SEVENTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
SIMON PROPERTY GROUP, L.P.
THIS SEVENTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT,
dated as of August 27, 1999, is made by and among SD PROPERTY GROUP, INC., an
Ohio corporation as a non-managing general partner ("SD Property"), SPG
PROPERTIES, INC., a Maryland corporation as a non-managing general partner
("SPG Properties" and together with SD Property, the "Non-Managing General
Partners"), SIMON PROPERTY GROUP, INC., a Delaware corporation as managing
general partner (the "Managing General Partner"), and those parties who have
executed this Agreement as limited partners and whose names and addresses are
set forth on EXHIBIT A hereto as limited partners (the "Limited Partners").
WITNESSETH:
WHEREAS, the Agreement of Limited Partnership of Simon Property
Group, L.P. (the "Partnership") was last amended and restated in its entirety
by the Sixth Amended and Restated Limited Partnership Agreement, dated
September 24, 1998;
WHEREAS, the parties hereto wish to provide for the further
amendment and restatement of the Agreement of Limited Partnership of the
Partnership to make various other changes provided for below;
WHEREAS, the further amendment and restatement of the Agreement of
Limited Partnership of the Partnership requires the Consent of the Limited
Partners (as defined herein); and
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties hereto, intending legally to be bound, hereby agree that the Sixth
Amended and Restated Agreement of Limited Partnership of the Partnership, as
heretofore amended and restated, is hereby further amended and restated in
its entirety to read as follows:
ARTICLE I
DEFINITIONS; ETC.
1.1 DEFINITIONS. Except as otherwise herein expressly provided the
following terms and phrases shall have the meanings set forth below:
"ACCOUNTANTS" shall mean the firm or firms of independent certified
public accountants selected by the Managing General Partner from time to time
on behalf of the Partnership to audit the books and records of the
Partnership and to prepare and certify statements and reports in connection
therewith.
"ACT" shall mean the Revised Uniform Limited Partnership Act as
enacted in the State of Delaware, as the same may hereafter be amended from
time to time.
"ADDITIONAL UNITS" shall have the meaning set forth in Section 9.4
hereof.
"ADJUSTMENT DATE" shall have the meaning set forth in Section 4.3(b)
hereof.
"ADMINISTRATIVE EXPENSES" shall mean (i) all administrative and
operating costs and expenses incurred by the Partnership, and (ii) those
administrative costs and expenses and accounting and legal expenses incurred
by the Managing General Partner or the Non-Managing General Partners on
behalf or for the benefit of the Partnership.
"AFFECTED GAIN" shall have the meaning set forth in Section 6.1(g)
hereof.
"AFFILIATE" shall mean, with respect to any Partner (or as to any
other Person the affiliates of which are relevant for purposes of any of the
provisions of this Agreement) (i) any member of the Immediate Family of such
Partner or Person; (ii) any partner, trustee, beneficiary, member or
shareholder of such Partner or Person; (iii) any legal representative,
successor or assignee of such Partner or any Person referred to in the
preceding clauses (i) and (ii); (iv) any trustee or trust for the benefit of
such Partner or any Person referred to in the preceding clauses (i) through
(iii); or (v) any Entity which, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control with
such Partner or any Person referred to in the preceding clauses (i) through
(iv).
"AFFILIATE FINANCING" shall mean financing or refinancing obtained
from a Partner or an Affiliate of a Partner by the Partnership.
"AGREEMENT" shall mean this Sixth Amended and Limited Partnership
Agreement, as originally and as amended, modified, supplemented or restated
from time to time, as the context requires.
"BANKRUPTCY" shall mean, with respect to any Partner, (i) the
commencement by such Partner of any proceeding seeking relief under any
provision or chapter of the federal Bankruptcy Code or any other federal or
state law relating to insolvency, bankruptcy or reorganization, (ii) an
adjudication that such Partner is insolvent or bankrupt, (iii) the entry of
an order for relief under the federal Bankruptcy Code with respect to such
Partner, (iv) the filing of any petition or the commencement of any case or
proceeding against such Partner under the federal Bankruptcy Code unless such
petition and the case or proceeding initiated thereby are dismissed within
ninety (90) days from the date of such filing
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or commencement, (v) the filing of an answer by such Partner admitting the
allegations of any such petition, (vi) the appointment of a trustee, receiver
or custodian for all or substantially all of the assets of such Partner
unless such appointment is vacated or dismissed within ninety (90) days from
the date of such appointment but not less than five (5) days before the
proposed sale of any assets of such Partner, (vii) the execution by such
Partner of a general assignment for the benefit of creditors, (viii) the
convening by such Partner of a meeting of its creditors, or any class
thereof, for purposes of effecting a moratorium upon or extension or
composition of its debts, (ix) the failure of such Partner to pay its debts
as they mature, (x} the levy, attachment, execution or other seizure of
substantially all of the assets of such Partner where such seizure is not
discharged within thirty (30) days thereafter, or (xi) the admission by such
Partner in writing of its inability to pay its debts as they mature or that
it is generally not paying its debts as they become due.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 4.8(a)
hereof.
"CAPITAL CONTRIBUTION" shall mean, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any property other than
money contributed to the Partnership with respect to the Partnership Units
held by such Partner (net of liabilities secured by such property which the
Partnership assumes or takes subject to).
"CERTIFICATE" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware
Secretary of State on November 18, 1993, as it has or may hereafter be
amended from time to time in accordance with the terms of this Agreement and
the Act.
"CHARTER" shall mean the articles of incorporation of a General
Partner and all amendments, supplements and restatements thereof.
"CLOSING PRICE" on any date shall mean the last sale price per
share, regular way, of the Paired Shares or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, of
the Paired Shares in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Paired Shares are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Paired Shares are listed or admitted to trading or, if the Paired Shares are
not listed or admitted to trading on any national securities exchange, the
last quoted price, or if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by
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the National Association of Securities Dealers, Inc. Automated Quotations
System for the Paired Shares or, if such system is no longer in use, the
principal other automated quotations system that may then be in use or, if
the Paired Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Paired Shares selected from time to time by the Board
of Directors of the Managing General Partner.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provisions of succeeding law.
"COMPUTATION DATE" shall have the meaning set forth in Section 11.3
hereof.
"CONSENT OF THE DEBARTOLOS" shall mean consent of those Limited
Partners who are "DeBartolos" as defined herein. EJDC (in such capacity the
"DeBartolo Designee") is hereby granted authority by those Limited Partners
who are DeBartolos to grant or withhold consent on behalf of the DeBartolos
whenever the Consent of the DeBartolos is required hereunder. The DeBartolos
shall have the right, from time to time, by written notice to the Partnership
signed by DeBartolos who hold in the aggregate more than fifty percent (50%)
of the Partnership Units then held by the DeBartolos, to substitute a new
Person as the DeBartolo Designee for the Person who is then acting as such.
The Partnership, the Partners and all Persons dealing with the Partnership
shall be fully protected in relying on any written consent of the DeBartolos
which is executed by the Person who is then acting as the DeBartolo Designee.
In the event that at any time there is no DeBartolo Designee, the consent of
the DeBartolos shall be given by those DeBartolos who hold in the aggregate
more than fifty percent (50%) of the Partnership Units then held by the
DeBartolos.
"CONSENT OF THE LIMITED PARTNERS" shall mean the written consent of
a Majority-In-Interest of the Limited Partners, which consent shall be
obtained prior to the taking of any action for which it is required by this
Agreement and may be given or withheld by a Majority-In-Interest of the
Limited Partners, unless otherwise expressly provided herein, in their sole
and absolute discretion. Whenever the Consent of the Limited Partners is
sought by a General Partner, the request for such consent, outlining in
reasonable detail the matter or matters for which such consent is being
requested, shall be submitted to all of the Limited Partners, and each
Limited Partner shall have at least 15 days to act upon such request.
"CONSENT OF THE SIMONS" shall mean consent of those Limited Partners
who are "Simons" as defined herein. David Simon (the "Simon Designee") is
hereby granted authority by those Limited Partners who are Simons to grant or
withhold consent on behalf of the Simons whenever the Consent of the Simons
is required hereunder. The Simons shall have the right from time to time, by
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written notice to the Partnership signed by Simons who hold in the aggregate
more than fifty percent (50%) of the Partnership Units then held by the
Simons, to substitute a new Person as the Simon Designee for the Person who
is then acting as such. The Partnership, the Partners and all Persons dealing
with the Partnership shall be fully protected in relying on any written
consent of the Simons which is executed by the Person who is then acting as
the Simon Designee. In the event that at any time there is no Simon Designee,
the Consent of the Simons shall be given by those Simons who hold in the
aggregate more than fifty percent (50%) of the Partnership Units then held by
the Simons.
"CONTRIBUTED FUNDS" shall have the meaning set forth in Section
4.3(b) hereof.
"CONTRIBUTION CURRENT PER SHARE MARKET PRICE" on any date shall mean
the average of the Closing Prices for a period of not less than five
consecutive Trading Days nor more than thirty consecutive Trading Days ending
on such date, such period determined in the sole and absolute discretion of
the Managing General Partner.
"CONTRIBUTION DATE" shall have the meaning set forth in Section 9.4
hereof.
"CONTRIBUTION DEEMED PARTNERSHIP UNIT VALUE" as of any date shall
mean (i) the Contribution Current Per Share Market Price as of the Trading
Day immediately preceding such date, minus (ii) the Deemed Partnership Unit
Value (as defined in the SRC Partnership agreement); PROVIDED, HOWEVER, that
Contribution Deemed Partnership Unit Value shall be adjusted as described in
Section 11.7(d) hereof in the event of any stock dividend, stock split, stock
distribution or similar transaction.
"CONTROL" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership or otherwise to select, or have the power to remove
and then select, a majority of those Persons exercising governing authority
over an Entity. In the case of a limited partnership, the sole general
partner, all of the general partners to the extent each has equal management
control and authority, or the managing general partner or managing general
partners thereof shall be deemed to have control of such partnership and, in
the case of a trust, any trustee thereof or any Person having the right to
select or remove any such trustee shall be deemed to have control of such
trust.
"COVERED SALE" shall have the meaning set forth in Section 6.2(d)
hereof.
"CURRENT PER SHARE MARKET PRICE" on any date shall mean the average
of the Closing Prices for the five consecutive Trading Days ending on such
date.
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"DEBARTOLOS" shall mean (i) the Estate of Edward J. DeBartolo, (ii)
Edward J. DeBartolo, Jr., Marie Denise DeBartolo York, members of the
Immediate Family of either of the foregoing, any other members of the
Immediate Family of Edward J. DeBartolo, any other lineal descendants of any
of the foregoing and any trusts established for the benefit of any of the
foregoing, and (iii) EJDC and any other Entity Controlled by any one or more
of the Persons listed or specified in clauses (i) and (ii) above.
"DEEMED PARTNERSHIP UNIT VALUE" as of any date shall mean (i) the
Current Per Share Market Price as of the Trading Day immediately preceding
such date, minus (ii) the Deemed Partnership Unit Value (as defined in the
SRC Partnership agreement); PROVIDED, HOWEVER, that Deemed Partnership Unit
Value shall be adjusted as described in Section 11.7(d) hereof in the event
of any stock dividend, stock split, stock distribution or similar transaction.
"DEPRECIATION" shall mean for each Partnership Fiscal Year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable under the Code with respect to a Partnership
asset for such year or other period, except that if the Gross Asset Value of
a Partnership asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be
an amount which bears the same ratio to such beginning Gross Asset Value as
the federal income tax depreciation, amortization or other cost recovery
deduction for such year or other period bears to such beginning adjusted tax
basis; PROVIDED, HOWEVER, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General Partner.
"DEVELOPMENT LAND" shall mean any vacant land suitable for
development as a Project.
"DIRECTORS" shall mean the Board of Directors of the Managing
General Partner.
"EFFECTIVE TIME" shall have the meaning set forth in the Merger
Agreement.
"EJDC" shall mean The Edward J. DeBartolo Corporation, an Ohio
corporation.
"ENTITY" shall mean any general partnership, limited partnership,
limited liability company, limited liability partnership, corporation, joint
venture, trust, business trust, cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time (or any corresponding provisions of
succeeding laws).
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"EXERCISE NOTICE" shall have the meaning set forth in Section 11.1
hereof.
"GAAP" shall mean generally accepted accounting principles
consistently applied.
"GENERAL PARTNER" shall mean the Managing General Partner, the
Non-Managing General Partners and their respective duly admitted successors
and assigns and any other Person who is a general partner of the Partnership
at the time of reference thereto.
"GP PREFERRED CONTRIBUTED FUNDS" shall have the meaning set forth in
Section 4.3(c) hereof.
"GP PREFERRED DISTRIBUTION REQUIREMENT" shall have the meaning set
forth in Section 4.3(c) hereof.
"GP PREFERRED REDEMPTION AMOUNT" shall mean, with respect to any
class or series of GP Preferred Units, the sum of (i) the amount of any
accumulated Preferred Distribution Shortfall with respect to such class or
series of GP Preferred Units, (ii) the Preferred Distribution Requirement
with respect to such class or series of GP Preferred Units to the date of
redemption and (iii) the GP Preferred Redemption Price indicated in the GP
Preferred Unit Designation with respect to such class or series of GP
Preferred Units.
"GP PREFERRED REDEMPTION PRICE" shall have the meaning set forth in
Section 4.3(c) hereof.
"GP PREFERRED UNIT DESIGNATION" shall have the meaning set forth in
Section 4.3(c) hereof.
"GP PREFERRED UNITS" means the preferred interests in the
Partnership issued to a General Partner pursuant to Section 4.3(c) hereof and
having the economic rights, including dividend or distribution, redemption
and conversion rights and sinking fund provisions, set forth in a GP
Preferred Unit Designation.
"GROSS ASSET VALUE" shall have the meaning set forth in Section
4.8(b) hereof.
"GROSS INCOME" shall mean the income of the Partnership determined
pursuant to Section 61 of the Code before deduction of items of expense or
deduction.
"IMMEDIATE FAMILY" shall mean, with respect to any Person, such
Person's spouse, parents, parents-in-law, descendants by blood or adoption,
nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-law and
children-in-law (in each case by whole or half-blood).
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"INCURRENCE" shall have the meaning set forth in Section 10.5(a)
hereof.
"INDEPENDENT DIRECTORS" shall mean members of the Board of Directors
of the Managing General Partner, none of whom is either employed by the
Managing General Partner or a member (or an Affiliate of a member) of the
Simons.
"INSTITUTIONAL INVESTORS" shall have the meaning set forth in Rule
501(a)(1)-(3), (7) and (8) of Regulation D promulgated under the Securities
Act.
"INSTITUTIONAL LENDER" shall mean a commercial bank or trust
company, a savings and loan association or an insurance company.
"JCP" shall mean JCP Realty, Inc., a Delaware corporation, or
Brandywine Realty, Inc., a Delaware corporation, or any of its or their
Affiliates that becomes a Limited Partner hereunder and that is an
"accredited investor" as defined in Regulation D under the Securities Act, as
amended.
"JCP LIMITED PARTNER" shall mean JCP, in its capacity as a Limited
Partner or Partners hereunder.
"JCP PROPERTY LIABILITIES" means any liabilities encumbering the
assets of Treasure Coast-JCP Associates, Ltd., Melbourne-JCP Associates,
Ltd., Boynton-JCP Associates, Ltd., Chesapeake-JCP Associates, Ltd., Mall of
the Mainland Associates, L.P., Port Charlotte-JCP Associates and Northfield
Center Limited Partnership, and any liability of the Partnership or any
Subsidiary Partnership with respect to which JCP has incurred the "economic
risk of loss" within the meaning of Treasury Regulation Section 1.752-2.
"LIEN" shall mean any liens, security interests, mortgages, deeds of
trust, charges, claims, encumbrances, restrictions, pledges, options, rights
of first offer or first refusal and any other rights or interests of others
of any kind or nature, actual or contingent, or other similar encumbrances of
any nature whatsoever.
"LIMITED PARTNER LIABILITY" shall mean, with respect to each Limited
Partner, each liability (or portion thereof) included in the basis of such
Limited Partner (other than as an "excess nonrecourse liability" within the
meaning of Regulations Section l.752-3(a)(3)) for federal income tax purposes.
"LIMITED PARTNERS" shall mean those Persons whose names are set
forth on EXHIBIT A hereto as Limited Partners, their permitted successors or
assigns as limited partners hereof, and/or any Person who, at the time of
reference thereto, is a limited partner of the Partnership.
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"LIMITED PARTNERSHIP UNIT" shall mean each Partnership Unit (as
defined below) held by a Limited Partner. Each Limited Partnership Unit shall
be paired with a SRC Limited Partnership Unit.
"LIQUIDATION AGENT" shall mean such Person as is selected as the
Liquidation Agent hereunder by the Managing General Partner, which Person may
be the Managing General Partner or an Affiliate of the Managing General
Partner, provided such Liquidation Agent agrees in writing to be bound by the
terms of this Agreement. The Liquidation Agent shall be empowered to give and
receive notices, reports and payments in connection with the dissolution,
liquidation and/or winding-up of the Partnership and shall hold and exercise
such other rights and powers as are necessary or required to permit all
parties to deal with the Liquidation Agent in connection with the
dissolution, liquidation and/or winding-up of the Partnership.
"LIQUIDATION TRANSACTION" shall mean any sale of assets of the
Partnership in contemplation of, or in connection with, the liquidation of
the Partnership.
"LOSSES" shall have the meaning set forth in Section 6.1(a) hereof.
"LP PREFERRED DISTRIBUTION REQUIREMENT" means the dividends or
distributions required to be made at the time such dividend or distribution
is required to be made on a class or series of LP Preferred Units as set
forth in the related LP Preferred Unit Designation.
"LP PREFERRED UNIT DESIGNATION" shall have the meaning set forth in
Section 9.4(b) hereof.
"LP PREFERRED UNITS" means the preferred interests in the
Partnership issued to a Limited Partner pursuant to Section 9.4(a) hereof and
having the economic rights, including dividend or distribution, redemption
and conversion rights and sinking fund provisions, set forth in the related
LP Preferred Unit Designation.
"MAJOR DECISIONS" shall have the meaning set forth in Section 7.3(b)
hereof.
"MAJORITY-IN-INTEREST OF THE LIMITED PARTNERS" shall mean Limited
Partner(s) who hold in the aggregate more than fifty percent (50%) of the
Partnership Units then held by all the Limited Partners, as a class
(excluding any Partnership Units held by the Non-Managing General Partners or
by the Managing General Partner, any Person Controlled by any of such General
Partners or any Person holding as nominee for either of such General
Partners).
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Managing General Partner advances Required Funds to the Partnership pursuant
to this Section 4.3(b) as Contributed Funds, then the Partnership shall
assume and pay (or reflect on its books as additional Contributed Funds) the
expenses (including any applicable underwriting discounts) incurred by the
Managing General Partner or a Non-Managing General Partner (or such
Affiliate) in connection with raising such Required Funds through a public
offering of its securities or otherwise. If the Managing General Partner
advances Required Funds to the Partnership as Contributed Funds pursuant to
this Section 4.3(b) from any offering or sale of Shares (including, without
limitation, any issuance of Shares pursuant to the exercise of options,
warrants, convertible securities or similar rights to acquire Shares), the
Partnership shall issue additional Partnership Units to the Managing General
Partner to reflect its contribution of the Contributed Funds equal in number
to such number of Shares issued in such offering or sale.
