EXECUTION COPY 2005 AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF MACWH, LP TABLE OF CONTENTSLimited Partnership Agreement |
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Exhibit 10.1
EXECUTION COPY
2005 AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MACWH, LP
TABLE OF CONTENTS
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MACWH, LP
THIS 2005 AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP , dated as of April 25, 2005 is entered into by and among MACWPI Corp., formerly known as Wilmorite Properties, Inc. (the “ Company ”), a Delaware corporation, as the general partner of MACWH, LP, formerly known as Wilmorite Holdings, L.P., a Delaware limited partnership (the “ Partnership ”), and those persons who have executed this Agreement as limited partners and whose names and addresses are set forth on Exhibit A hereto, as the same may be amended from time to time, together with any other Persons who become Partners of the Partnership as provided herein.
WHEREAS , the Partnership was formed by (i) filing a Certificate of Limited Partnership with the Secretary of State of the State of Delaware on October 20, 1999, and (ii) the Company, as the initial general partner, and Thomas C. Wilmot, Sr., as the initial limited partner, entering into that certain limited partnership agreement dated October 20, 1999 (the “ Original Agreement ”);
WHEREAS , the Original Agreement was amended and restated pursuant to that certain 2000 Amended and Restated Agreement of Limited Partnership dated February 23, 2000 (the “ First Amendment ”), and further amended and restated pursuant to that certain 2002 Amended and Restated Limited Partnership Agreement, dated as of July 2, 2002 (the “ Second Amendment ”);
WHEREAS , on the date hereof, Parent Acquisition, Inc. has merged with and into the Company (the “ Merger ”), with the Company becoming a wholly-owned subsidiary of The Macerich Partnership, L.P., a Delaware limited partnership (“ Parent LP ”), as a result of the transaction;
WHEREAS , Parent LP is majority owned by The Macerich Company, a Maryland corporation (“ Parent ”), that acts as general partner for Parent LP and whose shares of common stock are publicly traded on the New York Stock Exchange; and
WHEREAS , on the date hereof (the “ Effective Date ”), immediately following the consummation of the Merger, MACP LP, a Delaware limited partnership and subsidiary of Parent LP, is merging with and into the Partnership (the “ Partnership Merger ”), with the Partnership as the surviving entity of the Partnership Merger, in accordance with the terms of the Agreement and Plan of Merger, dated as of February 25, 2005 (the “ Partnership Merger Agreement ”), among Parent LP, MACP LP and the Partnership;
WHEREAS , simultaneously with the consummation of the Partnership Merger, the Second Amendment is being amended and restated as set forth herein; and
WHEREAS , this Agreement has been approved in accordance with the Second Amendment.
NOW, THEREFORE , in accordance with the provisions of Section 9.10 of the Second Amendment, the Second Amendment is hereby amended and restated in its entirety as follows.
ARTICLE I - DEFINED TERMSThe following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
“ Act ” means the Delaware Revised Uniform Limited Partnership Act, 6 Del.C. §17-101, et seq. as it may be amended, supplemented or restated from time to time, and any successor to such statute.
“ Additional Limited Partner ” means a Person admitted to the Partnership as a Limited Partner pursuant to Sections 4.2 and 12.2 hereof and who is shown as such on the books and records of the Partnership.
“ Adjusted Capital Account ” means the Capital Account maintained for each Partner as of the end of each Partnership taxable year (i) increased by any amounts which such Partner is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
“ Adjusted Capital Account Deficit ” means, with respect to any Partner, the deficit balance, if any, in such Partner’s Adjusted Capital Account as of the end of the relevant Partnership taxable year.
“ Adjusted Property ” means any property, the Carrying Value of which has been adjusted pursuant to Exhibit B hereof. Once an Adjusted Property is deemed contributed to the Partnership for federal income tax purposes upon a termination thereof pursuant to Section 708 of the Code, such property shall thereafter constitute a Contributed Property until the Carrying Value of such property is further adjusted pursuant to Exhibit B hereof.
“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, “control,” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“ Agreed Value ” means (i) in the case of any Contributed Property as of the time of its contribution to the Partnership, the 704(c) Value of such property, reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed, and (ii) in the case of any property distributed to a Partner by the Partnership,
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the Partnership’s Carrying Value of such property at the time such property is distributed, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution as determined under Section 752 of the Code and the Regulations thereunder. The aggregate Agreed Value of any Contributed Property contributed or deemed contributed by each Partner is as set forth on Exhibit A .
“ Agreement ” means this 2005 Amended and Restated Agreement of Limited Partnership, as it may be amended, supplemented or restated from time to time, including by way of adoption of a Certificate of Designations, including any exhibits attached hereto.
“ Applicable Protection Period ” has the meaning set forth in Section 10.7 hereof.
“ Applicable Tax Returns ” has the meaning set forth in Section 10.1 hereof.
“ Articles of Incorporation ” means the Articles of Incorporation of Parent filed with the Secretary of State of Maryland, as amended or restated from time to time.
“ Available Cash ” means, subject to Section 7.12.D, with respect to any period for which such calculation is being made, (a) all cash revenues and funds received by the Partnership from whatever source (but excluding the proceeds of any Capital Contribution to the Partnership pursuant to Section 4.1, 4.2 or 4.3 hereof and excluding the gross proceeds of any Terminating Capital Transaction) plus the amount of any reduction (including, without limitation, a reduction resulting because the General Partner determines such amounts are no longer necessary) in reserves of the Partnership, which reserves are referred to in clause (b)(v) below; (b) less the sum of the following (except to the extent made with the proceeds of any Capital Contribution and except to the extent taken into account in determining Capital Transaction Proceeds):
(i) all interest, principal and other debt payments made in cash during such period by the Partnership,
(ii) all expenditures made in cash by the Partnership during such period relating to normal and customary operating expenses and capital expenditures related to regular maintenance and customary tenant allowances,
(iii) all extraordinary capital expenditures made in cash by the Partnership during such period,
(iv) cash investments in any entity (including loans made thereto) to the extent that such investments are not otherwise described in clauses (b)(i), (ii) or (iii), and
(v) the amount of any increase in reserves established during such period which the General Partner reasonably determines is necessary or appropriate, subject to Section 7.12.D.
Notwithstanding the foregoing, Available Cash shall not include any cash received or reductions in reserves, or take into account any disbursements made or reserves established, after
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commencement of the dissolution and liquidation of the Partnership or relating to the Fixed Charge Escrow established pursuant to Section 7.12.D hereof.
“ Book-Tax Disparities ” means, with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax purposes as of such date. A Partner’s share of the Partnership’s Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner’s Capital Account balance as maintained pursuant to Exhibit B and the hypothetical balance of such Partner’s Capital Account computed as if it had been maintained strictly in accordance with federal income tax accounting principles.
“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.
“ Capital Account ” means the Capital Account maintained for a Partner pursuant to Exhibit B hereof.
“ Capital Contribution ” means, with respect to any Partner, any cash, cash equivalents and the Agreed Value of Contributed Property which such Partner contributes or is deemed to contribute to the Partnership pursuant to Section 4.1, 4.2, or 4.3 hereof.
“ Capital Transaction ” means a sale, exchange or other disposition (other than in liquidation of the Partnership) or a financing by the Partnership or any Subsidiary of the Partnership (which shall not include any loan or financing to or by the General Partner) of any property of the Partnership or any Subsidiary of the Partnership.
“ Capital Transaction Proceeds ” means the net cash proceeds of a Capital Transaction, after deducting all expenses incurred in connection therewith and after application of any proceeds, at the sole discretion of the General Partner, toward the payment of any indebtedness of the Partnership or Subsidiary of the Partnership, the purchase or financing of any additions, improvements or an expansion of existing or additional Partnership property or property of a Subsidiary of the Partnership, or the establishment of any reserves deemed reasonably necessary by the General Partner; provided that “Capital Transaction Proceeds” shall not include any proceeds received after commencement of the dissolution and liquidation of the Partnership or any proceeds from a Terminating Capital Transaction.
“ Carrying Value ” means (i) with respect to a Contributed Property or Adjusted Property, the 704(c) Value of such property, reduced (but not below zero) by all Depreciation with respect to such Contributed Property or Adjusted Property, as the case may be, charged to the Partners’ Capital Accounts following the contribution of or adjustment with respect to such property; and (ii) with respect to any other Partnership property, the adjusted basis of such property for federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Exhibit B hereof, and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.
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“ Cash Amount ” means an amount of cash equal to the Value on the Valuation Date or the Business Day immediately preceding the Conversion Date, as applicable, of the REIT Shares Amount plus , with respect to a Class A Preferred Unit, the Pro-Rated Preferred Amount.
“ Certificate of Designations ” means any Exhibit attached hereto or any amendment to this Agreement that sets forth the designations, rights, powers, duties and preferences of holders of any Partnership Interests issued pursuant to Section 4.2.A hereof, which amendment is in the form of a certificate signed by the General Partner and appended to this Agreement. A Certificate of Designations is not the exclusive manner in which such an amendment may be effected. The General Partner may adopt a Certificate of Designations without the Consent of the Limited Partners to the extent permitted pursuant to Section 14.1.B hereof.
“ Certificate of Limited Partnership ” means the Certificate of Limited Partnership relating to the Partnership filed in the office of the Secretary of State of the State of Delaware, as amended from time to time in accordance with the terms hereof and the Act.
“ Class A Forced Conversion ” has the meaning set forth in Section 8.6.C hereof.
“ Class A Liquidation Preference ” means an amount equal to $62.39 per Class A Preferred Unit.
“ Class A Preferred Return Amount ” means (A) with respect to those Units set forth on Exhibit E with respect to the Participating Election Right, an amount per Class A Preferred Unit for each quarter equal to the sum of (i) 1.15% per quarter of the Class A Liquidation Preference plus 80% of the amount, if any, by which the quarterly dividend payable on one REIT Share for such quarter with respect to the corresponding period exceeds $0.65 per share plus (ii) the aggregate amount of cash distributions per REIT Share paid or payable for such quarter with respect to a corresponding payment period on one REIT Share, multiplied by a fraction (the numerator of such fraction being 0.717485 and the denominator being 2.60), multiplied by the Conversion Factor; or (B) with respect to all other Class A Preferred Units, an amount per Class A Preferred Unit for each quarter equal to the sum of (i) 1.4375% of the Class A Liquidation Preference plus (ii) the amount, if any, by which the quarterly dividend payable on one REIT Share for such quarter with respect to the corresponding period exceeds $0.65 per share. Exhibit F attached hereto contains hypothetical calculations of this Class A Preferred Return Amount for illustrative purposes. The applicable Class A Preferred Return Amount shall accrue for the last full calendar quarter, or, if applicable, the relevant shorter period (including, (1) the period from the day after the Effective Date to the end of the first calendar quarter ending after the Effective Date, and (2) the period from the beginning of the calendar quarter in which commencement of the dissolution and liquidation of the Partnership occurs through the date of such commencement) on the Partnership Payment Date, and shall be adjusted as otherwise provided herein.
