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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 24, 1998
SIMON PROPERTY GROUP, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE
(State of incorporation or organization)
333-11491
(Commission File No.)
34-1755769
(I.R.S. Employer Identification No.)
NATIONAL CITY CENTER
115 WEST WASHINGTON STREET, SUITE 15 EAST
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)
(317) 636-1600
(Registrant's telephone number, including area code)
SIMON DEBARTOLO GROUP, L.P.
(Former name of registrant)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 23, 1998, the stockholders of each of Simon DeBartolo
Group, Inc. ("SDG"), Corporate Property Investors, Inc. ("CPI") and Corporate
Realty Consultants, Inc. ("CRC"), voted to, among other things, approve and
adopt the Agreement and Plan of Merger, dated as of February 18, 1998 (the
"Merger Agreement," a copy of which is attached hereto as Exhibit 2.1 and
incorporated by reference herein), by and among SDG, CPI and CRC. On September
24, 1998, SPG Merger Sub, Inc., a substantially wholly owned subsidiary of CPI,
merged (the "Merger") with and into SDG with SDG continuing as the surviving
company. As a result of the Merger, SDG became a subsidiary of CPI. The Merger
Agreement was negotiated on an arms' length basis among SDG, CPI and CRC. On
September 24, 1998, Simon Property Group, Inc. issued a press release relating
to the consummation of the Merger, a copy of which is attached hereto as Exhibit
99.1 and incorporated by reference herein. Prior to the Merger, the board of
directors of CPI declared a dividend on each share of CPI common stock
consisting of (i) $90 in cash, (ii) 1.0818 additional shares of CPI common stock
and (iii) 0.19 shares of 6.50% Series B Convertible Preferred Stock of CPI. The
dividends and the transactions contemplated by the Merger Agreement were
financed by general working capital, a senior unsecured term loan from The Chase
Manhattan Bank and Chase Securities Inc., proceeds from the sale of the General
Motors Building, and borrowings under other existing credit facilities.
In connection with the Merger, CPI was renamed "Simon Property Group,
Inc.," CRC was renamed "SPG Realty Consultants, Inc.," SDG was renamed "SPG
Properties, Inc.," and each issued and outstanding share of SDG common stock was
converted into one share of Simon Property Group, Inc. common stock and a
beneficial interest in 1/100th of a share of SPG Realty Consultants, Inc. common
stock. Each series of SDG preferred stock was renamed as a series of preferred
stock of SPG Properties, Inc. In addition, (i) CPI restated its Certificate of
Incorporation (Exhibit 3.1) and its By-laws (Exhibit 3.2); (ii) CRC restated its
Certificate of Incorporation (Exhibit 3.3) and its By-laws (Exhibit 3.4); (iii)
Simon DeBartolo Group, L.P. was renamed "Simon Property Group, L.P." and the
Sixth Amended and Restated Partnership Agreement of Simon Property Group, L.P.
(Exhibit 4.1) became effective; (iv) the SPG Realty Consultants, L.P.
Partnership Agreement (Exhibit 4.2), the Agreement between Simon Property Group,
L.P. and SPG Realty Consultants, L.P. (Exhibit 4.3), and the Issuance Agreement
between CPI and CRC (Exhibit 4.5) became effective; and (vi) the Simon Property
Group, Inc. Registration Rights Agreement (Exhibit 4.4) became effective.
Simon Property Group, Inc. is a self-administered and self-managed real
estate investment trust which, through its subsidiary partnerships, is engaged
primarily in the ownership, development, management, leasing, acquisition and
expansion of income-producing properties, primarily regional malls and community
shopping centers. Prior to the merger, CPI was a privately-held self-
administered and self-managed REIT holding interests in 29 properties, 23
shopping centers and six commercial properties. SPG Realty Consultants, Inc. is
engaged in the ownership, operation, acquisition and development of income
producing properties directly or through interests in joint ventures and other
non-REIT qualifying activities.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
The required financial statements were previously reported in
filings with the Securities and Exchange Commission, and
pursuant to General Instruction B.3 of Form 8-K are not
required to be additionally reported herein.
(b) Pro forma financial information.
The required pro forma financial information was previously
reported in filings with the Securities and Exchange Commission,
and pursuant to General Instruction B.3 of Form 8-K is not
required to be additionally reported herein.
(c) Exhibits:
2.1 Agreement and Plan of Merger, dated as of February 18,
1998, among SDG and CPI and CRC. (Incorporated by
reference to the Form 8-K filed by SDG on February 24,
1998 Exhibit 10.1).
3.1 Restated Certificate of Incorporation of Simon Property
Group, Inc.
3.2 Restated By-laws of Simon Property Group, Inc.
3.3 Restated Certificate of Incorporation of SPG Realty
Consultants, Inc.
3.4 Restated By-laws of SPG Realty Consultants, Inc.
4.1 Sixth Amended and Restated Limited Partnership
Agreement of Simon Property Group, L.P., dated as of
September 24, 1998, by and among SD Property Group,
Inc., SPG Properties, Inc., Simon Property Group, Inc.
and the limited partners named therein.
4.2 Limited Partnership Agreement of SPG Realty
Consultants, L.P., dated as of September 24, 1998, by
and among SPG Realty Consultants, Inc. and the limited
partners named therein.
4.3 Agreement Between Operating Partnerships, dated as of
September 24, 1998, by and among Simon Property Group,
L.P., SPG Realty Consultants, L.P., Simon Property
Group, Inc. and SPG Realty Consultants, Inc.
4.4 Simon Property Group, Inc. Registration Rights
Agreement, dated as of September 24, 1998, by and among
Simon Property Group, Inc. and the persons named
therein.
4.5 Issuance Agreement, dated as of September 23, 1998,
between CPI and CRC.
99.1 Press Release issued by Simon Property Group, Inc.,
dated September 24, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SIMON PROPERTY GROUP, L.P.
By: Simon Property Group, Inc., its General Partner
/s/ James M. Barkley
----------------------------------------------------
Name: James M. Barkley
Title: Secretary
October 9, 1998
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EXHIBIT INDEX
Exhibit
2.1 Agreement and Plan of Merger, dated as of February 18, 1998,
among SDG and CPI and CRC. (Incorporated by reference to the
Form 8-K filed by SDG on February 24, 1998 Exhibit 10.1).
3.1 Restated Certificate of Incorporation of Simon Property Group,
Inc.
3.2 Restated By-laws of Simon Property Group, Inc.
3.3 Restated Certificate of Incorporation of SPG Realty
Consultants, Inc.
3.4 Restated By-laws of SPG Realty Consultants, Inc.
4.1 Sixth Amended and Restated Limited Partnership Agreement of
Simon Property Group, L.P., dated as of September 24, 1998, by
and among SD Property Group, Inc., SPG Properties, Inc., Simon
Property Group, Inc. and the limited partners named therein.
4.2 Limited Partnership Agreement of SPG Realty Consultants, L.P.,
dated as of September 24, 1998, by and among SPG Realty
Consultants, Inc. and the limited partners named therein.
4.3 Agreement Between Operating Partnerships, dated as of
September 24, 1998, by and among Simon Property Group, L.P.,
SPG Realty Consultants, L.P., Simon Property Group, Inc. and
SPG Realty Consultants, Inc.
4.4 Simon Property Group, Inc. Registration Rights Agreement,
dated as of September 24, 1998, by and among Simon Property
Group, Inc. and the persons named therein.
4.5 Issuance Agreement, dated as of September 23, 1998, between
CPI and CRC.
99.1 Press Release issued by Simon Property Group, Inc., dated
September 24, 1998.
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Exhibit 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
CORPORATE PROPERTY INVESTORS, INC.
Corporate Property Investors, Inc. (the "Corporation"),
a corporation organized under and by virtue of the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
1. That the name of the Corporation is Corporate Property
Investors, Inc.
2. The original Certificate of Incorporation of the
Corporation was filed under the name Corporate Property Investors, Inc. with the
Secretary of State of Delaware on March 10, 1998.
3. This Restated Certificate of Incorporation was duly
authorized by the Corporation's Board of Directors and stockholders, and all
specifically affected classes or series of classes of stockholders, in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
4. This Restated Certificate of Incorporation has been duly
adopted in accordance with Sections 242 and 245 of the General Corporation Law
of the State of Delaware.
5. This Restated Certificate of Incorporation will be
effective at 4:30 p.m. September 24, 1998.
6. The text of the Restated Certificate of Incorporation reads
as follows:
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FIRST: The name of the corporation (which is hereinafter
called the "Corporation") is:
Simon Property Group, Inc.
SECOND: The purposes for which and any of which the
Corporation is formed and the business and objects to be carried on and promoted
by it are:
(a) To engage in the business of a real estate investment
trust ("REIT") as that phrase is defined in the Internal Revenue Code of 1986,
as amended (the "Code").
(b) To engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
THIRD: The address of its registered office in the State of
Delaware is c/o The Corporation Trust Company, 1209 Orange Street, Wilmington,
County of New Castle, Delaware. The name of its registered agent at such address
is The Corporation Trust Company.
FOURTH: (a) The total number of shares of stock of all classes
which the Corporation has authority to issue is 750,000,000 shares of capital
stock, of which 400,000,000 shares are classified as Common Stock, par value
$.0001 per share ("Common Stock"), 12,000,000 shares are classified as Class B
Common Stock, par value $.0001 per share ("Class B Common Stock"), 4,000 shares
are classified as Class C Common Stock, par value $.0001 per share ("Class C
Common Stock"), 100,000,000 shares are classified as Preferred Stock, par value
$.0001 per share, ("Preferred Stock"), and 237,996,000 shares are classified as
Excess Common Stock, par value $.0001 per share ("Excess Common Stock").
(b) The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Common
Stock of the Corporation:
(1) Each share of Common Stock shall have one vote, and,
except as otherwise provided in respect of any series of Preferred
Stock and any series of Preferred Stock hereafter created, and except
as otherwise provided with respect to directors elected by the holders
of the Class B Common Stock or of the Class C Common Stock, each voting
as a separate class, the exclusive voting power for all purposes shall
be vested in the holders of the Common Stock, the Class B Common Stock,
the Class C Common Stock and the Excess Common Stock, voting together
as a single class.
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Shares of Common Stock shall not have cumulative voting rights.
(2) Subject to the provisions of law and any preferences of
any series of Preferred Stock and any series of Preferred Stock
hereafter created, dividends or other distributions, including
dividends or other distributions payable in shares of another class of
the Corporation's stock, may be paid ratably on the Common Stock at
such time and in such amounts as the Board of Directors may deem
advisable, but only if at the same time, dividends are paid on
outstanding shares of Class B Common Stock and Class C Common Stock in
accordance with subparagraphs (c)(2) and (c-l)(2), respectively, of
this Article FOURTH.
(3) Subject to the provisions of law and the preferences of
any series of Preferred Stock and any series of Preferred Stock
hereafter created, in the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the
holders of the Common Stock shall be entitled, together with the
holders of Class B Common Stock, Class C Common Stock, Excess Common
Stock and any other series of Preferred Stock hereafter created not
having a preference on distributions in the liquidation, dissolution or
winding up of the Corporation, to share ratably in the net assets of
the Corporation remaining, after payment or provision for payment of
the debts and other liabilities of the Corporation and the amount to
which the holders of any series of Preferred Stock and any series of
Preferred Stock hereafter created having a preference on distributions
in the liquidation, dissolution or winding up of the Corporation shall
be entitled.
(4) Each share of Common Stock is convertible into Excess
Common Stock, as provided in Article NINTH hereof.
(c) The following is a description (which should be read in
conjunction with paragraph (c-1) of this Article FOURTH) of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Class B
Common Stock of the Corporation:
(1) Each share of Class B Common Stock shall have one vote,
and, except as otherwise provided in respect of any series of Preferred
Stock and any series of Preferred Stock hereafter created and except as
otherwise provided in this paragraph (c) and in paragraph (c-1), the
exclusive voting power for all purposes shall be vested in the holders
of the Class B Common Stock, the Class C Common Stock and the Common
Stock, voting together as a single class. Shares of Class B Common
Stock shall not have cumulative voting
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rights. The holders of the shares of Class B Common Stock shall have
the right, voting as a separate class, to elect four directors of the
Corporation and shall vote with the holders of the Class C Common
Stock, and the Common Stock (voting together as a single class) to
elect the remaining directors (other than the director or directors to
be elected by the holders of the Class C Common Stock voting as a
separate class); provided that if the Simon Family Group (as defined in
Article NINTH) shall sell or transfer a portion of their Common Stock,
Class B Common Stock and Units (as defined in Article NINTH) so as to
reduce their Aggregate Assumed Equity Interest in the Corporation (as
defined in Article NINTH) to less than 50% of the Simon Family Group
Initial Aggregate Assumed Equity Interest (as defined in Article NINTH)
in the Corporation, from and after the date of such reduction the
holders of the shares of Class B Common Stock shall have the right,
voting as a separate class, to elect two directors of the Corporation.
The right of the holders of Class B Common Stock to elect directors may
be exercised by written consent of such holders. For purposes of this
subparagraph, shares held in a voting trust shall be deemed owned by
the beneficiaries of the voting trust.
(2) Subject to the provisions of law and the preferences of
the Preferred Stock and of any series of Preferred Stock hereafter
created, dividends or other distributions, including dividends or other
distributions payable in shares of another class of the Corporation's
stock, may be paid ratably on the Class B Common Stock at such time and
in such amounts as the Board of Directors may deem advisable; provided
that cash dividends or other distributions shall be paid on each share
of Class B Common Stock at the same time as cash dividends or other
distributions are paid on Common Stock or Class C Common Stock and in
an amount equal to the amount payable on the number of shares of Common
Stock into which each share of Class B Common Stock is then
convertible; provided further that non-cash dividends or other non-cash
distributions (including the issuance of warrants or rights to acquire
securities of the Corporation) shall be distributed on each share of
Class B Common Stock at the same time as such non-cash dividends or
other non-cash distributions are distributed on Common Stock or Class C
Common Stock and in an amount equal to the amount distributable on the
number of shares of Common Stock into which each share of Class B
Common Stock is then convertible; provided further that any dividends
or other distributions payable otherwise on the Class B Common Stock
shall be paid in shares of Common Stock or securities convertible or
exchangeable into Common Stock (or warrants or rights issued to acquire
Common Stock or securities convertible or exchangeable into Common
Stock).
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(3) (A) Each share of Class B Common Stock is convertible into
Excess Common Stock, as provided in Article NINTH hereof. Each share of
Class B Common Stock may be converted at the option of the holder
thereof into one share of Common Stock. Immediately and automatically
each share of Class B Common Stock shall be converted into one share of
Common Stock (i) if the Aggregate Assumed Equity Interest in the
Corporation of the Simon Family Group is for any reason reduced to less
than 5% of the Aggregate Assumed Equity Interest in the Corporation or
(ii) if such share of Class B Common Stock is otherwise sold or
otherwise transferred to or is otherwise held by anyone other than a
member of the Simon Family Group. For purposes of this subparagraph,
shares held in a voting trust shall be deemed owned by the
beneficiaries of the voting trust.
(B) The Corporation may not subdivide its outstanding shares
of Common Stock, combine its outstanding shares of Common Stock into a
smaller number of shares, or issue by reclassification of its shares of
Common Stock any shares of capital stock of the Corporation without
making the same adjustment to the Class B Common Stock. The Corporation
shall not distribute to all holders of its Common Stock evidences of
its indebtedness or assets (excluding cash dividends or other
distributions to the extent permitted by subparagraph (c)(2) of this
Article FOURTH) or rights or warrants to subscribe for or purchase
securities issued by the Corporation or property of the Corporation
(excluding those referred to in subparagraph (c)(2) of this Article
FOURTH), without making the same distribution to all holders of its
Class B Common Stock. No adjustment of the conversion rate shall be
made as a result of or in connection with the issuance of Common Stock
of the Corporation pursuant to options or stock purchase agreements now
or hereafter granted or entered into with officers or employees of the
Corporation or its subsidiaries in connection with their employment,
whether entered into at the beginning of the employment or at any time
thereafter. In case of any capital reorganization of the Corporation,
or the consolidation or merger of the Corporation with or into another
corporation, or a statutory share exchange, or the sale, transfer or
other disposition of all or substantially all of the property, assets
or business of the Corporation then, in each such case, each share of
Common Stock and each share of Class B Common Stock shall be treated
the same unless the transaction is approved by the affirmative vote of
a majority of the holders of Class B Common stock shall be required to
approve such a transaction.
(C) Upon conversion of any shares of Class B Common Stock, no
payment or adjustment shall be made on account of dividends accrued,
whether or not in arrears, on such shares or on account of dividends
declared and payable
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to holders of Common Stock of record on a date prior to the date of
conversion.
(D) Except with respect to shares of Class B Common Stock
which have been deemed to have been automatically converted into Common
Stock pursuant to subparagraph (c)(3)(A) of this Article FOURTH, in
order to convert shares of Class B Common Stock into Common Stock the
holder thereof shall surrender at the office of the Transfer Agent the
certificate or certificates therefor, duly endorsed to the Corporation
or in blank, and give written notice to the Corporation at said office
that he elects to convert such shares and shall state in writing
therein the name or names (with addresses) in which he wishes the
certificate or certificates for Common Stock to be issued. Shares of
Class B Common Stock shall be deemed to have been converted on the date
of the surrender of such certificate or certificates for shares for
conversion as provided above, and the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated
for all purposes as the record holder or holders of such Common Stock
on such date. As soon as practicable on or after the date of conversion
as aforesaid, the Corporation will issue and deliver at said office a
certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with cash for any
fraction of a share, as provided in subparagraph (c)(3)(F) of this
Article FOURTH, to the person or persons entitled to receive the same.
The Corporation will pay any and all federal original issue taxes that
may be payable in respect of the issue or delivery of shares of Common
Stock on conversion of shares of Class B Common Stock pursuant hereto.
The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which
the shares of Class B Common Stock so converted were registered, and no
issue or delivery shall be made unless and until the person requesting
such issue has paid to the Corporation the amount of any such tax, or
has established to the satisfaction of the Corporation either that such
tax has been paid or that no such tax is payable.
(E) All shares of Class B Common Stock converted into Common
Stock shall be retired and cancelled and shall not be reissued.
(F) The Corporation shall not issue fractional shares of
Common Stock upon any conversion of shares of Class B Common Stock. As
to any final fraction of a share which the holder of one or more shares
of Class B Common Stock would be entitled to receive upon exercise of
such holder's conversion right the Corporation shall pay a cash
adjustment in an amount equal to the same fraction of the
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Market Price (as defined in Article NINTH) for the date of exercise.
(G) The Corporation shall at all times have authorized and
unissued a number of shares of Common Stock sufficient for the
conversion of all shares of Class B Common Stock at the time
outstanding. If any shares of Common Stock require registration with or
approval of any governmental authority under any Federal or State law,
before such shares may be validly issued upon conversion, then the
Corporation will in good faith and as expeditiously as possible
endeavor to secure such registration or approval as the case may be.
The Corporation warrants that all Common Stock issued upon conversion
of shares of Class B Common Stock will upon issue be fully paid and
nonassessable by the Corporation and free from original issue taxes.
(4) Subject to the provisions of law and the preferences of
the Preferred Stock and of any series of Preferred Stock hereafter
created, in the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of Class
B Common Stock shall be entitled, together with the holders of Class C
Common Stock, Common Stock, Excess Common Stock and any other series of
Preferred Stock hereafter created not having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation, to share ratably in the net assets of the Corporation
remaining, after payment or provision for payment of the debts and
other liabilities of the Corporation and the amount to which the
holders of the Preferred Stock and of any series of Preferred Stock
hereafter created having a preference on distributions in the
liquidation, dissolution or winding up of the Corporation shall be
entitled.
(c-1) The following is a description (which should be read in
conjunction with paragraph (c) of this Article FOURTH) of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Class C
Common Stock of the Corporation:
(1) Each share of Class C Common Stock shall have one vote,
and, except as otherwise provided in respect of any series of Preferred
Stock and any series of Preferred Stock hereafter created and except as
otherwise provided in this paragraph (c-1) and in paragraph (c), the
exclusive voting power for all purposes shall be vested in the holders
of the Class C Common Stock, the Class B Common Stock and the Common
Stock, voting together as a single class. Shares of Class C Common
Stock shall not have cumulative voting rights. Subject to paragraph (b)
of Article FIFTH, the holders of the shares of Class C Common Stock
shall have the
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right, voting as a separate class, to elect two directors of the
Corporation and shall vote with the holders of the Class B Common
Stock, and the Common Stock (voting together as a single class) to
elect the remaining directors (other than the directors to be elected
by the holders of the Class B Common Stock voting as a separate class);
provided that if the DeBartolo Family Group (as defined in Article
NINTH) shall sell or transfer a portion of their Common Stock, Class C
Common Stock and Units (as defined in Article NINTH) so as to reduce
their Aggregate Assumed Equity Interest in the Corporation (as defined
in Article NINTH) to less than 50% of the DeBartolo Family Group
Initial Aggregate Assumed Equity Interest (as defined in Article NINTH)
in the Corporation, from and after the date of such reduction the
holders of the shares of Class C Common Stock shall have the right,
voting as a separate class, to elect one director of the Corporation.
The right of holders of Class C Common Stock to elect directors may be
exercised by written consent of such holders. For purposes of this
subparagraph, shares held in a voting trust shall be deemed owned by
the beneficiaries of the voting trust.
(2) Subject to the provisions of law and the preferences of
the Preferred Stock and of any series of Preferred Stock hereafter
created, dividends or other distributions, including dividends or other
distributions payable in shares of another class of the Corporation's
stock, may be paid ratably on the Class C Common Stock at such time and
in such amounts as the Board of Directors may deem advisable; provided
that cash dividends or other distributions shall be paid on each share
of Class C Common Stock at the same time as cash dividends or other
distributions are paid on Common Stock or Class B Common Stock and in
an amount equal to the amount payable on the number of shares of Common
Stock into which each share of Class C Common Stock is then
convertible; provided further that non-cash dividends or other non-cash
distributions (including the issuance of warrants or rights to acquire
securities of the Corporation) shall be distributed on each share of
Class C Common Stock at the same time as such non-cash dividends or
other non-cash distributions are distributed on Common Stock or Class B
Common Stock and in an amount equal to the amount distributable on the
number of shares of Common Stock into which each share of Class C
Common Stock is then convertible; provided further that any dividends
or other distributions payable otherwise on the Class C Common Stock
shall be paid in shares of Common Stock or securities convertible or
exchangeable into Common Stock (or warrants or rights issued to acquire
Common Stock or securities convertible or exchangeable into Common
Stock).
(3) (A) Each share of Class C Common Stock is convertible into
Excess Common Stock, as provided in Article
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NINTH hereof. Each share of Class C Common Stock may be converted at
the option of the holder thereof into one share of Common Stock.
Immediately and automatically each share of Class C Common Stock shall
be converted into one share of Common Stock (i) if the Aggregate
Assumed Equity Interest in the Corporation of the DeBartolo Family
Group is for any reason reduced to less than 5% of the Aggregate
Assumed Equity Interest in the Corporation or (ii) if such share of
Class C Common Stock is otherwise sold or otherwise transferred to or
is otherwise held by anyone other than a member of the DeBartolo Family
Group. For purposes of this subparagraph, shares held in a voting trust
shall be deemed owned by the beneficiaries of the voting trust.
(B) The Corporation may not subdivide its outstanding shares
of Common Stock, combine its outstanding shares of Common Stock into a
smaller number of shares, or issue by reclassification of its shares of
Common Stock any shares of the Corporation without making the same
adjustment to the Class C Common Stock. The Corporation shall not
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (excluding cash dividends or other distributions
to the extent permitted by subparagraph (c-1)(2) of this Article
FOURTH) or rights or warrants to subscribe for or purchase securities
issued by the Corporation or property of the Corporation (excluding
those referred to subparagraph (c-1)(2) of this Article FOURTH),
without making the same distribution to all holders of its Class C
Common Stock. No adjustment of the conversion rate shall be made as a
result of or in connection with the issuance of Common Stock of the
Corporation pursuant to options or stock purchase agreements now or
hereafter granted or entered into with officers or employees of the
Corporation or its subsidiaries in connection with their employment,
whether entered into at the beginning of the employment or at any time
thereafter. In case of any capital reorganization of the Corporation,
or the consolidation or merger of the Corporation with or into another
corporation, or a statutory share exchange, or the sale, transfer or
other disposition of all or substantially all of the property, assets
or business of the Corporation then, in each such case, each share of
Common Stock and each share of Class C Common Stock shall be treated
the same unless the transaction is approved by the affirmative vote of
the holders of a majority of Class C Common Stock shall be required to
approve such a transaction.
(C) Upon conversion of any shares of Class C Common Stock, no
payment or adjustment shall be made on account of dividends accrued,
whether or not in arrears, on such shares or on account of dividends
declared and payable to holders of Common Stock of record on a date
prior to the date of conversion.
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(D) Except with respect to shares of Class C Common Stock
which have been deemed to have been automatically converted into Common
Stock pursuant to subparagraph (c-1)(3)(A) of this Article FOURTH, in
order to convert shares of Class C Common Stock into Common Stock the
holder thereof shall surrender at the office of the Transfer Agent the
certificate or certificates therefor, duly endorsed to the Corporation
or in blank, and give written notice to the Corporation at said office
that he elects to convert such shares and shall state in writing
therein the name or names (with addresses) in which he wishes the
certificate or certificates for Common Stock to be issued. Shares of
Class C Common Stock shall be deemed to have been converted on the date
of the surrender of such certificate or certificates for shares for
conversion as provided above, and the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be treated
for all purposes as the record holder or holders of such Common Stock
on such date. As soon as practicable on or after the date of conversion
as aforesaid, the Corporation will issue and deliver at said office a
certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with cash for any
fraction of a share, as provided in subparagraph (c-l)(3)(F) of this
Article FOURTH, to the person or persons entitled to receive the same.
The Corporation will pay any and all federal original issue taxes that
may be payable in respect of the issue or delivery of shares of Common
Stock on conversion of shares of Class C Common Stock pursuant hereto.
The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which
the shares of Class C Common Stock so converted were registered, and no
issue or delivery shall be made unless and until the person requesting
such issue has paid to the Corporation the amount of any such tax, or
has established to the satisfaction of the Corporation either that such
tax has been paid or that no such tax is payable.
(E) All shares of Class C Common Stock converted into Common
Stock shall be retired and cancelled and shall not be reissued.
(F) The Corporation shall not issue fractional shares of
Common Stock upon any conversion of shares of Class C Common Stock. As
to any final fraction of a share which the holder of one or more shares
of Class C Common Stock would be entitled to receive upon exercise of
such holder's conversion right the Corporation shall pay a cash
adjustment in an amount equal to the same fraction of the Market Price
(as defined in Article NINTH) for the date of exercise.
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(G) The Corporation shall at all times have authorized and
unissued a number of shares of Common Stock sufficient for the
conversion of all shares of Class C Common Stock at the time
outstanding. If any shares of Common Stock require registration with or
approval of any governmental authority under any Federal or State law,
before such shares may be validly issued upon conversion, then the
Corporation will in good faith and as expeditiously as possible
endeavor to secure such registration or approval as the case may be.
The Corporation warrants that all Common Stock issued upon conversion
of shares of Class C Common Stock will upon issue be fully paid and
nonassessable by the Corporation and free from original issue taxes.
(4) Subject to the provisions of law and the preferences of
the Preferred Stock and of any series of Preferred Stock hereafter
created, in the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of Class
C Common Stock shall be entitled, together with the holders of Class B
Common Stock, Common Stock, Excess Common Stock and any other series of
Preferred Stock hereafter created not having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation, to share ratably in the net assets of the Corporation
remaining, after payment or provision for payment of the debts and
other liabilities of the Corporation and the amount to which the
holders of the Preferred Stock and any series of Preferred Stock
hereafter created having a preference on distributions in the
liquidation, dissolution or winding up of the Corporation shall be
entitled.
(c-2) Subject in all cases to the provisions of Article NINTH with
respect to Excess Stock (as defined in this paragraph), the Preferred Stock may
be issued from time to time in one or more series, each of which series shall
have such distinctive designation or title as shall be fixed by the Board of
Directors prior to the issuance of any shares thereof. Each such series of
Preferred Stock shall have such voting powers, full or limited, or no voting
powers, and such preferences and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions thereof, as
shall be stated in such resolution providing for the issue of such series of
Preferred Stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof pursuant to the authority hereby
expressly vested in it, all in accordance with the laws of the State of
Delaware; provided, however, no shares of any series of Preferred Stock may be
authorized or issued unless (i) the certificates of designations relating to
such series contains restrictions on ownership and transfer and conversion
provisions applicable to such series comparable to those set forth in this
Article NINTH, and (ii) a corresponding series of Preferred Stock ("Excess
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Preferred Stock" and together with Excess Common Stock, unless the context
otherwise requires, "Excess Stock"), to be issued in accordance with any such
conversion provisions upon a violation of such restrictions on ownership and
transfer, is simultaneously authorized by filing of a certificate of
designations. The Board of Directors is further authorized to increase or
decrease (but not below the number of such shares of series then outstanding)
the shares of any series subsequent to the issuance of shares of that series.