(c) In the event any General Partner contributes to the
Partnership any Required Funds obtained from the sale of Preferred Shares
("GP Preferred Contributed Funds"), then the Partnership shall assume and pay
the expenses (including any applicable underwriter discounts) incurred by the
Managing General Partner in connection with raising such Required Funds. In
addition, the Managing General Partner shall be issued GP Preferred Units of
a designated class or series (a) to reflect its contribution of GP Preferred
Contributed Funds and (b) to reflect its issuance of a Related Issue upon
conversion of or in exchange for any LP Preferred Units. Each class or series
of GP Preferred Units so issued shall be designated by the Managing General
Partner to identify such class or series with the class or series of
Preferred Shares which constitutes the Related Issue. Each class or series of
GP Preferred Units shall be described in a written document (the "GP
Preferred Unit Designation") attached as EXHIBIT B-1 that shall set forth, in
sufficient detail, the economic rights, including dividend, distribution,
redemption and conversion rights and sinking fund provisions, of the class or
series of GP Preferred Units and the Related Issue. The number of GP
Preferred Units of a class or series shall be equal to the number of shares
of the Related Issue sold. The GP Preferred Unit Designation shall provide
for such terms for the class or series of GP Preferred Units that shall
entitle the Managing General Partner to substantially the same economic
rights as the holders of the Related Issue. Specifically, the Managing
General Partner shall receive distributions on the class or series of GP
Preferred Units pursuant to Section 6.2 equal to the aggregate dividends
payable on the Related Issue at the times such dividends are paid (the "GP
Preferred Distribution Requirement"). The Partnership shall redeem the class
or series of GP Preferred Units for a redemption price per GP Preferred Unit
equal to the redemption price per share of the Related Issue, exclusive of
any accrued unpaid dividends (the "GP Preferred Redemption Price") upon the
redemption of any shares of the Related Issue. Each class or series of GP
Preferred Units shall also be converted into
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additional Partnership Units at the time and on such economic terms and
conditions as the Related Issue is converted into Shares. Upon the issuance
of any class or series of GP Preferred Units pursuant to this Section 4.3(c),
the Managing General Partner shall provide the Limited Partners with a copy
of the GP Preferred Unit Designation relating to such class or series. The
Managing General Partner shall have the right, in lieu of contributing to the
Partnership proceeds from the sale of Preferred Shares as GP Preferred
Contributed Funds, to lend such proceeds to the Partnership. Any such loan
shall be on the same terms and conditions as the Related Issue except that
dividends payable on the Related Issue shall be payable by the Partnership to
the Managing General Partner as interest, any mandatory redemptions shall
take the form of principal payments and no GP Preferred Units shall be issued
to the Managing General Partner. If any such loan is made, the Partnership
shall promptly reimburse the Managing General Partner for all expenses
(including any applicable underwriter discounts) incurred by the Managing
General Partner in connection with raising the Required Funds. Any such loan
made by the Managing General Partner to the Partnership may at any time be
contributed to the Partnership as GP Preferred Contributed Funds in exchange
for GP Preferred Units as above provided; and if the Related Issue is by its
terms convertible into Shares, such loan shall be so contributed to the
Partnership prior to the effectuation of such conversion.
4.4 REDEMPTION; CHANGE IN NUMBER OF SHARES OUTSTANDING.
(a) If the Managing General Partner shall redeem any of its
outstanding Shares, the Partnership shall concurrently therewith redeem an
equal number of Units held by the Managing General Partner for the same price
(as determined in good faith by the Board of Directors of the Managing
General Partner) as paid by the Managing General Partner for the redemption
of such Shares.
(b) In the event of any change in the outstanding number of
Shares by reason of any share dividend, split, reverse split,
recapitalization, merger, consolidation or combination, the number of Units
held by each Partner (or assignee) shall be proportionately adjusted such
that, to the extent possible, one Unit remains the equivalent of one Share
without dilution.
4.5 STOCK OPTION PLAN; DIVIDEND REINVESTMENT PLAN. (a) If at any
time a stock option granted by the Partnership in connection with a stock
option plan is exercised in accordance with its terms, and the Partnership
chooses not to acquire any or all of the stock required to satisfy such
option through open market purchases, the Managing General Partner shall, as
soon as practicable after such exercise, sell to the Partnership for use in
satisfying such stock option, at a purchase price equal to the Current Per
Share Market Price on the date such stock option is exercised, the number of
newly issued Shares for which such option is exercised (or, if such stock
option is to be satisfied in part through open market purchases, the
remaining number of
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newly issued Shares) and the Managing General Partner shall contribute to the
capital of the Partnership, in exchange for additional Partnership Units, an
amount equal to the price paid to the Managing General Partner by the
Partnership in connection with the Partnership's purchase of newly issued
Shares upon exercise of such stock option. The number of Partnership Units to
be so issued shall be determined by dividing the amount of such capital
contribution by the Deemed Partnership Unit Value, computed as of the Trading
Day immediately preceding the date of such capital contribution. The Managing
General Partner shall promptly give each Limited Partner written notice of
the number of Partnership Units so issued. The Partnership shall retain the
exercise or purchase price paid by the holder of such option for the Shares
such holder is entitled to receive upon such exercise.
(b) All amounts received by the Managing General Partner in respect
of its dividend reinvestment plan, if any, either (a) shall be utilized by
the Managing General Partner to effect open market purchases of Paired
Shares, or (b) if the Managing General Partner elects instead to issue new
shares with respect to such amounts, shall be contributed by the Managing
General Partner to the Partnership in exchange for additional Partnership
Units. The number of Partnership Units so issued shall be determined by
dividing the amount of funds so contributed by the Deemed Partnership Unit
Value, computed as of the Trading Day immediately preceding the date such
funds are contributed. The Managing General Partner shall promptly give each
Limited Partner written notice of the number of Partnership Units so issued.
4.6 NO THIRD PARTY BENEFICIARY. No creditor or other Third Party
having dealings with the Partnership shall have the right to enforce the
right or obligation of any Partner to make Capital Contributions or to pursue
any other right or remedy hereunder or at law or in equity, it being
understood and agreed that the provisions of this Agreement shall be solely
for the benefit of, and may be enforced solely by, the parties hereto and
their respective successors and assigns. None of the rights or obligations of
the Partners herein set forth to make Capital Contributions to the
Partnership shall be deemed an asset of the Partnership for any purpose by
any creditor or other third party, nor may such rights or obligations be
sold, transferred or assigned by the Partnership or pledged or encumbered by
the Partnership to secure any debt or other obligation of the Partnership or
of any of the Partners.
4.7 NO INTEREST; NO RETURN. No Partner shall be entitled to interest
on its Capital Contribution or on such Partner's Capital Account. Except as
provided herein or by law, no Partner shall have any right to withdraw any
part of its Capital Account or to demand or receive the return of its Capital
Contribution from the Partnership.
4.8 CAPITAL ACCOUNTS.
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(a) The Partnership shall establish and maintain a separate
capital account ("Capital Account") for each Partner, including a Partner who
shall pursuant to the provisions hereof acquire a Partnership Interest, which
Capital Account shall be:
(1) credited with the amount of cash contributed
by such Partner to the capital of the Partnership; the initial Gross Asset
Value (net of liabilities secured by such contributed property that the
Partnership assumes or takes subject to) of any other property contributed by
such Partner to the capital of the Partnership; such Partner's distributive
share of Profits; and any other items in the nature of income or gain that
are allocated to such Partner pursuant to Section 6.1 hereof, but excluding
tax items described in Regulations Section 1.704-1(b)(4)(i); and
(2) debited with the amount of cash distributed to
such Partner pursuant to the provisions of this Agreement; the Gross Asset
Value (net of liabilities secured by such distributed property that such
Partner assumes or takes subject to) of any Partnership property distributed
to such Partner pursuant to any provision of this Agreement; the amount of
unsecured liabilities of such Partner assumed by the Partnership; such
Partner's distributive share of Losses; in the case of the General Partners,
payments of REIT Expenses by the Partnership; and any other items in the
nature of expenses or losses that are allocated to such Partner pursuant to
Section 6.1 hereof, but excluding tax items described in Regulations Section
1.704-1(b)(4)(i). In the event that any or all of a Partner's Partnership
Units or Preferred Units are transferred within the meaning of Regulations
Section 1.704-l(b)(2)(iv)(l), the transferee shall succeed to the Capital
Account of the transferor to the extent that it relates to the Partnership
Units or Preferred Units so transferred.
In the event that the Gross Asset Values of Partnership
assets are adjusted pursuant to Section 4.8(b)(ii) hereof, the Capital
Accounts of the Partners shall be adjusted to reflect the aggregate net
adjustments as if the Partnership sold all of its properties for their fair
market values and recognized gain or loss for federal income tax purposes
equal to the amount of such aggregate net adjustment.
A Limited Partner shall be liable unconditionally to the
Partnership for all or a portion of any deficit in its Capital Account if it
so elects to be liable for such deficit or portion thereof. Such election may
be for either a limited or unlimited amount and may be amended or withdrawn
at any time. The election, and any amendment thereof, shall be made by
written notice to the Managing General Partner (and the Managing General
Partner shall promptly upon receipt deliver copies thereof to the other
Partners) stating that the Limited Partner elects to be liable, and
specifying the limitations, if any, on the maximum amount or duration of such
liability. Said election, or amendment thereof,
23
shall be effective only from the date 25 days after written notice thereof is
received by the Managing General Partner, and shall terminate upon the date,
if any, specified therein as a termination date or upon delivery to the
Managing General Partner of a subsequent written notice terminating such
election. A termination of any such election, or an amendment reducing the
Limited Partner's maximum liability thereunder or the duration thereof, shall
not be effective to avoid responsibility for any loss incurred prior to such
termination or the effective date of such amendment. Except as provided in
this Section 4.8 or as required by law, no Limited Partner shall be liable
for any deficit in its Capital Account or be obligated to return any
distributions of any kind received from the Partnership.
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to
comply with Section 1.704-1(b) of the Regulations, and shall be interpreted
and applied as provided in the Regulations.
(b) The term "Gross Asset Value" or "Gross Asset Values"
means, with respect to any asset of the Partnership, such asset's adjusted
basis for federal income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross fair market
value of such asset as reasonably determined by the Managing General Partner;
(ii) the Gross Asset Values of all Partnership
assets shall be adjusted to equal their respective gross fair market values,
as reasonably determined by the General Partner, immediately prior to the
following events:
(A) a Capital Contribution (other than a
DE MINIMIS Capital Contribution, within the meaning of Secion
l.704-l(b)(2)(iv)(f)(5)(i) of the Regulations) to the Partnership by a new or
existing Partner as consideration for Partnership Units;
(B) the distribution by the Partnership
to a Partner of more than a DE MINIMIS amount (within the meaning of Section
1.704-1(b)(2)(iv)(f)(5)(ii) of the Regulations) of Partnership property as
consideration for the redemption of Partnership Units;
(C) the liquidation of the Partnership
within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; and
(D) in the sole discretion of the
Managing General Partner, any transaction involving LP Preferred Units; and
(iii) the Gross Asset Values of Partnership assets
distributed to any Partner shall be the gross fair market values
24
of such assets as reasonably determined by the Managing General Partner as of
the date of distribution. At all times, Gross Asset Values shall be adjusted
by any Depreciation taken into account with respect to the Partnership's
assets for purposes of computing Profits and Losses. Any adjustment to the
Gross Asset Values of Partnership property shall require an adjustment to the
Partners' Capital Accounts as described in Section 4.8(a) above.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENT
5.1 REPRESENTATIONS AND WARRANTIES BY MANAGING GENERAL PARTNER. The
Managing General Partner represents and warrants to the Limited Partners, the
other General Partners and to the Partnership that (i) it is a corporation
duly formed, validly existing and in good standing under the laws of its
state of incorporation, with full right, corporate power and authority to
fulfill all of its obligations hereunder or as contemplated herein; (ii) all
transactions contemplated by this Agreement to be performed by it have been
duly authorized by all necessary action; (iii) this Agreement has been duly
executed and delivered by and is the legal, valid and binding obligation of
the Managing General Partner and is enforceable against it in accordance with
its terms, except as such enforcement may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other laws of general application affecting the rights and remedies of
creditors and (b) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law); (iv) no
authorization, approval, consent or order of any court or governmental
authority or agency or any other Entity is required in connection with the
execution and delivery of this Agreement by the Managing General Partner,
except as may have been received prior to the date of this Agreement; (v) the
execution and delivery of this Agreement by the Managing General Partner and
the consummation of the transactions contemplated hereby will not conflict
with or constitute a breach or violation of, or a default under, any
contract, indenture, mortgage, loan agreement, note, lease, joint venture or
partnership agreement or other instrument or agreement to which either the
Managing General Partner or the Partnership is a party; and (vi) the
Partnership Units, upon payment of the consideration therefore pursuant to
this Agreement, will be validly issued, fully paid and, except as otherwise
provided in accordance with applicable law, non-assessable.
5.2 REPRESENTATIONS AND WARRANTIES BY NON-MANAGING GENERAL PARTNERS.
Each of the Non-Managing General Partners represents and warrants to the
Limited Partners, the other General Partners and to the Partnership that (i)
it is a corporation duly formed, validly existing and in good standing under
the laws of its state of incorporation, with full right, corporate power and
authority to fulfill all of its obligations hereunder or as contemplated
herein; (ii) all transactions contemplated by this Agreement to be performed
by it have been duly authorized by all necessary action;
25
(iii) this Agreement has been duly executed and delivered by and is the
legal, valid and binding obligation of the Non-Managing General Partner and
is enforceable against it in accordance with its terms, except as such
enforcement may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or other laws of general
application affecting the rights and remedies of creditors and (b) general
principles of equity (regardless of whether such enforcement is considered in
a proceeding in equity or at law); (iv) no authorization, approval, consent
or order of any court or governmental authority or agency or any other Entity
is required in connection with the execution and delivery of this Agreement
by the Non-Managing General Partner, except as may have been received prior
to the date of this Agreement; and (v) the execution and delivery of this
Agreement by the Non-Managing General Partner and the consummation of the
transactions contemplated hereby will not conflict with or constitute a
breach or violation of, or default under, any contract, indenture, mortgage,
loan agreement, note, lease, joint venture or partnership agreement or other
instrument or agreement to which the Non-Managing General Partner is a party.
5.3 REPRESENTATIONS AND WARRANTIES BY THE LIMITED PARTNERS. Each
Limited Partner, for itself only, represents and warrants to the General
Partners, the other Limited Partners and the Partnership that (i) all
transactions contemplated by this Agreement to be performed by such Limited
Partner have been duly authorized by all necessary action; and (ii) this
Agreement is binding upon, and enforceable against, such Limited Partner in
accordance with its terms, except as such enforcement may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or other laws of general application affecting the rights and
remedies of creditors and (b) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
5.4 ACKNOWLEDGMENT BY EACH PARTNER. Each Partner hereby acknowledges
that no representations as to potential profit, cash flows or yield, if any,
in respect of the Partnership or any one or more or all of the Projects
owned, directly or indirectly, by the Partnership have been made to it by any
other Partner or its Affiliates or any employee or representative of any
other Partner or its Affiliates, and that projections and any other
information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted to
such Partner shall not constitute a representation or warranty, express or
implied.
ARTICLE VI
ALLOCATIONS, DISTRIBUTIONS AND OTHER TAX AND ACCOUNTING MATTERS
6.1 ALLOCATIONS.
(a) For the purpose of this Agreement, the terms "Profits"
and "Losses" mean, respectively, for each Partnership Fiscal Year or other
period, the Partnership's taxable income or
26
loss for such Partnership Fiscal Year or other period, determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(l) of the Code shall be included in taxable income or loss),
adjusted as follows:
(1) any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in computing Profits
or Losses pursuant to this Section 6.1(a) shall be added to such taxable
income or loss;
(2) in lieu of the depreciation, amortization and other
cost recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such Partnership
Fiscal Year or other period;
(3) any items that are specially allocated pursuant to
Section 6.1(d) hereof shall not be taken into account in computing Profits or
Losses; and
(4) any expenditures of the Partnership described in
Section 705(a)(2)(B) of the Code (or treated as such under Regulation Section
1.704-l(b)(2)(iv)(i)) and not otherwise taken into account in computing
Profits or Losses pursuant to this Section 6.1(a) shall be deducted in
calculating such taxable income or loss.
(b) Except as otherwise provided in Section 6.1(d) hereof
and this Section 6.1(b), the Profits and Losses of the Partnership (and each
item thereof) for each Partnership Fiscal Year shall be allocated among the
Partners in the following order of priority, unless otherwise specified in a
Preferred Unit Designation:
(1) First, Profits shall be allocated to the holders of
Preferred Units in an amount equal to the excess of (A) the amount of Net
Operating Cash Flow distributed to each such holder pursuant to Sections
6.2(b) and Section 6.2(c)(but only to the extent of the Preferred
Distribution Requirement and Preferred Distribution Shortfalls) for the
current and all prior Partnership Fiscal Years over (B) the amount of Profits
previously allocated to each such holder pursuant to this subparagraph (1).
(2) Second, for any Partnership Fiscal Year ending on or
after a date on which Preferred Units are redeemed, Profits (or Losses) shall
be allocated to the holders of such Preferred Units in an amount equal to the
excess (or deficit) of the sum of the applicable Preferred Redemption Amounts
for the Preferred Units that have been or are being redeemed during such
Partnership Fiscal Year over the Preferred Unit Issue Price of such Preferred
Units. In addition, in the event that the Partnership is liquidated pursuant
to Article VIII, the allocation described above shall be made to the holders
of Preferred Units with respect to all Preferred Units then outstanding.
27
(3) Third, any remaining Profits and Losses shall be
allocated among the Partners in accordance with their proportionate ownership
of Partnership Units except as otherwise required by the Regulations.
(4) Notwithstanding subparagraphs (1), (2) and (3), Profits
and Losses from a Liquidation Transaction shall be allocated as follows
unless otherwise specified in a Preferred Unit Designation:
First, Profits (or Losses) shall be
allocated to the holders of Preferred Units in an amount equal to the excess
(or deficit) of the sum of the applicable Preferred Redemption Amounts of the
Preferred Units which have been or will be redeemed with the proceeds of the
Liquidation Transaction over the Preferred Unit Issue Price of such Preferred
Units;
Second, Profits (or Losses) shall be
allocated among the Partners so that the Capital Accounts of the Partners
(excluding from the Capital Account of any Partner the amount attributable to
its Preferred Units) are proportional to the number of Partnership Units held
by each Partner; and
Third, any remaining Profits and Losses
shall be allocated among the Partners in accordance with their proportionate
ownership of Partnership Units.
