1
Exhibit 4.1
--------------------------
SIXTH AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SIMON PROPERTY GROUP, L.P.
--------------------------
2
ARTICLE I
Definitions; Etc.
1.1 Definitions....................................................... 2
1.2 Exhibit, Etc. .................................................... 15
ARTICLE II
Continuation of Partnership
2.1 Continuation...................................................... 15
2.2 Name.............................................................. 16
2.3 Character of the Business......................................... 16
2.4 Location of the Principal Place of Business....................... 17
2.5 Registered Agent and Registered Office............................ 17
ARTICLE III
Term
3.1 Commencement...................................................... 17
3.2 Dissolution....................................................... 17
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contributions............................. 18
4.2 Limited Partner Capital Contributions............................. 18
4.3 Additional Funds.................................................. 18
4.4 Redemption; Change in Number of Shares Outstanding................ 21
4.5 Stock Option Plan; Dividend Reinvestment Plan..................... 21
4.6 No Third Party Beneficiary........................................ 22
4.7 No Interest; No Return............................................ 22
4.8 Capital Accounts.................................................. 22
ARTICLE V
Representations, Warranties and Acknowledgment
5.1 Representations and Warranties by Managing General
Partner........................................................... 24
5.2 Representations and Warranties by Non-Managing General
Partners.......................................................... 25
5.3 Representations and Warranties by the Limited Partners............ 25
5.4 Acknowledgment by Each Partner.................................... 26
3
ARTICLE VI
Allocations, Distributions and Other
Tax and Accounting Matters
6.1 Allocations....................................................... 26
6.2 Distributions..................................................... 32
6.3 Books of Account; Segregation of Funds............................ 34
6.4 Reports........................................................... 34
6.5 Audits............................................................ 35
6.6 Tax Returns....................................................... 35
6.7 Tax Matters Partner............................................... 36
6.8 Withholding....................................................... 36
ARTICLE VII
Rights, Duties and Restrictions
of the General Partners
7.1 Expenditures by Partnership....................................... 37
7.2 Powers and Duties of the General Partners......................... 37
7.3 Major Decisions................................................... 41
7.4 Managing General Partner and Non-Managing General
Partners Participation............................................ 43
7.5 Proscriptions..................................................... 44
7.6 Additional Partners............................................... 44
7.7 Title Holder...................................................... 44
7.8 Waiver and Indemnification........................................ 44
7.9 Limitation of Liability of Directors Shareholders
and Officers of the Managing General Partner and
the Non-Managing General Partners................................. 45
7.10 Distribution to Limited Partners of the
SRC Partnership................................................... 46
ARTICLE VIII
Dissolution, Liquidation and Winding-Up
8.1 Accounting........................................................ 46
8.2 Distribution on Dissolution....................................... 46
8.3 Sale of Partnership Assets........................................ 47
8.4 Distributions in Kind............................................. 47
8.5 Documentation of Liquidation...................................... 47
8.6 Liability of the Liquidation Agent................................ 48
ARTICLE IX
Transfer of Partnership Interests
and Related Matters
9.1 Non-Managing General Partners Transfers and
Deemed Transfers.................................................. 48
9.2 Managing General Partner Transfers and Deemed
Transfers......................................................... 48
2
4
9.3 Transfers by Limited Partners..................................... 49
9.4 Issuance of Additional Partnership Units and
Preferred Units................................................... 51
9.5 Restrictions on Transfer.......................................... 51
9.6 Shelf Registration Rights......................................... 52
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management.................................... 54
10.2 Bankruptcy of a Limited Partner................................... 54
10.3 No Withdrawal..................................................... 55
10.4 Duties and Conflicts.............................................. 55
10.5 Guaranty and Indemnification Agreements........................... 56
ARTICLE XI
Grant of Rights to the Limited Partners
11.1 Grant of Rights................................................... 57
11.2 Limitation on Exercise of Rights.................................. 57
11.3 Computation of Purchase Price/Form of Payment..................... 58
11.4 Closing........................................................... 58
11.5 Closing Deliveries................................................ 58
11.6 Term of Rights.................................................... 59
11.7 Covenants of the Managing General Partner......................... 59
11.8 Limited Partners' Covenant........................................ 59
11.9 Dividends......................................................... 60
ARTICLE XII
General Provisions
12.1 Investment Representations........................................ 60
12.2 Notices........................................................... 61
12.3 Successors........................................................ 61
12.4 Liability of Limited Partners..................................... 61
12.5 Effect and Interpretation......................................... 61
12.6 Counterparts...................................................... 61
12.7 Partners Not Agents............................................... 61
12.8 Entire Understanding; Etc......................................... 61
12.9 Severability...................................................... 62
12.10 Trust Provision................................................... 62
12.11 Pronouns and Headings............................................. 62
12.12 Assumption of Liabilities......................................... 62
12.13 Assurances........................................................ 62
3
5
EXECUTION VERSION
SIXTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
SIMON PROPERTY GROUP, L.P.
THIS SIXTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of
September 24, 1998, is made by and among SD PROPERTY GROUP, INC., an Ohio
corporation as a non-managing general partner ("SD Property"), SPG PROPERTIES,
INC., a Maryland corporation as a non-managing general partner ("SPG Properties"
and together with SD Property, the "Non-Managing General Partners"), SIMON
PROPERTY GROUP, INC., a Delaware corporation as managing general partner (the
"Managing General Partner"), and those parties who have executed this Agreement
as limited partners and whose names and addresses are set forth on Exhibit A
hereto as limited partners (the "Limited Partners").
WITNESSETH:
WHEREAS, the Agreement of Limited Partnership of Xxxxx XxXxxxxxx Group,
L.P. (the "Partnership") was last amended and restated in its entirety by the
Fifth Amended and Restated Limited Partnership Agreement, dated August 9, 1996;
and
WHEREAS, concurrently with the execution hereof, SPG Merger Sub, Inc., a
Maryland corporation and a wholly-owned subsidiary of the Managing General
Partner, merged into Xxxxx XxXxxxxxx Group, Inc. ("SDG"), pursuant to the
Agreement and Plan of Merger, dated as of February 18, 1998 (the "Merger
Agreement"), among SDG, Corporate Property Investors (the predecessor to the
Managing General Partner) and Corporate Realty Consultants, Inc. (renamed SPG
Realty Consultants, Inc. ("SPG Realty")); and
WHEREAS, concurrently with the execution hereof, the Partnership and SPG
Realty will enter into an Agreement of Limited Partnership of SPG Realty
Consultants, L.P. (the "SRC Partnership"), pursuant to which the Partnership
will become a limited partner of the SRC Partnership and receive SRC Partnership
Units, which the Partnership will, in turn, distribute pro rata to all Limited
Partners other than any General Partner who also holds SRC Partnership Units,
whereupon such Limited Partners shall become limited partners of the SRC
Partnership; and
WHEREAS, the parties hereto wish to provide for the further amendment and
restatement of the Agreement of Limited Partnership of the Partnership to allow
for the admission of the Managing General Partner and to make various other
changes provided for below; and
WHEREAS, the Managing General Partner is concurrently herewith, in
exchange for the contribution to the Partnership and/or its subsidiaries of
substantially all of its assets and
6
liabilities, becoming the managing general partner of the Partnership, holding
Units in the amount set forth in Exhibit A; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree that the Fifth Amended and Restated
Agreement of Limited Partnership of the Partnership, as heretofore amended and
restated, is hereby further amended and restated in its entirety to read as
follows:
ARTICLE I
Definitions; Etc.
1.1 Definitions. Except as otherwise herein expressly provided the
following terms and phrases shall have the meanings set forth below:
"Accountants" shall mean the firm or firms of independent certified public
accountants selected by the Managing General Partner from time to time on behalf
of the Partnership to audit the books and records of the Partnership and to
prepare and certify statements and reports in connection therewith.
"Act" shall mean the Revised Uniform Limited Partnership Act as enacted in
the State of Delaware, as the same may hereafter be amended from time to time.
"Additional Units" shall have the meaning set forth in Section 9.4
hereof.
"Adjustment Date" shall have the meaning set forth in Section 4.3(b)
hereof.
"Administrative Expenses" shall mean (i) all administrative and operating
costs and expenses incurred by the Partnership, and (ii) those administrative
costs and expenses and accounting and legal expenses incurred by the Managing
General Partner or the Non-Managing General Partners on behalf or for the
benefit of the Partnership.
"Affected Gain" shall have the meaning set forth in Section 6.1(g)
hereof.
"Affiliate" shall mean, with respect to any Partner (or as to any other
Person the affiliates of which are relevant for purposes of any of the
provisions of this Agreement) (i) any member of the Immediate Family of such
Partner or Person; (ii) any partner, trustee, beneficiary or shareholder of such
Partner or Person; (iii) any legal representative, successor or assignee of such
Partner or any Person referred to in the preceding clauses (i) and (ii); (iv)
any trustee or trust for the benefit of such Partner or
2
7
any Person referred to in the preceding clauses (i) through (iii); or (v) any
Entity which, directly or indirectly through one or more intermediaries,
Controls, is Controlled by or is under common Control with such Partner or any
Person referred to in the preceding clauses (i) through (iv).
"Affiliate Financing" shall mean financing or refinancing obtained from a
Partner or an Affiliate of a Partner by the Partnership.
"Agreement" shall mean this Sixth Amended and Limited Partnership
Agreement, as originally and as amended, modified, supplemented or restated from
time to time, as the context requires.
"Bankruptcy" shall mean, with respect to any Partner, (i) the commencement
by such Partner of any proceeding seeking relief under any provision or chapter
of the federal Bankruptcy Code or any other federal or state law relating to
insolvency, bankruptcy or reorganization, (ii) an adjudication that such Partner
is insolvent or bankrupt, (iii) the entry of an order for relief under the
federal Bankruptcy Code with respect to such Partner, (iv) the filing of any
petition or the commencement of any case or proceeding against such Partner
under the federal Bankruptcy Code unless such petition and the case or
proceeding initiated thereby are dismissed within ninety (90) days from the date
of such filing or commencement, (v) the filing of an answer by such Partner
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 Partner unless such appointment is vacated or dismissed within ninety (90)
days from the date of such appointment but not less than five (5) days before
the proposed sale of any assets of such Partner, (vii) the execution by such
Partner of a general assignment for the benefit of creditors, (viii) the
convening by such Partner of a meeting of its creditors, or any class thereof,
for purposes of effecting a moratorium upon or extension or composition of its
debts, (ix) the failure of such Partner to pay its debts as they mature, (x} the
levy, attachment, execution or other seizure of substantially all of the assets
of such Partner where such seizure is not discharged within thirty (30) days
thereafter, or (xi) the admission by such Partner in writing of its inability to
pay its debts as they mature or that it is generally not paying its debts as
they become due.
"Capital Account" shall have the meaning set forth in Section 4.8(a)
hereof.
"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 secured by such property which the Partnership
assumes or takes subject to).
3
8
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State on November 18, 1993, as it has or may hereafter be amended from time
to time in accordance with the terms of this Agreement and the Act.
"Charter" shall mean the articles of incorporation of a General Partner
and all amendments, supplements and restatements thereof.
"Closing Price" on any date shall mean the last sale price per share,
regular way, of the Paired Shares or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, of the Paired
Shares 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 Paired Shares are 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 Paired Shares are listed
or admitted to trading or, if the Paired Shares are 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 for the Paired Shares or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Paired Shares are 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 Paired Shares selected from time to time by
the Board of Directors of the Managing General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
corresponding provisions of succeeding law.
"Computation Date" shall have the meaning set forth in Section 11.3
hereof.
"Consent of the DeBartolos" shall mean consent of those Limited Partners
who are "DeBartolos" as defined herein. EJDC (in such capacity the "XxXxxxxxx
Designee") is hereby granted authority by those Limited Partners who are
DeBartolos to grant or withhold consent on behalf of the DeBartolos whenever the
Consent of the DeBartolos is required hereunder. The DeBartolos shall have the
right, from time to time, by written notice to the Partnership signed by
DeBartolos who hold in the aggregate more than fifty percent (50%) of the
Partnership Units then held by the DeBartolos, to substitute a new Person as the
XxXxxxxxx Designee for the Person who is then acting as such. The Partnership,
the Partners and all Persons dealing with the Partnership shall be fully
protected in relying on any written consent of the DeBartolos which is executed
by the Person who is then acting as the XxXxxxxxx Designee. In the
4
9
event that at any time there is no XxXxxxxxx Designee, the consent of the
DeBartolos shall be given by those DeBartolos who hold in the aggregate more
than fifty percent (50%) of the Partnership Units then held by the DeBartolos.
"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. Whenever the Consent of the Limited Partners is sought by a General
Partner, the request for such consent, outlining in reasonable detail the matter
or matters for which such consent is being requested, shall be submitted to all
of the Limited Partners, and each Limited Partner shall have at least 15 days to
act upon such request.
"Consent of the Xxxxxx" shall mean consent of those Limited Partners who
are "Xxxxxx" as defined herein. Xxxxx Xxxxx (the "Simon Designee") is hereby
granted authority by those Limited Partners who are Xxxxxx to xxxxx or withhold
consent on behalf of the Xxxxxx whenever the Consent of the Xxxxxx is required
hereunder. The Xxxxxx shall have the right from time to time, by written notice
to the Partnership signed by Xxxxxx who hold in the aggregate more than fifty
percent (50%) of the Partnership Units then held by the Xxxxxx, to substitute a
new Person as the Simon Designee for the Person who is then acting as such. The
Partnership, the Partners and all Persons dealing with the Partnership shall be
fully protected in relying on any written consent of the Xxxxxx which is
executed by the Person who is then acting as the Simon Designee. In the event
that at any time there is no Simon Designee, the Consent of the Xxxxxx shall be
given by those Xxxxxx who hold in the aggregate more than fifty percent (50%) of
the Partnership Units then held by the Xxxxxx.
"Contributed Funds" shall have the meaning set forth in Section 4.3(b)
hereof.
"Contribution Current Per Share Market Price" on any date shall mean the
average of the Closing Prices for a period of not less than five consecutive
Trading Days nor more than thirty consecutive Trading Days ending on such date,
such period determined in the sole and absolute discretion of the Managing
General Partner.
"Contribution Date" shall have the meaning set forth in Section 9.4
hereof.
"Contribution Deemed Partnership Unit Value" as of any date shall mean (i)
the Contribution Current Per Share Market Price as of the Trading Day
immediately preceding such date, minus (ii) the Deemed Partnership Unit Value
(as defined in the SRC Partnership agreement); provided, however, that
Contribution
5
10
Deemed Partnership Unit Value shall be adjusted as described in Section 11.7(d)
hereof in the event of any stock dividend, stock split, stock distribution or
similar transaction.
"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 or remove any such
trustee shall be deemed to have control of such trust.
"Covered Sale" shall have the meaning set forth in Section 6.2(d)
hereof.
"Current Per Share Market Price" on any date shall mean the average of the
Closing Prices for the five consecutive Trading Days ending on such date.
"DeBartolos" shall mean (i) the Estate of Xxxxxx X. XxXxxxxxx, (ii) Xxxxxx
X. XxXxxxxxx, Xx., Xxxxx Xxxxxx XxXxxxxxx York, members of the Immediate Family
of either of the foregoing, any other members of the Immediate Family of Xxxxxx
X. XxXxxxxxx, any other lineal descendants of any of the foregoing and any
trusts established for the benefit of any of the foregoing, and (iii) EJDC and
any other Entity Controlled by any one or more of the Persons listed or
specified in clauses (i) and (ii) above.
"Deemed Partnership Unit Value" as of any date shall mean (i) the Current
Per Share Market Price as of the Trading Day immediately preceding such date,
minus (ii) the Deemed Partnership Unit Value (as defined in the SRC Partnership
agreement); provided, however, that Deemed Partnership Unit Value shall be
adjusted as described in Section 11.7(d) hereof in the event of any stock
dividend, stock split, stock distribution or similar transaction.
"Depreciation" shall mean for each Partnership Fiscal Year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable under the Code with respect to a Partnership asset
for such year or other period, except that if the Gross Asset Value of a
Partnership asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost
6
11
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner.
