership to be filed with the Delaware Secretary of State, and such other notice, instrument, document or certificate as may be required by applicable law, and which may be necessary or desirable to enable the Partnership to conduct its business, and to own its properties, under the Partnership’s name, to be filed or recorded in all appropriate public offices.
2.2.           Name.  The business of the Partnership shall be conducted under the name of CBL & Associates Limited Partnership or such other name as the General Partner may select, and all transactions of the Partnership, to the extent permitted by applicable law, shall be carried on and completed in such name.
2.3.           Character of the Business.  The purpose of the Partnership shall be:  (i) to acquire, hold, own, develop, redevelop, construct, improve, maintain, operate, manage, sell, lease, rent, transfer, encumber, mortgage, convey, exchange and otherwise dispose of, deal with, foreclose upon or otherwise exercise all rights with respect to, any of the Properties and any other real, personal and intangible property of all kinds; (ii) to exercise all of the powers of a partner in Property Partnerships; (iii) to undertake such other activities as may be necessary, advisable, desirable or convenient to the business of the Partnership; (iv) to engage in such other ancillary activities as shall be necessary, desirable or appropriate to effectuate the foregoing purposes; and (v) to otherwise engage in any enterprise, business or activity in which a limited partnership may engage or conduct under the Act.  The Partnership shall have all powers necessary or desirable to accomplish the purposes herein enumerated.  In connection with the foregoing, but subject to all of the terms, covenants, conditions and limitations contained in this Agreement and any other agreement entered into by the Partnership, the Partnership shall have full power and authority,
 
directly or through its interest in Property Partnerships, to enter into, perform and carry out contracts of any kind, to borrow money and to issue evidences of indebtedness, whether or not secured by mortgage, trust deed, pledge or other lien or assignment and, directly or indirectly, to develop, acquire and construct additional Properties necessary or useful in connection with its business.
2.4.           Location of the Principal Place of Business.  The location of the principal place of business of the Partnership shall be at the Office Building, or such other location as shall be selected from time to time by the General Partner in its sole discretion.
2.5.           Registered Agent and Registered Office.  The Registered Agent of the Partnership shall be Corporation Service Company or such other Person as the General Partner may select in its sole discretion.  The Registered Office of the Partnership shall be 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808 or such other location as the General Partner may select in its sole and absolute discretion.

Term

3.1.           Commencement.  The Partnership’s term commenced upon the filing of the Certificate of Limited Partnership with the Secretary of State of the State of Delaware on July 16, 1993.
3.2.           Dissolution.  The Partnership shall continue until dissolved upon the occurrence of the earliest of the following events:

(a)  The withdrawal (is defined in the Act), dissolution, termination, retirement or Bankruptcy of the General Partner or the Bankruptcy of the Company; the Partnership’s business may, however, be continued and the Partnership reconstituted as provided in Section 9.1 hereof;

(b)  The election to dissolve the Partnership made in writing by the General Partner with, subject to Section 7.3, the Consent of the Limited Partners;
 

(c)  The sale or other disposition of all or substantially all the assets of the Partnership unless the General Partner elects to continue the Partnership business for the purpose of the receipt and the collection of indebtedness or the collection of any other consideration to be received in exchange for the assets of the Partnership (which activities shall be deemed to be part of the winding-up of the affairs of the Partnership);

(d)  Dissolution required by operation of law; or

(e)  December 31, 2090.



 
Contributions to Capital

4.1.           Partners.  Exhibit A hereto sets forth the names of the Partners of the Partnership as of the date hereof and the Partnership Units held by each such Partner.  A Partner may be both a General Partner and a Limited Partner hereunder. The Partnership shall establish and maintain a separate Capital Account for each Partner.
4.2.           General Partner Capital Contribution.

(a)  Prior to the date hereof, the General Partner has made certain Capital Contributions to the Partnership as described in the books and records of the Partnership as of the date hereof.
(b)  The gross fair market value of any property contributed by the General Partner to the Partnership (“Contributed Property”), other than money, shall, except as otherwise expressly provided herein, be the Acquisition Cost of such Contributed Property. For purposes hereof, the “Acquisition Cost” of Contributed Property shall be, (i) in the case of Contributed Property acquired by the General Partner or the Company in exchange for shares of Common Stock, the Current Per Share Market Price as of the closing date on which the General Partner or the Company, as applicable, acquired such Contributed Property multiplied by the number of shares of Common Stock issued in the acquisition or (ii) in the case of Contributed Property acquired by
 
the General Partner or the Company for consideration other than Common Stock, the amount of such consideration plus, in either case, any costs and expenses incurred by the General Partner or the Company, as applicable, (and unreimbursed by the Partnership) in connection with such acquisition or contribution; provided, however, that (A) in the event the General Partner or the Company acquires the Contributed Property in exchange for shares of Common Stock or with proceeds from a public offering of the Company’s securities, the Partnership shall assume and pay (or reflect on its books as additional consideration for such Contributed Properties) the expenses, including any applicable underwriting discounts, incurred by the Company in connection with the issuance of such shares or securities, and (B) in the event the Acquisition Cost of Contributed Property is financed by any borrowings by the General Partner or the Company, or is otherwise encumbered by Liens relating to obligations of the General Partner or the Company, the Partnership shall, in either case, assume any such obligations of the General Partner or the Company concurrently with the contribution of such property to the Partnership or, if impossible, shall obligate itself to the General Partner or the Company, as applicable, in an amount and on terms equal to such indebtedness or obligation, and the Acquisition Cost shall be reduced by the amount of such obligations assumed or obligations incurred by the Partnership.
4.3.
Limited Partner Capital Contributions.
(a)  Prior to the date hereof, each Limited Partner has made certain Capital Contributions to the Partnership as described in the books and records of the Partnership as of the date hereof.
(b)  A Limited Partner shall be unconditionally liable to the Partnership for all or a portion of any deficit in its Capital Account if it so elects to be liable for such deficit or portion thereof. Such election may be for either a limited or an unlimited amount and may be amended or withdrawn at any time. The election, and any amendment thereof, shall be made by written
 
notice to the General Partner stating that the Limited Partner elects to be liable, and specifying the limitations, if any, on the maximum amount or duration of such liability. Said election, or amendment thereof, shall be effective only from the date the written notice is received by the General Partner, and shall terminate upon the date, if any, specified therein as a termination date or upon delivery to the General Partner of a subsequent written notice withdrawing or otherwise amending such election. A withdrawal, or an amendment reducing the Limited Partner’s maximum liability, shall not be effective to avoid responsibility for any loss incurred prior to such amendment or withdrawal.
(c)  The Limited Partners acknowledge that the Partnership Units have not been registered under any federal or state securities laws and, as a result thereof, they may not be sold or otherwise transferred, except in compliance with such laws and in accordance with the provisions of this Agreement. Notwithstanding anything to the contrary contained in this Agreement, no Partnership Units may be sold or otherwise transferred unless such transfer is exempt from registration under any applicable securities laws or such transfer is registered under such laws, it being acknowledged that the Partnership has no obligation to take any action which would cause any such Units to be registered.
4.4.  Issuance of Additional Units.
(a)  Without the consent of any Limited Partner, but subject to the terms of Section 9.3 below, the General Partner may from time to time cause the Partnership to issue to the Partners (including the General Partner) or other Persons additional Partnership Units (“Additional Units”) in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including, without limitation, rights, powers and duties senior to the Common Units, and admit any such other Person as an additional Limited Partner (“Additional Partner”) (in
 
accordance with Section 4.5 hereof), in exchange for the Capital Contribution by such Partner or Person of cash and/or property.  Without limiting the provisions of this Article IV, the General Partner is expressly authorized to cause the Partnership to issue Additional Units for less than either, (i) the fair market value thereof, or (ii) the applicable Current Per Share Market Price multiplied by the number of shares of Common Stock issuable with respect to such Additional Units upon the exercise of the Rights with respect thereto.  The General Partner shall have the right and shall possess the authority to amend this Agreement without the consent of any Limited Partner to evidence any action taken pursuant to this Subsection 4.4 (a).
(b)  In the event a Partner (the “Contributing Partner”) contributes to the Partnership any funds obtained directly or indirectly from the issuance by the Company of Preferred Stock (the “Preferred Contributed Funds”), then the Contributing Partner shall be issued Preferred Units of a designated class or series to reflect its contribution of such funds. Each class or series of Preferred Units so issued shall be designated by the General Partner to identify such class or series with the class or series of Preferred Stock which constitutes the Related Issue.  Each class or series of Preferred Units shall be described in a written document (the “Preferred Unit Designation”) attached as Exhibit B that shall set forth in sufficient detail, the economic rights, including dividend, redemption and conversion rights and sinking fund provisions, of the class or series of Preferred Units and the Related Issue.  The number of Preferred Units of a class or series shall be equal to the number of shares of the Related Issue sold.  The Preferred Unit Designation shall provide for such terms for the class or series of Preferred Units that shall entitle the holders thereof to substantially the same economic rights as the holders of the Related Issue. Specifically, the holders of such Preferred Units shall receive distributions on the class or series of Preferred Units pursuant to Section 6.2 equal to the aggregate dividends payable on the Related Issue at the times such dividend are paid (the “Preferred Distribution Requirement”).  The Partnership shall redeem the class or series of Preferred Units for a redemption price per
 
Preferred Unit equal to the redemption price per share of the Related Issue, exclusive of any accrued unpaid dividends (the “Preferred Redemption Price”) upon the redemption of any shares of the Related Issue.  Each class or series of Preferred Units shall also be converted into additional Common Units at the time and on such economic terms and conditions as the Related Issue is converted into Common Stock.  Upon the issuance of any class or series of Preferred Units pursuant to this Subsection 4.4(b), the General Partner shall provide the Limited Partners with a copy of the Preferred Unit Designation relating to such class or series.  A Partner shall have the right, in lieu of contributing to the Partnership funds received directly or indirectly from the issuance of Preferred Stock as Preferred Contributed Funds, to lend such funds to the Partnership.  Any such loan shall be on the same terms and conditions as the Related Issue except that dividends payable on the Related Issue shall be payable by the Partnership to such Partner as interest, any mandatory redemptions shall take the form of principal payments and no Preferred Units shall be issued to such Partner. If any such loan is made, the Partnership shall promptly reimburse such Partner for all expenses including any applicable underwriter discounts incurred by the Company in connection with raising the funds. Any such loan made by such Partner to the Partnership may, at any time, be contributed to the Partnership as Preferred Contributed Funds in exchange for Preferred Units as above provided; and if the Related Issue is by its terms convertible into Common Stock, such loan shall be so contributed to the Partnership prior to the effectuation of such conversion.
(c)  In the event a Partner contributes to the Partnership any funds obtained directly or indirectly from the issuance by the Company of Capital Stock, the Partnership shall reimburse such Partner for the expenses (including any applicable underwriter discounts) incurred by the Company in connection with raising such funds.
 
4.5.           Admission of Additional Partners.
(a)  After the date hereof, a Person who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Partner only upon furnishing to the General Partner (i) a written agreement in form satisfactory to the General Partner accepting all of the terms and conditions of this Agreement and (ii) such other documents or instruments as may be required in the discretion of the General Partner.
(b)  No Person shall be admitted as an Additional Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner’s sole and absolute discretion and for any or no reason whatsoever.  The admission of any Person as an Additional Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the consent of the General Partner to such admission.
(c)  If an Additional Partner is admitted to the Partnership on any other date than the first day of the Partnership’s tax year, then Net Income, Net Loss, each item thereof and all other items allocable among Partners and Assignees for such tax year shall be allocated among such Additional Partner and all other Partners and Assignees by taking into account their varying interests during the Fiscal Year in accordance with Section 706(d) of the Code, using the interim closing of the books method. Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of any Additional Partner occurs shall be allocated among all Partners and Assignees including such Additional Partner.
(d)  The General Partner, acting alone, shall be authorized on behalf of each of the Partners to amend this Agreement to reflect the admission of any Additional Partner or to record any change in ownership of Partnership Units of any Partner.
 
4.6.           Stock Incentive Plan.  If, at any time or from time to time, Incentive Options granted in connection with the Company’s Stock Incentive Plan are exercised in accordance with the terms of the Incentive Option Agreement:
(a)  the Company shall, as soon as practicable after such exercise, contribute or cause to be contributed to the capital of the Partnership an amount equal to the exercise price paid to the Company by such exercising party in connection with the exercise of the Incentive Option; and

(b)  the Partner which makes a contribution to the capital of the Partnership pursuant to Subsection 4.2(a) hereof shall be deemed to have contributed to the Partnership as Capital Contributions an amount equal to the Current Per Share Market Price (as of the Trading Date immediately preceding the date on which the purchase of the Common Stock by such exercising party is consummated) multiplied by the number of shares of Common Stock delivered by the Company to such exercising party and the Partnership shall issue to such contributing Partner a number of Common Units equal to such number of shares of Common Stock divided by the Conversion Factor.
 
4.7.           No Third Party Beneficiary.  No creditor or other third party having dealings with the Partnership shall have the right to enforce the right or obligation of any Partner to make Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in equity, it being understood and agreed that the provisions of this Agreement shall be solely for the benefit of, and may be enforced solely by the parties hereto and their respective successors and assigns.  None of the rights or obligations of the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or assigned by the Partnership or pledged or encumbered by the Partnership to secure any debt or other obligation of the Partnership or of any of the Partners.
4.8.           No Interest; No Return.  No Partner shall be entitled to interest on its Capital Contribution or on such Partner’s Capital Account. Except as provided herein or by law, no Partner shall have any right to demand or receive the return of its Capital Contribution from the Partnership or from any of the other Partners.
4.9.           Adjustment Upon Conversion of Preferred Stock.  Upon the conversion of any shares of Preferred Stock to Common Stock pursuant to the terms of such Preferred Stock, the
 
ownership of Partnership Units of the Partners shall be adjusted in accordance with the provisions of this Agreement to reflect, on the date of such conversion, the parallel conversion of the Preferred Units that were a Related Issue of such converted Preferred Stock into Common Units equal in number to the number of shares of Common Stock issued as a result of such conversion.

Representations, Warranties and Covenants
5.1.           Representations and Warranties.  Each Limited Partner hereby represents and warrants to the Partnership and the General Partner the following:
(a)  Organization; Authority.  Such Limited Partner is either (A) in the case of such persons which are corporations, duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, or (B) in the case of such persons which are partnerships or trusts, a partnership or trust, as the case may be, duly formed, validly existing and in good standing (to the extent applicable) under the laws of its jurisdiction of formation. The Limited Partner has the requisite authority to enter into and perform this Agreement.

(b)  Due Authorization; Binding Agreement.  The execution, delivery and performance of this Agreement by such Limited Partner have been duly and validly authorized by all necessary action of such Limited Partner.  This Agreement has been duly executed and delivered by such Limited Partner, or an authorized representative of such Limited Partner, and constitutes a legal valid and binding obligation of such Limited Partner, enforceable against such Limited Partner in accordance with the terms hereof.

(c)  Consents and Approvals.  No consent, waiver, approval or authorization of, or filing, registration or qualification with, or notice to, any governmental unit or any other person is required to be made, obtained or given by such Limited Partner in connection with the execution, delivery and performance of this Agreement except for those which have been heretofore obtained.

(d)  No Violation.  None of the execution, delivery or performance of this Agreement by such Limited Partner does or will, with or without the giving of notice, lapse of time or both, (i) violate, conflict with or constitute a default under any term or provision of (A) the organizational documents of such Limited Partner or any agreement to which such Limited Partner is a party or by which it is bound or (B) any term or provision of any judgment, decree, order, statute, injunction, rule or regulation of a governmental unit applicable to such Limited Partner or any agreement to which such Limited Partner is a party or by which it or its assets or properties are bound, or (ii) result
 
in the creation of any Lien or other encumbrance upon the assets or properties of such Limited Partner other than in favor of the Partnership.

5.2.           Covenants.  Without the prior consent of the General Partner, no Limited Partner shall take any action, including acquiring, directly or indirectly, an interest in any tenant of a Property, which would have the effect of causing the percentage of the gross income of the Company that fails to be treated as “rents from real property” within the meaning of Section 856(d)(2) of the Code to exceed such percentage as of the date of the First Restated Agreement.



Allocations, Distributions, and
Other Tax and Accounting Matters

6.1.           Allocations.  The Net Income or Net Loss and/or other Partnership items shall be allocated pursuant to the provisions of Exhibit C hereto.  All Net Income or Net Loss with respect to the period prior to June 30, 1998 (the date of the Second Restated Agreement) shall be allocated to the Limited Partners pursuant to the First Restated Agreement.  All Net Income or Net Loss with respect to the period beginning June 30, 1998 (the date of the Second Restated Agreement) and ending on June 14, 2005 (one day prior to the date of the Third Restated Agreement) shall be allocated to the Limited Partners pursuant to the Second Restated Agreement.  All Net Income or Net Loss with respect to the period beginning June 15, 2005 (the date of the Third Restated Agreement) and ending on November 15, 2005 (one day prior to the date of the First Amendment to Third Restated Agreement) shall be allocated to the Limited Partners pursuant to the Third Restated Agreement.  All Net Income or Net Loss with respect to the period beginning November 16, 2005 (the date of the First Amendment to Third Restated Agreement) and continuing thereafter shall be allocated to the Limited Partners pursuant to this Fourth Restated Agreement.


6.2.           Distributions.

(a)  The General Partner shall cause the Partnership to distribute all or a portion of Net Cash Flow to the Partners from time to time as determined by the General Partner, but in any event not less frequently than quarterly, in such amounts as the General Partner shall determine. All such distributions shall be made in accordance with the following order of priority:
(i)  First, to the extent that the amount of Net Cash Flow distributed to the relevant Partner, on account of the Preferred Units, for any prior quarter was less than the Preferred Distribution Requirement for such quarter, and has not been subsequently distributed pursuant to this Subsection 6.2(a)(i) (a “Preferred Distribution Shortfall”), Net Cash Flow shall be distributed to the relevant Partner, on account of the Preferred Units, in an amount necessary to satisfy such Preferred Distribution Shortfall for the current and all prior Partnership taxable years. In the event that the Net Cash Flow distributed for a particular quarter is less than the Preferred Distribution Shortfall, then all Net Cash Flow for the current quarter shall be distributed to the relevant Partner on account of the Preferred Units;

(ii)  Second, Net Cash Flow shall be distributed to the relevant Partner, on account of the Preferred Units, in an amount equal to the Preferred Distribution Requirement for the then current quarter for each outstanding Preferred Unit. In the event that the amount of Net Cash Flow distributed for a particular quarter pursuant to this Subsection (a)(ii) is less than the Preferred Distribution Requirement for such quarter, then all such Net Cash Flow for such quarter shall be distributed to the relevant Partner, on account of the Preferred Units. In addition, in the event that the Partnership is liquidated pursuant to Article VIII, the allocation described above shall be made to the relevant Partner, on account of the Preferred Units, with respect to all Preferred Units then outstanding; and

(iii)  Third, to the extent that the amount of Net Cash Flow distributed to the holders of SCUs for any prior quarter was (for any reason, including as a result of Subsection 6.2(f), a lack of legally available funds or a decision by the General Partner not to make distributions for such quarter) less than the amount required to be distributed for such quarter on account of the SCUs pursuant to Subsection (a)(iv) below, and such shortfall has not been subsequently distributed pursuant to this Subsection 6.2(a)(iii), Net Cash Flow shall be distributed to the holders of SCUs ratably until they have received an amount per SCU necessary to satisfy such shortfall for all prior quarters of the current and all prior Partnership taxable years.

(iv) Fourth, Net Cash Flow shall be distributed to the holders of SCUs ratably until they have received for the quarter to which distribution relates an amount for each outstanding SCU equal to the Basic Distribution Amount, provided, however, that in the event that the Common Unit Distribution Amount with respect to each of the four
 
consecutive calendar quarters immediately preceding the calendar quarter to which the distribution under this Subsection (a)(iv) relates is not equal to or greater than the Floor Distribution, then the amount required to be distributed under this Subsection (a)(iv) for each outstanding SCU shall be equal to the product of the Reduction Factor and the Basic Distribution Amount; and

(v) Fifth, the balance of the Net Cash Flow to be distributed, if any, shall be distributed to holders of SCUs and Common Units, pro rata in accordance with their proportionate ownership of the aggregate number of SCUs and Common Units outstanding, counting each SCU as the number of Common Units into which it is convertible pursuant to the terms of Exhibit E, provided, however, that such distribution to the holders of SCUs shall be reduced by the amount of the distribution made to them on account of their SCUs with respect to such quarter pursuant to Subsection (a)(iv) above and the reduction will be allocated among the holders of SCUs pro rata in accordance with their respective percentage interests in the total number of SCUs then outstanding.

For the avoidance of doubt, set forth below are illustrations of the distributions payable to the holders of SCUs and Common Units pursuant to Subsections (a)(iv) and (a)(v) above: (I) if the Common Unit Distribution amount is $0.8750 ($0.43750 after the 6/15/05 Stock Split), then the amount payable with respect to each outstanding SCU for that quarter is $0.8750 ($0.43750 after the 6/15/05 Stock Split); (II) if the Common Unit Distribution amount is $0.725625 ($0.3628125 after the 6/15/05 Stock Split), then the amount payable with respect to each outstanding SCU for that quarter is $0.725625 ($0.3628125 after the 6/15/05 Stock Split); (III) if the Common Unit Distribution Amount is $0.5875 ($0.29375 after the 6/15/05 Stock Split), then the amount payable with respect to each outstanding SCU for that quarter is $0.725625 ($0.3628125 after the 6/15/05 Stock Split); (IV) if the Common Unit Distribution amount is $0.4375 ($0.21875 after the 6/15/05 Stock Split), then the amount payable with respect to each outstanding SCU for that quarter is $0.725625 ($0.3628125 after the 6/15/05 Stock Split); (V) if the Common Unit Distribution amount is $0.21875 ($0.109375 after the 6/15/05 Stock Split), then the amount payable with respect to each outstanding SCU for that quarter is $0.725625 ($0.3628125 after the 6/15/05 Stock Split) (unless the Common Unit Distribution amount with respect to each of the four consecutive quarters immediately preceding such quarter was less than the Floor Distribution, in which case the amount payable with respect to each outstanding SCU for that quarter would be $0.3628125 ($0.18140625 after the 6/15/05 Stock Split); and (VI) if the Common Unit Distribution amount is $0.00, then the amount payable with respect to each outstanding SCU for that quarter is $0.725625 ($0.3628125 after the 6/15/05 Stock Split) (unless the Common Unit Distribution Amount with respect to each of the four consecutive quarters immediately preceding such quarter was less than the Floor Distribution, in which case the amount payable with respect to each outstanding SCU for that quarter would be $0.00).

(b) Distributions shall also be made in accordance with the following order of priority:
 
(i) Concurrently, ratably and on parity with the distributions to holders of SCUs provided for under Subsection 6.2(a)(iii), to the extent that the amount of Net Cash Flow
 
distributed to the holders of S-SCUs for any prior quarter was (for any reason, including as a result of Subsection 6.2(f), a lack of legally available funds or a decision by the General Partner not to make distributions for such quarter) less than the amount required to be distributed for such quarter on account of the S-SCUs pursuant to Subsection (ii) below, and such shortfall has not been subsequently distributed pursuant to this Subsection 6.2(b)(i), Net Cash Flow shall be distributed to the holders of S-SCUs until they have received an amount per S-SCU, as applicable, necessary to satisfy such shortfall for all prior quarters of the current and all prior Partnership taxable years;
 
(ii) Concurrently, ratably and on parity with the distributions to holders of SCUs provided for under Subsection 6.2(a)(iv), Net Cash Flow shall be distributed among the holders of S-SCUs until they have received for the quarter to which the distribution relates an amount for each outstanding S-SCU equal to the applicable S-SCU Basic Distribution Amount;
 
(iii) Concurrently, ratably and on parity with the distributions to holders of SCUs and Common Units provided for under Subsection 6.2(a)(v), the balance of the Net Cash Flow to be distributed, if any, shall be distributed to holders of S-SCUs pro rata in accordance with their proportionate ownership of the aggregate number of SCUs, S-SCUs and Common Units outstanding (counting each SCU or S-SCU as the number of Common Units into which it is convertible pursuant to the terms of Exhibit E or Exhibit H, as applicable), provided, however, that such distribution to the holders of S-SCUs shall:
 
(A)  be made only after the quarterly distributions on account of each Common Unit under Subsection 6.2(a)(v) for the four previous consecutive quarters shall have averaged an amount that is equal to or greater than the applicable S-SCU Basic Distribution Amount; and
 
(B)  be reduced by the amount of the distribution made to such Holders on account of their S-SCUs with respect to such quarter pursuant to Subsection (b)(ii) above and the reduction will be allocated among the holders of S-SCUs pro rata in accordance with their respective percentage interests in the total number of S-SCUs then outstanding.
 
(iv) Notwithstanding the foregoing, all distributions pursuant to this Subsection 6.2(b) shall remain subject to the provisions of (i) each Certificate of Designation for any class or series of Preferred Units, (ii) Exhibit E hereto with respect to the SCUs, and (iii) Exhibit H hereto with respect to the S-SCUs.