(c) For the purpose of Section 6.1(b) hereof, gain or loss
resulting from any disposition of Partnership property shall be computed by
reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property for federal
income tax purposes differs from its Gross Asset Value.
(d) Notwithstanding the foregoing provisions of this
Section 6.1, the following provisions shall apply:
(1) A Partner shall not receive an allocation of any
Partnership deduction that would result in total loss allocations
attributable to "Nonrecourse Liabilities" (as defined in Regulations Section
1.704-2(b)(3)) in excess of such Partner's share of Minimum Gain (as
determined under Regulations Section 1.704-2(g)). The term "Minimum Gain"
means an amount determined in accordance with Regulations Section 1.704-2(d)
by computing, with respect to each Nonrecourse Liability of the Partnership,
the amount of gain, if any, that the Partnership would realize if it disposed
of the property subject to such liability for no consideration other than
full satisfaction thereof, and by then aggregating the amounts so computed.
If the Partnership makes a distribution allocable to the proceeds of a
Nonrecourse Liability, in accordance with Regulation Section 1.704-2(h), the
distribution will be treated as allocable to an increase in Partnership
Minimum Gain to the extent the increase results from encumbering Partnership
property with aggregate Nonrecourse Liabilities that
28
"MANAGING GENERAL PARTNER" shall mean Simon Property Group, Inc., a
Delaware corporation.
"MERGER AGREEMENT" shall have the meaning set forth in the Recitals
hereto.
"MINIMUM GAIN" shall have the meaning set forth in Section 6.1(d)(l)
hereof.
"MINIMUM GAIN CHARGEBACK" shall have the meaning set forth in Section
6.1(d)(l) hereof.
"NET FINANCING PROCEEDS" shall mean the cash proceeds received by
the Partnership in connection with any borrowing by or on behalf of the
Partnership (whether or not secured), or distributed to the Partnership in
respect of any such borrowing by any Subsidiary Entity, after deduction of
all costs and expenses incurred by the Partnership in connection with such
borrowing, and after deduction of that portion of such proceeds used to repay
any other indebtedness of the Partnership, or any interest or premium thereon.
"NET OPERATING CASH FLOW" shall mean, with respect to any fiscal
period of the Partnership, the aggregate amount of all cash received by the
Partnership from any source for such fiscal period (including Net Sale
Proceeds and Net Financing Proceeds but excluding Contributed Funds), less
the aggregate amount of all expenses or other amounts paid with respect to
such period and such additional cash reserves as of the last day of such
period as the Managing General Partner deems necessary for any capital or
operating expenditure permitted hereunder.
"NET SALE PROCEEDS" shall mean the cash proceeds received by the
Partnership in connection with a sale or other disposition of any asset by or
on behalf of the Partnership or a sale or other disposition of any asset by
or on behalf of any Subsidiary Entity, after deduction of any costs or
expenses incurred by the Partnership, or payable specifically out of the
proceeds of such sale or other disposition (including, without limitation,
any repayment of any indebtedness required to be repaid as a result of such
sale or other disposition or which the Managing General Partner elects to
repay out of the proceeds of such sale or other disposition, together with
accrued interest and premium, if any, thereon and any sales commissions or
other costs and expenses due and payable to any Person), in connection with
such sale or other disposition.
"NON-MANAGING GENERAL PARTNERS" shall mean, collectively, SD
Property Group, Inc. and SPG Properties, Inc.
"NONRECOURSE LIABILITIES" shall have the meaning set forth in Section
6.l(d)(l) hereof.
10
"OFFERED UNITS" shall have the meaning set forth in Section 11.1
hereof.
"OWNERSHIP LIMIT" shall have the meaning set forth in Article Ninth
of the Charter of the Managing General Partner.
"PAIRED SHARES" shall mean one Share and a PRO RATA beneficial
interest in the trust which owns all of the outstanding shares of the Common
Stock, par value $0.0001 per share, of SPG Realty that are subject to a trust
agreement among certain stockholders of the Managing General Partner, a
trustee and SPG Realty, pursuant to which holders of Shares are beneficiaries
of such trust agreement.
"PARTNER NONRECOURSE DEBT" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" shall have the meaning set
forth in Section 6.1(d)(2) hereof.
"PARTNER NONRECOURSE DEDUCTION" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"PARTNERS" shall mean the Managing General Partner, the Non-Managing
General Partners and the Limited Partners, their duly admitted successors or
assigns or any Person who is a partner of the Partnership at the time of
reference thereto.
"PARTNERSHIP" shall mean Simon Property Group, L.P., a Delaware
limited partnership, as such limited partnership may from time to time be
constituted.
"PARTNERSHIP FISCAL YEAR" shall mean the calendar year.
"PARTNERSHIP INTEREST" shall mean the interest of a Partner in the
Partnership.
"PARTNERSHIP MINIMUM GAIN" shall have the meaning set forth in Section
1.704-2(b)(2) of the Regulations.
"PARTNERSHIP RECORD DATE" shall mean the record date established by
the Managing General Partner for a distribution of Net Operating Cash Flow
pursuant to Section 6.2 hereof, which record date shall be the same as the
record date established by the Managing General Partner for distribution to
its shareholders of some or all of its share of such distribution.
"PARTNERSHIP UNITS" OR "UNITS" shall mean the interest in the
Partnership of any Partner which entitles a Partner to the allocations (and
each item thereof) specified in Section 6.1(b) hereof and all distributions
from the Partnership, and its rights of management, consent, approval, or
participation, if any, as provided in this Agreement. Partnership Units do
not include Preferred Units. Each Partner's percentage ownership interest in
11
the Partnership shall be determined by dividing the number of Partnership
Units then owned by each Partner by the total number of Partnership Units
then outstanding. The number of Partnership Units held by each Partner at the
date hereof is as set forth opposite its name on attached EXHIBIT A.
"PERSON" shall mean any individual or Entity.
"PLEDGE" shall mean granting of a Lien on a Partnership Interest.
"POST-EXCHANGE DISTRIBUTION" shall have the meaning set forth in
Section 6.2(a) hereof.
"PREFERRED DISTRIBUTION REQUIREMENT" shall mean the GP Preferred
Distribution Requirement and the LP Preferred Distribution Requirement.
"PREFERRED DISTRIBUTION SHORTFALL" shall have the meaning set forth
in Section 6.2(b)(i) hereof.
"PREFERRED SHARES" shall mean any class of equity securities of any
of the General Partners now or hereafter authorized or reclassified having
dividend rights that are superior or prior to dividends payable on the Shares
or any other shares of common stock of such General Partners.
"PREFERRED UNITS" shall mean GP Preferred Units issued to a General
Partner pursuant to Section 4.3(c) hereof and LP Preferred Units issued to a
Limited Partner pursuant to Section 9.4(a) hereof. Unless otherwise specified
in the Preferred Unit Designations, as the case may be, the holders of any
class or series of Preferred Units shall have such rights to the allocations
of Profits and Losses as specified in Section 6.1 hereof and to distributions
pursuant to Section 6.2 hereof, but shall not, by reason of their ownership
of such Preferred Units, be entitled to participate in the management of the
Partnership or to consent to or approve any action which is required by the
Act or this Agreement to be approved by any or all of the Partners.
"PREFERRED UNIT DESIGNATION" means the GP Preferred Unit
Designations and the LP Preferred Unit Designations, collectively.
"PREFERRED UNIT ISSUE PRICE" shall mean (i) with respect to GP
Preferred Units, (a) the amount of the Required Funds contributed or deemed
to have been contributed by a General Partner in exchange for a GP Preferred
Unit or (b) in the case of GP Preferred Units issued in respect of a Related
Issue issued upon conversion of or in exchange for any LP Preferred Units,
the liquidation preference of such GP Preferred Unit upon issuance, and (ii)
with respect to LP Preferred Units, the liquidation preference of such LP
Preferred Unit upon issuance.
12
"PROFITS" shall have the meaning set forth in Section 6.1(a) hereof.
"PROJECT" shall mean any property that is or is planned to be used
primarily for retail purposes, and shall include, but is not limited to, a
regional mall, a community shopping center, a specialty retail center and a
mixed-use property which contains a major retail component.
"PROPERTY OR PROPERTIES" shall mean any Development Land or Project
in which the Partnership acquires ownership of (a) the fee or leasehold
interest or (b) an indirect fee or leasehold interest through an interest in
any other Entity.
"PURCHASE PRICE" shall have the meaning set forth in Section 11.3
hereof.
"QUALIFIED REIT SUBSIDIARIES" shall have the meaning set forth in
Section 856(i)(2) of the Code.
"REGISTRATION RIGHTS AGREEMENTS" shall mean the agreements, in
effect as of the Effective Time, among the Managing General Partner, certain
of its stockholders and certain holders of Units.
"REGULATIONS" shall mean the final, temporary or proposed income tax
regulations promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
"REGULATORY ALLOCATIONS" shall have the meaning set forth in Section
6.l(d)(5) hereof.
"REIT EXPENSES" shall mean (i) costs and expenses relating to the
continuity of existence of the Managing General Partner and the Non-Managing
General Partners and their respective subsidiaries, including taxes, fees and
assessments associated therewith, and any and all costs, expenses or fees
payable to any director or trustee of the Managing General Partner, the
Non-Managing General Partners or such subsidiaries, (ii) costs and expenses
relating to any offer or registration of securities by the Managing General
Partner, the Non-Managing General Partners or their respective subsidiaries
and all statements, reports, fees and expenses incidental thereto, including
underwriting discounts, selling commissions and placement fees applicable to
any such offer of securities; PROVIDED, HOWEVER, that in the case of any such
registration of securities on behalf of one or more of the security holders
of the Managing General Partner, the Non-Managing General Partners or their
respective subsidiaries, REIT Expenses shall not include underwriting
discounts or selling commissions), (iii) costs and expenses associated with
the preparation and filing of any periodic reports by the Managing General
Partner, the Non-Managing General Partners or their respective subsidiaries
under federal, state or local laws or regulations, including tax returns and
filings with the SEC and any stock exchanges on which
13
the Shares are listed, (iv) costs and expenses associated with compliance by
the Managing General Partner, the Non-Managing General Partners or their
respective subsidiaries with laws, rules and regulations promulgated by any
regulatory body, including the SEC, (v) costs and expenses associated with
any 401(k) Plan, incentive plan, bonus plan or other plan providing for
compensation for the employees of the Managing General Partner, the
Non-Managing General Partners or their respective subsidiaries, and (vi) all
operating, administrative and other costs incurred by the Managing General
Partner, the Non-Managing General Partners or their respective subsidiaries
(including attorney's and accountant's fees, income and franchise taxes and
salaries paid to officers of the Managing General Partner, the Non-Managing
General Partners or their respective subsidiaries, but excluding costs of any
repurchase by the General Partners of any of their securities and excluding
costs associated with activities and business operations not conducted
directly or indirectly through the Partnership or any Subsidiary
Partnership); PROVIDED, HOWEVER that amounts described herein shall be
considered REIT Expenses hereunder (1) only if and to the extent during the
fiscal year in question the aggregate amount of such expenses for such fiscal
year and all prior fiscal years exceeds the aggregate of (a) all amounts
theretofore distributed or distributable to the Managing General Partner or a
Non-Managing General Partner by any wholly-owned subsidiary thereof and (b)
all amounts theretofore paid to the Managing General Partner or a
Non-Managing General Partner pursuant to Section 7.1 hereof and (2) with
respect to a Non-Managing General Partner, only if the Managing General
Partner holds, directly or indirectly, substantially all of the equity
interests of the Non-Managing General Partner and controls, directly or
indirectly, the Non-Managing General Partner.
"REIT REQUIREMENTS" shall mean all actions or omissions as may be
necessary (including making appropriate distributions from time to time) to
permit each of the Managing General Partner, the Non-Managing General
Partners and, where applicable, their respective subsidiaries to qualify or
continue to qualify as a real estate investment trust within the meaning of
Section 856 ET SEQ. of the Code, as such provisions may be amended from time
to time, or the corresponding provisions of succeeding law.
"REIT" shall mean a real estate investment trust as defined in
Section 856 of the Code.
"RELATED ISSUES" shall mean, with respect to a class or series of GP
Preferred Units, (a) the class or series of Preferred Shares the sale of
which provided a General Partner with the proceeds to contribute to the
Partnership in exchange for such GP Preferred Units and (b) the class or
series of Preferred Shares issued upon conversion of or in exchange for any
LP Preferred Units.
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"REQUIRED FUNDS" shall have the meaning set forth in Section 4.3(a)
hereof.
"RIGHTS" shall have the meaning set forth in Section 11.1 hereof.
"SD PROPERTY" shall mean SD Property Group, Inc.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHARES" shall mean the shares of Common Stock, par value $0.0001
per share, of the Managing General Partner.
"SIMONS" shall mean Melvin Simon, Herbert Simon and David Simon,
other members of the Immediate Family of any of the foregoing, any other
lineal descendants of any of the foregoing, any trusts established for the
benefit of any of the foregoing, and any Entity Controlled by any one or more
of the foregoing.
"SPG PROPERTIES" shall mean SPG Properties, Inc.
"SPG REALTY" shall mean SPG Realty Consultants, Inc.
"SRC LIMITED PARTNERSHIP UNITS" shall mean interests in the SRC
Partnership (as defined below) held by a Limited Partner, each of which is
paired with a Limited Partnership Unit.
"SRC PARTNERSHIP" shall mean SPG Realty Consultants, L.P., a
Delaware limited partnership.
"SRC PARTNERSHIP UNITS" shall mean interests in the SRC Partnership.
"SUBSIDIARY ENTITY" shall mean any Entity in which the Partnership
owns a direct or indirect equity interest.
"SUBSIDIARY PARTNERSHIP" shall mean any partnership in which the
Partnership owns a direct or indirect equity interest.
"SUBSTITUTED LIMITED PARTNER" shall have the meaning set forth in
the Act.
"TAX MATTERS PARTNER" shall have the meaning set forth in Section
6.7 hereof.
"THIRD PARTY FINANCING" shall mean financing or refinancing obtained
from a Third Party by the Partnership.
15
"THIRD PARTY" or "THIRD PARTIES" shall mean a Person or Persons who
is or are neither a Partner or Partners nor an Affiliate or Affiliates of a
Partner or Partners.
"TRADING DAY" shall mean a day on which the principal national
securities exchange on which the Shares are listed or admitted to trading is
open for the transaction of business or, if the Shares are not listed or
admitted to trading on any national securities exchange, shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.
"TRANSFER" shall mean any assignment, sale, transfer, conveyance or
other disposition or act of alienation (other than a Pledge), whether
voluntary or involuntary or by operation of law.
1.2 EXHIBIT. ETC. References in this Agreement to an "Exhibit" are,
unless otherwise specified, to one of the Exhibits attached to this
Agreement, and references in this Agreement to an "Article" or a "Section"
are, unless otherwise specified, to one of the Articles or Sections of this
Agreement. Each Exhibit attached hereto and referred to herein is hereby
incorporated herein by reference.
ARTICLE II
CONTINUATION OF PARTNERSHIP
2.1 CONTINUATION. The parties hereto do hereby agree to continue the
Partnership as a limited partnership pursuant to the provisions of the Act,
and all other pertinent laws of the State of Delaware, for the purposes and
upon the terms and conditions hereinafter set forth. The Partners agree that
the rights and liabilities of the Partners shall be as provided in the Act
except as otherwise herein expressly provided. Promptly upon the execution
and delivery of this Agreement, the Managing General Partner shall cause each
notice, instrument, document or certificate as may be required by applicable
law, and which may be necessary to enable the Partnership to continue to
conduct its business, and to own its properties, under the Partnership name
to be filed or recorded in all appropriate public offices. Upon request of
the Managing General Partner, the Partners shall execute any assumed or
fictitious name certificate or certificates required by law to be filed in
connection with the Partnership. The Managing General Partner shall properly
cause the execution and delivery of such additional documents and shall
perform such additional acts consistent with the terms of this Agreement as
may be necessary to comply with the requirements of law for the continued
operation of a limited partnership under the laws of the State of Delaware
(it being understood that the Managing General Partner shall be required to
provide the General Partners and Limited Partners with copies of any amended
Certificates of Limited Partnership required to be filed under such laws only
upon request) and for the continued operation of a limited partnership
16
in each other jurisdiction in which the Partnership shall conduct business.
2.2 NAME. The name of the Partnership is Simon Property Group, L.P.,
and all business of the Partnership shall be conducted under the name of
Simon Property Group, L.P. or such other name as the Managing General Partner
may select; PROVIDED, HOWEVER, that the Managing General Partner may not
choose the name (or any derivative thereof) of any Limited Partner (other
than the names "DeBartolo" or "Simon") without the prior written consent of
such Limited Partner. All transactions of the Partnership, to the extent
permitted by applicable law, shall be carried on and completed in such name
(it being understood that the Partnership may adopt assumed or fictitious
names in certain jurisdictions).
2.3 CHARACTER OF THE BUSINESS. The purpose of the Partnership is and
shall be to acquire, hold, own, develop, redevelop, construct, reconstruct,
alter, improve, maintain, operate, sell, lease, Transfer, encumber, convey,
exchange and otherwise dispose of or deal with the Properties and any other
real and personal property of all kinds; to undertake such other activities
as may be necessary, advisable, desirable or convenient to the business of
the Partnership; and to engage in such other ancillary activities as shall be
necessary or desirable to effectuate the foregoing purposes. The Partnership
shall have all powers necessary or desirable to accomplish the purposes
enumerated. In connection with the foregoing, but subject to all of the
terms, covenants, conditions and limitations contained in this Agreement and
any other agreement entered into by the Partnership, the Partnership shall
have full power and authority to enter into, perform and carry out contracts
of any kind, to borrow or lend money and to issue evidences of indebtedness,
whether or not secured by mortgage, trust deed, pledge or other Lien and,
directly or indirectly, to acquire and construct additional Properties
necessary or useful in connection with its business.
2.4 LOCATION OF THE PRINCIPAL PLACE OF BUSINESS. The location of the
principal place of business of the Partnership shall be at 115 West
Washington Street, Indianapolis, Indiana 46204 or such other location as
shall be selected from time to time by the Managing General Partner in its
sole discretion; PROVIDED, HOWEVER, that the Managing General Partner shall
promptly notify the Partners of any change in the location of the principal
place of business of the Partnership.
2.5 REGISTERED AGENT AND REGISTERED OFFICE. The Registered Agent of
the Partnership shall be The Corporation Trust Company, or such other Person
as the Managing General Partner may select in its sole discretion. The
Registered Office of the Partnership in the State of Delaware shall be c/o
The Corporation Trust Company, 1209 Orange Street, in the City of Wilmington,
County of New Castle, Delaware 19801, or such other location as the Managing
General Partner may select in its sole and absolute discretion.
17
The Managing General Partner shall promptly notify the Partners of any change
in the Registered Agent or Registered Office of the Partnership.
ARTICLE III
TERM
3.1 COMMENCEMENT. The Partnership commenced business as a limited
partnership on November 18, 1993 upon the filing of the Certificate with the
Secretary of State of the State of Delaware.