"Development Land" shall mean any vacant land suitable for development
as a Project.
"Directors" shall mean the Board of Directors of the Managing General
Partner.
"Effective Time" shall have the meaning set forth in the Merger
Agreement.
"EJDC" shall mean The Xxxxxx X. XxXxxxxxx Corporation, an Ohio
corporation.
"Entity" shall mean any general partnership, limited partnership, limited
liability company, limited liability partnership, corporation, joint venture,
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).
"Exercise Notice" shall have the meaning set forth in Section 11.1
hereof.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"General Partner" shall mean the Managing General Partner, the
Non-Managing General Partners and their respective 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 have the meaning set forth in Section 4.8(b)
hereof.
"Gross Income" shall mean the income of the Partnership determined
pursuant to Section 61 of the Code before deduction of items of expense or
deduction.
"Immediate Family" shall mean, with respect to any Person, such Person's
spouse, parents, parents-in-law, descendants by blood or adoption, nephews,
nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law
(in each case by whole or half-blood).
"Incurrence" shall have the meaning set forth in Section 10.5(a) hereof.
"Independent Directors" shall mean members of the Board of Directors of
the Managing General Partner, none of whom is either
7
12
employed by the Managing General Partner or a member (or an Affiliate of a
member) of the Xxxxxx.
"Institutional Investors" shall have the meaning set forth in Rule
501(a)(1)-(3), (7) and (8) of Regulation D promulgated under the Securities Act.
"Institutional Lender" shall mean a commercial bank or trust company, a
savings and loan association or an insurance company.
"JCP" shall mean JCP Realty, Inc., a Delaware corporation, or Brandywine
Realty, Inc., a Delaware corporation, or any of its or their Affiliates that
becomes a Limited Partner hereunder and that is an "accredited investor" as
defined in Regulation D under the Securities Act, as amended.
"JCP Limited Partner" shall mean JCP, in its capacity as a Limited Partner
or Partners hereunder.
"JCP Property Liabilities" means any liabilities encumbering the assets of
Treasure Coast-JCP Associates, Ltd., Melbourne-JCP Associates, Ltd., Boynton-JCP
Associates, Ltd., Chesapeake-JCP Associates, Ltd., Mall of the Mainland
Associates, L.P., Port Charlotte-JCP Associates and Northfield Center Limited
Partnership, and any liability of the Partnership or any Subsidiary Partnership
with respect to which JCP has incurred the "economic risk of loss" within the
meaning of Treasury Regulation Section 1.752-2.
"Lien" shall mean any liens, security interests, mortgages, deeds of
trust, charges, claims, encumbrances, restrictions, pledges, options, rights of
first offer or first refusal and any other rights or interests of others of any
kind or nature, actual or contingent, or other similar encumbrances of any
nature whatsoever.
"Limited Partner Liability" shall mean, with respect to each Limited
Partner, each liability (or portion thereof) included in the basis of such
Limited Partner (other than as an "excess nonrecourse liability" within the
meaning of Regulations Section l.752-3(a)(3)) for federal income tax purposes.
"Limited Partners" shall mean those Persons whose names are set forth on
Exhibit A hereto as Limited Partners, their permitted successors or assigns as
limited partners hereof, and/or any Person who, at the time of reference
thereto, is a limited partner of the Partnership.
"Limited Partnership Unit" shall mean each Partnership Unit (as defined
below) held by a Limited Partner. Each Limited Partnership Unit shall be
paired with a SRC Limited Partnership Unit.
"Liquidation Agent" shall mean such Person as is selected as the
Liquidation Agent hereunder by the Managing General Partner,
8
13
which Person may be the Managing General Partner or an Affiliate of the Managing
General Partner, provided such Liquidation Agent agrees in writing to be bound
by the terms of this Agreement. The Liquidation Agent shall be empowered to give
and receive notices, reports and payments in connection with the dissolution,
liquidation and/or winding-up of the Partnership and shall hold and exercise
such other rights and powers as are necessary or required to permit all parties
to deal with the Liquidation Agent in connection with the dissolution,
liquidation and/or winding-up of the Partnership.
"Liquidation Transaction" shall mean any sale of assets of the Partnership
in contemplation of, or in connection with, the liquidation of the Partnership.
"Losses" shall have the meaning set forth in Section 6.1(a) hereof.
"Major Decisions" shall have the meaning set forth in Section 7.3(b)
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
Partnership Units then held by all the Limited Partners, as a class (excluding
any Partnership Units held by the Non-Managing General Partners or by the
Managing General Partner, any Person Controlled by any of such General Partners
or any Person holding as nominee for either of such General Partners).
"Managing General Partner" shall mean Simon Property Group, Inc., a
Delaware corporation.
"Merger Agreement" shall have the meaning set forth in the Recitals
hereto.
"Minimum Gain" shall have the meaning set forth in Section 6.1(d)(l)
hereof.
"Minimum Gain Chargeback" shall have the meaning set forth in Section
6.1(d)(l) hereof.
"Net Financing Proceeds" shall mean the cash proceeds received by the
Partnership in connection with any borrowing by or on behalf of the Partnership
(whether or not secured), or distributed to the Partnership in respect of any
such borrowing by any Subsidiary Entity, after deduction of all costs and
expenses incurred by the Partnership in connection with such borrowing, and
after deduction of that portion of such proceeds used to repay any other
indebtedness of the Partnership, or any interest or premium thereon.
"Net Operating Cash Flow" shall mean, with respect to any fiscal period of
the Partnership, the aggregate amount of all cash received by the Partnership
from any source for such fiscal period
9
14
(including Net Sale Proceeds and Net Financing Proceeds but excluding
Contributed Funds), less the aggregate amount of all expenses or other amounts
paid with respect to such period and such additional cash reserves as of the
last day of such period as the Managing General Partner deems necessary for any
capital or operating expenditure permitted hereunder.
"Net Sale Proceeds" shall mean the cash proceeds received by the
Partnership in connection with a sale or other disposition of any asset by or on
behalf of the Partnership or a sale or other disposition of any asset by or on
behalf of any Subsidiary Entity, after deduction of any costs or expenses
incurred by the Partnership, or payable specifically out of the proceeds of such
sale or other disposition (including, without limitation, any repayment of any
indebtedness required to be repaid as a result of such sale or other disposition
or which the Managing General Partner elects to repay out of the proceeds of
such sale or other disposition, together with accrued interest and premium, if
any, thereon and any sales commissions or other costs and expenses due and
payable to any Person), in connection with such sale or other disposition.
"Non-Managing General Partners" shall mean, collectively, SD Property
Group, Inc. and SPG Properties, Inc.
"Nonrecourse Liabilities" shall have the meaning set forth in Section
6.l(d)(l) hereof.
"Offered Units" shall have the meaning set forth in Section 11.1 hereof.
"Ownership Limit" shall have the meaning set forth in Article Ninth of the
Charter of the Managing General Partner.
"Paired Shares" shall mean one Share and a pro rata beneficial interest in
the trust which owns all of the outstanding shares of the Common Stock, par
value $0.0001 per share, of SPG Realty that are subject to a trust agreement
among certain stockholders of the Managing General Partner, a trustee and SPG
Realty, pursuant to which holders of Shares are beneficiaries of such trust
agreement.
"Partner Nonrecourse Debt" shall have the meaning set forth in Section
6.1(d)(2) hereof.
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning set forth
in Section 6.1(d)(2) hereof.
"Partner Nonrecourse Deduction" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"Partners" shall mean the Managing General Partner, the Non-Managing
General Partners 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.
10
15
"Partnership" shall mean Simon Property Group, L.P., a Delaware limited
partnership, as such limited partnership may from time to time be constituted.
"Partnership Fiscal Year" shall mean the calendar year.
"Partnership Interest" shall mean the interest of a Partner in the
Partnership.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b)(2) of the Regulations.
"Partnership Record Date" shall mean the record date established by the
Managing General Partner for a distribution of Net Operating Cash Flow pursuant
to Section 6.2 hereof, which record date shall be the same as the record date
established by the Managing General Partner for distribution to its shareholders
of some or all of its share of such distribution.
"Partnership Units" or "Units" shall mean the interest in the Partnership
of any Partner which entitles a Partner to the allocations (and each item
thereof) specified in Section 6.1(b) hereof and all distributions from the
Partnership, and its rights of management, consent, approval, or participation,
if any, as provided in this Agreement. Partnership Units do not include
Preferred Units. Each Partner's percentage ownership interest in the Partnership
shall be determined by dividing the number of Partnership Units then owned by
each Partner by the total number of Partnership Units then outstanding. The
number of Partnership Units held by each Partner at the date hereof is as set
forth opposite its name on attached Exhibit A.
"Person" shall mean any individual or Entity.
"Pledge" shall mean granting of a Lien on a Partnership Interest.
"Post-Exchange Distribution" shall have the set forth in Section 6.2(a)
hereof.
"Preferred Contributed Funds" shall have the set forth in Section
4.3(c) hereof.
"Preferred Distribution Requirement" shall have the meaning set forth in
Section 4.3(c) hereof.
"Preferred Distribution Shortfall" shall have the set forth in Section
6.2(b)(i) hereof.
"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
11
16
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 Section
4.3(c) hereof.
"Preferred Shares" shall mean any class of equity securities of any of the
General Partners now or hereafter authorized or reclassified having dividend
rights that are superior or prior to dividends payable on the Shares or any
other shares of common stock of such General Partners.
"Preferred Unit Designation" shall have the set forth in Section 4.3(c)
hereof.
"Preferred Unit Issue Price" shall mean the amount of the Required Funds
contributed or deemed to have been contributed by a General Partner in exchange
for a Preferred Unit.
"Preferred Units" shall mean interests in the Partnership issued to a
General Partner pursuant to Section 4.3(c) hereof. The holder of Preferred Units
shall have such rights to the allocations of Profits and Losses 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.
"Profits" shall have the meaning set forth in Section 6.1(a) hereof.
"Project" shall mean any property that is or is planned to be used
primarily for retail purposes, and shall include, but is not limited to, a
regional mall, a community shopping center, a specialty retail center and a
mixed-use property which contains a major retail component.
"Property or Properties" shall mean any Development Land or Project in
which the Partnership acquires ownership of (a) the fee or leasehold interest or
(b) an indirect fee or leasehold interest through an interest in any other
Entity.
"Purchase Price" shall have the meaning set forth in Section 11.3
hereof.
"Qualified REIT Subsidiaries" shall have the meaning set forth in Section
856(i)(2) of the Code.
"Registration Rights Agreements" shall mean the agreements, in effect as
of the Effective Time, among the Managing General Partner, certain of its
stockholders and certain holders of Units.
12
17
"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
6.l(d)(5) hereof.
"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
continuity of existence of the Managing General Partner and the Non-Managing
General Partners and their respective subsidiaries, including taxes, fees and
assessments associated therewith, and any and all costs, expenses or fees
payable to any director or trustee of the Managing General Partner, the
Non-Managing General Partners or such subsidiaries, (ii) costs and expenses
relating to any offer or registration of securities by the Managing General
Partner, the Non-Managing General Partners or their respective subsidiaries and
all statements, reports, fees and expenses incidental thereto, including
underwriting discounts, selling commissions and placement fees applicable to any
such offer of securities; provided, however, that in the case of any such
registration of securities on behalf of one or more of the security holders of
the Managing General Partner, the Non-Managing General Partners or their
respective subsidiaries, REIT Expenses shall not include underwriting discounts
or selling commissions), (iii) costs and expenses associated with the
preparation and filing of any periodic reports by the Managing General Partner,
the Non-Managing General Partners or their respective subsidiaries under
federal, state or local laws or regulations, including tax returns and filings
with the SEC and any stock exchanges on which the Shares are listed, (iv) costs
and expenses associated with compliance by the Managing General Partner, the
Non-Managing General Partners or their respective subsidiaries with laws, rules
and regulations promulgated by any regulatory body, including the SEC, (v) costs
and expenses associated with any 401(k) Plan, incentive plan, bonus plan or
other plan providing for compensation for the employees of the Managing General
Partner, the Non-Managing General Partners or their respective subsidiaries, and
(vi) all operating, administrative and other costs incurred by the Managing
General Partner, the Non-Managing General Partners or their respective
subsidiaries (including attorney's and accountant's fees, income and franchise
taxes and salaries paid to officers of the Managing General Partner, the
Non-Managing General Partners or their respective subsidiaries, but excluding
costs of any repurchase by the General Partners of any of their securities and
excluding costs associated with activities and business operations not conducted
directly or indirectly through the Partnership or any Subsidiary Partnership);
provided, however that amounts described herein shall be considered REIT
Expenses hereunder (1) only if and to the extent during the fiscal year in
question the aggregate amount of such expenses for such fiscal year and all
prior fiscal years exceeds
13
18
the aggregate of (a) all amounts theretofore distributed or distributable to the
Managing General Partner or a Non-Managing General Partner by any wholly-owned
subsidiary thereof and (b) all amounts theretofore paid to the Managing General
Partner or a Non-Managing General Partner pursuant to Section 7.1 hereof and (2)
with respect to a Non-Managing General Partner, only if the Managing General
Partner holds, directly or indirectly, substantially all of the equity interests
of the Non-Managing General Partner and controls, directly or indirectly, the
Non-Managing General Partner.
"REIT Requirements" shall mean all actions or omissions as may be
necessary (including making appropriate distributions from time to time) to
permit each of the Managing General Partner, the Non-Managing General Partners
and, where applicable, their respective subsidiaries to qualify or continue to
qualify as a real estate investment trust within the meaning of Section 856 et
seq. of the Code, as such provisions may be amended from time to time, or the
corresponding provisions of succeeding law.
"Related Issues" shall mean, with respect to a class or series of
Preferred Units, the class or series of Preferred Shares the sale of which
provided a General Partner with the proceeds to contribute to the Partnership in
exchange for such Preferred Units.
"Required Funds" shall have the meaning set forth in Section 4.3(a)
hereof.
"Rights" shall have the meaning set forth in Section 11.1 hereof.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean the shares of Common Stock, par value $0.0001 per
share, of the Managing General Partner.
"Simons" shall mean Xxxxxx Xxxxx, Xxxxxxx Xxxxx and Xxxxx Xxxxx, other
members of the Immediate Family of any of the foregoing, any other lineal
descendants of any of the foregoing, any trusts established for the benefit of
any of the foregoing, and any Entity Controlled by any one or more of the
foregoing.
"SPG Realty" shall mean SPG Realty Consultants, Inc.
"SPG Properties" shall mean SPG Properties, Inc.
"SD Property" shall mean SD Property Group, Inc.
14
19
"SRC Limited Partnership Units" shall mean interests in the SRC
Partnership (as defined below) held by a Limited Partner, each of which is
paired with a Limited Partnership Unit.
"SRC Partnership" shall mean SPG Realty Consultants, L.P., a Delaware
limited partnership.
"SRC Partnership Units" shall mean interests in the SRC Partnership.
"Subsidiary Entity" shall mean any Entity in which the Partnership owns a
direct or indirect equity interest.
"Subsidiary Partnership" shall mean any partnership in which the
Partnership owns a direct or indirect equity interest.
"Substituted Limited Partner" shall have the meaning set forth in the
Act.
"Tax Matters Partner" shall have the meaning set forth in Section 6.7
hereof.
"Third Party" or "Third Parties" shall mean a Person or Persons who is or
are neither a Partner or Partners nor an Affiliate or Affiliates of a Partner or
Partners.
"Third Party Financing" shall mean financing or refinancing obtained from
a Third Party by the Partnership.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Shares are listed or admitted to trading is open for the
transaction of business or, if the Shares are 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" shall mean any assignment, sale, transfer, conveyance or other
disposition or act of alienation (other than a Pledge), whether voluntary or
involuntary or by operation of law.
1.2 Exhibit. Etc. References in this Agreement to an "Exhibit" are, unless
otherwise specified, to one of the Exhibits attached to this Agreement, and
references in this Agreement to an "Article" or a "Section" are, unless
otherwise specified, to one of the Articles or Sections of this Agreement. Each
Exhibit attached hereto and referred to herein is hereby incorporated herein by
reference.
