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EXHIBIT 10.63
LIMITED PARTNERSHIP AGREEMENT
OF SDG MACERICH PROPERTIES, L.P.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
1.1 Definitions 1
ARTICLE II GENERAL PROVISIONS 6
2.1 Formation and Organization 6
2.2 Partnership Name 7
2.3 Purpose 7
2.4 Registered Office; Registered Agent 7
2.5 Term 7
2.6 Filings 7
2.7 Bankruptcy Limitations 7
ARTICLE III PARTNERS' CAPITAL CONTRIBUTIONS 8
3.1 Capital Contributions of the Partners 8
3.2 Other Matters 8
ARTICLE IV ALLOCATIONS 8
4.1 Allocation of Profits and Losses 8
4.2 Elections 9
ARTICLE V DISTRIBUTIONS 9
5.1 Distributions 9
5.2 Amounts Withheld 9
5.3 In Kind Distributions 9
ARTICLE VI MANAGEMENT 10
6.1 Management Generally 10
6.2 Executive Committee 10
6.3 No Individual Authority 12
6.4 Operating Committee. 12
6.5 Warranted Reliance by Executive Committee Members and
Operating Committee Members on Others 14
6.6 Authority of the General Partners 15
6.7 Tax Matters Partner 15
6.8 Tax Elections 15
6.9 Right to Rely on a General Partner 15
6.10 Duties and Obligations of General Partners 16
6.11 Indemnification of General Partners 18
6.12 Reimbursement 18
6.13 Removal of General Partners 19
6.14 Management Agreements 19
6.15 REIT Status 20
6.16 Defaults and Remedies 22
ARTICLE VII AMENDMENTS 23
7.1 Amendments 23
ARTICLE VIII TRANSFERS OF PARTNERSHIP INTERESTS 24
8.1 Rights of Transferees 24
ARTICLE IX POWER OF ATTORNEY 24
9.1 General Partner as Attorney 24
ARTICLE X DISSOLUTION AND WINDING UP 24
10.1 Liquidating Events 24
10.2 Winding Up 25
ARTICLE XI BOOKS AND REPORTS 26
11.1 Books of Account and Records 26
ARTICLE XII MISCELLANEOUS 26
12.1 Notices 26
12.2 Binding Effect 27
12.3 Severability 27
12.4 Governing Law 27
12.5 Counterpart Execution 27
LIMITED PARTNERSHIP AGREEMENT
OF SDG MACERICH PROPERTIES, L.P.
THIS LIMITED PARTNERSHIP AGREEMENT is entered into and shall
be effective as of the 24th day of February, 1998, by and between Simco
Acquisitions, Inc., a Delaware corporation ("Simco"), and a wholly owned
subsidiary of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Group, Inc., a Maryland corporation, and
Macerich Property EQ GP Corp., a Delaware corporation ("Macerich"), and
a wholly owned subsidiary of The Macerich Company, a Maryland
corporation (each, individually, a ``General Partner,'' and
collectively, the ``General Partners''), and SM Portfolio Limited
Partnership, a Delaware limited partnership, as the Limited Partner,
pursuant to the provisions of the Delaware Revised Uniform Limited
Partnership Act, on the following terms and conditions:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following
terms have the following meanings:
(a) ``Act'' means the Delaware Revised Uniform Limited
Partnership Act, as set forth in Title 6, Chapter 17 of the Delaware
Code, as amended from time to time (or any corresponding provisions of
succeeding law).
(b) ``Affiliate'' shall have the meaning set form in the SM
Partnership Agreement.
(c) ``Agreement'' or ``Partnership Agreement'' means this
Agreement of Limited Partnership, as amended from time to time.
(d) ``Bankruptcy'' shall mean, with respect to any Partner,
(i) the commencement by such Partner of any proceeding seeking relief
under any provision or chapter of the federal Bankruptcy Code or any
other federal or state law relating to insolvency, bankruptcy or
reorganization; (ii) an adjudication that such Partner is insolvent or
bankrupt; (iii) the entry of an order for relief under the federal
Bankruptcy Code with respect to such Partner; (iv) the filing of any
such petition or the commencement of any such case or proceeding against
such Partner, unless such petition and the case or proceeding initiated
thereby are dismissed within ninety (90) days from the date of such
filing; (v) the filing of an answer by such Partner admitting the
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material allegations of any such petition; (vi) the appointment of a
trustee, receiver or custodian for all or substantially all of the
assets of such Partner unless such appointment is vacated or dismissed
within ninety (90) days from the date of such appointment but not less
than five (5) days before the proposed sale of any assets of such
Partner; (vii) the insolvency of such Partner or the execution by such
Partner of a general assignment for the benefit of creditors; (viii) the
convening by such Partner of a meeting of its creditors, or any class
thereof, for purposes of effecting a moratorium upon or extension or
composition of its debts; (ix) the failure of such Partner to pay its
debts as they mature; (x) the levy, attachment, execution or other
seizure of substantially all of the assets of such Partner where such
seizure is not discharged within thirty (30) days thereafter; or
(xi) the admission by such Partner in writing of its inability to pay
its debts as they mature or that it is generally not paying its debts as
they become due.
(e) ``Capital Account'' means, with respect to any Partner,
the Capital Account maintained for such Partner in accordance with
Section 704(b) of the Code and the Regulations thereunder.
(f) ``Capital Contributions'' means, with respect to any
Partner, the amount of money or other property or assets contributed to
the Partnership from time to time with respect to the interest in the
Partnership held by such Person.
(g) ``Code'' means the Internal Revenue Code of 1986, as
amended from time to time (or any corresponding provisions of succeeding
law).
(h) ``Controlling Partner'' is defined in Section 6.16(c).
(i) ``Defaulting Partner'' is defined in Section 6.16.
(j) ``Depreciation'' means, for each Fiscal Year, an amount
equal to the depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such Fiscal Year,
except that if the Gross Asset Value of an asset differs from its
adjusted Basis for Federal income tax purposes at the beginning of such
Fiscal Year, Depreciation shall be an amount which bears the same ratio
to such beginning Gross Asset Value as the Federal income tax
depreciation, amortization, or other cost recovery deduction for such
Fiscal Year bears to such beginning adjusted tax basis; provided,
however, that if the adjusted basis for Federal income tax purposes of
an asset at the beginning of such Fiscal Year is zero, Depreciation
shall be determined with reference to such beginning Gross Asset Value
using any reasonable method selected by the General Partner.
(k) ``Employee Benefit Plan'' has the meaning assigned to the
term ``employee benefit plan'' in Section 3(3) of ERISA, which is or was
maintained or contributed to by the Partnership or a Related Person to
the Partnership.
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(l) ``Event of Default'' is defined in Section 6.16.
(m) ``Executive Committee'' shall have the meaning set forth
in Section 6.2.
(n) ``Executive Committee Members'' shall have the meaning
set forth in Section 6.2.
(o) ``Equitable'' shall mean The Equitable Life Assurance
Society of the United States, a New York corporation, the "seller" of
the Properties under the Purchase Agreement.
(p) ``Existing Financing'' shall mean that certain financing
with respect to all of the Properties evidenced by those certain
collateralized fixed and floating rate notes in the aggregate principal
sum of $485,000,000 issued by Equitable, which notes are secured by,
inter alia, those documents and instruments more particularly described
on Exhibit B to the Purchase Agreement.
(q) ``Fiscal Year'' means (i) the period commencing on the
date hereof and ending on December 31, 1998 and, (ii) any subsequent
twelve (12) month period commencing on January 1.
(r) ``General Partnership Interest'' means the Partnership
Interest held by each General Partner constituting one half of one
percent (.5%) of the total Partnership Interests outstanding and owned
by all of the Partners.