(c)           Distributions shall also be made in accordance with the following order of priority:
 
(i)           Concurrently, ratably and on parity and with the distributions to holders of SCUs and S-SCUs provided for under Subsections 6.2(a)(iii) and 6.2(b)(i), respectively, to the extent that the amount of Net Cash Flow distributed to the holders of L-SCUs for
 
any prior quarter was (for any reason, including as a result of Subsection 6.2(f), a lack of legally available funds or a decision by the General Partner not to make distributions for such quarter) less than the amount required to be distributed for such quarter on account of the L-SCUs pursuant to Subsection (ii) below, and such shortfall has not been subsequently distributed pursuant to this Subsection 6.2(c)(i), Net Cash Flow shall be distributed to the holders of L-SCUs until they have received an amount per L-SCU, as applicable, necessary to satisfy such shortfall for all prior quarters of the current and all prior Partnership taxable years;

(ii)           Concurrently, ratably and on parity with the distributions to holders of SCUs and S-SCUs provided for under Subsections 6.2(a)(iv) and 6.2(b)(ii), respectively, Net Cash Flow shall be distributed among the holders of L-SCUs until they have received for the quarter to which the distribution relates an amount for each outstanding L-SCU equal to the applicable L-SCU Basic Distribution Amount;

(iii)           Concurrently, ratably and on parity with the distributions to holders of SCUs, S-SCUs and Common Units provided for under Subsection 6.2(a)(v) and 6.2(b)(iii), the balance of the Net Cash Flow to be distributed, if any, shall be distributed to holders of L-SCUs pro rata in accordance with their proportionate ownership of the aggregate number of SCUs, S-SCUs and L-SCUs and Common Units outstanding (counting each SCU, S-SCU or L-SCU as the number of Common Units or number of shares of Common Stock, as applicable, into which it is convertible pursuant to the terms of Exhibit E, Exhibit H or Exhibit J, as applicable), provided, however, that such distribution to the holders of L-SCUs shall be reduced by the amount of the distribution made to such Holders on account of their L-SCUs with respect to such quarter pursuant to Subsection (c)(ii) above and the reduction will be allocated among the holders of L-SCUs pro rata in accordance with their respective percentage interests in the total number of L-SCUs then outstanding.

(iv) Notwithstanding the foregoing, all distributions pursuant to this Subsection 6.2(c) shall remain subject to the provisions of (i) each Certificate of Designation for any class or series Preferred Units, (ii) Exhibit E hereto with respect to the SCUs, (iii) Exhibit H hereto with respect to the S-SCUs and (iv) Exhibit J hereto with respect to the L-SCUs.

(d) Distributions shall also be made in accordance with the following order of priority:
 
(i) Concurrently, ratably and on parity with the distributions to holders of SCUs, S-SCUs and L-SCUs provided for under Subsections 6.2(a)(iii), 6.2(b)(i) and 6.2(c)(i), respectively, to the extent that the amount of Net Cash Flow distributed to the holders of K-SCUs for any prior quarter was (for any reason, including as a result of Subsection 6.2(e), a lack of legally available funds or a decision by the General Partner not to make distributions for such quarter) less than the amount required to be distributed for such quarter on account of the K-SCUs pursuant to Subsection (ii) below, and such shortfall has not been subsequently distributed
 
pursuant to this Subsection 6.2(d)(i), Net Cash Flow shall be distributed to the holders of K-SCUs until they have received an amount per K-SCU, as applicable, necessary to satisfy such shortfall for all prior quarters of the current and all prior Partnership taxable years;
 
(ii) Concurrently, ratably and on parity with the distributions to holders of SCUs, S-SCUs and L-SCUs provided for under Subsections 6.2(a)(iv), 6.2(b)(ii) and 6.2(c)(ii), Net Cash Flow shall be distributed among the holders of K-SCUs until they have received for the quarter to which the distribution relates an amount for each outstanding K-SCU equal to the applicable K-SCU Basic Distribution Amount;
 
(iii) Concurrently, ratably and on parity with the distributions to holders of SCUs, S-SCUs, L-SCUs and Common Units provided for under Subsections 6.2(a)(v), 6.2(b)(iii) and 6.2(c)(iii), the balance of the Net Cash Flow to be distributed, if any, shall be distributed to holders of K-SCUs pro rata in accordance with their proportionate ownership of the aggregate number of SCUs, S-SCUs, L-SCUs, K-SCUs and Common Units outstanding (counting each SCU, S-SCU, L-SCU or K-SCU as the number of Common Units into which it is convertible pursuant to the terms of Exhibit E, Exhibit H, Exhibit J or Exhibit K, as applicable), provided, however, that such distribution to the holders of K-SCUs shall:
 
(A)  be made only after the quarterly distributions on account of each Common Unit under Subsection 6.2(a)(v) for each of the four previous consecutive quarters shall have been greater than the applicable K-SCU Basic Distribution Amount in each of such quarters; and
 
(B)  be reduced by the amount of the distribution made to such Holders on account of their K-SCUs with respect to such quarter pursuant to Subsection (d)(ii) above and the reduction will be allocated among the holders of K-SCUs pro rata in accordance with their respective percentage interests in the total number of K-SCUs then outstanding.
 
(iv)  Notwithstanding the foregoing, all distributions pursuant to this Subsection 6.2(d) shall remain subject to the provisions of (i) each Certificate of Designation for any class or series of Preferred Units, (ii) Exhibit E hereto with respect to the SCUs, (iii) Exhibit H hereto with respect to the S-SCUs, (iv) Exhibit J hereto with respect to the L-SCUs, and (v) Exhibit K hereto with respect to the K-SCUs.

           (e)  (i)                      Neither the Partnership nor the Limited Partners shall have any obligation to see that any funds distributed pursuant to Subsection (a) (i) of this Section 6.2 are in turn used to pay dividends on any Capital Stock of the Company. Subject to the preceding sentences, (A) the General Partner shall use its reasonable efforts to cause the Partnership to distribute sufficient
 
amounts to enable the Company to pay shareholder dividends that will (x) satisfy the requirements for qualifying as a REIT under the Code and Regulations (“REIT Requirements”), and (y) avoid any federal income or excise tax liability of the Company; and (B) in the event of a sale of a Property or an interest in a Property Partnership (other than a direct or indirect interest in a Property set forth in Exhibit A of the Master Contribution Agreement (a “Jacobs Property”) and other than a Property constituting “substituted basis property” (as defined in Section 7701(a)(42) of the Code) with respect to a Jacobs Property) giving rise to a special allocation of taxable income or gain to a Limited Partner or Partners pursuant to Subsection 3(c) of Exhibit C, the General Partner shall cause the Partnership to distribute the Net Sale Proceeds therefrom up to an amount sufficient to enable such Limited Partner or Partners to pay any income tax liability with respect to the income or gain so specially allocated (or, if any such Limited Partner is a partnership or S corporation, to enable such Limited Partner to distribute sufficient amounts to its equity owners to enable such owners to pay any income tax liability with respect to their share of such taxable income or gain).
(ii)  If in any quarter the Partnership redeems any outstanding Preferred Units, unless and except to the extent that such redemption is effected out of borrowed funds, Capital Contributions or other sources, Net Cash Flow shall be distributed to the relevant Partner, on account of the Preferred Units, in an amount equal to the Preferred Redemption Amount for the Preferred Units being redeemed before being distributed pursuant to Subsection 6.2(a). There shall be no adjustment of the then current proportionate ownership of Partnership Units of the Partners on account of any distribution under this Section.
(f) Notwithstanding the foregoing, all distributions pursuant to this Section 6.2 shall remain subject to the provisions of the Certificate of Designation for each class or series of
 
Preferred Units set forth in Exhibit B hereto, Exhibit E hereto with respect to the SCUs, Exhibit H hereto with respect to the S-SCUs, Exhibit J hereto with respect to the L-SCUs and Exhibit K hereto with respect to the K-SCUs.
(g)  Notwithstanding the provisions of Subsection 6.2(a) above, if the distributions with respect to the SCUs made on or prior to the second anniversary of the issuance of the SCUs would result in any holder of an SCU receiving an annual return on such holder’s “unreturned capital” (as defined for purposes of Regulation Section 1.707-4(a)) for a partnership tax year (treating the Partnership tax year in which such second anniversary occurs as ending on such date) in excess of the Safe Harbor Rate (as defined below), then the distributions to such holder in excess of such Safe Harbor Rate will be deferred, will continue to cumulate and will be payable on the earlier to occur of (i) the disposition of the SCUs to which such deferred distributions relate in a transaction in which the disposing holder recognizes taxable gain thereon or (ii) the first distribution payment date with respect to the SCUs following the second anniversary of the issuance of the SCUs. For purposes of the foregoing, the “Safe Harbor Rate” shall equal 150% of the highest applicable Federal rate, based on quarterly compounding, in effect for purposes of Section 1274(d) of the Code at any time between the date of the issuance of the SCUs and the date on which the relevant distribution payment is made.
(h)  Distributions to Common Units and SCUs may be made by offering the holders of Common Units and SCUs the opportunity to make an election to take a portion of such distribution in cash or additional Common Units; provided that such an offer may not be made unless (i) holders of SCUs and holders of Common Units received on a conversion or redemption of SCUs will receive the full amount of the distribution in cash to the extent that such holders elect to receive cash, including an election to receive 100% of the distribution in
 
cash, (ii) with respect to distributions made within two years of the final Closing provided for in the Master Contribution Agreement, such distributions will not cause the aggregate distributions to a holder of SCUs or holder of Common Units received on a conversion or redemption of SCUs, other than distributions to such holder in respect of the Basic Distribution Amount, to exceed the product of (x) the lesser of such holder’s percentage interest in Partnership profits for the year in which the distribution is made or such holder’s percentage interest in Partnership profits for the life of the Partnership (as determined for purposes of Regulations Section 1,707-4(b)) and (y) the Partnership’s net cash flow from operations for the year in which the distribution is made (as determined for purposes of Regulations Section 1.707-4(b)) and (iii) holders of SCUs that elect to receive 100% of the distribution in cash will have received in respect of the quarter to which such distribution relates an amount per SCU, in cash, pursuant to Subsection 6.2(a)(iv), equal to the Basic Distribution Amount. Any such election will be made pro rata between the Common Units and SCUs, i.e., the same amount of cash or Common Units shall be offered with respect to each Common Unit and SCU.  Holders of Common Units or SCUs shall in no event be required to elect to receive additional Common Units.
6.3.           Books of Account.  At all times during the continuance of the Partnership, the General Partner shall maintain or cause to be maintained full, true, complete and correct books of account in accordance with generally accepted accounting principles wherein shall be entered particulars of all monies, goods or effects belonging to or owing to or by the Partnership, or paid, received, sold or purchased in the course of the Partnership’s business, and all of such other transactions, matters and things relating to the business of the Partnership as are usually entered in books of account kept by persons engaged in a business of a like kind and character. In addition, the Partnership shall keep all records as required to be kept pursuant to the Act.  The
 
books and records of account shall be kept at the principal office of the Partnership, and each Partner shall at all reasonable times have access to such books and records and the right to inspect the same.
6.4.           Reports.  The General Partner shall cause to be submitted to the Limited Partner Representatives promptly upon receipt of the same from the Accountants and in no event later than April 1 of each year copies of Audited Financial Statements prepared on a consolidated basis for the Partnership and the Property Partnerships, together with the reports thereon, and all supplementary schedules and information, prepared by the Accountants, provided, however, that with respect to Joint Venture Partnerships which are not Controlled by the Partnership, the General Partner shall diligently seek to (i) cause the Joint Venture Partnership to distribute its Audited Financial Statements on or before April 1 of each year subject to the Joint Venture Partnership’s partnership agreement and (ii) cause such Audited Financial Statements to be submitted to the Limited Partners promptly upon their receipt. The Partnership shall also cause to be prepared such reports and/or information as are necessary for the General Partner to determine its qualification as a REIT and its compliance with REIT Requirements.
6.5.           Audits.  Not less frequently than annually, the General Partner shall cause the Accountants to audit books and records of the Partnership and the Property Partnerships (and, pursuant to the terms of the applicable partnership agreement, diligently seek to cause each Joint Venture Partnership not Controlled by the Partnership to annually audit such Joint Venture Partnership’s books and records).
6.6.           Tax Elections and Returns.  All elections required or permitted to be made by the Partnership under any applicable tax law shall be made by the General Partner in its sole discretion; provided, however, the General Partner shall, if requested by transferee, file an
 
election on behalf of the Partnership pursuant to Section 754 of the Code to adjust the basis of the Partnership property in the case of the Transfer of a Partnership Unit, including Transfers made in connection with the exercise of Rights (or Series J, Series S, Series L or Series K Exchange Rights), made in accordance with the provisions of this Agreement.  The General Partner shall cause the Accountants to prepare and file all state and federal tax returns on a timely basis.
6.7.           Tax Matters Partner.  The General Partner is hereby designated as the Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code for the Partnership; provided, however, (i) in exercising its authority as Tax Matters Partner it shall be limited by the provisions of this Agreement affecting tax aspects of the Partnership; (ii) the General Partner shall consult in good faith with the Limited Partner Representatives regarding the filing of a Code Section 6227(b) administrative adjustment request with respect to the Partnership or a Property before filing such request, it being understood, however, that the provisions hereof shall not be construed to limit the ability of any Partner, including the General Partner, to file an administrative adjustment request on its own behalf pursuant to Section 6227(a) of the Code; (iii) the General Partner shall consult in good faith with the Limited Partner Representatives regarding the filing of a petition for judicial review of an administrative adjustment request under Section 6228 of the Code, or a petition for judicial review of a final partnership administrative judgment under Section 6226 of the Code relating to the Partnership before filing such petition; (iv) the General Partner shall give prompt notice to the Limited Partner Representatives of the receipt of any written notice that the Internal Revenue Service or any state or local taxing authority intends to examine Partnership income tax returns for any year, receipt of written notice of the beginning of an administrative proceeding at the Partnership level relating to the Partnership under Section 6223 of the Code, receipt of written notice of the final Partnership administrative adjustment relating to the
 
Partnership pursuant to Section 6223 of the Code and receipt of any request from the Internal Revenue Service for waiver of any applicable statute of limitations with respect to the filing of any tax return by the Partnership; and (v) the General Partner shall promptly notify the Limited Partner Representatives if the General Partner does not intend to file for judicial review with respect to the Partnership.  The General Partner, in acting on behalf of the Partnership as Tax Matters Partner of a Property Partnership, shall afford the Limited Partners the same rights with respect to Property Partnership tax matters as afforded to the Limited Partners under this Section 6.7.


Rights, Duties and Restrictions of the General Partner

7.1.           Expenditures by Partnership.  The General Partner is hereby authorized to pay compensation for accounting, administrative, legal, technical, management and other services rendered to the Partnership. All of the aforesaid expenditures shall be made on behalf of the Partnership and the General Partner shall be entitled to reimbursement by the Partnership for any expenditures incurred by it on behalf of the Partnership which shall be made other than out of the funds of the Partnership. The Partnership shall also assume, and pay when due, all Administrative Expenses.
7.2.           Powers and Duties of General Partner.  The General Partner shall be responsible for the management of the Partnership’s business and affairs. Except as otherwise herein expressly provided, the General Partner shall have, and is hereby granted, full and complete power, authority and discretion to take such action for and on behalf of the Partnership and in its name as the General Partner shall, in its sole and absolute discretion, deem necessary or
 
appropriate to carry out the purposes for which the Partnership was organized. Except as otherwise expressly provided herein, and subject to Section 7.3 hereof, the General Partner shall have the right, power and authority:

(a)   To manage, control, invest, reinvest, acquire by purchase, lease or otherwise sell, contract to purchase or sell, grant, obtain, or exercise options to purchase, options to sell or conversion rights, assign, transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon, improve, repair, maintain, insure, lease for any term and otherwise deal with any and all property of whatsoever kind and nature, and wherever situated, in furtherance of the business or purposes of the Partnership;

(b)  To acquire, directly or indirectly, interests in real estate of any kind and of any type, and any and all kinds of interests therein (including, without limitation, Entities investing therein), and to determine the manner in which title thereto is to be held; to manage (directly or through property managers, including without limitation, the Management Company), insure against loss, protect and subdivide any of the real estate, interests therein or parts thereof; to improve, develop or redevelop any such real estate; to participate in the ownership and development of any property; to dedicate for public use, to vacate any subdivisions or parts thereof, to re-subdivide, to contract to sell, to grant options to purchase or lease, to sell on any terms; to convey, mortgage, pledge or otherwise encumber said property, or any part thereof; to lease said property or any part thereof from time to time, upon any terms and for any period of time, and to renew or extend leases, to amend, change or modify the terms and provisions of any leases and to grant options to lease and options to renew leases and options to purchase; to partition or to exchange said real property, or any part thereof, for other real or personal property; to grant easements or charges of any kind; to release, convey or assign any right, title or interest in or about or easement appurtenant to said property or any part thereof; to construct and reconstruct, remodel, alter, repair, add to or take from buildings on any property in which the Partnership owns an interest; to insure any Person having an interest in or responsibility for the care, management or repair of such property; to direct the trustee of any land trust to mortgage, lease, convey or contract to convey the real estate held in such land trust or to execute and deliver deeds, mortgages, notes, and any and all documents pertaining to the property subject to such land trust or in any matter regarding such trust; to execute assignments of all or any part of the beneficial interest in any land trust in which the Partnership owns a beneficial interest;

(c)  To employ, engage or contract with or dismiss from employment or engagement Persons to the extent deemed necessary or appropriate by the General Partner for the operation and management of the Partnership business, including but not limited to, contractors, subcontractors, engineers, architects, surveyors, mechanics, consultants, accountants, attorneys, insurance brokers, real estate brokers and others;

(d)  To enter into, make, amend, perform and carry out or cancel and rescind,
 
contracts and other obligations on behalf of the Partnership and to cause all Administrative Expenses to be paid;

(e)  To borrow money, procure loans and advances from any Person for Partnership purposes, and to apply for and secure, from any Person, credit or accommodations; to contract liabilities and obligations, direct or contingent and of every kind and nature (including interest rate swaps, caps, and hedges) with or without security; and to repay, discharge, settle, adjust, compromise or liquidate any such loan, advance, credit, obligation or liability;

(f)  To pledge, hypothecate, mortgage, assign, deposit, deliver, enter into sale and leaseback arrangements or otherwise give as security or as additional or substitute security or for sale or other disposition any and all Partnership property, tangible or intangible, including, but not limited to, real estate and beneficial interests in land trusts, and to make substitutions thereof, and to receive any proceeds thereof upon the release or surrender thereof; to sign, execute and deliver any and all assignments, deeds and other contracts and instruments in writing; to authorize, give, make, procure, accept and receive moneys, payments, property, notices, demands, vouchers, receipts, releases, compromises and adjustments; to waive notices, demands, protests and authorize and execute waivers of every kind and nature; to enter into, make, execute, deliver and receive written agreements, undertakings and instruments of every kind and nature; to give oral instructions and make oral agreements; and generally to do any and all other acts and things incidental to any of the foregoing or with reference to any dealings or transactions which the General Partner may deem necessary, proper or advisable to effect or accomplish any of the foregoing or to carry out the business and purposes of the Partnership;

(g)  To acquire and enter into any contract of insurance which the General Partner deems necessary or appropriate for the protection of the Partnership, for the conservation of the Partnership’s assets or for any purpose convenient or beneficial to the Partnership;

(h)  To conduct any and all banking transactions on behalf of the Partnership; to adjust and settle checking, savings, and other accounts with such institutions as the General Partner shall deem appropriate; to draw, sign, execute, accept, endorse, guarantee, deliver, receive and pay any checks, drafts, bills of exchange, acceptances, notes, obligations, undertakings and other instruments for or relating to the payment of money in, into or from any account in the Partnerships name; to execute, procure, consent to and authorize extensions and renewals of any of the foregoing; to make deposits into and withdrawals from the Partnership’s bank accounts; and to negotiate or discount commercial paper, acceptances, negotiable instruments, bills of exchange and dollar drafts;

(i)  To demand, sue for, receive, and otherwise take steps to collect or recover all debts, rents, proceeds, interests, dividends, goods, chattels, income from property, damages and all other property, to which the Partnership may be entitled or which are or may become due the Partnership from any Person; to commence, prosecute or enforce, or
 
to defend, answer or oppose, contest and abandon all legal proceedings in which the Partnership is or may hereafter be interested; and to settle, compromise or submit to arbitration any accounts, debts, claims, disputes and matters which may arise between the Partnership and any other Person and to grant an extension of time for the payment or satisfaction thereof on any terms, with or without security;



(j)  To make arrangements for financing, including the taking of all action deemed necessary or appropriate by the General Partner to cause any approved loans to be closed;

(k)  To take all reasonable measures necessary to insure compliance by the Partnership with applicable arrangements, and other contractual obligations and arrangements entered into by the Partnership from time to time in accordance with the provisions of this Agreement, including periodic reports as required to be submitted to lenders and using all due diligence to insure that the Partnership is in compliance with its contractual obligations;

(l)  To maintain the Partnership’s books and records;

(m)  To prepare and deliver, or cause to be prepared and delivered by the Partnership’s Accountants, all financial and other reports with respect to the operations of the Partnership and all Federal and state tax returns and reports;

(n)  To act in any state or nation in which the Partnership may lawfully act, for itself or as principal, agent or representative for any Person with respect to any business of the Partnership;

(o)  To become a partner or member in, and perform the obligations of a partner or member of, any general or limited partnership or limited liability company;

(p)  To apply for, register, obtain, purchase or otherwise acquire trademarks, trade names, labels and designs relating to or useful in connection with any business of the Partnership, and to use, exercise, develop and license the use of the same;

(q)  To pay or reimburse any and all actual fees, costs and expenses incurred in the formation and organization of the Partnership;

(r)  To do all acts which are necessary, customary or appropriate for the protection and preservation of the Partnership’s assets, including the establishment of reserves; and

(s)  In general, to exercise all of the general rights, privileges and powers permitted to be had and exercised by the provisions of the Act.

Except as otherwise provided herein, to the extent the duties of the General Partner require
 
expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties on behalf of the Partnership or to undertake any individual liability or obligation on behalf of the Partnership.
7.3.  Major Decisions.  The General Partner shall not, without the prior Consent of the Limited Partners, on behalf of the Partnership, undertake any of the following actions (the “Major Decisions”):

(a)  Make a general assignment for the benefit of creditors or appoint or acquiesce in the appointment of a custodian, receiver or trustee for all or any part of the assets of the Partnership;

(b)  Take title to any personal or real property, other than in the name of the Partnership, a Property Partnership or pursuant to Section 7.9 hereof;

(c)  Institute any proceeding for Bankruptcy on behalf of the Partnership; or

(d)  Dissolve the Partnership.

Except as specifically provided in this Agreement, including, without limitation, this Section 7.3, the Limited Partners shall have no right to vote on any matter concerning the business and affairs of the Partnership, including, without limitation, any decisions regarding the merger of the Partnership or the sale, exchange, lease, mortgage or pledge or other transfer of, or the granting of a security interest in, all or substantially all of the assets of the Partnership and the incurrence of indebtedness by the Partnership, whether or not in the ordinary course of the Partnership’s business.
7.4.           Actions with Respect to Certain Documents.  Notwithstanding the provisions of Section 7.3 hereof to the contrary, whenever the consent, agreement, authorization or approval of the Partnership is required under any agreement which the Limited Partners or their Affiliates
 
have executed other than in their capacities as Limited Partners of the Partnership, the Consent of the Limited Partners shall not be required.
7.5.  Reliance by Third Parties.  Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if it were the partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies which may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing.  In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and effect such certificate, document or instrument, this Agreement was in full force and effect; (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership; and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.
7.6.  Company Participation.  The Company agrees that all business activities of the Company, including without limitation all activities pertaining to the acquisition, development, ownership, management and leasing of real properties, shall be conducted, directly or indirectly, through the Partnership (except for: (i) property management and leasing activities conducted through the Management Company pursuant to the Management Agreement; and (ii) the Company’s direct and indirect interests in any Property Partnerships or subsidiaries other than
 
through the Partnership).  The Company agrees that all borrowings for the purpose of making distributions to its stockholders will be incurred by the Partnership or by one or more of the Property Partnerships and the proceeds of such indebtedness will be included as Net Financing Proceeds hereunder.
7.7.  Proscriptions.  Except as otherwise expressly authorized herein, the General Partner shall not have the authority to:

(a)  Do any act in contravention of this Agreement or which would make it impossible to carry on the ordinary business of the Partnership;

(b)  Possess any Partnership property or assign rights in specific Partnership property for other than Partnership purposes; or

(c)  Do any act in contravention of applicable law.  Nothing herein contained shall impose any obligation on any Person or firm doing business with the Partnership to inquire as to whether or not the General Partner has properly exercised its authority in executing any contract, lease, mortgage, deed or other instrument on behalf of the Partnership, and any such third Person shall be fully protected in relying upon such authority.

