1
Exhibit 4.2
--------------------------
LIMITED PARTNERSHIP AGREEMENT
OF
SPG REALTY CONSULTANTS, L.P.
--------------------------
2
ARTICLE I
Definitions; Etc.
1.1 Definitions........................................................ 2
ARTICLE II
Continuation of Partnership
2.1 Continuation....................................................... 13
2.2 Name............................................................... 14
2.3 Character of the Business.......................................... 14
2.4 Location of the Principal Place of Business........................ 14
2.5 Registered Agent and Registered Office............................. 14
ARTICLE III
Term
3.1 Commencement....................................................... 15
3.2 Dissolution........................................................ 15
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contributions.............................. 15
4.2 Limited Partner Capital Contributions.............................. 15
4.3 Additional Funds................................................... 16
4.4 Redemption; Change in Number of Shares Outstanding................. 18
4.5 Dividend Reinvestment Plan......................................... 18
4.6 No Third Party Beneficiary......................................... 18
4.7 No Interest; No Return............................................. 19
4.8 Capital Accounts................................................... 19
ARTICLE V
Representations, Warranties and Acknowledgment
5.1 Representations and Warranties by Managing
General Partner.................................................... 21
5.2 Representations and Warranties by the Limited
Partners........................................................... 22
5.3 Acknowledgment by Each Partner..................................... 22
ARTICLE VI
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations........................................................ 22
6.2 Distributions...................................................... 28
6.3 Books of Account; Segregation of Funds............................. 29
6.4 Reports............................................................ 30
6.5 Audits............................................................. 31
3
6.6 Tax Returns........................................................ 31
6.7 Tax Matters Partner................................................ 31
6.8 Withholding........................................................ 32
ARTICLE VII
Rights, Duties and Restrictions of the
Managing General Partners
7.1 Expenditures by Partnership........................................ 33
7.2 Powers and Duties of the Managing General Partner.................. 33
7.3 Major Decisions.................................................... 37
7.4 Managing General Partner Participation............................. 38
7.5 Proscriptions...................................................... 39
7.6 Additional Partners................................................ 39
7.7 Title Holder....................................................... 39
7.8 Waiver and Indemnification......................................... 39
7.9 Limitation of Liability of Directors, Shareholders
and Officers of the Managing General Partner....................... 40
ARTICLE VIII
Dissolution, Liquidation and Winding-Up
8.1 Accounting......................................................... 41
8.2 Distribution on Dissolution........................................ 41
8.3 Sale of Partnership Assets......................................... 41
8.4 Distributions in Kind.............................................. 42
8.5 Documentation of Liquidation....................................... 42
8.6 Liability of the Liquidation Agent................................. 42
ARTICLE IX
Transfer of Partnership Interests
and Related Matters
9.1 [INTENTIONALLY OMITTED]............................................ 43
9.2 Managing General Partner Transfers and
Deemed Transfers................................................... 43
9.3 Transfers by Limited Partners...................................... 43
9.4 Issuance of Additional Partnership Units and
Preferred Units.................................................... 45
9.5 Restrictions on Transfer........................................... 46
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management..................................... 47
10.2 Bankruptcy of a Limited Partner.................................... 47
10.3 No Withdrawal...................................................... 47
10.4 Duties and Conflicts............................................... 47
10.5 Guaranty and Indemnification Agreements............................ 48
2
4
ARTICLE XI
Grant of Rights to the Limited Partners
11.1 Grant of Rights.................................................... 49
11.2 [INTENTIONALLY OMITTED]............................................ 49
11.3 Computation of Purchase Price/Form of Payment...................... 49
11.4 Closing............................................................ 50
11.5 Closing Deliveries................................................. 50
11.6 Term of Rights..................................................... 50
11.7 Covenants of the Managing General Partner.......................... 50
11.8 Limited Partners' Covenant......................................... 51
11.9 Dividends.......................................................... 51
ARTICLE XIII
General Provisions
12.1 Investment Representations......................................... 51
12.2 Notices............................................................ 52
12.3 Successors......................................................... 52
12.4 Liability of Limited Partners...................................... 52
12.5 Effect and Interpretation.......................................... 53
12.6 Counterparts....................................................... 53
12.7 Partners Not Agents................................................ 53
12.8 Entire Understanding; Etc.......................................... 53
12.9 Severability....................................................... 53
12.10 Trust Provision.................................................... 53
12.11 Pronouns and Headings.............................................. 53
12.12 Assurances......................................................... 53
3
5
EXECUTION VERSION
LIMITED PARTNERSHIP AGREEMENT
OF
SPG REALTY CONSULTANTS, L.P.