ARTICLE II
Continuation of Partnership
2.1 Continuation. The parties hereto do hereby agree to continue the
Partnership as a limited partnership pursuant to the
15
20
provisions of the Act, and all other pertinent laws of the State of Delaware,
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 of this Agreement, the Managing General Partner shall
cause each notice, instrument, document or certificate as may be required by
applicable law, and which may be necessary to enable the Partnership to continue
to conduct its business, and to own its properties, under the Partnership name
to be filed or recorded in all appropriate public offices. Upon request of the
Managing General Partner, the Partners shall execute any assumed or fictitious
name certificate or certificates required by law to be filed in connection with
the Partnership. The Managing General Partner shall properly cause the execution
and delivery of such additional documents and shall perform such additional acts
consistent with the terms of this Agreement as may be necessary to comply with
the requirements of law for the continued operation of a limited partnership
under the laws of the State of Delaware (it being understood that the Managing
General Partner shall be required to provide the General Partners and Limited
Partners with copies of any amended Certificates of Limited Partnership required
to be filed under such laws only upon request) and for the continued operation
of a limited partnership in each other jurisdiction in which the Partnership
shall conduct business.
2.2 Name. The name of the Partnership is Simon Property Group, L.P., and
all business of the Partnership shall be conducted under the name of Simon
Property Group, L.P. or such other name as the Managing General Partner may
select; provided, however, that the Managing General Partner may not choose the
name (or any derivative thereof) of any Limited Partner (other than the names
"XxXxxxxxx" or "Xxxxx") without the prior written consent of such Limited
Partner. All transactions of the Partnership, to the extent permitted by
applicable law, shall be carried on and completed in such name (it being
understood that the Partnership may adopt assumed or fictitious names in certain
jurisdictions).
2.3 Character of the Business. The purpose of the Partnership is and shall
be to acquire, hold, own, develop, redevelop, construct, reconstruct, alter,
improve, maintain, operate, sell, lease, Transfer, encumber, convey, exchange
and otherwise dispose of or deal with the Properties and any other real and
personal property of all kinds; to undertake such other activities as may be
necessary, advisable, desirable or convenient to the business of the
Partnership; and to engage in such other ancillary activities as shall be
necessary or desirable to effectuate the foregoing purposes. The Partnership
shall have all powers necessary or desirable to accomplish the purposes
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 to enter into, perform and carry out contracts of any kind, to
borrow
16
21
or lend money and to issue evidences of indebtedness, whether or not secured by
mortgage, trust deed, pledge or other Lien and, directly or indirectly, to
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 000 Xxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 or such other location as shall be selected
from time to time by the Managing General Partner in its sole discretion;
provided, however, that the Managing General Partner shall promptly notify the
Partners of any change in the location of the principal place of business of the
Partnership.
2.5 Registered Agent and Registered Office. The Registered Agent of the
Partnership shall be The Corporation Trust Company, or such other Person as the
Managing General Partner may select in its sole discretion. The Registered
Office of the Partnership in the State of Delaware shall be c/o The Corporation
Trust Company, 0000 Xxxxxx Xxxxxx, xx xxx Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx
Xxxxxx, Xxxxxxxx 00000, or such other location as the Managing General Partner
may select in its sole and absolute discretion. The Managing General Partner
shall promptly notify the Partners of any change in the Registered Agent or
Registered Office of the Partnership.
ARTICLE III
Term
3.1 Commencement. The Partnership commenced business as a limited
partnership on November 18, 1993 upon the filing of the Certificate with the
Secretary of State of the State of Delaware.
3.2 Dissolution. The Partnership shall continue until dissolved and
terminated upon the earlier of (i) December 31, 2096, or (ii) the earliest to
occur of the following events:
(a) the dissolution, termination, withdrawal, retirement or
Bankruptcy of a General Partner unless the Partnership is continued as provided
in Section 9.1 hereof;
(b) the election to dissolve the Partnership made in writing by the
Managing General Partner, but only if the consent required by Section 7.3 and
the consent of the Non-Managing General Partners are obtained;
(c) the sale or other disposition of all or substantially all the
assets of the Partnership; or
(d) dissolution required by operation of law.
17
22
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contributions.
(a) Simultaneously with the execution and delivery hereof, the
Managing General Partner is contributing to the Partnership substantially all of
its assets and liabilities in exchange for a managing general partnership
interest in the Partnership and admission to the Partnership as a Limited
Partner with the number of Units set forth on Exhibit A. The Partnership may
direct the transfer of certain of such assets and/or liabilities to one or more
of its subsidiaries.
(b) The Managing General Partner shall contribute to the capital of
the Partnership, in exchange for Units as provided in Section 4.3(b) hereof, the
proceeds of the sale of any Shares.
(c) All transfer, stamp or similar taxes payable upon any
contribution provided for in this Section 4.1 shall be paid by the Partnership.
4.2 Limited Partner Capital Contributions. Except as expressly provided in
Sections 4.3, 4.4, 4.5 and 4.8 below, no Partner may make, and no Partner shall
have the obligation to make, additional contributions to the capital of the
Partnership without the consent of the General Partners.
4.3 Additional Funds.
(a) The Partnership may obtain funds ("Required Funds") which it
considers necessary to meet the needs, obligations and requirements of the
Partnership, or to maintain adequate working capital or to repay Partnership
indebtedness, and to carry out the Partnership's purposes, from the proceeds of
Third Party Financing or Affiliate Financing, in each case pursuant to such
terms, provisions and conditions and in such manner (including the engagement of
brokers and/or investment bankers to assist in providing such financing) and
amounts as the Managing General Partner and as the Non-Managing General Partners
shall determine to be in the best interests of the Partnership, subject to the
terms and conditions of this Agreement. Any and all funds required or expended,
directly or indirectly, by the Partnership for capital expenditures may be
obtained or replenished through Partnership borrowings. Any Third Party
Financing or Affiliate Financing obtained by the General Partners for and on
behalf of the Partnership may be convertible in whole or in part into Additional
Units (to be issued in accordance with Section 9.4 hereof), may be unsecured,
may be secured by mortgage(s) or deed(s) of trust and/or assignments on or in
respect of all or any portion of the assets of the Partnership or any other
security made available by the Partnership, may include or be obtained through
the public or private placement of debt and/or other instruments, domestic and
foreign may include provision for the option to acquire Additional Units (to be
issued in accordance with Section 9.4 hereof), and may
18
23
include the acquisition of or provision for interest rate swaps, credit
enhancers and/or other transactions or items in respect of such Third Party
Financing or Affiliate Financing; provided, however, that in no event may the
Partnership obtain any Affiliate Financing or Third Party Financing that is
recourse to any Partner or any Affiliate, partner, shareholder, beneficiary,
principal officer or director of any Partner without the consent of the affected
Partner and any other Person or Persons to whom such recourse may be had.
(b) To the extent the Partnership does not borrow all of the
Required Funds (and whether or not the Partnership is able to borrow all or part
of the Required Funds), the Managing General Partner or any of the Non-Managing
General Partners (or an Affiliate thereof) (i) may itself borrow such Required
Funds, in which case the Managing General Partner or such Non-Managing General
Partner shall lend such Required Funds to the Partnership on the same economic
terms and otherwise on substantially identical terms, or (ii) may raise such
Required Funds in any other manner, in which case, unless such Required Funds
are raised by the Managing General Partner or any Non-Managing General Partner
through the sale of Preferred Shares, the Managing General Partner or such
Non-Managing General Partner shall contribute to the Partnership as an
additional Capital Contribution the amount of the Required Funds so raised
("Contributed Funds") (hereinafter, each date on which the Managing General
Partner or the Non-Managing General Partners so contributes Contributed Funds
pursuant to this Section 4.3(b) is referred to as an "Adjustment Date"). Any
Required Funds raised from the sale of Preferred Shares shall either be
contributed to the Partnership as Contributed Funds or loaned to the Partnership
pursuant to Section 4.3(c) below. In the event the Managing General Partner or a
Non-Managing General Partner advances Required Funds to the Partnership pursuant
to this Section 4.3(b) as Contributed Funds, then the Partnership shall assume
and pay (or reflect on its books as additional Contributed Funds) the expenses
(including any applicable underwriting discounts) incurred by the Managing
General Partner or a Non-Managing General Partner (or such Affiliate) in
connection with raising such Required Funds through a public offering of its
securities or otherwise. If the Managing General Partner advances Required Funds
to the Partnership as Contributed Funds pursuant to this Section 4.3(b) from any
offering or sale of Shares (including, without limitation, any issuance of
Shares pursuant to the exercise of options, warrants, convertible securities or
similar rights to acquire Shares), the Partnership shall issue additional
Partnership Units to the Managing General Partner to reflect its contribution of
the Contributed Funds equal in number to such number of Shares issued in such
offering or sale.
(c) In the event any General Partner contributes to the Partnership
any Required Funds obtained from the sale of Preferred Shares ("Preferred
Contributed Funds"), then the Partnership shall assume and pay the expenses
(including any applicable underwriter discounts) incurred by the Managing
General Partner in connection
19
24
with raising such Required Funds. In addition, the Managing General 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 Managing General Partner to identify such class or
series with the class or series of Preferred Shares 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 Managing General Partner to
substantially the same economic rights as the holders of the Related Issue.
Specifically, the Managing General Partner 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 dividends 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 Partnership Units at the time and on
such economic terms and conditions as the Related Issue is converted into
Shares. Upon the issuance of any class or series of Preferred Units pursuant to
this Section 4.3(c), the Managing General Partner shall provide the Limited
Partners with a copy of the Preferred Unit Designation relating to such class or
series. The Managing General Partner shall have the right, in lieu of
contributing to the Partnership proceeds from the sale of Preferred Shares as
Preferred Contributed Funds, to lend such proceeds 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
the Managing General Partner as interest, any mandatory redemptions shall take
the form of principal payments and no Preferred Units shall be issued to the
Managing General Partner. If any such loan is made, the Partnership shall
promptly reimburse the Managing General Partner for all expenses (including any
applicable underwriter discounts) incurred by the Managing General Partner in
connection with raising the Required Funds. Any such loan made by the Managing
General 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
Shares, such loan shall be so contributed to the Partnership prior to the
effectuation of such conversion.
20
25
4.4 Redemption; Change in Number of Shares Outstanding.
(a) If the Managing General Partner shall redeem any of its
outstanding Shares, the Partnership shall concurrently therewith redeem an equal
number of Units held by the Managing General Partner for the same price (as
determined in good faith by the Board of Directors of the Managing General
Partner) as paid by the Managing General Partner for the redemption of such
Shares.
(b) In the event of any change in the outstanding number of Shares
by reason of any share dividend, split, reverse split, recapitalization, merger,
consolidation or combination, the number of Units held by each Partner (or
assignee) shall be proportionately adjusted such that, to the extent possible,
one Unit remains the equivalent of one Share without dilution.
4.5 Stock Option Plan; Dividend Reinvestment Plan. (a) If at any time a
stock option granted by the Partnership in connection with a stock option plan
is exercised in accordance with its terms, and the Partnership chooses not to
acquire any or all of the stock required to satisfy such option through open
market purchases, the Managing General Partner shall, as soon as practicable
after such exercise, sell to the Partnership for use in satisfying such stock
option, at a purchase price equal to the Current Per Share Market Price on the
date such stock option is exercised, the number of newly issued Shares for which
such option is exercised (or, if such stock option is to be satisfied in part
through open market purchases, the remaining number of newly issued Shares) and
the Managing General Partner shall contribute to the capital of the Partnership,
in exchange for additional Partnership Units, an amount equal to the price paid
to the Managing General Partner by the Partnership in connection with the
Partnership's purchase of newly issued Shares upon exercise of such stock
option. The number of Partnership Units to be so issued shall be determined by
dividing the amount of such capital contribution by the Deemed Partnership Unit
Value, computed as of the Trading Day immediately preceding the date of such
capital contribution. The Managing General Partner shall promptly give each
Limited Partner written notice of the number of Partnership Units so issued. The
Partnership shall retain the exercise or purchase price paid by the holder of
such option for the Shares such holder is entitled to receive upon such
exercise.
(b) All amounts received by the Managing General Partner in respect of its
dividend reinvestment plan, if any, either (a) shall be utilized by the Managing
General Partner to effect open market purchases of Paired Shares, or (b) if the
Managing General Partner elects instead to issue new shares with respect to such
amounts, shall be contributed by the Managing General Partner to the Partnership
in exchange for additional Partnership Units. The number of Partnership Units so
issued shall be determined by dividing the amount of funds so contributed by the
Deemed Partnership Unit Value, computed as of the Trading Day immediately
preceding the date such funds are contributed. The Managing
21
26
General Partner shall promptly give each Limited Partner written notice of the
number of Partnership Units so issued.
4.6 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 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 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.
4.7 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 withdraw any part
of its Capital Account or to demand or receive the return of its Capital
Contribution from the Partnership.
4.8 Capital Accounts.
(a) The Partnership shall establish and maintain a separate capital
account ("Capital Account") for each Partner, including a Partner who shall
pursuant to the provisions hereof acquire a Partnership Interest, which Capital
Account shall be:
(1) credited with the amount of cash contributed by such
Partner to the capital of the Partnership; the initial Gross Asset Value (net of
liabilities secured by such contributed property that the Partnership assumes or
takes subject to) of any other property contributed by such Partner to the
capital of the Partnership; such Partner's distributive share of Profits; and
any other items in the nature of income or gain that are allocated to such
Partner pursuant to Section 6.1 hereof, but excluding tax items described in
Regulations Section 1.704-1(b)(4)(i); and
(2) debited with the amount of cash distributed to such
Partner pursuant to the provisions of this Agreement; the Gross Asset Value (net
of liabilities secured by such distributed property that such Partner assumes or
takes subject to) of any Partnership property distributed to such Partner
pursuant to any provision of this Agreement; the amount of unsecured liabilities
of such Partner assumed by the Partnership; such Partner's distributive share of
Losses; in the case of the General Partners, payments of REIT Expenses by the
Partnership; and any other items in the nature of expenses or losses that are
allocated to such Partner pursuant to Section 6.1 hereof, but excluding tax
items described in Regulations Section 1.704-1(b)(4)(i).
22
27
In the event that any or all of a Partner's Partnership Units or
Preferred Units are transferred within the meaning of Regulations Section
1.704-l(b)(2)(iv)(l), the transferee shall succeed to the Capital Account of the
transferor to the extent that it relates to the Units so transferred.
In the event that the Gross Asset Values of Partnership assets are
adjusted pursuant to Section 4.8(b)(ii) hereof, the Capital Accounts of the
Partners shall be adjusted to reflect the aggregate net adjustments as if the
Partnership sold all of its properties for their fair market values and
recognized gain or loss for federal income tax purposes equal to the amount of
such aggregate net adjustment.
A Limited Partner shall be liable unconditionally 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 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
Managing General Partner (and the Managing General Partner shall promptly upon
receipt deliver copies thereof to the other Partners) 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 25 days after written notice
thereof is received by the Managing General Partner, and shall terminate upon
the date, if any, specified therein as a termination date or upon delivery to
the Managing General Partner of a subsequent written notice terminating such
election. A termination of any such election, or an amendment reducing the
Limited Partner's maximum liability thereunder or the duration thereof, shall
not be effective to avoid responsibility for any loss incurred prior to such
termination or the effective date of such amendment. Except as provided in this
Section 4.8 or as required by law, no Limited Partner shall be liable for any
deficit in its Capital Account or be obligated to return any distributions of
any kind received from the Partnership.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Section 1.704-1(b) of the Regulations, and shall be interpreted and applied as
provided in the Regulations.