“ Class A Preferred Unit ” means a Partnership Unit which is designated as a Class A Convertible Preferred Unit of limited partnership interest and which has the rights, preferences and other privileges designated herein in respect of Class A Preferred Unitholders. The allocation of Class A Preferred Units among the Partners shall be set forth on Exhibit A , as such Exhibit may be amended from time to time.
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“ Class A Preferred Unitholder ” means a Partner that holds Class A Preferred Units.
“ Class A Put Right ” has the meaning set forth in Section 8.6.C hereof.
“ Cliff Effect Transfer Tax ” has the meaning set forth in Section 8.6.G hereof.
“ Code ” means the Internal Revenue Code of 1986, as amended and in effect from time to time, as interpreted by the applicable regulations thereunder. Any reference herein to a specific Section or sections of the Code shall be deemed to include a reference to any corresponding provision of any succeeding law.
“ Common Distribution Amount ” means with respect to the Common Units held by a Partner (other than the General Partner, Parent, or any of their respective Subsidiaries or Affiliates or any Parent Transferee) on a Partnership Record Date for distribution of Available Cash, a cash amount for each quarter equal in value to the aggregate cash dividends, cash distributions or other cash amounts that would have been payable to such holder of Common Units in the event that such Partner owned REIT Shares equal in number to the REIT Shares Amount attributable to all of such Partner’s Common Units as of such Partnership Record Date. The Common Distribution Amount shall accrue for the last full calendar quarter, or, if applicable, the relevant shorter period (including, (1) the period from the day after the Effective Date to the end of the first calendar quarter ending after the Effective Date, and (2) the period from the beginning of the calendar quarter in which commencement of the dissolution and liquidation of the Partnership occurs through the date of such commencement) on the Partnership Payment Date, and shall be adjusted as otherwise provided herein.
“ Common Unit ” means a Partnership Unit which is designated as a common unit of limited partnership interest and which has the rights, preferences and other privileges designated herein in respect of Common Unitholders. The allocation of Common Units among the Partners shall be set forth on Exhibit A , as such Exhibit may be amended from time to time.
“ Common Unitholder ” means a Partner that holds Common Units.
“ Company ” has the meaning set forth in the preamble hereof and shall be deemed to refer to all successors, including without limitation, by operation of law.
“ Consent ” means the consent or approval of a proposed action by a Partner given in accordance with Section 14.2 hereof.
“ Contributed Property ” means each property or other asset, in such form as may be permitted by the Act (but excluding cash), contributed or deemed contributed to the Partnership (including deemed contributions to the Partnership on reconstitution thereof pursuant to Section 708 of the Code). Once the Carrying Value of a Contributed Property is adjusted pursuant to Exhibit B hereof, such property shall no longer constitute a Contributed Property for purposes of Exhibit B hereof, but shall be deemed an Adjusted Property for such purposes.
“ Conversion Date ” has the meaning set forth in Section 8.9.B hereof.
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“ Conversion Factor ” means, as of the date of this Agreement, one (1.0), provided that in the event that Parent (i) declares or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution to all holders of its outstanding REIT Shares in REIT Shares; (ii) subdivides its outstanding REIT Shares; or (iii) combines its outstanding REIT Shares into a smaller number of REIT Shares, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of REIT Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purpose that such dividend, distribution, subdivision or combination has occurred as of such time), and the denominator of which shall be the actual number of REIT Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event ( provided , however , if a Notice of Redemption is given prior to such a record date and the Specified Redemption Date is after such a record date, then the adjustment to the Conversion Factor shall, with respect to such Redeeming Partner, be retroactive to the date of such Notice of Redemption, provided that such dividend, distribution, subdivision or combination occurs as of the effective date of such event). It is intended that adjustments to the Conversion Factor are to be made in order to avoid unintended dilution or anti-dilution as a result of transactions in which REIT Shares are issued or combined for no consideration. If, prior to a Specified Redemption Date, Rights (other than Rights issued pursuant to an employee benefit plan or other compensation arrangement) were issued and have expired, and such Rights were issued with an exercise price that, together with the purchase price for such Rights, was below fair market value in relation to the security or other property to be acquired upon the exercise of such Rights, and such Rights were issued to all holders of outstanding REIT Shares or Parent and the General Partner cannot in good faith represent that the issuance of such Rights benefited the Limited Partners, then the Conversion Factor applicable upon a Notice of Redemption shall be equitably adjusted in a manner consistent with anti-dilution provisions in warrants and other instruments in the case of such a below market issuance or exercise price. A similar equitable adjustment to protect the value of Common Units shall be made in all events if any Rights issued under a “Shareholder Rights Plan” became exercisable and expired prior to a Specified Redemption Date. Any such equitable adjustment shall be made in a manner determined by the General Partner in good faith.
“ Conversion Price ” has the meaning set forth in Section 8.9.A hereof.
“ Conversion Rate ” has the meaning set forth in Section 8.9.A hereof.
“ Conversion Window ” has the meaning set forth in Section 8.6.C hereof.
“ Cumulative Unpaid Class A Preferred Return Amount ” means, with respect to any Class A Preferred Unitholder, an amount, if any, equal to (i) the aggregate of all accrued Class A Preferred Return Amounts for previous quarters with respect to the Class A Preferred Units held by such Partner, less (ii) the cumulative amount of distributions previously made with respect to such Class A Preferred Units pursuant to Sections 5.1.A and 5.1.B hereof. The Cumulative Unpaid Class A Preferred Return Amount of a Redeeming Partner shall be reduced by the value of the aggregate Cash Amount or REIT Shares Amount paid by the Partnership or Parent, as applicable, in respect of any Cumulative Unpaid Class A Preferred Return Amount attributable
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to any Class A Preferred Units redeemed by the Partnership or purchased by Parent pursuant to Section 8.6 hereof.
“ Cumulative Unpaid Common Distribution Amount ” means, with respect to any Common Unitholder (other than the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee), an amount, if any, equal to (i) the aggregate of all accrued Common Distribution Amounts for previous quarters with respect to the Common Units held by such Partner, less (ii) the cumulative amount of distributions previously made with respect to such Common Units pursuant to Sections 5.1.C and 5.1.D hereof. The Cumulative Unpaid Common Distribution Amount of a Redeeming Partner shall be reduced by the value of the aggregate Cash Amount or REIT Shares Amount paid by the Partnership or Parent, as applicable, in respect of any Cumulative Unpaid Common Distribution Amount attributable to any Common Units redeemed by the Partnership or purchased by Parent pursuant to Section 8.6 hereof.
“ Delaware Courts ” has the meaning set forth in Section 15.9.B hereof.
“ Depreciation ” means, for each taxable year or other period, an amount equal to the federal income tax depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Carrying Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Carrying 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 Carrying Value using any reasonable method selected by the General Partner.
“ Disposition ” has the meaning set forth in Section 10.8.A hereof.
“ Effective Date ” has the meaning set forth in the recitals hereof.
“ Encumbrance ” has the meaning set forth in the definition of “Indebtedness.”
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
“ Expiration Date ” has the meaning set forth in Section 8.8.E hereof.
“ Extraordinary Transaction ” means the occurrence of one or more of the following events: (i) a merger (including a triangular merger), consolidation or other combination with or into another Person (other than in connection with a change in Parent’s state of incorporation or organizational form or a merger with a direct or indirect Subsidiary of Parent); (ii) the direct or indirect sale, lease, exchange or other transfer of all or substantially all of its assets in one transaction or a series of related transactions; (iii) any reclassification, recapitalization or change of its outstanding equity interests (other than a change in par value, or from par value to no par value, or as a result of a split, dividend or similar subdivision); or (iv) the adoption of any plan of liquidation or dissolution of Parent (whether or not in compliance with the provisions of this Agreement).
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“ Family Group ” means, with respect to any natural Person, such Person’s spouse, brothers and sisters (whether by the whole or half blood or adopted), ancestors and lineal descendants (whether natural or adopted), any trust solely for the benefit of any one or more of the foregoing, and any limited partnership, limited liability company or other entity owned exclusively by any one or more of the foregoing.
“ Final Adjustment ” has the meaning set forth in Section 10.3.B hereof.
“ First Amendment ” has the meaning set forth in the recitals hereof.
“ First Put Window ” has the meaning set forth in Section 8.10.B.(1).
“ Fixed Charge Coverage Ratio ” shall mean the ratio of (a) net operating income (cash revenues less cash expenses) of the Partnership for the applicable calendar quarter less (i) all regularly scheduled principal amortization payments and all interest payments on all Indebtedness of the Partnership together with any Subsidiaries (excluding any balloon payments), and (ii) the pro rata share of all regularly scheduled principal amortization payments and all interest payments on all Indebtedness of any other entity in which the Partnership directly or indirectly owns an interest (excluding any balloon payments) to (b) the aggregate distribution payable to the holders of Class A Preferred Units and the holders of Common Units (other than the General Partner, the Parent, any of their respective Subsidiaries or Affiliates and any Parent Transferee) under Article 5 hereof for the applicable calendar quarter.
“ Fixed Charge Escrow ” has the meaning set forth in Section 7.12.D.
“ Flow Through Owner ” has the meaning set forth in Section 10.7.
“ GAAP ” means generally accepted accounting principles as used in the United States on the date hereof applied on a consistent basis.
“ General Partner ” means the Company, in its capacity as the general partner of the Partnership, or any Person who becomes a successor general partner of the Partnership, including Parent Transferee or any successor to the Company by operation of law.
“ General Partner Interest ” means a Partnership Interest held by the General Partner, in its capacity as general partner. A General Partner Interest may be expressed as a number of Partnership Units.
“ General Partner Partnership Units ” has the meaning set forth in Section 4.1.C hereof.
“ Gross-Up Amount ” has the meaning set forth in Section 10.13.A hereof.
“ Group A Restricted Properties ” shall mean Tysons Corner Center and Tysons Corner Office Building and all interests in downstream Affiliates of the Partnership directly or indirectly holding such properties.
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“ Group B Restricted Properties ” shall mean Freehold Raceway Mall and Wilton Mall at Saratoga and all interests in downstream Affiliates of the Partnership directly or indirectly holding such properties.
“ Group C Restricted Properties ” shall mean Freehold Raceway Mall and Danbury Fair Mall and all interests in downstream Affiliates of the Partnership directly or indirectly holding such properties.
“ Guarantee Opportunity ” has the meaning set forth in Section 10.10.A hereof.
“ IRS ” means the Internal Revenue Service, which administers the internal revenue laws of the United States.
“ Incapacity ” or “ Incapacitated ” means, (i) as to any natural person which is a Partner, death, total physical disability or entry by a court of competent jurisdiction of an order adjudicating him or her incompetent to manage his or her Person or estate; (ii) as to any corporation which is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its certificate of incorporation; (iii) as to any partnership or limited liability company which is a Partner, the dissolution and commencement of winding up of the partnership or the limited liability company; (iv) as to any estate which is a Partner, the distribution by the fiduciary of the estate’s entire interest in the Partnership; (v) as to any trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a new trustee) or (vi) as to any Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect; (b) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner; (c) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors; (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above; (e) the Partner seeks, consents to or acquiesces in, the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s properties; (f) any proceeding seeking liquidation, reorganization or other relief of or against such Partner under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof; (g) the appointment without the Partner’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment; or (h) an appointment referred to in clause (g) which has been stayed is not vacated within ninety (90) days after the expiration of any such stay.