THIS LIMITED PARTNERSHIP AGREEMENT, dated as of September 24, 1998, is
made by and among SPG REALTY CONSULTANTS, 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, concurrently with the execution hereof, SPG Merger Sub, Inc., a
Maryland corporation and a wholly-owned subsidiary of Simon Property Group, Inc.
("Simon Group"), merged into Xxxxx XxXxxxxxx Group, Inc. pursuant to the
Agreement and Plan of Merger, dated as of February 18, 1998 (the "Merger
Agreement"), among Xxxxx XxXxxxxxx Group, Inc., Corporate Property Investors
(the predecessor to Simon Group) and Corporate Realty Consultants, Inc. (renamed
SPG Realty Consultants, Inc.); and
WHEREAS, concurrently with the execution hereof, the Simon Group
Partnership (as defined below) will become a limited partner of the Partnership
and receive Partnership Units, which the Simon Group Partnership will, in turn,
distribute pro rata to all of its limited partners other than any general
partner of the Simon Group Partnership who also holds Partnership Units,
whereupon such limited partners shall become Limited Partners of the
Partnership; and
WHEREAS, the Managing General Partner is concurrently herewith, in
exchange for the contribution to the Partnership and its subsidiaries of
substantially all of its assets and liabilities, becoming the managing general
partner of the Partnership, holding Units in the amount set forth in Exhibit A;
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 as follows:
6
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 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 (1) and (ii); (iv)
any trustee or trust for the benefit of such Partner or 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 Limited Partnership Agreement, as amended,
modified, supplemented or restated from time to time, as the context requires.
2
7
"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).
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State on September 17, 1998, as it 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.
"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.
3
8
"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 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.
4
9
"Contribution Date" shall have the meaning set forth in Section 9.4
hereof.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership or otherwise to select, or have the power to remove and
then select, a majority of those Persons exercising governing authority over an
Entity. In the case of a limited partnership, the sole general partner, all of
the general partners to the extent each has equal management control and
authority, or the managing general partner or managing general partners thereof
shall be deemed to have control of such partnership and, in the case of a trust,
any trustee thereof or any Person having the right to select or remove any such
trustee shall be deemed to have control of such trust.
"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" with respect to a particular Trust
Interest as of any date shall mean the value of the Shares underlying such Trust
Interest, which shall be an amount equal to the greater of (i) the aggregate par
value of the Share underlying the Trust Interest and (ii) the amount determined
in good faith by the Board of Directors of the Managing General Partner to
represent the fair market net asset value of the Share underlying the Trust
Interest.
"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 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.
"Directors" shall mean the Board of Directors of the Managing General
Partner.
5
10
"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 and its duly
admitted successors and assigns and any other Person who is a general partner of
the Partnership at the time of reference thereto.
"GP Expenses" shall mean (i) costs and expenses relating to the
continuity of existence of the Managing General Partner and its 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 or such subsidiaries, (ii) costs and expenses relating to any
offer or registration of securities by the Managing General Partner or its
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 or its subsidiaries, GP 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 or its 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 or its 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 or its subsidiaries, and (vi) all operating,
administrative and other costs incurred by the Managing General Partner or its
subsidiaries (including attorney's and accountant's fees, income and franchise
taxes and salaries paid to
6
11
officers of the Managing General Partner or its 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 GP Expenses
hereunder 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 the aggregate of (a) all amounts theretofore distributed or
distributable to the Managing General Partner by any wholly-owned subsidiary
thereof and (b) all amounts theretofore paid to the Managing General Partner
pursuant to Section 7.1 hereof.
"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 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.
"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
7
12
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 Simon Group Partnership Unit.
