<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 3, 1997
REGISTRATION NO. 333-35433
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE
AMENDMENT NO. 1*
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TAUBMAN CENTERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS ARTICLES OF INCORPORATION)
<TABLE>
<S> <C>
MICHIGAN 38-2033632
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
200 EAST LONG LAKE ROAD
SUITE 300, P.O. BOX 200
BLOOMFIELD HILLS, MICHIGAN 48303-0200
(248) 258-6800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
LISA A. PAYNE
TAUBMAN CENTERS, INC.
200 EAST LONG LAKE ROAD
SUITE 300, P.O. BOX 200
BLOOMFIELD HILLS, MICHIGAN 48303-0200
(248) 258-6800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
DAVID A. HANDELSMAN, ESQ.
MIRO WEINER & KRAMER
500 N. WOODWARD AVENUE, SUITE 100
BLOOMFIELD HILLS, MICHIGAN 48304
(248) 646-2400
------------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
------------------------
* This Amendment is being filed pursuant to Rule 462(d) under the Securities Act
of 1933 and shall become effective immediately upon filing.
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<PAGE> 2
EXPLANATORY NOTE:
This Post-Effective Amendment No. 1 (this "Amendment") is being filed
pursuant to Rule 462(d) under the Securities Act of 1933 for the sole purpose of
filing exhibits and, accordingly, shall become effective immediately upon filing
with the Securities and Exchange Commission ("Commission"). After giving effect
to this Amendment, Registration Statement No. 333-35433 (the "Registration
Statement") consists of the Registration Statement as filed with the Commission
at the time it became effective on September 19, 1997, as supplemented by (i) a
Preliminary Prospectus Supplement Issued September 29, 1997, to Prospectus dated
September 19, 1997, filed with the Commission pursuant to Rule 424(b)(5), (ii) a
Prospectus Supplement dated September 30, 1997, to Prospectus dated September
19, 1997, as filed with the Commission pursuant to Rule 424(b)(5), and (iii)
this Amendment consisting of the facing page, this Explanatory Note, Part II of
this Amendment, a signature page, and the exhibits filed herewith.
<PAGE> 3
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.(1)
<TABLE>
<S> <C>
Registration Fee............................................ $151,515.15
Engraving and Printing Expenses............................. $ 50,000.00
-----------
Legal Fees and Expenses..................................... 150,000.00(2)
Accounting Fees and Expenses................................ 150,000.00(2)
Blue Sky Fees and Expenses.................................. 7,500.00(2)
Miscellaneous............................................... 50,000.00(2)
-----------
Total....................................................... $559,015.15(2)
===========
</TABLE>
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(1) Excluding underwriting fees and commissions.
(2) Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Articles of Incorporation provide that no director of the
Registrant shall be liable to the Registrant or the shareholders for monetary
damages for breach of the director's fiduciary duty. Such provision does not
limit a director's liability to the Registrant or its shareholders resulting
from:
(i) a breach of the director's duty of loyalty to the Registrant or
its shareholders;
(ii) acts or omissions of the director not in good faith or that
involve intentional misconduct or knowing violation of law;
(iii) a violation of Section 551(1) of the Michigan Business
Corporation Act (relating to unlawful payments of dividends);
(iv) a transaction from which the director derived an improper
personal benefit; or
(v) any act or omission occurring prior to November 20, 1992.
The Registrant's Articles of Incorporation provide for mandatory
indemnification by the Registrant of its directors (including directors of
subsidiaries) to the fullest extent permitted or not prohibited by existing law
or to such greater extent as may be permitted or not prohibited under succeeding
provisions of law. The Registrant's Articles of Incorporation provide that the
Registrant shall pay the expenses incurred by a director of the Registrant
(including a director of a subsidiary) in defending a civil or criminal action,
suit, or proceeding involving such person's acts or omissions as a director of
the Registrant (or of a subsidiary).
The Registrant's Articles of Incorporation authorize the Registrant to
indemnify any officer of the Registrant (or of a subsidiary), if such person
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Registrant or its shareholders and,
with respect to a criminal action or proceeding, if the person had no reasonable
cause to believe his or her conduct was unlawful. Unless ordered by a court,
indemnification of an officer shall be made by the Registrant only as authorized
in a specific case upon the determination that indemnification of the officer is
proper in the circumstances because he or she has met the applicable standard of
conduct. Such determination shall be made (i) by majority vote of the directors
of the Registrant who are not parties to the action, suit or proceeding, (ii) by
independent legal counsel in a written opinion, or (iii) by the shareholders of
the Registrant. The Registrant's Articles of Incorporation authorize the
Registrant to pay the expenses incurred by an officer in defending a civil or
criminal action, suit, or proceeding in advance of the final disposition
thereof, upon receipt of an undertaking by or on behalf of such officer to repay
the expenses if it is ultimately determined that the person is not entitled to
be indemnified by the Registrant. Such undertaking shall be by unlimited general
obligation of the person on whose behalf advances are made but need not be
secured.
The Registrant has the power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee, or agent of the
Registrant or is liable as a director of the Registrant, or is or was
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serving, at the request of the Registrant, as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against any liability asserted against him and incurred by him in
any such capacity or arising out of his status as such, regardless of whether
the Registrant would have power to indemnify him against such liability.
The Registrant has purchased a policy of directors' and officers' insurance
that insures both the Registrant and its officers and directors against expenses
and liabilities of the type normally insured against under such policies,
including the expense of the indemnifications described above.
ITEM 16. EXHIBITS
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<CAPTION>
EXHIBIT
NUMBER
-------
<S> <C>
1 -- Underwriting Agreement.
4(a) -- Form of Amended and Restated Articles of Incorporation.
4(b) -- Bylaws, as amended (incorporated by reference to Exhibit 3
to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996).
4(c) -- Form of The Amended and Restated Agreement of Limited
Partnership of The Taubman Realty Group Limited Partnership,
as amended through September 30, 1997.
4(d) -- Form of Contribution and Acceptance of Preferred Equity,
Designation of Series A Preferred Equity, and Establishment
of Preferred Rate.
*4(e) -- Form of Common Stock Warrant Agreement.
*4(f) -- Form of Preferred Stock Warrant Agreement.
*4(g) -- Form of Deposit Agreement and Depositary Receipt.
**5 -- Opinion of Miro Weiner & Kramer, counsel to Registrant, as
to the validity of the Securities.
**8 -- Opinion of Miro Weiner & Kramer, counsel to Registrant, as
to certain tax matters.
23(a) -- Consent of Deloitte & Touche LLP.
**23(b) -- Consent of Miro Weiner & Kramer (included in Exhibits 5 and
8).
**24 -- Powers of Attorney.
</TABLE>
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* To be filed by amendment or incorporated by reference.
** Previously filed.
ITEM 17. UNDERTAKINGS.
The Registrant undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) (a) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. (b) Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
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<PAGE> 5
price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in this
Registration Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933 (the "Act"), each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the
termination of the offering.
Paragraphs (1)(i) and (1)(ii)(a) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
The Registrant undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the Registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefor, unenforceable. In the event that claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-Effective
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bloomfield Hills, State
of Michigan, on the 3rd day of October, 1997.
TAUBMAN CENTERS, INC.
By: /s/ ROBERT S. TAUBMAN
------------------------------------
Robert S. Taubman
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to Registration Statement on Form S-3 has been
signed below by the following persons in the capacities and on the dates
indicated.
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SIGNATURE TITLE DATE
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<C> <S> <C>
* Vice Chairman of the Board October 3, 1997
- ---------------------------------------------
Robert C. Larson
/s/ ROBERT S. TAUBMAN President, Chief Executive Officer, October 3, 1997
- --------------------------------------------- and Director
Robert S. Taubman
/s/ LISA A. PAYNE Chief Financial Officer and Director October 3, 1997
- ---------------------------------------------
Lisa A. Payne
/s/ RICHARD B. MCGLINN Chief Accounting Officer October 3, 1997
- ---------------------------------------------
Richard B. McGlinn
* Director October 3, 1997
- ---------------------------------------------
Claude M. Ballard
* Director October 3, 1997
- ---------------------------------------------
Allan J. Bloostein
* Director October 3, 1997
- ---------------------------------------------
Jerome A. Chazen
* Director October 3, 1997
- ---------------------------------------------
Thomas E. Dobrowski
* Director October 3, 1997
- ---------------------------------------------
W. Allen Reed
*By: /s/ LISA A. PAYNE
---------------------------------------
Lisa A. Payne, Attorney-in-Fact
</TABLE>
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
1 -- Underwriting Agreement.
4(a) -- Form of Amended and Restated Articles of Incorporation.
4(b) -- Bylaws, as amended (incorporated by reference to Exhibit 3
to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996).
4(c) -- Form of The Amended and Restated Agreement of Limited
Partnership of The Taubman Realty Group Limited Partnership,
as amended through September 30, 1997.
4(d) -- Form of Contribution and Acceptance of Preferred Equity,
Designation of Series A Preferred Equity, and Establishment
of Preferred Rate.
*4(e) -- Form of Common Stock Warrant Agreement.
*4(f) -- Form of Preferred Stock Warrant Agreement.
*4(g) -- Form of Deposit Agreement and Depositary Receipt.
**5 -- Opinion of Miro Weiner & Kramer, counsel to Registrant, as
to the validity of the Securities.
**8 -- Opinion of Miro Weiner & Kramer, counsel to Registrant, as
to certain tax matters.
23(a) -- Consent of Deloitte & Touche LLP.
**23(b) -- Consent of Miro Weiner & Kramer (included in Exhibits 5 and
8).
**24 -- Powers of Attorney.
</TABLE>
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* To be filed by amendment or incorporated by reference.
** Previously filed.
<PAGE> 1
EXHIBIT 1
8,000,000 SHARES
TAUBMAN CENTERS, INC.
8.30% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
PAR VALUE $0.01 PER SHARE
(LIQUIDATION PREFERENCE $25 PER SHARE)
UNDERWRITING AGREEMENT
<PAGE> 2
8,000,000 SHARES
TAUBMAN CENTERS, INC.
8.30% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
PAR VALUE $0.01 PER SHARE
(LIQUIDATION PREFERENCE $25 PER SHARE)
UNDERWRITING AGREEMENT
September 30, 1997
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
As Representatives of the Several
Underwriters listed on Schedule I hereto
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Taubman Centers, Inc., a Michigan corporation (the "Company"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), 8,000,000 shares of its 8.30% Series A Cumulative
Redeemable Preferred Stock, par value $0.01 per share (the "Shares").
The Company has filed with the U.S. Securities and Exchange Commission
(the "Commission") a registration statement, including a prospectus, relating
to the Shares. The registration statement as amended at the time it became
effective, or, if a post-effective amendment is filed with respect thereto, as
amended by such post-effective amendment at the time of its effectiveness,
under the Securities Act of 1933, as amended (the "1933 Act"), is referred to
as the "Registration Statement," and the prospectus included in the
Registration Statement at the time it became effective under the Securities
Act, as supplemented by the preliminary prospectus supplement dated September
29, 1997 and by a final prospectus supplement of even date in the form first
used to confirm sales of Shares, is referred to as the "Prospectus." All
references in this Agreement to financial statements and
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schedules and other information which is "contained," "included" or "stated" in
the Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and included
the filing of any document under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), which is or is deemed to be incorporated by reference
in the Registration Statement or the Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (ii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply, and when filed pursuant to
Rule 424 under the Securities Act will comply, in all material respects with
the 1933 Act and the applicable rules and regulations of the Commission
thereunder (the "1933 Act Regulations") and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain, and
on the Closing Date will not contain, any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph 1(a)
do not apply to statements in or omissions from the Registration Statement or
the Prospectus under the caption "Underwriters" relating to the Underwriters.
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement or any part thereof
is in effect, and no proceeding for such purpose is pending before or, to the
knowledge of the Company, threatened by the Commission or by the state
securities authority of any jurisdiction. No order preventing or suspending
the use of the Prospectus has been issued, and no proceeding for that purpose
has been instituted or, to the knowledge of the Company, threatened by the
Commission or by the state securities authority of any jurisdiction.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property, to
conduct its business as described in the Prospectus, and to enter into and
perform its obligations under this Agreement and is duly qualified to transact
business and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or to be in good standing would not
have
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a material adverse effect on the condition, financial or otherwise, or the
earnings, assets, business, or operations of the Company.
(d) Each of The Taubman Realty Group Limited Partnership, a Delaware
limited partnership ("TRG"), and each Subsidiary (as defined below) other than
Taub-Co (as defined below) has been duly formed and is validly existing and in
good standing as a partnership or trust under the laws of its jurisdiction of
organization, with partnership or trust power and authority to carry on its
business and to own or lease its properties as described in the Prospectus. As
used in this Agreement, the term "Subsidiary" shall mean each consolidated
subsidiary of TRG (other than corporate subsidiaries of Taub-Co) and each joint
venture included in determining TRG's income from unconsolidated joint ventures
in the consolidated financial statements for TRG for the most recent fiscal
period included in the Prospectus, and "Taub-Co" shall mean Taub-Co Management,
Inc.
(e) TRG and each Subsidiary (other than Taub-Co) is duly qualified or
registered as a foreign partnership or trust in good standing and authorized to
do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets, business, or
operations of TRG or such Subsidiary, as the case may be.
(f) Taub-Co has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of its jurisdiction of
organization, with corporate power and authority to carry on its business as
described in the Prospectus, and is duly qualified and in good standing as a
foreign corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, assets, business, or operations of TRG.
(g) The Company is the managing general partner of TRG. The ownership
by the Company of its interest in TRG, and the ownership (direct or indirect)
by TRG of the capital stock or partnership interests of each Subsidiary, are as
set forth in the Prospectus, free and clear of any liens or encumbrances except
as described in the Prospectus and (in the case of TRG) except pursuant to that
certain Shareholders Agreement dated as of November 20, 1992 among Taub-Co,
TRG, The A. Alfred Taubman Restated Revocable Trust, as amended, and Taub-Co
Holdings Limited Partnership. Neither the Company nor TRG owns any direct or
indirect equity interest in any entity other than, in the case of the Company,
TRG or, in the case of TRG, the Subsidiaries and (through Taub-Co) the
corporate subsidiaries of Taub-Co.
(h) This Agreement has been duly authorized, executed, and delivered
by the Company and (for the limitedsole purposes as set forth herein) TRG.
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(i) The authorized capital stock of the Company and the authorized
partnership interests in TRG conform to the descriptions thereof contained in
the Prospectus in all material respects.
(j) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of the Shares will not
be subject to any preemptive or similar rights. The Shares conform to the
description thereof in the Prospectus in all material respects.
(k) Deloitte & Touche LLP, the accountants who have audited and
reported on the consolidated financial statements of the Company and TRG and
the financial statements of the unconsolidated joint ventures of TRG included
in the Registration Statement and the Prospectus, are independent certified
accountants as required by the 1933 Act and the 1933 Act Regulations.
(l) The financial statements of the Company, the consolidated
financial statements of TRG, and the financial statements of the unconsolidated
joint ventures of TRG included in the Registration Statement and the Prospectus
present fairly the financial position and results of operations of the Company
and TRG and the other entities purported to be shown thereby at the respective
dates and for the respective periods specified, and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout such periods. The supporting schedules included in
the Registration Statement present fairly the information required to be stated
therein. The financial information and data included in the Registration
Statement and the Prospectus present fairly the information included therein
and have been prepared on a basis consistent with that of the financial
statements included in the Registration Statement and the Prospectus and the
books and records of the respective entities presented therein. Other than the
financial statements (and schedules) included therein, no other financial
statements (or schedules) are required by the 1933 Act or the 1933 Act
Regulations to be included in the Registration Statement. Except as reflected
or disclosed in the financial statements included in the Registration Statement
or otherwise set forth in the Prospectus, none of the Company, TRG, or any
Subsidiary is subject to any material indebtedness, obligation, or liability,
contingent or otherwise.
(m) There are (i) no legal or governmental proceedings pending or
threatened to which the Company, TRG, or any of the Subsidiaries is a party
other than proceedings accurately described in the Registration Statement or
the Prospectus and proceedings that would not have a material adverse effect on
the Company, TRG, and the Subsidiaries, considered as a single enterprise, or
on the power or ability of the Company or TRG to perform its obligations under
this Agreement or to consummate the transactions contemplated by the
Registration Statement or the Prospectus; and (ii) no statutes, regulations,
contracts, or other documents that are required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement that are
not described or filed as required, except for this Agreement, the amendment to
the Company's articles of incorporation designating the terms of the Shares,
and the amendment to TRG's partnership agreement as of even date, all of
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<PAGE> 6
which will be filed prior to Closing Time under a Form 8-K or post-effective
amendment to the Registration Statement that becomes effective upon filing
under Rule 462(d) of the 1933 Act RegulationsForm 8-K.
(n) Each of TRG and each Subsidiary has good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of TRG and the
Subsidiaries, considered as a single enterprise, in each case free and clear of
all liens, claims, encumbrances, and defects except such as are described in
the Prospectus or such as do not materially interfere with the use made and
proposed to be made of such property by TRG or such Subsidiary and do not
materially affect the value of such property (except for reciprocal easement
agreements or agreements relating to common area maintenance that do not
materially interfere with the use made and proposed to be made of such property
by TRG or such Subsidiary); and any real property and buildings held under
lease by TRG and each Subsidiary are held by them under valid, subsisting, and
enforceable leases with such exceptions as do not materially interfere with the
use made and proposed to be made of such property and buildings by TRG or such
Subsidiary, in each case except as described in or contemplated by the
Registration Statement and the Prospectus.
(o) Each of the Company, TRG, and each Subsidiary is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which
they are engaged; and the Company has no reason to believe that it, TRG, or
any Subsidiary will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its businesses at a cost that would not
materially and adversely affect the condition, financial or otherwise, or the
earnings, assets, business, or operations of the Company, TRG, and the
Subsidiaries, considered as a single enterprise, except as described in or
contemplated by the Registration Statement and the Prospectus.
(p) Each of the Company, TRG, and the Subsidiaries has all consents,
authorizations, approvals, orders, certificates, and permits of and from, and
has made all declarations and filings with, all federal, state, local, and
other governmental authorities, all self- regulatory organizations, and all
courts and other tribunals required for it to own, lease, license, and use its
properties and assets and to conduct its business in the manner described in
the Registration Statement and the Prospectus, except to the extent that the
failure to obtain or file would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, assets, business, or
operations of the Company, TRG, and the Subsidiaries, considered as a single
enterprise, and none of the Company, TRG, or any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
consent, authorization, approval, order, certificate, or permit that, singly or
in the aggregate, if the subject of an unfavorable decision, ruling, or
finding, would materially and adversely affect the condition, financial or
otherwise, or the earnings, assets, business, or operations of the Company,
TRG, and the Subsidiaries, considered as a single enterprise.
5
<PAGE> 7
(q) Since the dates as of which information is given in the
Registration Statement, except as otherwise described therein, (i) there has
been no material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in the
earnings, assets, business, or operations of the Company, TRG, and the
Subsidiaries, considered as a single enterprise, (ii) there have been no
material transactions entered into by the Company, TRG, or to the knowledge of
the Company, any Subsidiary, other than transactions in the ordinary course of
business, (iii) none of the Company, TRG, or any Subsidiary has incurred any
material obligation or liability, direct, contingent, or otherwise, and (iv)
there has been no material change in the short-term debt or long-term debt of
the Company or TRG.
(r) None of the Company, TRG, or any Subsidiary is in violation of its
partnership agreement, charter documents, or bylaws or in default in the
performance of any obligation, agreement, or condition included in any bond,
debenture, note, or any other evidence of indebtedness or in any indenture,
instrument, or agreement to which the Company or TRG or, to the knowledge of
the Company, any Subsidiary is a party or by which any of their respective
properties may be bound or affected, except where any such violation or default
would not have a material adverse effect on the condition, financial or
otherwise, or on the earnings, assets, business, or operations of the Company,
TRG, and the Subsidiaries, considered as a single enterprise.
(s) The execution and delivery by the Company and TRG of this
Agreement, and the performance by the Company and TRG of their respective
obligations hereunder, and the compliance by the Company and TRG with all
provisions hereof, will not violate or conflict with or constitute a breach of
any of the terms or provisions of, or constitute a default under, (i) the
charter documents or bylaws of the Company, the partnership agreement of TRG
or, to the knowledge of the Company, the respective partnership agreements or
other organizational documents of any Subsidiary or (ii) any bond, debenture,
note, or other evidence of indebtedness or any material instrument or agreement
to which the Company, TRG or any Subsidiary is a party or may be bound, or to
which any of their respective properties may be subject, or (iii) any law,
regulation, ruling, order, judgment, or decree to which the Company, TRG or any
Subsidiary or any of their respective properties may be subject.
(t) All authorizations, approvals, orders, consents, qualifications
of, or filings with, any court or governmental or regulatory authority or
agency that are necessary in connection with the offering, issuance, or sale of
the Shares under this Agreement, and the performance by the Company and TRG of
their respective obligations hereunder, have been obtained or made, except such
as will be obtained on or prior to Closing Time under the 1933 Act and the 1933
Act Regulations, and except as may be required under state securities laws or
regulations with respect to the Shares.
(u) Neither the Company nor TRG is an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
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<PAGE> 8
(v) Each of the Company, TRG, and each Subsidiary (i) is in compliance
with any and all applicable foreign, federal, state, and local laws and
regulations relating to the protection of human health and safety, the
environment, or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all permits, licenses,
and other approvals required of it under applicable Environmental Laws to
conduct its respective businesses, and (iii) is in compliance with all terms
and conditions of any such permit, license, or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses, or other approvals, or failure to comply with the terms and
conditions of such permits, licenses, or approvals are otherwise disclosed in
the Prospectus or would not, singly or in the aggregate, have a material
adverse effect on the Company, TRG, and the Subsidiaries, considered as a
single enterprise.
(w) In the ordinary course of its business, TRG conducts a periodic
review of the effect of Environmental Laws on the business, operations, and
properties of it and the Subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties,
or compliance with Environmental Laws or any permit, license, or approval, any
related constraints on operating activities, and any potential liabilities to
third parties). On the basis of such review, TRG has reasonably concluded that
such associated costs and liabilities would not, singly or in the aggregate,
have a material adverse effect on the Company, TRG, and the Subsidiaries,
considered as a single enterprise.
(x) Neither the Company nor TRG has taken and neither will take,
directly or indirectly, any action prohibited by Regulation M under the 1934
Act.
(y) The assets of TRG do not constitute "plan assets" under the
Employee Retirement Income Security Act of 1974, as amended.
(z) There are no contracts, agreements, or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the 1933 Act with respect to any securities
of the Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement, except for such
contracts or agreements as are described in the Registration Statement
(including the contracts and agreements incorporated by reference in the
Registration Statement) and with which the Company has complied.
(aa) The statements set forth in the Prospectus under the captions
"Description of the Series A Preferred Stock" and "Description of Preferred
Stock," insofar as they purport to constitute a summary of the terms of the
Shares, and under "Underwriters," "Plan of Distribution" and "Federal Income
Tax Considerations," insofar as they purport to describe factual matters or
relate to matters of law or regulation or constitute summaries of documents
described therein, are accurate and complete in all material respects.
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<PAGE> 9
(bb) The Company has qualified to be taxed as a real estate investment
trust pursuant to Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code"), for its taxable years ended December 31, 1992,
1993, 1994, 1995, and 1996, and the Company's present and contemplated
organization, ownership, method of operation, assets, and income are such that
the Company is in a position under present law to so qualify for the taxable
year ending December 31, 1997, and in the future.
Any certificate signed by any officer of the Company and delivered to
an Underwriter or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE; PUBLIC OFFERING;
CLOSING.
(a) The Company hereby agrees to sell to the several Underwriters, and
each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from the Company, the respective numbers of Shares
set forth in Schedule I hereto opposite its name at $25.00 per share (the
"Purchase Price"), provided that TRG pays each Underwriter at Closing Time an
underwriting discount or commission of $0.7875 per share purchased by it as
required under Section 4 below.
(b) The Company hereby agrees that during the period beginning on the
date hereof and continuing to and including the date which is thirty (30) days
after the Closing Date, it will not offer, sell, contract to sell, or otherwise
dispose of any preferred stock of the Company or warrants to purchase preferred
stock of the Company substantially similar to the Shares (other than the
Shares) without the prior written consent of Morgan Stanley & Co. Incorporated.
(c) The Company is advised by the Representatives that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon as is advisable in the judgment of the Representatives. The
Company is further advised by the Representatives that the Shares are to be
offered to the public initially at $25.00 a share (the "Public Offering Price")
and to certain dealers selected by you at a price that represents a concession
not in excess of $.50 a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in
excess of $.40 a share, to any Underwriter or to certain other dealers.
(d) Payment for the Shares shall be made to the Company in Federal or
other funds immediately available in New York City against delivery of the
Shares to the Representatives for the respective accounts of the several
Underwriters at 10:00 A.M., New York City time, on October 3, 1997, or at such
other time on the same or such other date, not later than October 6, 1997, as
shall be designated in writing by the Representatives. The time and date of
such payment are hereinafter referred to as
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<PAGE> 10
the "Closing Time," and the date of such payment is hereinafter referred to as
the "Closing Date."
(e) Certificates for the Shares shall be in temporary form and
registered in such names and in such denominations as the Representatives shall
request in writing not later than one full business day prior to the Closing
Date. The certificates evidencing the Shares shall be delivered at the Closing
Time to the Representatives for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer
of the Shares to the Underwriters duly paid, against payment of the Purchase
Price therefor.
SECTION 3. COVENANTS OF THE COMPANY. Each of the Company and
(only as provided in paragraphs (h) and (i) of this Section 3) TRG covenants
with the Underwriters as follows:
(a) The Company will notify the Representatives immediately, and
confirm the notice in writing, of: (i) the effectiveness of any post-effective
amendment to the Registration Statement; (ii) the receipt of any comments from
the Commission; (iii) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information relating thereto; and (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any such stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will prepare and timely file or transmit for filing
with the Commission the Prospectus in accordance with Rule 424(b) under the
1933 Act Regulations.
(c) The Company will give the Representatives notice of its intention
to file or prepare any amendment to the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised Prospectus or prospectus supplement that the Company
proposes for use in connection with the offering of the Shares that differs
from the Prospectus, regardless of whether such revised Prospectus or
prospectus supplement is required to be filed pursuant to Rule 424(b) under the
1933 Act Regulations), will furnish the Representatives with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such Prospectus to which counsel for the Underwriters
shall reasonably object.
(d) The Company will deliver to Morgan Stanley & Co. Incorporated the
Representatives one (1) signed copy, and to the Underwriters as many conformed
copies, of the Registration Statement and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) as the
Underwriters may
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<PAGE> 11
reasonably request. The Company will deliver or cause to be delivered
definitive certificates evidencing for the Shares as soon as practicable after
the Closing Date.
(e) If any event shall occur as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters, to amend or supplement
the Prospectus in order to make the Prospectus not misleading in the light of
the circumstances existing at the time it is delivered to a prospective
investor or in order to otherwise comply with the 1933 Act or the 1934 Act, the
Company will forthwith prepare and furnish to the Underwriters a reasonable
number of copies of an amendment of or supplement to the Prospectus in form and
substance reasonably satisfactory to counsel for the Underwriters and the
Company's counsel, which will amend or supplement the Prospectus so that it
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances existing at the time it is delivered to a prospective
investor, not misleading, and otherwise comply with the 1933 Act and the 1934
Act.
(f) The Company will endeavor in good faith to qualify the Shares for
offering and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriters may designate, provided
that, in connection therewith, neither the Company nor any partner in TRG shall
be required to qualify to do business in any jurisdiction in which it is not so
qualified. In each jurisdiction in which the Shares have been so qualified,
the Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for so long
as required for the distribution of the Shares.
(g) The Company will make generally available to its security holders
as soon as reasonably practicable, but not later than 90 days after the close
of the period covered thereby, an earning statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations) covering
a period of at least 12 months beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the Registration
Statement. "Earning statement," "make generally available," and "effective
date of the registration statement" have the meanings included in Rule 158 of
the 1933 Act Regulations.
(h) The Company and TRG will use the net proceeds received by them
from the sale of the Shares in the manner specified in the Prospectus under the
caption "Use of Proceeds" in all material respects.
(i) At or prior to Closing Time, TRG will take or cause to be taken
all actions necessary to accept the proceeds from the offering, and designate
such capital inas Series A Preferred Equity, and authorize guaranteed payments
with respect to such Series A Preferred Equity in amounts equal to the
dividends payable on the Shares. authorize, issue, and deliver to the Company
the Parallel TRG Interest as described in the Prospectus,, including, without
limitation, including, without limitation, the authorization, execution, and
delivery of an amendment to the partnership agreement of TRG authorizing the
designation of one or more the Sseries Aof
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<PAGE> 12
Preferred Equity and the payment of guaranteed payments in respect any of such
seriesEquity, substantially in the form heretofore delivered to (and otherwise
reasonably satisfactory to) the Representatives and counsel for the
Underwriters.
SECTION 4. PAYMENT OF EXPENSES.
(a) TRG will pay all expenses incident to the performance of the
Company's obligations under this Agreement, including: (i) the printing and
filing of the Registration Statement as originally filed and of each amendment
thereto; (ii) a discount or commission equal to $0.7875 per Share to the
Underwriters and the costs and expenses relating to the transfer and delivery
of the Shares to the Underwriters and to the printing of the certificates
representing the Shares; (iii) the fees and disbursements of counsel for the
Company and TRG; (iv) the fees and disbursements of the Company's or TRG's
accountants; (v) the qualification of the Shares under state securities laws in
accordance with the provisions of Section 3(f), including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Memorandum;
(vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, and
of the Prospectus and any amendments or supplements thereto; (viii) any fees
charged by rating agencies for the rating of the Shares; (ix) any transfer
taxes imposed on the sale of the Shares to the Underwriters; (x) the costs and
charges of any transfer agent, registrar, or depositary; and (xi) all other
costs and expenses incident to the performance of the obligations of the
Company and TRG under this Agreement for which provision is not otherwise made
in this Section 4. It is understood, however, that except as expressly
provided in this Section 4 and Sections 6 and 7, the Underwriters will pay all
of their costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make.
(b) If this Agreement is terminated by the Underwriters in accordance
with the provisions of Section 5 or Section 9(a)(i), TRG shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters, (not to exceed
$100,000).
SECTION 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company herein included, to the
performance by the Company and TRG of their respective obligations hereunder,
and to the following further conditions:
(a) All required post-effective amendments to the Registration
Statement shall have become effective not later than 5:30 P.M. on the date
hereof, or, with the consent of the Representatives, at a later time and date,
not later, however, than 5:30 P.M. on the first second business day following
the date hereof or at such later time and date as may be approved by the
Representatives; and at the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been
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<PAGE> 13
issued under the 1933 Act or proceedings therefor initiated or threatened by
the Commission.
(b) Between the date of this Agreement and Closing Time, there shall
not have occurred any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded
any of the Company's or TRG's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the 1933 Act.
(c) At Closing Time, the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of Miro Weiner &
Kramer, counsel for the Company and TRG, in form and substance satisfactory to
the Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly existing
and in good standing under the Michigan Business Corporation Act, which opinion
may rely exclusively on a certificate of good standing issued by the
appropriate official of the State of Michigan;
(ii) TRG has been duly formed and is validly existing and in good
standing under the Delaware Revised Uniform Limited Partnership Act, which
opinion may rely exclusively on a certificate of good standing issued by the
appropriate official of the State of Delaware;
(iii) each of the Company and TRG has the power and authority to own
its property and conduct its business as described in the Prospectus, and is
duly qualified and in good standing and authorized to transact business in any
jurisdiction in which the conduct of its business or its ownership or leasing
of property requires such qualification, except where the failure to be so
qualified or in good standing will not have a material adverse effect on it;
(iv) each Subsidiary has been formed and is validly existing and in
good standing under the laws of the jurisdiction of its formation, has the
power and authority to own its property and conduct its business as described
in the Prospectus, and is duly qualified and in good standing and authorized to
transact business in any jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except where
the failure to be so qualified or in good standing will not have a material
adverse effect on such Subsidiary, provided that as to each Subsidiary, such
opinion may rely exclusively on a certificate of good standing or like
certificate issued by the appropriate state official;
(v) this Agreement has been duly authorized, executed and delivered by
the Company and TRG;
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<PAGE> 14
(vi) the Shares have been duly authorized and, when delivered to and
paid for by the Underwriters in accordance with this Agreement, will be validly
issued, fully paid and non-assessable;
(vii) each of the amendment to the partnership agreement of TRG
authorizingestablishing the Parallel TRG Interest and the Parallel TRG Interest
itself has been duly authorized by all necessary partnership action of TRG and
is a valid and binding obligation of TRG enforceable against TRG in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, or similar laws affecting creditors' rights
generally from time to time in effect. The enforceability of such amendment
and the Parallel TRG Interest are also subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity);
(viii) the execution by each of the Company and TRG of, and the
performance by the Company of its obligations under, this Agreement and the
consummation of the transactions contemplated hereby by the Company and TRG
(including, without limitation, the issuance of the Parallel TRG Interest) will
not contravene any provision of applicable law, the organizational documents of
the Company, the partnership agreement of TRG or any agreement or other
instrument that, to the knowledge of such counsel, is binding upon and is
material to the Company or TRG or any Subsidiary, or any judgment, order, or
decree of any governmental body, agency, or court having jurisdiction over the
Company or TRG that, to the knowledge of such counsel, is applicable to the
Company, TRG, or any Subsidiary;
(ix) no consent, approval, authorization, or order of, or
qualification with, any governmental body or agency and no consent, approval,
or authorization of any person other than the Company and TRG is required for
the performance by the Company and TRG of their respective obligations under
this Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares;
(x) to the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened to which the Company, TRG, or
any Subsidiary is a party or to which any of their properties is subject, other
than proceedings accurately described in the Registration Statement or the
Prospectus, or proceedings that would not have a material adverse effect on the
Company, TRG, and the Subsidiaries taken as a whole or on the power or ability
of the Company or TRG to perform theirits respective obligations under this
Agreement or to consummate the transactions contemplated by the Registration
Statement and Prospectus or any statutes, regulations, contracts, or other
documents that are required to be described in the Prospectus or to be filed
(by incorporation by reference or otherwise) as exhibits to the Registration
Statement that are not described or filed as required;
(xi) except as described in the Registration Statement or the
Prospectus, there is no matter known to such counsel relating to the protection
of human health and safety or the environment (a) that pertains to the Company,
TRG, or any
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<PAGE> 15
Subsidiary, (b) that individually (or in the aggregate with other similar
matters) is material to the business and operations of the Company, TRG, and
the Subsidiaries taken as a whole, other than as described in the Registration
Statement or the Prospectus, and (c) that is not so described;
(xii) to the knowledge of such counsel, the Company, TRG, and each
Subsidiary has consents, authorizations, approvals, orders, certificates, and
permits of and from, and has made all declarations and filings with, all
federal, state, local, and other governmental authorities, all self-regulatory
organizations, and all courts, and other tribunals, necessary to own, lease,
license, and use its properties and assets and to conduct its business in the
manner described in the Registration Statement and the Prospectus, except to
the extent that the failure to obtain or file would not have a material adverse
effect on the Company, TRG, and the Subsidiaries taken as a whole;
(xiii) neither the Company nor TRG is an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in the
1940 Act;
(xiv) the statements (1) set forth in the Prospectus under the
captions "Description of the Series A Preferred Stock" and "Description of
Preferred Stock," insofar as they constitute a summary of the terms of the
Shares, or under "Underwriters," "Certain Provisions of the Articles of
Incorporation and Bylaws," "Restrictions on Transfer," "Plan of Distribution,"
and "Federal Income Tax Considerations," insofar as they purport to describe
factual matters or relate to matters of law or regulation or constitute
summaries of documents described therein, and (2) in the Registration Statement
under Item 15 ("Indemnification of Directors and Officers"), are accurate and
complete in all material respects;
(xv) the Registration Statement has been declared effective under the
1933 Act, and to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act
or proceedings therefor initiated or threatened by the Commission.
(xvi) such counsel (1) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and schedules
included therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the 1933 Act and the rules and
regulations of the Commission thereunder, (2) each document heretofore filed
pursuant to the 1934 Act and incorporated or deemed incorporated by reference
in the Prospectus (except for financial statements and schedules included
therein, as to which such counsel need not express any opinion) complied as to
form in all material respects with the requirements of the 1934 Act and the
rules and regulations promulgated thereunder in effect at the date of their
respective filings, (3) believes that (except for financial statements and
schedules as to which such counsel need not express any belief) the
Registration Statement and the prospectus included therein at the time the
Registration Statement became effective did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary
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<PAGE> 16
to make the statements therein not misleading, and (4) believes that (except
for financial statements and schedules as to which such counsel need not
express any belief) the Prospectus as of the Closing Time does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
With respect to clause (xvi) above, such counsel may state that their
opinions and beliefs are based upon their participation in the preparation of
the Registration Statement and Prospectus and any amendments and supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(2) Miro Weiner & Kramer's confirmation, in its capacity as tax
counsel for the Company and TRG, that the Underwriters and their counsel may
rely on such tax counsel's opinion filed as Exhibit 8 to the Registration
Statement as if such opinion were addressed to them and dated as of Closing
Time.
(3) The favorable opinion, dated as of Closing Time, of Hogan &
Hartson L.L.P., counsel for the Underwriters, with respect to the matters set
forth above in Section (5)(c)(1)(i), (ii), (v), (vi), (xiv) (insofar as it
relates to the statements under the captions "Description of the Series A
Preferred Stock" and "Underwriters"), (xv), and (xvi)(1) and (2), and a
statement (in such counsel's customary form) to the effect of the statements
set forth in (xvi)(3) and (4). In giving its opinion, Hogan & Hartson L.L.P.
may rely, (A) as to all matters of fact, upon certificates and written
statements of officers and employees of and accountants for each of the
Company, TRG, and the Subsidiaries, (B) as to the qualification and good
standing of each of the Company and TRG to do business in any state or
jurisdiction, upon certificates of appropriate government officials or opinions
of counsel in such jurisdictions, which opinions shall be in form and substance
satisfactory to counsel for the Underwriters, and (C) as to certain matters of
law, upon the opinion of Miro Weiner & Kramer given pursuant to Section 5(c)(1)
above.
(d) At Closing Time (i) the Registration Statement and the Prospectus
shall include all statements which are required to be stated therein in
accordance with the 1933 Act and the 1933 Act Regulations and in all material
respects shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations, and neither the Registration Statement nor the Prospectus shall
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and no action, suit or proceeding at law or in equity shall be
pending or, to the knowledge of the Company or TRG, threatened against the
Company, TRG, or any Subsidiary which would be required to be set forth in the
Prospectus other than as set forth therein, (ii) there shall not have been,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or the earnings, assets, business, or operations of the
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<PAGE> 17
Company, TRG, and the Subsidiaries, considered as a single enterprise, from
that set forth in the Registration Statement, (iii) no proceedings shall be
pending or, to the knowledge of the Company or TRG, threatened against the
Company, TRG, or any Subsidiary before or by any Federal, state, or other
commission, board, or administrative agency wherein an unfavorable decision,
ruling, or finding might result in any material adverse change in the
condition, financial or otherwise, or the earnings, assets, business, or
operations of the Company, TRG, and the Subsidiaries, considered as a single
enterprise, other than as set forth in the Prospectus, (iv) no stop order
suspending the effectiveness of the Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been instituted or, to
the knowledge of the Company or TRG, threatened by the Commission or by the
state securities authority of any jurisdiction, and (v) the Underwriters shall
have received, at Closing Time, a certificate of an executive officer of the
Company dated as of Closing Time, evidencing compliance with the provisions of
this subsection (d) and stating (Y) that the representations and warranties set
forth in Section 1(a) hereof are accurate as though expressly made at and as of
Closing Time; and (Z) that the conditions precedent set forth in this Section 5
have been satisfied or waived.
(e) At the time of execution of this Agreement, the Representatives
shall have received from Deloitte & Touche LLP, independent public accountants
for the Company and TRG, a letter dated such date, in form and substance
satisfactory to the Representatives, to the effect that: (i) they are
independent public accountants with respect to the Company, TRG, and the
Subsidiaries as required by the 1933 Act and the applicable published rules and
regulations thereunder; (ii) it is their opinion that the financial statements
and supporting schedules included in the Registration Statement and covered by
their opinions therein (and any other financial statements audited by them from
which information included in the Registration Statement has been derived)
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations; (iii) based upon
limited procedures set forth in detail in such letter, nothing has come to
their attention which causes them to believe that (A) the unaudited financial
statements and supporting schedules of the Company, TRG, and the Subsidiaries
included in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration Statement, (B)
any unaudited financial statements from which information in the Prospectus is
derived are not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement, or (C) at a
specified date not more than five days prior to the date of this Agreement,
there have been any changes in the capital stock, equity interests, or debt of
the Company, TRG, or the Subsidiaries as compared with amounts disclosed in the
June 30, 1997 financial statements included in the Registration Statement or,
during the period from June 30, 1997 to a specified date not more than five
days prior to the date of this Agreement, or there were any decreases, as
compared with the corresponding period in the preceding year, of the sum of
TRG's Consolidated Business' (as such term is defined in the Registration
Statement) and
16
<PAGE> 18
Joint Ventures' (as such term is defined in TRG's consolidated financial
statements) contribution to EBITDA (as defined in the Registration Statement)
or any increases in interest expense of TRG or the Joint Ventures, except in
all instances for changes, increases, or decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur, and for
normal debt payments or amortization; and (iv) in addition to the examination
referred to in their opinions and the limited procedures referred to in clause
(iii) above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages, and
financial information which are included in the Registration Statement and the
Prospectus and which are specified by the Representatives, and have found such
amounts, percentages, and financial information to be in agreement with the
audited financial statements, unaudited financial statements, or other relevant
accounting, financial, and other records of the Company, TRG, and the
Subsidiaries as requested by the Representatives and as identified in such
letter.
(f) At the Closing Time, the Representatives shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Closing Time.
(g) Prior to the Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the
Shares as herein contemplated and related proceedings, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein included; and all proceedings taken by the
Company or TRG in connection with the issuance and sale of the Shares shall be
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof.
SECTION 6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the 1934 Act, from and
against any and all losses, claims, damages, or liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any claim) caused by any untrue statement or alleged
untrue statement of a material fact contained in either the Registration
Statement or any amendment thereto, any preliminary prospectus supplement or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements
17
<PAGE> 19
thereto, including pursuant to Section 3(e) hereof), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, or liabilities are caused by any such
untrue statement or omission or alleged omission based upon information
relating to any Underwriter contained in the Prospectus under the caption
"Underwriters."
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
1934 Act to the same extent as the foregoing indemnity from the Company to such
Underwriter, but only with reference to information relating to the Underwriter
and contained in the Prospectus under the caption "Underwriters."
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to paragraph (a) or (b) of this Section 6 such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual and potential differing interests between them. It
is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by Morgan Stanley & Co., in the case of parties indemnified pursuant to
paragraph (a) of this Section, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) of this Section. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such
18
<PAGE> 20
indemnified party from all liability on claims that are the subject matter of
such proceeding.
SECTION 7. CONTRIBUTION.
(a) If the indemnification provided for in paragraph (a) or (b) of
Section 6 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein in connection
with the offering of the Shares, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and of the Underwriters on the other hand in
connection with the matters that resulted in such losses, claims, damages, or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriter, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Price to Public of the Shares. In the case of an untrue or alleged
untrue statement of a material fact or the omission to state a material fact,
the relative fault of the Company on the one hand and of the Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement or the omission or alleged omission
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information, and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Shares they have purchased hereunder, and not
joint.
(b) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does not take into
account of the equitable considerations referred to in paragraph (a) of this
Section 7. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, and liabilities referred to in paragraph (a) shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or
19
<PAGE> 21
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 7 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified
party at law or in equity. The indemnity and contribution provisions contained
in this Section 7 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation
made by or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company or its officers or directors or
any person controlling the Company, and (iii) acceptance of and payment for any
of the Shares.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements included in this
Agreement, or included in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Shares.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by notice to the
Company, at any time prior to or at Closing Time (i) if there has been, since
the respective dates as of which information is given in the Registration
Statement, any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, assets, business, or operations of the Company, TRG, and
the Subsidiaries, considered as a single enterprise, regardless of whether
arising in the ordinary course of business, or (ii) if there has occurred any
outbreak of hostilities or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the reasonable judgment of the
Representatives, is material and adverse, (iii) if trading of any securities of
the Company or TRG shall have been suspended involuntarily on any exchange or
in any over-the-counter market, (iv) if trading generally on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq Stock Market, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange, or the Chicago
Board of Trade has been suspended, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchange or by order of the Commission or any other
governmental authority, or (v) if a general banking moratorium has been
declared by Federal or New York authorities.