The 6.50% Series A Convertible Preferred Stock, the 6.50% Series B Convertible
Preferred Stock, the 6.50% Series A Excess Preferred Stock and the 6.50% Series
B Excess Preferred Stock shall have the designation, powers, preferences and
right and the qualifications, limitations and restrictions as set forth in
Exhibits A, B, C and D hereto, respectively.
FIFTH: (a) The powers and duties conferred and imposed upon
the board of directors by the General Corporation Law of the State of Delaware
shall be exercised and performed, in accordance with Section 141 thereof
governing the action of directors, by a board (the "Board of Directors");
provided, however that pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware: (i) certain of such powers and duties of the Board of
Directors set forth herein shall be exercised and performed only by the
Independent Directors (as defined in Article NINTH hereof), (ii) certain of the
directors shall serve until the annual meeting of the stockholders next to his
or her name in Article FIFTH(e) and (iii) certain of such powers and duties of
the Board of Directors as described herein may be exercised and performed by one
or more committees consisting of one or more members of the Board of Directors
and one or more other persons to the extent such powers and duties are delegated
thereto by the Board of Directors. The number of directors of the Corporation
shall never be less than the minimum number permitted by the General Corporation
Law of the State of Delaware now or hereafter in force and:
(1) so long as any shares of both Class B Common Stock and
Class C Common Stock are outstanding, the number of directors of the
Corporation shall be thirteen;
(2) so long as any shares of Class B Common Stock (but no
Class C Common Stock) are outstanding, the number of directors of the
Corporation shall be nine;
(3) so long as any shares of Class C Common Stock (but no
Class B Common Stock) are outstanding, the number of directors of the
Corporation shall be nine; and
(4) so long as no shares of Class B Common Stock or Class C
Common Stock are outstanding, the number of directors of the
Corporation shall be fixed by the Board of Directors from time to time.
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At least a majority of the directors shall be Independent Directors (as defined
in Article NINTH).
(b) Subject to the rights of the holders of any
class of Preferred Stock then outstanding, newly created directorships resulting
from any increase in the authorized number of directors shall be filled by a
vote of the stockholders or a majority of the entire Board of Directors, and any
vacancies on the Board of Directors resulting from death, disability
("disability," which for purposes of this paragraph (b) shall mean illness,
physical or mental disability or other incapacity), resignation, retirement,
disqualification, removal from office, or other cause shall be filled by a vote
of the stockholders or a majority of the directors then in office; provided that
(1) any vacancies on the Board of Directors resulting from
death, disability, resignation, retirement, disqualification, removal
from office, or other cause of a director elected by the holders of
Class B Common Stock shall be filled by a vote of the holders of Class
B Common Stock; and
(2) any vacancies on the Board of Directors with respect to
a director elected by the holders of Class C Common Stock shall be
filled as follows:
(A) any vacancy resulting from the death, disability,
resignation, retirement, disqualification, removal from office or other
cause of Mr. Frederick W. Petri (and any person duly nominated and
elected to serve as his replacement) shall be filled by the holders of
Class C Common Stock, voting as a separate class, to elect as a
replacement director a candidate who is an Independent Director, who
has similar experience and standing in the business community to the
Independent Directors and who has been approved by a majority of the
Independent Directors elected by the holders of Common Stock and other
capital stock entitled to vote with the Common Stock as a single class.
If such Independent Directors do not approve such candidate, the
holders of Class C Common Stock may propose another candidate for
approval by a majority of such Independent Directors. The right of
holders of Class C Common Stock to propose candidates to the
Independent Directors shall continue until one such candidate is
approved by a majority of such Independent Directors;
(B) at any time prior to December 31, 2003, any vacancy in the
seat on the Board of Directors occupied by Ms. Marie Denise DeBartolo
York on September 24, 1998 other than one resulting from her death or
disability shall reduce by such vacancy an equivalent number of the
directors that holders of Class C Common Stock may, voting as a
separate
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class, elect, and such vacancy shall be filled by a majority of the
entire Board of Directors; and
(C) any vacancy in the seat on the Board of Directors occupied
by Ms. Marie Denise DeBartolo York on September 24, 1998 resulting from
the death or disability of Ms. Marie Denise DeBartolo York, or (ii) at
any time on or subsequent to December 31, 2003, shall be filled by
holders of Class C Common Stock, voting as a separate class, to elect
as a replacement director a candidate who is either (i) the Chief
Executive Officer of the Edward J. DeBartolo Corporation (or any
successor to such corporation), (ii) the Chief Financial Officer of the
Edward J. DeBartolo Corporation (or any successor to such corporation)
provided that such person was the Chief Financial Officer of the Edward
J. DeBartolo Corporation on September 24, 1998 or (iii) an Independent
Director, who has similar experience and standing in the business
community to the Independent Directors and who has been approved by a
majority of the Independent Directors elected by the holders of Common
Stock and other capital stock entitled to vote with the Common Stock as
a single class. If such Independent Directors do not approve such
candidate, the holders of Class C Common Stock may propose another
candidate for approval by a majority of such Independent Directors. The
right of holders of Class C Common Stock to propose candidates to the
Independent Directors shall continue until one such candidate is
approved by a majority of such Independent Directors.
(3) A special meeting of holders of the Class B Common Stock
or Class C Common Stock shall be called by the President in the event a
vacancy occurs on the Board of Directors from any cause among the
directors entitled to be elected by the holders of the Class B Common
Stock or Class C Common Stock, as the case may be, and a special
meeting of holders of the Common Stock, the Class C Common Stock and
the Class B Common Stock shall be called by the President in the event
a vacancy occurs on the Board of Directors from any cause among the
directors elected by the holders of the Common Stock, the Class C
Common Stock and the Class B Common Stock (voting together as a single
class) and is not filled by the directors within 30 days after the
vacancy occurs. The holders of Class B Common Stock and Class C Common
Stock may exercise their rights to elect directors by written consent
without a meeting.
No decrease in the number of directors constituting the Board of Directors shall
affect the tenure of office of any director.
(c) Whenever the holders of any one or more series of
Preferred Stock of the Corporation shall have the right, voting separately as a
class, to elect one or more directors of the Corporation, the Board of Directors
shall
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consist of said directors so elected in addition to the number of directors
fixed as provided in paragraph (a) of this Article FIFTH or in the By-Laws;
provided that if any shares of Class B Common Stock or Class C Common Stock are
outstanding, the election of one or more directors by such holders of Preferred
Stock will eliminate the corresponding number of directors to be elected by the
combined holders of the Common Stock, the Class B Common Stock, and the Class C
Common Stock, voting together as a single class, and will neither increase the
size of the Board of Directors nor eliminate the seat or seats of directors
elected by the holders of the Class B Common Stock or of the Class C Common
Stock, each voting as a separate class. Notwithstanding the foregoing, and
except as otherwise may be required by law, whenever the holders of any one or
more series of Preferred Stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
terms of the director or directors elected by such holders shall expire at the
next succeeding annual meeting of stockholders.
(d) Subject to Section 141(k) of the General Corporation Law
of the State of Delaware, directors may be removed from office at any time, with
or without cause, by the affirmative vote of the holders of at least a majority
of the combined voting power of all classes of shares of capital stock entitled
to vote in the election for directors voting together as a single class.
(e) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the following are the names of the current directors
of the Corporation, who will serve (or whose replacement will serve) until the
next following annual meeting of stockholders.
Name of Stock Classes
Current Director Entitled to Elect
---------------- -----------------
Robert E. Angelica Equity Stock
Birch Bayh Equity Stock
Hans C. Mautner Equity Stock
G. William Miller Equity Stock
J. Albert Smith, Jr. Equity Stock
Philip J. Ward Equity Stock
Pieter S. van den Berg Equity Stock
David Simon Class B Common Stock
Herbert Simon Class B Common Stock
Melvin Simon Class B Common Stock
Richard S. Solokov Class B Common Stock
Frederick W. Petri Class C Common Stock
M. Denise DeBartolo York Class C Common Stock
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(f) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, any action by the Corporation relating to (1)
transactions between the Corporation and M.S. Management Associates, Inc., Simon
MOA Management Company, Inc., DeBartolo Properties Management, Inc. and/or M.S.
Management Associates (Indiana), Inc. or (2) transactions involving the
Corporation, individually or in its capacity as general partner (whether
directly or indirectly through another entity) of Simon Property Group, L.P., in
which the Simon Family Group or the DeBartolo Family Group or any member or
affiliate of any member of the Simon Family Group or DeBartolo Family Group has
an interest (other than through ownership interests in the Corporation or Simon
Property Group, L.P.), shall, in addition to such other vote that may be
required, require the prior approval of a majority of the Independent Directors.
(g) Elections of directors need not be by written ballot.
(h) Pursuant to Section 141(a) of the Delaware General
Corporation Law, the Board of Directors may appoint an Executive Committee, an
Audit Committee, a Nominating Committee and other committees composed of one or
more directors or one or more other persons delegated such powers and duties by
the Board of Directors. Each committee except the Executive Committee, the Audit
Committee and the Nominating Committee shall have as a member at least one
director elected by the Class B Common Stock and at least one director elected
by the Class C Common Stock. The entire Audit Committee and a majority of the
Compensation Committee shall be Independent Directors. The Nominating Committee
shall have five members, with two being independent Directors, two elected by
the Class B Common Stock, and one elected by the Class C Common Stock, and,
except as otherwise provided in paragraph (b) of Article FIFTH of the Charter,
only those members of the Nominating Committee elected by the Class B Common
Stock or the Class C Common Stock shall nominate the persons to be elected to
serve as directors by the holders of Class B Common Stock or Class C Common
Stock, respectively.
SIXTH: (a) The following provisions are hereby adopted
for the purpose of defining, limiting, and regulating the powers
of the Corporation and of the directors and the stockholders:
(1) The Board of Directors is hereby empowered to authorize
the issuance from time to time of shares of its stock of any class,
whether now or hereafter authorized, or securities convertible into
shares of its stock of any class or classes, whether now or hereafter
authorized, for such consideration as may be deemed advisable by the
Board of Directors and without any action by the stockholders.
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(2) No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have any
preemptive right to subscribe for or purchase any stock or any other
securities of the Corporation and at such price or prices and upon such
other terms as the Board of Directors, in its sole discretion, may fix;
and any stock or other securities which the Board of Directors may
determine to offer for subscription may, as the Board of Directors in
its sole discretion shall determine, be offered to the holders of any
class, series or type of stock or other securities at the time
outstanding to the exclusion of the holders of any or all other
classes, series or types of stock or other securities at the time
outstanding.
(3) The Board of Directors of the Corporation shall,
consistent with applicable law, have power in its sole discretion to
determine from time to time in accordance with sound accounting
practice or other reasonable valuation methods what constitutes annual
or other net profits, earnings, surplus, or net assets in excess of
capital; to fix and vary from time to time the amount to be reserved as
working capital, or determine that retained earnings or surplus shall
remain in the hands of the Corporation; to set apart out of any funds
of the Corporation such reserve or reserves in such amount or amounts
and for such proper purpose or purposes as it shall determine and to
abolish any such reserve or any part thereof; to redeem or purchase its
stock or to distribute and pay distributions or dividends in stock,
cash or other securities or property, out of surplus or any other funds
or amounts legally available therefor, at such times and to the
stockholders of record on such dates as it may, from time to time,
determine; to determine the amount, purpose, time of creation, increase
or decrease, alteration or cancellation of any reserves or charges and
the propriety thereof (whether or not any obligation or liability for
which such reserves or charges shall have been created shall have been
paid or discharged); to determine the fair value and any matters
relating to the acquisition, holding and disposition of any assets by
the Corporation; and to determine whether and to what extent and at
what times and places and under what conditions and regulations the
books, accounts and documents of the Corporation, or any of them, shall
be open to the inspection of stockholders, except as otherwise provided
by statute or by the By-Laws, and, except as so provided, no
stockholder shall have any right to inspect any book, account or
document of the Corporation unless authorized so to do by resolution of
the Board of Directors.
(4) (a) The Corporation shall indemnify to the fullest extent
permitted under and in accordance with the laws of the State of
Delaware any person who was or is a party or is threatened to be made a
party to any threatened,
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pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact that he
is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer or
trustee of or in any other capacity with another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful.
(b) Expenses incurred in defending a civil or criminal action,
suit or proceeding shall (in the case of any action, suit or proceeding
against a director of the Corporation) or may (in the case of any
action, suit or proceeding against an officer, trustee, employee or
agent) be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of
Directors upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Corporation
as authorized in this Article SIXTH paragraph (a)(4).
(c) The indemnification and other rights set forth in this
paragraph (a)(4) shall not be exclusive of any provisions with respect
thereto in the By-Laws or any other contract or agreement between the
Corporation and any officer, director, employee or agent of the
Corporation.
(d) Neither the amendment nor repeal of this paragraph (a)(4),
subparagraph (a), (b) or (c), nor the adoption of any provision of this
Restated Certificate of Incorporation inconsistent with paragraph
(a)(4), subparagraph (a), (b) or (c), shall eliminate or reduce the
effect of this paragraph (a)(4), subparagraphs (a), (b) and (c), in
respect of any matter occurring before such amendment, repeal or
adoption of an inconsistent provision or in respect of any cause of
action, suit or claim relating to any such matter which would have
given rise to a right of indemnification or right to receive expenses
pursuant to this paragraph (a)(5), subparagraph (a), (b) or (c), if
such provision had not been so amended or repealed or if a provision
inconsistent therewith had not been so adopted.
(e) No director shall be personally liable to the Corporation
or any stockholder for monetary damages for breach of fiduciary duty as
a director, except for liability
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(i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders;
(ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing
violation of the law;
(iii) under Section 174 of the General
Corporation Law of the State of Delaware; or
(iv) for any transaction from which the director
derived an improper personal benefit.
If the General Corporation Law of the State of Delaware is
amended after the date hereof to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the General Corporation Law
of the State of Delaware, as so amended. All references in this
paragraph (e) shall also be deemed to refer to the Independent
Directors and members of committees of the Board of Directors.
(5) For any stockholder proposal to be presented in connection
with an annual meeting of stockholders of the Corporation, including
any proposal relating to the nomination of a director to be elected to
the Board of Directors of the Corporation, the stockholders must have
given timely written notice thereof in writing to the Secretary of the
Corporation in the manner and containing the information required by
the By-Laws. Stockholder proposals to be presented in connection with a
special meeting of stockholders will be presented by the Corporation
only to the extent required by the General Corporation Law of the State
of Delaware.
(b) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Charter, including any
amendments changing the terms or contract rights, as expressly set forth in the
Charter, of any of its outstanding stock by reclassification or otherwise, by a
majority of the directors (including a majority of the Independent Directors, a
majority of the directors elected by the holders of the Class B Common Stock and
one director elected by the holders of the Class C Common Stock, if such Class B
Common Stock and Class C Common Stock have at that time elected directors)
adopting a resolution setting forth the proposed change, declaring its
advisability, and either calling a special meeting of the stockholders certified
to vote on the proposed change, or directing the proposed change to be
considered at the next annual stockholders meeting; provided
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however, that any amendment to, repeal of or adoption of any provision
inconsistent with subparagraphs (a)(4)(e) or (a)(5) or this paragraph (b) of
Article SIXTH will be effective only if it is adopted upon the affirmative vote
of not less than 80% of the aggregate votes entitled to be cast thereon
(considered for this purpose as a single class) and any amendment to, repeal of,
or adoption of any provision inconsistent with paragraphs (c) or (c-1) of
Article FOURTH or Article FIFTH will be effective only if it is adopted upon
both (1) the affirmative vote of not less than 80% of the aggregate votes
entitled to be cast thereon (considered for this purpose as a single class) and
(2) the affirmative vote of not less than a majority of the aggregate votes
entitled to be cast by the holders of the Class B Common Stock (in the case of
paragraph (c) of Article FOURTH or Article FIFTH) or by the holders of the Class
C Common Stock (in the case of paragraph (c-1) of Article FOURTH or Article
FIFTH).
(c) In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal the By-Laws of the Corporation.
(d) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the affirmative vote of least six of the Independent
Directors is necessary to cause any partnership in which the Corporation acts,
directly or indirectly, as a general partner to sell any property owned by such
partnership in accordance with the terms of the partnership agreement of such
partnership.
(e) The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the Charter of the Corporation, or construed as or
deemed by inference or otherwise in any manner to exclude or limit any powers
conferred upon the Board of Directors under the General Corporation Law of the
State of Delaware now or hereafter in force.
SEVENTH: In the case of shares of Common Stock, Class B Common
Stock, Class C Common Stock, Preferred Stock and Excess Stock, the holders of
which are entitled to beneficial interests in shares of stock of SPG Realty
Consultants, Inc., a Delaware corporation ("SRC"), held in the trusts created
under (i) Trust Agreements dated as of October 30, 1979 and as of August 26,
1994, among stockholders of the Corporation (as successor to Corporate Property
Investors, a Massachusetts voluntary association), SRC (as successor to
Corporate Realty Consultants, Inc., a Delaware corporation) and the Trustee
thereunder, or (ii) any similar trust, such shares of the Corporation and such
beneficial interests in shares of SRC will not be separately transferable. By
acceptance of such shares of Common Stock, Class B Common Stock, Class C Common
Stock, Preferred Stock and
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Excess Stock, the holder thereof agrees to thereafter be subject to, bound by
and entitled to the benefits of all the terms and provisions of the applicable
Trust Agreement or any similar trust. Each certificate evidencing any such
shares of the Corporation will be endorsed with a legend stating that the holder
of the shares represented thereby also holds a beneficial interest in shares of
stock of SRC held in said trust under said Trust Agreement. Any purported
transfer in violation of this paragraph shall be null and void.
EIGHTH: Except as otherwise set forth in this Charter, any
action required or permitted to be taken by stockholders of the Corporation must
be taken at a duly called annual or special meeting of such stockholders of the
Corporation and may not be effected by any consent in writing by such
stockholders.
NINTH: (a) (1) The following terms shall have the following
meaning:
"Aggregate Assumed Equity Interest in the Corporation" shall
mean the aggregate equity interest in the Corporation represented by
the Common Stock, the Class B Common Stock, the Class C Common Stock
and the Units on the assumption that all shares of Class B Common Stock
and Class C Common Stock and all such Units are exchanged for Common
Stock.
"Beneficial Ownership" shall mean ownership of Capital Stock
by a Person who would be treated as an owner of such shares of Capital
Stock either directly or indirectly through the application of Section
544 of the Code, as modified by Section 856(h)(1)(B) of the Code, and
any comparable successor provisions thereto. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall have
correlative meanings.
"Beneficiary" shall mean any Qualified Charitable Organization
which, from time to time, is designated by the Corporation to be a
beneficiary of the Trust.
"Board of Directors" shall mean the Board of Directors of the
Corporation as defined in Article FIFTH.
"By-Laws" shall mean the By-Laws of the Corporation.
"Capital Stock" shall mean stock that is Common Stock,
Class B Common Stock, Class C Common Stock, Excess Stock or
Preferred Stock.
"Charter" shall mean the Restated Certificate of Incorporation
of the Corporation, as the same may be amended from time to time.
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"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" shall mean ownership of Capital Stock
by a Person who would be treated as an owner of such shares of Capital
Stock either directly or indirectly through the application of Section
318 of the Code, and any comparable successor provisions thereto, as
modified by Section 856(d)(5) of the Code. The terms "Constructive
Owner," "Constructively Owns" and "Constructively Owned" shall have
correlative meanings.
"DeBartolo Family Group" shall mean the Estate of Edward J.
DeBartolo, Sr., Edward J. DeBartolo, Jr. and Marie Denise DeBartolo
York, other members of the immediate family of any of the foregoing,
any other lineal descendants of any of the foregoing, any estates of
any of the foregoing, any trusts established for the benefit of any of
the foregoing, and any other entity controlled by any of the foregoing.
"DeBartolo Family Group Initial Aggregate Assumed Equity
Interest in the Corporation" shall mean the portion of the Aggregate
Assumed Equity Interest in the Corporation owned by the DeBartolo
Family Group immediately following the closing of the DeBartolo Merger.
"DeBartolo Merger" shall mean the merger, pursuant to the
Agreement and Plan of Merger dated March 26, 1996, among Simon
DeBartolo Group, Inc., Day Acquisition Corp., an Ohio corporation and a
wholly owned subsidiary of Simon DeBartolo Group, Inc. ("Sub"), and
DeBartolo Realty Corporation, an Ohio corporation ("DeBartolo"),
pursuant to which merger Sub was merged with and into DeBartolo.
"Exchange Rights" shall mean any rights granted to limited
partners of Simon Property Group, L.P., a Delaware limited partnership
(including pursuant to an Exchange Rights Agreement) to exchange
(subject to the Ownership Limit) limited partnership interests in such
Partnership for shares of Capital Stock or cash at the option of the
Corporation.
"Independent Director" shall mean a director of the
Corporation who is neither an employee of the Corporation nor a member
(or an affiliate of a member) of the Simon Family Group or the
DeBartolo Family Group.
"Market Price" of any class of Capital Stock on any date shall
mean the average Closing Price (as defined below) of such security for
the twenty consecutive Trading Days (as defined below) ending on the
Trading Day immediately preceding the day in question; the "Closing
Price" shall mean the last sale price for a such security as shown on
the
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New York Stock Exchange Composite Transactions Tape, or if no such sale
has taken place on such day, then the average of the closing bid and
ask prices for such security on the New York Stock Exchange, or if such
security is not listed or admitted to trading on the New York Stock
Exchange, then on the principal national securities exchange on which
such security is listed or admitted to trading, or, if such security is
not listed or admitted to trading on any national securities exchange,
then on the Nasdaq National Market, or, if such security is not quoted
on the Nasdaq National Market, then the average of the closing bid and
ask prices as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors of the Corporation
for such purposes; and "Trading Day" shall mean a day on which the New
York Stock Exchange or, if such security is not listed or admitted to
trading thereon, the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for the
transaction of business or, if the Common Stock is not so listed or
admitted, then any day that is not a Saturday, Sunday or other day on
which depositary institutions in the City of New York are authorized or
obligated by law to close.
"Option" shall mean any options, rights, warrants or
convertible or exchangeable securities containing the right to
subscribe for, purchase or receive upon exchange or conversion shares
of Capital Stock.
"Ownership Limit" shall mean (x) in the case of any member of
the Simon Family Group, 18.0%, and (y) in the case of any other Person,
8.0%, in each case, of any class of Capital Stock, or any combination
thereof, determined by (i) number of shares outstanding, (ii) voting
power or (iii) value (as determined by the Board of Directors),
whichever produces the smallest holding of Capital Stock under the
three methods, computed with regard to all outstanding shares of
Capital Stock and, to the extent provided by the Code, all shares of
Capital Stock issuable under outstanding Options and Exchange Rights
that have not been exercised.
"Person" shall mean 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
also includes a group as the term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended.
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"Purported Beneficial Holder" shall mean, with respect to any
event (other than a purported Transfer) which results in Excess Stock,
the Person for whom the Purported Record Holder held shares that were,
pursuant to subparagraph (a)(3) of this article NINTH, automatically
converted into Excess Stock upon the occurrence of such event.
"Purported Beneficial Transferee" shall mean, with respect to
any purported Transfer which results in Excess Stock, the purported
beneficial transferee for whom the Purported Record Transferee would
have acquired shares of Common Stock or Preferred Stock if such
Transfer had been valid under subparagraph (a)(2) of this Article
NINTH.
"Purported Record Holder" shall mean, with respect to any
event (other than a purported Transfer) which results in Excess Stock,
the record holder of the shares that were, pursuant to subparagraph
(a)(3) of this Article NINTH, automatically converted into Excess Stock
upon the occurrence of such event.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock, the record holder of
the Common Stock or the Preferred Stock if such Transfer had been valid
under subparagraph (a)(2) of this Article NINTH.
"Qualified Charitable Organization" shall mean (i) any entity
which would be exempt from federal income under Section 501(c)(3) of
the Code and to which contributions are deductible under Section 170 of
the Code or (ii) any federal, state or local government entity.
"REIT" shall mean a real estate investment trust under Section
856 of the Code.
"Restriction Termination Date" shall mean the first day after
the effective date of the DeBartolo Merger on which the Corporation's
status as a REIT shall have been terminated by the Board of Directors
and the stockholders of the Corporation.
"Simon Family Group" shall mean Melvin Simon, Herbert Simon
and David Simon, other members of the immediate family of any of the
foregoing, any other lineal descendants of any of the foregoing, any
estates of any of the foregoing, any trust established for the benefit
of any of the foregoing, and any other entity controlled by any of the
foregoing.
"Simon Family Group Initial Aggregate Assumed Equity Interest
in the Corporation" shall mean the portion of the Aggregate Assumed
Equity Interest in the Corporation owned by the Simon Family Group
immediately following the closing of the DeBartolo Merger.
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"Trading Day" shall mean, with respect to any class of Capital
Stock, a day on which the principal national securities exchange on
which such class of Capital Stock is listed or admitted to trading is
open for the transaction of business or, if such class of Capital Stock
is not listed or admitted to trading on any national securities
exchange, shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Transfer" shall mean any sale, transfer, gift, hypothecation,
pledge, assignment, devise or other disposition of Capital Stock
(including (i) the granting of any option (including an option to
acquire an Option or any series of such options) 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 into or exchangeable for Capital
Stock), whether voluntary or involuntary, whether of record,
constructively or beneficially and whether by operation of law or
otherwise.
"Trust" shall mean the trust created pursuant to subparagraph
(b)(1) of this Article NINTH.
"Trustee" shall mean any trustee for the Trust (or any
successor trustee) appointed from time to time by the Corporation;
provided, however, during any period in which Excess Stock is issued
and outstanding the Corporation shall undertake to appoint trustees of
the Trust which trustees are unaffiliated with the Corporation.
"Undesignated Excess Stock" shall have the meaning set forth
in subparagraph (b)(3) of this Article NINTH.
"Units" shall mean units representing limited partnership
interests in Simon Property Group, L.P.
(2)(A) Except as provided in subparagraph (a)(9) of this
Article NINTH, from the effective date of the DeBartolo Merger and
prior to the Restriction Termination Date, no Person shall Beneficially
Own or Constructively Own shares of the outstanding Capital Stock in
excess of the Ownership Limit.
(B) Except as provided in subparagraph (a)(9) of this
Article NINTH, from the effective date of the DeBartolo Merger and
prior to the Restriction Termination Date, any Transfer that, if
effective, would result in any Person Beneficially Owning or
Constructively Owning Capital Stock in excess of the Ownership Limit
shall be void ab initio as to the Transfer of that number of shares of
Capital Stock which would be otherwise Beneficially or Constructively
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Owned by such Person in excess of the Ownership Limit; and the intended
transferee shall acquire no rights in such shares of Common Stock or
Preferred Stock in excess of the Ownership Limit.
(C) Except as provided in subparagraph (a)(9) of this Article
NINTH, from the effective date of the DeBartolo Merger and prior to the
Restriction Termination Date, 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; and the intended transferee shall acquire no
rights in such shares of Common Stock or Preferred Stock.
(D) Except as provided in subparagraph (a)(9) of this Article
NINTH, from the effective date of the DeBartolo Merger and prior to the
Restriction Termination Date, any Transfer of shares or other event or
transaction involving Capital Stock 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 that
number of shares or other event or transaction of 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 of Common Stock or Preferred Stock in excess
of the Ownership Limit.
(3) (A) If, notwithstanding the other provisions contained in
this Article NINTH, at any time after the effective date of the
DeBartolo Merger and prior to the Restriction Termination Date, there
is a purported Transfer or other event such that any Person would
Beneficially Own or Constructively Own Capital Stock in excess of the
Ownership Limit, then, except as otherwise provided in subparagraph
(a)(9), each such share of Common Stock or Preferred Stock which, when
taken together with all other Capital Stock, would be in excess of the
Ownership Limit (rounded up to the nearest whole share), shall
automatically be converted into one share of Excess Stock, as further
described in subparagraph (a)(3)(C) below and such shares of Excess
Stock shall be automatically transferred to the Trustee as trustee for
the Trust. The Corporation shall issue fractional shares of Excess
Stock if required by such conversion ratio. Such conversion shall be
effective as of the close of business on the business day prior to the
date of the Transfer or other event.
(B) If, notwithstanding the other provisions contained in this
Article NINTH, at any time after the effective date of the DeBartolo
Merger and prior to the Restriction Termination Date, there is a
purported Transfer
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or other event which, if effective, would cause the Corporation to
become "closely held" within the meaning of Section 856(h) of the Code,
then each share of Common Stock or Preferred Stock being Transferred or
which are otherwise affected by such event and which, in either case,
would cause, when taken together with all other Capital Stock, the
Corporation to be "closely held" within the meaning of Section 856(h)
of the Code (rounded up to the nearest whole share) shall automatically
be converted into one share of Excess Stock, as further described in
subparagraph (a)(3)(C) of this Article NINTH, and such shares of Excess
Stock shall be automatically transferred to Trustee as trustee for the
Trust. The Corporation shall issue fractional shares of Excess Stock if
required by such conversion ratio. Such conversion shall be effective
as of the close of business on the business day prior to the date of
the Transfer or other event.
(C) Upon conversion of Common Stock or Preferred Stock into
Excess Stock pursuant to this subparagraph (a)(3) of this Article
NINTH, Common Stock shall be converted into Excess Common Stock and
Preferred Stock shall be converted into Excess Preferred Stock.