“ Indebtedness ” means any indebtedness of a Person, whether or not contingent, in respect of (i) borrowed money or evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness for borrowed money of such Person or any of its Subsidiaries which is secured by any mortgage, lien, charge, pledge, or security interest of any kind existing on property owned by such Person or any of its Subsidiaries (each securing such debt, an “ Encumbrance ”) to the extent of the lesser of (x) the amount of indebtedness so secured and (y) the fair market value of
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the property subject to such Encumbrance, (iii) the reimbursement obligations, contingent or otherwise, in connection with any letters of credit actually issued or amounts representing the balance deferred and unpaid of the purchase price of any property or services, except any such balance that constitutes an accrued expense or trade payable, or all conditional sale obligations or obligations under any title retention agreement, (iv) the principal amount of all obligations of such Person or any Subsidiary with respect to redemption, repayment or other repurchase of any Disqualified Stock, (v) any lease of property by such Person or any of its Subsidiaries as lessee which is reflected on such Person’s consolidated balance sheet as a capitalized lease in accordance with GAAP, or (vi) interest rate swaps, caps or similar agreements and foreign exchange contracts, currency swaps or similar agreements, to the extent, in the case of items of indebtedness under (i) through (iii) above, that any such items (other than letters of credit) would appear as a liability on such Person’s consolidated balance sheet in accordance with GAAP, and also includes, to the extent not otherwise included, any obligation by such Person or any of its Subsidiaries to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), Indebtedness of another Person, whether or not reflected on the Person’s balance sheet pursuant to GAAP (it being understood that Indebtedness shall be deemed to be incurred by such Person or any of its Subsidiaries whenever such Person or such Subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof).
“ Indemnitee ” means (i) any Person made a party to a proceeding by reason of his, her or its status as (a) the General Partner or (b) a director, officer, manager, trustee, general partner of the General Partner or any entity that directly or indirectly controls the General Partner, including without limitation, the Partnership and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.
“ Limited Partner ” means any Person (including the Company or its successor) named as a Limited Partner on Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity as a limited partner of the Partnership.
“ Limited Partner Interest ” means a Partnership Interest of a Limited Partner in the Partnership representing a fractional part of the Partnership Interests of all Partners and includes any and all benefits to which the holder of such a Partnership Interest may be entitled, as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Limited Partner Interest may be expressed as a number of Partnership Units.
“ Limited Partner Tax Representative ” means Thomas C. Wilmot, Sr. or such other person as he may designate in writing from time to time, provided , however , that in the event of such person’s death or resignation as Limited Partner Tax Representative, holders of a majority-in-interest of the Limited Partners, other than Parent, the General Partner or any of their respective Subsidiaries or Affiliates, or any Parent Transferee shall select a replacement Limited Partner Tax Representative.
“ Liquidating Event ” has the meaning set forth in Section 13.1.A hereof.
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“ Liquidator ” has the meaning set forth in Section 13.2.A hereof.
“ Lock-up Period ” has the meaning set forth in Section 8.6.D hereof.
“ Merger ” has the meaning set forth in the recitals hereof.
“ Merger Agreement ” means that certain Agreement and Plan of Merger among The Macerich Company, The Macerich Partnership, L.P., MACW, Inc., Wilmorite Properties, Inc. and Wilmorite Holdings, L.P., dated as of December 22, 2004.
“ Net Income ” means, for any taxable period, the excess, if any, of the Partnership’s items of income and gain for such taxable period over the Partnership’s items of loss and deduction for such taxable period. The items included in the calculation of Net Income shall be determined in accordance with federal income tax accounting principles, subject to the specific adjustments provided for on Exhibit B . If an item of income, gain, loss or deduction that has been included in the initial computation of Net Income is subjected to the special allocation rules in Exhibit C , Net Income or the resulting Net Loss, whichever the case may be, shall be recomputed without regard to such item.
“ Net Loss ” means, for any taxable period, the excess, if any, of the Partnership’s items of loss and deduction for such taxable period over the Partnership’s items of income and gain for such taxable period. The items included in the calculation of Net Loss shall be determined in accordance with federal income tax accounting principles, subject to the specific adjustments provided for on Exhibit B . If an item of income, gain, loss or deduction that has been included in the initial computation of Net Loss is subjected to the special allocation rules in Exhibit C , Net Loss or the resulting Net Income, whichever the case may be, shall be recomputed without regard to such item.
“ Net Owed Amount ” has the meaning set forth in Section 8.7.A hereof.
“ Net Owed Amount Financing ” has the meaning set forth in Section 8.7.A hereof.
“ Nonrecourse Built in Gain ” means, with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or negative pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Section 2.B of Exhibit C if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.
“ Nonrecourse Deductions ” has the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership taxable year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).
“ Nonrecourse Liability ” has the meaning set forth in Regulations Section 1.752-1(a)(2).
“ Notice of Redemption ” means the Notice of Redemption substantially in the form of Exhibit D to this Agreement.
“ Original Agreement ” has the meaning set forth in the recitals hereof.
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“ Other Protected Parties ” has the meaning set forth in Section 10.13.B.
“ Parent ” has the meaning set forth in the recitals hereof and shall be deemed to refer to all successors, including, without limitation, by operation of law.
“ Parent Acquisition, Inc. ” means MACW, Inc., a Delaware corporation.
“ Parent LP ” has the meaning set forth in the recitals hereof and shall be deemed to refer to all successors, including, without limitation, by operation of law.
“ Parent LP Call Right ” has the meaning set forth in Section 8.10.A hereof.
“ Parent LP Interests ” has the meaning set forth in Section 7.12.A hereof.
“ Parent Transferee ” has the meaning set forth in Section 11.2.E.
“ Participating Election Right ” has the meaning set forth in Section 8.7.A hereof.
“ Participating Limited Partners ” means those Limited Partners listed on Exhibit E attached hereto.
“ Participating LP Representative ” has the meaning set forth in Section 8.7.B hereof.
“ Participating Redemption Date ” has the meaning set forth in Section 8.7.A hereof.
“ Partner ” means a General Partner or a Limited Partner, and “ Partners ” means the General Partner and the Limited Partners collectively.
“ Partner Minimum Gain ” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).
“ Partner Nonrecourse Debt ” has the meaning set forth in Regulations Section 1.704-2(b)(4).
“ Partner Nonrecourse Deductions ” has the meaning set forth in Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership taxable year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).
“ Partnership ” has the meaning set forth in the preamble hereof and shall be deemed to refer to all successors, including without limitation, by operation of law.
“ Partnership Call Right ” has the meaning set forth in Section 8.8.A hereof.
“ Partnership Interest ” means an ownership interest in the Partnership representing a Capital Contribution by either a Limited Partner or the General Partner and includes any and all
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benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Partnership Interest may be expressed as a number of Partnership Units.
“ Partnership Merger ” has the meaning set forth in the recitals hereof.
“ Partnership Minimum Gain ” has the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in a Partnership Minimum Gain, for a Partnership taxable year shall be determined in accordance with the rules of Regulations Section 1.704-2(d).
“ Partnership Payment Date ” means the date on which the General Partner distributes the Available Cash with respect to Partnership Units pursuant to Section 5.1 hereof, which payment date shall be the same as the payment date established by Parent for a distribution to its common stockholders with respect to the same period, or if no such payment date is established by Parent, the payment date for such distribution shall be the 15 th day after the end of the applicable quarter.
“ Partnership Record Date ” means the record date for (i) the distribution of Available Cash with respect to Partnership Units pursuant to Section 5.1 hereof, which record date shall be the same as the record date established by Parent for a distribution to its common stockholders with respect to the same period, or if no such record date is established by Parent, the Partnership Payment Date for such distribution, or (ii) if applicable, determining the Partners entitled to vote on or consent to any proposed action for which the Consent or approval of the Partners is sought.
“ Partnership Unit ” or “ Unit ” means a fractional, undivided share of the Partnership Interests of all Partners issued pursuant to Sections 4.1, 4.2, and 4.3 hereof (and includes any class or series of Preferred Units established after the date hereof). The number of Partnership Units outstanding and, in the case of Common Units, the Percentage Interest in the Partnership represented by such Partnership Units, are set forth on Exhibit A attached hereto, as such Exhibit may be amended from time to time. The ownership of Partnership Units shall be evidenced by such form of certificate for Units as the General Partner adopts from time to time unless the General Partner determines that the Partnership Units shall be uncertificated securities.
“ Partnership Unit Put Right ” has the meaning set forth in the Section 8.10 hereof.
“ Partnership Year ” means the fiscal year of the Partnership, which shall be as determined in Section 9.2 hereof.
“ Percentage Interest ” means, as to a Partner, its percentage interest as a holder of Partnership Interests determined by dividing the Common Units and Class A Preferred Units (on an as-converted basis) owned by such Partner by the total number of Common Units and Class A Preferred Units (on an as-converted basis) then outstanding and as specified on Exhibit A attached hereto, as such Exhibit may be amended from time to time.
“ Person ” means a natural person, corporation, partnership (whether general or limited), limited liability company, trust, estate, unincorporated organization, association, custodian, nominee or any other individual or entity in its own or any representative capacity.
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“ Pre-Closing Period Returns ” has the meaning set forth in Section 10.1 hereof.
“ Preferred Unit ” means a limited partnership interest (of any series), other than a Common Unit, represented by a fractional, undivided share of the Partnership Interests of all Partners issued hereunder and which is designated as a “Preferred Unit” (or as a particular class or series of Preferred Units) herein and which has the rights, preferences and other privileges designated herein (including by way of a Certificate of Designations) in respect of a Preferred Unitholder. The allocation of Preferred Units among the Partners shall be set forth on Exhibit A , as such Exhibit may be amended from time to time.
“ Preferred Unitholder ” means a Limited Partner that holds Preferred Units (of any class or series).
“ Prior Agreements ” means collectively the Original Agreement, the First Amendment and the Second Amendment.
“ Prior Partnership Tax Protection Agreements ” has the meaning set forth in Section 10.17 hereof.
“ Pro-Rated Preferred Amount ” means an amount equal to the Class A Preferred Return Amount for the most recently completed calendar quarter multiplied by a fraction the numerator of which is equal to the number of days elapsed from the end of the most recent calendar quarter with respect to which the Partnership Record Date has occurred as of the applicable date of determination through the applicable date of determination and the denominator of which is 90 days, which calculation is intended to yield the portion of the Class A Preferred Return Amount accrued to the date of determination based on an assumed 360-day year of twelve 30-day months.
“ Property ” means any property or other investment in which the Partnership holds an ownership interest, directly or indirectly.
“ Protected Assets ” has the meaning set forth in Section 10.7 hereof.
“ Protected Parties ” has the meaning set forth in Section 10.7 hereof.