(b) The term "Gross Asset Value" or "Gross Asset Values" means, with
respect to any asset of the Partnership, such asset's adjusted basis for federal
income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such asset
as reasonably determined by the Managing General Partner;
23
28
(ii) 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, immediately prior to the following events:
(A) a Capital Contribution (other than a de minimis
Capital Contribution, within the meaning of Section l.704-l(b)(2)(iv)(f)(5)(i)
of the Regulations) to the Partnership by a new or existing Partner as
consideration for Partnership Units;
(B) the distribution by the Partnership to a
Partner of more than a de minimis amount (within the meaning of Section
1.704-1(b)(2)(iv)(f)(5)(ii) of the Regulations) of Partnership property as
consideration for the redemption of Partnership Units; and
(C) the liquidation of the Partnership within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; and
(iii) the Gross Asset Values of Partnership assets distributed
to any Partner shall be the gross fair market values of such assets as
reasonably determined by the Managing General Partner as of the date of
distribution. 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 Profits and Losses. Any adjustment to the Gross Asset
Values of Partnership property shall require an adjustment to the Partners'
Capital Accounts as described in Section 4.8(a) above.
ARTICLE V
Representations, Warranties and Acknowledgment
5.1 Representations and Warranties by Managing General Partner. The
Managing General Partner represents and warrants to the Limited Partners, the
other General Partners and to the Partnership that (i) it is a corporation duly
formed, validly existing and in good standing under the laws of its state of
incorporation, with full right, corporate power and authority to fulfill all of
its obligations hereunder or as contemplated herein; (ii) all transactions
contemplated by this Agreement to be performed by it have been duly authorized
by all necessary action; (iii) this Agreement has been duly executed and
delivered by and is the legal, valid and binding obligation of the Managing
General Partner and is enforceable against it in accordance with its terms,
except as such enforcement may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other laws of
general application affecting the rights and remedies of creditors and (b)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law); (iv) no authorization,
approval, consent or order of any court or governmental authority or agency or
any other Entity is required in connection with the execution and delivery of
this Agreement by the Managing General Partner, except as may have been received
prior to the date of this
24
29
Agreement; (v) the execution and delivery of this Agreement by the Managing
General Partner and the consummation of the transactions contemplated hereby
will not conflict with or constitute a breach or violation of, or a default
under, any contract, indenture, mortgage, loan agreement, note, lease, joint
venture or partnership agreement or other instrument or agreement to which
either the Managing General Partner or the Partnership is a party; and (vi) the
Partnership Units, upon payment of the consideration therefore pursuant to this
Agreement, will be validly issued, fully paid and, except as otherwise provided
in accordance with applicable law, non-assessable.
5.2 Representations and Warranties by Non-Managing General Partners. Each
of the Non-Managing General Partners represents and warrants to the Limited
Partners, the other General Partners and to the Partnership that (i) it is a
corporation duly formed, validly existing and in good standing under the laws of
its state of incorporation, with full right, corporate power and authority to
fulfill all of its obligations hereunder or as contemplated herein; (ii) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action; (iii) this Agreement has been duly executed
and delivered by and is the legal, valid and binding obligation of the
Non-Managing General Partner and is enforceable against it in accordance with
its terms, except as such enforcement may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other laws of general application affecting the rights and remedies of creditors
and (b) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law); (iv) no authorization,
approval, consent or order of any court or governmental authority or agency or
any other Entity is required in connection with the execution and delivery of
this Agreement by the Non-Managing General Partner, except as may have been
received prior to the date of this Agreement; and (v) the execution and delivery
of this Agreement by the Non-Managing General Partner and the consummation of
the transactions contemplated hereby will not conflict with or constitute a
breach or violation of, or default under, any contract, indenture, mortgage,
loan agreement, note, lease, joint venture or partnership agreement or other
instrument or agreement to which the Non-Managing General Partner is a party.
5.3 Representations and Warranties by the Limited Partners. Each Limited
Partner, for itself only, represents and warrants to the General Partners, the
other Limited Partners and the Partnership that (i) all transactions
contemplated by this Agreement to be performed by such Limited Partner have been
duly authorized by all necessary action; and (ii) this Agreement is binding
upon, and enforceable against, such Limited Partner in accordance with its
terms, except as such enforcement may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other laws of
general application affecting the rights and remedies of creditors and (b)
25
30
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
5.4 Acknowledgment by Each Partner. Each Partner hereby acknowledges that
no representations as to potential profit, cash flows or yield, if any, in
respect of the Partnership or any one or more or all of the Projects owned,
directly or indirectly, by the Partnership have been made to it by any other
Partner or its Affiliates or any employee or representative of any other Partner
or its Affiliates, and that projections and any other information, including,
without limitation, financial and descriptive information and documentation,
which may have been in any manner submitted to such Partner shall not constitute
a representation or warranty, express or implied.
ARTICLE VI
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations.
(a) For the purpose of this Agreement, the terms "Profits" and
"Losses" mean, respectively, for each Partnership Fiscal Year or other period,
the Partnership's taxable income or loss for such Partnership Fiscal Year or
other period, 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)(l) of the Code shall be included in
taxable income or loss), adjusted as follows:
(1) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses pursuant
to this Section 6.1(a) shall be added to such taxable income or loss;
(2) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Partnership Fiscal Year
or other period;
(3) any items that are specially allocated pursuant to Section
6.1(d) hereof shall not be taken into account in computing Profits or Losses;
and
(4) any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code (or treated as such under Regulation Section
1.704-l(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits
or Losses pursuant to this Section 6.1(a) shall be deducted in calculating such
taxable income or loss.
(b) Except as otherwise provided in Section 6.1(d) hereof and this
Section 6.1(b), the Profits and Losses of the Partnership (and each item
thereof) for each Partnership Fiscal Year shall be allocated among the Partners
in the following order of priority:
26
31
(1) First, Profits shall be allocated to the holder of Preferred
Units in an amount equal to the excess of (A) the amount of Net Operating Cash
Flow distributed to such holder pursuant to Sections 6.2(b)(i) and (ii) and
Section 6.2(c)(but only to the extent of the Preferred Distribution Requirement
and Preferred Distribution Shortfalls) for the current and all prior Partnership
Fiscal Years over (B) the amount of Profits previously allocated to such holder
pursuant to this subparagraph (1).
(2) Second, for any Partnership Fiscal Year ending on or after a
date on which Preferred Units are redeemed, Profits (or Losses) shall be
allocated to the holder of such 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
Fiscal Year over the Preferred Unit Issue Price of such 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 holder of Preferred
Units with respect to all Preferred Units then outstanding.
(3) Third, any remaining Profits and Losses shall be allocated among
the Partners in accordance with their proportionate ownership of Partnership
Units except as otherwise required by the Regulations.
(4) Notwithstanding subparagraphs (1), (2) and (3), Profits and
Losses from a Liquidation Transaction shall be allocated as follows:
First, Profits (or Losses) shall be allocated to the
holder of 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;
Second, Profits (or Losses) shall be allocated among
the Partners so that the Capital Accounts of the Partners (excluding from the
Capital Account of any Partner the amount attributable to its Preferred Units)
are proportional to the number of Partnership Units held by each Partner; and
Third, any remaining Profits and Losses shall be
allocated among the Partners in accordance with their proportionate ownership of
Partnership Units.
(c) For the purpose of Section 6.1(b) hereof, gain or loss
resulting from any disposition of Partnership property shall be computed by
reference to the Gross Asset Value of the property disposed of, notwithstanding
that the adjusted tax basis of such property for federal income tax purposes
differs from its Gross Asset Value.
27
32
(d) Notwithstanding the foregoing provisions of this Section 6.1,
the following provisions shall apply:
(1) A Partner shall not receive an allocation of any Partnership
deduction that would result in total loss allocations attributable to
"Nonrecourse Liabilities" (as defined in Regulations Section 1.704-2(b)(3)) in
excess of such Partner's share of Minimum Gain (as determined under Regulations
Section 1.704-2(g)). The term "Minimum Gain" means an amount determined in
accordance with Regulations Section 1.704-2(d) by computing, with respect to
each Nonrecourse Liability of the Partnership, the amount of gain, if any, that
the Partnership would realize if it disposed of the property subject to such
liability for no consideration other than full satisfaction thereof, and by then
aggregating the amounts so computed. If the Partnership makes a distribution
allocable to the proceeds of a Nonrecourse Liability, in accordance with
Regulation Section 1.704-2(h), the distribution will be treated as allocable to
an increase in Partnership Minimum Gain to the extent the increase results from
encumbering Partnership property with aggregate Nonrecourse Liabilities that
exceeds the property's adjusted tax basis. If there is a net decrease in
Partnership Minimum Gain for a Partnership Fiscal Year, in accordance with
Regulations Section 1.704-2(f) and the exceptions contained therein, the
Partners shall be allocated items of Partnership income and gain for such
Partnership Fiscal Year (and, if necessary, for subsequent Partnership Fiscal
Years) equal to the Partners' respective shares of the net decrease in Minimum
Gain within the meaning of Regulations Section l.704-2(g)(2) (the "Minimum Gain
Chargeback"). The items to be allocated pursuant to this Section 6.1(d)(1) shall
be determined in accordance with Regulations Section 1.704-2(f) and (j).
(2) Any item of "Partner Nonrecourse Deduction" (as defined in
Regulations Section 1.704-2(i)) with respect to a "Partner Nonrecourse Debt" (as
defined in Regulations Section l.704-2(b)(4)) shall be allocated to the Partner
or Partners who bear the economic risk of loss for such Partner Nonrecourse Debt
in accordance with Regulations Section l.704-2(i)(l). If the Partnership makes a
distribution allocable to the proceeds of a Partner Nonrecourse Debt, in
accordance with Regulation Section l.704-2(i)(6) the distribution will be
treated as allocable to an increase in Partner Minimum Gain to the extent the
increase results from encumbering Partnership property with aggregate Partner
Nonrecourse Debt that exceeds the property's adjusted tax basis. Subject to
Section 6.1(d)(1) hereof, but notwithstanding any other provision of this
Agreement, in the event that there is a net decrease in Minimum Gain
attributable to a Partner Nonrecourse Debt (such Minimum Gain being hereinafter
referred to as "Partner Nonrecourse Debt Minimum Gain") for a Partnership Fiscal
Year, then after taking into account allocations pursuant to Section 6.1(d)(1)
hereof, but before any other allocations are made for such taxable year, and
subject to the exceptions set forth in Regulations Section 1.704-2(i)(4), each
Partner with a share of Partner Non-recourse Debt Minimum Gain at the beginning
of such Partnership
28
33
Fiscal Year shall be allocated items of income and gain for such Partnership
Fiscal Year (and, if necessary, for subsequent Partnership Fiscal Years) equal
to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum
Gain as determined in a manner consistent with the provisions of Regulations
Section l.704-2(g)(2). The items to be allocated pursuant to this Section
6.1(d)(2) shall be determined in accordance with Regulations Section
1.704-2(i)(4) and (j).
(3) Pursuant to Regulations Section 1.752-3(a)(3), for the purpose
of determining each Partner's share of excess nonrecourse liabilities of the
Partnership, and solely for such purpose, each Partner's interest in Partnership
profits is hereby specified to be the quotient of (i) the number of Partnership
Units then held by such Partner, and (ii) the aggregate amount of Partnership
Units then outstanding.
(4) No Limited Partner shall be allocated any item of deduction or
loss of the Partnership if such allocation would cause such Limited Partner's
Capital Account to become negative by more than the sum of (i) any amount such
Limited Partner is obligated to restore upon liquidation of the Partnership,
plus (ii) such Limited Partner's share of the Partnership's Minimum Gain and
Partner Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot
be allocated to a Limited Partner pursuant to this Section 6.1(d)(4) shall be
allocated to the General Partners in accordance with the number of Partnership
Units held by each General Partner. For this purpose, in determining the Capital
Account balance of such Limited Partner, the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) shall be taken into account. In the
event that (A) any Limited Partner unexpectedly receives any adjustment,
allocation, or distribution described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), (5), or (6), and (B) such adjustment, allocation, or
distribution causes or increases a deficit balance (net of amounts which such
Limited Partner is obligated to restore or deemed obligated to restore under
Regulations Section 1.704-2(g)(l) and l.704-2(i)(5) and determined after taking
into account any adjustments, allocations, or distributions described in
Regulations Sections 1.704-l(b)(2)(ii)(d)(4), (5), or (6) that, as of the end of
the Partnership Fiscal Year, reasonably are expected to be made to such Limited
Partner) in such Limited Partner's Capital Account as of the end of the
Partnership Fiscal Year to which such adjustment, allocation, or distribution
relates, then items of Gross Income (consisting of a pro rata portion of each
item of Gross Income) for such Partnership Fiscal Year and each subsequent
Partnership Fiscal Year shall be allocated to such Limited Partner until such
deficit balance or increase in such deficit balance, as the case may be, has
been eliminated. In the event that this Section 6.1(d)(4) and Section 6.1(d)(1)
and/or (2) hereof apply, Section 6.1(d)(1) and/or (2) hereof shall be applied
prior to this Section 6.l(d)(4).
(5) The Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss, and
29
34
deduction among the Partners so that, to the extent possible, the cumulative net
amount of allocations of Partnership items under this Section 6.1 shall be equal
to the net amount that would have been allocated to each Partner if the
Regulatory Allocations had not been made. This Section 6.1(d)(5) 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
6.1(d) (other than this Section 6.l(d)(5)).
(e) In accordance with Sections 704(b) and 704(c) of the Code and
the Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for federal
income tax purposes, be allocated among the Partners on a property by property
basis so as to take account of any variation between the adjusted basis of such
property to the Partnership for federal income tax purposes and the initial
Gross Asset Value of such property. If the Gross Asset Value of any Partnership
property is adjusted as described in the definition of Gross Asset Value,
subsequent allocations of income, gains or losses from taxable sales or other
dispositions and deductions with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and the Gross Asset Value of such asset in the manner prescribed under
Sections 704(b) and 704(c) of the Code and the Regulations thereunder. In
furtherance of the foregoing, the Partnership shall employ the method prescribed
in Regulation S 1.704-3(b) (the "traditional method") or the equivalent
successor provision(s) of proposed, temporary or final Regulations. The
Partnership shall allocate items of income, gain, loss and deduction allocated
to it by a Subsidiary Entity to the Partner or Partners contributing the
interest or interests in such subsidiary Entity, so that, to the greatest extent
possible and consistent with the foregoing, such contributing Partner or
Partners are allocated the same amount and character of items of income, gain,
loss and deduction with respect to such Subsidiary Entity that they would have
been allocated had they contributed undivided interests in the assets owned by
such Subsidiary Entity to the Partnership in lieu of contributing the interest
or interests in the Subsidiary Entity to the Partnership.
(f) Notwithstanding anything to the contrary contained in this
Section 6.1, the allocation of Profits and Losses for any Partnership Fiscal
Year during which a Person acquires a Partnership Interest (other than upon
formation of the Partnership) pursuant to Section 4.3(b) or otherwise, shall
take into account the Partners' varying interests for such Partnership Fiscal
Year pursuant to any method permissible under Section 706 of the Code that is
selected by the Managing General Partner (notwithstanding any agreement between
the assignor and assignee of such Partnership Interest although the Managing
General Partner may recognize any such agreement), which method may take into
account the date on
30
35
which the Transfer or an agreement to Transfer becomes irrevocable pursuant to
its terms, as determined by the Managing General Partner; provided, that the
allocation of Profits and Losses with respect to a Partnership Unit acquired
during a fiscal quarter of the Partnership shall be appropriately adjusted in
accordance with Section 6.2(c)(ii) below.
(g) 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 Sections 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 Sections 1245 and/or 1250, shall be allocated away from
those Partners who are allocated Affected Gain pursuant to clause (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 Sections
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 Profits or Losses for such respective period.
(h) The Profits, Losses, gains, deductions and credits of the
Partnership (and all items thereof) for each Partnership Fiscal Year shall be
determined in accordance with the accounting method followed by the Partnership
for federal income tax purposes.
(i) Except as provided in Sections 6.1(e) and 6.1(g) hereof, for
federal income tax purposes, each item of income, gain, loss, or deduction shall
be allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction has been allocated pursuant to this
Section 6.1.
