THE SECOND AMENDMENT AND RESTATEMENT
OF
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
a Delaware limited partnership
September 30, 1998
TABLE OF CONTENTS
THE SECOND AMENDMENT AND RESTATEMENT
OF
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
a Delaware limited partnership
Page
----
I -- CONTINUATION; CHANGE OF JURISDICTION; NAME; PRINCIPAL OFFICE; AGENT
FOR SERVICE OF PROCESS; FILING OF CERTIFICATE(S); TERM; TITLE TO
PARTNERSHIP PROPERTY.
Section 1.1 Continuation; Change of Jurisdiction................. 2
Section 1.2 Name................................................. 2
Section 1.3 Principal Office; Agent for Service of Process....... 2
Section 1.4 Filing of Certificate(s) as Required................. 2
Section 1.5 Term................................................. 3
Section 1.6 Title to Partnership Property........................ 3
II -- DEFINITIONS......................................................... 4
III -- PURPOSES AND POWERS; PARTNERSHIP ONLY FOR PURPOSES SPECIFIED;
REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS.
Section 3.1 Purposes and Powers of the Partnership............... 14
Section 3.2 Partnership Only for Purposes Specified.............. 17
Section 3.3 Representations and Warranties by the Partners;
Certain Covenants.................................... 17
Section 3.4 Real Estate Investment Trust Requirements............ 18
Section 3.5 ERISA Requirement.................................... 19
IV -- CAPITAL CONTRIBUTIONS; OPENING CAPITAL ACCOUNT BALANCES; PREFERRED
EQUITY; ANTICIPATED FINANCING; CAPITAL ACCOUNTS; PARTNERSHIP
INTERESTS; UNITS OF PARTNERSHIP INTEREST; PERCENTAGE INTERESTS;
PARTNERSHIP INTEREST CERTIFICATES; PURCHASE OF FRACTIONAL UNITS;
ADJUSTMENT OF UNITS OF PARTNERSHIP INTEREST.
Section 4.1 Capital Contributions; Opening Capital Account
Balances; Preferred Equity........................... 20
Section 4.2 Anticipated Financing................................ 20
Section 4.3 No Right to Withdraw Capital; No Requirement of
Further Contributions................................ 21
Section 4.4 No Interest on Capital Contributions or Capital
Accounts............................................. 21
Section 4.5 Capital Accounts..................................... 21
Section 4.6 Partnership Interests; Units of Partnership Interest;
Percentage Interests................................. 22
Section 4.7 Partnership Interest Certificates.................... 23
Section 4.8 Purchase of Fractional Units of Partnership Interest;
Adjustment of Units of Partnership Interest.......... 23
V -- ALLOCATIONS; DISTRIBUTIONS; BANK ACCOUNTS; BOOKS OF ACCOUNT; TAX
RETURNS; ACCOUNTING AND REPORTS; PARTNERSHIP FISCAL YEAR.
Section 5.1 Allocations.......................................... 25
Section 5.2 Distributions........................................ 28
Section 5.3 Guaranteed Payments; TCO's Right to Convert.......... 28
Section 5.4 Bank Accounts and Other Investments.................. 29
Section 5.5 Books of Account..................................... 29
Section 5.6 Tax Returns.......................................... 29
Section 5.7 Accounting and Reports, Etc.......................... 30
Section 5.8 Partnership Fiscal Year.............................. 30
Page
----
VI -- MANAGEMENT; AUTHORITY AND AUTHORIZED ACTIONS BY THE MANAGING GENERAL
PARTNER; EXTRAORDINARY TRANSACTIONS; ANNUAL BUDGET; NOTICES; STANDARD
OF CONDUCT; MASTER SERVICES AGREEMENT AND CORPORATE SERVICES
AGREEMENT; ABSENCE OF AUTHORITY OF PARTNERS OTHER THAN THE MANAGING
GENERAL PARTNER; FIDELITY BONDS AND INSURANCE; ENGAGEMENT OF PARTNERS'
AFFILIATES; INDEMNITY AND REIMBURSEMENT; TAX MATTERS PARTNER.
Section 6.1 Management; Authority and Authorized Actions by
the Managing General Partner......................... 31
Section 6.2 Delegation of Authority and Designation of Officers.. 31
Section 6.3 Compensation of Certain Employees of the Manager;
Issuance of Incentive Options........................ 32
Section 6.4 Annual Budget; Notices............................... 32
Section 6.5 Master Services Agreement and Corporate Services
Agreement; Engagement of Partners' Affiliates........ 33
Section 6.6 Absence of Authority of Non-Managing Partners........ 33
Section 6.7 Fidelity Bonds and Insurance......................... 33
Section 6.8 Execution of Legal Instruments....................... 33
Section 6.9 Indemnity and Reimbursement; Advancement of Expenses
and Insurance 33..................................... 33
Section 6.10 Tax Matters Partner.................................. 34
VII -- OTHER VENTURES...................................................... 36
VIII -- TRANSFERS OF UNITS OF PARTNERSHIP INTEREST; SUBSTITUTION OF PARTNERS;
ADDITIONAL PARTNERSHIP INTERESTS; CONVERSION OF PARTNERSHIP INTERESTS.
Section 8.1 Transfers............................................ 37
Section 8.2 Substitution of Partners............................. 38
Section 8.3 Failure or Refusal to Grant Consent.................. 39
Section 8.4 Issuance of Additional Interests to TCO and Other
Persons or of Incentive Interests to Certain Persons. 39
Section 8.5 Conversion of Partnership Interests.................. 40
Section 8.6 No Change to TG Receivable Documents................. 40
IX -- WITHHOLDING......................................................... 41
X -- DISABLING EVENT OR EVENT OF WITHDRAWAL IN RESPECT OF A PARTNER;
SUCCESSION OF INTERESTS.
Section 10.1 Disabling Event or Event of Withdrawal in Respect
of a Partner 42..................................................... 42
Section 10.2 References to "Partner" and "Partners" in the Event
of Successors....................................................... 43
Section 10.3 Waiver of Dissolution if Transfer is in Full Compliance
with Agreement; Negation of Right to Dissolve Except as Herein
Provided; No Withdrawal............................................. 43
XI -- TERMINATION OF THE PARTNERSHIP, WINDING UP, AND LIQUIDATION.
Section 11.1 Liquidation of the Assets of the Partnership and
Disposition of the proceeds Thereof................................. 45
Section 11.2 Cancellation of Certificates.......................... 46
Section 11.3 Return of Capital..................................... 46
XII -- POWER OF ATTORNEY................................................... 47
XIII -- MISCELLANEOUS
Section 13.1 Notices............................................... 48
Section 13.2 Applicable Law........................................ 48
Section 13.3 Entire Agreement...................................... 48
Section 13.4 Word Meanings; Gender................................. 48
Section 13.5 Section Titles........................................ 48
Section 13.6 Waiver................................................ 49
Section 13.7 Separability of Provisions............................ 49
Section 13.8 Binding Agreement..................................... 49
Section 13.9 Equitable Remedies.................................... 49
Section 13.10 Partition............................................. 49
Section 13.11 Amendment............................................. 49
Section 13.12 No Third Party Rights Created Hereby.................. 50
Section 13.13 Liability of Partners................................. 50
Section 13.14 Additional Acts and Instruments....................... 50
Section 13.15 Agreement in Counterparts............................. 50
ii
Section 13.16 Attorneys-In-Fact..................................... 50
Section 13.17 Execution by Trustee.................................. 50
Section 13.18 Lost Partnership Interest Certificates................ 51
Schedule A Units of Partnership Interest and Percentage Interests
of the Partners.....................................................
Schedule B Certain Interests of Partners in Tenants of Regional
Centers..............................................................
Schedule C Capital Account Balances of the Partners as of
September 30, 1998...................................................
Schedule D Initial Book Value of Partnership Assets as of
September 30, 1998...................................................
Schedule E Designated Properties..................................
Exhibit A Form of Partnership Interest Certificate.............
iii
THE SECOND AMENDMENT AND RESTATEMENT
OF
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
a Delaware limited partnership
THIS SECOND AMENDMENT AND RESTATEMENT OF AGREEMENT OF LIMITED PARTNERSHIP
(hereinafter, as the same may be amended and/or supplemented, referred to as
this "Agreement") is made the 30th day of September, 1998, by, between, and
among TAUBMAN CENTERS, INC. ("TCO"), a Michigan corporation, TG PARTNERS LIMITED
PARTNERSHIP ("TG"), a Delaware limited partnership, and TAUB-CO MANAGEMENT, INC.
("Taub-Co"), a Michigan corporation, who as the Appointing Persons pursuant to
Section 13.11 of the Amended and Restated Partnership Agreement, as amended,
have the full power and authority to amend the Amended and Restated Partnership
Agreement, as amended, on behalf of all of the partners of the Partnership with
respect to the matters herein provided.
RECITALS:
A. Effective November 30, 1992, the parties hereto together with others
entered into the Amended and Restated Limited Partnership Agreement of The
Taubman Realty Group Limited Partnership (the "Amended and Restated Partnership
Agreement").
B. The Amended and Restated Partnership Agreement was subsequently amended
effective September 30, 1997 (the "Amended and Restated Partnership Agreement,
as amended") in certain respects.
C. On September 23, 1998, the Partnership formed two (2) limited liability
companies (the "Companies") pursuant to the Delaware Limited Liability Company
Act by filing Certificates of Formation with the Secretary of State of the State
of Delaware and, in exchange for all of the membership interests in each of the
Companies, contributed to the Companies all of its right, title, and interest in
and to certain of its assets, subject to certain liabilities.
D. On September 30, 1998, the Partnership distributed the Partnership's
entire interest in the Companies to GMPTS in redemption of GMPTS's entire
interest in the Partnership, and GMPTS executed a Certificate of Withdrawal from
the Partnership.
E. Pursuant to Section 6.1(b) of the Amended and Restated Partnership
Agreement, as amended, as a result of GMPTS's withdrawal from the Partnership,
GMPTS is no longer an Appointing Person, the remaining Appointing Persons now
being only TCO, TG, and Taub-Co.
F. The parties hereto now wish to amend and restate in its entirety the
Amended and Restated Partnership Agreement, as amended, to reflect the
redemption of GMPTS's entire interest in the Partnership and GMPTS's withdrawal
from the Partnership, to provide for various new terms of the Partnership, and
for certain other purposes.
NOW, THEREFORE, the parties hereto agree that the Amended and Restated
Partnership Agreement, as amended is hereby further amended and restated in its
entirety to read as follows:
I.
CONTINUATION; CHANGE OF JURISDICTION; NAME; PRINCIPAL OFFICE;
AGENT FOR SERVICE OF PROCESS; FILING OF CERTIFICATE(S);
TERM; TITLE TO PARTNERSHIP PROPERTY.
Section 1.1 Continuation; Change of Jurisdiction.
The parties hereto do hereby continue the Partnership as a Delaware limited
partnership pursuant to the applicable laws of the State of Delaware, including
the Delaware Revised Uniform Limited Partnership Act as in effect in the State
of Delaware, all as the same may be amended from time to time (all of such laws
being hereinafter referred to as the "Partnership Law"), upon the terms and
conditions herein set forth. If the Managing General Partner shall cause the
Partnership to change its jurisdiction, by merger, consolidation, or in any
other fashion or manner, the Partnership Law shall, for all purposes of this
Agreement, refer to the applicable laws of the new jurisdiction, as the same may
be amended from time to time. Without any further act, approval or vote of the
Partners, the Managing General Partner shall be authorized on behalf of the
Partners and the Partnership, as the case may be, to amend and/or restate this
Agreement and the Certificate of Limited Partnership, and to execute a plan of
merger or similar document, and all other documents determined by the Managing
General Partner, in all such cases as shall be necessary to effect solely a
change of jurisdiction.
Section 1.2 Name.
The name of the Partnership is "The Taubman Realty Group Limited Partnership"
or such other name or names as the Managing General Partner shall select from
time to time in compliance with the Partnership Law. The Managing General
Partner shall send written notice of any such name change to the Partners.
Section 1.3 Principal Office; Agent For Service of Process.
The principal office of the Partnership is located at 200 East Long Lake
Road, Bloomfield Hills, Michigan 48304, or at such other address(es) as shall be
designated from time to time by the Managing General Partner with written notice
thereof by the Managing General Partner to the other Partners. The address of
the office of the Partnership in the State of Delaware required to be maintained
pursuant to the Partnership Law is Corporation Service Company, 1013 Centre
Road, Wilmington, Delaware 19805, or such other address(es) as may be designated
from time to time by the Managing General Partner, with written notice thereof
by the Managing General Partner to the other Partners. The name and address of
the registered agent for service of process on the Partnership in the State of
Delaware is Corporation Service Company, 1013 Centre Road, Wilmington, Delaware
19805, or such other agent and address as may be designated from time to time by
the Managing General Partner in compliance with the Partnership Law, with
written notice thereof by the Managing General Partner to the other Partners.
Section 1.4 Filing of Certificate(s) as Required.
The Managing General Partner has caused or shall cause the execution and
filing of an appropriate partnership and/or assumed or fictitious name
certificate or certificates, or like instrument or instruments, or other filings
or applications, at any time and from time to time as required by the
Partnership Law or the law of any applicable jurisdiction in connection with the
existence or activities or business of the Partnership, a change in the
jurisdiction of the Partnership, and/or the use of a name (which name may be
different than the name of the Partnership), and all amendments thereto of
record. Copies of such certificates, instruments or other filings or
applications shall be furnished on a timely basis to all Partners.
2
Section 1.5 Term.
The term of the Partnership shall end, and the Partnership shall dissolve, on
the first to occur of (i) the recordation of the last (or only) deed, or the
execution and delivery of the last (or only) assignment, completing the
conveyance and transfer by the Partnership of all property (other than cash and
cash equivalents) owned by the Partnership to one or more bona fide purchasers
for value, or if such purchaser or purchasers give the Partnership a purchase
money obligation, then upon the payment in full by such purchaser or purchasers
of such obligation or upon the disposition for cash of such obligation, provided
that neither a sale and leaseback by the Partnership nor any other transfer of
title for financing purposes or pursuant to the provisions of Section 1.6
hereof, shall be deemed to be a sale for the purpose of dissolving and
terminating the Partnership, (ii) the occurrence of any event which would, under
the terms of this Agreement or the Partnership Law, result in the dissolution of
the Partnership; provided, however, that the term of the Partnership shall not
end and the Partnership shall not be dissolved upon the occurrence of such an
event if the Partnership is continued as provided in this Agreement, (iii) an
entry of a decree of judicial dissolution pursuant to ss.17-802 of the
Partnership Law, or (iv) December 31, 2090.
Section 1.6 Title to Partnership Property.
All property owned by the Partnership, whether real or personal, tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and no
Partner, individually, shall have any ownership of such property. The
Partnership may hold any of its property in its own name or in the name of one
or more nominees.
3
II.
DEFINITIONS.
Unless the context in which a term is used clearly indicates otherwise, the
following terms have the following respective meanings when used in this
Agreement, and the singular shall include the plural and vice versa, unless the
context requires otherwise:
"AAT" means A. Alfred Taubman.
"AAT Affiliates" means AAT, and any Affiliate of AAT or of any member of his
Immediate Family.
"Additional Interest" is defined in Section 8.4(a) hereof.
"Additional Required Amount" means, for the relevant period, an amount, as
set forth in the Additional Required Amount Notice, equal to the greater of (i)
the Tax Liability, and (ii) the Net Capital Gain.
"Additional Required Amount Notice" is defined in Section 6.4 hereof.
"Additional Tax" is defined in Article IX hereof.
"Affiliate" and "Affiliates" means, (i) with respect to any individual, any
member of such individual's Immediate Family, a Family Trust with respect to
such individual, and any Person (other than an individual) in which such
individual and/or his Affiliate(s) owns, Directly or Indirectly, more than fifty
percent (50%) of any class of Equity Security or of the aggregate Beneficial
Interest of all beneficial owners, or in which such individual or his Affiliate
is the sole general partner, or is the sole managing general partner, or is the
sole managing member, or which is Controlled By such individual and/or his
Affiliates; and (ii) with respect to any Person (other than an individual), any
Person (other than an individual) which Controls, is Controlled By, or is Under
Common Control With, such Person and any individual who is the sole general
partner, the sole managing general partner, or the sole managing member of, or
who Controls, such Person.
"Affiliate Financing" means financing or refinancing obtained from a Partner
or an Affiliate of a Partner by the Partnership or an Owning Entity, as the case
may be.
"Agreement" is defined in the Preamble to this Agreement.
"Alternative Minimum Tax Distribution Amount" means, for each Partnership
Fiscal Year, an amount equal to the quotient obtained by dividing (i) the
alternative minimum tax (as determined pursuant to Sections 55 through 59 of the
Code) of TCO for such Partnership Fiscal Year, by (ii) the Percentage Interest
of TCO on the Relevant Date.
"Amended and Restated Partnership Agreement" is defined in Recital A.
"Amended and Restated Partnership Agreement, as amended" is defined in
Recital B.
"Annual Budget" is defined in Section 6.4 hereof.
"Annual Development Budget" is defined in Section 6.4 hereof.
"Annual Operating Budget" is defined in Section 6.4 hereof.
"Appointing Person" means TCO, TG for so long as the aggregate Percentage
Interest held by Original Partner Affiliates and TTC Affiliates is not less than
seven and 7/10ths percent (7.7%), determined by including the total number of
Units of Partnership Interest over which Original Partner Affiliates and TTC
Affiliates have Incentive Options to the extent such Incentive Options are
vested, and Taub-Co for so long as Taub- Co has an interest in the Person that
is the Manager and the aggregate Percentage Interest held by Original Partner
Affiliates and TTC Affiliates is at least three percent (3%), determined by
including the total number of Units of Partnership Interest over which Original
Partner Affiliates and TTC Affiliates have Incentive Options to the extent such
Incentive Options are vested; it being understood that inasmuch as the
Partnership's partnership committee has been eliminated, Appointing Persons are
only relevant for purposes of Section 13.11 regarding amendment of this
Agreement.
4
"Assigned Interest" is defined in Section 8.3(b) hereof.
"Bankrupt" or "Bankruptcy" as to any Person means (i) applying for or
consenting to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, administrator, liquidator, or the like of itself or of all
or a substantial portion of its assets, (ii) admitting in writing its inability,
or being generally unable or deemed unable under any applicable law, to pay its
debts as such debts become due, (iii) convening a meeting of creditors for the
purpose of consummating an out-of- court arrangement, or entering into a
composition, extension, or similar arrangement, with creditors in respect of all
or a substantial portion of its debts, (iv) making a general assignment for the
benefit of its creditors, (v) placing itself or allowing itself to be placed,
voluntarily or involuntarily, under the protection of the law of any
jurisdiction relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, (vi) taking any action for the purpose of
effecting any of the foregoing, or (vii) if a proceeding or case shall be
commenced against such Person in any court of competent jurisdiction, seeking
(x) the liquidation, reorganization, dissolution, winding-up, or composition or
adjustment of debts, of such Person, (y) the appointment of a trustee, receiver,
custodian, administrator, liquidator, or the like of such Person or of all or a
substantial portion of such Person's assets, or (z) similar relief in respect of
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such proceeding or case
shall continue undismissed for a period of ninety (90) Days, or an order,
judgment, or decree approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect for a period of sixty (60) Days, or an order
for relief or other legal instrument of similar effect against such Person shall
be entered in an involuntary case under such law and shall continue unstayed and
in effect for a period of sixty (60) Days.
