EXHIBIT 99.2
AGREEMENT OF LIMITED PARTNERSHIP
OF
WESTFIELD INDEPENDENCE MALL LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP OF WESTFIELD INDEPENDENCE
MALL LIMITED PARTNERSHIP (this "Agreement"), dated as of August 11, 1998
(the "Effective Date"), is entered into by and among WESTFIELD INDEPENDENCE
LLC, a Delaware limited liability company, as the general partner (the
"General Partner"), and NEW HANOVER ASSOCIATES, a Pennsylvania general
partnership as the "Limited Partner" (as hereinafter defined).
WHEREAS, the General Partner and the Limited Partner desire to
form a Delaware limited partnership known as WESTFIELD INDEPENDENCE MALL
LIMITED PARTNERSHIP (the "Partnership"), as evidenced by this Agreement of
Limited Partnership of Westfield Independence Mall Limited Partnership
pursuant to the "Act" (as hereinafter defined).
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in
this Agreement.
Section 1.1 "Act" means the Delaware Revised Uniform Limited
Partnership Act, as it may be amended from time to time, and any successor
to such statute.
Section 1.2 "Additional Limited Partner" means a Person admitted
to the Partnership as a Limited Partner pursuant to Section 4.3 hereof and
who is shown as such on the books and records of the Partnership.
Section 1.3 "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.
Section 1.4 "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 or
as of such other date for which such deficit balance is to be calculated.
Section 1.5 "Adjusted Property" means any property, the Carrying
Value of which has been adjusted pursuant to Exhibit "B" hereof.
Section 1.6 "Affiliate" means, with respect to any Person: (i)
any Person directly or indirectly controlling, controlled by or under
common control with such Person; (ii) any Person owning or controlling ten
percent (10%) or more of the outstanding voting interests of such Person;
(iii) any Person of which such Person owns or controls ten percent (10%) or
more of the voting interests; or (iv) any officer, director, general
partner or trustee of such Person or of any Person referred to in clauses
(i), (ii), and (iii) above.
Section 1.7 "Agreed Value" means: (i) in the case of any
Contributed Property set forth on Exhibit "D" and as of the time of its
contribution to the Partnership, the Agreed Value of such property as set
forth in Exhibit "D"; (ii) in the case of any Contributed Property not set
forth in Exhibit "D" and 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 (iii) in the case of any property
distributed to a Partner by the Partnership, 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.
Section 1.8 "Agreement" means this Agreement of Limited
Partnership of Westfield Independence Mall Limited Partnership, as it may
be amended, supplemented or restated from time to time.
Section 1.9 "Assignee" means a Person to whom one or more
Partnership Units have been transferred in a manner permitted under this
Agreement, but who has not become a Substituted Limited Partner, and who
has the rights set forth in Section 11.5.
Section 1.10 "Available Cash" means, with respect to any period
for which such calculation is being made, (i) the sum of:
(a) the Net Income or Net Loss (as the case may be) for such
period (without regard to adjustments resulting from allocations described
in Sections 1.A through 1.E of Exhibit "C");
(b) Depreciation and all other noncash charges deducted in
determining Net Income or Net Loss for such period;
(c) the amount of any reduction in the reserves of the
Partnership referred to in clause (ii)(f) below (including, without
limitation, reductions resulting because the General Partner determines
such amounts are no longer necessary);
(d) the excess of proceeds from the sale, exchange,
disposition, or refinancing of Partnership property for such period over
the gain recognized from such sale, exchange, disposition or refinancing
during such period (excluding Terminating Capital Transactions); and
(e) all other cash received by the Partnership for such
period that was not included in determining Net Income or Net Loss for such
period;
(ii) less the sum of:
(a) all principal debt payments made by the Partnership
during such period;
(b) capital expenditures made by the Partnership during such
period;
(c) investments made by the Partnership during such period in
any entity (including loans made thereto) to the extent that such
investments are not otherwise described in clause (ii)(a) or (ii)(b) above;
(d) all other expenditures and payments not deducted in
determining Net Income or Net Loss for such period;
(e) any amount included in determining Net Income or Net Loss
for such period that was not received by the Partnership during such
period; and
(f) the amount of any increase in reserves and other cash or
similar balances (including, but not limited to, working capital reserves,
debt reserve funds, and capital improvements reserves) during any relevant
period, which the General Partner determines in good faith to be necessary
or appropriate in its sole and absolute discretion.
Section 1.11 "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.
Section 1.12 "Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Los Angeles, California
are authorized or required by law to close.
Section 1.13 "Capital Account" means the Capital Account
maintained for a Partner pursuant to Exhibit "B" hereof.
Section 1.14 "Capital Contribution" means, with respect to any
Partner, any cash, cash equivalents or the Agreed Value of Contributed
Property which such Partner contributes or has contributed to the
Partnership pursuant to Section 4.1 or 4.2 hereof.
Section 1.15 "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 property 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 reasonably deemed appropriate by
the General Partner.
Section 1.16 "Certificate" means a Certificate of Limited
Partnership relating to the Partnership filed in the office of the Delaware
Secretary of State, as amended from time to time in accordance with the
terms hereof and the Act.
Section 1.17 "Code" means the Internal Revenue Code of 1986, as
amended and in effect from time to time. Any reference herein to a
specific section or sections of the Code shall be deemed to include a
reference to any corresponding provisions of future law.
Section 1.18 "Consent" means the consent or approval of a proposed
action by a Partner given in accordance with Section 14.2 hereof.
Section 1.19 "Contributed Property" means the respective interests
of the General Partner and the Limited Partner in the assets of the
Partnership (including cash and the Mall-Partnership Interest) now or
hereafter contributed to the Partnership. 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.
Section 1.20 "Depreciation" means, for each taxable year, an
amount equal to the federal income tax depreciation, amortization, or other
cost recovery deduction allowable with respect to an asset for such year,
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 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 method selected by the General Partner.
Section 1.21 "Funds From Operations" shall mean such term as
defined by the National Association of Real Estate Investment Trusts
("NAREIT") or, if different, such substitute term as adopted or reported by
the General Partner from time to time in its sole discretion.
Section 1.22 "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.
Section 1.23 "Guaranteed Payment" shall have the meaning set forth
in Section 4.1.C.
Section 1.24 "IRS" means the Internal Revenue Service (or any
successor governmental entity), which administers the internal revenue laws
of the United States.
Section 1.25 "Incapacity" or "Incapacitated" means: (i) as to any
individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating him incompetent to manage his Person or
his 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 charter; (iii) as to any partnership which is a Partner,
the dissolution and commencement of winding up the partnership; (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 which 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 which 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.
Section 1.26 "Indemnitee" means any Person made a party to a
proceeding by reason of (i) his status as the General Partner, or as a
director, officer, employee, member, partner, agent, representative or
Affiliate of the General Partner, or (ii) his or its liabilities pursuant
to a loan guarantee or otherwise for or as a result of any indebtedness or
obligation of the Partnership or any Subsidiary of the Partnership
(including, without limitation, any indebtedness or obligation which the
Partnership or any Subsidiary of the Partnership has assumed or taken
assets subject to).
Section 1.27 "Limited Partner" means any Person 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.
Section 1.28 "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.
Section 1.29 "Liquidating Event" has the meaning set forth in
Section 13.1.
Section 1.30 "Liquidator" has the meaning set forth in Section
13.2.
Section 1.31 "Mall Partnership" means Independence Mall
Associates, a North Carolina Limited Partnership.
Section 1.32 "Mall Partnership Interest" means the 60% general
partnership interest of the Partnership in the Mall Partnership, together
with any additional interests in the Mall Partnership which may now or
hereafter be owned by the Partnership.
Section 1.33 "Market Price" means, on any given day with respect
to a Partnership Unit, the average of the daily market prices for ten (10)
consecutive trading days immediately preceding such date for a REIT Share.
The market price for any such trading day shall be:
(i) if the REIT Shares are listed or admitted to trading on any
securities exchange or The NASDAQ Stock Market's National Market System,
the closing price, regular way, on such day, or if no such sale takes
place on such day, the average of the closing bid and asked prices on
such day, in either case as reported in the principal consolidated
transaction reporting system,
(ii) if the REIT Shares are not listed or admitted to trading on
any securities exchange or The NASDAQ Stock Market's 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, or
(iii) if the REIT Shares are not listed or admitted to trading
on any securities exchange or The NASDAQ Stock Market's 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;
provided, however, that, if there are no bid and asked prices reported
during the ten (10) days prior to the date in question, the Market Price
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.
Section 1.34 "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
(including all Guaranteed Payments made to the Limited Partners pursuant to
Section 4.1.C) 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 in Exhibit "B".
Section 1.35 "Net Loss" means, for any taxable period, the excess,
if any, of the Partnership's items of loss and deduction (including all
Guaranteed Payments made to the Limited Partners pursuant to Section 4.1.C)
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 in Exhibit
"B".
Section 1.36 "Nonrecourse Built-in-Gain" means, with respect to
any Contributed Properties or Adjusted Properties that are subject to 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.
Section 1.37 "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).
Section 1.38 "Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.752-1(a)(2).
Section 1.39 "Operating Partnership" means Westfield America
Limited Partnership, a Delaware limited partnership, and any successor
thereto.
Section 1.40 "Partner" means a General Partner or a Limited
Partner, and "Partners" means the General Partner and the Limited Partners
collectively.
Section 1.41 "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).
Section 1.42 "Partner Nonrecourse Debt" has the meaning set forth
in Regulations Section 1.704-2(b)(4).
Section 1.43 "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).
Section 1.44 "Partnership" means the limited partnership created
and existing under this Agreement and any successor thereto.
Section 1.45 "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 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.
Section 1.46 "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).
Section 1.47 "Partnership Record Date" means the record date
established by the General Partner, in its sole and absolute discretion,
for the distribution of Available Cash pursuant to Section 5.1 hereof.
Section 1.48 "Partnership Unit" means a fractional, undivided
share of the Partnership Interests of all Partners issued pursuant to
Sections 4.1 and 4.2. The number of Partnership Units outstanding and the
Percentage Interest in the Partnership represented by such Units are set
forth in 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. If the General Partner elects to
evidence the Partnership Units with a certificate, such certificate may be
imprinted with a legend setting forth such restrictions placed on the units
as specified in this Agreement and such restrictions will be binding upon
all holders of the certificate along with the terms and conditions set
forth in this Agreement.
Section 1.49 "Partnership Year" means the fiscal year of the
Partnership, which shall be the calendar year.
Section 1.50 "Percentage Interest" means, as to a Partner, its
interest in the Partnership as determined by dividing the Partnership Units
owned by such Partner by the total number of Partnership Units then
outstanding and as specified in Exhibit "A" attached hereto, as such
Exhibit may be amended from time to time.
Section 1.51 "Permitted Loan Transaction" shall mean any loan or
advance to the Partnership by the General Partner or any Affiliates of the
General Partner (i) the proceeds of which are to be loaned or advanced by
the Partnership to the Mall Partnership on substantially the same term and
conditions, or (ii) which is on commercially reasonable terms and is
reasonably required in order to make any Guaranteed Payments, or (ii) which
is on commercially reasonable terms and which is reasonably required to
preserve the REIT status of WEA.
Section 1.52 "Person" means an individual or a corporation,
partnership, trust, limited liability company, unincorporated organization,
association or other entity.
Section 1.53 "Priority Return" means an amount per Partnership
Unit held by a Limited Partner equal to the excess of (i) the distributions
paid per REIT Share with respect to the period to which the Priority Return
relates over (ii) any Guaranteed Payments. Any unpaid Priority Return from
any applicable period will accrue at the rate of seven and one-half percent
(7.5%) per annum, compounded quarterly and shall be added to the Priority
Return for the following period.
Section 1.54 "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 ordinary income because it
represents the recapture of deductions previously taken with respect to
such property or asset.
Section 1.55 "Regulations" means the Income Tax Regulations
promulgated under the Code, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
Section 1.56 "REIT" means a real estate investment trust under
Section 856 of the Code.
Section 1.57 "REIT Share" shall mean a share of common stock of
WEA, par value $.01 per share (subject to adjustments, to the extent the
General Partner reasonably deems necessary, to avoid dilution, in the event
of any merger, consolidation, reorganization, share exchange,
recapitalization or similar event).
Section 1.58 "Required Amortization" means the regularly scheduled
principal amortization payments which are required to be made by the Mall
Partnership in connection with that certain $33,000,000 loan from PNC Bank,
National Association ("PNC"), to the Mall Partnership pursuant to the Loan
Agreement, dated as of August 4, 1998, among the Mall Partnership, PNC and
the Banks identified therein, and the other documents executed and
delivered in connection therewith or referenced therein, all as in effect
as of the date hereof (or any lesser regularly scheduled principal
amortization payments resulting from an amendment to such loan agreement),
but excluding any principal payments required at maturity.
Section 1.59 "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(a) or 2.B.2(a) of
Exhibit "C" to eliminate Book-Tax Disparities.
Section 1.60 "Restricted Period" shall mean the three year period
commencing on the Effective Date and ending on the third anniversary of the
Effective Date.
Section 1.61 "704(c) Value" of any Contributed Property means the
value of such property as set forth in Exhibit "D", or if no value is set
forth in Exhibit "D", 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;
provided, however, any property deemed contributed by the Partnership to a
new partnership that is treated as a continuation of the Partnership for
federal income tax purposes upon a termination of the Partnership pursuant
to Section 708(b)(1)(B) of the Code shall have the same 704(c) Value that
it had, and shall be subject to the same allocation method for eliminating
Book-Tax Disparities that was utilized with respect to such property,
immediately prior to such deemed contribution.
Section 1.62 "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.
Section 1.63 "Substituted Limited Partner" means a Person who is
admitted as a Limited Partner to the Partnership pursuant to Section 11.4.
Section 1.64 "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.
Section 1.65 "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.
Section 1.66 "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.
Section 1.67 "WEA" shall mean Westfield America, Inc., a Missouri
corporation, formerly known as Center ▇▇▇▇ Properties, Inc.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization
The Partnership is a limited partnership organized pursuant to the
provisions of the Act and upon the terms and conditions set forth in this
Agreement. 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. The Partnership Interest of
each Partner shall be personal property for all purposes. This Agreement
shall govern the Partnership and be effective from and after the Effective
Date.