7.8.  Additional Partners.  The General Partner shall have the right to admit additional Partners to the Partnership in accordance with the provisions of this Agreement.
7.9.  Title Holder.  To the extent allowable under applicable law, title to all or any part of the Properties of the Partnership may be held in the name of the Partnership or in the name of any other Person, provided, however, that all of the beneficial interest in such Properties shall at all times be vested in the Partnership.  Any such title holder shall perform any and all of its respective functions to the extent and upon such terms and conditions as may be determined from time to time by the General Partner, consistent with the business purposes of the Partnership.
7.10. Compensation of the General Partner.  The General Partner shall not be entitled to any compensation for services rendered to the Partnership solely in its capacity as General Partner except with respect to reimbursement for those costs and expenses constituting
 
Administrative Expenses.
7.11. Waiver and Indemnification.
(a) Neither the General Partner nor any Person acting on its behalf, pursuant hereto, shall be liable, responsible or accountable in damages or otherwise to the Partnership or to any Partner for any acts or omissions performed or omitted to be performed by them within the scope of the authority conferred upon the General Partner by this Agreement and the Act, provided that the General Partner’s or such other Person’s conduct or omission to act was taken in good faith and in the belief that such conduct or omission was in the best interests of the Partnership and, provided further, that the General Partner or such other Person shall not be guilty of fraud, misconduct or gross negligence. The Partnership shall, and hereby does, indemnify and hold harmless the General Partner and its Affiliates and any individual acting on their behalf from any loss, damage, claim or liability, including, but not limited to, reasonable attorneys’ fees and expenses, incurred by them by reason of any act performed by them in accordance with the standards set forth above or in enforcing the provisions of this indemnity; provided, however, no Partner shall have any personal liability with respect to the foregoing indemnification, any such indemnification to be satisfied solely out of the assets of the Partnership.
(b)  Any Person entitled to indemnification under this Agreement shall be entitled to receive, upon application therefor, advances to cover the costs of defending any proceeding against such Person; provided, however, that such advances shall be repaid to the Partnership, without interest, if such Person is found by a court of competent jurisdiction upon entry of a final judgment not to be entitled to such indemnification.  All rights of the indemnitee hereunder shall survive the dissolution of the Partnership; provided, however, that a claim for indemnification under this Agreement must be made by or on behalf of the Person seeking indemnification prior
 
to the time the Partnership is liquidated hereunder.  The indemnification rights contained in this Agreement shall be cumulative of, and in addition to, any and all rights, remedies and recourse to which the person seeking indemnification shall be entitled, whether at law or at equity. Indemnification pursuant to this Agreement shall be made solely and entirely from the assets of the Partnership and no Partner shall be liable therefor.
7.12.  Limited Partner Representatives.  Upon written notice to the General Partner, any Limited Partner or group of Limited Partners may appoint a representative to act on its or their behalf with respect to all Partnership matters, including exercising all voting rights of the Partnership Units owned by such Limited Partner. Whenever, under the terms of this Agreement, matters require the Consent of the Limited Partners, the same shall mean the consent of Limited Partner Representatives entitled to exercise voting rights with respect to a majority of the Partnership Units entitled to vote thereon, and any action taken by the Limited Partner Representatives shall be fully binding on the Limited Partners; it being the intention of the Limited Partners that the Limited Partner Representatives shall have full power and authority, to take all action, or to authorize all action, which the Limited Partners are entitled to take or authorize under the provisions of this Agreement.  Any appointments of Limited Partner Representatives made pursuant to this Section 7.12 shall remain effective until rescinded in a written notice to the General Partner, and the General Partner shall have the right and authority to rely (and shall be fully protected in so doing) on the actions taken and directions given by such Limited Partner Representatives without any further evidence of their authority or further action by the Limited Partners that appointed them.  Each of the Limited Partners (identified on Exhibit G hereto) hereby appoints JRI (or any person or entity appointed by JRI upon written notice to the General Partner; JRI, or such person or entity appointed by JRI upon written notice to the
 
General Partner, is referred to herein as the “Jacobs Limited Partner Representative”) as his, her or Limited Partner Representative with respect to all of the Partnership Units now or hereafter owned by such Limited Partner and such appointment shall remain effective with respect to each such Limited Partner and each transferee of the Partnership Units of each such Limited Partner until rescinded with respect to such Limited Partner or transferee in a written notice from that Limited Partner or transferee to the General Partner.
7.13.           Operation in Accordance with REIT Requirements.  The Partners acknowledge and agree that the Partnership shall be operated in a manner that will enable the Company to (a) satisfy the REIT Requirements and (b) avoid the imposition of any federal income or excise tax liability.  The Partnership shall avoid taking any action, or permitting to take any action, which would result in the Company ceasing to satisfy the REIT Requirements or would result in the imposition of any federal income or excise tax liability on the Company.  The determination as to whether the Partnership has operated in the manner prescribed in this Section 7.13 shall be made without regard to any action or inaction of the Company with respect to distributions and the timing thereof.
7.14.  Transactions with Affiliates.  The Partnership may lend or contribute funds to its subsidiaries or other Entities in which it has an equity investment, and such Entities may borrow funds from the Partnership, on terms and conditions established in the discretion of the General Partner. The foregoing authority shall not create any right or benefit in favor of any Person. The Partnership may also engage in other transactions and enter into contracts with an Affiliate of any Partner, which transactions and contracts are on terms fair and reasonable to the Partnership and no less favorable to the Partnership than would be obtained from unaffiliated third parties, provided, however, that the affirmative determination by the Company’s board of directors shall
 
determine conclusively that a transaction or contract between the Partnership on the one hand and the General Partner or the Company on the other hand satisfies such requirement.
7.15.           Other Matters Concerning the General Partner.
(a)  The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(b)  The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional expertise shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
(c)  The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and any attorney or attorneys-in-fact duly appointed by the General Partner. Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the General Partner hereunder.
(d)  Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order to (i) protect or further the ability of the Company to continue to qualify as a REIT or (ii) avoid the Company incurring any taxes under Section 857 or
 
Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners. Nothing however in this Agreement shall be deemed to give rise to any liability on the part of the Limited Partners for the Company’s failure to qualify or continue to qualify as a REIT or failure to avoid incurring any taxes under the foregoing Sections of the Code.

Dissolution, Liquidation and Winding-Up

8.1.  Accounting.  In the event of the dissolution, liquidation and winding-up of the Partnership, a proper accounting (which shall be certified) shall be made of the Capital Account of each Partner and of the Net Income or Net Losses of the Partnership from the date of the last previous accounting to the date of dissolution. Financial statements presenting such accounting shall include a report of a national certified public accountant (which may be the Accountant) selected by the Liquidating Trustee.
8.2.  Distribution on Dissolution.  In the event of the dissolution and liquidation of the Partnership for any reason, the assets of the Partnership shall be liquidated for distribution in the following rank and order:
(a)  Payment of creditors of the Partnership (other than Partners) in the order of priority as provided by law;

(b)  Establishment of reserves as provided by the Liquidating Trustee to provide for contingent liabilities, if any;

(c)  Payment of debts of the Partnership to Partners, if any, in the order of priority provided by law; and

(d)  To the Partners in accordance with the positive balances in their Capital Accounts after giving effect to all contributions, distributions and allocations for all periods, including the period in which such distribution occurs (other than those adjustments made pursuant to this Subsection 8.2(d), Section 8.4 or Section 8.5 hereof).
 
Whenever the Liquidating Trustee reasonably determines that any reserves established pursuant to Subsection (b) above are in excess of the reasonable requirements of the Partnership, the amount determined to be excess shall be distributed to the Partners in accordance with the above provisions. Notwithstanding the foregoing, all distributions pursuant to this Section 8.2 shall remain subject to the provisions of (i) the Certificate of Designation for each class or series of Preferred Units set forth in Exhibit B hereto; (ii) Exhibit E hereto with respect to the SCUs; (iii) Exhibit H hereto with respect to the S-SCUs; (iv) Exhibit J hereto with respect to the L-SCUs; and (v) Exhibit K hereto with respect to the K-SCUs.
8.3.  Timing Requirements.  In the event that the Partnership is “liquidated” within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations, any and all distributions to the Partners pursuant to Subsection 8.2(d) hereof shall be made no later than the later to occur of the following:  (i) the last day of the taxable year of the Partnership in which such liquidation occurs or (ii) ninety (90) days after the date of such liquidation.
8.4.  Sale of Partnership Assets.  In the event of the liquidation of the Partnership in accordance with the terms of this Agreement, the Liquidating Trustee may sell Partnership or Property Partnership property or Property Partnership interests on the best terms and conditions as the Liquidating Trustee in good faith believes are reasonably available at the time and under the circumstances and on a non-recourse basis to the Limited Partners. The liquidation of the Partnership shall not be deemed finally completed until the Partnership shall have received cash payments in full with respect to obligations such as notes, installment sale contracts or other similar receivables received by the Partnership in connection with the sale of Partnership assets and all obligations of the Partnership have been satisfied, released or assumed by the General Partner. The Liquidating Trustee shall continue to act to enforce all of the rights of the Partnership pursuant to any such obligations until such obligations are paid in full or otherwise satisfied.
8.5.           Distributions in Kind.  In the event that it becomes necessary to make a distribution of Partnership property in kind, the General partner may Transfer and convey such
 
property to the distributees as tenants in common, subject to any liabilities attached thereto, so as to vest in them undivided interests in the whole of such property in proportion to their respective rights to share in the proceeds of the sale of such property (other than as a creditor) in accordance with the provisions of Section 8.2 hereof.
8.6.           Documentation of Liquidation.  Upon the completion of the dissolution and liquidation of the Partnership, the Partnership shall terminate and the Liquidating Trustee shall have the authority to execute and record any and all documents or instruments required to cause the dissolution, liquidation and termination of the Partnership.
8.7.           Liability of the Liquidating Trustee.  The Liquidating Trustee shall be indemnified and held harmless by the Partnership from and against any and all claims, demands, liabilities, costs, damages and causes of action of any nature whatsoever arising out of or incidental to the Liquidating Trustee’s taking of any action authorized under or within the scope of this Agreement; provided, however, that the Liquidating Trustee shall not be entitled to indemnification, and shall not be held harmless, where the claim, demand, liability, cost, damage or cause of action at issue arose out of:

(a)  A matter entirely unrelated to the Liquidating Trustee’s action or conduct pursuant to the provisions of this Agreement; or
(b)  The proven misconduct or gross negligence of the Liquidating Trustee.

Transfer of Partnership Units

9.1.  General Partner Transfer.  The General Partner shall not withdraw from the Partnership and shall not sell, assign, pledge, encumber or otherwise dispose of all or any portion of its Partnership Units, in each case prior to the dissolution and winding up of the Partnership, without the Consent of the Limited Partners.  Upon any Transfer of a Partnership Unit in accordance with the provisions of this Section 9.1, the transferee General Partner shall become
 
vested with the powers and rights of the transferor General Partner, and shall be liable for all obligations and responsible for all duties of the General Partner, once such transferee has executed such instruments as may be necessary to effectuate such admission and to confirm the agreement of such transferee to be bound by all the terms and provisions of this Agreement with respect to the Partnership Unit so acquired.  It is a condition to any Transfer otherwise permitted hereunder that the transferee assume by operation of law or express agreement all of the obligations of the transferor General Partner under this Agreement with respect to such transferred Partnership Units and no such Transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor General Partner are assumed by a successor corporation or other Entity to the General Partner by operation of law) shall relieve the transferor General Partner of its obligations under this Agreement without the Consent of the Limited Partners, in their reasonable discretion.  In the event the General Partner withdraws from the Partnership in violation of this Agreement or otherwise, dissolves or terminates or upon the Bankruptcy of the General Partner, (i) any remaining general partner may continue the Partnership business or (ii) within 90 days thereafter, all of the remaining Partners (or, to the extent permitted under the Act, such lesser number or percentage of the Partners, but in no case less than a Majority-in-Interest of the Limited Partners) may elect to continue the business of the Partnership by selecting a substitute General Partner, which substitute General Partner accepts such election and agrees to serve as the General Partner.
Such successor General Partner shall thereupon succeed to the rights and obligations of the General Partner as provided in this Section 9.1.
9.2.  Transfers by Limited Partners.
(a)           Subject to the provisions of Section 9.3 hereof, each Limited Partner shall have the right to Transfer all or a portion of its Partnership Units to any Person that is the Immediate Family of such Limited Partner, an Affiliate of such Limited Partner, another Limited Partner,
 
an institutional lender as security for a bona fide obligation of such Limited Partner, a bona fide pledge after a default in the obligation secured by the pledge (or to a bona fide purchaser for value from such pledge), provided in each such case that prior written notice of the proposed Transfer is delivered to the General Partner.  Any transfer of Partnership Units permitted by the first sentence of this Subsection 9.2(a) or by any other provision of this Agreement (including, for example, Subsection 9.2(c) and Section 8 of Exhibit E) automatically will be admitted as a Substituted Limited Partner upon the filing with the Partnership of (A) a duly executed and acknowledged instrument of assignment between the transferor and the transferee specifying the Partnership Units being assigned, setting forth the intention of the transferor that such transferee succeed to the transferor’s interest as a Limited Partner with respect to the Partnership Units being assigned and agreement of the transferee assuming all of the obligations of a Limited Partner under this Agreement with respect to such transferred Partnership Units accruing from and after the date of transfer, (B) a duly executed and acknowledged instrument by which the transferee confirms to the Partnership that it accepts and adopts the provisions of this Agreement applicable to a Limited Partner and (C) any other instruments reasonably required by the General Partner and payment by the transferor of a transfer fee to the Partnership sufficient to cover the reasonable expenses of the transfer, if any.
(b)           Except as set forth in Subsection 9.2(a) above, or elsewhere in this Agreement (including Subsection 9.2(c) and Section 8 of Exhibit E), no Transfer of a Limited Partner’s Partnership Units may be effected without the consent of the General Partner, which consent may be given, withheld or conditioned in the General Partner’s sole and absolute discretion.  A transferee of Partnership Units shall be deemed to be an Assignee with respect to such Partnership Units, but shall not become or be admitted to the Partnership as a Substituted
 
Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner’s sole and absolute discretion.  An Assignee shall be entitled as a result of such Transfer only to receive the economic benefits of the Partnership Units to which the transferor Limited Partner would otherwise be entitled, along with such transferor Limited Partner’s rights with respect to the Rights or such other exchange rights as are applicable to the Transferred Partnership Units (although any transferee of any Transferred Partnership Units shall be subject to any and all ownership limitations contained in the certificate of incorporation of the Company as may be amended from time to time), and such Assignee shall have no right (i) to participate in the management of the Partnership or to vote on any matter requiring the consent or approval of the Limited Partners, (ii) to demand or receive any account of the Partnership’s business, or (iii) to inspect the Partnership’s books and records, unless and until such Assignee is admitted to the partnership as a Substituted Limited Partner.  In addition, unless and until a transferee is admitted to the Partnership as a Substituted Limited Partner, the transferor Limited Partner shall not be relieved of its obligations under this Agreement (except in the case of the Transfer pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor Limited Partner are assumed by a successor corporation or other Entity by operation of law). A transferee of Partnership Units may become a Substituted Limited Partner only upon the satisfaction of the following conditions: (A) the filing with the Partnership of a duly executed and acknowledged written instrument of assignment between the transferor and the transferee in a form approved by the General Partner specifying the Partnership Units being assigned, setting forth the intention of the transferor that such transferee succeed to the transferor’s interest as a Limited Partner with respect to the Partnership Units being assigned and agreement of the transferee assuming all of the obligations of a Limited Partner under this
 
Agreement with respect to such transferred Partnership Units accruing from and after the date of Transfer; (B) execution and acknowledgment by the transferor Limited Partner and such transferee of any other instruments required in the sole and absolute discretion of the General Partner, including the acceptance and obligation by such transferee of the provisions of this Agreement; (C) obtaining the written consent of the General Partner as provided in the second sentence of this Subsection 9.2(b); and (D) payment of a transfer fee to the Partnership, sufficient to cover the reasonable expenses of the substitution, if any. Any transferee, whether or not admitted as a Substituted Limited Partner, shall take its rights to the transferred Partnership Units subject to the obligations of the transferor Limited Partner hereunder.
(c)           The Approved Transfers permitted in Section 8 of Exhibit E hereto shall also be available, mutatis mutandis, to holders of any Common Units issued in exchange for or upon the redemption of SCUs.
(d)           The applicable Approved Transfers permitted in Section 8 of Exhibit H hereto shall also be available, mutatis mutandis, to holders of any Common Units issued in exchange for or upon the redemption of S-SCUs.
(e)           The applicable Approved Transfers permitted in Section 8 of Exhibit J hereto shall also be available, mutatis mutandis, to holders of any Common Units issued in exchange for or upon the redemption of L-SCUs.
(f) The applicable Approved Transfers permitted in Section 8 of Exhibit K hereto shall also be available, mutatis mutandis, to holders of any Common Units issued in exchange for or upon the redemption of K-SCUs.
9.3. Restrictions on Transfer.  In addition to any other restrictions on Transfer herein contained, in no event may any Transfer of a Partnership Unit by any Partner be made and in no
 
event shall Additional Units be issued (i) to any Person or Entity who or which lacks the legal right, power or capacity to own a Partnership Unit, or, except with the prior written consent of the General Partner, to a Person or Entity which is not an “Accredited Investor” within the meaning of Regulation D promulgated by the SEC under the Securities Act; (ii) in violation of any provision of any mortgage or trust deed (or the note or bond secured thereby) constituting a Lien against a Property or any part thereof, or other instrument, document or agreement to which the Partnership or any Property Partnership is a party or otherwise bound (including, without limitation, the organizational documents of any Property Partnership); (iii) in violation of applicable law; (iv) of any component portion of a Partnership Unit, such as the Capital Account, or rights to Net Cash Flow, separate and apart from all other components of a Partnership Unit; (v) in the event such Transfer would cause the Company to cease to comply with the REIT Requirements; (vi) if such Transfer would cause a termination of the Partnership for federal income tax purposes (except with the Consent of the General Partner and the Consent of the Limited Partners); (vii) if such Transfer would, in the opinion of counsel to the Partnership, cause the Partnership to cease to be classified as a partnership for federal income tax purposes; (viii) if such Transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title 1 of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(c) of the Code); (ix) if such Transfer would, in the opinion of counsel to the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.3-101; (x) if such Transfer would result in (A) the transferor or the transferee owning Common Units having a value (computed as of the date of such proposed Transfer by multiplying the Common Stock amount with respect to such Common Units by the
 
Current Per Share Market Price) less than $250,000, unless either the transferee is an existing Limited Partner or the General Partner has consented to such issuance or transfer, or (B) the transferee owning Common Units having a value (computed as of the date of such proposed Transfer by multiplying the Common Stock Amount with respect to such Common Units by the Current Per Share Market Price) less than $250,000, unless such Common Units constitute all of the Common Units then owned by such transferor or the General Partner has consented to such issuance or transfer; (xi) if such Transfer or issuance may not be effected without registration of such Partnership Units under the Securities Act, would require filing of a registration statement under the Securities Act or would otherwise violate any Federal, state or foreign securities laws or regulations applicable to the Partnership or such Partnership Units; (xii) if such Transfer or issuance would violate any provision of the Company’s certificate of incorporation as such may be amended from time to time; (xiii) to a lender to the Partnership or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose loan constitutes a “nonrecourse liability” (within the meaning of Section 1.752-1(a)(2) of the Regulations) without the consent of the General Partner, in its sole and absolute discretion, unless the Partnership’s basis for tax purposes would not be reduced as a result of such Transfer; (xiv) except with the express written consent of the General Partner, if such Transfer, in the opinion of counsel to the General Partner, would result in either the Partnership having more than one hundred (100) Partners or in the Partnership being classified as a “publicly traded partnership” within the meaning of the Code and the Regulation; (xv) except with the express written consent of the General Partner, to any entity that is a partnership, grantor trust or S corporation if (A) substantially all of the value of the interest of a person owning an interest in such entity is attributable to the entity’s (direct or indirect) interest in a Unit, and (B) a principal
 
purpose of the use of the tiered arrangement is to permit the Partnership to satisfy the 100-person limitation in section (h)(i)(ii) of Section 1.7704-1 of the Regulations; or (xvi) except with respect to (A) transfers qualifying as “private transfer” for purposes of Regulations Section 1.7704-1(e) or any successor provision or (B) up to two Transfers (excluding for this purpose, transfers qualifying as “private transfers”) of interests directly or indirectly held by the estate of or other successor to, a person that has died within the preceding twelve (12) months, if the General Partner determines in its reasonable discretion that if it permitted such transfer the Partnership would be unable to obtain an opinion of counsel of recognized standing to the effect that the Partnership should not be treated as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code.
 
Rights and Obligations of the Limited Partners

10.1.  No Participation in Management.

(a)  Except as expressly permitted hereunder, the Limited Partners, in their capacities as Limited Partners of the Partnership, shall not take part in the management of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership, provided, however, that nothing in the foregoing shall be deemed to prohibit or preclude any Limited Partner or its Affiliates from serving as an officer, director or employee of the Company, the General Partner or Management Company or otherwise transacting business with the Partnership.
(b)  In addition to other rights provided by this Agreement or by the Act, each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a limited partner in the Partnership, upon written demand with a statement of the purpose of such
 
demand and at such Limited Partner’s own expense (including such copying and administrative charges as the General Partner may establish from time to time):

(1)  to obtain a copy of the most recent annual and quarterly reports filed with the Securities and Exchange Commission by the General Partner pursuant to the Securities Exchange Act of 1934;

(2)  to obtain a copy of the Partnership’s federal, state and local income tax returns for each Partnership Year;

(3)  to obtain a current list of the name and last known business, resident or mailing address of each Partner; and

(4)  to obtain a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with executed copies of all powers of attorney pursuant to which this Agreement, the Certificate and all amendments thereto have been executed.

10.2.  Bankruptcy of a Limited Partner.  The Bankruptcy of any Limited Partner shall not cause a dissolution of the Partnership, but the rights of such Limited Partner to share in the Net Income or Net Losses of the Partnership and to receive distributions of Partnership funds shall, on the happening of such event, devolve on its successors or assigns, subject to the terns and conditions of this Agreement, and the Partnership shall continue as a limited partnership. In no event, however, shall such assignee(s) become an Assignee Limited Partner except in accordance with Article IX hereof.
10.3.           No Withdrawal.  No Limited Partner may withdraw from the Partnership without the prior written consent of the General Partner, other than as expressly provided in this Agreement.
10.4.           Duties and Conflicts.  The General Partner recognizes that certain of the Limited Partners and their Affiliates have or may have other business interests, activities and investments, some of which may be in conflict or competition with the business of the
 
Partnership, and that such Persons are entitled to carry on such other business interests, activities and investments.  Such Limited Partners and their Affiliates may engage in or possess an interest in any other business or venture of any kind, independently or with others, on their own behalf or on behalf of other entities with which they are affiliated or associated, and such Persons may engage in any activities, whether or not competitive with the Partnership, without any obligation to offer any interest in such activities to the Partnership or to any Partner.  Neither the Partnership nor any Partner shall have any right, by virtue of this Agreement, in or to such activities, or the income or profits derived therefrom, and the pursuit of such activities, even if competitive with the business of the Partnership, shall not be deemed wrongful or improper.
10.5.           Limited Liability.  No Limited Partner shall be bound, or personally liable for, the expenses, liabilities or obligations of the Partnership, except as provided by this Agreement or the Act.
Grant of Rights to Limited Partners

11.1.           Grant of Rights.  The Company does hereby grant to each Limited Partner, and each of the Limited Partners does hereby accept, the right, but not the obligation (hereinafter referred to as the “Rights”), to require the Company and the General Partner to exchange part or all of the Limited Partner’s Common Units for shares of Common Stock or their cash equivalent, at the Company’s election, at any time or from time to time prior to November 3, 2043, on the terms and subject to the conditions and restrictions contained in Exhibit D hereto.  The Rights granted hereunder may be exercised by any one or more of the Limited Partners, on the terms and subject to the conditions and restrictions contained in Exhibit D hereto, upon delivery to the Company of an Exchange Notice, which notice shall specify the number of Common Units to be
 
exchanged by such Limited Partner. Once delivered, the Exchange Notice shall be irrevocable, subject to delivery by the Company or the General Partner of the exchange consideration in respect of the Common Units being exchanged in accordance with the terms hereof.  Notwithstanding the forgoing, upon the issuance of any Common Units, the General Partner and the Partner to who such Common Units are issued may agree that such Common Units are not entitled to the Rights.  Notwithstanding the foregoing, the rights in respect of the Common Units issued upon the redemption or exchange of SCUs shall be subject to the terms, conditions and restrictions set forth in Exhibit F hereto and the Rights in respect of the Common Units issued upon the redemption or exchange of S-SCUs shall be subject to the terms, conditions and restrictions set forth in Exhibit I hereto.
11.2.           Terms of Rights.  The terms and provisions applicable to the Rights shall be as set forth in attached Exhibit D.  Notwithstanding the foregoing, the terms and provisions applicable to the Rights in respect of the Common Units issued upon the redemption or exchange of SCUs shall be as set forth in Exhibit F hereto and the terms and provisions applicable to the Rights in respect of the Common Units issued upon the redemption or exchange of S-SCUs shall be as set forth in Exhibit I hereto.
Indemnification

12.1.           Indemnification of the Limited Partners.  From and after the date hereof, the Partnership shall indemnify and hold harmless each of the Limited Partners and its Affiliates against and from all liability, demands, claims, actions or causes of action, assessments, losses, fines, penalties, costs, damages and expenses (including, without limitation, reasonable attorneys’ and accountants’ fees and expenses) (each, a “Claim”) sustained or incurred by such Limited Partner or Affiliate or any assignee or successor thereof (including, without limitation,
 
any Assignee Limited Partner) as a result of or arising out of any Assumed Liability.  If a claim for indemnification is asserted against the Partnership hereunder, the Partnership shall have the right, at its own expense, to participate in the defense of any Claim asserted against such Limited Partner or its Affiliate which resulted in the claim for indemnification, and if such right is exercised, the parties shall cooperate in the defense of such action or proceeding.
12.2.           Indemnification of the General Partner, the Company and Others.  From and after the date hereof, the Partnership shall indemnify and hold harmless each of the General Partner, the Company and any officer, director, employee or agent of any of the Partnership, the General Partner or the Company against and from all for the same matters and to the same extent as the Company is entitled to indemnify its officers, directors, employees or agents pursuant to the Company’s certificate of incorporation, as such may be amended from time to time.
Arbitration of Disputes

13.1.           Arbitration.                      Notwithstanding anything to the contrary contained in this Agreement, all claims, disputes and controversies between the parties hereto (including, without limitation, any claims, disputes and controversies between the Partnership and any one or more of the Partners and any claims, disputes and controversies between any one or more Partners) arising out of or in connection with this Agreement or the Partnership created hereby, relating to the validity, construction, performance, breach, enforcement or termination thereof, or otherwise, shall be resolved by binding arbitration in New York, New York, in accordance with this Article XIII and to the extent not inconsistent herewith, the Expedited Procedures and Commercial Arbitration Rules of the American Arbitration Association or any successor thereto.
13.2.           Procedures.  Any arbitration called for by this Article XIII shall be conducted in accordance with the following procedures:

(a)  The Partnership or any Partner (the “Requesting Party”) may demand
 
arbitration pursuant to Section 13.1 hereof at any time by giving written notice of such demand (the “Demand Notice”) to all other Partners and (if the Requesting Party is not the Partnership) to the Partnership, which Demand Notice shall describe in reasonable detail the nature of the claim, dispute or controversy.