3.2 DISSOLUTION. The Partnership shall continue until dissolved and
terminated upon the earlier of (i) December 31, 2096, or (ii) the earliest to
occur of the following events:
(a) the dissolution, termination, withdrawal, retirement or
Bankruptcy of a General Partner unless the Partnership is continued as
provided in Section 9.1 hereof;
(b) the election to dissolve the Partnership made in
writing by the Managing General Partner, but only if the consent required by
Section 7.3 and the consent of the Non-Managing General Partners are obtained;
(c) the sale or other disposition of all or substantially
all the assets of the Partnership; or
(d) dissolution required by operation of law.
ARTICLE IV
CONTRIBUTIONS TO CAPITAL
4.1 GENERAL PARTNER CAPITAL CONTRIBUTIONS.
(a) [RESERVED]
(b) The Managing General Partner shall contribute to the
capital of the Partnership, in exchange for Units as provided in Section
4.3(b) hereof, the proceeds of the sale of any Shares.
(c) All transfer, stamp or similar taxes payable upon any
contribution provided for in this Section 4.1 shall be paid by the
Partnership.
4.2 LIMITED PARTNER CAPITAL CONTRIBUTIONS. Except as expressly
provided in Sections 4.3, 4.4, 4.5 and 4.8 below, no Partner may make, and no
Partner shall have the obligation to make, additional contributions to the
capital of the Partnership without the consent of the General Partners.
4.3 ADDITIONAL FUNDS.
(a) The Partnership may obtain funds ("Required Funds")
which it considers necessary to meet the needs, obligations and requirements
of the Partnership, or to maintain adequate working
18
capital or to repay Partnership indebtedness, and to carry out the
Partnership's purposes, from the proceeds of Third Party Financing or
Affiliate Financing, in each case pursuant to such terms, provisions and
conditions and in such manner (including the engagement of brokers and/or
investment bankers to assist in providing such financing) and amounts as the
Managing General Partner and as the Non-Managing General Partners shall
determine to be in the best interests of the Partnership, subject to the
terms and conditions of this Agreement. Any and all funds required or
expended, directly or indirectly, by the Partnership for capital expenditures
may be obtained or replenished through Partnership borrowings. Any Third
Party Financing or Affiliate Financing obtained by the General Partners for
and on behalf of the Partnership may be convertible in whole or in part into
Additional Units (to be issued in accordance with Section 9.4 hereof), may be
unsecured, may be secured by mortgage(s) or deed(s) of trust and/or
assignments on or in respect of all or any portion of the assets of the
Partnership or any other security made available by the Partnership, may
include or be obtained through the public or private placement of debt and/or
other instruments, domestic and foreign may include provision for the option
to acquire Additional Units (to be issued in accordance with Section 9.4
hereof), and may include the acquisition of or provision for interest rate
swaps, credit enhancers and/or other transactions or items in respect of such
Third Party Financing or Affiliate Financing; PROVIDED, HOWEVER, that in no
event may the Partnership obtain any Affiliate Financing or Third Party
Financing that is recourse to any Partner or any Affiliate, partner,
shareholder, beneficiary, principal officer or director of any Partner
without the consent of the affected Partner and any other Person or Persons
to whom such recourse may be had.
(b) To the extent the Partnership does not borrow all of
the Required Funds (and whether or not the Partnership is able to borrow all
or part of the Required Funds), the Managing General Partner or any of the
Non-Managing General Partners (or an Affiliate thereof) (i) may itself borrow
such Required Funds, in which case the Managing General Partner or such
Non-Managing General Partner shall lend such Required Funds to the
Partnership on the same economic terms and otherwise on substantially
identical terms, or (ii) may raise such Required Funds in any other manner,
in which case, unless such Required Funds are raised by the Managing General
Partner or any Non-Managing General Partner through the sale of Preferred
Shares, the Managing General Partner or such Non-Managing General Partner
shall contribute to the Partnership as an additional Capital Contribution the
amount of the Required Funds so raised ("Contributed Funds") (hereinafter,
each date on which the Managing General Partner or the Non-Managing General
Partners so contributes Contributed Funds pursuant to this Section 4.3(b) is
referred to as an "Adjustment Date"). Any Required Funds raised from the sale
of Preferred Shares shall either be contributed to the Partnership as
Contributed Funds or loaned to the Partnership pursuant to Section 4.3(c)
below. In the event the Managing General Partner or a Non-
19
exceeds the property's adjusted tax basis. If there is a net decrease in
Partnership Minimum Gain for a Partnership Fiscal Year, in accordance with
Regulations Section 1.704-2(f) and the exceptions contained therein, the
Partners shall be allocated items of Partnership income and gain for such
Partnership Fiscal Year (and, if necessary, for subsequent Partnership Fiscal
Years) equal to the Partners' respective shares of the net decrease in
Minimum Gain within the meaning of Regulations Section l.704-2(g)(2) (the
"Minimum Gain Chargeback"). The items to be allocated pursuant to this
Section 6.1(d)(1) shall be determined in accordance with Regulations Section
1.704-2(f) and (j).
(2) Any item of "Partner Nonrecourse Deduction" (as
defined in Regulations Section 1.704-2(i)) with respect to a "Partner
Nonrecourse Debt" (as defined in Regulations Section l.704-2(b)(4)) shall be
allocated to the Partner or Partners who bear the economic risk of loss for
such Partner Nonrecourse Debt in accordance with Regulations Section
l.704-2(i)(l). If the Partnership makes a distribution allocable to the
proceeds of a Partner Nonrecourse Debt, in accordance with Regulation Section
l.704-2(i)(6) the distribution will be treated as allocable to an increase in
Partner Minimum Gain to the extent the increase results from encumbering
Partnership property with aggregate Partner Nonrecourse Debt that exceeds the
property's adjusted tax basis. Subject to Section 6.1(d)(1) hereof, but
notwithstanding any other provision of this Agreement, in the event that
there is a net decrease in Minimum Gain attributable to a Partner Nonrecourse
Debt (such Minimum Gain being hereinafter referred to as "Partner Nonrecourse
Debt Minimum Gain") for a Partnership Fiscal Year, then after taking into
account allocations pursuant to Section 6.1(d)(1) hereof, but before any
other allocations are made for such taxable year, and subject to the
exceptions set forth in Regulations Section 1.704-2(i)(4), each Partner with
a share of Partner Non-recourse Debt Minimum Gain at the beginning of such
Partnership Fiscal Year shall be allocated items of income and gain for such
Partnership Fiscal Year (and, if necessary, for subsequent Partnership Fiscal
Years) equal to such Partner's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain as determined in a manner consistent with the
provisions of Regulations Section l.704-2(g)(2). The items to be allocated
pursuant to this Section 6.1(d)(2) shall be determined in accordance with
Regulations Section 1.704-2(i)(4) and (j).
(3) Pursuant to Regulations Section 1.752-3(a)(3), for the
purpose of determining each Partner's share of excess nonrecourse liabilities
of the Partnership, and solely for such purpose, each Partner's interest in
Partnership profits shall be determined by any reasonable method chosen by
the Managing General Partner including, without limitation, the principles
set forth in Rev. Rul. 95-41, 1995-1 C.B. 132.
(4) No Limited Partner shall be allocated any item of
deduction or loss of the Partnership if such allocation would cause such
Limited Partner's Capital Account to become negative by
29
more than the sum of (i) any amount such Limited Partner is obligated to
restore upon liquidation of the Partnership, plus (ii) such Limited Partner's
share of the Partnership's Minimum Gain and Partner Nonrecourse Debt Minimum
Gain. An item of deduction or loss that cannot be allocated to a Limited
Partner pursuant to this Section 6.1(d)(4) shall be allocated to the General
Partners in accordance with the number of Partnership Units held by each
General Partner. For this purpose, in determining the Capital Account balance
of such Limited Partner, the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6) shall be taken into account. In the
event that (A) any Limited Partner unexpectedly receives any adjustment,
allocation, or distribution described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), (5), or (6), and (B) such adjustment, allocation, or
distribution causes or increases a deficit balance (net of amounts which such
Limited Partner is obligated to restore or deemed obligated to restore under
Regulations Section 1.704-2(g)(l) and l.704-2(i)(5) and determined after
taking into account any adjustments, allocations, or distributions described
in Regulations Sections 1.704-l(b)(2)(ii)(d)(4), (5), or (6) that, as of the
end of the Partnership Fiscal Year, reasonably are expected to be made to
such Limited Partner) in such Limited Partner's Capital Account as of the end
of the Partnership Fiscal Year to which such adjustment, allocation, or
distribution relates, then items of Gross Income (consisting of a pro rata
portion of each item of Gross Income) for such Partnership Fiscal Year and
each subsequent Partnership Fiscal Year shall be allocated to such Limited
Partner until such deficit balance or increase in such deficit balance, as
the case may be, has been eliminated. In the event that this Section
6.1(d)(4) and Section 6.1(d)(1) and/or (2) hereof apply, Section 6.1(d)(1)
and/or (2) hereof shall be applied prior to this Section 6.l(d)(4).
(5) The Regulatory Allocations shall be taken into account
in allocating other items of income, gain, loss, and deduction among the
Partners so that, to the extent possible, the cumulative net amount of
allocations of Partnership items under this Section 6.1 shall be equal to the
net amount that would have been allocated to each Partner if the Regulatory
Allocations had not been made. This Section 6.1(d)(5) is intended to minimize
to the extent possible and to the extent necessary any economic distortions
which may result from application of the Regulatory Allocations and shall be
interpreted in a manner consistent therewith. For purposes hereof,
"Regulatory Allocations" shall mean the allocations provided under this
Section 6.1(d) (other than this Section 6.l(d)(5)).
(e) In accordance with Sections 704(b) and 704(c) of the
Code and the Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the Partnership shall,
solely for federal income tax purposes, be allocated among the Partners on a
property by property basis so as to take account of any variation between the
adjusted basis of such property to the Partnership for federal income tax
purposes and the initial Gross Asset Value of such property. If the Gross
Asset Value of any Partnership property is adjusted as described in the
definition of Gross Asset Value, subsequent allocations of income, gains or
losses from taxable sales or other dispositions and deductions with respect
to such asset shall take account of any variation between the adjusted basis
of
30
such asset for federal income tax purposes and the Gross Asset Value of such
asset in the manner prescribed under Sections 704(b) and 704(c) of the Code
and the Regulations thereunder. In furtherance of the foregoing, the
Partnership shall employ the method prescribed in Regulation S 1.704-3(b)
(the "traditional method") or the equivalent successor provision(s) of
proposed, temporary or final Regulations. The Partnership shall allocate
items of income, gain, loss and deduction allocated to it by a Subsidiary
Entity to the Partner or Partners contributing the interest or interests in
such subsidiary Entity, so that, to the greatest extent possible and
consistent with the foregoing, such contributing Partner or Partners are
allocated the same amount and character of items of income, gain, loss and
deduction with respect to such Subsidiary Entity that they would have been
allocated had they contributed undivided interests in the assets owned by
such Subsidiary Entity to the Partnership in lieu of contributing the
interest or interests in the Subsidiary Entity to the Partnership.
(f) Notwithstanding anything to the contrary contained in
this Section 6.1, the allocation of Profits and Losses for any Partnership
Fiscal Year during which a Person acquires a Partnership Interest (other than
upon formation of the Partnership) pursuant to Section 4.3(b) or otherwise,
shall take into account the Partners' varying interests for such Partnership
Fiscal Year pursuant to any method permissible under Section 706 of the Code
that is selected by the Managing General Partner (notwithstanding any
agreement between the assignor and assignee of such Partnership Interest
although the Managing General Partner may recognize any such agreement),
which method may take into account the date on which the Transfer or an
agreement to Transfer becomes irrevocable pursuant to its terms, as
determined by the Managing General Partner; provided, that the allocation of
Profits and Losses with respect to a Partnership Unit acquired during a
fiscal quarter of the Partnership shall be appropriately adjusted in
accordance with Section 6.2(c)(ii) below.
(g) If any portion of gain from the sale of property is
treated as gain which is ordinary income by virtue of the application of Code
Sections 1245 or 1250 ("Affected Gain"), then (A) such Affected Gain shall be
allocated among the Partners in the same proportion that the depreciation and
amortization deductions giving rise to the Affected Gain were allocated and
(B) other tax items of gain of the same character that would have been
recognized, but for the application of Code Sections 1245 and/or 1250, shall
be allocated away from those Partners who are allocated Affected Gain
pursuant to clause (A) so that, to the extent possible, the other Partners
are allocated the same amount,
31
and type, of capital gain that would have been allocated to them had Code
Sections 1245 and/or 1250 not applied. For purposes hereof, in order to
determine the proportionate allocations of depreciation and amortization
deductions for each Fiscal Year or other applicable period, such deductions
shall be deemed allocated on the same basis as Profits or Losses for such
respective period.
(h) The Profits, Losses, gains, deductions and credits of
the Partnership (and all items thereof) for each Partnership Fiscal Year
shall be determined in accordance with the accounting method followed by the
Partnership for federal income tax purposes.
(i) Except as provided in Sections 6.1(e) and 6.1(g)
hereof, for federal income tax purposes, each item of income, gain, loss, or
deduction shall be allocated among the Partners in the same manner as its
correlative item of "book" income, gain, loss or deduction has been allocated
pursuant to this Section 6.1.
(j) To the extent permitted by Regulations Sections
1.704-2(h)(3) and 1.704-2(i)(6), the Managing General Partner shall endeavor
to treat distributions as having been made from the proceeds of Nonrecourse
Liabilities or Partner Nonrecourse Debt only to the extent that such
distributions would cause or increase a deficit balance in any Partner's
Capital Account that exceeds the amount such Partner is otherwise obligated
to restore (within the meaning of Regulations Section 1.704-l(b)(2)(ii)(c))
as of the end of the Partnership's taxable year in which the distribution
occurs.
(k) If any Partner sells or otherwise disposes of any
property, directly or indirectly, to the Partnership, and as a result
thereof, gain on a subsequent disposition of such property by the Partnership
is reduced pursuant to Section 267(d) of the Code, then, to the extent
permitted by applicable law, gain for federal income tax purposes
attributable to such subsequent disposition shall first be allocated among
the Partners other than the selling Partner in an amount equal to such
Partners' allocations of "book" gain on the property pursuant to this Section
6.1, and any remaining gain for federal income tax purposes shall be
allocated to the selling Partner.
6.2 DISTRIBUTIONS. (a) Except with respect to the liquidation of the
Partnership and subject to the priority set forth in Sections 6.2(b) and (c)
and in any Preferred Unit Designation, the Managing General Partner shall
cause the Partnership to distribute all or a portion of Net Operating Cash
Flow to the Partners who are such on the relevant Partnership Record Date
from time to time as determined by the Managing General Partner, but in any
event not less frequently than quarterly, in such amounts as the Managing
General Partner shall determine in its sole discretion; PROVIDED, HOWEVER,
that, except as provided in Sections 6.2(b) and (c) below and in any
Preferred Unit Designation, all such distributions shall be made PRO RATA in
32
accordance with the outstanding Partnership Units on the relevant Partnership
Record Date. In no event may a Limited Partner receive a distribution of Net
Operating Cash Flow with respect to a Partnership Unit that such Partner has
exchanged on or prior to the relevant Partnership Record Date for a Share,
pursuant to the Rights granted under Section 11.1 (a "Post-Exchange
Distribution"); rather, all such Post-Exchange Distributions shall be
distributed to the Managing General Partner.
(b) Except to the extent Net Operating Cash Flow is
distributed pursuant to Section 6.2(c), and except with respect to the
liquidation of the Partnership, distributions of Net Operating Cash Flow
shall be made in the following order of priority unless otherwise specified
in the Preferred Unit Designations, in which case the provisions of the
Preferred Unit Designations shall control;
(i) First, to the extent that the amount
of Net Operating Cash Flow distributed to the holders of any class or series
of Preferred Units for any prior quarter was less than the Preferred
Distribution Requirement for such class or series for such quarter, and has
not been subsequently distributed pursuant to this Section 6.2(b)(i) or
otherwise in accordance with the related Preferred Unit Designation (a
"Preferred Distribution Shortfall"), Net Operating Cash Flow shall be
distributed to the holders of Preferred Units (in accordance with their
respective priority as set forth in the Preferred Unit Designations) in an
amount necessary to satisfy such Preferred Distribution Shortfall for each
such class or series for the current and all prior Partnership Fiscal Years.
In the event that the Net Operating Cash Flow distributed for a particular
quarter is less than the Preferred Distribution Shortfall for all classes or
series of Preferred Units, then all Net Operating Cash Flow for the current
quarter shall be distributed to the holders of Preferred Units in accordance
with their respective priority as set forth in the Preferred Unit
Designations.
(ii) Second, Net Operating Cash Flow
shall be distributed to the holders of Preferred Units in an amount equal to
the Preferred Distribution Requirement for the then current quarter for each
outstanding Preferred Unit. In the event that the amount of Net Operating
Cash Flow distributed for a particular quarter pursuant to this subparagraph
(b)(ii) is less than the Preferred Distribution Requirement for such quarter,
then all such Net Operating Cash Flow for such quarter shall be distributed
to the holders of Preferred Units in accordance with their respective
priority as set forth in the Preferred Unit Designations.
(iii) The balance of the Net Operating
Cash Flow to be distributed, if any, shall be distributed to holders of
Partnership Units, in proportion to their ownership of Partnership Units.
33
(c) (i) If in any quarter the Partnership redeems any
outstanding GP Preferred Units, unless and except to the extent that such
redemption is effected out of borrowed funds, Capital Contributions or other
sources, Net Operating Cash Flow shall be distributed to the Managing General
Partner in an amount equal to the applicable GP Preferred Redemption Amount
for the GP Preferred Units being redeemed before being distributed pursuant
to Section 6.2(b).
(ii) Notwithstanding anything to the contrary contained in
this Section 6.2, unless expressly waived in writing by the Managing General
Partner, the distribution of Net Operating Cash Flow with respect to a
Partnership Unit acquired during a fiscal quarter of the Partnership shall be
an amount equal to the product of (i) the amount of Net Operating Cash Flow
otherwise distributable to a Partnership Unit held during such fiscal quarter
and (ii) (a) the number of days remaining in such fiscal quarter, determined
as of the date such Partnership Unit was acquired, divided by (b) the total
number of days in such fiscal quarter.