Section 2.2 Name
The name of the Partnership shall be Independence Mall Limited
Partnership. The Partnership's business may be conducted under any other
name or names deemed advisable by the General Partner. The words "Limited
Partnership," "L.P.," "Ltd." or similar words or letters shall be included
in the Partnership's name where necessary for the purpose 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, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
The principal office of the Partnership shall be c/o Westfield America,
Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or such other place as the General Partner may from time to time designate
by notice to the Limited Partners. 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 and each Assignee hereby constitutes and
appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting 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: (a) all certificates, documents
and other instruments (including, without limitation, this Agreement and
the Certificate and all amendments or restatement thereof) that the General
Partner or the 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; (b) 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; (c) all conveyances and other
instruments or documents that the General Partner or the 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; (d) all instruments relating to
the admission, withdrawal, removal or substitution of any Partner pursuant
to, or other events described in, Article 11, 12 or 13 hereof or the
Capital Contribution of any Partner; and (e) any and all financing
statements, continuation statements and other documents necessary or
desirable to create, perfect, continue or validate the security interest
granted by a Limited Partner pursuant to Section 10.5 of this Agreement or
to exercise or enforce the Partnership's rights with respect to such
security interest; 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 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 14 hereof or as may be otherwise expressly provided
for in this Agreement or in the Act.
B. The foregoing power of attorney is 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 it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee
and the transfer of all or any portion of such Limited Partner's Assignee's
Partnership Units and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by
the General Partner or any Liquidator, acting pursuant to such power of
attorney, and each such Limited Partner or Assignee hereby waives any and
all defenses which may be available to contest, negate or disaffirm the
action of the General Partner or any Liquidator, taken under such power of
attorney in accordance with the provisions of this Agreement. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner's
or Liquidator's request therefor, such further designation, powers of
attorney and other instruments not inconsistent herewith as the General
Partner or the 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 the Effective Date, and
shall continue until March 1, 2097, unless the Partnership is dissolved
sooner pursuant to the provisions of Article 13 or as otherwise provided by
law.
ARTICLE 3
PURPOSE
Section 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 WEA at all times to be classified as a REIT, unless WEA ceases to
qualify as a REIT for reasons other than the conduct of the business of the
Partnership; (ii) to enter into any partnership, joint venture or other
similar arrangement to engage in any of the foregoing or to own interests
in any entity engaged in any of the foregoing; and (iii) to do anything
necessary or incidental to the foregoing; provided, however, that during
the Restricted Period any business conducted pursuant to clauses (i), (ii)
or (iii) above shall be limited to the ownership of the Mall Partnership
Interest and acting as the general partner of the Mall Partnership, and any
activities related or incidental thereto. In connection with the
foregoing, and without limiting WEA's right, in its sole discretion, to
cease qualifying as a REIT, the Partners acknowledge that WEA's current
status as a REIT inures to the benefit of all of the Partners and not
solely WEA.
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, as determined
by the General Partner from time to time in its sole and absolute
discretion; provided, however, that the Partnership shall not take, or
refrain from taking, any action which, in the judgment of the General
Partner, in its sole and absolute discretion: (i) could adversely affect
the ability of WEA to continue to qualify as a REIT; (ii) could subject the
General Partner or WEA to any additional taxes under Section 857 or Section
4981 of the Code; or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over the General Partner,
WEA or their respective securities, unless such action (or inaction) shall
have been specifically consented to by the General Partner in writing.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions of the Partners
A. The Partners have heretofore made various cash contributions
to the Partnership and have contributed to the Partnership the Mall
Partnership Interest. In connection with this Agreement, the Carrying
Values of the Partnership's assets have been adjusted to reflect their
respective fair market values and the Capital Accounts of the Partners
shall reflect their respective contributions as set forth on Exhibit "A",
and such amounts shall be represented by the Partnership Interests and
Partnership Units shown on said Exhibit. The Partnership Units and the
Percentage Interests also shall be adjusted in Exhibit "A" from time to
time by the General Partner to the extent necessary to accurately reflect
redemptions, additional Capital Contributions, the issuance of additional
Partnership Units (pursuant to any merger or otherwise), or similar or
other events having an effect on any Partner's Percentage Interest. The
number of Partnership Units held by the General Partner, in its capacity as
general partner, shall be deemed to be the General Partner Interest.
Except as provided hereinabove and as expressly provided in Sections 4.2,
10.5, and 13.3, the Partners, including, without limitation, the General
Partner, shall have no obligation whatsoever to make any additional or
further Capital Contributions, loans, or advances of any kind to the
Partnership, or to in any way finance the operation of the Partnership, the
distributions to Partners or any of the debt or other obligations of the
Partnership.
B. Except as provided in Section 13.3 of this Agreement and as
otherwise expressly provided herein, the Capital Contribution of each
Partner will be returned to that Partner only in the manner and to the
extent provided in Article 5 and Article 13 hereof, and no Partner may
withdraw from the Partnership or otherwise have any right to demand or
receive the return of its Capital Contribution to the Partnership, except
as specifically provided herein. Under circumstances requiring a return of
any Capital Contribution, no Partner shall have the right to receive
property other than cash, except as specifically provided herein. No
Partner shall be entitled to interest on any Capital Contribution or
Capital Account. The General Partner shall not be liable for the return of
any portion of the Capital Contribution of any Limited Partner, and the
return of such Capital Contributions shall be made solely from Partnership
assets.
C. The Partnership shall make quarterly guaranteed payments to
the Limited Partners in an aggregate amount equal, on an annual basis, to
87.5% of the dividends paid per REIT Share with respect to such calendar
quarter or portion thereof (each such payment, a "Guaranteed Payment").
The Guaranteed Payments are intended by the Partners to be treated, and
shall be treated, as guaranteed payments for the use of capital pursuant to
Section 707(c) of the Code.
Section 4.2 Deficit Restoration Election
A. No Limited Partner shall have any further personal liability
to contribute money to, or in respect of, the liabilities or the
obligations of the Partnership, nor shall any Limited Partner be personally
liable for any obligations of the Partnership, except as otherwise provided
in this Agreement or in the Act. No Partner shall be required to make any
contributions to the capital of the Partnership other than as expressly
provided in this Agreement.
B. Each Partner may, prior to, or at, the time prescribed by
law for the filing of the Partnership federal income tax return for the
taxable year in question (not including extensions), elect to be
unconditionally obligated to restore all or a portion of any deficit in
such Partner's Capital Account upon liquidation of his interest in the
Partnership. Any such election shall be evidenced by written notice to the
Partnership, delivered prior to such time, specifying the amount of any
deficit for which the Partner elects a deficit restoration obligation. Any
amount owing pursuant to a deficit restoration obligation shall be payable
upon the later of (i) the end of the Partnership Year in which such
Partner's Partnership Interest is liquidated or (ii) 90 days after the date
of such liquidation.
C. The amount of any such election shall automatically be
reduced to the extent the deficit in such Partner's Capital Account is
subsequently reduced. If an allocation or distribution thereafter
increases the deficit in such Partner's Capital Account, unless a Partner
elects otherwise under paragraph B. above, such Partner will be obligated
to restore the deficit only to the extent of the lesser of (i) the deficit
amount such Partner has previously elected to restore or (ii) the smallest
deficit balance in such Partner's Capital Account at any time after such
election. For purposes of determining the amount referred to in clause
(ii) of this Section 4.2.C., the income, gain, losses and deductions of the
Partnership shall be prorated on a daily basis (except for income, gain,
losses and deductions from the sale or disposition of capital assets, which
items will be allocated under an interim closing of the books method).
D. Upon the written request of any Limited Partner, the General
Partner shall use reasonable efforts to provide or cause the Partnership to
provide information relevant to the calculation of the amount of the
Limited Partner's deficit in its Capital Account, the amount of its
Adjusted Capital Account, the amount of its Adjusted Capital Account
Deficit and any other information relevant to the Limited Partner's
determination as to whether to elect to restore all or a portion of any
deficit in its Capital Account; provided, that the General Partner shall
not be required to furnish such information to a Limited Partner more often
than once annually.
Section 4.3 Issuances of Additional Partnership Interests. The
General Partner is hereby authorized to cause the Partnership from time to
time to issue to the Partners (including the General Partner) or other
Persons additional Partnership Units or other Partnership Interests in one
or more classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other
special rights, powers and duties, including, rights, powers and duties
senior to the Limited Partners, except that, notwithstanding the foregoing,
none of such additional Partnership Units or Partnership Interests shall
carry or give to their holders rights to receive distributions (as to
amount, timing, and priority) senior to the rights of the Limited Partners
as set forth in this Agreement, and provided further however, that no
Additional Limited Partner may be admitted to the Partnership during the
Restricted Period without the written consent of a majority in interest of
the Limited Partners (excluding interests held by the General Partner or
its Affiliates). Subject to the foregoing, the rights, privileges,
benefits, burdens, and restrictions relating to any such additional
Partnership Units or Partnership Interests shall be determined by the
General Partner in its sole and absolute discretion, subject to the Act,
including, without limitation: (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; and (iii) 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, as the General Partner, or a Limited Partner, or to
an Affiliate of either the General Partner or the Limited Partner, unless
the additional Partnership Interests are issued for a fair economic
consideration determined at the time of or within ninety (90) days prior to
the issuance, or unless the issuance of such additional Partnership
Interests is otherwise permitted under the terms and provisions of this
Agreement. A determination by an independent investment banker or
financial advisor that the consideration paid or proposed to be paid by the
General Partner in this regard is a fair economic consideration, or is
otherwise fair from a financial point of view, to the Partnership shall be
conclusive and binding upon all parties hereto for all purposes, and shall
constitute a conclusive, non-rebuttable presumption that the consideration
so paid represented fair, good faith, and proper action by the General
Partner with the Partnership as concerns the General Partner's dealings and
transactions with the Partnership in relation to such issuance.
Section 4.4 General Partner Loans. The General Partner and its
Affiliates shall have the right, but not the obligation, to make loans and
advances to the Partnership, whether secured or unsecured, and shall be
treated as a third party lender to the Partnership (with all attendant
rights, privileges, and remedies) to the extent that it does so. Loans and
advances, if any, funded by the General Partner or its Affiliates shall be
on commercially competitive terms, comparable to similar loans and advances
made by unrelated third party institutional lenders; and, if institutional
lenders would not regularly make such loans or advances, then terms for a
comparable loan or advance described by any unrelated third party loan
broker upon request by the General Partner shall be presumed to be
commercially competitive and comparable to similar loans and advances made
by unrelated third parties for purposes of this Agreement. In addition,
any Permitted Loan Transaction shall be conclusively presumed to be fair,
reasonable and commercially competitive.
Section 4.5 Guaranty of Indebtedness. Any Partner shall have
the right (but not the obligation), exercisable upon written notice to the
Partnership, to elect to guaranty all or any portion of any loans and
advances to the Partnership, if any, in an amount which when taken with the
liabilities otherwise allocated to such Partner shall cause such Partner's
tax basis in such Partner's Partnership Interest to exceed zero but not to
exceed ten percent (10%) of the amount of such Partner's Capital Account as
of the date hereof (or in the event that such Partner is a successor to any
initial Partner, ten percent (10%) of such Partner's proportionate share of
the amount of its predecessor's initial Capital Account) (any such
guaranty, a "Bottom Guaranty"). The Partnership shall provide to the
Limited Partners, by November 1st of each calendar year, information
sufficient to permit the Limited Partners to determine (i) their respective
shares of the Partnership's liabilities at July 1 of such calendar year and
any changes therein reasonably anticipated to occur by December 31st of
such calendar year and (ii) their respective tax bases in their Partnership
Interests at July 1 of such calendar year. If a Limited Partner notifies
the Partnership that it wishes to enter into a Bottom Guaranty of
Partnership indebtedness pursuant to this Section 4.5, the Partnership
shall cooperate in all efforts to implement such Bottom Guaranty before
December 31st of the calendar year in which such Limited Partner so
notifies the Partnership. The Partner providing or requesting to provide
any Bottom Guaranty shall bear all costs and expenses incurred by it, and
all third-party out of pocket costs incurred by the Partnership and the
General Partner (and shall reimburse the Partnership and the General
Partner promptly upon demand), in connection with any request to provide a
Bottom Guaranty, including, without limitation, all costs and expenses
which may become due to the lender in connection therewith; provided,
however, that in the event that such Bottom Guaranty is required as a
result of the failure or inability to satisfy the requirements of Section
6.2.B hereof, all such costs and expenses shall be borne by the
Partnership. In the event that two or more Partners have provided a Bottom
Guaranty, the liability of such Partners thereunder shall be pro rata in
accordance with the amount of such Partner's Bottom Guaranty in relation to
all outstanding Bottom Guaranties of all Partners, regardless of when any
such Bottom Guaranty is entered into or made.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
The General Partner shall distribute to the Partners who were
Partners on the relevant Partnership Record Date, on a calendar quarter
basis, in arrears, within thirty (30) days following the end of the
preceding calendar quarter, an amount equal to the Available Cash (if any)
generated by the Partnership in such preceding calendar quarter as follows:
A. First, 100% to the Limited Partners until the Limited
Partners have received an amount equal to the Priority Return.
B. Second, 100% to the General Partner until such time as the
General Partner has received an amount equal to the sum of (i) all amounts
theretofore distributed to the Limited Partners pursuant to Section 5.1A
above, and (ii) all amount theretofore distributed to the Limited Partners
as Guaranteed Payments pursuant to Section 4.1C above.
C. Third, 99% to the General Partner and 1% to the Limited
Partners, on a pari passu basis.
Section 5.2 Amounts Withheld
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 or Assignees shall be
treated as amounts paid or distributed to such Partners or Assignees, as
the case may be, pursuant to Sections 4.1C and 5.1 for all purposes under
this Agreement.
Section 5.3 Distributions Upon Liquidation
Subject to Section 8.7 hereof, 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.
ARTICLE 6
ALLOCATIONS
Section 6.1 Allocations of Net Income and Net Loss
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 General and Limited
Partners in each taxable year (or portion thereof) as provided below.
A. Net Income for a particular period shall be allocated as
follows:
(1) First, 100% to the Limited Partners until the aggregate
Net Income allocated pursuant to this Section 6.1A(1) per Partnership Unit
for the current taxable period and all previous periods equals the
aggregate distributions to the Limited Partners made per Partnership Unit
pursuant to Section 5.1A.