(s) ``Gross Asset Value'' means the adjusted basis of
property for Federal income tax purposes, except that the Gross Asset
Value of the Property will be adjusted to its fair market value (i)
whenever such adjustment is required in order for allocations under this
Agreement to have "economic effect'' within the meaning of Regulation
Section 1.704-1(b)(2)(iv), and (ii) if the General Partners consider
appropriate, whenever such adjustment is permitted under Regulation
Section 1.704-l(b)(2)(ii). If the Gross Asset Value of property is so
adjusted, such Gross Asset Value shall thereafter be further adjusted by
the Depreciation taken into account with respect to such asset for
purposes of computing Profits and Losses.
(t) ``Independent Director'' means, with respect to any
Person, a director of such Person who is not at the time of appointment
and who has not at any time during the preceding five (5) year period
prior to such director's appointment as a director and during the
continuation of such director's service as a director has not been and
does not become subsequently: (i) a partner, stockholder or holder of
any other beneficial interest in such Person or in any Affiliate of such
Person, (ii) a director, officer, partner, trade creditor or employee of
such Person or any partner, subsidiary or Affiliate of such Person,
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(iii) a customer, service provider (including professionals), creditor,
supplier, independent contractor, manager, or any other Person who
derives more than $2,000 annually from its activities with such Person
or any Affiliate or partner of such Person (other than revenue derived
in respect of being an Independent Director); (iv) a Person controlling
or controlled by any of the Persons referenced in clauses (i) (ii) or
(iii) above, or (v) a member of the immediate family of any such Person
referenced in clauses (i), (ii), (iii) or (iv) above. Solely for
purposes of this definition, (x) "Affiliate'' shall mean, as to any
Person, any other Person that, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person, and (y)
"control'' of a person shall mean (i) either the power, directly or
indirectly, to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities, by contract or otherwise or (ii) the ownership of 10% or
more of the voting securities of such Person.
(u) ``Limited Partner'' means SM Portfolio Limited
Partnership and any Person who has become a Limited Partner pursuant to
the terms of this Agreement.
(v) ``Limited Partnership Interest'' means that Partnership
Interest held by the Limited Partner constituting ninety-nine percent
(99%) of the total Partnership Interests outstanding and owned by all of
the Partners.
(w) ``Macerich Management Agreement'' is defined in Section
6.14.
(x) ``Majority in Interest '' means as of any date any
Partner or Partners whose aggregate Partnership Interests constitute at
least a simple majority of the aggregate Partnership Interests then
outstanding.
(y) ``Net Cash Flow from Operations'' means the gross
proceeds from Partnership operations, less the portion thereof used to
pay or establish reserves for all Partnership expenses, debt payments,
capital improvements, replacements and contingencies, all as determined
by the General Partners. "Net Cash Flow From Operations'' shall not be
reduced by depreciation, amortization, cost recovery deductions or
similar allowances but shall be increased by any reduction of reserves
previously established pursuant to this paragraph or the succeeding
paragraph.
(z) ``Net Cash From Sales or Refinancings'' means the net
cash proceeds from the sale or other disposition and all refinancings of
the Property, less any portion thereof used to establish reserves, all
as determined by the General Partners. "Net Cash From Sales or
Refinancings'' shall include all principal and interest payments with
respect to any note or other obligation received by the Partnership in
connection with the sale or other disposition of the Property.
(aa) ``Operating Committee'' shall have the meaning set forth
in Section 6.4.
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(bb) ``Operating Committee Members'' shall have the meaning
set forth in Section 6.4.
(cc) ``Partners'' means all General Partners and all Limited
Partners, where no distinction is required by the context in which the
term is used herein. "Partner'' means any one of the Partners.
(dd) ``Partnership'' means the partnership formed pursuant to
the certificate of limited partnership and this Agreement.
(ee) ``Partnership Interest'' means the respective percentage
interest of a Partner in the Partnership as set forth in Exhibit A
attached hereto.
(ff) ``Person'' means any individual, partnership,
corporation, trust, or other entity.
(gg) ``Profits'' and ``Losses'' means, for each Fiscal Year,
an amount equal to the Partnership's taxable income or loss for such
Fiscal Year, determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain, loss, or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included
in taxable income or loss), with the following adjustments:
(i) Any income of the Partnership that is exempt from
Federal income tax and not otherwise taken into account in
computing Profits or Losses pursuant to this subsection shall
be added to such taxable income or loss;
(ii) In the event the Gross Asset Value of any property
is adjusted pursuant to Subparagraph (i) of the definition of
Gross Asset Value", the amount of such adjustment shall be
taken into account as gain or loss from the disposition of the
property for purposes of computing Profits or Losses;
(iii) Gain or loss resulting from the disposition of any
property shall be computed by reference to the Gross Asset
Value of such property, notwithstanding that the adjusted tax
basis of such property differs from its Gross Asset Value;
(iv) In lieu of the depreciation, amortization, and
other cost recovery deductions taken into account in computing
such taxable income or loss, there shall be taken into account
Depreciation for such Fiscal Year, computed in accordance with
the definition of Depreciation contained herein; and
(v) To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required pursuant to Regulations
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Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as a result of a distribution
other than in complete liquidation of a Partner's Interest,
the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or
loss (if the adjustment decreases the basis of the asset) from
the disposition of the asset and shall be taken into account
for purposes of computing Profits or Losses.
(hh) ``Properties'' shall mean the real properties to be
acquired by the Partnership pursuant to the Purchase Agreement, each of
which real properties is more specifically identified and defined on
Schedule 1 attached hereto, together with all other tangible and
intangible property to be acquired by the Partnership pursuant to the
Purchase Agreement.
(ii) ``Property'' shall mean any of the Properties
individually.
(jj) ``Property Manager'' shall mean the property manager for
any particular Property engaged pursuant to a Macerich Management
Agreement or Simco Management Agreement, as the case may be, as well as
any property manager approved by the Executive Committee with respect to
any Property.
(kk) ``Purchase Agreement'' shall mean that certain Purchase
and Sale Agreement by and between Equitable and SM Portfolio Partners,
which provides for the sale of the Properties by Equitable to SM
Portfolio Partners, subject to the Existing Financing.
(ll) ``REIT'' means a "real estate investment trust" within
the meaning of Section 856 of the Code.
(mm) ``Regulations'' means the Income Tax Regulations,
including Temporary Regulations, promulgated under the Code, as such
Regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
(nn) ``SIMCO Management Agreement'' is defined in Section
6.14.
(oo) ``SM Partnership Agreement'' means the Partnership
Agreement of SM Portfolio Limited Partnership, dated as of February 24,
1998.
ARTICLE II
GENERAL PROVISIONS
2.1 Formation and Organization. The Partners hereby agree to
form the Partnership as a limited partnership pursuant to the provisions
of the Act and upon the terms and conditions set forth in this
Agreement. Each Partner's initial Capital Contribution and corresponding
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Partnership Interest is set forth in Exhibit A, which is attached to and
forms part of this Agreement. The Partnership shall be treated as a
partnership for Federal income tax purposes, and the Tax Matters Partner
(as defined in Section 6.7) shall make any elections and take any and
all other actions necessary to effect such partnership status.
2.2 Partnership Name. The name of the Partnership shall be
SDG Macerich Properties, L.P., and all business of the Partnership shall
be conducted in such name.
2.3 Purpose. The limited purposes for which the Partnership
is organized are to acquire, improve, lease, finance, refinance,
mortgage, operate, manage, own, hold, sell exchange or otherwise
disclose of or deal with the Properties, or any part thereof, and to
engage in any and all activities related or incidental thereto. The
Partnership shall not engage in any other business activity, and shall
not own any assets or incur any indebtedness other than the assets or
indebtedness relating to the Properties or otherwise in furtherance of
the purposes of the Partnership.