(j) To the extent permitted by Regulations Sections 1.704-2(h)(3)
and 1.704-2(i)(6), the Managing General Partner shall endeavor to treat
distributions as having been made from the proceeds of Nonrecourse Liabilities
or Partner Nonrecourse Debt only to the extent that such distributions would
cause or increase a deficit balance in any Partner's Capital Account that
exceeds the amount such Partner is otherwise obligated to restore (within the
meaning of Regulations Section 1.704-l(b)(2)(ii)(c)) as of the end of the
Partnership's taxable year in which the distribution occurs.
(k) If any Partner sells or otherwise disposes of any property,
directly or indirectly, to the Partnership, and as a result thereof, gain on a
subsequent disposition of such property by the Partnership is reduced pursuant
to Section 267(d) of the Code, then, to the extent permitted by applicable law,
gain for federal income tax purposes attributable to such subsequent disposition
shall first be allocated among the Partners other than the selling Partner in an
amount equal to such Partners'
31
36
allocations of "book" gain on the property pursuant to this Section 6.1, and any
remaining gain for federal income tax purposes shall be allocated to the selling
Partner.
6.2 Distributions. (a) Except with respect to the liquidation of the
Partnership and subject to the priority set forth in Sections 6.2(b) and (c),
the Managing General Partner shall cause the Partnership to distribute all or a
portion of Net Operating Cash Flow to the Partners who are such on the relevant
Partnership Record Date from time to time as determined by the Managing General
Partner, but in any event not less frequently than quarterly, in such amounts as
the Managing General Partner shall determine in its sole discretion; provided,
however, that, except as provided in Sections 6.2(b) and (c) below, all such
distributions shall be made pro rata in accordance with the outstanding
Partnership Units on the relevant Partnership Record Date. In no event may a
Limited Partner receive a distribution of Net Operating Cash Flow with respect
to a Partnership Unit that such Partner has exchanged on or prior to the
relevant Partnership Record Date for a Share, pursuant to the Rights granted
under Section 11.1 (a "Post-Exchange Distribution"); rather, all such
Post-Exchange Distributions shall be distributed to the Managing General
Partner.
(b) Except to the extent Net Operating Cash Flow is distributed
pursuant to Section 6.2(c), and except with respect to the liquidation of the
Partnership, distributions of Net Operating Cash Flow shall be made in the
following order of priority;
(i) First, to the extent that the amount of Net Operating Cash
Flow distributed to the holder of 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 Section 6.2(b)(i) (a "Preferred
Distribution Shortfall"), Net Operating Cash Flow shall be distributed to the
holder of Preferred Units in an amount necessary to satisfy such Preferred
Distribution Shortfall for the current and all prior Partnership Fiscal Years.
In the event that the Net Operating Cash Flow distributed for a particular
quarter is less than the Preferred Distribution Shortfall, then all Net
Operating Cash Flow for the current quarter shall be distributed to the holder
of Preferred Units.
(ii) Second, Net Operating Cash Flow shall be distributed to
the holder of 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 Operating Cash Flow distributed for a
particular quarter pursuant to this subparagraph (b)(ii) is less than the
Preferred Distribution Requirement for such quarter, then all such Net Operating
Cash Flow for such quarter shall be distributed to the holder of Preferred
Units.
32
37
(iii) The balance of the Net Operating Cash Flow to be
distributed, if any, shall be distributed to holders of Partnership Units, in
proportion to their ownership of Partnership Units.
(c) (i) 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
Operating Cash Flow shall be distributed to the Managing General Partner in an
amount equal to the applicable Preferred Redemption Amount for the Preferred
Units being redeemed before being distributed pursuant to Section 6.2(b).
(ii) Notwithstanding anything to the contrary contained in
this Section 6.2, unless expressly waived in writing by the Managing General
Partner, the distribution of Net Operating Cash Flow with respect to a
Partnership Unit acquired during a fiscal quarter of the Partnership shall be an
amount equal to the product of (i) the amount of Net Operating Cash Flow
otherwise distributable to a Partnership Unit held during such fiscal quarter
and (ii) (a) the number of days remaining in such fiscal quarter, determined as
of the date such Partnership Unit was acquired, divided by (b) the total number
of days in such fiscal quarter.
(d) Notwithstanding the provision of the first sentence of Section
6.2(a), (i) the Managing General Partner shall use its best efforts to cause the
Partnership to distribute sufficient amounts, in accordance with Section 6.2(a)
above, to enable the Managing General Partner and the Non-Managing General
Partners to pay shareholder dividends that will (A) satisfy the REIT
Requirements, and (B) avoid any federal income or excise tax liability of the
Managing General Partner or any of the Non-Managing General Partners; and (ii)
in the event of a Covered Sale which occurs on a date on or after August 9,
1996, and before but not including August 9, 2001, and which gives rise to a
special allocation of taxable income or gain to one or more Limited Partners
pursuant to Section 6.1(e), (A) the Managing General Partner shall cause the
Partnership to distribute to all of the Partners, pro rata in accordance with
ownership of Partnership Units, the Net Sale Proceeds therefrom up to an amount
sufficient to enable each such Limited Partner, from the share of such
distribution made to it, to pay in full any income tax liability, computed at
the maximum applicable federal and state statutory rates, with respect to the
income or gain so specially allocated and on the distribution required by this
Section 6.2(d) (or, if any such Limited Partner is a partnership or Subchapter S
corporation, to enable such Limited Partner to distribute sufficient amounts to
its equity owners to enable such owners to pay in full any income tax liability,
computed at the maximum applicable federal and state statutory rates, with
respect to their share of such taxable income or gain and such distributions)
and (B) if the amounts distributed to each such Limited Partner in accordance
with the preceding clause (A) are insufficient to enable it to pay in full such
income
33
38
tax liabilities, the Managing General Partner shall cause the Partnership to
distribute sufficient funds from other sources to all of the Partners, pro rata
in accordance with ownership of Partnership Units, in an amount sufficient to
enable each such Limited Partner to pay in full such income tax liabilities and
any income tax liabilities of such Limited Partner(s) with respect to such
additional distribution. As used in this Section 6.2, the term "Covered Sale"
means a sale or other taxable disposition of any Property described on Exhibit
C.
6.3 Books of Account; Segregation of Funds
(a) At all times during the continuance of the Partnership, the
Managing General Partner shall maintain or cause to be maintained full, true,
complete and correct books of account in accordance with GAAP 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 and its representatives shall at all
reasonable times have access to such books and records and the right to inspect
and copy the same.
(b) The Partnership shall not commingle its funds with those of any
other Person or Entity; funds and other assets of the Partnership shall be
separately identified and segregated; all of the Partnership's assets shall at
all times be held by or on behalf of the Partnership and, if held on behalf of
the Partnership by another Entity, shall at all times be kept identifiable (in
accordance with customary usages) as assets owned by the Partnership; and the
Partnership shall maintain its own separate bank accounts, payroll and books of
account. The foregoing provisions of this Section 6.3(b) shall not apply with
respect to funds or assets of any Subsidiary Entities of the Partnership.
6.4 Reports. Within ninety (90) days after the end of each Partnership
Fiscal Year, the Partnership shall cause to be prepared and transmitted to each
Partner an annual report of the Partnership relating to the previous Partnership
Fiscal Year containing a balance sheet as of the year then ended, a statement of
financial condition as of the year then ended, and statements of operations,
cash flow and Partnership equity for the year then ended, which annual
statements shall be prepared in accordance with GAAP and shall be audited by the
Accountants. The Partnership shall also cause to be prepared and transmitted to
each Partner within forty-five (45) days after the end of each of the first
three (3) quarters of each Partnership Fiscal Year a quarterly unaudited report
containing a balance sheet, a statement of the Partnership's financial condition
and statements of operations, cash flow and Partnership equity, in each case
relating to the fiscal quarter
34
39
then just ended, and prepared in accordance with GAAP. The Partnership shall
further cause to be prepared and transmitted to the Managing General Partner and
the Non-Managing General Partners (i) such reports and/or information as are
necessary for each to fulfill its obligations under the Securities Act of 1933,
the Securities and Exchange Act of 1934 and the applicable stock exchange rules,
and under any other regulations to which such Partners or the Partnership may be
subject, and (ii) such other reports and/or information as are necessary for
each of the Managing General Partner and the Non-Managing General Partners to
determine and maintain its qualification as a REIT under the REIT Requirements,
its earnings and profits derived from the Partnership, its liability for a tax
as a consequence of its Partnership Interest and distributive share of taxable
income or loss and items thereof, in each case in a manner that will permit the
Managing General Partner and the Non-Managing General Partners to comply with
their respective obligations to file federal, state and local tax returns and
information returns and to provide their shareholders with tax information. The
Managing General Partner shall provide to each Partner copies of all reports it
provides to its stockholders at the same time such reports are distributed to
such stockholders. The Managing General Partner shall also promptly notify the
Partners of all actions taken by the Managing General Partner for which it has
obtained the Consent of the Limited Partners.
6.5 Audits. Not less frequently than annually, the books and records of
the Partnership shall be audited by the Accountants.
6.6 Tax Returns.
(a) Consistent with all other provisions of this Agreement, the
Managing General Partner shall determine the methods to be used in the
preparation of federal, state, and local income and other tax returns for the
Partnership in connection with all items of income and expense, including, but
not limited to, valuation of assets, the methods of Depreciation and cost
recovery, credits and tax accounting methods and procedures and, with the
consent of the Non-Managing General Partners, all tax elections.
(b) The Managing General Partner shall, at least 30 days prior to
the due dates (as extended) for such returns, but in no event later than July 15
of each year, cause the Accountants to prepare and submit to the XxXxxxxxx
Designee, the Simon Designee and the JCP Limited Partner for their review,
drafts of all federal and state income tax returns of the Partnership for the
preceding year, and the Managing General Partner shall consult in good faith
with the XxXxxxxxx Designee, the Simon Designee and the JCP Limited Partner
regarding any proposed modifications to such tax returns of the Partnership.
(c) The Partnership shall timely cause to be prepared and
transmitted to the Partners federal and appropriate state and local Partnership
Income Tax Schedules "K-l" or any substitute
35
40
therefor, with respect to each Partnership Fiscal Year on appropriate forms
prescribed. The Partnership shall make reasonable efforts to prepare and submit
such forms before the due date for filing federal income tax returns for the
fiscal year in question (determined without extensions), and shall in any event
prepare and submit such forms on or before July 15 of the year following the
fiscal year in question.
6.7 Tax Matters Partner
The Managing 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, that (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 Managing General Partner
shall give prompt notice to the Partners 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;
(iii) the Managing General Partner shall promptly notify the Partners if it does
not intend to file for judicial review with respect to the Partnership; and (iv)
as Tax Matters Partner, the Managing General Partner shall not be entitled to
bind a Partner by any settlement agreement (within the meaning of Section 6224
of the Code) unless such Partner consents thereto in writing and shall notify
the Partners in a manner and at such time as is sufficient to allow the Partners
to exercise their rights pursuant to Section 6224(c)(3) of the Code; (v) the
Managing General Partner shall consult in good faith with the Simon Designee,
the XxXxxxxxx Designee and the JCP Limited Partner 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 Managing General Partner, to file an
administrative adjustment request on its own behalf pursuant to Section 6227(a)
of the Code; and (vi) the Managing General Partner shall consult in good faith
with the Simon Designee, the XxXxxxxxx Designee and the JCP Limited Partner
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.
6.8 Withholding. Each Partner hereby authorizes the Partnership to
withhold or pay on behalf of or with respect to such Partner any amount of
federal, state, local or foreign taxes that
36
41
the Managing General Partner determines the Partnership is required to withhold
or pay with respect to any amount distributable or allocable to such Partner
pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Code Sections 1441, 1442,
1445, or 1446. Any amount paid on behalf of or with respect to a Partner shall
constitute a loan by the Partnership to such Partner, which loan shall be due
within fifteen (15) days after repayment is demanded of the Partner in question,
and shall be repaid through withholding of subsequent distributions to such
Partner. Nothing in this Section 6.8 shall create any obligation on the Managing
General Partner to advance funds to the Partnership or to borrow funds from
Third Parties in order to make payments on account of any liability of the
Partnership under a withholding tax act. Any amounts payable by a Limited
Partner hereunder shall bear interest at the lesser of (i) the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, or (ii) the maximum
lawful rate of interest on such obligation, such interest to accrue from the
date such amount is due (i.e., fifteen (15) days after demand) until such amount
is paid in full. To the extent the payment or accrual of withholding tax results
in a federal, state or local tax credit to the Partnership, such credit shall be
allocated to the Partner to whose distribution the tax is attributable.
ARTICLE VII
Rights, Duties and Restrictions of the General Partners
7.1 Expenditures by Partnership. The Managing 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
Managing General Partner shall be entitled to reimbursement by the Partnership
for any expenditures incurred by it on behalf of the Partnership which shall
have been made other than out of the funds of the Partnership. The Partnership
shall also assume, and pay when due, the Administrative Expenses and such
portion of the Managing General Partners', the Non-Managing General Partners'
and their respective subsidiaries' REIT Expenses as shall be appropriately
allocated to the Partnership by the Managing General Partner in the exercise of
its reasonable business judgment.
7.2 Powers and Duties of the General Partners. The Managing General
Partner shall be responsible for the management of the Partnership's business
and affairs. Except as otherwise herein expressly provided, and subject to the
limitations contained in Section 7.3 hereof with respect to Major Decisions, the
Managing 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 Managing General Partner shall, in its sole
and absolute discretion, deem necessary or appropriate to carry out the purposes
for which the Partnership was organized. Any action by the Managing General
37
42
Partner relating to (i) transactions between the Partnership or a Subsidiary
Entity and M.S. Management Associates, Inc., Simon MOA Management Company, Inc.
and/or M.S. Management Associates (Indiana), Inc., (ii) transactions between the
Partnership or a Subsidiary Entity and XxXxxxxxx Properties Management, Inc. or
(iii) transactions involving the Partnership or a Subsidiary Entity in which the
Xxxxxx, the DeBartolos or any Affiliate of the Xxxxxx or the DeBartolos has an
interest (other than a non-controlling minority equity interest, which has no
management or veto powers, in a Person, other than the Partnership or a
Subsidiary entity, which is engaged in such transaction) other than through
ownership of Partnership Units, shall require the prior approval of a majority
of the Independent Directors. Except as otherwise expressly provided herein and
subject to Section 7.3 hereof, the Managing General Partner shall have, for and
on behalf of the Partnership, the right, power and authority:
(a) To manage, control, hold, invest, lend, reinvest, acquire by
purchase, lease, 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 or otherwise encumber,
abandon, improve, repair, construct, maintain, operate, insure, lease for any
term and otherwise deal with any and all property of whatsoever kind and nature,
and wheresoever situated, in furtherance of the purposes of the Partnership, and
in addition, without limiting the foregoing, upon the affirmative vote of no
fewer than three (3) of the Independent Directors of the Managing General
Partner who are not Affiliates of the DeBartolos, the Managing General Partner
shall authorize and require the sale of any property owned by the Partnership or
a Subsidiary Entity.