(2) Second, 100% to the General Partner until the aggregate
Net Income allocated pursuant to this Section 6.1A(2) for the current
taxable period and all previous periods equals the aggregate amount of
Available Cash distributed to the General Partner pursuant to Section 5.1B.
(3) Third, if applicable, 99% to the General Partner and 1%
to the Limited Partners, on a pari passu basis.
B. Net Loss for a particular period shall be allocated 99% to
the General Partner and 1% to the Limited Partners, on a pari passu basis.
Section 6.2 Other Allocations
A. For purposes of Regulations Section 1.752-3(a), the Partners
agree that Nonrecourse Liabilities of the Partnership on the Effective Date
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 100%
to the Limited Partners; provided, that if the property of the Mall
Partnership is significantly expanded and additional Nonrecourse
Liabilities are incurred in amounts that substantially exceed the
Nonrecourse Liability existing on such property on the Effective Date, the
General Partner may be allocated such additional Nonrecourse Liabilities so
long as the Limited Partners are not allocated a lesser amount of
Nonrecourse Liabilities than the amounts allocated to such Limited Partners
on the Effective Date less such Limited Partners' share of any Required
Amortization.
B. During the period commencing on the Effective Date and
ending on the later to occur of (A) the last day of the Restricted Period
or (B) the date on which all of the Limited Partners have exercised their
Contribution Rights (as defined in and pursuant to that certain OP
Contribution Agreement of even date herewith between the Operating
Partnership and the Limited Partner) or their Redemption Rights and are no
longer a Partner, but in no event later than the tenth (10th) anniversary
of the Effective Date, the General Partner shall use its reasonable best
efforts (i) to cause the Mall Partnership to maintain outstanding
indebtedness that is considered to constitute a Nonrecourse Liability
secured by the property owned by the Mall Partnership (and allocable to
such property for purposes of Regulations Section 1.752-3(a)) in a
principal amount equal to at least $33,000,000 less any Required
Amortization and (ii) to cause the amount of Nonrecourse Liabilities
allocable to the Limited Partner and any permitted transferees pursuant to
Section 11.3A hereof to be no less than the amount of Nonrecourse
Liabilities allocable to the Limited Partner immediately prior to the
contribution by the Limited Partner of its interest in the Mall Partnership
to the Partnership less such Limited Partner's share of any Required
Amortization; provided, however, that such best efforts shall be deemed
satisfied with respect to this clause (ii) if clause (i) is satisfied and
such Nonrecourse Liability is properly allocated to the Partners in
accordance with the Regulations promulgated under Section 752 of the Code.
C. Any gain allocated to the General Partner and the Limited
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.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
A. All management powers over the business and affairs of the
Partnership are and shall be exclusively 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. 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, shall (except as otherwise set forth in
this Agreement) 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, including, without limitation:
(1) the making of any expenditures, the lending or
borrowing of money (including, without limitation, borrowing of money from
the General Partner or its affiliates as provided in Section 4.4 hereof,
and making prepayments on loans and borrowing money to permit WEA (so long
as WEA qualifies as a REIT) to avoid the payment of any federal income or
excise tax and to permit WEA to maintain REIT status), the assumption or
guarantee of (including, without limitation, the guarantee of indebtedness
or obligations of the General Partner or any of its Affiliates), 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, negative pledge or other lien or encumbrance on
the Partnership's assets) and the incurring of any obligations it in good
▇▇▇▇▇ ▇▇▇▇▇ necessary for the conduct of the activities of the Partnership,
the Mall Partnership, WEA or the Operating 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;
(3) subject to Section 8.7 hereof, the acquisition, sale,
disposition, lease, mortgage, pledge, transfer, encumbrance, hypothecation
or exchange of any assets of the Partnership for the benefit of the
Partnership, the Mall Partnership, WEA or the Operating Partnership,
including, without limitation, the exercise or grant of any conversion
option, privilege, negative pledge or subscription right or other right
available in connection with any assets at any time held by the
Partnership, the financing of the conduct of the operations of the
Partnership, the Mall Partnership, WEA or the Operating Partnership, the
secured or unsecured lending of funds to other Persons (including, without
limitation, the Subsidiaries and Affiliates of the Partnership and/or the
General Partner, provided that any loans to Affiliates of the General
Partner shall be at a rate of interest not less than the prime rate in
effect at the time such loan is made, as quoted in the Wall Street Journal)
or the merger or other combination of the Partnership with or into another
entity, and provided further that, without the consent of a majority in
interest of the Limited Partners (excluding interests held by the General
Partner or its Affiliates), the Partnership shall not acquire additional
properties or asset unrelated to the Mall Partnership Interest during the
Restricted Period;
(4) the use of the assets of the Partnership (including,
without limitation, cash on hand from whatever source) for any purpose not
inconsistent with the terms of this Agreement and on any terms it sees fit,
including, without limitation, 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 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 and the creation, by grant or otherwise, of easements or
servitudes;
(5) the management, operation, leasing, collection of
rents, marketing, landscaping, repair, alteration, renovation,
rehabilitation, demolition or improvement of any real property or
improvements owned by the Partnership or any Subsidiary of the Partnership,
including, without limitation, entering into management agreements and
performing any and all actions as contemplated by Section 7.3 hereof, and
the performance of any and all other acts necessary or appropriate to the
operation of such properties, including, without limitation, applications
for rezoning or objections to rezoning of such properties;
(6) the negotiation, execution, and performance of any
contracts, conveyances or other instruments 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, without limitation, the execution and delivery of
leases on behalf of or in the name of the Partnership, 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 negotiation, execution and performance of any
contracts with Affiliates of the General Partner in accordance with the
provisions of Section 7.5 hereof;
(8) the opening and closing of bank accounts, the
investment of Partnership funds in securities, certificates of deposit and
other instruments, and the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement;
(9) the holding, managing, investing and reinvesting cash
and other assets of the Partnership;
(10) the collection and receipt of revenues and income of
the Partnership;
(11) the establishment of one or more divisions of the
Partnership, the selection and dismissal of agents, outside attorneys,
accountants, consultants and contractors of the Partnership, and the
determination of their compensation and other terms of hiring (whether or
not any of the foregoing are also employed by, consultants to, independent
contractors for, or otherwise do business with the General Partner or its
Affiliates in related or unrelated matters);
(12) the maintenance of such insurance for the benefit of
the Partnership and the Partners as it deems necessary or appropriate
(whether or not such is done as part of a group, combined or other policy
or policies under which the Partnership and the General Partner (or its
Affiliates) are also insured, so long as the General Partner fairly
allocates the expense thereof among the covered parties);
(13) the formation of, or acquisition of an interest in, and
the contribution of some or all of property (or any part thereof or
interest therein) to, any further limited or general partnerships, joint
ventures or other relationships that it 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);
(14) the control of any and all 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 expense, and the
indemnification of any Person against liabilities and contingencies to the
extent permitted by law and consistent with the terms of this Agreement,
including in each and all of the foregoing instances any such matter or
thing in which the General Partner or its Affiliates have a direct
interest;
(15) 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);
(16) 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;
(17) 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;
(18) 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;
(19) 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;
(20) 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 judgment of the General Partner, for the accomplishment
of any of the powers of the General Partner enumerated in this Agreement;
(21) the issuance of additional Partnership Units or
Partnership Interests, as appropriate, in connection with Capital
Contributions by Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article 4 hereof;
(22) to perform or cause to be performed all such other acts
required by this Agreement or not inconsistent herewith; and
(23) to execute, acknowledge and deliver any and all
instruments necessary or desirable to effectuate any of the foregoing.
B. 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, notwithstanding, 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.
C. 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 sole and absolute discretion, deems
appropriate and reasonable from time to time.
D. In exercising its authority under this Agreement, the
General Partner may, but, except as otherwise expressly provided in this
Agreement or in any other Agreement to which the Partnership is a party or
by which it is bound, shall be under no obligation to, take into account
the tax consequences to any Partner of any action taken by it. The General
Partner and the Partnership shall not have liability to a Limited Partner
under any circumstances 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 taken pursuant to its authority under this Agreement and in
accordance with the terms hereof.
Section 7.2 Certificate of Limited Partnership
The General Partner has filed the Certificate with the Secretary
of State of Delaware as required by the Act. 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
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. 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 and do all of the things
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 or any amendment thereto to any Limited Partner.
Section 7.3 Management and Reimbursement of the General Partner
The General Partner and/or its Affiliates shall have the right,
but not the obligation, in the sole discretion of the General Partner, to
perform all or any of the property management services on account of the
property owned or managed by the Partnership, the Mall Partnership or any
Affiliate, and may, in connection therewith, cause the Partnership, the
Mall Partnership or any Affiliate to enter into a management agreement with
the General Partner or one or more of its Affiliates, in form and substance
acceptable to the General Partner in its sole discretion. If the General
Partner elects to so perform, or to have an Affiliate so perform, the
property management services, then the General Partner or its Affiliate
shall be reimbursed expenses and otherwise compensated therefor by the
Partnership in amounts determined by the General Partner, in its good faith
discretion, to be comparable to amounts which would be charged by reputable
unrelated third party property management companies which have substantial
experience in performing property management services for properties of the
type owned or managed by the Partnership for institutional owners with
portfolios under management which are substantially similar in size,
nature, and condition of property owned or managed by the Partnership. The
reimbursements and fees payable to the General Partner or its Affiliates
under this Section shall be paid no less frequently than monthly. Except
as provided in this Section 7.3 and elsewhere in this Agreement (including
the provisions of Articles 5 and 6 regarding distributions, payments, and
allocations to which it may be entitled), the General Partner shall not be
compensated for its services as general partner of the Partnership. The
General Partner shall be reimbursed by the Partnership (to the extent not
paid by the Mall Partnership) on a monthly basis, or such other basis as it
may determine in its sole and absolute discretion, for all expenses that it
incurs relating to the ownership and operation of, or for the benefit of,
the Partnership or any of its assets.
Section 7.4 Outside Activities of the General Partner
The General Partner and its Affiliates shall be permitted to
purchase, own, operate, manage and otherwise deal with and profit from any
property, real, personal or mixed, not owned by the Partnership for their
own account and benefit, whether or not competitive with the business and
affairs of the Partnership, and neither the Partnership, any Limited
Partner, or any other Person shall have any right, claim, interest or cause
of action therein or as a result thereof; provided, however, that during
the Restricted Period the General Partner shall not engage in any
activities other than the ownership of its Interests in the Partnership and
activities incidental thereto. Without limiting the generality of the
above, nothing in this Agreement shall obligate the General Partner or its
Affiliates to first offer the Partnership an opportunity to invest in any
investment which has been offered to or found by the General Partner or its
Affiliates, whether or not such investment is of a nature that may be
invested in by the Partnership or would compete directly or indirectly with
the business of the Partnership. The Limited Partners hereby acknowledge
that the General Partner currently owns a variety of real estate
investments and may in the future acquire additional real estate
investments that may be competitive with the business of the Partnership.
Section 7.5 Contracts with Affiliates
A. During the Restricted Period with the consent of a majority
in interest of the Limited Partners (excluding interests held by the
General Partner or its Affiliates) (provided, however, that no consent
shall be required in connection with a Permitted Loan Transaction) and from
and after the expiration of the Restricted Period without the consent of
the Limited Partners, the Partnership may lend or contribute funds or other
assets to its Subsidiaries, the General Partner or its Affiliates or other
Persons in which it has an equity 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 (provided, however, that any
loans to the General Partner or its Affiliates shall be at a rate of
interest not less than the prime rate in effect at the time such loan is
made, as quoted in the Wall Street Journal). The foregoing authority shall
not create any right or benefit in favor of any Subsidiary or any other
Person.
B. From and after the expiration of the Restricted Period, 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 permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey
any property to, or purchase or otherwise acquire any property from, the
Partnership, directly or indirectly, except pursuant to transactions that
are determined by the General Partner in good faith to be fair and
reasonable to the Partnership.
D. From and after the expiration of the Restricted Period, 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, Subsidiaries of
the Partnership or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Partnership or
any Subsidiaries of the Partnership. Any or all of the foregoing may be
jointly established with the General Partner or its Affiliates, provided
that in such case the allocation of expense shall be shared among the
parties on whose behalf such plans exist as determined by the General
Partner in good faith to be fair and reasonable.
Section 7.6 Indemnification
A. To the fullest extent permitted by 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, that relate to the operations of the
Partnership or the General Partner in its capacity as general partner of
the Partnership as set forth in this Agreement, in which such Indemnitee
may be involved, or is threatened to be involved, as a party or otherwise,
whether or not suit or other legal proceedings are commenced, unless it is
established by a court of competent jurisdiction and all appeals relating
thereto have been fully completed or the applicable appeal periods have
expired that: (i) the act or omission of the Indemnitee was material to
the matter giving rise to the proceedings and either was committed in bad
faith or was the result of active and deliberate dishonesty or a wilful and
knowing breach of this Agreement; (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 knew, or
was reckless in not knowing, 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, recourse obligation, general
partner liability, 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 7.6 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 as set forth in this Section 7.6A. The
termination of any proceeding by conviction of an Indemnitee, or an entry
of an order of probation against an Indemnitee prior to judgment, in each
case after all appeals relating thereto have been fully completed or the
applicable appeal periods have expired, creates a rebuttable presumption
that such Indemnitee acted in a manner contrary to that Specified in this
Section 7.6A with respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 7.6 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 7.6.
B. Reasonable expenses incurred by an Indemnitee who is a party
to a proceeding shall be paid or reimbursed by the Partnership in advance
of the final disposition of the proceeding.
C. The indemnification provided by this Section 7.6 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 Indemnities are indemnified.
D. The Partnership may, but shall not be obligated to, purchase
and maintain insurance, on behalf of the Indemnities 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.
E. For purposes of this Section 7.6, 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 Section 7.6;
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 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 7.6 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 7.6 are for the benefit of
the Indemnitees, their 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 7.6 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 7.6, 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 7.7 Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this
Agreement (except as otherwise set forth in Section 7.7E below), the
General Partner and its members, officers and directors shall not be liable
for monetary damages to the Partnership, any Partners or any Assignees for
losses sustained or liabilities incurred as a result of errors in judgment
or any act or omission if the General Partner acted without bad faith,
without a knowing and wilful breach of the agreement and without active and
deliberate dishonesty.
B. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership and the shareholders of WEA
collectively, that the General Partner is under no obligation to consider
the separate interests of the Limited Partners (except as otherwise
provided herein) in deciding whether to cause the Partnership to take (or
decline to take) any actions, and that the General Partner shall not be
liable for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted without bad faith, without a
knowing and wilful breach of the agreement and without active and
deliberate dishonesty.
C. 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 the General Partner taken
without bad faith, without a knowing and wilful breach of the agreement and
without active and deliberate dishonesty.
D. 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 limitations on the General Partner's and its officers and
directors' liability to the Partnership and the Limited Partners 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.
E. Nothing in this Section 7.7 shall be deemed to be a release
or waiver by the Limited Partners of (or an agreement by the Limited
Partners not to assert) any claims against the General Partner which may
arise as a result of a breach by the General Partner of its obligations
contained in Sections 4.1.C, 4.2.B, 4.3, 5.1.A, 6.2, 7.7.E, 8.6, 8.7, 10.2,
11.2, 14.1.C and 14.1.D of this Agreement, the first sentence of Section
4.5 of this Agreement and Sections 2.B.1(a) and 2.B.3 of Exhibit C hereto.
Section 7.8 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 accordance with such opinion.
C. The General Partner shall have the right, in respect of any
of its powers or obligations hereunder, to act through any of its duly
authorized officers and duly appointed attorneys-in-fact. Each such
attorney shall, to the extent provided by the General Partner in the power
of attorney, have full power and authority to do and perform all and every
act and duty which is permitted or required to be done by the General
Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or
the Act, any action of the General Partner on behalf of the Partnership or
any decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or
omission is necessary or advisable in order: (i) to protect the ability of
WEA to continue to qualify as a REIT; or (ii) to avoid the General Partner
or WEA incurring any taxes under Section 857 or Section 4981 of the Code,
is expressly authorized under this Agreement and is deemed approved by all
of the Limited Partners. To the extent that the General Partner takes any
such action which could reasonably be expected to have a material adverse
effect upon the Limited Partners, the General Partner shall promptly notify
the Limited Partners thereof. The General Partner shall indemnify and hold
the Limited Partners harmless from and against any and all claims, losses
and liabilities resulting from any such actions by the General Partner
under this Section 7.8.D which would constitute a breach or violation of
Sections 4.1.C, 4.2.B, 4.3, 5.1.A, 6.2, 7.7.E, 8.6, 8.7, 10.2, 11.2, 14.1.C
or 14.1.D of this Agreement, the first sentence of Section 4.5 of this
Agreement or Sections 2.B.1(a) and 2.B.3 of Exhibit C hereto absent the
first sentence of this Section 7.8.D.
Section 7.9 Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, individually or collectively,
shall have any ownership interest in such Partnership assets or any portion
thereof. Title to any or all of the Partnership assets shall be held in
the name of the Partnership.
Section 7.10 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any
Person dealing with the Partnership shall be entitled to assume that the
General Partner has full power and authority, without consent or approval
of any other Partner or Person, to encumber, sell or otherwise use in any
manner any and all assets of the Partnership and to enter into any
contracts on behalf of the Partnership, and take any and all actions on
behalf of the Partnership and such Person shall be entitled to deal with
the General Partner as if the General Partner were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner
hereby waives any and all defenses or other remedies which may be available
against such Person to contest, engage or disaffirm any action of the
General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated
to ascertain that the terms of this Agreement have been complied with or to
inquire into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every certificate,
document or other instrument executed on behalf of the Partnership by the
General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that:
(i) at the time of the execution and delivery of such certificate, document
or instrument, this Agreement was in full force and effect; (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership; and
(iii) such certificate, document or instrument was duly executed and
delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability
The Limited Partners shall have no liability under this
Agreement, except as expressly provided in this Agreement (including
Section 10.5 hereof) or under the Act.
Section 8.2 Management of Business
No Limited Partner or Assignee (other than the General Partner,
any of its Affiliates or any officer, director, employee, agent or trustee
of the General Partner, the Partnership or any of their Affiliates, in
their capacity as such) shall take part in the operation, management or
control (within the meaning of the Act) of the Partnership's business,
transact any business in the Partnership's name or have the power to sign
documents for or otherwise bind the Partnership. The transaction of any
such business by the General Partner, any of its Affiliates or any officer,
director, employee, partner, agent or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall
not affect, impair or eliminate the limitations on the liability of the
Limited Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners
Subject to the terms and provisions hereof (including, without
limitation, Section 7.4), it is agreed that any Partner (General and/or
Limited) and any Affiliate of any Partner (including any officer, director,
employee, agent, or representative of any Partner) shall be entitled to and
may have business interests and engage in business activities in addition
to those relating to the Partnership, including business interests and
activities that are in direct competition with the Partnership or that are
enhanced by the activities of the Partnership. Neither the Partnership nor
any Partners shall have any rights, claims, or interests by virtue of this
Agreement or any relationships, duties or obligations hereunder (including,
but not limited to, any fiduciary or similar duties created by this
Agreement, under the Act, or otherwise existing at law or in equity) in any
business ventures or investments of any General Partner or Limited Partner,
or any Affiliate of any of the foregoing. None of the Limited Partners nor
any other Person shall have any rights by virtue of this Agreement or the
Partnership relationship established hereby in any business ventures of any
other Person, and such Person shall have no obligation pursuant to this
Agreement to offer any interest in any such business ventures to the
Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person could be taken by such Person.
It is further agreed that none of the Partners, General or
Limited, or any of their Affiliates, have any duty, obligation, or
liability to present to the Partnership any business or investment
opportunity which may arise in the course of activity for or on behalf of
the Partnership, or otherwise, for investment by the Partnership or any of
the Partners (even if within the line and scope of the business and affairs
of the Partnership), and instead any Partner, General or Limited, and any
Affiliate may pursue such opportunity for such Partners or Affiliate's own
benefit and account, without any participation, right, or claim therein by
the Partnership or any other Partner, and without notification or
disclosure to the Partnership or any other Partner.
Section 8.4 Return of Capital
No Limited Partner shall be entitled to the withdrawal or return
of its Capital Contribution, except to the extent of distributions made
pursuant to this Agreement or upon termination of the Partnership as
provided herein. Except to the extent provided by Exhibit "C" hereof or as
otherwise expressly provided in this Agreement, no Limited Partner or
Assignee shall have priority over any other Limited Partner or Assignee,
either as to the return of Capital Contributions or as to profits, losses
or distributions.
Section 8.5 Rights of Limited Partners Relating to the
Partnership
A. In addition to the other rights (including, without
limitation, rights to receive other information) provided by this Agreement
or by the Act, and except as limited by Section 8.5.B hereof, each Limited
Partner shall have the right, upon written demand:
(1) to obtain a copy of the most recent annual and
quarterly balance sheet, income statement, and related financial statements
prepared by the Partnership;
(2) to obtain a copy of the Partnership's federal, state
and local income tax returns for each Partnership Year;
(3) to obtain a current list of the name and last known
business, residence or mailing address of each Partner;
(4) to obtain a copy of this Agreement and the Certificate
and all amendments thereto, together with executed copies of all powers of
attorney pursuant to which this Agreement, the Certificate and all
amendments thereto have been executed; and
(5) to obtain true and full information regarding the
amount of cash and a description and statement of any other property or
services contributed by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a Partner to
the extent the foregoing is materially different from information contained
in financial statements or other reports provided to Limited Partners.
The request by a Limited Partner of quarterly and annual balance
sheets and income statements regularly prepared by the Partnership in order
to verify the correctness of distributions of cash, if any, to the Limited
Partner in accordance with the terms and provisions of this Agreement shall
be considered a purpose reasonably related to the Limited Partner's
interest as a limited partner in the Partnership.
B. Notwithstanding any other provision of this Section 8.5, the
General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that: (i) the General Partner
reasonably believes to be in the nature of trade secrets or other
information, the disclosure of which the General Partner in good faith
believes is not in the best interests of the Partnership or could damage
the Partnership or its business; or (ii) the Partnership is required by law
or by agreement with an unaffiliated third party to keep confidential.
Section 8.6 Redemption Rights
Subject to the terms and conditions hereof, at any time following
the first anniversary of the Effective Date, the Limited Partner shall have
the right (the "Redemption Right") to cause the Partnership to redeem all
or any portion (but not less than 500) of the Partnership Units then held
by the Limited Partner. The redemption price per Partnership Unit (the
"Redemption Price") shall be equal to the Market Value of one share of
common stock of WEA and shall be payable, at the option of the General
Partner, in the form of cash or shares of common stock of WEA (valued at
the Market Value), or any combination thereof, within ten business days
following written notice to the General Partner of the exercise of the
Redemption Right. In addition to the Redemption Price, the Limited Partner
shall also be entitled to receive cash or WEA common stock in an amount
equal to any accrued but unpaid Priority Return related to the Partnership
Units which are being redeemed. Except for the Redemption Right, no
Limited Partner shall have the right to require the Partnership to redeem
all or a portion of the Partnership Units held by such Limited Partner. In
the event that the General Partner elects to pay the Redemption Price in
the form of cash, any portion of the Redemption Price which remains unpaid
for more than ten (10) Business Days after delivery of a valid redemption
notice, shall thereafter bear interest at the then-prevailing adjusted
short-term applicable federal rate as of the date of such notice. Any
exercise of the Redemption Rights hereunder shall be subject to and
conducted in accordance with the terms and conditions of (including,
without limitation, notices, required deliveries and deemed
representations) Section 16 of the First Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated as of August 3,
1998, as the same may be amended, supplemented or modified form time to
time, except to the extent inconsistent with any of the express terms and
conditions of this Agreement and subject to such modifications or
adjustments as may be appropriate to reflect that the Redemption Rights
apply to the Partnership Units.
Section 8.7 Sale of All or Substantially All Assets
Notwithstanding anything to the contrary contained herein, during
the ten year period following the Effective Date the General Partner shall
not, without the prior approval of a majority of Limited Partner Interests
(excluding those held by the General Partner and its Affiliates), have the
right to consummate (i) the sale or other taxable disposition of all or any
material portion (except for routine disposition of personal property and
fixtures in the ordinary course of business) of the Partnership's assets
and properties (or the Mall Partnership's assets or properties) (whether in
one or a series of transactions) or (ii) a merger, consolidation or
dissolution of the Partnership or the Mall Partnership, which in either
case would result in the recognition of taxable gain by the Limited Partner
in such fiscal year. In addition, from and after the tenth anniversary of
the Effective Date, the General Partner shall use its good faith efforts,
to the extent not inconsistent with the business objectives of the General
Partner, WEA, the Operating Partnership or their respective Affiliates, to
consummate any such sale or disposition in a manner that would enable the
Limited Partners to defer the recognition of taxable gain. In addition,
during the seven (7) year period following the Effective Date, the General
Partner shall not, without the prior approval of a majority of Limited
Partner Interests (excluding those held by the General Partner and its
Affiliates), have the right to distribute any property contributed to the
Partnership by any Partner to another Partner if, as a result of such
distribution, any Limited Partner would recognize income pursuant to
Section 737 of Section 704(c)(1)(B) of the Code.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the
principal office of the Partnership those records and documents required to
be maintained by the Act and other books and records deemed by the General
Partner to be appropriate with respect to the Partnership's business,
including without limitation, all books and records necessary to provide to
the Limited Partners any information, lists and copies of documents
required to be provided pursuant to Sections 8.5A and 9.3 hereof. Any
records maintained by or on behalf of the Partnership in the regular course
of its business may be kept on, or be in the form of, punch cards, magnetic
tape, photographs, micrographics or any other information storage device,
provided that the records so maintained are convertible into clearly
legible written form within a reasonable period of time. The books of the
Partnership shall be maintained, for financial and tax reporting purposes,
on an accrual basis in accordance with generally accepted accounting
principles, or such other basis as the General Partner determines to be
necessary or appropriate.
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
Section 9.3 Reports
A. The Partnership shall mail to each Limited Partner no later
than ninety (90) days after the close of each Partnership Year an annual
report containing unaudited financial statements of the Partnership, for
such Partnership year, presented in accordance with generally accepted
accounting principles.
B. The Partnership shall mail to each Limited Partner no later
than ninety (90) days after the close of each calendar quarter (except the
last calendar quarter of each year), a report containing unaudited
financial statements of the Partnership, and such other information as may
be required by applicable law or regulation, or as the General Partner
determines to be appropriate.
C. All accounting and other professional costs and fees
associated with the preparation, compilation, review, audit, and any other
matters relating to the Partnership's records, financial statements and
reports, tax returns, and any other Partnership items described in the
preceding paragraphs shall be at the expense of the Partnership, not the
General Partner.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely
filing of all returns of Partnership income, gains, deductions, losses and
other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety
(90) days of the close of each taxable year, the tax information reasonably
required by the Limited Partners for federal and state income tax reporting
purposes.
Section 10.2 Tax Elections
A. Except as otherwise provided herein, the General Partner
shall, in its sole and absolute discretion, determine whether to make any
available election pursuant to the Code; provided, however, that if
requested by a transferee of a Partnership Interest, the General Partner
shall file an election on behalf of the Partnership pursuant to Section 754
of the Code to adjust the basis of the Partnership property in the case of
a transfer of a Partnership Interest made in accordance with the provisions
of this Agreement. The General Partner intends to elect the so-called
"traditional method with curative allocations of gain from disposition of
contributed property" of making Section 704(c) allocations pursuant to
Regulations Section 1.704-3(c)(3)(iii)(B) with respect to property
contributed as of the date hereof. The General Partner shall have the
right to seek to revoke any tax election, other than the Section 704(c)
election described in the preceding sentence, it makes (including, without
limitation, the election under Section 754 of the Code) upon the General
Partner's determination, in its reasonable discretion, that such revocation
is in the best interest of the Partners.
B. The General Partner intends to elect to be treated as a
partnership under the Code, and, if applicable, for purposes of state and
local law.