"Beneficial Interest" means an interest, whether as partner, joint venturer,
cestui que trust, or otherwise, a contract right, or a legal or equitable
position under or by which the possessor participates in the economic or other
results of the Person (other than an individual) to which such interest,
contract right, or position relates.
"Best Efforts" is defined to require that the obligated party make a
diligent, reasonable and good faith effort to accomplish the applicable
objective. Such obligation, however, does not require any material expenditure
of funds or the incurrence of any material liability on the part of the
obligated party, nor does it require that the obligated party act in a manner
which would otherwise be contrary to prudent business judgment or normal
commercial practices in order to accomplish the objective. The fact that the
objective is not actually accomplished is no indication that the obligated party
did not in fact utilize its Best Efforts in attempting to accomplish the
objective.
"Book Value" and "Book Values" are defined in Section 4.5(b) hereof.
"Business Day" means any Day that is not a Saturday, Sunday, or legal holiday
in New York, New York and on which commercial banks are open for business in New
York, New York.
"Capital Account" is defined in Section 4.5(a) hereof.
"Code" means the Internal Revenue Code of 1986, as amended from time to time
(or any corresponding provisions of succeeding law).
"Communication" and "Communications" are defined in Section 13.1(a) hereof.
"Companies" is defined in Recital C.
"Conditional Transfer Determination" is defined in Section 8.1(e) hereof.
"Control(s)" (and its correlative terms "Controlled By" and "Under Common
Control With") means, with respect to any Person (other than an individual),
possession by the applicable Person or Persons of the power, acting alone (or,
solely among such applicable Person or Persons, acting together), to designate
and direct or cause the designation and direction of the management and policies
thereof, whether through the ownership of voting securities, by contract, or
otherwise.
"Day" or "Days" means each calendar day, including Saturdays, Sundays, and
legal holidays; provided, however, that if the Day on which a period of time for
consent or approval or other action begins or ends is not a Business Day, such
period shall begin or end, as applicable, on the next Business Day.
5
"Deficiency Dividend" means, for any Partnership Fiscal Year, an amount equal
to the quotient obtained by dividing (i) the adjustment (as defined in Section
860(d)(2) of the Code) in respect of a determination (as defined in Section
860(e) of the Code) in respect of TCO for such Partnership Fiscal Year, by (ii)
the Percentage Interest of TCO on the Relevant Date.
"Deficiency Dividend Notice" is defined in Section 6.4 hereof.
"Depreciation" means 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 an asset for such year or other period,
except that if the Book Value of an 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
Book 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 Book
Value using any reasonable method selected by the Managing General Partner.
"Designee Notice" is defined in Section 5.2(b) hereof.
"Development Opportunities" means any regional retail shopping center
developments and opportunities (through contract, option, or other rights) to
develop, redevelop, or expand regional retail shopping centers, including in all
such cases Peripheral Property in respect thereof, in which the Partnership has
a Direct or Indirect ownership interest and which is not yet a Regional Center.
Reference to a Development Opportunity includes any one of the Development
Opportunities.
"Development Opportunity Interest" or "Development Opportunity Interests"
means the interest or interests in a Development Opportunity or Development
Opportunities then held by the Partnership either Directly or Indirectly as the
holder of a Beneficial Interest, Directly or Indirectly, in an Owning Entity or
Owning Entities that own a Development Opportunity or Development Opportunities.
"Direct or Indirect" or "Directly or Indirectly", when used with respect to a
Person's, a Partner's, or the Partnership's interest in another partnership,
limited liability company, or joint venture which owns a Development Opportunity
or a Regional Center, or a Development Opportunity Interest or a Regional Center
Interest, means and includes all interests of, and acting in respect of all
interests of, the partner or partners or member or members therein, whether as
an owner or ground lessee, as a partner, member, or joint venturer of a
partnership, limited liability company, or joint venture which owns a
Development Opportunity or a Regional Center, as a stockholder of a corporation
which in turn owns an interest in a partnership, limited liability company, or
joint venture having an interest, direct or indirect, in a Development
Opportunity or a Regional Center, and as a beneficiary of a trust which has
legal title to a Development Opportunity or a Regional Center or owns a
partnership interest, limited liability company interest, or joint venture
interest in a partnership, limited liability company, or joint venture which
owns a Development Opportunity or a Regional Center, in each such case as the
context requires.
"Disabled Partner," "Disabled General Partner," and "Disabled Limited
Partner" are defined in Section 10.1(a)(2) hereof.
"Disabling Event" is defined in Section 10.1(a)(1) hereof.
"Distribution Date" is defined in Section 5.2(a)(i) hereof.
"Dollars" or "$" means United States dollars.
"Effective Date" means the date of the execution and delivery of this
Agreement.
"Equity Security" has the meaning ascribed to it in the Securities Exchange
Act of 1934, as amended from time to time, and the rules and regulations
thereunder (and any successor laws, rules and regulations of similar import).
"Equity Shares" means the shares of the common stock of TCO.
6
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time (or any corresponding provisions of succeeding law).
"Estimated Minimum Distribution Amount" means, for each Partnership Fiscal
Year, an amount equal to the greater of (i) the quotient obtained by dividing
(1) the sum of (x) TCO's allocable share of the Partnership's estimated Real
Estate Investment Trust Taxable Income for such Partnership Fiscal Year
(determined without regard to any deduction for dividends paid (as defined in
Section 561 of the Code)), and by excluding any net capital gain (as defined in
Section 1222(11) of the Code), and (y) TCO's allocable share of the
Partnership's estimated net income from foreclosure property for such
Partnership Fiscal Year, minus TCO's allocable share of the Partnership's
estimated excess noncash income (as determined under Section 857(e) of the
Code), if any, for such Partnership Fiscal Year, by (2) the Percentage Interest
of TCO on the Relevant Date, and (ii) the estimated Ordinary Tax Liability for
such Partnership Fiscal Year.
"Event of Withdrawal" is defined in Section 10.1(a)(5) hereof.
"Excise Tax Distribution Amount" means, for each Partnership Fiscal Year, an
amount equal to the quotient obtained by dividing (i) the excise tax imposed
pursuant to Section 4981(a) of the Code on TCO for such Partnership Fiscal Year,
by (ii) the Percentage Interest of TCO on the Relevant Date.
"Extraordinary Transaction" means (i) a sale, exchange, or other disposition
(including the encumbering) of all or substantially all of the Partnership's
assets or of any designated property described on Schedule E hereto, (ii) a
merger (including a triangular merger), consolidation, or other combination of
the Partnership with another Person, (iii) an issuance of Additional Interests
to any Person (including a Partner other than TCO) such that such Person
together with any of such Person's Affiliates would own a Percentage Interest in
excess of five percent (5%), (iv) the placing of the Partnership into
Bankruptcy, (v) a recapitalization of the Partnership, or (vi) the dissolution
of the Partnership, in each such case in any one (1) transaction or series of
transactions.
"Family Trust" means, with respect to an individual, a trust for the benefit
of such individual or for the benefit of any member or members of such
individual's Immediate Family or for the benefit of such individual and any
member or members of such individual's Immediate Family (for the purpose of
determining whether or not a trust is a Family Trust, the fact that one or more
of the beneficiaries (but not the sole beneficiary) of the trust includes a
Person or Persons, other than a member of such individual's Immediate Family,
entitled to a distribution after the death of the settlor if he, she, it, or
they shall have survived the settlor of such trust, which distribution may be
made of something other than a Partnership Interest and/or includes an
organization or organizations exempt from federal income taxes pursuant to the
provisions of Section 501(a) of the Code and described in Section 501(c)(3) of
the Code, shall be disregarded); provided, however, that in respect of transfers
by way of testamentary or inter vivos trust, the trustee or trustees shall be
solely such individual, a member or members of such individual's Immediate
Family, a responsible financial institution, an attorney that is a member of the
Bar of any State in the United States, and/or an individual or individuals
approved by the Managing General Partner.
"Fractional Unit" means a portion of, or less than the whole of, a Unit of
Partnership Interest.
"GAAP" means generally accepted accounting principles, consistently applied
in the United States.
"General Partner" and "General Partners" are (i) those Persons identified as
such on Schedule A hereto, in their capacities as general partners of the
Partnership, (ii) the successors to any portion or all of the Partnership
Interest of those Persons identified as General Partners on Schedule A hereto
who are admitted to the Partnership as general partners pursuant to Section 8.2
hereof, and (iii) any Person or Persons to whom an Additional Interest as a
general partner is issued pursuant to Section 8.4 hereof and who is admitted to
the Partnership as a general partner pursuant to Section 8.4 hereof.
"GMPTS" means "GMPTS Limited Partnership, a Delaware limited partnership, all
of the beneficial interests of which are held by General Motors Hourly-Rate
Employees Pension Trust u/t/a dated March 1, 1983, as amended, and General
Motors Salaried Employees Pension Trust u/t/a dated March 1, 1983, as amended.
7
"Gross Income" means the income of the Partnership determined pursuant to
Section 61 of the Code before deduction of items of expense or deduction.
"Guaranteed Payment" means, as to each series of Preferred Equity, the
applicable Preferred Rate multiplied by the balance of such series of Preferred
Equity during the period to which the Guaranteed Payment relates, commencing on
the date of the contribution of such Preferred Equity pursuant to Section 4.1(b)
hereof, determined on the basis of a year of three hundred sixty (360) Days,
consisting of twelve (12), thirty (30)-day months, cumulative to the extent not
paid in any given month pursuant to Section 5.3 hereof.
"Immediate Family" means, with respect to a Person, (i) such Person's spouse
(former or then current), (ii) such Person's parents and grandparents, and (iii)
ascendents and descendants (natural or adoptive, of the whole or half blood) of
such Person's parents or of the parents of such Person's spouse (former or then
current).
"Incentive Interest" is defined in Section 8.4(b) hereof.
"Incentive Options" is defined in Section 6.3 hereof.
"Incentive Option Plan" means an incentive option plan or plans (whether now
existing or hereafter established) pursuant to which the Partnership has granted
or shall grant Incentive Options, as the same may be amended from time to time.
"Income Source Tax Distribution Amount" means, for each Partnership Fiscal
Year, an amount equal to the quotient obtained by dividing (i) the tax, if any,
of TCO calculated pursuant to Section 857(b)(5) of the Code for such Partnership
Fiscal Year, by (ii) the Percentage Interest of TCO on the Relevant Date.
"Indemnified Person" means each Partner, each officer, each member of the TCO
Board, each member of any committee established by the TCO Board, each Person
designated or delegated by a Partner, an officer, the TCO Board, or a member of
a committee established by the TCO Board, and each employee, partner, principal,
shareholder, agent, director, or officer of a Partner.
"Knowing" means with respect to any Person that is an individual, the
conscious awareness by such Person of the matter at issue.
"Limited Partner" and "Limited Partners" are (i) those Persons identified as
such on Schedule A hereto, in their capacities as limited partners of the
Partnership, (ii) the successors to any portion or all of the Partnership
Interest of those Persons identified as Limited Partners on Schedule A hereto
who are admitted to the Partnership as limited partners pursuant to Section 8.2
hereof, and (iii) any Person or Persons to whom an Additional Interest as a
limited partner is issued pursuant to Section 8.4 hereof and who is admitted to
the Partnership as a limited partner pursuant to Section 8.4 hereof.
"Liquidator" is defined in Section 11.1(a).
"Losses" is defined in Section 5.1(a) hereof.
"Majority in Interest of the Non-Managing Partners" means those Non-Managing
Partners holding in excess of fifty percent (50%) of the aggregate Percentage
Interests held by all such Non-Managing Partners.
"Major Stores" means those stores occupied by a single Person, the gross
leasable floor area of which is in excess of forty thousand (40,000) square
feet.
"Manager" means that Person who has by written contract with the Partnership
agreed to provide management, administration, leasing and development services
for the properties of the Partnership. On the Effective Date, the Manager is TTC
pursuant to the Master Services Agreement.
"Managing General Partner" means TCO, as defined in the Preamble to this
Agreement.
"Master Services Agreement" means the management, administration, leasing and
development services agreement dated as of November 30, 1992, between the
Partnership and TTC, engaging TTC as the Manager,
8
as the same may be amended from time to time, or any agreement entered into
hereafter in replacement thereof.
"Minimum Distribution Amount" means, for each Partnership Fiscal Year, an
amount equal to the greater of (i) the quotient obtained by dividing (1) the sum
of (x) TCO's allocable share of the Partnership's Real Estate Investment Trust
Taxable Income for such Partnership Fiscal Year (determined without regard to
any deduction for dividends paid (as defined in Section 561 of the Code)), and
by excluding any net capital gain (as defined in Section 1222(11) of the Code),
and (y) TCO's allocable share of the Partnership's net income from foreclosure
property for such Partnership Fiscal Year, minus TCO's allocable share of the
Partnership's excess noncash income (as determined under Section 857(e) of the
Code), if any, for such Partnership Fiscal Year, by (2) the Percentage Interest
of TCO on the Relevant Date, and (ii) the Ordinary Tax Liability for such
Partnership Fiscal Year.
"Minimum Distribution Amount Adjustment" means, for each Partnership Fiscal
Year, an amount, as set forth in the Minimum Distribution Amount Adjustment
Notice, equal to the excess (if any) of (i) the sum of (1) the Minimum
Distribution Amount for such Partnership Fiscal Year, (2) the Net Capital Gain
for such Partnership Fiscal Year, (3) the Prohibited Transaction Tax
Distribution Amount for such Partnership Fiscal Year, (4) the Income Source Tax
Distribution Amount for such Partnership Fiscal Year, (5) the Alternative
Minimum Tax Distribution Amount for such Partnership Fiscal Year, and (6) the
Excise Tax Distribution Amount for such Partnership Fiscal Year, over (ii) the
amount of cash actually distributed to the Partners pursuant to Section 5.2(a)
hereof in respect of such Partnership Fiscal Year.
"Minimum Distribution Amount Adjustment Notice" is defined in Section 6.4
hereof.
"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.
"Minimum Gain Chargeback" is defined in Section 5.1(d)(1) hereof.
"Net Capital Gain" means, for the relevant period, an amount equal to the
quotient obtained by dividing (i) the net capital gain (as defined in Section
1222(11) of the Code) that is allocable to TCO for such period, by (ii) the
Percentage Interest of TCO on the Relevant Date.
"Ninety Day Period" is defined in Section 10.1(b) hereof.
"Non-Managing Partners" means all of the Partners other than the Managing
General Partner.
"Nonrecourse Deductions" is defined in Regulations Section 1.704-2(b)(1).
"Nonrecourse Liabilities and Nonrecourse Liability" are defined in
Regulations Section 1.704- 2(b)(3).
"Ordinary Tax Liability" means, for each Partnership Fiscal Year, an amount
equal to the product of (i) the highest individual federal income tax rate
applicable to ordinary income in effect for such Partnership Fiscal Year, and
(ii) the largest quotient obtained by dividing (a) each Partner's allocable
share of the taxable income of the Partnership for such Partnership Fiscal Year,
determined by taking into account allocation of items of income and deduction
pursuant to Section 704(c) of the Code and by excluding any items giving rise to
a capital gain or a capital loss, by (b) such Partner's Percentage Interest on
the Relevant Date.
"Original Assignor" is defined in Section 8.3(b) hereof.
"Original Partner" means each of those Persons listed on Schedule A hereto
other than TCO and GMPTS.
"Original Partner Affiliates" means AAT Affiliates, each Original Partner,
and any Affiliate of an Original Partner or of any member of an Original
Partner's Immediate Family.
9
"Other Retail Property" or "Other Retail Properties" means a developed
regional retail shopping center or centers, whether part of a mixed-use property
or not, having a gross leasable area (including space occupied by Major Stores)
in excess of Two Hundred Thousand (200,000) square feet.
"Owning Entity" means any Person, other than the Partnership, owning a
Development Opportunity or a Regional Center, provided that the Partnership
holds, Directly or Indirectly, a Beneficial Interest in such Person. Reference
to the Owning Entities includes each Owning Entity.
"Owning Entity Agreement" means an agreement, in whatever form embodied
(including, without limitation, within the partnership agreement, limited
liability company agreement, or other document forming or governing an Owning
Entity), providing for management, administration, leasing and/or development
and/or like services between an Owning Entity and Taub-Co or TTC, including any
such agreement entered into by an Owning Entity with Taub-Co prior to the
Effective Date.
"Partner" and "Partners" are (i) those Persons named in the Preamble to this
Agreement, (ii) the successors to any portion or all of the Partnership Interest
of those Persons named in the Preamble to this Agreement who are admitted as a
Partner or Partners pursuant to Section 8.2 hereof, and (iii) any Person or
Persons to whom a Partnership Interest has been issued pursuant to Section 8.4
hereof.
"Partner Nonrecourse Debt" is defined in Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" is defined in Section 5.1(d)(2)
hereof.
"Partner Nonrecourse Deduction" is defined in Regulations Section 1.704-2(i).
"Partnership" means The Taubman Realty Group Limited Partnership, a Delaware
limited partnership.
"Partnership Accountants" means Deloitte & Touche and its successors, or any
firm of independent certified public accountants of recognized national standing
selected by the Managing General Partner.
"Partnership Fiscal Year" means the calendar year.
"Partnership Interest" is defined in Section 4.6(a) hereof.
"Partnership Interest Certificate" and "Partnership Interest Certificates"
are defined in Section 4.7 hereof.
"Partnership Interest Ledger" means a ledger maintained at the principal
office of the Partnership that shall set forth, among other things, the name and
address of each Partner and the nature of the Partnership Interest of each
Partner, the number of Units of Partnership Interest held by each Partner, and
the current Percentage Interest of each Partner.
"Partnership Law" is defined in Section 1.1 hereof.
"Percentage Interest" is defined in Section 4.6(b) hereof.
"Peripheral Property" means the real property adjacent or related to a
Development Opportunity or a Regional Center, owned by the Partnership or an
Owning Entity and improved or unimproved and held as distinct from or in some
manner differentiated from, but intended as integrated with, the Regional Center
(or anticipated Regional Center).
"Person" or "Persons" means an individual, a partnership (general or
limited), limited liability company, corporation, joint venture, business trust,
cooperative, association, or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane, or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision, or other instrumentality thereof, or any other entity.
"Pledge" means a pledge or grant of a mortgage, security interest, lien or
other encumbrance in respect of a Partnership Interest.
"Preferred Equity" means, on any date, an amount equal to the aggregate
contributions to the capital of the Partnership made by TCO pursuant to Section
4.1(b) hereof, to the extent such contributions have not yet
10
been converted to Additional Interests pursuant to Sections 5.3 and 8.4 hereof.