“ Put Windows ” means, collectively, the First Put Window and the Second Put Window.
“ Qualified REIT Subsidiary ” means any Subsidiary of Parent that is a “qualified REIT subsidiary” within the meaning of Section 856(i) of the Code.
“ Recapture Income ” means any gain recognized by the Partnership upon the disposition of any property or asset of the Partnership, which gain is characterized as non-capital gain income because it represents the recapture of deductions previously taken with respect to such property or asset.
“ Recognition Event ” has the meaning set forth in Section 10.13.A hereof.
“ Redeeming Partner ” has the meaning set forth in Section 8.6.A hereof.
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“ Redemption Amount ” means either the Cash Amount or the REIT Shares Amount, as determined by Parent, in its sole and absolute discretion. A Redeeming Partner shall have no right, without Parent’s consent, which consent may be given or withheld in Parent’s sole and absolute discretion, to receive the Redemption Amount in the form of the REIT Shares Amount.
“ Redemption Right ” has the meaning set forth in Section 8.6.A hereof.
“ Regulations ” means the Federal Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including any corresponding provisions of succeeding regulations).
“ Regulatory Allocations ” has the meaning set forth in Exhibit C .
“ REIT ” means a real estate investment trust under Sections 856 through 860 of the Code.
“ REIT Share ” means (i) a share of common stock of Parent or (ii) a common equity security for which the Common Unitholders have the right to exchange their Common Unit equivalent interests in the surviving entity in an Extraordinary Transaction permitted by Section 11.2.B hereof.
“ REIT Shares Amount ” means a number of REIT Shares equal (A) if Common Units are redeemed, to the product of (x) the number of Common Units offered for redemption by a Redeeming Partner multiplied by (y) the Conversion Factor in effect on the date of receipt by the Partnership of a Notice of Redemption or (B) if Class A Preferred Units are redeemed, to the product of (1) the number of Class A Preferred Units offered for redemption by a Redeeming Partner multiplied by (2) the Conversion Rate and multiplied by (3) the Conversion Factor, each in effect on the date of receipt by the Partnership of a Notice of Redemption, and in the case of either (A) or (B) plus (without duplication of any amounts included in (A) or (B)) (i) cash in an amount equal to or (ii) additional REIT Shares with Value equal to the Cumulative Unpaid Common Distribution Amount or the Cumulative Unpaid Class A Preferred Return Amount, as applicable, if any, attributable to the Common or Class A Preferred Units being redeemed or purchased; provided that, in the event Parent has previously issued to all holders of REIT Shares rights, options, warrants or convertible or exchangeable securities entitling the holders of REIT shares to subscribe for or purchase REIT Shares, or any other securities or property (collectively, “ Rights ”), and the Rights have not expired at the Specified Redemption Date, then the REIT Shares Amount shall also include that number of Rights that were issuable to a holder of the REIT Shares Amount or REIT Shares on the applicable record date relating to the issuance of such Rights, including by making such adjustments to the Conversion Ratio or the Conversion Factor, for this purpose, as are necessary.
“ Required Nonrecourse Debt Amount ” has the meaning set forth in Section 10.9 hereof.
“ Residual Gain ” or “ Residual Loss ” means any item of gain or loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of Contributed Property or Adjusted Property, to the extent such item of gain or loss is not allocated pursuant to Section 2.B(1)(i) or Section 2.B(2)(i) of Exhibit C to eliminate Book-Tax Disparities.
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“ Restricted Properties ” shall mean the Group A Restricted Properties, the Group B Restricted Properties and the Group C Restricted Properties; provided , however , that in the event any of the Restricted Properties are transferred to a party other than a wholly-owned Subsidiary of the Partnership in compliance with Section 7.12.B hereof, such Restricted Property shall cease to be both a Restricted Property and a Group A Restricted Property, Group B Restricted Property or Group C Restricted Property, as applicable.
“ Rights ” has the meaning set forth in the definition of “REIT Shares Amount.”
“ Rochester Decrease Amount ” means an amount, if any, by which the equity value of the Rochester Properties shall have decreased as measured by the calculation below between the Effective Date and the consummation of the Participating Election Right or the Specified Call Date, as applicable. The Rochester Decrease Amount is intended to reflect the increase in indebtedness attributable to the Rochester Properties, net of extraordinary capital expenditures, leasing commissions and tenant allowances, and shall be determined through the following calculation, provided that the result of the following calculation may not be less than zero (in which case there shall be a Rochester Increase Amount and not a Rochester Decrease Amount):
(i) The excess of (x) the Rochester Indebtedness as of the Participating Redemption Date or Specified Call Date, as applicable, over (y) the Rochester Indebtedness as of the Effective Date, excluding for all purposes the amount of any Net Owed Amount Financing;minus(ii) any extraordinary capital expenditures made by the Partnership or its Affiliates with respect to significant improvements at the Rochester Properties or a pro rata share of such expenditures with respect to any such property that is not wholly-owned (excluding, without limitation, expenditures relating to the maintenance and operation of the Rochester Properties in the ordinary course of business or the repair or restoration of any partial destruction, casualty or other loss with respect to a Rochester Property in accordance with Section 8.7.C. hereof), which expenditures have been approved and agreed to by the General Partner and the Participating LP Representative;minus(iii) an amount equal to the unamortized amount of any reasonable and customary leasing commissions paid by the owners of the Rochester Properties or a pro rata share with respect to any such property that is not wholly-owned to any leasing or property management agent after the Effective Date, with “unamortized amount” meaning the pro rata unamortized balance of such commissions where the term of the lease or the lease renewal for which a commission was paid will remain in effect after the Participating Election Date or the Specified Call Date, as applicable, assuming a straight-line amortization of the amount of the commission over such term of the lease or lease renewal;
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minus(iv) an amount equal to the unamortized portion of all tenant cash allowances paid by the owners of the Rochester Properties (or a pro rata share with respect to any such property that is not wholly-owned) to tenants therein in respect of leases executed or renewed after the Effective Date and prior to the Participating Election Date or the Specified Call Date, as applicable, and assuming that all such allowances are amortized over the term of the lease on a straight-line basis, but only to the extent, in the case of each of Eastview Mall and Greece Ridge Center, that such allowances exceed $1,500,000.“ Rochester Increase Amount ” means the amount, if any, by which the equity value of the Rochester Properties shall have increased as measured by the calculation below between the Effective Date and the consummation of the Participating Election Right or the Specified Call Date, as applicable. The Rochester Increase Amount is intended to reflect the decrease in indebtedness attributable to the Rochester Properties and the total amount of extraordinary capital expenditures, leasing commissions and tenant allowances, and shall be determined through the following calculation, provided that the result of the following calculation may not be less than zero (in which case there shall be a Rochester Decrease Amount and not a Rochester Increase Amount):
(i) The excess, if any, of (x) the Rochester Indebtedness as of the Effective Date, over (y) the Rochester Indebtedness as of the Participating Redemption Date or Specified Call Date, as applicable, excluding for all purposes the amount of any Net Owed Amount Financing;plus(ii) any extraordinary capital expenditures made by the Partnership or its Affiliates with respect to significant improvements at the Rochester Properties or a pro rata share of such expenditures with respect to any such property that is not wholly-owned (excluding, without limitation, expenditures relating to the maintenance and operation of the Rochester Properties in the ordinary course of business or the repair or restoration of any partial destruction, casualty or other loss with respect to a Rochester Property in accordance with Section 8.7.C. hereof), which expenditures have been approved and agreed to by the General Partner and the Participating LP Representative;plus(iii) an amount equal to the unamortized amount of reasonable and customary leasing commissions paid by the owners of the Rochester Properties or a pro rata share with respect to any such property that is not wholly-owned to any leasing or property management agent after the Effective Time, with “unamortized amount” meaning the pro rata unamortized balance of such commissions where the term of the lease or the lease renewal for which a commission was paid will remain in effect after the Participating Election Date or
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the Specified Call Date, as applicable, assuming a straight-line amortization of the amount of the commission over such term of the lease or lease renewal;plus(iv) an amount equal to the unamortized portion of all tenant cash allowances paid by the owners of the Rochester Properties (or a pro rata share with respect to any such property that is not wholly-owned) to tenants therein in respect of leases executed or renewed after the Effective Date and prior to the Participating Election Date or the Specified Call Date, as applicable, and assuming that all such allowances are amortized over the term of the lease on a straight-line basis, but only to the extent, in the case of each of Eastview Mall and Greece Ridge Center, that such allowances exceed $1,500,000.“ Rochester Indebtedness ” means the aggregate outstanding secured and unsecured Indebtedness of Rochester Malls, LLC, and its subsidiaries, or its pro rata share thereof in the case of subsidiaries that are not wholly-owned.
“ Rochester Interests ” has the meaning set forth in Section 8.7.A hereof.
“ Rochester Properties ” or “ Rochester Portfolio ” means the Eastview Mall, Eastview Commons, Greece Ridge Center, Marketplace Mall and Pittsford Plaza.
“ Rochester Malls, LLC ” means, for the purposes of this Agreement, the limited liability company to be formed for the purpose of holding, directly or indirectly, the Rochester Properties.
“ 704(c) Value ” of any Contributed Property means the fair market value of such property or other consideration at the time of contribution, as determined by the General Partner using such reasonable method of valuation as it may adopt. Subject to Exhibit B hereof, the General Partner shall, in its sole and absolute discretion, use such method as it deems reasonable and appropriate to allocate the aggregate of the 704(c) Values of Contributed Properties in a single or integrated transaction among the separate properties on a basis proportional to their respective fair market values.
“ Second Amendment ” has the meaning set forth in the recitals hereof.
“ Second Put Window ” has the meaning set forth in Section 8.10.B.(2).
“ Specified Call Date ” has the meaning set forth in Section 8.8.A hereof.
“ Specified Redemption Date ” means the fifteenth (15th) Business Day after receipt by the Partnership (with a copy to Parent) of a Notice of Redemption; provided that if Parent combines its outstanding REIT Shares, no Specified Redemption Date shall occur after the record date of such combination of REIT Shares and prior to the effective date of such combination; provided, further, that such date in no event shall be prior to April 25, 2006.
“ Straddle Period Returns ” has the meaning set forth in Section 10.1 hereof.
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“ Subordinated Amounts ” means any and all payments of the Partnership that are attributable to (i) any payment of principal or interest with respect to any Indebtedness owing by the Partnership to the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee; (ii) any payments by the Partnership to the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee with respect to any reimbursement of expenses incurred by the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee; (iii) any compensation paid by the Partnership to the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee for services rendered and (iv) any other amounts owed to or being paid to the General Partner or any of its respective Subsidiaries or Affiliates or any Parent Transferee.
“ Subsidiary ” means, with respect to any Person, any corporation, partnership or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.
“ Substituted Limited Partner ” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 11.4 hereof.
“ Tax Arbitrator ” has the meaning set forth in Section 10.13.D hereof.
“ Tax-Deferred Exchange ” has the meaning set forth in Section 10.8.A hereof.