Section 10.3 Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of
the Partnership for federal income purposes. Pursuant to Section 6230(e)
of the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address, taxpayer
identification number, and profit interest of each of the Limited Partners
and the Assignees; provided, however, that such information is provided to
the Partnership by the Limited Partners and the Assignees.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect
to any administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner for income
tax purposes (such administrative proceedings being referred to as a "tax
audit" and such judicial proceedings being referred to as "judicial
review"), and in the settlement agreement the tax matters partner may
expressly state that such agreement shall bind all Partners, except that
such settlement agreement shall not bind any Partner: (i) who (within the
time period prescribed pursuant to the Code and Regulations) files a
statement with the IRS providing that the tax matters partner shall not
have the authority to enter into a settlement agreement on behalf of such
Partner; or (ii) who is a "notice partner" (as defined in Section
6231(a)(8) of the Code) or a member of a "notice group" (as defined in
Section 6223(b)(2) of the Code);
(2) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken into
account by a Partner for tax purposes (a "final adjustment") is mailed to
the tax matters partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the Tax Court or
the District Court of the United States for the district in which the
Partnership's principal place of business is located;
(3) to intervene in any action brought by any other Partner
for judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with
the IRS and, if any part of such request is not allowed by the IRS, to file
an appropriate pleading (petition or complaint) for judicial review with
respect to such request;
(5) to enter into an agreement with the IRS to extend the
period for assessing any tax which is attributable to any item required to
be taken account of by a Partner for tax purposes, or an item affected by
such item; and
(6) to take any other action of behalf of the Partners or
the Partnership in connection with any tax audit or judicial review
proceeding to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the
tax matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion of
the tax matters partner and the provisions relating to indemnification of
the General Partner set forth in Section 7.7 of this Agreement shall be
fully applicable to the tax matters partner in its capacity as such.
C. The tax matters partner shall receive no special
compensation for its services as such. All third party costs and expenses
incurred by the tax matters partner in performing its duties as such
(including legal and accounting fees and expenses) shall be borne or
reimbursed by the Partnership. Nothing herein shall be construed to
restrict the Partnership from engaging an accounting firm to assist the tax
matters partner in discharging its duties hereunder, including an
accounting firm which also renders services to the General Partner and its
Affiliates.
Section 10.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any, incurred
by it in organizing the Partnership ratably over a sixty (60) month period
as provided in Section 709 of the Code.
Section 10.5 Withholding
Each Partner hereby authorizes the Partnership to withhold from,
or pay on behalf of or with respect to, such Partner any amount of federal,
state, local or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
payable, distributable or allocable to such Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld
or paid by the Partnership pursuant to Sections 1441, 1442, 1445, or 1446
of the Code. Any amount paid on behalf of or with respect to any Partner
shall constitute a loan by the Partnership to such Partner, which loan
shall be repaid by such Partner within fifteen (15) days after notice from
the General Partner that such payment must be made, unless: (i) the
Partnership withholds such payment from a distribution which would
otherwise be made to the Partner; or (ii) the General Partner determines,
in its sole and absolute discretion, that such payment may be satisfied out
of the available funds of the Partnership which would, but for such
payment, be distributed to the Partner. Any amounts withheld pursuant to
the foregoing clauses (i) or (ii) shall be treated as having been
distributed to such Partner. Each Partner hereby unconditionally and
irrevocably grants to the Partnership a security interest in such Partner's
Partnership Interest to secure such Partner's obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 10.5.
In the event that a Partner fails to pay any amounts owed to the
Partnership pursuant to this Section 10.5 when due, the General Partner
may, in its sole and absolute discretion, elect to make the payment to the
Partnership on behalf of such defaulting Partner, and shall succeed to all
rights and remedies of the Partnership as against such defaulting Partner.
Without limitation, in such event the General Partner shall have the right
to receive distributions that would otherwise be distributable to such
defaulting Partner until such time as such loan, together with all interest
thereon, has been paid in full, and any such distributions so received by
the General Partner shall be treated as having been distributed to the
defaulting Partner and immediately paid by the defaulting Partner to the
General Partner in repayment of such loan. Any amounts payable by a
Partner hereunder shall bear interest at the lesser of (A) the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in the Wall Street Journal, plus four (4)
percentage points, or (B) the maximum lawful rate of interest on such
obligation, such interest to accrue from the date such amount is due (i.e.,
fifteen (15) days after demand) until such amount is paid in full. Each
Partner shall at its own expense take such actions as the Partnership or
the General Partner shall request in order to perfect or enforce the
security interest created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer" when used in this Article 11 with
respect to a Partnership Unit shall be deemed to refer to a transaction by
which the General Partner purports to assign all or any part of its General
Partner Interest to another Person or by which a Limited Partner purports
to assign all or any part of its Limited Partner Interest to another
Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or
otherwise. The term "transfer" when used in this Article 11 does not
include any acquisition of Partnership Interests by the General Partner
from any Limited Partner of any Partnership Units, nor does it include any
grant of a security interest or any related action involving levy,
execution, or the like contemplated under Section 10.5 of this Agreement.
B. No Partnership Interest shall be transferred, in whole or in
part (including any interest therein), except in accordance with the terms
and conditions set forth in this Article 11. Any transfer or purported
transfer of a Partnership Interest not made in accordance with this Article
11 shall be null and void ab initio, and the Partnership shall have no duty
or obligation to recognize the transferee as a partner or holder of any
interest whatsoever in the Partnership, and the transferee shall have no
rights, interests or claims in or against the Partnership or any Partner.
Section 11.2 Transfer of the General Partner's Interests
During the Restricted Period, the General Partner may transfer
any of its General Partner Interests or Limited Partner Interests to any
Affiliate of the General Partner or otherwise in connection with any merger
reorganization or restructuring of WEA or the Operating Partnership without
consent or approval of the Limited Partners. During the Restricted period,
except as permitted in the preceding sentence, without the consent or
approval of a majority in interest of the Limited Partners (other than
interests held by the General Partner or its Affiliates), the General
partner shall not otherwise transfer all or any portion of its General
Partner Interests or withdraw as a General Partner of the Partnership.
From and after the expiration of the Restricted Period, the General Partner
may transfer any of its General Partner Interest or withdraw as General
Partner, or transfer any of its Limited Partner Interest, without consent
or approval from any Limited Partners, and any Affiliate of the General
Partner may transfer any of its General Partner Interest or Limited Partner
Interest without consent or approval from any Limited Partners.
Section 11.3 Limited Partners' Rights to Transfer
A. Except for a transfer to the General Partner, the Operating
Partnership or any other Affiliate of the General Partner (or its
successors, assignees, affiliates and designees), a Limited Partner (other
than the General Partner and its Affiliates) shall not transfer all or any
portion of its Partnership Interest, or any of such Limited Partner's
economic rights as a Limited Partner without the prior written consent of
the General Partner, which may be withheld in the General Partner's sole
discretion; provided, however, that a Limited Partner may, subject to the
provisions of Sections 11.3.C, 11.3.D, 11.3.E, and 11.4 but without the
requirement of first obtaining the consent of the General Partner, transfer
all or any portion of its Partnership Interest, or any of such Limited
Partner's economic rights as a Limited Partner, to (i) the partners of the
Limited Partner as of the date hereof or the constituent partners, members,
beneficiaries or shareholders as of the date hereof of such partners (each
an "Indirect LP Party"), (ii) immediate family members of the Limited
Partners or of any Indirect LP Party, and (iii) family planning trusts in
which the Limited Partner or any Indirect LP Party (together with their
immediate family members) has a 50% or greater economic interest, provided,
further, however, that any such transferee shall first have executed and
delivered a written agreement, in form and substance reasonably
satisfactory to the General Partner, agreeing to be bound by the terms of
this Agreement.
B. If a Limited Partner is subject to Incapacity, the partners,
executor, administrator, trustee, committee, guardian, conservator or
receiver of such Limited Partner's estate shall have all of the rights of a
Limited Partner, but not more rights than those enjoyed by other Limited
Partners, for the purpose of settling or managing the estate and such power
as the Incapacitated Limited Partner possessed to transfer all or any part
of his or its interest in the Partnership. The Incapacity of a Limited
Partner, in and of itself, shall not dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer by a Limited
Partner or its Partnership Units if, in the opinion of legal counsel to the
Partnership or the General Partner, such transfer would require
registration under the Securities Act of 1933, as amended, or would
otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Units.
D. No transfer by a Limited Partner of its Partnership Units
may be made to any Person if: (i) in the opinion of legal counsel for the
Partnership or the General Partner, it would result in the Partnership
being treated as an association taxable as a corporation; (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the
meaning of Section 7704 of the Code; (iii) such transfer would cause the
Partnership to become, with respect to any employee benefit plan subject to
Title I of ERISA, a "party-in-interest" (as defined in Section 3(14) of
ERISA) or a "disqualified person" (as defined in Section 4975(c) of the
Code); (iv) such transfer would, in the opinion of legal counsel for the
Partnership or the General Partner, cause any portion of the assets of the
Partnership to constitute assets of any employee benefit plan pursuant to
Department of Labor Regulations Section 2510.2-101; (v) such transfer would
subject the Partnership to be regulated under the Investment Company Act of
1940, the Investment Advisors Act of 1940 or the Employee Retirement Income
Security Act of 1974, each as amended; or (vi) in the opinion of legal
counsel for the Partnership or the General Partner, it would adversely
affect the ability of WEA to continue to qualify as a REIT or subject the
General Partner or WEA to any additional taxes under Section 857 or Section
4981 of the Code.
E. No transfer of any Partnership Units may be made to a lender
to the Partnership or any Person who is related (within the meaning of
Section 1.752-4(b) of the Regulations) to any lender to the Partnership
whose loan constitutes a Nonrecourse Liability, without the consent of the
General Partner, in its sole and absolute discretion; provided that as a
condition to such consent the lender will be required to enter into an
arrangement with the Partnership or the General Partner to exchange or
redeem at a price agreeable to the lender, the General Partner, and the
transferring Partner (each in their respective discretion) any Partnership
Units in which a security interest is held immediately prior to the time at
which such lender would be deemed to be a partner in the Partnership for
purposes of allocating liabilities to such lender under Section 752 of the
Code, and provided further, that each Limited Partner adversely affected by
such transfer shall be given an opportunity to guaranty all or a portion of
the indebtedness of the Partnership as provided in Section 4.5.
Section 11.4 Substituted Limited Partners
A. Except for a transferee permitted pursuant to Section
11.3.A, no Limited Partner shall have the right to substitute a transferee
as a Limited Partner in his place. Any transferee permitted pursuant to
Section 11.3.A shall be admitted to the Partnership as a Substituted
Limited Partner. In addition, the General Partner shall have the right to
consent to the admission of any other transferee of the interest of a
Limited Partner pursuant to this Section 11.4 as a Substituted Limited
Partner, which consent may be given or withheld by the General Partner in
its sole and absolute discretion. The General Partner's failure or refusal
to permit a transferee of any such interests to become a Substituted
Limited Partner shall not give rise to any cause of action against the
Partnership or any Partner.
B. A transferee who has been admitted as a Substituted Limited
Partner in accordance with this Article 11 shall have all the rights and
powers and be subject to all the restrictions and liabilities of a Limited
Partner under this Agreement.
C. Upon admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units, and Percentage Interest of such Substituted Limited
Partner.
Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion, does
not consent to the admission of any transferee as a Substituted Limited
Partner, as described in Section 11.4, such transferee shall be considered
an Assignee for purposes of this Agreement. An Assignee shall be deemed to
have had assigned to it, and shall be entitled to receive, distributions
from the Partnership and the share of Net Income, Net Losses, Recapture
Income, and any other items, gain, loss deduction and credit of the
Partnership attributable to the Partnership Units assigned to such
transferee, but shall not be deemed to be a holder of Partnership Units for
any other purpose under this Agreement, and shall not be entitled to vote
such Partnership Units for any other purpose under this Agreement, and
shall not be entitled to vote such Partnership Units in any matter
presented to the Limited Partners for a vote (such Partnership Units being
deemed to have been voted on such matters in the same proportion as all
other Partnership Units held by Limited Partners are voted). In the event
any such transferee desires to make a further assignment of any such
Partnership Units, such transferee shall be subject to all of the
provisions of this Article 11 to the same extent and in the same manner as
any Limited Partner desiring to make an assignment of Partnership Units.
Section 11.6 General Provisions
A. No Limited Partner may withdraw from the Partnership other
than as a result of a permitted transfer of all such Limited Partner's
Partnership Units in accordance with this Article 11 or a redemption in
accordance with Section 8.6 hereof, or pursuant to any agreement consented
to by the Partnership pursuant to which the Limited Partner's interests in
the Partnership are conveyed and the Limited Partner's withdrawal is
provided for (including, without limitation the OP Contribution Agreement
of even date herewith between the Limited Partner and the Operating
Partnership).
B. Any Limited Partner who shall transfer all of its
Partnership Units in a transfer permitted pursuant to this Article 11 shall
cease to be a Limited Partner upon the admission of all Assignees of such
Partnership Units as Substitute Limited Partners. Similarly, any Limited
Partner who shall transfer all of its Partnership Units pursuant to any
agreement of the type referred to in the preceding paragraph shall cease to
be a Limited Partner.
C. (1) If any Partnership Unit is transferred, or upon the
admission or withdrawal of a Partner, in accordance with the provisions of
the Agreement during any calendar year, the income or loss attributable to
such Partnership Unit for such calendar year shall be divided and allocated
among the Partners based upon an interim closing of the Partnership's books
or another permissible method selected by the General Partner. For the
purposes of accounting convenience and simplicity, if the "interim closing
of the books" method is selected, the Partnership shall treat a transfer
of, or any increase or decrease in, a Partnership Unit which occurs at any
time during any monthly period as having been consummated on the first day
of such monthly period, regardless of when during such monthly period such
transfer, increase or decrease actually occurs.
(2) Distributions under Sections 5.1 and 13.2 and
Guaranteed Payments under Section 4.1.C shall be made only to Partners and
transferees who, according to the books and records of the Partnership, are
Partners or transferees on the actual date of distribution. Neither the
Partnership nor any Partner shall incur any liability for making
distributions in accordance with this Section 11.6.C.(2).
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner
A successor to all of the General Partner Interest pursuant to
Section 11.2 hereof who is proposed to be admitted as successor General
Partner shall be admitted to the Partnership as the General Partner,
effective upon such transfer. The admission of any such transferee shall
not cause a dissolution of the Partnership and such transferee shall carry
on the business of the Partnership in accordance with the terms and
provisions of this Agreement. In each case, the admission shall be subject
to the successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this
Agreement and such other documents or instruments as may be required to
effect the admission. In the case of such admission on any day other than
the first day of a Partnership Year, all items attributable to the General
Partner Interest for such Partnership Year shall be allocated between the
transferring General Partner and such successor as provided in Section
11.6.C hereof.