(b) The Representatives may also terminate this Agreement, by notice
to the Company, at any time prior to or at Closing Time, in the event that the
occurrence of any of the events specified in paragraph (a) of this Section 9,
either singly or together with any other such event, makes it, in the
reasonable judgment of the Representatives, impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus.
20
<PAGE> 22
(c) If this Agreement is terminated pursuant to Section 9(a) or (b),
such termination shall be without liability of any party to any other party
except as provided in Section 4, and provided further that Sections 6 and 7
hereof shall survive such termination.
SECTION 10. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of the Shares to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the number of Shares set forth opposite their respective
names in Schedule I bears to the aggregate number of Shares set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as the Representatives may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such number
of Shares without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Shares to be purchased, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Shares are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case, either the Representatives or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10036; Attention: Legal Department, (telephone:
(212) 761-4000; telecopy: (212) 761-0783 attention of Legal Department); and
notices to the Company shall be directed to it at Taubman Centers, Inc., 200
East Long Lake Road, Bloomfield Hills, Michigan 48304; Attention: Treasurer
(telephone: (248) 258-6800; telecopy: (248) 258-7275), attention of Treasurer.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Company and (to the limited extent set
forth above)
21
<PAGE> 23
TRG and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than those referred to in Sections 6 and 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein or therein included.
This Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the parties hereto and
thereto and their respective successors and said controlling persons and
officers, trustees and directors and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
Shares from any Underwriter shall be deemed to be a successor by reason merely
of such purchase.
SECTION 13. GOVERNING LAW AND TIME; MISCELLANEOUS. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed in said State.
Specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
SECTION 15. HEADINGS. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
22
<PAGE> 24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
TAUBMAN CENTERS, INC.
By:
----------------------------------
Name:
Title:
TRG has executed this Agreement for the sole purpose of agreeing to be
bound by the provisions of Sections 3(h), 3(i), and 4 hereof.
THE TAUBMAN REALTY GROUP LIMITED
PARTNERSHIP
By: Taubman Centers, Inc., its
Managing General Partner
By:
----------------------------------
Name:
Its:
Accepted as of the date hereof:
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Acting severally on behalf of themselves
and the several Underwriters named herein.
By: Morgan Stanley & Co. Incorporated
By:
------------------------------------
Name:
Title:
23
<PAGE> 25
SCHEDULE I
<TABLE>
<CAPTION>
Number of
Shares
Underwriter To Be Purchased
- ----------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated 1,600,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 1,600,000
PaineWebber Incorporated 1,600,000
Prudential Securities Incorporated 1,600,000
A.G. Edwards & Sons, Inc. 80,000
BT Alex. Brown & Sons Incorporated 80,000
EVEREN Securities, Inc. 80,000
First of Michigan Corporation 80,000
Goldman, Sachs & Co. 80,000
Oppenheimer & Co., Inc. 80,000
Cowen & Company 40,000
Craigie Incorporated 40,000
Crowell, Weedon & Co. 40,000
Dain Bosworth Incorporated 40,000
First Albany Corporation 40,000
Gruntal & Co., Incorporated 40,000
H.J. Meyers & Co., Inc. 40,000
Interstate/Johnson Lane Corporation 40,000
Janney Montgomery Scott Inc. 40,000
J.J.B. Hilliard, W.L. Lyons, Inc. 40,000
Josephthal Lyon & Ross Incorporated 40,000
Legg Mason Wood Walker, Incorporated 40,000
McDonald & Company Securities, Inc. 40,000
McGinn, Smith & Co., Inc. 40,000
Morgan Keegan & Company, Inc. 40,000
The Ohio Company 40,000
Donaldson, Lufkin & Jenrette Securities Corporation 40,000
Piper Jaffray Inc. 40,000
Principal Financial Securities, Inc. 40,000
Rauscher Pierce Refsnes, Inc. 40,000
Raymond James & Associates, Inc. 40,000
The Robinsosn-Humphrey Company, Inc. 40,000
Roney & Co., LLC 40,000
Scott & Stringfellow, Inc. 40,000
Sutro & Co. Incorporated 40,000
Tucker Anthony Incorporated 40,000
U.S. Clearing Corp. 40,000
Wheat, First Securities, Inc. 40,000
-----------
Total 8,000,000
===========
</TABLE>
24
<PAGE> 1
EXHIBIT 4(A)
FORM OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
TAUBMAN CENTERS, INC.
[SET FORTH BELOW IS THE TEXT OF THE ARTICLES OF INCORPORATION OF TAUBMAN
CENTERS, INC., AS AMENDED THROUGH OCTOBER 3, 1997.]
ARTICLE I
Name
The name of the Corporation is: Taubman Centers, Inc.
ARTICLE II
Purpose
The purpose for which the Corporation is organized is to:
1. own, hold, develop and dispose of and invest in any type of
retail real property or mixed use real property having a
retail component of significant value in relation to the value
of the entire mixed use real property, including any entity
whose material assets include such real properties including,
but not limited to, partnership interests in The Taubman
Realty Group Limited Partnership, a Delaware limited
partnership, and any successor thereto ("TRG");
2. act as managing general partner of TRG;
3. at such time, if ever, as TRG distributes its assets to its
partners, own, hold, manage, develop and dispose of said
assets and in all other respects, carry on the business of
TRG;
4. qualify as a REIT (as hereinafter defined); and
5. engage in any other lawful act or activity for which
corporations may be organized under the Michigan Business
Corporation Act in addition to any of the foregoing purposes,
that is consistent with the Corporation's qualification as a
REIT.
ARTICLE III
Capital
1. Classes and Number of Shares.
The total number of shares of all classes of stock that the
Corporation shall have authority to issue is 300,000,000 shares. The classes
and the aggregate number of shares of stock of each class are as follows:
250,000,000 shares of Common Stock, par value $0.01 per share
(the "Common Stock"), which shall have the rights and limitations set
forth below.
50,000,000 shares of preferred stock (the "Preferred Stock"),
which may be issued in one or more series having such relative rights,
preferences, priorities, privileges, restrictions, and limitations as
the Board of Directors may determine from time to time.
<PAGE> 2
2. Certain Powers, Rights, and Limitations of Capital Stock.
(a) Common Stock. Subject to the rights, preferences, and
limitations that the Board of Directors designates with respect to any series
of Preferred Stock, a statement of certain powers, rights, and limitations of
the shares of the Common Stock is as follows:
(i) Dividend Rights. The holders of shares of the Common
Stock shall be entitled to receive such dividends as may be declared
by the Board of Directors of the Corporation with respect to the
Common Stock, subject to the preferential rights of any series of
Preferred Stock designated by the Corporation's Board of Directors.
(ii) Rights Upon Liquidation. Subject to the provisions
of Subsection (e) of this Section 2 of this Article III, in the event
of any voluntary or involuntary liquidation, dissolution or winding up
of, or any distribution of the assets of, the Corporation, each holder
of shares of the Common Stock shall be entitled to receive, ratably
with each other holder of shares of the Common Stock, that portion of
the assets of the Corporation available for distribution to its
holders of shares of Common Stock as the number of shares of the
Common Stock held by such holder bears to the total number of shares
of Common Stock (including shares of Common Stock that have become
Excess Stock) then outstanding.
(b) Voting Rights. Subject to the provisions of Subsection (e) of
this Section 2 of this Article III, the holders of shares of the Common Stock
shall be entitled to vote on all matters (for which a common shareholder shall
be entitled to vote thereon) at all meetings of the shareholders of the
Corporation, and shall be entitled to one vote for each share of the Common
Stock entitled to vote at such meeting. Any action to be taken by the
shareholders, other than the election of directors or adjourning a meeting,
including, but not limited to, the approval of an amendment to these Amended
and Restated Articles of Incorporation (other than an amendment by the Board of
Directors to establish the relative rights, preferences, priorities,
privileges, restrictions, and limitations of Preferred Stock as provided in
Subsection (c) of this Section 2 of this Article III, which amendment by the
Board of Directors shall require no action to be taken by the shareholders),
shall be authorized if approved by the affirmative vote of two-thirds of the
shares of Capital Stock entitled to vote thereon. Directors shall be elected
if approved by a plurality of the votes cast at an election.
(c) Preferred Stock. The Preferred Stock shall have such relative
rights, preferences, priorities, privileges, restrictions, and limitations as
the Board of Directors may determine from time to time by one or more
amendments to these Amended and Restated Articles of Incorporation.
(i) Series A Preferred Stock. Subject in all cases to
the other provisions of this Section 2 of this Article III, including,
without limitation, those provisions restricting the Beneficial
Ownership and Constructive Ownership of shares of Capital Stock and
those provisions with respect to Excess Stock, the following sets
forth the designation, preferences, limitations as to dividends,
voting and other rights, and the terms and conditions of redemption of
the Series A Preferred Stock (defined below) of the Corporation.
(a) There is hereby established a series of
Preferred Stock designated "8.30% Series A Cumulative
Redeemable Preferred Stock, par value $0.01 per share" (the
"Series A Preferred Stock"),which shall consist of 8,000,000
authorized shares.
(b) All shares of Series A Preferred Stock
redeemed, purchased, exchanged, or otherwise acquired by the
Corporation shall be restored to the status of authorized but
unissued shares of Preferred Stock.
-2-
<PAGE> 3
(c) The Series A Preferred Stock shall, with
respect to dividend rights, rights upon liquidation, winding
up or dissolution, and redemption rights, rank (i) junior to
any other series of Preferred Stock hereafter duly established
by the Board of Directors of the Corporation, the terms of
which specifically provide that such series shall rank prior
to the Series A Preferred Stock as to the payment of dividends
and distribution of assets upon liquidation (the "Senior
Preferred Stock"), (ii) pari passu with any other series of
Preferred Stock hereafter duly established by the Board of
Directors of the Corporation, the terms of which specifically
provide that such series shall rank pari passu with the Series
A Preferred Stock as to the payment of dividends and
distribution of assets upon liquidation (the "Parity Preferred
Stock"), and (iii) prior to any other class or series of
Capital Stock, including, without limitation, the Common Stock
of the Corporation, whether now existing or hereafter created
(collectively, the "Junior Stock").
(d) (1) Subject to the rights of any Senior
Preferred Stock, the holders of the then outstanding shares of
Series A Preferred Stock shall be entitled to receive, as and
when declared by the Board of Directors, out of funds legally
available for the payment of dividends, cumulative
preferential cash dividends at the annual rate of 8.30% of the
$25.00 per share liquidation preference (i.e., $2.075 per
annum per share). Such dividends shall accrue and be
cumulative from the date of original issue and shall be
payable in equal quarterly amounts in arrears on or before the
last day of each March, June, September, and December or, if
such day is not a business day, the next succeeding business
day (each, a "Dividend Payment Date") (for the purposes of
this Subparagraph (1) of this Paragraph (d), a "business day"
is any day, other than a Saturday, Sunday, or legal holiday,
on which banks in Detroit, Michigan, are open for business).
The first dividend, which shall be paid on December 31, 1997,
will be for less than a full quarter. All dividends on the
Series A Preferred Stock, including any dividend for any
partial dividend period, shall be computed on the basis of a
360-day year consisting of twelve 30-day months. Dividends
will be payable to holders of record as they appear in the
stock records of the Corporation at the close of business on
the applicable record date, which shall be the 15th day of the
calendar month in which the applicable Dividend Payment Date
falls or on such other date designed by the Board of Directors
of the Corporation for the payment of dividends that is not
more than 30 nor less than ten days prior to such Dividend
Payment Date (each, a "Dividend Record Date").
(2) No dividends on the Series A
Preferred Stock shall be declared by the Board of Directors or
paid or set apart for payment by the Corporation at such time
as any agreement of the Corporation, including any agreement
relating to its indebtedness, prohibits such declaration,
payment, or setting apart for payment or provides that such
declaration, payment, or setting apart for payment would
constitute a breach of, or a default under, such agreement or
if such declaration, payment, or setting aside shall be
restricted or prohibited by law.
(3) Dividends on the Series A Preferred
Stock shall accrue and be cumulative regardless of whether the
Corporation has earnings, regardless of whether there are
funds legally available for the payment of such dividends, and
regardless of whether such dividends are declared. Accrued
but unpaid dividends on the Series A Preferred Stock will
accumulate as of the Dividend Payment Date on which they first
become payable. Except as set forth below in this
Subparagraph (3), no dividends shall be declared or paid or
set apart for payment on any Common Stock or any other series
of Preferred Stock ranking, as to dividends, on a parity with
or junior to the Series A Preferred Stock (other
-3-
<PAGE> 4
than a dividend in shares of Junior Stock) for any
period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof is set apart for such
payment on the Series A Preferred Stock for all past dividend
periods and the then current dividend period. When dividends
are not paid in full (and a sum sufficient for such full
payment is not so set apart) upon the Series A Preferred Stock
and the shares of any other series of Preferred Stock ranking
on a parity as to dividends with the Series A Preferred Stock,
all dividends declared upon the Series A Preferred Stock and
any other series of Preferred Stock ranking on a parity as to
dividends with the Series A Preferred Stock shall be declared
pro rata, so that the amount of dividends declared per share
of Series A Preferred Stock and such other series of Preferred
Stock shall in all cases bear to each other the same ratio
that accrued dividends per share on the Series A Preferred
Stock and such other series of Preferred Stock (which shall
not include any accrual in respect of unpaid dividends for
prior dividend periods if such Preferred Stock does not have a
cumulative dividend) bear to each other. No interest shall be
payable in respect of any dividend payment on the Series A
Preferred Stock that may be in arrears. Holders of shares of
the Series A Preferred Stock shall not be entitled to any
dividend, whether payable in cash, property, or stock, in
excess of full cumulative dividends on the Series A Preferred
Stock as provided above. Any dividend payment made on shares
of the Series A Preferred Stock shall first be credited
against the earliest accumulated but unpaid dividend due with
respect to such shares that remains payable.
(4) Except as provided in Subparagraph
(3) of this Paragraph (d) of this Item (i) of this Subsection
(c) of this Section 2 of this Article III, unless full
cumulative dividends on the Series A Preferred Stock have been
or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof is set apart for
payment for all past dividend periods and the then current
dividend period: (i) no dividends (other than in shares of
Junior Stock) shall be declared or paid or set aside for
payment nor shall any other distribution be declared or made
upon the Common Stock (or any other Preferred Stock ranking
junior to or on a parity with the Series A Preferred Stock as
to dividends or upon liquidation); and (ii) no shares of
Common Stock (or any other Preferred Stock of the Corporation
ranking junior to or on a parity with the Series A Preferred
Stock as to dividends or upon liquidation) shall be redeemed,
purchased, or otherwise acquired for any consideration (nor
shall any moneys be paid to or made available for a sinking
fund for the redemption of any such shares) by the Corporation
(except by conversion into or exchange for Junior Stock).
(5) If for any taxable year the
Corporation elects to designate as "capital gains dividends"
(as defined in Section 857 of the Code) any portion (the
"Capital Gains Amount") of the dividends paid or made
available for the year to holders of all classes of Capital
Stock (the "Total Dividends"), then the portion of the Capital
Gains Amount that shall be allocable to the holders of Series
A Preferred Stock shall be the amount that the total dividends
paid or made available to the holders of the Series A
Preferred Stock for the year bears to the Total Dividends.
(e) Subject to the rights of any Senior Preferred
Stock, upon any voluntary or involuntary liquidation,
dissolution, or winding up of the affairs of the Corporation,
and before any distribution of assets shall be made in respect
of any Junior Stock, the holders of the Series A Preferred
Stock shall be entitled to be paid out of the assets of the
Corporation legally available for distribution to its
shareholders a liquidation preference of $25.00 per share in
cash (or property having a fair market value as determined by
the Board of Directors
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<PAGE> 5
valued at $25.00 per share), plus an amount equal to
any accrued but unpaid dividends to the date of payment.
After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of
Series A Preferred Stock shall have no right or claims to any
of the remaining assets of the Corporation. In the event
that, upon any such voluntary or involuntary liquidation,
dissolution, or winding up of the affairs of the Corporation,
the available assets of the Corporation are insufficient to
pay the amount of the liquidation distributions on all
outstanding shares of Series A Preferred Stock and the
corresponding amounts payable on all shares of Parity
Preferred Stock, then the holders of Series A Preferred Stock
and Parity Preferred Stock shall share ratably in any such
distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively
entitled. Neither the consolidation or merger of the
Corporation with or into any other corporation, trust, or
entity (or of any other corporation with or into the
Corporation) nor the sale, lease, or conveyance of all or
substantially all of the property or business of the
Corporation shall be deemed to constitute a liquidation,
dissolution or winding up of the Corporation for the purpose
of this Paragraph (e) of this Item (i).
(f) (1) The Series A Preferred Stock is not
redeemable prior to October 3, 2002. On and after October 3,
2002, the Corporation, at its option upon not less than 30 nor
more than 60 days' written notice, may redeem shares of the
Series A Preferred Stock, in whole or in part, at any time and
from time to time, for a cash redemption price of $25.00 per
share, plus all accrued and unpaid dividends to the date fixed
for redemption (except as provided below).
(2) The redemption price of the Series A
Preferred Stock (other than the portion thereof consisting of
accrued but unpaid dividends) shall be payable solely out of
the sale proceeds of other "capital stock" of the Corporation.
For purposes of the preceding sentence, the term "capital
stock" means any equity securities of the Corporation
(including Common Stock and Preferred Stock), shares,
interest, participation, or other ownership interests (however
designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities) or
options to purchase any of the foregoing. Holders of Series A
Preferred Stock to be redeemed shall surrender such shares at
the place designated in the notice of redemption and shall be
entitled to the redemption price and any accrued and unpaid
dividends payable upon such redemption following such
surrender. If notice of redemption has been given and if the
Corporation has set aside in trust the funds necessary for the
redemption, then from and after the redemption date: (i)
dividends shall cease to accrue on such shares of Series A
Preferred Stock; (ii) such shares of Series A Preferred Stock
shall no longer be deemed outstanding; and (iii) all rights of
the holders of such shares shall terminate, except the right
to receive the redemption price. If less than all of the
outstanding Series A Preferred Stock is to be redeemed, the
Series A Preferred Stock to be redeemed shall be selected pro
rata (as nearly as may be practicable without creating
fractional shares) or by any other equitable method determined
by the Corporation.
(3) Unless full cumulative dividends on
all shares of Series A Preferred Stock shall have been or
contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment, no
shares of Series A Preferred Stock shall be redeemed unless
all outstanding shares of Series A Preferred Stock are
simultaneously redeemed, and the Corporation shall not
purchase or otherwise acquire directly or indirectly any
shares of Series A Preferred Stock (except by exchange for
Junior Stock); however, the foregoing shall not prevent the
purchase or acquisition of shares of Series A Preferred Stock
pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding shares of Series A
Preferred Stock.
(4) Notice of redemption shall be given
by publication in a newspaper of general circulation in The
City of New York, such publication to be made once a week for
two successive weeks commencing not less than 30 nor more than
60 days prior to the redemption date. A similar notice shall
be mailed by the Corporation, postage prepaid, not less than
30 nor more than 60
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<PAGE> 6
days prior to the redemption date, addressed to the
respective holders of record of the Series A Preferred Stock
to be redeemed at their respective addresses as they appear on
the stock transfer records of the Corporation. No failure to
give or defect in such notice shall affect the validity of the
proceedings for the redemption of any shares of Series A
Preferred Stock except as to the holder to whom notice was
defective or not given. Each notice shall state: (i) the
redemption date; (ii) the redemption price; (iii) the number
of shares of Series A Preferred Stock to be redeemed; (iv) the
place or places where the Series A Preferred Stock is to be
surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on
such redemption date. If fewer than all shares of the Series
A Preferred Stock held by any holder are to be redeemed, the
notice mailed to such holder shall also specify the number of
shares of Series A Preferred Stock to be redeemed from such
holder.
(5) The holders of Series A Preferred
Stock at the close of business on a Dividend Record Date shall
be entitled to receive the dividend payable with respect to
such Series A Preferred Stock on the corresponding Dividend
Payment Date notwithstanding the redemption thereof between
such Dividend Record Date and the corresponding Dividend
Payment Date or the Corporation's default in the payment of
the dividend due. Except as provided above, the Corporation
will make no payment or allowance for unpaid dividends,
regardless of whether in arrears, on called Series A Preferred
Stock.
(6) The Series A Preferred Stock has no
stated maturity and shall not be subject to any sinking fund
or mandatory redemption. The Series A Preferred Stock is not
convertible into any other securities of the Corporation, but
is subject to the Excess Stock (and all other) provisions of
this Article III.
(g) (1) Except as may be required by law or
as otherwise expressly provided in this Item (i) of this
Subsection (c) of this Section 2 of this Article III, the
holders of Series A Preferred Stock shall not be entitled to
vote. On all matters with respect to which the Series A
Preferred Stock is entitled to vote, each share of Series A
Preferred Stock shall be entitled to one vote.
(2) Whenever dividends on the Series A
Preferred Stock are in arrears for six or more quarterly
periods, the number of directors then constituting the Board
of Directors shall be increased by two, and the holders of
Series A Preferred Stock (voting separately as a class with
all other series of Preferred Stock upon which like voting
rights have been conferred and are exercisable) ("Voting
Parity Preferred") shall have the right to elect two directors
of the Corporation at a special meeting called by the holders
of record of at least 10% of the Series A Preferred Stock or
at least 10% of any other Voting Parity Preferred so in
arrears (unless such request is received less than 90 days
before the date fixed for the next annual or special meeting
of the shareholders) or at the next annual meeting of
shareholders, and at each subsequent annual meeting, until all
dividends accumulated on the Series A Preferred Stock for the
past dividend periods and the then current dividend period
have been fully paid or declared and a sum sufficient for the
payment of such dividends has been set aside for payment. If
and when all accumulated dividends and the dividend for the
then current dividend period on the Series A Preferred Stock
shall have been paid in full or set aside for payment in full,
the holders of the Series A Preferred Stock shall be divested
of the foregoing voting rights, and if all accumulated
dividends and the dividend for the then current period have
been paid in full or set aside for payment in full on all
series of Voting Parity Preferred, the term of office of each
director so elected by the
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<PAGE> 7
holders of the Series A Preferred Stock and the Voting
Parity Preferred shall terminate.
(3) As long as any shares of Series A
Preferred Stock remain outstanding, the Corporation shall not,
without the affirmative vote or consent of the holders of at
least two-thirds of the outstanding shares of Series A
Preferred Stock (voting as a separate class): (i) authorize or
create, or increase the authorized or issued amount of, any
Capital Stock ranking senior to the Series A Preferred Stock
with respect to the payment of dividends or the distribution
of assets upon liquidation, dissolution, or winding up or
reclassify any authorized Capital Stock of the Corporation
into such shares, or create, authorize, or issue any
obligation or security convertible into or evidencing the
right to purchase any such shares; or (ii) amend, alter, or
repeal the provisions of these Amended and Restated Articles
of Incorporation, whether by merger, consolidation, or
otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege, or voting power of
the Series A Preferred Stock or the holders thereof; however,
as long as the Series A Preferred Stock remains outstanding
with its terms materially unchanged, taking into account that
upon the occurrence of an Event, the Corporation may not be
the surviving entity, the occurrence of an Event described in
clause (ii) above of this Subparagraph (3) shall not be deemed
to materially and adversely affect such rights, preferences,
privileges, or voting power of the holders of Series A
Preferred Stock, and (x) any increase in the amount of the
authorized Preferred Stock or the creation or issuance of any
other series of Preferred Stock, or (y) any increase in the
amount of authorized shares of the Series A Preferred Stock or
any other series of Preferred Stock, in each case ranking on a
parity with or junior to the Series A Preferred Stock with
respect to payment of dividends or the distribution of assets
upon liquidation, dissolution, or winding up, shall not be
deemed to materially and adversely affect such rights,
preferences, privileges, or voting powers.
(4) Notwithstanding the foregoing, the
Series A Preferred Stock shall not be entitled to vote, and
the foregoing voting provisions shall not apply, if at or
prior to the time when the act with respect to which such vote
would otherwise be required is effected, all outstanding
shares of the Series A Preferred Stock have been redeemed or
called for redemption, and sufficient funds have been
deposited in trust for the benefit of the holders of the
Series A Preferred Stock to effect such redemption.
(d) Restrictions on Transfer.
(i) Definitions. The following terms shall have the
following meanings for purposes of these Amended and Restated Articles
of Incorporation:
"Affiliate" and "Affiliates" mean, (i) with respect
to any individual, any member of such individual's Immediate Family, a
Family Trust with respect to such individual, and any Person (other
than an individual) in which such individual and/or his Affiliate(s)
owns, directly or indirectly, more than 50% of any class of Equity
Security or of the aggregate Beneficial Interest of all beneficial
owners, or in which such individual or his Affiliate is the sole
general partner, or is the sole managing general partner, or which is
controlled by such individual and/or his Affiliates; and (ii) with
respect to any Person (other than an individual), any Person (other
than an individual) which controls, is controlled by, or is under
common control with, such Person, and any individual who is the sole
general partner or the sole managing general partner in, or who
controls, such Person. The terms "Affiliated" and "Affiliated with"
shall have the correlative meanings.
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<PAGE> 8
"Beneficial Interest" means an interest, whether as
partner, joint venturer, cestui que trust, or otherwise, a contract
right, or a legal or equitable position under or by which the
possessor participates in the economic or other results of the Person
(other than an individual) to which such interest, contract right, or
position relates.
"Beneficial Ownership" means ownership of shares of
Capital Stock (including Capital Stock that may be acquired upon
conversion of Debentures) (i) by a Person who owns such shares of
Capital Stock in his own name or is treated as an owner of such shares
of Capital Stock constructively through the application of Section 544
of the Code, as modified by Sections 856(h)(1)(B) and 856(h)(3)(A) of
the Code; or (ii) by a person who falls within the definition of
"Beneficial Owner" under Section 776(4) of the Act. The terms
"Beneficial Owner", "Beneficially Owns" and "Beneficially Owned" shall
have the correlative meanings.
"Capital Stock" means the Common Stock and the
Preferred Stock, including shares of Common Stock and Preferred Stock
that have become Excess Stock.
"Charitable Proceeds" means the amounts due from time
to time to the Designated Charity, consisting of (i) dividends or
other distributions, including capital gain distributions (but not
including liquidating distributions not otherwise within the
definition of Excess Liquidation Proceeds), paid with respect to
Excess Stock, (ii) in the case of a sale of Excess Stock, the excess,
if any, of the Net Sales Proceeds over the amount due to the Purported
Transferee as determined under Item (iii)(b) of Subsection (e) of this
Section 2 of this Article III, and (iii) in the case of any voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation, the Excess Liquidation Proceeds.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" means ownership of shares of
Capital Stock (including Capital Stock that may be acquired upon
conversion of Debentures) by a Person who owns such shares of Capital
Stock in his own name or would be treated as an owner of such shares
of Capital Stock constructively through the application of Section 318
of the Code, as modified by Section 856 (d)(5) of the Code. The terms
"Constructive Owner", "Constructively Owns" and "Constructively Owned"
shall have the correlative meanings.
"Control(s)" (and its correlative terms "Controlled
By" and "Under Common Control With") means, with respect to any Person
(other than an individual), possession by the applicable Person or
Persons of the power, acting alone (or solely among such applicable
Person or Persons, acting together), to designate and direct or cause
the designation and direction of the management and policies thereof,
whether through the ownership of voting securities, by contract, or
otherwise.
"Debentures" means any convertible debentures or
other convertible debt securities issued by the Corporation from time
to time.
"Demand" means the written notice to the Purported
Transferee demanding delivery to the Designated Agent of (i) all
certificates or other evidence of ownership of shares of Excess Stock
and (ii) Excess Share Distributions. Any reference to "the date of
the Demand" means the date upon which the Demand is mailed or
otherwise transmitted by the Corporation.
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<PAGE> 9
"Designated Agent" means the agent designated by the
Board of Directors, from time to time, to act as attorney-in-fact for
the Designated Charity and to take delivery of certificates or other
evidence of ownership of shares of Excess Stock and Excess Share
Distributions from a Purported Transferee.
"Designated Charity" means any one or more
organizations described in Sections 501(c)(3) and 170(c) of the Code,
as may be designated by the Board of Directors from time to time to
receive any Charitable Proceeds.
"Equity Security" has the meaning ascribed to it in
the Securities Exchange Act of 1934, as amended from time to time, and
the rules and regulations thereunder (and any successor laws, rules
and regulations of similar import).
"Excess Liquidation Proceeds" means, with respect to
shares of Excess Stock, the excess, if any, of (i) the amount which
would have been due to the Purported Transferee pursuant to Subsection
(a)(ii) of this Section 2 of this Article III with respect to such
stock in the case of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation if the Transfer had been
valid under Item (ii) of this Subsection (d) of this Section 2 of this
Article III, over (ii) the amount due to the Purported Transferee as
determined under Item (iii)(b)(2) of Subsection (e) of this Section 2
of this Article III.
"Excess Share Distributions" means dividends or other
distributions, including, without limitation, capital gain
distributions and liquidating distributions, paid with respect to
shares of Excess Stock.
"Excess Stock" means shares of Common Stock and
shares of Preferred Stock that have been automatically converted to
Excess Stock pursuant to the provisions of Item (iii) of this
Subsection (d) of this Section 2 of this Article III, and which are
subject to the provisions of Subsection (e) of this Section 2 of this
Article III.
"Existing Holder" means (i) the General Motors
Hourly-Rate Employes Pension Trust, (ii) the General Motors Salaried
Employes Pension Trust (such trusts referred to in (i) or (ii) are
hereinafter referred to as "GMPTS"), (iii) the AT&T Master Pension
Trust, (iv) any nominee of the foregoing, and (v) any Person to whom
an Existing Holder transfers Beneficial Interest of Regular Capital
Stock if (x) the result of such transfer would be to cause the
transferee to Beneficially Own shares of Regular Capital Stock in
excess of the greater of the Ownership Limit or any pre-existing
Existing Holder Limit with respect to such transferee (such excess
being herein referred to as the "Excess Amount") and (y) the
transferor Existing Holder, by notice to the Corporation in connection
with such transfer, designates such transferee as a successor Existing
Holder (it being understood that, upon any such transfer, the Existing
Holder Limit for the transferor Existing Holder shall be reduced by
the Excess Amount and the then applicable Ownership Limit or Existing
Holder Limit for the transferee Existing Holder shall be increased by
such Excess Amount).
"Existing Holder Limit" (i) for any Existing Holder
who is an Existing Holder by virtue of Clauses (i) and (ii) of the
definition thereof means the greater of (x) 9.9% of the outstanding
Capital Stock, reduced (but not below the Ownership Limit) by any
Excess Amount transferred in accordance with clause (v) of the
definition of Existing Holder and (y) 4,365,713 shares of Regular
Capital Stock (as adjusted to reflect any increase in the number of
outstanding shares as the result of a stock dividend or any increase
or decrease in the number of outstanding shares resulting from a stock
split or reverse stock split), reduced (but not below the Ownership
Limit) by any Excess Amount transferred in accordance with clause (v)
of the definition of Existing Holder, (ii) for any Existing Holder who
is an Existing Holder by virtue of
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<PAGE> 10
Clause (iii) of the definition thereof means the greater of (x) 13.74%
of the outstanding Capital Stock, reduced (but not below the
Ownership Limit) by any Excess Amount transferred in accordance with
clause (v) of the definition of Existing Holder and (y) 6,059,080
shares of Regular Capital Stock (as adjusted to reflect any increase
in the number of outstanding shares as the result of a stock dividend
or any increase or decrease in the number of outstanding shares
resulting from a stock split or reverse stock split), reduced (but not
below the Ownership Limit) by any Excess Amount transferred in
accordance with Clause (v) of the definition of Existing Holder, (iii)
for any Existing Holder who is an Existing Holder by virtue of Clause
(iv) of the definition thereof means the percentage of the outstanding
Capital Stock or the number of shares of the outstanding Regular
Capital Stock that the Beneficial Owner for whom the Existing Holder
is acting as nominee is permitted to own under this definition, and
(iv) for any Existing Holder who is an Existing Holder by virtue of
Clause (v) of the definition thereof means the greater of (x) a
percentage of the outstanding Capital Stock equal to the Ownership
Limit or pre-existing Existing Holder Limit applicable to such Person
plus the Excess Amount transferred to such Person pursuant to clause
(v) of the definition of Existing Holder and (y) the number of shares
of outstanding Regular Capital Stock equal to the Ownership Limit or
pre-existing Existing Holder Limit applicable to such Person plus the
Excess Amount transferred to such Person pursuant to clause (v) of the
definition of Existing Holder.
"Family Trust" means, with respect to an individual,
a trust for the benefit of such individual or for the benefit of any
member or members of such individual's Immediate Family or for the
benefit of such individual and any member or members of such
individual's Immediate Family (for the purpose of determining whether
or not a trust is a Family Trust, the fact that one or more of the
beneficiaries (but not the sole beneficiary) of the trust includes a
Person or Persons, other than a member of such individual's Immediate
Family, entitled to a distribution after the death of the settlor if
he, she, it, or they shall have survived the settlor of such trust
and/or includes an organization or organizations exempt from federal
income taxes pursuant to the provisions of Section 501(a) of the Code
and described in Section 501(c)(3) of the Code, shall be disregarded);
provided, however, that in respect of transfers by way of testamentary
or inter vivos trust, the trustee or trustees shall be solely such
individual, a member or members of such individual's Immediate Family,
a responsible financial institution and/or an attorney that is a
member of the bar of any state in the United States.
"Immediate Family" means, with respect to a Person,
(i) such Person's spouse (former or then current), (ii) such Person's
parents and grandparents, and (iii) ascendants and descendants
(natural or adoptive, of the whole or half blood) of such Person's
parents or of the parents of such Person's spouse (former or then
current).
"Look Through Entity" means any Person that (i) is
not an individual or an organization described in Sections 401(a),
501(c)(17), or 509(a) of the Code or a portion of a trust permanently
set aside or to be used exclusively for the purposes described in
Section 642(c) of the Code or a corresponding provision of a prior
income tax law, and (ii) provides the Corporation with (a) a written
affirmation and undertaking, subject only to such exceptions as are
acceptable to the Corporation in its sole discretion, that (x) it is
not an organization described in Sections 401(a), 501(c)(17) or 509(a)
of the Code or a portion of a trust permanently set aside or to be
used exclusively for the purposes described in Section 642(c) of the
Code or a corresponding provision of a prior income tax law, (y) after
the application of the rules for determining stock ownership, as set
forth in Section 544(a) of the Code, as modified by Sections
856(h)(1)(B) and 856(h)(3)(A) of the Code, no "individual" would own,
Beneficially or Constructively, more than the then- applicable
Ownership Limit, taking into account solely for the purpose of
determining such "individual's" ownership for the purposes of this
clause (y) (but not for determining whether such "individual"
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<PAGE> 11
is in compliance with the Ownership Limit for any other purpose) only
such "individual's" Beneficial and Constructive Ownership derived
solely from such Person and (z) it does not Constructively Own
10% or more of the equity of any tenant with respect to real property
from which the Corporation or TRG receives or accrues any rent from
real property, and (b) such other information regarding the Person
that is relevant to the Corporation's qualifications to be taxed as a
REIT as the Corporation may reasonably request.
"Market Price" means, with respect to any class or
series of shares of Regular Capital Stock, the last reported sales
price of such class or series of shares reported on the New York Stock
Exchange on the trading day immediately preceding the relevant date,
or if such class or series of shares of Regular Capital Stock is not
then traded on the New York Stock Exchange, the last reported sales
price of such class or series of shares on the trading day immediately
preceding the relevant date as reported on any exchange or quotation
system over which such class or series of shares may be traded, or if
such class or series of shares of Regular Capital Stock is not then
traded over any exchange or quotation system, then the market price of
such class or series of shares on the relevant date as determined in
good faith by the Board of Directors of the Corporation.
"Net Sales Proceeds" means the gross proceeds
received by the Designated Agent upon a sale of Regular Capital Stock
that has become Excess Stock, reduced by (i) all expenses (including,
without limitation, any legal expenses or fees) incurred by the
Designated Agent in obtaining possession of (x) the certificates or
other evidence of ownership of the Regular Capital Stock that had
become Excess Stock and (y) any Excess Share Distributions, and (ii)
any expenses incurred in selling or transferring such shares
(including, without limitation, any brokerage fees, commissions, stock
transfer taxes or other transfer fees or expenses).
"Ownership Limit" means 8.23% of the value of the
outstanding Capital Stock of the Corporation.
"Person" means (a) an individual, corporation,
partnership, estate, trust (including a trust qualified under Section
401(a) or 501(c)(17) of the Code), a portion of a trust permanently
set aside for or to be used exclusively for the purposes described in
Section 642(c) of the Code, association, private foundation within the
meaning of Section 509(a) of the Code, joint stock company or other
entity and (b) also includes a group as that term is used for purposes
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations thereunder (and any
successor laws, rules and regulations of similar import).
"Purported Transferee" means, with respect to any
purported Transfer which results in Excess Stock, the purported
beneficial transferee for whom the shares of Regular Capital Stock
would have been acquired if such Transfer had been valid under Item
(ii) of this Subsection (d) of this Section 2 of this Article III.
"Regular Capital Stock" means shares of Common Stock
and Preferred Stock that are not Excess Stock.
"REIT" means a Real Estate Investment Trust defined
in Section 856 of the Code.
"Transfer" means any sale, transfer, gift,
assignment, devise or other disposition of Capital Stock, (including
(i) the granting of any option or entering into any agreement for the
sale, transfer or other disposition of Capital Stock or (ii) the sale,
transfer, assignment or other disposition of any securities or rights
convertible
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<PAGE> 12
into or for Capital Stock), whether voluntary or involuntary,
whether of record or beneficial ownership, and whether by operation of
law or otherwise.
(ii) Restriction on Transfers.
(a) Except as provided in Item (viii) of this
Subsection (d) of this Section 2 of this Article III, no
Person (other than an Existing Holder) shall Beneficially Own
or Constructively Own shares of Capital Stock having an
aggregate value in excess of the Ownership Limit, and No
Existing Holder shall Beneficially Own or Constructively Own
shares of Capital Stock in excess of the Existing Holder Limit
for such Existing Holder.
(b) Except as provided in Item (viii) of this
Subsection (d) of this Section 2 of this Article III, any
Transfer that, if effective, would result in any Person (other
than an Existing Holder) Beneficially Owning or Constructively
Owning shares of Regular Capital Stock having an aggregate
value in excess of the Ownership Limit shall be void ab initio
as to the Transfer of such shares which would be otherwise
Beneficially Owned or Constructively Owned by such Person in
excess of the Ownership Limit, and the intended transferee
shall acquire no rights in such shares.
(c) Except as provided in Item (viii) of this
Subsection (d) of this Section 2 of this Article III, any
Transfer that, if effective, would result in any Existing
Holder Beneficially Owning or Constructively Owning shares of
Regular Capital Stock in excess of the applicable Existing
Holder Limit shall be void ab initio as to the Transfer of
such shares which would be otherwise Beneficially Owned or
Constructively Owned by such Existing Holder in excess of the
applicable Existing Holder Limit, and such Existing Holder
shall acquire no rights in such shares.
(d) Except as provided in Item (viii) of this
Subsection (d) of this Section 2 of this Article III, any
Transfer that, if effective, would result in the Capital Stock
being beneficially owned by fewer than 100 Persons (determined
without reference to any rules of attribution) shall be void
ab initio as to the Transfer of such shares which would be
otherwise beneficially owned by the transferee, and the
intended transferee shall acquire no rights in such shares.
(e) Any Transfer that, if effective, would result
in the Corporation being "closely held" within the meaning of
Section 856(h) of the Code shall be void ab initio as to the
Transfer of the shares of Regular Capital Stock which would
cause the Corporation to be "closely held" within the meaning
of Section 856(h) of the Code, and the intended transferee
shall acquire no rights in such shares.
(f) In determining the shares which any Person
Beneficially Owns (or would Beneficially Own following a
purported Transfer) or Constructively Owns (or would
Constructively Own following a purported Transfer) for
purposes of applying the limitations contained in Paragraphs
(a), (b), (c), (d) and (e) of this Item (ii) of this
Subsection (d) of this Article III:
(1) shares of Capital Stock that may be
acquired upon conversion of Debentures Beneficially Owned or
Constructively Owned by such Person, but not shares of Capital
Stock issuable upon conversion of Debentures held by others,
are deemed to be outstanding.
(2) a pension trust shall be treated as
owning all shares of Capital Stock (including Capital Stock
that may be acquired upon conversion of
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<PAGE> 13
Debentures) as are (x) owned in its own name or with
respect to which it is treated as an owner constructively
through the application of Section 544 of the Code as modified
by Section 856(h)(1)(B) of the Code but not by Section
856(h)(3)(A) of the Code and (y) owned by, or treated as owned
by, constructively through the application of Section 544 of
the Code as modified by Section 856(h)(1)(B) of the Code but
not by Section 856(h)(3)(A) of the Code, all pension trusts
sponsored by the same employer as such pension trust or
sponsored by any of such employer's Affiliates.
Notwithstanding the foregoing, (y) above shall not apply in
the case of either Motors Insurance Corporation and its
subsidiaries (collectively, "MIC") or any pension trusts
sponsored by the General Motors Corporation, a Delaware
corporation ("GMC"), or the American Telephone and Telegraph
Company, a New York corporation ("AT&T"), or by any of their
respective Affiliates, provided that with respect to MIC and
each such pension trust sponsored by GMC, AT&T or any of their
respective Affiliates, other than the Existing Holders
described in (i) through (iii) in the definition thereof, all
of the following conditions are met: (i) each such pension
trust is administered, and will continue to be administered,
by persons who do not serve in an administrative or other
capacity to any other such pension trust sponsored by GMC or
any Affiliate of GMC or AT&T or any Affiliate of AT&T, as
applicable, including the Existing Holders described in (i)
through (iv) in the definition thereof, (it being understood
that the fact that any two such pension trusts may have in
common one or more, but less than a majority, of the persons
having ultimate investment authority for such pension trusts
shall not cause such trusts to be treated as one Person,
provided that they are otherwise separately administered as
hereinbefore described), (ii) day to day investment decisions
with respect to MIC are made by a person or persons different
than the person or persons who make such decisions for the
pension trusts sponsored by GMC or its affiliates, including
the Existing Holders described in (i), (ii) and, in respect of
(i) and (ii), item (iv) in the definition thereof, (although
MIC and the pension trusts sponsored by GMC may have in common
the person or persons with ultimate investment authority for
such entities), and the investment of MIC in the Corporation
does not exceed 2% of the value of the outstanding Capital
Stock of the Corporation, (iii) neither MIC nor any such
pension trust acts or will act, in concert with MIC, any other
pension trust sponsored by GMC or any Affiliate of GMC or AT&T
or any Affiliate of AT&T, as applicable, including the
Existing Holders described in (i) through (iv) in the
definition thereof, with respect to its investment in the
Corporation, and (iv) as from time to time requested by the
Corporation, MIC and each pension trust shall provide the
Corporation with a representation and undertaking in writing
to the foregoing effect.
(3) If there are two or more classes of
stock then outstanding, the total value of the outstanding
Capital Stock shall be allocated among the different classes
and series according to the relative value of each class or
series, as determined by reference to the Market Price per
share of each such class or series, using the date on which
the Transfer occurs as the relevant date, or the effective
date of the change in capital structure as the relevant date,
as appropriate.
(g) If any shares are transferred resulting in a
violation of the Ownership Limit or Paragraphs (b), (c), (d)
or (e) of this Item (ii) of this Subsection (d) of this
Section 2 of this Article III, such Transfer shall be valid
only with respect to such amount of shares transferred as does
not result in a violation of such limitations, and such
Transfer otherwise shall be null and void ab initio.
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<PAGE> 14
(iii) Conversion to Excess Stock.