(b)  Within fifteen (15) days after the giving of a Demand Notice, the Requesting Party, on the one hand, and each of the other Partners and/or the Partnership against whom the claim has been made or with respect to which a dispute has arisen (collectively, the “Responding Party”), on the other hand, shall select and designate in writing to the other party one reputable, disinterested individual (a “Qualified Individual”) willing to act as an arbitrator of the claim, dispute or controversy in question.  Both the Requesting Party and the Responding Party shall use their best efforts to select a present or former partner of a national accounting firm having no affiliation with any of the parties as their respective Qualified Individual to act as the second arbitrator.  Within fifteen (15) days after the foregoing selections have been made, the arbitrators so selected shall jointly select a present or former partner of a national accounting firm having no affiliation with any of the parties as the third Qualified Individual willing to act as an arbitrator of the claim, dispute or controversy in question. In the event that the two arbitrators initially selected are unable to agree on a third arbitrator within the second fifteen (15) day period referred to above, then, on the application of either party, the American Arbitration Association shall promptly select and appoint a present or former partner of a national accounting firm having no affiliation with any of the parties as the Qualified Individual to act as the third arbitrator.  The three arbitrators selected pursuant to this Subsection (b) shall constitute the arbitration panel for the arbitration in question.

(c)  The presentations of the parties hereto in the arbitration proceeding shall be commenced and completed within sixty (60) days after the selection of the arbitration panel pursuant to Subsection (b) above, and the arbitration panel shall render its decision in writing within thirty (30) days after the completion of such presentations. Any decision concurred in by any two (2) of the arbitrators shall constitute the decision of the arbitration panel, and unanimity shall not be required.

(d)  The arbitration panel shall have the discretion to include in its decision a direction that all or part of the attorneys’ fees and costs of any party or parties and/or the costs of such arbitration be paid by any other party or parties. On the application of a party before or after the initial decision of the arbitration panel, and proof of its attorneys’ fees and costs, the arbitration panel shall order the other party to make any payments directed pursuant to the preceding sentence.

13.3.           Binding Character.  Any decision rendered by the arbitration panel pursuant to this Article XIII shall be final and binding on the parties hereto, and judgment thereon may be entered by any state or federal court of competent jurisdiction.
 
13.4.           Exclusivity.  Arbitration shall be the exclusive method available for resolution of claims, disputes and controversies described in Section 13.1 hereof, and the Partnership and its Partners stipulate that the provisions hereof shall be a complete defense to any suit, action or proceeding in any court or before any administrative or arbitration tribunal with respect to any such claim, controversy or dispute.  The provisions of this Article XIII shall survive the dissolution of the Partnership.
13.5.           No Alteration of Agreement.  Nothing contained herein shall be deemed to give the arbitrators any authority, power or right to alter, change, amend modify, add to or subtract from any of the provisions of this Partnership Agreement.
ARTICLE XIV
General Provisions

14.1           Notices.  All notices, offers or other communications required or permitted to be given pursuant to this Agreement shall be in writing and may be personally served, telecopied or sent by United States mail and shall be deemed to have been given when delivered in person, upon receipt of telecopy or three business days after deposit in United States mail registered or certified, postage prepaid, and properly addressed by or to the appropriate party. For purposes of this Section 14.1, the address of the General Partner shall be: 2030 Hamilton Place Boulevard, Suite 500, CBL Center, Chattanooga, Tennessee 37421 (telecopier number (423) 490-8662) and the address of each of the Limited Partners shall be c/o CBL & Associates Properties, Inc., 2030 Hamilton Place Boulevard, Suite 500, CBL Center, Chattanooga, Tennessee 37421 (telecopier number (423) 490-8662).  The address of any party hereto may be changed by a notice in writing given in accordance with the provisions hereof.
14.2.           Successor.  This Agreement and all the terms and provisions hereof shall be binding upon and shall inure to the benefit of all Partners, and their legal representatives, heirs,
 
successors and permitted assigns, except as expressly herein otherwise provided.
14.3.           Effect and Interpretation.  This Agreement shall be governed by and construed in conformity with the laws of the State of Delaware.
14.4.           Counterparts.  This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.
14.5.           Partners Not Agents.  Nothing contained herein shall be construed to constitute any Partner the agent of another Partner, except as specifically provided herein, or in any manner to limit the Partners in the carrying on of their own respective businesses or activities.  Notwithstanding anything to the contrary contained herein, no recourse shall be had by the Partnership or any Partner against any director, shareholder, officer, employee, agent or attorney of the General Partner acting in such capacity for any act or omission of the General Partner or any obligation or liability of the General Partner under this Agreement, and none of the foregoing shall have any personal liability for or with respect to any of the foregoing.
14.6.           Entire Understanding; Etc.  This Agreement constitutes the entire agreement and understanding among the Partners and supersedes any prior understandings and/or written or oral agreements among them respecting the subject matter within.
14.7.           Amendments.
(a)  Except to the extent expressly otherwise provided herein (including, without limitation, in Subsection 14.7(b) below), this Agreement may not be amended unless such amendment is approved by the General Partner with the prior Consent of the Limited Partners; provided that no amendment of this Agreement may be made without the consent of all of the affected Limited Partners if such amendment (i) converts any Limited Partner’s interest in the Partnership into a general partnership interest (other than the General Partner if the General
 
Partner is also a Limited Partner), (ii) modifies the limited liability of any Limited Partner (if the General Partner is also a Limited Partner), or (iii) alters or modifies the Rights set forth in Article XI in a manner adverse to such Partner.
(b)  Notwithstanding anything to the contrary provided in Subsection 14.7(a) above, the General Partner shall have the power, without the consent of any Limited Partner, to amend this Agreement as may be required to facilitate or implement any of the following:
(i) to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Limited Partners;

(ii) to reflect the admission, substitution, termination or withdrawal of Partners in accordance with this Agreement;

(iii) to set forth the rights, powers and duties of the holders of any Additional Units issued pursuant to Subsection 4.4(a) hereof (including, without limitation, amending the distribution and allocation provisions set forth herein);

(iv) to reflect any change that does not adversely affect the Limited Partners in any material respect, to cure any ambiguity, to correct or supplement any defective provision in this Agreement or to make other changes with respect to matters arising under this Agreement that will not be inconsistent with any other provision of this Agreement; and

(v) to satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulations of a federal or state agency or contained in federal or state law.

(c)  This Section 14.7 may not be amended except with the prior written consent of all the Partners.
 
14.8.           Severability.  If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid by a court of competent jurisdiction, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those to which it is held invalid by such court, shall not be affected thereby.
 
14.9.           Pronouns and Headings.  As used herein, all pronouns shall include the masculine, feminine and neuter, and all defined terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings, titles and subtitles herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to “including” shall be deemed to mean “including without limitation.”
14.10.           Assurances.  Each of the Partners shall hereafter execute and deliver such further instruments and do such further acts and things as maybe required or useful to carry out the intent and purpose of this Agreement and as are not inconsistent with the terms hereof.
14.11.           Expenses.  All expenses incurred by the Partners in negotiating, drafting and executing this Agreement and the Exhibits hereto, including without limitation all expenses of counsel, shall be borne and paid by the Partnership.
14.12.           Waiver of Partition.  Except as otherwise expressly provided for in this Agreement, no Partner shall, either directly or indirectly, take any action to require partition or appraisement of the Partnership or any of its assets or properties or cause the sale of any Partnership assets or property, and notwithstanding any provision of applicable law to the contrary, each Partner (for itself and its legal representatives, successors and assigns) hereby irrevocably waives any and all right to partition, or to maintain any action for partition, or to compel any sale with respect to its interest in, or with respect to, any assets or properties of the Partnership, except as expressly provided in this Agreement.




SIGNATURES APPEAR ON NEXT PAGE




IN WITNESS WHEREOF, the General Partner has executed this Fourth Amended and Restated Agreement as of the date first written above.



CBL HOLDINGS I, INC.

By:           \s\ John N. Foy
John N. Foy
Vice Chairman of the Board
And Chief Financial Officer
 
 

Accepted and Agreed:

CBL & ASSOCIATES PROPERTIES, INC.

By:           \s\ John N. Foy
John N. Foy
Vice Chairman of the Board
And Chief Financial Officer

Consented to:

CBL HOLDINGS II, INC.

By:           \s\ John N. Foy
John N. Foy
Vice Chairman of the Board
And Chief Financial Officer

ATTACHMENT 1-A

LIMITED PARTNER ACCEPTANCE
OF PARTNERSHIP AGREEMENT

This Limited Partner Acceptance of Partnership Agreement (this, “Acceptance”) is made as of ____ 2001, by ______, [a _____ organized under the laws of the State of ____ ] (the “Limited Partner”), to and for the benefit of CBL & Associates Limited Partnership, a Delaware limited partnership (the “Partnership”).

Capitalized terms used and not defined herein shall have the meaning set forth in the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of June 30, 1998 as amended through the date hereof (the “Partnership Agreement”).

WHEREAS, on the date hereof, the partnership has agreed to issue to the Limited Partner [______] SCUs (the “Units”) in connection with the closing of the transactions contemplated by the Master Contribution Agreement, dated as of September 25, 2000, among the Partnership, CBL & Associates Properties, Inc., Jacobs Realty Investors Limited Partnership and Richard E. Jacobs, solely as Trustee of the Richard E. Jacobs Revocable Living Trust and the David H. Jacobs Marital Trust, as amended] [____received [____] SCUs (the “Units”) in connection with the closing of the transactions contemplated by the Master Contribution Agreement, dated as of September 25, 2000 (as amended, the “Master Contribution Agreement”), among the Partnership, CBL & Associates Properties, Inc., Jacobs Realty Investors Limited Partnership and Richard E. Jacobs, solely as Trustee of the Richard E. Jacobs Revocable Living Trust and the David H. Jacobs Marital Trust and transferred all of such Units to the Limited Partner, its designated holding entity, as contemplated in the Master Contribution Agreement]; and

WHEREAS, in connection with the acceptance of the Units by the Limited Partner, the Limited Partner has agreed to affirm its obligations as a limited partner under the Partnership Agreement with respect to the Units and to confirm the additional agreements set forth herein;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Limited Partner hereby confirms that it has been given the opportunity to review the terms of the Partnership Agreement and affirms and agrees that it is bound by each of the terms and conditions of the Partnership Agreement applicable to a holder of SCUs, including; without limitation, the provisions thereof relating to limitations and restrictions on the transfer of SCUs.



IN WITNESS WHEREOF, the Limited Partner has caused this Acceptance to be duly executed and delivered as of the date first written above.

[Insert Name of Limited Partner]

By:______________________________
     Name:


Acknowledged and accepted:

CBL & Associates Limited Partnership

By:  CBL Holdings I, Inc.,
        General Partner

By:____________________
     Name:
     Title:


ATTACHMENT 1-B
LIMITED PARTNER ACCEPTANCE OF
PARTNERSHIP AGREEMENT

This Limited Partner Acceptance of Partnership Agreement (this “Acceptance”) is made as of ______, 2004, by _________, [a ________ organized under the laws of the State of ____] (the “Limited Partner”), to and for the benefit of CBL & Associates Limited Partnership, a Delaware limited partnership (the “Partnership”).

Capitalized terms used and not defined herein shall have the meaning set forth in the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of June 30, 1998, as amended through the date hereof (the “Partnership Agreement”).

WHEREAS, on the date hereof, the Partnership has agreed to issue to the Limited Partner [_______] S-SCUs (the “Units”) in connection with the closing of the transactions contemplated by the Contribution and Exchange Agreement, dated as of _____________, 2004 (as amended, the “Contribution Agreement”), by and between Donald Soffer, Rita Soffer Leeds, Eugene Kessler, Pittsburg Mall Limited and Monroeville Mall Partners, L.P. (collectively, the “Contributors”) and the Partnership;

WHEREAS, in connection with the acceptance of the Units by the Limited Partner, the Limited Partner has agreed to affirm its obligations as a limited partner under the Partnership Agreement with respect to the Units and to confirm the additional agreements set forth herein;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Limited Partner hereby confirms that it has been given the opportunity to review the terms of the Partnership Agreement and affirms and agrees that it is bound by each of the terms and conditions of the Partnership Agreement applicable to a holder of S-SCUs, including, without limitation, the provisions thereof relating to limitations and restrictions on the transfer of S-SCUs.


IN WITNESS WHEREOF, the Limited Partner has caused this Acceptance to be duly executed and delivered as of the date first written above.

[Insert Name of Limited Partner]
  _________________________________
       Name:

Acknowledged and accepted:

CBL & Associates Limited Partnership

By:  CBL Holdings I, Inc.,
        General Partner



By:___________________________
      Name:
      Title:

ATTACHMENT 1-C
LIMITED PARTNER ACCEPTANCE OF
PARTNERSHIP AGREEMENT

This Limited Partner Acceptance of Partnership Agreement (this “Acceptance”) is made as of June 1, 2005 by Schostak Laurel Park Retail Holding LLC, a Michigan limited liability company (the “Limited Partner”), to and for the benefit of CBL & Associates Limited Partnership, a Delaware limited partnership (“the “Partnership”).

Capitalized terms used and not defined herein shall have the meaning set forth in the Second Amended and Restated Agreement of limited partnership of the Partnership, dated as of June 30, 1998, as amended through the date hereof (the “Partnership Agreement”).

WHEREAS, on the date hereof, the Partnership has agreed to issue the Limited Partner [________] L-SCUs (the “Units”) in connection with the closing of the transactions contemplated by that certain Contribution and Exchange Agreement dated March 18, 2005 (the “Contribution Agreement”), by and among Newburgh/Six Mile Limited Partnership, the Limited Partner and the Partnership;

WHEREAS, in connection with the acceptance of the Units by the Limited Partner, the Limited Partner has agreed to affirm its obligations as a limited partner under the Partnership Agreement with respect to the Units and to confirm the additional agreements set forth herein;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Limited partner hereby confirms that it has been given the opportunity to review the terms of the Partnership Agreement and affirms and agrees that it is bound by each of the terms and conditions of the Partnership Agreement applicable to a holder of L-SCUs, including, without limitation, the provisions thereof relating to limitations and restrictions on the transfer of L-SCUs.  The Limited Partner hereby confirms that Informational Materials (as defined in the Contribution Agreement).

[Signature on Next Page]



IN WITNESS WHEREOF, the Limited Partner has caused this Acceptance to be duly executed and delivered as of the date first written above.



SCHOSTAK LAUREL PARK
RETAIL HOLDING LLC

By:  ________________________________                                                    
Name:  ______________________________                                                    
Title: _______________________________                                                     

Acknowledged and accepted:

CBL & ASSOCIATES LIMITED
PARTNERSHIP

By:  CBL Holdings I, Inc., its
        general partner

By:  __________________________________                                                    
      Name:
      Title:


ATTACHMENT 1-D
LIMITED PARTNER ACCEPTANCE OF
PARTNERSHIP AGREEMENT
Form of
 
Acknowledgement Regarding
 
Issuance of Partnership Interests
 
and Assumption of Partnership Agreement
 
For Valuable Consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned partnership, CBL & Associates Limited Partnership, a Delaware limited partnership having an address of CBL Center, 2030 Hamilton Place Boulevard, Suite 500, Chattanooga, Tennessee 37421 (the “Partnership), does hereby acknowledge that there has been acquired by and issued to _____________________, a _______________ having an address of __________________ (“Contributor), the partnership interests denoted as Series K Special Common Units (“K-SCUs) containing the terms and characteristics and as described on Schedule A, attached hereto and made a part hereof, being interests as a limited partner in and of the Partnership on the books of the Partnership, together with any and all right, title and interest in any property, both real and personal, to which the K-SCUs relate and any other rights, privileges and benefits appertaining thereto.  The Partnership and Contributor acknowledge that the issuance of the K-SCUs to Contributor (i) is in consideration for Contributor’s contribution of certain limited liability company interests in ________________ to the capital of the Partnership as set forth in that certain Contribution Agreement among Contributor, the Partnership and Eastland Investments, L.P. and other contributors dated October 17, 2005 (the “Contribution Agreement), and (ii) is being made in accordance with, and subject to the parties’ respective representations and warranties contained in the Contribution Agreement.

Contributor further acknowledges by execution hereof that the issuance of the K-SCUs to, and the acquisition and ownership of the K-SCUs by, Contributor is subject to all of the terms and conditions of the Third Amended and Restated Agreement of Limited Partnership of CBL & Associates Limited Partnership dated June 15, 2005, as amended by the First Amendment to Third Amended and Restated Agreement of Limited Partnership of CBL & Associates Limited Partnership dated as of November 16, 2005 and as the same may be further amended from time to time (the “OP Agreement), and Contributor, by execution of this Acknowledgement, agrees to abide by and be bound by all of the terms and conditions of the OP Agreement as a limited partner and holder of K-SCUs of the Partnership.
 


Attachment 1-D continued
 
IN Witness Whereof, the Partnership and Contributor have executed this Acknowledgement as of the _____ day of __________, 2005.
 
Partnership:
CBL & Associates Limited Partnership
a Delaware limited partnership
 
By:           CBL Holdings I, Inc., its general partner
 
By:   ____________________________                                                             
Name: ___________________________                                                               
Title: ____________________________                                                               
 

Acceptance
 
The Contributor hereby acknowledges its acceptance of the K-SCUs and agrees to be bound by and subject at all times to all of the terms and conditions of the OP Agreement, which Agreement is incorporated herein by reference, as a limited partner and holder of K-SCUs of the Partnership.
 
Dated as of the _____ day of __________, 2005.
 
Contributor:
______________________________________ ,
a ____________________________________
 
By: _______________________________
Name:  ____________________________
Title:  _____________________________
   

ATTACHMENT 1-D CONTINUED
 
Schedule A
 
Description of the Interests
 



EXHIBIT A

List of Partners, Percentage Interests, Share Equivalents

[Schedule will change as capital is contributed, partners are redeemed and other matters impacting percentage interests according to the terms of this Agreement.  The General Partner shall revise this schedule from time to time to reflect the current status of the partners, their percentage interests and share equivalents.  A current copy of Exhibit A is available on request by any Partner by request of such Partner to the General Partner.]


Form of Exhibit A

General Partner                                           Percentage Interest                                           Share Equivalents




Limited Partners*1                                     Percentage Interests                                          Share Equivalents



















*1 – Exhibit A denotes the type of Units a Limited Partner may hold, i.e., Common Units, SCUs, S-SCUs, L-SCUs and/or K-SCUs.


EXHIBIT B

CERTIFICATE OF DESIGNATION

OF

9.0% SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS

OF

CBL & ASSOCIATES LIMITED PARTNERSHIP

Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership

WHEREAS, CBL & Associates Properties, Inc. (the “Company”) has issued 2,875,000 shares (the “Offering”) of 9.0% Series A Cumulative Redeemable Preferred Stock (the “Preferred Stock”);

WHEREAS, the Company and the Operating Partnership desire that the Company contribute net proceeds of the Offering to CBL & Associates Limited Partnership (the “Operating Partnership”) in exchange for preferred units having substantially the same economic rights and terms of the Preferred Stock;

WHEREAS, Article 4.4 of the Second Amended and Restated Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) provides for a Preferred Unit Designation, setting forth, in sufficient detail, the economic rights and terms of the class or series of preferred units.

NOW THEREFORE, CBL Holdings I, Inc., the partner of the Operating Partnership (the “General Partner”) hereby designates a series of preferred units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

1.           Designation and Amount.

The units of such series shall be designated “9.0% Series A Cumulative Redeemable Preferred Units” the (“Series A Preferred Units”) and the number of units constituting such series shall be 2,875,000.  The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Series A Preferred Units shall be subject in all cases to the provisions of the Partnership Agreement.



2.           Dividends and Distribution Rights.

(a)  Holders of Series A Preferred Units shall be entitled to receive, when, as and if declared by the General Partner, out of assets of the Operating Partnership legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 9.0% per annum of the $25.00 liquidation preference.  Such dividends shall be cumulative from the date of the original issue by the Operating Partnership of Series A Preferred Units and shall be payable quarterly in arrears on the 30th day of March, June, September, and December of each year or, if not a business day: the next succeeding business day (each, a “Dividend Payment Date”).  The first dividend shall be paid on September 30, 1998.  Such first dividend and any dividend payable on the Series A Preferred Units for any partial dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends will be payable to 50 holders of record as they appear in the records of the Operating Partnership at the close of business on the applicable record date which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the General Partner for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).

(b)  No dividends on the Series A Preferred Units shall be declared by the General Partner or paid or set apart for payment by the General Partner at such time as the terms and provisions of any agreement of the Operating Partnership, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

(c)  Notwithstanding anything contained herein to the contrary, dividends on the Series A Preferred Units shall accrue whether or not the Operating Partnership has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared.  Accrued but unpaid dividends on the Series A Preferred Units shall accumulate as of the Dividend Payment Date on which they first become payable.

(d)  Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on any of the Operating Partnership’s Common Units (“Common Units”) or units of any other class or series of units of the Operating Partnership ranking, as to dividends, on a parity with or junior to the Series A Preferred Units (other than a dividend paid in units of Common Units or in units of any other class or series of units ranking junior to the Series A Preferred Units as to dividends and upon liquidation) for any period unless full cumulative dividends for all past dividend periods and the then current dividend period shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment on the Series A Preferred Units.  When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series A Preferred Units and the units of any other series of preferred units ranking on a parity as to dividends with the Series A Preferred Units, all dividends declared upon the Series A Preferred Units and any other series of preferred units ranking on a parity as to dividends with the Series A Preferred Units shall be declared pro rata so that the amount of dividends declared per unit of Series A Preferred Units and such other series of preferred units
 
 shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Units and such other series of preferred units (which shall not include any accrual in respect of unpaid dividends on such other series of preferred units for prior dividend periods if such other series of preferred units does not have a cumulative dividend) bear to each other.  No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series A Preferred Units which may be in arrears.

(e)  Except as provided in Subsection 2(d), unless full cumulative dividends on the Series A Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash is set apart for payment for all past dividend and the then current dividend period, no dividends (other than in Common Units or other units ranking junior to the Series A Preferred Units as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other dividend shall be declared or made upon the Common Units or any other units of the Operating Partnership ranking junior to or on a parity with the Series A Preferred Units as to dividends or amounts upon liquidation nor shall any units of Common Units, or any other units of capital stock of the Operating Partnership ranking junior to or on a parity with the Series A Preferred Units as to dividends on upon liquidation, shall be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Operating Partnership except by conversion into or exchange for other units of the Operating Partnership ranking junior to the Series A Preferred Units as to dividends and upon liquidation).  Nothing in the foregoing shall be deemed to preclude the exercise of Rights (as defined in the Partnership Agreement) by any unit holder in accordance with the Partnership Agreement.

(f)  Holders of units of Series A Preferred Units shall not be entitled to any dividend, whether payable in cash, Property or units, in excess of full cumulative dividends on the Series A Preferred Units as provided above.  Any dividend payment made on the Series A Preferred Units shall first be credited against the earliest accrued but unpaid dividends due with respect to such units which remains payable.

3.
Liquidation Rights.

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, the holders of units of Series A Preferred Units shall be entitled to be paid out of the assets of the Operating Partnership legally available for distribution to its Unit holders a liquidation preference of $25.00 per unit, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment shall be made to holders of share of Common Units or any other class or series of Units of the Operating Partnership ranking junior to the Series A Preferred Units as to liquidation rights.  In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up the available assets of the Operating Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding units of Series A Preferred Units and the corresponding amounts payable on all units of other classes or series of units of the Operating Partnership ranking on a parity with the Series A Preferred Units in the distribution of assets, then the holders of the Series A Preferred Units and all other such classes or series of units shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to
 
which they would otherwise be respectively entitled.  Holders of Series A Preferred Units shall be entitled to written notice of any such liquidation.  After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series A Preferred Units will have no right or claim to any of the remaining assets of the Operating Partnership.  The consolidation or merger of the Operating Partnership with or into any corporation, trust or entity or of any corporation, trust or other entity, or the sale, lease or conveyance of all or substantially all of the property or business of the Operating Partnership shall not be deemed to constitute a liquidation, dissolution or winding-up of the Operating Partnership.

4.
Redemption.

(a)  Series A Preferred Units shall not be redeemable prior to July 1, 2003.  On or after July 1, 2003, the Operating Partnership, at its option upon not less than 30 nor more than 60 days, written notice, may redeem the Series A Preferred Units, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per unit, plus all accrued and unpaid dividends thereon to the date fixed for redemption (except as provided below), without interest.  If fewer than all of the outstanding units of Series A Preferred Units are to be redeemed, the units of Series A Preferred Units to be redeemed shall be redeemed, pro rata (as nearly as may be practicable without creating fractional units) or by a lot or by any other equitable method determined by the Operating Partnership.  Holders of Series A Preferred Units to be redeemed shall surrender such Series A Preferred Units at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender.  If notice of redemption of any Series A Preferred Units has been given and if the funds necessary for such redemption have been set aside by the Operating Partnership in trust for the benefit of the holders of any units of Series A Preferred Units so called for redemption, then from and after the redemption date, dividends shall cease to accrue on such Series A Preferred Units, such units of Series A Preferred Units shall no longer be deemed outstanding and all rights of the holders of such units will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption.

(b)  Unless full cumulative dividends on all Series A Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no Series A Preferred Units shall be redeemed unless all outstanding units of Series A Preferred Units are simultaneously redeemed and the Operating Partnership shall not purchase or otherwise acquire directly or indirectly any units of Series A Preferred Units (except by exchange for units of the Operating Partnership ranking junior to the Series A Preferred Units as to dividends and amounts upon liquidation.

(c)  Notice of redemption shall be mailed by the Operating Partnership, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the units of Series A Preferred Units to be redeemed at their respective addresses as they appear on the records of the Operating Partnership.  No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series A Preferred Units except as to a holder to whom
 
notice was defective or not given.  Each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the number of units of Series A Preferred Units to be redeemed; (iv) the place or places where units of Series A Preferred Units are to be surrendered for payment of the redemption price; and (v) that dividends on the Series A Preferred Units to be redeemed shall cease to accrue on such redemption date.  If fewer than all of the units of Series A Preferred Units held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of units of Series A Preferred Units held by such holder to be redeemed.

(d)  Immediately prior to any redemption of Series A Preferred Units, the Operating Partnership shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series A Preferred Units at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such units on the corresponding Dividend Payment Date notwithstanding the redemption of such units before such Dividend Payment Date.  Except as provided above, the Operating Partnership shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series A Preferred Units for which a notice of redemption has been given.