Section 12.2 Admission of Additional Limited Partners
A. Except as otherwise provided elsewhere in this Agreement and
subject to the terms and conditions set forth in Section 4.3 hereof, after
the admission to the Partnership of the initial Limited Partners on the
date hereof, a Person who makes a Capital Contribution to the Partnership
in accordance with this Agreement shall be admitted to the Partnership as
an Additional Limited Partner only upon furnishing to the General Partner
(i) evidence of acceptance in form reasonably satisfactory to the General
Partner of all of the terms and conditions of this Agreement, including,
without limitation, the power of attorney granted in Section 2.4 hereof,
and (ii) such other documents or instruments as may be required in the
reasonable discretion of the General Partner in order to effect such
Person's admission as an Additional Limited Partner.
B. Notwithstanding anything to the contrary in this Section
12.2, no Person shall be admitted as an Additional Limited Partner without
the consent of the General Partner, which consent may be given or withheld
in the General Partner's sole and absolute discretion and, during the
Restricted Period, the consent of a majority in interest of the Limited
Partner (excluding interests held by the General Partner or its
Affiliates). The admission of any Person as an Additional Limited Partner
shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent
of the General Partner to such admission.
C. If any Additional Limited Partner is admitted to the
Partnership on any day other than the first day of a Partnership Year, then
Net Income, Net Losses, each item thereof and all other items allocable
among Partners and Assignees for such Partnership Year shall be allocated
among such Additional Limited Partner and all other Partners and Assignees
by taking into account their varying interests during the Partnership Year
in accordance with Section 706(d) of the Code, using the interim closing of
the books method. Solely for purposes of making such allocations, each of
such items for the calendar month in which an admission of any Additional
Limited Partner occurs shall be allocated among all of the Partners and
Assignees, including such Additional Limited Partner. All distributions of
Available Cash with respect to which the Partnership Record Date is before
the date of such admission shall be made solely to Partners and Assignees,
other than the Additional Limited Partner, and all distributions of
Available Cash thereafter shall be made to all of the Partners and
Assignees, including such Additional Limited Partner.
Section 12.3 Amendment of Agreement and Certificate of Limited
Partnership
For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to
amend the records of the Partnership and, if necessary, to prepare as soon
as practical an amendment to this Agreement (including an amendment of
Exhibit "A") and, if required by law, shall prepare and file an amendment
to the Certificate and may for this purpose exercise the power of attorney
granted pursuant to Section 2.4 hereof.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution
The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by the
admission of a successor General Partner in accordance with the terms of
this Agreement. Upon the withdrawal of the General Partner, any successor
General Partner shall continue the business of the Partnership. The
Partnership shall dissolve, and its affairs be wound up, only upon the
first to occur of any of the following ("Liquidating Events"):
A. the expiration of its term as provided in Section 2.5
hereof;
B. an event of withdrawal of the General Partner, as permitted
by and defined in the Act (other than an event of bankruptcy), unless
within ninety (90) days after such event of withdrawal, a majority in
interest in capital and profits of the remaining Partners agrees in writing
to continue the business of the Partnership and to the appointment,
effective as of the date of withdrawal of a substitute General Partner;
C. entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
D. the sale of all or substantially all of the assets and
properties of the Partnership; or
E. a final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that the General Partner is bankrupt or
insolvent, or a final and non-appealable order for relief is entered by a
court with appropriate jurisdiction against the General Partner, in each
case under any federal or state bankruptcy or insolvency laws as now or
hereafter in effect, unless prior to the entry of such order or judgment a
majority in interest in capital and profits of the remaining Partners agree
in writing to continue the business of the Partnership and to the
appointment, effective as of a date prior to the date of such order or
judgment, of a substitute General Partner.
Section 13.2 Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an
orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. No Partner shall take any action that is
inconsistent with, or not necessary to or appropriate for, the winding up
of the Partnership's business and affairs. The General Partner, or in the
event there is no remaining General Partner, any Person elected by a
majority in interest of the Limited Partners (the General Partner or such
other Person being referred to herein as the "Liquidator"), shall be
responsible for overseeing the winding up and dissolution of the
Partnership and shall take full account of the Partnership's liabilities
and property and the Partnership property shall be liquidated as promptly
as is consistent with obtaining the fair value thereof, and the proceeds
therefrom shall be applied and distributed in the following order:
(1) First, to the satisfaction of all of the Partnership's
debts and liabilities to creditors other than the Partners (whether by
payment or the reasonable provision for payment thereof);
(2) Second, pari passu to the satisfaction of all of the
Partnership's debts and liabilities to the Partners and their Affiliates
(whether by payment or the reasonable provision for payment thereof); and
(3) The balance, if any, to the General Partner and Limited
Partners in accordance with the positive balances in their respective
Capital Accounts, after giving effect to all contributions, distributions,
and allocations for all periods.
The General Partner shall not receive any special compensation
for any services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof
which require liquidation of the assets of the Partnership, but subject to
the order of priorities set forth therein, if prior to or upon dissolution
of the Partnership the Liquidator determines that an immediate sale of part
or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its sole and absolute
discretion, defer for a reasonable time the liquidation of any assets
except those necessary to satisfy liabilities of the Partnership (including
those to Partners and their Affiliates as creditors) and/or distribute to
the Partners, in lieu of cash, as tenants in common and in accordance with
the provisions of Section 13.2.A hereof, undivided interests in such
Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made upon not less than ten days
prior written notice to the Partners and only if, in the good faith
judgment of the Liquidator, such distributions in kind are in the best
interest of the Partners, and shall be subject to such conditions relating
to the disposition and management of such properties as the Liquidator
deems reasonable and equitable and to any agreements governing the
operation of such properties at such time. The Liquidator shall determine
the fair market value of any property distributed in kind using such
reasonable method of valuation as it may adopt.
C. In the discretion of the Liquidator, a pro rata portion of
the distributions that would otherwise be made pursuant to this Article 13
may be:
(1) distributed to one or more trust(s) established for the
benefit of the creditors and the General Partner and Limited Partners for
the purposes of liquidating Partnership assets, collecting amounts owed to
the Partnership, and paying any contingent, conditional or unmatured
liabilities or obligations of the Partnership or the General Partner
arising out of or in connection with the Partnership. The assets of any
such trust(s) shall be distributed to the creditors and General Partner and
Limited Partners from time to time, in the reasonable direction of the
Liquidator, in the same manner and proportions as the amount distributed to
such trust (s) by the Partnership would otherwise have been distributed to
the creditors and General Partner and Limited Partners pursuant to this
Agreement; and
(2) withheld or escrowed to provide a reasonable reserve
for Partnership liabilities (contingent or otherwise) and to reflect the
unrealized portion of any installment obligations owed to the Partnership,
provided that such withheld or escrowed amounts shall be distributed to the
creditors and General Partner and Limited Partners in the manner and order
of priority set forth in Section 13.2.A as soon as practicable.
D. Notwithstanding any other provision of this Agreement to the
contrary, if upon a Terminating Capital Event or the final dissolution and
termination of the Partnership and after taking into account all
allocations of Net Income and Net Loss (and other tax items under Article
VI), there remains a deficit in any Partner's Capital Account, then gross
items of income and gain for Capital Account purposes for such Partnership
Year (and to the extent permitted by Section 761(c) of the Code, gross
items of income and gain for Capital Account purposes for the prior
Partnership Year) shall be allocated so as to eliminate, to the extent
possible, the deficit balance in any Partner's Capital Account in
proportion to such deficit.
Section 13.3 Compliance with Timing Requirements of Regulations
In the event the Partnership is "liquidated" within the meaning
of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
pursuant to this Article 13 to the General Partner and Limited Partners who
have positive Capital Account balances in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in
his Capital Account (after giving effect to all contributions,
distributions and allocations for all taxable years, including the year
during which such liquidation occurs), such Partner shall make a
contribution to the capital of the Partnership equal to such deficit, and
such deficit shall be considered a debt owed to the Partnership, but only
if and to the extent such Partner has undertaken to do so in accordance
with Sections 4.2.B. and C.
Section 13.4 Tax Termination
Notwithstanding any other provision of this Article 13, in the
event the Partnership is considered "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event has
occurred, the Partnership's property shall not be liquidated, the
Partnership's liabilities shall not be paid or discharged, and the
Partnership's affairs shall not be wound up. Instead, for federal income
tax purposes, the Partnership shall be deemed to have contributed the
property in kind to a new partnership treated as a continuation of the
Partnership for federal income tax purposes pursuant to Regulations Section
1.708-1(b)(1)(iv) and the Partnership shall be deemed to liquidate and, in
connection with such deemed liquidation, distribute interests in the new
partnership to the Partners pro rata in accordance with their respective
Capital Account balances immediately prior to such deemed liquidation. The
deemed termination and liquidation of the Partnership pursuant to
Regulations Section 1.708-1(b)(1)(iv) shall be disregarded for purposes of
maintaining and computing the Partners' Capital Accounts in Exhibit "B"
hereto.
Section 13.5 Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited
Partner shall look solely to the assets of the Partnership for the return
of its Capital Contributions and shall have no right, power or claim to
demand or receive property other than cash from the Partnership. Except as
otherwise provided in this Agreement, no Limited Partner shall have
priority over any other Partner as to the return of its Capital
Contributions, distributions, or allocations.
Section 13.6 Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs that
would, but for the provisions of an election or objection by one or more
Partners pursuant to Section 13.1, result in a dissolution of the
Partnership, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Partners.
Section 13.7 Termination of Partnership and Cancellation of
Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership's
assets, as provided in Section 13.2 hereof, a certificate of cancellation
shall be filed, the Partnership shall be terminated, and all qualifications
of the Partnership as a foreign limited partnership in jurisdictions other
than the State of California shall be canceled and such other actions as
may be necessary to terminate the Partnership shall be taken.
Section 13.8 Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up of
the business and affairs of the Partnership and the liquidation of its
assets pursuant to Section 13.2 hereof, in order to minimize any losses
otherwise attendant upon such winding-up, and the provisions of this
Agreement shall remain in effect between the Partners during the period of
liquidation.
Section 13.9 Waiver of Partition and Dissolution
Each Partner hereby waives any right to partition of the
Partnership property and any right to initiate, trigger, cause or commence
a dissolution or an action for dissolution of the Partnership.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments
A. Amendments to this Agreement may be proposed by the General
Partner or by any Limited Partners (other than the General Partner) holding
twenty-five percent (25%) or more of the Partnership Interests. Following
such proposal, the General Partner shall submit any proposed amendment to
the Limited Partners. The General Partner shall seek the written vote of
the Partners on the proposed amendment or shall call a meeting to vote
thereon and to transact any other business that it may deem appropriate.
For purposes of obtaining a written vote, the General Partner may require a
response within a reasonable specified time, but not less than fifteen (15)
days, and failure to respond in such time period shall constitute a vote
which is consistent with the General Partner's recommendation with respect
to the proposal. Except as provided in Section 13.1C, 14.1B, 14.1C, or
14.1D, a proposed amendment shall be adopted and be effective as an
amendment hereto if it is approved by the General Partner and it receives
the Consent of Limited Partners holding a majority of the Percentage
Interests of all Limited Partners (without taking into account any
Interests held by the General Partner or any Affiliate thereof); provided,
however, that, except as otherwise provided in Section 4.2A hereof, any
amendment which materially and adversely alters the right of a Limited
Partner to receive distributions of Available Cash or allocations of Net
Income, Net Loss or any other items in the amounts, in the priorities or at
the times described in this Agreement shall require the consent of such
Limited Partner in order to become effective.
B. Notwithstanding Section 14.1.A, the General Partner shall
have the power, without the consent or approval of the Limited Partners, to
amend this Agreement as may be required to facilitate or implement any of
the following purposes:
(1) to add to the obligations of the General Partner or
surrender any right or power granted to the General Partner or any
Affiliate of the General Partner for the benefit of the Limited Partners;
(2) to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement;
(3) to set forth the designations, rights, powers, duties,
and preferences of other holders of any additional Partnership Interests
issued pursuant to Section 4.3, or otherwise pursuant to the terms of this
Agreement;
(4) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any provision in
this Agreement not inconsistent with law or with other provisions of this
Agreement, or make any other changes with respect to matters arising under
this Agreement that will not be inconsistent with law or with the
provisions of this Agreement; and
(5) to satisfy any requirements, conditions, or guidelines,
contained in any order, directive, opinion, ruling or regulation of a
federal or state agency or contained in federal or state law.
The General Partner shall provide notice to the Limited Partners
when any action under this Section 14.1.B is taken.
C. Notwithstanding Section 14.1.A and 14.1.B hereof, this
Agreement shall not be amended without Consent of each Partner adversely
affected if such amendment would: (i) convert a Limited Partner's interest
in the Partnership into a General Partner Interest; (ii) modify the limited
liability of a Limited Partner in a manner adverse to such Limited Partner;
(iii) alter rights of the Partner to receive distributions pursuant to
Article 5 or Article 13, or the allocations specified in Article 6 (except
as permitted pursuant to Section 4.2 and Section 14.1.B(3) hereof); (iv)
cause the termination of the Partnership prior to the time set forth in
Sections 2.5 or 13.1; or (v) amend this Section 14.1.C.
D. Notwithstanding Section 14.1.A and 14.1.B hereof, the
General Partner shall not amend Sections 14.1A, 14.1C or 14.2 without
Consent of Limited Partners holding a majority of the Percentage Interests
of the Limited Partners, excluding Limited Partner Interests held by the
General Partner or any Affiliate thereof.
Section 14.2 Meetings of the Partners
A. Meetings of the Partners may be called by the General
Partner. Notice of any such meeting shall be given to all Partners not
less than seven (7) days nor more than thirty (30) days prior to the date
of such meeting. Partners may vote in person or by proxy at such meeting.
Whenever the vote or consent of the Partners is permitted or required under
this Agreement, such vote or consent may be given at a meeting of the
Partners or may be given in accordance with the procedures prescribed in
Sections 14.1A or 14.2B hereof.