“ Tax Proceeding ” has the meaning set forth in Section 10.3.D hereof.
“ Terminating Capital Transaction ” means any sale or other disposition of all or substantially all of the assets of the Partnership or a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of the assets of the Partnership, other than a transaction in which gain or loss is not recognized by the Partnership for federal income tax purposes.
“ Tier 1 Protected Assets ” has the meaning set forth in Section 10.7 hereof.
“ Tier 2 Protected Assets ” has the meaning set forth in Section 10.7 hereof.
“ Tier 1 Protection Period ” has the meaning set forth in Section 10.8.A hereof.
“ Tier 2 Protection Period ” has the meaning set forth in Section 10.8.A hereof.
“ Total Put Exercise ” has the meaning set forth in Section 8.6.C hereof.
“ Unconsolidated Subsidiaries ” means, with respect to a Person, those Subsidiaries of such Person that are not consolidated for GAAP purposes.
“ Unrealized Gain ” attributable to any item of Partnership Property means, as of any date of determination, the excess, if any, of (i) the fair market value of such Property (as determined under Exhibit B hereof) as of such date over (ii) the Carrying Value of such Property (prior to any adjustment to be made pursuant to Exhibit B hereof) as of such date.
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“ Unrealized Loss ” attributable to any item of Partnership Property means, as of any date of determination, the excess, if any, of (i) the Carrying Value of such Property (prior to any adjustment to be made pursuant to Exhibit B hereof) as of such date over (ii) the fair market value of such Property (as determined under Exhibit B hereof) as of such date.
“ Valuation Date ” means the date of receipt by the Partnership of a Notice of Redemption or, if such date is not a Business Day, the first Business Day thereafter.
“ Value ” means, with respect to a REIT Share, the average of the daily market price for the ten (10) consecutive trading days ending on and including the Valuation Date. The market price for each such trading day shall be: (i) if the REIT Shares are listed or admitted to trading on any national securities exchange or the NASDAQ National Market System, the closing price on such day as reported by such national securities exchange or the NASDAQ National Market System, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day; (ii) if the REIT Shares are not listed or admitted to trading on any national securities exchange or the NASDAQ National Market System, the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the General Partner; (iii) if the REIT Shares are not listed or admitted to trading on any national securities exchange or the NASDAQ National Market System and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than ten (10) days prior to the date in question) for which prices have been so reported; or (iv) if none of the conditions set forth in clauses (i), (ii), or (iii) is met then, unless the holder of the Partnership Units being redeemed and the General Partner otherwise agree, with respect to a REIT Share per Common Unit offered for redemption, the amount that a holder of one Common Unit would receive if each of the assets of the Partnership were sold for its fair market value on the Specified Redemption Date, the Partnership were to pay all of its outstanding liabilities, and the remaining proceeds were to be distributed to the Partners in accordance with the terms of this Agreement. Such Value shall be determined by the General Partner, acting in good faith and based upon a commercially reasonable estimate of the amount that would be realized by the Partnership if each asset of the Partnership (and each asset of each partnership, limited liability company, trust, joint venture or other entity in which the Partnership owns a direct or indirect interest) were sold to an unrelated purchaser in an arms’ length transaction where neither the purchaser nor the seller were under any economic compulsion to enter into the transaction (without regard to any discount in value as a result of the Partnership’s minority interest in any property or any illiquidity of the Partnership’s interest in any property). In the event the REIT Shares Amount includes Rights, then the Value of such Rights shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate; provided that the Value of any Rights issued pursuant to a “Shareholder Rights Plan” shall be deemed to have no value unless a “triggering event” shall have occurred (i.e., if the Rights issued pursuant thereto are no longer “attached” to the REIT Shares and are able to trade independently).
“ Wilmorite Limited Partners ” has the meaning set forth in Section 10.7 hereof.
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“ Zone Credit ” means the refundable real property tax credits originating from Qualified Empire Zone Entities pursuant to Section 15 of the New York Tax Law, as amended.
ARTICLE II - ORGANIZATIONAL MATTERSSection 2.1 . Formation and Continuation
The Partnership was formed as a limited partnership organized pursuant to the provisions of the Act by filing the Certificate of Limited Partnership with the Delaware Secretary of State on October 20, 1999. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. No Partner has any interest in any Partnership property, and the Partnership Interest of each Partner shall be personal property for all purposes.
Section 2.2 . Name
Prior to the Effective Date, the name of the Partnership was “Wilmorite Holdings, L.P.” From and after the Effective Date, upon the effectiveness of the Partnership Merger, the name of the Partnership shall be MACWH, LP. Immediately following the Merger, an amendment to the Partnership’s Certificate of Limited Partnership was filed to reflect the change in the name of General Partner. In accordance with Section 17-211(c) of the Act, the Certificate of Merger of Merger Sub, L.P. into the Partnership shall amend the Certificate of Limited Partnership to reflect the name of the Partnership. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3 . Registered Office and Agent; Principal Office
The address of the registered office of the Partnership in the State of Delaware and the name and address of the registered agent for service of process on the Partnership in the State of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The principal business office of the Partnership shall be c/o The Macerich Company, 401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401. The General Partner may from time to time designate in its sole and absolute discretion another registered agent or another location for the registered office or principal place of business, and shall provide the Limited Partners with notice of such change promptly following its effective date. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable.
Section 2.4 . Power of Attorney
A. Each Limited Partner hereby constitutes and appoints the General Partner, any Liquidator, and authorized officers and attorneys in fact of each, and each of those acting
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singly, in each case with full power of substitution, as its true and lawful agent and attorney in fact, with full power and authority in its name, place and stead to:(1) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (i) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate of Limited Partnership and all amendments or restatements thereof) that the General Partner or any Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may or plans to conduct business or own property; (ii) all instruments that the General Partner deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (iii) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; (iv) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article XI, XII or XIII hereof or the Capital Contribution of any Partner and (v) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; and(2) execute, swear to, seal, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement.Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article XIV hereof or as may be otherwise expressly provided for in this Agreement. This power of attorney may be executed by such agent and attorney-in-fact for all Limited Partners (or any of them) by a single signature of the attorney-in-fact with or without listing all of the Limited Partners executing an instrument.
B. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner and any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and, to the fullest extent permitted by law, it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or the transfer of all or any portion of such Limited Partner’s Partnership Units and shall extend to such Limited Partner’s heirs, successors, assigns and personal representatives. Each such Limited Partner, to the fullest extent permitted by law, hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney, and each such Limited Partner, to the fullest extent permitted by law, hereby waives any and all defenses which may be available to contest, negate
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or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney. Each Limited Partner shall execute and deliver to the General Partner or any Liquidator, within fifteen (15) days after receipt of the General Partner’s or such Liquidator’s request therefor, such further designation, powers of attorney and other instruments as the General Partner or any Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership.Section 2.5 . Term
The term of the Partnership commenced on October 20, 1999 and shall continue until December 31, 2099, unless the Partnership is dissolved and terminated sooner pursuant to the provisions of Article XIII hereof or as otherwise provided by law.
ARTICLE III - PURPOSESection 3.1. Purpose and Business
The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act; provided , however , that such business shall be limited to and conducted in such a manner as to permit Parent at all times to be qualified as a REIT for federal income tax purposes, unless and until Parent is not qualified or ceases to qualify as a REIT for any reason or reasons other than the conduct of the business of the Partnership; (ii) to enter into any partnership, joint venture, limited liability company or other similar arrangement to engage in any of the foregoing or to own interests in any entity engaged, directly or indirectly, in any of the foregoing; and (iii) to do anything necessary or incidental to the foregoing. In connection with the foregoing, and without limiting Parent’s right, in its sole discretion, to cease qualifying as a REIT, the Partners acknowledge that Parent’s status as a REIT inures to the benefit of all of the Partners and not solely the General Partner or its Affiliates.
Section 3.2 . Powers
The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness whether or not secured by mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and develop real property, and lease, sell, transfer and dispose of real property; provided , however , that (i) the Partnership shall not have the authority to take any actions expressly prohibited by this Agreement and (ii) the Partnership shall not take, or omit to take, any action which, in the judgment of the General Partner, in its sole and absolute discretion, (a) could adversely affect the ability of Parent to achieve or maintain qualification as a REIT or (b) could violate any law or regulation of any governmental body or agency having jurisdiction over Parent or its securities, unless in each case any such action (or inaction) under the foregoing clauses (a) or (b) shall have been specifically consented to by Parent in writing. Notwithstanding the foregoing or any other provision of this
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Agreement, any provision of this Agreement that might jeopardize the REIT status of Parent (or any of its Affiliates) shall be void and of no effect, or reformed, as necessary, to avoid any loss of REIT status, provided , however , that Parent has the right, in its sole discretion, to cease qualifying as a REIT.
ARTICLE IV - CAPITAL CONTRIBUTIONSSection 4.1 . Capital Contributions of the Partners
A. Prior to the Effective Date, the Partners have made Capital Contributions to the Partnership as reflected on Exhibit A attached hereto and in connection with the Partnership Merger, the Partners were offered the opportunity to elect to exchange for cash any Partnership Interest then held or to exchange such Partnership Interest for Partnership Interests designated herein as “Common Units” or “Class A Preferred Units”, each with the rights, powers, duties and other terms outlined in this Agreement. On the Effective Date, upon the effectiveness of the Partnership Merger, this Agreement became effective and replaced the Second Amendment in its entirety. In connection with the amendments effected by this Agreement, among other things, the Partnership amended the terms of the Common Units as reflected herein, and designated herein the rights of Class A Preferred Units. As of the Effective Date (after taking into account the Merger, the Partnership Merger and any Capital Contributions or redemptions relating thereto as well as the amendments to the terms of the Common and Preferred Units), the (i) number and class of Partnership Units held by each Partner, (ii) Capital Account balance of each Partner(1) and (iii) Percentage Interest of each Partner are as set forth on Exhibit A , which Percentage Interest may be adjusted on Exhibit A from time to time by the General Partner to the extent necessary to reflect accurately redemptions, additional Capital Contributions, the issuance of additional Partnership Units (pursuant to any merger or otherwise), or similar events having an effect on any Partner’s Percentage Interest.B. The Partners listed on Exhibit A attached hereto have heretofore been admitted as Partners, and upon the execution of this Agreement or a counterpart of this Agreement, the Partners listed on Exhibit A attached hereto shall continue as Partners. The Common Units and Class A Preferred Units issued pursuant to this Agreement and the Partnership Merger Agreement are duly authorized and validly issued limited partner interests in the Partnership.C. To the extent the Partnership acquires any property (or an indirect interest therein) by the merger of any other Person into the Partnership or with or into a Subsidiary of the Partnership in a triangular merger, Persons who receive Partnership Interests in exchange for their interests in the Person merging into the Partnership or with or into a Subsidiary of the Partnership shall become Partners and shall be deemed to have made Capital Contributions as provided in the applicable merger agreement (or if not so provided, as determined by the General Partner in its reasonable discretion) and as set forth on Exhibit A , as amended to reflect such deemed Capital Contributions.D. The number of Common Units held by the General Partner equal to one percent (1%) of all outstanding Common Units shall be deemed to be the “ General Partner
(1) The Capital Account balances will reflect a full book-up as of the Effective Date.