(4) If the Board of Directors or its designees shall at any
time determine in good faith that a Transfer or other event has taken
place in violation of subparagraph (a)(2) of this Article NINTH or that
a Person intends to acquire or has attempted to acquire Beneficial
Ownership or Constructive Ownership of any shares of Capital Stock in
violation of subparagraph (a)(2) of this Article NINTH, the Board of
Directors or its designees may take such action as it or they deem
advisable to refuse to give effect to or to prevent such Transfer or
other event, including, but not limited to, refusing to give effect to
such Transfer or other event on the books of the Corporation or
instituting proceedings to enjoin such Transfer or other event or
transaction; provided, however, that any Transfers or attempted
Transfers (or, in the case of events other than a Transfer, Beneficial
ownership or Constructive Ownership) in violation of subparagraphs
(a)(2)(A), (B), (C) and (D) of this Article NINTH shall be void ab
initio and any Transfers or attempted Transfers (or, in the case of
events other than a Transfer, Beneficial Ownership or Constructive
ownership) in violation of subparagraphs (a)(2)(A), (B), and (D) shall
automatically result in the conversion described in subparagraph
(a)(3), irrespective of any action (or non-action) by the Board of
Directors or its designees.
(5) Any Person who acquires or attempts to acquire shares of
Capital Stock in violation of subparagraph (a)(2) of this Article
NINTH, or any Person who is a transferee such that Excess Stock results
under subparagraph (a)(3) of
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this Article NINTH, 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 in order to determine
the effect, if any, of such Transfer or attempted Transfer or other
event on the Corporation's status as a REIT.
(6) From the effective date of the DeBartolo Merger and prior
to the Restriction Termination Date:
(A) Every Beneficial Owner or Constructive Owner of
more than 5%, or such lower percentages as required pursuant to
regulations under the Code, of the outstanding Capital Stock of the
Corporation shall, before January 30 of each year, give written notice
to the Corporation stating the name and address of such Beneficial
Owner or Constructive Owner, the general ownership structure of such
Beneficial Owner or Constructive Owner, the number of shares of each
class of Capital Stock Beneficially Owned or Constructively Owned, and
a description of how such shares are held.
(B) Each Person who is a Beneficial Owner or
Constructive Owner of Capital Stock and each Person (including the
stockholder of record) who is holding Capital Stock for a Beneficial
Owner or Constructive Owner shall provide on demand to the Corporation
such information as the Corporation may request from time to time in
order to determine the Corporation's status as a REIT and to ensure
compliance with the Ownership Limit.
(7) Subject to subparagraph (a)(12) of this Article NINTH,
nothing contained in this Article NINTH shall limit the authority of
the Board of Directors to take such other action as it deems necessary
or advisable to protect the Corporation and the interests of its
stockholders by preservation of the Corporation's status as REIT and to
ensure compliance with the Ownership Limit.
(8) In the case of an ambiguity in the application of any of
the provisions of subparagraph (a) of this Article NINTH, including any
definition contained in subparagraph (a)(1), the Board of Directors
shall have the power to determine the application of the provisions of
this subparagraph (a) with respect to any situation based on the facts
known to it.
(9) The Board of Directors upon receipt of a ruling from the
Internal Revenue Service or an opinion of tax counsel in each case to
the effect that the restrictions contained in subparagraphs (a)(2)(A),
(B), (C) and (D) of
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29
this Article NINTH will not be violated, may exempt a Person from the
Ownership Limit:
(A) (i) if such Person is not an individual for
purposes of Section 542(a)(2) of the Code, or (ii) if such Person is an
underwriter which participates in a public offering of Common Stock or
Preferred Stock for a period of 90 days following the purchase by such
underwriter of the Common Stock or Preferred Stock, or (iii) in such
other circumstances which the Board of Directors determines are
appropriately excepted from the Ownership Limit, and
(B) the Board of Directors obtains such
representations and undertakings from such Person as are reasonably
necessary to ascertain that no individual's Beneficial Ownership and
Constructive Ownership of Capital Stock will violate the Ownership
Limit and agrees that any violation or attempted violation will result
in such Common Stock or Preferred Stock being converted into shares of
Excess Stock in accordance with subparagraph (a)(3) of this Article
NINTH.
(10) From September 24, 1998 and until the Restriction
Termination Date, each certificate for the respective class of Capital
Stock shall bear the following legend:
The securities represented by this certificate are
subject to restrictions on transfer for the purpose
of the Corporation's maintenance of its status as a
real estate investment trust under the Internal
Revenue Code of 1986, as amended from time to time
(the "Code"). Transfers in contravention of such
restrictions shall be void ab initio. Except as
otherwise determined by the Board of Directors of the
Corporation, no Person may (1) Beneficially Own or
Constructively Own shares of Capital Stock in excess
of 8.0% (other than members of the Simon Family
Group, whose relevant percentage is 18.0%) of the
value of any class of outstanding Capital Stock of
the Corporation, or any combination thereof,
determined as provided in the Corporation's Restated
Certificate of Incorporation, as the same may be
amended from time to time (the "Charter"), and
computed with regard to all outstanding shares of
Capital Stock and, to the extent provided by the
Code, all shares of Capital Stock issuable under
existing Options and Exchange Rights that have not
been exercised; or (2) Beneficially Own Capital Stock
which
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would result in the Corporation being "closely held"
under Section 856(h) of the Code. Unless so excepted,
any acquisition of Capital Stock and continued
holding of ownership constitutes a continuous
representation of compliance with the above
limitations, and any Person who attempts to
Beneficially Own or Constructively Own shares of
Capital Stock in excess of the above limitations has
an affirmative obligation to notify the Corporation
immediately upon such attempt. If the restrictions on
transfer are violated, the transfer will be void ab
initio and the shares of Capital Stock represented
hereby will be automatically converted into shares of
Excess Stock and will be transferred to the Trustee
to be held in trust for the benefit of one or more
Qualified Charitable Organizations, whereupon such
Person shall forfeit all rights and interests in such
Excess Stock. In addition, certain Beneficial Owners
or Constructive Owners must give written notice as to
certain information on demand and on an annual basis.
All capitalized terms in this legend have the
meanings defined in the Charter. The Corporation will
mail without charge to any requesting stockholder a
copy of the Charter, including the express terms of
each class and series of the authorized capital stock
of the Corporation, within five days after receipt of
a written request therefor.
(11) If any provision of this Article NINTH 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.
(12) Nothing in this Article NINTH shall preclude the
settlement of any transaction entered into through the facilities of
the New York Stock Exchange.
(A)(1) Upon any purported Transfer or other event that results
in Excess Stock pursuant to subparagraph (a)(3) of this Article NINTH,
such Excess Stock shall be deemed to have been transferred to the
Trustee as trustee of the Trust for the exclusive benefit of one or
more Qualifying Charitable Organizations as are designated from time to
time by the Board of Directors with respect to such Excess Stock.
Shares of Excess Stock held in trust shall be issued and
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outstanding stock of the Corporation. The Purported Record Transferee
or Purported Record Holder and the Purported Beneficial Transferee or
Purported Beneficial Holder shall have no rights in such Excess Stock,
except such rights to certain proceeds upon Transfer of shares of
Excess Stock or upon any voluntary or involuntary liquidation,
dissolution or winding up of, or any distribution of the assets of, the
Corporation as are expressly set forth herein.
(2) Excess Common Stock shall be entitled to dividends in an
amount equal to any dividends which are declared and paid with respect
to shares of Common Stock from which such shares of Excess Common Stock
were converted. Excess Preferred Stock shall be entitled to dividends
in an amount equal to any dividends which are declared and paid with
respect to shares of Preferred Stock from which such shares of Excess
Preferred Stock were converted. Any dividend or distribution paid prior
to discovery by the Corporation that shares of Common Stock or
Preferred Stock have been converted into Excess Common Stock or Excess
Preferred Stock, as the case may be, shall be repaid to the Corporation
upon demand for delivery to the Trustee. The recipient of such dividend
shall be personally liable to the Trust for such dividend. Any dividend
or distribution declared but unpaid shall be rescinded as void ab
initio with respect to such shares of Common Stock or Preferred Stock
and shall automatically be deemed to have been declared and paid with
respect to the shares of Excess Common Stock or Excess Preferred Stock,
as the case may be, into which such shares of Common Stock or Preferred
Stock shall have been converted.
(3) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of, or any distribution of the assets of, the
Corporation, (i) subject to the preferential rights of the Preferred
Stock, if any, as may be determined by the Board of Directors and the
preferential rights of the Excess Preferred Stock, if any, each holder
of shares of Excess Common Stock shall be entitled to receive, ratably
with each other holder of Common Stock and Excess Common Stock that
portion of the assets of the Corporation available for distribution to
the holders of Common Stock or Excess Common Stock as the number of
shares of the Excess Common Stock held by such holder bears to the
total number of shares of Common Stock and the number of shares of
Excess Common Stock then outstanding and (ii) each holder of shares of
Excess Preferred Stock shall be entitled to receive that portion of the
assets of the Corporation which a holder of the shares of Preferred
Stock that were converted into such shares of Excess Preferred Stock
would have been entitled to receive had such shares of Preferred Stock
remained outstanding. Notwithstanding the foregoing, distributions
shall not be made to holders of
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Excess Stock except in accordance with the following sentence. The
Corporation shall distribute to the Trustee, as holder of the Excess
Stock in trust, on behalf of the Beneficiaries any such assets received
in respect of the Excess Stock in any liquidation, dissolution or
winding up of, or any distribution of the assets of the Corporation.
Following any such distribution, the Trustee shall distribute such
proceeds between the Purported Record Transferee or Purported Record
Holder, as appropriate, and the Qualified Charitable organizations
which are Beneficiaries in accordance with procedure for distribution
of proceeds upon Transfer of Excess Stock set forth in subparagraph
(b)(5) of this Article NINTH; provided, however, that with respect to
any Excess Stock as to which no Beneficiary shall have been determined
within 10 days following the date upon which the Corporation is
prepared to distribute assets ("Undesignated Excess Stock"), any assets
that would have been distributed on account of such Undesignated Excess
Stock had a Beneficiary been determined shall be distributed to the
holders of Common Stock and the Beneficiaries of the Trust designated
with respect to shares of Excess Common Stock, or to the holders of
Preferred Stock and the Beneficiaries of the Trust designated with
respect to shares of Excess Preferred Stock as determined in the sole
discretion of the Board of Directors.
(4) Excess Common Stock shall be entitled to such voting
rights as are ascribed to shares of Common Stock from which such shares
of Excess Common Stock were converted. Excess Preferred Stock shall be
entitled to such voting rights as are ascribed to shares of Preferred
Stock from which such shares of Excess Preferred Stock were converted.
Any voting rights exercised prior to discovery by the Corporation that
shares of Common Stock or Preferred Stock have been converted into
Excess Common Stock or Excess Preferred Stock, as the case may be,
shall be rescinded and recast as determined by the Trustee.
(5) (A) Following the expiration of the ninety day period
referred to in subparagraph (b)(6) of this Article NINTH, Excess Stock
shall be transferable by the Trustee to any Person whose Beneficial
Ownership or Constructive Ownership of shares of Capital Stock
outstanding, after giving effect to such Transfer, would not result in
the shares of Excess Stock proposed to be transferred constituting
Excess Stock in the hands of the proposed transferee. A Purported
Record Transferee or, in the case of Excess Stock resulting from any
event other than a purported Transfer, the Purported Record Holder
shall have no rights whatsoever in such Excess Stock, except that such
Purported Record Transferee or, in the case of Excess Stock resulting
from any event other than a purported Transfer, the Purported Record
Holder, upon completion of such
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Transfer, shall be entitled to receive the lesser of a price per share
for such Excess Stock not in excess (based on the information provided
to the Corporation in the notice given pursuant to this subparagraph
(b)(5)(A)) of (x) the price per share such Purported Beneficial
Transferee paid for the Common Stock or Preferred Stock in the
purported Transfer that resulted in the Excess Stock, or (y) if the
Purported Beneficial Transferee did not give value for such shares of
Excess Stock (through a gift, devise or other transaction), a price per
share of Excess Stock equal to the Market Price of the Common Stock or
Preferred Stock on the date of the purported Transfer that resulted in
the Excess Stock. Upon such transfer of any interest in Excess Stock
held by the Trust, the corresponding shares of Excess Stock in the
Trust shall be automatically converted into such number of shares of
Common Stock or Preferred Stock (of the same class as the shares that
were converted into such Excess Stock) as is equal to the number of
shares of Excess Stock, and such shares of Common Stock or Preferred
Stock (of the same class as the shares that were converted into such
Excess Stock) as is equal to the number of shares of Excess Stock, and
such shares of Common Stock or Preferred Stock shall be transferred of
record to the proposed transferee of the Excess Stock. If,
notwithstanding the provisions of this Article NINTH, under any
circumstances, a Purported Transferee receives an amount for shares of
Excess Stock that exceeds the amount provided by the formula set forth
above, the Purported Transferee must pay the excess to the Trust. Prior
to any transfer resulting in Common Stock or Preferred Stock being
converted into Excess Stock, the Purported Record Transferee and
Purported Beneficial Transferee, jointly, or Purported Record Holder
and Purported Beneficial Holder, jointly, must give written notice to
the Corporation of the date and sale price of the purported Transfer
that resulted in Excess Stock or the Market Price on the date of the
other event that resulted in Excess Stock. Prior to a Transfer by the
Trustee of any shares of Excess Stock, the intended transferee must
give advance notice to the Corporation of the information (after giving
effect to the intended Transfer) required under subparagraph (a)(6),
and the Corporation must have waived in writing its purchase rights, if
any, under subparagraph (b)(6) of this Article NINTH. The Board of
Directors may waive the notice requirements of this subparagraph in
such circumstances as it deems appropriate.
(B) Notwithstanding the foregoing, if the provisions
of paragraph (b)(5) of this Article NINTH are determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation,
then the Purported Beneficial Transferee or Purported Beneficial Holder
of any shares of Excess Stock may be deemed, at the option of the
Corporation, to have acted as an agent on behalf of the
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Trust, in acquiring or holding such shares of Excess Stock and to hold
such shares of Excess Stock in trust on behalf of the Trust.
(6) Shares of Excess Stock shall be deemed to have been
offered for sale by the Trust to the Corporation, or its designee, at a
price per share of Excess Stock equal to the lesser of:
(A) (i) in the case of Excess Stock resulting from a purported
Transfer, (x) the price per share of the Common Stock or Preferred
Stock in the transaction that created such Excess Stock (or, in the
case of devise or gift, the Market Price of the Common Stock or
Preferred Stock at the time of such devise or gift), or (y) in the
absence of a notice from the Purported Record Transferee or Purported
Record Holder and Purported Beneficial Transferee to the Corporation
within ten days after request therefor, such price as may be determined
by the Board of Directors in its sole discretion, which price per share
of Excess Stock shall be equal to the lowest Market Price of Common
Stock or Preferred Stock (whichever resulted in Excess Stock) at any
time prior to the date the Corporation, or its designee, accepts such
offer; or
(ii) in the case of Excess Stock resulting from an event other
than a Purported Transfer, (x) the Market Price of the Common Stock or
Preferred Stock on the date of such event, or (y) in the absence of a
notice from the Purported Record Holder and Purported Beneficial Holder
to the Corporation within ten days after request therefor, such price
as may be determined, by the Board of Directors in its sole discretion,
which price shall be the lowest Market Price for shares of Common Stock
or Preferred Stock (whichever resulted in Excess Stock) at any time
from the date of the event resulting in Excess Stock and prior to the
date the Corporation, or its designee, accepts such offer, and
(B) the Market Price of the Common Stock or Preferred Stock on
the date the Corporation, or its designee, accepts such offer. The
Corporation shall have the right to accept such offer for a period of
ninety days after the later of (i) the date of the Transfer which
resulted in such shares of Excess Stock and (ii) the date the Board of
Directors determines in good faith that a Transfer or other event
resulting in shares of Excess Stock has occurred, if the Corporation
does not receive a notice of such Transfer or other event pursuant to
subparagraph (a)(5) of this Article NINTH.
TENTH: Whenever the Corporation shall have the obligation to
purchase Units and shall have the right to choose
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35
to satisfy such obligation by purchasing such Units either with cash or with
Common Stock, the determination whether to utilize cash or Common Stock to
effect such purchase shall be made by majority vote of the Independent
Directors, pursuant to Section 141(a) of the General Corporation Law of the
State of Delaware.
ELEVENTH: In the event any term, provision, sentence or
paragraph of the Charter of the Corporation is declared by a court of competent
jurisdiction to be invalid or unenforceable, such term, provision, sentence or
paragraph shall be deemed severed from the remainder of the Charter, and the
balance of the Charter shall remain in effect and be enforced to the fullest
extent permitted by law and shall be construed to preserve the intent and
purposes of the Charter. Any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such term, provision,
sentence or paragraph of the Charter in any other jurisdiction.
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IN WITNESS WHEREOF, I have made and signed this Certificate this 24th day of
September, 1998 and affirm the statements contained herein as true under
penalties of perjury.
/s/ Hans C. Mautner
------------------------------
Name: Hans C. Mautner
Title: Chief Executive Officer
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37
Exhibit A
6.50% Series A Convertible Preferred Stock
------------------------------------------
The authorized number of shares of the series of preferred stock
created by this Exhibit and the voting powers, preferences and relative,
participating optional or other special rights and qualifications, and the
limitations or restrictions thereof, of such series shall be as set forth in
this Exhibit herein. For purposes of this exhibit:
"Corporation" shall mean Simon Property Group, Inc., a Delaware
corporation, and, with reference to periods prior to the reorganization of the
Corporation as a Delaware corporation, the Trust (as defined below);
"Trust" shall mean Corporate Property Investors, a Massachusetts
business trust and the predecessor to the Corporation; and
"Convertible Preference Shares" shall mean the preference shares of
beneficial interest in the Trust which have been converted into shares of Series
A Convertible Preferred Stock (as defined below).
SECTION 1. Designation and Number. The designation of the series of
Preferred Stock of the Corporation created by this Exhibit shall be "6.50%
Series A Convertible Preferred Stock" (the "Series A Convertible Preferred
Stock"). The authorized number of shares of Series A Convertible Preferred Stock
shall be 209,249, with par value $.0001 per share.
SECTION 2. Dividends. (a) The holders of shares of Series A
Convertible Preferred Stock, in preference to the holders of Common Stock, par
value $.0001 per share, of the Corporation (the "Common Stock"), any other
series of Preferred Stock ranking junior to the Series A Convertible Preferred
Stock either as to dividends or upon liquidation, dissolution or winding-up
("Junior Preferred Stock") or any other class or series of stock of the
Corporation ranking junior to the Series A Convertible Preferred Stock either as
to dividends or upon liquidation, dissolution or winding-up ("Other Junior
Stock"), shall be entitled to receive, when, as and if declared by the Board of
Directors, in their sole discretion, out of assets of the Corporation legally
available for payment of dividends, an annual cash dividend of the Per Share
Dividend Amount (as defined below), payable in equal semiannual installments on
March 31 and September 30, commencing on March 31, 1998 (each such date, a
"Semiannual Payment Date"); provided that if any Semiannual Payment Date is not
a business day (as defined in Section 4(b)), then such semiannual installment
shall be payable on the next
38
business day. The "Per Share Dividend Amount" shall be equal to the product of
(x) the Liquidation Preference (as defined below) and (y) the Basic Rate (as
defined below) and (z) the sum of 1.00 and a fraction, the numerator of which
shall be the Basic Rate and the denominator of which shall be 8.00. The "Basic
Rate" shall be .065. Dividends shall be payable to holders of record as they
appear on the stock register of the Corporation (or, with respect to the first
dividend payable hereon, if applicable, the Trust) on such record dates, not
more than 30 calendar days nor less than five calendar days preceding the
payment dates thereof, as shall be fixed by the Board of Directors. A dividend
shall not be payable, but shall accumulate (even if undeclared), to the extent
that it would exceed the Corporation's cash flow from operations, as determined
in good faith by the Board of Directors, for the six-month period ending
immediately before the Semiannual Payment Date.
(b) Dividends on shares of Series A Convertible Preferred Stock
shall be cumulative (even if undeclared). Such dividends on shares of Series A
Convertible Preferred Stock shall accumulate from the first date of issuance of
any such shares. Dividends on shares of Series A Convertible Preferred Stock
shall cease to accumulate on such shares on the date of their earlier conversion
or redemption.
(c) When holders of shares of Series A Convertible Preferred Stock
are entitled to receive dividends pursuant to the first sentence of this Section
and such dividends and dividends on any other series of Preferred Stock ranking
on a parity both as to dividends and upon liquidation, dissolution or winding-up
with the Series A Convertible Preferred Stock (the Series A Convertible
Preferred Stock and such other Preferred Stock being called "Parity Preferred
Stock") are not paid in full, all dividends declared on Parity Preferred Stock
shall be declared pro rata so that the amount of dividends declared per share on
shares of Series A Convertible Preferred Stock and on such other Parity
Preferred Stock bear to each other the same ratio that unpaid dividends per
share on shares of Series A Convertible Preferred Stock and such other Parity
Preferred Stock bear to each other. Except as set forth in the preceding
sentence with respect to Parity Preferred Stock, unless the full amount of
cumulative dividends on shares of Series A Convertible Preferred Stock have been
paid, no dividends may be paid or declared and set aside for payment or other
distribution ordered or made on the Common Stock or on any other series of
Preferred Stock or other class or series of stock of the Corporation ranking
junior to or on a parity with the Series A Convertible Preferred Stock either as
to dividends or upon liquidation, dissolution or winding-up, nor may any Common
Stock or any other series of Preferred Stock or other class or series of stock
of the Corporation ranking junior to or on a parity with the Series A
Convertible Preferred Stock either as to dividends or upon liquidation,
dissolution or winding-up be redeemed, repurchased or otherwise acquired for any
consideration (or any payment made
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to or available for a sinking fund or defeasance Corporation for any such
redemption, repurchase or acquisition) by the Corporation or any subsidiary
thereof.
(d) The Corporation shall not repurchase any shares of Series A
Convertible Preferred Stock from any holder thereof prior to the initial
Permissible Conversion Date (as defined below) unless the holders of more than
50% of the outstanding shares of Series A Convertible Preferred Stock shall have
given their written consent thereto.
SECTION 3. Liquidation. The Series A Convertible Preferred Stock
shall rank prior to the Common Stock, Junior Preferred Stock and any Other
Junior Stock, so that in the event of any liquidation, dissolution or winding-up
of the Corporation (a "Liquidation Transaction"), whether voluntary or
involuntary, the holders of shares of Series A Convertible Preferred Stock shall
be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of Common Stock, Junior Preferred
Stock or Other Junior Stock, an amount equal to $1,000.00 per share (the
"Liquidation Preference" of a share of Series A Convertible Preferred Stock)
plus an amount equal to the full amount of accumulated and unpaid dividends
thereon on the date of final distribution, prorating the dividend accumulated
during the period commencing on the Semiannual Payment Date immediately
preceding the date of final distribution and ending on such final distribution
date (calculated on the basis of a 360-day year of twelve 30-day months). If,
upon any Liquidation Transaction, the assets of the Corporation, or proceeds
thereof, distributable among the holders of Parity Preferred Stock shall be
insufficient to permit the payment in full to such holders of the amounts
payable to such holders upon a Liquidation Transaction pursuant to the
provisions of the Restated Certificate of Incorporation of the Corporation, then
such assets or proceeds shall be distributed among such holders ratably in
proportion to the amounts that would be payable on such shares if all amounts
payable thereon were paid in full. After payment in full of the Liquidation
Preference and accumulated and unpaid dividends to which they are entitled, the
holders of shares of Series A Convertible Preferred Stock shall not be entitled
to any further participation in any distribution of the assets of the
Corporation. For purposes hereof, neither the voluntary sale, conveyance,
exchange or transfer (for cash, shares, securities or other consideration) of
all or substantially all the property or assets of the Corporation nor a
consolidation or merger of the Corporation with one or more other persons shall
be deemed to be a Liquidation Transaction, voluntary or involuntary.
The holder of any share of Series A Convertible Preferred Stock
shall not be entitled to receive any payment owed for such shares of Series A
Convertible Preferred Stock under this Section 3 until such holder shall (a)
cause to be delivered
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to the Corporation the certificate(s) representing such shares of Series A
Convertible Preferred Stock and (b) transfer instrument(s) satisfactory to the
Corporation and sufficient to transfer such shares of Series A Convertible
Preferred Stock to the Corporation free of any adverse interest. As in the case
of the Redemption Price referred to in Section 6, no interest shall accrue on
any payment upon liquidation after the date thereof.
SECTION 4. Conversion. (a) General. On the terms and subject to the
conditions of this Section 4, at any time after the earlier of (i) the later of
(A) the last day of the first calendar year in which the aggregate dividends and
distributions that would have been payable to the holder of a single share of
Series A Convertible Preferred Stock or Convertible Preference Share that had
converted such share pursuant to this Section 4 (or the comparable provision for
the Convertible Preference Shares) on the last day of the preceding calendar
year and thereafter held the Conversion Stock (as defined below) received in the
conversion of such single share of Series A Convertible Preferred Stock or
Convertible Preference Share exceeds $65 and (B) August 31, 2000, and (ii) the
first date as of which written conversion notices pursuant to Section 4(b) shall
have been delivered with respect to more than 50% of the outstanding shares of
Series A Convertible Preferred Stock (any conversion date occurring after such
earlier date is hereinafter called a "Permissible Conversion Date"), the holder
of a share of Series A Convertible Preferred Stock shall have the right, at such
holder's option, to convert such shares of Series A Convertible Preferred Stock,
unless previously redeemed, into that number of voting shares of Common Stock
(calculated as to each conversion to the nearest 1/1000th of a share) obtained
by dividing $1,000.00 by the lesser of the Conversion Price (as defined in
Section 4(d)) and the Alternative Conversion Price (as defined below) (shares of
the Common Stock issuable upon the aforesaid conversion, together with shares of
any Common Stock issuable pursuant to clause (iii) of the third sentence of
Section 4(b), being called "Conversion Stock"). The right of conversion of
shares of Series A Convertible Preferred Stock called for redemption by the
Corporation shall terminate immediately prior to the close of business on the
Redemption Date (as defined in Section 6) with respect to such shares of Series
A Convertible Preferred Stock. The "Alternative Conversion Price" shall be the
amount that would be the Conversion Price if the Conversion Price had been
determined without giving effect to any adjustment pursuant to paragraphs (iii)
or (iv) of Section 4(d).
(b) Conversion Procedures. In order to exercise the conversion
privilege, the holder of any share of Series A Convertible Preferred Stock to be
converted (i) at least fifteen business days prior to any Permissible Conversion
Date (or five business days, if another holder of shares of Series A Convertible
Preferred Stock shall have delivered a conversion notice with respect to such
Permissible Conversion Date), shall deliver to the principal office of the
Corporation a written
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41
notice (a) stating that such holder elects to convert all or a specified whole
number of such shares pursuant to this Section 4 and (b) specifying the name or
names in which such holder wishes the certificate or certificates for Conversion
Stock to be issued, (ii) on or prior to the applicable Permissible Conversion
Date, shall surrender the certificate representing the shares of Series A
Convertible Preferred Stock to be converted at the principal office of the
Corporation and (iii) on or prior to the applicable Permissible Conversion Date,
execute and deliver to the Corporation at the principal office of the
Corporation a dividend proration agreement in the form of Exhibit A attached
hereto. Unless the shares of Conversion Stock are to be issued in the same name
as the name in which such shares of Series A Convertible Preferred Stock are
registered, the certificate representing the shares surrendered for conversion
shall be accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or its duly authorized attorney. As
promptly as practicable after such surrender of a certificate for shares of
Series A Convertible Preferred Stock, but in no event before the applicable
Permissible Conversion Date or after the fifth business day following such
Permissible Conversion Date, the Corporation shall issue and deliver at such
office to such holder, or on such holder's written order, (i) a certificate or
certificates for the applicable number of full shares of Common Stock determined
to be issuable pursuant to Section 4(a), (ii) if less than the full number of
shares of Series A Convertible Preferred Stock evidenced by the surrendered
certificate is being converted, a new certificate, of like tenor, for the number
of shares of Series A Convertible Preferred Stock evidenced by such surrendered
certificate less the number of shares being converted and (iii) to the extent
that the Board of Directors determine in good faith that the amount in the
numerator of the fraction referred to below does not exceed the Corporation's
cash flow from operations from the last Semiannual Payment Date with respect to
the Convertible Preference Shares or Series A Convertible Preferred Stock, a
certificate or certificates for a number of shares of Common Stock equal to a
fraction, the numerator of which shall be an amount equal to a pro rata portion
of the semiannual dividend next payable on shares of Series A Convertible
Preferred Stock being converted by such holder, such proration to be made from
the date of the last Semiannual Payment Date with respect to the Convertible
Preference Shares or Series A Convertible Preferred Stock to the date of
conversion of such shares of Series A Convertible Preferred Stock and computed
on the basis of a 360-day year of twelve 30-day months, and the denominator of
which shall be the current market price of a share of Common Stock (as defined
in Section 4(h)). Except as provided in clause (iii) above and the dividend
proration agreement referred to above, no payment or adjustment shall be made on
conversion for accumulated and unpaid dividends on shares of Series A
Convertible Preferred Stock surrendered for conversion or for dividends on
Conversion Stock. A "business day" is a day
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42
other than a Saturday, Sunday or other day on which banks in the State of New
York are authorized to be closed.