Each contribution of Preferred Equity shall be designated as a separate series,
e.g., Series A Preferred Equity.
"Preferred Rate" means, a fixed rate per annum, specified by TCO as to a
given series of Preferred Equity, which rate shall be equal to the dividend rate
for the Related Issue.
"Primarily Engaged" means, with respect to a private or public Person (other
than an individual), that (i) Other Retail Properties held by such Person (other
than an individual) at the relevant time represent at least twenty-five percent
(25%) of the value of all of the assets of such Person (other than an
individual), or (ii) at least twenty-five percent (25%) of the average annual
gross revenues of such Person (other than an individual) during the immediately
preceding twenty-four (24) month period were derived from the development and/or
management of Other Retail Properties not owned by such Person (other than an
individual), or (iii) if each of the percentages determined under clauses (i)
and (ii) is less than twenty-five percent (25%), the percentages determined
under both clauses (i) and (ii) in the aggregate equal at least forty-five
percent (45%).
"Profits" is defined in Section 5.1(a) hereof.
"Prohibited Transaction" means such term as defined in Section
857(b)(6)(B)(iii) of the Code.
"Prohibited Transaction Tax Distribution Amount" means, for each Partnership
Fiscal Year, an amount equal to the quotient obtained by dividing (i) one
hundred percent (100%) of the net income of TCO derived from prohibited
transactions (as defined in Section 857(b)(6)(B)(i) of the Code) for such
Partnership Fiscal Year, by (ii) the Percentage Interest of TCO on the Relevant
Date.
"Qualified Appraiser" means a Third Party designated by the Managing General
Partner and who is a member in good standing of the American Institute of Real
Estate Appraisers, or a Member, Appraisal Institute (or a member of the
successor to either such organization).
"Qualified Institutional Transferee" means any transferee of a Partnership
Interest that is or are (i) a pension fund, profit-sharing fund or similar fund,
or an organization or organizations exempt from federal income taxes pursuant to
the provisions of Section 501(a) of the Code and described in Section 501(c)(3)
of the Code, in each such case possessing more than Fifty Million Dollars
($50,000,000) in assets, (ii) an organization described in Section 509 of the
Code, and having a Partner as a "substantial contributor" (as defined in Section
507(d)(2) of the Code), (iii) pooled funds for Keogh plans, individual
retirement plans, profit-sharing plans, pension plans or similar tax-exempt
plans, in each such case possessing more than One Hundred Million Dollars
($100,000,000) in assets, (iv) insurance companies or banks, in each such case
possessing more than Two Billion Dollars ($2,000,000,000) in assets, (v) a
domestic entity organized as a mutual fund or registered investment company in
each case possessing more than One Hundred Million Dollars ($100,000,000) in
assets, (vi) any other Person (a "QIT Entity"), all the Beneficial Interests in
which at the time of such Transfer and thereafter are owned by one or more of
the foregoing, or (vii) a QIT Entity that has as one (1) or more of its
constituent partners, a foreign entity that is organized as a mutual fund or
investment company that is not Primarily Engaged and, in each such case, that
possesses more than One Hundred Million Dollars ($100,000,000) in assets,
provided that such QIT Entity is at no time a nonresident alien, foreign
corporation, foreign trust, or foreign estate, within the meaning of Section
7701 of the Code; provided that a Transfer to such transferee will not cause a
prohibited transaction (as defined in Section 4975(c) of the Code or Section 406
of ERISA) to occur.
"QIT Entity" is defined in the definition of "Qualified Institutional
Transferee."
"REAs" means reciprocal easement and operating or like agreements.
"Real Estate Investment Trust" means such term as defined in Section 856 of
the Code.
"Real Estate Investment Trust Taxable Income" means such term as defined in
Section 857(b)(2) of the Code.
"Record Partner" means a Person set forth as a Partner on the books and
records of the Partnership. No Person other than a Person that is a Partner on
the Effective Date shall be a Record Partner until such Person
11
has become a substitute Partner in the Partnership pursuant to Section 8.2
hereof, or has acquired an Additional Interest or an Incentive Interest pursuant
to Section 8.4 hereof and has become a Partner in the Partnership pursuant to
Section 8.4 hereof.
"Regional Center Interest" or "Regional Center Interests" means the interest
or interests in a Regional Center or Regional Centers then held by the
Partnership either Directly or Indirectly as the holder of a Beneficial
Interest, Directly or Indirectly, in an Owning Entity or Owning Entities that
own or owns a Regional Center or Regional Centers.
"Regional Centers" means those regional retail shopping centers, including
Peripheral Property in respect thereof, and any other real property owned,
acquired and/or developed by the Partnership, provided that some portion of the
enclosed mall portion thereof is open for business to the public generally, in
each case for so long as the Partnership has a Direct or Indirect Beneficial
Interest therein.
Reference to a Regional Center includes any one of the Regional Centers.
"Regulations" (including Temporary Regulations or Proposed Regulations) means
Department of Treasury regulations promulgated under the Code, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
"REIT Requirements" is defined in Section 3.4 hereof.
"Related Issue" and "Related Issues" are defined in Section 4.1(b) hereof.
"Relevant Date" means, (i) with respect to a Minimum Distribution Amount, the
date of the Annual Budget setting forth such amount, or the date of an amendment
thereto which provides a change in such amount, (ii) with respect to an
Additional Required Amount, the date of the Additional Required Amount Notice in
respect thereof, and (iii) with respect to a Minimum Distribution Amount
Adjustment, or any component thereof, or a Tax Adjustment Amount, the date of
the TCO Information Notice in respect thereof.
"Representative" is defined in Section 10.1(a)(3) hereof.
"Required Distribution Amount" means an amount, as set forth in the Annual
Budget, equal to the aggregate cash (or cash per Unit of Partnership Interest)
to be distributed to the Partners for such Partnership Fiscal Year, as such
amount may be increased or decreased from time to time by the Managing General
Partner, in consultation with the Manager, but in no event less than the
Estimated Minimum Distribution Amount.
"Successor" is defined in Section 10.1(a)(4) hereof.
"Successor General Partner" is defined in Section 10.1(b) hereof.
"Taub-Co" is defined in the Preamble to this Agreement.
"Tax Adjustment Amount" means, for each Partnership Fiscal Year, an amount
equal to the excess (if any) of (i) the sum of (x) TCO's Real Estate Investment
Trust Taxable Income for such Partnership Fiscal Year (determined without regard
to any deduction for dividends paid (as defined in Section 561 of the Code)),
and by excluding any net capital gain (as defined in Section 1222(11) of the
Code), and (y) TCO's net income from foreclosure property for such Partnership
Fiscal Year, minus its excess noncash income (as determined under Section 857(e)
of the Code) for such Partnership Fiscal Year, over (ii) the sum of (A) TCO's
allocable portion of the Required Distribution Amount distributed to TCO during
such Partnership Fiscal Year, and (B) TCO's allocable portion of the Minimum
Distribution Amount Adjustment distributed to TCO during the current Partnership
Fiscal Year, to the extent such Minimum Distribution Amount Adjustment was a
distribution in respect of those amounts determined under subclauses (x) and (y)
of clause (i) hereof.
"Tax Adjustment Notice" is defined in Section 6.4 hereof.
"Tax Liability" means, for the relevant period, the product of (i) the
highest individual federal income tax rate applicable to capital gains (taking
into account the relevant holding period for the applicable capital asset) in
effect for such period, and (ii) the largest quotient obtained by dividing (a)
each Partner's (other
12
than TCO's) allocable share of net capital gain (as defined in Section 1222(11)
of the Code) of the Partnership for such period, by (b) such Partner's (other
than TCO's) Percentage Interest on the Relevant Date, taking into account
allocation of gain pursuant to Section 704(c) of the Code; provided, however,
that in no event shall the Tax Liability for any period exceed the cash proceeds
received or to be received by the Partnership on the sale during such period of
capital assets.
"Tax Matters Partner" is defined in Section 6.10(a) hereof.
"TCO" means Taubman Centers, Inc., a Michigan corporation.
"TCO Board" means the Board of Directors of TCO.
"TCO Information Notice" is defined in Section 5.7(b) hereof.
"TG" is defined in the Preamble to this Agreement.
"TG Receivables" means those certain loan receivables created by the TG
Receivable Documents and held by TG in respect of the amounts owed to TG by
certain of its partners.
"TG Receivable Documents" means that certain Loan Agreement dated August 1,
1985, among the Partnership and certain of the partners of TG, the promissory
notes, and all other documents, agreements, certificates and other instruments
(as the same have been amended through the Effective Date) executed in
connection with the authorization and consummation of those certain loans made
pursuant to such Loan Agreement, and as the same may be amended, restated or
supplemented.
"Third Party" or "Third Parties" means 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" means financing or refinancing obtained from a Third
Party by the Partnership or an Owning Entity, as the case may be.
"Transfer" means any assignment, sale, transfer, conveyance, Pledge, grant of
an option or proxy, or other disposition or act of alienation, whether voluntary
or involuntary, or by operation of law.
"Transfer Determination" is defined in Section 8.1(b) hereof.
"TTC" is The Taubman Company Limited Partnership, a Delaware limited
partnership, its successors and assigns, the present constituency of which is
Taub-Co and the Partnership.
"TTC Affiliates" means all officers and employees of TTC for so long as they
are actively employed by TTC, and for so long as any of such individuals are
included within such definition of TTC Affiliates, any Affiliate of such
individual. Reference to a TTC Affiliate includes any one of the TTC Affiliates.
"Unit of Partnership Interest" and "Units of Partnership Interest" are
defined in Section 4.6(a) hereof.
13
III.
PURPOSES AND POWERS; PARTNERSHIP ONLY FOR
PURPOSES SPECIFIED; REPRESENTATIONS AND WARRANTIES;
CERTAIN COVENANTS.
Section 3.1 Purposes and Powers of the Partnership.
The Partnership has been formed pursuant to the Partnership Law and continued
in accordance with this Agreement for the purposes of (i) owning, operating,
maintaining, administering, developing, holding, improving, rehabilitating,
redeveloping, renovating, expanding, leasing, mortgaging, selling, exchanging,
disposing of, and generally dealing in and with, the Development Opportunities,
the Development Opportunity Interests, the Regional Centers, the Regional Center
Interests, and any other property owned by the Partnership, (ii) financing or
refinancing for any of the foregoing purposes, or for any other purpose in
furtherance of, or necessary, convenient, or incidental to the business or
requirements of the Partnership, (iii) seeking to acquire, acquiring, obtaining
options or other rights to acquire (pursuant to a purchase for cash and/or other
consideration, exchange, merger, contribution to the capital of the Partnership,
or otherwise) interests in, or in Persons owning, or owning an interest or
interests in, regional retail shopping centers (including mixed-use properties
the retail component of which is or is anticipated to be of significant value in
relation to the value of the entire mixed-use property), or property or
properties in anticipation of developing same as a regional retail shopping
center or centers, or any other property as shall be specifically, in all such
cases, designated from time to time by the Managing General Partner, (iv)
holding an interest as a partner (general and/or limited), member of a limited
liability company, or shareholder in a management, leasing, development,
administrative or other service company, including interests incidental to such
interest, and (v) engaging in any other activities (including the ownership of
property) that are in furtherance of or necessary or incidental or related to
any of the foregoing.
In furtherance of its purposes, but subject to the provisions of this
Agreement, the Partnership has the power and is hereby authorized to, Directly
or Indirectly:
(i) retain, own, hold, do business with, acquire (pursuant to a purchase
for cash and/or other consideration, exchange, merger, contribution to the
capital of the Partnership, or otherwise), renovate, rehabilitate, improve,
expand, lease, operate, maintain, and administer and sell, convey, assign,
exchange, mortgage, finance, refinance, or demolish, or deal in any manner
with, a Development Opportunity, a Development Opportunity Interest, a
Regional Center, a Regional Center Interest, and any real or personal
property used in connection therewith or which may be in furtherance of, or
necessary, convenient, or incidental to the accomplishment of, the purposes
of the Partnership;
(ii) borrow, including without limitation, borrowing to obtain funds to
acquire, own, obtain an option or other right to acquire, develop, and/or
improve (including, without limitation, to renovate, rehabilitate, expand,
lease, operate, maintain, and administer) a regional retail shopping center
or other venture opportunity, a Regional Center, or a Regional Center
Interest, and make capital improvements and/or investments in one or more
Owning Entities or Regional Centers, and refinance any indebtedness or
borrowing in furtherance of, or necessary, convenient, or incidental to the
accomplishment of, any purposes or requirements of the Partnership, issue
evidences of indebtedness to evidence such borrowings which may be
convertible in whole or in part into Partnership Interests (to be issued in
accordance with the provisions of Section 8.4 hereof) and which may be
unsecured or secured by a mortgage, deed of trust, assignment, pledge, or
other lien on a Regional Center or Regional Center Interest or any other
asset(s) of the Partnership and/or an Owning Entity, and enter into guaranty
agreements and/or indemnity agreements in connection with any such borrowings
or in connection with a borrowing by or indebtedness of any other Person in
which the Partnership holds an interest;
(iii) contribute to the capital of, or lend to, an Owning Entity, acquire,
own, obtain an option or other right to acquire (pursuant to a purchase for
cash and/or other consideration, exchange, merger, contribution to the
capital of the Partnership, or otherwise), develop, renovate, rehabilitate,
improve,
14
expand, lease, make capital improvements to, satisfy obligations of, or
operate a regional retail shopping center, or other venture opportunity, a
Regional Center, or a Regional Center Interest;
(iv) seek and/or locate regional retail shopping centers or other venture
opportunities that are or are intended to be in furtherance of, or necessary,
convenient, or incidental to the accomplishment of, any purposes of the
Partnership;
(v) perform and/or engage others to perform studies and/or investigation
or analysis of any sort in respect of a possible or proposed regional retail
shopping center or other venture opportunity;
(vi) acquire and/or obtain options or other rights to acquire (pursuant to
a purchase for cash and/or other consideration, exchange, merger,
contribution to the capital of the Partnership, or otherwise) regional retail
shopping centers (including interests therein) or other venture opportunities
that are or are intended to be in furtherance of, or necessary, convenient,
or incidental to the accomplishment of, the purposes of the Partnership, as
shall be specifically, from time to time, designated by the Managing General
Partner, and enter into and perform any and all agreements, execute any and
all instruments and documents, and take any and all actions with respect
thereto;
(vii) accept, in exchange for a Partnership Interest and, if desired,
admission as a Partner in the Partnership, and as a contribution to the
capital of the Partnership, or through the liquidation of a corporation or
other entity, or otherwise, regional retail shopping centers, interests in
regional retail shopping centers, development or other venture opportunities,
or interests in development or other venture opportunities;
(viii) take any action reasonably anticipated to enhance, protect, defend
and/or preserve, the value of a Development Opportunity, a Development
Opportunity Interest, a Regional Center, a Regional Center Interest or other
venture opportunity, or the Partnership and the return to the Partners;
(ix) act as one of the general and/or limited partners or members of, or
act as the sole general or limited partner or member of, an Owning Entity and
exercise all the powers and authorities given to the Partnership by the
partnership agreement, limited liability company agreement, or other
governing document covering such Owning Entity, or otherwise own all or any
part or portion of a Development Opportunity, a Development Opportunity
Interest, a Regional Center, or a Regional Center Interest;
(x) enter into, consent to, and enter into amendments of, any partnership
or limited liability company agreement or other governing document covering
an Owning Entity or any other agreement to which the Partnership or an Owning
Entity is or is to be a party;
(xi) enter into ground leases, as a tenant or landlord, in respect of all
or any part or portion of the Partnership's real property;
(xii) convert a Regional Center or a Regional Center Interest, or a part
thereof, to condominium or cooperative status;
(xiii) prepay in whole or in part, and refinance, recast, increase,
modify, amend, extend, or assign any loan, secured or unsecured, and in
connection therewith, execute any extensions, renewals, or modifications of
any mortgage or deed of trust or lien securing any such loan;
(xiv) act as one of the general and/or limited partners or members, or
shareholders of, or act as the sole general or limited partner or member or
shareholder of, or otherwise employ, a management, leasing, development, or
other service company, to perform or engage others to perform all activities
and services in respect of a Development Opportunity, a Development
Opportunity Interest, a Regional Center, or a Regional Center Interest or
other venture opportunity, or to perform administrative services for the
Partnership and the Managing General Partner, and pay compensation for such
services;
(xv) enter into, perform, and carry out contracts or agreements of any
kind, including, without limitation, contracts or agreements with a Partner
or an Affiliate or Affiliates of a Partner, in furtherance of, or necessary,
convenient, or incidental to the accomplishment of, the purposes of the
Partnership,
15
including, without limitation, the execution and delivery of all agreements,
certificates, instruments, or documents required by lenders or in connection
with any mortgage, deed of trust, or assignment;
(xvi) place record ownership to a Development Opportunity, a Development
Opportunity Interest, a Regional Center, a Regional Center Interest (or any
part thereof), or other venture opportunity, or any other Partnership
property in the name or names of a nominee or nominees, or establish a trust
("nominee" or otherwise) to own or hold a Development Opportunity, a
Development Opportunity Interest, a Regional Center, or a Regional Center
Interest, or any other Partnership property, including to direct, select, and
remove the trustee(s) thereof and amend or terminate such trust, all for the
purpose of financing or any other convenience;
(xvii) execute contracts with governmental agencies, including, without
limitation, any documents required in connection with any debt;
(xviii) execute any lease or leases (without limit as to the term thereof
(including beyond the term of the Partnership), whether or not the space so
leased is to be occupied by the lessee or, in turn, sub-leased in whole or in
part to others) with respect to all or any part of a Development Opportunity,
a Development Opportunity Interest, a Regional Center, or a Regional Center
Interest;
(xix) obtain, through contract or otherwise, goods and services;
(xx) maintain insurance;
(xxi) invest in, reinvest, and oversee the investment of, cash a nd cash-
like assets;
(xxii) make or revoke any election permitted the Partnership by any taxing
or other authority;
(xxiii) grant and enter into and amend REAs and impose restrictions with
respect to all or any part of a Development Opportunity, a Development
Opportunity Interest, a Regional Center, a Regional Center Interest,
Peripheral Property, or other property;
(xxiv) foreclose upon any property;
(xxv) admit a Person as a Partner to the Partnership, or increase or
decrease the interest of a Partner in the Partnership, pursuant to the terms
of this Agreement;
(xxvi) sell, exchange, or otherwise dispose of, upon any terms, all or any
part or portion of Partnership property or the property of an Owning Entity;
(xxvii) enter into, perform, and carry out contracts which may be lawfully
carried out or performed by a partnership under applicable laws including,
without limitation, the Master Services Agreement;
(xxviii) enter into an agreement to merge with or into another partnership
having similar purposes as the Partnership and having the Partnership or such
other partnership as the surviving partnership;
(xxix) retain legal counsel, the Partnership Accountants, appraisers, and
any other professionals in connection with the business of the Partnership or
of an Owning Entity;
(xxx) execute or deliver any assignment for the benefit of creditors of
the Partnership or of an Owning Entity;
(xxxi) negotiate with, defend, and resolve all matters with any Person;
(xxxii) sue on, defend, pursue, or compromise any and all claims or
liabilities in favor of or against the Partnership or an Owning Entity,
submit any or all such claims or liabilities to arbitration, and confess a
judgment against the Partnership or an Owning Entity in connection with
litigation in which the Partnership or an Owning Entity may be involved;
(xxxiii) take any action and exercise any right (including the assignment
or disposition of same) under any contract or agreement to which the
Partnership or an Owning Entity is a party;
16
(xxxiv) terminate, dissolve, and liquidate any Person, including, without
limitation, an Owning Entity, and retain and deal in and with the assets
(subject to liabilities and obligations) received as a result of any such
liquidation;
(xxxv) amend, modify, or terminate and deal in any manner with any
instrument, including without limitation, any trust instrument, corporate
document, partnership agreement, limited liability company agreement, or
joint venture agreement covering or in respect of an Owning Entity, a
Development Opportunity, a Development Opportunity Interest, a Regional
Center, or a Regional Center Interest;
(xxxvi) indemnify the Indemnified Persons and satisfy such
indemnifications from the assets of the Partnership; and
(xxxvii) in addition to the foregoing, take or omit to take any action as
may be necessary, convenient, or desirable to further the purposes or intent
of the Partnership or of an Owning Entity, and have and exercise all of the
powers and rights conferred upon limited partnerships formed pursuant to the
Partnership Law.