"Liquidation Agent" shall mean such Person as is selected as the
Liquidation Agent hereunder by the Managing General Partner, 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 Managing General Partner, any Person
Controlled by the Managing General Partner or any Person holding as nominee for
the General Partners).
"Managing General Partner" shall mean SPG Realty Consultants, Inc., a
Delaware corporation.
8
13
"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 (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.
"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.
"Paired Shares" shall mean one share of Simon Group Common Stock and a
pro rata Trust Interest.
9
14
"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 and the Limited
Partners, their duly admitted successors or assigns or any Person who is a
partner of the Partnership at the time of reference thereto.
"Partnership" shall mean SPG Realty Consultants, 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.
10
15
"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 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 the
Managing General Partner now or hereafter authorized or reclassified having
dividend rights that are superior or prior to dividends payable on the Shares.
"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 the Managing General Partner
in exchange for a Preferred Unit.
"Preferred Units" shall mean interests in the Partnership issued to the
Managing 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.
"Purchase Price" shall have the meaning set forth in Section 11.3
hereof.
"Regulations" shall mean the final, temporary or proposed income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
11
16
"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 Requirements" shall mean all actions or omissions as may be
necessary (including making appropriate distributions from time to time) to
permit each of Simon Group and its REIT 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 the Managing 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 Common Stock, par value $0.0001 per share, of the
Managing General Partner.
"Simon Group" shall mean Simon Property Group, Inc., a Delaware
corporation.
"Simon Group Common Stock" shall mean the shares of Common Stock, par
value $0.0001 per share, of Simon Group.
"Simon Group Limited Partnership Units" shall mean interests in the Simon
Group Partnership (as defined below) held by a Limited Partner, each of which is
paired with a Limited Partnership Unit.
"Simon Group Partnership" shall mean Simon Property Group, L.P., a
Delaware limited partnership.
"Simon Group Partnership Units" shall mean interests in the Simon Group
Partnership.
"Xxxxxx" 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,
12
17
any trusts established for the benefit of any of the foregoing, and any Entity
Controlled by any one or more of the foregoing.
"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.
"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.
"Trust" shall mean the trust owning all of the outstanding Shares subject
to a trust agreement among certain stockholders of Simon Group, a trustee and
the Managing General Partner, pursuant to which all holders of Simon Group
Common Stock are beneficiaries of such Trust.
"Trust Interest" shall mean a beneficial interest in the Trust associated
with or attached to a Share.
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 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
13
18
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 SPG Realty Consultants, L.P., and
all business of the Partnership shall be conducted under the name of SPG Realty
Consultants, 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 conduct any business that may be conducted by the Managing General
Partner.
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, Xxxxxxxxxx, 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
14
19
Partners of any change in the Registered Agent or Registered Office of the
Partnership.
ARTICLE III
Term
3.1 Commencement. The Partnership shall commence business 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 is
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.
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 and its subsidiaries
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.
(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.
15
20
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 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 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 an Affiliate thereof)
(i) may itself borrow such Required Funds, in which case the 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 through the sale of Preferred Shares,
the 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 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
16
21
event the 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 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 the number of Shares issued in such offering or sale.
(c) In the event the Managing 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 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
17
22
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.
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 the number of Units
underlying the Trust Interests holding such Shares 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 Trust Interest without dilution.
4.5 Dividend Reinvestment Plan. 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. The Managing 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
18
23
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 GP 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).
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
19
24
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;
(ii) the Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective gross fair
20
25
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 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 Agreement; (v) the execution and
delivery of this Agreement by the Managing General Partner and the consummation
of
21
26
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 the Limited Partners. Each Limited
Partner, for itself only, represents and warrants to the Managing General
Partner, 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) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
5.3 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 assets 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
22
27
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:
(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:
23
28
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.
(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
24
29
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 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
25
30
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 1.704-1(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
1.704-1(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 6.1(d)(4).
(5) The Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss, and 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
6.1(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
26
31
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 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.
27
32
(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' 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;
28
33
(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.
(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.