(d) Notwithstanding the provision of the first sentence of
Section 6.2(a), (i) the Managing General Partner shall use its best efforts
to cause the Partnership to distribute sufficient amounts, in accordance with
Section 6.2(a) above, to enable the Managing General Partner and the
Non-Managing General Partners to pay shareholder dividends that will (A)
satisfy the REIT Requirements, and (B) avoid any federal income or excise tax
liability of the Managing General Partner or any of the Non-Managing General
Partners; and (ii) in the event of a Covered Sale which occurs on a date on
or after August 9, 1996, and before but not including August 9, 2001, and
which gives rise to a special allocation of taxable income or gain to one or
more Limited Partners pursuant to Section 6.1(e), (A) the Managing General
Partner shall cause the Partnership to distribute to all of the Partners, PRO
RATA in accordance with ownership of Partnership Units, the Net Sale Proceeds
therefrom up to an amount sufficient to enable each such Limited Partner,
from the share of such distribution made to it, to pay in full any income tax
liability, computed at the maximum applicable federal and state statutory
rates, with respect to the income or gain so specially allocated and on the
distribution required by this Section 6.2(d) (or, if any such Limited Partner
is a partnership or Subchapter S corporation, to enable such Limited Partner
to distribute sufficient amounts to its equity owners to enable such owners
to pay in full any income tax liability, computed at the maximum applicable
federal and state statutory rates, with respect to their share of such
taxable income or gain and such distributions) and (B) if the amounts
distributed to each such Limited Partner in accordance with the preceding
clause (A) are insufficient to enable it to pay in full such income tax
liabilities, the Managing General Partner shall cause the Partnership to
distribute sufficient funds from other sources to all of the Partners, PRO
RATA in accordance with ownership of Partnership Units, in an
34
amount sufficient to enable each such Limited Partner to pay in full such
income tax liabilities and any income tax liabilities of such Limited
Partner(s) with respect to such additional distribution. As used in this
Section 6.2, the term "Covered Sale" means a sale or other taxable
disposition of any Property described on Exhibit C.
6.3 BOOKS OF ACCOUNT; SEGREGATION OF FUNDS
(a) At all times during the continuance of the Partnership,
the Managing General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with GAAP wherein
shall be entered particulars of all monies, goods or effects belonging to or
owing to or by the Partnership, or paid, received, sold or purchased in the
course of the Partnership's business, and all of such other transactions,
matters and things relating to the business of the Partnership as are usually
entered in books of account kept by Persons engaged in a business of a like
kind and character. In addition, the Partnership shall keep all records as
required to be kept pursuant to the Act. The books and records of account
shall be kept at the principal office of the Partnership, and each Partner
and its representatives shall at all reasonable times have access to such
books and records and the right to inspect and copy the same.
(b) The Partnership shall not commingle its funds with
those of any other Person or Entity; funds and other assets of the
Partnership shall be separately identified and segregated; all of the
Partnership's assets shall at all times be held by or on behalf of the
Partnership and, if held on behalf of the Partnership by another Entity,
shall at all times be kept identifiable (in accordance with customary usages)
as assets owned by the Partnership; and the Partnership shall maintain its
own separate bank accounts, payroll and books of account. The foregoing
provisions of this Section 6.3(b) shall not apply with respect to funds or
assets of any Subsidiary Entities of the Partnership.
6.4 REPORTS. Within ninety (90) days after the end of each
Partnership Fiscal Year, the Partnership shall cause to be prepared and
transmitted to each Partner an annual report of the Partnership relating to
the previous Partnership Fiscal Year containing a balance sheet as of the
year then ended, a statement of financial condition as of the year then
ended, and statements of operations, cash flow and Partnership equity for the
year then ended, which annual statements shall be prepared in accordance with
GAAP and shall be audited by the Accountants. The Partnership shall also
cause to be prepared and transmitted to each Partner within forty-five (45)
days after the end of each of the first three (3) quarters of each
Partnership Fiscal Year a quarterly unaudited report containing a balance
sheet, a statement of the Partnership's financial condition and statements of
operations, cash flow and Partnership equity, in each case relating to the
fiscal quarter then just ended, and prepared in accordance with GAAP. The
Partnership shall further cause to be
35
prepared and transmitted to the Managing General Partner and the Non-Managing
General Partners (i) such reports and/or information as are necessary for
each to fulfill its obligations under the Securities Act of 1933, the
Securities and Exchange Act of 1934 and the applicable stock exchange rules,
and under any other regulations to which such Partners or the Partnership may
be subject, and (ii) such other reports and/or information as are necessary
for each of the Managing General Partner and the Non-Managing General
Partners to determine and maintain its qualification as a REIT under the REIT
Requirements, its earnings and profits derived from the Partnership, its
liability for a tax as a consequence of its Partnership Interest and
distributive share of taxable income or loss and items thereof, in each case
in a manner that will permit the Managing General Partner and the
Non-Managing General Partners to comply with their respective obligations to
file federal, state and local tax returns and information returns and to
provide their shareholders with tax information. The Managing General Partner
shall provide to each Partner copies of all reports it provides to its
stockholders at the same time such reports are distributed to such
stockholders. The Managing General Partner shall also promptly notify the
Partners of all actions taken by the Managing General Partner for which it
has obtained the Consent of the Limited Partners.
6.5 AUDITS. Not less frequently than annually, the books and records
of the Partnership shall be audited by the Accountants.
6.6 TAX RETURNS.
(a) Consistent with all other provisions of this
Agreement, the Managing General Partner shall determine the methods to be
used in the preparation of federal, state, and local income and other tax
returns for the Partnership in connection with all items of income and
expense, including, but not limited to, valuation of assets, the methods of
Depreciation and cost recovery, credits and tax accounting methods and
procedures and, with the consent of the Non-Managing General Partners, all
tax elections.
(b) The Managing General Partner shall, at least 30 days
prior to the due dates (as extended) for such returns, but in no event later
than July 15 of each year, cause the Accountants to prepare and submit to the
DeBartolo Designee, the Simon Designee and the JCP Limited Partner for their
review, drafts of all federal and state income tax returns of the Partnership
for the preceding year, and the Managing General Partner shall consult in
good faith with the DeBartolo Designee, the Simon Designee and the JCP
Limited Partner regarding any proposed modifications to such tax returns of
the Partnership.
(c) The Partnership shall timely cause to be prepared and
transmitted to the Partners federal and appropriate state and local
Partnership Income Tax Schedules "K-1" or any substitute
36
therefor, with respect to each Partnership Fiscal Year on appropriate forms
prescribed. The Partnership shall make reasonable efforts to prepare and
submit such forms before the due date for filing federal income tax returns
for the fiscal year in question (determined without extensions), and shall in
any event prepare and submit such forms on or before July 15 of the year
following the fiscal year in question.
6.7 TAX MATTERS PARTNER
The Managing General Partner is hereby designated as the
Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code for
the Partnership; PROVIDED, HOWEVER, that (i) in exercising its authority as
Tax Matters Partner it shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; (ii) the Managing General Partner
shall give prompt notice to the Partners of the receipt of any written notice
that the Internal Revenue Service or any state or local taxing authority
intends to examine Partnership income tax returns for any year, receipt of
written notice of the beginning of an administrative proceeding at the
Partnership level relating to the Partnership under Section 6223 of the Code,
receipt of written notice of the final Partnership administrative adjustment
relating to the Partnership pursuant to Section 6223 of the Code, and receipt
of any request from the Internal Revenue Service for waiver of any applicable
statute of limitations with respect to the filing of any tax return by the
Partnership; (iii) the Managing General Partner shall promptly notify the
Partners if it does not intend to file for judicial review with respect to
the Partnership; and (iv) as Tax Matters Partner, the Managing General
Partner shall not be entitled to bind a Partner by any settlement agreement
(within the meaning of Section 6224 of the Code) unless such Partner consents
thereto in writing and shall notify the Partners in a manner and at such time
as is sufficient to allow the Partners to exercise their rights pursuant to
Section 6224(c)(3) of the Code; (v) the Managing General Partner shall
consult in good faith with the Simon Designee, the DeBartolo Designee and the
JCP Limited Partner regarding the filing of a Code Section 6227(b)
administrative adjustment request with respect to the Partnership or a
Property before filing such request, it being understood, however, that the
provisions hereof shall not be construed to limit the ability of any Partner,
including the Managing General Partner, to file an administrative adjustment
request on its own behalf pursuant to Section 6227(a) of the Code; and (vi)
the Managing General Partner shall consult in good faith with the Simon
Designee, the DeBartolo Designee and the JCP Limited Partner regarding the
filing of a petition for judicial review of an administrative adjustment
request under Section 6228 of the Code, or a petition for judicial review of
a final partnership administrative judgment under Section 6226 of the Code
relating to the Partnership before filing such petition.
6.8 WITHHOLDING. Each Partner hereby authorizes the
Partnership to withhold or pay on behalf of or with respect to such Partner any
amount of federal, state, local or foreign taxes
37
that the Managing General Partner determines the Partnership is required to
withhold or pay with respect to any amount distributable or allocable to such
Partner pursuant to this Agreement, including, without limitation, any taxes
required to be withheld or paid by the Partnership pursuant to Code Sections
1441, 1442, 1445, or 1446. Any amount paid on behalf of or with respect to a
Partner shall constitute a loan by the Partnership to such Partner, which
loan shall be due within fifteen (15) days after repayment is demanded of the
Partner in question, and shall be repaid through withholding of subsequent
distributions to such Partner. Nothing in this Section 6.8 shall create any
obligation on the Managing General Partner to advance funds to the
Partnership or to borrow funds from Third Parties in order to make payments
on account of any liability of the Partnership under a withholding tax act.
Any amounts payable by a Limited Partner hereunder shall bear interest at the
lesser of (i) the base rate on corporate loans at large United States money
center commercial banks, as published from time to time in THE WALL STREET
JOURNAL, or (ii) the maximum lawful rate of interest on such obligation, such
interest to accrue from the date such amount is due (i.e., fifteen (15) days
after demand) until such amount is paid in full. To the extent the payment or
accrual of withholding tax results in a federal, state or local tax credit to
the Partnership, such credit shall be allocated to the Partner to whose
distribution the tax is attributable.
ARTICLE VII
RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNERS
7.1 EXPENDITURES BY PARTNERSHIP. The Managing General
Partner is hereby authorized to pay compensation for accounting,
administrative, legal, technical, management and other services rendered to
the Partnership. All of the aforesaid expenditures shall be made on behalf of
the Partnership and the Managing General Partner shall be entitled to
reimbursement by the Partnership for any expenditures incurred by it on
behalf of the Partnership which shall have been made other than out of the
funds of the Partnership. The Partnership shall also assume, and pay when
due, the Administrative Expenses and such portion of the Managing General
Partners', the Non-Managing General Partners' and their respective
subsidiaries' REIT Expenses as shall be appropriately allocated to the
Partnership by the Managing General Partner in the exercise of its reasonable
business judgment.
7.2 POWERS AND DUTIES OF THE GENERAL PARTNERS. The Managing
General Partner shall be responsible for the management of the Partnership's
business and affairs. Except as otherwise herein expressly provided, and
subject to the limitations contained in Section 7.3 hereof with respect to
Major Decisions, the Managing General Partner shall have, and is hereby
granted, full and complete power, authority and discretion to take such
action for and on behalf of the Partnership and in its name as the Managing
General Partner shall, in its sole and absolute discretion, deem necessary or
appropriate to carry out the
38
purposes for which the Partnership was organized. Any action by the Managing
General Partner relating to (i) transactions between the Partnership or a
Subsidiary Entity and M.S. Management Associates, Inc., Simon MOA Management
Company, Inc. and/or M.S. Management Associates (Indiana), Inc., (ii)
transactions between the Partnership or a Subsidiary Entity and DeBartolo
Properties Management, Inc. or (iii) transactions involving the Partnership
or a Subsidiary Entity in which the Simons, the DeBartolos or any Affiliate
of the Simons or the DeBartolos has an interest (other than a non-controlling
minority equity interest, which has no management or veto powers, in a
Person, other than the Partnership or a Subsidiary entity, which is engaged
in such transaction) other than through ownership of Partnership Units, shall
require the prior approval of a majority of the Independent Directors. Except
as otherwise expressly provided herein and subject to Section 7.3 hereof, the
Managing General Partner shall have, for and on behalf of the Partnership,
the right, power and authority:
(a) To manage, control, hold, invest, lend, reinvest,
acquire by purchase, lease, sell, contract to purchase or sell, grant,
obtain, or exercise options to purchase, options to sell or conversion
rights, assign, transfer, convey, deliver, endorse, exchange, pledge,
mortgage or otherwise encumber, abandon, improve, repair, construct,
maintain, operate, insure, lease for any term and otherwise deal with any and
all property of whatsoever kind and nature, and wheresoever situated, in
furtherance of the purposes of the Partnership, and in addition, without
limiting the foregoing, upon the affirmative vote of no fewer than three (3)
of the Independent Directors of the Managing General Partner who are not
Affiliates of the DeBartolos, the Managing General Partner shall authorize
and require the sale of any property owned by the Partnership or a Subsidiary
Entity.
(b) To acquire, directly or indirectly, interests in real
or personal property (collectively, "property") of any kind and of any type,
and any and all kinds of interests therein, and to determine the manner in
which title thereto is to be held; to manage, insure against loss, protect
and subdivide any property, interests therein or parts thereof; to improve,
develop or redevelop any property; to participate in the ownership and
development of any property; to dedicate for public use, to vacate any
subdivisions or parts thereof, to resubdivide, to contract to sell, to grant
options to purchase or lease and to sell on any terms; to convey, to
mortgage, pledge or otherwise encumber any property, or any part thereof; to
lease any property or any part thereof from time to time, upon any terms and
for any period of time, and to renew or extend leases, to amend, change or
modify the terms and provisions of any leases and to grant options to lease
and options to renew leases and options to purchase; to partition or to
exchange any property, or any part thereof, for other property; to grant
easements or charges of any kind; to release, convey or assign any right,
title or interest in or about or easement appurtenant to any property or any
part thereof; to construct and reconstruct, remodel, alter, repair, add to or
take
39
from buildings on any property; to insure any Person having an interest in or
responsibility for the care, management or repair of any property; to direct
the trustee of any land trust to mortgage, lease, convey or contract to
convey any property held in such land trust or to execute and deliver deeds,
mortgages, notes and any and all documents pertaining to the property subject
to such land trust or in any matter regarding such trust; and to execute
assignments of all or any part of the beneficial interest in such land trust;
(c) To employ, engage or contract with or dismiss from
employment or engagement Persons to the extent deemed necessary by the
Managing General Partner for the operation and management of the Partnership
business, including but not limited to, employees, contractors,
subcontractors, engineers, architects, surveyors, mechanics, consultants,
accountants, attorneys, insurance brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the
Partnership;
(e) To borrow or lend money, procure loans and advances
from any Person for Partnership purposes, and to apply for and secure from
any Person credit or accommodations; to contract liabilities and obligations,
direct or contingent and of every kind and nature with or without security;
and to repay, discharge, settle, adjust, compromise or liquidate any such
loan, advance, credit, obligation or liability (including by deeding property
to a lender in lieu of foreclosure);
(f) To Pledge, hypothecate, mortgage, assign, deposit,
deliver, enter into sale and leaseback arrangements or otherwise give as
security or as additional or substitute security or for sale or other
disposition any and all Partnership property, tangible or intangible,
including, but not limited to, real estate and beneficial interests in land
trusts, and to make substitutions thereof, and to receive any proceeds
thereof upon the release or surrender thereof; to sign, execute and deliver
any and all assignments, deeds and other contracts and instruments in
writing; to authorize, give, make, procure, accept and receive moneys,
payments, property, notices, demands, vouchers, receipts, releases,
compromises and adjustments; to waive notices, demands, protests and
authorize and execute waivers of every kind and nature; to enter into, make,
execute, deliver and receive written agreements, undertakings and instruments
of every kind and nature; to give oral instructions and make oral agreements;
and generally to do any and all other acts and things incidental to any of
the foregoing or with reference to any dealings or transactions which any
attorney for the Partnership may deem necessary, proper or advisable;
(g) To acquire and enter into any contract of insurance
which the Managing General Partner deems necessary or appropriate for the
protection of the Partnership or any Affiliate thereof,
40
for the conservation of the Partnership's assets (or the assets of any
Affiliate thereof) or for any purpose convenient or beneficial to the
Partnership or any Affiliate thereof;
(h) To conduct any and all banking transactions on behalf
of the Partnership; to adjust and settle checking, savings and other accounts
with such institutions as the Managing General Partner shall deem
appropriate; to draw, sign, execute, accept, endorse, guarantee, deliver,
receive and pay any checks, drafts, bills of exchange, acceptances, notes,
obligations, undertakings and other instruments for or relating to the
payment of money in, into or from any account in the Partnership's name; to
execute, procure, consent to and authorize extensions and renewals of the
same; to make deposits and withdraw the same and to negotiate or discount
commercial paper, acceptances, negotiable instruments, bills of exchange and
dollar drafts;
(i) To demand, sue for, receive, and otherwise take steps
to collect or recover all debts, rents, proceeds, interests, dividends,
goods, chattels, income from property, damages and all other property to
which the Partnership may be entitled or which are or may become due the
Partnership from any Person; to commence, prosecute or enforce, or to defend,
answer or oppose, contest and abandon all legal proceedings in which the
Partnership is or may hereafter be interested; and to settle, compromise or
submit to arbitration any accounts, debts, claims, disputes and matters which
may arise between the Partnership and any other Person and to grant an
extension of time for the payment or satisfaction thereof on any terms, with
or without security;
(j) To make arrangements for financing, including the
taking of all action deemed necessary or appropriate by the Managing General
Partner to cause any approved loans to be closed;
(k) To take all reasonable measures necessary to insure
compliance by the Partnership with contractual obligations and other
arrangements entered into by the Partnership from time to time in accordance
with the provisions of this Agreement, including periodic reports as required
to lenders and using all due diligence to insure that the Partnership is in
compliance with its contractual obligations;
(l) To maintain the Partnership's books and records;
(m) To create or maintain Affiliates engaged in activities
that the Partnership could itself undertake; and
(n) To prepare and deliver, or cause to be prepared and
delivered by the Accountants, all financial and other reports with respect to
the operations of the Partnership, and preparation and filing of all federal,
state and local tax returns and reports.
Except as otherwise provided herein, to the extent the
duties of the Managing General Partner require expenditures of
41
funds to be paid to Third Parties, the Managing General Partner shall not
have any obligations hereunder except to the extent that Partnership funds
are reasonably available to it for the performance of such duties, and
nothing herein contained shall be deemed to authorize or require the Managing
General Partner, in its capacity as such, to expend its individual funds for
payment to Third Parties or to undertake any individual liability or
obligation on behalf of the Partnership.
Notwithstanding any other provisions of this Agreement or
the Act, any action of the Managing General Partner on behalf of the
Partnership or any decision of the Managing General Partner to refrain from
acting on behalf of the Partnership, undertaken in the good faith belief that
such action or omission is necessary or advisable in order (i) to protect or
further the ability of the Managing General Partner, the Non-Managing General
Partners and their respective Subsidiary Entities, as applicable, to continue
to qualify as REITs or (ii) to avoid the Managing General Partner's or the
Non-Managing General Partners' incurring any taxes under Section 857 or
Section 4981 of the Code, is expressly authorized under this Agreement and is
deemed approved by all of the Limited Partners. Nothing, however, in this
Agreement shall be deemed to give rise to any liability on the part of a
Limited Partner for the Managing General Partner's, the Non-Managing General
Partner's or any of their applicable Subsidiary Entity's failure to qualify
or continue to qualify as a REIT or a failure to avoid incurring any taxes
under the foregoing sections of the Code, unless such failure or failures
result from an act of the Limited Partner which constitutes a breach of this
Agreement (including, without limitation, Section 10.4(b)).