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Partnership Units ” and shall be the General Partner Interest. All other Partnership Units held by the General Partner shall be deemed to be Limited Partner Interests and shall be held by the General Partner in its capacity as a Limited Partner in the Partnership.
E. Except as provided in Sections 4.2 and 10.5 hereof, the Partners shall have no obligation to make any additional Capital Contributions or loans to the Partnership.Section 4.2 . Future Issuances of Additional Partnership Interests
A. The General Partner is hereby authorized, in its sole and absolute discretion and without the approval of the Limited Partners, to cause the Partnership from time to time to issue to the Partners (including the General Partner and its Affiliates) or other Persons (including, without limitation, in connection with the contribution of cash and other property to the Partnership) additional Partnership Units or other Partnership Interests in one or more classes, or in one or more series of any of such classes, with such designations, preferences, and relative, participating, optional, or other special rights, powers and duties all as shall be determined by the General Partner in its sole and absolute discretion subject to Delaware law, including, without limitation, (i) rights, powers, and duties senior to one or more classes or series of Partnership Interests and any other Partnership Units outstanding or thereafter issued; (ii) the rights to an allocation of items of Partnership income, gain, loss, deduction, and credit to each such class or series of Partnership Interests; (iii) the rights of each such class or series of Partnership Interests to share in Partnership distributions; and (iv) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; provided that no such additional Partnership Units or other Partnership Interests shall be issued to the General Partner or Parent or any of their respective Subsidiaries or Affiliates, unless either (x) Parent, the General Partner or any of their respective Subsidiaries or Affiliates, as applicable, shall make a Capital Contribution to the Partnership in an amount equal to the fair market value of such Partnership Units or other Partnership Interest (as determined in good faith by the General Partner; provided , however , that for purposes hereof the fair market value of a Common Unit of the same class of Common Units of the Limited Partners shall be equal to (A) the Value of that number of REIT Shares (or fraction thereof) comprising the REIT Shares Amount attributable to a single Common Unit of such class as of the date of issuance of such Common Unit or (B) with respect to issuances on the Effective Date, the Partnership Cash Consideration (as defined in the Merger Agreement), or (y) additional Partnership Units or other Partnership Interests are issued to all Partners in proportion to their respective Percentage Interests; and provided further that no such additional Partnership Units or other Partnership Interests shall be issued to Parent, the General Partner or any of their respective Subsidiaries or Affiliates or any Parent Transferee, with rights to distributions during the operation or upon the liquidation of the Partnership that are senior to the distributions of the Limited Partners during the operation or upon the liquidation of Partnership or with rights to Net Losses that would result in a change in the priority of allocation of Net Losses pursuant to Section 6.1.B hereof in a manner that has an adverse effect upon any of the Limited Partners, without the Consent of the Limited Partners holding two-thirds-in-interest of the Common Units and the Class A Preferred Units (on an as-converted basis), other than Partnership Units held by the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee, or such other percentage of the Limited Partners as may be specifically provided for under a provision of this Agreement. Upon the issuance of additional Partnership Interests in accordance with this Section 4.2.A and the satisfaction of the
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conditions set forth in Section 12.2 hereof, the holders of such additional Partnership Interests shall be admitted to the Partnership as Additional Limited Partners. B. In the event that the Partnership issues Partnership Interests pursuant to Section 4.2.A hereof, the General Partner may make such revisions to this Agreement (without any requirement of receiving approval of the Limited Partners), as it deems necessary to reflect the issuance of such additional Partnership Interests and the special rights, powers, and duties associated therewith.Section 4.3. Other Contribution Provisions
If any Partner is admitted to the Partnership and is given a positive Capital Account balance in exchange for services rendered to the Partnership, such transaction shall be treated by the Partnership as if the Partnership had compensated such Partner in cash, and such Partner had contributed such cash to the capital of the Partnership.
Section 4.4. No Preemptive Rights
Except to the extent expressly granted by the Partnership pursuant to another agreement, no Person shall have any preemptive, preferential or other similar right with respect to (i) Capital Contributions or loans to the Partnership or (ii) the issuance or sale of any Partnership Units or other Partnership Interests.
Section 4.5. No Interest on Capital
No Partner shall be entitled to interest on its Capital Contributions or its 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 Contributions.
ARTICLE V - DISTRIBUTIONSSection 5.1. Requirement and Characterization of Distributions
Subject to Sections 5.3, 5.4 and 5.5 hereof, the General Partner shall distribute to the Common and Preferred Unitholders who are Partners as of the Partnership Record Date at least quarterly an amount equal to one hundred percent (100%) of Available Cash generated by the Partnership during the last full calendar quarter, or, if applicable, the relevant shorter period (including, (1) the period from the day after Effective Date to the end of the first calendar quarter ending after the Effective Date, and (2) the period from the beginning of the calendar quarter in which commencement of the dissolution and liquidation of the Partnership occurs through the date of such commencement) on the Partnership Payment Date as follows:
A. first, to the Class A Preferred Unitholders who are Partners on the Partnership Record Date with respect to such distribution, pro rata among them in proportion to the Cumulative Unpaid Class A Preferred Return Amount, if any, of each such Class A Preferred Unitholder until the Cumulative Unpaid Class A Preferred Return Amount of each Class A Preferred Unitholder is reduced to zero;
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B. second, to the Class A Preferred Unitholders who are Partners on the Partnership Record Date with respect to such distribution, pro rata among them in proportion to the Class A Preferred Return Amount, if any, of each such Class A Preferred Unitholder, until each such Class A Preferred Unitholder has received an amount equal to the Class A Preferred Return Amount with respect to such distribution;C. third, to the Common Unitholders (other than the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee) who are Partners on the Partnership Record Date with respect to such distribution, pro rata among them in proportion to the Cumulative Unpaid Common Distribution Amount, if any, of each such Common Unitholder until the Cumulative Unpaid Common Distribution Amount of each such Common Unitholder is reduced to zero;D. fourth, to the Common Unitholders (other than the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee) who are Partners on the Partnership Record Date with respect to such distribution, pro rata among them in proportion to the Common Distribution Amount, if any, of each such Common Unitholder, until each such Common Unitholder has received an amount equal to the Common Distribution Amount with respect to such distribution; andE. thereafter and without limitation, one hundred percent (100%) to the General Partner, Parent and their respective Subsidiaries and Affiliates or any Parent Transferee (and any permitted transferee under Section 11.3 hereof) pro rata in proportion to the Common Units held by the General Partner, Parent and their respective Subsidiaries and Affiliates or any Parent Transferee (and any permitted transferee under Section 11.3 hereof).Notwithstanding the foregoing, in no event may a Partner receive a distribution of Available Cash with respect to a Common Unit or Class A Preferred Unit if and to the extent that such Common Unit or Class A Preferred Unit has been redeemed or exchanged prior to the Partnership Record Date for the same period. In addition, for the avoidance of doubt, no Partner shall receive a distribution with respect to a Common Unit or a Class A Preferred Unit and a dividend with respect to a REIT Share received upon redemption of such Common Unit or Class A Preferred Unit for the same quarter.
All amounts withheld pursuant to the Code or any provisions of any state or local tax law and Section 10.5 hereof with respect to any allocation, payment or distribution to the Partners shall be treated as amounts distributed to the Partners pursuant to Section 5.1 hereof for all purposes under this Agreement.
Section 5.3. Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction and any other cash received or reductions in reserves made after commencement of the liquidation of the Partnership shall be distributed to the Partners in accordance with Section 13.2 hereof.
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Section 5.4. Subordinated Amounts
Notwithstanding any other provision of this Agreement to the contrary, the Partnership shall not pay any Subordinated Amounts unless and until the Cumulative Unpaid Common Distribution Amounts and the Common Distribution Amounts of all of the holders of Common Units (other than the General Partner, Parent and their respective Subsidiaries and Affiliates and Parent Transferees) have been reduced to zero. Subordinated Amounts shall be paid prior to the payment of distributions under Section 5.1.E. In addition, any payment of Subordinated Amounts shall be considered as a distribution of Available Cash solely for purposes of the one hundred percent (100%) distribution requirement of Section 5.1 hereof.
Section 5.5 Limitation on Distributions
Notwithstanding anything to the contrary contained in this Agreement, the Partnership, and the General Partner on behalf of the Partnership, shall not be required to make a distribution to any Partner on account of its interest in the Partnership if such distribution would violate the Act or other applicable law; provided, however, that any amounts not paid as a result thereof shall continue to accumulate as Cumulative Unpaid Class A Preferred Return Amount or Cumulative Unpaid Common Distribution Amount, as applicable.
ARTICLE VI - ALLOCATIONS
Section 6.1. Allocations For Capital Account Purposes
For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership’s items of income, gain, loss and deduction (computed in accordance with Exhibit B hereof) shall be allocated among the Partners in each taxable year (or portion thereof) as provided herein below.
A. Net Income . Net Income shall be allocated:(1) first, to the General Partner to the extent that Net Losses previously allocated to the General Partner pursuant to Section 6.1.B(3) hereof for all prior taxable years exceed Net Income previously allocated to the General Partner pursuant to this Section 6.1.A(1) for all prior taxable years;(2) second, to Partners holding Class A Preferred Units to the extent that Net Losses previously allocated to such Partners pursuant to Section 6.1.B(2) hereof for all prior taxable years exceed Net Income previously allocated to such Partners pursuant to this Section 6.1.A(2) for all prior taxable years;(3) third, to Partners holding Common Units to the extent that Net Losses previously allocated to such Partners pursuant to Section 6.1.B(1) hereof for all prior taxable years exceed Net Income previously allocated to such Partners pursuant to this Section 6.1.A(3) for all prior taxable years;
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(4) fourth, to Partners holding Class A Preferred Units, pro rata in proportion to the number of Class A Preferred Units held by them, until each such Class A Preferred Unit has been allocated Net Income equal to the excess of (x) the cumulative amount of preferred distributions such Partners are entitled to receive pursuant to Section 5.1 hereof as of the last day of the current taxable year or to the date of redemption to the extent such Partnership Interests are redeemed during such taxable year over (y) the cumulative Net Income allocated to such Partners pursuant to this Section 6.1.A(4) for all prior taxable years;(5) fifth, to Partners holding Common Units pro rata in proportion to and up to the amount of any distributions received by each such Partner pursuant to Section 5.1 hereof for the current taxable year or other taxable period (provided that for purposes of this Section 6.1.A(5) the General Partner may include in the calculation of distributions received by a Partner during any taxable year or other taxable period of the Partnership any distributions received by the Partner on or before the thirtieth (30th) day following the end of the particular taxable year or other period of the Partnership, provided further that, if the General Partner elects to include the distribution in any such calculation, any such distribution shall be disregarded for purposes of determining allocations of income in the year in which it is actually made); and(6) sixth, the remaining Net Income of the Partnership shall be allocated one hundred percent (100%) to the General Partner and its Subsidiaries and Affiliates (and any Parent Transferee or permitted transferee under Section 11.3 hereof) pro rata in proportion to the Common Units held by the General Partner and its respective Subsidiaries and Affiliates (and any Parent Transferee or permitted transferee under Section 11.3 hereof).B. Net Losses . After giving effect to the special allocations set forth in Section 1 of Exhibit C attached hereto, Net Losses shall be allocated:(1) first, with respect to Common Units, pro rata in proportion to each Partner’s respective Adjusted Capital Account as of the last day of the period for which such allocation is being made until the Adjusted Capital Account (ignoring for this purpose any amounts a Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)) of each Partner with respect to such Common Units is reduced to zero;(2) second, to the Partners holding Preferred Units in accordance with the rights of such class of Preferred Units (and, if there is more than one class of such Preferred Units, then in the reverse order of their preferences in distributions), until the Adjusted Capital Account (modified in the same manner as in the parenthetical in the immediately preceding clause (1)) of each such Partner with respect to such Preferred Units is reduced to zero; and(3) third, to the General Partner.