Section 3.2 Partnership Only for Purposes Specified.
The Partnership shall be a partnership only for the purposes specified in
Section 3.1 hereof, and this Agreement shall not be deemed to create a
partnership among the Partners with respect to any activities whatsoever other
than the activities within the purposes of the Partnership as specified in
Section 3.1 hereof. Except as otherwise provided in this Agreement, no Partner
shall have any authority to act for, bind, commit, or assume any obligation or
responsibility on behalf of the Partnership, its properties, or any other
Partner. No Partner, in its capacity as a Partner under this Agreement, shall be
responsible or liable for any indebtedness or obligation of another Partner, nor
shall the Partnership be responsible or liable for any indebtedness or
obligation of any Partner, incurred either before or after the execution and
delivery of this Agreement by such Partner, except as to those responsibilities,
liabilities, indebtedness, or obligations incurred pursuant to and as limited by
the terms of this Agreement or incurred pursuant to the Partnership Law.
Section 3.3 Representations and Warranties by the Partners; Certain Covenants.
(a) Each Partner that is an individual represents and warrants to each
other Partner, that (i) the consummation of the transactions contemplated by
this Agreement to be performed by such Partner will not result in a breach or
violation of, or a default under, any agreement by which such Partner or any
of such Partner's properties is or are bound, or any statute, regulation,
order, or other law to which such Partner is subject, (ii) such Partner is
not a "foreign person" within the meaning of Section 1445(f) of the Code,
(iii) except as specifically provided on Schedule B attached hereto, such
Partner does not own, Directly or Indirectly, (1) two percent (2%) or more of
the total combined voting power of all classes of stock entitled to vote, or
two percent (2%) or more of the total number of shares of all classes of
stock, of any corporation that is a tenant of a Regional Center, or (2) an
interest of two percent (2%) or more in the assets or net profits of any
tenant of a Regional Center, and (iv) this Agreement is binding upon, and
enforceable against, such Partner in accordance with its terms.
(b) Each Partner that is not an individual represents and warrants to each
other Partner, that (i) all transactions contemplated by this Agreement to be
performed by it have been duly authorized by all necessary action, including
without limitation, that of its general partner(s), committee(s), trustee(s),
beneficiaries, directors, and/or shareholder(s), as the case may be, as
required, (ii) the consummation of such transactions shall not result in a
breach or violation of, or a default under, its partnership agreement, trust
agreement, charter, or by-laws, as the case may be, any agreement by which
such Partner or any of such Partner's properties or any of its partners,
beneficiaries, trustees, or shareholders, as the case may be, is or are
bound, or any statute, regulation, order, or other law to which such Partner
or any of its partners, trustees, beneficiaries, or shareholders, as the case
may be, is or are subject, (iii) such Partner is neither a "foreign person"
within the meaning of Section 1445(f) of the Code nor a "foreign partner"
within the
17
meaning of Section 1446(e) of the Code, (iv) except as specifically provided
on Schedule B attached hereto, such Partner does not own, Directly or
Indirectly, (1) two percent (2%) or more of the total combined voting power
of all classes of stock entitled to vote, or two percent (2%) or more of the
total number of shares of all classes of stock, of any corporation that is a
tenant of a Regional Center, or (2) an interest of two percent (2%) or more
in the assets or net profits of any tenant of a Regional Center, and (v) this
Agreement is binding upon, and enforceable against, such Partner in
accordance with its terms.
(c) The representations and warranties contained in Sections 3.3(a) and
3.3(b) hereof shall survive the execution and delivery of this Agreement by
each Partner and the dissolution, liquidation and termination of the
Partnership; provided, however, that in the event of a breach of any such
representation or warranty the sole source of recovery by the Partners shall
be a Partner's Partnership Interest.
(d) TCO covenants and agrees that, (i) it will not Directly or Indirectly
through ownership of another Person (including a wholly owned direct or
indirect subsidiary) engage in any business other than through the
Partnership except for the acquisition of businesses held for the sole
benefit of the Partnership or a subsidiary partnership or limited liability
company, (ii) it will own all Regional Center Interests and Development
Opportunity Interests only through the Partnership, (iii) it will not incur
any indebtedness for borrowed money other than to effect a distribution to
satisfy the REIT Requirements, to contribute or loan such proceeds to the
Partnership to accomplish the Partnership's purposes, or to refinance any
existing indebtedness of the Partnership, and (iv) it will not assign or
otherwise dispose of its right to a Guaranteed Payment or the corresponding
series of Preferred Equity or its right to any loan and corresponding
interest described in Section 4.1(b) hereof, other then as set forth in
Section 5.3 hereof.
(e) Each Partner hereby acknowledges that no representations as to
potential profit, cash flows, or yield, if any, in respect of the Partnership
or any one or more or all of the Regional Centers or Regional Center
Interests or Development Opportunities or Development Opportunity Interests
have been made by any Partner or any employee or representative or Affiliate
of any Partner, 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 any representation or warranty, express or implied.
Section 3.4 Real Estate Investment Trust Requirements.
Notwithstanding anything to the contrary contained in this Agreement, for so
long as TCO is a Partner, the Partnership shall operate in such a manner and the
Partnership shall take or omit to take all actions as may be necessary
(including making appropriate distributions from time to time), so as to permit
TCO (i) to continue to qualify as a Real Estate Investment Trust under Sections
856 through 860 of the Code so long as such requirements exist and as such
provisions may be amended from time to time, or corresponding provisions of
succeeding law (the "REIT Requirements"), and (ii) to minimize its exposure to
the imposition of an excise tax under Section 4981(a) of the Code or a tax under
Section 857(b)(5) of the Code, so long as such taxes may be imposed and as such
provisions may be amended from time to time, or corresponding provisions of
succeeding law, each of (i) and (ii) to at all times be determined (a) as if
TCO's sole asset is its Partnership Interest, and (b) without regard to the
action or inaction of TCO with respect to distributions (by way of dividends or
otherwise) and the timing thereof. The Managing General Partner may cause the
Partnership to obtain an opinion of tax counsel selected by the Managing General
Partner, regarding the impact of any proposed action affecting TCO's continuing
ability to qualify as a Real Estate Investment Trust, or its exposure to an
excise tax under Section 4981(a) of the Code, or a tax under Section 857(b)(5)
of the Code, so long as such taxes exist and as such provisions may be amended
from time to time or corresponding provisions of succeeding law.
18
Section 3.5 ERISA Requirement.
Notwithstanding anything to the contrary contained in this Agreement, the
Partnership shall operate in such a manner and the Partnership shall take or
omit to take all actions as may be necessary so as (i) to permit the Partnership
to satisfy the requirements of a "real estate operating company" (as defined by
Department of Labor Regulations 29 C.F.R. ss.2510.3-101), as such requirements
exist and as such provisions may be amended from time to time, or corresponding
provisions of succeeding law, and (ii) to prevent the occurrence of a
"prohibited transaction" (as defined in Section 4975(c) of the Code or Section
406 of ERISA).
19
IV.
CAPITAL CONTRIBUTIONS; OPENING CAPITAL ACCOUNT BALANCES;
PREFERRED EQUITY; ANTICIPATED FINANCING; CAPITAL ACCOUNTS;
PARTNERSHIP INTERESTS; UNITS OF PARTNERSHIP INTEREST;
PERCENTAGE INTERESTS; PARTNERSHIP INTEREST CERTIFICATES;
PURCHASE OF FRACTIONAL UNITS; ADJUSTMENT OF UNITS OF
PARTNERSHIP INTEREST.
Section 4.1 Capital Contributions; Opening Capital Account Balances; Preferred
Equity.
(a) The Partners have contributed to the capital of the Partnership such
assets and amounts as set forth on the books and records of the Partnership.
(b) TCO may contribute, from time to time, amounts to the capital of the
Partnership as Preferred Equity, which amounts have been obtained from the
sale by TCO of any one or more series of shares of preferred stock. In lieu
of contributing such proceeds as Preferred Equity, TCO shall have the right
to lend such proceeds to the Partnership. Any such loan shall be on the same
terms and conditions as the Related Issue except that in lieu of dividends
payable by TCO on the Related Issue, interest shall be payable by the
Partnership to TCO. The Partnership shall assume and pay the expenses
(including applicable underwriter discounts) incurred by TCO in connection
with any contributions or loans by TCO to the capital of the Partnership
pursuant to this Section 4.1(b). Any such loan made by TCO to the Partnership
may at any time be converted by TCO to Preferred Equity pursuant to Section
5.3 hereof. Each contribution or loan made by TCO pursuant to this Section
4.1(b) shall be identified by the series of preferred shares which provided
TCO with the funds to contribute or loan to the Partnership (individually, a
"Related Issue," and collectively, the "Related Issues").
(c) The Capital Account balances of the Partners as of the Effective Date
shall be as set forth opposite their respective names on Schedule C attached
hereto.
Section 4.2 Anticipated Financing.
The Partnership may obtain funds which it considers necessary to meet the
needs and obligations and requirements of the Partnership, including, without
limitation, the Partnership's obligation to lend and/or contribute funds to, or
the Partnership's obligations in respect of, an Owning Entity, 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. 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 Managing General Partner on
behalf of the Partnership may be convertible in whole or in part into Additional
Interests (to be issued in accordance with Section 8.4 hereof), may be
unsecured, may be secured by a mortgage or mortgages, or deed(s) of trust and/or
assignments on or in respect of all or any portion of the assets of the
Partnership or an Owning Entity, may include or be obtained through the public
or private placement of debt and/or other instruments, domestic and foreign, and
may include the provision for the option to acquire Additional Interests (to be
issued in accordance with Section 8.4 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
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 Person or Persons to whom such recourse may be had.
Section 4.3 No Right to Withdraw Capital; No Requirement of Further
Contributions.
Except as specifically provided in this Agreement, no Partner (i) shall have
the right to withdraw any part of its Capital Account or to demand or receive
the return of its capital contributions, or any part thereof, or to receive any
distributions from the Partnership, (ii) shall be entitled to make, or have any
obligation to make, any contribution to the capital of, or any loan to, or
provide a guaranty with respect to any loan to, the Partnership, or (iii) except
as provided in Section 11.1(d) hereof, shall have any liability for the return
of any other Partner's Capital Account or contributions to the capital of the
Partnership. No Partner shall be liable for the liabilities and obligations of
the Partnership except as otherwise provided by the Partnership Law; provided,
however, that any and all obligations and liabilities to a Partner or an
Affiliate of a Partner shall be satisfied solely from Partnership assets and no
Partner shall have any personal liability on account thereof.
Section 4.4 No Interest on Capital Contributions or Capital Accounts.
No Partner shall receive any interest or return in the nature of interest on
its contributions to the capital of the Partnership, or on the positive balance,
if any, in its Capital Account.
Section 4.5 Capital Accounts.
(a) The Partnership shall establish and maintain a separate capital account
("Capital Account") for each Partner, including a substitute partner who shall
pursuant to the provisions hereof acquire a Partnership Interest, which Capital
Account shall be:
(1) credited with the amount of cash and the initial Book 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 items in the nature of income or gain that are allocated to such Partner
pursuant to Section 5.1 hereof, but excluding tax items described in
Regulations Section 1.704-1(b)(4)(i); and
(2) debited with the amount of cash and the Book 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, such Partner's distributive share of
Losses, any items in the nature of expenses or losses that are allocated to
such Partner pursuant to Section 5.1 hereof, but excluding tax items
described in Regulations Section 1.704-1(b)(4)(i), and such Partner's share,
determined in accordance with its Percentage Interest, of any expenditures of
the Partnership described in Section 705(a)(2)(B) of the Code or treated as
Section 705(a)(2)(B) expenditures pursuant to Regulations Section
1.704-1(b)(2)(iv)(i).
In the event that a Partner's Partnership Interest or portion thereof is
transferred within the meaning of Regulations Section 1.704- 1(b)(2)(iv)(l), the
transferee shall succeed to the Capital Account of the transferor to the extent
that it relates to the Partnership Interest or portion thereof so transferred.
In the event that the Book Values of Partnership assets are adjusted as
described below in Section 4.5(b) hereof, the Capital Accounts of the Partners
shall be adjusted simultaneously to reflect the aggregate net adjustments as if
the Partnership recognized gain or loss for federal income tax purposes equal to
the amount of such aggregate net adjustment.
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. In the event that the Managing General Partner reasonably
determines that the manner in which the Capital Accounts, or any debits or
credits thereto, are maintained or computed under the Regulations should be
further amended, the Managing General Partner shall be authorized, without the
approval, consent or act of any of the Partners, to amend this Agreement,
provided that such amendment shall not directly and adversely affect the
Partnership Interest of a Partner, including without limitation, the right to
receive distributions allocable thereto, without the written concurrence of such
Partner. In determining whether this Agreement should be amended to reflect the
foregoing, the Managing
21
General Partner shall be entitled to rely on the advice of the Partnership
Accountants and/or counsel to the Partnership.
(b) Except as otherwise provided in this Agreement, the term "Book Value"
or "Book Values" means, with respect to any asset, such asset's adjusted
basis for federal income tax purposes, except:
(1) the initial Book Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset;
(2) the Book Value of all Partnership assets may be adjusted to equal
their respective gross fair market values as of the following times, as
determined by the Managing General Partner (unless such adjustment shall
be required by Regulations Section 1.704-1(b)(2)(iv)(f)): (i) the
acquisition from the Partnership, in exchange for more than a de minimis
capital contribution, of a Partnership Interest by an additional partner
or an additional Partnership Interest by an existing Partner; (ii) the
distribution by the Partnership to a Partner of more than a de minimis
amount of Partnership property (including money) as consideration for an
interest in the Partnership; and (iii) the liquidation of the Partnership
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) if there is
an in-kind distribution of Partnership property or an installment sale of
Partnership assets, or if, pursuant to the penultimate sentence of
Regulations Section 1.704-1(b)(2)(ii)(b), the Partnership establishes
reserves to provide for Partnership liabilities in connection with the
liquidation of the Partnership;
(3) if the Book Value of an asset has been determined or adjusted as
provided in Section 4.5(b)(1) or 4.5(b)(2) hereof, the Book Value of such
asset shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Profits and Losses;
and
(4) the Book Value of any Partnership asset distributed to any Partner
shall be the gross fair market value of such asset on the date of
distribution.
(c) In the event that subsequent to the Effective Date any provision of
this Article IV requires the determination of the fair market value of any
asset, such fair market value shall be as determined by the Managing General
Partner and the relevant Partner, provided that (i) such value is reasonably
agreed to by such Persons in arm's-length negotiations and (ii) such Persons
have sufficiently adverse interests, as provided in Regulations Section
1.704-1(b)(2)(iv)(h). In the event that the requirements of clauses (i) and
(ii) of this Section 4.5(c) are not met, then the fair market value shall be
determined by a Qualified Appraiser. The cost of any such appraisal shall be
an expense of the Partnership.
Section 4.6 Partnership Interests; Units of Partnership Interest; Percentage
Interests.
(a) For the purpose of this Agreement, the term "Partnership Interest"
means, with respect to a Partner, such Partner's right to the allocations
(and each item thereof) specified in Section 5.1 hereof and distributions
from the Partnership, its share of expenditures of the Partnership described
in Section 705(a)(2)(B) of the Code (or treated as such under Regulations
Section 1.704- 1(b)(2)(iv)(i)) and its rights of management, consent,
approval, or participation, if any, as provided in this Agreement. Each
Partner's Partnership Interest shall be divided into units (herein referred
to collectively as the "Units of Partnership Interest" and individually as a
"Unit of Partnership Interest") and shall be represented by that number of
Units of Partnership Interest set forth opposite such Partner's name on
Schedule A attached hereto, as such Schedule may be amended from time to time
pursuant to Section 4.8, Article VIII or Article X hereof. The Partnership
may issue additional Units of Partnership Interest in accordance with Section
8.4 hereof. The Partnership and TCO shall conduct their respective
operations, to the extent they are able to do so, so that one Unit of
Partnership Interest will be equal in value to one (1) share of TCO's common
stock.
(b) For the purpose of this Agreement, the term "Percentage Interest"
means, with respect to each Partner, the percentage set forth opposite such
Partner's name on Schedule A attached hereto, as such Schedule may be amended
from time to time pursuant to Section 4.8, Article VIII or Article X hereof,
22
and shall at any time be equal to a fraction, the numerator of which is the
aggregate number of Units of Partnership Interest held by such Partner, and
the denominator of which is the aggregate number of all Units of Partnership
Interest that are issued and outstanding. For purposes of calculating
Percentage Interests, no interest in the Partnership that is Preferred Equity
shall be taken into account.
Section 4.7 Partnership Interest Certificates.
Units of Partnership Interest shall be evidenced by Partnership Interest
Certificates (herein referred to collectively as "Partnership Interest
Certificates" and individually as a "Partnership Interest Certificate") which
shall be issued in accordance with this Section 4.7 and Section 13.18 hereof, in
the form attached hereto as Exhibit A, as such form may be amended from time to
time by the Managing General Partner. Each Partnership Interest Certificate
shall be signed by an authorized signatory or signatories of the Partnership and
shall bear the following legend:
"The Unit(s) of Partnership Interest represented by this certificate
is(are) subject to and transferable only in compliance with The Second
Amendment and Restatement of Agreement of Limited Partnership of The Taubman
Realty Group Limited Partnership, as the same may be amended and/or
supplemented from time to time (the "Partnership Agreement"), a copy of which
is on file at the office of The Taubman Realty Group Limited Partnership. Any
assignment, sale, transfer, conveyance, mortgage, or other encumbrance,
pledge, grant of an option or proxy, or other disposition or act of
alienation, whether voluntary or involuntary, or by operation of law, in
respect of a Unit of Partnership Interest made other than as permitted in the
Partnership Agreement shall be null and void and have no force or effect
whatsoever."