7.3 MAJOR DECISIONS.
(a) The Managing General Partner shall not, without the
Consent of the Limited Partners, and the consent of the Non-Managing General
Partners, (y) on behalf of the Partnership, amend, modify or terminate this
Agreement other than to reflect (A) the admission of Additional Limited
Partners pursuant to Section 9.4 hereof, (B) the making of additional Capital
Contributions and the issuance of additional Partnership Units by reason
thereof, all in accordance with the terms of this Agreement, (C) the
withdrawal or assignment of the interest of any Partner in accordance with
the terms of this Agreement, or (D) any changes necessary to satisfy the REIT
Requirements, or (z) permit the Partnership, on behalf of any Subsidiary
Partnership, to amend, modify or terminate the organizing agreement pursuant
to which such Subsidiary Partnership operates other than to reflect (A) the
admission of additional limited partners therein pursuant to the terms
thereof, (B) the making of additional capital contributions thereto pursuant
to the terms thereof, (C) the withdrawal or assignment of the interest of any
partner thereof pursuant to the terms thereof, or (D) any changes necessary
to satisfy the REIT Requirements. Notwithstanding the foregoing, this
Agreement shall not be modified or amended without the prior written consent
of each Partner adversely affected if such
42
modification or acquisition would (i) convert a Limited Partner's interest in
the Partnership to a general partnership interest, (ii) modify the limited
liability of a Limited Partner, (iii) reduce the interest of any Partner in
the Partnership, (iv) reduce any Partner's share of distributions made by the
Partnership, (v) amend this Section 7.3 or Section 7.5 or (vi) create any
obligations for any Limited Partner or deprive any Limited Partner of (or
otherwise impair) any other rights it may have under this Agreement
(including in respect of tax allocations, rights to indemnification under
Section 7.8, rights of the Limited Partner or a Secured Creditor of a Limited
Partner under Section 9.3 (which rights are subject to the restrictions set
forth in Section 9.5), rights of a Limited Partner under Section 9.6 or
Article XI, or the rights of a Limited Partner under Section 10.4(a) or
10.5); PROVIDED, HOWEVER, that an amendment that reduces the percentage
ownership interest of any Partner in the Partnership or reduces any Partner's
share of distributions made by the Partnership (including tax allocations in
respect of such distributions) shall not require the consent of any Partner
if such change is made on a uniform or pro-rata basis with respect to all
Partners.
(b) The Managing General Partner shall not, without the
consent of the Non-Managing General Partners, and for all periods during
which the Simons hold at least ten percent of the Partnership Units then
outstanding, the Managing General Partner shall not, without the prior
Consent of the Simons, and for all periods during which the DeBartolos hold
at least ten percent of the Partnership Units then outstanding, the Managing
General Partner shall not, without the prior Consent of the DeBartolos, on
behalf of the Partnership, undertake any of the following actions (together
with any act described in paragraph (a) hereof, the "Major Decisions"):
(i) Make a general assignment for the benefit of creditors
(or cause or permit (if permission of the Partnership or any Subsidiary
Partnership is required) such an assignment to be made on behalf of a
Subsidiary Partnership) or appoint or acquiesce in the appointment of a
custodian, receiver or trustee for all or any part of the assets of the
Partnership (or any Subsidiary Partnership);
(ii) take title to any personal or real property, other
than in the name of the Partnership or a Subsidiary Entity or pursuant to
Section 7.7 hereof;
(iii) institute any proceeding for Bankruptcy on behalf of
the Partnership, or cause or permit (if permission of the Partnership or any
Subsidiary Partnership is required) the institution of any such proceeding on
behalf of any Subsidiary Partnership;
(iv) act or cause the taking or refraining of any action
with respect to the dissolution and winding up of the Partnership (or any
Subsidiary Partnership) or an election to continue the
43
Partnership (or any Subsidiary Partnership) or to continue the business of
the Partnership (or any Subsidiary Partnership); or
(v) sell, exchange, Transfer or otherwise dispose of all or
substantially all of the Partnership's assets.
(c) The Managing General Partner shall not, without the
prior Consent of the Limited Partners,
(i) after the Effective Time, amend the Charter of the
Managing General Partner to increase or decrease the Ownership Limit or alter
any other provision of said Charter or of any of the definitions of defined
terms contained in such Charter which would have the effect of changing the
Ownership Limit in any way;
(ii) except in connection with the dissolution and
winding-up of the Partnership by the Liquidation Agent, agree to or
consummate the merger or consolidation of the Partnership or the voluntary
sale or other Transfer of all or substantially all of the Partnership's
assets in a single transaction or related series of transactions (without
limiting the transactions which will not be deemed to be a voluntary sale or
Transfer, the foreclosure of a mortgage lien on any Property or the grant by
the Partnership of a deed in lieu of foreclosure for such Property shall not
be deemed to be such a voluntary sale or other Transfer); or
(iii) dissolve the Partnership; or
(iv) issue additional shares of common stock of the
Non-Managing General Partners other than to any of the General Partners or as
may be necessary or desirable in order for the General Partners to comply
with REIT Requirements.
Without the consent of all the Limited Partners, the
General Partners shall have no power to do any act in contravention of this
Agreement or applicable law.
7.4 MANAGING GENERAL PARTNER AND NON-MANAGING GENERAL PARTNERS
PARTICIPATION. The Managing General Partner and the Non-Managing General
Partners agree that (a) substantially all activities and business operations
of the Managing General Partner and the Non-Managing General Partners,
including but not limited to, activities pertaining to the acquisition,
development, redevelopment and ownership of properties, shall be conducted
directly or indirectly through the Partnership or any Subsidiary Partnership,
(b) except for a property acquisition authorized by the Managing General
Partner with the Consent of the Limited Partners, all property acquisitions
shall henceforth be made through the Partnership or any Subsidiary
Partnership, and (c) except as provided below any funds raised by the
Managing General Partner or the Non-Managing General Partners, whether by
issuance of stock, borrowing or otherwise, will be made available to the
Partnership whether as capital contributions, loans or otherwise,
44
as appropriate. Notwithstanding the provisions of the preceding sentence,
each of the Managing General Partner and the Non-Managing General Partners
shall have the right to form Qualified REIT subsidiaries to act as general
partners of Subsidiary Partnerships of the Partnership. The Managing General
Partner and the Non Managing General Partner agree to conduct their
respective affairs, to the extent they are so able to do, in a manner which
will preserve the equivalence in value between a Share and a Partnership Unit.
7.5 PROSCRIPTIONS. The Managing General Partner shall not
have the authority to:
(a) Do any act in contravention of this Agreement;
(b) Possess any Partnership property or assign rights in
specific Partnership property for other than Partnership purposes; or.
(c) Do any act in contravention of applicable law.
Nothing herein contained shall impose any obligation on any
Person doing business with the Partnership to inquire as to whether or not the
Managing General Partner has properly exercised its authority in executing any
contract, lease, mortgage, deed or any other instrument or document on behalf of
the Partnership, and any such Person shall be fully protected in relying upon
such authority.
7.6 ADDITIONAL PARTNERS. Additional Partners may be
admitted to the Partnership only as provided in Section 9.4 hereof.
7.7 TITLE HOLDER. To the extent allowable under applicable law,
title to all or any part of the Properties of the Partnership may be held in
the name of the Partnership or any other individual, corporation,
partnership, trust or otherwise, the beneficial interest in which shall at
all times be vested in the Partnership. Any such title holder shall perform
any and all of its respective functions to the extent and upon such terms and
conditions as may be determined from time to time by the Managing General
Partner.
7.8 WAIVER AND INDEMNIFICATION. Neither the Managing General
Partner, the Non-Managing General Partners nor any of their Affiliates,
directors, trust managers, officers, shareholders, nor any Person acting on
their behalf pursuant hereto, shall be liable, responsible or accountable in
damages or otherwise to the Partnership or to any Partner for any acts or
omissions performed or omitted to be performed by them within the scope of
the authority conferred upon the Managing General Partner or the Non-Managing
General Partners by this Agreement and the Act, provided that the Managing
General Partner's, the Non-Managing General Partners' or such other Person's
conduct or omission to act was taken in good faith and in the belief that
45
such conduct or omission was in the best interests of the Partnership and,
provided further, that the Managing General Partner, the Non-Managing General
Partners or such other Person shall not be guilty of fraud, willful
misconduct or gross negligence. The Managing General Partner acknowledges
that it owes fiduciary duties both to its shareholders and to the Limited
Partners and it shall use its reasonable efforts to discharge such duties to
each; PROVIDED, HOWEVER, that in the event of a conflict between the
interests of the shareholders of the Managing General Partner and the
interests of the Limited Partners, the Limited Partners agree that the
Managing General Partner shall discharge its fiduciary duties to the Limited
Partners by acting in the best interests of the Managing General Partner's
shareholders. Nothing contained in the preceding sentence shall be construed
as entitling either the Managing General Partner or the Non-Managing General
Partners to realize any profit or gain from any transaction between such
Partner and the Partnership (except as may be required by law upon a
distribution to the Managing General Partner or the Non-Managing General
Partners), including from the lending of money by the Managing General
Partner or the Non-Managing General Partners to the Partnership or the
contribution of property by the Managing General Partner or the Non-Managing
General Partners to the Partnership, it being understood that in any such
transaction the Managing General Partner or the Non-Managing General
Partners, as the case may be, shall be entitled to cost recovery only. The
Partnership shall, and hereby does, indemnify and hold harmless each of the
Managing General Partner and the Non-Managing General Partners and its
Affiliates, their respective directors, officers, shareholders and any other
individual acting on its or their behalf to the extent such Persons would be
indemnified by the Managing General Partner pursuant to the Charter of the
Managing General Partner if such persons were directors, officers, agents or
employees of the Managing General Partner (or the Charter of SDG or the
Amended and Restated Regulations of SD Property, if such Persons were
directors, officers, agents or employees of the Non-Managing General
Partners); PROVIDED, HOWEVER, that no Partner shall have any personal
liability with respect to the foregoing indemnification, any such
indemnification to be satisfied solely out of the assets of the Partnership.
The Partnership shall, and hereby does, indemnify each Limited Partner and
its Affiliates, their respective directors, officers, shareholders and any
other individual acting on its or their behalf, from and against any costs
(including costs of defense) incurred by it as a result of any litigation or
other proceeding in which any Limited Partner is named as a defendant or any
claim threatened or asserted against any Limited Partner, in either case
which relates to the operations of the Partnership or any obligation assumed
by the Partnership, unless such costs are the result of misconduct on the
part of, or a breach of this Agreement by, such Limited Partner; PROVIDED,
HOWEVER, no Partner shall have any personal liability with respect to the
foregoing indemnification, any such indemnification to be satisfied solely
out of the assets of the Partnership.
46
7.9 LIMITATION OF LIABILITY OF DIRECTORS SHAREHOLDERS AND OFFICERS
OF THE MANAGING GENERAL PARTNER AND THE NON-MANAGING GENERAL PARTNERS. Any
obligation or liability whatsoever of the General Partners which may arise at
any time under this Agreement or any other instrument, transaction, or
undertaking contemplated hereby shall be satisfied, if at all, out of the
assets of the General Partners or the Partnership only. No such obligation or
liability shall be personally binding upon, nor shall resort for the
enforcement thereof be had to, any of the General Partners' directors,
shareholders, officers, employees, or agents, regardless of whether such
obligation or liability is in the nature of contract, tort or otherwise.
7.10 DISTRIBUTION TO LIMITED PARTNERS OF THE SRC PARTNERSHIP.
Pursuant to the terms of the Agreement of Limited Partnership of the SRC
Partnership, the Partnership will contribute assets to the SRC Partnership,
become a limited partner of the SRC Partnership and receive SRC Partnership
Units, which the Partnership will, in turn, distribute PRO RATA to all
Limited Partners other than any General Partner who also holds SRC
Partnership Units, whereupon the Limited Partners shall become limited
partners of the SRC Partnership.
ARTICLE VIII
DISSOLUTION, LIQUIDATION AND WINDING-UP
8.1 ACCOUNTING. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting (which shall be certified
by the Accountants) shall be made of the Capital Account of each Partner and
of the Profits or Losses of the Partnership from the date of the last
previous accounting to the date of dissolution. Financial statements
presenting such accounting shall include a report of the Accountants.
8.2 DISTRIBUTION ON DISSOLUTION. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership (other than
Partners) in the order of priority as provided by law;
(b) Establishment of reserves as determined by the Managing
General Partner to provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Partners, if
any, in the order of priority provided by law;
(d) To the Partners in accordance with the positive
balances in their Capital Accounts after giving effect to all contributions,
distributions and allocations for all periods, including the period in which
such distribution occurs (other than
47
those distributions made pursuant to this Section 8.2(d), Section 8.3 or
Section 8.4 hereof).
If upon dissolution and termination of the Partnership the
Capital Account of any Partner is less than zero, then such Partner shall
have no obligation to restore the negative balance in its Capital Account
unless and except to the extent that such Partner has so elected under
Section 4.8. Whenever the Liquidation Agent reasonably determines that any
reserves established pursuant to paragraph (b) above are in excess of the
reasonable requirements of the Partnership, the amount determined to be
excess shall be distributed to the Partners in accordance with the above
provisions.
8.3 SALE OF PARTNERSHIP ASSETS. In the event of the liquidation of
the Partnership in accordance with the terms of this Agreement, the
Liquidation Agent may sell Partnership property; PROVIDED, HOWEVER, that all
sales, leases, encumbrances or transfers of Partnership assets shall be made
by the Liquidation Agent solely on an "arm's length" basis, at the best price
and on the best terms and conditions as the Liquidation Agent in good faith
believes are reasonably available at the time and under the circumstances and
on a non-recourse basis to the Limited Partners. The liquidation of the
Partnership shall not be deemed finally terminated until the Partnership
shall have received cash payments in full with respect to obligations such as
notes, purchase money mortgages, installment sale contracts or other similar
receivables received by the Partnership in connection with the sale of
Partnership assets and all obligations of the Partnership have been satisfied
or assumed by the Managing General Partner or the Non-Managing General
Partners. The Liquidation Agent shall continue to act to enforce all of the
rights of the Partnership pursuant to any such obligations until paid in full
or otherwise discharged or settled.
8.4 DISTRIBUTIONS IN KIND. In the event that it becomes necessary to
make a distribution of Partnership property in kind in connection with the
liquidation of the Partnership, the Managing General Partner may, if it
determines that to do so would be in the best interest of the Partners and
obtains the Consent of the Limited Partners and consent of the Non-Managing
General Partners, transfer and convey such property to the distributees as
tenants in common, subject to any liabilities attached thereto, so as to vest
in them undivided interests in the whole of such property in proportion to
their respective rights to share in the proceeds of the sale of such property
(other than as a creditor) in accordance with the provisions of Section 8.2
hereof. Immediately prior to the distribution of Partnership property in
kind, the Capital Account of each Partner shall be increased or decreased, as
the case may be, to reflect the manner in which the unrealized income, gain,
loss and deduction inherent in such property (to the extent not previously
reflected in the Capital Accounts) would be allocated among the Partners if
there were a
48
taxable disposition of such property for its fair market value as of the date
of the distribution.
8.5 DOCUMENTATION OF LIQUIDATION. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall
terminate and the Liquidation Agent shall have the authority to execute and
record any and all documents or instruments required to effect the
dissolution, liquidation and termination of the Partnership.
8.6 LIABILITY OF THE LIQUIDATION AGENT. The Liquidation Agent shall
be indemnified and held harmless by the Partnership from and against any and
all claims, demands, liabilities, costs, damages and causes of action of any
nature whatsoever arising out of or incidental to the Liquidation Agent's
taking of any action authorized under or within the scope of this Agreement;
and PROVIDED, HOWEVER, that no Partner shall have any personal liability with
respect to the foregoing indemnification, any such indemnification to be
satisfied solely out of the assets of the Partnership; and PROVIDED FURTHER,
HOWEVER, that the Liquidation Agent shall not be entitled to indemnification,
and shall not be held harmless, where the claim, demand, liability, cost,
damage or cause of action at issue arose out of:
(a) A matter entirely unrelated to the Liquidation Agent's
action or conduct pursuant to the provisions of this Agreement; or
(b) The proven misconduct or gross negligence of the
Liquidation Agent.
ARTICLE IX
TRANSFER OF PARTNERSHIP INTERESTS AND RELATED MATTERS
9.1 NON-MANAGING GENERAL PARTNERS TRANSFERS AND DEEMED TRANSFERS.
Neither of the Non-Managing General Partners shall (i) withdraw from the
Partnership, (ii) merge, consolidate or engage in any combination with
another Person, (iii) sell all or substantially all of its assets or (iv)
sell, assign, pledge, encumber or otherwise dispose of all or any portion of
its Partnership Units except where such merger, consolidation, sale,
assignment, pledge or other disposal is to another General Partner as its
sole successor. In the event of the withdrawal by a General Partner from the
Partnership, in violation of this Agreement or otherwise, or the dissolution,
termination or Bankruptcy of a General Partner, within 90 days after the
occurrence of any such event, the remaining General Partners or a majority in
interest of the remaining Partners may elect in writing to continue the
Partnership business and may, or if there is then no General Partner other
than one that has withdrawn or as to which dissolution, termination or
Bankruptcy has occurred shall, select a substitute general partner effective
as of the date of the occurrence of any such event.
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9.2 MANAGING GENERAL PARTNER TRANSFERS AND DEEMED TRANSFERS. The
Managing General Partner shall not (i) withdraw from the Partnership, (ii)
merge, consolidate or engage in any combination with another Person other
than another General Partner, (iii) sell all or substantially all of its
assets or (iv) sell, assign, pledge, encumber or otherwise dispose of all or
any portion of its Partnership Units or Preferred Units except to the
Partnership, in each case without the Consent of the Limited Partners. Upon
any transfer of any Partnership Units (not Preferred Units) in accordance
with the provisions of this Section 9.2, the transferee General Partner shall
become vested with the powers and rights of the transferor General Partner
with respect to the Partnership Units transferred, and shall be liable for
all obligations and responsible for all duties of the transferor General
Partner, once such transferee has executed such instruments as may be
necessary to effectuate such admission and to confirm the agreement of such
transferee to be bound by all the terms and provisions of this Agreement with
respect to the Partnership Units so acquired. It is a condition to any
transfer otherwise permitted hereunder that the transferee assumes by
operation of law or express agreement all of the obligations of the
transferor Managing General Partner under this Agreement with respect to such
transferred Partnership Units and no such transfer (other than pursuant to a
statutory merger or consolidation wherein all obligations and liabilities of
the transferor General Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor General Partner of its
obligations under this Agreement accruing prior to the date of such transfer.
9.3 TRANSFERS BY LIMITED PARTNERS. Except as otherwise provided in
this Section 9.3, the Limited Partners shall not Transfer all or any portion
of their Partnership Units to any transferee without the consent of the
Managing General Partner, which consent may be withheld in its sole and
absolute discretion; PROVIDED, HOWEVER, that the foregoing shall not be
considered a limitation on the ability of the Limited Partners to exercise
their Rights pursuant to Article XI hereof.