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C. For purposes of Regulations Section 1.752-3(a), the Partners agree that Nonrecourse Liabilities of the Partnership in excess of the sum of (i) the amount of Partnership Minimum Gain; and (ii) the total amount of Nonrecourse Built-in Gain shall be allocated among the Partners (A) first, to each Partner pro rata in proportion to and up to the amount of built-in gain that is allocable to such Partner with respect to Section 704(c) property (as defined under Regulations Section 1.704-3(a)(3)(ii)) or property for which reverse 704(c) allocations are applicable (as described in Regulations Section 1.704-3(a)(6)(i)) to the extent permitted by Regulations Section 1.752-3(a)(3) (as initially set forth on Schedule 10.9 ); and (B) thereafter, to the Partners in accordance with each Partner’s share of partnership profits as determined by the General Partner in a manner consistent with Regulations Section 1.752-3(a)(3).D. Any gain allocated to the Partners upon the sale or other taxable disposition of any Partnership asset shall, to the extent possible, after taking into account other required allocations of gain pursuant to Exhibit C , be characterized as Recapture Income in the same proportions and to the same extent as such Partners have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.E. Notwithstanding anything to the contrary in this Agreement, upon any conversion of Class A Preferred Units pursuant to Section 8.6.C or Section 8.9 hereof or otherwise, items of income, gain, loss and deduction resulting from the revaluation of the Partnership assets pursuant to Section 1.D of Exhibit B hereto otherwise allocable to the converting Limited Partner and the General Partner and its Subsidiaries and Affiliates or any Parent Transferee shall be specially allocated to the holder of the Class A Preferred Units and the General Partner and its Subsidiaries and Affiliates until so much of the Capital Account of such holder represented by the Class A Preferred Units being converted by such holder equals the aggregate Capital Accounts of holders of Common Units other than the General Partner and its Subsidiaries and Affiliates or any Parent Transferee (after giving effect to any allocation of income, gain, loss and deduction to such holders as a result of the applicable revaluation) divided by the number of Common Units outstanding and owned by such holders of Common Units not owned by the General Partner and its Subsidiaries and Affiliates or any Parent Transferee immediately prior to the conversion.
Section 6.2. Substantial Economic Effect
It is the intent of the Partners that the allocations of Net Income and Net Losses under this Agreement have substantial economic effect (or be consistent with the Partners’ interests in the Partnership in the case of the allocation of losses attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code as interpreted by the Regulations promulgated pursuant thereto. This Article VI and other relevant provisions of this Agreement shall be interpreted in a manner consistent with such intent.
ARTICLE VII - MANAGEMENT AND OPERATIONS OF BUSINESS
A. Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership are and shall be exclusively
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vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. Notwithstanding anything to the contrary in this Agreement, the General Partner may not be removed by the Limited Partners with or without cause. In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to Sections 7.1.B, 7.3, 7.12, 8.7, 8.8, Article X and Section 11.2 hereof, shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all powers set forth in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1 hereof (subject to the proviso in Section 3.2 hereof), including, without limitation: (1) the making of any expenditures, the lending or borrowing of money, the assumption or guaranty of, or other contracting for, indebtedness and other liabilities, the issuance of evidence of indebtedness (including the securing of the same by deed, mortgage, deed of trust or other lien or encumbrance on the Partnership’s assets) and the incurring of any other obligations it deems necessary for the conduct of the activities of the Partnership;(2) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership, the registration of any class of securities of the Partnership under the Securities Exchange Act of 1934, as amended, and the listing of any debt securities of the Partnership on any exchange;(3) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any or all of the assets of the Partnership (including the exercise or grant of any conversion, option, privilege, or subscription right or other right available in connection with any assets at any time held by the Partnership) or the merger or other combination of the Partnership with or into another entity on such terms as the General Partner deems proper (all of the foregoing subject to prior approval as provided elsewhere in this Agreement);(4) the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms the General Partner, in good faith, deems proper, including, without limitation, the financing of the conduct of the operations of the General Partner, Partnership or any Subsidiary of the Partnership, the lending of funds to other Persons (including, without limitation, any Subsidiary of the Partnership) and the repayment of obligations of the Partnership and its Subsidiaries and any other Person in which it has an equity investment, and the making of capital contributions to any of its Subsidiaries, the holding of any real, personal and mixed property of the Partnership in the name of the Partnership or in the name of a nominee or trustee (subject to Section 7.10 hereof), the creation, by grant or otherwise, of easements or servitudes, and the performance of any and all acts necessary or appropriate to the operation of the Partnership assets including, but not limited to, applications for rezoning, objections to rezoning, constructing,
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altering, improving, repairing, renovating, rehabilitating, razing, demolishing or condemning any improvements or property of the Partnership; (5) the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Partnership or any Subsidiary of the Partnership or any Person in which the Partnership has made a direct or indirect equity investment;(6) the negotiation, execution, and performance of any contracts, conveyances or other instruments (including with Affiliates of the Partnership to the extent permitted by this Agreement) that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement, including contracting with contractors, developers, consultants, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Partnership’s assets;(7) the distribution of Partnership cash or other Partnership assets in accordance with this Agreement;(8) the holding, managing, investing and reinvesting of cash and other assets of the Partnership;(9) the collection and receipt of revenues and income of the Partnership;(10) the establishment of one or more divisions of the Partnership, the selection and dismissal of employees of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer” of the Partnership), and agents, outside attorneys, accountants, consultants and contractors of the Partnership, and the determination of their compensation and other terms of employment or hiring, including waivers of conflicts of interest and the payment of their expenses and compensation out of the Partnership’s assets;(11) the maintenance of such insurance for the benefit of the Partnership, the Partners and directors and officers thereof as it deems necessary or appropriate in good faith;(12) the formation of, or acquisition of an interest in, and the contribution of property to, any other corporations, limited or general partnerships, joint ventures or other entities or relationships that it, in good faith, deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to, its Subsidiaries and any other Person in which it has an equity investment from time to time), provided that, as long as Parent has determined to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause Parent to fail to qualify as a REIT;
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(13) the control of any matters affecting the rights and obligations of the Partnership, including the settlement, compromise, submission to arbitration or any other form of dispute resolution, or abandonment of, any claim, cause of action, liability, debt or damages, due or owing to or from the Partnership, the commencement or defense of suits, legal proceedings, administrative proceedings, arbitration or other forms of dispute resolution, and the representation of the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expenses, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;(14) the undertaking of any action in connection with the Partnership’s direct or indirect investment in its Subsidiaries or any other Person (including, without limitation, the contribution or loan of funds by the Partnership to such Persons, incurring indebtedness on behalf of, or guarantying the obligations of, any such Persons);(15) the determination of the fair market value of any Partnership Property distributed in kind using such reasonable method of valuation as the General Partner may adopt in good faith (excluding distributions pursuant to Section 8.7 or 8.8 hereof);(16) the exercise, directly or indirectly, through any attorney in fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership;(17) the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person;(18) the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have an interest pursuant to contractual or other arrangements with such Person;(19) the making, execution and delivery of any and all deeds, leases, notes, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements in writing necessary or appropriate, in the good faith judgment of the General Partner, for the accomplishment of any of the powers of the General Partner enumerated in this Agreement;(20) the maintenance of the Partnership’s books and records;(21) the issuance of additional Partnership Units, as appropriate, in connection with Capital Contributions by Additional Limited Partners and additional Capital Contributions by Partners pursuant to Article IV hereof;(22) the distribution of cash to acquire Partnership Units held by a Limited Partner in connection with a Limited Partner’s exercise of its Redemption Right
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under Section 8.6 hereof, and the in-kind distribution of the Rochester Interests in connection with the transactions contemplated in Section 8.7 or 8.8 hereof;(23) to do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Code, including but not limited to imposing restrictions on transfers and restrictions on redemptions (other than redemptions contemplated by this Agreement); and(24) to take such other action, execute, acknowledge, swear to or deliver such other documents and instruments, and perform any and all other acts that the General Partner deems necessary or appropriate for the formation, continuation and conduct of the business and affairs of the Partnership (including, without limitation, all actions consistent with allowing Parent at all times to qualify as a REIT unless Parent voluntarily terminates its REIT status) and to possess and enjoy all the rights and powers of a general partner as provided by the Act.B. Management Limitations on the Rochester Properties
(1) Notwithstanding anything in this Agreement to the contrary, until the earlier of (a) August 31, 2010, and (b) the waiver by the Partnership or termination pursuant to Section 8.8.E hereof of the Partnership Call Right, none of Parent, the General Partner or any of their respective Subsidiaries or Affiliates shall, without the Consent of the Participating LP Representative, take any of the following actions:(i) except pursuant to credit facilities in existence as of the date hereof, incur or refinance any amount of indebtedness for borrowed money secured by the Rochester Properties, guarantee any indebtedness secured by the Rochester Properties, mortgage, pledge or otherwise encumber any assets of, or create or suffer any material lien upon, any of the Rochester Properties in excess of 105% of the current amount of indebtedness on such property, or pursuant to terms that would change floating rate indebtedness into fixed rate indebtedness;(ii) enter into, terminate, modify or supplement any tax increment financing related to any of the Rochester Properties;(iii) directly or indirectly purchase, acquire or agree to acquire by any other manner, the fee or leasehold interest of any anchor tenant maintained at any of the Rochester Properties;(iv) enter into, terminate or modify in any material respect any agreement with a tenant in connection with a new space that consists of square footage in excess of 35,000 square feet or in replacement of an existing space maintained by any of the Rochester Properties;(v) enter into, terminate or modify any (a) material contract with respect to the Rochester Properties or in connection therewith requiring Rochester Malls, LLC or the relevant property owner to pay amounts in excess of
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$100,000 individually or $1 million in the aggregate or that cannot be terminated without penalty upon either (x) no more than 60 days notice or (y) prior to the expiration of the Participating Election Right, or (b) easement agreement or similar agreement affecting any Rochester Property; and(vi) amend, terminate or otherwise modify or agree to amend, terminate or modify, any reciprocal easement agreement or supplemental agreement related to any Rochester Property.C. Each of the Limited Partners agrees that the General Partner is authorized to execute, deliver and perform the above mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the Partners, the Act or any applicable law, rule or regulation, to the fullest extent permitted under the Act or other applicable law, rule or regulation. The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity.D. At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain at any and all times working capital accounts and other cash or similar balances in such amounts as the General Partner, in its reasonable discretion, deems appropriate and reasonable from time to time, including upon liquidation of the Partnership under Article XIII hereof.E. At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain (i) casualty, liability and other insurance on the Properties of the Partnership, (ii) liability insurance for the Indemnitees hereunder and (iii) such other insurance as the General Partner, in its reasonable discretion, determines to be necessary.F. Except as otherwise provided herein or expressly agreed to in a separate written agreement between the General Partner and one or more Limited Partners, in exercising its authority under this Agreement, the General Partner may, but shall be under no obligation to, take into account the tax consequences to any Partner of any action taken by it. Except as otherwise provided herein or expressly agreed to in a separate written agreement between the General Partner and one or more Limited Partners, or with respect to actions taken in bad faith, the General Partner and the Partnership shall not have liability to a Limited Partner as a result of an income tax liability incurred by such Limited Partner as a result of an action (or inaction) by the General Partner pursuant to its authority under this Agreement.