B. Any action required or permitted to be taken at a meeting of
the Partners may be taken without a meeting if a written consent setting
forth the action so taken is signed by majority of the Percentage Interests
of the Partners (or such other percentage as is expressly required by this
Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a
majority of the Percentage Interests of the Partners (or such other
percentage as is expressly required by this Agreement). Such consent shall
be filed with the General Partner. An action so taken shall be deemed to
have been taken at a meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to
act for him by proxy on all matters in which a Limited Partner is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the Limited
Partner or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months from the date hereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of
the Limited Partner executing it, such revocation to be effective upon the
Partnership's receipt of written notice of such revocation from the Limited
Partner executing such proxy.
D. Each meeting of the Partners shall be conducted by the
General Partner or such other Person as the General Partner may appoint
pursuant to such rules for the conduct of the meeting as the General
Partner or such other Person deems appropriate. Without limitation,
meetings of Partners may be conducted in the same manner as meetings of the
shareholders of the General Partner and may be held at the same time, and
as part of, meetings of the shareholders of the General Partner.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notices
Any notice, demand, request or report required or permitted to be
given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when
sent by first class United States mail or by other means of written
communication to the Partner or Assignee at the address set forth in
Exhibit "A" or such other address of which the Partner shall notify the
General Partner in writing.
Section 15.2 Titles and Captions
All article or section titles or captions in this Agreement are
for convenience only. They shall not be deemed part of this Agreement and
in no way define, limit, extend or describe the scope or intent of any
provisions hereof. Except as specifically provided otherwise, references
to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
Section 15.3 Pronouns and Plurals
Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns, pronouns and verbs shall include the
plural and vice versa.
Section 15.4 Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain form taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.
Section 15.6 Creditors
Other than as expressly set forth herein with respect to the
Indemnitees, none of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 15.7 Waiver
No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute
waiver of any such breach or any covenant, duty, agreement or condition.
Section 15.8 Counterparts
This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all of the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.
Section 15.9 Applicable Law
This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
Section 15.10 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal
or unenforceable in any respect, the validity, legality or enforceability
of other remaining provisions contained herein shall not be affected
thereby.
Section 15.11 Entire Agreement
This Agreement contains the entire understanding and agreement
among the Partners with respect to the subject matter hereof and amends,
restates and supersedes the Original Agreement and any other prior written
or oral understandings or agreements among them with respect thereto.
Section 15.12 No Rights as Shareholders
Nothing contained in this Agreement shall be construed as
conferring upon the holders of the Partnership Units any rights whatsoever
as shareholders of WEA, including, without limitation, any right to receive
dividends or other distributions made to shareholders of WEA or to vote or
to consent or to receive notice as shareholders in respect of any meeting
of shareholders for the election of directors of WEA or any other matter.
Section 15.13 Discretion of General Partner
With respect to any provision hereof which requires or provides
for the consent or approval of the General Partner, shall consent or
approval may be granted or withheld in the General Partner's sole and
absolute discretion. The General Partner's "sole and absolute discretion,"
"sole discretion" and "discretion" under this Agreement shall be exercised
in good faith.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day first above written.
GENERAL PARTNER:
WESTFIELD INDEPENDENCE LLC,
a Delaware limited liability company
By: Westfield America Limited Partnership,
a Delaware limited partnership
Its: Managing Member
By: Westfield America, Inc.,
a Missouri corporation
Its: Managing General Partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
_________________________
Name: ▇▇▇ ▇▇▇▇▇▇
Its: Secretary
LIMITED PARTNER:
NEW HANOVER ASSOCIATES,
a Pennsylvania general partnership
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
_________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
Its: Managing Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Managing Partner
EXHIBIT A
INTERESTS OF THE PARTNERS
Partnership
Partner Percentage Interest Capital Account Units
------- ------------------- --------------- -----------
Limited Partners
New Hanover Associates 80% $14,153,148 786,286
General Partner
Westfield Independence LLC 20% $ 3,440,000 191,111
EXHIBIT B
Capital Account Maintenance
1. Capital Accounts of the Partners
A. The Partnership shall maintain for each Partner a separate
Capital Account in accordance with the rules of Regulations Section 1.704-
1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions and any other deemed contributions made by such
Partner to the Partnership pursuant to this Agreement; and (ii) all items
of Partnership income and gain (including income and gain exempt from tax)
computed in accordance with Section 1.B hereof and allocated to such
Partner pursuant to Section 6.1.A of the Agreement and Exhibit C to the
Agreement, and decreased by (x) the amount of cash or Agreed Value of all
distributions of cash or property made to such Partner pursuant to this
Agreement; and (y) all items of Partnership deduction and loss computed in
accordance with Section 1.B hereof and allocated to such Partner pursuant
to Section 6.1.B of the Agreement and Exhibit C to the Agreement.
B. For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, unless
otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant
to Section 703(a)(1) of the Code shall be included in taxable income or
loss), with the following adjustments:
(1) Except as otherwise provided in Regulations Section 1.704-
1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of
the Code which may be made by the Partnership, provided that the amounts of
any adjustments to the adjusted bases of the assets of the Partnership made
pursuant to Section 734 of the Code as a result of the distribution of
property by the Partnership to a Partner (to the extent that such
adjustments have not previously been reflected in the Partners' Capital
Accounts) shall be reflected in the Capital Accounts of the Partners in the
manner and subject to the limitations prescribed in Regulations Section
1.704-1(b)(2)(iv)(m)(4).
(2) The computation of all items of income, gain, and deduction
shall be made without regard to the fact that items described in Sections
705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable in gross income
or are neither currently deductible nor capitalized for federal income tax
purposes.
(3) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the
adjusted basis of such property as of such date of disposition were equal
in amount to the Partnership's Carrying Value with respect to such property
as of such date.
(4) In lieu of depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such fiscal year.
(5) In the event the Carrying Value of any Partnership Asset is
adjusted pursuant to Section 1.D hereof, the amount of any such adjustment
shall be taken into account as gain or loss from the disposition of such
asset.
(6) Any items specifically allocated under Section 1 of Exhibit
C to the Agreement shall not be taken into account.
C. Generally, a transferee (including an Assignee) of a Partnership
Unit shall succeed to a pro rata portion of the Capital Account of the
transferor; provided, however, that if the transfer causes a termination of
the Partnership under Section 708(b)(1)(B) of the Code, the Partnership's
assets and liabilities shall be deemed solely for federal income tax
purposes, to have been contributed to a new partnership treated as a
continuation of the Partnership and the Partnership shall be deemed to have
liquidated and, in connection with such deemed liquidation, distributed
interests in the new partnership to the Partners pro rata in accordance
with their respective Capital Account balances immediately prior to such
deemed liquidation. In such event, the Carrying Values of the Partnership
properties shall not be adjusted in connection with such deemed liquidation
pursuant to Section 1.D.(2) hereof. The Capital Accounts of such new
partnership shall be maintained in accordance with the principles of this
Exhibit B.
D. (1) Consistent with the provisions of Regulations Section 1.704-
1(b)(2)(iv)(f), and as provided in Section 1.D.(2), the Carrying Value of
all Partnership assets shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as of the times of the adjustments provided in Section 1.D.(2)
hereof, as if such Unrealized Gain or Unrealized Loss had been recognized
on an actual sale of each such property and allocated pursuant to Section
6.1 of the Agreement.
(2) Such adjustments shall be made as of the following times:
(a) immediately prior to the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (b) immediately prior to the distribution by
the Partnership to a Partner of more than a de minimis amount of property
as consideration for an interest in the Partnership, other than as set
forth in Section 1.C of this Exhibit B; and (c) immediately prior to the
liquidation of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to
clauses (a) and (b) above shall be made only if the General Partner
determines that such adjustments are necessary or appropriate to reflect
economic interests of the Partners in the Partnership.
(3) In accordance with Regulations Section 1.704-1(b)(2)(iv)(e),
the Carrying Value of Partnership assets distributed in kind shall be
adjusted upward or downward to reflect any Unrealized Gain or Unrealized
Loss attributable to such Partnership property, as of the time any such
asset is distributed.
(4) In determining Unrealized Gain or Unrealized Loss for
purposes of this Exhibit B, the aggregate cash amount and fair market value
of all Partnership assets (including cash or cash equivalents) shall be
determined by the General Partner using such reasonable method of valuation
as it may adopt, or in the case of a liquidating distribution pursuant to
Article 13 of the Agreement, shall be determined and allocated by the
Liquidator using such reasonable methods of valuation as it may adopt. The
General Partner, or the Liquidator, as the case may be, shall allocate such
aggregate value among the assets of the Partnership (in such manner as it
determines in its reasonable discretion to arrive at a fair market value
for individual properties).
E. The provisions of this Agreement (including this Exhibit B and
other Exhibits to this Agreement) relating to the maintenance of Capital
Accounts are intended to comply with Regulations Section 1.704-1(b), and
shall be interpreted and applied in a manner consistent with such
Regulations. In the event the General Partner shall determine that it is
prudent to modify (i) the manner in which the Capital Accounts, or any
debits or credits thereto (including, without limitation, debits or credits
relating to liabilities which are secured by contributed or distributed
property or which are assumed by the Partnership, the General Partner, or
the Limited Partners) are computed; or (ii) the manner in which items are
allocated among the Partners for federal income tax purposes in order to
comply with such Regulations or to comply with Section 704(c) of the Code,
the General Partner may make such modification without regard to Article 14
of the Agreement, provided that it is not likely to have a material effect
on the amounts distributable to any Person pursuant to Article 13 of the
Agreement upon the dissolution of the Partnership. The General Partner
also shall (i) where appropriate, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q), make any adjustments that are necessary or
appropriate to maintain equality between Capital Accounts of the Partners
and the amount of Partnership capital reflected on the Partnership's
balance sheet, as computed for book purposes; and (ii) make any appropriate
modifications in the event unanticipated events occur that might otherwise
cause this Agreement not to comply with Regulations Section 1.704-1(b). In
addition, the General Partner may adopt and employ such methods and
procedures for (i) the maintenance of book and tax capital accounts; (ii)
the determination and allocation of adjustments under Sections 704(c), 734
and 743 of the Code; (iii) the determination of Net Income, Net Loss,
taxable loss and items thereof under this Agreement and pursuant to the
Code; (iv) conventions for the determination of cost recovery, depreciation
and amortization deductions, as it determines in its sole discretion are
necessary or appropriate to execute the provisions of this Agreement, to
comply with federal and state tax laws, and are in the best interest of the
Partners.
2. No Interest
No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
3. No Withdrawal
No Partner shall be entitled to withdraw any part of his Capital
Contribution or his Capital Account or to receive any distribution from the
Partnership, except as provided in Articles 4, 5, 8 and 13 of the
Agreement.
EXHIBIT C
Special Allocation Rules
1. Special Allocation Rules
Notwithstanding any other provision of the Agreement or this Exhibit
C, the following special allocations shall be made in the following order:
A. Minimum Gain Chargeback. Notwithstanding the provisions of
Section 6.1 of the Agreement or any other provisions of this Exhibit C, if
there is a net decrease in Partnership Minimum Gain during any Partnership
taxable year, each Partner shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, as determined under Regulations Section 1.704-
2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated shall be determined
in accordance with Regulations Section 1.704-2(f)(6). This Section 1.A is
intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith. Solely for purposes of this Section 1.A, each Partner's
Adjusted Capital Account Deficit shall be determined prior to any other
allocations pursuant to Section 6.1 of Partner Minimum Gain during such
Partnership taxable year.
B. Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Section 6.1 of this Agreement or any other provisions of this
Exhibit C (except Section 1.A hereof), if there is a net decrease in
Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any
Partnership taxable year, each Partner who has a share of the Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.702-2(i)(5), shall be specially
allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Partner's share of
the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-
2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated shall be determined
in accordance with Regulations Section 1.704-2(i)(4). This Section 1.B is
intended to comply with the partner nonrecourse debt minimum gain
chargeback requirement in such Section of the Regulations and shall be
interpreted consistently therewith. Solely for purposes of this Section
1.B, each Partner's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to Section 6.1 of the Agreement or
this Exhibit with respect to such Partnership taxable year, other than
allocations pursuant to Section 1.A hereof.
C. Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations
required under Sections 1.A and 1.B hereof such Partner has an Adjusted
Capital Account Deficit, items of Partnership income and gain (consisting
of a pro rata portion of each item of Partnership income, including gross
income and gain for the Partnership taxable year) shall be specifically
allocated to such Partner in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, its Adjusted Capital Account
Deficit created by such adjustments, allocations or distributions as
quickly as possible.
D. Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership taxable year shall be allocated to the Partners in accordance
with their respective Percentage Interests. If the General Partner
determines in its good faith discretion that the Partnership's Nonrecourse
Deductions must be allocated in a different ratio to satisfy the safe
harbor requirements of the Regulations promulgated under Section 704(b) of
the Code, the General Partner is authorized, upon notice to the Limited
Partners, to revise the prescribed ratio to the numerically closest ratio
for such Partnership taxable year which satisfy such requirements.
E. Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership taxable year shall be specially allocated to
the Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i).
F. Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Regulations Section 1.704-
1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as
an item of gain (if the adjustment increases the basis of the asset) or
loss (if the adjustment decreases such basis), and such item of gain or
loss shall be specially allocated to the Partners in a manner consistent
with the manner in which their Capital Accounts are required to be adjusted
pursuant to such Section of the Regulations.
G. Curative Allocations. The allocations set forth in Section 1.A
through 1.F of this Exhibit C (the "Regulatory Allocations") are intended
to comply with certain requirements of the Regulations under Section 704(b)
of the Code. The Regulatory Allocations may not be consistent with the
manner in which the Partners intend to divide Partnership distributions.
Accordingly, the General Partner is hereby authorized to divide other
allocations of income, gain, deduction and loss among the Partners so as to
prevent the Regulatory Allocations from distorting the manner in which
Partnership distributions will be divided among the Partners. In general,
the Partners anticipate that this will be accomplished by specially
allocating other items of income, gain, loss and deduction among the
Partners so that the net amount of the Regulatory Allocations and such
special allocations to each person is zero. However, the General Partner
will have discretion to accomplish this result in any reasonable manner;
provided, however, that no allocation pursuant to this Section 1.G shall
cause the Partnership to fail to comply with the requirements of
Regulations Sections 1.704-1(b)(2)(ii)(d), -2(e) or -2(i).