(b) To acquire, directly or indirectly, interests in real or
personal property (collectively, "property") of any kind and of any type, and
any and all kinds of interests therein, and to determine the manner in which
title thereto is to be held; to manage, insure against loss, protect and
subdivide any property, interests therein or parts thereof; to improve, develop
or redevelop any property; to participate in the ownership and development of
any property; to dedicate for public use, to vacate any subdivisions or parts
thereof, to resubdivide, to contract to sell, to grant options to purchase or
lease and to sell on any terms; to convey, to mortgage, pledge or otherwise
encumber any property, or any part thereof; to lease any 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 any property, or any part thereof, for
other 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 any
property or any part thereof; to construct and reconstruct, remodel, alter,
repair, add to or take from buildings on any property; to insure any Person
having an
38
43
interest in or responsibility for the care, management or repair of any
property; to direct the trustee of any land trust to mortgage, lease, convey or
contract to convey any property 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; and
to execute assignments of all or any part of the beneficial interest in such
land trust;
(c) To employ, engage or contract with or dismiss from employment or
engagement Persons to the extent deemed necessary by the Managing General
Partner for the operation and management of the Partnership business, including
but not limited to, employees, contractors, subcontractors, engineers,
architects, surveyors, mechanics, consultants, accountants, attorneys, insurance
brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow or lend 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 with or without security; and to repay,
discharge, settle, adjust, compromise or liquidate any such loan, advance,
credit, obligation or liability (including by deeding property to a lender in
lieu of foreclosure);
(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 any attorney
for the Partnership may deem necessary, proper or advisable;
(g) To acquire and enter into any contract of insurance which the
Managing General Partner deems necessary or appropriate for the protection of
the Partnership or any Affiliate thereof, for the conservation of the
Partnership's assets (or the assets of any Affiliate thereof) or for any purpose
convenient or beneficial to the Partnership or any Affiliate thereof;
39
44
(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 Managing 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 Partnership's name; to execute, procure, consent to and authorize
extensions and renewals of the same; to make deposits and withdraw the same and
to negotiate or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts;
(i) To demand, xxx 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 Managing General Partner to cause
any approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance
by the Partnership with contractual obligations and other arrangements entered
into by the Partnership from time to time in accordance with the provisions of
this Agreement, including periodic reports as required to lenders and using all
due diligence to insure that the Partnership is in compliance with its
contractual obligations;
(1) To maintain the Partnership's books and records;
(m) To create or maintain Affiliates engaged in activities that the
Partnership could itself undertake; and
(n) To prepare and deliver, or cause to be prepared and delivered by
the Accountants, all financial and other reports with respect to the operations
of the Partnership, and preparation and filing of all federal, state and local
tax returns and reports.
Except as otherwise provided herein, to the extent the duties of the
Managing General Partner require expenditures of funds to be paid to Third
Parties, the Managing 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
40
45
deemed to authorize or require the Managing General Partner, in its capacity as
such, to expend its individual funds for payment to Third Parties or to
undertake any individual liability or obligation on behalf of the Partnership.
Notwithstanding any other provisions of this Agreement or the Act,
any action of the Managing General Partner on behalf of the Partnership or any
decision of the Managing 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 (i) to protect or further the ability of the
Managing General Partner, the Non-Managing General Partners and their respective
Subsidiary Entities, as applicable, to continue to qualify as REITs or (ii) to
avoid the Managing General Partner's or the Non-Managing General Partners'
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 a Limited Partner for the Managing General
Partner's, the Non-Managing General Partner's or any of their applicable
Subsidiary Entity's failure to qualify or continue to qualify as a REIT or a
failure to avoid incurring any taxes under the foregoing sections of the Code,
unless such failure or failures result from an act of the Limited Partner which
constitutes a breach of this Agreement (including, without limitation, Section
10.4(b)).
7.3 Major Decisions.
(a) The Managing General Partner shall not, without the Consent of
the Limited Partners, and the consent of the Non-Managing General Partners, (y)
on behalf of the Partnership, amend, modify or terminate this Agreement other
than to reflect (A) the admission of Additional Limited Partners pursuant to
Section 9.4 hereof, (B) the making of additional Capital Contributions and the
issuance of additional Partnership Units by reason thereof, all in accordance
with the terms of this Agreement, (C) the withdrawal or assignment of the
interest of any Partner in accordance with the terms of this Agreement, or (D)
any changes necessary to satisfy the REIT Requirements, or (z) permit the
Partnership, on behalf of any Subsidiary Partnership, to amend, modify or
terminate the organizing agreement pursuant to which such Subsidiary Partnership
operates other than to reflect (A) the admission of additional limited partners
therein pursuant to the terms thereof, (B) the making of additional capital
contributions thereto pursuant to the terms thereof, (C) the withdrawal or
assignment of the interest of any partner thereof pursuant to the terms thereof,
or (D) any changes necessary to satisfy the REIT Requirements. Notwithstanding
the foregoing, this Agreement shall not be modified or amended without the prior
written consent of each Partner adversely affected if such modification or
acquisition would (i) convert a Limited Partner's interest in the Partnership to
a general partnership interest, (ii) modify the limited liability of a Limited
Partner, (iii) reduce the interest of any Partner in the Partnership, (iv)
reduce any Partner's share of distributions made
41
46
by the Partnership, (v) amend this Section 7.3 or Section 7.5 or (vi) create any
obligations for any Limited Partner or deprive any Limited Partner of (or
otherwise impair) any other rights it may have under this Agreement (including
in respect of tax allocations, rights to indemnification under Section 7.8,
rights of the Limited Partner or a Secured Creditor of a Limited Partner under
Section 9.3 (which rights are subject to the restrictions set forth in Section
9.5), rights of a Limited Partner under Section 9.6 or Article XI, or the rights
of a Limited Partner under Section 10.4(a) or 10.5); provided, however, that an
amendment that reduces the percentage ownership interest of any Partner in the
Partnership or reduces any Partner's share of distributions made by the
Partnership (including tax allocations in respect of such distributions) shall
not require the consent of any Partner if such change is made on a uniform or
pro-rata basis with respect to all Partners.
(b) The Managing General Partner shall not, without the consent of
the Non-Managing General Partners, and for all periods during which the Xxxxxx
hold at least ten percent of the Partnership Units then outstanding, the
Managing General Partner shall not, without the prior Consent of the Xxxxxx, and
for all periods during which the DeBartolos hold at least ten percent of the
Partnership Units then outstanding, the Managing General Partner shall not,
without the prior Consent of the DeBartolos, on behalf of the Partnership,
undertake any of the following actions (together with any act described in
paragraph (a) hereof, the "Major Decisions"):
(i) Make a general assignment for the benefit of creditors (or cause
or permit (if permission of the Partnership or any Subsidiary Partnership is
required) such an assignment to be made on behalf of a Subsidiary Partnership)
or appoint or acquiesce in the appointment of a custodian, receiver or trustee
for all or any part of the assets of the Partnership (or any Subsidiary
Partnership);
(ii) take title to any personal or real property, other than in the
name of the Partnership or a Subsidiary Entity or pursuant to Section 7.7
hereof;
(iii) institute any proceeding for Bankruptcy on behalf of the
Partnership, or cause or permit (if permission of the Partnership or any
Subsidiary Partnership is required) the institution of any such proceeding on
behalf of any Subsidiary Partnership;
(iv) act or cause the taking or refraining of any action with
respect to the dissolution and winding up of the Partnership (or any Subsidiary
Partnership) or an election to continue the Partnership (or any Subsidiary
Partnership) or to continue the business of the Partnership (or any Subsidiary
Partnership); or
42
47
(v) sell, exchange, Transfer or otherwise dispose of all or
substantially all of the Partnership's assets.
(c) The Managing General Partner shall not, without the prior
Consent of the Limited Partners,
(i) after the Effective Time, amend the Charter of the Managing
General Partner to increase or decrease the Ownership Limit or alter any other
provision of said Charter or of any of the definitions of defined terms
contained in such Charter which would have the effect of changing the Ownership
Limit in any way;
(ii) except in connection with the dissolution and winding-up of the
Partnership by the Liquidation Agent, agree to or consummate the merger or
consolidation of the Partnership or the voluntary sale or other Transfer of all
or substantially all of the Partnership's assets in a single transaction or
related series of transactions (without limiting the transactions which will not
be deemed to be a voluntary sale or Transfer, the foreclosure of a mortgage lien
on any Property or the grant by the Partnership of a deed in lieu of foreclosure
for such Property shall not be deemed to be such a voluntary sale or other
Transfer ); or
(iii) dissolve the Partnership; or
(iv) issue additional shares of common stock of the Non-Managing
General Partners other than to any of the General Partners or as may be
necessary or desirable in order for the General Partners to comply with REIT
Requirements.
Without the consent of all the Limited Partners, the General
Partners shall have no power to do any act in contravention of this Agreement or
applicable law.
7.4 Managing General Partner and Non-Managing General Partners
Participation. The Managing General Partner and the Non-Managing General
Partners agree that (a) substantially all activities and business operations of
the Managing General Partner and the Non-Managing General Partners, including
but not limited to, activities pertaining to the acquisition, development,
redevelopment and ownership of properties, shall be conducted directly or
indirectly through the Partnership or any Subsidiary Partnership, (b) except for
a property acquisition authorized by the Managing General Partner with the
Consent of the Limited Partners, all property acquisitions shall henceforth be
made through the Partnership or any Subsidiary Partnership, and (c) except as
provided below any funds raised by the Managing General Partner or the
Non-Managing General Partners, whether by issuance of stock, borrowing or
otherwise, will be made available to the Partnership whether as capital
contributions, loans or otherwise, as appropriate. Notwithstanding the
provisions of the preceding sentence, each of the Managing General Partner and
the Non-Managing General Partners shall have the right to form Qualified REIT
subsidiaries to act as general partners of Subsidiary Partnerships
43
48
of the Partnership. The Managing General Partner and the Non Managing General
Partner agree to conduct their respective affairs, to the extent they are so
able to do, in a manner which will preserve the equivalence in value between a
Share and a Partnership Unit.
7.5 Proscriptions. The Managing General Partner shall not have the
authority to:
(a) Do any act in contravention of this Agreement;
(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
doing business with the Partnership to inquire as to whether or not the Managing
General Partner has properly exercised its authority in executing any contract,
lease, mortgage, deed or any other instrument or document on behalf of the
Partnership, and any such Person shall be fully protected in relying upon such
authority.
7.6 Additional Partners. Additional Partners may be admitted to the
Partnership only as provided in Section 9.4 hereof.
7.7 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 any other individual, corporation, partnership, trust or
otherwise, the beneficial interest in which 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 Managing General Partner.
7.8 Waiver and Indemnification. Neither the Managing General Partner, the
Non-Managing General Partners nor any of their Affiliates, directors, trust
managers, officers, shareholders, nor any Person acting on their 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
Managing General Partner or the Non-Managing General Partners by this Agreement
and the Act, provided that the Managing General Partner's, the Non-Managing
General Partners' 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 Managing General
Partner, the Non-Managing General Partners or such other Person shall not be
guilty of fraud, willful misconduct or gross negligence. The Managing General
Partner acknowledges that it owes fiduciary duties both to its shareholders and
to the Limited Partners and it shall use its reasonable efforts
44
49
to discharge such duties to each; provided, however, that in the event of a
conflict between the interests of the shareholders of the Managing General
Partner and the interests of the Limited Partners, the Limited Partners agree
that the Managing General Partner shall discharge its fiduciary duties to the
Limited Partners by acting in the best interests of the Managing General
Partner's shareholders. Nothing contained in the preceding sentence shall be
construed as entitling either the Managing General Partner or the Non-Managing
General Partners to realize any profit or gain from any transaction between such
Partner and the Partnership (except as may be required by law upon a
distribution to the Managing General Partner or the Non-Managing General
Partners), including from the lending of money by the Managing General Partner
or the Non-Managing General Partners to the Partnership or the contribution of
property by the Managing General Partner or the Non-Managing General Partners to
the Partnership, it being understood that in any such transaction the Managing
General Partner or the Non-Managing General Partners, as the case may be, shall
be entitled to cost recovery only. The Partnership shall, and hereby does,
indemnify and hold harmless each of the Managing General Partner and the
Non-Managing General Partners and its Affiliates, their respective directors,
officers, shareholders and any other individual acting on its or their behalf to
the extent such Persons would be indemnified by the Managing General Partner
pursuant to the Charter of the Managing General Partner if such persons were
directors, officers, agents or employees of the Managing General Partner (or the
Charter of SDG or the Amended and Restated Regulations of SD Property, if such
Persons were directors, officers, agents or employees of the Non-Managing
General Partners); provided, however, that 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. The
Partnership shall, and hereby does, indemnify each Limited Partner and its
Affiliates, their respective directors, officers, shareholders and any other
individual acting on its or their behalf, from and against any costs (including
costs of defense) incurred by it as a result of any litigation or other
proceeding in which any Limited Partner is named as a defendant or any claim
threatened or asserted against any Limited Partner, in either case which relates
to the operations of the Partnership or any obligation assumed by the
Partnership, unless such costs are the result of misconduct on the part of, or a
breach of this Agreement by, such Limited Partner; 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.
7.9 Limitation of Liability of Directors Shareholders and Officers of the
Managing General Partner and the Non-Managing General Partners. Any obligation
or liability whatsoever of the General Partners which may arise at any time
under this Agreement or any other instrument, transaction, or undertaking
contemplated hereby shall be satisfied, if at all, out of the assets of the
General Partners or the Partnership only. No such obligation or
45
50
liability shall be personally binding upon, nor shall resort for the enforcement
thereof be had to, any of the General Partners' directors, shareholders,
officers, employees, or agents, regardless of whether such obligation or
liability is in the nature of contract, tort or otherwise.
7.10 Distribution to Limited Partners of the SRC Partnership. Pursuant to
the terms of the Agreement of Limited Partnership of the SRC Partnership, the
Partnership will contribute assets to the SRC Partnership, become a limited
partner of the SRC Partnership and receive SRC Partnership Units, which the
Partnership will, in turn, distribute pro rata to all Limited Partners other
than any General Partner who also holds SRC Partnership Units, whereupon the
Limited Partners shall become limited partners of the SRC Partnership.
ARTICLE VIII
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 by
the Accountants) shall be made of the Capital Account of each Partner and of the
Profits or 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 the Accountants.
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 determined by the Managing General
Partner 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;
(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 distributions made pursuant to this Section 8.2(d),
Section 8.3 or Section 8.4 hereof).
If upon dissolution and termination of the Partnership the Capital
Account of any Partner is less than zero, then such Partner shall have no
obligation to restore the negative balance in its Capital Account unless and
except to the extent that such Partner has so elected under Section 4.8.
Whenever the Liquidation
46
51
Agent reasonably determines that any reserves established pursuant to paragraph
(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.
8.3 Sale of Partnership Assets. In the event of the liquidation of the
Partnership in accordance with the terms of this Agreement, the Liquidation
Agent may sell Partnership property; provided, however, that all sales, leases,
encumbrances or transfers of Partnership assets shall be made by the Liquidation
Agent solely on an "arm's length" basis, at the best price and on the best terms
and conditions as the Liquidation Agent 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 terminated until the Partnership shall have received cash payments in
full with respect to obligations such as notes, purchase money mortgages,
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 or assumed by the Managing
General Partner or the Non-Managing General Partners. The Liquidation Agent
shall continue to act to enforce all of the rights of the Partnership pursuant
to any such obligations until paid in full or otherwise discharged or settled.
8.4 Distributions in Kind. In the event that it becomes necessary to make
a distribution of Partnership property in kind in connection with the
liquidation of the Partnership, the Managing General Partner may, if it
determines that to do so would be in the best interest of the Partners and
obtains the Consent of the Limited Partners and consent of the Non-Managing
General Partners, 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.
Immediately prior to the distribution of Partnership property in kind, the
Capital Account of each Partner shall be increased or decreased, as the case may
be, to reflect the manner in which the unrealized income, gain, loss and
deduction inherent in such property (to the extent not previously reflected in
the Capital Accounts) would be allocated among the Partners if there were a
taxable disposition of such property for its fair market value as of the date of
the distribution.
8.5 Documentation of Liquidation. Upon the completion of the dissolution
and liquidation of the Partnership, the Partnership shall terminate and the
Liquidation Agent shall have the authority to execute and record any and all
documents or instruments required to effect the dissolution, liquidation and
termination of the Partnership.
47
52
8.6 Liability of the Liquidation Agent. The Liquidation Agent 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 Liquidation Agent's taking of any
action authorized under or within the scope of this Agreement; and provided,
however, that 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; and provided further, however, that the
Liquidation Agent 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 Liquidation Agent's action or
conduct pursuant to the provisions of this Agreement; or
(b) The proven misconduct or gross negligence of the Liquidation
Agent.
ARTICLE IX
Transfer of Partnership Interests and Related Matters
9.1 Non-Managing General Partners Transfers and Deemed Transfers. Neither
of the Non-Managing General Partners shall (i) withdraw from the Partnership,
(ii) merge, consolidate or engage in any combination with another Person, (iii)
sell all or substantially all of its assets or (iv) sell, assign, pledge,
encumber or otherwise dispose of all or any portion of its Partnership Units
except where such merger, consolidation, sale, assignment, pledge or other
disposal is to another General Partner as its sole successor. In the event of
the withdrawal by a General Partner from the Partnership, in violation of this
Agreement or otherwise, or the dissolution, termination or Bankruptcy of a
General Partner, within 90 days after the occurrence of any such event, the
remaining General Partners or a majority in interest of the remaining Partners
may elect in writing to continue the Partnership business and may, or if there
is then no General Partner other than one that has withdrawn or as to which
dissolution, termination or Bankruptcy has occurred shall, select a substitute
general partner effective as of the date of the occurrence of any such event.