Each conversion shall be deemed to have been effected as of the
close of business on the applicable Permissible Conversion Date, and the person
or persons in whose name or names any certificate or certificates for Conversion
Stock are issuable shall be deemed to have become the holder or holders of
record of such Conversion Stock at such time on such Permissible Conversion Date
and such conversion shall be at the Conversion Price (or current market price,
as applicable) in effect at such time on such Permissible Conversion Date,
unless the share transfer books of the Corporation are closed on such
Permissible Conversion Date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of business
on the next day on which such share transfer books are open, but such conversion
shall be at the Conversion Price in effect on the applicable Permissible
Conversion Date. Upon delivery, all Conversion Stock shall be duly authorized,
validly issued, fully paid, nonassessable, free of all liens and charges and not
subject to any preemptive or subscription rights.
(c) Warrants Issued for Fractional Conversion Stock. No fractional
Conversion Stock or scrip representing fractions of Conversion Stock shall be
issued upon conversion of shares of Series A Convertible Preferred Stock. If a
fractional share of Conversion Stock is otherwise deliverable to a converting
holder upon a conversion of shares of Series A Convertible Preferred Stock being
converted by such holder, the Corporation shall in lieu thereof issue to the
person entitled thereto a warrant in certified form which shall entitle the
holder to receive a full share of Common Stock upon the surrender of warrants
aggregating a full share of Common Stock. Any such warrant shall become void if
not exchanged for certificates representing full shares of Common Stock before
the first anniversary of the conversion of the shares of Series A Preferred
Stock giving rise to the issuance of such warrant. No warrant issued in lieu of
a fractional share of Conversion Stock shall entitle the holder thereof to
exercise voting rights with respect thereto, receive dividends thereon or to
participate in any assets of the Corporation in the event of liquidation.
(d) Conversion Price. "Conversion Price" shall mean $26.319, as
adjusted pursuant to this Section 4(d). The Conversion Price (and the kind and
amount of consideration receivable by holders of shares of Series A Convertible
Preferred Stock upon conversion) shall be adjusted from time to time as follows:
(i) If the Corporation (A) pays a dividend or makes a
distribution to all or substantially all holders of Common Stock on the
Common Stock in shares of Common Stock or (B) subdivides, combines or
reclassifies its outstanding shares of Common Stock into a greater or
smaller number of
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shares, the Conversion Price in effect immediately prior to such action
shall be adjusted so that the holder of any shares of Series A Convertible
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock that it would have owned or
been entitled to receive immediately following such action had such stock
been converted immediately prior to such action or the record date
therefor, whichever is earlier. Such adjustment shall become effective
immediately after the record date, in the case of a dividend or
distribution, or immediately after the effective date, in the case of a
subdivision, combination or reclassification.
(ii) In case the Corporation shall issue rights or warrants to
all or substantially all holders of Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities
convertible into shares of Common Stock) at a price per share of Common
Stock (or having a conversion price per share of Common Stock) less than
the current market price (as defined in Section 4(h)) of a share of Common
Stock on the record date mentioned below, the Conversion Price in effect
immediately prior thereto shall be adjusted so that it shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior thereto by a fraction, of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights
or warrants (immediately prior to such issuance) plus the number of shares
of Common Stock which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of
the convertible securities so offered) would purchase at such current
market price per share of Common Stock and the denominator of which shall
be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants (immediately prior to such issuance)
plus the total number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible securities so
offered are convertible). Such adjustment shall be made successively
whenever any rights or warrants are issued and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants; provided, however, that in
the event that all shares of the Common Stock offered for subscription or
purchase are not delivered (or securities convertible into shares of
Common Stock are not delivered) upon the exercise of such rights or
warrants, upon the expiration of such rights or warrants the Conversion
Price shall be readjusted to the Conversion Price which would have been in
effect had the numerator and the denominator of the foregoing fraction and
the resulting adjustments made upon the issuance of such rights or
warrants been made based upon the number of shares of Common Stock (or
securities convertible into shares of Common Stock) actually delivered
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44
upon the exercise of such rights or warrants rather than upon the number
of shares of Common Stock offered for subscription or purchase. In
determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than such current
market price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any
consideration received by the Corporation for such rights or warrants, the
value of such consideration, if other than cash, to be determined in good
faith by the Board of Directors (whose determination shall be described in
a Board of Directors' resolution filed with the Transfer Agent).
(iii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of shares of Common Stock, evidences of
indebtedness or other assets (including, without limitation, securities
and cash distributions paid on shares of Common Stock to the extent
exceeding Cash Flow (as defined below) in the period with respect to which
such dividend or distribution is payable, but excluding cash dividends or
distributions to the extent not exceeding Cash Flow in the period with
respect to which such dividends or distributions are payable and dividends
or distributions referred to in paragraph (i) of this Section 4(d)) or
rights or warrants (excluding those referred to in paragraph (ii) of this
Section 4(d)), in each such case the Conversion Price in effect thereafter
shall be determined by multiplying the Conversion Price in effect
immediately prior thereto by a fraction, of which the numerator shall be
the difference between (I) the total number of shares of Common Stock
outstanding multiplied by the current market price per share of Common
Stock on the record date mentioned below and (II) the aggregate fair
market value determined by the Board of Directors, whose determination
shall be described in a Board of Directors' resolution filed with the
Transfer Agent) of such evidences of indebtedness or other assets so
distributed or of such rights or warrants, and the denominator shall be
the total number of shares of Common Stock outstanding multiplied by such
current market price per share of Common Stock. Such adjustment shall be
made whenever any such distribution is made and shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution. "Cash Flow" shall mean cash flow
from operations after payment of dividends on all shares of stock of the
Corporation other than shares of Common Stock, as determined in good faith
by the Board of Directors, whose determination shall be described in a
Board of Directors' resolution filed with the Transfer Agent.
(iv) In case the Corporation shall, by dividend or otherwise,
distribute cash from Cash Flow to all holders of shares of its shares of
Common Stock but, after giving
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45
effect to the distribution, shall retain a portion of such Cash Flow in
the Corporation undistributed, the Conversion Price in effect thereafter
shall be determined by multiplying the Conversion Price in effect
immediately prior thereto by a fraction, of which the numerator shall be
the total number of shares of Common Stock outstanding multiplied by the
current market price per share of Common Stock on the record date
mentioned below, plus the portion of such Cash Flow retained in the
Corporation and the denominator of which shall be the total number of
shares of Common Stock outstanding multiplied by such current market price
per share of Common Stock. Such adjustment shall be made whenever any such
distribution and retention occurs and shall become effective immediately
after the record date for the determination of stockholders entitled to
receive such distribution.
(v) (A) If the Corporation effects any consolidation or merger
to which the Corporation is a party (other than a merger or consolidation
in which the Corporation is the surviving person), any sale or conveyance
to another person of all or substantially all the assets of the
Corporation or any statutory exchange of securities with another person
(including any exchange effected in connection with a merger of a third
person into the Corporation), then in any such event the holder of each
share of Series A Convertible Preferred Stock then outstanding shall have
the right thereafter to convert such share into the kind and amount of
consideration receivable pursuant to such transaction by a holder of the
number of shares of Common Stock into which such shares of Series A
Convertible Preferred Stock might have been converted immediately prior to
such transaction, assuming such holder of shares of Common Stock failed to
exercise its rights of election, if any, as to the kind or amount of
consideration receivable upon such transaction (provided that if the kind
or amount of consideration receivable pursuant to such transaction is not
the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing share"), then, for
purposes of this paragraph (v)(A) the kind and amount of consideration
receivable pursuant to such transaction for each non-electing share shall
be deemed to be the kind and amount so receivable per share by a plurality
of the non-electing shares). Thereafter, the holders of shares of Series A
Convertible Preferred Stock shall be entitled to appropriate adjustments
with respect to their conversion rights to the end that the provisions set
forth in this Section 4 shall correspondingly be made applicable, as
nearly as may reasonably be, to any consideration thereafter deliverable
on conversion of shares of Series A Convertible Preferred Stock.
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(B) As evidence of the kind and amount of consideration
receivable pursuant to such consolidation, merger, statutory exchange,
sale or conveyance, or as to the appropriate adjustments of the Conversion
Price applicable with respect thereto, the Transfer Agent shall be
furnished with and may accept the certificates or opinion of an
independent public accountant of the type referred to in paragraph (vii)
of this Section 4(d) with respect thereto; and, in the absence of bad
faith on the part of the Transfer Agent, the Transfer Agent may
conclusively rely thereon and shall not be responsible or accountable to
any holder of shares of Series A Convertible Preferred Stock for any
provision in conformity therewith or approved by such independent public
accountant. The foregoing provisions of this paragraph (v) shall similarly
apply to successive consolidations, mergers, statutory exchanges, sales or
conveyances.
(vi) No adjustment in the Conversion Price shall be required to
be made unless it would require an increase or decrease of at least .25%
in the Conversion Price, but any adjustments not made because of this
paragraph (vi) shall be carried forward and taken into account in any
subsequent adjustment otherwise required. All calculations under this
Section 4(d) shall be made to the nearest 1/10th of a cent or to the
nearest 1/1000th of a share, as the case may be. All adjustments with
respect to a transaction or event shall apply to subsequent such
transactions and events. Anything in this Section 4(d) to the contrary
notwithstanding, the Board of Directors shall be entitled to make such an
irrevocable reduction in the Conversion Price, in addition to the
adjustments required by this Section 4(d), as in their discretion they
shall determine to be advisable in order to avoid or diminish any income
deemed to be received for Federal income tax purposes by any holder of
shares of Common Stock or shares of Series A Convertible Preferred Stock
resulting from any event or occurrence giving rise to an adjustment
pursuant to this Section 4(d) or from any similar event or occurrence, and
evidence of the Board of Directors' determination of such adjustment shall
be described in a Board of Directors' resolution filed with the Transfer
Agent.
(vii) Whenever the Conversion Price is adjusted pursuant to this
Section 4(d), (A) the Corporation shall promptly file with the Transfer
Agent a certificate of a firm of nationally recognized independent public
accountants setting forth the Conversion Price (and any change in the kind
or amount of consideration to be received by holders of shares of Series A
Convertible Preferred Stock upon conversion) after such adjustment and
setting forth a brief statement of the facts requiring such adjustment and
the manner of computing the same and (B) a notice stating that the
Conversion Price has been adjusted, stating the
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effective date of such adjustment and enclosing such certificate shall
forthwith be mailed by the Corporation to the holders of shares of Series
A Convertible Preferred Stock at their addresses as shown on the share
register books of the Corporation.
(viii) If as a result of any adjustment pursuant to this
Section 4(d), the holder of any shares of Series A Convertible Preferred
Stock surrendered for conversion becomes entitled to receive any
consideration other than shares of Common Stock, (A) the Conversion Price
with respect to such other consideration shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to shares of Common Stock
contained in this Section 4(d) and (B) in the case such consideration
shall consist of shares of Common Stock and some other kind of
consideration or of two or more kinds of consideration, the Board of
Directors shall determine in good faith the fair allocation of the
adjusted Conversion Price between or among such types of consideration,
and evidence of such determination shall be described in a Board of
Directors' resolution filed with the Transfer Agent.
(e) The Corporation shall at all times reserve and keep available,
free from preemptive and subscription rights, out of its authorized but unissued
shares of Common Stock, for the purpose of effecting conversions of shares of
Series A Convertible Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series A
Convertible Preferred Stock not theretofore converted. For this purpose, the
number of shares of Common Stock deliverable upon the conversion of all
outstanding shares of Series A Convertible Preferred Stock shall be computed as
if at the time of computation all such outstanding shares were held by a single
holder. The Corporation will not effect any transaction which would give rise to
an adjustment in the Conversion Price unless immediately following such
transaction the Corporation shall have available, free from preemptive and
subscription rights, out of its authorized but unissued shares of Common Stock,
the full number of shares of Common Stock deliverable upon the conversion of all
outstanding shares of Series A Convertible Preferred Stock not theretofore
converted.
(f) The Corporation shall pay all documentary stamp or similar issue
or transfer taxes payable in respect of the issue or delivery of securities on
conversion of the shares of Series A Convertible Preferred Stock; provided,
however, that (i) the Corporation shall not be required to pay any tax to the
extent payable in respect of any transfer involved in the issue or delivery of
securities in a name other than that of the holder of shares of the Series A
Convertible Preferred Stock to be converted and (ii) no such issue or delivery
shall be made unless and until such holder has paid to the Corporation the
amount of
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any tax described in clause (i) payable in respect of the shares of stock of
such holder or has established, to the satisfaction of the Corporation, that
such tax has been paid or provided for.
(g) By acceptance of any shares of Series A Convertible Preferred
Stock, the holder thereof agrees that upon conversion of any shares of Series A
Convertible Preferred Stock, any shares of Common Stock, par value $0.0001 per
share ("SPG Shares"), of SPG Realty Consultants, Inc., a Delaware corporation
("SPG"), which relate to such shares of Series A Convertible Preferred Stock and
which are held in the SPG Trust II (as defined below) shall be transferred to
the SPG Trust (as defined below), and shall thereafter be subject to, bound by
and entitled to the benefits of all the terms and provisions of the SPG Trust
Agreement (as defined below within the definition of the "SPG Trust"), all as
provided in the agreement establishing the SPG Trust II. The "SPG Trust II"
means that certain Trust created by that certain Trust Agreement among the
holders of the shares of Series A Convertible Preferred Stock, SPG (as successor
to Corporate Realty Consultants, Inc. ("CRC")) and the Trustee of such Trust,
under which the holders of the shares of Series A Convertible Preferred Stock
have beneficial interests in the SPG Shares deposited in such Trust. The "SPG
Trust" means that certain Trust created by that certain Trust Agreement (the
"SPG Trust Agreement") dated as of October 30, 1979, among certain shareholders
of the Corporation at that date, SPG (as successor to CRC) and the Trustee of
such Trust, under which substantially all the holders of shares of Common Stock
have beneficial interests in the SPG Shares deposited in such Trust.
(h) The "current market price" per share of share of Common Stock on
any day shall be the average of the closing per share sales prices of the Common
Stock during the last twenty trading days as reported on the Composite Tape of
the New York Stock Exchange, Inc. (the "NYSE") or, if shares of Common Stock are
not then listed on the NYSE, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended, on which
shares of Common Stock are then listed or, if shares of Common Stock are not
then listed on any such stock exchange, the average of the average closing bid
and ask quotations with respect to a share of Common Stock during the last
twenty trading days on the NASDAQ Stock Market or any successor system then in
use or, if no such quotations are then available, the average of the bid and
asked prices with respect to a share of Common Stock for such trading days, as
furnished by a member of the NYSE regularly making a market in the Common Stock
selected by the Board of Directors of the Corporation, or, if no such member
firm is then making a market in the Common Stock, the fair market value on such
date of a share of Common Stock as determined in good faith by a majority of the
members of the Board of Directors of the Corporation after consultation with an
independent financial advisor of recognized national standing.
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SECTION 5. Status of Converted or Redeemed Series A Convertible
Preferred Stock. Upon any conversion or any redemption, repurchase or other
acquisition by the Corporation of shares of Series A Convertible Preferred
Stock, the shares of Series A Convertible Preferred Stock so converted,
redeemed, repurchased or acquired shall be retired and canceled.
SECTION 6. Redemption at the Option of the Corporation. (a) The
Board of Directors shall have the power to restrict transfers of shares of
Series A Convertible Preferred Stock and/or to call for redemption a sufficient
number of shares of Series A Convertible Preferred Stock, selected in a manner
deemed appropriate in the opinion of the Board of Directors, to maintain or
bring the direct or indirect ownership of the capital stock of the Corporation
into conformity with the requirements of Section 856(a)(6) of the Internal
Revenue Code of 1986, as amended, at the greater of (i) a price (the "Redemption
Price") equal to the Liquidation Preference of the redeemed shares of Series A
Convertible Preferred Stock, plus an amount equal to the full amount of
accumulated and unpaid dividends thereon at the Redemption Date (as hereinafter
defined), prorating the dividend accumulated during the period commencing on the
Semiannual Payment Date immediately preceding the date of the payment of the
Redemption Price and ending on such payment date (calculated on the basis of a
360-day year of twelve 30-day months) and (ii) the current market price of the
Common Stock into which shares of such redeemed Series A Convertible Preferred
Stock could have been converted if a right to convert existed at such time. In
making such selection, the Board of Directors shall take due regard of all
feasible selection methods and shall only select shares of Series A Convertible
Preferred Stock if, in their considered, good faith judgment, such selection
shall be an equitable way of maintaining or bringing ownership of the capital
stock of the Corporation into conformity with Section 856(a)(6) of the Internal
Revenue Code of 1986, as amended, given the burdens on the holders of the shares
of redeemed Series A Convertible Preferred Stock of the various selection
methods and the consequences (including withholding tax and other tax
consequences) to the Corporation and its remaining shareholders associated with
such methods, such judgment to be made without reference to the liquidation
preference, conversion rights or dividend rate of the shares of Series A
Convertible Preferred Stock unless such preference, conversion rights or rate
shall be directly relevant to the conformity of the ownership of the capital
stock of the Corporation with said Section 856(a)(6).
(b) The Corporation shall give the holders of shares of Series A
Convertible Preferred Stock prior written notice of a redemption pursuant to
this Section 6 (a "Redemption") not more than 60 nor less than 30 calendar days
prior to the date fixed for redemption (the "Redemption Date") at the address of
such holders on the books of the Corporation (provided that failure to give such
notice or any defect therein shall not affect the validity of the proceeding for
a Redemption except as to the
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holder to whom the Corporation has failed to give such notice or whose notice
was defective), and shall set apart the funds necessary to pay the aggregate
Redemption Price on all shares of Series A Convertible Preferred Stock then
called for redemption. Provided that such funds have been so set apart, from and
after the close of business on the Redemption Date the shares of Series A
Convertible Preferred Stock shall no longer be deemed outstanding and all rights
with respect to such shares shall forthwith cease and terminate, except the
right of the holders thereof to receive the Redemption Price (without interest)
upon surrender of the certificates evidencing their shares of Series A
Convertible Preferred Stock. In case fewer than all of the shares of Series A
Convertible Preferred Stock represented by any such surrendered certificate are
called for redemption, a new certificate shall be issued at the expense of the
Corporation representing the unredeemed shares.
SECTION 7. Voting. (a) In addition to any rights provided by law,
each holder of shares of Series A Convertible Preferred Stock shall be entitled
to such number of votes per share held as shall equal the number (rounded to the
nearest whole vote) obtained by dividing $1,000.00 by the lesser of (x) the
Conversion Price and (y) the Alternative Conversion Price. Except as provided in
paragraph (b) below, the holders of shares of Series A Convertible Preferred
Stock shall be entitled to vote on all matters as to which holders of shares of
Common Stock shall be entitled to vote, in the same manner and with the same
effect as such holders of shares of Common Stock, voting together with the
holders of shares of Common Stock as one class.
(b) The Corporation shall not, without the affirmative consent or
approval of the holders of at least two-thirds of the shares of Series A
Convertible Preferred Stock then outstanding, voting separately as a class,
given by written consent in lieu of a meeting or by vote at a meeting called for
such purpose for which notice shall have been given to the holders of shares of
Series A Convertible Preferred Stock, (i) authorize any class of stock ranking
prior to the Series A Convertible Preferred Stock with respect to the payment of
dividends or distribution of assets upon dissolution, liquidation or winding-up;
(ii) amend, alter or repeal any of the provisions of the Restated Certificate of
Incorporation of the Corporation so as to affect adversely the powers,
preferences or rights of the holders of shares of Series A Convertible Preferred
Stock then outstanding or reduce the minimum time required for any notice to
which only the holders of shares of Series A Convertible Preferred Stock then
outstanding may be entitled (an amendment of the Restated Certificate of
Incorporation of the Corporation to authorize or create, or to increase the
authorized amount of, any shares of any class ranking junior or on a parity with
shares of Series A Convertible Preferred Stock shall be deemed not to affect
adversely the powers, preferences or rights of the holders of shares of Series A
Convertible Preferred Stock); (iii) authorize or create, or increase the
authorized amount of, any shares, or any security
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convertible into stock, of any class ranking prior to the Series A Convertible
Preferred Stock with respect to the payment of dividends or distribution of
assets upon dissolution, liquidation or winding-up; (iv) merge or consolidate
with or into any other person, unless each holder of shares of Series A
Convertible Preferred Stock immediately preceding such merger or consolidation
shall receive or continue to hold in the resulting person the same number of
shares, with substantially the same rights and preferences, as correspond to
shares of Series A Convertible Preferred Stock so held; (v) increase the number
of authorized shares of Series A Convertible Preferred Stock above 209,249; (vi)
amend, alter or modify any of the provisions of this Exhibit; or (vii) otherwise
alter or change the powers, preferences, or rights, or qualifications,
limitations or restrictions of the shares of Series A Convertible Preferred
Stock so as to affect them adversely.
SECTION 8. Notice of Certain Events. (a) In case at any time the
Corporation shall propose
(i) to pay any dividend payable in shares of Common Stock upon
its shares of Common Stock, or to make any distribution (other than a
dividend or distribution of cash from Cash Flow) to the holders of shares
of Common Stock;
(ii) to make any dividend or distribution of cash to the
holders of shares of Common Stock from Cash Flow but to retain a portion
of such Cash Flow in the Corporation;
(iii) to offer for subscription pro rata to the holders of
shares of Common Stock any additional shares of beneficial interest of any
class or any other rights or warrants;
(iv) to consolidate or merge with or into another person; or
(v) to effect any reorganization, reclassification,
liquidation, dissolution or winding-up of the Corporation;
and the effect of such proposed action would be to cause there to be made an
adjustment in the Conversion Price pursuant to Section 4(d), then, and in any
one or more of such cases, the Corporation shall cause at least ten calendar
days' notice thereof to be filed with the Transfer Agent and to be given to each
holder of shares of Series A Convertible Preferred Stock as of the date on which
(x) the books of the Corporation shall close, or a record be taken, for such
dividend or distribution on shares of Common Stock, dividend or distribution or
offering of rights or warrants or (y) such consolidation, merger,
reorganization, reclassification, liquidation, dissolution or winding-up shall
be effective, as the case may be.
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(b) In case the Board of Directors shall approve the sale or other
transfer of all or substantially all the interest of the Corporation or any
affiliate of the Corporation in any of the Specified Assets (as defined below)
to any person that is not an affiliate of the Corporation, then the Corporation
shall cause notice of such approval to be filed with the Transfer Agent and
given to each holder of shares of Series A Convertible Preferred Stock as of the
date of the giving of such approval within five business days of the date of the
giving of such approval. The term "Specified Assets" shall mean the properties
commonly known as Roosevelt Field Shopping Center (Nassau County, New York),
Lenox Square Mall (Atlanta, Georgia), Town Center at Boca Raton (Palm Beach
County, Florida), Brea Mall (Brea, California) and Rockaway Townsquare Mall
(Rockaway, New Jersey).
(c) If the Corporation shall receive written conversion notices
pursuant to Section 4(b) with respect to more than two percent of the
outstanding shares of Series A Convertible Preferred Stock, then the Corporation
shall cause notice of its receipt of such notices to be filed with the Transfer
Agent and given to each holder of shares of Series A Convertible Preferred Stock
within five business days of the date of the Corporation's receipt of such
notices.
(d) The failure to give or receive the notice required by this
Section 8 or any defect therein shall not affect the legality or validity of any
such dividend, distribution, issuance of any right or warrant or other action.
SECTION 9. Designation of Capital Gain Dividends. So long as 10,000
or more shares of Series A Convertible Preferred Stock are held of record by one
or more of (i) Stichting Pensioenfonds voor de Gezondheid Geestelijke en
Maatschappelijke belangen ("PGGM"), (ii) any affiliate of PGGM that identifies
itself to the Transfer Agent and the Corporation as such an affiliate and (iii)
any other foreign individual or entity with a record address outside the United
States of America: the Corporation shall not designate any dividends paid on
shares of the Series A Convertible Preferred Stock (or dividends deemed paid
pursuant to Section 305 of the Code) as capital gain dividends for U.S. tax
purposes, and all distributions on the Common Stock of the Corporation in excess
of the Corporation's real estate investment trust taxable income (excluding net
capital gains) for any taxable year shall be designated as capital gains
dividends to the extent of the Corporation's recognized capital gains for such
taxable year.
SECTION 10. Return of Money Deposited for Converted Shares of Series
A Convertible Preferred Stock. Notwithstanding anything elsewhere contained
herein, any funds which at any time shall have been deposited by the Corporation
or on its behalf with the Transfer Agent or any other depositary for the purpose
of any payment with respect to any shares of Series A Convertible Preferred
Stock which shall have been converted into shares of
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Common Stock pursuant to the provisions of Section 4 shall forthwith upon such
conversion be repaid to the Corporation by the Transfer Agent or such other
depositary.
SECTION 11. Definitions and Construction. As used in this
resolution: (a) "herein", "hereof", "hereunder" and other like words mean or
refer to this resolution in its entirety; (b) "outstanding", when used with
reference to shares of stock, means issued shares of stock, excluding shares of
stock held by the Corporation or a subsidiary thereof; (c) "person" means any
corporation, partnership, trust, organization, association or other entity or
individual; (d) "affiliate" of any person means any other person controlling,
controlled by or under common control with such person; (e) "capital stock of
the Corporation" shall mean shares of the capital stock of the Corporation as
described in Article FOURTH of the Restated Certificate of Incorporation of the
Corporation; (f) "Common Stock" shall mean the stock described as Common Stock
in Article FOURTH of the Restated Certificate of Incorporation of the
Corporation; (g) "Preferred Stock" shall mean the stock described as Preferred
Stock in Article FOURTH of the Restated Certificate of Incorporation of the
Corporation; (h) "Transfer Agent" shall First Chicago Trust Company of New York
or such other successor transfer agent(s) appointed by the Board of Directors in
accordance with Section 6.02 of the Restated By-Laws of the Corporation; (i)
headings are for convenience of reference only and shall not define, limit or
affect any of the provisions hereof; and (j) references to Sections are to
Sections of this Exhibit, unless otherwise expressly provided.
In addition, whenever reference is made herein to cash flow from
operations of the Corporation, as determined in good faith by the Board of
Directors, such determination shall be made on a basis substantially consistent
with that employed by the Corporation in computing funds from operations
(without duplicating the deduction for preferred stock dividends) as reported in
the Corporation's filings with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, and the Securities and Exchange Act
of 1934, as amended.
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Exhibit A to
6.50% Series A Convertible
Preferred Stock
DIVIDEND PRORATION AGREEMENT
Date: __________________
Simon Property Group, Inc.
National City Center
115 West Washington Street, Suite 15 East
Indianapolis, Indiana 46204
Dear Sirs:
The undersigned is a holder of shares of 6.50% Series A Convertible
Preferred Stock ("Preferred Stock") of Simon Property Group, Inc., a Delaware
corporation (the "Corporation"). On the date hereof, the undersigned has
presented _____________ (number) shares of Preferred Stock for conversion
pursuant to their terms (the "Conversion"). This letter agreement is being given
in satisfaction of a condition to the Conversion.
The undersigned hereby agrees with the Corporation that concurrently with
the first payment of a regular cash dividend (i.e., a dividend that would not
give rise to an adjustment of the "Conversion Price" pursuant to Section
4(d)(iii) of Exhibit A to the Corporation's Restated Certificate of
Incorporation with respect to the shares of Preferred Stock) on shares of the
Corporation's Common Stock with respect to which the record date (the "Next
Record Date") occurs after the date of the Conversion, the undersigned shall pay
to the Corporation an amount equal to the product of (x) the number of such
shares of Common Stock issued in the Conversion (adjusted for any dividend or
distribution on the shares of Common Stock in shares of Common Stock or the
subdivision, combination or reclassification of outstanding shares of Common
Stock into a greater or smaller number of Preferred Stock occurring after the
date of the Conversion in order to give appropriate effect thereto), (y) the per
share amount of such cash dividend and (z) a fraction, the numerator of which
shall be the number of days elapsed (computed on the basis of a 360-day year of
twelve 30-day months) from the record date (the "Last Record Date") for the
payment of the last regular dividend on shares of the Corporation's Common Stock
occurring on or before the date of the Conversion and the denominator of which
shall be the number of days elapsed (computed as aforesaid) from the Last Record
Date to the Next Record Date.
The undersigned further grants to the Corporation the right to set off
against any unpaid amount due to the Corporation under this letter agreement any
debt or other obligation of the
55
Corporation owing to the undersigned, including, without limitation, any
dividend or other distribution payable to the undersigned by reason of its
ownership of shares of the Corporation's Common Stock.
If the undersigned wishes to transfer legal, beneficial or record
ownership of any shares of the Corporation's Common Stock (or any interest
therein) issuable in the Conversion before all the undersigned's foregoing
obligations are fully performed, it shall obtain, for the Corporation's benefit,
an instrument of assumption by the transferee in which the transferee assumes
all the undersigned's obligations under this letter agreement, which instrument
shall contain a provision with respect to subsequent transfers with the same
effect as this paragraph.
This letter agreement shall be construed in accordance with, and governed
by, the laws of the State of New York, without regard to conflicts of laws
principles.