(a) If, notwithstanding the other provisions
contained in this Article III, at any time there is a
purported Transfer or other change in the capital structure of
the Corporation such that any Person (other than an Existing
Holder) would Beneficially Own or any Person (other than an
Existing Holder) would Constructively Own shares of Regular
Capital Stock in excess of the Ownership Limit, or that any
Person who is an Existing Holder would Beneficially Own or any
Person who is an Existing Holder would Constructively Own
shares of Regular Capital Stock in excess of the Existing
Holder Limit, then, except as otherwise provided in Item
(viii) of this Subsection (d) of this Section 2 of this
Article III, such shares of Common Stock or Preferred Stock,
or both, in excess of the Ownership Limit or Existing Holder
Limit, as the case may be, (rounded up to the nearest whole
share) shall automatically become Excess Stock. Such
conversion shall be effective as of the close of business on
the business day prior to the date of the Transfer or change
in capital structure.
(b) If, notwithstanding the other provisions
contained in this Article III, at any time, there is a
purported Transfer or other change in the capital structure of
the Corporation which, if effective, would cause the
Corporation to become "closely held" within the meaning of
Section 856(h) of the Code then the shares of Common Stock or
Preferred Stock, or both, being Transferred which would cause
the Corporation to be "closely held" within the meaning of
Section 856(h) of the Code or held by a Person in excess of
that Person's Ownership Limit or Existing Holder Limit, as
applicable (rounded up to the nearest whole share) shall
automatically become Excess Stock. Such conversion shall be
effective as of the close of business on the business day
prior to the date of the Transfer or change in capital
structure.
(c) Shares of Excess Stock shall be issued and
outstanding stock of the Corporation. The Purported
Transferee shall have no rights in such shares of Excess Stock
except as provided in Subsection (e) of this Section 2 of this
Article III.
(iv) Notice of Restricted Transfer. Any Person who
acquires or attempts to acquire shares in violation of Item (ii) of
this Subsection (d) of this Section 2 of this Article III, or any
Person who is a transferee such that Excess Stock results under Item
(iii) of this Subsection (d) of this Section 2 of this Article III,
shall immediately give written notice to the Corporation of such event
and shall provide to the Corporation such other information as the
Corporation may request regarding such Person's ownership of Capital
Stock.
(v) Owners Required to Provide Information.
(a) Every Beneficial Owner of more than 5% (or
such other percentage, as provided in the applicable
regulations adopted under Sections 856 through 859 of the
Code) of the outstanding shares of the Capital Stock of the
Corporation shall, within 30 days after January 1 of each
year, give written notice to the Corporation stating the name
and address of such Beneficial Owner, the number of shares
Beneficially Owned and Constructively Owned, and a full
description of how such shares are held. Every Beneficial
Owner shall, upon demand by the Corporation, disclose to the
Corporation in writing such additional information with
respect to the Beneficial Ownership and Constructive Ownership
of the Capital Stock as the Board of Directors deems
appropriate or necessary (i) to comply with the provisions of
the Code,
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<PAGE> 15
regarding the qualification of the Corporation as a
REIT under the Code, and (ii) to ensure compliance with the
Ownership Limit or the Existing Holder Limit.
(b) Any Person who is a Beneficial Owner or
Constructive Owner of shares of Capital Stock and any Person
(including the shareholder of record) who is holding Capital
Stock for a Beneficial Owner or Constructive Owner, and any
proposed transferee of shares, upon the determination by the
Board of Directors to be reasonably necessary to protect the
status of the Corporation as a REIT under the Code, shall
provide a statement or affidavit to the Corporation, setting
forth the number of shares of Capital Stock already
Beneficially Owned or Constructively Owned by such shareholder
or proposed transferee and any related person specified, which
statement or affidavit shall be in the form prescribed by the
Corporation for that purpose.
(vi) Remedies Not Limited. Subject to Subsection (h) of
this Section 2 of this Article III, nothing contained in this Article
III shall limit the authority of the Board of Directors to take such
other action as it deems necessary or advisable (i) to protect the
Corporation and the interests of its shareholders in the preservation
of the Corporation's status as a REIT, and (ii) to insure compliance
with the Ownership Limit and the Existing Holder Limit.
(vii) Determination. Any question regarding the
application of any of the provisions of this Subsection (d) of this
Section 2 of this Article III, including any definition contained in
Item (i) of this Subsection (d) of this Section 2 of this Article III,
shall be determined or resolved by the Board of Directors and any such
determination or resolution shall be final and binding on the
Corporation, its shareholders, and all parties in interest.
(viii) Exceptions. The Board of Directors, upon advice from,
or an opinion from, Counsel, may exempt a Person from the Ownership
Limit if such Person is a Look Through Entity, provided, however, in
no event may any such exception cause such Person's ownership, direct
or indirect (without taking into account such Person's ownership of
interests in TRG), to exceed 9.9% of the value of the outstanding
Capital Stock.
For a period of 90 days following the purchase of
Regular Capital Stock by an underwriter that (i) is a Look
Through Entity and (ii) participates in a public offering of
the Regular Capital Stock, such underwriter shall not be
subject to the Ownership Limit with respect to the Regular
Capital Stock purchased by it as a part of such public
offering.
(e) Excess Stock.
(i) Surrender of Excess Stock to Designated Agent.
Within thirty business days of the date upon which the Corporation
determines that shares have become Excess Stock, the Corporation, by
written notice to the Purported Transferee, shall demand that any
certificate or other evidence of ownership of the shares of Excess
Stock be immediately surrendered to the Designated Agent (the
"Demand").
(ii) Excess Share Distributions. The Designated Agent
shall be entitled to receive all Excess Share Distributions. The
Purported Transferee of Regular Capital Stock that has become Excess
Stock shall not be entitled to any dividends or other distributions,
including, without limitation, capital gain distributions, with
respect to the Excess Stock. Any Excess Share Distributions paid to a
Purported Transferee shall be remitted to the Designated Agent within
thirty business days after the date of the Demand.
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<PAGE> 16
(iii) Restrictions on Transfer; Sale of Excess Stock.
(a) Excess Stock shall be transferable by the
Designated Agent as attorney-in-fact for the Designated
Charity. Excess Stock shall not be transferable by the
Purported Transferee.
(b) Upon delivery of the certificates or other
evidence of ownership of the shares of Excess Stock to the
Designated Agent, the Designated Agent shall immediately sell
such shares in an arms-length transaction (over the New York
Stock Exchange or such other exchange over which the shares of
the applicable class or series of Regular Capital Stock may
then be traded, if practicable), and the Purported Transferee
shall receive from the Net Sales Proceeds, the lesser of:
(1) the Net Sales Proceeds; or
(2) the price per share that such
Purported Transferee paid for the Regular Capital Stock in the
purported Transfer that resulted in the Excess Stock, or if
the Purported Transferee did not give value for such shares
(because the Transfer was, for example, through a gift, devise
or other transaction), a price per share equal to the Market
Price determined using the date of the purported Transfer that
resulted in the Excess Stock as the relevant date.
(c) If some or all of the shares of Excess Stock
have been sold prior to receiving the Demand, such sale shall
be deemed to been made for the benefit of and as the agent for
the Designated Charity. The Purported Transferee shall pay to
the Designated Agent, within thirty business days of the date
of the Demand, the entire gross proceeds realized upon such
sale. Notwithstanding the preceding sentence, the Designated
Agent may grant written permission to the Purported Transferee
to retain an amount from the gross proceeds equal to the
amount the Purported Transferee would have been entitled to
receive had the Designated Agent sold the shares as provided
in Item (iii)(b) of this Subsection (e) of this Section 2 of
this Article III.
(d) The Designated Agent shall promptly pay to
the Designated Charity any Excess Share Distributions
recovered by the Designated Agent and the excess, if any, of
the Net Sales Proceeds over the amount due to the Purported
Transferee as provided in Item (iii)(b) of this Subsection (e)
of this Section 2 of this Article III.
(iv) Voting Rights. The Designated Agent shall have the
exclusive right to vote all shares of Excess Stock as the
attorney-in-fact for the Designated Charity. The Purported Transferee
shall not be entitled to vote such shares (except as required by
applicable law). Notwithstanding the foregoing, votes erroneously
cast by a Prohibited Transferee shall not be invalidated in the event
that the Corporation has already taken irreversible corporate action
to effect a reorganization, merger, sale or dissolution of the
Corporation.
(v) Rights Upon Liquidation. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or
any distribution of the assets of the Corporation, a Purported
Transferee shall be entitled to receive the lesser of (i) that amount
which would have been due to such Purported Transferee had the
Designated Agent sold the shares of Excess Stock as provided in Item
(iii)(b) of this Subsection (e) of this Section 2 of this Article III
and (ii) that amount which would have been due to the Purported
Transferee if the Transfer had been valid under Item (ii) of
Subsection (d) of this Section 2 of this Article III, determined (A)
in the case of Common Stock,
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<PAGE> 17
pursuant to Subsection (a)(ii) of this Section 2 of this
Article III, and (B) in the case of Preferred Stock, pursuant to the
provisions of these Amended and Restated Articles of Incorporation,
amended as authorized by Section 1 of this Article III, which sets
forth the liquidation rights of such class or series of Preferred
Stock. With respect to shares of Excess Stock, a Purported Transferee
shall not have any rights to share in the assets of the Corporation
upon the liquidation, dissolution or winding up of the Corporation
other than the right to receive the amount determined in the preceding
sentence and shall not be entitled to any preference or priority (as a
creditor of the Corporation) over the holders of the shares of Regular
Capital Stock. Any Excess Liquidation Proceeds shall be paid to the
Designated Charity.
(vi) Action by Corporation to Enforce Transfer
Restrictions. If the Purported Transferee fails to deliver the
certificates or other evidence of ownership and all Excess Share
Distributions to the Designated Agent within thirty business days of
the date of Demand, the Corporation shall take such legal action to
enforce the provisions of this Article III as may be permitted under
applicable law.
(f) Legend. Each certificate for Capital Stock shall bear the
following legend:
"The Amended and Restated Articles of Incorporation, as the
same may be amended (the "Articles"), impose certain
restrictions on the transfer and ownership of the shares
represented by this Certificate based upon the percentage of
the outstanding shares owned by the shareholder. At no
charge, any shareholder may receive a written statement of the
restrictions on transfer and ownership that are imposed by the
Articles."
(g) Severability. If any provision of this Article III or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
(h) New York Stock Exchange Settlement. Nothing contained in
these Amended and Restated Articles of Incorporation shall preclude the
settlement of any transaction entered into through the facilities of the New
York Stock Exchange or of any other stock exchange on which shares of the
Common Stock or class or series of Preferred Stock may be listed, or of the
Nasdaq National Market (if the shares are quoted on such Market) and which has
conditioned such listing or quotation on the inclusion in the Corporation's
Amended and Restated Articles of Incorporation of a provision such as this
Subsection (h). The fact that the settlement of any transaction is permitted
shall not negate the effect of any other provision of this Article III and any
transferee in such a transaction shall be subject to all of the provisions and
limitations set forth in this Article III.
ARTICLE IV
Registered Office and Registered Agent
1. Registered Office.
The address and mailing address of the registered office of the
Corporation is 500 North Woodward Avenue, Suite 100, Bloomfield Hills, Michigan
48304.
2. Resident Agent.
The resident agent for service of process on the Corporation at
the registered office is Jeffrey H. Miro.
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<PAGE> 18
ARTICLE V
Plan of Compromise or Reorganization
When a compromise or arrangement or a plan of reorganization of the
Corporation is proposed between the Corporation and its creditors or any class
of them or between the Corporation and its shareholders or any class of them, a
court of equity jurisdiction within the State of Michigan, on application of
the Corporation or of a creditor or shareholder thereof, or on application of a
receiver appointed for the Corporation, may order a meeting of the creditors or
class of creditors or of the shareholders or class of shareholders to be
affected by the proposed compromise or arrangement or reorganization, to be
summoned in such manner as the court directs. If a majority in number
representing 75% in value of the creditors or class of creditors, or of the
shareholders or class of shareholders to be affected by the proposed compromise
or arrangement or a reorganization, agree to a compromise or arrangement or a
reorganization of the Corporation as a consequence of the compromise or
arrangement, the compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has been made, shall be
binding on all the creditors or class of creditors, or on all the shareholders
or class of shareholders and also on the Corporation.
ARTICLE VI
Directors
For so long as the Corporation has the right to designate, pursuant to
The Amended and Restated Agreement of Limited Partnership of TRG (as the same
may be amended, the "Partnership Agreement"), members of the committee of TRG
that have the power to approve or propose all actions, decisions,
determinations, designations, delegations, directions, appointments, consents,
approvals, selections, and the like to be taken, made or given, with respect to
TRG, its business and its properties as well as the management of all affairs
of TRG (the "Partnership Committee"), the Board of Directors shall consist of,
except during the period of any vacancy between annual meetings of the
shareholders, that number of members as are set forth in the By-Laws of the
Corporation of which, except during the period of any vacancy between annual
meetings of the shareholders, not less than 40% (rounded up to the next whole
number) of the members shall be Independent Directors (as hereinafter defined),
and, thereafter, the Board of Directors shall consist of, except during the
period of any vacancy between annual meetings of the shareholders, that number
of members as are set forth in the By-Laws of the Corporation. For purposes of
this Article VI, "Independent Director" shall mean an individual who is neither
one of the following named persons nor an employee, beneficiary, principal,
director, officer or agent of, or a general partner in, or limited partner
(owning in excess of 5% of the Beneficial Interest) or shareholder (owning in
excess of 5% of the Beneficial Interest) in, any such named Person: (i) for so
long as TG Partners Limited Partnership, a Delaware limited partnership, has
the right to appoint one or more Partnership Committee members, A. Alfred
Taubman and any Affiliate of A. Alfred Taubman or any member of his Immediate
Family, (ii) for so long as Taub-Co Management, Inc., a Michigan corporation
(formerly The Taubman Company, Inc. ("T-Co")) has the right to appoint one or
more Partnership Committee members, T-Co or an Affiliate of T-Co, (iii) for so
long as a Taubman Transferee (as hereinafter defined) has the right to appoint
one or more Partnership Committee members, a Taubman Transferee, or an
Affiliate of such Taubman Transferee, (iv) for so long as GMPTS has the right
to appoint one or more Partnership Committee members, GMPTS, General Motors
Corporation, or an Affiliate of GMPTS or of General Motors Corporation, and (v)
for so long as a GMPTS Transferee (as hereinafter defined) has the right to
appoint one or more Partnership Committee members, a GMPTS Transferee or an
Affiliate of such GMPTS Transferee. "Taubman Transferee" means a single Person
that acquires, pursuant to Section 8.1(b) or Section 8.3(a) of The Partnership
Agreement, or upon the foreclosure or like action in respect of a pledge of a
partnership interest in TRG, the then (i.e., at the time of such acquisition)
entire partnership interest in TRG (excluding, in the case of an acquisition
pursuant to Section 8.3(a) of the Partnership Agreement or pursuant to a
foreclosure or like action in respect of a pledge of a partnership interest in
TRG, the ability of such Person to act as a substitute partner) of A. Alfred
Taubman, and any Affiliate of A.
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<PAGE> 19
Alfred Taubman or any member of his Immediate Family, from one or more such
persons or from any Taubman Transferee; provided that the percentage interest
in TRG being transferred exceeds 7.7%. "GMPTS Transferee" means a single
Person that acquires, pursuant to Section 8.1(b) or Section 8.3(a) of the
Partnership Agreement, or upon the foreclosure or like action in respect of a
pledge of a partnership interest in TRG, the then (i.e., at the time of such
acquisition) entire such partnership interest in TRG (excluding, in the case of
an acquisition pursuant to Section 8.3(a) of the Partnership Agreement or
pursuant to a foreclosure or like action in respect of a pledge of partnership
interests in TRG, the ability of such Person to act as a substitute partner) of
GMPTS or of any GMPTS Transferee; provided that the percentage interest in TRG
being transferred exceeds 7.7%.
For so long as the Corporation has the right to designate, pursuant to
the Partnership Agreement, any members of the Partnership Committee, the
affirmative vote of both a majority of the Independent Directors who do not
have a beneficial financial interest in the action before the Board of
Directors and a majority of all members of the Board of Directors who do not
have a beneficial financial interest in the action before the Board of
Directors is required for the approval of all actions to be taken by the Board
of Directors; provided, however, the Corporation may not appoint to the
Partnership Committee as a Corporation appointee an individual who does not
satisfy the definition of Independent Director in one or more respects without
the affirmative vote of all of the Independent Directors then in office.
Thereafter, the affirmative vote of a majority of all members of the Board of
Directors who do not have a beneficial financial interest in the action before
the Board of Directors is required for the approval of all actions to be taken
by the Board of Directors. The establishment of reasonable compensation of
Directors for services to the Corporation as Directors or officers shall not
constitute action in which any Director has a beneficial financial interest.
Subject to the foregoing, a Director shall be deemed and considered in
all respects and for all purposes to be a Director of the Corporation,
including, without limitation, having the authority to vote or act on all
matters, including, without limitation, matters submitted to a vote at any
meeting of the Board of Directors or at any meeting of a committee of the Board
of Directors, and the application to such Director of Articles VII and VIII of
these Amended and Restated Articles of Incorporation, notwithstanding a
Purported Transferee's unauthorized exercise of voting rights with respect to
such Director's election.
ARTICLE VII
Limited Liability of Directors
No director of the Corporation shall be liable to the Corporation or
its shareholders for monetary damages for a breach of the director's fiduciary
duty; provided, however, the foregoing provision shall not be deemed to limit a
director's liability to the Corporation or its shareholders resulting from:
(i) a breach of the director's duty of loyalty to the
Corporation or its shareholders;
(ii) acts or omissions of the director not in good faith
or which involve intentional misconduct or knowing
violation of law;
(iii) a violation of Section 551(1) of the Act or;
(iv) a transaction from which the director derived an
improper personal benefit.
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<PAGE> 20
ARTICLE VIII
Indemnification of Officers, Directors, Etc.
1. Indemnification of Directors.
The Corporation shall and does hereby indemnify a person (including
the heirs, executors, and administrators of such person) who is or was a party
to, or who is threatened to be made a party to, a threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative and whether formal or informal, including, without limitation,
an action by or in the right of the Corporation, by reason of the fact that he
or she is or was a director of the Corporation, or is or was serving at the
request of the Corporation as a director (or in a similar capacity, including
serving as a member of the Partnership Committee and of any other committee of
TRG) or in any other representative capacity of another foreign or domestic
corporation or of or with respect to any other entity (including TRG), whether
for profit or not, against expenses, attorneys' fees, judgments, penalties,
fines, and amounts paid in settlement actually and reasonably incurred by him
or her in connection with the action, suit, or proceeding. This Section 1 of
this Article VIII is intended to grant the persons herein described with the
fullest protection not prohibited by existing law in effect as of the date of
filing this Amended and Restated Articles of Incorporation or such greater
protection as may be permitted or not prohibited under succeeding provisions of
law.
2. Indemnification of Officers, Etc.
The Corporation has the power to indemnify a person (including the
heirs, executors, and administrators of such person) who is or was a party to,
or who is threatened to be made a party to, a threatened, pending, or
contemplated action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal, including an
action by or in the right of the Corporation, by reason of the fact that he or
she is or was an officer, employee, or agent of the Corporation or is or was
serving at the request of the Corporation as an officer, partner, trustee,
employee, or agent of another foreign or domestic corporation, partnership
(including TRG), joint venture, trust or other enterprise, whether for profit
or not, against expenses, including attorneys' fees, judgments, penalties,
fines, and amounts paid in settlement actually and reasonably incurred by him
or her in connection with the action, suit, or proceeding, if the person acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Corporation or its shareholders, and with
respect to a criminal action or proceeding, if the person had no reasonable
cause to believe his or her conduct was unlawful. Unless ordered by a court,
an indemnification under this Section 2 of this Article VIII shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of the officer, employee, or agent is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in this Section 2 of this Article VIII.
3. Advancement of Expenses.
The Corporation shall pay the expenses incurred by a person described
in Section 1 of this Article VIII in defending a civil or criminal action,
suit, or proceeding described in such Section 1 in advance of the final
disposition of the action, suit, or proceeding. The Corporation shall pay the
expenses incurred by a person described in Section 2 of this Article VIII in
defending a civil or criminal action, suit, or proceeding described in such
Section 2 in advance of the final disposition of the action, suit, or
proceeding upon receipt of an undertaking by or on behalf of such person to
repay the expenses if it is ultimately determined
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<PAGE> 21
that the person is not entitled to be indemnified by the Corporation. Such
undertaking shall be by unlimited general obligation of the person on whose
behalf advances are made but need not be secured.
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<PAGE> 1
EXHIBIT 4(C)
EXPLANATORY NOTE: THE FOLLOWING DOCUMENT INCORPORATES CHANGES MADE BY A FIRST
AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE
TAUBMAN REALTY GROUP LIMITED PARTNERSHIP EFFECTIVE SEPTEMBER 30, 1997 (THE
"AMENDMENT"). THE PARTIES HAVE NOT FORMALLY ADOPTED AND EXECUTED A SECOND
AMENDED AND RESTATED AGREEMENT.
THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
DATED NOVEMBER 30, 1992
[AS AMENDED BY A FIRST AMENDMENT TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF THE TAUBMAN REALTY GROUP LIMITED
PARTNERSHIP AGREEMENT EFFECTIVE SEPTEMBER 30, 1997]
<PAGE> 2
TABLE
OF
CONTENTS
THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
RESULTING FROM THE DIVISION OF THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
A DELAWARE LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
I - CONTINUATION; CHANGE OF JURISDICTION; NAME;
PRINCIPAL OFFICE; AGENT FOR SERVICE OF PROCESS;
FILING OF CERTIFICATE(S); TERM; TITLE TO PARTNERSHIP
PROPERTY.
Section 1.1 Continuation; Change of Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.2 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.3 Principal Office; Agent For Service of Process . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.4 Filing of Certificate(s) as Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.5 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.6 Title to Partnership Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
II - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
III - PURPOSES AND POWERS; PARTNERSHIP ONLY FOR PURPOSES
SPECIFIED; REPRESENTATIONS AND WARRANTIES.
Section 3.1 Purposes and Powers of the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.2 Partnership Only for Purposes Specified . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.3 Representations and Warranties by the Partners . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.4 Real Estate Investment Trust Requirements . . . . . . . . . . . . . . . . . . . . . . . . 28
IV - CAPITAL CONTRIBUTIONS; OPENING CAPITAL ACCOUNT
BALANCES; ANTICIPATED FINANCING; CAPITAL ACCOUNTS;
PARTNERSHIP INTERESTS; UNITS OF PARTNERSHIP INTEREST;
PERCENTAGE INTERESTS; PARTNERSHIP INTEREST CERTIFICATES;
PURCHASE OF FRACTIONAL UNITS; ADJUSTMENT OF UNITS OF
PARTNERSHIP INTEREST.
Section 4.1 Capital Contributions; Opening Capital Account Balances . . . . . . . . . . . . . . . . . 30
Section 4.2 Anticipated Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.3 No Right to Withdraw Capital; No Requirement
of Further Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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Section 4.4 No Interest on Capital Contributions or
Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.5 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.6 Partnership Interests; Units of Partnership
Interest; Percentage Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 4.7 Partnership Interest Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.8 Purchase of Fractional Units of Partnership
Interest; Adjustment of Units of Partnership Interest . . . . . . . . . . . . . . . . . 38
V - ALLOCATIONS; DISTRIBUTIONS; BANK ACCOUNTS;
BOOKS OF ACCOUNT; TAX RETURNS;
ACCOUNTING AND REPORTS; PARTNERSHIP FISCAL YEAR.
Section 5.1 Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.2 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
[THE AMENDMENT ADDED THE FOLLOWING SECTION:
Section 5.3 Guaranteed Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49]
Section 5.3 Bank Accounts and Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.4 Books of Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.5 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.6 Accounting and Reports, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.7 Partnership Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
VI - MANAGEMENT; AUTHORITY AND AUTHORIZED ACTIONS BY THE
MANAGING GENERAL PARTNER; AUTHORITY AND APPOINTMENT AND
AUTHORIZED ACTIONS BY THE PARTNERSHIP COMMITTEE; AUTHORITY
AND APPOINTMENT OF AND AUTHORIZED ACTIONS BY THE EXECUTIVE
COMMITTEE; CERTAIN LIMITATIONS ON THE AUTHORITY OF THE
EXECUTIVE COMMITTEE; AUTHORITY AND
APPOINTMENT OF AND AUTHORIZED ACTIONS BY THE COMPENSATION
COMMITTEE; ANNUAL BUDGET; NOTICES; STANDARD OF CONDUCT;
CONFLICTING INTEREST DISCLOSURE OR RECUSAL; MASTER
SERVICES AGREEMENT AND CORPORATE SERVICES AGREEMENT;
ABSENCE OF AUTHORITY OF LIMITED PARTNERS; FIDELITY
BONDS AND INSURANCE; ENGAGEMENT OF PARTNERS' AFFILIATES;
INDEMNITY AND REIMBURSEMENT; TAX MATTERS PARTNER.
Section 6.1 Management; Authority and Authorized Actions
by the Managing General Partner; Authority
and Appointment of and Authorized Actions by
the Partnership Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.2 Authority and Appointment of and Authorized
Actions by the Executive Committee; Certain
Limitations on the Authority of the
Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 6.3 Authority and Appointment of and Authorized
Action by the Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 6.4 Additional Limitations on Authority of the
Managing General Partner, the Partnership
Committee and the Executive Committee;
Delegation of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 6.5 Annual Budget; Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 6.6 Standard of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 6.7 Conflicting Interest Disclosure or Recusal . . . . . . . . . . . . . . . . . . . . . . . 72
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Section 6.8 Master Services Agreement and Corporate
Services Agreement; Engagement
of Partners' Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 6.9 Absence of Authority of Limited Partners . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 6.10 Fidelity Bonds and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 6.11 Execution of Legal Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 6.12 Indemnity and Reimbursement; Advancement of
Expenses and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 6.13 Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
VII - OTHER VENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
VIII - TRANSFERS OF UNITS OF PARTNERSHIP INTEREST; SUBSTITUTION OF PARTNERS; ADDITIONAL PARTNERSHIP INTERESTS; CONVERSION
OF PARTNERSHIP INTERESTS.
Section 8.1 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 8.2 Substitution of Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 8.3 Failure or Refusal to Grant Consent . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 8.4 Issuance of Additional Interests
to TREIT and Other Persons or of Incentive
Interests to Certain Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 8.5 Conversion of Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 8.6 No Change to TG Receivable Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 88
IX - WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
X - DISABLING EVENT OR EVENT OF WITHDRAWAL IN RESPECT
OF A PARTNER; SUCCESSION OF INTERESTS.
Section 10.1 Disabling Event or Event of Withdrawal
in Respect of a Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 10.2 References to "Partner" and "Partners" in the
Event of Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 10.3 Waiver of Dissolution if Transfer is in Full
Compliance with Agreement; Negation of Right
to Dissolve Except as Herein Provided;
No Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
XI - TERMINATION OF THE PARTNERSHIP,
WINDING UP, AND LIQUIDATION.
Section 11.1 Liquidation of the Assets of the Partnership
and Disposition of the Proceeds Thereof . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 11.2 Cancellation of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 11.3 Return of Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
XII - POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
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XIII- MISCELLANEOUS.
Section 13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 13.2 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 13.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 13.4 Word Meanings; Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 13.5 Section Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 13.6 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 13.7 Separability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 13.8 Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 13.9 Equitable Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 13.10 Partition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 13.11 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 13.12 No Third Party Rights Created Hereby . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 13.13 Liability of Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 13.14 Additional Acts and Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 13.15 Agreement in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 13.16 Attorneys-In-Fact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 13.17 Execution by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Section 13.18 Lost Partnership Interest Certificates . . . . . . . . . . . . . . . . . . . . . . . 106
Section 13.19 Certain Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Section 13.20 Closing Allocation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Schedule A Capital Account Balances of the Partners as of the Contribution Date After Giving
Effect to Capital Contributions
Schedule B Units of Partnership Interest and Percentage Interests of the Partners
Schedule C Initial Number and Value of Units of Partnership Interest
Schedule D Regional Centers
Schedule E Developments
Schedule F Development Opportunities Specifically Excluded from Contribution
Schedule G Excluded Retail Interests, Retail Opportunities, and Retail Properties
Schedule H Adjusted Basis and Initial Book Values of Regional Center Interests, Development
Opportunity Interests, and Development Opportunities
Schedule I Initial Grant of Incentive Options
Schedule J Certain Interests of Partners in Tenants of Regional Centers
Exhibit A Master Services Agreement
Exhibit B Incentive Option Plan
Exhibit C Form of Partnership Interest Certificate
Exhibit D Corporate Services Agreement
Exhibit E Consents
Appendix A Closing Allocation Provisions
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EXPLANATORY NOTE: THE FOLLOWING DOCUMENT INCORPORATES CHANGES MADE BY A FIRST
AMENDMENT TO THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE
TAUBMAN REALTY GROUP LIMITED PARTNERSHIP EFFECTIVE SEPTEMBER 30, 1997 (THE
"AMENDMENT"). THE PARTIES HAVE NOT FORMALLY ADOPTED AND EXECUTED A SECOND
AMENDED AND RESTATED AGREEMENT.
THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
[AS AMENDED THROUGH SEPTEMBER 30, 1997]
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (hereinafter,
as the same may be amended and/or supplemented, referred to as this
"Agreement") is made the 30th day of November, 1992, by, between, and among
TAUBMAN CENTERS, INC. ("TREIT"), a Michigan corporation (hereinafter sometimes
referred to as the Managing General Partner), TG PARTNERS LIMITED PARTNERSHIP
("TG"), a Delaware limited partnership, TAUB-CO MANAGEMENT, INC., a Michigan
corporation [formerly The Taubman Company, Inc.] ("T-Co"), and GMPTS LIMITED
PARTNERSHIP, a Delaware limited partnership ("GMPTS"), all of the beneficial
interests of which are held by General Motors Hourly-Rate Employes Pension
Trust u/t/a dated March 1, 1983, as amended, and General Motors Salaried
Employes Pension Trust u/t/a dated March 1, 1983, as amended, as general
partners (hereinafter sometimes referred to collectively as the "General
Partners" and individually as a "General Partner"), and TAUBMAN REALTY VENTURES
("TRV"), a Michigan co-partnership, TRA PARTNERS, a Michigan co-partnership
("TRAP"), A. ALFRED TAUBMAN, acting not individually but as Trustee, or the
successor(s) in trust, of THE A. ALFRED TAUBMAN RESTATED REVOCABLE TRUST, as
amended and restated in its entirety by Instrument dated January 10, 1989 (as
the same has been and may hereafter be amended from time to time) ("AAT
Trust"), ROBERT S. TAUBMAN, WILLIAM S. TAUBMAN, GAYLE T. KALISMAN, RICHARD P.
KUGHN, THE KUGHN REAL PROPERTIES COMPANY, a Michigan limited partnership,
ROBERT C. LARSON, SIDNEY R. UNOBSKEY, LEONARD DOBBS, AVNER NAGGAR, MARVIN G.
LEECH, MGL & ASSOCIATES LIMITED PARTNERSHIP, a Michigan limited partnership,
JOE E. BURKHARDT and JUANITA J. BURKHARDT, not individually but
<PAGE> 7
as Co-Trustees of the BURKHARDT FAMILY TRUST, under trust agreement dated March
12, 1983, as amended, DAVID NAGGAR, not individually but as Trustee, or the
successor(s) in trust, of the NAGGAR FAMILY TRUST, under instrument dated
September 12, 1989, and MAX M. FISHER, acting not individually but as Trustee,
or the successor(s) in trust, of THE MAX M. FISHER REVOCABLE TRUST, as amended
and restated in its entirety by Instrument dated May 11, 1992 (as the same may
be amended from time to time) ("MMF"), all as limited partners (hereinafter
sometimes referred to collectively as the "Limited Partners" and individually
as a "Limited Partner").
RECITALS:
A. Certain of the parties hereto entered into the Limited Partnership
Agreement of The Taubman Realty Group Limited Partnership, dated August 1, 1985
(the "Original Partnership Agreement"), pursuant to which such parties
reconstituted The Taubman Realty Group, a Michigan co-partnership, as The
Taubman Realty Group Limited Partnership, a limited partnership under the laws
of the Commonwealth of Massachusetts (the "Original Partnership").
B. The Original Partnership Agreement was subsequently amended to reflect
the admission of certain Persons as Partners, and for certain other purposes.
C. Pursuant to an Agreement and Plan of Merger dated November 16, 1992,
the Original Partnership was merged with and into The Taubman Realty Group
Limited Partnership, a Delaware limited partnership, with The Taubman Realty
Group Limited Partnership, a Delaware limited partnership, being the surviving
partnership (the "Surviving Partnership"), and the partnership agreement of The
Taubman Realty Group Limited Partnership, a Delaware limited partnership, being
the Surviving Partnership's partnership agreement (the "Surviving Partnership
Agreement").
D. The Surviving Partnership then proceeded to effect a division pursuant
to Section 708(a)(2)(B) of the Code and a certain Agreement of Division,
resulting in two (2) continuing partnerships, the Partnership and TG.
E. The Surviving Partnership Agreement was amended (the "First Amendment")
to reflect the admission of TG as a limited partner in the Partnership (such
admission being
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pursuant to, and as a part of, and in order to effect, the division described
in Recital D hereof), as well as to reflect the admission of certain other
Persons as limited partners in the Partnership.
F. Subsequent to the First Amendment, and pursuant to, and as a part of,
and in order to effect, the division described in Recital D hereof, the TG
Receivables were allocated and distributed in their entirety to TG in reduction
of its interest as a limited partner in the Partnership.
G. The Surviving Partnership Agreement, as amended by the First Amendment,
was subsequently amended on November 20, 1992 (the "Second Amendment"), to
reflect the admission of TREIT as a general partner of the Partnership, and to
reflect the admission of TRAP as a limited partner of the Partnership, and for
certain other purposes. (The Surviving Partnership Agreement, as amended by
the First Amendment and the Second Amendment, is herein referred to as the
"Amended Partnership Agreement".)
H. The parties hereto now wish to continue the Partnership as a Delaware
limited partnership, and to amend and restate in its entirety the Amended
Partnership Agreement to reflect the admission of GMPTS as a general partner,
the admission of MMF as a limited partner, the Transfer by AAT Trust, Robert S.
Taubman, William S. Taubman and Gayle T. Kalisman of a portion of their
partnership interests as limited partners in the Partnership to TRAP, the
conversion by TG of its remaining partnership interest as a limited partner in
the Partnership to a partnership interest as a general partner in the
Partnership, and the conversion by each of the other general partners other
than TREIT, of their respective partnership interests as general partners in
the Partnership, to partnership interests as limited partners in the
Partnership, and for certain other purposes.
NOW, THEREFORE, the parties hereto agree that the Amended Partnership
Agreement is hereby amended and restated in its entirety to read as follows:
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I.
CONTINUATION; CHANGE OF JURISDICTION; NAME;
PRINCIPAL OFFICE; AGENT FOR SERVICE OF PROCESS;
FILING OF CERTIFICATE(S); TERM; TITLE TO PARTNERSHIP PROPERTY.
Section 1.1 Continuation; Change of Jurisdiction.
The parties hereto do hereby continue the Partnership as a Delaware
limited partnership pursuant to the applicable laws of the State of Delaware,
including the Delaware Revised Uniform Limited Partnership Act as in effect in
the State of Delaware, all as the same may be amended from time to time (all of
such laws being hereinafter referred to as the "Partnership Law"), upon the
terms and conditions herein set forth. If the Managing General Partner, with
the approval or at the direction of the Partnership Committee, shall cause the
Partnership to change its jurisdiction, by merger, consolidation, or in any
other fashion or manner, the Partnership Law shall, for all purposes of this
Agreement, refer to the applicable laws of the new jurisdiction, as the same
may be amended from time to time. Without any further act, approval or vote of
the Partners, the Managing General Partner shall be authorized on behalf of the
Partners and the Partnership, as the case may be, to amend and/or restate this
Agreement and the Certificate of Limited Partnership, and to execute a plan of
merger or similar document, and all other documents determined by the Managing
General Partner to be necessary to effect a change of jurisdiction.
Section 1.2 Name.
The name of the Partnership is "The Taubman Realty Group Limited
Partnership" or such other name or names as the Managing General Partner, with
the approval or at the direction of the Partnership Committee, shall select
from time to time in compliance with the Partnership Law. The Managing General
Partner shall send written notice of any such name change to the Partners.
Section 1.3 Principal Office; Agent For Service of Process.
The principal office of the Partnership is located at 200 East Long Lake
Road, Bloomfield Hills, Michigan 48304, or at such other address(es) as shall
be designated from time to time by the Managing General Partner, with the
approval or at the direction of the Partnership Committee, with written notice
thereof by the Managing General Partner to the
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other Partners. The address of the office of the Partnership in the State of
Delaware required to be maintained pursuant to the Partnership Law is
Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805, or
such other address(es) as may be designated from time to time by the Managing
General Partner, with the approval or at the direction of the Partnership
Committee, with written notice thereof by the Managing General Partner to the
other Partners. The name and address of the registered agent for service of
process on the Partnership in the State of Delaware is Corporation Service
Company, 1013 Centre Road, Wilmington, Delaware 19805, or such other agent and
address as may be designated from time to time by the Managing General Partner,
with the approval or at the direction of the Partnership Committee, in
compliance with the Partnership Law, with written notice thereof by the
Managing General Partner to the other Partners.
Section 1.4 Filing of Certificate(s) as Required.
The Managing General Partner shall cause the execution and filing of an
appropriate partnership and/or assumed or fictitious name certificate or
certificates, or like instrument or instruments, or other filings or
applications, at any time and from time to time as required by the Partnership
Law or the law of any applicable jurisdiction in connection with the existence
or activities or business of the Partnership, a change in the jurisdiction of
the Partnership, and/or the use of a name (which name may be different than the
name of the Partnership), and all amendments thereto of record. Copies of such
certificates, instruments or other filings or applications shall be furnished
on a timely basis to all Partners.
Section 1.5 Term.
The term of the Partnership shall end, and the Partnership shall dissolve,
on the first to occur of (i) the recordation of the last (or only) deed, or the
execution and delivery of the last (or only) assignment, completing the
conveyance and transfer by the Partnership of all property (other than cash and
cash equivalents) owned by the Partnership to one or more bona fide purchasers
for value, or if such purchaser or purchasers give the Partnership a purchase
money obligation, then upon the payment in full by such purchaser or purchasers
of such obligation or upon the disposition for cash of such obligation,
provided that neither a sale and leaseback by the Partnership nor any other
transfer of title for financing purposes
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<PAGE> 11
or pursuant to the provisions of Section 1.6 hereof, shall be deemed to be a
sale for the purpose of dissolving and terminating the Partnership, (ii) the
occurrence of any event which would, under the terms of this Agreement or the
Partnership Law, result in the dissolution of the Partnership; provided,
however, that the term of the Partnership shall not end and the Partnership
shall not be dissolved upon the occurrence of such an event if the Partnership
is continued as provided in this Agreement, (iii) an entry of a decree of
judicial dissolution pursuant to Section 17-802 of the Partnership Law, or (iv)
December 31, 2090.
Section 1.6 Title to Partnership Property.
All property owned by the Partnership, whether real or personal, tangible
or intangible, shall be deemed to be owned by the Partnership as an entity, and
no Partner, individually, shall have any ownership of such property. The
Partnership may hold any of its property in its own name or in the name of one
or more nominees.
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II.
DEFINITIONS.
Unless the context in which a term is used clearly indicates otherwise,
the following terms have the following respective meanings when used in this
Agreement, and the singular shall include the plural and vice versa, unless the
context requires otherwise:
"AAT" means A. Alfred Taubman.
"AAT Affiliates" means AAT, and any Affiliate of AAT or of any member of his
Immediate Family.
"AAT Trust" is defined in the Preamble to this Agreement.
"Additional Interest" is defined in Section 8.4(a) hereof.
"Additional Required Amount" means, for the relevant period, an amount, as set
forth in the Additional Required Amount Notice, equal to the greater of (i) the
Tax Liability, and (ii) the Net Capital Gain.
"Additional Required Amount Notice" is defined in Section 6.5 hereof.
"Additional Tax" is defined in Article IX hereof.
"Affiliate" and "Affiliates" means, (i) with respect to any individual, any
member of such individual's Immediate Family, a Family Trust with respect to
such individual, and any Person (other than an individual) in which such
individual and/or his Affiliate(s) owns, Directly or Indirectly, more than
fifty percent (50%) of any class of Equity Security or of the aggregate
Beneficial Interest of all beneficial owners, or in which such individual or
his Affiliate is the sole general partner, or is the sole managing general
partner, or which is Controlled By such individual and/or his Affiliates; and
(ii) with respect to any Person (other than an individual), any Person (other
than an individual) which Controls, is Controlled By, or is Under Common
Control With, such Person, and any individual who is the sole general partner
or the sole managing general partner in, or who Controls, such Person.
"Affiliate Financing" means financing or refinancing obtained from a Partner or
an Affiliate of a Partner by the Partnership or an Owning Entity, as the case
may be.
"Affiliated with" means, with respect to a Person, being an Affiliate of such
Person.
"Agreement" is defined in the Preamble to this Agreement.
"Alternative Minimum Tax Distribution Amount" means, for each Partnership
Fiscal Year, an amount equal to the quotient obtained by dividing (i) the
alternative minimum tax (as determined pursuant to Sections 55 through 59 of
the Code) of TREIT for such Partnership Fiscal Year, by (ii) the Percentage
Interest of TREIT on the Relevant Date.
"Amended Partnership Agreement" is defined in Recital G.
"Annual Budget" is defined in Section 6.5 hereof.
"Annual Development Budget" is defined in Section 6.5 hereof.
"Annual Operating Budget" is defined in Section 6.5 hereof.
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<PAGE> 13
"Appointing Person" means a Person who pursuant to the provisions of this
Agreement shall, at the relevant time, have the right to appoint or remove a
Committee Member.
"Assigned Interest" is defined in Section 8.3(b) hereof.
"AT&T" means The AT&T Master Pension Trust.
"Bankrupt" or "Bankruptcy" as to any Person means (i) applying for or
consenting to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, administrator, liquidator, or the like of itself or of all
or a substantial portion of its assets, (ii) admitting in writing its
inability, or being generally unable or deemed unable under any applicable law,
to pay its debts as such debts become due, (iii) convening a meeting of
creditors for the purpose of consummating an out-of-court arrangement, or
entering into a composition, extension, or similar arrangement, with creditors
in respect of all or a substantial portion of its debts, (iv) making a general
assignment for the benefit of its creditors, (v) placing itself or allowing
itself to be placed, voluntarily or involuntarily, under the protection of the
law of any jurisdiction relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, (vi) taking any action for
the purpose of effecting any of the foregoing, or (vii) if a proceeding or case
shall be commenced against such Person in any court of competent jurisdiction,
seeking (x) the liquidation, reorganization, dissolution, winding-up, or
composition or adjustment of debts, of such Person, (y) the appointment of a
trustee, receiver, custodian, administrator, liquidator, or the like of such
Person or of all or a substantial portion of such Person's assets, or (z)
similar relief in respect of such Person under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts,
and such proceeding or case shall continue undismissed for a period of ninety
(90) Days, or an order, judgment, or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect for a period of
sixty (60) Days, or an order for relief or other legal instrument of similar
effect against such Person shall be entered in an involuntary case under such
law and shall continue unstayed and in effect for a period of sixty (60) Days.
"Beneficial Interest" means an interest, whether as partner, joint venturer,
cestui que trust, or otherwise, a contract right, or a legal or equitable
position under or by which the possessor participates in the economic or other
results of the Person (other than an individual) to which such interest,
contract right, or position relates.
"Best Efforts" is defined to require that the obligated party make a diligent,
reasonable and good faith effort to accomplish the applicable objective. Such
obligation, however, does not require any material expenditure of funds or the
incurrence of any material liability on the part of the obligated party, nor
does it require that the obligated party act in a manner which would otherwise
be contrary to prudent business judgment or normal commercial practices in
order to accomplish the objective. The fact that the objective is not actually
accomplished is no indication that the obligated party did not in fact utilize
its Best Efforts in attempting to accomplish the objective.
"Book Value" and "Book Values" are defined in Section 4.5(b) hereof.
"Built-in Gain" means, for each Partnership Fiscal Year, an amount equal to the
quotient obtained by dividing (i) the built-in gain of TREIT for such
Partnership Fiscal Year, as determined by TREIT in accordance with appropriate
authority promulgated under Section 337(d) of the Code, and (ii) the Percentage
Interest of TREIT on the Relevant Date.
"Business Day" means any Day that is not a Saturday, Sunday, or legal holiday
in New York, New York and on which commercial banks are open for business in
New York, New York.
"Capital Account" is defined in Section 4.5(a) hereof.
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<PAGE> 14
"Code" means the Internal Revenue Code of 1986, as amended from time to time
(or any corresponding provisions of succeeding law).