9.2 Managing General Partner Transfers and Deemed Transfers. The Managing
General Partner shall not (i) withdraw from the Partnership, (ii) merge,
consolidate or engage in any combination with another Person other than another
General Partner, (iii) sell all or substantially all of its assets or (iv) sell,
assign, pledge, encumber or otherwise dispose of all or any portion of its
Partnership Units or Preferred Units except to the Partnership, in each case
without the Consent of the Limited Partners. Upon any transfer of any
Partnership Units (not Preferred Units) in accordance with the provisions of
this Section 9.2, the transferee
48
53
General Partner shall become vested with the powers and rights of the transferor
General Partner with respect to the Partnership Units transferred, and shall be
liable for all obligations and responsible for all duties of the transferor
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 Units so acquired. It is a condition to any transfer
otherwise permitted hereunder that the transferee assumes by operation of law or
express agreement all of the obligations of the transferor Managing 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 by operation of law) shall relieve the
transferor General Partner of its obligations under this Agreement accruing
prior to the date of such transfer.
9.3 Transfers by Limited Partners. Except as otherwise provided in this
Section 9.3, the Limited Partners shall not Transfer all or any portion of their
Partnership Units to any transferee without the consent of the Managing General
Partner, which consent may be withheld in its sole and absolute discretion;
provided, however, that the foregoing shall not be considered a limitation on
the ability of the Limited Partners to exercise their Rights pursuant to Article
XI hereof.
(a) Notwithstanding the foregoing, but subject to the provisions of
Section 9.5 hereof, any Limited Partner may at any time, without the consent of
the Managing General Partner, (i) Transfer all or a portion of its Partnership
Units to an Affiliate of such Limited Partner, or (ii) Pledge some or all of its
Partnership Units to any Institutional Lender. Any Transfer to an Affiliate
pursuant to clause (i) and any Transfer to a pledgee of Partnership Units
Pledged pursuant to clause (ii) may be made without the consent of the Managing
General Partner but, except as provided in subsequent provisions of this Section
9.3, such transferee or such pledgee shall hold the Units so transferred to it
(and shall be admitted to the Partnership as a Substitute Limited Partner)
subject to all the restrictions set forth in this Section 9.3. It is a condition
to any Transfer otherwise permitted under any provision of this Section 9.3 that
the transferee assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such transferred Partnership Units arising after the effective date of the
Transfer and no such Transfer (other than pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor Partner
are assumed by a successor corporation by operation of law, and other than
pursuant to an exercise of the Rights pursuant to Article XI wherein all
obligations and liabilities of the transferor Partner arising from and after the
date of such Transfer shall be assumed by the Managing General Partner) shall
relieve the transferor Partner of
49
54
its obligations under this Agreement prior to the effective date of such
Transfer. Upon any such Transfer or Pledge permitted under this Section 9.3, the
transferee or, upon foreclosure on the Pledged Partnership Units, each
Institutional Lender which is the pledgee shall be admitted as a Substituted
Limited Partner as such term is defined in the Act and shall succeed to all of
the rights, including rights with respect to the Rights, of the transferor
Limited Partner under this Agreement in the place and stead of such transferor
Limited Partner; provided, however, that notwithstanding the foregoing, any
transferee of any transferred Partnership Unit shall, unless the Ownership Limit
is waived in writing by the Managing General Partner, be subject to the
Ownership Limit applicable to Persons other than the Limited Partners and/or
their Affiliates which may limit or restrict such transferee's ability to
exercise the Limited Partner's Rights, if any. Any transferee, whether or not
admitted as a Substituted Limited Partner, shall take subject to the obligations
of the transferor hereunder. No transferee pursuant to a Transfer which is not
expressly permitted under this Section 9.3 and is not consented to by the
Managing General Partner, whether by a voluntary Transfer, by operation of law
or otherwise, shall have any rights hereunder, other than the right to receive
such portion of the distributions and allocations of Profits and Losses made by
the Partnership as are allocable to the Partnership Units so transferred.
(b) In addition to the Rights granted to the JCP Limited Partner and
any other Transfers permitted under this Article IX, the JCP Limited Partner
shall have the right to transfer all of its Partnership Units to a single
accredited investor, as defined in Rule 501 promulgated under the Securities
Act, subject to the provisions of Section 9.5, and such transferee shall be
admitted to the Partnership as a Substitute Limited Partner. Any transferee of
the Partnership Units owned by the JCP Limited Partner shall be subject to all
of the restrictions set forth in Section 9.3(a) above; provided, however, that
if the JCP Limited Partner hereafter Pledges its Partnership Units pursuant to
Section 9.3(a), then provided that the JCP Limited Partner has not previously
exercised the right provided for above in this Section 9.3(b), the Institutional
Lender or Lenders which are the pledgee(s) may exercise such right, whether by
taking title to the JCP Limited Partner's Partnership Units and then
transferring the same or by effecting such transfer upon foreclosure of the
Pledge.
(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 accordance
with Article XI or otherwise in compliance with such laws. Notwithstanding
anything to the contrary contained in this Agreement, no Partnership Units may
be sold or otherwise transferred except pursuant to Article XI 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
50
55
Partnership has no obligation to take any action which would cause any such
interests to be registered.
9.4 Issuance of Additional Partnership Units and Preferred Units. At any
time after the date hereof, subject to the provisions of Section 9.5 hereof, the
Managing General Partner may, upon its determination that the issuance of
additional Partnership Units ("Additional Units") is in the best interests of
the Partnership, cause the Partnership to issue Additional Units to any existing
Partner or issue Additional Units to and admit as a partner in the Partnership
any Person in exchange for the contribution by such Person of cash and/or
property which the Managing General Partner determines is desirable to further
the purposes of the Partnership under Section 2.3 hereof and which the Managing
General Partner determines has a value that justifies the issuance of such
Additional Units. In the event that Additional Units are issued by the
Partnership pursuant to this Section 9.4, the number of Partnership Units issued
shall be determined by dividing the Gross Asset Value of the property
contributed (reduced by the amount of any indebtedness assumed by the
Partnership or to which such property is subject) as of the date of contribution
to the Partnership (the "Contribution Date") by the Contribution Deemed
Partnership Unit Value, computed as of the Trading Day immediately preceding the
Contribution Date.
In addition, the Managing General Partner may, upon its
determination that the issuance of Preferred Units is in the best interests of
the Partnership, issue Preferred Units in accordance with Section 4.3(c) hereof.
The Managing General Partner shall be authorized on behalf of each
of the Partners to amend this Agreement to reflect the admission of any Partner
or any increase in the Partnership Units or Preferred Units of any Partner in
accordance with the provisions of this Section 9.4, and the Managing General
Partner shall promptly deliver a copy of such amendment to the Non-Managing
General Partners and each Limited Partner. The Limited Partners hereby
irrevocably appoint the Managing General Partner as their attorney-in-fact,
coupled with an interest, solely for the purpose of executing and delivering
such documents, and taking such actions, as shall be reasonably necessary in
connection with the provisions of this Section 9.4 or making any modification to
this Agreement permitted by Section 7.3 (including, without limitation, any
modification which, under Section 7.3 hereof, requires the Consent of the
Limited Partners where such consent has been obtained). Nothing contained in
this Section 9.4 shall be construed as authorizing the Managing General Partner
to grant any consent on behalf of the Limited Partners, or any of them.
9.5 Restrictions on Transfer.
(a) In addition to any other restrictions on Transfer herein
contained, in no event may any Transfer or assignment of a Partnership Unit or
Preferred Unit by any Partner be made nor may any new Partnership Unit or
Preferred Unit be issued by the
51
56
Partnership (i) to any Person which lacks the legal right, power or capacity to
own a Partnership Unit or Preferred Unit; (ii) in violation of applicable law;
(iii) if such Transfer would immediately or with the passage of time cause
either the Managing General Partner or the Non-Managing General Partners to fail
to comply with the REIT Requirements, such determination to be made assuming
that such Partners do comply with the REIT Requirements immediately prior to the
proposed Transfer; (iv) if such Transfer would cause the Partnership to become,
with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(e) of the Code); (v) if such Transfer would,
in the opinion of counsel to the Partnership, cause any portion of the
underlying assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.3-101;
(vi) if such Transfer would result in a deemed distribution to any Partner
attributable to a failure to meet the requirements of Regulations Section
l.752-2(d)(l), unless such Partner consents thereto, (vii) if such Transfer
would cause any lender to the Partnership to hold in excess of ten (10) percent
of the Partnership Interest that would, pursuant to the regulations under
Section 752 of the Code or any successor provision, cause a loan by such a
lender to constitute Partner Nonrecourse Debt, (viii) if such Transfer, other
than to an Affiliate, is of a Partnership Interest the value of which would have
been less than $20,000 when issued, (ix) 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 or (x) if such Transfer is
effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Section 7704(b)
of the Code.
(b) No Preferred Unit may be Transferred by the Managing General
Partner to any Person who is not a General Partner of the Partnership.
(c) No Limited Partnership Unit may be transferred by any Partner
without a Transfer of the corresponding SRC Limited Partnership Unit to the same
transferee.
9.6 Shelf Registration Rights. The Managing General Partner agrees that,
upon the request of any Limited Partner that has not entered into a Registration
Rights Agreement with the Managing General Partner substantially in the form of
Exhibit D hereto (each, a "Shelf Rights Holder"), made at any time, the Managing
General Partner will, if it has not already done so, within 60 days thereafter
file a "shelf" registration statement (the "Shelf Registration"), on an
appropriate form pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act"), or any similar rule that may be adopted by the
SEC, with respect to the sale of Registrable Securities (as defined below) by
the Shelf Rights Holders in ordinary course brokerage or dealer transactions not
involving an underwritten public offering. The Managing
52
57
General Partner shall use all reasonable efforts to have the Shelf Registration
declared effective as soon as practicable after such filing and to keep such
Shelf Registration continuously effective following the date on which such Shelf
Registration is declared effective for so long as any Units are outstanding. The
Managing General Partner further agrees, if necessary, to supplement or make
amendments to the Shelf Registration, if required by the registration form used
by the Managing General Partner for the Shelf Registration or by the
instructions applicable to such registration form or by the Securities Act or
the rules and regulations thereunder, and the Managing General Partner agrees to
furnish to each Shelf Rights Holder copies of any such supplement or amendment
at least three days prior to its being used and/or filed with the SEC.
Notwithstanding the foregoing, if the Managing General Partner shall furnish to
the Unit holder a certificate signed by the Chief Executive Officer of the
Managing General Partner stating that in the good faith judgment of the
Directors it would be significantly disadvantageous to the Managing General
Partner and its stockholders for any such Shelf Registration to be amended or
supplemented, the Managing General Partner may defer such amending or
supplementing of such Shelf Registration for not more than 45 days and in such
event the Unit holder shall be required to discontinue disposition of any
Registrable Securities covered by such Shelf Registration during such period.
Notwithstanding the foregoing, if the Managing General Partner irrevocably
elects, or the Partnership is so required under Section 11.3, prior to the
filing of any Shelf Registration to issue all cash in lieu of Shares upon the
exchange of Units by the holder requesting the tiling of such Shelf
Registration, the Managing General Partner shall not be obligated to file such
Shelf Registration Statement. The Managing General Partner shall make available
to its security holders, as soon as reasonably practicable, a statement of
operations covering a period of twelve (12) months, commencing on the first day
of the fiscal quarter next succeeding each sale of any Registrable Securities
pursuant to the Shelf Registration, in a manner which shall satisfy the
provisions of Section 11(a) of the Securities Act.
(a) Securities Subject to this Section 9.6. The securities entitled
to the benefits of this Section 9.6 are the Shares that have been or may be
issued from time to time upon the exchange of Units pursuant to Article XI
hereof and any other securities issued by the Managing General Partner in
accordance with the terms of this Agreement in exchange for any of the Shares
(collectively, the "Registrable Securities") but, with respect to any particular
Registrable Security, only so long as it continues to be a Registrable Security.
Registrable Securities shall include any securities issued in accordance with
the terms of this Agreement as a dividend or distribution on account of
Registrable Securities or resulting from a subdivision of the outstanding Shares
of Registrable Securities into a greater number of shares (by reclassification,
stock split or otherwise). For the purposes of this Agreement, a security that
was at one time a Registrable Security shall cease to be a Registrable Security
when (i) such
53
58
security has been effectively registered under the Securities Act, and either
(A) the registration statement with respect thereto has remained continuously
effective for 150 days or (B) such security has been disposed of pursuant to
such registration statement, (ii) such security is or can be immediately sold to
the public in reliance on Rule 144 (or any similar provision then in force)
under the Securities Act, (iii) such security has been otherwise transferred and
(a) the Managing General Partner has delivered a new certificate or other
evidence of ownership not bearing the legend set forth on the Shares upon the
initial issuance thereof (or other legend of similar import) and (b) in the
opinion of counsel to the Managing General Partner, the subsequent disposition
of such security would not require the registration or qualification under the
Securities Act or any similar state law then in force, or (iv) such security has
ceased to be outstanding.
(b) Registration Expenses. The Managing General Partner shall pay,
as REIT Expenses, all expenses incident to the Shelf Registration, including,
without limitation, (i) all SEC, stock exchange and National Association of
Securities Dealers, Inc. registration, filing and listing fees, (ii) all fees
and expenses incurred in complying with securities or "blue sky" laws (including
reasonable tees and disbursements of counsel in connection with "blue sky"
qualifications of the Registrable Securities), (iii) all printing, messenger and
delivery expenses, (iv) all fees and disbursements of the Managing General
Partner's independent public accountants and counsel and (v) all fees and
expenses of any special experts retained by the Managing General Partner in
connection with the Shelf Registration pursuant to the terms of this Section
9.6, regardless of whether such Shelf Registration becomes effective, unless
such Shelf Registration fails to become effective as a result of the fault of
the Shelf Rights Holders; provided, however, that the Managing General Partner
shall not pay the costs and expenses of any Shelf Rights Holder relating to
brokerage or dealer fees, transfer taxes or the fees or expenses of any
counsel's accountants or other representatives retained by the Shelf Rights
Holders, individually or in the aggregate.
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management. Except as expressly permitted
hereunder, the Limited Partners 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,
that the foregoing shall not be deemed to limit the ability of a Limited Partner
(or any officer or director thereof) who is an officer, director or employee of
the Partnership, either the Managing General Partner or Non-Managing General
Partners, or any Affiliate thereof, to act in such capacity.
10.2 Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership,
54
59
but the rights of such Limited Partner to share in the Profits or Losses of the
Partnership and to receive distributions of Partnership funds shall, on the
happening of such event, devolve to its successors or assigns, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership. However, in no event shall such assignee(s) become a
Substituted Limited Partner except in accordance with Article IX.
10.3 No Withdrawal. No Limited Partner may withdraw from the Partnership
without the prior written consent of the Managing General Partner and of the
Non-Managing General Partners, other than as expressly provided in this
Agreement.