2.4 Registered Office; Registered Agent. The registered
office and registered agent for service of process of the Partnership in
the State of Delaware shall be The Corporation Trust Company,
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other Person as the General Partners may appoint.
2.5 Term. The term of the Partnership commenced on the date
the certificate of limited partnership was filed in the office of the
Secretary of State of Delaware in accordance with the Act and shall
continue until the winding up and liquidation of the Partnership (in
accordance with Article X) and the completion of its business.
2.6 Filings.
(a) The General Partners shall take any and all other actions
as may be reasonably necessary to perfect and maintain the status of the
Partnership as a limited partnership or similar type of entity under the
laws of Delaware and any other states or jurisdictions in which the
Partnership engages in business.
(b) Upon the dissolution of the Partnership, the General
Partners shall promptly execute and cause to be filed certificates of
dissolution in accordance with the Act and the laws of any other states
or jurisdictions in which the Partnership has filed certificates.
2.7 Bankruptcy Limitations. The Partnership shall not,
without unanimous vote of the directors of the General Partners (which
must include the affirmative vote of at least one Independent Director
of each General Partner) (i) commence any case, proceeding or other
action seeking protection for the Partnership as a debtor under any
existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief of debtors, (ii) consent to the
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entry of an order for relief in or institution of any case, proceeding
or other action brought by any third party against the Partnership as a
debtor under any existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors, (iii) file
an answer in any involuntary case or proceeding described in clause (ii)
above admitting the material allegations of the petition therein or
otherwise failing to contest any such involuntary case or proceeding,
(iv) seek or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, custodian or any similar official for
the Partnership or for a substantial portion of its properties, (v) make
any assignment for the benefit of the creditors of the Partnership, or
(vi) admit in writing the inability of the Partnership to generally pay
its debts as they mature or that the Partnership is generally not paying
its debts as they become due.
ARTICLE III
PARTNERS' CAPITAL CONTRIBUTIONS
3.1 Capital Contributions of the Partners. Each Partner has
made the initial Capital Contributions set forth in Exhibit A attached
hereto and any subsequent Capital Contributions shall be reflected in
the books and records of the Partnership. No Partner shall be obligated
to make any additional Capital Contributions. Each Partner shall
establish and maintain a Capital Account with respect to the
Partnership.
3.2 Other Matters.
(a) Except as otherwise provided in this Agreement, no
Partner shall demand or receive a return of its Capital Contributions or
withdraw from the Partnership without the consent of all Partners.
(b) The General Partners shall not have any personal
liability for the repayment of any Capital Contributions of any Limited
Partner.
(c) The Limited Partner shall not be personally liable for
the debts, liabilities, contracts or other obligations of the
Partnership.
ARTICLE IV
ALLOCATIONS
4.1 Allocation of Profits and Losses. The Profits and Losses
of the Partnership shall be allocated among the Partners in accordance
with their Partnership Interests; provided, however, that, in accordance
with Code Section 704(c) and the Regulations thereunder and Regulation
Section 1.704-1(b)(4)(i), income, gain, loss, and deduction with respect
to any property contributed to the capital of the Partnership shall,
solely for tax purposes, be allocated among the Partners so as to take
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account of any variation between the adjusted basis of such property to
the Partnership for federal income tax purposes and its initial Gross
Asset Value.
4.2 Elections. In no event shall the Tax Matters Partner (as
defined in Section 6.7) make any election or cause any election to be
made that would cause the Partnership to be treated as an association
taxable as a corporation for Federal income tax purposes. Except as
otherwise expressly provided herein, any tax elections required or
permitted to be made by the Partnership under the Code or otherwise, and
all material decisions with respect to the calculation of the Net
Profits or Net Losses of the Partnership, shall be made in such manner
as may be determined by the General Partners to be in the best interests
of the Partners.
ARTICLE V
DISTRIBUTIONS
5.1 Distributions. Net Cash Flow From Operations, Net Cash
Flow from Sales or Refinancings, and, except as otherwise prohibited
under this Agreement, any of the Properties, shall be distributed at
such times as the General Partners may determine, to the Partners pro
rata in accordance with their Partnership Interests.
5.2 Amounts Withheld. The General Partners are authorized to
withhold from distributions or allocations to a Partner and to pay over
to any Federal, state or local government any amounts required to be
withheld pursuant to the Code or any provisions of any other Federal,
state or local law with respect to any payment, distribution or
allocation to the Partnership or the Partner and shall allocate any such
amounts to the Partner with respect to which such amount was withheld.
All amounts so withheld shall be treated as amounts distributed to such
Partner, and will reduce the amount otherwise distributable to such
Partner, pursuant to this Article V for all purposes under this
Agreement.
5.3 In Kind Distributions. If there shall occur, as between
the General Partners, a deadlock over a Buy-Sell Major Decision (as
defined in the SM Partnership Agreement), then either General Partner
may elect to cause the Property with respect to which such deadlock
exists to be distributed in kind to the Partners pro rata in accordance
with their Partnership Interests; provided, however, that no such in
kind distribution shall occur unless, either prior to or
contemporaneously with such distribution, the Property is released from
the Existing Financing, or any other lien or encumbrance to which it may
become subject after the date hereof.
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ARTICLE VI
MANAGEMENT
6.1 Management Generally. The management of the
Partnership shall be vested in the Executive Committee, Operating
Committee and the General Partners constituted as hereinafter provided.
The Limited Partner shall have no part in the management or control of
the Partnership, shall have no authority or right to act on behalf of
the Partnership in connection with any matter, and shall have no right
to consent to or approve any action by the General Partners except as
expressly provided herein or as required by the Act.
6.2 Executive Committee. The Partnership shall at all
times have an executive committee (the "Executive Committee") composed
of two individuals (the "Executive Committee Members") who shall oversee
the performance of the Operating Committee.
(a) Membership and Voting.
(i) Membership. The Executive Committee will
consist of two (2) Executive Committee Members, with one (1)
Executive Committee Member appointed by each General Partner.
Concurrently with the execution and delivery of this Agreement, the
General Partners have notified one another in writing of their
respective initial appointed Executive Committee Member. Each
General Partner may, at any time, appoint an alternate Executive
Committee Member by prior written notice to the other General
Partner's appointed Executive Committee Member and such alternates
will have all the powers, authority and duties of a regular
Executive Committee Member in the absence or inability of a regular
Executive Committee Member to serve. In no event, however, shall
the other Executive Committee Member be under any obligation to
make inquiries as to, or verify or confirm, any such absence or
inability to serve of a regular Executive Committee Member, it
being understood and agreed that the Executive Committee Members
shall be entitled to rely upon and accept an alternate Executive
Committee Member's assertion of the absence or inability to serve
of the regular Executive Committee Member in question. Each
General Partner shall cause its appointed Executive Committee
Member and alternate Executive Committee Member to comply with the
terms of this Agreement. Each General Partner will have the power
to remove its Executive Committee Member or alternate Executive
Committee Member appointed by it by written notice to the other
General Partner's Executive Committee Member. Vacancies on the
Executive Committee will be filled by appointment by the General
Partner that appointed the Executive Committee Member previously
holding the position that is then vacant. The General Partners may
mutually agree to increase or decrease the size of the Executive
Committee proportionately, from time to time. Notices to an
Executive Committee Member shall be delivered to such Person's
attention at the address set forth in Section 12.1 for the General
Partner that appointed such Executive Committee Member. No
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appointment or removal by a General Partner of an Executive
Committee Member or alternate Executive Committee Member shall be
effective until written notice of such action is received or deemed
received pursuant to Section 12.1 by the Executive Committee Member
of the other General Partner. Each General Partner and its
respective Executive Committee Member and alternate Executive
Committee Member, when dealing with the other General Partner's
respective Executive Committee Member and alternate Executive
Committee Member, (i) shall be entitled to rely upon and accept the
written act, approval, consent or vote of each of such other
General Partner's then-appointed Executive Committee Member and
alternate Executive Committee Member, and (ii) shall be under no
obligation to make any inquiries in order to verify or confirm any
of such written acts, approvals, consents or votes.