Very truly yours,
___________________________________________
(Name of Converting Holder of Preferred
Stock)
By:________________________________________
Name:
Title:
AGREED:
SIMON PROPERTY GROUP, INC.
By:________________________________
Name:
Title:
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Exhibit B
6.50% Series B Convertible Preferred Stock
------------------------------------------
The authorized number of shares of the series of Preferred Stock created
herein and the voting powers, preferences and relative, participating optional
or other special rights and qualifications, and the limitations or restrictions
thereof, of such series shall be as set forth herein.
For purposes of this exhibit, capitalized terms used but not otherwise
defined herein shall have the meanings assigned to them in the Simon Property
Group, Inc. Restated Certificate of Incorporation (the "Charter").
Subject in all cases to the provisions of Article NINTH of the Charter of
the Corporation with respect to Excess Stock, the following is a description of
the preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of the 6.50% Series B Convertible Preferred Stock (the "Series B
Preferred Stock") of the Corporation:
(1) Designation and Amount. The designation of the series of Preferred
Stock of the Corporation created herein shall be "6.50% Series B Convertible
Preferred Stock." The authorized number of shares of Series B Preferred Stock
shall be 5,000,000, with par value $0.0001 per share.
All shares of Series B Preferred Stock redeemed, purchased, exchanged,
unissued or otherwise acquired by the Corporation shall be retired and canceled
and, upon the taking of any action required by applicable law, shall be restored
to the status of authorized but unissued shares of capital stock and may
thereafter be issued, but not as Series B Preferred Stock.
(2) Ranking. The Series B Preferred Stock shall, with respect to dividend
rights, rights upon liquidation, winding up, dissolution, and redemption rights,
rank (A) junior to any other class or series of preferred stock hereafter duly
established by the Board of Directors of the Corporation, the terms of which
shall specifically provide that such series shall rank prior to the Series B
Preferred Stock as to the payment of dividends, distribution of assets upon
liquidation and redemption rights (the "Senior Preferred Stock"), (B) pari passu
with the Series A Convertible Preferred Stock of the Corporation, par value
$0.0001 per share, and any other class or series of Preferred Stock hereafter
duly established by the Board of Directors of the Corporation, the terms of
which shall specifically provide that such class or series shall rank pari passu
with the Series B Preferred Stock as to the payment of dividends, distribution
of assets upon liquidation and redemption rights (the "Parity Preferred Stock")
and (C) prior to any other class or series of preferred stock or other class or
series of capital stock of or
57
other equity interests in the Corporation, including, without limitation, all
classes of the common stock of the Corporation, whether now or hereafter
created. All of such classes or series of capital stock and other equity
interests of the Corporation, including, without limitation, the Common Stock,
the Class B Common Stock and the Class C Common Stock are collectively referred
to herein as the "Junior Stock".
(3) Dividends. (A) Subject to the rights of series of Preferred Stock
which may from time to time come into existence, holders of the then outstanding
Series B Preferred Stock shall be entitled to receive, when and as declared by
the Board of Directors, out of funds legally available for the payment of
dividends, cumulative preferential cash dividends at the rate of $6.50 per annum
per share. Such dividends shall accrue and be cumulative from the date of
original issue and shall be payable in equal amounts quarterly in arrears on the
last day of March, June, September and December or, if not a business day, the
next succeeding business day (each, a "Distribution Payment Date"). The first
dividend, which will be paid on September 30, 1998, will be for less than a full
quarter. Such first dividend and any dividend distribution payable on Series B
Preferred Stock for any partial distribution period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Distributions will
be payable to holders of record as they appear in the share records of the
Corporation at the close of business on the applicable record date, which shall
be on the first day of the calendar month in which the applicable Distribution
Payment Date falls on or on such other date designated by the Board of Directors
of the Corporation for the payment of distributions that is not more than 30 nor
less than 10 days prior to such Distribution Payment Date (each, a "Distribution
Record Date").
(B) Dividends on Series B Preferred Stock will accrue and be cumulative
whether or not the Corporation has earnings, whether or not there are funds
legally available for the payment of such distributions and whether or not such
distributions are earned, declared or authorized. No interest, or sum of money
in lieu of interest, shall be payable in respect of any distribution payment or
payments on Series B Preferred Stock which may be in arrears. Dividends paid on
the Series B Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a per share basis among all such shares at the time outstanding.
(C) If, for any taxable year, the Corporation elects to designate as
capital gain distributions (as defined in Section 857 of the Internal Revenue
Code of 1986, as amended, or any successor revenue code or section (the "Code"))
any portion (the "Capital Gains Amount") of the total distributions (as
determined for federal income tax purposes) paid or made available for the year
to holders of all classes of capital stock (the "Total Distributions"), then the
portion of the Capital Gains Amount that shall be allocable to holders of Series
B Preferred Stock
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58
shall be in the same percentage that the total distributions paid or made
available to the holders of Series B Preferred Stock for the year bears to the
Total Distributions.
(D) If any shares of Series B Preferred Stock are outstanding, then,
except as provided in the following sentence, no distributions shall be declared
or paid or set apart for payment on any shares of any other series of Preferred
Stock of the Corporation ranking, as to distributions, on a parity with or
junior to Series B Preferred Stock for any period unless full cumulative
distributions have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for such payments on
shares of Series B Preferred Stock for all past distribution periods and the
then current distribution period. When distributions are not paid in full (or a
sum sufficient for such full payment is not set apart) upon the shares of Series
B Preferred Stock and the shares of any other series of Preferred Stock ranking
on parity as to distributions with shares of Series B Preferred Stock, all
distributions declared upon shares of Series B Preferred Stock and any other
series of Preferred Stock ranking on a parity as to distributions with Series B
Preferred Stock shall be declared pro rata so that the amount of distributions
declared per share on Series B Preferred Stock and such other series of
Preferred Stock shall in all cases bear to each other the same ratio that
accrued distributions per share on Series B Preferred Stock and such other
series of Preferred Stock bear to each other.
(E) Except as provided in subparagraph (3)(D) herein, unless full
cumulative distributions on shares of Series B Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past distribution periods and the
then current distribution period, no distributions (other than in shares of
Common Stock or other Junior Stock) shall be declared or paid aside for payment
or other distribution shall be declared or made upon the shares of Common Stock
or any other capital stock of the Corporation ranking junior to or on a parity
with Series B Preferred Stock as to distributions or upon liquidation, nor shall
any shares of Common Stock or any other capital stock of the Corporation ranking
junior to or on a parity with Series B Preferred Stock as to distributions or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any such capital stock) by the Corporation (except by
conversion into or exchange for Junior Stock).
(F) Any distribution payment made on shares of Series B Preferred Stock
shall first be credited against the earliest accrued but unpaid distribution due
with respect to shares of Series B Preferred Stock which remain payable.
(G) No distributions on the Series B Preferred Stock shall be authorized
by the Board of Directors of the Corporation or be
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paid or set apart for payment by the Corporation at such time as the terms and
provisions of any agreement of the Corporation, including any agreement relating
to its indebtedness, prohibits such authorization, payment or setting apart for
payment or provides that such authorization, payment or setting apart for
payment would constitute a breach thereof or a default thereunder if such
authorization or payment shall be restricted or prohibited by law.
(H) Except as provided in this paragraph (3) and in paragraph (5), the
Series B Preferred Stock shall not be entitled to participate in the earnings or
assets of the Corporation.
(4) Conversion. (A) General. On the terms and subject to the conditions of
this paragraph (4), the holder of a share of Series B Preferred Stock shall have
the right, at any time at such holder's option, to convert such shares of Series
B Preferred Stock, unless previously redeemed, into that number of shares of
Common Stock (calculated as to each conversion to the nearest 1/1000th of a
share) obtained by dividing $100.00 by the Conversion Price (as defined in
subparagraph (4)(D)) (shares of the Common Stock issuable upon the aforesaid
conversion being called "Conversion Stock"). (Any such conversion date is
hereinafter called a "Permissible Conversion Date"). The right of conversion of
shares of Series B Preferred Stock called for redemption by the Corporation
shall terminate immediately prior to the close of business on the redemption
date with respect to such shares of Series B Preferred Stock.
(B) Conversion Procedures. In order to exercise the conversion privilege,
the holder of any share of Series B Preferred Stock to be converted (i) at least
fifteen business days prior to any Permissible Conversion Date (or five business
days, if another holder of shares of Series B Preferred Stock shall have
delivered a conversion notice with respect to such Permissible Conversion Date),
shall deliver to the principal office of the Corporation a written notice (a)
stating that such holder elects to convert all or a specified whole number of
such shares pursuant to this paragraph (4) and (b) specifying the name or names
in which such holder wishes the certificate or certificates for Conversion Stock
to be issued and (ii) on or prior to the applicable Permissible Conversion Date,
shall surrender the certificate representing the shares of Series B Preferred
Stock to be converted at the principal office of the Corporation. Unless the
shares of Conversion Stock are to be issued in the same name as the name in
which such shares of Series B Preferred Stock are registered, the certificate
representing the shares surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the holder or its duly authorized attorney. As promptly as practicable after
such surrender of a certificate for shares of Series B Preferred Stock, but in
no event before the applicable Permissible Conversion Date or after the fifth
business day following such
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Permissible Conversion Date, the Corporation shall issue and deliver at such
office to such holder, or on such holder's written order, (i) a certificate or
certificates for the applicable number of full shares of Common Stock determined
to be issuable pursuant to subparagraph (4)(A) and (ii) if less than the full
number of shares of Series B Preferred Stock evidenced by the surrendered
certificate is being converted, a new certificate, of like tenor, for the number
of shares of Series B Preferred Stock evidenced by such surrendered certificate
less the number of shares being converted. No payment or adjustment shall be
made on conversion for accumulated and unpaid dividends on shares of Series B
Preferred Stock surrendered for conversion or for dividends on Conversion Stock.
A "business day" is a day other than a Saturday, Sunday or other day on which
banks in the State of New York are authorized to be closed.
Each conversion shall be deemed to have been effected as of the close of
business on the applicable Permissible Conversion Date, and the person or
persons in whose name or names any certificate or certificates for Conversion
Stock are issuable shall be deemed to have become the holder or holders of
record of such Conversion Stock at such time on such Permissible Conversion Date
and such conversion shall be at the Conversion Price (or current market price,
as applicable) in effect at such time on such Permissible Conversion Date,
unless the share transfer books of the Corporation are closed on such
Permissible Conversion Date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of business
on the next day on which such share transfer books are open, but such conversion
shall be at the Conversion Price in effect on the applicable Permissible
Conversion Date. Upon delivery, all Conversion Stock shall be duly authorized,
validly issued, fully paid, nonassessable, free of all liens and charges and not
subject to any preemptive or subscription rights.
In lieu of delivering physical certificates representing the securities
issued upon conversion, providing the Corporation's Transfer Agent is
participating on the Depositary Trust Company ("DTC") Fast Automated Securities
Transfer program, upon the request of the holder of Series B Preferred Stock and
its compliance with the provisions contained in this paragraph, so long as the
certificates therefor do not bear a legend and such holders of Series B
Preferred Stock thereof is not obligated to return such certificate for a
placement of a legend thereon, the Corporation shall use its reasonable best
efforts to cause its Transfer Agent to electronically transmit the Common Stock
issuable upon conversion to the holder of Series B Preferred Stock by crediting
the account of the broker of such holder of Series B Preferred Stock with DTC
through its Deposit Withdrawal Agent Commission System.
(C) Rounding of Fractional Conversion Stock. No fractional Conversion
Stock or scrip representing fractions of Conversion Stock shall be issued upon
conversion of shares of Series B
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Preferred Stock. If a fractional Conversion Share is otherwise deliverable to a
converting holder upon a conversion of shares of Series B Preferred Stock (based
upon the total number of shares of Series B Preferred Stock being converted by
such holder), the Corporation shall in lieu thereof pay to the person entitled
thereto an amount in cash equal to the current value of such fraction,
calculated to the nearest 1/1000th of a share, to be computed based on the
current market price of a share of Common Stock on the date of conversion.
(D) Conversion Price. "Conversion Price", shall mean $38.669, as adjusted
pursuant to this subparagraph (4)(D). The Conversion Price (and the kind and
amount of consideration receivable by holders of shares of Series B Preferred
Stock upon conversion) shall be adjusted from time to time as follows:
(i) If the Corporation (A) pays a dividend or makes a distribution
to all holders of Common Stock on the Common Stock in shares of
Common Stock or (B) subdivides, combines or reclassifies its
outstanding shares of Common Stock into a greater or smaller number
of shares, the Conversion Price in effect immediately prior to such
action shall be adjusted so that the holder of any shares of Series
B Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock that it
would have owned or been entitled to receive immediately following
such action had such stock been converted immediately prior to such
action or the record date therefor, whichever is earlier. Such
adjustment shall become effective immediately after the record date,
in the case of a dividend or distribution, or immediately after the
effective date, in the case of a subdivision, combination or
reclassification.
(ii) In case the Corporation shall issue rights or warrants to all
holders of Common Stock entitling them to subscribe for or purchase
shares of Common Stock (or securities convertible into shares of
Common Stock) at a price per share of Common Stock (or having a
conversion price per share of Common Stock) less than the current
market price (as defined in subparagraph (4)(H)) of a share of
Common Stock on the record date mentioned below, the Conversion
Price in effect immediately prior thereto shall be adjusted so that
it shall equal the price determined by multiplying the Conversion
Price in effect immediately prior thereto by a fraction, of which
the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants
(immediately prior to such issuance) plus the number of shares of
Common Stock which the aggregate offering price of the total number
of shares of Common Stock so offered (or the aggregate conversion
price of the convertible
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securities so offered) would purchase at such current market price
per share of Common Stock and the denominator of which shall be the
number of shares of Common Stock outstanding on the date of issuance
of such rights or warrants (immediately prior to, such issuance)
plus the total number of additional shares of Common Stock offered
for subscription or purchase (or into which the convertible
securities so offered are convertible). Such adjustment shall be
made successively whenever any rights or warrants are issued and
shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or
warrants; provided, however, that in the event that all shares of
the Common Stock offered for subscription or purchase are not
delivered (or securities convertible into shares of Common Stock are
not delivered) upon the exercise of such rights or warrants, upon
the expiration of such rights or warrants the Conversion Price shall
be readjusted to the Conversion Price which would have been in
effect had the numerator and the denominator of the foregoing
fraction and the resulting adjustments made upon the issuance of
such rights or warrants been made based upon the number of shares of
Common Stock (or securities convertible into shares of Common Stock)
actually delivered upon the exercise of such rights or warrants
rather than upon the number of shares of Common Stock offered for
subscription or purchase. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of
Common Stock at less than such current market price, and in
determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received
by the Corporation for such rights or warrants, the value of such
consideration, if other than cash, to be determined in good faith by
the Board of Directors (whose determination shall be described in a
Board of Directors' resolution filed with the Transfer Agent).
(iii) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of shares of Common Stock, evidences of
indebtedness or other assets (excluding cash dividends or
distributions paid in cash and dividends or distributions referred
to in subparagraph (i) of this subparagraph 4(D)) or rights or
warrants (excluding those referred to in subparagraph (ii) of this
subparagraph 4(D)), in each such case the Conversion Price in effect
thereafter shall be determined by multiplying the Conversion Price
in effect immediately prior thereto by a fraction, of which the
numerator shall be the difference between (I) the total number of
shares of Common Stock outstanding multiplied by the current market
price per share of
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63
Common Share on the record date mentioned below and (II) the
aggregate fair market value determined by the Board of Directors
(whose determination shall be described in a Board of Directors'
resolution filed with the Transfer Agent) of such evidences of
indebtedness or other assets so distributed or of such rights or
warrants, and the denominator shall be the total number of shares of
Common Stock outstanding multiplied by such current market price per
share of Common Stock. Such adjustment shall be made whenever any
such distribution is made and shall become effective immediately
after the record date for the determination of stockholders entitled
to receive such distribution.
(iv)(a) If the Corporation effects any consolidation or merger to
which the Corporation is a party (other than a merger in which the
Corporation is the surviving person and which does not result in any
change in the Common Stock), any sale or conveyance to another
person of all or substantially all the assets of the Corporation or
any statutory exchange of securities with another person, then in
any such event the holder of each share of Series B Preferred Stock
thereafter outstanding shall have the right to convert such share
into the kind and amount of consideration receivable pursuant to
such transaction by a holder of the number of shares of Common Stock
into which such shares of Series B Preferred Stock might have been
converted immediately prior to such transaction, assuming such
holder of shares of Common Stock failed to exercise its rights of
election, if any, as to the kind or amount of consideration
receivable upon such transaction (provided that if the kind or
amount of consideration receivable pursuant to such transaction is
not the same for each share of Common Stock in respect of which such
rights of election shall not have been exercised ("nonelecting
share"), then, for purposes of this subparagraph (iv)(a) the kind
and amount of consideration receivable pursuant to such transaction
for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing
shares). Thereafter, the holders of shares of Series B Preferred
Stock shall be entitled to appropriate adjustments with respect to
their conversion rights such that the provisions set forth in this
paragraph 4 shall correspondingly be made applicable, as nearly as
may reasonably be, to any consideration thereafter deliverable on
conversion of shares of Series B Preferred Stock.
(b) As evidence of the kind and amount of consideration
receivable pursuant to such consolidation, merger, statutory
exchange, sale or
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64
conveyance, or as to the appropriate adjustments of the Conversion
Price applicable with respect thereto, the Transfer Agent shall be
furnished with and may accept the certificates or opinion of an
independent public accountant of the type referred to in
subparagraph (vi) of this subparagraph 4(D) with respect thereto;
and, in the absence of bad faith on the part of the Transfer Agent,
the Transfer Agent may conclusively rely thereon and shall not be
responsible or accountable to any holder of shares of Series B
Preferred Stock for any provision in conformity therewith or
approved by such independent public accountant. The foregoing
provisions of this subparagraph (iv) shall similarly apply to
successive consolidations, mergers, statutory exchanges, sales or
conveyances.
(v) No adjustment in the Conversion Price shall be required to be
made unless it would require an increase or decrease of at least
.25% in the Conversion Price, but any adjustments not made because
of this subparagraph (v) shall be carried forward and taken into
account in any subsequent adjustment otherwise required. All
calculations under this subparagraph 4(D) shall be made to the
nearest 1/10th of a cent or to the nearest 1/1000th of a share, as
the case may be. All adjustments with respect to a transaction or
event shall apply to subsequent such transactions and events.
Anything in this subparagraph 4(D) to the contrary notwithstanding,
the Board of Directors shall be entitled to make such an irrevocable
reduction in the Conversion Price, in addition to the adjustments
required by this subparagraph 4(D), as in their discretion they
shall determine to be advisable in order to avoid or diminish any
income deemed to be received for Federal income tax purposes by any
holder of shares of Common Stock or shares of Series B Preferred
Stock resulting from any event or occurrence giving rise to an
adjustment pursuant to this subparagraph 4(D) or from any similar
event or occurrence, and evidence of the Board of Directors'
determination of such adjustment shall be described in a Board of
Directors' resolution filed with the Transfer Agent.
(vi) Whenever the Conversion Price is adjusted pursuant to this
subparagraph 4(D), (a) the Corporation shall promptly file with the
Transfer Agent a certificate of a firm of nationally recognized
independent public accountants setting forth the Conversion Price
(and any change in the kind or amount of consideration to be
received by holders of shares of Series B Preferred Stock upon
conversion) after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the manner of
computing the same
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65
and (b) a notice stating that the Conversion Price has been
adjusted, stating the effective date of such adjustment and
enclosing such certificate shall forthwith be mailed by the
Corporation to the holders of shares of Series B Preferred Stock at
their addresses as shown on the share register books of the
Corporation.
(vii) If as a result of any adjustment pursuant to this subparagraph
4(D), the holder of any shares of Series B Preferred Stock
surrendered for conversion becomes entitled to receive any
consideration other than shares of Common Stock, (a) the Conversion
Price with respect to such other consideration shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to shares
of Common Stock contained in this subparagraph (4)(D) and (b) in the
case such consideration shall consist of shares of Common Stock and
some other kind of consideration or of two or more kinds of
consideration, the Board of Directors shall determine in good faith
the fair allocation of the adjusted Conversion Price between or
among such types of consideration, and evidence of such
determination shall be described in a Board of Directors, resolution
filed with the Transfer Agent.
(E) The Corporation shall at all times reserve and keep available, free
from preemptive and subscription rights, out of its authorized but unissued
shares of Common Stock, for the purpose of effecting conversions of shares of
Series B Preferred Stock, the full number of shares of Common Stock deliverable
upon the conversion of all outstanding shares of Series B Preferred Stock not
theretofore converted. For this purpose, the number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series B Preferred
Stock shall be computed as if at the time of computation all such outstanding
shares were held by a single holder. The Corporation will not effect any
transaction which would give rise to an adjustment in the Conversion Price
unless immediately following such transaction the Corporation shall have
available, free from preemptive and subscription rights, out of its authorized
but unissued shares of Common Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series B Preferred
Stock not theretofore converted.
(F) The Corporation shall pay all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of securities on
conversion of the shares of Series B Preferred Stock; provided, however, that
(i) the Corporation shall not be required to pay any tax to the extent payable
in respect of any transfer involved in the issue or delivery of securities in a
name other than that of the holder of shares of the Series B Preferred Stock to
be converted and (ii) no such
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66
issue or delivery shall be made unless and until such holder has paid to the
Corporation the amount of any tax described in clause (i) payable in respect of
the shares of stock of such holder or has established, to the satisfaction of
the Corporation, that such tax has been paid or provided for.
(G) By acceptance of any shares of Series B Preferred Stock, the holder
thereof agrees that upon conversion of any shares of Series B Preferred Stock,
the holder will have a beneficial interest in shares of Common Stock, par value
$.0001 per share ("SRC Shares"), of SPG Realty Consultants, Inc., a Delaware
corporation ("SRC"), which relate to such Conversion Stock and which are held in
the SRC Trust (as defined below), and that the holder of Series B Preferred
Stock shall thereafter be subject to, bound by and entitled to the benefits of
all the terms and provisions of the SRC Trust Agreement (as defined below within
the definition of the "SRC Trust"). The "SRC Trust" means that certain trust
created by that certain Trust Agreement (the "SRC Trust Agreement"), dated as of
October 30, 1979, among certain stockholders of the Corporation at that date,
SRC (as successor to Corporate Realty Consultants, Inc., a Delaware corporation)
and the Trustee of such trust, under which all the holders of shares of Common
Stock have beneficial interests in the SRC Shares deposited in such trust.
(H) The "current market price" of a security on any date shall mean the
average Closing Price (as defined below) of such security for the twenty
consecutive Trading Days (as defined below) ending on the Trading Day
immediately preceding the day in question; the "Closing Price" shall mean the
last sale price for a such security as shown on the New York Stock Exchange
Composite Transactions Tape, or if no such sale has taken place on such day,
then the average of the closing bid and ask prices for such security on the New
York Stock Exchange, or if such security is not listed or admitted to trading on
the New York Stock Exchange, then on the principal national securities exchange
on which such security is listed or admitted to trading, or, if such security is
not listed or admitted to trading on any national securities exchange, then on
the Nasdaq National Market, or, if such security is not quoted on the Nasdaq
National Market, then the average of the closing bid and ask prices as furnished
by any New York Stock Exchange member firm selected from time to time by the
Board of Directors of the Corporation for such purposes; and "Trading Day" shall
mean a day on which the New York Stock Exchange or, if such security is not
listed or admitted to trading thereon, the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not so listed or
admitted, then any day that is not a Saturday, Sunday or other day on which
depositary institutions in the City of New York are authorized or obligated by
law to close.
(5) Liquidation, Dissolution or Winding Up. (A) Subject to the rights of
series of Preferred Stock which may from time to
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67
time come into existence, upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, then, before any
distribution or payment shall be made to the holders of any Junior Stock, the
holders of shares of Series B Preferred Stock shall be entitled to receive out
of assets of the Corporation legally available for distribution to stockholders,
liquidation distributions in the amount of the liquidation preference of $100.00
per share in cash or property having a fair market value as determined by the
Board of Directors valued at $100.00 per share, plus an amount equal to all
distributions accrued and unpaid at the date of such liquidation, dissolution or
winding up. After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of shares of Series B Preferred Stock will
have no right or claim 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 B Preferred Stock and the corresponding
amounts payable on all shares of Parity Preferred Stock, then the holders of
shares of Series B 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.
(B) A consolidation or merger of the Corporation with or into any other
entity or entities, or a sale, lease, transfer, conveyance or disposition of all
or substantially all of the assets of the Corporation or a statutory share
exchange in which stockholders of the Corporation may participate, shall not be
deemed to be a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this paragraph (5).
(6) Redemption. (A) Shares of Series B Preferred Stock are not redeemable
prior to September 24, 2003. On and after September 24, 2003, the Corporation at
its option upon not less than 30 nor more than 60 days' written notice, may
redeem outstanding shares of Series B Preferred Stock, in whole or in part, at
any time or from time to time, for cash at the following redemption prices
(expressed as a percentage of liquidation value) after September 24 in the
following years:
Year Percentage
---- ----------
2003 105
2004 104
2005 103
2006 102
2007 101
2008 and thereafter 100
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plus an amount equal to all distributions accrued and unpaid thereon to the date
fixed for redemption, without interest to the extent the Corporation will have
funds legally available therefor. The redemption price of shares of Series B
Preferred Stock (other than the portion hereof consisting of accrued and unpaid
distributions) is payable solely out of proceeds from the sale of other capital
stock of the Corporation, which may include Common Stock, Preferred Stock,
depository shares, interests, participations or other ownership interests in the
Corporation however designated, and any rights (other than debt securities
converted into or exchangeable for capital stock), warrants or options to
purchase any thereof, and not from any other source. Holders of shares of Series
B Preferred Stock to be redeemed shall surrender such shares of Series B
Preferred Stock at the place designated in such notice and shall be entitled to
the redemption price and any accrued and unpaid distributions payable upon such
redemption following such surrender. If fewer than all of the outstanding shares
of Series B Preferred Stock are to be redeemed, the number of shares to be
redeemed will be determined by the Corporation and such shares may be redeemed
pro rata from the holder of record of such shares in proportion to the number of
such shares held by such holders (with adjustments to avoid redemption of
fractional shares or by lot in a manner determined by the Corporation).
(B) Unless cumulative distributions on all shares of Series B Preferred
Stock and Parity Stock shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof for payment for
all past distribution periods and the current distribution period, no shares of
Series B Preferred Stock or Parity Stock shall be redeemed unless all
outstanding shares of Series B Preferred Stock and Parity Preferred Stock are
simultaneously redeemed; the foregoing shall not prevent the purchase or
acquisition of shares of Series B Preferred Stock or Parity Stock pursuant to a
purchase or exchange offer made on the same terms to holders of all outstanding
shares of Series B Preferred Stock or Parity Preferred Stock, as the case may
be. Furthermore, unless full cumulative distributions on all outstanding shares
of Series B Preferred Stock and Parity Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past distribution periods and the
then current distribution period, the Corporation shall not purchase or
otherwise acquire directly or indirectly any shares of Series B Preferred Stock
or Parity Preferred Stock (except by conversion into or exchange for shares of
capital stock of the Corporation ranking junior to Series B Preferred Stock and
Parity Preferred Stock as to distributions and upon liquidation).
(C) Notice of redemption will 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
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69
redemption date. A similar notice will be mailed, postage prepaid, at least 30
days but not more than 90 days before the redemption date, to each holder of
record of shares of Series B Preferred Stock at the address shown on the share
transfer books of the Corporation. Each notice shall state: (i) the redemption
date; (ii) the number of shares of Series B Preferred Stock to be redeemed;
(iii) the redemption price per share; (iv) the place or places where
certificates for shares of Series B Preferred Stock are to be surrendered for
payment of the redemption price; and (v) that distributions on shares of Series
B Preferred Stock will cease to accrue on such redemption date. No failure to
give such notice or any defect thereto or in the mailing thereof shall affect
the validity of the proceeding for the redemption of any Series B Preferred
Stock except as to the holder to whom notice was defective or not given. If
fewer than all shares of Series B Preferred Stock are to be redeemed, the notice
mailed to each such holder thereof shall also specify the number of shares of
Series B Preferred Stock to be redeemed from each such holder. If notice of
redemption of any shares of Series B Preferred Stock has been given and if the
funds necessary for such redemption have been set aside by the Corporation in
trust for the benefit of the holders of shares of Series B Preferred Stock so
called for redemption, then from and after the redemption date, distributions
will cease to accrue on such shares of Series B Preferred Stock, such shares of
Series B Preferred Stock shall no longer be deemed outstanding and all rights of
the holders of such shares will terminate, except the right to receive the
redemption price.
(D) The holders of shares of Series B Preferred Stock at the close of
business on a Distribution Record Date will be entitled to receive the
distribution payable with respect to such shares of Series B Preferred Stock on
the corresponding Distribution Payment Date notwithstanding the redemption
thereof between such Distribution Record Date and the corresponding Distribution
Payment Date or the Corporation's default in the payment of the distribution
due. Except as provided above, the Corporation will make no payment or allowance
for unpaid distributions, whether or not in arrears, on shares of Series B
Preferred Stock which have been called for redemption.
(E) Series B Preferred Stock have no stated maturity and will not be
subject to any sinking fund or mandatory redemption, except as provided in
Article NINTH of the Charter of the Corporation.