(e)  All units of the Series A Preferred Units redeemed pursuant to this Section 4 shall be retired and shall be restored to the status of authorized and unissued units of preferred units, without designation as to series and may thereafter be reissued as units of any series of preferred units.

(f)  The Series A Preferred Units shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption.

5.           Voting Rights.

        (a)  Holders of the Series A Preferred Units shall not have any voting rights, except as set forth in the Partnership Agreement.

(b)  So long as any units of Series A Preferred Units remain outstanding, the Operating Partnership shall not, without the affirmative vote or consent of the holders of two-thirds of the units of Series A Preferred Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class):  (i) authorize or create or increase the authorized or issued amount of any class or series of units ranking prior to the Series A Preferred Units with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the Operating Partnership or reclassify any authorized units of the Operating Partnership into such units, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership Agreement or this Certificate of Designations, whether by merger, consolidation or otherwise (an “Event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series A Preferred Units or the holders thereof; provided however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series A Preferred Units remains outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an
 
Event, the Operating Partnership may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series A Preferred Units and provided further that (A) any increase in amount of the authorized Preferred Units or the creation or issuance of any other Series A Preferred Units or (B) any increase in the number of authorized units of Series A Preferred Units or any other series of Preferred Units in each case ranking on a parity with or junior to the Series A Preferred Units of such series with respect to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.

(c)  The foregoing voting provisions of this Section 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding units of Series A Preferred Units shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.

(d)  In any matter in which the Series A Preferred Units may vote (as expressly provided herein or as may be required by law), each share of Series A Preferred Units shall be entitled to one vote, except that when any other series of preferred units of the Operating Partnership shall have the right to vote with the Series A Preferred Units as a single class on any matter, the Series A Preferred Units and such other series shall have with respect to such matters one vote per each $25.00 of stated liquidation preference.

6.           Conversion.

The units of Series A Preferred Units shall, with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Operating Partnership, rank (a) senior to the Common Units and to all units ranking junior to such Series A Preferred Units; (b) on a parity with all units issued by the Operating Partnership the terms of which specifically provide that such units rank on a parity with the Series A Preferred Units; and (c) junior to all units issued by the Operating partnership (in accordance with this Certificate of Designations) the terms of which specifically provide that such units rank senior to the Series A Preferred Units.  For purposes of this Section 6, the term “units” does not include indebtedness convertible into units.

7.           Exclusion of Other Rights.

The Series A Preferred Units shall not have any references or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than expressly set forth in the Partnership Agreement and this Certificate of Designations.

8.           Headings of Subdivisions.

The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

9.           Severability of Provisions.

If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Units set forth in the Partnership Agreement and this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of Series A Preferred Units set forth in the Partnership Agreement which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Units herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.

10.           No Preemptive Rights.

No holder of Series A Preferred Units shall be entitled to any preemptive rights to subscribe for or acquire any unissued units of the Operating Partnership (whether now or hereafter authorized) or securities of the Operating Partnership convertible into or carrying a right to subscribe to or acquire units of the Operating Partnership.

SIGNATURE APPEARS ON NEXT PAGE





IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of Designation of Series A Cumulative Redeemable referred Units to be duly executed by its Executive Vice President and Chief Financial Officer this 30th day of June, 1998.

CBL Holdings I, Inc.



By:           /s/ John N. Foy                                           
John N. Foy
Executive Vice President
And Chief Financial Officer


CERTIFICATE OF DESIGNATION

OF

8.75% SERIES B CUMULATIVE REDEEMABLE PREFERRED UNITS

OF

CBL & ASSOCIATES LIMITED PARTNERSHIP

Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership


WHEREAS, CBL & Associates Properties, Inc. (the “Company”) has issued 2,000,000 shares (the “Offering”) of 8.75% Series B Cumulative Redeemable Preferred Stock (the “Preferred Stock”);

WHEREAS, the Company and the Operating Partnership desire that the Company contribute net proceeds of the Offering to CBL & Associates Limited Partnership (the “Operating Partnership”) in exchange for preferred units having substantially the same economic rights and terms of the Preferred Stock;

WHEREAS, Article 4.4 of the Second Amended and Restated Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) provides for a Preferred Unit Designation, setting forth, in sufficient detail, the economic rights and terms of the class or series of preferred units.

NOW, THEREFORE, CBL Holdings I, Inc., the general partner of the Operating Partnership (the “General Partner”) hereby designates a series of preferred units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

1.           Designation and Amount.

The units of such series shall be designated “8.75% Series B Cumulative Redeemable Preferred Units” (the “Series B Preferred Units”) and the number of units constituting such series shall be 2,000,000.  The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Series B Preferred Units shall be subject in all cases to the provisions of the Partnership Agreement.

2.           Dividends and Distribution Rights.

(a)  Holders of Series B Preferred Units shall be entitled to receive, when, as and if
 
declared by the General Partner, out of assets of the Operating Partnership legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 8.75% per annum of the $50.00 liquidation preference.  Such dividends shall be cumulative from the date of the original issue by the Operating Partnership of Series B Preferred Units and shall be payable quarterly in arrears on the 30th day of March, June, September, and December of each year or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”).  The first dividend shall be paid on June 30, 2002.  Such first dividend and any dividend payable on the Series B Preferred Units for any partial dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends will be payable to holders of record as they appear in the records of the Operating Partnership at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the General Partner for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).

(b)           No dividends on the Series B Preferred Units shall be declared by the General Partner or paid or set apart for payment by the General Partner at such time as the terms and provisions of any agreement of the Operating Partnership, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

(c)           Notwithstanding anything contained herein to the contrary, dividends on the Series B Preferred Units shall accrue whether or not the Operating Partnership has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared.  Accrued but unpaid dividends on the Series B Preferred Units shall accumulate as of the Dividend Payment Date on which they first become payable.

(d)           Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on any of the Operating Partnership’s Common Units (“Common Units”), or units of any other class or series of units of the Operating Partnership ranking, as to dividends, on a parity with or junior to the Series B Preferred Units (other than a dividend paid in units of Common Units or in units of any other class or series of units ranking junior to the Series B Preferred Units as to dividends and upon liquidation) for any period unless full cumulative dividends on the Series B Preferred Units for all past dividend periods and the then current dividend period shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment.  When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series B Preferred Units and the units of any other series of preferred units ranking on a parity as to dividends with the Series B Preferred Units, all dividends declared upon the Series B Preferred Units and any other series of preferred units ranking on a parity as to dividends with the Series B Preferred Units shall be declared pro rata so that the amount of dividends declared per unit of Series B Preferred Units and such other series of preferred units shall in all cases bear to each other the same ratio that accrued dividends per share on the Series B Preferred Units and such other series of preferred units (which shall not include any accrual in respect of unpaid dividends on such other series of preferred units for prior dividend periods if such other series of
 
preferred units does not have a cumulative dividend) bear to each other.  No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series B Preferred Units which may be in arrears.

(e)           Except as provided in Subsection 2(d), unless full cumulative dividends on Series B Preferred Units shall have been or contemporaneously are declared and paid in cash declared and a sum sufficient for the payment thereof in cash is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in Common Units or other units ranking junior to the Series B Preferred Units as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other dividend shall be declared or made upon the Common Units or any other units of the Operating Partnership ranking junior to or on a parity with the Series B Preferred Units as to dividends or amounts upon liquidation nor shall any units of Common Units, or any other units of capital stock of the Operating Partnership ranking junior to or on a parity with the Series B Preferred Units as to dividends or upon liquidation, shall be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Operating Partnership (except by conversion into or exchange for other units of the Operating Partnership ranking junior to the Series B Preferred Units as to dividends and upon liquidation).  Nothing in the foregoing shall be deemed to preclude the exercise of Rights (as defined in the Partnership Agreement) by any unit holder in accordance with the Partnership Agreement.

(f)           Holders of units of Series B Preferred Units shall not be entitled to any dividend, whether payable in cash, property or units, in excess of full cumulative dividends on the Series B Preferred Units as provided above.  Any dividend payment made on the Series B Preferred Units shall first be credited against the earliest accrued but unpaid dividends due with respect to such units which remains payable.

3.           Liquidation Rights.

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, the holders of units of Series B Preferred Units shall be entitled to be paid out of the assets of the Operating Partnership legally available for distribution to its Unit holders a liquidation preference of $50.00 per unit, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment shall be made to holders of shares of Common Units or any other class or series of Units of the Operating Partnership ranking junior to the Series B Preferred Units as to liquidation rights.  In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Operating Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding units of Series B Preferred Units and the corresponding amounts payable on all units of other classes or series of units of the Operating Partnership ranking on a parity with the Series B Preferred Units in the distribution of assets, then the holders of the Series B Preferred Units and all other such classes or series of units shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.  Holders of Series B Preferred Units shall be entitled to written notice of any such liquidation.  After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Units will
 
have no right or claim to any of the remaining assets of the Operating Partnership.  The consolidation or merger of the Operating Partnership with or into any corporation, trust or entity or of any corporation, trust or other entity, or the sale, lease or conveyance of all or substantially all of the property or business of the Operating Partnership shall not be deemed to constitute a liquidation, dissolution or winding-up of the Operating Partnership.

4.
Redemption.

(a)  Series B Preferred Units shall not be redeemable prior to June 14, 2007.  On or after June 14, 2007, the Operating Partnership, at its option upon not less than 30 nor more than 60 days’ written notice, may redeem the Series B Preferred Units, in whole or in part, at any time or from time to time, for cash at a redemption price of $50.00 per unit, plus any accrued and unpaid dividends thereon to the date fixed for redemption (except as provided below), without interest.  If fewer than all of the outstanding units of Series B Preferred Units are to be redeemed, the units of Series B Preferred Units to be redeemed shall be redeemed, pro rata (as nearly as may be practicable without creating fractional units) or by a lot or by any other equitable method determined by the Operating Partnership.  Holders of Series B Preferred Units to be redeemed shall surrender such Series B Preferred Units at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender.  If notice of redemption of any Series B Preferred Units has been given and if the funds necessary for such redemption have been set aside by the Operating Partnership in trust for the benefit of the holders of any units of Series B Preferred Units so called for redemption, then from and after the redemption date dividends shall cease to accrue on such Series B Preferred Units, such units of Series B Preferred Units shall no longer be deemed outstanding and all rights of the holders of such units will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption.  Nothing herein shall prevent or restrict the Operating Partnership’s right or ability to purchase, from time to time either at a public or a private sale, of the whole, or any part of the Series B Preferred Stock at such price or prices as the Operating Partnership may determine, subject to the provisions of applicable law.

(b)  Unless full cumulative dividends on all Series B Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no Series B Preferred Units shall be redeemed unless all outstanding units of Series B Preferred Units are simultaneously redeemed and the Operating Partnership shall not purchase or otherwise acquire directly or indirectly any units of Series B Preferred Units (except by exchange for units of the Operating Partnership ranking junior to the Series B Preferred Units as to dividends and amounts upon liquidation).

(c)  Notice of redemption shall be mailed by the Operating Partnership, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the units of Series B Preferred Units to be redeemed at their respective addresses as they appear on the records of the Operating Partnership.  No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series B Preferred Units except as to a holder to whom notice was
 
defective or not given.  Each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the number of units of Series B Preferred Units to be redeemed; (iv) the place or places where units of Series B Preferred Units are to be surrendered for payment of the redemption price; and (v) that dividends on the Series B Preferred Units to be redeemed shall cease to accrue on such redemption date.  If fewer than all of the units of Series B Preferred Units held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of units of Series B Preferred Units held by such holder to be redeemed.

(d)  Immediately prior to any redemption of Series B Preferred Units, the Operating Partnership shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series B Preferred Units at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such units on the corresponding Dividend Payment Date notwithstanding the redemption of such units before such Dividend Payment Date.  Except as provided above, the Operating Partnership shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series B Preferred Units for which a notice of redemption has been given.

(e)  All units of the Series B Preferred Units redeemed pursuant to this Section 4 shall be retired and shall be restored to the status of authorized and unissued units of preferred units, without designation as to Series B and may thereafter be reissued as units of any series of preferred units.

(f)  The Series B Preferred Units shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption.

5.           Voting Rights.

(a)  Holders of the Series B Preferred Units shall not have any voting rights, except as set forth in the Partnership Agreement.

(b)  So long as any units of Series B Preferred Units remain outstanding, the Operating Partnership shall not, without the affirmative vote or consent of the holders of two-thirds of the units of Series B Preferred Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class):  (i) authorize or create or increase the authorized or issued amount of any class or series of units ranking prior to the Series B Preferred Units with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the Operating Partnership or reclassify any authorized units of the Operating Partnership into such units, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership Agreement or this Certificate of Designations, whether by merger, consolidation or otherwise (an “Event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series B Preferred Units or the holders thereof; provided however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series B Preferred Units remains outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an
 
Event, the Operating Partnership may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series B Preferred Units and provided further that (A) any increase in amount of the authorized Preferred Units or the creation or issuance of any other Series B Preferred Units or (B) any increase in the number of authorized units of Series B Preferred Units or any other series of Preferred Units, in each case ranking on a parity with or junior to the
Series B Preferred Units of such series with respect to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.

(c)  The foregoing voting provisions of this Section 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding units of Series B Preferred Units shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.

(d)  In any matter in which the Series B Preferred Units may vote (as expressly provided herein or as may be required by law), each share of Series B Preferred Units shall be entitled to one vote, except that when any other series of preferred units of the Operating Partnership shall have the right to vote with the Series B Preferred Units as a single class on any matter, the Series B Preferred Units and such other series shall have with respect to such matters one vote per each $50.00 of stated liquidation preference.

6.           Conversion.

The units of Series B Preferred Units shall not be convertible into or exchangeable for any other property or units of the Operating Partnership.

7.           Ranking.

The Series B Preferred Units shall, with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Operating Partnership, rank (a) senior to the Common Units and to all units ranking junior to such Series B Preferred Units; (b) on a parity with all units issued by the Operating partnership the terms of which specifically provide that such units rank on a parity with the Series B Preferred Units; and (c) junior to all units issued by the Operating partnership (in accordance with this Certificate of Designations) the terms of which specifically provide that such units rank senior to the Series B Preferred Units.  For purposes of this Section 7, the term “units” does not include indebtedness convertible into units.

8.           Exclusion of Other Rights.

The Series B Preferred Units shall not have any references or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than expressly set forth in the Partnership Agreement and this Certificate of Designations.

9.           Headings of Subdivisions.

The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

10.           Severability of Provisions.

If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series B Preferred Units set forth in the Partnership Agreement and this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of Series B Preferred Units set forth in the Partnership Agreement which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series B Preferred Units herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.

11.           No Preemptive Rights.

No holder of Series B Preferred Units shall be entitled to any preemptive rights to subscribe for or acquire any unissued units of the Operating Partnership (whether now or hereafter authorized) or securities of the Operating Partnership convertible into or carrying a right to subscribe to or acquire units of the Operating Partnership.

SIGNATURE APPEARS ON NEXT PAGE


IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of Designation of Series C Cumulative Redeemable Preferred Units to be duly executed by its Vice Chairman of the Board and Chief Financial Officer this 11th day of June, 2002.

CBL Holdings I, Inc.


By:/s/ John N. Foy
John N. Foy
Vice Chairman of the Board
And Chief Financial Officer

7.75% SERIES C CUMULATIVE REDEEMABLE PREFERRED UNITS

OF

CBL & ASSOCIATES LIMITED PARTNERSHIP

Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership


WHEREAS, CBL & Associates Properties, Inc. (the “Company”) has filed a registration statement for the offering of up to an aggregate of 4,830,000 depositary shares, each representing 1/10th of a share (the “Offering”) of 7.75% Series C Cumulative Redeemable Preferred Stock (the “Preferred Stock”);

WHEREAS, the Company and the Operating Partnership desire that the Company contribute net proceeds of the Offering to CBL & Associates Limited Partnership (the “Operating Partnership”) in exchange for preferred units having substantially the same economic rights and terms of the Preferred Stock;

WHEREAS, Article 4.4 of the Second Amended and Restated Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) provides for a Preferred Unit Designation, setting forth, in sufficient detail, the economic rights and terms of the class or series of preferred units.

NOW, THEREFORE, CBL Holdings I, Inc., the general partner of the Operating Partnership (the “General Partner”) hereby designates a series of preferred units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

1.           Designation and Amount.

The units of such series shall be designated “7.75% Series C Cumulative Redeemable Preferred Units” (the “Series C Preferred Units”) and the number of units constituting such series shall be 483,000.  The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Series C Preferred Units shall be subject in all cases to the provisions of the Partnership Agreement.

2.           Dividends and Distribution Rights.

(a)  Holders of Series C Preferred Units shall be entitled to receive, when, as and if declared by the General Partner, out of assets of the Operating Partnership legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 7.75% per annum of the $250.00 liquidation preference.  Such dividends shall be cumulative from the date of the original issue by the Operating Partnership of Series B Preferred Units and shall be payable
 
quarterly in arrears on the 30th day of March, June, September, and December of each year or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”).  The first dividend shall be paid on June 30, 2002.  Such first dividend and any divided payable on the Series C Preferred Units for any partial dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends will be payable to holders of record as they appear in the records of the Operating Partnership at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the General Partner for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).

(b)           No dividends on the Series C Preferred Units shall be declared by the General Partner or paid or set apart for payment by the General Partner at such time as the terms and provisions of any agreement of the Operating Partnership, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

(c)           Notwithstanding anything contained herein to the contrary, dividends on the Series B Preferred Units shall accrue whether or not the Operating Partnership has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared.  Accrued but unpaid dividends on the Series B Preferred Units shall accumulate as of the Dividend Payment Date on which they first become payable.

(d)           Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on any of the Operating Partnership’s Common Units (“Common Units”), or units of any other class or series of units of the Operating Partnership ranking, as to dividends, on a parity with or junior to the Series C Preferred Units (other than a dividend paid in units of Common Units or in units of any other class or series of units ranking junior to the Series C Preferred Units as to dividends and upon liquidation) for any period unless full cumulative dividends on the Series C Preferred Units for all past dividend periods and the then current dividend period shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment.  When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series C Preferred Units and the units of any other series of preferred units ranking on a parity as to dividends with the Series C Preferred Units, all dividends declared upon the Series C Preferred Units and any other series of preferred units ranking no a parity as to dividends with the Series C Preferred Units shall be declared pro rata so that the amount of dividends declared per unit of Series C Preferred Units and such other series of preferred units shall in all cases bear to each other the same ratio that accrued dividends per share on the Series C Preferred Units and such other series of preferred units (which shall not include any accrual in respect of unpaid dividends on such other series of preferred units for prior dividend periods if such other series of preferred units does not have a cumulative dividend) bear to each other.  No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series C Preferred Units which may be in arrears.

(e)           Except as provided in Subsection 2(d), unless full cumulative dividends on Series C Preferred Units shall have been or contemporaneously are declared and paid in cash declared and a sum sufficient for the payment thereof in cash is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in Common Units or other units ranking junior to the Series C Preferred Units as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other dividend shall be declared or made upon the Common Units or any other units of the Operating Partnership ranking junior to or on a parity with the Series C Preferred Units as to dividends or amounts upon liquidation nor shall any units of Common Units, or any other units of capital stock of the Operating Partnership ranking junior to or on a parity with the Series C Preferred Units as to dividends or upon liquidation, shall be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Operating Partnership (except by conversion into or exchange for other units of the Operating Partnership ranking junior to the Series C Preferred Units as to dividends and upon liquidation).  Nothing in the foregoing shall be deemed to preclude the exercise of Rights (as defined in the Partnership Agreement) by any unit holder in accordance with the Partnership Agreement.

(f)           Holders of units of Series C Preferred Units shall not be entitled to any dividend, whether payable in cash, property or units, in excess of full cumulative dividends on the Series C Preferred Units as provided above.  Any dividend payment made on the Series C Preferred Units shall first be credited against the earliest accrued but unpaid dividends due with respect to such units which remains payable.

3.           Liquidation Rights.

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, the holders of units of Series C Preferred Units shall be entitled to be paid out of the assets of the Operating Partnership legally available for distribution to its Unit holders a liquidation preference of $250.00 per unit, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment shall be made to holders of shares of Common Units or any other class or series of Units of the Operating Partnership ranking junior to the Series C Preferred Units as to liquidation rights.  In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Operating Partnership legally available for distribution to its Unit holders a liquidation preference of $250.00 per unit, plus an amount equal to any distribution or payment shall be made to holders of shares of Common Units or any other class or series of Units of the Operating Partnership ranking junior to the Series C Preferred Units as to liquidation rights.  In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Operating Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding units of Series C Preferred Units and the corresponding amounts payable on all units of other classes or series of units of the Operating Partnership ranking on a parity with the Series C Preferred Units in the distribution of assets, then the holders of the Series C Preferred Units and all other such classes or series of units shall share ratable in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.  Holders of Series C Preferred Units shall be entitled to written notice of any such liquidation.  After payment of the full amount of the
 
liquidating distributions to which they are entitled, the holders of Series C Preferred Units will have no right or claim to any of the remaining assets of the Operating Partnership.  The consolidation or merger of the Operating Partnership with or into any corporation, trust or entity or of any corporation, trust or other entity, or the sale, lease or conveyance of all or substantially all of the property or business of the Operating Partnership shall not be deemed to constitute a liquidation, dissolution or winding-up of the Operating Partnership.

4.
Redemption.

(a)  Series C Preferred Units shall not be redeemable prior to August 22, 2008.  On or after August 22, 2008, the Operating Partnership, at its option upon not less than 30 nor more than 60 days’ written notice, may redeem the Series C Preferred Units, in whole or in part, at any time or from time to time, for cash at a redemption price of $250.00 per unit, plus any accrued and unpaid dividends thereon to the date fixed for redemption (except as provided below), without interest.  If fewer than all of the outstanding units of Series C Preferred Units are to be redeemed, the units of Series C Preferred Units to be redeemed shall be redeemed, pro rata (as nearly as may be practicable without creating fractional units) or by a lot or by any other equitable method determined by the Operating Partnership.  Holders of Series A Preferred Units to be redeemed shall surrender such Series C Preferred Units at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender.  If notice of redemption of any Series C Preferred Units has been given and if the funds necessary for such redemption have been set aside by the Operating Partnership in trust for the benefit of the holders of any units of Series C Preferred Units so called for redemption, then from and after the redemption date, dividends shall cease to accrue on such Series C Preferred Units, such units of Series C Preferred Units shall no longer be deemed outstanding and all rights of the holders of such units will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption.  Nothing herein shall prevent or restrict the Operating Partnership’s right or ability to purchase, from time to time either at a public or a private sale, of the whole, or any part of the Series C Preferred Stock at such price or prices as the Operating Partnership may determine, subject to the provisions of applicable law.

(b)  Unless full cumulative dividends on all Series C Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no Series C Preferred Units shall be redeemed unless all outstanding units of Series C Preferred Units are simultaneously redeemed and the Operating Partnership shall not purchase or otherwise acquire directly or indirectly any units of Series C Preferred -Units (except by exchange for units of the Operating Partnership ranking junior to the Series C Preferred Units as to dividends and amounts upon liquidation).

(c)  Notice of redemption shall be mailed by the Operating Partnership, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the units of Series C Preferred Units to be redeemed at their respective addresses as they appear on the records of the Operating Partnership.  No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings
 
for the redemption of any Series C Preferred Units except as to a holder to whom notice was defective or not given.  Each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the number of units of Series C Preferred Units to be redeemed; (iv) the place or places where units of Series C Preferred Units are to be surrendered for payment of the redemption price; and (v) that dividends on the Series C Preferred Units to be redeemed shall cease to accrue on such redemption date.  If fewer than all of the units of Series C Preferred Units held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of units of Series C Preferred Units held by such holder to be redeemed.

(d)  Immediately prior to any redemption of Series C Preferred Units, the Operating Partnership shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series C Preferred Units at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such units on the corresponding Dividend Payment Date notwithstanding the redemption of such units before such Dividend Payment Date.  Except as provided above, the Operating Partnership shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series C Preferred Units for which a notice of redemption has been given.

(e)  All units of the Series C Preferred Units redeemed pursuant to this Section 4 shall be retired and shall be restored to the status of authorized and unissued units of preferred units, without designation as to Series C and may thereafter be reissued as units of any series of preferred units.

(f)  The Series C Preferred Units shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption.

5.           Voting Rights.

(a)  Holders of the Series C Preferred Units shall not have any voting rights, except as set forth in the Partnership Agreement.

(b)  So long as any units of Series C Preferred Units remain outstanding, the Operating Partnership shall not, without the affirmative vote or consent of the holders of two-thirds of the units of Series C Preferred Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class):  (i) authorize or create or increase the authorized or issued amount of any class or series of units ranking prior to the Series C Preferred Units with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the Operating Partnership or reclassify any authorized units of the Operating Partnership into such units, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership Agreement or this Certificate of Designations, whether by merger, consolidation or otherwise (an “Event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series C Preferred Units or the holders thereof; provided however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series C Preferred Units remains outstanding with the terms thereof materially
 
unchanged, taking into account that, upon the occurrence of an Event, the Operating Partnership may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series C Preferred Units and provided further that (A) any increase in amount of the authorized Preferred Units or the creation or issuance of any other Series C Preferred Units or (B) any increase in the number of authorized units of Series C Preferred Units or (C) the creation or issuance of any other series of Preferred Units, in each case referred to in clauses (A), (B) or (C) above, ranking on a parity with or junior to the Series C Preferred Units with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up.

(c)  The foregoing voting provisions of this Section 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding units of Series C Preferred Units shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.

(d)  In any matter in which the Series C Preferred Units may vote (as expressly provided herein or as may be required by law), each share of Series C Preferred Units shall be entitled to one vote per each $25.00 in stated liquidation preference.

6.           Conversion.

The units of Series C Preferred Units shall not be convertible into or exchangeable for any other property or units of the Operating partnership.

