FOURTH AMENDMENT TO THE
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF
THE MACERICH PARTNERSHIP, L.P.
THIS FOURTH AMENDMENT (the "AMENDMENT") TO THE AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT DATED AS OF MARCH 16, 1994, AMENDED AS OF
AUGUST 14, 1995, FURTHER AMENDED AS OF JUNE 27, 1997, AND FURTHER AMENDED AS
OF NOVEMBER 16, 1997 (the "AGREEMENT") OF THE MACERICH PARTNERSHIP, L.P. (the
"PARTNERSHIP") is dated effective as of February 25, 1998.
RECITALS
WHEREAS, The Macerich Company, the general partner of the Partnership
(the "GENERAL PARTNER"), will be issuing to Security Capital Preferred Growth
Incorporated ("Security Capital"), 3,627,131 shares of Series A Cumulative
Convertible Redeemable Preferred Stock, $.01 par value per share ("SERIES A
PREFERRED SHARES"), pursuant to the Series A Preferred Securities Purchase
Agreement dated as of January 19, 1998 between the General Partner and
Security Capital (the "Purchase Agreement");
WHEREAS, SECTION 3.3 (a)(i) of the Agreement authorizes the General
Partner to cause the Partnership to issue additional interests in the
Partnership in one or more classes, or one or more series of any of such
classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to those of the Limited Partners, all as shall be
determined by the General Partner in its sole and absolute discretion and
without the approval of any of the Limited Partners; PROVIDED, HOWEVER, that
any such additional interests in the Partnership must be issued in connection
with an issuance of shares of or other interests in the General Partner,
which shares or interests have designations, preferences and other rights,
all such that the economic interests are substantially similar to the
designations, preferences and other rights of the additional interests in the
Partnership being issued to the General Partner by the Partnership in
accordance with SECTION 3.3. OF THE AGREEMENT, and the General Partner shall
make a capital contribution to the Partnership in an amount equal to the
proceeds raised in connection with the issuance of such shares of or other
interests in the General Partner;
WHEREAS, SECTION 12.1(b)(iii) of the Agreement provides that the General
Partner has the power, without the consent of the Limited Partners of the
Partnership, to amend the Agreement as may be required to facilitate or
implement setting forth the designations, rights, powers, duties, and
preferences of the holders of any additional interests in the Partnership
issued pursuant to SECTION 3.3;
WHEREAS, the General Partner has made the determination pursuant to
SECTION 12.1(b)(iii) of the Agreement that consent of the Limited Partners of
the Partnership is not required with respect to the matters set forth in this
Amendment; and
WHEREAS, all things necessary to make this Amendment a valid agreement
of the Partnership have been done;
NOW, THEREFORE, pursuant to the authority granted to the General Partner
under the Agreement, the Agreement is hereby amended as follows:
1. Amendments:
(a) Section 2.2 of the Agreement is hereby amended by inserting the
following new Section 2.2(c) to read as follows:
(c) SERIES A PREFERRED UNITS. The General Partner hereby makes a
capital contribution to the Partnership in the amount of the gross
proceeds from the sale of the Series A Preferred Shares to Security
Capital pursuant to the Purchase Agreement, which amount is
$100,000,001.67. In exchange for such capital contribution, the
Partnership hereby issues to the General Partner 3,627,131 Series A
Preferred Units, each Series A Preferred Unit representing a capital
contribution of $27.57. Series A Preferred Units shall entitle the
General Partner to a Preferred Return, all as described in SECTION 4.1
of the Agreement. Series A Preferred Units shall be converted into
Common Units at the time the Series A Preferred Shares are converted
into common shares of the General Partner in an amount of Common Units
equal to the total amount of such converted common shares divided by the
Conversion Factor. To the extent that Series A Preferred Shares are
being redeemed, the General Partner shall be obligated to put to the
Partnership a number of Series A Preferred Units equal to the number of
Series A Preferred Shares being redeemed or repaid. Upon putting a
Series A Preferred Unit to the Partnership, the General Partner will be
paid, in liquidation of each Series A Preferred Unit being put to the
Partnership, an amount equal to $27.57 plus any accumulated, accrued and
unpaid Series A Preferred Return on such Series A Preferred Unit, PLUS
any other amounts owed or to be paid by the General Partner in
connection with the redemption of the corresponding Series A Preferred
Share; PROVIDED, HOWEVER, that the General Partner shall not put the
Series A Preferred Units to the Partnership if the payment in
liquidation of those Series A Preferred Units would cause the
Partnership or the General Partner to be in violation of (i) any
provision of any agreement with respect to indebtedness, including the
Credit and Guaranty Agreement and those agreements with respect to the
Convertible Subordinated Debentures (the "Debt Instruments"), or (ii)
Section 17-607 of the Act. Before any Series A Preferred Units may be
put to the Partnership, the General Partner shall determine in good
faith that the redemption of such Series A Preferred Units will not
cause a violation of the Debt Instruments
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or Section 17-607 of the Act. To the extent the General Partner is not
permitted to make a payment in respect of the Series A Preferred Shares
by reason of a restriction imposed by the Debt Instruments or Section
17-607 of the Act, the Partnership shall not, and shall not be obligated
to, make any such payment to the General Partner with respect to the
corresponding Series A Preferred Units.