(ii) Voting. Each Executive Committee Member shall have
one vote on any decision of the Executive Committee. An Executive
Committee Member may give a written proxy to another Executive
Committee Member to vote on such Executive Committee Member's
behalf in such Executive Committee Member's absence. Except as
expressly provided to the contrary in this Agreement, all actions,
decisions, capital calls, determinations, waivers, approvals and
consents to be taken or given by the Executive Committee must be
unanimously approved by the Executive Committee Members (whether or
not present at the meeting at which such vote occurs).
(b) Meetings of the Executive Committee; Time and
Place. Unless otherwise agreed by the Executive Committee, regular
meetings of the Executive Committee shall be held no less often than
quarterly at such time and at such place as the Executive Committee
shall determine. At such regular meetings, the Operating Committee
shall report on the financial performance and condition of the
Partnership on a year-to-date basis (including cash flows, reserves,
outstanding loans, and compliance efforts), progress on capital
projects, material contracts entered into, material litigation,
marketing and leasing efforts, deviations from any budget and such other
matters relevant to the management and operation of the Partnership and
the Properties. Special meetings of the Executive Committee shall be
held on the call of any Executive Committee Member; provided that at
least three (3) business days' notice is given to all Executive
Committee Members (unless written waiver of this requirement by all
Executive Committee Members is obtained). A quorum for any Executive
Committee meeting shall consist of not less than two (2) Executive
Committee Members (one appointed by each General Partner) present either
in person or by proxy. The Executive Committee may make use of
telephones and other electronic devices to hold meetings; provided that
the Executive Committee Members participating in such meeting can hear
one another. The Executive Committee may act without a meeting if the
action taken is reduced to writing and approved by the Executive
Committee in accordance with the other voting provisions of this
Agreement. Written minutes shall be taken at each meeting of the
Executive Committee. However, any action taken or matter agreed upon by
the Executive Committee shall be deemed final, whether or not written
minutes are ever prepared or finalized.
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6.3 No Individual Authority. Except as otherwise expressly
provided in this Agreement, no Partner, acting alone, shall have any
authority to act for, or undertake or assume any obligation or
responsibility on behalf of, the other Partner or the Partnership.
6.4 Operating Committee. Unless otherwise agreed to by the
General Partners, the management of the Partnership, subject to the
restrictions on its authority set forth in Section 6.2, shall be vested
in the operating committee (the "Operating Committee"). The Operating
Committee shall be composed of two individuals (the "Operating Committee
Members") who shall vote on all management issues relating to the
business and operations of the Partnership.
(a) Membership and Voting.
(i) Membership. The Operating Committee will
consist of two (2) Operating Committee Members, with one (1)
Operating Committee Member appointed by each General Partner.
Concurrently with the execution and delivery of this Agreement, the
General Partners have notified one another in writing of their
respective initial appointed Operating Committee Member. Each
General Partner may, at any time, appoint one of its employees as
an alternate Operating Committee Member by prior written notice to
the other General Partner's appointed Operating Committee Member
and such alternates will have all the powers, authority and duties
of a regular Operating Committee Member in the absence or inability
of a regular Operating Committee Member to serve. In no event,
however, shall the other Operating Committee Member be under any
obligation to make inquiries as to, or verify or confirm, any such
absence or inability to serve of a regular Operating Committee
Member, it being understood and agreed that the Operating Committee
Members shall be entitled to rely upon and accept an alternate
Operating Committee Member's assertion of the absence or inability
to serve of the regular Operating Committee Member in question.
Each General Partner shall cause its appointed Operating Committee
Member and alternate Operating Committee Member to comply with the
terms of this Agreement. Each General Partner will have the power
to remove its Operating Committee Member or alternate Operating
Committee Member appointed by it by written notice to the other
General Partner's Operating Committee Member. Vacancies on the
Operating Committee will be filled by appointment by the General
Partner that appointed the Operating Committee Member previously
holding the position that is then vacant. The General Partners may
mutually agree to increase or decrease the size of the Operating
Committee proportionately, from time to time. Notices to an
Operating Committee Member shall be delivered to such Person's
attention at the address set forth in Section 12.1 for the General
Partner that appointed such Operating Committee Member. No
appointment or removal by a General Partner of an Operating
Committee Member or alternate Operating Committee Member shall be
effective until written notice of such action is received or deemed
received pursuant to Section 12.1 by the Operating Committee Member
of the other General Partner. Each General Partner and its
respective Operating Committee Member and alternate Operating
Committee Member, when dealing with the other General Partner's
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respective Operating Committee Member and alternate Operating
Committee Member, (i) shall be entitled to rely upon and accept the
written act, approval, consent or vote of each of such other
General Partner's then-appointed Operating Committee Member and
alternate Operating Committee Member, and (ii) shall be under no
obligation to make any inquiries in order to verify or confirm any
of such written acts, approvals, consents or votes.
(ii) Voting. Each Operating Committee Member shall
have one vote on any decision of the Operating Committee. An
Operating Committee Member may give a written proxy to another
Operating Committee Member or any Partner's employee to vote on
such Operating Committee Member's behalf in such Operating
Committee Member's absence. Except as expressly provided to the
contrary in this Agreement, all actions, decisions, capital calls,
determinations, waivers, approvals and consents to be taken or
given by the Operating Committee must be unanimously approved by
the Operating Committee Members (whether or not present at the
meeting at which such vote occurs).
(b) Reports and Meetings of the Operating Committee;
Time and Place. The Operating Committee shall report to the Executive
Committee on activities undertaken by the Operating Committee, as
required by the Executive Committee and this Agreement. Unless
otherwise agreed by the Operating Committee, regular meetings of the
Operating Committee shall be held monthly at such time and at such place
as the Operating Committee shall determine. Special meetings of the
Operating Committee shall be held on the call of any Operating Committee
Member; provided that at least three (3) business days' notice is given
to all Operating Committee Members (unless written waiver of this
requirement by all Operating Committee Members is obtained). A quorum
for any Operating Committee meeting shall consist of not less than two
(2) Operating Committee Members (one appointed by each General Partner)
present either in person or by proxy. The Operating Committee may make
use of telephones and other electronic devices to hold meetings;
provided that the Operating Committee Members participating in such
meeting can hear one another. The Operating Committee may act without a
meeting if the action taken is reduced to writing and approved by the
Operating Committee in accordance with the other voting provisions of
this Agreement. Written minutes shall be taken at each meeting of the
Operating Committee. However, any action taken or matter agreed upon by
the Operating Committee shall be deemed final, whether or not written
minutes are ever prepared or finalized. Operating Committee meetings
may be attended by persons other than the Operating Committee Members
(including other employees of the Partners and their Affiliates).