7.           Ranking.

The Series C Preferred Units shall, with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Operating Partnership, rank (a) senior to the Common Units and to all units ranking junior to such Series C Preferred Units; (b) on a parity with all units issued by the Operating Partnership the terms of which specifically provide that such units rank on a parity with the Series C Preferred Units; and (c) junior to all units issued by the Operating partnership (in accordance with this Certificate of Designations) the terms of which specifically provide that such units rank senior to the Series C Preferred Units.  For purposes of this Section 7, the term “units” does not include indebtedness convertible into units.

8.           Exclusion of Other Rights.

The Series C Preferred Units shall not have any references or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than expressly set forth in the Partnership Agreement and this Certificate of Designations.



9.           Headings of Subdivisions.

The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

10.           Severability of Provisions.

If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series C Preferred Units set forth in the Partnership Agreement and this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of Series C Preferred Units set forth in the Partnership Agreement which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series C Preferred Units herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.

11.           No Preemptive Rights.

No holder of Series C Preferred Units shall be entitled to any preemptive rights to subscribe for or acquire any unissued units of the Operating Partnership (whether now or hereafter authorized) or securities of the Operating Partnership convertible into or carrying a right to subscribe to or acquire units of the Operating Partnership.


SIGNATURE APPEARS ON NEXT PAGE



IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of Designation of Series C Cumulative Redeemable Preferred Units to be duly executed by its Vice Chairman of the Board and Chief Financial officer this 21st day of August, 2003.

CBL Holdings I, Inc.



By: /s/ John N. Foy
John Foy
Vice Chairman of the Board
And Chief Financial Officer



CERTIFICATE OF DESIGNATION
OF
7.375% SERIES D CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP

Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership

WHEREAS, CBL & Associates Properties, Inc. (the “Company”) has issued 805,000 shares (the “Offering”) of 7.375% Series D Cumulative Redeemable Preferred Stock (the “Preferred Stock”);
 
WHEREAS, the Company and CBL & Associates Limited Partnership (the “Operating Partnership”) desire that the Company contribute net proceeds of the Offering to the Operating Partnership in exchange for preferred units having substantially the same economic rights and terms as the Preferred Stock;
 
WHEREAS, Article 4.4 of the Second Amended and Restated Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) provides for a Preferred Unit Designation, setting forth, in sufficient detail, the economic rights and terms of the class or series of preferred units.
 
NOW THEREFORE, CBL Holdings I, Inc., the general partner of the Operating Partnership (the “General Partner”) hereby designates a series of preferred units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:
 
1. Designation and Amount.
 

The units of such series shall be designated “7.375% Series D Cumulative Redeemable Preferred Units” (the “Series D Preferred Units”) and the number of units constituting such series shall be 805,000.  The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Series D Preferred Units shall be subject in all cases to the provisions of the Partnership Agreement.
 
2. Dividends and Distribution Rights.
 

(a)  Holders of Series D Preferred Units shall be entitled to receive, when, as and if declared by the General Partner, out of assets of the Operating Partnership legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 7.375% per annum of the $250.00 liquidation preference.  Such dividends shall be cumulative from and
 
including the date of the original issue by the Operating Partnership of the Series D Preferred Units and shall be payable quarterly in arrears on the 30th day of March, June, September, and December of each year or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”).  The first dividend shall be paid on March 30, 2005.  Such first dividend and any dividend payable on the Series D Preferred Units for any other partial dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends will be payable to holders of record as they appear in the records of the Operating Partnership at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the General Partner for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).
 
(b)  No dividends on the Series D Preferred Units shall be declared by the General Partner or paid or set apart for payment by the General Partner at such time as the terms and provisions of any agreement of the Operating Partnership, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.
 
(c)  Notwithstanding anything contained herein to the contrary, dividends on the Series D Preferred Units shall accrue whether or not the Operating Partnership has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared.  Accrued but unpaid dividends on the Series D Preferred Units shall accumulate as of the Dividend Payment Date on which they first become payable.
 
(d)  Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on any of the Operating Partnership’s Common Units (“Common Units”), or units of any other class or series of units of the Operating Partnership ranking, as to dividends, on a parity with or junior to the Series D Preferred Units (other than a dividend paid in units of Common Units or in units of any other class or series of units ranking junior to the Series D Preferred Units as to dividends and upon liquidation) for any period unless full cumulative dividends on the Series D Preferred Units for all past dividend periods and the then current dividend period shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment.  When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series D Preferred Units and the units of any other series of preferred units ranking on a parity as to dividends with the Series D Preferred Units, all dividends declared upon the Series D Preferred Units and any other series of preferred units ranking on a parity as to dividends with the Series D Preferred Units shall be declared pro rata so that the amount of dividends declared per unit of Series D Preferred Units and such other series of preferred units shall in all cases bear to each other the same ratio that accrued dividends per unit on the Series D Preferred Units and such other series of preferred units (which shall not include any accrual in respect of unpaid dividends on such other series of preferred units for prior dividend periods if such other series of preferred units does not have a cumulative dividend) bear to each other.  No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series D Preferred Units which may be in arrears.
 
(e)  Except as provided in Subsection 2(d), unless full cumulative dividends on the Series D Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in Common Units or other units ranking junior to the Series D Preferred Units as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other dividend shall be declared or made upon the Common Units or any other units of the Operating Partnership ranking junior to or on a parity with the Series D Preferred Units as to dividends or amounts upon liquidation nor shall any units of Common Units, or any units of any other class or series of units of the Operating Partnership ranking junior to or on a parity with the Series D Preferred Units as to dividends or upon liquidation, be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Operating Partnership (except by conversion into or exchange for other units of the Operating Partnership ranking junior to the Series D Preferred Units as to dividends and upon liquidation).  Nothing in the foregoing shall be deemed to preclude the exercise of Rights (as defined in the Partnership Agreement) by any unit holder in accordance with the Partnership Agreement.
 
(f)  Holders of Series D Preferred Units shall not be entitled to any dividend, whether payable in cash, property or units, in excess of full cumulative dividends on the Series D Preferred Units as provided above.  Any dividend payment made on the Series D Preferred Units shall first be credited against the earliest accrued but unpaid dividends due with respect to such units which remains payable.
 
3.           Liquidation Rights.
 

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, the holders of units of Series D Preferred Units shall be entitled to be paid out of the assets of the Operating Partnership legally available for distribution to its Unit holders a liquidation preference of $250.00 per unit, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment shall be made to holders of units of Common Units or any other class or series of units of the Operating Partnership ranking junior to the Series D Preferred Units as to liquidation rights.  In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Operating Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding units of Series D Preferred Units and the corresponding amounts payable on all units of other classes or series of units of the Operating Partnership ranking on a parity with the Series D Preferred Units in the distribution of assets, then the holders of the Series D Preferred Units and all other such classes or series of units shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.  Holders of Series D Preferred Units shall be entitled to written notice of any such liquidation.  After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series D Preferred Units will have no right or claim to any of the remaining assets of the Operating Partnership.  The consolidation or merger of the Operating Partnership with or into any corporation, trust or entity, or of any corporation, trust or other entity with or into the Operating Partnership, or the sale,
 
lease or conveyance of all or substantially all of the property or business of the Operating Partnership shall not be deemed to constitute a liquidation, dissolution or winding-up of the Operating Partnership.
 
4.           Redemption.
 

(a)  Series D Preferred Units shall not be redeemable prior to December 13, 2009.  On or after December 13, 2009, the Operating Partnership, at its option upon not less than 30 nor more than 60 days’ written notice, may redeem the Series D Preferred Units, in whole or in part, at any time or from time to time, for cash at a redemption price of $250.00 per unit, plus any accrued and unpaid dividends thereon up to and including the date fixed for redemption (except as provided below), without interest.  If fewer than all of the outstanding units of Series D Preferred Units are to be redeemed, the units of Series D Preferred Units to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional units) or by lot or by any other equitable method determined by the Operating Partnership.  Holders of Series D Preferred Units to be redeemed shall surrender such Series D Preferred Units at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender.  If notice of redemption of any Series D Preferred Units has been given and if the funds necessary for such redemption have been set aside by the Operating Partnership in trust for the benefit of the holders of any units of Series D Preferred Units so called for redemption, then from and after the redemption date, dividends shall cease to accrue on such Series D Preferred Units, such units of Series D Preferred Units shall no longer be deemed outstanding and all rights of the holders of such units will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption.  Nothing herein shall prevent or restrict the Operating Partnership’s right or ability to purchase, from time to time either at a public or a private sale, all, or any portion, of the outstanding Series D Preferred Units at such price or prices as the Operating Partnership may determine, subject to the provisions of applicable law.
 
(b)  Unless full cumulative dividends on all Series D Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no Series D Preferred Units shall be redeemed unless all outstanding units of Series D Preferred Units are simultaneously redeemed and the Operating Partnership shall not purchase or otherwise acquire directly or indirectly any units of Series D Preferred Units (except by exchange for units of the Operating Partnership ranking junior to the Series D Preferred Units as to dividends and amounts upon liquidation).
 
(c)  Notice of redemption shall be mailed by the Operating Partnership, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the units of Series D Preferred Units to be redeemed at their respective addresses as they appear on the records of the Operating Partnership.  No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series D Preferred Units except as to a holder to whom notice was defective or not given.  Each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the number of units of Series D Preferred Units to be redeemed; (iv) the place or places
 
where units of Series D Preferred Units are to be surrendered for payment of the redemption price; and (v) that dividends on the Series D Preferred Units to be redeemed shall cease to accrue on such redemption date.  If fewer than all of the units of Series D Preferred Units held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of units of Series D Preferred Units held by such holder to be redeemed.
 
(d)  Immediately prior to any redemption of Series D Preferred Units, the Operating Partnership shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series D Preferred Units at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such units on the corresponding Dividend Payment Date notwithstanding the redemption of such units before such Dividend Payment Date.  Except as provided above, the Operating Partnership shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series D Preferred Units for which a notice of redemption has been given.
 
(e)  All Series D Preferred Units redeemed or repurchased pursuant to this Section 4 shall be retired and shall be restored to the status of authorized and unissued units of preferred units, without designation as to Series D and may thereafter be reissued as units of any series of preferred units.
 
(f)  The Series D Preferred Units shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption.
 
5.           Voting Rights.
 

(a)  Holders of the Series D Preferred Units shall not have any voting rights, except as set forth in the Partnership Agreement.
 
(b)  The affirmative vote or consent of the holders of two-thirds of the units of Series D Preferred Units and the holders of all other classes or series of Preferred Units of the Operating Partnership ranking on parity with the Series D Preferred Units upon which like voting rights have been conferred and are exercisable, outstanding at the time (voting together as a class), given in person or by proxy, either in writing or at a meeting, will be required to: (i) authorize or create or increase the authorized or issued amount of any class or series of units ranking senior to the Series D Preferred Units with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the Operating Partnership or reclassify any authorized units of the Operating Partnership into such units, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership Agreement or this Certificate of Designations, whether by merger, consolidation, transfer or conveyance of substantially all of its assets or otherwise (an “Event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series D Preferred Units or the holders thereof; provided however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series D Preferred Units remain outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an Event, the Operating Partnership may not be the
 
surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series D Preferred Units and in such case such holders shall not have any voting rights with respect to the Events set forth in (ii) above.  Except as may be required by law, holders of Series D Preferred Units shall not be entitled to vote with respect to (A) any increase or decrease in the total number of authorized Preferred Units, (B) any increase, decrease or issuance of any series of Preferred Units including the Series D Preferred Units or (C) the creation or issuance of any other series of Preferred Units, in each case referred to in clauses (A), (B) or (C) above, ranking on a parity with or junior to the Series D Preferred Units with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding-up.
 
(c)  The foregoing voting provisions of this Section 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding units of Series D Preferred Units shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.
 
(d)  In any matter in which the Series D Preferred Units may vote (as expressly provided herein or as may be required by law), each unit of Series D Preferred Units shall be entitled to one vote per each $25.00 in stated liquidation preference.
 
6.           Conversion.
 

The units of Series D Preferred Units shall not be convertible into or exchangeable for any other property or units of the Operating Partnership.
 
7.           Ranking.
 

The Series D Preferred Units shall, with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Operating Partnership, rank (a) senior to the Common Units and to all units ranking junior to such Series D Preferred Units; (b) on a parity with all units issued by the Operating Partnership the terms of which specifically provide that such units rank on a parity with the Series D Preferred Units; and (c) junior to all units issued by the Operating Partnership (in accordance with this Certificate of Designations) the terms of which specifically provide that such units rank senior to the Series D Preferred Units. For purposes of this Section 7, the term “units” does not include indebtedness convertible into units.
 
8.           Exclusion of Other Rights.
 

The Series D Preferred Units shall not have any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than as expressly set forth in the Partnership Agreement and this Certificate of Designations.
 
9.           Headings of Subdivisions.
 

The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
 
10.           Severability of Provisions.
 

If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series D Preferred Units set forth in the Partnership Agreement and this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of Series D Preferred Units set forth in the Partnership Agreement which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series D Preferred Units herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.
 
11.           No Preemptive Rights.
 

No holder of Series D Preferred Units shall be entitled to any preemptive rights to subscribe for or acquire any unissued units of the Operating Partnership (whether now or hereafter authorized) or securities of the Operating Partnership convertible into or carrying a right to subscribe to or acquire units of the Operating Partnership.
 

SIGNATURE APPEARS ON NEXT PAGE




IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of Designation of 7.375% Series D Cumulative Redeemable Preferred Units to be duly executed by its Vice Chairman of the Board and Chief Financial Officer this 10th day of December, 2004.


CBL Holdings I, Inc.


By:  /s/ John N. Foy
John N. Foy
Vice Chairman of the Board
and Chief Financial Officer



AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION
OF
7.375% SERIES D CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP

Pursuant to Article 4.4 of the
Third Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership

WHEREAS, CBL & Associates Properties, Inc. (the “Company”) previously issued, in December 2004, 700,000 shares (the “2004 Offering”) of 7.375% Series D Cumulative Redeemable Preferred Stock (the “Preferred Stock”); and
 
WHEREAS, the Company has committed to issue, in March 2010, an additional 630,000 shares (the “2010 Offering”) of the Preferred Stock; and
 
WHEREAS, the Company previously contributed the net proceeds of the 2004 Offering to CBL & Associates Limited Partnership (the “Operating Partnership”), and the Company and the Operating Partnership now desire that the Company contribute net proceeds of the 2010 Offering to the Operating Partnership, in each case in exchange for preferred units having substantially the same economic rights and terms as the Preferred Stock;
 
WHEREAS, Article 4.4 of the Third Amended and Restated Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) provides for a Preferred Unit Designation, setting forth, in sufficient detail, the economic rights and terms of the class or series of preferred units.
 
NOW THEREFORE, CBL Holdings I, Inc., the general partner of the Operating Partnership (the “General Partner”) hereby amends and restates in full, as so amended, the designated terms of a series of preferred units, with the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, being hereby fixed as follows:
 
1.           Designation and Amount.
 

The units of such series shall be designated “7.375% Series D Cumulative Redeemable Preferred Units” (the “Series D Preferred Units”) and the number of units constituting such series shall be 1,800,000.  The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Series D Preferred Units shall be subject in all cases to the provisions of the Partnership Agreement.
 

 
2.           Dividends and Distribution Rights.
 

(a)  Holders of Series D Preferred Units shall be entitled to receive, when, as and if declared by the General Partner, out of assets of the Operating Partnership legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 7.375% per annum of the $250.00 liquidation preference.  Such dividends shall be cumulative from and including the date of the original issue by the Operating Partnership of the Series D Preferred Units and shall be payable quarterly in arrears on the 30th day of March, June, September, and December of each year or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”).  The first dividend shall be paid on March 30, 2005.  Such first dividend and any dividend payable on the Series D Preferred Units for any other partial dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends will be payable to holders of record as they appear in the records of the Operating Partnership at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the General Partner for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).
 
(b)  No dividends on the Series D Preferred Units shall be declared by the General Partner or paid or set apart for payment by the General Partner at such time as the terms and provisions of any agreement of the Operating Partnership, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.
 
(c)  Notwithstanding anything contained herein to the contrary, dividends on the Series D Preferred Units shall accrue whether or not the Operating Partnership has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared.  Accrued but unpaid dividends on the Series D Preferred Units shall accumulate as of the Dividend Payment Date on which they first become payable.
 
(d)  Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on any of the Operating Partnership’s Common Units (“Common Units”), or units of any other class or series of units of the Operating Partnership ranking, as to dividends, on a parity with or junior to the Series D Preferred Units (other than a dividend paid in units of Common Units or in units of any other class or series of units ranking junior to the Series D Preferred Units as to dividends and upon liquidation) for any period unless full cumulative dividends on the Series D Preferred Units for all past dividend periods and the then current dividend period shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment.  When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series D Preferred Units and the units of any other series of preferred units ranking on a parity as to dividends with the Series D Preferred Units, all dividends declared upon the Series D Preferred Units and any other series of preferred units ranking on a parity as to dividends with the Series D Preferred Units shall be declared pro rata so that the amount of dividends declared per unit of Series D Preferred Units and such other series of preferred units shall in all cases bear
 
to each other the same ratio that accrued dividends per unit on the Series D Preferred Units and such other series of preferred units (which shall not include any accrual in respect of unpaid dividends on such other series of preferred units for prior dividend periods if such other series of preferred units does not have a cumulative dividend) bear to each other.  No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series D Preferred Units which may be in arrears.
 
(e)  Except as provided in Subsection 2(d), unless full cumulative dividends on the Series D Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in Common Units or other units ranking junior to the Series D Preferred Units as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other dividend shall be declared or made upon the Common Units or any other units of the Operating Partnership ranking junior to or on a parity with the Series D Preferred Units as to dividends or amounts upon liquidation nor shall any units of Common Units, or any units of any other class or series of units of the Operating Partnership ranking junior to or on a parity with the Series D Preferred Units as to dividends or upon liquidation, be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Operating Partnership (except by conversion into or exchange for other units of the Operating Partnership ranking junior to the Series D Preferred Units as to dividends and upon liquidation).  Nothing in the foregoing shall be deemed to preclude the exercise of Rights (as defined in the Partnership Agreement) by any unit holder in accordance with the Partnership Agreement.
 
(f)  Holders of Series D Preferred Units shall not be entitled to any dividend, whether payable in cash, property or units, in excess of full cumulative dividends on the Series D Preferred Units as provided above.  Any dividend payment made on the Series D Preferred Units shall first be credited against the earliest accrued but unpaid dividends due with respect to such units which remains payable.
 
3.           Liquidation Rights.
 

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, the holders of units of Series D Preferred Units shall be entitled to be paid out of the assets of the Operating Partnership legally available for distribution to its Unit holders a liquidation preference of $250.00 per unit, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment shall be made to holders of units of Common Units or any other class or series of units of the Operating Partnership ranking junior to the Series D Preferred Units as to liquidation rights.  In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Operating Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding units of Series D Preferred Units and the corresponding amounts payable on all units of other classes or series of units of the Operating Partnership ranking on a parity with the Series D Preferred Units in the distribution of assets, then the holders of the Series D Preferred Units and all other such classes or series of units shall
 
share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.  Holders of Series D Preferred Units shall be entitled to written notice of any such liquidation.  After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series D Preferred Units will have no right or claim to any of the remaining assets of the Operating Partnership.  The consolidation or merger of the Operating Partnership with or into any corporation, trust or entity, or of any corporation, trust or other entity with or into the Operating Partnership, or the sale, lease or conveyance of all or substantially all of the property or business of the Operating Partnership shall not be deemed to constitute a liquidation, dissolution or winding-up of the Operating Partnership.
 
4.           Redemption.
 

(a)  Series D Preferred Units shall not be redeemable prior to December 13, 2009.  On or after December 13, 2009, the Operating Partnership, at its option upon not less than 30 nor more than 60 days’ written notice, may redeem the Series D Preferred Units, in whole or in part, at any time or from time to time, for cash at a redemption price of $250.00 per unit, plus any accrued and unpaid dividends thereon up to and including the date fixed for redemption (except as provided below), without interest.  If fewer than all of the outstanding units of Series D Preferred Units are to be redeemed, the units of Series D Preferred Units to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional units) or by lot or by any other equitable method determined by the Operating Partnership.  Holders of Series D Preferred Units to be redeemed shall surrender such Series D Preferred Units at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender.  If notice of redemption of any Series D Preferred Units has been given and if the funds necessary for such redemption have been set aside by the Operating Partnership in trust for the benefit of the holders of any units of Series D Preferred Units so called for redemption, then from and after the redemption date, dividends shall cease to accrue on such Series D Preferred Units, such units of Series D Preferred Units shall no longer be deemed outstanding and all rights of the holders of such units will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption. Nothing herein shall prevent or restrict the Operating Partnership’s right or ability to purchase, from time to time either at a public or a private sale, all, or any portion, of the outstanding Series D Preferred Units at such price or prices as the Operating Partnership may determine, subject to the provisions of applicable law.
 
(b)  Unless full cumulative dividends on all Series D Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no Series D Preferred Units shall be redeemed unless all outstanding units of Series D Preferred Units are simultaneously redeemed and the Operating Partnership shall not purchase or otherwise acquire directly or indirectly any units of Series D Preferred Units (except by exchange for units of the Operating Partnership ranking junior to the Series D Preferred Units as to dividends and amounts upon liquidation).
 
(c)  Notice of redemption shall be mailed by the Operating Partnership, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the units of Series D Preferred Units to be redeemed at their respective addresses as they appear on the records of the Operating Partnership.  No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series D Preferred Units except as to a holder to whom notice was defective or not given.  Each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the number of units of Series D Preferred Units to be redeemed; (iv) the place or places where units of Series D Preferred Units are to be surrendered for payment of the redemption price; and (v) that dividends on the Series D Preferred Units to be redeemed shall cease to accrue on such redemption date.  If fewer than all of the units of Series D Preferred Units held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of units of Series D Preferred Units held by such holder to be redeemed.
 
(d)  Immediately prior to any redemption of Series D Preferred Units, the Operating Partnership shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series D Preferred Units at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such units on the corresponding Dividend Payment Date notwithstanding the redemption of such units before such Dividend Payment Date.  Except as provided above, the Operating Partnership shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series D Preferred Units for which a notice of redemption has been given.
 
(e)  All Series D Preferred Units redeemed or repurchased pursuant to this Section 4 shall be retired and shall be restored to the status of authorized and unissued units of preferred units, without designation as to Series D and may thereafter be reissued as units of any series of preferred units.
 
(f)  The Series D Preferred Units shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption.
 
5.           Voting Rights.
 

(a)  Holders of the Series D Preferred Units shall not have any voting rights, except as set forth in the Partnership Agreement.
 
(b)  The affirmative vote or consent of the holders of two-thirds of the units of Series D Preferred Units and the holders of all other classes or series of Preferred Units of the Operating Partnership ranking on parity with the Series D Preferred Units upon which like voting rights have been conferred and are exercisable, outstanding at the time (voting together as a class), given in person or by proxy, either in writing or at a meeting, will be required to: (i) authorize or create or increase the authorized or issued amount of any class or series of units ranking senior to the Series D Preferred Units with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the Operating Partnership or reclassify any authorized units of the Operating Partnership into such units, or create, authorize
 
or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership Agreement or this Certificate of Designations, whether by merger, consolidation, transfer or conveyance of substantially all of its assets or otherwise (an “Event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series D Preferred Units or the holders thereof; provided however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series D Preferred Units remain outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an Event, the Operating Partnership may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series D Preferred Units and in such case such holders shall not have any voting rights with respect to the Events set forth in (ii) above.  Except as may be required by law, holders of Series D Preferred Units shall not be entitled to vote with respect to (A) any increase or decrease in the total number of authorized Preferred Units, (B) any increase, decrease or issuance of any series of Preferred Units including the Series D Preferred Units or (C) the creation or issuance of any other series of Preferred Units, in each case referred to in clauses (A), (B) or (C) above, ranking on a parity with or junior to the Series D Preferred Units with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding-up.
 
(c)  The foregoing voting provisions of this Section 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding units of Series D Preferred Units shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.
 
(d)  In any matter in which the Series D Preferred Units may vote (as expressly provided herein or as may be required by law), each unit of Series D Preferred Units shall be entitled to one vote per each $25.00 in stated liquidation preference.
 
6.           Conversion.
 

The units of Series D Preferred Units shall not be convertible into or exchangeable for any other property or units of the Operating Partnership.
 
7.           Ranking.
 

The Series D Preferred Units shall, with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Operating Partnership, rank (a) senior to the Common Units and to all units ranking junior to such Series D Preferred Units; (b) on a parity with all units issued by the Operating Partnership the terms of which specifically provide that such units rank on a parity with the Series D Preferred Units; and (c) junior to all units issued by the Operating Partnership (in accordance with this Certificate of Designations) the terms of which specifically provide that such units rank senior to the Series D Preferred Units. For purposes of this Section 7, the term “units” does not include indebtedness convertible into units.
 
8.           Exclusion of Other Rights.
 

The Series D Preferred Units shall not have any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than as expressly set forth in the Partnership Agreement and this Certificate of Designations.
 
9.           Headings of Subdivisions.
 

The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
 
10.           Severability of Provisions.
 

If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series D Preferred Units set forth in the Partnership Agreement and this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of Series D Preferred Units set forth in the Partnership Agreement which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series D Preferred Units herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.
 
11.           No Preemptive Rights.
 

No holder of Series D Preferred Units shall be entitled to any preemptive rights to subscribe for or acquire any unissued units of the Operating Partnership (whether now or hereafter authorized) or securities of the Operating Partnership convertible into or carrying a right to subscribe to or acquire units of the Operating Partnership.
 

SIGNATURE APPEARS ON NEXT PAGE




IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Amended and Restated Certificate of Designation of 7.375% Series D Cumulative Redeemable Preferred Units to be duly executed by its Vice Chairman of the Board and Chief Financial Officer this 25th day of February, 2010.


CBL Holdings I, Inc.