(b) Section 4.1 of the Agreement is hereby amended to read as follows:
4.1 DISTRIBUTION OF NET CASH FLOW. The General Partner shall
cause the Partnership to distribute all or a portion of Net Cash Flow to
the Partners from time to time as determined by the General Partner, but
in any event not less frequently than quarterly, in such amounts as the
General Partner shall determine. Notwithstanding the foregoing, the
General Partner shall use its reasonable efforts to cause the
Partnership to distribute sufficient amounts to enable the General
Partner to pay shareholder dividends that will (a) satisfy the
requirements for qualifying as a REIT under the Code and Regulations
("REIT REQUIREMENTS"), and (b) avoid any federal income or excise tax
liability of the General Partner. All amounts withheld pursuant to the
Code or a provision of any state or local tax law with respect to any
allocation, payment or distribution to the General Partner or any
Limited Partner shall be treated as amounts distributed to such Partner.
Upon the receipt by the General Partner of each Exercise Notice
pursuant to which one or more Redemption Partners exercise Redemption
Rights in accordance with the provisions of ARTICLE IX and the
Redemption Rights Exhibit, the General Partner shall, unless the General
Partner has elected to issue only Shares to such Redemption Partners in
respect of the Purchase Price of the Offer Interests, cause the
Partnership to distribute to the Partners, PRO RATA in accordance with
their respective Percentage Interests as of the date of delivery of such
Exercise Notice, all (or such lesser portion as the General Partner
shall reasonably determine to be prudent under the circumstances) of Net
Cash Flow, which distribution shall be made prior to the closing of the
redemption or purchase and sale of the Offered Interests specified in
such Exercise Notice. Subject to any restrictions or limitations
imposed by the Debt Instruments or Section 17-607 of the Act,
distributions shall be made in accordance with the following order of
priority:
(a) First, semi-annual distributions to the General Partner
with respect to the Preferred Units in an amount equal to the cumulative
and unpaid Preferred Return on such Preferred Units in such a way as to
allow the General Partner to pay interest and any additional amounts on
the Convertible Subordinated Debentures payable to the holders thereof;
(b) Second, to the General Partner with respect to the Series
A Preferred Units in an amount equal to the cumulative and unpaid Series
A Preferred Return on such Series A Preferred Units in such a way as to
allow the General Partner to
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pay cumulative preferential dividends and any additional amounts
required on the Series A Preferred Shares payable to the holders
thereof; and
(c) Next, to the Partners holding Common Units, PRO RATA in
accordance with such Partners' then Percentage Interests.
(c) The definition of the term "Partnership Interest" contained in the
Glossary of Defined Terms of the Agreement is hereby amended to read as
follows:
"PARTNERSHIP INTEREST" shall mean an ownership interest of a Partner in
the Partnership from time to time, including, as applicable, such
Partner's Preferred Units, Series A Preferred Units and Percentage
Interest and such Partner's Capital Account, and any and all other
benefits to which the holder of such Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of
such Person to comply with the terms of this Agreement.