2. Allocations for Tax Purposes
A. Except as otherwise provided in this Section 2, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Section 6.1
of the Agreement and Section 1 of this Exhibit C.
B. In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss, and
deduction shall be allocated for federal income tax purposes among the
Partners as follows:
(1) (a) In the case of a Contributed Property on the Effective
Date, such items attributable thereto shall be
allocated among the Partners, consistent with the
principles of Section 704(c) of the Code and pursuant
to the "traditional method with curative allocations of
gain from disposition of contributed property" under
Regulations Section 1.704-3(c), to take into account
the variation between the 704(c) Value of such property
and its adjusted basis at the time of contribution; and
(b) any item of Residual Gain or Residual Loss attributable
to a Contributed Property shall be allocated among the
Partners in the same manner as its correlative item of
"book" gain or loss is allocated pursuant to Section
6.1 of the Agreement and Section 1 of this Exhibit C.
(2) (a) In the case of an Adjusted Property, such items shall
(1) first, be allocated among the Partners in a manner
consistent with the principles of Section 704(c)
of the Code and Regulations Section 1.704-3(c) to
take into account the Unrealized Gain or
Unrealized Loss attributable to such property and
the allocations thereof pursuant to Exhibit B; and
(2) second, in the event such property was a
Contributed Property on the Effective Date, be
allocated among the Partners in a manner
consistent with Section 2.B.(1) of this Exhibit C;
and
(b) any item of Residual Gain or Residual Loss
attributable to an Adjusted Property shall be
allocated among the Partners in the same manner
its correlative item of "book" gain or loss is
allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit C.
(3) all other items of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as their
correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section 1 of
this Exhibit C.
3. Allocations of Nonrecourse Debt
As set forth in Section 6.2 of the Agreement and subject to Section
4.5 of the Agreement, the Partners hereby agree that for purposes of
allocating excess nonrecourse liabilities pursuant to Regulations Section
1.752-3(a)(3), the Partners' interests in Partnership profits shall be 100%
to the Limited Partner and 0% to the General Partner; provided, that if the
property of the Mall Partnership is significantly expanded and additional
Nonrecourse Liabilities are incurred in amounts that substantially exceed
the Nonrecourse Liability existing on such property on the Effective Date,
the General Partner may be allocated such additional Nonrecourse
Liabilities so long as the Limited Partners are not allocated a lesser
amount of Nonrecourse Liabilities than the amounts allocated to such
Limited Partners on the Effective Date.
4. No Withdrawal
No Partner shall be entitled to withdraw any part of his Capital
Contribution or his Capital Account or to receive any distribution from the
Partnership, except as provided in Articles 4, 5, 8 and 13 of the
Agreement.
EXHIBIT D
SCHEDULE OF AGREED VALUE
Contributed Agreed
Partner Property Value
------ ----------- ------
Limited Partner
---------------
New Hanover Associates 48% General Partner interest $30,145,234.12
in the Mall Partnership
General Partner
--------------
Westfield Independence LLC 12% General Partner Interest $ 7,247,913.88
in the Mall Partnership
TABLE OF CONTENTS
Page(s)
ARTICLE 1 DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Act . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Additional Limited Partner . . . . . . . . . 1
Section 1.3 Adjusted Capital Account . . . . . . . . . . 1
Section 1.4 Adjusted Capital Account Deficit . . . . . . 2
Section 1.5 Adjusted Property . . . . . . . . . . . . . . 2
Section 1.6 Affiliate . . . . . . . . . . . . . . . . . . 2
Section 1.7 Agreed Value . . . . . . . . . . . . . . . . 2
Section 1.8 Agreement . . . . . . . . . . . . . . . . . . 2
Section 1.9 Assignee . . . . . . . . . . . . . . . . . . 2
Section 1.10 Available Cash . . . . . . . . . . . . . . . 2
Section 1.11 Book-Tax Disparities . . . . . . . . . . . . 3
Section 1.12 Business Day . . . . . . . . . . . . . . . . 4
Section 1.13 Capital Account . . . . . . . . . . . . . . 4
Section 1.14 Capital Contribution . . . . . . . . . . . . 4
Section 1.15 Carrying Value . . . . . . . . . . . . . . . 4
Section 1.16 Certificate . . . . . . . . . . . . . . . . 4
Section 1.17 Code . . . . . . . . . . . . . . . . . . . . 4
Section 1.18 Consent . . . . . . . . . . . . . . . . . . 4
Section 1.19 Contributed Property . . . . . . . . . . . . 4
Section 1.20 Depreciation . . . . . . . . . . . . . . . . 5
Section 1.21 Funds From Operations . . . . . . . . . . . 5
Section 1.22 General Partner Interest . . . . . . . . . . 5
Section 1.23 Guaranteed Payment . . . . . . . . . . . . . 5
Section 1.24 IRS . . . . . . . . . . . . . . . . . . . . 5
Section 1.25 Incapacity or Incapacitated . . . . . . . . 5
Section 1.26 Indemnitee . . . . . . . . . . . . . . . . . 6
Section 1.27 Limited Partner . . . . . . . . . . . . . . 6
Section 1.28 Limited Partner Interest . . . . . . . . . . 6
Section 1.29 Liquidating Event . . . . . . . . . . . . . 6
Section 1.30 Liquidator . . . . . . . . . . . . . . . . . 6
Section 1.31 Mall Partnership . . . . . . . . . . . . . . 6
Section 1.32 Mall Partnership Interest . . . . . . . . . 6
Section 1.33 Market Price . . . . . . . . . . . . . . . . 6
Section 1.34 Net Income . . . . . . . . . . . . . . . . . 7
Section 1.35 Net Loss . . . . . . . . . . . . . . . . . . 7
Section 1.36 Nonrecourse Built-in-Gain . . . . . . . . . 8
Section 1.37 Nonrecourse Deductions . . . . . . . . . . . 8
Section 1.38 Nonrecourse Liability . . . . . . . . . . . 8
Section 1.39 Operating Partnership . . . . . . . . . . . 8
Section 1.40 Partner . . . . . . . . . . . . . . . . . . 8
Section 1.41 Partner Minimum Gain . . . . . . . . . . . . 8
Section 1.42 Partner Nonrecourse Debt . . . . . . . . . . 8
Section 1.43 Partner Nonrecourse Deductions . . . . . . . 8
Section 1.44 Partnership . . . . . . . . . . . . . . . . 8
Section 1.45 Partnership Interest . . . . . . . . . . . . 8
Section 1.46 Partnership Minimum Gain . . . . . . . . . . 9
Section 1.47 Partnership Record Date . . . . . . . . . . 9
Section 1.48 Partnership Unit . . . . . . . . . . . . . . 9
Section 1.49 Partnership Year . . . . . . . . . . . . . . 9
Section 1.50 Percentage Interest . . . . . . . . . . . . 9
Section 1.51 Permitted Loan Transaction . . . . . . . . . 9
Section 1.52 Person . . . . . . . . . . . . . . . . . . . 9
Section 1.53 Priority Return . . . . . . . . . . . . . . 9
Section 1.54 Recapture Income . . . . . . . . . . . . . 10
Section 1.55 Regulations . . . . . . . . . . . . . . . 10
Section 1.56 REIT . . . . . . . . . . . . . . . . . . . 10
Section 1.57 REIT Share . . . . . . . . . . . . . . . . 10
Section 1.58 Residual Gain or Residual Loss . . . . . . 10
Section 1.59 Restricted Period . . . . . . . . . . . . 10
Section 1.60 704(c) Value . . . . . . . . . . . . . . . 10
Section 1.61 Subsidiary . . . . . . . . . . . . . . . . 10
Section 1.62 Substituted Limited Partner . . . . . . . 11
Section 1.63 Terminating Capital Transaction . . . . . 11
Section 1.64 Unrealized Gain . . . . . . . . . . . . . 11
Section 1.65 Unrealized Loss . . . . . . . . . . . . . 11
Section 1.66 WEA . . . . . . . . . . . . . . . . . . . 11
ARTICLE 2 ORGANIZATIONAL MATTERS . . . . . . . . . . . . . . . . . 11
Section 2.1 Organization . . . . . . . . . . . . . . . 11
Section 2.2 Name . . . . . . . . . . . . . . . . . . . 12
Section 2.3 Registered Office and Agent;
Principal Office. . . . . . . . . . . . . . 12
Section 2.4 Power of Attorney . . . . . . . . . . . . . 12
Section 2.5 Term . . . . . . . . . . . . . . . . . . . 13
ARTICLE 3 PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.1 Purpose and Business . . . . . . . . . . . 14
Section 3.2 Powers . . . . . . . . . . . . . . . . . . 14
ARTICLE 4 CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . 15
Section 4.1 Capital Contributions of the Partners . . 15
Section 4.2 Deficit Restoration Election . . . . . . . 16
Section 4.3 Issuances of Additional Partnership
Interests . . . . . . . . . . . . . . . . . 17
Section 4.4 General Partner Loans . . . . . . . . . . . 17
Section 4.5 Guaranty of Indebtedness . . . . . . . . . 18
ARTICLE 5 DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 18
Section 5.1 Requirement and Characterization of
Distributions . . . . . . . . . . . . . . . 18
Section 5.2 Amounts Withheld . . . . . . . . . . . . . 19
Section 5.3 Distributions Upon Liquidation . . . . . . 19
ARTICLE 6 ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . 19
Section 6.1 Allocations of Net Income and Net Loss . . 19
Section 6.2 Other Allocations . . . . . . . . . . . . . 20
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS . . . . . . . . . 21
Section 7.1 Management . . . . . . . . . . . . . . . . 21
Section 7.2 Certificate of Limited Partnership . . . . 25
Section 7.3 Management and Reimbursement of the
General Partner . . . . . . . . . . . . . . 25
Section 7.4 Outside Activities of the General Partner . 26
Section 7.5 Contracts with Affiliates . . . . . . . . . 26
Section 7.6 Indemnification . . . . . . . . . . . . . . 27
Section 7.7 Liability of the General Partner . . . . . 29
Section 7.8 Other Matters Concerning the
General Partner . . . . . . . . . . . . . . 30
Section 7.9 Title to Partnership Assets . . . . . . . . 31
Section 7.10 Reliance by Third Parties . . . . . . . . 31
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS . . . . . . . 32
Section 8.1 Limitation of Liability . . . . . . . . . . 32
Section 8.2 Management of Business . . . . . . . . . . 32
Section 8.3 Outside Activities of Limited Partners . . 32
Section 8.4 Return of Capital . . . . . . . . . . . . . 33
Section 8.5 Rights of Limited Partners
Relating to the Partnership . . . . . . . . 33
Section 8.6 Redemption Rights . . . . . . . . . . . . . 34
Section 8.7 Sale of All or Substantially All Assets . . 35
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS . . . . . . . . . 35
Section 9.1 Records and Accounting . . . . . . . . . . 35
Section 9.2 Fiscal Year . . . . . . . . . . . . . . . . 36
Section 9.3 Reports . . . . . . . . . . . . . . . . . . 36
ARTICLE 10 TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.1 Preparation of Tax Returns . . . . . . . . 36
Section 10.2 Tax Elections . . . . . . . . . . . . . . 37
Section 10.3 Tax Matters Partner . . . . . . . . . . . 37
Section 10.4 Organizational Expenses . . . . . . . . . 38
Section 10.5 Withholding . . . . . . . . . . . . . . . 39
ARTICLE 11 TRANSFERS AND WITHDRAWALS. . . . . . . . . . . . . . . . 40
Section 11.1 Transfer . . . . . . . . . . . . . . . . . 40
Section 11.2 Transfer of the General Partner's Interests 40
Section 11.3 Limited Partners' Rights to Transfer . . . 41
Section 11.4 Substituted Limited Partners . . . . . . . 42
Section 11.5 Assignees . . . . . . . . . . . . . . . . 43
Section 11.6 General Provisions . . . . . . . . . . . . 43
ARTICLE 12 ADMISSION OF PARTNERS. . . . . . . . . . . . . . . . . . 44
Section 12.1 Admission of Successor General Partner . . 44
Section 12.2 Admission of Additional Limited Partners . 44
Section 12.3 Amendment of Agreement and Certificate . 45
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION . . . . . . . . 45
Section 13.1 Dissolution . . . . . . . . . . . . . . . 45
Section 13.2 Winding Up . . . . . . . . . . . . . . . . 46
Section 13.3 Compliance with Timing Requirements
of Regulations . . . . . . . . . . . . . . 48
Section 13.4 Tax Termination . . . . . . . . . . . . . 48
Section 13.5 Rights of Limited Partners . . . . . . . . 49
Section 13.6 Notice of Dissolution . . . . . . . . . . 49
Section 13.7 Termination of Partnership and
Cancellation of Certificate of Limited
Partnership . . . . . . . . . . . . . . . 49
Section 13.8 Reasonable Time for Winding-Up . . . . . . 49
Section 13.9 Waiver of Partition and Dissolution . . . 49
ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS . . . . . . 50
Section 14.1 Amendments . . . . . . . . . . . . . . . . 50
Section 14.2 Meetings of the Partners . . . . . . . . . 51
ARTICLE 15 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 52
Section 15.1 Addresses and Notices . . . . . . . . . . 52
Section 15.2 Titles and Captions . . . . . . . . . . . 52
Section 15.3 Pronouns and Plurals . . . . . . . . . . . 52
Section 15.4 Further Action . . . . . . . . . . . . . . 53
Section 15.5 Binding Effect . . . . . . . . . . . . . . 53
Section 15.6 Creditors . . . . . . . . . . . . . . . . 53
Section 15.7 Waiver . . . . . . . . . . . . . . . . . . 53
Section 15.8 Counterparts . . . . . . . . . . . . . . . 53
Section 15.9 Applicable Law . . . . . . . . . . . . . . 53
Section 15.10 Invalidity of Provisions . . . . . . . . 53
Section 15.11 Entire Agreement . . . . . . . . . . . . 54
Section 15.12 No Rights as Shareholders . . . . . . . . 54
Section 15.13 Discretion of General Partner . . . . . . 54
EXHIBITS
EXHIBIT A Interests of the Partners
EXHIBIT B Capital Account Maintenance
EXHIBIT C Special Allocation Rules