Transfers (except by way of a Pledge) of Units of Partnership Interest shall be
made only upon the request of the Person named in the Partnership Interest
Certificate, or by its attorney lawfully constituted in writing, and upon
surrender and cancellation of a Partnership Interest Certificate for a like
number of Units of Partnership Interest, a duly executed and acknowledged
written instrument of assignment, and with such proof of authenticity of the
signatures as the Managing General Partner may reasonably require. In the event
of a Transfer of a Unit of Partnership Interest or the issuance of additional
Units of Partnership Interest pursuant to the provisions of Article VIII or
Article X hereof, the Managing General Partner shall cause the Partnership to
issue Partnership Interest Certificates to the appropriate Persons to reflect
any Transfer of Units of Partnership Interest or issuance of additional Units of
Partnership Interest, as the case may be. In the event that the Partnership
shall purchase any Units of Partnership Interest (including Fractional Units),
such Units of Partnership Interest (or Fractional Units) shall be extinguished
and the Partnership Interest Certificates with respect thereto shall be
surrendered and cancelled.
Section 4.8 Purchase of Fractional Units of Partnership Interest; Adjustment of
Units of Partnership Interest.
If as a result of any division or combination of Units of Partnership
Interest (as provided below in this Section 4.8) or Transfer or issuance of
Units of Partnership Interest, there shall be outstanding any Fractional Unit,
the Managing General Partner may, but shall not be obligated to, at any time
cause the Partnership to purchase such Fractional Unit, in which event the
Partner holding such Fractional Unit shall sell such Fractional Unit to the
Partnership for an amount equal to the fair market value of such Fractional Unit
as determined in good faith by the Managing General Partner.
The Managing General Partner, in good faith, may, from time to time, divide
or combine all Units of Partnership Interest then issued and outstanding;
provided, however, that in no event shall the Managing General Partner combine
the Units of Partnership Interest unless the fair market value of each resulting
Unit of Partnership Interest is One Hundred Thousand Dollars ($100,000) or less.
Accordingly, divisions or combinations of Units of Partnership Interests may
provide for fractional ratios. In the event of any such action to combine or
divide Units of Partnership Interest as provided in this Section 4.8, all
references in this Agreement to a number of Units of Partnership Interest shall
be combined or divided by the same divisor or multiplier, as the case may be.
Any action to divide or combine Units of Partnership Interest pursuant to this
23
Section 4.8 shall be effective on the date set forth as the effective date for
such action, and each Partner or Person to whom a Unit of Partnership Interest
has been pledged shall have the right to request a certification from the
Partnership as to the date of the last division or combination of Units of
Partnership Interest. Promptly following any such action, Schedule A shall be
amended to reflect such action, notice of such action shall be provided to each
of the Partners and to any Person to whom a Unit of Partnership Interest has
been pledged (provided the Partnership shall have received notice of such Pledge
and the identity and address of such pledgee), and appropriate substitute
Partnership Interest Certificates shall be issued as of the effective date of
such action, in exchange for outstanding Partnership Interest Certificates
pursuant to such terms as shall be established by the Managing General Partner.
For the purpose of this Section 4.8, fair market values shall be as determined
in good faith by the Managing General Partner.
24
V.
ALLOCATIONS; DISTRIBUTIONS; BANK ACCOUNTS;
BOOKS OF ACCOUNT; TAX RETURNS; ACCOUNTING AND
REPORTS; PARTNERSHIP FISCAL YEAR.
Section 5.1 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)(1) of the Code shall be included
in taxable income or loss), adjusted as follows:
(1) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses
pursuant to this Section 5.1(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; and
(3) any items that are specially allocated pursuant to Section 5.1(d)
or 5.1(f) hereof shall not be taken into account in computing Profits or
Losses.
(b) Except as otherwise provided in Section 5.1(d) or 5.1(f) hereof, the
Profits and Losses of the Partnership (and each item thereof) for each
Partnership Fiscal Year shall be allocated among the Partners in accordance
with their respective Percentage Interests.
(c) For the purpose of Section 5.1(b) hereof, gain or loss resulting from
any disposition of Partnership property shall be computed by reference to the
Book Value of the property disposed of, notwithstanding that the adjusted tax
basis of such property for federal income tax purposes differs from its Book
Value.
(d) Notwithstanding the foregoing provisions of this Section 5.1, the
following provisions shall apply:
(1) Nonrecourse Deductions shall be allocated in accordance with the
Partners' Percentage Interests; provided, however, a Partner shall not
receive an allocation of any Partnership deduction that would result in
total loss allocations attributable to Nonrecourse Liabilities in excess
of such Partner's share of Minimum Gain (as determined under Regulations
Section 1.704- 2(g)). 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 1.704-2(g)(2) (the "Minimum Gain
Chargeback"). The items to be allocated pursuant to this Section 5.1(d)(1)
shall be determined in accordance with Regulations Section 1.704-2(f) and
(j).
(2) Any item of Partner Nonrecourse Deduction with respect to a Partner
Nonrecourse Debt 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 1.704-2(i)(1). Subject to Section 5.1(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 5.1(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 Nonrecourse Debt
25
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 1.704-2(g)(2). The items to be allocated pursuant to
this Section 5.1(d)(2) shall be determined in accordance with Regulations
Section 1.704-2(i)(4) and (j).
(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 shall be reasonably
determined by the Managing General Partner in accordance with Internal
Revenue Service authority interpreting Regulations Section 1.752-3(a)(3).
(4) No Partner shall be allocated any item of deduction or loss of the
Partnership if such allocation would cause such Partner's Capital Account
to become negative by more than the sum of (i) any amount such Partner is
obligated to restore upon liquidation of the Partnership, plus (ii) such
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 Partner pursuant to this Section 5.1(d)(4) shall be allocated among
the General Partners in proportion to their respective Percentage
Interests. For this purpose, in determining the Capital Account balance of
such Partner, the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6) shall be taken into account. In the
event that (A) any Limited Partner unexpectedly receives any adjustment,
allocation, or distribution described in Regulations Sections
1.704-1(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)(1) and 1.704-2(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 5.1(d)(4) and Section 5.1(d)(1) and/or (2)
hereof apply, Section 5.1(d)(1) and/or (2) hereof shall be applied prior
to this Section 5.1(d)(4).
(5) 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 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 Book
Value of such property as set forth on Schedule D hereto. If the Book
Value of any Partnership property is adjusted pursuant to Section 4.5(b)
hereof, subsequent allocations of income, gain, loss, and deduction 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 Book
Value of such asset in the manner prescribed under Sections 704(b) and
704(c) of the Code and the Regulations thereunder.
(e) Notwithstanding anything to the contrary contained in this Section
5.1, 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) 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.
26
(f) In the event of a sale or exchange of a Partner's Partnership Interest
or portion thereof or upon the death of a Partner, if the Partnership has not
theretofore elected, pursuant to Section 754 of the Code, to adjust the basis
of Partnership property, the Managing General Partner shall cause the
Partnership to elect, if the Person acquiring such Partnership Interest or
portion thereof so requests, pursuant to Section 754 of the Code, to adjust
the basis of Partnership property. In addition, in the event of a
distribution referred to in Section 734(b) of the Code, if the Partnership
has not theretofore elected, the Managing General Partner may, in the
exercise of its reasonable discretion, cause the Partnership to elect,
pursuant to Section 754 of the Code, to adjust the basis of Partnership
property. Except as provided in Regulations Section 1.704-1(b)(2)(iv)(m),
such adjustment shall not be reflected in the Partners' Capital Accounts and
shall be effective solely for federal and (if applicable) state and local
income tax purposes. Each Partner hereby agrees to provide the Partnership
with all information necessary to give effect to such election. With respect
to such election:
(1) Any change in the amount of the depreciation deducted by the
Partnership and any change in the gain or loss of the Partnership, for
federal income tax purposes, resulting from an adjustment pursuant to
Section 743(b) of the Code shall be allocated entirely to the transferee
of the Partnership Interest or portion thereof so transferred. Neither the
capital contribution obligations of, nor the Partnership Interest of, nor
the amount of any cash distributions to, the Partners shall be affected as
a result of such election, and except as provided in Regulations Section
1.704-1(b)(2)(iv)(m), the making of such election shall have no effect
except for federal and (if applicable) state and local income tax
purposes.
(2) Solely for federal and (if applicable) state and local income tax
purposes and not for the purpose of maintaining the Partners' Capital
Accounts (except as provided in Regulations Section 1.704-1(b)(2)(iv)(m)),
the Partnership shall keep a written record for those assets, the basis of
which is adjusted as a result of such election, and the amount at which
such assets are carried on such record shall be debited (in the case of an
increase in basis) or credited (in the case of a decrease in basis) by the
amount of such basis adjustment. Any change in the amount of the
depreciation deducted by the Partnership and any change in the gain or
loss of the Partnership, for federal and (if applicable) state and local
income tax purposes, attributable to the basis adjustment made as a result
of such election shall be debited or credited, as the case may be, on such
record.
(g) 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.
(h) Except as provided in Sections 5.1(d)(5) and 5.1(f) 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 5.1.
(i) Such portion of the gain allocated pursuant to this Section 5.1 that
is treated as ordinary income attributable to the recapture of depreciation
shall, to the extent possible, be allocated among the Partners in the
proportion that (i) the amount of depreciation previously allocated to each
Partner relating to the property that is the subject of the disposition bears
to (ii) the total of such depreciation allocated to all of the Partners. This
Section 5.1(i) shall not alter the amount of allocations among the Partners
pursuant to this Section 5.1, but merely the character of gain so allocated.
(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 a
distribution of the proceeds of Nonrecourse Liabilities (that would otherwise
be allocable to an increase in Partnership Minimum Gain) or Partner
Nonrecourse Debt (that would otherwise be allocable to an increase in Partner
Nonrecourse Debt Minimum Gain) as a distribution that is not allocable to an
increase in Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain
to the extent that such distribution does not cause or increase a deficit
balance in any Partner's Capital Account that exceeds the amount such Partner
is otherwise
27
obligated to restore (within the meaning of Regulations Section
1.704-1(b)(2)(ii)(c)) as of the end of the Partnership's taxable year in
which the distribution occurs.
Section 5.2 Distributions.
(a) Subject, on liquidation of the Partnership to Section 11.1(a) hereof,
and to Section 11.1(e) hereof on liquidation of a Partner's interest in the
Partnership that is not in connection with the liquidation of the
Partnership, for the term of the Partnership, as set forth in Section 1.5
hereof:
(i) a cash distribution shall be made to the Partners, in accordance
with their respective Percentage Interests, not later than the fifteenth
(15th) Day of each month (the "Distribution Date") of each Partnership
Fiscal Year, in an amount equal to one-twelfth (1/12) of the Required
Distribution Amount for such Partnership Fiscal Year;
(ii) a cash distribution shall be made to the Partners, in accordance
with their respective Percentage Interests, on the Distribution Date
immediately following the date of an Additional Required Amount Notice, in
an amount equal to the Additional Required Amount; provided, however, that
if such Distribution Date is less than twenty (20) Days after the date of
such Additional Required Amount Notice, the Additional Required Amount
shall be distributed on the next Distribution Date;
(iii) in the event of a Minimum Distribution Amount Adjustment Notice, a
cash distribution shall be made to the Partners, in accordance with their
respective Percentage Interests, not later than the fifteenth (15th) Day of
the first month of each Partnership Fiscal Year, in an amount equal to the
Minimum Distribution Amount Adjustment for the prior Partnership Fiscal
Year;
(iv) in the event of a Tax Adjustment Notice, a cash distribution shall
be made to the Partners, in accordance with their respective Percentage
Interests, not later than the last Day of the fourth (4th) month of each
Partnership Fiscal Year, in an amount equal to the quotient obtained by
dividing (x) the Tax Adjustment Amount for the prior Partnership Fiscal
Year, by (y) the Percentage Interest of TCO on the Relevant Date; and
(v) in the event of a Deficiency Dividend Notice, a cash distribution
shall be made to the Partners, in accordance with their respective
Percentage Interests, as and when required by TCO, in an amount equal to
the Deficiency Dividend.
(b) All distributions pursuant to Section 5.2(a), Section 11.1(a), and
Section 11.1(e) hereof shall be made in accordance with the terms and
provisions of this Agreement to the Record Partner; provided, however, that
in the event of an assignment of a Partnership Interest pursuant to Section
8.3(a) hereof to a Person that does not become a substitute Partner in the
Partnership, the Record Partner may, subject to the provisions of Section
8.3(a) hereof, by written notice (a "Designee Notice") to the Manager, the
Partnership, and the Managing General Partner, designate such Person to
receive those distributions pursuant to Section 5.2(a) and Section 11.1(a) to
which the Record Partner would otherwise be entitled. The Managing General
Partner shall not incur any liability for distributions made in good faith to
any Record Partner or the designee of any Record Partner set forth in a
Designee Notice as provided above in this Section 5.2(b), notwithstanding
that another Person may have an interest in or be affected by such
distribution. Distributions to the Partners under this Agreement shall be
subject to any restriction imposed by applicable law, and the Managing
General Partner may refrain from making any distribution hereunder without
liability if it believes that the distribution would be in violation of any
applicable law.
Section 5.3 Guaranteed Payments; TCO's Right to Convert.
Not later than the fifteenth (15th) Day of each month of each Partnership
Fiscal Year, the Partnership shall pay to TCO, in cash or by good certified or
official bank check or by Fedwire transfer of immediately available funds, an
amount equal to the excess, if any, of (i) the cumulative Guaranteed Payment on
all Preferred Equity, over (ii) the sum of all prior payments made to TCO
pursuant to this Section 5.3, such amounts to be paid in the priorities, if any,
set forth in the applicable series. Amounts paid pursuant to this Section
28
5.3 are intended to constitute guaranteed payments within the meaning of Section
707(c) of the Code and shall not be treated as distributions for purposes of
computing TCO's Capital Account balance.
TCO shall have the right, but not the obligation, to convert all or any
portion of the proceeds loaned to the Partnership pursuant to Section 4.1(b) to
Preferred Equity, which Preferred Equity shall be entitled to a Guaranteed
Payment in lieu of the payment of interest.
In the event of the redemption by TCO, in whole or in part, of any series of
preferred shares that constitute a Related Issue, TCO may convert that portion
of its Preferred Equity equal to the portion of the Related Issue that was
redeemed (exclusive of any accrued but unpaid dividends), to an Additional
Interest by contributing to the capital of the Partnership all of its right,
title, and interest, in and to the payment of any future Guaranteed Payment on
that portion of the converted Preferred Equity, with the effect that the portion
of the converted Preferred Equity and related right to the payment of any future
Guaranteed Payment shall be converted to an Additional Interest in accordance
with Section 8.4(a) hereof, such Additional Interest to be provided by a
proportionate reduction in the Percentage Interests of all of the Partners, as
provided in Section 8.4(a) hereof. Upon and to the extent of the conversion of
Preferred Equity to Additional Interests in accordance with this Section 5.3,
Schedule A to this Agreement shall be amended accordingly.
Section 5.4 Bank Accounts and Other Investments.
Funds of the Partnership shall be deposited in one or more bank accounts in
federal or state chartered banks having a shareholder capital and undistributed
surplus of not less than One Hundred Million Dollars ($100,000,000), all as
determined by the Managing General Partner. All withdrawals therefrom shall be
made upon the signature or signatures of whomever shall be designated in writing
from time to time by the Managing General Partner. Any checks of the Partnership
may be signed by any Person(s) designated in writing, from time to time, by the
Managing General Partner. In addition, funds of the Partnership may be invested
in highly liquid investments pursuant to an investment policy determined from
time to time by the Managing General Partner.
Section 5.5 Books of Account.
The Partnership shall maintain at its principal office complete and accurate
books of account and records of its operations showing the assets, liabilities,
costs, expenditures, receipts, profits, and losses of the Partnership, and which
books of account and records shall include provision for separate Capital
Accounts for the Partners and shall provide for such other matters and
information as may be required by the Partnership Law or as the Managing General
Partner shall otherwise determine, together with copies of all documents
executed on behalf of the Partnership. In addition, the Partnership shall
maintain at its principal office a Partnership Interest Ledger of the
Partnership, which shall set forth the information contained in Schedule A
attached hereto, and which shall be kept current by the Managing General
Partner. Each Limited Partner and its representatives, duly authorized in
writing, shall have the right to inspect and examine, at all reasonable times,
at the principal office of the Partnership, all such books of account, records,
ledgers, and documents.
Section 5.6 Tax Returns.
(a) 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, elections, credits, and tax accounting methods and procedures.
(b) To the extent all necessary information is available, within ninety
(90) Days after the end of each Partnership Fiscal Year, and in any event
within one hundred twenty (120) Days after the end of each Partnership Fiscal
Year, the Partnership shall cause to be prepared and transmitted to the
Partners federal and appropriate state and local Partnership Income Tax
Schedules "K-1," or any substitute therefor, with respect to such Partnership
Fiscal Year on appropriate forms prescribed.
29
Section 5.7 Accounting and Reports, Etc.
(a) 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 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 Partnership 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 of the
Partnership's financial condition and statements of operations, cash flow and
Partnership equity relating to the fiscal quarter then just ended, prepared
in accordance with GAAP. The Partnership shall further cause to be prepared
and transmitted to TCO (i) such reports and/or information as are necessary
for TCO to fulfill its obligations under the Securities Act of 1933, the
Securities and Exchange Act of 1934 and the applicable stock exchange rules,
and under any other regulations to which TCO or the Partnership may be
subject, and (ii) such other reports and/or information as are necessary for
TCO to determine its qualification as a Real Estate Investment Trust under
the REIT Requirements or its liability for a tax as a consequence of its
Partnership Interest, including its distributive share of taxable income, in
each case, in a manner that will permit TCO to comply with such obligations
or make such determinations in a timely fashion.
(b) TCO shall, from time to time, upon the reasonable request of the
Manager, or as and when such information first becomes available to it,
provide the Manager, by written notice (the "TCO Information Notice"), with
such information necessary to permit the Manager to determine the Minimum
Distribution Amount Adjustment, including TCO's allocable portion of any
component thereof, for each Partnership Fiscal Year, any Tax Adjustment
Amount for any prior Partnership Fiscal Year, to the extent such Tax
Adjustment Amount has not yet been distributed or previously taken into
account in calculating a Tax Adjustment Amount, and any Deficiency Dividend.
Section 5.8 Partnership Fiscal Year.
The Partnership's fiscal year (and taxable year) shall be the Partnership
Fiscal Year.
30
VI.