"Committee" means the Partnership Committee, the Executive Committee, the
Compensation Committee, or a committee established by the Partnership Committee
pursuant to Section 6.1(g) hereof, as applicable.
"Committee Member" means a member of the Partnership Committee, a member of the
Executive Committee, a member of the Compensation Committee, or a member of a
committee established by the Partnership Committee pursuant to Section 6.1(g)
hereof, as applicable.
"Communication" and "Communications" are defined in Section 13.1(a) hereof.
"Compensation Committee" means the compensation committee established for the
Partnership pursuant to Section 6.3 hereof.
"Conditional Transfer Determination" is defined in Section 8.1(e) hereof.
"Conflicting Interest" means, in the case of any determination or other action
to be taken by a Committee Member under this Agreement, the interest that such
Committee Member Knowingly has, respecting a Relevant Transaction or a Relevant
Matter, in each case if such Committee Member Knows at the Time of Commitment
that any of the Persons described below in this definition is either a party to
the Relevant Transaction or the Relevant Matter, or has a beneficial financial
interest in, the Relevant Transaction or the Relevant Matter: (i) such
Committee Member; (ii) the Appointing Person of such Committee Member; (iii) a
Person (other than the Partnership) of which such Committee Member or the
Appointing Person of such Committee Member is a director, general partner,
trustee, principal, agent, officer, or employee; (iv) a Person that Controls
one or more of the Persons specified in subclause (ii) or subclause (iii), or a
Person that is Controlled By, or is Under Common Control With, one or more of
the Persons specified in subclause (ii) or subclause (iii); or (v) an
individual who is a director, trustee, principal, agent, officer, or employer
of such Committee Member or of the Appointing Person of such Committee Member.
"Conflicting Interest Disclosure" means disclosure by a Committee Member who has
a Conflicting Interest of (i) the existence and nature of his Conflicting
Interest, and (ii) all facts Known to him respecting the subject matter of the
Relevant Transaction or the Relevant Matter that an ordinarily prudent person
would reasonably believe to be material to a judgment about whether or not to
proceed with the Relevant Transaction or the Relevant Matter.
"Conflicting Interest Transaction or Matter" means a Relevant Transaction or
Relevant Matter respecting which a Committee Member has a Conflicting Interest;
provided, however, that "Conflicting Interest Transaction or Matter" shall not
include the process of approving the Annual Development Budget, the Annual
Operating Budget, and the Manager's Budget, except to the extent that the
process of approval of any such budget constitutes the approval of (i) a
transaction between the Partnership or the Manager and an Affiliate of such
Committee Member or (ii) the compensation of a Committee Member.
"Contribution Date" means the date on which TREIT contributes the TREIT Capital
Contribution, and GMPTS contributes the GMPTS Capital Contribution, to the
Partnership.
"Control(s)" (and its correlative terms "Controlled By" and "Under Common
Control With") means, with respect to any Person (other than an individual),
possession by the applicable Person or Persons of the power, acting alone (or,
solely among such applicable Person or Persons, acting together), to designate
and direct or cause the designation and direction of the management and
policies thereof, whether through the ownership of voting securities, by
contract, or otherwise.
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<PAGE> 15
"Day" or "Days" means each calendar day, including Saturdays, Sundays, and
legal holidays; provided, however, that if the Day on which a period of time
for consent or approval or other action begins or ends is not a Business Day,
such period shall begin or end, as applicable, on the next Business Day.
"Deficiency Dividend" means, for any Partnership Fiscal Year, an amount equal
to the quotient obtained by dividing (i) the adjustment (as defined in Section
860(d)(2) of the Code) in respect of a determination (as defined in Section
860(e) of the Code) in respect of TREIT for such Partnership Fiscal Year, by
(ii) the Percentage Interest of TREIT on the Relevant Date.
"Deficiency Dividend Notice" is defined in Section 6.5 hereof.
"Depreciation" means for each Partnership Fiscal Year or other period, an
amount equal to the depreciation, amortization, or other cost recovery
deduction allowable under the Code with respect to an asset for such year or
other period, except that if the Book Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
other period, Depreciation shall be an amount which bears the same ratio to
such beginning Book Value as the federal income tax depreciation, amortization,
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization, or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Book
Value using any reasonable method selected by the Managing General Partner,
with the approval or at the direction of the Partnership Committee.
"Designee Notice" is defined in Section 5.2(c) hereof.
"Development Opportunities" means the development opportunities set forth on
Schedule E attached hereto, and any other regional retail shopping center
developments and opportunities (through contract, option, or other rights),
except those development opportunities identified on Schedule F attached hereto
that are specifically excluded from contribution to the Partnership, to
develop, redevelop or expand regional retail shopping centers, including in all
such cases Peripheral Property in respect thereof, in which the Partnership has
a Direct or Indirect ownership interest and which is not yet a Regional Center.
Reference to a Development Opportunity includes any one of the Development
Opportunities.
"Development Opportunity Interest" or "Development Opportunity Interests" means
the interest or interests in a Development Opportunity or Development
Opportunities then held by the Partnership either Directly or Indirectly as the
holder of a Beneficial Interest, Directly or Indirectly, in an Owning Entity or
Owning Entities that own a Development Opportunity or Development
Opportunities.
"Direct or Indirect" or "Directly or Indirectly", when used with respect to a
Person's, a Partner's, or the Partnership's interest in another partnership or
joint venture which owns a Development Opportunity or a Regional Center, or a
Development Opportunity Interest or a Regional Center Interest, means and
includes all interests of, and acting in respect of all interests of, the
partner or partners therein, whether as an owner or ground lessee, as a partner
or joint venturer of another partnership or joint venture which owns a
Development Opportunity or a Regional Center, as a stockholder of a corporation
which in turn owns an interest in a partnership or joint venture having an
interest, direct or indirect, in a Development Opportunity or a Regional
Center, and as a beneficiary of a trust which has legal title to a Development
Opportunity or a Regional Center or owns a partnership interest or joint
venture interest in a partnership or joint venture which owns a Development
Opportunity or a Regional Center, in each such case as the context requires.
"Disabled Partner," "Disabled General Partner," and "Disabled Limited Partner"
are defined in Section 10.1(a)(2) hereof.
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<PAGE> 16
"Disabling Event" is defined in Section 10.1(a)(1) hereof.
"Distribution Date" is defined in Section 5.2(a)(i) hereof.
"Dollars" or "$" means United States dollars.
"Eligible TREIT Appointee" means an individual who is neither one of the
following named Persons nor an employee, beneficiary, principal, director,
officer or agent of, or a general partner in, or limited partner (owning in
excess of five percent (5%) of the Beneficial Interest) or shareholder (owning
in excess of five percent (5%) of the Beneficial Interest) in, any such named
Person: (i) for so long as TG has the right to appoint one or more Committee
Members, an AAT Affiliate, (ii) for so long as T-Co has the right to appoint
one or more Committee Members, T-Co or an Affiliate of T-Co, (iii) for so long
as a Taubman Transferee has the right to appoint one or more Committee Members,
a Taubman Transferee, or an Affiliate of such Taubman Transferee, (iv) for so
long as GMPTS has the right to appoint one or more Committee Members, GMPTS,
General Motors Corporation, or an Affiliate of GMPTS or of General Motors
Corporation, and (v) for so long as a GMPTS Transferee has the right to appoint
one or more Committee Members, a GMPTS Transferee or an Affiliate of such GMPTS
Transferee; provided, however, that in the event that each Appointing Person
concurs with respect to an individual, notwithstanding the fact that such
individual may not satisfy the foregoing in one (1) or more respects, such
individual shall be deemed and shall continue to be deemed an Eligible TREIT
Appointee for all purposes of this Agreement.
"Equity Security" has the meaning ascribed to it in the Securities Exchange Act
of 1934, as amended from time to time, and the rules and regulations thereunder
(and any successor laws, rules and regulations of similar import).
"Equity Shares" means the shares of the common stock of TREIT.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time (or any corresponding provisions of succeeding law).
"Estimated Minimum Distribution Amount" means, for each Partnership Fiscal
Year, an amount equal to the greater of (i) the quotient obtained by dividing
(1) the sum of (x) TREIT's allocable share of the Partnership's estimated Real
Estate Investment Trust Taxable Income for such Partnership Fiscal Year
(determined without regard to any deduction for dividends paid (as defined in
Section 561 of the Code)), and by excluding any net capital gain (as defined in
Section 1222(11) of the Code), and (y) TREIT's allocable share of the
Partnership's estimated net income from foreclosure property for such
Partnership Fiscal Year, minus TREIT's allocable share of the Partnership's
estimated excess noncash income (as determined under Section 857(e) of the
Code), if any, for such Partnership Fiscal Year, by (2) the Percentage Interest
of TREIT on the Relevant Date, and (ii) the estimated Ordinary Tax Liability
for such Partnership Fiscal Year.
"Event of Withdrawal" is defined in Section 10.1(a)(5) hereof.
"Excise Tax Distribution Amount" means, for each Partnership Fiscal Year, an
amount equal to the quotient obtained by dividing (i) the excise tax imposed
pursuant to Section 4981(a) of the Code on TREIT for such Partnership Fiscal
Year, by (ii) the Percentage Interest of TREIT on the Relevant Date.
"Executive Committee" means the executive committee established pursuant to
Section 6.2(a) hereof.
"Exercise Price" is defined in Section 6.3(a) hereof.
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<PAGE> 17
"Family Trust" means, with respect to an individual, a trust for the benefit of
such individual or for the benefit of any member or members of such
individual's Immediate Family or for the benefit of such individual and any
member or members of such individual's Immediate Family (for the purpose of
determining whether or not a trust is a Family Trust, the fact that one or more
of the beneficiaries (but not the sole beneficiary) of the trust includes a
Person or Persons, other than a member of such individual's Immediate Family,
entitled to a distribution after the death of the settlor if he, she, it, or
they shall have survived the settlor of such trust, which distribution is to be
made of something other than a Partnership Interest and/or includes an
organization or organizations exempt from federal income taxes pursuant to the
provisions of Section 501(a) of the Code and described in Section 501(c)(3) of
the Code, shall be disregarded); provided, however, that in respect of
transfers by way of testamentary or inter vivos trust, the trustee or trustees
shall be solely such individual, a member or members of such individual's
Immediate Family, a responsible financial institution, an attorney that is a
member of the Bar of any State in the United States, and/or an individual or
individuals approved by the Partnership Committee.
"First Amendment" is defined in Recital E.
"Fractional Unit" means a portion of, or less than the whole of, a Unit of
Partnership Interest.
"GAAP" means generally accepted accounting principles, consistently applied in
the United States.
"General Partner" and "General Partners" are (i) those Persons identified as
such in the Preamble to this Agreement, in their capacities as general partners
of the Partnership, (ii) the successors to any portion or all of the
Partnership Interest of those Persons identified as General Partners in the
Preamble to this Agreement who are admitted to the Partnership as general
partners pursuant to Section 8.2 hereof, and (iii) any Person or Persons to
whom an Additional Interest as a general partner is issued pursuant to Section
8.4 hereof and who is admitted to the Partnership as a general partner pursuant
to Section 8.4 hereof.
"GMPT" means General Motors Hourly-Rate Employes Pension Trust u/t/a dated
March 1, 1983, as amended, and General Motors Salaried Employes Pension Trust
u/t/a dated March 1, 1983, as amended.
"GMPTS" is defined in the Preamble to this Agreement.
"GMPTS Capital Contribution" is defined in Section 4.1(b) hereof.
"GMPTS Priority Capital Amount" is an amount equal to Ten Million Eight Hundred
Fifty-Four Thousand Two Hundred Eighty-Three Dollars ($10,854,283).
"GMPTS Transferee" means a single Person that acquires, pursuant to Section
8.1(b) or Section 8.3(a) hereof, or upon the foreclosure or like action in
respect of a Pledge, the then (i.e., at the time of such acquisition) entire
Partnership Interest (excluding, in the case of an acquisition pursuant to
Section 8.3(a) hereof or pursuant to a foreclosure or like action in respect of
a Pledge, the ability of such Person to act as a substitute partner) of GMPTS
or of any GMPTS Transferee; provided that the Percentage Interest being
Transferred exceeds seven and 7/10ths percent (7.7%).
"Gross Income" means the income of the Partnership determined pursuant to
Section 61 of the Code before deduction of items of expense or deduction.
[THE AMENDMENT ADDED THE FOLLOWING DEFINITION:
"Guaranteed Payment" means, as to each series of Preferred Equity, the
applicable Preferred Rate multiplied by the balance of such series of Preferred
Equity during the period to which
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<PAGE> 18
the Guaranteed Payment relates, commencing on the date of the contribution of
such Preferred Equity pursuant to Section 4.1(f) hereof, determined on the
basis of a year of three hundred sixty (360) Days, consisting of twelve (12),
30-day months, cumulative to the extent not paid in any given month pursuant to
Section 5.3 hereof.]
"Hilltop" means Richmond Associates, a Michigan general partnership.
"Immediate Family" means, with respect to a Person, (i) such Person's spouse
(former or then current), (ii) such Person's parents and grandparents, and
(iii) ascendents and descendants (natural or adoptive, of the whole or half
blood) of such Person's parents or of the parents of such Person's spouse
(former or then current).
"Incentive Interest" is defined in Section 8.4 (b) hereof.
"Incentive Options" is defined in Section 6.3(a) hereof.
"Incentive Option Plan" means that certain incentive option plan pursuant to
which the Partnership shall grant the Incentive Options, as the same may be
amended from time to time.
"Income Source Tax Distribution Amount" means, for each Partnership Fiscal
Year, an amount equal to the quotient obtained by dividing (i) the tax, if any,
of TREIT calculated pursuant to Section 857(b)(5) of the Code for such
Partnership Fiscal Year, by (ii) the Percentage Interest of TREIT on the
Relevant Date.
"Indemnified Person" means each Committee, each Committee Member, each Partner,
each officer, each Person designated or delegated by a Committee, a Committee
Member, a Partner, or an officer, and each employee, partner, principal,
shareholder, agent, director or officer of a Partner.
"Known," "Knows," "Knowing," and "Knowingly" mean, with respect to any Person
that is an individual, the conscious awareness by such Person of the matter at
issue.
"Limited Partner" and "Limited Partners" are (i) those Persons identified as
such in the Preamble to this Agreement, in their capacities as limited partners
of the Partnership, (ii) the successors to any portion or all of the
Partnership Interest of those Persons identified as Limited Partners in the
Preamble to this Agreement who are admitted to the Partnership as limited
partners pursuant to Section 8.2 hereof, and (iii) any Person or Persons to
whom an Additional Interest as a limited partner is issued pursuant to Section
8.4 hereof and who is admitted to the Partnership as a limited partner pursuant
to Section 8.4 hereof.
"Liquidator" is defined in Section 11.1(a).
"Losses" is defined in Section 5.1(a) hereof.
"Major Stores" means those stores occupied by a single Person, the gross
leasable floor area of which is in excess of forty thousand (40,000) square
feet.
"Manager" means that Person who has by written contract with the Partnership
agreed to provide management, administration, leasing and development services
for the properties of the Partnership. On the Contribution Date, the Manager
is TTC pursuant to the Master Services Agreement.
"Manager's Budget" means the annual budget of the Manager.
"Managing General Partner" means TREIT, as defined in the Preamble to this
Agreement.
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<PAGE> 19
"Master Services Agreement" means the management, administration, leasing and
development services agreement dated as of the date hereof, between the
Partnership and TTC, engaging TTC as the Manager, as the same may be amended
from time to time, or any agreement entered into hereafter in replacement
thereof.
"Minimum Distribution Amount" means, for each Partnership Fiscal Year, an
amount equal to the greater of (i) the quotient obtained by dividing (1) the
sum of (x) TREIT's allocable share of the Partnership's Real Estate Investment
Trust Taxable Income for such Partnership Fiscal Year (determined without
regard to any deduction for dividends paid (as defined in Section 561 of the
Code)), and by excluding any net capital gain (as defined in Section 1222(11)
of the Code), and (y) TREIT's allocable share of the Partnership's net income
from foreclosure property for such Partnership Fiscal Year, minus TREIT's
allocable share of the Partnership's excess noncash income (as determined under
Section 857(e) of the Code), if any, for such Partnership Fiscal Year, by (2)
the Percentage Interest of TREIT on the Relevant Date, and (ii) the Ordinary
Tax Liability for such Partnership Fiscal Year.
"Minimum Distribution Amount Adjustment" means, for each Partnership Fiscal
Year, an amount, as set forth in the Minimum Distribution Amount Adjustment
Notice, equal to the excess (if any) of (i) the sum of (1) the Minimum
Distribution Amount for such Partnership Fiscal Year, (2) the Net Capital Gain
for such Partnership Fiscal Year, (3) the Built-in Gain for such Partnership
Fiscal Year, (4) the Prohibited Transaction Tax Distribution Amount for such
Partnership Fiscal Year, (5) the Income Source Tax Distribution Amount for such
Partnership Fiscal Year, (6) the Alternative Minimum Tax Distribution Amount
for such Partnership Fiscal Year, and (7) the Excise Tax Distribution Amount
for such Partnership Fiscal Year, over (ii) the amount of cash actually
distributed to the Partners pursuant to Section 5.2(a) hereof in respect of
such Partnership Fiscal Year.
"Minimum Distribution Amount Adjustment Notice" is defined in Section 6.5
hereof.
"Minimum Gain" is defined in Section 5.1(d)(1) hereof.
"Minimum Gain Chargeback" is defined in Section 5.1(d)(1) hereof.
"MMF" is defined in the Preamble to this Agreement.
"Net Capital Gain" means, for the relevant period, an amount equal to the
quotient obtained by dividing (i) the net capital gain (as defined in Section
1222(11) of the Code) that is allocable to TREIT for such period, by (ii) the
Percentage Interest of TREIT on the Relevant Date.
"Ninety Day Period" is defined in Section 10.1(b) hereof.
"Nonrecourse Liabilities" is defined in Section 5.1(d)(1) hereof.
"Opportunity Exercise Notice" is defined in paragraph (c) of Article VII
hereof.
"Ordinary Tax Liability" means, for each Partnership Fiscal Year, an amount
equal to the product of (i) the highest individual federal income tax rate
applicable to ordinary income in effect for such Partnership Fiscal Year, and
(ii) the largest quotient obtained by dividing (a) each Partner's allocable
share of the taxable income of the Partnership for such Partnership Fiscal
Year, determined by taking into account allocation of items of income and
deduction pursuant to Section 704(c) of the Code and by excluding any items
giving rise to a capital gain or a capital loss, by (b) such Partner's
Percentage Interest on the Relevant Date.
"Original Assignor" is defined in Section 8.3(b) hereof.
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<PAGE> 20
"Original Partner Affiliates" means AAT Affiliates, each Original Partner, and
any Affiliate of an Original Partner or of any member of an Original Partner's
Immediate Family.
"Original Partner" means each of those Persons who are signatories to the
Surviving Partnership Agreement.
"Original Partnership" is defined in Recital A.
"Original Partnership Agreement" is defined in Recital A.
"Other Retail Interest" or "Other Retail Interests" means stock, partnership
interests, or other Direct or Indirect ownership interests in a private or
public entity which is Primarily Engaged, excluding those retail interests
identified on Schedule G attached hereto.
"Other Retail Opportunity" or "Other Retail Opportunities" means an opportunity
or opportunities to develop (including, without limitation, any in the process
of development) an income-producing regional retail shopping center or centers,
whether part of a mixed-use property or not, having a gross leasable area
(including space occupied by Major Stores) in excess of Two Hundred Thousand
(200,000) square feet, excluding those retail opportunities identified on
Schedule G attached hereto.
"Other Retail Property" or "Other Retail Properties" means a developed regional
retail shopping center or centers, whether part of a mixed-use property or not,
having a gross leasable area (including space occupied by Major Stores) in
excess of Two Hundred Thousand (200,000) square feet, excluding those retail
properties identified on Schedule G attached hereto.
"Owning Entity" means any Person, other than the Partnership, owning a
Development Opportunity or a Regional Center, provided that the Partnership
holds, Directly or Indirectly, a Beneficial Interest in such Person. Reference
to the Owning Entities includes each Owning Entity.
"Owning Entity Agreement" means an agreement, in whatever form embodied
(including, without limitation, within the partnership agreement or other
document forming or governing an Owning Entity), providing for management,
administration, leasing and/or development and/or like services between an
Owning Entity and T-Co or TTC, including any such agreement entered into by an
Owning Entity with T-Co prior to the Contribution Date.
"Partner" and "Partners" are (i) those Persons named in the Preamble to this
Agreement, (ii) the successors to any portion or all of the Partnership
Interest of those Persons named in the Preamble to this Agreement who are
admitted as a Partner or Partners pursuant to Section 8.2 hereof, and (iii) any
Person or Persons to whom a Partnership Interest has been issued pursuant to
Section 8.4 hereof.
"Partner Nonrecourse Debt" is defined in Section 5.1(d)(2) hereof.
"Partner Nonrecourse Debt Minimum Gain" is defined in Section 5.1(d)(2) hereof.
"Partner Nonrecourse Deduction" is defined in Section 5.1(d)(2) hereof.
"Partnership" means The Taubman Realty Group Limited Partnership, a Delaware
limited partnership.
"Partnership Accountants" means Deloitte & Touche and its successors, or any
firm of independent certified public accountants of recognized national
standing selected by the Managing General Partner, with the approval or at the
direction of the Partnership Committee.
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<PAGE> 21
"Partnership Committee" means the partnership committee established for the
Partnership pursuant to Section 6.1(b) hereof.
"Partnership Committee Action" means the action of the Partnership Committee,
or the Executive Committee, as applicable, taken or to be taken, including
without limitation, all actions, decisions, determinations, directions,
appointments, selections, resolutions, consents, delegations, designations,
approvals, and the like required or provided to be made or contemplated by this
Agreement.
"Partnership Fiscal Year" means the calendar year.
"Partnership Interest" is defined in Section 4.6(a) hereof.
"Partnership Interest Certificate" and "Partnership Interest Certificates" are
defined in Section 4.7 hereof.
"Partnership Interest Ledger" means a ledger maintained at the principal office
of the Partnership that shall set forth, among other things, the name and
address of each Partner and the nature of the Partnership Interest of each
Partner, the number of Units of Partnership Interest held by each Partner, and
the current Percentage Interest of each Partner.
"Partnership Law" is defined in Section 1.1 hereof.
"Partnership Opportunity" is defined in paragraph (c) of Article VII hereof.
"Partnership Opportunity Notice" is defined in paragraph (c) of Article VII
hereof.
"Percentage Interest" is defined in Section 4.6(b) hereof.
"Peripheral Property" means the real property adjacent or related to a
Development Opportunity or a Regional Center, owned by the Partnership or an
Owning Entity and improved or unimproved and held as distinct from or in some
manner differentiated from, but intended as integrated with, the Regional
Center (or anticipated Regional Center), which real property shall include the
approximately two hundred and fifty (250) acre Kingspointe property located in
Sterling Heights, Michigan.
"Person" or "Persons" means an individual, a partnership (general or limited),
corporation, joint venture, business trust, cooperative, association, or other
form of business organization, whether or not regarded as a legal entity under
applicable law, a trust (inter vivos or testamentary), an estate of a deceased,
insane, or incompetent person, a quasi-governmental entity, a government or any
agency, authority, political subdivision, or other instrumentality thereof, or
any other entity.
"Pledge" means a pledge or grant of a mortgage, security interest, lien or
other encumbrance in respect of a Partnership Interest.
[THE AMENDMENT ADDED THE FOLLOWING DEFINITION:
"Preferred Equity" means, on any date, an amount equal to the aggregate
contributions to the capital of the Partnership made by TREIT pursuant to
Section 4.1(f) hereof, to the extent such contributions have not yet been
converted to Additional Interests pursuant to Sections 5.3 and 8.4 hereof.
Each contribution of Preferred Equity shall be designated as a separate series,
e.g., Series A Preferred Equity.]
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[THE AMENDMENT ADDED THE FOLLOWING DEFINITION:
"Preferred Rate" means, a fixed rate per annum, specified by TREIT and agreed
to by the Partnership Committee, as to a given series of Preferred Equity,
which rate shall be equal to the dividend rate for the Related Issue.]
"Primarily Engaged" means, with respect to a private or public Person (other
than an individual), that (i) Other Retail Properties held by such Person
(other than an individual) at the relevant time represent at least twenty-five
percent (25%) of the value of all of the assets of such Person (other than an
individual), or (ii) at least twenty-five percent (25%) of the average annual
gross revenues of such Person (other than an individual) during the immediately
preceding twenty-four (24) month period were derived from the development
and/or management of Other Retail Properties not owned by such Person (other
than an individual), or (iii) if each of the percentages determined under
clauses (i) and (ii) is less than twenty-five percent (25%), the percentages
determined under both clauses (i) and (ii) in the aggregate equal at least
forty-five percent (45%).
"Profits" is defined in Section 5.1(a) hereof.
"Prohibited Transaction" means such term as defined in Section
857(b)(6)(B)(iii) of the Code.
"Prohibited Transaction Tax Distribution Amount" means, for each Partnership
Fiscal Year, an amount equal to the quotient obtained by dividing (i) one
hundred percent (100%) of the net income of TREIT derived from prohibited
transactions (as defined in Section 857(b)(6)(B)(i) of the Code) for such
Partnership Fiscal Year, by (ii) the Percentage Interest of TREIT on the
Relevant Date.
"Qualified Appraiser" means a Third Party designated by the Managing General
Partner, with the approval or at the direction of the Partnership Committee,
and who is a member in good standing of the American Institute of Real Estate
Appraisers, or a Member, Appraisal Institute (or a member of the successor to
either such organization).
"Qualified Committee Members" means, with respect to a Conflicting Interest
Transaction or Matter, those Committee Members who do not Knowingly have a
Conflicting Interest respecting the Relevant Transaction or the Relevant
Matter.
"Qualified Institutional Transferee" means any transferee of a Partnership
Interest that is or are (i) a pension fund, profit-sharing fund or similar
fund, or an organization or organizations exempt from federal income taxes
pursuant to the provisions of Section 501(a) of the Code and described in
Section 501(c)(3) of the Code, in each such case possessing more than Fifty
Million Dollars ($50,000,000) in assets, (ii) an organization described in
Section 509 of the Code, and having a Partner as a "substantial contributor"
(as defined in Section 507(d)(2) of the Code), (iii) pooled funds for Keogh
plans, individual retirement plans, profit-sharing plans, pension plans or
similar tax-exempt plans, in each such case possessing more than One Hundred
Million Dollars ($100,000,000) in assets, (iv) insurance companies or banks, in
each such case possessing more than Two Billion Dollars ($2,000,000,000) in
assets, (v) a domestic entity organized as a mutual fund or registered
investment company in each case possessing more than One Hundred Million
Dollars ($100,000,000) in assets, (vi) any other Person (a "QIT Entity"), all
the Beneficial Interests in which at the time of such Transfer and thereafter
are owned by one or more of the foregoing, or (vii) a QIT Entity that has as
one (1) or more of its constituent partners, a foreign entity that is organized
as a mutual fund or investment company that is not Primarily Engaged and, in
each such case, that possesses more than One Hundred Million Dollars
($100,000,000) in assets, provided that such QIT Entity is at no time a
nonresident alien, foreign corporation, foreign trust, or foreign estate,
within the meaning of Section 7701 of the Code; provided that a Transfer to
such transferee will not cause a prohibited transaction (as defined in Section
4975(c) of the Code or Section 406 of ERISA) to occur.
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<PAGE> 23
"QIT Entity" is defined in the definition of "Qualified Institutional
Transferee."
"REAs" means reciprocal easement and operating or like agreements.
"Real Estate Investment Trust" means such term as defined in Section 856 of the
Code.
"Real Estate Investment Trust Taxable Income" means such term as defined in
Section 857(b)(2) of the Code.
"Record Partner" means a Person set forth as a Partner on the books and records
of the Partnership. No Person other than a Person that is a Partner on the
Contribution Date shall be a Record Partner until such Person has become a
substitute Partner in the Partnership pursuant to Section 8.2 hereof, or has
acquired an Additional Interest or an Incentive Interest pursuant to Section
8.4 hereof and has become a Partner in the Partnership pursuant to Section 8.4
hereof.
"Recusal" is defined in Section 6.7 hereof.
"Regional Center Interest" or "Regional Center Interests" means the interest or
interests in a Regional Center or Regional Centers then held by the Partnership
either Directly or Indirectly as the holder of a Beneficial Interest, Directly
or Indirectly, in an Owning Entity or Owning Entities that own or owns a
Regional Center or Regional Centers.
"Regional Centers" means those regional retail shopping centers, including
Peripheral Property in respect thereof, set forth on Schedule D attached hereto
and made a part hereof, as well as those regional retail shopping centers and
any other real property acquired and/or developed by the Partnership after the
Contribution Date in accordance with the provisions of Section 3.1 hereof,
provided that some portion of the enclosed mall portion thereof is open for
business to the public generally, in each case for so long as the Partnership
has a Direct or Indirect Beneficial Interest therein. Reference to a Regional
Center includes any one of the Regional Centers.
"Regulations" (including Temporary Regulations or Proposed Regulations) means
Department of Treasury regulations promulgated under the Code, as such
regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"REIT Requirements" is defined in Section 3.4 hereof.
[THE AMENDMENT ADDED THE FOLLOWING DEFINITION:
"Related Issue" and "Related Issues" are defined in Section 4.1(f) hereof.]
"Relevant Date" means, (i) with respect to a Minimum Distribution Amount, the
date of the Annual Budget setting forth such amount, or the date of an
amendment thereto which provides a change in such amount, (ii) with respect to
an Additional Required Amount, the date of the Additional Required Amount
Notice in respect thereof, and (iii) with respect to a Minimum Distribution
Amount Adjustment, or any component thereof, or a Tax Adjustment Amount, the
date of the TREIT Information Notice in respect thereof.
"Relevant Matter" means a matter dealt with or proposed to be dealt with by
Partnership Committee Action.
"Relevant Transaction" means a transaction effected or proposed to be effected
by the Partnership or by an Affiliate of the Partnership.
"Representative" is defined in Section 10.1(a)(3) hereof.
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<PAGE> 24
"Required Distribution Amount" means an amount, as set forth in the Annual
Budget, equal to the aggregate cash to be distributed to the Partners for such
Partnership Fiscal Year, as such amount may be increased or decreased from time
to time by the Partnership Committee, in consultation with the Manager, but in
no event less than the Estimated Minimum Distribution Amount.
"Restricted AAT Affiliates" means AAT, his current spouse, his descendants
(natural or adoptive, of the whole or half blood), and any Affiliate of any of
the foregoing individuals, provided that for such purposes "Affiliate" shall
not include an individual's Immediate Family. Reference to a Restricted AAT
Affiliate includes any of the Restricted AAT Affiliates.
"Restricted Affiliates" means, with respect to the referenced individual, such
individual, such individual's current spouse, and any Affiliate of either of
the foregoing, provided that for such purposes "Affiliate" shall not include an
individual's Immediate Family. Reference to a Restricted Affiliate includes
any one of the Restricted Affiliates.
"Second Amendment" is defined in Recital G.
"Successor" is defined in Section 10.1(a)(4) hereof.
"Successor General Partner" is defined in Section 10.1(b) hereof.
"Surviving Partnership" is defined in Recital C.
"Surviving Partnership Agreement" is defined in Recital C.
"Taubman Transferee" means a single Person that acquires, pursuant to Section
8.1(b) or Section 8.3(a) hereof, or upon the foreclosure or like action in
respect of a Pledge, the then (i.e., at the time of such acquisition) entire
Partnership Interest (excluding, in the case of an acquisition pursuant to
Section 8.3(a) hereof or pursuant to a foreclosure or like action in respect of
a Pledge, the ability of such Person to act as a substitute partner) of AAT
Affiliates (excluding the Partnership Interest held by TG), from one or more
AAT Affiliates or from any Taubman Transferee provided that the Percentage
Interest being Transferred exceeds seven and 7/10ths percent (7.7%).
"Tax Adjustment Amount" means, for each Partnership Fiscal Year, an amount
equal to the excess (if any) of (i) the sum of (x) TREIT's Real Estate
Investment Trust Taxable Income for such Partnership Fiscal Year (determined
without regard to any deduction for dividends paid (as defined in Section 561
of the Code)), and by excluding any net capital gain (as defined in Section
1222(11) of the Code), and (y) TREIT's net income from foreclosure property for
such Partnership Fiscal Year, minus its excess noncash income (as determined
under Section 857(e) of the Code) for such Partnership Fiscal Year, over (ii)
the sum of (A) TREIT's allocable portion of the Required Distribution Amount
distributed to TREIT during such Partnership Fiscal Year, and (B) TREIT's
allocable portion of the Minimum Distribution Amount Adjustment distributed to
TREIT during the current Partnership Fiscal Year, to the extent such Minimum
Distribution Amount Adjustment was a distribution in respect of those amounts
determined under subclauses (x) and (y) of clause (i) hereof.
"Tax Adjustment Notice" is defined in Section 6.5 hereof.
"Tax Liability" means, for the relevant period, the product of (i) the highest
individual federal income tax rate applicable to capital gains (taking into
account the relevant holding period for the applicable capital asset) in effect
for such period, and (ii) the largest quotient obtained by dividing (a) each
Partner's (other than TREIT's) allocable share of net capital gain (as defined
in Section 1222(11) of the Code) of the Partnership for such period, by (b)
such Partner's (other than TREIT's) Percentage Interest on the Relevant Date,
taking into account allocation of gain pursuant to Section 704(c) of the Code;
provided, however, that in no event shall the
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<PAGE> 25
Tax Liability for any period exceed the cash proceeds received or to be
received by the Partnership on the sale during such period of capital assets.
"Tax Matters Partner" is defined in Section 6.13(a) hereof.
"T-Co" is defined in the Preamble to this Agreement.
"TG" is defined in the Preamble to this Agreement.
"TG Receivables" means those certain loan receivables created by the TG
Receivable Documents and held by TG in respect of the amounts owed to TG by
certain of its partners.
"TG Receivable Documents" means that certain Loan Agreement dated August 1,
1985, among the Original Partnership and certain of the partners of TG, the
promissory notes, and all other documents, agreements, certificates and other
instruments (as the same have been amended through the Contribution Date)
executed in connection with the authorization and consummation of those certain
loans made pursuant to such Loan Agreement, and as the same may be amended,
restated or supplemented.
"Third Party" or "Third Parties" means a Person or Persons who is or are
neither a Partner or Partners nor an Affiliate or Affiliates of a Partner or
Partners.
"Third Party Financing" means financing or refinancing obtained from a Third
Party by the Partnership or an Owning Entity, as the case may be.
"Time of Commitment" means, (i) respecting a Relevant Transaction, the time
when the Relevant Transaction is consummated or, if made pursuant to contract,
the time when the withdrawal from the Relevant Transaction would entail
significant loss, liability or other damage to the Partnership (or its
Affiliate) but in no event later than the time when the Partnership (or its
Affiliate) becomes contractually obligated, and (ii) respecting a Relevant
Matter, the time when Partnership Committee Action has been taken and is
communicated by the Managing General Partner to the relevant parties and such
other action is taken so that the unilateral withdrawal of such Partnership
Committee Action would entail significant loss, liability, or other damage
(including to the reputation or credibility of the Partnership).
"TRAP" is defined in the Preamble to this Agreement.
"Transfer" means any assignment, sale, transfer, conveyance, Pledge, grant of
an option or proxy, or other disposition or act of alienation, whether
voluntary or involuntary, or by operation of law.
"Transfer Determination" is defined in Section 8.1(b) hereof.
"TREIT" is defined in the Preamble to this Agreement.
"TREIT Appointee" and "TREIT Appointees" means that individual or those
individuals who, at the relevant time, are serving on the Partnership Committee
as an appointee or appointees of TREIT.
"TREIT Capital Contribution" is defined in Section 4.1(a) hereof.
"TREIT Information Notice" is defined in Section 5.6(b) hereof.
"Trusts" means GMPT and AT&T.
"Trusts' Loan" means that certain loan made pursuant to the Loan Agreement
dated August 1, 1985, between the Partnership and GMPT, a portion of which was
acquired by AT&T.
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<PAGE> 26
"Trusts' Option" means that certain option pursuant to which GMPT and AT&T have
an option to acquire a Partnership Interest as a "Class A Limited Partner" (as
defined in the Original Partnership Agreement) in the Partnership.
"TRV" is defined in the Preamble to this Agreement.
"TTC" is The Taubman Company Limited Partnership, a Delaware limited
partnership, its successors and assigns, the present constituency of which is
T-Co and the Partnership.
"TTC Affiliates" means all officers and employees of TTC for so long as they
are actively employed by TTC, and for so long as any of such individuals are
included within such definition of TTC Affiliates, any Affiliate of such
individual. Reference to a TTC Affiliate includes any one of the TTC
Affiliates.
"UBTI" means unrelated business taxable income as defined in Section 512(a) of
the Code.
"Units of Partnership Interest" means the units into which Partnership
Interests are divided, as provided in Section 4.6(a) hereof, and as the same
may be adjusted, as provided in Section 4.8 hereof.
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III.
PURPOSES AND POWERS; PARTNERSHIP ONLY FOR
PURPOSES SPECIFIED; REPRESENTATIONS AND WARRANTIES.
Section 3.1 Purposes and Powers of the Partnership.
The Partnership has been formed pursuant to the Partnership
Law and continued in accordance with this Agreement for the purposes of (i)
owning, operating, maintaining, administering, developing, holding, improving,
rehabilitating, redeveloping, renovating, expanding, leasing, mortgaging,
selling, exchanging, disposing of, and generally dealing in and with, the
Development Opportunities, the Development Opportunity Interests, the Regional
Centers, the Regional Center Interests, and any other property owned by the
Partnership, (ii) financing or refinancing for any of the foregoing purposes,
or for any other purpose in furtherance of, or necessary, convenient, or
incidental to the business or requirements of the Partnership, (iii) seeking to
acquire, acquiring, obtaining options or other rights to acquire (pursuant to a
purchase for cash and/or other consideration, exchange, merger, contribution to
the capital of the Partnership, or otherwise) interests in, or in Persons
owning, or owning an interest or interests in, regional retail shopping centers
(including mixed-use properties the retail component of which is or is
anticipated to be of significant value in relation to the value of the entire
mixed-use property), or property or properties in anticipation of developing
same as a regional retail shopping center or centers, or any other property as
shall be specifically, in all such cases, designated from time to time by the
Managing General Partner, with the approval or at the direction of the
Partnership Committee, (iv) holding an interest as a partner (general and/or
limited) or shareholder in a management, leasing, development, administrative
or other service company, including interests incidental to such interest, and
(v) engaging in any other activities (including the ownership of property) that
are in furtherance of or necessary or incidental or related to any of the
foregoing.
In furtherance of its purposes, but subject to the provisions of this
Agreement, the Partnership has the power and is hereby authorized to, directly
or indirectly:
(i) retain, own, hold, do business with, acquire (pursuant to a
purchase for cash and/or other consideration, exchange, merger,
contribution to the capital of the Partnership, or otherwise), renovate,
rehabilitate, improve, expand, lease, operate, maintain, and administer
and sell, convey, assign, exchange, mortgage,
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<PAGE> 28
finance, refinance, or demolish, or deal in any manner with, a
Development Opportunity, a Development Opportunity Interest, a Regional
Center, a Regional Center Interest, and any real or personal property
used in connection therewith or which may be in furtherance of, or
necessary, convenient, or incidental to the accomplishment of, the
purposes of the Partnership;
(ii) borrow, including without limitation, borrowing to obtain funds
to acquire, own, obtain an option or other right to acquire, develop,
and/or improve (including, without limitation, to renovate, rehabilitate,
expand, lease, operate, maintain, and administer) a regional retail
shopping center or other venture opportunity, a Regional Center, or a
Regional Center Interest, and make capital improvements and/or
investments in one or more Owning Entities or Regional Centers, and
refinance any indebtedness or borrowing in furtherance of, or necessary,
convenient, or incidental to the accomplishment of, any purposes or
requirements of the Partnership, issue evidences of indebtedness to
evidence such borrowings which may be convertible in whole or in part
into Partnership Interests (to be issued in accordance with the
provisions of Section 8.4 hereof) and which may be unsecured or secured
by a mortgage, deed of trust, assignment, pledge, or other lien on a
Regional Center or Regional Center Interest or any other asset(s) of the
Partnership and/or an Owning Entity, and enter into guaranty agreements
and/or indemnity agreements in connection with any such borrowings or in
connection with a borrowing by or indebtedness of any other Person in
which the Partnership holds an interest;
(iii) contribute to the capital of, or lend to, an Owning Entity,
acquire, own, obtain an option or other right to acquire (pursuant to a
purchase for cash and/or other consideration, exchange, merger,
contribution to the capital of the Partnership, or otherwise), develop,
renovate, rehabilitate, improve, expand, lease, make capital improvements
to, satisfy obligations of, or operate a regional retail shopping center
or other venture opportunity, a Regional Center, or a Regional Center
Interest;
(iv) seek and/or locate regional retail shopping centers or other
venture opportunities that are or are intended to be in furtherance of,
or necessary, convenient, or incidental to the accomplishment of, any
purposes of the Partnership;
(v) perform and/or engage others to perform studies and/or
investigation or analysis of any sort in respect of a possible or
proposed regional retail shopping center or other venture opportunity;
(vi) acquire and/or obtain options or other rights to acquire
(pursuant to a purchase for cash and/or other consideration, exchange,
merger, contribution to the capital of the Partnership, or otherwise)
regional retail shopping centers (including interests therein) or other
venture opportunities that are or are intended to be in furtherance of,
or necessary, convenient, or incidental to the accomplishment of, the
purposes of the Partnership, as shall be specifically, from time to time,
designated by the Managing General Partner, with the approval or at the
direction of the Partnership Committee, and enter into and perform any
and all agreements, execute any and all instruments and documents, and
take any and all actions with respect thereto;
(vii) accept, in exchange for a Partnership Interest and, if
desired, admission as a Partner in the Partnership, and as a contribution
to the capital of the Partnership, or through the liquidation of a
corporation or other entity, or otherwise, regional retail shopping
centers, interests in regional retail shopping centers, development or
other venture opportunities, or interests in development or other venture
opportunities;
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<PAGE> 29
(viii) take any action reasonably anticipated to enhance, protect,
defend and/or preserve, the value of a Development Opportunity, a
Development Opportunity Interest, a Regional Center, a Regional Center
Interest or other venture opportunity, or the Partnership and the return
to the Partners;
(ix) act as one of the general and/or limited partners of, or act as
the sole general or limited partner of, an Owning Entity and exercise all
the powers and authorities given to the Partnership by the partnership
agreement or other governing document covering such Owning Entity, or
otherwise own all or any part or portion of a Development Opportunity, a
Development Opportunity Interest, a Regional Center, or a Regional Center
Interest;
(x) enter into, consent to, and enter into amendments of, any
partnership agreement or other governing document covering an Owning
Entity or any other agreement to which the Partnership or an Owning
Entity is or is to be a party;
(xi) enter into ground leases, as a tenant or landlord, in respect
of all or any part or portion of the Partnership's real property;
(xii) convert a Regional Center or a Regional Center Interest, or a
part thereof, to condominium or cooperative status;
(xiii) prepay in whole or in part, and refinance, recast, increase,
modify, amend, extend, or assign any loan, secured or unsecured, and in
connection therewith, execute any extensions, renewals, or modifications
of any mortgage or deed of trust or lien securing any such loan;
(xiv) act as one of the general and/or limited partners, or
shareholders of, or act as the sole general or limited partner or
shareholder of, or otherwise employ, a management, leasing, development,
or other service company, to perform or engage others to perform all
activities and services in respect of a Development Opportunity, a
Development Opportunity Interest, a Regional Center, or a Regional Center
Interest or other venture opportunity, or to perform administrative
services for the Partnership and the Managing General Partner, and pay
compensation for such services;
(xv) enter into, perform, and carry out contracts or agreements of
any kind, including, without limitation, contracts or agreements with a
Partner or an Affiliate or Affiliates of a Partner, in furtherance of, or
necessary, convenient, or incidental to the accomplishment of, the
purposes of the Partnership, including, without limitation, the execution
and delivery of all agreements, certificates, instruments, or documents
required by lenders or in connection with any mortgage, deed of trust, or
assignment;
(xvi) place record ownership to a Development Opportunity, a
Development Opportunity Interest, a Regional Center, a Regional Center
Interest (or any part thereof), or other venture opportunity, or any
other Partnership property in the name or names of a nominee or nominees,
or establish a trust ("nominee" or otherwise) to own or hold a
Development Opportunity, a Development Opportunity Interest, a Regional
Center, or a Regional Center Interest, or any other Partnership property,
including to direct, select, and remove the trustee(s) thereof and amend
or terminate such trust, all for the purpose of financing or any other
convenience;
(xvii) execute contracts with governmental agencies, including,
without limitation, any documents required in connection with any debt;
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<PAGE> 30
(xviii) execute any lease or leases (without limit as to the term
thereof (including beyond the term of the Partnership), whether or not
the space so leased is to be occupied by the lessee or, in turn,
sub-leased in whole or in part to others) with respect to all or any part
of a Development Opportunity, a Development Opportunity Interest, a
Regional Center, or a Regional Center Interest;
(xix) obtain, through contract or otherwise, goods and services;
(xx) maintain insurance;
(xxi) invest in, reinvest, and oversee the investment of, cash and
cash-like assets;
(xxii) make or revoke any election permitted the Partnership by any
taxing or other authority;
(xxiii) grant and enter into and amend REAs and impose restrictions
with respect to all or any part of a Development Opportunity, a
Development Opportunity Interest, a Regional Center, a Regional Center
Interest, Peripheral Property, or other property;
(xxiv) foreclose upon any property;
(xxv) admit a Person as a Partner to the Partnership, or increase or
decrease the interest of a Partner in the Partnership, pursuant to the
terms of this Agreement;
(xxvi) sell, exchange, or otherwise dispose of, upon any terms, all
or any part or portion of Partnership property or the property of an
Owning Entity;
(xxvii) enter into, perform, and carry out contracts which may be
lawfully carried out or performed by a partnership under applicable laws
including, without limitation, the Master Services Agreement;
(xxviii) enter into an agreement to merge with or into another
partnership having similar purposes as the Partnership and having the
Partnership or such other partnership as the surviving partnership;
(xxix) retain legal counsel, the Partnership Accountants,
appraisers, and any other professionals in connection with the business
of the Partnership or of an Owning Entity;
(xxx) execute or deliver any assignment for the benefit of creditors
of the Partnership or of an Owning Entity;
(xxxi) negotiate with, defend, and resolve all matters with any
Person;
(xxxii) sue on, defend, pursue, or compromise any and all claims or
liabilities in favor of or against the Partnership or an Owning Entity,
submit any or all such claims or liabilities to arbitration, and confess
a judgment against the Partnership or an Owning Entity in connection with
litigation in which the Partnership or an Owning Entity may be involved;
(xxxiii) take any action and exercise any right (including the
assignment or disposition of same) under any contract or agreement to
which the Partnership or an Owning Entity is a party;
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(xxxiv) terminate, dissolve, and liquidate any Person, including,
without limitation, an Owning Entity, and retain and deal in and with the
assets (subject to liabilities and obligations) received as a result of
any such liquidation;
(xxxv) amend, modify, or terminate and deal in any manner with any
instrument, including without limitation, any trust instrument, corporate
document, partnership agreement, or joint venture agreement covering or
in respect of an Owning Entity, a Development Opportunity, a Development
Opportunity Interest, a Regional Center, or a Regional Center Interest;
(xxxvi) indemnify the Indemnified Persons and satisfy such
indemnifications from the assets of the Partnership; and
(xxxvii) in addition to the foregoing, take or omit to take any
action as may be necessary, convenient, or desirable to further the
purposes or intent of the Partnership or of an Owning Entity, and have
and exercise all of the powers and rights conferred upon limited
partnerships formed pursuant to the Partnership Law.