Section 7.2. Certificate of Limited Partnership
The General Partner has previously filed the Certificate of Limited Partnership with the Secretary of State of the State of Delaware as required by the Act. Immediately following the Merger, the Certificate of Limited Partnership was amended to reflect the change of the name of the General Partner. The Certificate of Limited Partnership is being further amended as of the Effective Date, pursuant to the amendment to change the name of the Limited Partnership
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contained in the Certificate of Merger of Merger Sub, L.P. into the Partnership. To the extent that such action is determined by the General Partner to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all of the things necessary to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the State of Delaware and each other state, or the District of Columbia, in which the Partnership may elect to do business or own property. Subject to the terms of Section 8.5.A(4) hereof, the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership or any amendment thereto to any Limited Partner. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and any other state, or the District of Columbia, in which the Partnership may elect to do business or own property.
Section 7.3. Restrictions on General Partner Authority
A. Except as provided in this Agreement to the contrary, the General Partner may not take any action in contravention of an express prohibition or limitation of this Agreement without the Consent of Limited Partners holding a majority-in-interest of the Common Units and the Class A Preferred Units (on an as-converted basis), other than Partnership Units held by the General Partner, Parent or any of their respective Subsidiaries or Affiliates, or any Parent Transferee, or such other percentage of the Limited Partners as may be specifically provided for under a provision of this Agreement.B. Prior to June 1, 2011, and notwithstanding any other provision contained herein to the contrary, to the fullest extent permitted by law, the General Partner may not cause the Partnership to liquidate, dissolve or make an exchange offer for any of the outstanding Partnership Interests, other than those held by the General Partner, Parent or any of their respective Subsidiaries and Affiliates or any Parent Transferee, or otherwise engage in a transaction that would result in the repurchase or exchange of the Units other than as provided in Article VIII hereof. After June 1, 2011, except as provided in Section 8.10, or in Article XIII hereof, the General Partner may not cause the Partnership to liquidate, without the Consent of Limited Partners holding two-thirds-in-interest of the Percentage Interests of the Common Units and Class A Preferred Units (on an as-converted basis), other than Partnership Units held by the General Partner, Parent, or any of their respective Subsidiaries or Affiliates or any Parent Transferee.C. Except as permitted in Section 11.2.E, the General Partner shall not transfer or assign its General Partner Interest to any Person other than Parent, Parent LP or a direct or indirect Subsidiary of Parent or Parent LP without the Consent of Limited Partners holding a majority-in-interest of the Common Units and Class A Preferred Units (on an as-converted basis), other than Partnership Units held by the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee, provided , however , that a merger, consolidation or other business combination involving the General Partner shall not constitute a “transfer” or “assignment” of its General Partner Interest for purposes of this Section 7.3.C so long as the General Partner complies with Section 11.2.B hereof.
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D. Except as provided in Section 7.12.B, Section 8.7, Section 10.8 or Article XIII hereof, the General Partner may not directly or indirectly, cause the Partnership to sell, exchange, transfer or otherwise dispose of all or substantially all of the Partnership’s assets in a single transaction or a series of related transactions (including by way of merger (including a triangular merger), consolidation or other combination with any other Persons except (i) if such sale, exchange, transfer, merger or other transaction is in connection with an Extraordinary Transaction permitted under Section 11.2.B hereof or (ii) with the Consent of the Limited Partners holding a majority-in-interest of the Common Units and Class A Preferred Units (on an as-converted basis), other than Partnership Units held by the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee.E. The General Partner shall not cause the Partnership to commence a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law or to consent to the filing of any involuntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law, without the Consent of Limited Partners holding two-thirds in interest of the Common Units and Class A Preferred Units (on an as-converted basis), other than Partnership Units held by the General Partner, Parent or any of their respective Subsidiaries or Affiliates or any Parent Transferee.
Section 7.4. Compensation of the General Partner
A. The General Partner and its Affiliates and their employees may perform services for the Partnership, including without limitation, property management, construction management, leasing, legal, accounting, sale and other services with respect to the Partnership and its assets, and may compensate and reimburse such Persons for such services determined on a fair market value basis, provided that such compensation and reimbursement shall be considered Subordinated Amounts.B. The General Partner shall be reimbursed on a monthly basis, or such other basis as it may determine in its sole and absolute discretion, for all out-of-pocket expenses actually incurred and compensation paid to Persons who are not Affiliates of the General Partner (and to Affiliates as provided in Section 7.4.A above) relating to the ownership and operation of, or for the benefit of, the Partnership.
Section 7.5. Outside Activities of the General Partner
Nothing herein contained shall prevent or prohibit the General Partner or any employee or other Affiliate of the General Partner from entering into, engaging in or conducting any other activity or performing for a fee any service including (without limiting the generality of the foregoing) engaging in any business dealing with real property of any type or location; acting as a director, officer or employee of any corporation, as a trustee of any trust, as a general partner of any partnership, or as an administrative official of any other business entity; or receiving compensation for services to, or participating in profits derived from the investments of any such corporation, trust, partnership or other entity, regardless of whether such activities are competitive with the Partnership (subject to Section 8.7.D hereof); provided in each case that such activity, service, acting, receipt of compensation or participation in profits relates to or is in
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connection with the business of Parent and/or Parent LP. Nothing herein shall require the General Partner or any employee or Affiliate thereof to offer any interest in such activities to the Partnership or any Partner and the doctrine of “corporate opportunity” shall not apply to such activities. The General Partner and any Affiliates of the General Partner may acquire Limited Partner Interests and shall be entitled to exercise all rights of a Limited Partner relating to such Limited Partner Interests except as otherwise expressly stated in this Agreement.
Section 7.6. Contracts with Affiliates
A. Except as provided elsewhere in this Agreement, the Partnership may lend or contribute funds or other assets to any Affiliate or Subsidiary or other Persons in which it has an investment and such Persons may borrow funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner. The foregoing authority shall not create any right or benefit in favor of any Subsidiary or any other Person.B. Except as provided elsewhere in this Agreement, the Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law as the General Partner, in its sole and absolute discretion, believes are advisable.C. Except as expressly prohibited by this Agreement or expressly agreed to in a separate written agreement, the General Partner or any of its Affiliates may sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, pursuant to transactions that are determined by the General Partner in good faith to be fair and reasonable to the Partnership and the Limited Partners.D. The General Partner, in its sole and absolute discretion and without the approval of the Limited Partners, may propose and adopt, on behalf of the Partnership, employee benefit plans, stock option plans, and similar plans funded by the Partnership for the benefit of employees of the Partnership, any Subsidiary of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the Partnership, the General Partner, or any Subsidiary of the Partnership.E. The General Partner is expressly authorized to enter into, in the name and on behalf of the Partnership, a right of first opportunity arrangement and other conflict avoidance agreements with various Affiliates of the Partnership and the General Partner, on such terms as the General Partner, in its sole and absolute discretion, believes are advisable.
A. To the fullest extent permitted by Delaware law, the Partnership shall indemnify each Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including, without limitation, attorneys fees and other legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, whether or not by or in the right of the Partnership that relate to the operations of the Partnership as set forth
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in this Agreement, in which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it has been determined in a judicial proceeding that: (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the Indemnitee actually received an improper and unpermitted personal benefit in money, property or services; or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guaranty (except a guaranty by a Limited Partner of nonrecourse indebtedness of the Partnership or as otherwise provided in any such loan guaranty) or otherwise for any indebtedness of the Partnership or any Subsidiary of the Partnership (including without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 7.7.A. The termination of any proceeding by conviction of an Indemnitee or upon a plea of nolo contendere or its equivalent by an Indemnitee, or an entry of an order of probation against an Indemnitee prior to judgment, creates a rebuttable presumption that such Indemnitee acted in a manner contrary to that specified in this Section 7.7.A. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its obligations under this Section 7.7. B. Reasonable expenses incurred by an Indemnitee or expected to be incurred by an Indemnitee shall be paid or reimbursed by the Partnership in advance of the final disposition of any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative made or threatened against an Indemnitee upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 7.7.A hereof has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.C. The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified.D. The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
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E. For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of this Section 7.7; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.F. In no event may an Indemnitee subject any of the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.G. An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.H. The provisions of this Section 7.7 are for the benefit of the Indemnitees, their employees, officers, directors, trustees, heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 7.7 or any provision hereof shall be prospective only and shall not in any way affect the Partnership’s liability to any Indemnitee under this Section 7.7, as in effect immediately prior to such amendment, modification, or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.I. If and to the extent any payments to the General Partner pursuant to this Section 7.7 constitute gross income to the General Partner (as opposed to the repayment of advances made on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.
Section 7.8. Liability of the General Partner
A. Except as otherwise provided herein or by law, neither the General Partner, nor any of its directors, officers, partners, agents or employees, shall be liable for monetary damages to the Partnership or any Partnership Subsidiary or any Partners for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or of any act or omission if the General Partner acted in good faith, in compliance with this Agreement and in compliance with the law.B. Except as otherwise provided herein or expressly agreed to in a separate written agreement, the Limited Partners expressly acknowledge that the General Partner is under no obligation to consider the separate interests of the Limited Partners (including without limitation, the tax consequences to Limited Partners) in deciding whether to cause the
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Partnership to take (or decline to take) any actions which the General Partner has undertaken (or not taken) in good faith on behalf of the Partnership. In the event of a conflict between the interests of the General Partner or its shareholders, on the one hand, and the Limited Partners, on the other hand, the General Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either its shareholders or the Limited Partners. Subject to its obligations and duties as General Partner set forth in Section 7.1.A hereof, the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it in good faith. C. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the General Partner’s and its officers’ and directors’ liability to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9. Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties.B. The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers, architects, engineers, environmental consultants and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in acc |
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