MANAGEMENT; AUTHORITY AND AUTHORIZED ACTIONS BY THE
MANAGING GENERAL PARTNER; EXTRAORDINARY TRANSACTIONS;
ANNUAL BUDGET; NOTICES; STANDARD OF CONDUCT; MASTER
SERVICES AGREEMENT AND CORPORATE SERVICES AGREEMENT;
ABSENCE OF AUTHORITY OF PARTNERS OTHER THAN THE MANAGING
GENERAL PARTNER; FIDELITY BONDS AND INSURANCE;
ENGAGEMENT OF PARTNERS' AFFILIATES; INDEMNITY AND
REIMBURSEMENT; TAX MATTERS PARTNER.
Section 6.1 Management; Authority and Authorized Actions by the Managing General
Partner.
(a) The Managing General Partner shall be responsible for the management
of the Partnership and, subject to Section 6.1(b) hereof, shall have the full
and exclusive right, power and authority, on behalf of and in the name of the
Partnership, to carry out any and all objectives and purposes of the
Partnership and to exercise any and all of the powers of the Partnership and
to perform any and all acts and enter into and perform any and all contracts,
agreements, and other undertakings which it may deem necessary or advisable
in furtherance of the purposes of the Partnership or incidental thereto. In
such capacity, the Managing General Partner shall use its Best Efforts to
carry out the purposes of the Partnership and shall have in respect of its
management of the Partnership all of the powers of the Partnership and shall
devote such time and attention to the Partnership as is reasonably necessary
for the proper management of the Partnership and its properties. The Managing
General Partner may employ or engage others including one or more Affiliates
of a Partner (e.g., TTC) to satisfy its obligations in respect of all
actions, decisions, determinations, designations, delegations, directions,
appointments, consents, approvals, selections, and the like to be taken,
made, or given by and/or with respect to the Partnership, its business and
its properties as well as management of all Partnership affairs, and all such
actions, decisions, determinations, designations, delegations, directions,
appointments, consents, approvals, selections, and the like shall be
controlling and binding upon the Partnership. Any Person employed or engaged
by the Managing General Partner shall have and be subject to all of the
rights, obligations and restrictions of the Managing General Partner, all as
provided in this Agreement.
The Managing General Partner shall supervise the Manager and review on a
regular basis the reports and other information furnished by the Manager from
time to time pursuant to the Master Services Agreement.
(b) For so long as the aggregate Percentage Interest held by AAT
Affiliates equals or exceeds five percent (5%), without the prior written
consent of a Majority in Interest of the Non-Managing Partners, the Managing
General Partner shall not enter into any Extraordinary Transaction. For
purposes of this Section 6.1(b), a Majority in Interest of the Non-Managing
Partners shall be deemed to have consented to an Extraordinary Transaction,
without the requirement of an actual vote of the Non-Managing Partners, if
those Non-Managing Partners holding in excess of fifty percent (50%) of the
aggregate Percentage Interests held by all the Non-Managing Partners consent
to such transaction in writing.
Section 6.2 Delegation of Authority and Designation of Officers.
(a) The Managing General Partner may delegate any of its powers
hereinbefore, hereinafter, or by law provided or conferred to one (1) or more
Persons, or designate one (1) or more Persons to do or perform those matters
to be done or performed by the Managing General Partner. In addition, the
Managing General Partner may designate one (1) or more employees or agents of
the Partnership who are denominated as officers who shall exercise such
powers and shall have such duties as may from time to time be assigned or
established by the Managing General Partner. Any designated officer of the
Partnership shall serve at the pleasure of the Managing General Partner and
may be removed at any time with or without cause, by the Managing General
Partner.
31
(b) The Partners, by their execution and delivery of this Agreement,
irrevocably authorize the Managing General Partner and any Person or Persons
designated or delegated by the Managing General Partner to do any act that
the Managing General Partner has the right, power, and authority to do under
the provisions of this Agreement, without any other or subsequent
authorizations, approvals, or consents of any kind. No Person dealing with
the Partnership shall be required to investigate or inquire as to the
authority of the Managing General Partner, and any Person or Persons
designated or delegated by the Managing General Partner to exercise the
rights, powers, and authority herein conferred upon them. Any Person dealing
with the Partnership shall be entitled to rely upon any action taken by the
Managing General Partner and any Person or Persons designated or delegated by
the Managing General Partner, and the Partnership shall be bound thereby. Any
Person dealing with the Partnership shall be entitled to rely upon any
document or instrument executed and delivered by a Person or Persons
designated by the Managing General Partner, and the Partnership shall be
bound thereby. No purchaser of any property or interest owned by the
Partnership, or lender, or Third Party in respect of any matter shall be
required to determine the sole and exclusive authority of the Person or
Persons designated or delegated by the Managing General Partner to execute
and deliver on behalf of the Partnership any such instrument of transfer or
security, or to see to the application or distribution of revenues or
proceeds paid or credited in connection therewith.
Section 6.3 Compensation of Certain Employees of the Manager; Issuance of
Incentive Options.
The Managing General Partner shall approve the compensation of any employee
of the Manager or the Partnership who is also at such time an AAT Affiliate and
administer a program or programs whereby the Partnership shall from time to
time, and without the consent of any Partner, grant to employees of TTC options
(the "Incentive Options") to acquire limited partner Partnership Interests
pursuant to an Incentive Option Plan, which plan and any amendments thereto
shall have been approved by the Managing General Partner. After review of
recommendations made by Taub-Co, the Managing General Partner may direct the
Partnership to issue the Incentive Options to employees of TTC.
Section 6.4 Annual Budget; Notices.
Pursuant to the Master Services Agreement, the Manager is required to prepare
and submit to the Managing General Partner for approval, prior to the beginning
of each Partnership Fiscal Year, an annual development budget (the "Annual
Development Budget"), and an annual operating budget (the "Annual Operating
Budget") for the Partnership, which shall reflect a reasonable estimate of the
proposed operations (including development) and expenses of the Partnership for
such Partnership Fiscal Year, and which shall include the Required Distribution
Amount for such Partnership Fiscal Year and any annual business plan, leasing
plan or similar materials required of the Manager under the Master Services
Agreement. (The Annual Development Budget and the Annual Operating Budget are
referred to together as the "Annual Budget".)
In addition to the foregoing, pursuant to the Master Services Agreement, the
Manager will be engaged to: (i) advise the Managing General Partner by written
notice (an "Additional Required Amount Notice"), within thirty (30) Days after
the closing of any capital gain transaction of the Partnership, of the
Additional Required Amount with respect to such capital gain transaction of the
Partnership, (ii) after a TCO Information Notice in respect of a Tax Adjustment
Amount, advise the Managing General Partner by written notice (a "Tax Adjustment
Notice") not less than ten (10) Days prior to TCO's first regular dividend date,
of the Tax Adjustment Amount for such Partnership Fiscal Year, (iii) after a TCO
Information Notice, in respect of a Minimum Distribution Amount Adjustment, not
later than December 1 of each Partnership Fiscal Year, advise the Managing
General Partner, by written notice (a "Minimum Distribution Amount Adjustment
Notice") of the Minimum Distribution Amount Adjustment for such Partnership
Fiscal Year, and (iv) after a TCO Information Notice, in respect of TCO's
obligation to declare and pay a deficiency dividend pursuant to Section
860(f)(1) of the Code as a result of a determination (as defined in Section
860(e) of the Code), advise the Managing General Partner by written notice (the
"Deficiency Dividend Notice") of the Deficiency Dividend for such Partnership
Fiscal Year.
32
Section 6.5 Master Services Agreement and Corporate Services Agreement;
Engagement of Partners' Affiliates.
The Managing General Partner shall manage and perform, or employ or engage
others, including one or more Affiliates of a Partner (e.g., TTC), to manage and
perform all activities and services in furtherance of the purposes of the
Partnership including, without limitation, seeking Development Opportunities,
and Regional Centers, and further including without limitation, all activities
and services in respect of Development Opportunities, all activities and
services in respect of the expansion, reconstruction, repair, renovation, or
alteration of Regional Centers and/or the development of any Peripheral
Property, and all other activities and services in respect of the management,
administration, leasing, financing, refinancing, development, improvement,
acquisition and disposition of Regional Centers. The Partnership has heretofore
entered into the Master Services Agreement. In addition, the Partnership may
provide in the partnership agreement, limited liability company agreement, or
other agreement forming or covering an Owning Entity or in separate agreements
entered into between an Owning Entity and TTC, which agreements may include an
Owning Entity Agreement, for such terms, provisions, and conditions, and
compensation to TTC, all in respect of the activities of TTC for the benefit of
a Development Opportunity or a Regional Center, as shall be determined by the
Managing General Partner, and TTC or as shall be available pursuant to
negotiations with Third Parties having an interest in such Development
Opportunity or Regional Center. The compensation to be paid to TTC, as
applicable, as well as all reimbursements for or in respect of services rendered
to the Partnership shall be as provided in the Master Services Agreement, an
Owning Entity Agreement, or other applicable agreement forming or covering an
Owning Entity. The Partnership has heretofore entered into the Corporate
Services Agreement, pursuant to which TCO has engaged TTC to assist with,
implement and effect the actions to be taken by TCO as the Managing General
Partner, and to do or perform those matters to be done or performed by TCO as
the Managing General Partner in accordance with the terms and provisions of this
Agreement.
Section 6.6 Absence of Authority of Non-Managing Partners.
Except as specifically provided in this Agreement, the Non-Managing Partners,
as such, shall take no part in, nor have the right to take part in, nor
interfere in, nor have the right to interfere or participate in, in any manner,
the conduct or control of the business of the Partnership or have any right or
authority to act for or on behalf of the Partnership.
Section 6.7 Fidelity Bonds and Insurance.
The Partnership shall obtain fidelity bonds with reputable surety companies,
covering all Persons having access to the Partnership funds, indemnifying the
Partnership against loss resulting from fraud, theft, dishonesty, and other
wrongful acts of such Persons. The Partnership shall carry or cause to be
carried on its behalf, with companies and in amounts determined by the Managing
General Partner all property, liability, and workers' compensation insurance as
shall be required under applicable mortgages, leases, agreements, and other
instruments and statutes by which the Partnership or its properties are bound,
as well as such additional insurance and coverages as the Managing General
Partner, shall from time to time propose or approve.
Section 6.8 Execution of Legal Instruments.
All legal instruments affecting the Partnership or Partnership property need
be executed by, and only by, that Person or those Persons (who need not be
Partners) designated in writing by the Managing General Partner and such
designated Person's(s') signature(s) shall be sufficient to bind the Partnership
and its properties.
Section 6.9 Indemnity and Reimbursement; Advancement of Expenses and Insurance.
(a) To the fullest extent permitted by law, the Partnership shall and does
hereby indemnify, defend, and hold harmless each Indemnified Person from any
claim, demand, or liability, and from any loss, cost, or expense including,
without limitation, attorneys' fees and court costs, which may be asserted
against,
33
imposed upon, or suffered by such Indemnified Person by reason of any act
performed for or on behalf of the Partnership, or in furtherance of the
Partnership's business, to the extent authorized hereby, or by reason of any
omission, except for any act or omission that constitutes a breach of a duty
of loyalty, any act or omission not in good faith or which involves
intentional misconduct or a Knowing violation of law, and provided that with
respect to any criminal action or proceeding, such Indemnified Person had no
reasonable cause to believe its or his conduct was unlawful, and provided
further that no indemnification shall be made in respect of any claim,
demand, or liability, or for any loss, cost, or expense, as to which such
Indemnified Person shall have been adjudged to be liable to the Partnership
unless and only to the extent that a court shall determine, despite the
adjudication of liability but in view of all the circumstances of the case,
such Indemnified Person is fairly and reasonably entitled to indemnity. Each
Indemnified Person shall not have any personal liability to the Partnership
or its Partners for monetary damages for breach of fiduciary duty except (i)
for a breach of a duty of loyalty, or (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a Knowing violation of law.
Any indemnity under this Section 6.9(a) shall be provided out of and to the
extent of Partnership assets only, and only with respect to amounts actually
and reasonably incurred, and no Partner shall have any personal liability on
account thereof.
(b) Expenses (including attorneys' fees) incurred by an Indemnified Person
in defending any civil, criminal, administrative or investigative action,
suit, or proceeding relating to any action or omission in respect of the
Partnership shall be paid by the Partnership in advance of the final
disposition of the action, suit, or proceeding upon receipt of an undertaking
by or on behalf of such Indemnified Person to repay such amount if it is
ultimately determined that such Indemnified Person is not entitled to be
indemnified by the Partnership.
(c) The Partnership may purchase and maintain insurance, as determined by
the Managing General Partner in respect of each Indemnified Person against
any liability relating to any act or omission in respect of the Partnership,
whether or not the Partnership may indemnify such Indemnified Person against
such liability.
(d) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 6.9 shall survive the liquidation,
dissolution and termination of the Partnership and the termination of this
Agreement, shall continue as to any Person who has terminated his
relationship with the Partnership and shall inure to the benefit of such
Person's heirs, executors and administrators and shall, to the extent
permitted by the Partnership Law, be binding on the Partnership's successors
and assigns.
Section 6.10 Tax Matters Partner.
(a) As used in this Agreement, "Tax Matters Partner" has the meaning set
forth in Section 6231(a)(7) of the Code. The Managing General Partner is
hereby designated Tax Matters Partner for the Partnership. The Tax Matters
Partner shall comply with the requirements of Sections 6221 through 6233 of
the Code applicable to a Tax Matters Partner. To the fullest extent permitted
by law, the Partnership shall and does hereby indemnify, defend, and hold
harmless the Tax Matters Partner from any claim, demand, or liability, and
from any loss, cost, or expense including, without limitation, attorneys'
fees and court costs, which may be asserted against, imposed upon, or
suffered by the Tax Matters Partner by reason of any act performed for or on
behalf of the Partnership in its capacity as Tax Matters Partner to the
extent authorized hereby, or by reason of any omission, except acts or
omissions not in good faith or which involve intentional misconduct or a
Knowing violation of law. Any indemnity under this Section 6.10(a) shall be
provided out of and to the extent of Partnership assets only, and only with
respect to amounts actually and reasonably incurred, and no Partner shall
have any personal liability on account thereof. The indemnity provided in
this Section 6.10 shall survive the liquidation, dissolution, and termination
of the Partnership and the termination of this Agreement and shall, to the
extent permitted by the Partnership Law, be binding on the Partnership's
successors and assigns.
34
(b) The Tax Matters Partner shall have a continuing obligation to provide
the Internal Revenue Service with sufficient information so that proper
notice can be mailed to all Partners as provided in Section 6223 of the Code,
provided that each Partner shall furnish the Tax Matters Partner with all
such information (including information specified in Section 6230(e) of the
Code) as is required with respect to such Partner for such purpose.
35
VII.
OTHER VENTURES.
The Partners acknowledge and agree that each of them and their respective
constituents and Affiliates may have interests in other present or future
ventures, of whatever nature, including real estate, and further including
without limitation, ventures that are competitive with the Partnership and that,
notwithstanding its status as a Partner in the Partnership, a Partner and their
respective constituents and Affiliates shall be entitled to obtain and/or
continue their respective individual participation in all such ventures without
(i) accounting to the Partnership or the other Partners for any profits with
respect thereto, (ii) any obligation to advise the other Partners of business
opportunities for the Partnership which may come to its or its constituents' or
Affiliates' attention as a result of its or its Affiliates' or constituents'
participation in such other ventures or in the Partnership, and (iii) being
subject to any claims whatsoever on account of such participation.
36
VIII.
TRANSFERS OF UNITS OF PARTNERSHIP INTEREST;
SUBSTITUTION OF PARTNERS; ADDITIONAL PARTNERSHIP
INTERESTS; CONVERSION OF PARTNERSHIP INTERESTS.
Section 8.1 Transfers.
(a) No Partner may Transfer all or any portion of its Partnership Interest
or, if such Partner is an entity (other than TCO and other than a Qualified
Institutional Transferee that is not a QIT Entity), permit a Transfer of an
interest in such Partner, to any Person except as specifically permitted in
this Article VIII.
(b) A Partner (other than TCO) may Transfer all or any portion of its
Partnership Interest (but not less than one (1) Unit of Partnership Interest)
to any other Partner, or to one (1) or more members of such Partner's
Immediate Family, or to a Family Trust, or to any Qualified Institutional
Transferee, or to an entity consisting of or owned entirely by one (1) or
more of the foregoing Persons, or to the Partnership, or, in the event that a
Partner is a partnership, or other entity (other than TCO and other than a
Qualified Institutional Transferee that is not a QIT Entity), to one (1) or
more of the constituent partners, or owners of such Partner or other entity,
or to one (1) or more members of the respective Immediate Families or Family
Trusts of the constituent partners, or owners of such Partner or other
entity, or to any Qualified Institutional Transferee, or to an entity
consisting of or owned entirely by one (1) or more of the foregoing Persons,
or to the Partnership, provided that, in each case, the Managing General
Partner has determined by written notification (a "Transfer Determination"),
to the transferring Partner, which Transfer Determination shall not be
unreasonably withheld and shall be deemed given if not refused within seven
(7) Business Days of the date of notice thereof to the Partnership, that
either (A) such Transfer will not cause (i) any lender of the Partnership or
an Owning Entity to hold in excess of ten percent (10%) of the Percentage
Interests or any other percentage of the Percentage Interests that would,
pursuant to the Regulations under Section 752 of the Code or any successor
provision, cause a loan by such lender to constitute Partner Nonrecourse Debt
or (ii) a violation of any partnership agreement or other document forming or
governing an Owning Entity, or (B) the Managing General Partner has
determined to waive such requirement in its reasonable discretion, after
having determined that the Transfer will not materially adversely affect the
Partnership, its assets or any Partner, or constitute a violation of the
Partnership Law, or any other law to which the Partnership or an Owning
Entity is subject.
In addition to the foregoing, in the event that a Partner is a partnership
or other entity (other than the Managing General Partner and other than a
Qualified Institutional Transferee that is not a QIT Entity), such Partner
may permit a Transfer of an interest in such Partner to any constituent
partner or owner of such Partner, to one (1) or more members of any
constituent partner's or owner's Immediate Family or a Family Trust with
respect to any constituent partner or owner, or to any Qualified
Institutional Transferee, or to any Partner, provided that, in each case, the
Managing General Partner has made a Transfer Determination prior to the
proposed Transfer.
(c) TCO may Transfer all or any portion of its Partnership Interest (but
not less than one (1) Unit of Partnership Interest) to, and only to, the
Partnership or to any other Partner(s) or to any Qualified Institutional
Transferee(s) provided that TCO retains at least a thirty percent (30%)
Percentage Interest in the Partnership. Notwithstanding anything to the
contrary contained in this Agreement, in the event of a Transfer (other than
a Transfer to an existing General Partner or to the Partnership) of a portion
of TCO's Partnership Interest pursuant to this Section 8.1(c), such
Partnership Interest (or a portion thereof) shall immediately convert to a
Partnership Interest as a limited partner in the Partnership, which
transferee, subject to the provisions of Section 8.2 hereof, shall have and
be subject to all of the rights, obligations, restrictions, and attributes of
a limited partner, all as provided in this Agreement. In the event of a
conversion of a portion of TCO's Partnership Interest pursuant to this
Section 8.1(c), without the approval, consent or act of any Partner, the
Managing General Partner may amend this Agreement, the
37
Certificate of Limited Partnership (if required by the Partnership Law), and
any other document determined by the Managing General Partner to be necessary
to reflect the foregoing.