(d) The definition of the term "Partnership Unit" contained in the
Glossary of Defined Terms of the Agreement is hereby amended to read as
follows:
"PARTNERSHIP UNIT" shall mean a Common Unit, Preferred Unit or Series A
Preferred Unit and shall constitute a fractional, undivided share of the
Partnership Interests corresponding to that particular class of Units.
[The allocation of Partnership Units among the Partners as of this date
is as set forth on EXHIBIT D.]
(e) The definition of the term "Common Unit" contained in the Glossary
of Defined Terms of the Agreement is hereby amended to read as follows:
"COMMON UNIT" shall mean Partnership Interests other than Preferred
Units and Series A Preferred Units.
(f) The Glossary of Defined Terms of the Agreement is hereby amended to
include the following definitions:
"SERIES A PREFERRED RETURN" shall mean an amount per Series A Preferred
Unit equal to the greater of (i) an annual distribution of $1.84 or (ii)
the regular cash distributions on the Common Units, or portion thereof,
into which a Series A Preferred Unit is convertible. The Series A
Preferred Return will be based on the General Partner's Capital
Contribution in respect of the Series A Preferred Units for which the
Series A Preferred Return is being determined as provided in the
definition of Series A preferred Units below (taking into account any
reduction of such Capital Contribution by any redemptions or conversions
of such Series A Preferred Units), commencing on the first date such
Series A Preferred Units are issued to the General Partner. It is
intended that the Series A Preferred Return will be equal to the
dividends and any additional amounts payable on the Series A
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Preferred Shares to the holders thereof so that the General Partner will
receive a Series A Preferred Return in an amount sufficient for the
General Partner to make all payments in respect of the Series A
Preferred Shares.
"SERIES A PREFERRED SHARES" shall mean those shares of Series A
Cumulative Convertible Redeemable Preferred Stock, $.01 par value per
share; issued by the General Partner to Security Capital.
"SERIES A PREFERRED SHARES ARTICLES SUPPLEMENTARY" shall mean the Series
A Cumulative Convertible Redeemable Preferred Stock Articles
Supplementary, dated as of February [23], 1998, which fixes the
distribution and other preferences and rights of the Series A Preferred
Shares.
"SERIES A PREFERRED UNITS" shall mean the Partnership Units of the
General Partner representing the Capital Contribution of the Series A
Preferred Share proceeds, as set forth in SECTION 2.2(c) of the
Agreement. For the purposes of this Agreement, if the proceeds actually
received by the General Partner are less than the gross proceeds of the
issuance of the Series A Preferred Shares as a result of any
underwriter's discount, placement fee or other expenses paid or incurred
in connection with such issuance, then the General Partner shall be
deemed to have made a Capital Contribution to the Partnership in the
amount of the gross proceeds of such issuance and the Partnership shall
be deemed simultaneously to have reimbursed the General Partner pursuant
to SECTION 6.1 for the amount of such underwriter's discount, placement
fee or other expenses.
(g) Section 1.1 of Exhibit A (Allocations Exhibit) is hereby amended to
read as follows:
1.1 ESTABLISHMENT AND MAINTENANCE OF CAPITAL ACCOUNTS. The
Partnership shall establish and maintain for each Partner a separate
account ("CAPITAL ACCOUNT") in accordance with the rules of Regulations
Section 1.704-1(b)(2)(iv) and this Allocations Exhibit. The Capital
Account of each Partner shall be increased by (i) the amount of all
Capital Contributions and any other contributions made by such Partner
to the Partnership pursuant to the Agreement, (ii) the amount of Net
Income allocated to such Partner pursuant to Section 2.1 of this
Allocations Exhibit, and (iii) the amount of any other items of income
or gain specially allocated to such Partner pursuant to Article 3 of
this Allocations Exhibit. The Capital Account of each Partner shall be
decreased by (x) the amount of cash or Gross Asset Value (net of any
liabilities to which such property is subject) of any distributions of
cash or property made to such Partner pursuant to the Agreement, (y) the
amount of Net Loss allocated to such Partner pursuant to Section 2.2 of
this Allocations Exhibit, and (z) the amount of any other items of
deduction or loss specially allocated to such Partner pursuant to
Article 3 of this Allocations Exhibit. The Capital Accounts of each
Partner shall be increased or
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decreased to reflect the revaluation of Partnership assets under Section
1.3 of this Allocations Exhibit.