By:     /s/ John N. Foy                                                                 
John N. Foy
Vice Chairman of the Board
and Chief Financial Officer



SECOND AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION
OF
7.375% SERIES D CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP

Pursuant to Article 4.4 of the
Third Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership

WHEREAS, CBL & Associates Properties, Inc. (the “Company”) previously issued, in December 2004, 700,000 shares (the “2004 Offering”) of 7.375% Series D Cumulative Redeemable Preferred Stock (the “Preferred Stock”); and
 
WHEREAS, the Company previously issued, in March 2010, an additional 630,000 shares (the “March 2010 Offering”) of the Preferred Stock; and
 
WHEREAS, the Company has committed to issue, in October 2010, an additional 440,000 shares (the “October 2010 Offering”) of the Preferred Stock; and
 
WHEREAS, the Company previously contributed the net proceeds of the 2004 Offering and the March 2010 Offering to CBL & Associates Limited Partnership (the “Operating Partnership”), and the Company and the Operating Partnership now desire that the Company contribute net proceeds of the October 2010 Offering to the Operating Partnership, in each case in exchange for preferred units having substantially the same economic rights and terms as the Preferred Stock;
 
WHEREAS, Article 4.4 of the Third Amended and Restated Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) provides for a Preferred Unit Designation, setting forth, in sufficient detail, the economic rights and terms of the class or series of preferred units.
 
NOW THEREFORE, CBL Holdings I, Inc., the general partner of the Operating Partnership (the “General Partner”) hereby amends and restates in full, as so amended, the designated terms of a series of preferred units, with the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, being hereby fixed as follows:
 
1.           Designation and Amount.
 

The units of such series shall be designated “7.375% Series D Cumulative Redeemable Preferred Units” (the “Series D Preferred Units”) and the number of units constituting such series shall be 2,200,000.  The designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of the Series D Preferred Units shall be subject in all cases to the provisions of the
 
Partnership Agreement.
 
2.           Dividends and Distribution Rights.
 

(a)  Holders of Series D Preferred Units shall be entitled to receive, when, as and if declared by the General Partner, out of assets of the Operating Partnership legally available for the payment of dividends, cumulative preferential cash dividends at the rate of 7.375% per annum of the $250.00 liquidation preference.  Such dividends shall be cumulative from and including the date of the original issue by the Operating Partnership of the Series D Preferred Units and shall be payable quarterly in arrears on the 30th day of March, June, September, and December of each year or, if not a business day, the next succeeding business day (each, a “Dividend Payment Date”).  The first dividend shall be paid on March 30, 2005.  Such first dividend and any dividend payable on the Series D Preferred Units for any other partial dividend period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.  Dividends will be payable to holders of record as they appear in the records of the Operating Partnership at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or on such other date designated by the General Partner for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).
 
(b)  No dividends on the Series D Preferred Units shall be declared by the General Partner or paid or set apart for payment by the General Partner at such time as the terms and provisions of any agreement of the Operating Partnership, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.
 
(c)  Notwithstanding anything contained herein to the contrary, dividends on the Series D Preferred Units shall accrue whether or not the Operating Partnership has earnings, whether or not there are funds legally available for the payment of such dividends, and whether or not such dividends are declared.  Accrued but unpaid dividends on the Series D Preferred Units shall accumulate as of the Dividend Payment Date on which they first become payable.
 
(d)  Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on any of the Operating Partnership’s Common Units (“Common Units”), or units of any other class or series of units of the Operating Partnership ranking, as to dividends, on a parity with or junior to the Series D Preferred Units (other than a dividend paid in units of Common Units or in units of any other class or series of units ranking junior to the Series D Preferred Units as to dividends and upon liquidation) for any period unless full cumulative dividends on the Series D Preferred Units for all past dividend periods and the then current dividend period shall have been or contemporaneously are (i) declared and paid in cash or (ii) declared and a sum sufficient for the payment thereof in cash is set apart for such payment.  When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series D Preferred Units and the units of any other series of preferred units ranking on a parity as to dividends with the Series D Preferred Units, all dividends declared upon the Series D Preferred Units and any other series of preferred units ranking on a parity as to dividends with
 
the Series D Preferred Units shall be declared pro rata so that the amount of dividends declared per unit of Series D Preferred Units and such other series of preferred units shall in all cases bear to each other the same ratio that accrued dividends per unit on the Series D Preferred Units and such other series of preferred units (which shall not include any accrual in respect of unpaid dividends on such other series of preferred units for prior dividend periods if such other series of preferred units does not have a cumulative dividend) bear to each other.  No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series D Preferred Units which may be in arrears.
 
(e)  Except as provided in paragraph 2(d), unless full cumulative dividends on the Series D Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash is set apart for payment for all past dividend periods and the then current dividend period, no dividends (other than in Common Units or other units ranking junior to the Series D Preferred Units as to dividends and upon liquidation) shall be declared or paid or set aside for payment or other dividend shall be declared or made upon the Common Units or any other units of the Operating Partnership ranking junior to or on parity with the Series D Preferred Units as to dividends or amounts upon liquidation nor shall any units of Common Units, or any units of any other class or series of units of the Operating Partnership ranking junior to or on a parity with the Series D Preferred Units as to dividends or upon liquidation, be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such units) by the Operating Partnership (except by conversion into or exchange for other units of the Operating Partnership ranking junior to the Series D Preferred Units as to dividends and upon liquidation).  Nothing in the foregoing shall be deemed to preclude the exercise of Rights (as defined in the Partnership Agreement) by any unit holder in accordance with the Partnership Agreement.
 
(f)  Holders of Series D Preferred Units shall not be entitled to any dividend, whether payable in cash, property or units, in excess of full cumulative dividends on the Series D Preferred Units as provided above.  Any dividend payment made on the Series D Preferred Units shall first be credited against the earliest accrued but unpaid dividends due with respect to such units which remains payable.
 
3.           Liquidation Rights.
 

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Operating Partnership, the holders of units of Series D Preferred Units shall be entitled to be paid out of the assets of the Operating Partnership legally available for distribution to its Unit holders a liquidation preference of $250.00 per unit, plus an amount equal to any accrued and unpaid dividends to the date of payment (whether or not declared), before any distribution or payment shall be made to holders of units of Common Units or any other class or series of units of the Operating Partnership ranking junior to the Series D Preferred Units as to liquidation rights.  In the event that, upon such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Operating Partnership are insufficient to pay the amount of the liquidating distributions on all outstanding units of Series D Preferred Units and the corresponding amounts payable on all units of other classes or series of units of the Operating
 
Partnership ranking on a parity with the Series D Preferred Units in the distribution of assets, then the holders of the Series D Preferred Units and all other such classes or series of units shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.  Holders of Series D Preferred Units shall be entitled to written notice of any such liquidation.  After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series D Preferred Units will have no right or claim to any of the remaining assets of the Operating Partnership.  The consolidation or merger of the Operating Partnership with or into any corporation, trust or entity, or of any corporation, trust or other entity with or into the Operating Partnership, or the sale, lease or conveyance of all or substantially all of the property or business of the Operating Partnership shall not be deemed to constitute a liquidation, dissolution or winding-up of the Operating Partnership.
 
4.           Redemption.
 

(a)  Series D Preferred Units shall not be redeemable prior to December 13, 2009.  On or after December 13, 2009, the Operating Partnership, at its option upon not less than 30 nor more than 60 days’ written notice, may redeem the Series D Preferred Units, in whole or in part, at any time or from time to time, for cash at a redemption price of $250.00 per unit, plus any accrued and unpaid dividends thereon up to and including the date fixed for redemption (except as provided below), without interest.  If fewer than all of the outstanding units of Series D Preferred Units are to be redeemed, the units of Series D Preferred Units to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional units) or by lot or by any other equitable method determined by the Operating Partnership.  Holders of Series D Preferred Units to be redeemed shall surrender such Series D Preferred Units at the place designated in such notice and shall be entitled to the redemption price and any accrued and unpaid dividends payable upon such redemption following such surrender.  If notice of redemption of any Series D Preferred Units has been given and if the funds necessary for such redemption have been set aside by the Operating Partnership in trust for the benefit of the holders of any units of Series D Preferred Units so called for redemption, then from and after the redemption date dividends shall cease to accrue on such Series D Preferred Units, such units of Series D Preferred Units shall no longer be deemed outstanding and all rights of the holders of such units will terminate, except the right to receive the redemption price plus any accrued and unpaid dividends payable upon such redemption.  Nothing herein shall prevent or restrict the Operating Partnership’s right or ability to purchase, from time to time either at a public or a private sale, all, or any portion, of the outstanding Series D Preferred Units at such price or prices as the Operating Partnership may determine, subject to the provisions of applicable law.
 
(b)  Unless full cumulative dividends on all Series D Preferred Units shall have been or contemporaneously are declared and paid in cash or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past dividend periods and the then current dividend period, no Series D Preferred Units shall be redeemed unless all outstanding units of Series D Preferred Units are simultaneously redeemed and the Operating Partnership shall not purchase or otherwise acquire directly or indirectly any units of Series D Preferred Units (except by exchange for units of the Operating Partnership ranking junior to the Series D Preferred Units as to dividends and amounts upon liquidation).
 
(c)  Notice of redemption shall be mailed by the Operating Partnership, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the units of Series D Preferred Units to be redeemed at their respective addresses as they appear on the records of the Operating Partnership.  No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Series D Preferred Units except as to a holder to whom notice was defective or not given.  Each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the number of units of Series D Preferred Units to be redeemed; (iv) the place or places where units of Series D Preferred Units are to be surrendered for payment of the redemption price; and (v) that dividends on the Series D Preferred Units to be redeemed shall cease to accrue on such redemption date.  If fewer than all of the units of Series D Preferred Units held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of units of Series D Preferred Units held by such holder to be redeemed.
 
(d)  Immediately prior to any redemption of Series D Preferred Units, the Operating Partnership shall pay, in cash, any accumulated and unpaid dividends through the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series D Preferred Units at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such units on the corresponding Dividend Payment Date notwithstanding the redemption of such units before such Dividend Payment Date.  Except as provided above, the Operating Partnership shall make no payment or allowance for unpaid dividends, whether or not in arrears, on Series D Preferred Units for which a notice of redemption has been given.
 
(e)  All Series D Preferred Units redeemed or repurchased pursuant to this paragraph 4 shall be retired and shall be restored to the status of authorized and unissued units of preferred units, without designation as to Series D and may thereafter be reissued as units of any series of preferred units.
 
(f)  The Series D Preferred Units shall have no stated maturity and shall not be subject to any sinking fund or mandatory redemption.
 
5.           Voting Rights.
 

(a)  Holders of the Series D Preferred Units shall not have any voting rights, except as set forth in the Partnership Agreement.
 
(b)  The affirmative vote or consent of the holders of two-thirds of the units of Series D Preferred Units and the holders of all other classes or series of Preferred Units of the Operating Partnership ranking on parity with the Series D Preferred Units upon which like voting rights have been conferred and are exercisable, outstanding at the time (voting together as a class), given in person or by proxy, either in writing or at a meeting, will be required to: (i) authorize or create, or increase the authorized or issued amount of, any class or series of units ranking senior to the Series D Preferred Units with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding-up of the Operating Partnership or reclassify any authorized units of the Operating Partnership into such units, or create, authorize or issue any
 
obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership Agreement or this Certificate of Designations, whether by merger, consolidation, transfer or conveyance of substantially all of its assets or otherwise (an “Event”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series D Preferred Units or the holders thereof; provided however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series D Preferred Units remain outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an Event, the Operating Partnership may not be the surviving entity, the occurrence of such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series D Preferred Units and in such case such holders shall not have any voting rights with respect to the Events set forth in (ii) above.  Except as may be required by law, holders of Series D Preferred Units shall not be entitled to vote with respect to (A) any increase or decrease in the total number of authorized Preferred Units, (B) any increase, decrease or issuance of any series of Preferred Units including the Series D Preferred Units or (C) the creation or issuance of any other series of Preferred Units, in each case referred to in clauses (A), (B) or (C) above, ranking on a parity with or junior to the Series D Preferred Units with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding-up.
 
(c)  The foregoing voting provisions of this paragraph 5 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding units of Series D Preferred Units shall have been redeemed or called for redemption upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption.
 
(d)  In any matter in which the Series D Preferred Units may vote (as expressly provided herein or as may be required by law), each unit of Series D Preferred Units shall be entitled to one vote per each $25.00 in stated liquidation preference.
 
6.           Conversion.
 

The units of Series D Preferred Units shall not be convertible into or exchangeable for any other property or units of the Operating Partnership.
 
7.           Ranking.
 

The Series D Preferred Units shall, with respect to dividend rights and rights upon liquidation, dissolution or winding-up of the Operating Partnership, rank (a) senior to the Common Units and to all units ranking junior to such Series D Preferred Units; (b) on a parity with all units issued by the Operating Partnership the terms of which specifically provide that such units rank on a parity with the Series D Preferred Units; and (c) junior to all units issued by the Operating Partnership (in accordance with this Certificate of Designations) the terms of which specifically provide that such units rank senior to the Series D Preferred Units. For purposes of this paragraph 7, the term “units” does not include indebtedness convertible into units.
 


8.           Exclusion of Other Rights.
 

The Series D Preferred Units shall not have any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption other than as expressly set forth in the Partnership Agreement and this Certificate of Designations.
 
9.           Headings of Subdivisions.
 

The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
 
10.           Severability of Provisions.
 

If any preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series D Preferred Units set forth in the Partnership Agreement and this Certificate of Designations is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of Series D Preferred Units set forth in the Partnership Agreement which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series D Preferred Units herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.
 
11.           No Preemptive Rights.
 

No holder of Series D Preferred Units shall be entitled to any preemptive rights to subscribe for or acquire any unissued units of the Operating Partnership (whether now or hereafter authorized) or securities of the Operating Partnership convertible into or carrying a right to subscribe to or acquire units of the Operating Partnership.
 


SIGNATURE APPEARS ON NEXT PAGE




IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Second Amended and Restated Certificate of Designation of 7.375% Series D Cumulative Redeemable Preferred Units to be duly executed by its Vice Chairman of the Board and Chief Financial Officer this 14 day of October, 2010.


CBL Holdings I, Inc.


By:           /s/ John N. Foy
John N. Foy
Vice Chairman of the Board
and Chief Financial Officer






EXHIBIT C

EXHIBIT C

Allocations
 
1.           Allocations of Gross Income, Net Income and Net Loss.

(a) Except as otherwise provided herein, in each tax year in which there is sufficient Gross Income and Net Income to make all of the allocations described in subsections (i) through (iv) below, Gross Income, Net Income and Net Loss of the Partnership for such tax year shall be allocated among the Partners in the following order and priority:
 
(i) First, Net Income shall be allocated to the relevant Partner, on account of the Preferred Units, in an amount equal to the excess of (A) the amount of Net Cash Flow distributed to such Partner pursuant to Sections 6.2(a)(i) and (ii) and Subsection 6.2(f) (but only to the extent of the Preferred Distribution Requirement and Preferred Distribution Shortfalls) for the current and all prior Partnership tax years over (B) the amount of Net Income previously allocated to such Partner pursuant to this Subsection (a)(i) or pursuant to Subsection (b)(i);
 
(ii) Second, for any Partnership tax year ending on or after a date on which Preferred Units are redeemed, Net Income (or Net Losses) shall be allocated to the relevant Partner, on account of the Preferred Units, in an amount equal to the excess (or deficit) of the sum of the applicable Preferred Redemption Amounts for the Preferred Units that have been or are being redeemed during such Partnership tax year over the Preferred Unit Issue Price of such Preferred Units;
 
(iii) Third, Gross Income shall be allocated to the relevant Partner, on account of SCUs or S-SCUs, or Common Units received on a conversion or redemption of SCUs or S-SCUs in an amount equal to the amount of cash distributed to such Partner in respect of such SCUs or S-SCUs, or Common Units pursuant to Subsections 6.2(a)(iii), (iv) and (v) and Subsections 6.2(b)(i), (ii) and (iii) (the “Target Amount”).  The character of the items of Gross Income allocated to the relevant Partners pursuant to this Subsection (iii) shall proportionately reflect the relative amounts of the Partnership’s Gross Income having such character for such year, excluding from such Gross Income Net Capital Gain allocated pursuant to Subsection 1(c) below; provided, however, that such items shall not include items described in Subsection (e) of the definition of Net Income or Net Loss, it being the intention of the parties that the tax items allocated under Subsection 3(a) corresponding to the items of Gross Income allocated pursuant to this Subsection 1(a)(iii) will equal the Target Amount.  If the amount of such items differs from the Target Amount, the items of Gross Income allocated pursuant to this Subsection 1(a)(iii) shall be adjusted to cause the amount of such tax items to equal the Target Amount.  For purposes of determining the amount of cash distributed to such Partners, Special Tax Distributions shall not be taken into account, and Extraordinary Return of Capital Distributions shall be taken into account only to the extent that the amount of
 
such Extraordinary Return of Capital Distributions exceed the aggregate of the Excess Allocations made to such Partners.  For this purpose, “Excess Allocations” mean the excess of the Tax Net Capital Gain allocated under Subsection 3(a) to holders of SCUs or S-SCUs and holders of Common Units received on a conversion or redemption of SCUs and S-SCUs in connection with allocations of Net Capital Gain under Subsection 1(c) over the Special Tax Distribution made to such Partners.  A distribution shall be treated as an Extraordinary Return of Capital Distribution to the extent that such distribution is reasonably attributable to (x) Net Financing Proceeds or (y) proceeds allocable to a transaction generating Net Capital Gain allocated pursuant to Subsection 1(c); in either case limited to the excess of the Tax Net Capital Gain allocated under Subsection 3(a) to holders of SCUs or S-SCUs and holders of Common Units received on a conversion or redemption of SCUs or S-SCUs in connection with allocations of Net Capital Gain under Subsection 1(c) over the Special Tax Distributions made to such Partners;
 
(iv) Fourth, Gross Income shall be allocated to the relevant Partner, on account of L-SCUs, K-SCUs or Common Units received on a conversion or redemption of L-SCUs or K-SCUs in an amount equal to the amount of cash distributed to such Partner in respect of such L-SCUs, K-SCUs or Common Units pursuant to Subsections 6.2(c)(i), (ii) and (iii) and Subsections 6.2(e)(i), (ii) and (iii) (the “Target Amount”).  The character of the items of Gross Income allocated to the relevant Partners pursuant to this subsection (iv) shall proportionately reflect the relative amounts of the Partnership’s Gross Income having such character for such year (such that if, for example, X% of the Partnership’s Gross Income for such year consisted of net capital gain, then X% of the Gross Income allocated under this Subsection (iv) would consist of net capital gain); provided, however, that such items shall not include items described in Subsection (e) of the definition of Net Income or Net Loss, it being the intention of the parties that the tax items allocated under Subsection 3(a) corresponding to the items of Gross Income allocated pursuant to this Subsection 1(a)(iv) will equal the Target Amount.  If the amount of such items differs from the Target Amount, the items of Gross Income allocated pursuant to this Subsection 1(a)(iv) shall be adjusted to cause the amount of such tax items to equal the Target Amount;
 
(v) Fifth, Gross Income shall be allocated to the relevant Partner, on account of the Common Units issued in conjunction with the Panama City Mall contribution, in an amount equal to the amount of cash distributed to such Partner pursuant to Section 6.2 of the Partnership Agreement.  The character of the items of Gross Income allocated to the relevant Partners pursuant to this subsection (v) shall proportionately reflect the relative amounts of the Partnership’s Gross Income having such character for such year (such that if, for example, X% of the Partnership’s Gross Income for such year consisted of net capital gain, then X% of the Gross Income allocated under this Subsection (v) would consist of net capital gain); provided, however, that such items shall not include items described in Subsection (e) of the definition of Net Income or Net Loss, it being the intention of the parties that the tax items allocated under Subsection 3(a) corresponding to the items of Gross Income allocated pursuant to this Subsection 1(a)(v) will equal the Target Amount.  If the amount of such items differs from the Target Amount, the items of Gross Income allocated pursuant to this Subsection
 
1(a)(iv) shall be adjusted to cause the amount of such tax items to equal the Target Amount;
 
(vi) Sixth, any remaining Net Income and Net Losses (taking into account in determining such Net Income or Net Losses the allocation of Gross Income provided for in subsections (a)(iii), (a)(iv), and (a)(v) above) shall be allocated among the Partners, on account of their Common Units other than Common Units received on a conversion or redemption of SCUs, S-SCUs, L-SCUs or K-SCUs, in accordance with their proportionate ownership of Common Units other than Common Units received on a conversion or redemption of SCUs, S-SCUs, L-SCUs or K-SCUs (except as otherwise required by the Regulations).
 
(b) Except as otherwise provided herein, in each tax year in which there is not sufficient Gross Income and Net Income to make all of the allocations described in subsections (a)(i) through (a)(v) above, Gross Income, Net Income and Net Loss of the Partnership for such tax year shall be allocated among the Partners in the following order and priority:
 
(i) First, Net Income shall be allocated to the relevant Partner, on account of the Preferred Units, in an amount equal to the excess of (A) the amount of Net Cash Flow distributed to such Partner pursuant to Subsections 6.2(a)(i) and (ii) and Subsection 6.2(f) (but only to the extent of the Preferred Distribution Requirement and Preferred Distribution Shortfalls) for the current and all prior Partnership tax years over (B) the amount of Net Income previously allocated to such Partner pursuant to this Subsection (b)(i) or pursuant to Subsection (a)(i);
 
(ii) Second, for any Partnership tax year ending on or after a date on which Preferred Units are redeemed, Net Income (or Net Losses) shall be allocated to the relevant Partner, on account of the Preferred Units, in an amount equal to the excess (or deficit) of the sum of the applicable Preferred Redemption Amounts for the Preferred units that have been or are being redeemed during such Partnership tax year over the Preferred Unit Issue Price of such Preferred Units;
 
(iii) Third, Gross Income, to the extent not previously taken into account in making the allocations required under Subsections (a)(i) and (a)(ii), shall be allocated to the relevant Partner, on account of SCUs or S-SCUs, or Common Units received on a conversion or redemption of such SCUs or S-SCUs in an amount equal to the Target Amount.  The character of the items of Gross Income allocated to the relevant Partners pursuant to this Subsection (iii) shall proportionately reflect the relative amounts of the Partnership’s Gross Income having such character for such year, excluding from such Gross Income, Net Capital Gain allocated pursuant to Subsection 1(c) below; provided, however, that such items shall not include items described in Subsection (e) of the definition of Net Income or Net Loss, it being the intention of the parties that the tax items allocated under Subsection 3(a) corresponding to the items of Gross Income allocated pursuant to this Subsection 1(b)(iii) will equal the Target Amount.  If the amount of such items differs from the Target Amount, the items of Gross Income allocated pursuant to this Subsection 1(b)(iii) shall be adjusted to cause the amount of such tax items to equal the Target Amount.  For purposes of determining the amount of
 
cash distributed to such Partners, Special Tax Distributions shall not be taken into account, and Extraordinary Return of Capital Distributions shall be taken into account only to the extent that the amount of such Extraordinary Return of Capital Distributions exceed the aggregate of the Excess Allocations made to such Partners.  For this purpose, “Excess Allocations” mean the excess of the Tax Net Capital Gain allocated under Subsection 3(a) to holders of SCUs or S-SCUs, and holders of Common Units received on a conversion or redemption of SCUs or S-SCUs in connection with allocations of Net Capital Gain under Subsection 1(c) over the Special Tax Distribution made to such Partners.  A distribution shall be treated as an Extraordinary Return of Capital Distribution to the extent that such distribution is reasonably attributable to (x) Net Financing Proceeds or (y) proceeds allocable to a transaction generating Net Capital Gain allocated pursuant to Subsection 1(c); in either case limited to the excess of the Tax Net Capital Gain allocated under Subsection 3(a) to holders of SCUs or S-SCUs, and holders of Common Units received on a conversion or redemption of SCUs or S-SCUs in connection with allocations of Net Capital Gain under Subsection 1(c) over the Special Tax Distributions made to such Partners.
 
(iv) Fourth, Gross Income, to the extent not previously taken into account in making the allocations required under Subsections (a)(i), (a)(ii), or (a)(iii) shall be allocated to the relevant Partner, on account of L-SCUs, K-SCUs or Common Units received on a conversion or redemption of such L-SCUs or K-SCUs in an amount equal to the Target Amount.  The character of the items of Gross Income allocated to the relevant Partners pursuant to this Subsection (b)(iv) shall proportionately reflect the relative amounts of the Partnership’s Gross Income having such character for such year (such that if, for example, X% of the Partnership’s Gross Income for such year consisted of net capital gain, then X% of the Gross Income allocated under this Subsection (iv) would consist of net capital gain); provided, however, that such items shall not include items described in Subsection (e) of the definition of Net Income or Net Loss, it being the intention of the parties that the tax items allocated under Subsection 3(a) corresponding to the items of Gross Income allocated pursuant to this Subsection 1(b)(iv) will equal the Target Amount.  If the amount of such items differs from the Target Amount, the items of Gross Income allocated pursuant to this Subsection 1(b)(iv) shall be adjusted to cause the amount of such tax items to equal the Target Amount;
 
(v) Fifth, Gross Income (to the extent not previously taken into account in making the allocations required under Subsections (a)(i), (a)(ii), (a)(iii), or (a)(iv)) shall be allocated to the relevant Partner, on account of Common Units issued in conjunction with the Panama City Mall contribution as defined herein below.  The character of the items of Gross Income allocated to the relevant Partners pursuant to this Subsection (v) shall proportionately reflect the relative amounts of the Partnership’s Gross Income having such character for such year (such that if, for example, X% of the Partnership’s Gross Income for such year consisted of net capital gain, then X% of the Gross Income allocated under this Subsection (v) would consist of net capital gain); provided, however, that such items shall not include items described in Subsection (e) of the definition of Net Income or Net Loss, it being the intention of the parties that the tax items allocated under Subsection 3(a) corresponding to the items of Gross Income allocated pursuant to this Subsection 1(b)(v) will equal the Target Amount.  If the amount
 
of such items differs from the Target Amount, the items of Gross Income allocated pursuant to this Subsection 1(b)(v) shall be adjusted to cause the amount of such tax items to equal the Target Amount;
 
(vi) Sixth, any remaining Net Income and Net Losses (taking into account in determining such Net Income or Net Losses the allocation of Gross Income provided for in Subsections (b)(iii), (b)(iv), and (b)(v) above) shall be allocated among the Partners, on account of their Common Units other than Common Units received on a conversion or redemption of SCUs, S-SCUs, L-SCUs or K-SCUs, in accordance with their proportionate ownership of Common Units other than common units received on a conversion or redemption of SCUs, S-SCUs, L-SCUs or K-SCUs (except as otherwise required by the Regulations).
 