(7) Voting. (A) Except as indicated in this paragraph (7), except as may
be required by applicable law, or, at any time Series B Preferred Stock are
listed on a securities exchange, as may be required by the rules of such
exchange, the holders of shares of Series B Preferred Stock will have no voting
rights.
(B) If six quarterly distributions (whether or not consecutive) payable on
shares of Series B Preferred Stock are in
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arrears, whether or not earned or declared, the number of directors then
constituting the Board of Directors of the Corporation will be increased by two
(except as provided in the proviso to paragraph (c) to Article FOURTH of the
Charter), and the holders of shares of Series B Preferred Stock, voting together
as a class with the holders of shares of any other series of Preferred Stock
upon which like voting rights have been conferred and are exercisable (any such
other series, the "Nonvoting Preferred Stock"), will have the right to elect two
directors to serve on the Corporation's Board of Directors at any annual meeting
of stockholders or a special meeting of the holders of Series B Preferred Stock
and such other voting Preferred Stock called by the holders of record of at
least 10% of any series of Preferred Stock 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 stockholders), until all such distributions have been declared
and paid or set aside for payment. The term of office of all directors so
elected will terminate with the termination of such voting rights.
(C) The approval of two-thirds of the outstanding Series B Preferred Stock
voting as a single class is required in order to (i) amend, alter or repeal any
provision of the Charter, so as to materially and adversely affect the rights,
preferences, privileges or voting power of the Series B Preferred Stock; or (ii)
authorize, reclassify, create or increase the authorized or issued amount of any
class or series of stock having rights senior to Series B Preferred Stock with
respect to the payment of distributions or amounts upon liquidation, dissolution
or winding up of the affairs of the Corporation or to create, authorize or issue
any obligation or security convertible into or evidencing the right to purchase
such shares. However, the Corporation may create additional classes of Parity
Preferred Stock and Junior Stock, increase the authorized number of shares of
Parity Preferred Stock and Junior Stock and issue additional series of Parity
Preferred Stock and Junior Stock without the consent of any holder of Series B
Preferred Stock or Voting Preferred Stock.
(D) Except as provided above, as may be required by law or as required by
the rules of any securities exchange on which the Series B Preferred Stock are
listed, the holders of Series B Preferred Stock are not entitled to vote on any
merger or consolidation involving the Corporation, on any share exchange or on a
sale of all or substantially all of the assets of the Corporation.
(E) In any matter in which the Series B Preferred Stock are entitled to
vote (as provided in this paragraph (7)), as may be required by law or as
required by the rules of any securities exchange on which the Series B Preferred
Stock are listed, including any action by written consent, each share of Series
B Preferred Stock shall be entitled to one vote.
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(8) Excess Stock. Each share of Series B Preferred Stock is convertible
into Series B Excess Preferred Stock as provided in Article NINTH of the Charter
of the Corporation.
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Exhibit C
6.50% Series A Excess Preferred Stock
-------------------------------------
The authorized number of shares of the series of preferred stock
created by this Exhibit and the voting powers, preferences and relative,
participating optional or other special rights and qualifications, and the
limitations or restrictions thereof, of such series shall be as set forth in
this Exhibit herein.
For purposes of this Exhibit, capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the Simon
Property Group, Inc. Restated Certificate of Incorporation (the "Charter"). In
addition, for purposes of this Exhibit:
"Corporation" shall mean Simon Property Group, Inc., a Delaware
corporation, and, with reference to periods prior to the reorganization of the
Corporation as a Delaware corporation; the Trust (as defined below); and
"Trust" shall mean Corporate Property Investors, a Massachusetts
business trust and the predecessor to the Corporation.
Each share of 6.50% Series A Convertible Preferred Stock, par value
$0.0001 per share, of the Corporation ("Series A Preferred Stock"), is
convertible into 6.50% Series A Excess Preferred Stock (the "Series A Excess
Preferred Stock") of the Corporation as provided in Article NINTH of the Charter
of the Corporation. Subject in all cases to the provisions of Article NINTH of
the Charter of the Corporation with respect to Excess Stock, the following is a
description of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of the Series A Excess Preferred Stock:
SECTION 1. Designation and Number. The designation of the series of
Preferred Stock of the Corporation created by this Exhibit shall be "6.50%
Series A Excess Preferred Stock". The authorized number of shares of Series A
Excess Preferred Stock shall be 209,249, with par value $.0001 per share.
SECTION 2. Dividends. (a) The holders of shares of Series A Excess
Preferred Stock, in preference to the holders of Common Stock, par value $.0001
per share, of the Corporation (the "Common Stock"), any other series of
Preferred Stock ranking junior to the Series A Excess Preferred Stock either as
to dividends or upon liquidation, dissolution or
73
winding-up ("Junior Preferred Stock") or any other class or series of stock of
the Corporation ranking junior to the Series A Excess Preferred Stock either as
to dividends or upon liquidation, dissolution or winding-up ("Other Junior
Stock"), shall be entitled to receive, when, as and if declared by the Board of
Directors, in their sole discretion, out of assets of the Corporation legally
available for payment of dividends, an annual cash dividend of the Per Share
Dividend Amount (as defined below), payable in equal semiannual installments on
March 31 and September 30, commencing on March 31, 1998 (each such date, a
"Semiannual Payment Date"); provided that if any Semiannual Payment Date is not
a business day, then such semiannual installment shall be payable on the next
business day. A "business day" is a day other than a Saturday, Sunday or other
day on which banks in the State of New York are authorized to be closed. The
"Per Share Dividend Amount" shall be equal to the product of (x) the Liquidation
Preference (as defined below) and (y) the Basic Rate (as defined below) and (z)
the sum of 1.00 and a fraction, the numerator of which shall be the Basic Rate
and the denominator of which shall be 8.00. The "Basic Rate" shall be .065.
Dividends shall be payable to holders of record as they appear on the stock
register of the Corporation (or, with respect to the first dividend payable
hereon, if applicable, the Trust) on such record dates, not more than 30
calendar days nor less than five calendar days preceding the payment dates
thereof, as shall be fixed by the Board of Directors. A dividend shall not be
payable, but shall accumulate (even if undeclared), to the extent that it would
exceed the Corporation's cash flow from operations, as determined in good faith
by the Board of Directors, for the six-month period ending immediately before
the Semiannual Payment Date.
(b) Dividends on shares of Series A Excess Preferred Stock shall be
cumulative (even if undeclared). Such dividends on shares of Series A Excess
Preferred Stock shall accumulate from the first date of issuance of any such
shares. Dividends on shares of Series A Excess Preferred Stock shall cease to
accumulate on such shares on the date of their earlier conversion or redemption.
(c) When holders of shares of Series A Excess Preferred Stock are
entitled to receive dividends pursuant to the first sentence of this Section and
such dividends and dividends on any other series of Preferred Stock ranking on a
parity both as to dividends and upon liquidation, dissolution or winding-up with
the Series A Excess Preferred Stock (the Series A Excess Preferred Stock and
such other Preferred Stock being called "Parity Preferred Stock") are not paid
in full, all dividends declared on Parity Preferred Stock shall be declared pro
rata so that the amount of dividends declared per share on shares of Series A
Excess Preferred Stock and on such other Parity Preferred Stock bear to each
other the same ratio that unpaid dividends per share on shares of Series A
Excess Preferred Stock and such other Parity Preferred Stock bear to each other.
Except as set forth in the preceding sentence with respect to Parity Preferred
Stock, unless the full amount of cumulative dividends on shares of Series A
Excess Preferred Stock have been paid, no dividends may be paid or declared and
set aside for payment or
2
74
other distribution ordered or made on the Common Stock or on any other series of
Preferred Stock or other class or series of stock of the Corporation ranking
junior to or on a parity with the Series A Excess Preferred Stock either as to
dividends or upon liquidation, dissolution or winding-up, nor may any Common
Stock or any other series of Preferred Stock or other class or series of stock
of the Corporation ranking junior to or on a parity with the Series A Excess
Preferred Stock either as to dividends or upon liquidation, dissolution or
winding-up be redeemed, repurchased or otherwise acquired for any consideration
(or any payment made to or available for a sinking fund or defeasance
Corporation for any such redemption, repurchase or acquisition) by the
Corporation or any subsidiary thereof.
SECTION 3. Liquidation. The Series A Excess Preferred Stock shall
rank prior to the Common Stock, Junior Preferred Stock and any Other Junior
Stock, so that in the event of any liquidation, dissolution or winding-up of the
Corporation (a "Liquidation Transaction"), whether voluntary or involuntary, the
holders of shares of Series A Excess Preferred Stock shall be entitled to
receive out of the assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings, before any distribution
is made to holders of Common Stock, Junior Preferred Stock or Other Junior
Stock, an amount equal to $1,000.00 per share (the "Liquidation Preference" of a
share of Series A Excess Preferred Stock) plus an amount equal to the full
amount of accumulated and unpaid dividends thereon on the date of final
distribution, prorating the dividend accumulated during the period commencing on
the Semiannual Payment Date immediately preceding the date of final distribution
and ending on such final distribution date (calculated on the basis of a 360-day
year of twelve 30-day months). If, upon any Liquidation Transaction, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
Parity Preferred Stock shall be insufficient to permit the payment in full to
such holders of the amounts payable to such holders upon a Liquidation
Transaction pursuant to the provisions of the Restated Certificate of
Incorporation of the Corporation, then such assets or proceeds shall be
distributed among such holders ratably in proportion to the amounts that would
be payable on such shares if all amounts payable thereon were paid in full.
After payment in full of the Liquidation Preference and accumulated and unpaid
dividends to which they are entitled, the holders of shares of Series A Excess
Preferred Stock shall not be entitled to any further participation in any
distribution of the assets of the Corporation. For purposes hereof, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares, securities
or other consideration) of all or substantially all the property or assets of
the Corporation nor a consolidation or merger of the Corporation with one or
more other persons shall be deemed to be a Liquidation Transaction, voluntary or
involuntary.
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The holder of any share of Series A Excess Preferred Stock shall not
be entitled to receive any payment owed for such shares of Series A Excess
Preferred Stock under this Section 3 until such holder shall (a) cause to be
delivered to the Corporation the certificate(s) representing such shares of
Series A Excess Preferred Stock and (b) transfer instrument(s) satisfactory to
the Corporation and sufficient to transfer such shares of Series A Excess
Preferred Stock to the Corporation free of any adverse interest. As in the case
of the Redemption Price referred to in Section 5, no interest shall accrue on
any payment upon liquidation after the date thereof.
SECTION 4. Status of Redeemed Series A Excess Preferred Stock. Upon
any redemption, repurchase or other acquisition by the Corporation of shares of
Series A Excess Preferred Stock, the shares of Series A Excess Preferred Stock
so redeemed, repurchased or acquired shall be retired and canceled.
SECTION 5. Redemption at the Option of the Corporation. (a) The
Board of Directors shall have the power to restrict transfers of shares of
Series A Excess Preferred Stock and/or to call for redemption a sufficient
number of shares of Series A Excess Preferred Stock, selected in a manner deemed
appropriate in the opinion of the Board of Directors, to maintain or bring the
direct or indirect ownership of the capital stock of the Corporation into
conformity with the requirements of Section 856(a)(6) of the Internal Revenue
Code of 1986, as amended, at the greater of (i) a price (the "Redemption Price")
equal to the Liquidation Preference of the redeemed shares of Series A Excess
Preferred Stock, plus an amount equal to the full amount of accumulated and
unpaid dividends thereon at the Redemption Date (as hereinafter defined),
prorating the dividend accumulated during the period commencing on the
Semiannual Payment Date immediately preceding the date of the payment of the
Redemption Price and ending on such payment date (calculated on the basis of a
360-day year of twelve 30-day months) and (ii) the current market price (as
defined in Section 5(c)) of the Common Stock into which shares of such redeemed
Series A Excess Preferred Stock could have been converted if a right to convert
existed at such time. In making such selection, the Board of Directors shall
take due regard of all feasible selection methods and shall only select shares
of Series A Excess Preferred Stock if, in their considered, good faith judgment,
such selection shall be an equitable way of maintaining or bringing ownership of
the capital stock of the Corporation into conformity with Section 856(a)(6) of
the Internal Revenue Code of 1986, as amended, given the burdens on the holders
of the shares of redeemed Series A Excess Preferred Stock of the various
selection methods and the consequences (including withholding tax and other tax
consequences) to the Corporation and its remaining shareholders associated with
such methods, such judgment to be made without reference to the liquidation
preference, conversion rights or dividend rate of the shares of Series A Excess
Preferred Stock unless such preference, conversion rights or rate shall be
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directly relevant to the conformity of the ownership of the capital stock of the
Corporation with said Section 856(a)(6).
(b) The Corporation shall give the holders of shares of Series A
Excess Preferred Stock prior written notice of a redemption pursuant to this
Section 5 (a "Redemption") not more than 60 nor less than 30 calendar days prior
to the date fixed for redemption (the "Redemption Date") at the address of such
holders on the books of the Corporation (provided that failure to give such
notice or any defect therein shall not affect the validity of the proceeding for
a Redemption except as to the holder to whom the Corporation has failed to give
such notice or whose notice was defective), and shall set apart the funds
necessary to pay the aggregate Redemption Price on all shares of Series A Excess
Preferred Stock then called for redemption. Provided that such funds have been
so set apart, from and after the close of business on the Redemption Date the
shares of Series A Excess Preferred Stock shall no longer be deemed outstanding
and all rights with respect to such shares shall forthwith cease and terminate,
except the right of the holders thereof to receive the Redemption Price (without
interest) upon surrender of the certificates evidencing their shares of Series A
Excess Preferred Stock. In case fewer than all of the shares of Series A Excess
Preferred Stock represented by any such surrendered certificate are called for
redemption, a new certificate shall be issued at the expense of the Corporation
representing the unredeemed shares.
(c) The "current market price" per share of share of Common Stock on
any day shall be the average of the closing per share sales prices of the Common
Stock during the last twenty trading days as reported on the Composite Tape of
the New York Stock Exchange, Inc. (the "NYSE") or, if shares of Common Stock are
not then listed on the NYSE, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended, on which
shares of Common Stock are then listed or, if shares of Common Stock are not
then listed on any such stock exchange, the average of the average closing bid
and ask quotations with respect to a share of Common Stock during the last
twenty trading days on the NASDAQ Stock Market or any successor system then in
use or, if no such quotations are then available, the average of the bid and
asked prices with respect to a share of Common Stock for such trading days, as
furnished by a member of the NYSE regularly making a market in the Common Stock
selected by the Board of Directors of the Corporation, or, if no such member
firm is then making a market in the Common Stock, the fair market value on such
date of a share of Common Stock as determined in good faith by a majority of the
members of the Board of Directors of the Corporation after consultation with an
independent financial advisor of recognized national standing.
SECTION 6. Voting. (a) In addition to any rights provided by law,
each holder of shares of Series A Excess Preferred Stock shall be entitled to
such number of votes per
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share held as shall equal the number (rounded to the nearest whole vote)
obtained by dividing $1,000.00 by the lesser of (x) the Conversion Price and (y)
the Alternative Conversion Price. Except as provided in paragraph (b) below, the
holders of shares of Series A Excess Preferred Stock shall be entitled to vote
on all matters as to which holders of shares of Common Stock shall be entitled
to vote, in the same manner and with the same effect as such holders of shares
of Common Stock, voting together with the holders of shares of Common Stock as
one class.
(b) The Corporation shall not, without the affirmative consent or
approval of the holders of at least two-thirds of the shares of Series A Excess
Preferred Stock then outstanding, voting separately as a class, given by written
consent in lieu of a meeting or by vote at a meeting called for such purpose for
which notice shall have been given to the holders of shares of Series A Excess
Preferred Stock, (i) authorize any class of stock ranking prior to the Series A
Excess Preferred Stock with respect to the payment of dividends or distribution
of assets upon dissolution, liquidation or winding-up; (ii) amend, alter or
repeal any of the provisions of the Restated Certificate of Incorporation of the
Corporation so as to affect adversely the powers, preferences or rights of the
holders of shares of Series A Excess Preferred Stock then outstanding or reduce
the minimum time required for any notice to which only the holders of shares of
Series A Excess Preferred Stock then outstanding may be entitled (an amendment
of the Restated Certificate of Incorporation of the Corporation to authorize or
create, or to increase the authorized amount of, any shares of any class ranking
junior or on a parity with shares of Series A Excess Preferred Stock shall be
deemed not to affect adversely the powers, preferences or rights of the holders
of shares of Series A Excess Preferred Stock); (iii) authorize or create, or
increase the authorized amount of, any shares, or any security convertible into
stock, of any class ranking prior to the Series A Excess Preferred Stock with
respect to the payment of dividends or distribution of assets upon dissolution,
liquidation or winding-up; (iv) merge or consolidate with or into any other
person, unless each holder of shares of Series A Excess Preferred Stock
immediately preceding such merger or consolidation shall receive or continue to
hold in the resulting person the same number of shares, with substantially the
same rights and preferences, as correspond to shares of Series A Excess
Preferred Stock so held; (v) increase the number of authorized shares of Series
A Excess Preferred Stock above 209,249; (vi) amend, alter or modify any of the
provisions of this Exhibit; or (vii) otherwise alter or change the powers,
preferences, or rights, or qualifications, limitations or restrictions of the
shares of Series A Excess Preferred Stock so as to affect them adversely.
SECTION 7. Notice of Certain Events. (a) In case at any
time the Corporation shall propose
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(i) to pay any dividend payable in shares of Common Stock upon
its shares of Common Stock, or to make any distribution (other than a
dividend or distribution of cash from Cash Flow) to the holders of shares
of Common Stock;
(ii) to make any dividend or distribution of cash to the
holders of shares of Common Stock from Cash Flow but to retain a portion
of such Cash Flow in the Corporation;
(iii) to offer for subscription pro rata to the holders of
shares of Common Stock any additional shares of beneficial interest of any
class or any other rights or warrants;
(iv) to consolidate or merge with or into another person; or
(v) to effect any reorganization, reclassification,
liquidation, dissolution or winding-up of the Corporation;
and the effect of such proposed action would be to cause there to be made an
adjustment in the Conversion Price of the Series A Convertible Preferred Stock
pursuant to the Charter, then, and in any one or more of such cases, the
Corporation shall cause at least ten calendar days' notice thereof to be filed
with the Transfer Agent and to be given to each holder of shares of Series A
Excess Preferred Stock as of the date on which (x) the books of the Corporation
shall close, or a record be taken, for such dividend or distribution on shares
of Common Stock, dividend or distribution or offering of rights or warrants or
(y) such consolidation, merger, reorganization, reclassification, liquidation,
dissolution or winding-up shall be effective, as the case may be.
(b) In case the Board of Directors shall approve the sale or other
transfer of all or substantially all the interest of the Corporation or any
affiliate of the Corporation in any of the Specified Assets (as defined below)
to any person that is not an affiliate of the Corporation, then the Corporation
shall cause notice of such approval to be filed with the Transfer Agent and
given to each holder of shares of Series A Excess Preferred Stock as of the date
of the giving of such approval within five business days of the date of the
giving of such approval. The term "Specified Assets" shall mean the properties
commonly known as Roosevelt Field Shopping Center (Nassau County, New York),
Lenox Square Mall (Atlanta, Georgia), Town Center at Boca Raton (Palm Beach
County, Florida), Brea Mall (Brea, California) and Rockaway Townsquare Mall
(Rockaway, New Jersey).
(c) The failure to give or receive the notice required by this
Section 7 or any defect therein shall not affect the legality or validity of any
such dividend, distribution, issuance of any right or warrant or other action.
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SECTION 8. Designation of Capital Gain Dividends. So long as 10,000
or more shares of Series A Excess Preferred Stock are held of record by one or
more of (i) Stichting Pensioenfonds voor de Gezondheid Geestelijke en
Maatschappelijke belangen ("PGGM"), (ii) any affiliate of PGGM that identifies
itself to the Transfer Agent and the Corporation as such an affiliate and (iii)
any other foreign individual or entity with a record address outside the United
States of America: the Corporation shall not designate any dividends paid on
shares of the Series A Excess Preferred Stock (or dividends deemed paid pursuant
to Section 305 of the Code) as capital gain dividends for U.S. tax purposes, and
all distributions on the Common Stock of the Corporation in excess of the
Corporation's real estate investment trust taxable income (excluding net capital
gains) for any taxable year shall be designated as capital gains dividends to
the extent of the Corporation's recognized capital gains for such taxable year.
SECTION 9. Definitions and Construction. As used in this resolution:
(a) "herein", "hereof", "hereunder" and other like words mean or refer to this
resolution in its entirety; (b) "outstanding", when used with reference to
shares of stock, means issued shares of stock, excluding shares of stock held by
the Corporation or a subsidiary thereof; (c) "person" means any corporation,
partnership, trust, organization, association or other entity or individual; (d)
"affiliate" of any person means any other person controlling, controlled by or
under common control with such person; (e) "capital stock of the Corporation"
shall mean shares of the capital stock of the Corporation as described in
Article FOURTH of the Restated Certificate of Incorporation of the Corporation;
(f) "Common Stock" shall mean the stock described as Common Stock in Article
FOURTH of the Restated Certificate of Incorporation of the Corporation; (g)
"Preferred Stock" shall mean the stock described as Preferred Stock in Article
FOURTH of the Restated Certificate of Incorporation of the Corporation; (h)
"Transfer Agent" shall First Chicago Trust Company of New York or such other
successor transfer agent(s) appointed by the Board of Directors in accordance
with Section 6.02 of the Restated By-Laws of the Corporation; (i) headings are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof; and (j) references to Sections are to Sections of this
Exhibit, unless otherwise expressly provided.
In addition, whenever reference is made herein to cash flow from
operations of the Corporation, as determined in good faith by the Board of
Directors, such determination shall be made on a basis substantially consistent
with that employed by the Corporation in computing funds from operations
(without duplicating the deduction for preferred stock dividends) as reported in
the Corporation's filings with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, and the Securities and Exchange Act
of 1934, as amended.
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Exhibit D
6.50% SERIES B EXCESS PREFERRED STOCK
The authorized number of shares of the series of Preferred Stock created
herein and the voting powers, preferences and relative, participating optional
or other special rights and qualifications, and the limitations or restrictions
thereof, of such series shall be as set forth herein.
For purposes of this exhibit, capitalized terms used but not otherwise
defined herein shall have the meanings assigned to them in the Simon Property
Group, Inc. Restated Certificate of Incorporation (the "Charter").
Each share of 6.50% Series B Convertible Preferred Stock, par value
$0.0001 per share, of the Corporation ("Series B Preferred Stock"), is
convertible into 6.50% Series B Excess Preferred Stock (the "Series B Excess
Preferred Stock") of the Corporation as provided in Article NINTH of the Charter
of the Corporation. Subject in all cases to the provisions of Article NINTH of
the Charter of the Corporation with respect to Excess Stock, the following is a
description of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of the Series B Excess Preferred Stock:
(1) Designation and Amount. The designation of the series of Preferred
Stock of the Corporation created herein shall be "6.50% Series B Excess
Preferred Stock." The authorized number of shares of Series B Excess Preferred
Stock shall be 5,000,000, with par value $0.0001 per share.
All shares of Series B Excess Preferred Stock redeemed, purchased,
exchanged, unissued or otherwise acquired by the Corporation shall be retired
and canceled and, upon the taking of any action required by applicable law,
shall be restored to the status of authorized but unissued shares of capital
stock and may thereafter be issued, but not as Series B Excess Preferred Stock.
(2) Ranking. The Series B Excess Preferred Stock shall, with respect to
dividend rights, rights upon liquidation, winding up, dissolution, and
redemption rights, rank (A) junior to any other class or series of preferred
stock hereafter duly established by the Board of Directors of the Corporation,
the terms of which shall specifically provide that such series shall rank prior
to the Series B Excess Preferred Stock as to the payment of dividends,
distribution of assets upon liquidation and redemption rights (the "Senior
Preferred Stock"), (B) pari passu with the Series A Convertible Preferred Stock
of the Corporation,
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par value $0.0001 per share, the Series A Convertible Preferred Excess Stock of
the Corporation, par value $0.0001 per share, the Series B Preferred Stock and
any other class or series of Preferred Stock hereafter duly established by the
Board of Directors of the Corporation, the terms of which shall specifically
provide that such class or series shall rank pari passu with the Series B Excess
Preferred Stock as to the payment of dividends, distribution of assets upon
liquidation and redemption rights (the "Parity Preferred Stock") and (C) prior
to any other class or series of preferred stock or other class or series of
capital stock of or other equity interests in the Corporation, including,
without limitation, all classes of the common stock of the Corporation, whether
now or hereafter created. All of such classes or series of capital stock and
other equity interests of the Corporation, including, without limitation, the
Common Stock, the Class B Common Stock and the Class C Common Stock are
collectively referred to herein as the "Junior Stock".
(3) Dividends. (A) Subject to the rights of series of Preferred Stock
which may from time to time come into existence, holders of the then outstanding
Series B Excess Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of funds legally available for the
payment of dividends, cumulative preferential cash dividends at the rate of
$6.50 per annum per share. Such dividends shall accrue and be cumulative from
the date of original issue and shall be payable in equal amounts quarterly in
arrears on the last day of March, June, September and December or, if not a
business day, the next succeeding business day (each, a "Distribution Payment
Date"). The first dividend, which will be paid on September 30, 1998, will be
for less than a full quarter. Such first dividend and any dividend distribution
payable on Series B Excess Preferred Stock for any partial distribution period
will be computed on the basis of a 360-day year consisting of twelve 30-day
months. Distributions will be payable to holders of record as they appear in the
share records of the Corporation at the close of business on the applicable
record date, which shall be on the first day of the calendar month in which the
applicable Distribution Payment Date falls on or on such other date designated
by the Board of Directors of the Corporation for the payment of distributions
that is not more than 30 nor less than 10 days prior to such Distribution
Payment Date (each, a "Distribution Record Date").
(B) Dividends on Series B Excess Preferred Stock will accrue and be
cumulative whether or not the Corporation has earnings, whether or not there are
funds legally available for the payment of such distributions and whether or not
such distributions are earned, declared or authorized. No interest, or sum of
money in lieu of interest, shall be payable in respect of any distribution
payment or payments on Series B Excess Preferred Stock which may be in arrears.
Dividends paid on the Series B Excess Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such
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shares shall be allocated pro rata on a per share basis among all such shares at
the time outstanding.
(C) If, for any taxable year, the Corporation elects to designate as
capital gain distributions (as defined in Section 857 of the Internal Revenue
Code of 1986, as amended, or any successor revenue code or section (the "Code"))
any portion (the "Capital Gains Amount") of the total distributions (as
determined for federal income tax purposes) paid or made available for the year
to holders of all classes of capital stock (the "Total Distributions"), then the
portion of the Capital Gains Amount that shall be allocable to holders of Series
B Excess Preferred Stock shall be in the same percentage that the total
distributions paid or made available to the holders of Series B Excess Preferred
Stock for the year bears to the Total Distributions.
(D) If any shares of Series B Excess Preferred Stock are outstanding,
then, except as provided in the following sentence, no distributions shall be
declared or paid or set apart for payment on any shares of any other series of
Preferred Stock of the Corporation ranking, as to distributions, on a parity
with or junior to Series B Excess Preferred Stock for any period unless full
cumulative distributions have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for such
payments on shares of Series B Excess Preferred Stock for all past distribution
periods and the then current distribution period. When distributions are not
paid in full (or a sum sufficient for such full payment is not set apart) upon
the shares of Series B Excess Preferred Stock and the shares of any other series
of Preferred Stock ranking on parity as to distributions with shares of Series B
Excess Preferred Stock, all distributions declared upon shares of Series B
Excess Preferred Stock and any other series of Preferred Stock ranking on a
parity as to distributions with Series B Excess Preferred Stock shall be
declared pro rata so that the amount of distributions declared per share on
Series B Excess Preferred Stock and such other series of Preferred Stock shall
in all cases bear to each other the same ratio that accrued distributions per
share on Series B Excess Preferred Stock and such other series of Preferred
Stock bear to each other.
(E) Except as provided in subparagraph (3)(D) herein, unless full
cumulative distributions on shares of Series B Excess Preferred Stock have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past distribution periods and
the then current distribution period, no distributions (other than in shares of
Common Stock or other Junior Stock) shall be declared or paid aside for payment
or other distribution shall be declared or made upon the shares of Common Stock
or any other
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capital stock of the Corporation ranking junior to or on a parity with Series B
Excess Preferred Stock as to distributions or upon liquidation, nor shall any
shares of Common Stock or any other capital stock of the Corporation ranking
junior to or on a parity with Series B Excess Preferred Stock as to
distributions or upon liquidation be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such capital stock) by the Corporation (except by
conversion into or exchange for Junior Stock).
(F) Any distribution payment made on shares of Series B Excess Preferred
Stock shall first be credited against the earliest accrued but unpaid
distribution due with respect to shares of Series B Excess Preferred Stock which
remain payable.
(G) No distributions on the Series B Excess Preferred Stock shall be
authorized by the Board of Directors of the Corporation or be paid or set apart
for payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such authorization, payment or setting apart for payment
or provides that such authorization, payment or setting apart for payment would
constitute a breach thereof or a default thereunder if such authorization or
payment shall be restricted or prohibited by law.
(H) Except as provided in this paragraph (3) and in paragraph (4), the
Series B Excess Preferred Stock shall not be entitled to participate in the
earnings or assets of the Corporation.