(h) Section 2.1 of Exhibit A (Allocations Exhibit) is hereby amended to
read as follows:
2.1 NET INCOME. After giving effect to the special allocations
set forth in Article 3 of this Allocations Exhibit, Net Income for any
fiscal year or other applicable period shall be allocated in the
following order and priority:
(a) First, to the Partners, until the cumulative Net Income
allocated pursuant to this subparagraph 2.1(a) for the current and all
prior periods equals the cumulative Net Loss allocated pursuant to
subparagraphs 2.2(c) and (d) hereof for all prior periods, among the
Partners in the reverse order that such Net Loss was allocated (and, in
the event of a shift of a Partner's interest in the Partnership, to the
Partners in a manner that most equitably reflects the successors in
interest of such Partners);
(b) Second, to the General Partner, until the cumulative Net
Income allocated pursuant to this subparagraph 2.1(b) for the current
and all prior periods equals the cumulative Net Loss allocated pursuant
to Subparagraph 2.2(b) hereof for all prior periods;
(c) Third in respect of its Preferred Units to the General
Partner until the cumulative amount of Net Income allocated pursuant to
this subparagraph 2.1(c) for the current and all prior periods equals
the cumulative Preferred Return on the Preferred Units;
(d) Fourth, to the General Partner in respect of the Series A
Preferred Units until the cumulative amount of Net Income allocated
pursuant to this subparagraph 2.1(d) equals the cumulative Series A
Preferred Return on the Series A Preferred Units; and
(e) Thereafter, the balance of the Net Income, if any, shall
be allocated to the Partners holding Common Units in accordance with
their respective Percentage Interests.
(i) Section 2.2 of Exhibit A (Allocations Exhibit) is hereby amended to
read as follows:
2.2 NET LOSS. After giving effect to the special allocations set
forth in Article 3 of this Allocations Exhibit, Net Loss of the
Partnership for each fiscal year or other applicable period shall be
allocated as follows:
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(a) To the Partners holding Common Units in accordance with
their respective Percentage Interests until the Capital Accounts of the
Limited Partners are all reduced to zero (determined after all capital
contributions, distributions, and special allocations under Article III
of this Allocations Exhibit allocable to the Partner for the Fiscal Year
have been reflected in the Partner's Capital Account). For these
purposes, each Limited Partner's Capital Account shall be increased by
such Limited Partner's share of Partnership Minimum Gain and Minimum
Gain Attributable to a Partner Nonrecourse Debt for the Fiscal Year;
(b) Second, to the General Partner until its Capital Account
is reduced to zero. For these purposes, the General Partner's Capital
Account shall be increased by the General Partner's share of Partnership
Minimum Gain and Minimum Gain Attributable to a Partner Nonrecourse Debt
for the Fiscal Year;
(c) Thereafter, to the Partners holding Common Units in
accordance with their then Percentage Interests; and
(d) Notwithstanding preceding provisions of this Section 2.2,
to the extent any Net Losses allocated to a Partner under this Section
2.2 would cause such Partner (hereinafter, a "RESTRICTED PARTNER") to
have an Adjusted Capital Account Deficit at the end of the fiscal year
to which such Losses related, such Losses shall not be allocated to such
Restricted Partners and instead shall be allocated to the other
Partner(s) (herein, the "PERMITTED PARTNERS") PRO RATA in accordance
with their relative Partnership Interests.
(j) Section 5 of EXHIBIT A (Allocations Exhibit) is hereby amended by
deleting the definitions for the following terms: "Common Capital Account"
and GP Subaccount."
2. DEFINED TERMS AND RECITALS. As used in this Amendment, capitalized
terms used and defined in this Amendment shall have the meaning assigned to
them in this Amendment, and capitalized terms used in this Amendment but not
defined herein, shall have the meaning assigned to them in the Agreement.
3. RATIFICATION AND CONFIRMATION. Except to the extent specifically
amended by this Amendment, the terms and provisions of the Agreement, as
previously amended, are hereby ratified and confirmed.
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IN WITNESS WHEREOF, the undersigned has executed this Amendment
effective as of the date first above mentioned.
GENERAL PARTNER:
THE MACERICH COMPANY
By:
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Name:
Title:
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