10.4 Duties and Conflicts. (a) The Partners recognize that each of the
other 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. In addition, the
Partners recognize that certain of the Limited Partners and their Affiliates are
and may in the future be tenants of the Partnership, Subsidiary Entities or
other Persons or own anchor or other stores in the Properties of the
Partnership, or Subsidiary Entities or other properties and in connection
therewith may have interests that conflict with those of the Partnership or
Subsidiary Entities. In deciding whether to take any actions in such capacity,
such Limited Partners and their Affiliates shall be under no obligation to
consider the separate interests of the Partnership or Subsidiary Entities and
shall have no fiduciary obligations to the Partnership or Subsidiary Entities
and shall not be liable for monetary damages for losses sustained, liabilities
incurred or benefits not derived by the other Partners in connection with such
acts; nor shall the Partnership, the Non-Managing General Partners, the Managing
General Partner or any Subsidiary Entities be under any obligation to consider
the separate interests of the Limited Partners and their Affiliates in such
Limited Partners' independent capacities or have any fiduciary obligations to
the Limited Partners and their Affiliates in such capacity or be liable for
monetary damages for losses sustained, liabilities incurred or benefits not
derived by the Limited Partners and their Affiliates in such independent
capacities arising from actions or omissions taken by the Partnership or
Subsidiary Entities. The 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 or Subsidiary
Entities, without any obligation to offer any interest in such activities to the
Partnership or Subsidiary Entities or to any Partner or otherwise. 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
55
60
with the business of the Partnership or Subsidiary Entities, shall not be deemed
wrongful or improper.
(b) Notwithstanding the foregoing, without the prior consents of the
Managing General Partner and the Non-Managing General Partners, no Limited
Partner shall knowingly take any action, including acquiring, directly or
indirectly, an interest in any tenant of a Property which would have, through
the actual or constructive ownership of any tenant of any Property, the effect
of causing the percentage of the gross income of either of the Managing General
Partner or the Non-Managing General Partners that fails to be treated as "rents
from real property" within the meaning of Section 856(d) of the Code to exceed
such percentage on the date hereof. Each Limited Partner shall have a duty to
notify the Managing General Partner and the Non-Managing General Partners on a
timely basis of any potential acquisition or change in ownership that could
reasonably be expected to have such effect.
10.5 Guaranty and Indemnification Agreements.
(a) The Partnership shall notify the Limited Partners no less than
45 days (or, if the Partnership itself has less than 45 days' prior notice, as
promptly as practicable) prior to the occurrence of any event that the
Partnership reasonably expects will reduce the amount of Partnership liabilities
(including liabilities of any Subsidiary Partnership) that the Limited Partners
may include in their individual tax bases of their respective Partnership
Interests pursuant to Treasury Regulation Section 1.752-2 and Treasury
Regulations Section 1.752-3(a)(2) and (3). Upon receipt of such notice, each
Limited Partner shall inform the Partnership of any action it desires to take in
its sole and absolute discretion in order to increase the "economic risk of
loss" (within the meaning of Treasury Regulation 5 1.752-2) (the "Incurrence")
that it has with respect to liabilities of the Partnership or any other
Subsidiary Partnerships. The Partnership shall cooperate with each Limited
Partner to facilitate the Incurrence by such Limited Partner with respect to
Partnership Liabilities or liabilities of any Subsidiary Partnerships in such a
way that the Incurrence has the least amount of real economic risk to such
Limited Partner and provided that the Incurrence does not have a material
adverse impact on any other Partner in the Partnership or any such Partner's
Affiliates.
No direct or indirect Partner in the Partnership or any partnership
which is the obligor on a JCP Property Liability shall incur the "economic risk
of loss" (within the meaning of Treasury Regulation Section 752-2) with respect
to any JCP Property Liability without the prior written consent of the JCP
Limited Partner.
(b) Notwithstanding the provisions of Section 10.5(a) above, no
Limited Partners shall have any right to negotiate directly with any lender of
the Partnership or any other Subsidiary Partnership, any such negotiation to be
undertaken in good faith by the Managing General Partner or the Non-Managing
General Partners on behalf of, and at the request of, all affected Limited
Partners.
56
61
ARTICLE XI
Grant of Rights to the Limited Partners
11.1 Grant of Rights. The Managing General Partner does hereby grant
to each of the Limited Partners (other than The Retail Property Trust) and each
of the Limited Partners does hereby accept the right, but not the obligation
(hereinafter such right sometimes referred to as the "Rights"), to convert all
or a portion of such Limited Partner's Limited Partnership Units into Shares or
cash, as selected by the Managing General Partner, at any time or from time to
time, on the terms and subject to the conditions and restrictions contained in
this Article XI; provided, however, that no Limited Partnership Unit may be
converted pursuant to this Article XI without a conversion of the corresponding
SRC Limited Partnership Unit; and provided, further that each Limited
Partnership Unit converted pursuant to this Article XI shall be converted into
the same form of consideration as the corresponding SRC Limited Partnership
Unit. The Rights granted hereunder may be exercised by a Limited Partner, on the
terms and subject to the conditions and restrictions contained in this Article
XI, upon delivery to the Managing General Partner of a notice in the form of
Exhibit E (an "Exercise Notice"), which notice shall specify the number of such
Limited Partner's Limited Partnership Units to be converted by such Limited
Partner (the "Offered Units"). Once delivered, the Exercise Notice shall be
irrevocable, subject to payment by the Managing General Partner or the
Partnership of the Purchase Price for the Offered Units in accordance with the
terms hereof and subject to Section 1 of the Registration Rights Agreements. In
the event the Managing General Partner elects to cause the Offered Units to be
converted into cash, the Managing General Partner shall effect such conversion
by causing the Partnership to redeem the Offered Units for cash.
11.2 Limitation on Exercise of Rights. If an Exercise Notice is delivered
to the Managing General Partner but, as a result of the Ownership Limit or as a
result of other restrictions contained in the Charter of the Managing General
Partner, the Rights cannot be exercised in full for Shares, the Exercise Notice,
if the Purchase Price is to be payable in Shares, shall be deemed to be modified
such that the Rights shall be exercised only to the extent permitted under the
Ownership Limit or under other restrictions in the Charter of the Managing
General Partner. Notwithstanding the foregoing, any Person shall be permitted to
exercise its Rights hereunder during the first half of a taxable year of the
Managing General Partner even if upon conversion of the Offered Units into
Shares, the Shares held by such Person will exceed the Ownership Limit, so long
as such Person shall immediately following such conversion sell so many of such
Shares as shall cause the Ownership Limit not to be exceeded upon consummation
of such sale. The Managing General Partner hereby agrees to exercise its right
pursuant to its Charter to permit the Ownership Limit to be exceeded in the
circumstances described in the preceding sentence.
57
62
11.3 Computation of Purchase Price/Form of Payment. The purchase price
("Purchase Price") payable to a tendering Limited Partner shall be equal to the
Deemed Partnership Unit Value multiplied by the number of Offered Units computed
as of the date on which the Exercise Notice was delivered to the Managing
General Partner (the "Computation Date"). Subject to the following paragraph,
the Purchase Price for the Offered Units shall be payable, at the option of the
Managing General Partner, by causing the Partnership to redeem the Offered Units
for cash in the amount of the Purchase Price, or by the issuance by the Managing
General Partner of the number of Shares equal to the number of Offered Units
(adjusted as appropriate to account for stock splits, stock dividends or other
similar transactions between the Computation Date and the closing of the
purchase and sale of the Offered Units in the manner specified in Section
11.7(d) below).
Where a Limited Partner exercising its rights pursuant to this
Section on or after August 9, 2001, up to, but not including, August 9, 2004, is
a XxXxxxxxx, and such Limited Partner has received a special allocation of
taxable income or gain from a Covered Sale pursuant to Section 6.1(e) within 90
days prior to the date of such exercise, then to the extent of any tax due on
such allocation and on the redemption of such Limited Partner's Units, the
Managing General Partner shall, if such Limited Partner so requests in the
Exercise Notice, cause the Partnership to redeem its Units for cash in
accordance with this Section 11.3.
11.4 Closing. The closing of the acquisition or redemption of Offered
Units shall, unless otherwise mutually agreed, be held at the principal offices
of the Managing General Partner, on the date agreed to by the Managing General
Partner and the relevant Limited Partner, which date (the "Settlement Date")
shall in no event be on a date which is later than the later of (i) ten (10)
days after the date of the Exercise Notice and (ii) five (5) days after the
expiration or termination of the waiting period applicable to the Limited
Partner, if any, under the Xxxx-Xxxxx-Xxxxxx Act (the "HSR Act"). The Managing
General Partner agrees to use its best efforts to obtain an early termination of
the waiting period applicable to any such acquisition, if any, under the HSR
Act. Until the Settlement Date, each tendering Partner shall continue to own his
Offered Units, and will continue to be treated as the holder of such Offered
Units for all purposes of this Agreement, including, without limitation, for
purposes of voting, consent, allocations and distributions. Offered Units will
be transferred to the Managing General Partner only upon receipt by the
tendering Partner of Shares or cash in payment in full therefor.
11.5 Closing Deliveries. At the closing of the purchase and sale or
redemption of Offered Units, payment of the Purchase Price shall be accompanied
by proper instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the tendering Limited Partner with respect
to its due authority to sell all of the right, title and interest in and
58
63
to such Offered Units to the Managing General Partner or the Partnership, as
applicable, and with respect to the ownership by the Limited Partner of such
Units, free and clear of all Liens, and (B) the Managing General Partner with
respect to its due authority to acquire such Units for Shares or to cause the
Partnership to redeem such Units for cash and, in the case of payment by Shares,
(ii) (A) an opinion of counsel for the Managing General Partner, reasonably
satisfactory to such Limited Partner, to the effect that such Shares have been
duly authorized, are validly issued, fully-paid and non-assessable, and (B) a
stock certificate or certificates evidencing the Shares to be issued and
registered in the name of the Limited Partner or its designee.
11.6 Term of Rights. The rights of the parties with respect to the Rights
shall remain in effect, subject to the terms hereof, throughout the existence of
the Partnership.
11.7 Covenants of the Managing General Partner. To facilitate the Managing
General Partner's ability fully to perform its obligations hereunder, the
Managing General Partner covenants and agrees as follows:
(a) At all times while the Rights are in existence, the Managing
General Partner shall reserve for issuance such number of Shares as may be
necessary to enable the Managing General Partner to issue such Shares in full
payment of the Purchase Price in regard to all Partnership Units which are from
time to time outstanding and held by the Limited Partners.
(b) As long as the Managing General Partner shall be obligated to
file periodic reports under the Exchange Act, the Managing General Partner will
timely file such reports in such manner as shall enable any recipient of Shares
issued to a Limited Partner hereunder in reliance upon an exemption from
registration under the Securities Act to continue to be eligible to utilize Rule
144 promulgated by the SEC pursuant to the Securities Act, or any successor rule
or regulation or statute thereunder, for the resale thereof.
(c) During the pendency of the Rights, the Limited Partners shall
receive in a timely manner all reports filed by the Managing General Partner
with the SEC and all other communications transmitted from time to time by the
Managing General Partner to the owners of its Shares.
(d) Under no circumstances shall the Managing General Partner
declare any stock dividend, stock split, stock distribution or the like, unless
fair and equitable arrangements are provided, to the extent necessary, fully to
adjust, and to avoid any dilution in, the Rights of any Limited Partner under
this Agreement.
11.8 Limited Partners' Covenant. Each of the Limited Partners covenants
and agrees with the Managing General Partner that all Offered Units tendered to
the Managing General Partner or
59
64
the Partnership, as the case may be, in accordance with the exercise of Rights
herein provided shall be delivered free and clear of all Liens and should any
Liens exist or arise with respect to such Offered Units, the Managing General
Partner or the Partnership, as the case may be, shall be under no obligation to
acquire the same unless, in connection with such acquisition, the Managing
General Partner has elected to cause the Partnership to pay such portion of the
Purchase Price in the form of cash consideration in circumstances where such
consideration will be sufficient to cause such existing Lien to be discharged in
full upon application of all or a part of such consideration and the Partnership
is expressly authorized to apply such portion of the Purchase Price as may be
necessary to satisfy any indebtedness in full and to discharge such Lien in
full. In the event any transfer tax is payable by the Limited Partner as a
result of a transfer of Partnership Units pursuant to the exercise by a Limited
Partner of the Rights, the Limited Partner shall pay such transfer tax.
11.9 Dividends. If a Limited Partner shall exchange any Partnership Units
for Shares pursuant to this Article XI on or prior to the Partnership Record
Date for any distribution to be made on such Partnership Units, in accordance
with the Charter of the Managing General Partner such Limited Partner will be
entitled to receive the corresponding distribution to be paid on such Shares and
shall not be entitled to receive the distribution made by the Partnership in
respect of the exchanged Partnership Units.
ARTICLE XII
General Provisions
12.1 Investment Representations.
(a) Each Limited Partner acknowledges that it (i) has been given
full and complete access to the Partnership and those person who will manage the
Partnership in connection with this Agreement and the transactions contemplated
hereby, (ii) has had the opportunity to review all documents relevant to its
decision to enter into this Agreement, and (iii) has had the opportunity to ask
questions of the Partnership and those persons who will manage the Partnership
concerning its investment in the Partnership and the transactions contemplated
hereby.
(b) Each Limited Partner acknowledges that it understands that the
Partnership Units to be purchased or otherwise acquired by it hereunder will not
be registered under the Securities Act of 1933 in reliance upon the exemption
afforded by Section 4(2) thereof for transactions by an issuer not involving any
public offering, and will not be registered or qualified under any applicable
state securities laws. Each Limited Partner represents that (i) it is acquiring
such Partnership Units for investment only and without any view toward
distribution thereof, and it will not sell or otherwise dispose of such
Partnership Units except pursuant to the exercise of the Rights or otherwise in
accordance with the terms hereof and in compliance with the registration
requirements or exemption provisions of any applicable
60
65
state securities laws, (ii) its economic circumstances are such that it is able
to bear all risks of the investment in the Partnership Units for an indefinite
period of time including the risk of a complete loss of its investment in the
Units and (iii) it has knowledge and experience in financial and business
matters sufficient to evaluate the risks of investment in the Partnership Units.
Each Limited Partner further acknowledges and represents that it has made its
own independent investigation of the Partnership and the business conducted and
proposed to be conducted by the Partnership, and that any information relating
thereto furnished to the Limited Partner was supplied by or on behalf of the
Partnership.
12.2 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 delivered or sent by United States mail or by reputable overnight
delivery service and shall be deemed to have been given when delivered in
person, upon receipt when delivered by overnight delivery service 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 12.2, the addresses of the parties hereto shall be as
set forth on Exhibit A hereof. The address of any party hereto may be changed by
a notice in writing given in accordance with the provisions hereof.
12.3 Successors. 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.
12.4 Liability of Limited Partners. The liability of the Limited Partners
for their obligations, covenants representations and warranties under this
Agreement shall be several and not joint.
12.5 Effect and Interpretation. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN CONFORMITY WITH THE LAWS OF THE STATE OF DELAWARE.
12.6 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.
12.7 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.
12.8 Entire Understanding; Etc. This Agreement and the other agreements
referenced herein or therein or to which the signatories hereto or thereto are
parties constitute the entire agreement and understanding among the Partners and
supersede any prior
61
66
understandings and/or written or oral agreements among them respecting the
subject matter within.
12.9 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.
12.10 Trust Provision. This Agreement, to the extent executed by the
trustee of a trust, is executed by such trustee solely as trustee and not in a
separate capacity. Nothing herein contained shall create any liability on, or
require the performance of any covenant by, any such trustee individually, nor
shall anything contained herein subject the individual property of any trustee
to any liability.
12.11 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."
12.12 Assumption of Liabilities. Nothing contained in this Agreement shall
have the effect of terminating, negating or modifying in any respect the
assumption of liabilities by the Partnership set forth in Section 10.8 of the
Fourth Amended and Restated Limited Partnership Agreement of the Partnership
dated as of April 21, 1994 and the Partnership reaffirms its obligations
thereunder.
12.13 Assurances. Each of the Partners shall hereafter execute and deliver
such further instruments (provided such instruments are in form and substance
reasonably satisfactory to the executing Partner) and do such further acts and
things as may be reasonably required or useful to carry out the intent and
purpose of this Agreement and as are not inconsistent with the terms hereof.
62
67
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed effective as of the date and year first
above written.
GENERAL PARTNERS:
SD PROPERTY GROUP, INC.
By: /s/ Xxxxx Xxxxx
_____________________
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
SPG PROPERTIES, INC.
By: /s/ Xxxxx Xxxxx
_____________________
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
SIMON PROPERTY GROUP, INC.
By: /s/ Xxxxx Xxxxx
_____________________
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
LIMITED PARTNERS:
63