(4) Liquidation, Dissolution or Winding Up. (A) Subject to the rights of
series of Preferred Stock which may from time to time come into existence, upon
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, then, before any distribution or payment shall be
made to the holders of any Junior Stock, the holders of shares of Series B
Excess Preferred Stock shall be entitled to receive out of assets of the
Corporation legally available for distribution to stockholders, liquidation
distributions in the amount of the liquidation preference of $100.00 per share
in cash or property having a fair market value as determined by the Board of
Directors valued at $100.00 per share, plus an amount equal to all distributions
accrued and unpaid at the date of such liquidation, dissolution or winding up.
After payment of the full amount of the liquidating distributions to which they
are entitled, the holders of shares of Series B Excess Preferred Stock will have
no right or claim 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 B Excess Preferred Stock and the
corresponding amounts payable on all shares of Parity Preferred Stock, then the
holders of shares of Series B Excess Preferred Stock and Parity Preferred Stock
shall
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share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled.
(B) A consolidation or merger of the Corporation with or into any other
entity or entities, or a sale, lease, transfer, conveyance or disposition of all
or substantially all of the assets of the Corporation or a statutory share
exchange in which stockholders of the Corporation may participate, shall not be
deemed to be a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this paragraph (4).
(5) Redemption. (A) Shares of Series B Excess Preferred Stock are not
redeemable prior to September 24, 2003. On and after September 24, 2003, the
Corporation at its option upon not less than 30 nor more than 60 days' written
notice, may redeem outstanding shares of Series B Excess Preferred Stock, in
whole or in part, at any time or from time to time, for cash at the following
redemption prices (expressed as a percentage of liquidation value) after
September 24 in the following years:
Year Percentage
---- ----------
2003 105
2004 104
2005 103
2006 102
2007 101
2008 and thereafter 100
plus an amount equal to all distributions accrued and unpaid thereon to the date
fixed for redemption, without interest to the extent the Corporation will have
funds legally available therefor. The redemption price of shares of Series B
Excess Preferred Stock (other than the portion hereof consisting of accrued and
unpaid distributions) is payable solely out of proceeds from the sale of other
capital stock of the Corporation, which may include Common Stock, Preferred
Stock, depository shares, interests, participations or other ownership interests
in the Corporation however designated, and any rights (other than debt
securities converted into or exchangeable for capital stock), warrants or
options to purchase any thereof, and not from any other source. Holders of
shares of Series B Excess Preferred Stock to be redeemed shall surrender such
shares of Series B Excess Preferred Stock at the place designated in such notice
and shall be entitled to the redemption price and any accrued and unpaid
distributions payable upon such redemption following such surrender. If fewer
than all of the outstanding shares of Series B Excess Preferred Stock are to be
redeemed, the number of shares to be redeemed will be determined by the
Corporation and such shares may be redeemed pro rata from the holder of record
of such shares in proportion to the number of such shares held by such holders
(with adjustments to avoid redemption of fractional shares or by lot in a manner
determined by the Corporation).
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(B) Unless cumulative distributions on all shares of Series B Excess
Preferred Stock and Parity Stock shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof for
payment for all past distribution periods and the current distribution period,
no shares of Series B Excess Preferred Stock or Parity Stock shall be redeemed
unless all outstanding shares of Series B Excess Preferred Stock and Parity
Preferred Stock are simultaneously redeemed; the foregoing shall not prevent the
purchase or acquisition of shares of Series B Excess Preferred Stock or Parity
Stock pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding shares of Series B Excess Preferred Stock or Parity Preferred
Stock, as the case may be. Furthermore, unless full cumulative distributions on
all outstanding shares of Series B Excess Preferred Stock and Parity Preferred
Stock have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire directly or indirectly any shares of
Series B Excess Preferred Stock or Parity Preferred Stock (except by conversion
into or exchange for shares of capital stock of the Corporation ranking junior
to Series B Excess Preferred Stock and Parity Preferred Stock as to
distributions and upon liquidation).
(C) Notice of redemption will 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 will be mailed, postage prepaid,
at least 30 days but not more than 90 days before the redemption date, to each
holder of record of shares of Series B Excess Preferred Stock at the address
shown on the share transfer books of the Corporation. Each notice shall state:
(i) the redemption date; (ii) the number of shares of Series B Excess Preferred
Stock to be redeemed; (iii) the redemption price per share; (iv) the place or
places where certificates for shares of Series B Excess Preferred Stock are to
be surrendered for payment of the redemption price; and (v) that distributions
on shares of Series B Excess Preferred Stock will cease to accrue on such
redemption date. No failure to give such notice or any defect thereto or in the
mailing thereof shall affect the validity of the proceeding for the redemption
of any Series B Excess Preferred Stock except as to the holder to whom notice
was defective or not given. If fewer than all shares of Series B Excess
Preferred Stock are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of shares of Series B Excess Preferred
Stock to be redeemed from each such holder. If notice of redemption of any
shares of Series B Excess Preferred Stock has been given and if the funds
necessary for such redemption have been set aside by the Corporation in trust
for the benefit of the holders of shares of Series B Excess Preferred Stock so
called for redemption, then from and after the redemption date, distributions
will cease to accrue on such
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shares of Series B Excess Preferred Stock, such shares of Series B Excess
Preferred Stock shall no longer be deemed outstanding and all rights of the
holders of such shares will terminate, except the right to receive the
redemption price.
(D) The holders of shares of Series B Excess Preferred Stock at the close
of business on a Distribution Record Date will be entitled to receive the
distribution payable with respect to such shares of Series B Excess Preferred
Stock on the corresponding Distribution Payment Date notwithstanding the
redemption thereof between such Distribution Record Date and the corresponding
Distribution Payment Date or the Corporation's default in the payment of the
distribution due. Except as provided above, the Corporation will make no payment
or allowance for unpaid distributions, whether or not in arrears, on shares of
Series B Excess Preferred Stock which have been called for redemption.
(E) Series B Excess Preferred Stock have no stated maturity and will not
be subject to any sinking fund or mandatory redemption, except as provided in
Article NINTH of the Charter of the Corporation.
(6) Voting. (A) Except as indicated in this paragraph (6), except as may
be required by applicable law, or, at any time Series B Excess Preferred Stock
are listed on a securities exchange, as may be required by the rules of such
exchange, the holders of shares of Series B Excess Preferred Stock will have no
voting rights.
(B) If six quarterly distributions (whether or not consecutive) payable on
shares of Series B Preferred Stock or Series B Excess Preferred Stock are in
arrears, whether or not earned or declared, the number of directors then
constituting the Board of Directors of the Corporation will be increased by two
(except as provided in the proviso to paragraph (c) to Article FOURTH of the
Charter), and the holders of shares of Series B Preferred Stock and Series B
Excess Preferred Stock, voting together as a class with the holders of shares of
any other series of Preferred Stock upon which like voting rights have been
conferred and are exercisable (any such other series, the "Nonvoting Preferred
Stock"), will have the right to elect two directors to serve on the
Corporation's Board of Directors at any annual meeting of stockholders or a
special meeting of the holders of Series B Preferred Stock and Series B Excess
Preferred Stock and such other voting Preferred Stock called by the holders of
record of at least 10% of any series of Preferred Stock 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 stockholders), until all such distributions
have been declared and paid or set aside for payment. The term of office of all
directors so elected will terminate with the termination of such voting rights.
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(C) The approval of two-thirds of the outstanding Series B Excess
Preferred Stock voting as a single class is required in order to (i) amend,
alter or repeal any provision of the Charter, so as to materially and adversely
affect the rights, preferences, privileges or voting power of the Series B
Excess Preferred Stock; or (ii) authorize, reclassify, create or increase the
authorized or issued amount of any class or series of stock having rights senior
to Series B Excess Preferred Stock with respect to the payment of distributions
or amounts upon liquidation, dissolution or winding up of the affairs of the
Corporation or to create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase such shares. However, the
Corporation may create additional classes of Parity Preferred Stock and Junior
Stock, increase the authorized number of shares of Parity Preferred Stock and
Junior Stock and issue additional series of Parity Preferred Stock and Junior
Stock without the consent of any holder of Series B Excess Preferred Stock or
Voting Preferred Stock.
(D) Except as provided above, as may be required by law or as required by
the rules of any securities exchange on which the Series B Excess Preferred
Stock are listed, the holders of Series B Excess Preferred Stock are not
entitled to vote on any merger or consolidation involving the Corporation, on
any share exchange or on a sale of all or substantially all of the assets of the
Corporation.
(E) In any matter in which the Series B Excess Preferred Stock are
entitled to vote (as provided in this paragraph (6)), as may be required by law
or as required by the rules of any securities exchange on which the Series B
Excess Preferred Stock are listed, including any action by written consent, each
share of Series B Excess Preferred Stock shall be entitled to one vote.
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Exhibit 3.2
SIMON PROPERTY GROUP, INC.
BY-LAWS
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. ANNUAL MEETING. Simon Property Group, Inc. (the
"Corporation") shall hold an annual meeting of its stockholders to elect
directors and transact any other business within its powers, at such place, on
such date, and at such time as shall be set by the Board of Directors. Except as
the Restated Certificate of Incorporation of the Corporation (the "Charter"),
these By-Laws, or statute provides otherwise, any business may be considered at
an annual meeting without the purpose of the meeting having been specified in
the notice. Failure to hold an annual meeting does not invalidate the
Corporation's existence or affect any otherwise valid corporate acts.
SECTION 1.02. SPECIAL MEETING. At any time in the interval between annual
meetings, a special meeting of the stockholders may be called by the Chairman of
the Board, or a Co-Chairman of the Board or the President or by a majority of
the Board of Directors by vote at a meeting or in writing (addressed to the
Secretary of the Corporation) with or without a meeting.
SECTION 1.03. PLACE OF MEETINGS. Meetings of stockholders shall be held at
such place in the United States as is set from time to time by the Board of
Directors.
SECTION 1.04. NOTICE OF MEETINGS; WAIVER OF NOTICE. Not less than ten nor
more than 60 days before each stockholders meeting, the Secretary shall give
written notice of the meeting to each stockholder entitled to vote at the
meeting and each other stockholder entitled to notice of the meeting. The notice
shall state the time and place of the meeting and, if the meeting is a special
meeting or notice of the purpose is required by statute, the purpose of the
meeting. Notice is given to a stockholder when it is personally delivered to
him, left at his residence or usual place of business, or mailed to him at his
address as it appears on the records of the Corporation. Notwithstanding the
foregoing provisions, each person who is entitled to notice waives notice if he
or she before or after the meeting signs a waiver of the notice which is filed
with the records of stockholders' meetings, or is present at the meeting in
person or by proxy (except as otherwise provided by Section 229 of the General
Corporation Law of the State of Delaware).
SECTION 1.05. QUORUM; VOTING. Unless any statute or the Charter provides
otherwise, at a meeting of stockholders the presence in person or by proxy of
stockholders entitled to cast a majority of all the votes entitled to be cast at
the meeting
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constitutes a quorum, and the affirmative vote of a majority of all the votes
cast at a meeting at which a quorum is present is sufficient to approve any
matter which properly comes before the meeting, except that a plurality of all
the votes cast at a meeting at which a quorum is present is sufficient to elect
a director.
SECTION 1.06. ADJOURNMENTS. Whether or not a quorum is present, a meeting
of stockholders convened on the date for which it was called may be adjourned
from time to time by a majority vote of the stockholders present in person or by
proxy entitled to vote without notice other than by announcement at the meeting.
Any business which might have been transacted at the meeting as originally
notified may be deferred and transacted at any such adjourned meeting at which a
quorum shall be present.
SECTION 1.07. GENERAL RIGHT TO VOTE; PROXIES. Unless the Charter provides
otherwise, each outstanding share of stock, regardless of class, is entitled to
one vote on each matter submitted to a vote at a meeting of stockholders. In all
elections for directors, each share of stock entitled to vote may be voted for
as many individuals as there are directors to be elected and for whose election
the share is entitled to be voted. A stockholder may vote the stock he or she
owns of record either in person or by proxy authorized by an instrument in
writing or by a transmission permitted by law. Unless a proxy provides
otherwise, it is not valid more than three years after its date.
SECTION 1.08. LIST OF STOCKHOLDERS. The Secretary shall prepare and make,
at least ten days before every election of directors, a complete list of the
stockholders entitled to vote, arranged in alphabetical order and showing the
address of each stockholder and the number of shares of each stockholder. Such
list shall be open at the place where the election is to be held for said ten
days, to the examination of any stockholder, and shall be produced and kept at
the time and place of election during the whole time thereof, and subject to the
inspection of any stockholder who may be present.
SECTION 1.09. CONDUCT OF BUSINESS. Nominations of persons for election to
the Board of Directors and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (a) pursuant to
the Corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any stockholder of the Corporation who was a stockholder of
record at the time of giving notice provided for in Section 1.11, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth in Section 1.12. The chairman of the meeting shall have the power and duty
to determine whether a nomination or any business proposed to be brought before
the meeting was made in accordance with the procedures set forth in this Section
and Section 1.12 and, if any proposed nomination or business is not in
compliance with this Section and Section 1.12, to declare that such defective
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nomination or proposal be disregarded. No person shall be qualified to serve as
a director unless nominated in accordance with this Section 1.09.
SECTION 1.10. CONDUCT OF VOTING. At all meetings of stockholders, unless
the voting is conducted by inspectors, the proxies and ballots shall be
received, and all questions touching the qualification of voters and the
validity of proxies, the acceptance or rejection of votes and procedures for the
conduct of business not otherwise specified by these By-Laws, the Charter or
law, shall be decided or determined by the chairman of the meeting. Unless
required by law, no vote need be by ballot and voting need not be conducted by
an inspector. No candidate for election as a director at a meeting shall serve
as an inspector thereat.
SECTION 1.11. STOCKHOLDER PROPOSALS. For any stockholder proposal to be
presented in connection with an annual meeting of stockholders of the
Corporation, including any proposal relating to the nomination of a director to
be elected to the Board of Directors of the Corporation, the stockholders must
have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not less than 60 days nor more
than 90 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day prior to such
annual meeting or the tenth day following the day on which public announcement
of the date of such meeting is first made. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (b) as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and of the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is
made, (i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of
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stock of the Corporation which are owned beneficially and of record by such
stockholders and such beneficial owner.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. FUNCTION OF DIRECTORS. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors. All
powers of the Corporation may be exercised by or under authority of the Board of
Directors, except as conferred on or reserved to the stockholders by statute or
by the Charter or By-Laws.
SECTION 2.02. NUMBER OF DIRECTORS. The Corporation shall have that number
of directors as provided in paragraph (a) of Article FIFTH of the Charter.
SECTION 2.03. REMOVAL OF DIRECTOR. Any director or the entire Board of
Directors may be removed only in accordance with the provisions of the Charter
and General Corporation Law of the State of Delaware.
SECTION 2.04. VACANCY ON BOARD. Subject to the rights of the holders of
any class of Preferred Stock then outstanding, newly created directorships
resulting from any increase in the authorized number of directors shall be
filled by a vote of the stockholders or a majority of the directors in office on
the Board of Directors, and any vacancies on the Board of Directors resulting
from death, resignation, retirement, disqualification, removal from office, or
other cause shall be filled in accordance with paragraph (b) of Article FIFTH of
the Charter.
SECTION 2.05. REGULAR MEETINGS. After each meeting of stockholders at
which directors shall have been elected, the Board of Directors shall meet as
soon as practicable for the purpose of organization and the transaction of other
business. In the event that no other time and place are specified by resolution
of the Board of Directors, the President, the Chairman of the Board or a
Co-Chairman of the Board, with notice in accordance with Section 2.07, the Board
of Directors shall meet immediately following the close of, and at the place of,
such stockholders' meeting. Any other regular meeting of the Board of Directors
shall be held on such date and at any place as may be designated from time to
time by the Board of Directors.
SECTION 2.06. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board, a Co-Chairman of the
Board, or the President or by a majority of the Board of Directors by vote at a
meeting, or in writing with or without a meeting. A special meeting of the Board
of Directors shall be held on such date and at any place as may be designated
from time to time by the Board of Directors.
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In the absence of designation such meeting shall be held at such place as may be
designated in the call.
SECTION 2.07. NOTICE OF MEETING. Except as provided in Section 2.05, the
Secretary shall give notice to each director of each regular and special meeting
of the Board of Directors. The notice shall state the time and place of the
meeting. Notice is given to a director when it is delivered personally to him,
left at his residence or usual place of business, or sent by telegraph,
facsimile transmission or telephone, at least 24 hours before the time of the
meeting or, in the alternative by mail to his address as it shall appear on the
records of the Corporation, at least 72 hours before the time of the meeting.
Unless the By-Laws or a resolution of the Board of Directors provides otherwise,
the notice need not state the business to be transacted at or the purposes of
any regular or special meeting of the Board of Directors. No notice of any
meeting of the Board of Directors need be given to any director who attends
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened, or to any director who, in writing executed and filed with the records
of the meeting either before or after the holding thereof, waives such notice.
Any meeting of the Board of Directors, regular or special, may adjourn from time
to time to reconvene at the same or some other place, and no notice need be
given of any such adjourned meeting other than by announcement.
SECTION 2.08. ACTION BY DIRECTORS. Unless statute or the Charter or
By-Laws requires a greater proportion, the action of a majority of the directors
present at a meeting at which a quorum is present is action of the Board of
Directors. A majority of the entire Board of Directors shall constitute a quorum
for the transaction of business. In the absence of a quorum, the directors
present by majority vote and without notice other than by announcement may
adjourn the meeting from time to time until a quorum shall attend. At any such
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified. Any action required or permitted to be taken at a meeting of the Board
of Directors may be taken without a meeting, if an unanimous written consent
which sets forth the action is signed by each member of the Board and filed with
the minutes of proceedings of the Board.
SECTION 2.09. MEETING BY CONFERENCE TELEPHONE. Members of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
constitutes presence in person at a meeting.
SECTION 2.10. COMPENSATION. By resolution of the Board of Directors a
fixed sum and expenses, if any, for attendance at
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each regular or special meeting of the Board of Directors or of committees
thereof, and other compensation for their services as such or on committees of
the Board of Directors, may be paid to directors. Directors who are employees of
the Corporation need not be paid for attendance at meetings of the board or
committees thereof for which fees are paid to other directors. A director who
serves the Corporation in any other capacity also may receive compensation for
such other services, pursuant to a resolution of the directors.
SECTION 2.11. ADVISORY DIRECTORS. The Board of Directors may by resolution
appoint advisory directors to the Board, who may also serve as directors
emeriti, and shall have such authority and receive such compensation and
reimbursement as the Board of Directors shall provide. Advisory directors or
directors emeriti shall not have the authority to participate by vote in the
transaction of business.
SECTION 2.12. SURETY BONDS. Unless required by law, no director shall be
obligated to give any bond or surety or other security for the performance of
any of his or her duties.
ARTICLE III.
COMMITTEES
SECTION 3.01. COMMITTEES. In accordance with the Charter, the Board of
Directors may appoint an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating Committee and other committees composed of one or more
directors and delegate to these committees any of the powers of the Board of
Directors, except the power to declare dividends or other distributions on
stock, elect directors, issue stock other than as provided in the next sentence,
recommend to the stockholders any action which requires stockholder approval,
amend the By-Laws, or approve any merger or share exchange which does not
require stockholder approval. If the Board of Directors has given general
authorization for the issuance of stock, a committee of the Board of Directors,
in accordance with a general formula or method specified by the Board of
Directors by resolution or by adoption of a stock option or other plan, may fix
the terms of stock subject to the terms on which any stock may be issued,
including all terms and conditions required or permitted to be established or
authorized by the Board of Directors.
SECTION 3.02. COMMITTEE PROCEDURE. Each committee may fix rules of
procedure for its business. A majority of the members of a committee shall
constitute a quorum for the transaction of business and the act of a majority of
those present at a meeting at which a quorum is present shall be the act of the
committee. Any action required or permitted to be taken at a meeting of a
committee may be taken without a meeting, if a unanimous written consent which
sets forth the action is signed by each committee
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member and filed with the minutes of the committee. The members of a committee
may conduct any meeting thereof by conference telephone in accordance with the
provisions of Section 2.10.
ARTICLE IV.
OFFICERS
SECTION 4.01. EXECUTIVE AND OTHER OFFICERS. The Corporation shall have a
President, a Secretary, and a Treasurer. The Corporation may also have a
Chairman, or Co-Chairmen, of the Board, a Chief Executive Officer, a Chief
Operating Officer, one or more Vice-Presidents, assistant officers, and
subordinate officers as may be established by the Board of Directors. A person
may hold more than one office in the Corporation except that no person may serve
concurrently as both President and Vice-President of the Corporation. The
Chairman of the Board, or each of the Co-Chairmen of the Board, as the case may
be, shall be a director; the other officers may be directors.
SECTION 4.02. CHAIRMAN OF THE BOARD. The Chairman, or Co-Chairmen, of the
Board, if elected, shall preside at all meetings of the Board of Directors and
of the stockholders at which he or she or they shall be present. In general, the
Chairman of the Board and a Co-Chairman of the Board shall perform all such
duties as are from time to time assigned to him or her by the Board of
Directors.
SECTION 4.03. VICE CHAIRMAN. The Vice Chairman of the Board, if one be
elected by the Board of Directors, shall be an officer of the Corporation. In
general, the Vice Chairman of the Board shall perform all such duties as are
from time to time assigned to him or her by the Board of Directors.
SECTION 4.04. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall
be the principal executive officer of the Corporation and, subject to the
control of the Board of Directors and with the President, shall in general
supervise and control all of the business and affairs of the Corporation. In
general, he or she shall perform such other duties usually performed by a chief
executive officer of a corporation and such other duties as are from time to
time assigned to him or her by the Board of Directors of the Corporation. Unless
otherwise provided by resolution of the Board of Directors, the Chief Executive
Officer, if one be elected, in the absence of the Chairman of the Board or a
Co-Chairman of the Board, shall preside at all meetings of the Board of
Directors and of the stockholders at which he or she shall be present.
SECTION 4.05. PRESIDENT. Unless otherwise specified by the Board of
Directors, the President shall be the principal operating officer of the
Corporation and perform the duties customarily performed by a principal
operating officer of a corporation. If no Chief Executive Officer is appointed,
he or
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she shall also serve as the Chief Executive Officer of the Corporation. The
President may sign and execute, in the name of the Corporation, all authorized
deeds, mortgages, bonds, contracts or other instruments, except in cases in
which the signing and execution thereof shall have been expressly delegated to
some other officer or agent of the Corporation. In general, he or she shall
perform such other duties usually performed by a president of a corporation and
such other duties as are from time to time assigned to him or her by the Board
of Directors or the Chief Executive Officer of the Corporation. Unless otherwise
provided by resolution of the Board of Directors, the President, in the absence
of the Chairman of the Board, a Co-Chairman of the Board and the Chief Executive
Officer, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present.
SECTION 4.06. CHIEF OPERATING OFFICER. The Chief Operating Officer, at the
request of the Chief Executive Officer or the President, or in the President's
absence or during his inability to act, shall perform the duties and exercise
the functions of the President, and when so acting shall have the powers of the
President. Unless otherwise specified by the Board of Directors, he or she shall
perform such other duties usually performed by a chief operating officer of a
corporation and such other duties as are from time to time assigned to him or
her by the Board of Directors, the Chief Executive Officer or the President of
the Corporation.
SECTION 4.07. VICE-PRESIDENTS. The Vice-President or Vice-Presidents, at
the request of the Chief Executive Officer or the President or the Chief
Operating Officer, or in the Chief Operating Officer's absence or during his
inability to act, shall perform the duties and exercise the functions of the
Chief Operating Officer, and when so acting shall have the powers of the Chief
Operating Officer. If there be more than one Vice-President, the Board of
Directors may determine which one or more of the Vice-Presidents shall perform
any of such duties or exercise any of such functions, or if such determination
is not made by the Board of Directors, the Chief Executive Officer, or the
President may make such determination; otherwise any of the Vice-Presidents may
perform any of such duties or exercise any of such functions. The Vice-President
or Vice-Presidents shall have such other powers and perform such other duties,
and have such additional descriptive designations in their titles (if any), as
are from time to time assigned to them by the Board of Directors, the Chief
Executive Officer, or the President of the Corporation.
SECTION 4.08. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, of the Board of Directors and of any committees,
in books provided for the purpose; he or she shall see that all notices are duly
given in accordance with the provisions of the By-Laws or as required by law; he
or she shall be custodian of the records of the Corporation; he or she may
witness any document on behalf of the
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Corporation, the execution of which is duly authorized, see that the corporate
seal is affixed where such document is required or desired to be under its seal,
and, when so affixed, may attest the same; and, in general, the Secretary shall
perform all duties incident to the office of a secretary of a corporation, and
such other duties as are from time to time assigned to him or her by the Board
of Directors, the Chief Executive officer, or the President of the Corporation.
SECTION 4.09. TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust companies
or other depositories as shall, from time to time, be selected by the Board of
Directors; he or she shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation; and, in general, the Treasurer shall perform all the duties
incident to the office of a treasurer of a corporation, and such other duties as
are from time to time assigned to him or her by the Board of Directors, the
Chief Executive officer, or the President of the Corporation.
SECTION 4.10. ASSISTANT AND SUBORDINATE OFFICERS. The assistant and
subordinate officers of the Corporation are all officers below the office of
Vice-President, Secretary, or Treasurer. The assistant or subordinate officers
shall have such duties as are from time to time assigned to them by the Board of
Directors, the Chief Executive Officer, or the President of the Corporation.
SECTION 4.11. ELECTION, TENURE AND REMOVAL OF OFFICERS. The Board of
Directors shall elect the officers. The Board of Directors may from time to time
authorize any committee or officer to appoint assistant and subordinate
officers. Election or appointment of an officer, employee or agent shall not of
itself create contract rights. All officers shall be appointed to hold their
offices, respectively, during the pleasure of the Board. The Board of Directors
(or, as to any assistant or subordinate officer, any committee or officer
authorized by the Board) may remove an officer at any time. The removal of an
officer does not prejudice any of his contract rights. The Board of Directors
(or, as to any assistant or subordinate officer, any committee or officer
authorized by the Board) may fill a vacancy which occurs in any office for the
unexpired portion of the term.
SECTION 4.12. COMPENSATION. The Board of Directors shall have power to fix
the salaries and other compensation and remuneration, of whatever kind, of all
officers of the Corporation. No officer shall be prevented from receiving such
salary by reason of the fact that he or she is also a director of the
Corporation. The Board of Directors may authorize any committee or officer, upon
whom the power of appointing assistant and subordinate officers may have been
conferred, to fix the
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salaries, compensation and remuneration of such assistant and subordinate
officers.
ARTICLE V.
DIVISIONAL TITLES
SECTION 5.01. CONFERRING DIVISIONAL TITLES. The Board of Directors may
from time to time confer upon any employee of a division of the Corporation the
title of President, Vice President, Treasurer or Controller of such division or
any other title or titles deemed appropriate, or may authorize the Chairman of
the Board, a Co-Chairman of the Board, the Chief Executive Officer or the
President to do so. Any such titles so conferred may be discontinued and
withdrawn at any time by the Board of Directors, or by the Chairman of the
Board, or a Co-Chairman of the Board or the President if so authorized by the
Board of Directors. Any employee of a division designated by such a divisional
title shall have the powers and duties with respect to such division as shall be
prescribed by the Board of Directors, the Chairman of the Board, a Co-Chairman
of the Board, or the President.
SECTION 5.02. EFFECT OF DIVISIONAL TITLES. The conferring of divisional
titles, as described in Section 5.01 hereof, shall not create an office of the
Corporation under Article IV unless specifically designated as such by the Board
of Directors; but any person who is an officer of the Corporation may also have
a divisional title.
ARTICLE VI.
STOCK
SECTION 6.01. CERTIFICATES FOR STOCK. Each stockholder is entitled to
certificates which represent and certify the shares of stock he or she holds in
the Corporation. Each stock certificate shall include on its face the name of
the Corporation, the name of the stockholder or other person to whom it is
issued, and the class of stock and number of shares it represents. It shall be
in such form, not inconsistent with law or with the Charter, as shall be
approved by the Board of Directors or any officer or officers designated for
such purpose by resolution of the Board of Directors. Each stock certificate
shall be signed by the Chairman of the Board, a Co-Chairman of the Board, the
President, or a Vice-President, and countersigned by the Secretary, an Assistant
Secretary, the Treasurer, or an Assistant Treasurer. Each certificate may be
sealed with the actual corporate seal or a facsimile of it or in any other form
and the signatures may be either manual or facsimile signatures. A certificate
is valid and may be issued whether or not an officer who signed it is still an
officer when it is issued. A certificate may not be issued until the stock
represented by it is fully paid.
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SECTION 6.02. TRANSFERS. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient concerning
the issue, transfer and registration of certificates of stock; and may appoint
transfer agents and registrars thereof. The duties of transfer agent and
registrar may be combined.
SECTION 6.03. RECORD DATES. The Board of Directors may set a record date
for the purpose of making any proper determination with respect to stockholders,
including which stockholders are entitled to notice of a meeting, vote at a
meeting, receive a dividend, or be allotted other rights. The record date may
not be prior to the close of business on the day the record date is fixed nor,
subject to Section 1.06, more than 60 days before the date on which the action
requiring the determination will be taken; and, in the case of a meeting of
stockholders, the record date shall be at least ten days before the date of the
meeting.