(c) Duties of the Operating Committee. The Operating
Committee shall be generally responsible for overseeing and managing the
day-to-day business, operations and affairs of the Partnership and
carrying out the duties delegated to it by the Executive Committee, and
shall have fiduciary responsibility for the safekeeping and use of all
funds and assets of the Partnership, whether or not in its immediate
possession or control. The Operating Committee may, in carrying out its
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duties, defend against lawsuits or other judicial or administrative
proceedings brought against the Partnership, provided that it promptly
notifies the Executive Committee of such action. The funds of the
Partnership shall not be commingled with the funds of any other Person,
and the Operating Committee shall not employ, or permit any other Person
to employ, such funds in any manner except for the benefit of the
Partnership. The bank accounts of the Partnership shall be maintained
in such banking institutions as are approved by the Operating Committee
and withdrawals shall be made only in the regular course of Partnership
business and as otherwise authorized in this Agreement on such signature
or signatures as the Operating Committee may determine. Subject to the
limitations on its powers and authorities set forth in this Agreement,
the Operating Committee shall ensure that the Partnership complies with
its obligations under the Purchase Agreement and the loan documents
pertaining to the Existing Financing, and all other material agreements
to which the Partnership is a party or by which the Partnership is
bound. The Operating Committee shall also have the duties imposed upon
it elsewhere in this Agreement. The Operating Committee shall devote
sufficient time, effort and managerial resources to the business of the
Partnership as is reasonably required to fulfill its obligations
hereunder.
6.5 Warranted Reliance by Executive Committee Members and
Operating Committee Members on Others. In exercising their authority
and performing their duties under this Agreement, the Executive
Committee Members and the Operating Committee Members shall be entitled
to rely on information, opinions, reports, or statements of the
following persons or groups unless they have actual knowledge concerning
the matter in question that would cause such reliance to be unwarranted:
(a) one or more agents of the Partnership whom the
Executive Committee Member or Operating Committee Member, as the case
may be, reasonably believes to be reliable and competent in the matters
presented; and
(b) any attorney, public accountant, or other person as
to matters which the Executive Committee Member or Operating Committee
Member, as the case may be, reasonably believes to be within such
person's professional or expert competence.
6.6 Authority of the General Partners.
(a) Except as otherwise provided herein, the General Partners
shall have the power on behalf and in the name of the Partnership to
carry out any and all of the objects and purposes of the Partnership set
forth in Section 2.3 and to perform all acts incidental thereto or
connected therewith which it may deem necessary or advisable, including,
without limitation, the power to:
(i) acquire or sell any assets of the Partnership;
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(ii) incur indebtedness on behalf of the Partnership and
secure any and all of such indebtedness with the assets of the
Partnership: and
(iii) open, maintain, and close bank accounts and draw
checks or other orders for the payment of money.
6.7 Tax Matters Partner. Macerich Property EQ GP Corp. is
specifically authorized and appointed to act as the ``Tax Matters
Partner'' under section 6231(a)(7) of the Code and in any similar
capacity under state or local law; provided, however, that it shall
exercise its authority in such capacity subject to all applicable terms
and limitations set forth in this Agreement. Notwithstanding the
foregoing, the Tax Matters Partner shall not, without the prior written
approval of the other General Partner, (i) make any tax election on
behalf of the Partnership, (ii) take any action with respect to any
federal, state or local contest of any partnership item (as defined in
Section 6231(a)(7) of the Code (or any successor thereto) (and
comparable provisions of state and local income tax laws) of the
Partnership, or (iii) take any action with respect to any audit of any
federal, state or local income tax return or income tax report filed by
or on behalf of the Partnership.
6.8 Tax Elections. Without limiting in any way the General
Partners' rights and powers under Section 6.6, and subject to Section
6.7, the Tax Matters Partner may make any and all elections for Federal,
state, and local tax purposes including any election, if permitted by
applicable law, to adjust the basis of the Property pursuant to Code
Sections 754, 734(b), and 743(b), or comparable provisions of state or
local law, in connection with transfers of interests in the Partnership
and Partnership distributions.
6.9 Right to Rely on a General Partner. Any Person dealing
with the Partnership may rely (without duty of further inquiry) upon a
certificate signed by a General Partner as to the identity of such
General Partner or the Limited Partner, the Persons who are authorized
to execute and deliver any instrument or document of the Partnership,
and any act or failure to act by the Partnership or any other matter
whatsoever involving the Partnership or any Partner.
6.10 Duties and Obligations of General Partners.
(a) The General Partners shall take all actions which may be
necessary or appropriate (i) for the continuation of the Partnership's
valid existence as a limited partnership under the laws of the State of
Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Limited Partner or to
enable the Partnership to conduct the business in which it is engaged
and (ii) for the accomplishment of the Partnership's purposes.
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(b) The General Partners shall cause to be provided, or cause
the Partnership to carry, such insurance as is customary in the business
in which the Partnership is engaged and in the places in which it is so
engaged.
(c) Notwithstanding anything to the contrary herein, the
Partnership shall, and the General Partners shall cause the Partnership
to:
i) maintain its records and books of account separate
from those of any other Person;
ii) not commingle its assets and funds with those of
any other Person (it being understood that a General Partner may,
in its capacity as a general partner of the Partnership, hold
assets or funds on behalf of the Partnership);
iii) conduct its own business in its own name (it being
understood that a General Partner may act on behalf of the
Partnership in its capacity as a general partner of the
Partnership);
iv) maintain separate financial statements;
v) pay its own liabilities out of its own funds;
vi) cause the directors of its general partners to meet
on a regular basis, or act pursuant to a unanimous written consent,
to carry on the business of the Partnership and keep minutes of
such meetings and observe all limited partnership formalities, as
applicable;
vii) maintain an arms-length relationship with its
Affiliates;
viii) pay the salaries of its own employees, if any, and
maintain a sufficient number of employees in light of its
contemplated business operations;
ix) not guarantee or become obligated for the debts of
any other Person (except in connection with the endorsement of
negotiable instruments in the ordinary course of business and
except for a General Partner in its capacity as a general partner
of the Partnership) or hold out its credit as being available to
satisfy the obligations of others;
x) allocate fairly and reasonably any overhead for
shared office space;
xi) use separate stationery, invoices and checks;
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xii) not pledge its assets for the benefit of any other
Person or make any loans or advances to any Person;
xiii) maintain its accounts separate from those of any
other Person (it being understood that a General Partner may, in
its capacity as a general partner of the Partnership, maintain an
account on behalf of the Partnership);
xiv) hold itself out as a separate entity;
xv) file its own tax returns, as required;
xvi) not engage in any nonexempt ``prohibited
transaction'' described in Section 406 of ERISA or section 4975 of
the Code;
xvii) not acquire obligations or securities of its
stockholders or Affiliates (it being understood that a General
Partner, in its capacity as a general partner of the Partnership,
may hold its interest as a general partner of the Partnership);
17
xviii) correct any misunderstanding actually known by it
regarding its separate identity; and
xix) maintain adequate capital in light of its
contemplated business operations.
(d) Notwithstanding anything to the contrary herein, for so
long as the Existing Financing is outstanding, the General Partners may
not do, or cause or permit the Partnership to do, any of the following:
(i) wind up, dissolve or liquidate, in whole or in part, consolidate or
merge with or into any other Person or convey, sell or transfer all or
substantially all of the assets of the Partnership to any Person; (ii)
approve any act by the Partnership as a result of which the Partnership
would be dissolved; (iii) engage in any business or activity other than,
in the case of a General Partner, the ownership of such General
Partner's interest in the Partnership, or in the case of the
Partnership, the ownership and operation of the Properties; or (iv)
incur or assume any indebtedness, other than, in the case of the
Partnership, the Existing Financing.