(d) Transfers of ownership interests in TCO and in any Qualified
Institutional Transferee (other than a QIT Entity) as well as the change in a
trustee of any trust that is a Partner or of any trust that holds an interest
in any Partner may be made without restriction by the terms of this
Agreement. Without the approval, consent or act of any Partner, the Managing
General Partner may amend this Agreement, the Certificate of Limited
Partnership (if required by the Partnership Law), and any other document
determined by the Managing General Partner to be necessary to reflect any
such Transfer or, if necessary, change in trustee.
(e) In the event that the Managing General Partner is unable to provide a
Transfer Determination to a Partner in accordance with this Section 8.1, upon
request of such Partner, the Managing General Partner may provide a
conditional Transfer Determination (a "Conditional Transfer Determination"),
which Conditional Transfer Determination shall be subject to such terms and
conditions as the Managing General Partner shall determine and so state in
the Conditional Transfer Determination.
(f) Any action contrary to the provisions of this Article VIII shall be
null and void and ineffective for all purposes.
Section 8.2 Substitution of Partners.
Regardless of compliance with any of the provisions hereof (including,
without limitation, the provisions of Section 8.1 and Article IX hereof)
permitting a Transfer of a Partnership Interest, no Transfer (except by way of a
Pledge) of a Partnership Interest shall be recognized by or be binding upon the
Partnership unless:
(i) such instruments as may be required by the Partnership Law or other
applicable law or to effect the continuation of the Partnership and the
Partnership's ownership of its properties are executed and delivered and/or
filed;
(ii) the assignee delivers to the Partnership, a Partnership Interest
Certificate evidencing the number of Units of Partnership Interest which are
the subject of the Transfer, together with a duly executed and acknowledged
written instrument of assignment, which instrument of assignment binds the
assignee to all of the terms and conditions of this Agreement as if the
assignee were a signatory party hereto and does not release the assignor from
any liability or obligation (accrued to the date of Transfer) of or in
respect of the Partnership Interest which is the subject of the Transfer;
(iii) the instrument of assignment is manually signed by the assignee and
assignor with such proof of authenticity of the signatures as the Managing
General Partner may reasonably require; and
(iv) in the event that such assignee is not then a Partner in the
Partnership, the Managing General Partner shall have consented (which consent
may be withheld for any reason or for no reason) in writing to the admission
of the assignee as a substitute partner (in respect of the Partnership
Interest acquired) in the Partnership.
An assignee of a Partnership Interest pursuant to a Transfer permitted in
this Agreement may, subject to the provisions of this Article VIII, be admitted
as a partner in the Partnership in the place and stead of the assignor Partner
in respect of the Partnership Interest acquired from the assignor Partner and
shall, except as otherwise specifically provided in this Agreement, have all of
the rights, powers, obligations, and liabilities, and be subject to all of the
restrictions, of the assignor Partner, including, without limitation, the
liability of the assignor Partner for any existing unperformed obligations of
the assignor Partner. In the event that a Partner pledges or proposes to pledge
its Partnership Interest or any portion thereof (but not less than one (1) Unit
of Partnership Interest) in connection with a financing transaction, such
Partner may request that the Managing General Partner consent in writing, at the
time of the financing transaction or in contemplation thereof, to the admission
of a pledgee or pledgees (or transferee(s) upon the foreclosure or like action
in respect of such Pledge) as a substitute partner(s) in the Partnership (which
consent may be withheld for any reason or for
38
no reason). Each of the Partners, on behalf of itself and its permitted
successors and assigns, HEREBY AGREES AND CONSENTS to the admission of any such
substitute partners as herein provided.
Section 8.3 Failure or Refusal to Grant Consent.
(a) The Managing General Partner's failure or refusal to grant its consent
to the admission of an assignee as a substitute Partner in the Partnership as
provided in clause (iv) of Section 8.2 hereof, shall not affect the validity
or effectiveness of any such instrument as an assignment by the assignor to
the assignee of the right to receive the share of the Profits or Losses or
other items, or distributions from the Partnership, or the return of the
contribution to which such assignor would be entitled and which was thereby
assigned, provided that such assignor has received a Transfer Determination
from the Managing General Partner in accordance with Section 8.1(b) hereof in
respect of such Transfer, and a duly executed and acknowledged written
instrument of assignment in form reasonably satisfactory to the Managing
General Partner, the terms of which are not in contravention of any of the
provisions of this Agreement, and which terms shall contain appropriate
indemnifications in favor of the Partnership with respect to distributions
and other matters as the Managing General Partner may reasonably require, is
filed with the Partnership; provided, however, that the assignor shall
continue to be a Partner for all purposes of the Partnership, except that the
assignee (and not the assignor) shall be considered to hold the interest (and
the related Units of Partnership Interest) assigned for purposes of
exercising all rights of approval under this Agreement.
(b) An assignee of any portion of or an interest in a Partnership Interest
(an "Assigned Interest") pursuant to a Transfer with respect to which a
Transfer Determination has been granted that has not, for any reason, been
admitted as, or become, a partner in the Partnership in the place and stead
of an assignor Partner (the "Original Assignor") in respect of the Assigned
Interest, may, by prior written notice to the Managing General Partner,
assign the Assigned Interest, in accordance with and subject to the
provisions of this Article VIII, in all respects as if or with the same
effect as if such assignee were a Partner, and in the event that any
subsequent assignee is admitted as a substitute partner in accordance with
and subject to Section 8.2 hereof, the Original Assignor, simultaneously with
such subsequent assignment, shall Transfer all of its remaining right, title,
and interest in the Partnership Interest relating to the Assigned Interest,
to the Partner acquiring the Assigned Interest, which Partner shall act and
be the partner in respect of the Assigned Interest in the place and stead of
the Original Assignor. Each assignor Partner, on behalf of itself and its
permitted successors and assigns, hereby agrees to enter into an appropriate
amendment to this Agreement, the Certificate of Limited Partnership (if
required by the Partnership Law), and any other document determined by the
Managing General Partner to be necessary to reflect the foregoing.
Section 8.4 Issuance of Additional Interests to TCO and Other Persons or of
Incentive Interests to Certain Persons.
(a) At any time after the Effective Date, the Managing General Partner,
subject to (i) Section 6.1(b) hereof, (ii) a determination in accordance with
the Transfer Determination provisions of Section 8.1(b) hereof in respect of
the issuance of additional Partnership Interests, and (iii) a determination
that such issuance will be in the best interests of the Partnership, may
cause the Partnership to issue additional Partnership Interests in the
Partnership to and, if desired, admit as a Partner in the Partnership, any
Person including TCO (herein referred to as an "Additional Interest") in
exchange for the contribution to the Partnership by such Person of
development or other venture opportunities, interests in development or other
venture opportunities, regional shopping center developments, interests in
regional shopping center developments, cash, cash equivalents and/or other
assets, as determined by the Managing General Partner in accordance with
Section 3.1 hereof. In the event that an Additional Interest is issued by the
Partnership pursuant to this Section 8.4(a), such Additional Interest shall
be provided by a proportionate reduction in the Percentage Interests of all
of the Partners. The Managing General Partner shall be authorized on behalf
of each of the Partners to amend this Agreement and the Certificate of
Limited Partnership (if required by the Partnership Law), to reflect the
admission
39
of an additional partner or an increase in the Percentage Interest of a
Partner, as applicable, and the corresponding reduction in the Percentage
Interests of the Partners.
(b) At any time and without the consent of any Partner, the Managing
General Partner, subject to a determination by the Managing General Partner
in accordance with the Transfer Determination provisions of Section 8.1(b)
hereof in respect of the issuance of additional Partnership Interests, may
cause the Partnership to issue, pursuant to an Incentive Option Plan,
Partnership Interests (herein referred to as an "Incentive Interest") to and,
if desired, admit as Partners in the Partnership, Persons upon exercise of
the Incentive Options in exchange for the contribution to the capital of the
Partnership of the exercise price, in accordance with the Incentive Option
Plan governing such grant. In the event that any individual that is granted
an Incentive Option is not permitted to be a partner in the Partnership as a
result of Section 8.1(b)(i) hereof, and is not prohibited from acquiring
additional Equity Shares pursuant to the provisions of TCO's Articles of
Incorporation, as the same may be amended from time to time, such individual
shall assign to TCO its rights under the Incentive Option Plan in exchange
for Equity Shares prior to the actual issuance of such Partnership Interest
to such individual. In the event that an Incentive Interest is issued by the
Partnership pursuant to this Section 8.4(b), such Incentive Interest shall be
provided by a proportionate reduction in the Percentage Interests of all of
the Partners. The Managing General Partner shall be authorized on behalf of
each of the Partners to amend this Agreement and the Certificate of Limited
Partnership (if required by the Partnership Law), to reflect the admission of
an additional limited partner and the corresponding reduction in the
Percentage Interests of all of the Partners.
Section 8.5 Conversion of Partnership Interests.
(a) Taub-Co shall have no obligation to remain a General Partner of the
Partnership. Taub-Co, at any time, may, without the consent of any Partner
including the Managing General Partner, convert all, or any portion, of its
Partnership Interest as a General Partner to a Partnership Interest as a
limited partner, which limited partner shall have and be subject to all of
the rights, obligations, restrictions, and attributes of a limited partner,
all as provided in this Agreement but shall retain all of those specific
rights and attributes provided Taub-Co as a Non-Managing Partner under this
Agreement. In the event of a conversion of all or a portion of Taub-Co's
Partnership Interest pursuant to this Section 8.5(a), the Managing General
Partner may, without the approval, consent or act of any Partner, amend this
Agreement, the Certificate of Limited Partnership (if required by the
Partnership Law), and any other document determined by the Managing General
Partner, or reasonably requested by Taub-Co, to be necessary to reflect the
foregoing.
(b) TG and TCO shall each remain a General Partner of the Partnership. In
the event that TCO acquires all or a portion of the Partnership Interest of a
Limited Partner, such Partnership Interest shall, without any further action,
automatically convert to a general partner's Partnership Interest in the
Partnership; provided, however, that without the approval, consent or act of
any Partner, the Managing General Partner may amend this Agreement, the
Certificate of Limited Partnership (if required by the Partnership Law), and
any other document determined by the Managing General Partner to be necessary
to reflect the foregoing.
Section 8.6 No Change to TG Receivable Documents.
The approval of the Managing General Partner shall be required to amend the
TG Receivable Documents, to permit a Transfer, or a prepayment (in whole or in
part), of the TG Receivables or permit any Person to be released from liability
thereunder.
40
IX.
WITHHOLDING.
If the Partnership is required by any state or federal law or regulation to
withhold tax attributable to allocations of Profits or items of the foregoing or
distributions to a Partner or if the Managing General Partner in its discretion,
determines it to be in the best interest of the Partnership to withhold amounts
in connection with a Partner's tax liability (e.g., to file a unified state
income tax return for nonresidents of a particular state) (all such amounts
being herein referred to collectively as the "Additional Tax"), any Additional
Tax shall (i) be withheld from cash otherwise currently distributable to such
Partner, and (ii) to the extent cash is not distributable to such Partner for
the taxable period as to which such withholding is required, be treated as a
loan from the Partnership to such Partner, which loan shall bear interest at the
Partnership's cost of funds, and the portion of all cash subsequently
distributable to such Partner shall, to the extent of the unpaid principal
amount of, and the accrued interest on, such loan, be retained by the
Partnership and applied against such loan.
For the purpose of determining a Partner's Capital Account, any amount of
cash allocable to a Partner that is retained by the Partnership pursuant to this
Article IX shall be treated as if such cash had been actually distributed to
such Partner.
41
X.
DISABLING EVENT OR EVENT OF WITHDRAWAL IN RESPECT
OF A PARTNER; SUCCESSION OF INTERESTS.
Section 10.1 Disabling Event or Event of Withdrawal in Respect of a Partner.
(a) For purposes of this Article X:
(1) a "Disabling Event" means, with respect to a Partner, such Partner's
(A) in the case of a Partner that is a natural person, death, (B)
Bankruptcy, (C) in the case of a Partner who is a natural person, the entry
by a court of competent jurisdiction adjudicating him incompetent to manage
his person or his property, (D) in the case of a Partner who is acting as a
Partner by virtue of being a trustee of a trust, the termination of the
trust (but not merely the substitution of a new trustee), (E) in the case
of a Partner that is a separate partnership or limited liability company,
the dissolution and commencement of winding up of the separate partnership
or limited liability company, or (F) in the case of a Partner that is a
corporation, the filing of a certificate of dissolution, or its equivalent,
for the corporation or the revocation of its charter and the expiration of
ninety (90) Days after the date of notice to the corporation or revocation
without a reinstatement of its charter;
(2) a "Disabled Partner" or the "Disabled General Partner" or the
"Disabled Limited Partner" means a Partner (General or Limited, as the case
may be) who has suffered a Disabling Event or an Event of Withdrawal;
(3) a "Representative" means, with respect to a Disabled Partner, (A)
the personal representative(s), executor(s), or administrator(s) of the
estate of a deceased Partner, and (B) the committee or other legal
representative(s) of the estate of an insane, incompetent, or Bankrupt
Partner;
(4) a "Successor" means, with respect to a Disabled Partner, the legal
representative(s) or successor(s) of a corporation, partnership or other
business organization, or trust or other entity which is dissolved (without
timely reconstitution or continuation) or terminated or whose legal
existence has ceased; and
(5) "Event of Withdrawal" means, with respect to a Partner, such
Partner's retirement, resignation, other withdrawal from the Partnership
pursuant to the Partnership Law or any other event (which is not a
Disabling Event) that causes a Partner to cease to be a Partner under the
Partnership Law.
(b) Upon the occurrence of a Disabling Event or an Event of Withdrawal in
respect of a General Partner the Partnership shall dissolve; provided,
however, that the Partnership shall not be dissolved if the remaining General
Partners, by an affirmative, unanimous vote of such General Partners, elect
to continue the Partnership in all respects pursuant to this Agreement, and
the Partnership Interest of the Disabled General Partner shall automatically
become that of a limited partner except to the extent such Disabled General
Partner, at such time or any time thereafter, assigns its Partnership
Interest to another General Partner, subject to the provisions of Section 8.1
hereof; and such Disabled General Partner or Successor shall thereupon have
the same interest in the Partnership capital, profits, losses, and
distributions as the Disabled General Partner, but otherwise shall have and
be subject to all the rights, obligations, restrictions, and attributes of a
limited partner, all as provided in this Agreement. Upon the occurrence of a
Disabling Event or an Event of Withdrawal in respect of the last remaining
General Partner, the Partnership shall dissolve; provided, however, that the
Partnership shall not be dissolved if within ninety (90) Days after such
Disabling Event or Event of Withdrawal (the "Ninety Day Period") all Partners
agree in writing to continue the business of the Partnership and to the
appointment, effective as of the date of such Disabling Event or Event of
Withdrawal, of one (1) or more general partners of the Partnership as
successor general partner(s) ("Successor General Partner") to act as, and be
in all respects under this Agreement, a general partner. If any such election
is made, the Partnership shall continue pursuant to this Agreement for the
term provided in Section 1.5 hereof, and the Partnership
42
Interest of the Disabled General Partner in the Partnership (except to the
extent such interest is held by the Successor General Partner) shall
automatically become that of a limited partner; and such Representative or
Successor to the Disabled General Partner (subject, in the case of a
Representative or Successor, to Sections 8.1 and 8.2 hereof) shall thereupon
have the same interest in the Partnership capital, profits, losses, and
distributions as the Disabled General Partner, but otherwise (except to the
extent a Successor to the Disabled General Partner shall be the Successor
General Partner) shall have and be subject to all the rights, obligations,
restrictions, and attributes of a limited partner, all as provided in this
Agreement. In the event of the selection of a Successor General Partner, as
provided in this Section 10.1(b), (1) each of the Partners, on behalf of
itself and its permitted successors and assigns, HEREBY AGREES AND CONSENTS
to the admission of any such Successor General Partner as herein provided;
and (2) the then Partners shall execute and deliver such instruments and
documents, and shall take such actions, as shall be necessary or advisable,
in the sole and absolute discretion of the Successor General Partner to carry
out the provisions of this Article X, including, but not limited to, (x) the
execution of conformed counterparts of this Agreement, amendments to this
Agreement, and/or an amended limited partnership agreement, (y) the execution
and filing of certificates of discontinuance, assumed or fictitious name
certificates, certificates of co-partnership, and/or certificates of limited
partnership, and/or amended certificates of limited partnership, and (z) the
execution of such instruments and documents (including, but not limited to,
deeds, bills of sale, and other instruments of conveyance and/or assignments
of Partnership Interest) as shall be necessary or advisable to effect any
necessary transfer (nominal or otherwise) of the property, assets,
investments, rights, liabilities, and business of the Partnership or of a
Partnership Interest and/or to accomplish the purpose and intent of this
Article X. In the event that a Partner shall fail to execute any such
instruments or documents or fail to take any such actions, when requested to
do so by the Successor General Partner, the Successor General Partner and/or
any Person designated by the Successor General Partner, as attorney-in-fact
for each of the Partners, shall have the right and power for, on behalf of,
and in the name of each of the Partners to execute any and all such
instruments and documents and take any and all such actions.
(c) The occurrence of a Disabling Event or an Event of Withdrawal in
respect of a Limited Partner shall not, in and of itself, dissolve the
Partnership. Subject to the provisions of Section 8.1 hereof, in the event of
a Disabling Event or an Event of Withdrawal in respect of a Limited Partner,
the Disabled Limited Partner or its Representative or Successor, upon
compliance with the provisions of Section 8.2 hereof, shall remain or be
admitted as a limited partner in the Partnership and shall have all the
rights of the Disabled Limited Partner as a limited partner in the
Partnership to the extent of the Disabled Limited Partner's Partnership
Interest, subject to the terms, provisions, and conditions of this Agreement.
Section 10.2 References to "Partner" and "Partners" in the Event of Successors.
In the event that any Partner's Partnership Interest is held by one or more
successors to such Partner, references in this Article X to "Partner" and
"Partners" shall refer, as applicable and except as otherwise provided herein,
to the collective Partnership Interests of all successors to the Partnership
Interest of such Partner.
Section 10.3 Waiver of Dissolution if Transfer is in Full Compliance with
Agreement; Negation of Right to Dissolve Except as Herein Provided; No
Withdrawal.
(a) Each of the Partners hereby waives its right to terminate or cause the
dissolution and winding up of the Partnership (as such right is or may be
provided under the Partnership Law) upon the Transfer of any Partner's
Partnership Interest.
(b) No Partner shall have the right to terminate this Agreement or
dissolve the Partnership by such Partner's express will.
(c) No Partner shall have any right to retire, resign, or otherwise
withdraw from the Partnership and have the value of such Partner's
Partnership Interest ascertained and receive an amount equal to the value of
such Partnership Interest.