(a) Notwithstanding the foregoing, but subject to the
provisions of Section 9.5 hereof, any Limited Partner may at any time,
without the consent of the Managing General Partner, (i) Transfer all or a
portion of its Partnership Units or LP Preferred Units to an Affiliate of
such Limited Partner, or (ii) Pledge some or all of its Partnership Units or
LP Preferred Units to any Institutional Lender. Any Transfer to an Affiliate
pursuant to clause (i) and any Transfer to a pledgee of Partnership Units or
LP Preferred Units Pledged pursuant to clause (ii) may be made without the
consent of the Managing General Partner but, except as provided in subsequent
provisions of this Section 9.3, such transferee or such pledgee shall hold
the Units or LP Preferred Units so transferred to it (and shall be admitted
to the Partnership as a Substitute Limited Partner) subject to all the
restrictions set forth in this Section 9.3. It is a condition to any Transfer
otherwise permitted under any provision of this
50
Section 9.3 that the transferee assumes by operation of law or express
agreement all of the obligations of the transferor Limited Partner under this
Agreement with respect to such transferred Partnership Units or LP Preferred
Units, as the case may be, arising after the effective date of the Transfer
and no such Transfer (other than pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor
Partner are assumed by a successor corporation by operation of law, and other
than pursuant to an exercise of the Rights pursuant to Article XI wherein all
obligations and liabilities of the transferor Partner arising from and after
the date of such Transfer shall be assumed by the Managing General Partner)
shall relieve the transferor Partner of its obligations under this Agreement
prior to the effective date of such Transfer. Upon any such Transfer or
Pledge permitted under this Section 9.3, the transferee or, upon foreclosure
on the Pledged Partnership Units or LP Preferred Units, as the case may be,
each Institutional Lender which is the pledgee shall be admitted as a
Substituted Limited Partner as such term is defined in the Act and shall
succeed to all of the rights, including rights with respect to the Rights, of
the transferor Limited Partner under this Agreement in the place and stead of
such transferor Limited Partner; PROVIDED, HOWEVER, that notwithstanding the
foregoing, any transferee of any transferred Partnership Unit or LP Preferred
Units, as the case may be, shall, unless the Ownership Limit is waived in
writing by the Managing General Partner, be subject to the Ownership Limit
applicable to Persons other than the Limited Partners and/or their Affiliates
which may limit or restrict such transferee's ability to exercise the Limited
Partner's Rights, if any. Any transferee, whether or not admitted as a
Substituted Limited Partner, shall take subject to the obligations of the
transferor hereunder. No transferee pursuant to a Transfer which is not
expressly permitted under this Section 9.3 and is not consented to by the
Managing General Partner, whether by a voluntary Transfer, by operation of
law or otherwise, shall have any rights hereunder, other than the right to
receive such portion of the distributions and allocations of Profits and
Losses made by the Partnership as are allocable to the Partnership Units or
LP Preferred Units, as the case may be, so transferred.
(b) In addition to the Rights granted to the JCP Limited
Partner and any other Transfers permitted under this Article IX, the JCP
Limited Partner shall have the right to transfer all of its Partnership Units
to a single accredited investor, as defined in Rule 501 promulgated under the
Securities Act, subject to the provisions of Section 9.5, and such transferee
shall be admitted to the Partnership as a Substitute Limited Partner. Any
transferee of the Partnership Units owned by the JCP Limited Partner shall be
subject to all of the restrictions set forth in Section 9.3(a) above;
PROVIDED, HOWEVER, that if the JCP Limited Partner hereafter Pledges its
Partnership Units pursuant to Section 9.3(a), then provided that the JCP
Limited Partner has not previously exercised the right provided for above in
this Section 9.3(b), the Institutional Lender or Lenders which are the
51
pledgee(s) may exercise such right, whether by taking title to the JCP
Limited Partner's Partnership Units and then transferring the same or by
effecting such transfer upon foreclosure of the Pledge.
(c) The Limited Partners acknowledge that the Partnership
Units and LP Preferred Units have not been registered under any federal or
state securities laws and, as a result thereof, they may not be sold or
otherwise transferred, except in accordance with Article XI or otherwise in
compliance with such laws. Notwithstanding anything to the contrary contained
in this Agreement, no Partnership Units or LP Preferred Units may be sold or
otherwise transferred except pursuant to Article XI unless such Transfer is
exempt from registration under any applicable securities laws or such
Transfer is registered under such laws, it being acknowledged that the
Partnership has no obligation to take any action which would cause any such
interests to be registered.
9.4 ISSUANCE OF ADDITIONAL PARTNERSHIP UNITS AND PREFERRED UNITS.
(a) At any time after the date hereof, subject to the provisions of Section
9.5 hereof, the Managing General Partner may, upon its determination that the
issuance of additional Partnership Units or LP Preferred Units ("Additional
Units") is in the best interests of the Partnership, cause the Partnership to
issue Additional Units to any existing Partner or issue Additional Units to
and admit as a partner in the Partnership any Person in exchange for the
contribution by such Person of cash and/or property which the Managing
General Partner determines is desirable to further the purposes of the
Partnership under Section 2.3 hereof and which the Managing General Partner
determines has a value that justifies the issuance of such Additional Units.
In the event that Additional Units are issued by the Partnership pursuant to
this Section 9.4, (i) in the case of the issuance of Partnership Units, the
number of Partnership Units issued shall be determined by dividing the Gross
Asset Value of the property contributed (reduced by the amount of any
indebtedness assumed by the Partnership or to which such property is subject)
as of the date of contribution to the Partnership (the "Contribution Date")
by the Contribution Deemed Partnership Unit Value, computed as of the Trading
Day immediately preceding the Contribution Date and (ii) in the case of the
issuance of LP Preferred Units, the aggregate liquidation preference of LP
Preferred Units as of the date they are so issued shall equal the Gross Asset
Value of the property contributed (reduced by the amount of any indebtedness
assumed by the Partnership or to which such property is subject) as of the
Contribution Date.
In addition, the Managing General Partner may, upon its
determination that the issuance of GP Preferred Units is in the best
interests of the Partnership, issue GP Preferred Units in accordance with
Section 4.3(c) hereof.
(b) Each class or series of LP Preferred Units issued in
accordance with Section 9.4(a) shall be described in a written document (the
"LP Preferred Unit Designation") attached as EXHIBIT
52
B-2 that shall set forth, in sufficient detail, the economic rights,
including dividend, distribution, redemption and conversion rights and
sinking fund provisions, of the class or series of LP Preferred Units.
(c) The Managing General Partner shall be authorized on
behalf of each of the Partners to amend this Agreement to reflect the
admission of any Partner or any increase in the Partnership Units or
Preferred Units of any Partner in accordance with the provisions of this
Section 9.4, and the Managing General Partner shall promptly deliver a copy
of such amendment to the Non-Managing General Partners and each Limited
Partner. In addition, upon the issuance of any class or series of LP
Preferred Units pursuant to Section 9.4(a), the Managing General Partner
shall provide the Limited Partners with a copy of the LP Preferred Unit
Designation relating to such class or series. The Limited Partners hereby
irrevocably appoint the Managing General Partner as their attorney-in-fact,
coupled with an interest, solely for the purpose of executing and delivering
such documents, and taking such actions, as shall be reasonably necessary in
connection with the provisions of this Section 9.4 or making any modification
to this Agreement permitted by Section 7.3 (including, without limitation,
any modification which, under Section 7.3 hereof, requires the Consent of the
Limited Partners where such consent has been obtained). Nothing contained in
this Section 9.4 shall be construed as authorizing the Managing General
Partner to grant any consent on behalf of the Limited Partners, or any of
them.
9.5 RESTRICTIONS ON TRANSFER.
(a) In addition to any other restrictions on Transfer
herein contained, in no event may any Transfer or assignment of a Partnership
Unit or Preferred Unit by any Partner be made nor may any new Partnership
Unit or Preferred Unit be issued by the Partnership (i) to any Person which
lacks the legal right, power or capacity to own a Partnership Unit or
Preferred Unit; (ii) in violation of applicable law; (iii) if such Transfer
would immediately or with the passage of time cause either the Managing
General Partner or the Non-Managing General Partners to fail to comply with
the REIT Requirements, such determination to be made assuming that such
Partners do comply with the REIT Requirements immediately prior to the
proposed Transfer; (iv) if such Transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to Title I of
ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA) or a
"disqualified person" (as defined in Section 4975(e) of the Code); (v) if
such Transfer would, in the opinion of counsel to the Partnership, cause any
portion of the underlying assets of the Partnership to constitute assets of
any employee benefit plan pursuant to Department of Labor Regulations Section
2510.3-101; (vi) if such Transfer would result in a deemed distribution to
any Partner attributable to a failure to meet the requirements of Regulations
Section l.752-2(d)(l), unless such Partner consents thereto, (vii) if such
Transfer would cause any lender to the Partnership to hold in excess of ten
(10) percent of the
53
Partnership Interest that would, pursuant to the regulations under Section
752 of the Code or any successor provision, cause a loan by such a lender to
constitute Partner Nonrecourse Debt, (viii) if such Transfer, other than to
an Affiliate, is of a Partnership Interest the value of which would have been
less than $20,000 when issued, (ix) if such Transfer would, in the opinion of
counsel to the Partnership, cause the Partnership to cease to be classified
as a Partnership for federal income tax purposes or (x) if such Transfer is
effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Section
7704(b) of the Code.
(b) No GP Preferred Unit may be Transferred by the Managing
General Partner to any Person who is not a General Partner of the Partnership.
(c) No Limited Partnership Unit may be transferred by any
Partner without a Transfer of the corresponding SRC Limited Partnership Unit
to the same transferee.
9.6 SHELF REGISTRATION RIGHTS. The Managing General Partner agrees
that, upon the request of any Limited Partner that has not entered into a
Registration Rights Agreement with the Managing General Partner substantially
in the form of Exhibit D hereto (each, a "Shelf Rights Holder"), made at any
time, the Managing General Partner will, if it has not already done so,
within 60 days thereafter file a "shelf" registration statement (the "Shelf
Registration"), on an appropriate form pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), or any similar
rule that may be adopted by the SEC, with respect to the sale of Registrable
Securities (as defined below) by the Shelf Rights Holders in ordinary course
brokerage or dealer transactions not involving an underwritten public
offering. The Managing General Partner shall use all reasonable efforts to
have the Shelf Registration declared effective as soon as practicable after
such filing and to keep such Shelf Registration continuously effective
following the date on which such Shelf Registration is declared effective for
so long as any Units are outstanding. The Managing General Partner further
agrees, if necessary, to supplement or make amendments to the Shelf
Registration, if required by the registration form used by the Managing
General Partner for the Shelf Registration or by the instructions applicable
to such registration form or by the Securities Act or the rules and
regulations thereunder, and the Managing General Partner agrees to furnish to
each Shelf Rights Holder copies of any such supplement or amendment at least
three days prior to its being used and/or filed with the SEC. Notwithstanding
the foregoing, if the Managing General Partner shall furnish to the Unit
holder a certificate signed by the Chief Executive Officer of the Managing
General Partner stating that in the good faith judgment of the Directors it
would be significantly disadvantageous to the Managing General Partner and
its stockholders for any such Shelf Registration to be amended or
supplemented, the Managing General Partner may defer such amending or
supplementing of such Shelf
54
Registration for not more than 45 days and in such event the Unit holder
shall be required to discontinue disposition of any Registrable Securities
covered by such Shelf Registration during such period. Notwithstanding the
foregoing, if the Managing General Partner irrevocably elects, or the
Partnership is so required under Section 11.3, prior to the filing of any
Shelf Registration to issue all cash in lieu of Shares upon the exchange of
Units by the holder requesting the tiling of such Shelf Registration, the
Managing General Partner shall not be obligated to file such Shelf
Registration Statement. The Managing General Partner shall make available to
its security holders, as soon as reasonably practicable, a statement of
operations covering a period of twelve (12) months, commencing on the first
day of the fiscal quarter next succeeding each sale of any Registrable
Securities pursuant to the Shelf Registration, in a manner which shall
satisfy the provisions of Section 11(a) of the Securities Act.
(a) SECURITIES SUBJECT TO THIS SECTION 9.6. The securities
entitled to the benefits of this Section 9.6 are the Shares that have been or
may be issued from time to time upon the exchange of Units pursuant to
Article XI hereof and any other securities issued by the Managing General
Partner in accordance with the terms of this Agreement in exchange for any of
the Shares (collectively, the "Registrable Securities") but, with respect to
any particular Registrable Security, only so long as it continues to be a
Registrable Security. Registrable Securities shall include any securities
issued in accordance with the terms of this Agreement as a dividend or
distribution on account of Registrable Securities or resulting from a
subdivision of the outstanding Shares of Registrable Securities into a
greater number of shares (by reclassification, stock split or otherwise). For
the purposes of this Agreement, a security that was at one time a Registrable
Security shall cease to be a Registrable Security when (i) such security has
been effectively registered under the Securities Act, and either (A) the
registration statement with respect thereto has remained continuously
effective for 150 days or (B) such security has been disposed of pursuant to
such registration statement, (ii) such security is or can be immediately sold
to the public in reliance on Rule 144 (or any similar provision then in
force) under the Securities Act, (iii) such security has been otherwise
transferred and (a) the Managing General Partner has delivered a new
certificate or other evidence of ownership not bearing the legend set forth
on the Shares upon the initial issuance thereof (or other legend of similar
import) and (b) in the opinion of counsel to the Managing General Partner,
the subsequent disposition of such security would not require the
registration or qualification under the Securities Act or any similar state
law then in force, or (iv) such security has ceased to be outstanding.
(b) REGISTRATION EXPENSES. The Managing General Partner
shall pay, as REIT Expenses, all expenses incident to the Shelf Registration,
including, without limitation, (i) all SEC, stock exchange and National
Association of Securities Dealers,
55
Inc. registration, filing and listing fees, (ii) all fees and expenses
incurred in complying with securities or "blue sky" laws (including
reasonable tees and disbursements of counsel in connection with "blue sky"
qualifications of the Registrable Securities), (iii) all printing, messenger
and delivery expenses, (iv) all fees and disbursements of the Managing
General Partner's independent public accountants and counsel and (v) all fees
and expenses of any special experts retained by the Managing General Partner
in connection with the Shelf Registration pursuant to the terms of this
Section 9.6, regardless of whether such Shelf Registration becomes effective,
unless such Shelf Registration fails to become effective as a result of the
fault of the Shelf Rights Holders; PROVIDED, HOWEVER, that the Managing
General Partner shall not pay the costs and expenses of any Shelf Rights
Holder relating to brokerage or dealer fees, transfer taxes or the fees or
expenses of any counsel's accountants or other representatives retained by
the Shelf Rights Holders, individually or in the aggregate.
ARTICLE X
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
10.1 NO PARTICIPATION IN MANAGEMENT. Except as expressly permitted
hereunder, the Limited Partners shall not take part in the management of the
Partnership's business, transact any business in the Partnership's name or
have the power to sign documents for or otherwise bind the Partnership;
PROVIDED, that the foregoing shall not be deemed to limit the ability of a
Limited Partner (or any officer or director thereof) who is an officer,
director or employee of the Partnership, either the Managing General Partner
or Non-Managing General Partners, or any Affiliate thereof, to act in such
capacity.
10.2 BANKRUPTCY OF A LIMITED PARTNER. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership, but the rights of
such Limited Partner to share in the Profits or Losses of the Partnership and
to receive distributions of Partnership funds shall, on the happening of such
event, devolve to its successors or assigns, subject to the terms and
conditions of this Agreement, and the Partnership shall continue as a limited
partnership. However, in no event shall such assignee(s) become a Substituted
Limited Partner except in accordance with Article IX.
10.3 NO WITHDRAWAL. No Limited Partner may withdraw from the
Partnership without the prior written consent of the Managing General Partner
and of the Non-Managing General Partners, other than as expressly provided in
this Agreement.
10.4 DUTIES AND CONFLICTS. (a) The Partners recognize that each of
the other Partners and their Affiliates have or may have other business
interests, activities and investments, some of which may be in conflict or
competition with the business of the Partnership, and that such Persons are
entitled to carry on such other business interests, activities and
investments. In
56
addition, the Partners recognize that certain of the Limited Partners and
their Affiliates are and may in the future be tenants of the Partnership,
Subsidiary Entities or other Persons or own anchor or other stores in the
Properties of the Partnership, or Subsidiary Entities or other properties and
in connection therewith may have interests that conflict with those of the
Partnership or Subsidiary Entities. In deciding whether to take any actions
in such capacity, such Limited Partners and their Affiliates shall be under
no obligation to consider the separate interests of the Partnership or
Subsidiary Entities and shall have no fiduciary obligations to the
Partnership or Subsidiary Entities and shall not be liable for monetary
damages for losses sustained, liabilities incurred or benefits not derived by
the other Partners in connection with such acts; nor shall the Partnership,
the Non-Managing General Partners, the Managing General Partner or any
Subsidiary Entities be under any obligation to consider the separate
interests of the Limited Partners and their Affiliates in such Limited
Partners' independent capacities or have any fiduciary obligations to the
Limited Partners and their Affiliates in such capacity or be liable for
monetary damages for losses sustained, liabilities incurred or benefits not
derived by the Limited Partners and their Affiliates in such independent
capacities arising from actions or omissions taken by the Partnership or
Subsidiary Entities. The Limited Partners and their Affiliates may engage in
or possess an interest in any other business or venture of any kind,
independently or with others, on their own behalf or on behalf of other
Entities with which they are affiliated or associated, and such Persons may
engage in any activities, whether or not competitive with the Partnership or
Subsidiary Entities, without any obligation to offer any interest in such
activities to the Partnership or Subsidiary Entities or to any Partner or
otherwise. Neither the Partnership nor any Partner shall have any right, by
virtue of this Agreement, in or to such activities, or the income or profits
derived therefrom, and the pursuit of such activities, even if competitive
with the business of the Partnership or Subsidiary Entities, shall not be
deemed wrongful or improper.
(b) Notwithstanding the foregoing, without the prior
consents of the Managing General Partner and the Non-Managing General
Partners, no Limited Partner shall knowingly take any action, including
acquiring, directly or indirectly, an interest in any tenant of a Property
which would have, through the actual or constructive ownership of any tenant
of any Property, the effect of causing the percentage of the gross income of
either of the Managing General Partner or the Non-Managing General Partners
that fails to be treated as "rents from real property" within the meaning of
Section 856(d) of the Code to exceed such percentage on the date hereof. Each
Limited Partner shall have a duty to notify the Managing General Partner and
the Non-Managing General Partners on a timely basis of any potential
acquisition or change in ownership that could reasonably be expected to have
such effect.