Section 3.2 Partnership Only for Purposes Specified.
The Partnership shall be a partnership only for the purposes
specified in Section 3.1 hereof, and this Agreement shall not be deemed to
create a partnership among the Partners with respect to any activities
whatsoever other than the activities within the purposes of the Partnership as
specified in Section 3.1 hereof. Except as otherwise provided in this
Agreement, no Partner shall have any authority to act for, bind, commit, or
assume any obligation or responsibility on behalf of the Partnership, its
properties, or any other Partner. No Partner, in its capacity as a Partner
under this Agreement, shall be responsible or liable for any indebtedness or
obligation of another Partner, nor shall the Partnership be responsible or
liable for any indebtedness or obligation of any Partner, incurred either
before or after the execution and delivery of this Agreement by such Partner,
except as to those responsibilities, liabilities, indebtedness, or obligations
incurred pursuant to and as limited by the terms of this Agreement or incurred
pursuant to the Partnership Law.
Section 3.3 Representations and Warranties by the Partners.
(a) Each Partner that is an individual represents and warrants to each
other Partner, that (i) the consummation of the transactions contemplated by
this Agreement to be performed by such Partner will not result in a breach or
violation of, or a default under, any agreement by which such Partner or any of
such Partner's property is or are bound, or any statute, regulation, order, or
other law to which such Partner is subject, (ii) such Partner is not a "foreign
person" within the meaning of Section 1445(f) of the Code, (iii) except as
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specifically provided on Schedule J attached hereto, such Partner does not own,
directly or indirectly, (1) two percent (2%) or more of the total combined
voting power of all classes of stock entitled to vote, or two percent (2%) or
more of the total number of shares of all classes of stock, of any corporation
that is a tenant of a Regional Center, or (2) an interest of two percent (2%)
or more in the assets or net profits of any tenant of a Regional Center, and
(iv) this Agreement is binding upon, and enforceable against, such Partner in
accordance with its terms.
(b) Each Partner that is not an individual represents and warrants to each
other Partner, that (i) all transactions contemplated by this Agreement to be
performed by it have been duly authorized by all necessary action, including
without limitation, that of its general partner(s), committee(s), trustee(s),
beneficiaries, directors, and/or shareholder(s), as the case may be, as
required, (ii) the consummation of such transactions shall not result in a
breach or violation of, or a default under, its partnership agreement, trust
agreement, charter, or by-laws, as the case may be, any agreement by which such
Partner or any of such Partner's properties or any of its partners,
beneficiaries, trustees, or shareholders, as the case may be, is or are bound,
or any statute, regulation, order, or other law to which such Partner or any of
its partners, trustees, beneficiaries, or shareholders, as the case may be, is
or are subject, (iii) such Partner is neither a "foreign person" within the
meaning of Section 1445(f) of the Code nor a "foreign partner" within the
meaning of Section 1446(e) of the Code, (iv) except as specifically provided on
Schedule J attached hereto, such Partner does not own, directly or indirectly,
(1) two percent (2%) or more of the total combined voting power of all classes
of stock entitled to vote, or two percent (2%) or more of the total number of
shares of all classes of stock, of any corporation that is a tenant of a
Regional Center, or (2) an interest of two percent (2%) or more in the assets
or net profits of any tenant of a Regional Center, and (v) this Agreement is
binding upon, and enforceable against, such Partner in accordance with its
terms.
[THE AMENDMENT ADDED THE FOLLOWING PROVISION:
(c) TREIT covenants and agrees that, (i) it will not directly or
indirectly through ownership of another Person (including a wholly-owned direct
or indirect subsidiary) engage
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in any business other than through the Partnership except for the acquisition
of businesses held for the sole benefit of the Partnership or a subsidiary
partnership, (ii) it will own all Regional Center Interests and Development
Opportunity Interests only through the Partnership, (iii) it will not incur any
indebtedness for borrowed money other than to effect a distribution to satisfy
the REIT Requirements, to contribute or loan such proceeds to the Partnership
to accomplish the Partnership's purposes, or to refinance any existing
indebtedness of the Partnership, and (iv) it will not assign or otherwise
dispose of its right to a Guaranteed Payment or the corresponding series of
Preferred Equity or its right to any loan and corresponding interest described
in Section 4.1(f) hereof, other then as set forth in Section 5.3 hereof.]
(d) The representations and warranties contained in Sections 3.3(a) and
3.3(b) hereof shall survive the execution and delivery of this Agreement by
each Partner and the dissolution, liquidation and termination of the
Partnership; provided, however, that in the event of a breach of any such
representation or warranty the sole source of recovery by the Partners shall be
a Partner's Partnership Interest.
(e) Each Partner hereby acknowledges that no representations as to
potential profit, cash flows, or yield, if any, in respect of the Partnership
or any one or more or all of the Regional Centers or Regional Center Interests
or Development Opportunities or Development Opportunity Interests have been
made by any Partner or any employee or representative or Affiliate of any
Partner, and that projections and any other information, including, without
limitation, financial and descriptive information and documentation, which may
have been in any manner submitted to such Partner shall not constitute any
representation or warranty, express or implied.
Section 3.4 Real Estate Investment Trust Requirements.
Notwithstanding anything to the contrary contained in this Agreement, for
so long as TREIT is a Partner, the Partnership shall operate in such a manner
and the Partnership shall take or omit to take all actions as may be necessary
(including making appropriate distributions from time to time), so as to permit
TREIT (i) to continue to qualify as a Real Estate Investment Trust under
Sections 856 through 860 of the Code so long as such
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<PAGE> 34
requirements exist and as such provisions may be amended from time to time, or
corresponding provisions of succeeding law (the "REIT Requirements"), and (ii)
to minimize its exposure to the imposition of an excise tax under Section
4981(a) of the Code or a tax under Section 857(b)(5) of the Code, so long as
such taxes may be imposed and as such provisions may be amended from time to
time, or corresponding provisions of succeeding law, each of (i) and (ii) to at
all times be determined (a) as if TREIT's sole asset is its Partnership
Interest, and (b) without regard to the action or inaction of TREIT with
respect to distributions (by way of dividends or otherwise) and the timing
thereof. The Managing General Partner may cause the Partnership to obtain an
opinion of tax counsel selected by the Managing General Partner and reasonably
acceptable to the Partnership Committee, regarding the impact of any proposed
action affecting TREIT's continuing ability to qualify as a Real Estate
Investment Trust, or its exposure to an excise tax under Section 4981(a) of the
Code, or a tax under Section 857(b)(5) of the Code, so long as such taxes exist
and as such provisions may be amended from time to time or corresponding
provisions of succeeding law. Further, without the consent of the Managing
General Partner, which consent shall not be unreasonably withheld, the
Partnership shall take no action with respect to a sale, exchange or other
disposition of any property owned by the Partnership with respect to which a
material issue exists as to whether such sale, exchange or other disposition
would cause TREIT to incur a prohibited transaction tax under Section 857(b)(6)
of the Code; it being hereby agreed and understood that the consent of the
Managing General Partner shall not be required under this Section 3.4 with
respect to a sale, exchange or other disposition of the Peripheral Property to
the extent that such sale, exchange or other disposition is to be effected in a
manner generally consistent with past practices. Further, in no event shall
consent be withheld upon receipt of an opinion of tax counsel selected by the
Managing General Partner and reasonably acceptable to the Partnership
Committee, that such sale, exchange or other disposition should not cause TREIT
to incur a prohibited transaction tax under Section 857(b)(6) of the Code at
the time and under the circumstances of the proposed sale, exchange or
disposition.
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IV.
CAPITAL CONTRIBUTIONS; OPENING CAPITAL ACCOUNT
BALANCES; ANTICIPATED FINANCING; CAPITAL ACCOUNTS;
PARTNERSHIP INTERESTS; UNITS OF PARTNERSHIP INTEREST;
PERCENTAGE INTERESTS; PARTNERSHIP INTEREST CERTIFICATES;
PURCHASE OF FRACTIONAL UNITS; ADJUSTMENT OF UNITS OF
PARTNERSHIP INTEREST.
Section 4.1 Capital Contributions; Opening Capital Account Balances.
(a) Simultaneously with the execution and delivery of this Agreement,
TREIT shall make an additional contribution to the capital of the Partnership,
in exchange for additional Units of Partnership Interest resulting in TREIT
holding a total of that number of Units of Partnership Interest and a
Percentage Interest set forth on Schedule B attached hereto, of the following,
free and clear of any encumbrances, liens or other security interests: (i)
Sixty-Seven Million Six Hundred Eighty-Six Thousand Nine Hundred Three Dollars
($67,686,903) in face amount of the Trusts' Loan, and (ii) one hundred percent
(100%) of the Trusts' Option (the "TREIT Capital Contribution"). TREIT may, as
and when and in the manner approved by the Partnership Committee, contribute
additional development or other venture opportunities, interests in development
or other venture opportunities, regional shopping center developments, and
interests in regional shopping center developments, and/or cash or other
property to the capital of the Partnership in exchange for Additional Interests
in accordance with the provisions of Section 8.4 hereof.
(b) Simultaneously with the execution and delivery of this Agreement,
GMPTS shall acquire that number of Units of Partnership Interest and the
Percentage Interest set forth on Schedule B attached hereto, and the
Partnership shall repay Six Hundred Million Seventy-Five Thousand Four Hundred
Six Dollars ($600,075,406) in face amount of the Trusts' Loan (the "GMPTS
Capital Contribution").
(c) Simultaneously with the execution and delivery of this Agreement, TG
shall make an additional contribution of a twenty-one percent (21%) interest as
a general partner in Hilltop to the capital of the Partnership, free and clear
of any encumbrances, liens, or other security interests, and in exchange for
additional Units of Partnership Interest resulting in TG
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<PAGE> 36
holding a total of that number of Units of Partnership Interest and a
Percentage Interest set forth on Schedule B attached hereto.
(d) Simultaneously with the execution and delivery of this Agreement, MMF
shall contribute a seven percent (7%) interest as a general partner in Hilltop
to the capital of the Partnership, free and clear of any encumbrances, liens,
or other security interests, and in exchange for that number of Units of
Partnership Interest and a Percentage Interest set forth on Schedule B attached
hereto.
(e) The Capital Account balances of the Partners as of the Contribution
Date, after giving effect to all of the contributions set forth in this Section
4.1, shall be as set forth opposite their respective names on Schedule A
attached hereto.
[THE AMENDMENT ADDED THE FOLLOWING PROVISION:
(f) With the approval of the Partnership Committee, TREIT may contribute,
from time to time, amounts to the capital of the Partnership as Preferred
Equity, which amounts have been obtained from the sale by TREIT of any one or
more series of shares of preferred stock. In lieu of contributing such
proceeds as Preferred Equity, TREIT shall have the right, with the approval of
the Partnership Committee, to lend such proceeds to the Partnership. Any such
loan shall be on the same terms and conditions as the Related Issue except that
in lieu of dividends payable by TREIT on the Related Issue, interest shall be
payable by the Partnership to TREIT. The Partnership shall assume and pay the
expenses (including applicable underwriter discounts) incurred by TREIT in
connection with any contributions or loans by TREIT to the capital of the
Partnership pursuant to this Section 4.1(f). Any such loan made by TREIT to
the Partnership may at any time be converted by TREIT to Preferred Equity
pursuant to Section 5.3 hereof. Each contribution or loan made by TREIT
pursuant to this Section 4.1(f) shall be identified by the series of preferred
shares which provided TREIT with the funds to contribute or loan to the
Partnership (individually, a "Related Issue," and collectively, the "Related
Issues").]
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Section 4.2 Anticipated Financing.
The Partnership may obtain funds which it considers necessary to meet the
needs and obligations and requirements of the Partnership, including, without
limitation, the Partnership's obligation to lend and/or contribute funds to, or
the Partnership's obligations in respect of, an Owning Entity, or to maintain
adequate working capital or to repay Partnership indebtedness, and to carry out
the Partnership's purposes, from the proceeds of Third Party Financing or
Affiliate Financing, in each case pursuant to such terms, provisions, and
conditions and in such manner (including the engagement of brokers and/or
investment bankers to assist in providing such financing) and amounts as the
Managing General Partner, with the approval or at the direction of the
Partnership Committee, shall determine. Any and all funds required or
expended, directly or indirectly, by the Partnership for capital expenditures
may be obtained or replenished through Partnership borrowings. Any Third Party
Financing or Affiliate Financing obtained by the Managing General Partner, with
the approval or at the direction of the Partnership Committee, on behalf of the
Partnership may be convertible in whole or in part into Additional Interests
(to be issued in accordance with Section 8.4 hereof), may be unsecured, may be
secured by a mortgage or mortgages, or deed(s) of trust and/or assignments on
or in respect of all or any portion of the assets of the Partnership or an
Owning Entity, may include or be obtained through the public or private
placement of debt and/or other instruments, domestic and foreign, and may
include the provision for the option to acquire Additional Interests (to be
issued in accordance with Section 8.4 hereof), and may include the acquisition
of or provision for interest rate swaps, credit enhancers, and/or other
transactions or items in respect of such Third Party Financing or Affiliate
Financing; provided, however, that (A) any Third Party Financing may be with
recourse to the Partnership and its assets only if an exculpation acceptable to
the Partnership Committee is provided with respect to each Partner, and (B) in
no event may the Partnership obtain any Third Party Financing that is recourse
to any Partner or any Affiliate, partner, shareholder, beneficiary, principal,
officer, or director of any Partner without the consent of both the Person or
Persons to whom such recourse may be had and each Appointing Person.
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<PAGE> 38
Section 4.3 No Right to Withdraw Capital; No Requirement of Further
Contributions.
Except as specifically provided in this Agreement, no Partner (i)
shall have the right to withdraw any part of its Capital Account or to
demand or receive the return of its capital contributions, or any part thereof,
or to receive any distributions from the Partnership, (ii) shall be entitled to
make, or have any obligation to make, any contribution to the capital of, or
any loan to, or provide a guaranty with respect to any loan to, the
Partnership, or (iii) except as provided in Section 11.1(d) hereof, shall have
any liability for the return of any other Partner's Capital Account or
contributions to the capital of the Partnership. No Partner shall be liable
for the liabilities and obligations of the Partnership except as otherwise
provided by the Partnership Law; provided, however, that any and all
obligations and liabilities to a Partner or an Affiliate of a Partner shall be
satisfied solely from Partnership assets and no Partner shall have any personal
liability on account thereof.
Section 4.4 No Interest on Capital Contributions or Capital Accounts.
No Partner shall receive any interest or return in the nature of
interest on its contributions to the capital of the Partnership, or on the
positive balance, if any, in its Capital Account.
Section 4.5 Capital Accounts.
(a) The Partnership shall establish and maintain a separate capital
account ("Capital Account") for each Partner, including a substitute partner
who shall pursuant to the provisions hereof acquire a Partnership Interest,
which Capital Account shall be:
(1) credited with the amount of cash and the initial Book Value
(net of liabilities secured by such contributed property that
the Partnership assumes or takes subject to) of any other property
contributed by such Partner to the capital of the Partnership, such
Partner's distributive share of Profits, and any items in the nature of
income or gain that are allocated to such Partner pursuant to Section
5.1 hereof, but excluding tax items described in Regulations Section
1.704-1(b)(4)(i); and
(2) debited with the amount of cash and the Book Value (net of
liabilities secured by such distributed property that such Partner
assumes or takes subject to) of any Partnership property distributed to
such Partner pursuant to any provision of
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<PAGE> 39
this Agreement, such Partner's distributive share of Losses, any items in
the nature of expenses or losses that are allocated to such Partner
pursuant to Section 5.1 hereof, but excluding tax items described in
Regulations Section 1.704-1(b)(4)(i), and such Partner's share,
determined in accordance with its Percentage Interest, of any
expenditures of the Partnership described in Section 705(a)(2)(B) of the
Code or treated as Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i).
In the event that a Partner's Partnership Interest or portion thereof is
transferred within the meaning of Regulations Section 1.704-1(b)(2)(iv)(l), the
transferee shall succeed to the Capital Account of the transferor to the extent
that it relates to the Partnership Interest or portion thereof so transferred.
In the event that the Book Values of Partnership assets are adjusted as
described below in Section 4.5(b) hereof, the Capital Accounts of the Partners
shall be adjusted simultaneously to reflect the aggregate net adjustments as if
the Partnership recognized gain or loss for federal income tax purposes equal
to the amount of such aggregate net adjustment.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Section 1.704-1(b) of the Regulations, and shall be interpreted and applied as
provided in the Regulations. In the event that the Managing General Partner,
with the approval or at the direction of the Partnership Committee, reasonably
determines that the manner in which the Capital Accounts, or any debits or
credits thereto, are maintained or computed under the Regulations should be
further amended, the Managing General Partner, with the approval or at the
direction of the Partnership Committee, shall be authorized, without the
approval, consent or act of any of the Partners, to amend this Agreement,
provided that such amendment shall not directly and adversely affect the
Partnership Interest of a Partner, including without limitation, the right to
receive distributions allocable thereto, without the written concurrence of
such Partner. In determining whether this Agreement should be amended to
reflect the foregoing, the Managing General Partner, with the approval or at
the direction of the Partnership Committee,
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<PAGE> 40
shall be entitled to rely on the advice of the Partnership Accountants and/or
counsel to the Partnership.
(b) Except as otherwise provided in this Agreement, the term "Book Value"
or "Book Values" means, with respect to any asset, such asset's adjusted basis
for federal income tax purposes, except:
(1) the initial Book Value of any asset contributed by a Partner to
the Partnership shall be the gross fair market value of such asset;
(2) the Book Value of all Partnership assets may be adjusted to
equal their respective gross fair market values as of the following
times, as determined by the Managing General Partner, with the approval
or at the direction of the Partnership Committee (unless such adjustment
shall be required by Regulations Section 1.704-1(b)(2)(iv)(f)): (i) the
acquisition from the Partnership, in exchange for more than a de minimis
capital contribution, of a Partnership Interest by an additional partner
or an additional Partnership Interest by an existing Partner; (ii) the
distribution by the Partnership to a Partner of more than a de minimis
amount of Partnership property (including money) as consideration for an
interest in the Partnership; and (iii) the liquidation of the Partnership
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) if there
is an in-kind distribution of Partnership property or a deemed in-kind
distribution of Partnership property pursuant to Section 708(b)(1)(B) of
the Code or an installment sale of Partnership assets, or if, pursuant to
the penultimate sentence of Regulations Section 1.704-1(b)(2)(ii)(b), the
Partnership establishes reserves to provide for Partnership liabilities
in connection with the liquidation of the Partnership;
(3) if the Book Value of an asset has been determined or adjusted as
provided in Section 4.5(b)(1) or 4.5(b)(2) hereof, the Book Value of such
asset shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Profits and Losses;
and
(4) the Book Value of any Partnership asset distributed to any
Partner shall be the gross fair market value of such asset on the date of
distribution.
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<PAGE> 41
(c) In the event that subsequent to the Contribution Date any provision of
this Article IV requires the determination of the fair market value of any
asset, such fair market value shall be as determined by the relevant Partner
and those members of the Partnership Committee who are Qualified Committee
Members with respect to such Conflicting Interest Transaction or Matter,
provided that (i) such value is reasonably agreed to by such Persons in
arm's-length negotiations and (ii) such Persons have sufficiently adverse
interests, as provided in Regulations Section 1.704-1(b)(2)(iv)(h). In the
event that the requirements of clauses (i) and (ii) of this Section 4.5(c) are
not met, then the fair market value shall be determined by a Qualified
Appraiser. The cost of any such appraisal shall be an expense of the
Partnership.
Section 4.6 Partnership Interests; Units of Partnership Interest; Percentage
Interests.
(a) For the purpose of this Agreement, the term "Partnership Interest"
means, with respect to a Partner, such Partner's right to the allocations (and
each item thereof) specified in Section 5.1 hereof and distributions from the
Partnership, its share of expenditures of the Partnership described in Section
705(a)(2)(B) of the Code (or treated as such under Regulations Section
1.704-1(b)(2)(iv)(i)) and its rights of management, consent, approval, or
participation, if any, as provided in this Agreement. Each Partner's
Partnership Interest shall be divided into units (herein referred to
collectively as the "Units of Partnership Interest" and individually as a "Unit
of Partnership Interest") and shall be represented by that number of Units of
Partnership Interest set forth opposite such Partner's name on Schedule B
attached hereto, as such Schedule may be amended from time to time pursuant to
Section 4.8, Article VIII or Article X hereof. Initially there shall be that
number of Units of Partnership Interest issued and outstanding as set forth on
Schedule C attached hereto, representing one hundred percent (100%) of all of
the outstanding Partnership Interests held by all Partners. Each of such Units
of Partnership Interest shall have an initial value of that amount set forth on
Schedule C attached hereto. The Partnership may issue additional Units of
Partnership Interest in accordance with Section 8.4 hereof.
(b) For the purpose of this Agreement, the term "Percentage Interest"
means, with respect to each Partner, the percentage set forth opposite such
Partner's name on Schedule
- 36 -
<PAGE> 42
B attached hereto, as such Schedule may be amended from time to time pursuant
to Section 4.8, Article VIII or Article X hereof, and shall at any time be
equal to a fraction, the numerator of which is the aggregate number of Units of
Partnership Interest held by such Partner, and the denominator of which is the
aggregate number of all Units of Partnership Interest that are issued and
outstanding.
Section 4.7 Partnership Interest Certificates.
Units of Partnership Interest shall be evidenced by Partnership
Interest Certificates (herein referred to collectively as "Partnership
Interest Certificates" and individually as a "Partnership Interest
Certificate") which shall be issued in accordance with this Section 4.7 and
Section 13.18 hereof, in the form attached hereto as Exhibit C, as such form
may be amended from time to time by the Managing General Partner, with the
approval or at the direction of, the Partnership Committee. Each Partnership
Interest Certificate shall be signed by an authorized signatory or signatories
of the Partnership and shall bear the following legend:
"The Unit(s) of Partnership Interest represented by this certificate
is(are) subject to and transferable only in compliance with The Amended and
Restated Agreement of Limited Partnership of The Taubman Realty Group
Limited Partnership, as the same may be amended and/or supplemented from
time to time (the "Partnership Agreement"), a copy of which is on file at
the office of The Taubman Realty Group Limited Partnership. Any
assignment, sale, transfer, conveyance, mortgage, or other encumbrance,
pledge, grant of an option or proxy, or other disposition or act of
alienation, whether voluntary or involuntary, or by operation of law, in
respect of a Unit of Partnership Interest made other than as permitted in
the Partnership Agreement shall be null and void and have no force or
effect whatsoever."
Transfers (except by way of a Pledge) of Units of Partnership Interest shall be
made only upon the request of the Person named in the Partnership Interest
Certificate, or by its attorney lawfully constituted in writing, and upon
surrender and cancellation of a Partnership Interest Certificate for a like
number of Units of Partnership Interest, a duly executed and acknowledged
written instrument of assignment, and with such proof of authenticity of the
signatures as the Managing General Partner, with the approval or at the
direction of the Partnership Committee, may reasonably require. In the event of
a Transfer of a Unit of Partnership Interest or the issuance of additional Units
of Partnership Interest pursuant to the provisions of Article VIII or Article X
hereof, the Managing General Partner, with the approval
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<PAGE> 43
or at the direction of the Partnership Committee, shall cause the Partnership to
issue Partnership Interest Certificates to the appropriate Persons to reflect
any Transfer of Units of Partnership Interest or issuance of additional Units of
Partnership Interest, as the case may be. In the event that the Partnership
shall purchase any Units of Partnership Interest (including Fractional Units),
such Units of Partnership Interest (or Fractional Units) shall be extinguished
and the Partnership Interest Certificates with respect thereto shall be
surrendered and cancelled.
Section 4.8 Purchase of Fractional Units of Partnership Interest; Adjustment of
Units of Partnership Interest.
If as a result of any division or combination of Units of
Partnership Interest (as provided below in this Section 4.8) or
Transfer or issuance of Units of Partnership Interest, there shall be
outstanding any Fractional Unit, the Partnership Committee may, but shall not
be obligated to, at any time cause the Partnership to purchase such Fractional
Unit, in which event the Partner holding such Fractional Unit shall sell such
Fractional Unit to the Partnership for an amount equal to the fair market value
of such Fractional Unit as determined in good faith by the Partnership
Committee.
[THE AMENDMENT DELETED THE FOLLOWING PROVISION: It is the intent of
the Partnership to maintain a fair market value of each Unit of Partnership
Interest of at least Twenty Thousand Dollars ($20,000), but to the extent
practicable, of less than Thirty Thousand Dollars ($30,000) and the Partnership
Committee, in good faith, shall, from time to time, divide or combine all Units
of Partnership Interest then issued and outstanding consistent with this
intention; provided, however, that in no event shall the Partnership Committee
(i) divide the Units of Partnership Interest except in connection with the
issuance of Units of Partnership Interest pursuant to Section 8.4 hereof or
except in connection with the granting of Incentive Options and unless each
resulting Unit of Partnership Interest is issued at a fair market value of, or
is to be issued at an exercise price of, at least Twenty Thousand Dollars
($20,000), or (ii) combine the Units of Partnership Interest unless the fair
market value of each resulting Unit of Partnership Interest is Thirty Thousand
Dollars ($30,000) or less. Accordingly, divisions or combinations of Units of
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<PAGE> 44
Partnership Interests may provide for fractional ratios. For example, assume
that the fair market value of a Unit of Partnership Interest increases to
Twenty-Five Thousand Dollars ($25,000). The Partnership Committee may divide
Units of Partnership Interest in order to decrease the fair market value of
each Unit of Partnership Interest to Twenty Thousand Dollars ($20,000) (in
order to, for example, grant Incentive Options at an exercise price of Twenty
Thousand Dollars ($20,000) for each Unit of Partnership Interest), such that
each eighty/100ths (.80) then existing Units of Partnership Interest shall,
pursuant to such action, equal one (1) new Unit of Partnership Interest.
Alternatively, assume that the fair market value of a Unit of Partnership
Interest decreases to Fifteen Thousand Dollars ($15,000). The Partnership
Committee may combine Units of Partnership Interest (and shall combine Units of
Partnership Interest in order to issue any Units of Partnership Interest) to
increase the fair market value of each Unit of Partnership Interest to Twenty
Thousand Dollars ($20,000), such that each one and one-third (1 1/3) of a then
existing Unit of Partnership Interest shall, pursuant to such action, equal one
(1) new Unit of Partnership Interest. In the event of any such action to
combineor divide Units of Partnership Interest as provided in this Section 4.8,
all references in this Agreement to a number of Units of Partnership Interest
shall be combined or divided by the same divisor or multiplier, as the case may
be. Any action to divide or combine Units of Partnership Interest pursuant to
this Section 4.8 shall be effective on the date set forth in the resolution as
the effective date for such action, and each Partner or Person to whom a Unit
of Partnership Interest has been pledged shall have the right to request a
certification from the Partnership as to the date of the last division or
combination of Units of Partnership Interest. Promptly following any such
action, Schedule B shall be amended to reflect such action, notice of such
action shall be provided to each of the Partners and to any Person to whom a
Unit of Partnership Interest has been pledged (provided the Partnership shall
have received notice of such Pledge and the identity and address of such
pledgee), and appropriate substitute Partnership Interest Certificates shall be
issued as of the effective date of such action, in exchange for outstanding
Partnership Interest Certificates pursuant to such terms as shall be
established by the Partnership Committee. For the purpose of this Section 4.8,
fair market values shall be as determined in good faith by the Partnership
Committee.]
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<PAGE> 45
[THE AMENDMENT ADDED THE FOLLOWING PROVISION:
The Partnership Committee, in good faith, may, from time to time, divide
or combine all Units of Partnership Interest then issued and outstanding;
provided, however, that in no event shall the Partnership Committee combine the
Units of Partnership Interest unless the fair market value of each resulting
Unit of Partnership Interest is One Hundred Thousand Dollars ($100,000) or
less. Accordingly, divisions or combinations of Units of Partnership Interests
may provide for fractional ratios. In the event of any such action to combine
or divide Units of Partnership Interest as provided in this Section 4.8, all
references in this Agreement to a number of Units of Partnership Interest shall
be combined or divided by the same divisor or multiplier, as the case may be.
Any action to divide or combine Units of Partnership Interest pursuant to this
Section 4.8 shall be effective on the date set forth in the resolution as the
effective date for such action, and each Partner or Person to whom a Unit of
Partnership Interest has been pledged shall have the right to request a
certification from the Partnership as to the date of the last division or
combination of Units of Partnership Interest. Promptly following any such
action, Schedule B shall be amended to reflect such action, notice of such
action shall be provided to each of the Partners and to any Person to whom a
Unit of Partnership Interest has been pledged (provided the Partnership shall
have received notice of such Pledge and the identity and address of such
pledgee), and appropriate substitute Partnership Interest Certificates shall be
issued as of the effective date of such action, in exchange for outstanding
Partnership Interest Certificates, pursuant to such terms as shall be
established by the Partnership Committee. For the purpose of this Section 4.8,
fair market values shall be as determined in good faith by the Partnership
Committee.]
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<PAGE> 46
V.
ALLOCATIONS; DISTRIBUTIONS; BANK ACCOUNTS;
BOOKS OF ACCOUNT; TAX RETURNS; ACCOUNTING AND REPORTS;
PARTNERSHIP FISCAL YEAR.
Section 5.1 Allocations.
(a) For the purpose of this Agreement, the terms "Profits" and "Losses"
mean, respectively, for each Partnership Fiscal Year or other period, the
Partnership's taxable income or loss for such Partnership Fiscal Year or other
period, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), adjusted as follows:
(1) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses
pursuant to this Section 5.1(a) shall be added to such taxable income or
loss;
(2) in lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such
Partnership Fiscal Year or other period; and
(3) any items that are specially allocated pursuant to Section
5.1(d) or 5.1(f) hereof shall not be taken into account in computing
Profits or Losses.
(b) Except as otherwise provided in Section 5.1(d) or 5.1(f) hereof, the
Profits and Losses of the Partnership (and each item thereof) for each
Partnership Fiscal Year shall be allocated among the Partners in accordance
with their respective Percentage Interests.
(c) For the purpose of Section 5.1(b) hereof, gain or loss resulting from
any disposition of Partnership property shall be computed by reference to the
Book Value of the property disposed of, notwithstanding that the adjusted tax
basis of such property for federal income tax purposes differs from its Book
Value.
(d) Notwithstanding the foregoing provisions of this Section 5.1, the
following provisions shall apply:
(1) A Partner shall not receive an allocation of any Partnership
deduction that would result in total loss allocations attributable to
"Nonrecourse Liabilities" (as
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defined in Regulations Section 1.704-2(b)(3)) in excess of such Partner's
share of Minimum Gain (as determined under Regulations Section
1.704-2(g)). The term "Minimum Gain" means an amount determined in
accordance with Regulations Section 1.704-2(d) by computing, with respect
to each Nonrecourse Liability of the Partnership, the amount of gain, if
any, that the Partnership would realize if it disposed of the property
subject to such liability for no consideration other than full
satisfaction thereof, and by then aggregating the amounts so computed.
If there is a net decrease in Partnership Minimum Gain for a Partnership
Fiscal Year, in accordance with Regulations Section 1.704-2(f) and the
exceptions contained therein, the Partners shall be allocated items of
Partnership income and gain for such Partnership Fiscal Year (and, if
necessary, for subsequent Partnership Fiscal Years) equal to the
Partners' respective shares of the net decrease in Minimum Gain within
the meaning of Regulations Section 1.704-2(g)(2) (the "Minimum Gain
Chargeback"). The items to be allocated pursuant to this Section
5.1(d)(1) shall be determined in accordance with Regulations Section
1.704-2(f) and (j).
(2) Any item of "Partner Nonrecourse Deduction" (as defined in
Regulations Section 1.704-2(i)) with respect to a "Partner Nonrecourse
Debt" (as defined in Regulations Section 1.704-2(b)(4)) shall be
allocated to the Partner or Partners who bear the economic risk of loss
for such Partner Nonrecourse Debt in accordance with Regulations Section
1.704-2(i)(1). Subject to Section 5.1(d)(1) hereof, but notwithstanding
any other provision of this Agreement, in the event that there is a net
decrease in Minimum Gain attributable to a Partner Nonrecourse Debt (such
Minimum Gain being hereinafter referred to as "Partner Nonrecourse Debt
Minimum Gain") for a Partnership Fiscal Year, then after taking into
account allocations pursuant to Section 5.1(d)(1) hereof, but before any
other allocations are made for such taxable year, and subject to the
exceptions set forth in Regulations Section 1.704-2(i)(4), each Partner
with a share of Partner Nonrecourse Debt Minimum Gain at the beginning of
such Partnership Fiscal Year shall be allocated items of income and
gain for such Partnership Fiscal Year (and, if necessary, for subsequent
Partnership Fiscal Years) equal to such
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Partner's share of the net decrease in Partner Nonrecourse Debt Minimum
Gain as determined in a manner consistent with the provisions of
Regulations Section 1.704-2(g)(2). The items to be allocated pursuant to
this Section 5.1(d)(2) shall be determined in accordance with Regulations
Section 1.704-2(i)(4) and (j).
(3) Pursuant to Regulations Section 1.752-3(a)(3), for the purpose
of determining each Partner's share of excess nonrecourse liabilities of
the Partnership, and solely for such purpose, each Partner's interest in
Partnership profits is hereby specified to be such Partner's Percentage
Interest.
(4) No Partner shall be allocated any item of deduction or loss of
the Partnership if such allocation would cause such Partner's Capital
Account to become negative by more than the sum of (i) any amount such
Partner is obligated to restore upon liquidation of the Partnership, plus
(ii) such Partner's share of the Partnership's Minimum Gain and Partner
Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot
be allocated to a Partner pursuant to this Section 5.1(d)(4) shall be
allocated among the General Partners, other than GMPTS, its transferees
and other than any transferee of a Partnership Interest that is described
in clause (i), (ii) or (iii) of the definition of "Qualified
Institutional Transferee" or that is a QIT Entity consisting solely of
(and for so long as such QIT Entity consists solely of) entities
described in clause (i), (ii) or (iii) of the definition of "Qualified
Institutional Transferee", in proportion to their respective Percentage
Interests; it being agreed and understood that no such item of deduction
or loss shall be allocated to GMPTS or any such transferee. For this
purpose, in determining the Capital Account balance of such Partner, the
items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), and
(6) shall be taken into account. In the event that (A) any Limited
Partner unexpectedly receives any adjustment, allocation, or distribution
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6),
and (B) such adjustment, allocation, or distribution causes or increases
a deficit balance (net of amounts which such Limited Partner is obligated
to restore or deemed obligated to restore under Regulations
Section 1.704-2(g)(1) and 1.704-2(i)(5) and determined after taking into
account any adjustments, allocations,
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or distributions described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5), or (6) that, as of the end of the
Partnership Fiscal Year, reasonably are expected to be made to such
Limited Partner) in such Limited Partner's Capital Account as of the end
of the Partnership Fiscal Year to which such adjustment, allocation, or
distribution relates, then items of Gross Income (consisting of a pro
rata portion of each item of Gross Income) for such Partnership Fiscal
Year and each subsequent Partnership Fiscal Year shall be allocated to
such Limited Partner until such deficit balance or increase in such
deficit balance, as the case may be, has been eliminated. In the event
that this Section 5.1(d)(4) and Section 5.1(d)(1) and/or (2) hereof
apply, Section 5.1(d)(1) and/or (2) hereof shall be applied prior to this
Section 5.1(d)(4).
(5) In accordance with Sections 704(b) and 704(c) of the Code and
the Regulations thereunder, income, gain, loss, and deduction with
respect to any property contributed to the capital of the Partnership
shall, solely for federal income tax purposes, be allocated among the
Partners so as to take account of any variation between the adjusted
basis of such property to the Partnership for federal income tax purposes
and the initial Book Value of such property, all as set forth on Schedule
H hereto. If the Book Value of any Partnership property is adjusted
pursuant to Section 4.5(b) hereof, subsequent allocations of income,
gain, loss, and deduction with respect to such asset shall take account
of any variation between the adjusted basis of such asset for federal
income tax purposes and the Book Value of such asset in the manner
prescribed under Sections 704(b) and 704(c) of the Code and the
Regulations thereunder.
(e) Notwithstanding anything to the contrary contained in this Section
5.1, the allocation of Profits and Losses for any Partnership Fiscal Year
during which a Person acquires a Partnership Interest (other than upon
formation of the Partnership) shall take into account the Partners' varying
interests for such Partnership Fiscal Year pursuant to any method permissible
under Section 706 of the Code that is selected by the Managing General Partner,
with the approval or at the direction of the Partnership Committee
(notwithstanding any agreement between the assignor and assignee of such
Partnership Interest although the
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Managing General Partner, with the approval or at the direction of the
Partnership Committee, may recognize any such agreement), which method may take
into account the date on which the Transfer or an agreement to Transfer becomes
irrevocable pursuant to its terms, as determined by the Managing General
Partner, with the approval or at the direction of the Partnership Committee.
(f) In the event of a sale or exchange of a Partner's Partnership Interest
or portion thereof or upon the death of a Partner, if the Partnership has not
theretofore elected, pursuant to Section 754 of the Code, to adjust the basis
of Partnership property, the Managing General Partner, with the approval or at
the direction of the Partnership Committee, shall cause the Partnership to
elect, if the Person acquiring such Partnership Interest or portion thereof so
requests, pursuant to Section 754 of the Code, to adjust the basis of
Partnership property. In addition, in the event of a distribution referred to
in Section 734(b) of the Code, if the Partnership has not theretofore elected,
the Managing General Partner, with the approval or at the direction of the
Partnership Committee, may, in the exercise of its reasonable discretion, cause
the Partnership to elect, pursuant to Section 754 of the Code, to adjust the
basis of Partnership property. Except as provided in Regulations Section
1.704-1(b)(2)(iv)(m), such adjustment shall not be reflected in the Partners'
Capital Accounts and shall be effective solely for federal and (if applicable)
state and local income tax purposes. Each Partner hereby agrees to provide the
Partnership with all information necessary to give effect to such election.
With respect to such election:
(1) Any change in the amount of the depreciation deducted by the
Partnership and any change in the gain or loss of the Partnership, for
federal income tax purposes, resulting from an adjustment pursuant to
Section 743(b) of the Code shall be allocated entirely to the transferee
of the Partnership Interest or portion thereof so transferred. Neither
the capital contribution obligations of, nor the Partnership Interest of,
nor the amount of any cash distributions to, the Partners shall be
affected as a result of such election, and except as provided in
Regulations Section 1.704-1(b)(2)(iv)(m), the making of such
election shall have no effect except for federal and (if applicable)
state and local income tax purposes.
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(2) Solely for federal and (if applicable) state and local income
tax purposes and not for the purpose of maintaining the Partners' Capital
Accounts (except as provided in Regulations Section
1.704-1(b)(2)(iv)(m)), the Partnership shall keep a written record for
those assets, the basis of which is adjusted as a result of such
election, and the amount at which such assets are carried on such record
shall be debited (in the case of an increase in basis) or credited (in
the case of a decrease in basis) by the amount of such basis adjustment.
Any change in the amount of the depreciation deducted by the Partnership
and any change in the gain or loss of the Partnership, for federal and
(if applicable) state and local income tax purposes, attributable to the
basis adjustment made as a result of such election shall be debited or
credited, as the case may be, on such record.
(g) The Profits, Losses, gains, deductions, and credits of the Partnership
(and all items thereof) for each Partnership Fiscal Year shall be determined in
accordance with the accounting method followed by the Partnership for federal
income tax purposes.
(h) Except as provided in Sections 5.1(d)(5) and 5.1(f) hereof, for
federal income tax purposes, each item of income, gain, loss, or deduction
shall be allocated among the Partners in the same manner as its correlative
item of "book" income, gain, loss, or deduction has been allocated pursuant to
this Section 5.1.
(i) Such portion of the gain allocated pursuant to this Section 5.1 that
is treated as ordinary income attributable to the recapture of depreciation
shall, to the extent possible, be allocated among the Partners in the
proportion that (i) the amount of depreciation previously allocated to each
Partner relating to the property that is the subject of the disposition bears
to (ii) the total of such depreciation allocated to all of the Partners. This
Section 5.1(i) shall not alter the amount of allocations among the Partners
pursuant to this Section 5.1, but merely the character of gain so allocated and
shall be disregarded to the extent its application would cause the allocation
of Profits and Losses and items thereof to fail to satisfy the requirements of
Section 514(c)(9)(B)(vi)(II) of the Code and Regulations promulgated
thereunder.
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(j) To the extent permitted by Regulations Sections 1.704-2(h)(3) and
1.704-2(i)(6), the Managing General Partner shall endeavor to treat a
distribution of the proceeds of Nonrecourse Liabilities (that would otherwise
be allocable to an increase in Partnership Minimum Gain) or Partner Nonrecourse
Debt (that would otherwise be allocable to an increase in Partner Nonrecourse
Debt Minimum Gain) as a distribution that is not allocable to an increase in
Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain to the extent
that such distribution does not cause or increase a deficit balance in any
Partner's Capital Account that exceeds the amount such Partner is otherwise
obligated to restore (within the meaning of Regulations Section
1.704-1(b)(2)(ii)(c)) as of the end of the Partnership's taxable year in which
the distribution occurs.