(c) Notwithstanding Subsections (a)(iii) and (a)(vi), and Subsections (b) (iii) and (b)(vi), above, holders of SCUs or S-SCUs and holders of Common Units received upon a conversion or redemption of SCUs or S-SCUs may be allocated their proportionate share of Net Capital Gain recognized by the Partnership in a taxable year (in accordance with their proportionate ownership of the aggregate number of SCUs, S-SCUs and Common Units, counting each SCU or S-SCU, as applicable, as the number of Common Units into which it is convertible in accordance with Exhibit E or Exhibit H as applicable), in addition to the amount specified in Subsection (a)(iii) above and Subsection (b)(iii) above, if each of the following requirements is satisfied:
 
(i) the Partnership shall have distributed to each holder of SCUs and S-SCUs in cash pursuant to Subsection 6.2(a)(iv) or 6.2(b)(ii) for the last quarter of such taxable year an amount equal to the Basic Distribution Amount or the S-SCU Basic Distribution Amount, as applicable (determined without taking into account any Special Tax Distribution);
 
(ii) during such taxable year, the Partnership has recognized Net Capital Gain in connection with a sale of, condemnation of or disposition of one or more Properties;
 
(iii) the Partnership has made or will make prior to January 30, of the following tax year a cash distribution (a “Special Tax Distribution”) to the Partners, and the portion of such Special Tax Distribution made (x) to the holders of SCUs and holders of Common Units received upon a conversion or redemption of SCUs equals or exceeds the product of the maximum combined federal, Ohio and Cleveland rates imposed on net capital gains of the applicable holding period (taking into account recapture, if applicable, and the deductibility of state and local taxes) multiplied by the amount of Tax Net Capital Gain allocated under Subsection 3(a) to holders of SCUs and holders of Common Units received upon a conversion or redemption of SCUs in connection with the allocation under this Subsection 1(c) of Net Capital Gain to such holders, and (y) to the holders of S-SCUs and holders of Common Units received upon a conversion or redemption of S-SCUs equals or exceeds the product of the maximum combined federal, Ohio and Cleveland rates imposed on net capital gains of the applicable holding period (taking into account recapture, if applicable, and the deductibility of state and local taxes) multiplied
 
by the amount of Tax Net Capital Gain allocated under Subsection 3(a) to holders of S-SCUs and holders of Common Units received upon a conversion or redemption of S-SCUs in connection with the allocation under this Subsection 1(c) of Net Capital Gain to such holders.  For these purposes, Tax Net Capital Gain means net capital gain, as determined for federal income tax purposes, which is governed by Subsection 3(a) and not Subsection 3(c) hereof.  For the avoidance of doubt, no portion of any Special Tax Distribution will be taken into account when determining whether the Partnership has satisfied the distribution requirement of Subsections 6.2(a)(iii), 6.2(a)(iv), 6.2(b)(i) and 6.2(b)(ii);
 
(iv) (A)  [intentionally left blank]
 
(B)  with respect to Special Tax Distributions to be made within two years of the Closing Date provided for in the Contribution and Exchange Agreement for Monroeville Mall, the Special Tax Distribution will not cause the aggregate distributions to a holder of S-SCUs or a holder of Common Units received on a conversion or redemption of S-SCUs, other than distributions to such holder in respect of the S-SCU Basic Distribution Amount, to exceed the product of (x) the lesser of such holder’s percentage interest in Partnership profits for the year in which the Special Tax Distribution is made or such holder’s percentage interest in Partnership profits for the life of the Partnership (as determined for purposes of Regulations Section 1.707-4(b)) and (y) the Partnership’s net cash flow from operations for the year in which the Special Tax Distribution is made (as determined for purposes of Regulations Section 1.707-4(b)).
 
(d) Notwithstanding Subsections (a)(iv) and (a)(vi), and Subsections (b)(iv) and (b)(vi) above, holders of L-SCUs shall be allocated Gross Income in excess of the amount in Subsections (a)(iv) and (b)(iv) above if and only if (i) all other Common Unit holders have received an income and/or gain allocation equivalent to their cash distributions, and (ii) such allocation of income and/or gain to holders of the L-SCUs is in an amount equivalent to their pro rata portion, treating each SCU, S-SCU, L-SCU and K-SCU as the number of Common Units into which such SCU, S-SCU, L-SCU and K-SCU are convertible pursuant to Exhibit E, Exhibit H, Exhibit J or Exhibit K, as applicable, of the aggregate of the income and/or gain remaining after the other Common Unit holders have been allocated income and/or gain in an amount equivalent to the cash distributions that they received for such fiscal year.
 
(e) Notwithstanding Subsections (a)(iv) and (a)(vi), and Subsections (b)(iv) and (b)(vi) above, holders of K-SCUs and holders of Common Units received upon a conversion or redemption of K-SCUs shall be allocated Gross Income in excess of the amount in Subsections (a)(iv) and (b)(iv) above if and only if (i) all other Common Unit holders have received an income and/or gain allocation equivalent to their cash distributions and (ii) such allocation of income and/or gain to holders of the K-SCUs is in an amount equivalent to their pro rata portion, treating each SCU, S-SCU, L-SCU and K-SCU as the number of Common Units into which such SCU, S-SCU, L-SCU and K-SCU is convertible pursuant to Exhibit E, Exhibit H, Exhibit J or Exhibit K, as applicable, of the aggregate of the income and/or gain remaining after the other Common Unit holders have been allocated income and/or gain in an amount equivalent to the cash distributions that they received for such fiscal year.
 
(f) Notwithstanding Subsections (a)(v) and (a)(vi), and Subsections (b)(v) and (b)(vi), above, holders of Common Units issued in conjunction with the Panama City Mall contribution as defined hereinbelow, shall be allocated Gross Income in excess of the amount in Subsections (a)(v) and (b)(v) above if and only if (i) all other Common Unit holders have received an income and/or gain allocation equivalent to their cash distributions, and (ii) such allocation of income and/or gain to holders of the L-SCUs is in an amount equivalent to their pro rata portion, treating each SCU, S-SCU, L-SCU and K-SCU as the number of Common Units into which such SCU, S-SCU, L-SCU and K-SCU are convertible pursuant to Exhibit E, Exhibit H, Exhibit J or Exhibit K, as applicable, of the aggregate of the income and/or gain remaining after the other Common Unit holders have been allocated income and/or gain in an amount equivalent to the cash distributions that they received for such fiscal year.
 
(g) Notwithstanding Subsections (a), (b), (c), (d), (e) and (f), Net Income and Net Losses from a Liquidation Transaction shall be allocated as follows:
 
(i) First, Net Income (or Net Losses) from the Liquidation Transaction shall be allocated to the relevant Partner, in connection with the Preferred Units, in an amount equal to the excess (or deficit) of the sum of the applicable Preferred Redemption Amounts of the Preferred Units which have been or will be redeemed with the proceeds of the Liquidation Transaction over the Preferred Unit Issue Price of such Preferred Units;
 
(ii) Second, Net Income (or Net Losses) from the Liquidation Transaction shall be allocated among the Partners owning SCUs, S-SCUs, L-SCUs, K-SCUs or Common Units so that the Capital Accounts of the Partners (excluding from the Capital Account of any Partner the amount attributable to such Partner’s Preferred Units) are proportional to the number of Common Units held by each Partner.  For purposes of this Subsection (ii), each SCU, S-SCU, L-SCU or K-SCUs shall be treated as the number of Common Units into which the SCU, S-SCUs, L-SCUs or K-SCUs are convertible pursuant to the terms of Exhibit E, Exhibit H, Exhibit J or Exhibit K, as applicable, to the Agreement.
 
(iii) Third, any remaining Net Income or Net Losses from the Liquidation Transaction shall be allocated among the Partners owning SCUs, S-SCUs, L-SCUs, K-SCUs or Common Units in accordance with their proportionate ownership of Common Units.  For purposes of this Subsection (iii), each SCU, S-SCU, L-SCU or K-SCU shall be treated as the number of Common Units into which the SCU, S-SCU, L-SCU or K-SCU is convertible pursuant to the terms of Exhibit E, Exhibit H, Exhibit J or Exhibit K, as applicable, to the Agreement.
 
2.           Special Allocations.
Notwithstanding any provisions of Section 1 of this Exhibit C, the following special allocations shall be made in the following order:
 
(a)           Minimum Gain Chargeback (Nonrecourse Liabilities).  If there is a net decrease in Partnership Minimum Gain for any Partnership fiscal year (except as a result of conversion or refinancing of Partnership indebtedness, certain capital contributions or
 
revaluation of the Partnership property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner’s share of the net decrease in Partnership Minimum Gain.  The items to be so allocated shall be determined in accordance with Regulation Section 1.704-2(f).  This Subsection (a) is intended to comply with the minimum gain chargeback requirement in said section of the Regulations and shall be interpreted consistently therewith.  Allocations pursuant to this Subsection (a) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.
 
(b)           Minimum Gain Attributable to Partner Nonrecourse Debt.  If there is a net decrease in minimum Gain Attributable to Partner Nonrecourse Debt during any fiscal year (other than due to the conversion, refinancing or other change in the debt instrument causing it to become partially or wholly nonrecourse, certain capital contributions, or certain revaluations of Partnership property as further outlined in Regulation Section 1.704-2(i)(4)), each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner’s share of the net decrease in the Minimum Gain Attributable to Partner Nonrecourse Debt.  The items to be so allocated shall be determined in accordance with Regulation Sections 1.704-2(i)(4) and (j)(2).  This Subsection (b) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said sections of the Regulations and shall be interpreted consistently therewith.  Allocations pursuant to this Subsection (b) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.
 
(c)           Qualified Income Offset.  In the event a Limited Partner unexpectedly receives any adjustments, allocations or distributions described in Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Limited Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit as quickly as possible.  This Subsection (c) is intended to constitute a “qualified income offset” under Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
 
(d)           Nonrecourse Deductions.  Nonrecourse Deductions for any fiscal year or other applicable period shall be allocated to the Partners in accordance with their proportionate ownership of Common Units other than Common Units issued on a redemption or conversion of SCUs, S-SCUs L-SCUs or K-SCUs.
 
(e)           Partner Nonrecourse Deductions.  Partner Nonrecourse Deductions for any fiscal year or other applicable period shall be specially allocated to the Partner that bears the economic risk of loss for the debt (i.e., the Partner Nonrecourse Debt) in respect of which such Partner Nonrecourse Deductions are attributable (as determined under Regulation Sections 1.704-2(b)(4) and (i)(1)).
 
           (f)           Curative Allocations.  The Regulatory Allocations (as defined below) shall be taken into account in allocating other items of income (including Gross Income), gain, loss, and deduction among the Partners so that, to the extent possible, the cumulative net amount of allocations of Partnership Items under Sections 1 and 2 of this Exhibit C shall be equal to the net amount that would have been allocated to each Partner if the Regulatory Allocations had not
 
occurred.  To the extent that there is an allocation under Subsection 2(a) or (b) hereof of Partnership income or gain to a holder of SCUs, S-SCUs, L-SCUs, K-SCUs or Common Units issued on a redemption or conversion of SCUs, S-SCUs, L-SCUs or K-SCUs, there will be a correspondingly smaller allocation of Gross Income to such holder under Sections 1(a)(iii), 1(a)(iv),l(b)(iii), or 1(b)(iv) hereof.  This Subsection (f) is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith.  For purposes hereof, “Regulatory Allocations” shall mean the allocations provided under this Section 2.
 
3.           Tax Allocations.
 
(a)           Generally.  Subject to Subsections (b) and (c) hereof, items of income, gain, loss, deduction and credit to be allocated for income tax purposes (collectively, “Tax Items”) shall be allocated among the Partners on the same basis as their respective book items.
 
(b)           Sections 1245/1250 Recapture.  If any portion of gain from the sale of property is treated as gain which is ordinary income by virtue of the application of Code Section 1245 or 1250 (“Affected Gain”), then (A) such Affected Gain shall be allocated among the Partners in the same proportion that the depreciation and amortization deductions giving rise to the Affected Gain were allocated and (B) other Tax Items of gain of the same character that would have been recognized, but for the application of Code Section 1245 and/or 1250, shall be allocated away from those Partners who are allocated Affected Gain pursuant to Subsection (A) so that, to the extent possible, the other Partners are allocated the same amount, and type, of capital gain that would have been allocated to them had Code Section 1245 and/or 1250 not applied.  For purposes hereof, in order to determine the proportionate allocations of depreciation and amortization deductions for each fiscal year or other applicable period, such deductions shall be deemed allocated on the same basis as Net Income and Net Loss for such respective period.
 
(c)           Allocations Respecting Section 704(c) and Revaluations: Curative Allocations Resulting from the Ceiling Rule.  Notwithstanding Subsection (b) hereof, Tax Items with respect to Partnership property that is subject to Code Section 704(c) and/or Regulation Section 1.704-1(b)(2)(iv)(f) (collectively, “Section 704(c) Tax Items”) shall be allocated in accordance with said Code section and/or Regulation Section 1.704-1(b)(4)(i), as the case may be.  The allocation of Tax Items shall be subject to the ceiling rule stated in Regulation Section 1.704-1(c) and Regulation Section 1.704-3, except that with respect to the properties contributed to the Partnership (the “Jacobs Properties”) pursuant to the Master Contribution Agreement dated September 25, 2000 among Jacobs Realty Investors Limited Partnership, CBL & Associates Properties, Inc., CBL & Associates Limited Partnership and others (as amended, the “Master Contribution Agreement”), the property (“Monroeville Mall”) contributed to the Partnership pursuant to the Contribution and Exchange Agreement for Monroeville Mall, the property (“Laurel Park Place”) contributed to the Partnership pursuant to the Contribution and Exchange Agreement for Laurel Park Place and the property (“Panama City Mall”) contributed to the Partnership pursuant to the Contribution and Exchange for Panama City Mall, and Oak Park Mall and Eastland Mall (collectively, the “CWB Properties”) contributed to the Partnership pursuant to Contribution Agreements and Joint Escrow Instructions dated as of October 19, 2005, curative allocations of gain recognized on a disposition of a direct or indirect interest in a
 
Jacobs Property, Monroeville Mall, Laurel Park Place, Panama City Mall or a CWB Property may be made to the extent permitted in Regulation Section 1.704-3(c) respectively.  The Partnership shall allocate items of income, gain, loss and deduction allocated to it by a Property Partnership to the Partner or Partners contributing the interest or interests in such Property Partnership, so that, to the greatest extent possible, such contributing Partner or Partners are allocated the same amount and character of items of income, gain, loss and deduction with respect to such Property Partnership that they would have been allocated had they contributed undivided interests in the assets owned by such Property Partnership to the Partnership in lieu of contributing the interest or interests in the Property Partnership to the Partnership.  Notwithstanding the above, with respect to property contributed to the Partnership after the date hereof, such Section 704(c) Tax Items may be allocated under such method selected by the General Partner that is consistent with the Section 704(c) Regulations.
 
4.            Certain Allocations of Depreciation and Loss.  Notwithstanding anything in this Exhibit C to the contrary, depreciation, amortization, gain and loss attributable to an adjustment under Section 743 or Section 734 of the Code of the federal income tax basis of Partnership assets (including adjustments made prior to or after the contribution of the relevant assets or indirect interests therein to the Partnership) shall be allocated to the direct or indirect partner, or such partner’s successor or assign, whose death or acquisition of a direct or indirect interest gave rise to the adjustments, except to the extent such allocations would not be valid as a result of a change in tax law occurring after the date of the Master Contribution Agreement.
 
5.           Clarification Regarding L-SCUs’ Conversion to Common Units.  Throughout this Exhibit C, reference is made to “L-SCUs or Common Units received on a conversion or redemption of such L-SCUs” or words to similar effect.  The terms and rights of the L-SCUs are set forth on Exhibit J of the Partnership Agreement and such rights do not include the right on the part of the holder of L-SCUs to convert such L-SCUs to Common Units in all circumstances.  However, circumstances may arise where holders of L-SCUs receive Common Units in exchange for or in redemption of L-SCUs, i.e., on a Recapitalization Transaction as defined in Exhibit J.  The references to L-SCUs being converted to Common Units or Common Units being received in redemption of L-SCUs as set forth above shall not be construed as amending, reducing, expanding or otherwise changing the terms and rights of the L-SCUs as set forth on Exhibit J.
 




EXHIBIT D
 
Rights Terms
 

 
The Rights granted to the Limited Partners pursuant to Section 11.1 hereof shall be subject to the following terms and conditions:
 
1.           Definitions.  Capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement, and, in addition, the following terms and phrases shall, for purposes of this Exhibit D and the Agreement, have the meanings set forth below:
 
Beneficially Own; Beneficially Owned” shall mean the ownership of shares of Common Stock by a Person who would be treated as an owner of such shares of common Stock either directly or indirectly though the application of Sections 542 and 544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and any comparable successor provisions thereto.
 
“Beneficial Ownership Limit” shall mean (A) with respect to any Person other than members of the Lebovitz Group and the Wolford Group, 6% of the outstanding Capital Stock of the Company, (B) with respect to the Lebovitz Group, 23% of the outstanding Capital Stock of the Company and (C) with respect to the Wolford Group, 8% of the outstanding Capital Stock of the Company, in each case, determined by (i) number of shares outstanding, (ii) voting power or (iii) value (as determined by the Company’s board of directors), whichever produces the smallest holding of Capital Stock under the three methods, and computed taking into account all outstanding shares of Capital Stock and, to the extent provided by the Code, all shares of Capital Stock issuable under existing options and Exchange Rights that have not been exercised or deferred stock that has not vested.
 
“Constructively Own; Constructively Owned” shall mean the ownership of shares of Common Stock by a Person who would be treated as an owner of such shares of Common Stock either directly or indirectly through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code, and any comparable successor provisions thereto.
 
“Constructive Ownership Limit” shall mean (A) with respect to any Person other than members of the Lebovitz Group and the Wolford Group, 6% of the outstanding Capital Stock of the Company, (B) with respect to the Lebovitz Group, 23% of the outstanding Capital Stock of the Company and (C) with respect to the Wolford Group, 8% of the outstanding Capital Stock of the Company, in each case, determined by (i) number of shares outstanding, (ii) voting power or (iii) value (as determined by the Company’s board of directors), whichever produces the smallest holding of Capital Stock under the three methods, and computed taking into account all outstanding shares of Capital Stock and, to the extent provided by the Code, all shares of Capital Stock issuable under existing options and Exchange Rights that have not been exercised or deferred stock that has not vested; provided however, that members of the Lebovitz Group or the Wolford Group shall be subject to a Constructive Ownership Limit of 9.9% of the outstanding Capital Stock of the Company at all times that (x) members of the Lebovitz Group or the
 
Wolford Group Constructively Own (i) 10% or more of either the total combined voting power of all classes of stock entitled to vote or the total number of all classes of stock entitled to vote or the total number of outstanding shares of stock of any Tenant that is treated as a corporation for federal income tax purposes or (ii) an interest of 10% or more in the assets or net profits of any Tenant that is not treated as a corporation for federal income tax purposes and (y) the aggregate amount of income derived by the Company in its immediately preceding taxable year from such Tenants whose ownership is described in clause (x) hereof exceeded the amount derived from Tenants on November 3, 1993, adjusted as provided herein.
 
Election Notice” shall mean the written notice to be given by the Company to the Exercising Partners in accordance with the provisions of Section 6 hereof in response to the receipt by the Company of an Exchange Notice from such Exercising Partners, the form of which Election Notice is attached hereto as Schedule 2.
 
Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor statute.
 
“Exchange Consideration” shall have the meaning set forth in Section 5 hereof.
 
Exchange Notice” shall have the meaning set forth in Subsection 2(a) hereof.
 
Exchange Rights” shall have the meaning set forth in Subsection 2(a) hereof.
 
Exercising Partners” shall have the meaning set forth in Section 2 hereof.
 
Grandfathered Related Party Tenant” shall mean any Tenant which is a Related Party Tenant at the time that the Agreement of which this Exhibit is a part is entered into, as set forth on Schedule 4 hereto.
 
Hart-Scott Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
 
“Independent” shall have the meaning set forth in the Amended and Restated Certificate of Incorporation of the Company.
 
Lebovitz Group” shall mean (i) Charles B. Lebovitz and (ii) any Beneficial Owner or Constructive Owner of shares of Common Stock whose shares of Common Stock are Beneficially Owned or Constructively Owned by Charles B. Lebovitz or members of his family.
 
Offered Units” shall mean the Common Units of the Exercising partners identified in an Exchange Notice which, pursuant to the exercise of Exchange Rights, can be acquired by the Company under the terms hereof.
 
“Ownership Limit” shall mean the Beneficial Ownership Limit or the Constructive Ownership Limit, as appropriate.
 
“Registration Rights” shall mean the registration right attributable to shares of Common Stock, if any, issued to Limited Partners in accordance with the provisions hereof, as set forth in Schedule 3 hereto.
 
“Related Party Tenant” shall mean any Tenant with 10% or more of either the total combined voting power of all classes of stock entitled to vote or the total number of outstanding shares of stock of which, in the case of a corporate Tenant, or 10% or more of the assets or net profits of which, in the case of a non-corporate Tenant, is Constructively Owned by members of the Lebovitz Group or the Wolford Group.
 
“Securities Act” shall mean the Securities Act of 1933, as amended, or any successor statute.
 
“Tenant” shall mean any Person that rents real property owned, directly or indirectly, by the Company or the Partnership.
 
Wolford Group” shall mean (i) James L. Wolford and (ii) any Beneficial Owner or Constructive Owner of shares of Common Stock whose shares of Common Stock are Beneficially Owned or Constructively Owned by James L. Wolford or members of his family.
 
2.           Delivery of Exchange Notices.  Any one or more Limited Partners (“Exercising Partners”) may, subject to the limitations set forth herein, deliver to the Company written notice (the “Exchange Notice”) pursuant to which such Exercising Partners elect to exercise their Right to exchange (the “Exchange Rights”) all or any portion of their Common Units for Exchange Consideration subject to the limitations contained in Sections 3 and 4 below.
 
3.           Exercise Subject to Ownership Limit.  Exchange Rights may be exercised at any time and from time to time, to the extent that, upon exercise of the Exchange Rights, the Exercising Partner shall not, on a cumulative basis, Beneficially Own or Constructively Own shares of Common Stock including shares of Common Stock to be issued in connection with the exercise of such Exchange Rights, in excess of the applicable Ownership Limit.  If an Exchange Notice is delivered to the Company, but as a result of the applicable Ownership Limit or as a result of restrictions contained in the Certificate of Incorporation of the Company, the Exchange Rights cannot be exercised in full, the Exchange Notice shall be deemed to be modified such that the Exchange Rights shall be exercised only to the extent permitted under the applicable Ownership Limit under the Certificate of Incorporation of the Company, and the Exchange Notice with respect to the remainder of such Exchange Rights shall be deemed to have been withdrawn.
 
4.           Limitation on Exercise of Exchange Rights.  Exchange Rights may be exercised at any time and from time to time, provided however, that, except with the prior written consent of the General Partner, (a) only one (1) Exchange Notice may be delivered to the Company by any Limited Partners during any consecutive 12-month period; and (b) no Exchange Notice may be delivered with respect to Common Units having a value of less than $250,000 or result in the exchanging Limited Partner owning Common Units having a value of less than $250,000 after giving effect to the exchange, in each case calculated by multiplying the Common Stock Amount with respect to such Common Units by the Current Per Share Market Price.
 
5.           Computation of Exchange Consideration/Form of Payment.  The exchange consideration (“Exchange Consideration”) payable by the Company to each Exercising Partner shall be equal to the Common Stock Amount with respect to the Offered Units multiplied by the Current Per Share Market Price, each computed as of the date on which the Exchange Notice was delivered to the Company (the “Computation Date”).  The Exchange Consideration shall, in the sole and absolute discretion of the Company, be paid in the form of (a) cash, or cashier’s or certified check or by wire transfer of immediately available funds to the Exercising Partner’s designated account or (b) subject to the applicable Ownership Limit, by the issuance by the Company of a number of shares of its Common Stock equal to the Common Stock Amount with respect to the Offered Units or (c) subject to the applicable Ownership Limit, any combination of cash and Common Stock (valued at the Current Per Share Market Price).
 
6.           Closing; Delivery of Election Notice.  Within thirty (30) days after receipt by the Company of any Exchange Notice delivered in accordance with the requirements of Sections 2 and 4 hereof, the Company shall deliver to the Exercising Partners a notice (an “Election Notice”), which Election Notice shall set forth the computation of the Exchange Consideration and shall specify the form of the Exchange Consideration (which shall be in accordance with Section 5 hereof) to be paid by the Company to such Exercising Partners and the date, time and location for completion of the purchase and sale of the Offered Units, which date shall, to the extent required, in no event be more than (A) in the case of Offered Units with respect to which the Company has elected to pay the Exchange Consideration by issuance of shares of Common Stock, the later of (i) ten (10) days after delivery by the Company of the Election Notice for Offered units and (ii) the expiration or termination of the waiting period applicable to each Exercising Partner, if any, under the Hart-Scott Act or (B) in the case of Offered Units with respect to which the Company has elected to pay the Exchange Consideration in cash, sixty (60) days after the initial date of receipt by the Company of the Exchange Notice for such Offered Units; provided however, that such sixty (60) day period may be extended for an additional sixty (60) day period to the extent required for the Company to cause additional shares of its Common Stock to be issued to provide financing to be used to acquire the Offered Units.  Notwithstanding the foregoing, the Company agrees to use its reasonable efforts to cause the closing of the exchange hereunder to occur as quickly as possible.
 
7.           Adjustment to Exchange Consideration.  If the Comp