6.11 Indemnification of General Partners. The General
Partners or any officers or directors of the General Partners
(collectively, "Indemnitees") shall have no liability to any Partner
or the Partnership for, and the Partnership agrees to indemnify each
Indemnitee to the fullest extent permitted by law from and against, any
and all losses, judgments, liabilities, expenses and amounts paid in
settlement of any claims sustained by them in connection with the
Partnership. However, each Indemnitee shall be liable, responsible, and
accountable, and the Partnership shall not be liable to any Indemnitee,
for any portion of such losses, judgments, liabilities and expenses that
results from any Indemnitee's willful misconduct, or fraud, as finally
determined by a court of competent jurisdiction. If any action, suit or
proceeding shall be pending against the Partnership or an Indemnitee in
connection with the Partnership, such Indemnitee shall have the right to
employ separate counsel of its choice in such action, suit or
proceeding. The reasonable fees and expenses of such separate counsel
shall constitute expenses for the purposes of the indemnification
provided by this Section 6.11. The satisfaction of the obligations of
the Partnership under this Section 6.11 shall be from and limited to the
assets of the Partnership, and no other Partner shall have any personal
liability on account thereof. Each Indemnitee shall have the right to
receive advances from the Partnership for all legal expenses and other
costs incurred as a result of a legal action and for all amounts for
which such Indemnitee believes in good faith that such Indemnitee is
entitled to indemnification under this Section 6.11, but only if (i) the
legal action relates to the performance of duties or services by such
Indemnitee on behalf of the Partnership; and (ii) such Indemnitee
undertakes to repay the advanced funds to the Partnership in the
circumstances and the manner set out below. The Partnership shall make
such advances (for which the Partnership is liable as determined above)
within 30 days after a request for such advance is received. In the
event that a determination is made that the Partnership is not so
obligated in respect of any advance made by it, such Indemnitee will
within 30 days of such determination repay the advanced funds to the
Partnership with interest from the date of payment until the date of
repayment of such amount and in the event that a determination is made
18
that the Partnership is so obligated in respect of any amount not
advanced by the Partnership to a particular Indemnitee, the Partnership
will within 30 days of such determination pay such amount to such
Indemnitee with interest from the date of any expenditure to the date of
such determination. Any judgment against the Partnership and any
Indemnitee wherein such Indemnitee is entitled to indemnification
hereunder must first be satisfied from the assets of the Partnership
before such Indemnitee is responsible for the satisfaction of such
judgment.
6.12 Reimbursement. A General Partner shall be reimbursed for
all reasonable costs and expenses incurred by it on behalf of the
Partnership. A General Partner shall receive no other compensation for
managing the affairs of the Partnership.
6.13 Removal of General Partners. A Majority in Interest of
the Limited Partners shall have the power and authority to remove a
General Partner and to appoint a replacement General Partner, provided
that any such replacement General Partner shall be a Person (i) who
consents to such appointment, (ii) who is capable of performing the
functions of the replaced General Partner hereunder, and (iii) who is an
entity organized pursuant to a certificate of incorporation (or other
constituent documents) which includes provisions in form and in
substance that comply with the requirements of the Existing Financing.
Any replacement General Partner appointed pursuant to this Section 6.13
shall, effective upon acceptance of such appointment, be admitted as a
General Partner of the Partnership, and shall succeed to all of the
powers and responsibilities of the replaced General Partner hereunder.
In the event that the replaced General Partner is replaced pursuant to
this Section 6.13 by a replacement General Partner which does not
purchase such replaced General Partner's Partnership Interest, (i) such
replaced General Partner shall be treated as an assignee of a
Partnership Interest under Section 8.1 and may be admitted as a
substituted Partner subject to the consent of a Majority in Interest of
the Limited Partners and (ii) all Partnership Interests shall be reduced
pro rata to the minimum extent necessary to admit the replacement
General Partner as a Partner.
6.14 Management Agreements. Macerich or an Affiliate of
Macerich shall be hired as Property Manager to manage the Properties
described on Schedule 2 attached hereto, and Simco or an Affiliate of
Simco shall be hired as Property Manager to manage the Properties
described on Schedule 3 attached hereto. The management of each of the
Properties shall be governed by management agreements to be entered into
prior to the Partnership's acquisition of the Properties. Macerich and
Simco hereby covenant and agree to negotiate in good faith to agree upon
a form management agreement which will govern the management of each of
the Properties. One form management agreement will be used for all
Properties, whether managed by Macerich or Simco. Notwithstanding
anything to the contrary stated in this Agreement, Macerich, acting
alone, shall have the exclusive right and authority on behalf of the
Partnership so long as Macerich is not a Defaulting Partner (i) to
determine on behalf of the Partnership whether Simco or its Affiliate
acting as Property Manager under any management agreement for any
property (each a "Simco Management Agreement") is in default under such
Simco Management Agreement, and, if so, the action to be taken by the
Partnership with respect thereto, (ii) to exercise termination rights in
19
accordance with the terms under each Simco Management Agreement, (iii)
to arrange for and cause the enforcement and defense of the
Partnership's rights under each such Simco Management Agreement
(including by the prosecution or defense of any proceeding or action
that it deems necessary or appropriate), (iv) to grant any approval or
waiver under, or agree to any amendment or modification of, any Simco
Management Agreement, and (v) to retain, as a Partnership expense,
counsel of its choosing in connection with any of the foregoing actions
set forth in clauses (i), (ii), (iii) or (iv). Notwithstanding anything
to the contrary statement in this Agreement, Simco, acting alone, shall
have the exclusive right and authority on behalf of the Partnership so
long as Simco is not a Defaulting Partner (i) to determine on behalf of
the Partnership whether Macerich or its Affiliate acting as Property
Manager under any management agreement for any Property (each a
"Macerich Management Agreement") is in default under such Macerich
Management Agreement, and, if so, the action to be taken by the
Partnership with respect thereto, (ii) to exercise termination rights in
accordance with the terms under each Macerich Management Agreement,
(iii) to arrange for and cause the enforcement and defense of the
Partnership's rights under each such Macerich Management Agreement
(including by the prosecution or defense of any proceeding or action
that it deems necessary or appropriate), (iv) to grant any approval or
waiver under, or agree to any amendment or modification of, any Macerich
Management Agreement, and (v) to retain, as a Partnership expense,
counsel of its choosing in connection with any of the foregoing actions
set forth in clauses (i), (ii), (iii) or (iv). In no event shall
Macerich have the right to cause the termination or cancellation of any
Simco Management Agreement without cause, and in no event shall Simco
have the right to cause the termination or cancellation of any Macerich
Management Agreement without cause.