(k) It is the intention of the Partners that this Agreement provide for
allocations of Profits and Losses and items thereof that meet the requirements
of [THE AMENDMENT DELETED THE FOLLOWING REFERENCE: Section
514(c)(9)(B)(vi)(II)] [THE AMENDMENT ADDED THE FOLLOWING REFERENCE:
514(c)(9)(E)] of the Code and any Regulations promulgated thereunder, and the
Managing General Partner, with the approval of the Partnership Committee, shall
interpret this Agreement accordingly.
Section 5.2 Distributions.
(a) Subject, on liquidation of the Partnership to Section 11.1(a) hereof,
and to Section 11.1(c) hereof on liquidation of a Partner's interest in the
Partnership that is not in connection with the liquidation of the Partnership,
for the term of the Partnership, as set forth in Section 1.5 hereof:
(i) a cash distribution shall be made to the Partners, in accordance
with their respective Percentage Interests, not later than the fifteenth
(15th) Day of each month (the "Distribution Date") of each Partnership
Fiscal Year, in an amount equal to one-twelfth (1/12) of the Required
Distribution Amount for such Partnership Fiscal Year;
(ii) a cash distribution shall be made to the Partners, in
accordance with their respective Percentage Interests, on the
Distribution Date immediately following the date of an Additional
Required Amount Notice, in an amount equal to the Additional Required
Amount; provided, however, that if such Distribution Date is less than
twenty (20) Days after the date of such Additional Required Amount
Notice, the Additional Required Amount shall be distributed on the next
Distribution Date; provided, further however, that if the Partnership
does not receive, in accordance with Section 6.5 hereof, an Additional
Required Amount Notice in respect of a capital gain transaction within
seven (7) Days of the date of the next regular meeting of the
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Partnership Committee following such capital gain transaction, a cash
distribution shall nevertheless be made to the Partners, in accordance
with their respective Percentage Interests, on the Distribution Date
immediately following such meeting of the Partnership Committee, in an
amount equal to the Additional Required Amount in respect of such
transaction, or in the event that such Distribution Date is less than
twenty (20) Days after the date of such meeting, such Additional Required
Amount shall be distributed on the next Distribution Date;
(iii) in the event of a Minimum Distribution Amount Adjustment
Notice, a cash distribution shall be made to the Partners, in accordance
with their respective Percentage Interests, not later than the fifteenth
(15th) Day of the first month of each Partnership Fiscal Year, in an
amount equal to the Minimum Distribution Amount Adjustment for the prior
Partnership Fiscal Year;
(iv) in the event of a Tax Adjustment Notice, a cash distribution
shall be made to the Partners, in accordance with their respective
Percentage Interests, not later than the last Day of the fourth (4th)
month of each Partnership Fiscal Year, in an amount equal to the quotient
obtained by dividing (x) the Tax Adjustment Amount for the prior
Partnership Fiscal Year, by (y) the Percentage Interest of TREIT on the
Relevant Date; and
(v) in the event of a Deficiency Dividend Notice, a cash
distribution shall be made to the Partners, in accordance with their
respective Percentage Interests, as and when required by TREIT, in an
amount equal to the Deficiency Dividend.
(b) Until such time that the GMPTS Priority Capital Amount has been paid
out pursuant to this Section 5.2(b), in the event, and each time that, GMPTS or
a transferee of the interest of GMPTS whom GMPTS has designated in writing
(with notice thereof to the Partnership Committee and the Manager) as being
entitled to the benefit of this Section 5.2(b) sells one (1) or more Units of
Partnership Interest to TREIT, a cash distribution shall be made to GMPTS or
such designated transferee in an amount equal to the product of fifty-five
thousandths (.055), and the amount of cash proceeds received by GMPTS or such
GMPTS designated transferee as a result of such sale; provided, however, that
the aggregate cumulative amount to be distributed pursuant to this Section
5.2(b) shall in no event exceed the GMPTS Priority Capital Amount.
(c) All distributions pursuant to Section 5.2(a), 5.2(b), and Section
11.1(a) hereof shall be made in accordance with the terms and provisions of
this Agreement to the Record Partner; provided, however, that in the event of
an assignment of a Partnership Interest pursuant to Section 8.3(a) hereof to a
Person that does not become a substitute Partner in the Partnership, the Record
Partner may, subject to the provisions of Section 8.3(a) hereof, by written
notice (a "Designee Notice") to the Manager, the Partnership, and the Managing
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General Partner, designate such Person to receive those distributions pursuant
to Section 5.2(a), 5.2(b), and Section 11.1(a) to which the Record Partner
would otherwise be entitled. The Managing General Partner shall not incur any
liability for distributions made in good faith to any Record Partner or the
designee of any Record Partner set forth in a Designee Notice as provided above
in this Section 5.2(c), notwithstanding that another Person may have an
interest in or be affected by such distribution. Distributions to the Partners
under this Agreement shall be subject to any restriction imposed by applicable
law, and the Managing General Partner may refrain from making any distribution
hereunder without liability if it believes that the distribution would be in
violation of any applicable law.
[THE AMENDMENT ADDED THE FOLLOWING PROVISION:
Section 5.3 Guaranteed Payments.
Not later than the fifteenth (15th) Day of each month of each
Partnership Fiscal Year, the Partnership shall pay to TREIT, in cash or
by good certified or official bank check or by Fedwire transfer of immediately
available funds, an amount equal to the excess, if any, of (i) the cumulative
Guaranteed Payment on all Preferred Equity, over (ii) the sum of all prior
payments made to TREIT pursuant to this Section 5.3, such amounts to be paid in
the priorities, if any, set forth in the applicable series. Amounts paid
pursuant to this Section 5.3 are intended to constitute guaranteed payments
within the meaning of Section 707(c) of the Code and shall not be treated as
distributions for purposes of computing TREIT's Capital Account balance.
TREIT, with the approval of the Partnership Committee, shall have the
right, but not the obligation, to convert all or any portion of the proceeds
loaned to the Partnership pursuant to Section 4.1(f) to Preferred Equity, which
Preferred Equity shall be entitled to a Guaranteed Payment in lieu of the
payment of interest.
In the event of the redemption by TREIT, in whole or in part, of any
series of preferred shares that constitute a Related Issue, TREIT, with the
consent of the Partnership Committee, may convert that portion of its Preferred
Equity equal to the portion of the Related Issue that was redeemed (exclusive
of any accrued but unpaid dividends), to an Additional Interest by contributing
to the capital of the Partnership all of its right, title, and interest, in
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and to the payment of any future Guaranteed Payment on that portion of the
converted Preferred Equity, with the effect that the portion of the converted
Preferred Equity and related right to the payment of any future Guaranteed
Payment shall be converted to an Additional Interest in accordance with Section
8.4(a) hereof, such Additional Interest to be provided by a proportionate
reduction in the Percentage Interests of all of the Partners, as provided in
Section 8.4(a) hereof. Upon and to the extent of the conversion of Preferred
Equity to Additional Interests in accordance with this Section 5.3, Schedule B
to the Partnership Agreement shall be amended accordingly.]
Section 5.3 Bank Accounts and Other Investments.
Funds of the Partnership shall be deposited in one or more bank accounts
in federal or state chartered banks having a shareholder capital and
undistributed surplus of not less than One Hundred Million Dollars
($100,000,000), all as determined by the Managing General Partner, with the
approval or at the direction of the Partnership Committee. All withdrawals
therefrom shall be made upon the signature or signatures of whomever shall be
designated in writing from time to time by the Managing General Partner, with
the approval or at the direction of the Partnership Committee. Any checks of
the Partnership may be signed by any Person(s) designated in writing, from time
to time, by the Managing General Partner, with the approval or at the direction
of the Partnership Committee. In addition, funds of the Partnership may be
invested in highly liquid investments pursuant to an investment policy
determined from time to time by the Managing General Partner, with the approval
or at the direction of the Partnership Committee.
Section 5.4 Books of Account.
The Partnership shall maintain at its principal office complete and
accurate books of account and records of its operations showing the assets,
liabilities, costs, expenditures, receipts, profits, and losses of the
Partnership, and which books of account and records shall include provision for
separate Capital Accounts for the Partners and shall provide for such other
matters and information as may be required by the Partnership Law or as the
Managing General Partner, with the approval or at the direction of the
Partnership Committee, shall otherwise determine, together with copies of
all documents executed on behalf of the
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Partnership. In addition, the Partnership shall maintain at its principal
office a Partnership Interest Ledger of the Partnership, which shall set forth
the information contained in Schedule B attached hereto, and which shall be
kept current by the Managing General Partner. Each Limited Partner and its
representatives, duly authorized in writing, shall have the right to inspect
and examine, at all reasonable times, at the principal office of the
Partnership, all such books of account, records, ledgers, and documents.
Section 5.5 Tax Returns.
(a) The Managing General Partner, with the approval or at the direction of
the Partnership Committee, shall determine the methods to be used in the
preparation of federal, state, and local income and other tax returns for the
Partnership in connection with all items of income and expense, including but
not limited to, valuation of assets, the methods of depreciation and cost
recovery, elections, credits, and tax accounting methods and procedures.
(b) To the extent all necessary information is available, within ninety
(90) Days after the end of each Partnership Fiscal Year, and in any event
within one hundred twenty (120) Days after the end of each Partnership Fiscal
Year, the Partnership shall cause to be prepared and transmitted to the
Partners federal and appropriate state and local Partnership Income Tax
Schedules "K-1," or any substitute therefor, with respect to such Partnership
Fiscal Year on appropriate forms prescribed.
Section 5.6 Accounting and Reports, Etc.
(a) Within ninety (90) Days after the end of each Partnership Fiscal Year,
the Partnership shall cause to be prepared and transmitted to each Partner, an
annual report of the Partnership relating to the previous Partnership Fiscal
Year containing a statement of financial condition as of the year then ended,
and statements of operations, cash flow and Partnership equity for the year
then ended, which annual statements shall be prepared in accordance with GAAP
and shall be audited by the Partnership Accountants. The Partnership shall
also cause to be prepared and transmitted to each Partner within forty-five
(45) Days after the end of each of the first three (3) quarters of each
Partnership Fiscal Year, a quarterly unaudited report of the Partnership's
financial condition and statements of operations, cash
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flow and Partnership equity relating to the fiscal quarter then just ended,
prepared in accordance with GAAP. The Partnership shall further cause to be
prepared and transmitted to TREIT (i) such reports and/or information as are
necessary for TREIT to fulfill its obligations under the Securities Act of
1933, the Securities and Exchange Act of 1934 and the applicable stock exchange
rules, and under any other regulations to which TREIT or the Partnership may be
subject, and (ii) such other reports and/or information as are necessary for
TREIT to determine its qualification as a Real Estate Investment Trust under
the REIT Requirements or its liability for a tax as a consequence of its
Partnership Interest, including its distributive share of taxable income, in
each case, in a manner that will permit TREIT to comply with such obligations
or make such determinations in a timely fashion.
(b) TREIT shall, from time to time, upon the reasonable request of the
Manager, or as and when such information first becomes available to it, provide
the Manager, by written notice (the "TREIT Information Notice"), with such
information necessary to permit the Manager to determine the Minimum
Distribution Amount Adjustment, including TREIT's allocable portion of any
component thereof, for each Partnership Fiscal Year, any Tax Adjustment Amount
for any prior Partnership Fiscal Year, to the extent such Tax Adjustment Amount
has not yet been distributed or previously taken into account in calculating a
Tax Adjustment Amount, and any Deficiency Dividend.
Section 5.7 Partnership Fiscal Year.
The Partnership's fiscal year (and taxable year) shall be the
Partnership Fiscal Year.
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VI.
MANAGEMENT; AUTHORITY AND AUTHORIZED ACTIONS BY THE
MANAGING GENERAL PARTNER; AUTHORITY AND APPOINTMENT
AND AUTHORIZED ACTIONS BY THE PARTNERSHIP COMMITTEE; AUTHORITY
AND APPOINTMENT OF AND AUTHORIZED ACTIONS BY THE EXECUTIVE
COMMITTEE; CERTAIN LIMITATIONS ON THE AUTHORITY OF THE EXECUTIVE
COMMITTEE; AUTHORITY AND APPOINTMENT OF AND AUTHORIZED ACTIONS BY
THE COMPENSATION COMMITTEE; ANNUAL BUDGET; NOTICES;
STANDARD OF CONDUCT; CONFLICTING INTEREST DISCLOSURE OR RECUSAL;
MASTER SERVICES AGREEMENT AND CORPORATE SERVICES AGREEMENT;
ABSENCE OF AUTHORITY OF LIMITED PARTNERS; FIDELITY BONDS
AND INSURANCE; ENGAGEMENT OF PARTNERS' AFFILIATES; INDEMNITY
AND REIMBURSEMENT; TAX MATTERS PARTNER.
Section 6.1 Management; Authority and Authorized Actions by the Managing
General Partner; Authority and Appointment of and Authorized
Actions by the Partnership Committee.
(a) The Managing General Partner shall be responsible for the management
of the Partnership and shall have the full and exclusive right, power and
authority, on behalf of and in the name of the Partnership, to carry out any
and all objectives and purposes of the Partnership and to exercise any and all
of the powers of the Partnership and to perform any and all acts and enter into
and perform any and all contracts, agreements, and other undertakings which it
may deem necessary or advisable in furtherance of the purposes of the
Partnership or incidental thereto; provided, however, that the Managing General
Partner shall not take, make or give, or refuse to take, make or give, as
applicable, any action, decision, determination, designation, delegation,
direction, appointment, consent, approval, selection, and the like by or with
respect to the Partnership, its business and properties as well as the
management of all Partnership affairs, without prior Partnership Committee
Action; provided further, however, that the Managing General Partner shall
take, make or give, or refuse to take, make or give, as applicable, any action,
decision, determination, designation, delegation, direction, appointment,
consent, approval, selection, and the like by or with respect to the
Partnership in accordance with any Partnership Committee Action. In such
capacity, and subject to the foregoing provisos, the Managing General Partner
shall use its Best Efforts to carry out the purposes of the Partnership and
shall have in respect of its management of the Partnership all of the powers of
the Partnership and shall devote such time and attention to the Partnership as
is reasonably necessary for the proper management of the Partnership and
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its properties. The Managing General Partner may, with the approval or at the
direction of the Partnership Committee, employ or engage others including one
or more Affiliates of a Partner (e.g., TTC) to satisfy its obligations in
respect of all actions, decisions, determinations, designations, delegations,
directions, appointments, consents, approvals, selections, and the like to be
taken, made, or given by and/or with respect to the Partnership, its business
and its properties as well as management of all Partnership affairs, and all
such actions, decisions, determinations, designations, delegations, directions,
appointments, consents, approvals, selections, and the like shall be
controlling and binding upon the Partnership. Any Person employed or engaged
by the Managing General Partner, with the approval or at the direction of the
Partnership Committee, shall have and be subject to all of the rights,
obligations and restrictions of the Managing General Partner, all as provided
in this Agreement.
(b) The Partnership shall have a Partnership Committee which, acting in
its capacity as a fiduciary solely in accordance with the standard of conduct
set forth in Section 6.6 hereof, shall, through Partnership Committee Action,
approve or propose all actions, decisions, determinations, designations,
delegations, directions, appointments, consents, approvals, selections, and the
like to be taken, made, or given, with respect to the Partnership, its business
and its properties as well as the management of all Partnership affairs, by the
Managing General Partner, and shall interpret and construe this Agreement, and
any action taken relying upon any such construction or interpretation,
reasonably made, shall fully protect the Partnership Committee and each
Committee Member, even though it may be subsequently determined that such
construction or interpretation was erroneous. The Partnership Committee shall
consist of thirteen (13) members. Subject to Section 6.1(b)(i) and Section
6.1(b)(ii) hereof, five (5) members of the Partnership Committee shall be
appointed by GMPTS; two (2) members shall be appointed by TG; and two (2)
members shall be appointed by T-Co, so long as T-Co has an interest in the
Person that is the Manager and is a Partner and the aggregate Percentage
Interest held by Original Partner Affiliates and TTC Affiliates is at least
three percent (3%), or in the event that T-Co no longer has an interest in the
Person that is the Manager or is no longer a Partner, the two (2) members
previously appointed by
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T-Co shall be appointed by TG; and four (4) members who are and continue to be
Eligible TREIT Appointees shall be appointed by TREIT.
The Partnership Committee, or the Executive Committee as its designee,
shall supervise the Manager and review on a regular basis the reports and other
information furnished by the Manager from time to time pursuant to the Master
Services Agreement.
Each of GMPTS, TG, T-Co, and TREIT shall have the power to at any time
remove with or without cause any member of the Partnership Committee appointed
by it by delivering written notice of such removal to the Partnership and to
the other members of the Partnership Committee. In the event and at such time
that any member of the Partnership Committee appointed by TREIT is no longer an
Eligible TREIT Appointee, TREIT shall remove such member of the Partnership
Committee, and shall appoint to the Partnership Committee in the place and
stead of such individual so removed another individual who is an Eligible TREIT
Appointee. The Partnership Committee may, at a meeting of the Partnership
Committee, remove any member of the Partnership Committee for cause in which
event the individual so removed may not be reappointed. Vacancies for whatever
reason (other than because of a reduction in the number of members an
Appointing Person may appoint) on the Partnership Committee shall in all events
be filled by the party who appointed the Partnership Committee member
previously holding the position that is then vacant.
(i) In the event and from and after the time that the Percentage
Interest held by GMPTS shall fall below thirty-eight and 5/10ths percent
(38.5%), the number of members of the Partnership Committee that GMPTS
shall have the right to appoint shall be reduced as follows: in the event
and from and after the time that the Percentage Interest held by GMPTS
shall fall below thirty-eight and 5/10ths percent (38.5%) but not below
thirty and 8/10ths percent (30.8%), then GMPTS shall have the right to
appoint four (4) members; in the event and from and after the time that
the Percentage Interest held by GMPTS shall fall below thirty and 8/10ths
percent (30.8%) but not below twenty-three and 1/10ths percent (23.1%),
then GMPTS shall have the right to appoint three (3) members; in the
event and from and after the time that the Percentage Interest held by
GMPTS shall fall below twenty-three and 1/10ths percent
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(23.1%) but not below fifteen and 4/10ths percent (15.4%), then GMPTS
shall have the right to appoint two (2) members; in the event and from
and after the time that the Percentage Interest of GMPTS shall fall below
fifteen and 4/10ths percent (15.4%) but not below seven and 7/10ths
percent (7.7%), then GMPTS shall have the right to appoint one (1)
member; and in the event and from and after the time that the Percentage
Interest held by GMPTS shall fall below seven and 7/10ths percent (7.7%),
then GMPTS shall have no further right to appoint any member of or be
represented on the Partnership Committee; provided, however, that in the
event of a Transfer of the Partnership Interest of GMPTS to a single
GMPTS Transferee in accordance with Section 8.1(b) or Section 8.3(a)
hereof, or pursuant to a foreclosure or like action in respect of a
Pledge, such GMPTS Transferee shall succeed to GMPTS' right to appoint
members of the Partnership Committee in accordance with the provisions of
this Section 6.1(b)(i); provided further, however, that if such
Partnership Interest is Transferred to an entity consisting of multiple
investors in accordance with Section 8.1(b) or Section 8.3(a) hereof or
pursuant to a foreclosure or like action in respect of a Pledge, a single
agent with full discretionary rights shall be designated by such GMPTS
Transferee to act on behalf of such GMPTS Transferee in respect of all
Partnership matters so long as such GMPTS Transferee is a Partner or
otherwise possesses GMPTS' right to appoint members of the Partnership
Committee in accordance with this Section 6.1(b)(i), or such GMPTS
Transferee shall lose its right to appoint members of the Partnership
Committee. A GMPTS Transferee may at any time change its single agent
provided that written notice thereof has been given to the Managing
General Partner and the Partnership Committee.
(ii) In the event and from and after the time that the aggregate
Percentage Interest held by Original Partner Affiliates and TTC
Affiliates shall fall below fifteen and 4/10ths percent (15.4%) the
number of members of the Partnership Committee that TG shall have the
right to appoint shall be reduced as follows: for so long as T-Co has an
interest in the Person that is the Manager and the aggregate Percentage
Interest held by Original Partner Affiliates and the TTC Affiliates is
at least three percent (3%),
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and (A) in the event and from and after the time that the Percentage
Interest held by Original Partner Affiliates and TTC Affiliates shall
fall below an aggregate fifteen and 4/10ths percent (15.4%), but not
below an aggregate seven and 7/10ths percent (7.7%), TG shall have the
right to appoint one (1) member to the Partnership Committee in addition
to the two (2) members appointed by T-Co (or by TG if T-Co is not a
Partner), and (B) in the event and from and after the time that the
aggregate Percentage Interest held by Original Partner Affiliates and TTC
Affiliates shall fall below an aggregate seven and 7/10ths percent
(7.7%), then TG shall have no further right to appoint any member of the
Partnership Committee. For so long as T-Co has an interest in the Person
that is the Manager and the aggregate Percentage Interest held by
Original Partner Affiliates and TTC Affiliates is at least three percent
(3%), T-Co's right (or TG's right if T-Co is not a Partner) to appoint
two (2) members of the Partnership Committee shall exist. In the event
and from and after the time that T-Co no longer has an interest in the
Person that is the Manager, T-Co shall have no further right to appoint
any member of the Partnership Committee, and TG shall be entitled to
appoint four (4) members to the Partnership Committee, provided that in
the event and from and after the time that the aggregate Percentage
Interest of Original Partner Affiliates and TTC Affiliates shall fall
below thirty and 8/10ths percent (30.8%), the number of members of the
Partnership Committee that TG shall have the right to appoint shall be
reduced as follows: in the event and from and after the time that the
aggregate Percentage Interest held by Original Partner Affiliates and TTC
Affiliates shall fall below an aggregate thirty and 8/10ths percent
(30.8%) but not below an aggregate twenty-three and 1/10ths percent
(23.1%) then TG shall have the right to appoint three (3) members; in the
event and from and after the time that the aggregate Percentage Interest
held by Original Partner Affiliates and TTC Affiliates shall fall below
an aggregate twenty-three and 1/10ths percent (23.1%) but not below an
aggregate
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fifteen and 4/10ths percent (15.4%), then TG shall have the right to
appoint two (2) members; in the event and from and after the time that
the aggregate Percentage Interest held by Original Partner Affiliates and
TTC Affiliates is less than an aggregate fifteen and 4/10ths percent
(15.4%) but not below an aggregate seven and 7/10ths percent (7.7%), then
TG shall have the right to appoint one (1) member; and in the event and
from and after the time that the aggregate Percentage Interest held by
Original Partner Affiliates and TTC Affiliates shall fall below an
aggregate seven and 7/10ths percent (7.7%), then TG shall have no further
right to appoint any member of or be represented on the Partnership
Committee. Notwithstanding anything to the contrary contained in this
Agreement, in the event of a Transfer of the Partnership Interest of AAT
Affiliates (excluding the Partnership Interest of TG) to a single Taubman
Transferee in accordance with Section 8.1(b) or Section 8.3(a) hereof, or
pursuant to a foreclosure or like action in respect of a Pledge, such
Taubman Transferee shall succeed to TG's right to appoint members of the
Partnership Committee in accordance with the provisions of this Section
6.1(b)(ii); provided, however, that if such Partnership Interest is
Transferred to an entity consisting of multiple investors in accordance
with Section 8.1(b) or Section 8.3(b) hereof, or pursuant to a
foreclosure or like action in respect of a Pledge, a single agent with
full discretionary rights shall be designated by such Taubman Transferee
to act on behalf of such Taubman Transferee in respect of all Partnership
matters so long as such Taubman Transferee is a Partner or otherwise
possesses TG's right to appoint members of the Partnership Committee in
accordance with this Section 6.1(b)(ii), or such Taubman Transferee shall
lose its right to appoint members of the Partnership Committee. A
Taubman Transferee may at any time change its single agent provided that
prior written notice thereof has been given to the Managing General
Partner and the Partnership Committee. In determining the Percentage
Interest held by Original Partner Affiliates and TTC Affiliates for the
purposes of this Section 6.1(b)(ii) and other Sections hereof relating to
the appointment of Committee Members, there shall be included the total
number of Units of Partnership Interest over which Original Partner
Affiliates and TTC Affiliates have Incentive Options to the extent such
Incentive Options are vested.
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(iii) In the event and at the time of a reduction in the number of
members of the Partnership Committee that GMPTS and/or TG are entitled to
appoint as provided in Section 6.1(b)(i) or Section 6.1(b)(ii) hereof,
(x) the number of members of the Partnership Committee that TREIT may
appoint (which members shall be and shall continue to be Eligible TREIT
Appointees) shall increase accordingly, such that there shall in all
events be thirteen (13) members of the Partnership Committee, and (y) the
Appointing Person that has suffered a reduction in the number of members
that such Appointing Person is entitled to appoint to the Partnership
Committee shall forthwith remove that number of members appointed by such
Appointing Person equal to such reduction, failing which the members of
the Partnership Committee who are Eligible TREIT Appointees may effect
such removal by notice thereof to such Appointing Person. In the event
and at such time that TREIT shall be entitled to appoint all members of
the Partnership Committee, each of such members, notwithstanding anything
herein to the contrary, shall be considered to be a Qualified Committee
Member with respect to a Relevant Transaction or Relevant Matter if such
Committee Member would qualify as such without regard to such Committee
Member's relationship to TREIT (including the fact that TREIT is such
Committee Member's Appointing Person). If prior to the time that TREIT
shall be entitled to appoint all members of the Partnership Committee, no
member of the Partnership Committee shall be a Qualified Committee Member
with respect to a Relevant Transaction or Relevant Matter, then all
members shall nevertheless be considered to be Qualified Committee
Members with respect to such Relevant Transaction or Relevant Matter.
(c) The Partnership Committee shall meet by telephone conference or by
other means of communication acceptable to the Partnership Committee, or at the
principal office of the Partnership or at such other place as shall be agreed
to from time to time by a majority of the members of the Partnership Committee
(which majority shall include, at all times during which TREIT holds a
Percentage Interest of in excess of fifty percent (50%), at least one (1) TREIT
Appointee). The Partnership Committee shall meet at least four (4) times each
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Partnership Fiscal Year, and on the call of any two (2) members of the
Partnership Committee, and except as otherwise provided in the last sentence of
Section 6.2(b) hereof, upon seven (7) Days' prior notice to the other members
of the Partnership Committee and the Manager. The Partnership Committee shall
establish, at or prior to its last meeting for each Partnership Fiscal Year,
the dates for regular meetings to be held during the following Partnership
Fiscal Year. The Partnership Committee may act without a meeting if the action
taken is consented to in advance, or subsequently ratified, in writing by all
of the members of the Partnership Committee.
(d) A majority of the members of the Partnership Committee (which majority
shall include, at all times during which TREIT holds a Percentage Interest of
in excess of fifty percent (50%), at least one (1) TREIT Appointee), or with
respect to a Conflicting Interest Transaction or Matter, a majority of the
Qualified Committee Members (which majority shall include, at all times during
which TREIT holds a Percentage Interest of in excess of fifty percent (50%), at
least one (1) TREIT Appointee who is also a Qualified Committee Member),
present in person or by telephone conference or by other means of communication
acceptable to the Partnership Committee, shall be necessary and sufficient to
constitute a quorum for the purpose of taking any Partnership Committee Action.
Except with respect to Partnership Committee Actions taken by unanimous
written consent without a meeting as described above, the concurrence of a
majority of the members of the Partnership Committee with, at all times during
which TREIT holds a Percentage Interest of in excess of fifty percent (50%),
the concurrence of a majority of those TREIT Appointees who are present in
person or by telephone conference or by other means of communication acceptable
to the Partnership Committee, or with respect to a Conflicting Interest
Transaction or Matter, the concurrence of a majority of the Qualified Committee
Members, with, at all times during which TREIT holds a Percentage Interest of
in excess of fifty percent (50%) and does not itself have a Conflicting
Interest with respect to a Conflicting Interest Transaction or Matter, the
concurrence of a majority of those TREIT Appointees who are present in person
or by telephone conference or by other means of communication acceptable to the
Partnership Committee, and are Qualified Committee Members with respect to
such Conflicting Interest Transaction or Matter, shall be
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required for any Partnership Committee Action, and such concurrence of a
majority of the members of the Partnership Committee, with, if applicable, such
concurrence of a majority of those TREIT Appointees who are present in person
or by telephone conference or by other means of communication acceptable to the
Partnership Committee, or with respect to a Conflicting Interest Transaction or
Matter, such concurrence of a majority of the Qualified Committee Members,
with, if applicable, such concurrence of a majority of those TREIT Appointees
who are Qualified Committee Members and who are present in person or by
telephone conference or by other means of communication acceptable to the
Partnership Committee, shall be binding on the Partnership and all Partners for
all matters and purposes.
(e) Notwithstanding that a Committee Member may not be a Qualified
Committee Member with respect to a Conflicting Interest Transaction or Matter,
upon the concurrence of a majority of the Qualified Committee Members, with, at
all times during which TREIT holds a Percentage Interest of in excess of fifty
percent (50%), the concurrence of a majority of those TREIT Appointees who are
present in person or by telephone conference or by other means of communication
acceptable to the Partnership Committee, (i) any such Committee Member who is
not a Qualified Committee Member, unless such Committee Member shall have
effected a Recusal, shall be entitled to participate and vote (provided that
such vote is not necessary for such Partnership Committee Action), in respect
of such Conflicting Interest Transaction or Matter, and (ii) any Partnership
Committee Action taken in respect of such Conflicting Interest Transaction or
Matter shall be valid and binding on the Partnership, notwithstanding that a
Committee Member who is not a Qualified Committee Member participated and voted
(provided that such vote is not necessary for such Partnership Committee
Action) in such Partnership Committee Action.
(f) The Partnership Committee shall, by resolution, (i) designate one (1)
or more employees or agents of the Partnership who are denominated as officers
who shall exercise such powers and shall have such duties as may from time to
time be assigned or established by the Partnership Committee, and (ii)
designate a chairman of each Committee (including the Partnership Committee)
from among the members of each such Committee. Any designated officer of the
Partnership and each chairman shall serve at the pleasure of the Partnership
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Committee and may be removed at any time with or without cause, by resolution
of the Partnership Committee.
(g) The Partnership may have such additional committees as the Partnership
Committee shall by resolution from time to time determine, consisting of
members designated from among its members provided that the selection of
members and requirements for quorums and actions shall be the same as the
Executive Committee. Other matters relating to the operation of any such
committee shall be as determined by the Partnership Committee in such
resolution.
(h) Each member of the Partnership Committee shall be entitled to
reasonable expenses, if any, for acting as a member of the Partnership
Committee and for attendance at any meeting of the Partnership Committee, but
shall be entitled to no compensation from the Partnership. Nothing herein
contained shall be construed to preclude any member of the Partnership
Committee from serving the Partnership or any Affiliate of the Partnership in
any other capacity and receiving compensation therefor from the Partnership.
Section 6.2 Authority and Appointment of and Authorized Actions by the
Executive Committee; Certain Limitations on the
Authority of the Executive Committee.
(a) The Partnership intends, in due course, by resolution of the
Partnership Committee, to establish an Executive Committee in accordance with
the provisions of this Section 6.2, which committee shall have all of the
powers herein provided for or conferred on the Partnership Committee (subject
to limitations set forth in Section 6.2(c) hereof). The Executive Committee
shall consist of three (3) members of the Partnership Committee. Each of
GMPTS, TG (or T-Co, as TG and T-Co shall determine from time to time), and
TREIT shall appoint one (1) member of the Executive Committee; provided,
however, that in the event that the aggregate Percentage Interest held by
Original Partner Affiliates and TTC Affiliates shall fall below nine and
9/10ths percent (9.9%), and TG (together with T-Co), or T-Co (together with
TG), is entitled for any reason to less than two (2) members on the Partnership
Committee, TG (and T-Co) shall no longer be entitled
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to appoint a member to the Executive Committee; provided further, however, that
in the event that the Percentage Interest held by GMPTS shall fall below nine
and 9/10ths percent (9.9%), GMPTS shall no longer be entitled to appoint a
member to the Executive Committee. In the event that TG (and T-Co) or GMPTS is
no longer entitled to appoint a member of the Executive Committee, then the
number of members of the Executive Committee that TREIT may appoint shall
increase accordingly, such that there shall in all events be three (3) members
of the Executive Committee. Each of GMPTS, TG (or T-Co, as TG and T-Co shall
determine from time to time), and TREIT shall have the power to at any time
remove with or without cause the member of the Executive Committee appointed by
it by delivering written notice of such removal to the Partnership Committee
and to the other members of the Executive Committee. Any member of the
Executive Committee who ceases to be a member of the Partnership Committee
shall automatically and simultaneously cease to be a member of the Executive
Committee. Vacancies for whatever reason (other than because of a reduction in
the number of members an Appointing Person may appoint) on the Executive
Committee shall be filled by the party who appointed the Executive Committee
member previously holding the position that is then vacant.
(b) The Executive Committee shall meet on a regular basis by telephone
conference or by other means of communication acceptable to the Executive
Committee, or at the principal office of the Partnership or at such other place
as shall be agreed to from time to time by all of the members of the Executive
Committee. The Executive Committee shall meet on the call of any member on not
less than forty-eight (48) hours notice (unless said notice is or shall have
been waived or the Executive Committee shall have otherwise agreed). The
Executive Committee may act without a meeting if the action taken is consented
to in advance, or subsequently ratified, in writing by all of the members of
the Executive Committee. Each Executive Committee member shall be entitled to
cast one (1) vote with respect to any decision to be made by the Executive
Committee. The presence, in person or by telephone conference or by other
means of communication acceptable to the Executive Committee, of all three (3)
members of the Executive Committee, shall be necessary and sufficient to
constitute a quorum for the purpose of taking any actions, including a
Conflicting Interest Transaction or Matter, to be taken by the Executive
Committee. The concurrence of all three (3) members of the Executive
Committee shall be required for any action by the
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Executive Committee; provided, however, that in the event a member or members
of the Executive Committee shall have a Conflicting Interest with respect to a
Relevant Transaction or a Relevant Matter, the concurrence of all three (3)
members of the Executive Committee after either (i) a Conflicting Interest
Disclosure to them, or (ii) a determination by the Qualified Committee
Member(s) that such Relevant Transaction or the Relevant Matter, judged
according to the circumstances at the Time of the Commitment, is fair to the
Partnership, shall be required for any action by the Executive Committee;
provided further, however, that with respect to a Conflicting Interest
Transaction or Matter, action may also be taken by the Executive Committee,
after a Recusal by any member(s), upon the concurrence of the remaining members
of the Executive Committee. Subject to Section 6.2(c) hereof, any action on
the part of the Executive Committee taken in the manner provided in the
foregoing sentence shall be binding on all Partners for all such matters and
purposes. In any event, and with respect to any action, any member of the
Executive Committee (including a Committee Member with a Conflicting Interest),
may require that such action be taken not by the Executive Committee but by the
Partnership Committee.
The Executive Committee shall report at every meeting of the Partnership
Committee, and shall promptly advise the Managing General Partner and the
Partnership Committee in writing of all actions by the Executive Committee.
The Executive Committee may, upon the concurrence of all three (3) members of
the Executive Committee, call for a meeting of the Partnership Committee upon
three (3) Days' prior notice to the members of the Partnership Committee.
(c) Notwithstanding anything to the contrary contained in this Agreement,
the Executive Committee shall not have the power to take, make or give, as
applicable, any action, decision, determination, designation, direction,
appointment, consent, approval, selection, resolution, or the like in
connection with any of the following:
(i) selling, exchanging, transferring, or otherwise disposing of a
Regional Center or a Regional Center Interest;
(ii) amending, extending, or terminating the Incentive Option Plan
or the Master Services Agreement;
(iii) approving the Annual Budget for any Partnership Fiscal Year;
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(iv) acquiring a Regional Center or a Regional Center Interest;
(v) removing or selecting accountants of the Partnership;
(vi) liquidating and winding up the business of the Partnership in
accordance with Section 1.5 and Article XI hereof;
(vii) amending this Agreement; and
(viii) taking any action set forth in clauses (i) through (vii) of
the definition of "Bankrupt" as set forth in Article II hereof in respect
of the Partnership or of an Owning Entity.
(d) Each member of the Executive Committee shall be entitled to reasonable
expenses, if any, for acting as a member of the Executive Committee and for
attendance at any meeting of the Executive Committee, but shall be entitled to
no compensation from the Partnership. Nothing herein contained shall be
construed to preclude any member of the Executive Committee from serving the
Partnership or any Affiliate of the Partnership in any other capacity and
receiving compensation therefor from the Partnership.
Section 6.3 Authority and Appointment of and Authorized Action by the
Compensation Committee.
(a) The Partnership Committee shall, by resolution, establish a
Compensation Committee to approve the compensation of any employee of the
Manager who is also at such time a member of the Partnership Committee or an
AAT Affiliate, and administer a program whereby the Partnership shall from time
to time, and without the consent of any Partner, grant to employees of TTC
options (the "Incentive Options") to acquire limited partner Partnership
Interests at an exercise price (the "Exercise Price") equal to the fair market
value of such Partnership Interests on the date of the grant of the Incentive
Options, as determined in accordance with the formula set forth in the
Incentive Option Plan, a copy of which is attached hereto as Exhibit B, and
which Incentive Option Plan is hereby ratified, confirmed, approved, and agreed
to. After review of recommendations made by T-Co, the Compensation Committee
may, from time to time, in accordance with the Incentive Option Plan, cause the
Managing General Partner to direct the Partnership to issue the Incentive
Options to employees of TTC. The Partnership Committee, from time to time, may
amend the Incentive Option Plan (including the number or amount of Incentive
Options and Partnership Interests that may be issued under the Incentive Option
Plan). The Partners acknowledge their having
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agreed to an initial grant of Incentive Options pursuant to the Incentive
Option Plan, in those amounts, and for an Exercise Price (which Exercise Price
is equal to the fair market value of such Partnership Interests on the
Contribution Date) set forth on Schedule I attached hereto.
(b) For so long as T-Co has an interest in the Person that is the Manager,
the Compensation Committee shall consist of four (4) members of the Partnership
Committee. Each of GMPTS and TREIT shall have the right to appoint two (2)
members of the Compensation Committee; provided, however, that in the event
that GMPTS is entitled to appoint only one (1) member of the Partnership
Committee, GMPTS shall be entitled to appoint only one (1) member of the
Compensation Committee, and the number of members that TREIT shall have the
right to appoint shall be increased to three (3); provided further, however,
that in the event that GMPTS is no longer entitled to appoint any member of the
Partnership Committee, GMPTS shall no longer be entitled to appoint any member
of the Compensation Committee, and the number of members that TREIT shall have
the right to appoint shall be increased to four (4). Each of GMPTS and TREIT
shall have the power at any time to remove for or without cause any member of
the Compensation Committee appointed by it by delivering written notice of such
removal to the Partnership Committee and to the other members of the
Compensation Committee. Any member of the Compensation Committee who ceases to
be a member of the Partnership Committee shall automatically and simultaneously
cease to be a member of the Compensation Committee. Vacancies for whatever
reason (other than because of a reduction in the number of members an
Appointing Person may appoint) on the Compensation Committee shall be filled by
the party who appointed the Compensation Committee member previously holding
the position that is then vacant. A majority of the members of the
Compensation Committee, present in person or by telephone conference or by
other means of communication acceptable to the Compensation Committee, shall be
necessary and sufficient to constitute a quorum for the purpose of taking any
action by the Compensation Committee. The concurrence of a majority of the
members of the Compensation Committee shall be required for any action of the
Compensation Committee.
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In the event that T-Co no longer has an interest in the Person that is the
Manager, the Compensation Committee shall consist of three (3) members of the
Partnership Committee, and the appointment of members to the Compensation
Committee, the casting of votes by such members, and the filling of vacancies
on the Compensation Committee shall follow the procedures set forth in Section
6.2 hereof in respect of the Executive Committee.
(c) The Compensation Committee shall meet by telephone conference or by
other means of communication acceptable to the Compensation Committee, or at
the principal office of the Partnership or at such other place as shall be
agreed to by all of the members of the Compensation Committee in order to
administer the provisions of the Incentive Option Plan and to grant the
Incentive Options. The Compensation Committee shall meet on the call of any
member upon seven (7) Days' prior notice to the other members. The
Compensation Committee shall promptly advise the Managing General Partner and
the Partnership Committee of all actions by the Compensation Committee.
(d) Each member of the Compensation Committee shall be entitled to
reasonable expenses, if any, for acting as a member of the Compensation
Committee and for attendance at any meeting of the Compensation Committee, but
shall be entitled to no compensation from the Partnership. Nothing herein
contained shall be construed to preclude any member of the Compensation
Committee from serving the Partnership or any Affiliate of the Partnership in
any other capacity and receiving compensation therefor from the Partnership.
Section 6.4 Additional Limitations on Authority of the Managing General
Partner, the Partnership Committee and the Executive Committee;
Delegation of Authority.
(a) Notwithstanding anything to the contrary contained in this Agreement,
the Partnership shall operate in such a manner and the Partnership shall take
or omit to take all actions as may be necessary so as (i) to permit the
Partnership to satisfy the requirements of a "real estate operating company"
(as defined by Department of Labor Regulations 29 C.F.R. Section 2510.3-101),
as such requirements exist and as such provisions may be amended from time to
time, or corresponding provisions of succeeding law, and (ii) to prevent the
occurrence of a "prohibited transaction" (as defined in Section 4975(c) of the
Code or Section 406 of ERISA).
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(b) In addition to the foregoing, for so long as GMPTS or any transferee
of a Partnership Interest that is described in clause (i), (ii) or (iii) of the
definition of "Qualified Institutional Transferee" or that is a QIT Entity
consisting solely of (and for so long as such QIT Entity consists solely of)
entities described in clause (i), (ii) or (iii) of the definition of "Qualified
Institutional Transferee" holds a Percentage Interest equal to at least nine
and 9/10ths percent (9.9%), then without the approval of every member of the
Partnership Committee, no action (including any action which causes the
Partnership to violate the "acquisition indebtedness" limitations of Section
514(c)(9) of the Code) shall be approved or taken on behalf of the Partnership,
as provided in the second paragraph of Section 3.1 hereof, that would give rise
to the realization of taxable income that is UBTI to GMPTS or such transferee
except for (1) any UBTI that is realized by GMPTS or such transferee as a
result of the Partnership's activities and obligations as such activities and
obligations exist on the Contribution Date; provided, however, that (x) in the
event that the amount determined pursuant to this clause (1) decreases as a
result of a change in the Partnership's activities and obligations, the amount
determined pursuant to this clause (1) shall be such decreased amount, and (y)
in addition, the Partnership shall use its Best Efforts to amend the
partnership agreement of each Owning Entity so that the allocations of Profits,
Losses and items thereof contained in each such partnership agreement meet all
of the technical substantial economic effect requirements of Section 704(b) of
the Code and the Regulations as of a date no later than the Contribution Date,
and (2) any action (other than an action which causes the Partnership to
violate the "acquisition indebtedness" limitations of Section 514(c)(9) of the
Code) which does not cause the aggregate taxable income to the Partnership that
is UBTI, without regard and in addition to those amounts described in clause
(1) hereof, to exceed in any Partnership Fiscal Year, one percent (1%) of the
gross receipts of the Regional Centers for the last completed Partnership
Fiscal Year.
(c) The Managing General Partner and each Committee may delegate any of
its powers hereinbefore, hereinafter, or by law provided or conferred to one
(1) or more Persons, or designate one (1) or more Persons to do or perform
those matters to be done or performed by the Managing General Partner or a
Committee.
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(d) The Partners, by their execution and delivery of this Agreement,
irrevocably authorize the Managing General Partner, each Committee, and any
Person or Persons designated or delegated by the Managing General Partner or a
Committee, to do any act that the Managing General Partner or such Committee,
has the right, power, and authority to do under the provisions of this
Agreement, without any other or subsequent authorizations, approvals, or
consents of any kind. No Person dealing with the Partnership shall be required
to investigate or inquire as to the authority of the Managing General Partner,
a Committee, and any Person or Persons designated or delegated by the Managing
General Partner or a Committee to exercise the rights, powers, and authority
herein (or by resolution of the Partnership Committee with respect to the
Executive Committee) conferred upon them. Any Person dealing with the
Partnership shall be entitled to rely upon any action taken by the Managing
General Partner or a Committee, and any Person or Persons designated or
delegated by the Managing General Partner or a Committee, and the Partnership
shall be bound thereby. Any Person dealing with the Partnership shall be
entitled to rely upon any document or instrument executed and delivered by a
Person or Persons designated by the Managing General Partner or a Committee,
and the Partnership shall be bound thereby. No purchaser of any property or
interest owned by the Partnership, or lender, or Third Party in respect of any
matter shall be required to determine the sole and exclusive authority of the
Person or Persons designated or delegated by the Managing General Partner or a
Committee to execute and deliver on behalf of the Partnership any such
instrument of transfer or security, or to see to the application or
distribution of revenues or proceeds paid or credited in connection therewith.