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
29
34
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 then just ended, and prepared in accordance with
GAAP. The Partnership shall further cause to be prepared and transmitted to the
Managing General Partner such reports and/or information as are necessary for
the Managing General Partner to determine 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 to comply
with its obligations to file federal, state and local tax returns and
information returns and to provide its 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
30
35
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 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 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
31
36
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 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 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
32
37
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 Managing 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 Partner's and its subsidiaries' GP 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 Managing General Partner. 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 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,
33
38
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 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
34
39
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;
(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
35
40
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 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 Simon
Group, the non-managing General Partners of the Simon Group Partnership and
their Subsidiary Entities (as defined in the Sixth Amended and Restated Limited
Partnership Agreement of Simon Group Partnership) to continue to qualify as
REITs or (ii) to avoid Simon Group, the non-managing General Partners of the
Simon Group Partnership and their Subsidiary Entities (as defined in the Sixth
Amended and Restated Limited Partnership Agreement of Simon Group Partnership)
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. The Managing
36
41
General Partner agrees and acknowledges that it shall take all reasonable
actions necessary to satisfy the REIT Requirements.
7.3 Major Decisions.
(a) The Managing General Partner shall not, without the Consent of
the Limited 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 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 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, for all periods during
which the Xxxxxx hold at least ten percent of the Partnership Units then
outstanding, and 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
37
42
(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
(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) 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
(ii) dissolve the Partnership.
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 Participation. The Managing General Partner
agrees that (a) substantially all activities and business operations of the
Managing General Partner shall be
38
43
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, whether by issuance of stock, borrowing or otherwise, will be
made available to the Partnership whether as capital contributions, loans or
otherwise, as appropriate.
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 nor
any of its 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 by this
Agreement and the Act, provided that the Managing General Partner's or such
other Person's conduct or omission to act was taken in good faith and in the
belief that such conduct or omission was in the best interests of the
Partnership and, provided further, that the Managing General Partner or such
other Person shall not be guilty of fraud, willful misconduct or
39
44
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 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 the Managing General
Partner 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), including from the lending of money by the Managing
General Partner to the Partnership or the contribution of property by the
Managing General Partner to the Partnership, it being understood that in any
such transaction the Managing General Partner shall be entitled to cost recovery
only. The Partnership shall, and hereby does, indemnify and hold harmless each
of the Managing General Partner 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;
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. 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 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.
40
45
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 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.
41
46
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. 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, 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.
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:
42
47
(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 [INTENTIONALLY OMITTED].
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, (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 Managing
General Partner shall become vested with the powers and rights of the transferor
Managing General Partner with respect to the Partnership Units transferred, and
shall be liable for all obligations and responsible for all duties of the
Transferor Managing 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 Managing General Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Managing 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)
43
48
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 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. 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
44
49
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 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 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 Deemed Partnership Unit
Value.
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 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
45
50
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 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 violate the REIT Requirements, such determination to be made
assuming that the REIT Requirements are satisfied 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 Simon Group Limited Partnership Unit to
the same transferee.
46
51
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 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, 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, other than as
expressly provided in this Agreement.
10.4 Duties and Conflicts. 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 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
47
52
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 with
the business of the Partnership or Subsidiary Entities, shall not be deemed
wrongful or improper.
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.
(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 on behalf of, and at
the request of, all affected Limited Partners.
48
53
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 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 (which will be contributed by the Managing General
Partner to the Trust in consideration for Trust Interests attached to the Simon
Group Common Stock issued upon the concurrent conversion of the Simon Group
Limited Partnership Unit referred to in the proviso below) 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 Simon Group 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 Simon Group 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 C
(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. 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 [INTENTIONALLY OMITTED].
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 (which will be contributed by the
Managing General Partner to the Trusts in return for Trust Interests attached to
the Simon Group Common Stock issued upon the concurrent conversion of a Simon
Group Partnership Unit) equal to the number of Offered Units (adjusted as
appropriate to account for
49
54
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).
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 to such
Offered Units to the Managing General Partner or the Partnership, as applicable,
and with respect to the ownership by of 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) 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.
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
50
55
Shares as may be necessary to enable the Managing General Partner to issue such
Shares underlying the Trust Interests 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) 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 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 XIII
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
51
56
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 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.
52
57
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 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 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.
53
58
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:
SPG REALTY CONSULTANTS, INC.
By: /s/ Xxxxx Xxxxx
_____________________
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
LIMITED PARTNERS:
54