6.15 REIT Status. The Partners hereby acknowledge that
certain Persons directly or indirectly owning interests in Macerich or
Simco or the Limited Partners are and intend to qualify at all times as
a REIT, and that each such Partner's or other Person's ability to
qualify as such will depend principally upon the nature of the
Partnership's operations. Accordingly, the Partnership's operations
shall be conducted at all times in a manner that will enable each of
Macerich, Simco and the Limited Partners and each Person owning,
directly or indirectly, interests in either Macerich or Simco or the
Limited Partners to satisfy all requirements for REIT status under
Sections 856 through 860 of the Code and the regulations promulgated
thereunder to the extent possible. In furtherance of the foregoing (and
not in limitation thereof), notwithstanding any other provision herein
to the contrary, the Partnership shall conduct its operations in
accordance with the following provisions at all times:
(a) The Partnership shall not render any services to
any lessee or sublessee or any customer thereof, either directly or
through an "independent contractor" within the meaning of Section
856(d)(3) of the Code, if the rendering of such services shall cause all
or any part of the rents received by the Partnership to fail to qualify
as "rents from real property" within the meaning of Section 856(d) of
the Code;
20
(b) The Partnership shall not own, directly or
indirectly (taking into account the attribution rules referred to in
Section 856(d)(5) of the Code), in the aggregate 10% or more of the
total number of shares of all classes of stock, 10% or more of the
voting power of all classes of voting stock or 10% or more of the assets
or net profits of any lessee or sublessee of all or any part of any of
the Properties;
(c) No lease or sublease of any space at the Properties
shall provide for any rent based in whole or in part on the "income or
profits" within the meaning of Section 856(d)(2)(A) of the Code derived
by any lessee or sublessee;
(d) The Partnership shall not own more than 10% of the
outstanding voting securities of any one issuer (as determined for
purposes of Section 856(c)(5)(B) of the Code);
(e) Neither the Partnership nor any Partner shall take
any action (or fail to take any action permitted under this Agreement)
that would otherwise cause the Partnership's gross income to consist of
more than one percent (1%) of income not described in Section 856(c)(2)
of the Code or more than ten percent (10%) of income not described in
Section 856(c)(3) of the Code, or cause any significant part of the
Partnership Assets to consist of assets other than "real estate assets"
within the meaning of Section 856(c)(6)(B) of the Code;
(f) The Partnership shall distribute to the Partners
during each Fiscal Year an amount of cash such that the portion so
distributed will equal or exceed 100% of the amount of Partnership
taxable income, if any, to be allocated to the Partners with respect to
such Fiscal Year distributed at the times required to prevent the
imposition of an excise tax under Section 4981 of the Code; provided,
however, that if each such Partner's distributable share of any Net Cash
Flow from Operations of the Partnership and its distributable share of
any funds maintained in the Partnership reserves are insufficient to
meet the aforesaid distribution requirement with respect to such
Partner, then the Partnership shall have satisfied the foregoing
distribution requirement with respect to such Partner upon distributing
to it such distributable share of Net Cash Flow from Operations and
funds maintained in the Partnership reserves. In no event shall the
Partnership be required to borrow funds, or any Partner be required to
contribute funds to the Partnership, in order to permit the Partnership
to satisfy the foregoing distribution requirement. In no event shall
the foregoing provisions of this subsection (f) adversely affect the
allocation of, and Partnership Interest in, Net Cash Flow from
Operations of any other Partner.
(g) The Partnership shall not engage in any "prohibited
transactions" within the meaning of Section 857(b)(6)(B)(iii) of the
Code.
The Partners hereby acknowledge that the foregoing are the current
guidelines applicable to the qualification of REITs. If and to the
extent that any of the requirements to qualify for REIT status shall be
changed, altered, modified or added to, then such changes, alterations,
21
modifications or additions, as applicable, shall be deemed incorporated
herein, and this Section 6.15 shall be deemed to be amended and modified
as necessary to incorporate such changed, altered, modified or added
REIT requirements.
6.16 Defaults and Remedies.
(a) Events of Default. The occurrence of any of the
following events by or with respect to a Partner (the "Defaulting
Partner"; and the other Partners shall be referred to herein as a
"Non-defaulting Partner," provided that the other Partners or any of
them is not already a Defaulting Partner) shall be a default hereunder
and if not cured within the applicable notice and cure period provided
below, if any, such default shall constitute an "Event of Default"
hereunder:
(i) The failure of a Partner to make any payment as
required by this Agreement that is not cured within five (5)
business days of written notice to such Partner;
(ii) The failure of a Partner to perform any of its
other obligations under this Agreement or the breach by a Partner
of any of the terms of this Agreement, and a continuation of such
failure or breach for more than thirty (30) days after notice by a
Non-defaulting Partner to the Defaulting Partner that such
Defaulting Partner has failed to perform any of its obligations
under, or has breached, this Agreement; provided that if such
failure or breach is of the nature that it can be cured but cannot
reasonably be cured within such thirty (30) day period, such period
shall be extended for up to an additional sixty (60) days so long
as the Defaulting Partner in good faith commences all reasonable
curative efforts within ten (10) days of its receipt of such notice
from the Non-defaulting Partner and diligently and expeditiously
continues its curative efforts to completion; or
(iii) The occurrence of a Bankruptcy with respect to
a Partner or the withdrawal by a Partner.
(b) Remedies. Upon the occurrence of any Event of
Default, a Non-defaulting Partner may elect to do one or more of the
following:
(i) Exercise its rights under Section 6.16;
(ii) Dissolve the Partnership and commence to
liquidate its assets as provided in Article X;
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(iii) Enforce any covenant by the Defaulting Partner
to advance money or to take or forbear from any other action
hereunder; or
(iv) Pursue any other remedy permitted by this
Agreement or at law or in equity.
(c) Change of Governance of Partnership. In addition
to any other rights or remedies which a Non-defaulting Partner may have
under this Agreement or under applicable laws with respect to an Event
of Default, a Non-defaulting Partner that is a General Partner shall
have the option to exercise the rights set forth below in this
Section 6.16 in the event of the occurrence of any Event of Default by
the other General Partner. Upon the occurrence of an Event of Default
by a General Partner, the other General Partner may elect, by giving
written notice to the Defaulting Partner, to assume the role of the
"Controlling Partner" of the Partnership, and shall remain as such
unless and until (i) the Partners otherwise agree, (ii) such Controlling
Partner is removed as such pursuant to the foregoing provisions of this
Section 6.16 by reason of its having become a Defaulting Partner, or
(iii) such Event of Default is cured. During the period of time that an
Event of Default by a General Partner has occurred and is continuing,
the other General Partner shall have the authority to take exclusive
charge and control of the Partnership free and clear of any and all
restrictions (including any and all restrictions set forth in this
Article VI and any and all consent, voting or approval rights granted
the Executive Committee, Operating Committee or any General Partner,
other than that of the Controlling Partner) imposed by this Agreement,
and the Defaulting Partner's right to, acting alone, make certain
decisions and take certain actions with respect to matters concerning
the Partnership's management agreements with a Non-defaulting Partner
(or its Affiliates) as provided in Section 6.14 shall be suspended and
the other General Partner as the Controlling Partner shall make all such
decisions and take all such actions thereunder. The Controlling Partner
shall have the right to amend any fictitious business name statement,
certificate of partnership, or any similar document to reflect such
election and to provide that it is the sole General Partner authorized
to bind the Partnership, and to file or record any such amended
documents and change the Partnership's Principal Office, and each
Partner hereby grants to the Controlling Partner its irrevocable power
of attorney to do the same, which power of attorney shall be deemed to
be a power coupled with an interest which may not be revoked until the
termination and winding up of the Partnership. The provisions of this
Section 6.16(c) shall take precedence over any provision to the contrary
set forth in this Agreement.
(d) Remedies Not Exclusive. No remedy conferred upon
the Partnership or any Partner in this Agreement is intended to be
exclusive of any other remedy herein or by law provided or permitted,
but rather each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law, in
equity or by statute.
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ARTICLE VII
AMENDMENTS
7.1 Amendments. Amendments permitted to be made under this
Agreement may be made only by an instrument in writing signed by all of
the Partners. For so long as the Existing Financing is outstanding, the
Partnership shall not amend, alter in any manner or delete Sections 2.3,
2.7, 6.10, 6.13, 7.1, or 10.1 hereof without the unanimous vote of all
directors of the General Partners, including the Independent Directors
of each General Partner; provided, however, that the Partnership may
amend or alter any such Section without obtaining such consent in order
to clarify the provision of such Section if (i) such amendment or
alteration will not materially adversely affect the rights of the
holders of any outstanding debt instruments of the Partnership, and
(ii) prior written notice is given to each rating agency for such debt
instruments of such amendment and each rating agency approves the same.
ARTICLE VIII
TRANSFERS OF PARTNERSHIP INTERESTS
8.1 Rights of Transferees. An assignee of a Limited
Partnership Interest shall be admitted as a substitute Limited Partner,
and shall have all rights of a Partner under the Act and this Agreement.
An assignee of a Partnership Interest shall execute an instrument in
form and substance satisfactory to the General Partners agreeing to be
bound by, and to acquire the Partnership Interest subject to, the
provisions of this Agreement.