(e) Notwithstanding any other provision of this Article VI, if any
Partnership Committee Action would otherwise give rise to a "prohibited
transaction" (as defined in Section 4975(c) of the Code or Section 406 of
ERISA) pursuant to 29 C.F.R. 2509.75-2(c) by virtue of the power of appointees
of GMPTS, T-Co, and TG to cause such Partnership Committee Action, then the
concurrence of at least one member of the Partnership Committee appointed by
TREIT shall be required for such Partnership Committee Action.
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Section 6.5 Annual Budget; Notices.
Pursuant to the Master Services Agreement, the Manager is required to
prepare and submit to the Partnership Committee for approval, prior to the
beginning of each Partnership Fiscal Year, an annual development budget (the
"Annual Development Budget"), and an annual operating budget (the "Annual
Operating Budget") for the Partnership, which shall reflect a reasonable
estimate of the proposed operations (including development) and expenses of the
Partnership for such Partnership Fiscal Year, and which shall include the
Required Distribution Amount for such Partnership Fiscal Year and any annual
business plan, leasing plan or similar materials required of the Manager under
the Master Services Agreement. (The Annual Development Budget and the Annual
Operating Budget are referred to together as the "Annual Budget".)
In addition to the foregoing, pursuant to the Master Services Agreement,
the Manager will be engaged to: (i) advise the Managing General Partner and the
Partnership Committee by written notice (an "Additional Required Amount
Notice"), not less than seven (7) Days prior to the next regular meeting of the
Partnership Committee, of the Additional Required Amount with respect to any
capital gain transaction of the Partnership that shall have been closed for
federal income tax purposes after the last regular meeting of the Partnership
Committee but prior to the time of such Additional Required Amount Notice (for
this purpose, any Additional Required Amount with respect to a capital gain
transaction that shall have closed for federal income tax purposes during the
period commencing on the date of the Additional Required Amount Notice and
prior to the next regular meeting of the Partnership Committee shall be deemed
to have closed on the Day immediately following such Partnership Committee
meeting), (ii) after a TREIT Information Notice in respect of a Tax Adjustment
Amount, advise the Managing General Partner and the Partnership Committee by
written notice (a "Tax Adjustment Notice") not less than ten (10) Days prior to
the first regular meeting of the Partnership Committee for the Partnership
Fiscal Year (but in any event not less than ten (10) Days prior to TREIT's
first regular dividend date), of the Tax Adjustment Amount for such Partnership
Fiscal Year, (iii) after a TREIT Information Notice, in respect of a Minimum
Distribution Amount Adjustment, not later than December 1 of each Partnership
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Fiscal Year, advise the Managing General Partner and the Partnership Committee,
by written notice (a "Minimum Distribution Amount Adjustment Notice") of the
Minimum Distribution Amount Adjustment for such Partnership Fiscal Year, and
(iv) after a TREIT Information Notice, in respect of TREIT's obligation to
declare and pay a deficiency dividend pursuant to Section 860(f)(1) of the Code
as a result of a determination (as defined in Section 860(e) of the Code),
advise the Managing General Partner and the Partnership Committee, by written
notice (the "Deficiency Dividend Notice") of the Deficiency Dividend for such
Partnership Fiscal Year.
Section 6.6 Standard of Conduct.
(a) Except as otherwise permitted by Article VII hereof with respect to
Partners (and their respective constituents and Affiliates) and Committee
Members on behalf of Partners (and their respective constituents and
Affiliates), each Committee Member, each Partner, each officer, and each Person
designated or delegated by a Committee or a Partner, shall discharge its or his
respective duties as a Committee Member, a Partner, an officer, or a designee
or delegate of a Committee or of a Partner or of an officer in a manner it or
he reasonably believes to be in or not opposed to the best interests of the
Partnership, as an entity distinct from the individual interests of the
respective Partners; and in a manner consistent with the fiduciary duties of
care and loyalty imposed upon directors of a corporation formed from time to
time under the laws of the State of Delaware as such duties are set forth in
the General Corporation Law of the State of Delaware and construed by the
courts of the State of Delaware. For purposes hereof, acting in a manner which
furthers compliance with the provisions of Section 3.4 and Section 6.4 hereof
shall be deemed to be acting in the best interest of the Partnership and
consistent with the aforesaid duties of care and loyalty.
(b) Each Committee, each Committee Member, each Partner, each officer, and
each Person or Persons designated or delegated by a Committee, a Committee
Member, a Partner, or an officer, shall, in the performance of its or his
duties, be fully protected in relying in good faith upon the records of the
Partnership and upon such information, opinions, reports, or statements
presented to such Committee, such Committee Member, such Partner, such
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officer, or such Person or Persons designated or delegated by a Committee, a
Committee Member, a Partner, or an officer, as applicable, by any Person
(including, without limitation, legal counsel and public accountants) as to
matters that such Committee, such Committee Member, such Partner, such officer,
or such Person or Persons designated or delegated by a Committee, a Committee
Member, a Partner, or an officer, as applicable, reasonably believes are within
such Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Partnership, such Committee, such
Committee Member, such Partner, such officer, or such Person or Persons
designated or delegated by a Committee, a Committee Member, a Partner, or an
officer.
Section 6.7 Conflicting Interest Disclosure or Recusal.
Each Committee Member who has a Conflicting Interest with respect
to a Relevant Transaction or Relevant Matter shall have the obligation to
either (i) excuse himself from participating in any Partnership Committee
Action and from being present at any presentation or discussion (a "Recusal")
in respect of any potential Partnership Committee Action with respect to such
Relevant Transaction or Relevant Matter, or (ii) provide the Partnership
Committee or the Executive Committee, as the case may be, with a
Conflicting Interest Disclosure prior to any proposed Partnership Committee
Action or presentation or discussion in respect of any potential Partnership
Committee Action with respect to such Relevant Transaction or Relevant Matter.
Section 6.8 Master Services Agreement and Corporate Services Agreement;
Engagement of Partners' Affiliates.
The Managing General Partner, with the approval or at the direction
of the Partnership Committee, shall manage and perform, or employ or
engage others, including one or more Affiliates of a Partner (e.g., TTC), to
manage and perform all activities and services in furtherance of the purposes
of the Partnership including, without limitation, seeking Development
Opportunities, and Regional Centers, and further including without limitation,
all activities and services in respect of Development Opportunities, all
activities and services in respect of the expansion, reconstruction, repair,
renovation, or alteration of Regional Centers and/or the development of any
Peripheral Property, and all other activities and
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services in respect of the management, administration, leasing, financing,
refinancing, development, improvement, acquisition and disposition of Regional
Centers. The Partnership, on the Contribution Date, shall enter into the
Master Services Agreement in the form attached hereto as Exhibit A for an
initial term of five (5) years (to be renewed for consecutive three (3) year
terms upon the consent of the Managing General Partner, with the approval or at
the direction of the Partnership Committee). In addition, the Partnership may
provide in the partnership agreement or other agreement forming or covering an
Owning Entity or in separate agreements entered into between an Owning Entity
and TTC, which agreements may include an Owning Entity Agreement, for such
terms, provisions, and conditions, and compensation to TTC, all in respect of
the activities of TTC for the benefit of a Development Opportunity or a
Regional Center, as shall be determined by the Managing General Partner, with
the approval or at the direction of the Partnership Committee, and TTC or as
shall be available pursuant to negotiations with Third Parties having an
interest in such Development Opportunity or Regional Center. The compensation
to be paid to TTC, as applicable, as well as all reimbursements for or in
respect of services rendered to the Partnership shall be as provided in the
Master Services Agreement, an Owning Entity Agreement, or other applicable
agreement forming or covering an Owning Entity. The Partnership hereby
authorizes TREIT to enter into the Corporate Services Agreement, a copy of
which is attached hereto as Exhibit D, pursuant to which TREIT may engage TTC
to assist with, implement and effect the actions to be taken by TREIT as the
Managing General Partner, and to do or perform those matters to be done or
performed by TREIT as the Managing General Partner in accordance with the terms
and provisions of this Agreement.
Section 6.9 Absence of Authority of Limited Partners.
The Limited Partners, as such, shall take no part in, nor have the
right to take part in, nor interfere in, nor have the right to interfere or
participate in, in any manner, the conduct or control of the business of the
Partnership or have any right or authority to act for or on behalf of the
Partnership. However, in the event of a conversion by T-Co, GMPTS, or any
GMPTS Transferee of all or any portion of its Partnership Interest as a general
partner, to a Partnership Interest as a limited partner pursuant to Section
8.5(a) hereof, such limited
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partner shall retain the right, subject to the terms of this Agreement, to
appoint members to the Committees.
Section 6.10 Fidelity Bonds and Insurance.
The Partnership shall obtain fidelity bonds with reputable surety
companies, covering all Persons having access to the Partnership funds,
indemnifying the Partnership against loss resulting from fraud, theft,
dishonesty, and other wrongful acts of such Persons. The Partnership shall
carry or cause to be carried on its behalf, with companies and in amounts
determined by the Managing General Partner, with the approval or at the
direction of the Partnership Committee, all property, liability, and workers'
compensation insurance as shall be required under applicable mortgages, leases,
agreements, and other instruments and statutes by which the Partnership or its
properties are bound, as well as such additional insurance and coverages as the
Managing General Partner, with the approval or at the direction of the
Partnership Committee, shall from time to time propose or approve.
Section 6.11 Execution of Legal Instruments.
All legal instruments affecting the Partnership or Partnership property
need be executed by, and only by, that Person or those Persons (who need not be
Partners) designated in writing by the Managing General Partner or the
Partnership Committee, and such designated Person's(s') signature(s) shall be
sufficient to bind the Partnership and its properties.
Section 6.12 Indemnity and Reimbursement; Advancement of Expenses and
Insurance.
(a) To the fullest extent permitted by law, the Partnership shall and does
hereby indemnify, defend, and hold harmless each Indemnified Person from any
claim, demand, or liability, and from any loss, cost, or expense including,
without limitation, attorneys' fees and court costs, which may be asserted
against, imposed upon, or suffered by such Indemnified Person by reason of any
act performed for or on behalf of the Partnership, or in furtherance of the
Partnership's business, to the extent authorized hereby, or by reason of any
omission provided that such Indemnified Person acted in accordance with the
standard of conduct specified in Section 6.6(a) hereof, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe its or
his conduct was unlawful, and provided further that no indemnification shall
be made in respect of any claim, demand, or liability, or for any loss,
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cost, or expense, as to which such Indemnified Person shall have been adjudged
to be liable to the Partnership unless and only to the extent that a court
shall determine, despite the adjudication of liability but in view of all the
circumstances of the case, such Indemnified Person is fairly and reasonably
entitled to indemnity. Each Indemnified Person shall not have any personal
liability to the Partnership or its Partners for monetary damages for breach of
fiduciary duty except (i) for a breach of a duty of loyalty, or (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
Knowing violation of law. Any indemnity under this Section 6.12(a) shall be
provided out of and to the extent of Partnership assets only, and only with
respect to amounts actually and reasonably incurred, and no Partner shall have
any personal liability on account thereof.
(b) Expenses (including attorneys' fees) incurred by an Indemnified Person
in defending any civil, criminal, administrative or investigative action, suit,
or proceeding relating to any action or omission in respect of the Partnership
shall be paid by the Partnership in advance of the final disposition of the
action, suit, or proceeding upon receipt of an undertaking by or on behalf of
such Indemnified Person to repay such amount if it is ultimately determined
that such Indemnified Person is not entitled to be indemnified by the
Partnership.
(c) The Partnership may purchase and maintain insurance, as determined by
the Managing General Partner, with the approval or at the direction of the
Partnership Committee, in respect of each Indemnified Person against any
liability relating to any act or omission in respect of the Partnership,
whether or not the Partnership may indemnify such Indemnified Person against
such liability.
(d) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 6.12 shall survive the liquidation,
dissolution and termination of the Partnership and the termination of this
Agreement, shall continue as to any Person who has terminated his relationship
with the Partnership and shall inure to the benefit of such Person's heirs,
executors and administrators and shall, to the extent permitted by the
Partnership Law, be binding on the Partnership's successors and assigns.
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Section 6.13 Tax Matters Partner.
(a) As used in this Agreement, "Tax Matters Partner" has the meaning set
forth in Section 6231(a)(7) of the Code. The Managing General Partner is
hereby designated Tax Matters Partner for the Partnership; provided, however,
that the Managing General Partner shall not bind the Partnership or any Partner
without the prior written consent of the Partnership Committee. The Tax
Matters Partner shall comply with the requirements of Sections 6221 through
6233 of the Code applicable to a Tax Matters Partner. The Managing General
Partner shall keep the Partnership Committee timely informed of all actions
taken by it and correspondence received by it in its capacity as a Tax Matters
Partner. To the fullest extent permitted by law, the Partnership shall and
does hereby indemnify, defend, and hold harmless the Tax Matters Partner from
any claim, demand, or liability, and from any loss, cost, or expense including,
without limitation, attorneys' fees and court costs, which may be asserted
against, imposed upon, or suffered by the Tax Matters Partner by reason of any
act performed for or on behalf of the Partnership in its capacity as Tax
Matters Partner to the extent authorized hereby, or by reason of any omission,
except acts or omissions not in good faith or which involve intentional
misconduct or a Knowing violation of law. Any indemnity under this Section
6.13(a) shall be provided out of and to the extent of Partnership assets only,
and only with respect to amounts actually and reasonably incurred, and no
Partner shall have any personal liability on account thereof. The indemnity
provided in this Section 6.13 shall survive the liquidation, dissolution, and
termination of the Partnership and the termination of this Agreement and shall,
to the extent permitted by the Partnership Law, be binding on the Partnership's
successors and assigns.
(b) The Tax Matters Partner shall have a continuing obligation to provide
the Internal Revenue Service with sufficient information so that proper notice
can be mailed to all Partners as provided in Section 6223 of the Code, provided
that each Partner shall furnish the Tax Matters Partner with all such
information (including information specified in Section 6230(e) of the Code) as
is required with respect to such Partner for such purpose.
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VII.
OTHER VENTURES.
(a) Subject to paragraph (b) and paragraph (c) of this Article VII, the
Partners acknowledge and agree that each of them and each Committee Member and
their respective constituents and Affiliates may have interests in other
present or future ventures, of whatever nature, including real estate, and
further including without limitation, ventures that are competitive with the
Partnership and that, notwithstanding its status as a Partner in the
Partnership, or as a Committee Member, a Partner, a Committee Member, their
respective constituents and Affiliates shall be entitled to obtain and/or
continue their respective individual participation in all such ventures without
(i) accounting to the Partnership or the other Partners for any profits with
respect thereto, (ii) any obligation to advise the other Partners or Committee
Members of business opportunities for the Partnership which may come to its or
its constituents' or Affiliates' attention as a result of its or its
Affiliates' or constituents' participation in such other ventures or in the
Partnership, and (iii) being subject to any claims whatsoever on account of
such participation.
(b) Notwithstanding paragraph (a) of this Article VII, (i) until (A) the
termination of TTC as the Manager pursuant to the Master Services Agreement or
(B) the loss of Control, Directly or Indirectly (other than through an
assignment which constitutes a breach of the Master Services Agreement), of the
Manager by Restricted AAT Affiliates, Restricted AAT Affiliates shall not,
other than through an interest, Direct or Indirect, in the Partnership or TTC,
acquire, own, manage or develop any Other Retail Property or Other Retail
Opportunity except indirectly (but subject to the second proviso set forth
below) through ownership of a Person that is not Primarily Engaged, and shall
not, other than through an interest, Direct or Indirect, in the Partnership or
TTC, acquire or own Other Retail Interests in a private or public entity which
is Primarily Engaged; provided, however, that with respect to any public entity
that is Primarily Engaged, the acquisition of an interest which shall not
exceed five percent (5%) in the aggregate held by all Restricted AAT Affiliates
of the outstanding Equity Securities of such entity shall be permitted; and
provided further, however, that with respect to any private entity in which
Restricted AAT Affiliates shall have acquired Control and that
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Restricted AAT Affiliates would, but for the fact that such entity is not
Primarily Engaged, be precluded from owning pursuant to the provisions of this
Article VII, Restricted AAT Affiliates shall make all reasonable efforts to
enable the Partnership (for a full and fair consideration and without tax cost
to such private entity and to the extent permitted by agreements to which such
private entity or the Other Retail Property or Other Retail Properties is or
are subject) to acquire such Other Retail Property or Other Retail Properties
from such private entity; (ii) until any Committee Member who is an active
employee of the Manager and who is not a Restricted AAT Affiliate terminates
his position as an officer or employee of the Manager or T-Co, such individual
shall not, directly or through a Restricted Affiliate of such individual,
acquire, own, manage or develop any Other Retail Property or Other Retail
Opportunity except indirectly (but subject to the second proviso set forth
below) through ownership of a Person that is not Primarily Engaged, and shall
not, directly or through a Restricted Affiliate of such individual, acquire, or
own Other Retail Interests in a private or public entity which is Primarily
Engaged; provided, however, that with respect to any public entity that is
Primarily Engaged, the acquisition of an interest which shall not exceed five
percent (5%) in the aggregate held by such individual and such individual's
Restricted Affiliates of the outstanding Equity Securities of such entity shall
be permitted; and provided further, however, that with respect to any private
entity in which such individual (and such individual's Restricted Affiliates)
shall have acquired a Controlling interest and that such individual (and such
individual's Restricted Affiliates) would, but for the fact that such entity is
not Primarily Engaged, be precluded from owning pursuant to the provisions of
this Article VII, such individual and/or such individual's Restricted
Affiliates shall make all reasonable efforts to enable the Partnership (for a
full and fair consideration and without tax cost to such private entity and to
the extent permitted by agreements to which such private entity or the Other
Retail Property or Other Retail Properties is or are subject) to acquire such
Other Retail Property or Other Retail Properties from such private entity.
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(c) Notwithstanding paragraph (a) of this Article VII, for so long as
TREIT is a Partner, TREIT shall not, Directly or Indirectly other than through
its Partnership Interest, manage or develop any Other Retail Property or Other
Retail Opportunity, and shall not, Directly or Indirectly other than through
its Partnership Interest, acquire, or own an ownership interest in any Other
Retail Property or Other Retail Opportunity, or acquire, or own any interest in
a private or public entity which is Primarily Engaged, unless the Partnership
shall have first been afforded the opportunity to manage or develop such Other
Retail Property or Other Retail Opportunity, or the opportunity to acquire such
ownership interest in such Other Retail Property or Other Retail Opportunity,
or to acquire such interest in a private or public entity which is Primarily
Engaged (any such opportunity to manage, develop or acquire is herein referred
to as a "Partnership Opportunity"), and the Partnership shall have determined
not to pursue such Partnership Opportunity, all in accordance with the
following procedures. As soon as practicable after TREIT first becomes aware
of a Partnership Opportunity it shall, by written notice to the Partnership
Committee and the Manager (a "Partnership Opportunity Notice"), make full and
accurate disclosure of all material facts relevant to such Partnership
Opportunity, including, without limitation, all documentation relating thereto.
The Partnership shall have the absolute right to pursue such Partnership
Opportunity, as set forth in the Partnership Opportunity Notice, upon such
terms and provisions as it determines to be appropriate. The Partnership
shall, within sixty (60) Days after receipt of a Partnership Opportunity
Notice, specify in a notice (an "Opportunity Exercise Notice") to TREIT,
whether or not it desires to pursue the Partnership Opportunity. Failure to
give an Opportunity Exercise Notice within sixty (60) Days after receipt of a
Partnership Opportunity Notice shall constitute an election not to pursue the
Partnership Opportunity. If the Partnership determines to pursue a Partnership
Opportunity, and so long as the Partnership does in fact pursue such
Partnership Opportunity, the Partnership shall have the sole and exclusive
right and authority to pursue such Partnership Opportunity, and TREIT shall
have no further right to pursue such Partnership Opportunity for its own
account. In the event that the Partnership determines not to pursue a
Partnership Opportunity, TREIT may pursue such Partnership Opportunity for its
own account, and without accounting to the Partnership or the other Partners
with respect thereto.
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VIII.
TRANSFERS OF UNITS OF PARTNERSHIP INTEREST;
SUBSTITUTION OF PARTNERS; ADDITIONAL PARTNERSHIP INTERESTS;
CONVERSION OF PARTNERSHIP INTERESTS.
Section 8.1 Transfers.
(a) No Partner may Transfer all or any portion of its Partnership Interest
or, if such Partner is an entity (other than TREIT and other than a Qualified
Institutional Transferee that is not a QIT Entity), permit a Transfer of an
interest in such Partner, to any Person except as specifically permitted in
this Article VIII.
(b) A Partner (other than TREIT) may Transfer all or any portion of its
Partnership Interest (but not less than one (1) Unit of Partnership Interest)
to any other Partner, or to one (1) or more members of such Partner's Immediate
Family, or to a Family Trust, or to any Qualified Institutional Transferee, or
to an entity consisting of or owned entirely by one (1) or more of the
foregoing Persons, or to the Partnership, or, in the event that a Partner is a
partnership or other entity (other than TREIT and other than a Qualified
Institutional Transferee that is not a QIT Entity), to one (1) or more of the
constituent partners or owners of such Partner or other entity, or to one (1)
or more members of the respective Immediate Families or Family Trusts of the
constituent partners or owners of such Partner or other entity, or to any
Qualified Institutional Transferee, or to an entity consisting of or owned
entirely by one (1) or more of the foregoing Persons, or to the Partnership,
provided that, in each case, the Partnership Committee has determined by
written notification (a "Transfer Determination"), to the transferring Partner,
which Transfer Determination shall not be unreasonably withheld and shall be
deemed given if not refused within three (3) Business Days of the date of
notice thereof to the Partnership in the event of a Transfer to TREIT, or
within seven (7) Business Days of the date of notice thereof to the Partnership
in all other events, that either (A) such Transfer will not cause (i) any
lender of the Partnership or an Owning Entity to hold in excess of ten percent
(10%) of the Percentage Interests or any other percentage of the Percentage
Interests that would, pursuant to the Regulations under Section 752 of the Code
or any successor provision, cause a loan by such lender to constitute Partner
Nonrecourse Debt, [THE AMENDMENT DELETED THE FOLLOWING PROVISION: (ii) a
Transfer of a Partnership
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Interest the value of which would have been less than Twenty Thousand Dollars
($20,000) when issued,] (iii) the Partnership to become, with respect to GMPT
or a GMPTS Transferee, 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),
or (iv) a violation of any partnership agreement or other document forming or
governing an Owning Entity, or (B) the Partnership Committee has determined to
waive one (1) or more or all of such requirements in its reasonable discretion,
after having determined that the Transfer will not materially adversely affect
the Partnership, its assets or any Partner, or constitute a violation of the
Partnership Law, or any other law to which the Partnership or an Owning Entity
is subject.
In addition to the foregoing, in the event that a Partner is a partnership
or other entity (other than TREIT and other than a Qualified Institutional
Transferee that is not a QIT Entity), such Partner may permit a Transfer of an
interest in such Partner to any constituent partner or owner of such Partner,
to one (1) or more members of any constituent partner's or owner's Immediate
Family or a Family Trust with respect to any constituent partner or owner, or
to any Qualified Institutional Transferee, or to any Partner, provided that, in
each case, the Partnership Committee has made a Transfer Determination prior to
the proposed Transfer.
(c) TREIT may Transfer all or any portion of its Partnership Interest (but
not less than one (1) Unit of Partnership Interest) to, and only to, the
Partnership or to any other Partner(s) or to any Qualified Institutional
Transferee(s) provided that, in each and every case, (i) the Partnership
Committee has made a Transfer Determination prior to the proposed Transfer, and
(ii) TREIT retains at least a thirty percent (30%) Percentage Interest in the
Partnership. Notwithstanding anything to the contrary contained in this
Agreement, in the event of a Transfer (other than a Transfer to an existing
General Partner or to the Partnership) of a portion of TREIT's Partnership
Interest pursuant to this Section 8.1(c), such Partnership Interest (or a
portion thereof) shall immediately convert to a Partnership Interest as a
limited partner in the Partnership, which transferee, subject to the provisions
of Section 8.2 hereof, shall have and be subject to all of the rights,
obligations, restrictions, and attributes of a limited partner, all as
provided in this Agreement, but shall have no right to appoint any
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member to the Partnership Committee. Any right to appoint members to the
Partnership Committee shall in no event be transferable by TREIT to any Person
(including, without limitation, to an existing Partner or to the Partnership).
In the event of a conversion of a portion of TREIT's Partnership Interest
pursuant to this Section 8.1(c), without the approval, consent or act of any
Partner, the Managing General Partner may amend this Agreement, the Certificate
of Limited Partnership (if required by the Partnership Law), and any other
document determined by the Managing General Partner, with the approval or at
the direction of the Partnership Committee, to be necessary to reflect the
foregoing.
(d) Transfers of ownership interests in TREIT and in any Qualified
Institutional Transferee (other than a QIT Entity) as well as the change in a
trustee of any trust that is a Partner or of any trust that holds an interest
in any Partner may be made without restriction by the terms of this Agreement.
Without the approval, consent or act of any Partner, the Managing General
Partner may amend this Agreement, the Certificate of Limited Partnership (if
required by the Partnership Law), and any other document determined by the
Partnership Committee to be necessary to reflect any such Transfer or, if
necessary, change in trustee.
(e) In the event that the Partnership Committee is unable to provide a
Transfer Determination to a Partner in accordance with this Section 8.1, upon
request of such Partner, the Partnership Committee may provide a conditional
Transfer Determination (a "Conditional Transfer Determination"), which
Conditional Transfer Determination shall be subject to such terms and
conditions as the Partnership Committee shall determine and so state in the
Conditional Transfer Determination.
[THE AMENDMENT DELETED THE FOLLOWING PROVISION:
(f) Notwithstanding anything to the contrary contained in this Agreement,
(i) no Transfer of a portion of, or issuance of, a Partnership Interest the
value of which is (or would have been when issued) less than Twenty Thousand
Dollars ($20,000) shall be permitted, and (ii) in the event that a Transfer of
a portion of a Partnership Interest would cause the value of the remaining
Partnership Interest held by such Partner to be less than Twenty Thousand
Dollars ($20,000), or if the remaining Partnership Interest held by such
Partner would have had a value when issued of less than Twenty Thousand
Dollars ($20,000), determined in each
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case at the time of the proposed Transfer, such Partner shall be required to
Transfer its entire Partnership Interest, or no Transfer of such Partner's
Partnership Interest shall be permitted.]
(g) Any action contrary to the provisions of this Article VIII shall be
null and void and ineffective for all purposes.
Section 8.2 Substitution of Partners.
Regardless of compliance with any of the provisions hereof (including,
without limitation, the provisions of Section 8.1 and Article IX hereof)
permitting a Transfer of a Partnership Interest, no Transfer (except by way of
a Pledge) of a Partnership Interest shall be recognized by or be binding upon
the Partnership unless:
(i) such instruments as may be required by the
Partnership Law or other applicable law or to effect the
continuation of the Partnership and the Partnership's
ownership of its properties are executed and delivered and/or
filed;
(ii) the assignee delivers to the Partnership, a
Partnership Interest Certificate evidencing the number of
Units of Partnership Interest which are the subject of the
Transfer, together with a duly executed and acknowledged
written instrument of assignment, which instrument of
assignment binds the assignee to all of the terms and
conditions of this Agreement as if the assignee were a
signatory party hereto and does not release the assignor from
any liability or obligation (accrued to the date of Transfer)
of or in respect of the Partnership Interest which is the
subject of the Transfer;
(iii)the instrument of assignment is manually signed
by the assignee and assignor with such proof of authenticity
of the signatures as the Partnership Committee may reasonably
require; and
(iv) in the event that such assignee is not then a
Partner in the Partnership, the Partnership Committee shall
have consented (which consent may be withheld for any reason
or for no reason) in writing to the admission of the assignee
as a substitute partner (in respect of the Partnership
Interest acquired) in the Partnership.
An assignee of a Partnership Interest pursuant to a Transfer permitted in
this Agreement may, subject to the provisions of this Article VIII, be admitted
as a partner in the Partnership in the place and stead of the assignor Partner
in respect of the Partnership Interest acquired from the assignor Partner and
shall, except as otherwise specifically provided in this Agreement, have all of
the rights, powers, obligations, and liabilities, and be subject to all of the
restrictions, of the assignor Partner, including, without limitation, the
liability of the assignor Partner for any existing unperformed obligations of
the assignor Partner. In the event
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that a Partner pledges or proposes to pledge its Partnership Interest or any
portion thereof (but not less than one (1) Unit of Partnership Interest) in
connection with a financing transaction, such Partner may request that the
Partnership Committee consent in writing, at the time of the financing
transaction or in contemplation thereof, to the admission of a pledgee or
pledgees (or transferee(s) upon the foreclosure or like action in respect of
such Pledge) as a substitute partner(s) in the Partnership (which consent may
be withheld for any reason or for no reason). Each of the Partners, on behalf
of itself and its permitted successors and assigns, HEREBY AGREES AND CONSENTS
to the admission of any such substitute partners as herein provided.
Section 8.3 Failure or Refusal to Grant Consent.
(a) The Partnership Committee's failure or refusal to grant its consent to
the admission of an assignee as a substitute Partner in the Partnership as
provided in clause (iv) of Section 8.2 hereof, shall not affect the validity or
effectiveness of any such instrument as an assignment by the assignor to the
assignee of the right to receive the share of the Profits or Losses or other
items, or distributions from the Partnership, or the return of the contribution
to which such assignor would be entitled and which was thereby assigned,
provided that such assignor has received a Transfer Determination from the
Partnership Committee in accordance with Section 8.1(b) hereof in respect of
such Transfer, and a duly executed and acknowledged written instrument of
assignment in form reasonably satisfactory to the Partnership Committee, the
terms of which are not in contravention of any of the provisions of this
Agreement, and which terms shall contain appropriate indemnifications in favor
of the Partnership with respect to distributions and other matters as the
Partnership Committee may reasonably require, is filed with the Partnership;
provided, however, that the assignor shall continue to be a Partner for all
purposes of the Partnership, except that the assignee (and not the assignor)
shall be considered to hold the interest (and the related Units of Partnership
Interest) assigned for purposes of determining the right to appoint members of
each Committee, and for purposes of exercising all other rights of approval
under this Agreement.
(b) An assignee of any portion of or an interest in a Partnership Interest
(an "Assigned Interest") pursuant to a Transfer with respect to which a
Transfer Determination
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has been granted that has not, for any reason, been admitted as, or become, a
partner in the Partnership in the place and stead of an assignor Partner (the
"Original Assignor") in respect of the Assigned Interest, may, by prior written
notice to the Managing General Partner and the Partnership Committee, assign
the Assigned Interest, in accordance with and subject to the provisions of this
Article VIII, in all respects as if or with the same effect as if such assignee
were a Partner, and in the event that any subsequent assignee is admitted as a
substitute partner in accordance with and subject to Section 8.2 hereof, the
Original Assignor, simultaneously with such subsequent assignment, shall
Transfer all of its remaining right, title, and interest in the Partnership
Interest relating to the Assigned Interest, to the Partner acquiring the
Assigned Interest, which Partner shall act and be the partner in respect of the
Assigned Interest in the place and stead of the Original Assignor. Each
assignor Partner, on behalf of itself and its permitted successors and assigns,
hereby agrees to enter into an appropriate amendment to this Agreement, the
Certificate of Limited Partnership (if required by the Partnership Law), and
any other document determined by the Partnership Committee to be necessary to
reflect the foregoing.
Section 8.4 Issuance of Additional Interests to TREIT and Other Persons or of
Incentive Interests to Certain Persons.
(a) At any time after the Contribution Date and without the consent of any
Partner, the Partnership Committee may direct the Managing General Partner,
subject to a determination by the Partnership Committee in accordance with the
Transfer Determination provisions of Section 8.1(b) hereof in respect of the
issuance of additional Partnership Interests (so long as such provisions
relating to a Transfer Determination are applicable to such issuance), and
subject to a determination that such issuance will be in the best interests of
the Partnership, to cause the Partnership to issue additional Partnership
Interests in the Partnership to and, if desired, admit as a Partner in the
Partnership, any Person including TREIT (herein referred to as an "Additional
Interest") in exchange for the contribution to the Partnership by such Person
of development or other venture opportunities, interests in development or
other venture opportunities, regional shopping center developments, interests
in regional shopping center developments, cash, cash equivalents and/or other
assets, as
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determined by the Partnership Committee in accordance with Section 3.1 hereof.
In the event that an Additional Interest is issued by the Partnership pursuant
to this Section 8.4(a), such Additional Interest shall be provided by a
proportionate reduction in the Percentage Interests of all of the Partners.
The Managing General Partner, with the approval or at the direction of the
Partnership Committee, shall be authorized on behalf of each of the Partners to
amend this Agreement and the Certificate of Limited Partnership (if required by
the Partnership Law), to reflect the admission of an additional partner or an
increase in the Percentage Interest of a Partner, as applicable, and the
corresponding reduction in the Percentage Interests of the Partners.
(b) At any time after the Contribution Date and without the consent of any
Partner, the Compensation Committee may direct the Managing General Partner,
subject to a determination by the Compensation Committee in accordance with the
Transfer Determination provisions of Section 8.1(b) hereof in respect of the
issuance of additional Partnership Interests (so long as such provisions
relating to a Transfer Determination are applicable to such issuance), to cause
the Partnership to issue, pursuant to the Incentive Option Plan, Partnership
Interests (herein referred to as an "Incentive Interest") to and, if desired,
admit as Partners in the Partnership, Persons upon exercise of the Incentive
Options in exchange for the contribution to the capital of the Partnership of
the Exercise Price, in accordance with the Incentive Option Plan. The initial
grant of Incentive Options pursuant to the Incentive Option Plan shall be as
set forth on Schedule I hereto. In the event that any individual that is
granted an Incentive Option is not permitted to be a partner in the Partnership
as a result of clause (iv) of Section 8.1(b) hereof, and is not prohibited from
acquiring additional Equity Shares pursuant to the provisions of TREIT's
Articles of Incorporation, as the same may be amended from time to time, such
individual shall assign to TREIT its rights under the Incentive Option Plan in
exchange for Equity Shares prior to the actual issuance of such Partnership
Interest to such individual. In the event that an Incentive Interest is issued
by the Partnership pursuant to this Section 8.4(b), such Incentive Interest
shall be provided by a proportionate reduction in the Percentage Interests of
all of the Partners. The Managing General Partner, with the approval or at the
direction of the Compensation Committee, shall be authorized on
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behalf of each of the Partners to amend this Agreement and the Certificate of
Limited Partnership (if required by the Partnership Law), to reflect the
admission of an additional limited partner and the corresponding reduction in
the Percentage Interests of all of the Partners.
Section 8.5 Conversion of Partnership Interests.
(a) GMPT, or, in the case of a transfer to a GMPTS Transferee, such GMPTS
Transferee, shall, except as specifically provided in this Section 8.5, remain
a General Partner of the Partnership for a period of not less than three (3)
years after the Contribution Date. T-Co shall have no obligation to remain a
General Partner of the Partnership. T-Co, at any time, and GMPTS or any such
GMPTS Transferee, at any time after the third (3rd) anniversary of the
Contribution Date, may, without the consent of the Partnership Committee, or of
any Partner including the Managing General Partner, convert all, or any
portion, of its or their Partnership Interest(s) as a General Partner(s) to a
Partnership Interest(s) as a limited partner(s), which limited partner(s) shall
have and be subject to all of the rights, obligations, restrictions, and
attributes of a limited partner, all as provided in this Agreement but shall
retain all of those specific rights and attributes (including without
limitation the right to appoint Committee Members) provided T-Co, GMPTS, or a
GMPTS Transferee, as applicable, under this Agreement. Notwithstanding the
foregoing, immediately prior to a Transfer of all or any portion of its
Partnership Interest, GMPTS or any GMPTS Transferee, may at any time and
without the consent of the Partnership Committee or of any Partner including
the Managing General Partner, convert that portion (which may be all) of its
Partnership Interest as a General Partner that is to be transferred, to a
Partnership Interest as a limited partner, which limited partner shall have and
be subject to all of the rights, obligations, restrictions, and attributes of a
limited partner, all as provided in this Agreement but shall retain all of
those specific rights and attributes (including without limitation the right to
appoint Committee Members) provided GMPTS or a GMPTS Transferee, as applicable,
under this Agreement. In the event of a conversion of all or a portion of
T-Co's, GMPTS', or any GMPTS' Transferee's Partnership Interest pursuant to
this Section 8.5(a), the Managing General Partner may, without the approval,
consent or act of any Partner, amend this Agreement, the Certificate
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of Limited Partnership (if required by the Partnership Law), and any
other document determined by the Managing General Partner, with the approval of
the Partnership Committee or reasonably requested by T-Co, GMPTS, or any GMPTS
Transferee, as applicable, to be necessary to reflect the foregoing.
(b) TG and TREIT shall each remain a General Partner of the Partnership.
In the event that TREIT acquires all or a portion of the Partnership Interest
of a Limited Partner, such Partnership Interest shall, without any further
action, automatically convert to a general partner's Partnership Interest in
the Partnership; provided, however, that without the approval, consent or act
of any Partner, the Managing General Partner may amend this Agreement, the
Certificate of Limited Partnership (if required by the Partnership Law), and
any other document determined by the Managing General Partner, with the
approval of the Partnership Committee or reasonably requested by TREIT, to be
necessary to reflect the foregoing.
Section 8.6 No Change to TG Receivable Documents.
The approval of the Partnership Committee shall be required to amend the
TG Receivable Documents, to permit a Transfer, or a prepayment (in whole or in
part), of the TG Receivables or permit any Person to be released from liability
thereunder.
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IX.
WITHHOLDING.
If the Partnership is required by any state or federal law or regulation
to withhold tax attributable to allocations of Profits or items of the
foregoing or distributions to a Partner or if the Managing General Partner,
with the approval or at the direction of the Partnership Committee, in its
discretion, determines it to be in the best interest of the Partnership to
withhold amounts in connection with a Partner's tax liability (e.g., to file a
unified state income tax return for nonresidents of a particular state) (all
such amounts being herein referred to collectively as the "Additional Tax"),
any Additional Tax shall (i) be withheld from cash otherwise currently
distributable to such Partner, and (ii) to the extent cash is not distributable
to such Partner for the taxable period as to which such withholding is
required, be treated as a loan from the Partnership to such Partner, which loan
shall bear interest at the Partnership's cost of funds, and the portion of all
cash subsequently distributable to such Partner shall, to the extent of the
unpaid principal amount of, and the accrued interest on, such loan, be retained
by the Partnership and applied against such loan.
For the purpose of determining a Partner's Capital Account, any amount of
cash allocable to a Partner that is retained by the Partnership pursuant to
this Article IX shall be treated as if such cash had been actually distributed
to such Partner.
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X.
DISABLING EVENT OR EVENT OF WITHDRAWAL IN RESPECT
OF A PARTNER; SUCCESSION OF INTERESTS.
Section 10.1 Disabling Event or Event of Withdrawal in Respect of a Partner.
(a) For purposes of this Article X:
(1) a "Disabling Event" means, with respect to a
Partner, such Partner's (A) in the case of a Partner that is a
natural person, death, (B) Bankruptcy, (C) in the case of a
Partner who is a natural person, the entry by a court of
competent jurisdiction adjudicating him incompetent to manage
his person or his property, (D) in the case of a Partner who
is acting as a Partner by virtue of being a trustee of a
trust, the termination of the trust (but not merely the
substitution of a new trustee), (E) in the case of a Partner
that is a separate partnership, the dissolution and
commencement of winding up of the separate partnership, or (F)
in the case of a Partner that is a corporation, the filing of
a certificate of dissolution, or its equivalent, for the
corporation or the revocation of its charter and the
expiration of ninety (90) Days after the date of notice to the
corporation or revocation without a reinstatement of its
charter;
(2) a "Disabled Partner" or the "Disabled General
Partner" or the "Disabled Limited Partner" means a Partner
(General or Limited, as the case may be) who has suffered a
Disabling Event or an Event of Withdrawal;
(3) a "Representative" means, with respect to a
Disabled Partner, (A) the personal representative(s),
executor(s), or administrator(s) of the estate of a deceased
Partner, and (B) the committee or other legal
representative(s) of the estate of an insane, incompetent, or
Bankrupt Partner;
(4) a "Successor" means, with respect to a Disabled
Partner, the legal representative(s) or successor(s) of a
corporation, partnership or other business
organization, or trust or other entity which is dissolved
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(without timely reconstitution or continuation) or terminated
or whose legal existence has ceased; and
(5) "Event of Withdrawal" means, with respect to a
Partner, such Partner's retirement, resignation, other
withdrawal from the Partnership pursuant to the Partnership
Law or any other event (which is not a Disabling Event) that
causes a Partner to cease to be a Partner under the
Partnership Law.
(b) Upon the occurrence of a Disabling Event or an Event of Withdrawal in
respect of a General Partner the Partnership shall dissolve; provided, however,
that the Partnership shall not be dissolved if the remaining General Partners,
by an affirmative, unanimous vote of such General Partners, elect to continue
the Partnership in all respects pursuant to this Agreement, and the Partnership
Interest of the Disabled General Partner shall automatically become that of a
limited partner except to the extent such Disabled General Partner, at such
time or any time thereafter, assigns its Partnership Interest to another
General Partner, subject to the provisions of Section 8.1 hereof; and such
Disabled General Partner or Successor shall thereupon have the same interest in
the Partnership capital, profits, losses, and distributions as the Disabled
General Partner, but otherwise shall have and be subject to all the rights,
obligations, restrictions, and attributes of a limited partner, all as provided
in this Agreement. Upon the occurrence of a Disabling Event or an Event of
Withdrawal in respect of the last remaining General Partner, the Partnership
shall dissolve; provided, however, that the Partnership shall not be dissolved
if within ninety (90) Days after such Disabling Event or Event of Withdrawal
(the "Ninety Day Period") all Partners agree in writing to continue the
business of the Partnership and to the appointment, effective as of the date of
such Disabling Event or Event of Withdrawal, of one (1) or more general
partners of the Partnership as successor general partner(s) ("Successor General
Partner") to act as, and be in all respects under this Agreement, a general
partner; provided, however, that such Successor General Partner must have an
interest in the profits, losses, and distributions of the Partnership
sufficient to satisfy the then applicable Regulations and Internal Revenue
Service policy establishing the criteria for general partner participation in
the limited partnership form of
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organization. If any such election is made, the Partnership shall continue
pursuant to this Agreement for the term provided in Section 1.5 hereof, and the
Partnership Interest of the Disabled General Partner in the Partnership (except
to the extent such interest is held by the Successor General Partner) shall
automatically become that of a limited partner; and such Representative or
Successor to the Disabled General Partner (subject, in the case of a
Representative or Successor, to Sections 8.1 and 8.2 hereof) shall thereupon
have the same interest in the Partnership capital, profits, losses, and
distributions as the Disabled General Partner, but otherwise (except to the
extent a Successor to the Disabled General Partner shall be the Successor
General Partner) shall have and be subject to all the rights, obligations,
restrictions, and attributes of a limited partner, all as provided in this
Agreement. In the event of the selection of a Successor General Partner, as
provided in this Section 10.1(b), (1) each of the Partners, on behalf of itself
and its permitted successors and assigns, HEREBY AGREES AND CONSENTS to the
admission of any such Successor General Partner as herein provided; and (2) the
then Partners shall execute and deliver such instruments and documents, and
shall take such actions, as shall be necessary or advisable, in the sole and
absolute discretion of the Successor General Partner to carry out the
provisions of this Article X, including, but not limited to, (x) the execution
of conformed counterparts of this Agreement, amendments to this Agreement,
and/or an amended limited partnership agreement, (y) the execution and filing
of certificates of discontinuance, assumed or fictitious name certificates,
certificates of co-partnership, and/or certificates of limited partnership,
and/or amended certificates of limited partnership, and (z) the execution of
such instruments and documents (including, but not limited to, deeds, bills of
sale, and other instruments of conveyance and/or assignments of Partnership
Interest) as shall be necessary or advisable to effect any necessary transfer
(nominal or otherwise) of the property, assets, investments, rights,
liabilities, and business of the Partnership or of a Partnership Interest
and/or to accomplish the purpose and intent of this Article X. In the event
that a Partner shall fail to execute any such instruments or documents or fail
to take any such actions, when requested to do so by the Successor General
Partner, the Successor General Partner and/or any Person designated by the
Successor General Partner, as attorney-in-fact for each of the Partners, shall
have the right and power for, on
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behalf of, and in the name of each of the Partners to execute any and all such
instruments and documents and take any and all such actions.