10.5 GUARANTY AND INDEMNIFICATION AGREEMENTS.
57
(a) The Partnership shall notify the Limited Partners no
less than 45 days (or, if the Partnership itself has less than 45 days' prior
notice, as promptly as practicable) prior to the occurrence of any event that
the Partnership reasonably expects will reduce the amount of Partnership
liabilities (including liabilities of any Subsidiary Partnership) that the
Limited Partners may include in their individual tax bases of their
respective Partnership Interests pursuant to Treasury Regulation Section
1.752-2 and Treasury Regulations Section 1.752-3(a)(2) and (3). Upon receipt
of such notice, each Limited Partner shall inform the Partnership of any
action it desires to take in its sole and absolute discretion in order to
increase the "economic risk of loss" (within the meaning of Treasury
Regulation 5 1.752-2) (the "Incurrence") that it has with respect to
liabilities of the Partnership or any other Subsidiary Partnerships. The
Partnership shall cooperate with each Limited Partner to facilitate the
Incurrence by such Limited Partner with respect to Partnership Liabilities or
liabilities of any Subsidiary Partnerships in such a way that the Incurrence
has the least amount of real economic risk to such Limited Partner and
provided that the Incurrence does not have a material adverse impact on any
other Partner in the Partnership or any such Partner's Affiliates.
No direct or indirect Partner in the Partnership or any
partnership which is the obligor on a JCP Property Liability shall incur the
"economic risk of loss" (within the meaning of Treasury Regulation Section
752-2) with respect to any JCP Property Liability without the prior written
consent of the JCP Limited Partner.
(b) Notwithstanding the provisions of Section 10.5(a)
above, no Limited Partners shall have any right to negotiate directly with
any lender of the Partnership or any other Subsidiary Partnership, any such
negotiation to be undertaken in good faith by the Managing General Partner or
the Non-Managing General Partners on behalf of, and at the request of, all
affected Limited Partners.
ARTICLE XI
GRANT OF RIGHTS TO THE LIMITED PARTNERS
11.1 GRANT OF RIGHTS. The Managing General Partner does hereby grant
to each of the Limited Partners (other than The Retail Property Trust) and
each of the Limited Partners does hereby accept the right, but not the
obligation (hereinafter such right sometimes referred to as the "Rights"), to
convert all or a portion of such Limited Partner's Limited Partnership Units
into Shares or cash, as selected by the Managing General Partner, at any time
or from time to time, on the terms and subject to the conditions and
restrictions contained in this Article XI; provided, however, that no Limited
Partnership Unit may be converted pursuant to this Article XI without a
conversion of the corresponding SRC Limited Partnership Unit; and provided,
further that each Limited Partnership Unit converted pursuant to this Article
XI shall be converted into the same form of consideration
58
as the corresponding SRC Limited Partnership Unit. The Rights granted
hereunder may be exercised by a Limited Partner, on the terms and subject to
the conditions and restrictions contained in this Article XI, upon delivery
to the Managing General Partner of a notice in the form of Exhibit E (an
"Exercise Notice"), which notice shall specify the number of such Limited
Partner's Limited Partnership Units to be converted by such Limited Partner
(the "Offered Units"). Once delivered, the Exercise Notice shall be
irrevocable, subject to payment by the Managing General Partner or the
Partnership of the Purchase Price for the Offered Units in accordance with
the terms hereof and subject to Section 1 of the Registration Rights
Agreements. In the event the Managing General Partner elects to cause the
Offered Units to be converted into cash, the Managing General Partner shall
effect such conversion by causing the Partnership to redeem the Offered Units
for cash.
11.2 LIMITATION ON EXERCISE OF RIGHTS. If an Exercise Notice is
delivered to the Managing General Partner but, as a result of the Ownership
Limit or as a result of other restrictions contained in the Charter of the
Managing General Partner, the Rights cannot be exercised in full for Shares,
the Exercise Notice, if the Purchase Price is to be payable in Shares, shall
be deemed to be modified such that the Rights shall be exercised only to the
extent permitted under the Ownership Limit or under other restrictions in the
Charter of the Managing General Partner. Notwithstanding the foregoing, any
Person shall be permitted to exercise its Rights hereunder during the first
half of a taxable year of the Managing General Partner even if upon
conversion of the Offered Units into Shares, the Shares held by such Person
will exceed the Ownership Limit, so long as such Person shall immediately
following such conversion sell so many of such Shares as shall cause the
Ownership Limit not to be exceeded upon consummation of such sale. The
Managing General Partner hereby agrees to exercise its right pursuant to its
Charter to permit the Ownership Limit to be exceeded in the circumstances
described in the preceding sentence.
11.3 COMPUTATION OF PURCHASE PRICE/FORM OF PAYMENT. The purchase
price ("Purchase Price") payable to a tendering Limited Partner shall be
equal to the Deemed Partnership Unit Value multiplied by the number of
Offered Units computed as of the date on which the Exercise Notice was
delivered to the Managing General Partner (the "Computation Date"). Subject
to the following paragraph, the Purchase Price for the Offered Units shall be
payable, at the option of the Managing General Partner, by causing the
Partnership to redeem the Offered Units for cash in the amount of the
Purchase Price, or by the issuance by the Managing General Partner of the
number of Shares equal to the number of Offered Units (adjusted as
appropriate to account for stock splits, stock dividends or other similar
transactions between the Computation Date and the closing of the purchase and
sale of the Offered Units in the manner specified in Section 11.7(d) below).
59
Where a Limited Partner exercising its rights pursuant to
this Section on or after August 9, 2001, up to, but not including, August 9,
2004, is a DeBartolo, and such Limited Partner has received a special
allocation of taxable income or gain from a Covered Sale pursuant to Section
6.1(e) within 90 days prior to the date of such exercise, then to the extent
of any tax due on such allocation and on the redemption of such Limited
Partner's Units, the Managing General Partner shall, if such Limited Partner
so requests in the Exercise Notice, cause the Partnership to redeem its Units
for cash in accordance with this Section 11.3.
11.4 CLOSING. The closing of the acquisition or redemption of
Offered Units shall, unless otherwise mutually agreed, be held at the
principal offices of the Managing General Partner, on the date agreed to by
the Managing General Partner and the relevant Limited Partner, which date
(the "Settlement Date") shall in no event be on a date which is later than
the later of (i) ten (10) days after the date of the Exercise Notice and (ii)
five (5) days after the expiration or termination of the waiting period
applicable to the Limited Partner, if any, under the Hart-Scott-Rodino Act
(the "HSR Act"). The Managing General Partner agrees to use its best efforts
to obtain an early termination of the waiting period applicable to any such
acquisition, if any, under the HSR Act. Until the Settlement Date, each
tendering Partner shall continue to own his Offered Units, and will continue
to be treated as the holder of such Offered Units for all purposes of this
Agreement, including, without limitation, for purposes of voting, consent,
allocations and distributions. Offered Units will be transferred to the
Managing General Partner only upon receipt by the tendering Partner of Shares
or cash in payment in full therefor.
11.5 CLOSING DELIVERIES. At the closing of the purchase and sale or
redemption of Offered Units, payment of the Purchase Price shall be
accompanied by proper instruments of transfer and assignment and by the
delivery of (i) representations and warranties of (A) the tendering Limited
Partner with respect to its due authority to sell all of the right, title and
interest in and to such Offered Units to the Managing General Partner or the
Partnership, as applicable, and with respect to the ownership by the Limited
Partner of such Units, free and clear of all Liens, and (B) the Managing
General Partner with respect to its due authority to acquire such Units for
Shares or to cause the Partnership to redeem such Units for cash and, in the
case of payment by Shares, (ii) (A) an opinion of counsel for the Managing
General Partner, reasonably satisfactory to such Limited Partner, to the
effect that such Shares have been duly authorized, are validly issued,
fully-paid and non-assessable, and (B) a stock certificate or certificates
evidencing the Shares to be issued and registered in the name of the Limited
Partner or its designee.
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11.6 TERM OF RIGHTS. The rights of the parties with respect to the
Rights shall remain in effect, subject to the terms hereof, throughout the
existence of the Partnership.
11.7 COVENANTS OF THE MANAGING GENERAL PARTNER. To facilitate the
Managing General Partner's ability fully to perform its obligations
hereunder, the Managing General Partner covenants and agrees as follows:
(a) At all times while the Rights are in existence, the
Managing General Partner shall reserve for issuance such number of Shares as
may be necessary to enable the Managing General Partner to issue such Shares
in full payment of the Purchase Price in regard to all Partnership Units
which are from time to time outstanding and held by the Limited Partners.
(b) As long as the Managing General Partner shall be
obligated to file periodic reports under the Exchange Act, the Managing
General Partner will timely file such reports in such manner as shall enable
any recipient of Shares issued to a Limited Partner hereunder in reliance
upon an exemption from registration under the Securities Act to continue to
be eligible to utilize Rule 144 promulgated by the SEC pursuant to the
Securities Act, or any successor rule or regulation or statute thereunder,
for the resale thereof.
(c) During the pendency of the Rights, the Limited Partners
shall receive in a timely manner all reports filed by the Managing General
Partner with the SEC and all other communications transmitted from time to
time by the Managing General Partner to the owners of its Shares.
(d) Under no circumstances shall the Managing General
Partner declare any stock dividend, stock split, stock distribution or the
like, unless fair and equitable arrangements are provided, to the extent
necessary, fully to adjust, and to avoid any dilution in, the Rights of any
Limited Partner under this Agreement.
11.8 LIMITED PARTNERS' COVENANT. Each of the Limited Partners
covenants and agrees with the Managing General Partner that all Offered Units
tendered to the Managing General Partner or the Partnership, as the case may
be, in accordance with the exercise of Rights herein provided shall be
delivered free and clear of all Liens and should any Liens exist or arise
with respect to such Offered Units, the Managing General Partner or the
Partnership, as the case may be, shall be under no obligation to acquire the
same unless, in connection with such acquisition, the Managing General
Partner has elected to cause the Partnership to pay such portion of the
Purchase Price in the form of cash consideration in circumstances where such
consideration will be sufficient to cause such existing Lien to be discharged
in full upon application of all or a part of such consideration and the
Partnership is expressly authorized to apply such portion of the
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Purchase Price as may be necessary to satisfy any indebtedness in full and to
discharge such Lien in full. In the event any transfer tax is payable by the
Limited Partner as a result of a transfer of Partnership Units pursuant to
the exercise by a Limited Partner of the Rights, the Limited Partner shall
pay such transfer tax.
11.9 DIVIDENDS. If a Limited Partner shall exchange any Partnership
Units for Shares pursuant to this Article XI on or prior to the Partnership
Record Date for any distribution to be made on such Partnership Units, in
accordance with the Charter of the Managing General Partner such Limited
Partner will be entitled to receive the corresponding distribution to be paid
on such Shares and shall not be entitled to receive the distribution made by
the Partnership in respect of the exchanged Partnership Units.
ARTICLE XII
GENERAL PROVISIONS
12.1 INVESTMENT REPRESENTATIONS.
(a) Each Limited Partner acknowledges that it (i) has been
given full and complete access to the Partnership and those person who will
manage the Partnership in connection with this Agreement and the transactions
contemplated hereby, (ii) has had the opportunity to review all documents
relevant to its decision to enter into this Agreement, and (iii) has had the
opportunity to ask questions of the Partnership and those persons who will
manage the Partnership concerning its investment in the Partnership and the
transactions contemplated hereby.
(b) Each Limited Partner acknowledges that it understands
that the Partnership Units to be purchased or otherwise acquired by it
hereunder will not be registered under the Securities Act of 1933 in reliance
upon the exemption afforded by Section 4(2) thereof for transactions by an
issuer not involving any public offering, and will not be registered or
qualified under any applicable state securities laws. Each Limited Partner
represents that (i) it is acquiring such Partnership Units for investment
only and without any view toward distribution thereof, and it will not sell
or otherwise dispose of such Partnership Units except pursuant to the
exercise of the Rights or otherwise in accordance with the terms hereof and
in compliance with the registration requirements or exemption provisions of
any applicable state securities laws, (ii) its economic circumstances are
such that it is able to bear all risks of the investment in the Partnership
Units for an indefinite period of time including the risk of a complete loss
of its investment in the Units and (iii) it has knowledge and experience in
financial and business matters sufficient to evaluate the risks of investment
in the Partnership Units. Each Limited Partner further acknowledges and
represents that it has made its own independent investigation of the
Partnership and the business conducted and proposed to be conducted by the
Partnership, and
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that any information relating thereto furnished to the Limited Partner was
supplied by or on behalf of the Partnership.
12.2 NOTICES. All notices, offers or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and
may be personally delivered or sent by United States mail or by reputable
overnight delivery service and shall be deemed to have been given when
delivered in person, upon receipt when delivered by overnight delivery
service or three business days after deposit in United States mail,
registered or certified, postage prepaid, and properly addressed, by or to
the appropriate party. For purposes of this Section 12.2, the addresses of
the parties hereto shall be as set forth on Exhibit A hereof. The address of
any party hereto may be changed by a notice in writing given in accordance
with the provisions hereof.
12.3 SUCCESSORS. This Agreement and all the terms and provisions
hereof shall be binding upon and shall inure to the benefit of all Partners,
and their legal representatives, heirs, successors and permitted assigns,
except as expressly herein otherwise provided.
12.4 LIABILITY OF LIMITED PARTNERS. The liability of the Limited
Partners for their obligations, covenants representations and warranties
under this Agreement shall be several and not joint.
12.5 EFFECT AND INTERPRETATION. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN CONFORMITY WITH THE LAWS OF THE STATE OF DELAWARE.
12.6 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which shall constitute one and
the same instrument.
12.7 PARTNERS NOT AGENTS. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Partners in the
carrying on of their own respective businesses or activities.
12.8 ENTIRE UNDERSTANDING; ETC. This Agreement and the other
agreements referenced herein or therein or to which the signatories hereto or
thereto are parties constitute the entire agreement and understanding among
the Partners and supersede any prior understandings and/or written or oral
agreements among them respecting the subject matter within.
12.9 SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any Person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this
Agreement, or the application of such provision to Persons or circumstances
other than those to which it is held invalid by such court, shall not be
affected thereby.
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12.10 TRUST PROVISION. This Agreement, to the extent executed by the
trustee of a trust, is executed by such trustee solely as trustee and not in
a separate capacity. Nothing herein contained shall create any liability on,
or require the performance of any covenant by, any such trustee individually,
nor shall anything contained herein subject the individual property of any
trustee to any liability.
12.11 PRONOUNS AND HEADINGS As used herein, all pronouns shall
include the masculine, feminine and neuter, and all defined terms shall
include the singular and plural thereof wherever the context and facts
require such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof. Any references in this Agreement to
"including" shall be deemed to mean "including without limitation."
12.12 ASSUMPTION OF LIABILITIES. Nothing contained in this Agreement
shall have the effect of terminating, negating or modifying in any respect
the assumption of liabilities by the Partnership set forth in Section 10.8 of
the Fourth Amended and Restated Limited Partnership Agreement of the
Partnership dated as of April 21, 1994 and the Partnership reaffirms its
obligations thereunder.
12.13 ASSURANCES. Each of the Partners shall hereafter execute and
deliver such further instruments (provided such instruments are in form and
substance reasonably satisfactory to the executing Partner) and do such
further acts and things as may be reasonably required or useful to carry out
the intent and purpose of this Agreement and as are not inconsistent with the
terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed effective as of the date and year first
above written.
GENERAL PARTNERS:
SD PROPERTY GROUP, INC.
By:_____________________
Name:
Title:
SPG PROPERTIES, INC.
By:_____________________
Name:
Title:
SIMON PROPERTY GROUP, INC.
By:_____________________
Name:
Title:
LIMITED PARTNERS:
- ----------------
MELVIN SIMON & ASSOCIATES, INC.
By:__________________
Name:
Title:
JCP REALTY, INC.
By:__________________
Name:
Title:
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BRANDYWINE REALTY, INC.
By:__________________
Name:
Title:
- ---------------------
MELVIN SIMON
- ---------------------
HERBERT SIMON
- ---------------------
DAVID SIMON
- ---------------------
DEBORAH J. SIMON
- ---------------------
CYNTHIA J. SIMON SKJODT
- ---------------------
IRWIN KATZ, as Successor Trustee Under Declaration of Trust and Trust Agreement
Dated August 4, 1970
- ---------------------
IRWIN KATZ, as Trustee of the Melvin Simon Trust No. 1, the Melvin Simon Trust
No. 6, the Melvin Simon Trust No. 7 and the Herbert Simon Trust No. 3
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MELVIN SIMON & ASSOCIATES, INC.
By:__________________
Name:
Title:
PENN SIMON CORPORATION
By:__________________
Name:
Title:
NACO SIMON CORP.
By:__________________
Name:
Title:
SANDY SPRINGS PROPERTIES, INC.
By:__________________
Name:
Title:
SIMON ENTERPRISES, INC.
By:__________________
Name:
Title:
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S.F.G. COMPANY, L.L.C.
By: MELVIN SIMON & ASSOCIATES, INC.,
its manager
By:__________________
Name:
Title:
MELVIN SIMON, HERBERT SIMON AND DAVID SIMON, NOT INDIVIDUALLY BUT AS VOTING
TRUSTEES UNDER THAT CERTAIN VOTING TRUST AGREEMENT, VOTING AGREEMENT AND
PROXY DATED AS OF DECEMBER 1, 1993, BETWEEN MELVIN SIMON & ASSOCIATES, INC.,
AND MELVIN SIMON, HERBERT SIMON AND DAVID SIMON:
- ---------------------
Melvin Simon
- ---------------------
Herbert Simon
- ---------------------
David Simon
ESTATE OF EDWARD J. DeBARTOLO
By:__________________
Name:
Title:
By:__________________
Name:
Title:
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- ---------------------
Edward J. DeBartolo, Jr., individually, and in his capacity as Trustee under (1)
the Lisa M. DeBartolo Revocable Trust-successor by assignment from Edward J.
DeBartolo Trust No. 5, (ii) the Tiffanie L. DeBartolo Revocable Trust-successor
by assignment from Edward J. DeBartolo Trust No. 6 and (iii) Edward J. DeBartolo
Trust No. 7 for the Benefit of Nicole A. DeBartolo
- ---------------------
Cynthia R. DeBartolo
- ---------------------
Marie Denise DeBartolo York, individually, and in his/her capacity as Trustee
under (i) Edward J. DeBartolo Trust No. 8 for the benefit of John Edward York,
(ii) Edward J. DeBartolo Trust No. 9 for the benefit of Anthony John York, (iii)
Edward J. DeBartolo Trust No. 10 for the benefit of Mara Denise York and (iv)
Edward J. DeBartolo Trust No. 11 for the benefit of Jenna Marie York
EJDC LLC
By:__________________
Name:
Title:
DeBARTOLO LLC
By:__________________
Name:
Title:
NIDC LLC
By:__________________
Name:
Title:
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GREAT LAKES MALL LLC
By:__________________
Name:
Title:
RUES PROPERTIES LLC
By:__________________
Name:
Title:
RUES PROPERTIES, INC.
By:__________________
Name:
Title:
CHELTENHAM SHOPPING CENTER ASSOCIATES
By:__________________
Name:
Title:
70