ARTICLE IX
POWER OF ATTORNEY
9.1 General Partner as Attorney. The Limited Partner hereby
makes, constitutes, and appoints each General Partner its true and
lawful attorney to make, sign, execute, certify, acknowledge, file, and
record any instrument deemed necessary or appropriate by the General
Partners to carry out fully the provisions of this Agreement. The
Limited Partner authorizes the General Partners to take any further
action which the General Partners consider necessary or advisable in
connection with the foregoing.
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ARTICLE X
DISSOLUTION AND WINDING UP
10.1 Liquidating Events. The Partnership shall dissolve and
commence winding up and liquidating upon the first to occur of any of
the following, and upon no other event without the unanimous consent of
all general partners of the Partnership at such time (``Liquidating
Events''):
(a) January 1, 2095;
(b) The sale of all property of the Partnership so long as
the Existing Financing is no longer outstanding and all of the
Partnership's obligations with respect to such Existing Financing have
been satisfied;
(c) The happening of any other event that makes it unlawful,
impossible, or, so long as the Existing Financing is no longer
outstanding and all of the Partnership's obligations with respect to the
Existing Financing have been satisfied, impractical to carry on the
business of the Partnership;
(d) The withdrawal, removal or bankruptcy of the last
remaining General Partner, the assignment by such General Partner of its
entire interest in the Partnership or any other event that causes such
General Partner to cease to be a general partner under the Act, provided
that any such event shall not constitute a Liquidating Event if the
Partnership is continued pursuant to this Section 10.1; or
(e) At any time from and after the date which is eighteen
(18) months after the acquisition of the Properties by the Partnership,
upon the election of either General Partner, without cause and in its
sole and absolute discretion; provided, however, that this subclause (e)
shall not be effective unless, prior to or contemporaneously with any
such transaction, the Existing Financing is satisfied in full.
The Partners hereby agree that, notwithstanding any provision of the
Act, the Partnership shall not dissolve prior to the occurrence of a
Liquidating Event. Upon the occurrence of any event set forth in
Subparagraph (d) hereof, the Partnership shall not be dissolved or
required to be wound up if within ninety (90) days after such event
Partners holding a majority of the remaining Partnership Interests in
the Partnership agree in writing to continue the business of the
Partnership and to the appointment, effective as of the date of such
event, of one or more additional General Partners.
10.2 Winding Up. Except as otherwise provided in Section 10.1,
upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly
25
manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. To the extent not inconsistent with the
foregoing, all covenants and obligations in this Agreement shall
continue in full force and effect until such time as the Partnership
assets have been distributed pursuant to this Section 10.2 and the
certificate of limited partnership has been canceled in accordance with
the Act. The General Partner (or, in the event there is no General
Partner, any Person elected by the Limited Partners) shall be
responsible for overseeing the winding up and dissolution of the
Partnership, shall take full account of the Partnership's liabilities
and Property, shall cause the Partnership assets to be liquidated as
promptly as is consistent with obtaining the fair value thereof, and
shall cause the proceeds therefrom, to the extent sufficient therefor,
to be applied and distributed in the following order:
(a) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors; and
(b) The balance, if any, to the General Partners and the
Limited Partner in accordance with their Capital Accounts, after giving
effect to all contributions, distributions, and allocations for all
periods.
Notwithstanding the foregoing, in the event of a dissolution
under the circumstances described in subclause (e) of Section 10.1, the
assets of the Partnership shall not be sold, but shall be distributed in
kind to the Partners.
ARTICLE XI
BOOKS AND REPORTS
11.1 Books of Account and Records.
(a) Appropriate books of account and records shall be kept by
the General Partners at the principal office the Partnership and each
Partner shall at all times have access thereto. Such books of account
and records shall include a Register of Partnership Interests to reflect
the ownership, transfer, pledge or release of pledge of uncertificated
securities.
(b) The books of account of the Partnership shall, at the
election of the General Partners, be kept on a cash or accrual basis in
accordance with sound accounting principles.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this Agreement
shall be in writing and addressed as follows, provided that any Partner
26
may change any of the following information by delivering notice of such
change to the other party:
If to the Limited Partner:
SM Portfolio Limited Partnership
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the General Partners:
If to Simco Acquisitions, Inc.:
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Group
National City Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Macerich Property EQ GP Corp.:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice shall be deemed to be delivered, given, and received for
all purposes as of the date so delivered.
12.2 Binding Effect. Except as otherwise provided in this
Agreement, every covenant, term, and provision of this Agreement shall
be binding upon and inure to the benefit of the Partners and their
respective heirs, legatees, legal representatives, successors,
transferees, and assigns.
12.3 Severability. Every provision of this Agreement is
intended to be severable. If any term or provision hereof is illegal or
invalid for any reason whatsoever, such illegality or invalidity shall
not affect the validity or legality of the remainder of this Agreement.
12.4 Governing Law. The laws of the State of Delaware shall
govern the validity of this Agreement, the construction of its terms,
and the interpretation of the rights and duties of the Partners.
27
12.5 Counterpart Execution. This Agreement may be executed in
any number of counterparts with the same effect as if all of the
Partners had signed the same document. All counterparts shall be
construed together and shall constitute one agreement.
[The remainder of this page has been intentionally been left blank]
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IN WITNESS WHEREOF, the parties have entered into this
Agreement of Limited Partnership as of the day first above written.
General Partners
Simco Acquisitions, Inc.
By:
Its:
Macerich Property EQ GP Corp.
By: \s\▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: General Counsel and Secretary
Limited Partner
SM Portfolio Limited Partnership
By: Macerich EQ GP Corp.,
a Delaware corporation,
its General Partner
By: \s\▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: General Counsel and Secretary
29
By: SDG EQ Associates, Inc.,
a Delaware corporation,
its General Partner
By:
Its:
30
EXHIBIT A
AGREEMENT OF LIMITED PARTNERSHIP
OF
Partners
Names Capital Contribution Partnership Interest
SM Portfolio Limited Partnership $ 990 99%
SDG Property EQ Associates, Inc. $ 5 .5%
Macerich Property EQ GP Corp. $ 5 .5%
SCHEDULE 1
LIST OF PROPERTIES
1. Eastland Mall
Evansville, Indiana
2. Empire East
Sioux Falls, South Dakota
3. Empire Mall
Sioux Falls, South Dakota
4. Granite Run Mall
Media, Pennsylvania
5. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
6. Lindale Mall
Cedar Rapids, Iowa
7. Mesa Mall
Grand Junction, Colorado
8. NorthPark Mall
Davenport, Iowa
9. Rushmore Mall
Rapid City, South Dakota
10. Southern Hills Mall
Sioux City, Iowa
11. SouthPark Mall
Moline, Illinois
12. Southridge Mall
Des Moines, Iowa
13. Valley Mall
Harrisonburg, Virginia
SCHEDULE 2
MACERICH MANAGED PROPERTIES
1. Empire East
Sioux Falls, South Dakota
2. Empire Mall
Sioux Falls, South Dakota
3. Lindale Mall
Cedar Rapids, Iowa
4. Mesa Mall
Grand Junction, Colorado
5. Rushmore Mall
Rapid City, South Dakota
6. Southern Hills Mall
Sioux City, Iowa
7. Southridge Mall
Des Moines, Iowa
SCHEDULE 3
SIMCO MANAGED PROPERTIES
1. Eastland Mall
Evansville, Indiana
2. Granite Run Mall
Media, Pennsylvania
3. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
4. NorthPark Mall
Davenport, Iowa
5. SouthPark Mall
Moline, Illinois
6. Valley Mall
Harrisonburg, Virginia