(c) The occurrence of a Disabling Event or an Event of Withdrawal in
respect of a Limited Partner shall not, in and of itself, dissolve the
Partnership. Subject to the provisions of Section 8.1 hereof, in the event of
a Disabling Event or an Event of Withdrawal in respect of a Limited Partner,
the Disabled Limited Partner or its Representative or Successor, upon
compliance with the provisions of Section 8.2 hereof, shall remain or be
admitted as a limited partner in the Partnership and shall have all the rights
of the Disabled Limited Partner as a limited partner in the Partnership to the
extent of the Disabled Limited Partner's Partnership Interest, subject to the
terms, provisions, and conditions of this Agreement.
Section 10.2 References to "Partner" and "Partners" in the Event of Successors.
In the event that any Partner's Partnership Interest is held by one or
more successors to such Partner, references in this Article X to "Partner" and
"Partners" shall refer, as applicable and except as otherwise provided herein,
to the collective Partnership Interests of all successors to the Partnership
Interest of such Partner.
Section 10.3 Waiver of Dissolution if Transfer is in Full Compliance with
Agreement; Negation of Right to Dissolve Except as Herein Provided;
No Withdrawal.
(a) Each of the Partners hereby waives its right to terminate or cause the
dissolution and winding up of the Partnership (as such right is or may be
provided under the Partnership Law) upon the Transfer of any Partner's
Partnership Interest.
(b) No Partner shall have the right to terminate this Agreement or
dissolve the Partnership by such Partner's express will.
(c) No Partner shall have any right to retire, resign, or otherwise
withdraw from the Partnership and have the value of such Partner's Partnership
Interest ascertained and receive an amount equal to the value of such
Partnership Interest.
(d) In the event of an Event of Withdrawal in respect of a Partner in
breach of this Agreement but pursuant to such Partner's statutory powers under
the Partnership Law, to the extent that such powers exist in the face of a
prohibition against withdrawal in this Agreement, then the value of such
Partner's Partnership Interest shall be ascertained in
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accordance with the Partnership Law, and such Partner shall receive from the
Partnership in exchange for the relinquishment of such Partner's Partnership
Interest an amount equal to the lesser of (i) the value of such Partner's
Partnership Interest as so determined less any damages incurred by the
Partnership as a result of such Partner's breach of this Agreement, and (ii)
ninety percent (90%) of the value of such Partner's Partnership Interest as so
determined. In no event shall a Partner be considered to have withdrawn from
the Partnership solely as a result of such Partner having suffered a Disabling
Event.
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XI.
TERMINATION OF THE PARTNERSHIP,
WINDING UP, AND LIQUIDATION.
Section 11.1 Liquidation of the Assets of the Partnership and Disposition of
the Proceeds Thereof.
(a) Upon the dissolution of the Partnership, the Managing General Partner,
with the approval of the Partnership Committee or, in the event that the
Managing General Partner has suffered a Disabling Event or an Event of
Withdrawal and there are one or more remaining General Partners, such remaining
General Partner(s), or in the event that there is no remaining General Partner,
a Person selected by the Partnership Committee, or in the event that the
Partnership Committee has been disbanded, a Person selected by those Partners
holding in the aggregate a Percentage Interest of in excess of fifty percent
(50%) (such Person so selected is herein referred to as the "Liquidator"),
shall proceed to wind up the affairs of the Partnership, liquidate the property
and assets of the Partnership, and terminate the Partnership, and the proceeds
of such liquidation shall be applied and distributed in the following order of
priority:
(1) to creditors, to the extent otherwise permitted by law, in
satisfaction of liabilities of the Partnership (whether by payment or by
making a reasonable provision for payment) other than obligations of the
Partnership to the Partners and liabilities for distribution to Partners
on account of their respective interests in the Partnership; and then
(2) to the satisfaction of all obligations of the Partnership to
Partners; and then
[THE AMENDMENT DELETED THE FOLLOWING PROVISION:
(3) to the Partners in accordance with and in proportion to their
positive Capital Account balances. For this purpose, the determination
of the Partners' Capital Account balances shall be made after adjustment
to reflect the allocation of all Profits, Losses, and items in the nature
of income, gain, expense, or loss under Section 5.1 hereof, and all
distributions to the Partners pursuant to Section 5.2(a) and Section
5.2(b) hereof, in each case for all Partnership Fiscal Years through and
including the
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Partnership Fiscal Year of liquidation. Subject to the provisions of
clause (3) of this Section 11.1(a), all distributions pursuant to this
Section 11.1(a) shall be made by the end of the Partnership Fiscal Year
of liquidation (or if later, within ninety (90) Days after the date of
such liquidation).]
[THE AMENDMENT ADDED THE FOLLOWING PROVISION:
(3) to TREIT in an amount equal to the accrued but unpaid Guaranteed
Payment (in the priorities, if any, set forth in the applicable series);
and then
(4) to TREIT in an amount equal to the Preferred Equity (in
the priorities, if any, set forth in the applicable series); and
then
(5) to the Partners in accordance with and in proportion to
their positive Capital Account balances. For this purpose, the
determination of the Partners' Capital Account balances shall be
made after adjustment to reflect the allocation of all Profits,
Losses, and items in the nature of income, gain, expense, or loss
under Section 5.1 hereof, and all distributions to the Partners
pursuant to Section 5.2(a), Section 5.2(b), and 11.1(a)(4) hereof,
in each case for all Partnership Fiscal Years through and
including the Partnership Fiscal Year of liquidation. Subject to
the provisions of clause (1) of this Section 11.1(a), all
distributions pursuant to this Section 11.1(a) shall be made by
the end of the Partnership Fiscal Year of liquidation (or if
later, within ninety (90) Days after the date of such
liquidation).]
(b) Subject to the requirements of Regulations Section
1.704-1(b)(2)(ii)(b)(2), a reasonable time shall be allowed for the orderly
liquidation of the property and assets of the Partnership and the payment of
the debts and liabilities of the Partnership in order to minimize the losses
normally attendant upon a liquidation.
(c) Each Partner hereby appoints the Liquidator as its true and lawful
attorney-in-fact to hold, collect, and disburse, in accordance with this
Agreement, the applicable requirements of Regulations Section 1.704-1(b), and
the terms of any receivables, any Partnership receivables existing at the time
of the termination of the Partnership and the proceeds of the collection of
such receivables, including those arising from the sale of
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Partnership property and assets. Notwithstanding anything to the contrary in
this Agreement, the foregoing power of attorney shall terminate upon the
distribution of the proceeds of all such receivables in accordance with the
provisions of this Agreement.
(d) Notwithstanding anything to the contrary contained in this Agreement,
if a General Partner or any Limited Partner which, by written notice to the
Partnership, in its sole discretion, elects to be bound by this Section
11.1(d), shall have a negative balance in its Capital Account upon liquidation
of the Partnership or upon liquidation of its Partnership Interest, after
giving effect to the allocation of all Profits, Losses, gain or loss and items
of the foregoing under Section 5.1 hereof and all distributions to the Partners
pursuant to Section 5.2 hereof in each case for all Partnership Fiscal Years
through and including the Partnership Fiscal Year of such liquidation, such
Partner shall be obligated to make an additional capital contribution to the
Partnership by the end of the Partnership Fiscal Year of liquidation (or, if
later, within ninety (90) Days after the date of such liquidation), in an
amount sufficient to eliminate the negative balance in its Capital Account.
For purposes of this Section 11.1(d), "liquidation" shall be as defined in
Regulations Section 1.704-1(b)(2)(ii)(g).
(e) In connection with a liquidation of a Partner's interest in the
Partnership within the meaning of Treasury Regulations Section
1.704-1(b)(2)(ii)(g) that is not in connection with a liquidation of the
Partnership, distributions to such Partner shall be made in accordance with the
requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).
Section 11.2 Cancellation of Certificates.
After the affairs of the Partnership have been wound up, the property and
assets of the Partnership have been liquidated, and the proceeds thereof have
been applied and distributed as provided in Section 11.1(a) hereof and the
Partnership has been terminated, appropriate Persons shall, if required by law,
execute and file a certificate of dissolution or cancellation of the
Certificate of Limited Partnership and/or assumed or fictitious name
certificate (or a similar writing) to effect the cancellation, of record, of
the certificate(s) of partnership of the Partnership (or similar writing), and
the Partnership Interest Certificates.
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Section 11.3 Return of Capital.
Except as otherwise provided in Section 11.1(d) hereof, anything in this
Agreement to the contrary notwithstanding, no General Partner shall be
personally liable for the return of the capital contributions or Capital
Account of any Partner, or any portion thereof, it being expressly understood
that any such return shall be made only from and to the extent of Partnership
assets.
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XII.
POWER OF ATTORNEY.
Each Partner hereby constitutes and appoints the Managing General
Partner and any Person or Persons designated or delegated by the Managing
General Partner its true and lawful attorney-in-fact with full power of
substitution, and with power and authority to act in its name and on its
behalf, to make, execute and deliver, swear to, acknowledge, file, and record:
(a) this Agreement (and copies hereof) and amendments hereto or
restatements hereof adopted pursuant to the provisions hereof (including,
without limitation, any such amendment required upon the admission of a
substitute or additional partner, the continuation of the Partnership, the
formation of a successor partnership, or the doing of any act requiring the
amendment of this Agreement under the Partnership Law or under the applicable
laws of any other jurisdiction in which the Managing General Partner, with the
approval of the Partnership Committee, deems such action to be necessary or
desirable, or by any regulatory agency) and, upon termination of the
Partnership (or its successor), a certificate or agreement of dissolution and
termination, as and if the same may be required by applicable law, or by any
regulatory agency;
(b) the Certificate of Limited Partnership (and copies thereof) and any
amendments thereto or restatements thereof adopted pursuant to the provisions
hereof (including, without limitation, any amendment required upon the
admission of a substitute or additional partner, the continuation of the
Partnership, the formation of a successor partnership, or the doing of any act
requiring the amendment of the Certificate of Limited Partnership under
applicable law or regulatory agency, or the filing of a new or restated or
amended Certificate of Limited Partnership (or amendment thereto) after the
filing of a Certificate of Discontinuance or Dissolution or Termination, a
cancellation, or the like, to evidence a new or changed constituency of, or a
termination of, the Partnership, as the Managing General Partner, with the
approval of the Partnership Committee, deems said filing to be necessary or
desirable);
(c) any certificate of fictitious or assumed name and any amendment
thereto, if required by law;
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(d) any other certificates or instruments as may be required under
applicable laws or by any regulatory agency, as the Managing General Partner,
with the approval of the Partnership Committee, deems necessary or desirable;
(e) all such other instruments as the Managing General Partner, with the
approval of the Partnership Committee, deems necessary or desirable and not
inconsistent with this Agreement to carry out the provisions hereof in
accordance with the terms hereof, including, without limitation, to execute and
issue Partnership Interest Certificates in accordance with Section 4.7 or
Section 13.18 hereof; and
(f) any document(s) to confirm the foregoing.
Such attorney-in-fact shall, as such, have the right, power, and authority
as such to amend or modify this Agreement and all certificates and the like
required when acting in such capacity, so long as such amendment, modification,
and/or filing is(are) specifically permitted by this Agreement.
The power of attorney granted in this Article XII (and each other power of
attorney granted under or pursuant to this Agreement) is a special power of
attorney coupled with an interest, is irrevocable, and shall survive the
Transfer by a Partner of his Partnership Interest and shall survive his
insanity, disability, incapacity, incompetency, Bankruptcy, and death and may
be exercised by the attorney-in-fact by his signature on behalf of all
Partners.
- 100 -
<PAGE> 106
XIII.
MISCELLANEOUS.
Section 13.1 Notices.
(a) Any and all notices, approvals, directions, consents, offers,
elections, and other communications (herein sometimes referred to collectively
as the "Communications" and individually as a "Communication") required or
permitted under this Agreement shall be deemed adequately given only if in
writing.
(b) All Communications to be sent hereunder to a Partner, a Committee, a
Committee Member, or the Manager, shall be given or served only if addressed to
such Partner, such Committee or such Committee Member at its address set forth
in the records of the Partnership, or the Manager, at its address as set forth
in the Master Services Agreement or applicable management, administration,
leasing, and development services contract, and if delivered by hand (with
delivery receipt required), by telecopier (confirmation of receipt requested),
or by certified mail, return receipt requested, or Federal Express or similar
expedited overnight commercial carrier or courier.
(c) All Communications shall be deemed to have been properly given or
served, if delivered by hand or mailed, on the date of receipt or date of
refusal to accept shown on the delivery receipt or return receipt, if delivered
by Federal Express or similar expedited overnight commercial carrier or
courier, on the date that is one Business Day after the date upon which the
same shall have been delivered to Federal Express or similar expedited
overnight commercial carrier, addressed to the recipient, with all shipping
charges prepaid, provided that the same is actually received (or refused) by
the recipient in the ordinary course, and if sent by telecopier, on the date of
confirmed delivery. The time to respond to any Communication given pursuant to
this Agreement shall run from the date of receipt or confirmed delivery, as
applicable.
(d) By giving to the Managing General Partner written notice thereof, the
parties hereto and their respective successors and assigns shall have the right
from time to time and at any time during the term of this Agreement to change
the Person to receive Communications and their respective addresses effective
upon receipt by the other parties of
- 101 -
<PAGE> 107
such notice and each shall have the right to specify as its address any other
address within the United States of America.
Section 13.2 Applicable Law.
This Agreement shall be governed by and construed in accordance with, the
laws (other than the law governing choice of law) of the State of Delaware. In
the event of a conflict between any provision of this Agreement and any
non-mandatory provision of the Partnership Law, the provision of this Agreement
shall control and take precedence.
Section 13.3 Entire Agreement.
This Agreement contains the entire agreement among the parties hereto
relative to the Partnership.
Section 13.4 Word Meanings; Gender.
The words such as "herein," "hereinafter," "hereof," and "hereunder" refer
to this Agreement as a whole and not merely to a subdivision in which such
words appear unless the context otherwise requires. The singular shall include
the plural and the masculine gender shall include the feminine and neuter, and
vice versa, unless the context otherwise requires.
Section 13.5 Section Titles.
Section titles are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.
Section 13.6 Waiver.
No consent or waiver, express or implied, by a Partner to or of any breach
or default by any other Partner in the performance by such other Partner of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by such other Partner of
the same or any other obligation of such Partner hereunder. Failure on the
part of a Partner to object to any act or failure to act of any other Partner
or to declare such other Partner in default, irrespective of how long such
failure continues, shall not constitute a waiver by such Partner of its rights
hereunder.
Section 13.7 Separability of Provisions.
Each provision of this Agreement shall be considered separable and if for
any reason any provision or provisions herein are determined to be invalid,
unenforceable, or illegal
- 102 -
<PAGE> 108
under any existing or future law, such invalidity, unenforceability, or
illegality shall not impair the operation of or affect the other portions of
this Agreement.
Section 13.8 Binding Agreement.
Subject to the restrictions on Transfers set forth herein, this Agreement
shall inure to the benefit of and be binding upon the undersigned Partners and
their respective heirs, executors, personal representatives, successors, and
assigns. Whenever, in this instrument, a reference to any party or Partner is
made, such reference shall be deemed to include a reference to the permitted
heirs, executors, personal representatives, successors, and assigns of such
party or Partner.
Section 13.9 Equitable Remedies.
Except as otherwise provided in this Agreement, the rights and remedies of
the Partners hereunder shall not be mutually exclusive, i.e., the exercise of a
right or remedy under any given provision hereof shall not preclude or impair
exercise of any other right or remedy hereunder. Each of the Partners confirms
that damages at law may not always be an adequate remedy for a breach or
threatened breach of this Agreement and agrees that, in the event of a breach
or threatened breach of any provision hereof, the respective rights and
obligations hereunder shall be enforceable by specific performance, injunction,
or other equitable remedy, but nothing herein contained is intended to, nor
shall it, limit or affect any rights at law or by statute or otherwise of any
party aggrieved as against the other for a breach or threatened breach of any
provision hereof.
Section 13.10 Partition.
No Partner nor any successor-in-interest to a Partner shall have the right
while this Agreement remains in effect to have any property of the Partnership
partitioned, or to file a complaint or institute any proceeding at law or in
equity to have such property of the Partnership partitioned, and each Partner,
on behalf of itself and its successors and assigns, hereby waives any such
right. It is the intention of the Partners that the rights of the parties
hereto and their successors-in-interest to Partnership property, as among
themselves, shall be governed by the terms of this Agreement, and that the
rights of the Partners and their
-103 -
<PAGE> 109
successors-in-interest to Transfer any interest in the Partnership shall be
subject to the limitations and restrictions set forth in this Agreement.
Section 13.11 Amendment.
Without the consent of any Partner, except as otherwise provided in
Sections 1.1, 4.5(a), 8.1, 8.2, 8.4, 8.5 and Article X hereof, a proposed
amendment to this Agreement may be adopted and effective as an amendment hereto
if it receives the written concurrence of each Appointing Person.
Notwithstanding the foregoing, but except as otherwise provided in Sections
1.1, 4.5(a), 8.1, 8.2, 8.4, 8.5 and Article X hereof, (i) no such amendment
shall change a Partner's Percentage Interest or increase a Partner's obligation
to contribute to the capital of (or require a Partner to loan to) the
Partnership, or change the proviso at the end of Section 4.2 hereof, or change
the provisions hereof relating to the allocation of Profits, Losses, or other
items, or change the distribution provisions of Section 5.2(a) or Section
5.2(b) hereof except for the timing of such distributions within the
Partnership Fiscal Year and within thirty (30) Days thereafter and except for
the timing of notices, including notices to be given pursuant to Section 6.5
hereof, with respect to distributions, or change the provisions of Sections
6.4(a), 6.4(b) and 6.4(e) hereof, or change the provisions of Section 8.5(a)
hereof, or cause a limited partner to become a general partner, or remove a
Partner, or remove from a Partner such Partner's right to appoint and remove
Committee Members or right to assign that right as herein provided, or change
the ability of a Partner to assign its Partnership Interest as provided in
Article VIII hereof, without, in each such case, the written concurrence of
each Partner, if any, whose Partnership Interest will be directly and adversely
affected by such amendment, (ii) no such amendment shall change the provisions
of Section 8.1(c) hereof without the written concurrence of those Partners
holding in the aggregate a Percentage Interest equal to at least the sum of (x)
the Percentage Interest held by TREIT at the time of any such amendment plus
(y) ninety-five percent (95%) of the difference between one hundred percent
(100%) and the Percentage Interest held by TREIT at the time of any such
amendment, and (iii) no such amendment shall permit a combination of Units of
Partnership Interest where the fair market value of each resulting Unit of
Partnership Interest is in excess
- 104 -
<PAGE> 110
of One Hundred Thousand Dollars ($100,000) or change the provisions of this
Section 13.11 without in either case the written concurrence of each Partner.
Section 13.12 No Third Party Rights Created Hereby.
The provisions of this Agreement are solely for the purpose of defining
the interests of the Partners, inter se; and no other person, firm, or entity
(i.e., a party who is not a signatory hereto or a permitted successor to such
signatory hereto) shall have any right, power, title, or interest by way of
subrogation or otherwise, in and to the rights, powers, titles, and provisions
of this Agreement.
Section 13.13 Liability of Partners.
Except as otherwise provided in this Agreement, as among the Partners, any
liability or debt of the Partnership shall first be satisfied out of the assets
of the Partnership, including the proceeds of any liability insurance which the
Partnership may recover, and thereafter, in accordance with the applicable
provisions of the Partnership Law.
Section 13.14 Additional Acts and Instruments.
Each Partner hereby agrees to do such further acts and things and to
execute any and all instruments necessary or desirable and as reasonably
required in the future to carry out the full intent and purpose of this
Agreement.
Section 13.15 Agreement in Counterparts.
This Agreement may be executed in two (2) or more counterparts, all of
which as so executed shall constitute one (1) Agreement, binding on all of the
parties hereto, notwithstanding that all the parties are not signatory to the
original or the same counterpart; provided, however, that no provision of this
Agreement shall become effective and binding unless and until all parties
hereto have duly executed this Agreement, at which time this Agreement shall
then become effective and binding as of the date first above written.
Section 13.16 Attorneys-In-Fact.
Any Partner may execute a document or instrument or take any action
required or permitted to be executed or taken under the terms of this Agreement
by and through an attorney-in-fact duly appointed for such purpose (or for
purposes including such
- 105 -
<PAGE> 111
purpose) under the terms of a written power of attorney (including any power
of attorney granted herein).
Section 13.17 Execution by Trustee.
Any trustee executing this Agreement shall be considered as executing this
Agreement solely in his capacity as a trustee of the trust of which he is a
trustee, and such trustee shall have no personal liability hereunder.
Section 13.18 Lost Partnership Interest Certificates.
In the event that any Partnership Interest Certificates shall be lost,
stolen, or destroyed, the Managing General Partner, with the approval or at the
direction of the Partnership Committee, may authorize the issuance of a
substitute Partnership Interest Certificate in place of the Partnership
Interest Certificate so lost, stolen, or destroyed. In each such case, the
applicant for a substitute Partnership Interest Certificate shall furnish to
the Managing General Partner, the Partnership Committee, and, if applicable,
the Compensation Committee, evidence to their satisfaction of the loss, theft,
or destruction of such Partnership Interest Certificate and of the ownership
thereof, and also such security or indemnity as they may reasonably require.
Section 13.19 Certain Consents.
By executing this Agreement, each Partner hereby consents to each of the
consents contained in Exhibit E hereto with the same force and effect as if he
had signed the actual consent and hereby agrees that each such consent shall be
in lieu of any Partnership Committee consent, approval, or determination
(including, without limitation, a Transfer Determination), which is otherwise
provided or required pursuant to this Agreement, including without limitation,
Article VIII hereof, and that notwithstanding the provisions of this Agreement,
including without limitation, Article VIII hereof, Partnership Committee Action
(including, without limitation, a Transfer Determination, consent or
ratification) shall in no event be required with respect to the matters set
forth on such Exhibit.
Section 13.20 Closing Allocation Agreement.
Certain of the Partners and the Partnership have entered into at the time
of and effective as of the Contribution Date, a Closing Allocation Agreement
providing for a
- 106 -
<PAGE> 112
certain Percentage Interest to be resolved and ultimately allocated, as of the
Contribution Date, between such Partners. Accordingly, the provisions of
Appendix A attached hereto are made a part of this Agreement.
[THE AMENDMENT ADDED THE FOLLOWING PROVISIONS:
1. Margaret Putnam, The Avner Naggar and Gloria Frank Naggar Living Trust,
Gloria Dobbs, Charles Carlise, Grossman/Southwest Associates Limited
Partnership, Southwest Associates, El Camino Associates, Michaela Naggar
Bourne, Auri Neal Naggar, Ron Naggar, David Naggar, Tamara Naggar, and Master
Pension Trust of Pacific Telesis have been admitted as limited partners of the
Partnership, and MGL & Associates Limited Partnership and the Naggar Family
Trust have withdrawn as limited partners of the Partnership.
2. All references in the Partnership Agreement to the "Limited Partners"
or the "Partners" or to a "Limited Partner" or a "Partner" include "Margaret
Putnam," "The Avner Naggar and Gloria Frank Naggar Living Trust," "Gloria
Dobbs," "Charles Carlise," "Grossman/Southwest Associates Limited Partnership,"
"Southwest Associates," "El Camino Associates," "Michaela Naggar Bourne," "Auri
Neal Naggar," "Ron Naggar," "David Naggar," "Tamara Naggar," and "Master
Pension Trust of Pacific Telesis," as the context may require.
3. The Units of Partnership Interest outstanding on September 30, 1997 are
hereby divided, such that (i) TREIT's Units of Partnership Interest are equal
in number to TREIT's outstanding shares of common stock on September 30, 1997,
and each other Partner's Units of Partnership Interest are changed into Units
of Partnership Interest using the same conversion factor, and (ii) by virtue of
the division, each Partner's Percentage Interest shall remain the same as such
Percentage Interest immediately prior to the division, all as more particularly
set forth on Schedule B attached hereto and made a part hereof. Further, the
Partnership and TREIT will hereafter conduct their respective operations, to
the extent they are able to do so, so that one Unit of Partnership Interest
will be equal in value to one share of TREIT's common stock.
4. Section and clause references within the Partnership Agreement are
renumbered accordingly.]'
- 107 -
<PAGE> 113
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
TAUBMAN CENTERS, INC., a Michigan
corporation
By:_______________________________
Its:______________________________
TG PARTNERS LIMITED PARTNERSHIP, a
Delaware limited partnership
By: TG Michigan, Inc., a Michigan
corporation, managing general
partner
By: _________________________
_________________________
TAUB-CO MANAGEMENT, INC., a Michigan
corporation
By: _____________________________
Its: _____________________________
GMPTS LIMITED PARTNERSHIP, a
Delaware limited partnership
By: GMPTS Corporation, a Delaware
corporation, general partner
By: ________________________
Its:________________________
GENERAL PARTNERS
- 108 -
<PAGE> 114
TAUBMAN REALTY VENTURES, a
Michigan co-partnership
By: The A. Alfred Taubman Restated
Revocable Trust, as amended and
restated in its entirety by
Instrument dated January 10,
1989 (as the same has been and
may hereafter be amended from
time to time), managing partner
By: _____________________________
A. Alfred Taubman, Trustee
TRA PARTNERS, a Michigan
co-partnership
By: The A. Alfred Taubman Restated
Revocable Trust, as amended and
restated in its entirety by
Instrument dated January 10,
1989 (as the same has been and
may hereafter be amended from
time to time), managing partner
By: ____________________________
A. Alfred Taubman, Trustee
THE A. ALFRED TAUBMAN RESTATED
REVOCABLE TRUST, as amended and
restated in its entirety by
Instrument dated January 10, 1989
(as the same has been and may
hereafter be amended from time to
time)
By: _____________________________
A. Alfred Taubman, Trustee
_________________________________
ROBERT S. TAUBMAN
_________________________________
WILLIAM S. TAUBMAN
- 109 -
<PAGE> 115
_________________________________
GAYLE T. KALISMAN
_________________________________
RICHARD P. KUGHN
THE KUGHN REAL PROPERTIES COMPANY, a
Michigan limited partnership
By: ____________________________
The Richard P. Kughn 1978
Trust, as the same may be
amended
By: _________________________
Richard P. Kughn, Trustee
__________________________________
ROBERT C. LARSON
__________________________________
SIDNEY R. UNOBSKEY
__________________________________
LEONARD DOBBS
__________________________________
AVNER NAGGAR
__________________________________
MARVIN G. LEECH
MGL & ASSOCIATES LIMITED
PARTNERSHIP, a Michigan limited
partnership
By: ____________________________
Marvin G. Leech, general
partner
- 110 -
<PAGE> 116
THE BURKHARDT FAMILY TRUST, under
trust agreement dated March 12,
1983, as amended
By: ______________________________
Joe E. Burkhardt, Co-Trustee
And:
By: ______________________________
Juanita J. Burkhardt,
Co-Trustee
NAGGAR FAMILY TRUST, under
instrument dated September 12, 1989
By: ______________________________
THE MAX M. FISHER REVOCABLE TRUST,
as amended and restated in its
entirety by Instrument dated May 11,
1992 (as the same may be amended
from time to time)
By: ______________________________
Max M. Fisher, Trustee
LIMITED PARTNERS
- 111 -
<PAGE> 117
SCHEDULE A
CAPITAL ACCOUNT BALANCES OF THE PARTNERS
AS OF THE CONTRIBUTION DATE AFTER GIVING EFFECT
TO CAPITAL CONTRIBUTIONS
<TABLE>
<CAPTION>
Partner Opening Balance
<S> <C>
TREIT $ 447,639,642
TG $ 70,476,245
GMPTS $ 547,386,815
TRV $ 122,646
TRAP $ 197,155,254
The A. Alfred Taubman Restated
Revocable Trust $ 110,000
Robert S. Taubman $ 66,000
William S. Taubman $ 66,000
Gayle T. Kalisman $ 66,000
Richard P. Kughn $ 19,665,929
The Kughn Real Properties Company $ 1,128,721
Robert C. Larson $ 12,941,493
Sidney R. Unobskey $ 3,392,175
Leonard Dobbs $ 2,403,231
Avner Naggar $ 110,000
Marvin G. Leech $ 1,553,250
MGL & Associates Limited Partnership $ 226,757
Burkhardt Family Trust $ 318,007
T-Co $ 22,000
Naggar Family Trust $ 1,670,007
MMF $ 4,381,300
Unallocated Interests $ 65,899,580
---------------
Total $1,376,801,052
</TABLE>
- 112 -
<PAGE> 118
[THE AMENDMENT DELETED THE FOLLOWING PAGE OF SCHEDULE B:
SCHEDULE B
UNITS OF PARTNERSHIP INTEREST AND
PERCENTAGE INTERESTS OF THE PARTNERS
<TABLE>
<CAPTION>
Number of
Units of
Partnership Percentage
Partner Nature of Interest Interest Interest
<S> <C> <C> <C>
TREIT General 20,347.256 32.828022%
TG General 3,203.465 5.168433%
GMPTS General 24,280.719 39.174224%
T-Co General 1.000 .001613%
TRV Limited 5.575 .008994%
TRAP Limited 8,961.603 14.458543%
The A. Alfred Taubman
Restated Revocable
Trust Limited 5.000 .008067%
Robert S. Taubman Limited 3.000 .004840%
William S. Taubman Limited 3.000 .004840%
Gayle T. Kalisman Limited 3.000 .004840%
Richard P. Kughn Limited 893.906 1.442217%
The Kughn Real
Properties Company Limited 51.306 .082776%
Robert C. Larson Limited 588.250 .949075%
Sidney R. Unobskey Limited 154.190 .248768%
Leonard Dobbs Limited 109.238 .176243%
Avner Naggar Limited 5.000 .008067%
Marvin G. Leech Limited 70.602 .113909%
MGL & Associates
Limited Partnership Limited 10.307 .016629%
Burkhardt Family Trust Limited 14.455 .023321%
Naggar Family Trust Limited 75.909 .122471%
MMF Limited 199.150 .321306%
Unallocated Interests 2,995.435 4.832800%
---------- ---------
Total 61,981.366 100.000000%]
</TABLE>
- 113 -
<PAGE> 119
[THE AMENDMENT ADDED THE FOLLOWING PAGE TO SCHEDULE B:
EXHIBIT B
SCHEDULE OF PARTNERS
<TABLE>
<CAPTION>
Number of
Units of
Nature Partnership Percentage
Partner of Interest Interest Interest
------- ----------- ----------- -----------
<S> <C> <C> <C>
TREIT General 50,757,681 36.701851%
TG General 6,327,098 4.574996%
GMPTS General 50,025,713 36.172579%
T-Co General 1,975 0.001428%
Master Pension Trust of
Pacific Telesis Limited 6,114,027 4.420929%
TRV Limited 11,011 0.007962%
TRAP Limited 17,699,879 12.798424%
The A. Alfred Taubman Restated
Revocable Trust Limited 9,875 0.007140%
Robert S. Taubman Limited 5,925 0.004284%
William S. Taubman Limited 5,925 0.004284%
Gayle T. Kalisman Limited 5,925 0.004284%
Richard P. Kughn Limited 1,765,535 1.276623%
The Kughn Real Properties Co. Limited 101,333 0.073272%
Robert C. Larson Limited 1,161,841 0.840104%
Sidney R. Unobskey Limited 304,538 0.220205%
Leonard Dobbs Limited 107,877 0.078004%
Gloria Dobbs Limited 107,877 0.078004%
Avner and Gloria Frank
Naggar Living Trust Limited 9,875 0.007140%
Marvin G. Leech Limited 139,648 0.100977%
Margaret Putnam Limited 20,154 0.014573%
Burkhardt Family Trust Limited 28,550 0.020644%
Michaela Naggar Bourne Limited 29,985 0.021682%
Auri Neal Naggar Limited 29,985 0.021682%
Ron Naggar Limited 29,985 0.021682%
David Naggar Limited 29,985 0.021682%
Tamara Naggar Limited 29,985 0.021682%
MMF Limited 393,337 0.284414%
Charles Carlise Limited 295,073 0.213361%
Grossman/Southwest Associates
Limited Partnership Limited 1,971,274 1.425387%
Southwest Associates Limited 586,294 0.423937%
El Camino Associates Limited 189,169 0.136784%
------------
Total 138,297,334 100.000000%]
============ ============
</TABLE>
- 114 -
<PAGE> 120
SCHEDULE B (CONT.)
SCHEDULE OF NON-SUBSTITUTE ASSIGNEES
(INDICATED ABOVE BY "X" NEXT TO ASSIGNOR PARTNER'S NAME)
Number of
Units of
Non-Substitute Partnership Percentage
Partner Assignee Interest Interest
------- -------------- ----------- ----------
- 115 -
<PAGE> 121
SCHEDULE C
INITIAL NUMBER AND VALUE OF UNITS
OF PARTNERSHIP INTEREST
Initial Number of Units of
Partnership Interest Issued Initial Value of Units
and Outstanding of Partnership Interest
--------------------------- ----------------------------
61,981.366 $22,000
- 116 -
<PAGE> 122
SCHEDULE D
REGIONAL CENTERS
Regional Center Owning Entity
Bellevue Center Bellevue Associates
Beverly Center La Cienega Associates
Briarwood Briarwood
Cherry Creek Taubman-Cherry Creek Limited
Partnership
Columbus City Center TL-Columbus Associates
Fairlane Town Center Fairlane Town Center
Fair Oaks Fairfax Associates
Hilltop Richmond Associates
Lakeforest Mall Lakeforest Associates
Lakeside Lakeside/Novi Associates
Marley Station TKL-East
Meadowood Taubman-Western Associates No. 2
Short Hills Prutaub Joint Venture
Stamford Town Center Rich-Taubman Associates
Stoneridge Stoneridge Properties
Twelve Oaks Lakeside/Novi Associates
West Farms West Farms Associates
Woodfield Woodfield Associates
Woodland Woodland
- 117 -
<PAGE> 123
SCHEDULE E
DEVELOPMENTS
Those activities being conducted under the following TTC Job Numbers:
4000.037 Apple Valley
4000.101 Boca Raton, Florida
1988.019 Downtown Denver, Colorado
3131.001 East Caln, Pennsylvania
4000.131
2125.001 Konterra, Maryland
4000.377 Lake County, Illinois
4000.416 Los Angeles Region, California
4000.549 New Haven, Connecticut
4000.564 North Columbus, Ohio
4000.716 Rochester Hills/Auburn Hills, Michigan
4000.788 Tampa, Florida
4000.940 Western Wayne County, Michigan
2934.001 West Palm Beach, Florida
4000.560 Orlando, Florida
2089.001 Tampa, Florida
4000.973 World Trade Center
4000.900 Waterbury, Connecticut
- 118 -
<PAGE> 124
SCHEDULE F
DEVELOPMENT OPPORTUNITIES SPECIFICALLY EXCLUDED FROM CONTRIBUTION
TWA-Anaheim Limited Partnership
New York Coliseum
Detroit Riverfront
Marbeth
- 119 -
<PAGE> 125
SCHEDULE G
EXCLUDED RETAIL INTERESTS, RETAIL
OPPORTUNITIES, AND RETAIL PROPERTIES
SunValley Associates
Carmenita Associates
TWA-Anaheim Limited Partnership
- 120 -
<PAGE> 126
SCHEDULE H
ADJUSTED BASIS AND INITIAL BOOK VALUES OF REGIONAL CENTER INTERESTS,
DEVELOPMENT OPPORTUNITY INTERESTS, AND DEVELOPMENT OPPORTUNITIES
Initial
Adjusted Basis* Book Values
--------------- --------------
LaCienega Associates $ 38,544,114 $ 106,079,418
Briarwood Associates 51,464,259 83,993,979
Fairfax Associates 17,617,290 83,688,375
Fairlane Town Center 8,676,308 30,560,450
Lakeforest Associates 17,615,797 117,452,946
Lakeside/Novi Associates 16,875,501 139,884,947
Prutaub Joint Venture 29,167,429 74,777,786
Richmond Associates 17,450,029 62,318,114
Rich-Taubman Associates 11,834,950 49,747,372
Stoneridge Properties 43,154,104 133,142,744
Taubman Western Associates II 11,394,771 47,888,540
West Farms Associates 15,936,108 94,160,842
Woodfield Associates 15,976,065 115,909,171
Woodland Associates 5,171,532 55,166,338
TBA Limited Partnership 32,146,385 45,462,608
Bellevue Associates 48,719,651 15,954,445
Taubman Cherry Creek L.P. 59,474,132 24,731,911
TL-Columbus Associates 74,373,371 79,079,103
TKL-East Associates 44,265,470 62,759,192
Development Opportunities 12,632,077 26,065,028
Lakeside/Novi Land Partnership 8,314,940 9,766,742
--------------- --------------
$580,804,283 $1,458,590,051
=============== ==============
*Adjusted Basis @ 1/1/92
- 121 -
<PAGE> 127
SCHEDULE I
INITIAL GRANT OF INCENTIVE OPTIONS
Exercise Price
Number of Units of Per Unit of Partnership
Optionee Partnership Interest Interest
--------- -------------------- --------
Robert C. Larson 500 $22,000
Robert S. Taubman 1,500 $22,000
Bernard Winograd 500 $22,000
Richard B. McGlinn 14 $22,000
Others 577 $22,000
-----
Total 3,091
=====
- 122 -
<PAGE> 128
SCHEDULE J
CERTAIN INTERESTS OF PARTNERS IN TENANTS OF REGIONAL CENTERS
Ownership
Interest
(Direct or Regional
Partner Tenant Indirect Center
------- ------------------ ---------- ---------
AAT Woodward & Lothrop 100% Fair Oaks
Incorporated (The
Home Store at Fair
Oaks)
- 123 -
<PAGE> 129
EXHIBIT A
MASTER SERVICES AGREEMENT
<PAGE> 130
EXHIBIT B
INCENTIVE OPTION PLAN
<PAGE> 131
EXHIBIT C
FORM OF PARTNERSHIP INTEREST CERTIFICATE
<PAGE> 132
EXHIBIT D
CORPORATE SERVICES AGREEMENT
<PAGE> 133
EXHIBIT E
CONSENTS
Consent to Agreements
Consent to Distributions
Approval of Establishment of Compensation Committee and Confirmation of
Incentive Option Plan
Consent to Letter Agreement Regarding Possible Tax Termination and Transfer
Determination in Respect of Transfer of Interests in GMPTS
Consent to Letter Agreement Regarding Nonrecourse Financing
Ratification of Guaranty of $17,000,000 Line of Credit Loan by Comerica Bank to
The Taubman Company Limited Partnership
Consent to Transfer Determination in Respect of Pledge of Partnership Interest
to Union Bank of Switzerland (New York Branch) and Certain Other Banks and
Substitutions as a Partner
Consent to Transfer Determination in Respect of Pledge of Partnership Interest
to Comerica Bank and Substitution as a Partner
Consent to Briarwood Financing
Consent to TL-Cherry Creek Associates Financing
Consent to Lakeforest Financing
Consent to Guaranty of Ridge Road Lease of The Taubman Company Limited
Partnership
<PAGE> 134
APPENDIX A
CLOSING ALLOCATION PROVISIONS
(i) Add the following sentences prior to the last sentence of Section
4.6(a) of this Agreement:
"It is understood, however, that the foregoing is subject to
Section 4.6(c) hereof. For purposes of Schedule C hereto,
Unallocated Units (as defined in the Closing Allocation Agreement)
shall be included as if they were issued and outstanding."
(ii) Add the following paragraph (c) to Section 4.6 of this Agreement,
immediately after paragraph (b) thereof:
"(c) Pursuant to the Closing Allocation Agreement and until
the date of the Settlement Allocation (as defined in the Closing
Allocation Agreement), the Unallocated Units (as defined in the
Closing Allocation Agreement) shall be segregated, and retained by
the Partnership, and the Unallocated Distribution Amount (as
defined in the Closing Allocation Agreement) shall be held in
escrow, as provided in the Closing Allocation Agreement. On the
date of the Settlement Allocation, (i) the Ultimate Percentage
Interests (as defined in the Closing Allocation Agreement) of
GMPTS and certain of the other Partners shall be finally
determined effective as of and from the Contribution Date, and
(ii) the Partnership shall allocate and issue the Unallocated
Units and distribute the Unallocated Distribution Amount pursuant
to the Settlement Allocation, to such Partners in a manner
provided in the Closing Allocation Agreement such that pursuant to
the Settlement Allocation, the Unallocated Distribution Amount
shall have been distributed and Profits, Losses, and items thereof
allocable to the Unallocated Units shall have been allocated from
the Contribution Date in accordance with Ultimate Percentage
Interests.
The Partners hereby agree that once the Ultimate Percentage
Interests under the Closing Allocation Agreement have been
determined, the Managing General Partner, without the approval,
consent or act of any other Partner, shall substitute a revised
Schedule A and Schedule B hereto, to increase the Capital Account
balances
<PAGE> 135
and the Units of Partnership Interest of those affected Partners
in order to reflect the allocation of the Unallocated Units
pursuant to the Closing Allocation Agreement."
<PAGE> 1
EXHIBIT 4(d)
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP
CONTRIBUTION AND ACCEPTANCE OF PREFERRED EQUITY,
DESIGNATION OF SERIES A PREFERRED EQUITY, AND
ESTABLISHMENT OF PREFERRED RATE
Reference is made to that certain Amended and Restated Agreement of Limited
Partnership of The Taubman Realty Group Limited Partnership dated November 30,
1992, as amended by a certain First Amendment to The Amended and Restated
Agreement of The Taubman Realty Group Limited Partnership dated as of September
30, 1997 (as amended, the "Partnership Agreement"). Terms used in this
instrument have the meanings ascribed to them in the Partnership Agreement.
Pursuant to Section 4.1(f) of the Partnership Agreement, TREIT hereby
contributes to the capital of the Partnership, as Preferred Equity, $200
million in immediately available funds, such amount representing the proceeds
from TREIT's sale of eight million shares of its 8.30% Series A Cumulative
Redeemable Preferred Stock, par value $0.01 per share (the "Series A Stock"),
which is the Related Issue of such Preferred Equity. Such Preferred Equity
shall be entitled to a Guaranteed Payment from the date hereof calculated at
the Preferred Rate of 8.30% per annum, which is the dividend rate on the Series
A Stock.
The Partnership hereby accepts such contribution of Preferred Equity,
designates the same as Series A Preferred Equity, and confirms the Preferred
Rate of 8.30% per annum with respect to the Series A Preferred Equity. The
Partnership hereby confirms its statement of intent with respect to the payment
of the Guaranteed Payment on the Series A Preferred Equity, as set forth in the
last sentence under the caption "Description of the Series A Preferred
Stock--General" in TREIT's Prospectus Supplement dated September 30, 1997, with
respect to the offer and sale of the Series A Stock.
Dated: October 3, 1997
TAUBMAN CENTERS, INC., a Michigan
corporation
By: _______________________________________
Richard B. McGlinn
Its: Senior Vice President and Chief
Accounting Officer
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP,
a Delaware limited partnership
By: _______________________________________
Richard B. McGlinn
Its: Authorized Signatory
<PAGE> 1
EXHIBIT 23A
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to Registration Statement No. 333-35433 of Taubman Centers, Inc. on
Form S-3 of our reports dated February 17, 1997, on the financial
statements of Taubman Centers, Inc., the consolidated financial statements and
related schedules of The Taubman Realty Group Limited Partnership, and the
combined financial statements and related schedules of the Unconsolidated Joint
Ventures of The Taubman Realty Group Limited Partnership, appearing in the
Annual Report on Form 10-K of Taubman Centers, Inc. for the year ended December
31, 1996, and our report dated July 31, 1997, on the historical summary of
revenues and direct operating expenses of Regency Square for the year ended
December 31, 1996, appearing in the Current Report on Form 8-K of Taubman
Centers, Inc. dated September 4, 1997, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement, as amended.
Deloitte & Touche LLP
Detroit, Michigan
October 2, 1997