43
(d) In the event of an Event of Withdrawal in respect of a Partner in
breach of this Agreement but pursuant to such Partner's statutory powers
under the Partnership Law, to the extent that such powers exist in the face
of a prohibition against withdrawal in this Agreement, then the value of such
Partner's Partnership Interest shall be ascertained in accordance with the
Partnership Law, and such Partner shall receive from the Partnership in
exchange for the relinquishment of such Partner's Partnership Interest an
amount equal to the lesser of (i) the value of such Partner's Partnership
Interest as so determined less any damages incurred by the Partnership as a
result of such Partner's breach of this Agreement, and (ii) ninety percent
(90%) of the value of such Partner's Partnership Interest as so determined.
In no event shall a Partner be considered to have withdrawn from the
Partnership solely as a result of such Partner having suffered a Disabling
Event.
44
XI.
TERMINATION OF THE PARTNERSHIP,
WINDING UP, AND LIQUIDATION.
Section 11.1 Liquidation of the Assets of the Partnership and Disposition of the
Proceeds Thereof.
(a) Upon the dissolution of the Partnership, the Managing General Partner,
or in the event that the Managing General Partner has suffered a Disabling
Event or an Event of Withdrawal and there are one or more remaining General
Partners, such remaining General Partner(s), or in the event that there is no
remaining General Partner, a Person selected by those Partners holding in the
aggregate a Percentage Interest of in excess of fifty percent (50%) (the
Managing General Partner or such Person so selected is herein referred to as
the "Liquidator"), shall proceed to wind up the affairs of the Partnership,
liquidate the property and assets of the Partnership, and terminate the
Partnership, and the proceeds of such liquidation shall be applied and
distributed in the following order of priority:
(1) to creditors, to the extent otherwise permitted by law, in
satisfaction of liabilities of the Partnership (whether by payment or by
making a reasonable provision for payment) other than obligations of the
Partnership to the Partners and liabilities for distribution to Partners on
account of their respective interests in the Partnership; and then
(2) to the satisfaction of all obligations of the Partnership to
Partners other than the Guaranteed Payment; and then
(3) to TCO in an amount equal to the accrued but unpaid Guaranteed
Payment (in the priorities, if any, set forth in the applicable series);
and then
(4) to TCO in an amount equal to the Preferred Equity (in the
priorities, if any, set forth in the applicable series); and then
(5) to the Partners in accordance with and in proportion to their
positive Capital Account balances. For this purpose, the determination of
the Partners' Capital Account balances shall be made after adjustment to
reflect the allocation of all Profits, Losses, and items in the nature of
income, gain, expense, or loss under Section 5.1 hereof, and all
distributions to the Partners pursuant to Section 5.2(a), Section 5.2(b),
and Section 11.1(a)(4) hereof, in each case for all Partnership Fiscal
Years through and including the Partnership Fiscal Year of liquidation.
Subject to the provisions of clause (1) of this Section 11.1(a), all
distributions pursuant to this Section 11.1(a) shall be made by the end of
the Partnership Fiscal Year of liquidation (or if later, within ninety (90)
Days after the date of such liquidation).
(b) Subject to the requirements of Regulations Section
1.704-1(b)(2)(ii)(b)(2), a reasonable time shall be allowed for the orderly
liquidation of the property and assets of the Partnership and the payment of
the debts and liabilities of the Partnership in order to minimize the losses
normally attendant upon a liquidation.
(c) Each Partner hereby appoints the Liquidator as its true and lawful
attorney-in-fact to hold, collect, and disburse, in accordance with this
Agreement, the applicable requirements of Regulations Section 1.704-1(b), and
the terms of any receivables, any Partnership receivables existing at the
time of the termination of the Partnership and the proceeds of the collection
of such receivables, including those arising from the sale of Partnership
property and assets. Notwithstanding anything to the contrary in this
Agreement, the foregoing power of attorney shall terminate upon the
distribution of the proceeds of all such receivables in accordance with the
provisions of this Agreement.
(d) Notwithstanding anything to the contrary contained in this Agreement,
if a General Partner or any Limited Partner which, by written notice to the
Partnership, in its sole discretion, elects to be bound by this Section
11.1(d) shall have a negative balance in its Capital Account upon liquidation
of the Partnership or upon liquidation of its Partnership Interest, after
giving effect to the allocation of all Profits, Losses, gain or loss and
items of the foregoing under Section 5.1 hereof and all distributions to the
45
Partners pursuant to Section 5.2 hereof in each case for all Partnership
Fiscal Years through and including the Partnership Fiscal Year of such
liquidation, such Partner shall be obligated to make an additional capital
contribution to the Partnership by the end of the Partnership Fiscal Year of
liquidation (or, if later, within ninety (90) Days after the date of such
liquidation), in an amount sufficient to eliminate the negative balance in
its Capital Account. For purposes of this Section 11.1(d), "liquidation"
shall be as defined in Regulations Section 1.704-1(b)(2)(ii)(g).
(e) In connection with a liquidation of a Partner's interest in the
Partnership within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(g) that is not in connection with a liquidation of the
Partnership, distributions to such Partner shall be made in accordance with
the requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).
Section 11.2 Cancellation of Certificates.
After the affairs of the Partnership have been wound up, the property and
assets of the Partnership have been liquidated, and the proceeds thereof have
been applied and distributed as provided in Section 11.1(a) hereof and the
Partnership has been terminated, appropriate Persons shall, if required by law,
execute and file a certificate of dissolution or cancellation of the Certificate
of Limited Partnership and/or assumed or fictitious name certificate (or a
similar writing) to effect the cancellation, of record, of the certificate(s) of
partnership of the Partnership (or similar writing), and the Partnership
Interest Certificates.
Section 11.3 Return of Capital.
Except as otherwise provided in Section 11.1(d) hereof, anything in this
Agreement to the contrary notwithstanding, no General Partner shall be
personally liable for the return of the capital contributions or Capital Account
of any Partner, or any portion thereof, it being expressly understood that any
such return shall be made only from and to the extent of Partnership assets.
46
XII.
POWER OF ATTORNEY.
Each Partner hereby constitutes and appoints the Managing General Partner and
any Person or Persons designated or delegated by the Managing General Partner
its true and lawful attorney-in-fact with full power of substitution, and with
power and authority to act in its name and on its behalf, to make, execute and
deliver, swear to, acknowledge, file, and record:
(a) this Agreement (and copies hereof) and amendments hereto or
restatements hereof adopted pursuant to the provisions hereof (including,
without limitation, any such amendment required upon the admission of a
substitute or additional partner, the continuation of the Partnership, the
formation of a successor partnership, or the doing of any act requiring the
amendment of this Agreement under the Partnership Law or under the applicable
laws of any other jurisdiction in which the Managing General Partner deems
such action to be necessary or desirable, or by any regulatory agency) and,
upon termination of the Partnership (or its successor), a certificate or
agreement of dissolution and termination, as and if the same may be required
by applicable law, or by any regulatory agency;
(b) the Certificate of Limited Partnership (and copies thereof) and any
amendments thereto or restatements thereof adopted pursuant to the provisions
hereof (including, without limitation, any amendment required upon the
admission of a substitute or additional partner, the continuation of the
Partnership, the formation of a successor partnership, or the doing of any
act requiring the amendment of the Certificate of Limited Partnership under
applicable law or regulatory agency, or the filing of a new or restated or
amended Certificate of Limited Partnership (or amendment thereto) after the
filing of a Certificate of Discontinuance or Dissolution or Termination, a
cancellation, or the like, to evidence a new or changed constituency of, or a
termination of, the Partnership, as the Managing General Partner deems said
filing to be necessary or desirable);
(c) any certificate of fictitious or assumed name and any amendment
thereto, if required by law;
(d) any other certificates or instruments as may be required under
applicable laws or by any regulatory agency, as the Managing General Partner,
deems necessary or desirable;
(e) all such other instruments as the Managing General Partner deems
necessary or desirable and not inconsistent with this Agreement to carry out
the provisions hereof in accordance with the terms hereof, including, without
limitation, to execute and issue Partnership Interest Certificates in
accordance with Section 4.7 or Section 13.18 hereof; and
(f) any document(s) to confirm the foregoing. Such attorney-in-fact shall,
as such, have the right, power, and authority as such to amend or modify this
Agreement and all certificates and the like required when acting in such
capacity, so long as such amendment, modification, and/or filing is(are)
specifically permitted by this Agreement.
The power of attorney granted in this Article XII (and each other power of
attorney granted under or pursuant to this Agreement) is a special power of
attorney coupled with an interest, is irrevocable, and shall survive the
Transfer by a Partner of his Partnership Interest and shall survive his
insanity, disability, incapacity, incompetency, Bankruptcy, and death and may be
exercised by the attorney-in-fact by his signature on behalf of all Partners.
47
XIII.
MISCELLANEOUS.
Section 13.1 Notices.
(a) Any and all notices, approvals, directions, consents, offers,
elections, and other communications (herein sometimes referred to
collectively as the "Communications" and individually as a "Communication")
required or permitted under this Agreement shall be deemed adequately given
only if in writing.
(b) All Communications to be sent hereunder to a Partner or the Manager
shall be given or served only if addressed to such Partner at its address set
forth in the records of the Partnership or the Manager at its address as set
forth in the Master Services Agreement or applicable management,
administration, leasing, and development services contract, and if delivered
by hand (with delivery receipt required), by telecopier (confirmation of
receipt requested), or by certified mail, return receipt requested, or
Federal Express or similar expedited overnight commercial carrier or courier.
(c) All Communications shall be deemed to have been properly given or
served, if delivered by hand or mailed, on the date of receipt or date of
refusal to accept shown on the delivery receipt or return receipt, if
delivered by Federal Express or similar expedited overnight commercial
carrier or courier, on the date that is one Business Day after the date upon
which the same shall have been delivered to Federal Express or similar
expedited overnight commercial carrier, addressed to the recipient, with all
shipping charges prepaid, provided that the same is actually received (or
refused) by the recipient in the ordinary course, and if sent by telecopier,
on the date of confirmed delivery. The time to respond to any Communication
given pursuant to this Agreement shall run from the date of receipt or
confirmed delivery, as applicable.
(d) By giving to the Managing General Partner written notice thereof, the
parties hereto and their respective successors and assigns shall have the
right from time to time and at any time during the term of this Agreement to
change the Person to receive Communications and their respective addresses
effective upon receipt by the other parties of such notice and each shall
have the right to specify as its address any other address within the United
States of America.
Section 13.2 Applicable Law.
This Agreement shall be governed by and construed in accordance with, the
laws (other than the law governing choice of law) of the State of Delaware. In
the event of a conflict between any provision of this Agreement and any
non-mandatory provision of the Partnership Law, the provision of this Agreement
shall control and take precedence.
Section 13.3 Entire Agreement.
This Agreement contains the entire agreement among the parties hereto
relative to the Partnership.
Section 13.4 Word Meanings; Gender.
The words such as "herein," "hereinafter," "hereof," and "hereunder" refer to
this Agreement as a whole and not merely to a subdivision in which such words
appear unless the context otherwise requires. The singular shall include the
plural and the masculine gender shall include the feminine and neuter, and vice
versa, unless the context otherwise requires.
Section 13.5 Section Titles.
Section titles are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.
48
Section 13.6 Waiver.
No consent or waiver, express or implied, by a Partner to or of any breach or
default by any other Partner in the performance by such other Partner of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such other Partner of
the same or any other obligation of such Partner hereunder. Failure on the part
of a Partner to object to any act or failure to act of any other Partner or to
declare such other Partner in default, irrespective of how long such failure
continues, shall not constitute a waiver by such Partner of its rights
hereunder.
Section 13.7 Separability of Provisions.
Each provision of this Agreement shall be considered separable and if for any
reason any provision or provisions herein are determined to be invalid,
unenforceable, or illegal under any existing or future law, such invalidity,
unenforceability, or illegality shall not impair the operation of or affect the
other portions of this Agreement.
Section 13.8 Binding Agreement.
Subject to the restrictions on Transfers set forth herein, this Agreement
shall inure to the benefit of and be binding upon the undersigned Partners and
their respective heirs, executors, personal representatives, successors, and
assigns. Whenever, in this instrument, a reference to any party or Partner is
made, such reference shall be deemed to include a reference to the permitted
heirs, executors, personal representatives, successors, and assigns of such
party or Partner.
Section 13.9 Equitable Remedies.
Except as otherwise provided in this Agreement, the rights and remedies of
the Partners hereunder shall not be mutually exclusive, i.e., the exercise of a
right or remedy under any given provision hereof shall not preclude or impair
exercise of any other right or remedy hereunder. Each of the Partners confirms
that damages at law may not always be an adequate remedy for a breach or
threatened breach of this Agreement and agrees that, in the event of a breach or
threatened breach of any provision hereof, the respective rights and obligations
hereunder shall be enforceable by specific performance, injunction, or other
equitable remedy, but nothing herein contained is intended to, nor shall it,
limit or affect any rights at law or by statute or otherwise of any party
aggrieved as against the other for a breach or threatened breach of any
provision hereof.
Section 13.10 Partition.
No Partner nor any successor-in-interest to a Partner shall have the right
while this Agreement remains in effect to have any property of the Partnership
partitioned, or to file a complaint or institute any proceeding at law or in
equity to have such property of the Partnership partitioned, and each Partner,
on behalf of itself and its successors and assigns, hereby waives any such
right. It is the intention of the Partners that the rights of the parties hereto
and their successors-in-interest to Partnership property, as among themselves,
shall be governed by the terms of this Agreement, and that the rights of the
Partners and their successors-in-interest to Transfer any interest in the
Partnership shall be subject to the limitations and restrictions set forth in
this Agreement.
Section 13.11 Amendment.
Except as otherwise provided in Sections 1.1, 4.5(a), 8.1, 8.2, 8.4, 8.5, and
Article X hereof, a proposed amendment to this Agreement may be adopted and
effective as an amendment hereto if it receives the written concurrence of each
Appointing Person. Notwithstanding the foregoing, but except as otherwise
provided in Sections 1.1, 4.5(a), 8.1, 8.2, 8.4, 8.5, and Article X hereof, (i)
no such amendment shall change a Partner's Percentage Interest or increase a
Partner's obligation to contribute to the capital of (or require a Partner to
loan to) the Partnership or change the proviso at the end of Section 4.2 hereof,
or change the provisions hereof relating to the allocation of Profits, Losses,
or other items, or change the distribution provisions of Section 5.2(a) hereof
except for the timing of such distributions within the Partnership Fiscal Year
and within
49
thirty (30) Days thereafter and except for the timing of notices, including
notices to be given pursuant to Section 6.4 hereof, with respect to
distributions, or change the provisions of Section 8.5(a) hereof, or cause a
limited partner to become a general partner, or remove a Partner, or remove a
Partner's right to consent, approve, or vote or right to assign any such right
as herein provided, or change the ability of a Partner to assign its Partnership
Interest as provided in Article VIII hereof, without, in each such case, the
written concurrence of each Partner, if any, whose Partnership Interest will be
directly and adversely affected by such amendment, (ii) no such amendment shall
change the provisions of Section 8.1(c) hereof without the written concurrence
of those Partners holding in the aggregate a Percentage Interest equal to at
least the sum of (x) the Percentage Interest held by TCO at the time of any such
amendment plus (y) ninety-five percent (95%) of the difference between one
hundred percent (100%) and the Percentage Interest held by TCO at the time of
any such amendment, and (iii) no such amendment shall permit a combination of
Units of Partnership Interest where the fair market value of each resulting Unit
of Partnership Interest is in excess of One Hundred Thousand Dollars ($100,000)
or change the provisions of this Section 13.11 without in either case the
written concurrence of each Partner.
Section 13.12 No Third Party Rights Created Hereby.
The provisions of this Agreement are solely for the purpose of defining the
interests of the Partners, inter se; and no other person, firm, or entity (i.e.,
a party who is not a signatory hereto or a permitted successor to such signatory
hereto) shall have any right, power, title, or interest by way of subrogation or
otherwise, in and to the rights, powers, titles, and provisions of this
Agreement.
Section 13.13 Liability of Partners.
Except as otherwise provided in this Agreement, as among the Partners, any
liability or debt of the Partnership shall first be satisfied out of the assets
of the Partnership, including the proceeds of any liability insurance which the
Partnership may recover, and thereafter, in accordance with the applicable
provisions of the Partnership Law.
Section 13.14 Additional Acts and Instruments.
Each Partner hereby agrees to do such further acts and things and to execute
any and all instruments necessary or desirable and as reasonably required in the
future to carry out the full intent and purpose of this Agreement.
Section 13.15 Agreement in Counterparts.
This Agreement may be executed in two (2) or more counterparts, all of which
as so executed shall constitute one (1) Agreement, binding on all of the parties
hereto, notwithstanding that all the parties are not signatory to the original
or the same counterpart; provided, however, that no provision of this Agreement
shall become effective and binding unless and until all parties hereto have duly
executed this Agreement, at which time this Agreement shall then become
effective and binding as of the date first above written.
Section 13.16 Attorneys-In-Fact.
Any Partner may execute a document or instrument or take any action required
or permitted to be executed or taken under the terms of this Agreement by and
through an attorney-in-fact duly appointed for such purpose (or for purposes
including such purpose) under the terms of a written power of attorney
(including any power of attorney granted herein).
Section 13.17 Execution by Trustee.
Any trustee executing this Agreement shall be considered as executing this
Agreement solely in his capacity as a trustee of the trust of which he is a
trustee, and such trustee shall have no personal liability hereunder.
50
Section 13.18 Lost Partnership Interest Certificates.
In the event that any Partnership Interest Certificate shall be lost, stolen,
or destroyed, the Managing General Partner may authorize the issuance of a
substitute Partnership Interest Certificate in place of the Partnership Interest
Certificate so lost, stolen, or destroyed. In each such case, the applicant for
a substitute Partnership Interest Certificate shall furnish to the Managing
General Partner evidence to their satisfaction of the loss, theft, or
destruction of such Partnership Interest Certificate and of the ownership
thereof, and also such security or indemnity as they may reasonably require.
51
IN WITNESS WHEREOF, the undersigned Appointing Persons, in accordance with
Section 13.11 of the Amended and Restated Partnership Agreement, as amended, on
behalf of all of the Partners, have executed this Agreement as of the date first
above written.
TAUBMAN CENTERS, INC., a Michigan
corporation
By: /s/ LISA A. PAYNE
------------------------------
Lisa A. Payne
Its: Executive Vice President and
Chief Financial Officer
TG PARTNERS LIMITED PARTNERSHIP,
a Delaware limited partnership
By: TG Michigan, Inc., a Michigan
corporation, managing general
partner
By: /s/ ROBERT S. TAUBMAN
------------------------------
Robert S. Taubman
Its: President and Chief Executive
Officer
TAUB-CO MANAGEMENT, INC., a
Michigan corporation
By: /s/ ROBERT S. TAUBMAN
------------------------------
Robert S. Taubman
Its: President and Chief Executive
Officer
52