SECTION 6.04. STOCK LEDGER. The Corporation shall maintain a stock ledger
which contains the name and address of each stockholder and the number of shares
of stock of each class which the stockholder holds. The stock ledger may be in
written form or in any other form which can be converted within a reasonable
time into written form for visual inspection. The original or a duplicate of the
stock ledger shall be kept at the offices of a transfer agent for the particular
class of stock, or, if none, at the principal office in the State of Delaware or
the principal executive offices of the Corporation.
SECTION 6.05. LOST STOCK CERTIFICATES. The Board of Directors of the
Corporation may determine the conditions for issuing a new stock certificate in
place of one which is alleged to have been lost, stolen, or destroyed, or the
Board of Directors may delegate such power to any officer or officers of the
Corporation. In their discretion, the Board of Directors or such officer or
officers may refuse to issue such new certificate save upon the order of some
court having jurisdiction in the premises.
ARTICLE VII.
FINANCE
SECTION 7.01. CHECKS, DRAFTS, ETC. All checks, drafts and orders for the
payment of money, notes and other evidences of indebtedness, issued in the name
of the Corporation, shall, unless otherwise provided by resolution of the Board
of Directors, be signed by the Chief Executive Officer, the President, a
Vice-President or an Assistant Vice-President and countersigned by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary.
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SECTION 7.02. FISCAL YEAR. The fiscal year of the Corporation shall be the
twelve calendar months period ending December 31 in each year, unless otherwise
provided by the Board of Directors.
SECTION 7.03. DIVIDENDS. If declared by the Board of Directors at any
meeting thereof, the Corporation may pay dividends on its shares in cash,
property, or in shares of the capital stock of the Corporation, unless such
dividend is contrary to law or to a restriction contained in the Charter.
SECTION 7.04. CONTRACTS. To the extent permitted by applicable law, and
except as otherwise prescribed by the Charter or these By-Laws with respect to
certificates for shares, the Board of Directors may authorize any officer,
employee, or agent of the Corporation to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation. Such
authority may be general or confined to specific instances.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.01. PROCEDURE. Any indemnification, or payment of expenses, for
which mandatory payments must be made under the Charter, in advance of the final
disposition of any proceeding, shall be made promptly, and in any event within
60 days, upon the written request of the director or officer entitled to seek
indemnification (the "Indemnified Party"). The right to indemnification and
advances hereunder shall be enforceable by the Indemnified Party in any court of
competent jurisdiction, if (i) the Corporation denies such request, in whole or
in part, or (ii) no disposition thereof is made within 60 days. The Indemnified
Party's costs and expenses incurred in connection with successfully establishing
his right to indemnification, in whole or in part, in any such action shall also
be reimbursed by the Corporation. It shall be a defense to any action for
advance for expenses that (a) a determination has been made that the facts then
known to those making the determination would preclude indemnification or (b)
the Corporation has not received both (i) an undertaking as required by law to
repay such advances in the event it shall ultimately be determined that the
standard of conduct has not been met and (ii) a written affirmation by the
Indemnified Party of such Indemnified Party's good faith belief that the
standard of conduct necessary for indemnification by the Corporation has been
met.
SECTION 8.02. EXCLUSIVITY, ETC. The indemnification and advance of
expenses provided by the Charter and these By-Laws shall not be deemed exclusive
of any other rights to which a person seeking indemnification or advance of
expenses may be entitled under any law (common or statutory), or any agreement,
vote of stockholders or disinterested directors or other
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provision that is consistent with law, both as to action in his official
capacity and as to action in another capacity while holding office or while
employed by or acting as agent for the Corporation, shall continue in respect of
all events occurring while a person was a director or officer after such person
has ceased to be a director or officer, and shall inure to the benefit of the
estate, heirs, executors and administrators of such person. All rights to
indemnification and advance of expenses under the Charter of the Corporation and
hereunder shall be deemed to be a contract between the Corporation and each
director or officer of the Corporation who serves or served in such capacity at
any time while this By-Law is in effect. Nothing herein shall prevent the
amendment of this By-Law, provided that no such amendment shall diminish the
rights of any person hereunder with respect to events occurring or claims made
before its adoption or as to claims made after its adoption in respect of events
occurring before its adoption. Any repeal or modification of this By-Law shall
not in any way diminish any rights to indemnification or advance of expenses of
such director or officer or the obligations of the Corporation arising hereunder
with respect to events occurring, or claims made, while this By-Law or any
provision hereof is in force.
SECTION 8.03. SEVERABILITY; DEFINITIONS. The invalidity or
unenforceability of any provision of this Article VIII shall not affect the
validity or enforceability of any other provision hereof. The phrase "this
By-Law" in this Article VIII means this Article VIII in its entirety.
ARTICLE IX.
SUNDRY PROVISIONS
SECTION 9.01. BOOKS AND RECORDS. The Corporation shall keep correct and
complete books and records of its accounts and transactions and minutes of the
proceedings of its stockholders and Board of Directors and of any executive or
other committee when exercising any of the powers of the Board of Directors. The
books and records of a Corporation may be in written form or in any other form
which can be converted within a reasonable time into written form for visual
inspection. Minutes shall be recorded in written form but may be maintained in
the form of a reproduction. The original or a certified copy of the By-Laws
shall be kept at the principal office of the Corporation.
SECTION 9.02. CORPORATE SEAL. The Board of Directors shall provide a
suitable seal, bearing the name of the Corporation, which shall be in the charge
of the Secretary. The Board of Directors may authorize one or more duplicate
seals and provide for the custody thereof. If the Corporation is required to
place its corporate seal to a document, it is sufficient to meet the requirement
of any law, rule, or regulation relating to a corporate seal to place the word
"Seal" adjacent to the
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signature of the person authorized to sign the document on behalf of the
Corporation.
SECTION 9.03. BONDS. The Board of Directors may require any officer, agent
or employee of the Corporation to give a bond to the Corporation, conditioned
upon the faithful discharge of his duties, with one or more sureties and in such
amount as may be satisfactory to the Board of Directors.
SECTION 9.04. VOTING UPON SHARES IN OTHER CORPORATIONS. Stock of other
corporations or associations, registered in the name of the Corporation, may be
voted by the President, a Vice-President, or a proxy appointed by either of
them. The Board of Directors, however, may by resolution appoint some other
person to vote such shares, in which case such person shall be entitled to vote
such shares upon the production of a certified copy of such resolution.
SECTION 9.05. MAIL. Any notice or other document which is required by
these By-Laws to be mailed shall be deposited in the United States mails,
postage prepaid.
SECTION 9.06. EXECUTION OF DOCUMENTS. A person who holds more than one
office in the Corporation may not act in more than one capacity to execute,
acknowledge, or verify an instrument required by law to be executed,
acknowledged, or verified by more than one officer.
SECTION 9.07. RELIANCE. Each director, officer, employee and agent of the
Corporation shall, in the performance of his or her duties with respect to the
Corporation, be fully justified and protected with regard to any act or failure
to act in reliance in good faith upon the books of account or other records of
the Corporation, upon an opinion of counsel or upon reports made to the
Corporation by any of its officers or employees or by the adviser, accountants,
appraisers or other experts or consultants selected by the Board of Directors or
officers of the Corporation, regardless of whether such counsel or expert may
also be a director.
SECTION 9.08. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
The directors shall have no responsibility to devote their full time to the
affairs of the Corporation. Any director or officer, employee or agent of the
Corporation, in his or her personal capacity or in a capacity as an affiliate,
employee, or agent of any other person, or otherwise, may have business
interests and engage in business activities similar to or in addition to those
of or relating to the Corporation.
SECTION 9.09. AMENDMENTS. In accordance with the Charter, these By-Laws
may be repealed, altered, amended or rescinded by the stockholders of the
Corporation (considered for this purpose as one class) by the affirmative vote
of not less than 80% of all the votes entitled to be cast generally in the
election of
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directors which are cast on the matter at any meeting of the stockholders called
for that purpose (provided that notice of such proposed repeal, alteration,
amendment or rescission is included in the notice of such meeting).
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EXHIBIT 3.3
RESTATED
CERTIFICATE OF INCORPORATION
OF
CORPORATE REALTY CONSULTANTS, INC.
Corporate Realty Consultants, Inc. (the "Corporation"), a
corporation organized under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
1. That the name of the Corporation is Corporate Realty
Consultants, Inc.
2. The original Certificate of Incorporation of the
Corporation was filed under the name CPI Realty Services, Inc. with the
Secretary of State of Delaware on October 1, 1975.
3. This Restated Certificate of Incorporation was duly
authorized by the Corporation's Board of Directors and stockholders, and all
specifically affected classes or series of classes of stockholders, in
accordance with the provisions of Section 242 of the General Corporation Law of
the State of Delaware.
4. This Restated Certificate of Incorporation has been duly
adopted in accordance with Sections 242 and 245 of the General Corporation Law
of the State of Delaware.
5. This Restated Certificate of Incorporation will be
effective at 4:30 p.m. September 24, 1998.
6. The text of the Restated Certificate of Incorporation reads
as follows:
2
FIRST: The name of the corporation (which is hereinafter
called the "Corporation") is:
SPG Realty Consultants, Inc.
SECOND: The purposes for which the Corporation is formed is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware; provided, however
that the Corporation may not engage in any transaction or activity or take
advantage of any business opportunity which could legally be engaged in or taken
advantage of by Simon Property Group, Inc., a Delaware corporation ("Simon
Group"), without jeopardizing Simon Group's status as a real estate investment
trust under the Internal Revenue Code of 1986, as amended, or under any similar
provisions of any subsequently adopted Federal income tax law, unless the
Corporation shall by written notice delivered to Simon Group have first given
Simon Group, for no consideration payable by Simon Group to the Corporation
other than reimbursement to the Corporation for any expenditure or investment
made by the Corporation in acquiring or creating such transaction, activity or
business opportunity, a first refusal right to engage in such transaction or
activity or to take advantage of such business opportunity and Simon Group shall
not within 60 days of its receipt of such notice have advised the Corporation
that Simon Group desires to exercise such right.
THIRD: The address of its registered office in the State of
Delaware is c/o The Corporation Trust Company, 1209 Orange Street, Wilmington,
County of New Castle, Delaware. The name of its registered agent at such address
is The Corporation Trust Company.
FOURTH: (a) The total number of shares of stock which the
Corporation has authority to issue is 7,500,000 shares of Common Stock, par
value $.0001 per share ("Common Stock").
(b) The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the Common
Stock of the Corporation:
(1) Each share of Common Stock shall have one vote, and the
exclusive voting power for all purposes shall be vested in the holders
of the Common Stock. Shares of Common Stock shall not have cumulative
voting rights.
(2) Subject to the provisions of law, dividends or other
distributions, including dividends or other distributions payable in
shares of another class of the Corporation's stock, may be paid ratably
on the Common Stock at such time and in such amounts as the Board of
Directors may deem advisable.
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(3) Subject to the provisions of law, in the event of any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Common Stock shall be
entitled to share ratably in the net assets of the Corporation
remaining, after payment or provision for payment of the debts and
other liabilities of the Corporation and the amount to which any series
of preferred stock hereafter created having a preference on
distributions in the liquidation, dissolution or winding up of the
Corporation shall be entitled.
FIFTH: (a) The powers and duties conferred and imposed upon
the board of directors by the General Corporation Law of the State of Delaware
shall be exercised and performed, in accordance with Section 141 thereof
governing the action of directors, by a board (the "Board of Directors");
provided, however that pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware: (i) certain of such powers and duties of the Board of
Directors set forth herein shall be exercised and performed only by the
Independent Directors (as defined in Article EIGHTH hereof) and (ii) certain of
such powers and duties of the Board of Directors as described herein may be
exercised and performed by one or more committees consisting of one or more
members of the Board of Directors and one or more other persons to the extent
such powers and duties are delegated thereto by the Board of Directors. The
number of directors of the Corporation shall never be less than the minimum
number permitted by the General Corporation Law of the State of Delaware now or
hereafter in force. The number of directors of the Corporation shall be fixed by
the Board of Directors from time to time and shall initially be thirteen.
At least a majority of the directors shall be Independent Directors (as defined
in Article EIGHTH).
(b) Newly created directorships resulting from any increase in
the authorized number of directors shall be filled by a vote of the stockholders
or a majority of the entire Board of Directors, and any vacancies on the Board
of Directors resulting from death, disability ("disability," which for purposes
of this paragraph (b) shall mean illness, physical or mental disability or other
incapacity), resignation, retirement, disqualification, removal from office, or
other cause shall be filled by a vote of the stockholders or a majority of the
directors then in office.
No decrease in the number of directors constituting the Board of Directors shall
affect the tenure of office of any director.
(c) Each director of the Corporation shall be a person
who is a director of Simon Group.
(d) Subject to Section 141(k) of the General Corporation Law
of the State of Delaware, directors may be removed from office at any time, with
or without cause, by the
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affirmative vote of the holders of at least a majority of the combined voting
power of all classes of shares of capital stock entitled to vote in the election
for directors voting together as a single class.
(e) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the following are the names of the current directors
of the Corporation, each of whom shall serve until the annual meeting of
stockholders.
Name of Director
Robert E. Angelica
Birch Bayh
Hans C. Mautner
G. William Miller
J. Albert Smith, Jr.
Philip J. Ward
Pieter S. van den Berg
David Simon
Herbert Simon
Melvin Simon
Richard S. Sokolov
Frederick W. Petri
M. Denise DeBartolo York
(f) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, any action by the Corporation relating to (1)
transactions between the Corporation and M.S. Management Associates, Inc., Simon
MOA Management Company, Inc., DeBartolo Properties Management, Inc. and/or M.S.
Management Associates (Indiana), Inc. or (2) transactions involving the
Corporation, individually or in its capacity as general partner (whether
directly or indirectly through another entity) of SPG Realty Consultants, L.P.,
in which the Simon Family Group or the DeBartolo Family Group or any member or
affiliate of any member of the Simon Family Group or DeBartolo Family Group has
an interest (other than through ownership interests in the Corporation or SPG
Realty Consultants, L.P.), shall, in addition to such other vote that may be
required, require the prior approval of a majority of the Independent Directors.
(g) Elections of directors need not be by written ballot.
(h) Pursuant to Section 141(a) of the Delaware General
Corporation Law, the Board of Directors may appoint an Executive Committee, an
Audit Committee, a Nominating Committee and other committees composed of one or
more directors or one or more other persons delegated such powers and duties by
the Board of Directors. The entire Audit Committee and a majority of the
Compensation Committee shall be Independent Directors. The Nominating Committee
shall have five members, with two being independent Directors.
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SIXTH: (a) The following provisions are hereby adopted for the
purpose of defining, limiting, and regulating the powers of the Corporation and
of the directors and the stockholders:
(1) The Board of Directors is hereby empowered to authorize
the issuance from time to time of shares of its stock of any class,
whether now or hereafter authorized, or securities convertible into
shares of its stock of any class or classes, whether now or hereafter
authorized, for such consideration as may be deemed advisable by the
Board of Directors and without any action by the stockholders.
(2) No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have any
preemptive right to subscribe for or purchase any stock or any other
securities of the Corporation and at such price or prices and upon such
other terms as the Board of Directors, in its sole discretion, may fix;
and any stock or other securities which the Board of Directors may
determine to offer for subscription may, as the Board of Directors in
its sole discretion shall determine, be offered to the holders of any
class, series or type of stock or other securities at the time
outstanding to the exclusion of the holders of any or all other
classes, series or types of stock or other securities at the time
outstanding.
(3) The Board of Directors of the Corporation shall,
consistent with applicable law, have power in its sole discretion to
determine from time to time in accordance with sound accounting
practice or other reasonable valuation methods what constitutes annual
or other net profits, earnings, surplus, or net assets in excess of
capital; to fix and vary from time to time the amount to be reserved as
working capital, or determine that retained earnings or surplus shall
remain in the hands of the Corporation; to set apart out of any funds
of the Corporation such reserve or reserves in such amount or amounts
and for such proper purpose or purposes as it shall determine and to
abolish any such reserve or any part thereof; to redeem or purchase its
stock or to distribute and pay distributions or dividends in stock,
cash or other securities or property, out of surplus or any other funds
or amounts legally available therefor, at such times and to the
stockholders of record on such dates as it may, from time to time,
determine; to determine the amount, purpose, time of creation, increase
or decrease, alteration or cancellation of any reserves or charges and
the propriety thereof (whether or not any obligation or liability for
which such reserves or charges shall have been created shall have been
paid or discharged); to determine the fair value and any matters
relating to the acquisition, holding and disposition of any assets by
the Corporation; and to determine whether and to what extent and at
what times and places and under what conditions and regulations
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the books, accounts and documents of the Corporation, or any of them,
shall be open to the inspection of stockholders, except as otherwise
provided by statute or by the By-laws, and, except as so provided, no
stockholder shall have any right to inspect any book, account or
document of the Corporation unless authorized so to do by resolution of
the Board of Directors.
(4) (a) The Corporation shall indemnify to the fullest extent
permitted under and in accordance with the laws of the State of
Delaware any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by
reason of the fact that he is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as
a director, officer or trustee of or in any other capacity with another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
(b) Expenses incurred in defending a civil or criminal action,
suit or proceeding shall (in the case of any action, suit or proceeding
against a director of the Corporation) or may (in the case of any
action, suit or proceeding against an officer, trustee, employee or
agent) be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of
Directors upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Corporation
as authorized in this Article SIXTH paragraph (a)(4).
(c) The indemnification and other rights set forth in this
paragraph (a)(4) shall not be exclusive of any provisions with respect
thereto in the By-laws or any other contract or agreement between the
Corporation and any officer, director, employee or agent of the
Corporation.
(d) Neither the amendment nor repeal of this paragraph (a)(4),
subparagraph (a), (b) or (c), nor the adoption of any provision of this
Restated Certificate of Incorporation inconsistent with paragraph
(a)(4), subparagraph (a), (b) or (c), shall eliminate or reduce the
effect of this paragraph (a)(4), subparagraphs (a), (b) and (c), in
respect of any matter occurring before such
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amendment, repeal or adoption of an inconsistent provision or in
respect of any cause of action, suit or claim relating to any such
matter which would have given rise to a right of indemnification or
right to receive expenses pursuant to this paragraph (a)(5),
subparagraph (a), (b) or (c), if such provision had not been so amended
or repealed or if a provision inconsistent therewith had not been so
adopted.
(e) No director shall be personally liable to the Corporation
or any stockholder for monetary damages for breach of fiduciary duty as
a director, except for liability
(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law;
(iii) under Section 174 of the General Corporation Law of the
State of Delaware; or
(iv) for any transaction from which the director derived an
improper personal benefit.
If the General Corporation Law of the State of Delaware is
amended after the date hereof to authorize corporate action further
eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the General Corporation Law
of the State of Delaware, as so amended. All references in this
paragraph (e) shall also be deemed to refer to the Independent
Directors and members of committees of the Board of Directors.
(5) For any stockholder proposal to be presented in connection
with an annual meeting of stockholders of the Corporation, including
any proposal relating to the nomination of a director to be elected to
the Board of Directors of the Corporation, the stockholders must have
given timely written notice thereof in writing to the Secretary of the
Corporation in the manner and containing the information required by
the By-laws. Stockholder proposals to be presented in connection with a
special meeting of stockholders will be presented by the Corporation
only to the extent required by the General Corporation Law of the State
of Delaware.
(b) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Charter, including any
amendments
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changing the terms or contract rights, as expressly set forth in the Charter, of
any of its outstanding stock by reclassification or otherwise, by a majority of
the directors (including a majority of the Independent Directors adopting a
resolution setting forth the proposed change, declaring its advisability, and
either calling a special meeting of the stockholders certified to vote on the
proposed change, or directing the proposed change to be considered at the next
annual stockholders meeting; provided however, that any amendment to, repeal of
or adoption of any provision inconsistent with subparagraphs (a)(4)(e) or (a)(5)
or this paragraph (b) of Article SIXTH will be effective only if it is adopted
upon the affirmative vote of not less than 80% of the aggregate votes entitled
to be cast thereon.
(c) In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
alter or repeal the By-laws of the Corporation.
(d) Pursuant to Section 141(a) of the General Corporation Law
of the State of Delaware, the affirmative vote of least six of the Independent
Directors is necessary to cause any partnership in which the Corporation acts,
directly or indirectly, as a general partner to sell any property owned by such
partnership in accordance with the terms of the partnership agreement of such
partnership.
(e) The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the Charter of the Corporation, or construed as or
deemed by inference or otherwise in any manner to exclude or limit any powers
conferred upon the Board of Directors under the General Corporation Law of the
State of Delaware now or hereafter in force.
SEVENTH: Any action required or permitted to be taken by
stockholders of the Company at a duly called annual or special meeting of such
stockholders of the Company may be effected by written consent without a meeting
by such stockholders.
EIGHTH: The following terms shall have the following meaning:
"Board of Directors" shall mean the Board of Directors of the
Corporation as defined in Article FIFTH.
"By-laws" shall mean the By-laws of the Corporation.
"DeBartolo Family Group" shall mean the Estate of Edward J.
DeBartolo, Sr., Edward J. DeBartolo, Jr. and Marie Denise DeBartolo
York, other members of the immediate family
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of any of the foregoing, any other lineal descendants of any of the
foregoing, any estates of any of the foregoing, any trusts established
for the benefit of any of the foregoing, and any other entity
controlled by any of the foregoing.
"Independent Director" shall mean a director of the
Corporation who is neither an employee of the Corporation nor a member
(or an affiliate of a member) of the Simon Family Group or the
DeBartolo Family Group.
"Simon Family Group" shall mean Melvin Simon, Herbert Simon
and David Simon, other members of the immediate family of any of the
foregoing, any other lineal descendants of any of the foregoing, any
estates of any of the foregoing, any trust established for the benefit
of any of the foregoing, and any other entity controlled by any of the
foregoing.
"Units" shall mean units representing limited partnership
interests in SPG Realty Consultants, L.P.
NINTH: Whenever the Corporation shall have the obligation to
purchase Units and shall have the right to choose to satisfy such obligation by
purchasing such Units either with cash or with Common Stock, the determination
whether to utilize cash or Common Stock to effect such purchase shall be made by
majority vote of the Independent Directors, pursuant to Section 141(a) of the
General Corporation Law of the State of Delaware.
TENTH: In the event any term, provision, sentence or paragraph
of the Charter of the Corporation is declared by a court of competent
jurisdiction to be invalid or unenforceable, such term, provision, sentence or
paragraph shall be deemed severed from the remainder of the Charter, and the
balance of the Charter shall remain in effect and be enforced to the fullest
extent permitted by law and shall be construed to preserve the intent and
purposes of the Charter. Any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such term, provision,
sentence or paragraph of the Charter in any other jurisdiction.
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IN WITNESS WHEREOF, I have made and signed this Certificate this 24th day of
September, 1998 and affirm the statements contained herein as true under
penalties of perjury.
/s/ Hans C. Mautner
------------------------------
Name: Hans C. Mautner
Title: Chief Executive Officer
1
EXHIBIT 3.4
SPG REALTY CONSULTANTS, INC.
BY-LAWS
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. ANNUAL MEETING. SPG Realty Consultants, Inc. (the
"Corporation") shall hold an annual meeting of its stockholders to elect
directors and transact any other business within its powers, at such place, on
such date, and at such time as shall be set by the Board of Directors. Except as
the Restated Certificate of Incorporation of the Corporation (the "Charter"),
these By-Laws, or statute provides otherwise, any business may be considered at
an annual meeting without the purpose of the meeting having been specified in
the notice. Failure to hold an annual meeting does not invalidate the
Corporation's existence or affect any otherwise valid corporate acts.
SECTION 1.02. SPECIAL MEETING. At any time in the interval between
annual meetings, a special meeting of the stockholders may be called by the
Chairman of the Board, or a Co-Chairman of the Board or the President or by a
majority of the Board of Directors by vote at a meeting or in writing (addressed
to the Secretary of the Corporation) with or without a meeting.
SECTION 1.03. PLACE OF MEETINGS. Meetings of stockholders
shall be held at such place in the United States as is set from
time to time by the Board of Directors.
SECTION 1.04. NOTICE OF MEETINGS; WAIVER OF NOTICE. Not less than ten
nor more than 60 days before each stockholders meeting, the Secretary shall give
written notice of the meeting to each stockholder entitled to vote at the
meeting and each other stockholder entitled to notice of the meeting. The notice
shall state the time and place of the meeting and, if the meeting is a special
meeting or notice of the purpose is required by statute, the purpose of the
meeting. Notice is given to a stockholder when it is personally delivered to
him, left at his residence or usual place of business, or mailed to him at his
address as it appears on the records of the Corporation. Notwithstanding the
foregoing provisions, each person who is entitled to notice waives notice if he
or she before or after the meeting signs a waiver of the notice which is filed
with the records of stockholders' meetings, or is present at the meeting in
person or by proxy (except as otherwise provided by Section 229 of the General
Corporation Law of the State of Delaware).
SECTION 1.05. QUORUM; VOTING. Unless any statute or the Charter
provides otherwise, at a meeting of stockholders the presence in person or by
proxy of stockholders entitled to cast a majority of all the votes entitled to
be cast at the meeting
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constitutes a quorum, and the affirmative vote of a majority of all the votes
cast at a meeting at which a quorum is present is sufficient to approve any
matter which properly comes before the meeting, except that a plurality of all
the votes cast at a meeting at which a quorum is present is sufficient to elect
a director.
SECTION 1.06. ADJOURNMENTS. Whether or not a quorum is present, a
meeting of stockholders convened on the date for which it was called may be
adjourned from time to time by a majority vote of the stockholders present in
person or by proxy entitled to vote without notice other than by announcement at
the meeting. Any business which might have been transacted at the meeting as
originally notified may be deferred and transacted at any such adjourned meeting
at which a quorum shall be present.
SECTION 1.07. GENERAL RIGHT TO VOTE; PROXIES. Unless the Charter
provides otherwise, each outstanding share of stock, regardless of class, is
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders. In all elections for directors, each share of stock entitled to
vote may be voted for as many individuals as there are directors to be elected
and for whose election the share is entitled to be voted. A stockholder may vote
the stock he or she owns of record either in person or by proxy authorized by an
instrument in writing or by a transmission permitted by law. Unless a proxy
provides otherwise, it is not valid more than three years after its date.
SECTION 1.08. LIST OF STOCKHOLDERS. The Secretary shall prepare and
make, at least ten days before every election of directors, a complete list of
the stockholders entitled to vote, arranged in alphabetical order and showing
the address of each stockholder and the number of shares of each stockholder.
Such list shall be open at the place where the election is to be held for said
ten days, to the examination of any stockholder, and shall be produced and kept
at the time and place of election during the whole time thereof, and subject to
the inspection of any stockholder who may be present.
SECTION 1.09. CONDUCT OF BUSINESS. Nominations of persons for election
to the Board of Directors and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (a) pursuant to
the Corporation's notice of meeting, (b) by or at the direction of the Board of
Directors or (c) by any stockholder of the Corporation who was a stockholder of
record at the time of giving notice provided for in Section 1.11, who is
entitled to vote at the meeting and who complied with the notice procedures set
forth in Section 1.12. The chairman of the meeting shall have the power and duty
to determine whether a nomination or any business proposed to be brought before
the meeting was made in accordance with the procedures set forth in this Section
and Section 1.12 and, if any proposed nomination or business is not in
compliance with this Section and Section 1.12, to declare that such defective
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nomination or proposal be disregarded. No person shall be qualified to serve as
a director unless nominated in accordance with this Section 1.09.
SECTION 1.10. CONDUCT OF VOTING. At all meetings of stockholders,
unless the voting is conducted by inspectors, the proxies and ballots shall be
received, and all questions touching the qualification of voters and the
validity of proxies, the acceptance or rejection of votes and procedures for the
conduct of business not otherwise specified by these By-laws, the Charter or
law, shall be decided or determined by the chairman of the meeting. Unless
required by law, no vote need be by ballot and voting need not be conducted by
an inspector. No candidate for election as a director at a meeting shall serve
as an inspector thereat.
SECTION 1.11. STOCKHOLDER PROPOSALS. For any stockholder proposal to be
presented in connection with an annual meeting of stockholders of the
Corporation, including any proposal relating to the nomination of a director to
be elected to the Board of Directors of the Corporation, the stockholders must
have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not less than 60 days nor more
than 90 days prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day prior to such
annual meeting or the tenth day following the day on which public announcement
of the date of such meeting is first made. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (b) as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and of the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is
made, (i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of
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stock of the Corporation which are owned beneficially and of record by such
stockholders and such beneficial owner.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. FUNCTION OF DIRECTORS. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors. All
powers of the Corporation may be exercised by or under authority of the Board of
Directors, except as conferred on or reserved to the stockholders by statute or
by the Charter or By-laws.
SECTION 2.02. NUMBER OF DIRECTORS. The Corporation shall have that
number of directors as provided in paragraph (a) of Article FIFTH of the
Charter.
SECTION 2.03. REMOVAL OF DIRECTOR. Any director or the entire Board of
Directors may be removed only in accordance with the provisions of the Charter
and General Corporation Law of the State of Delaware.
SECTION 2.04. VACANCY ON BOARD. Subject to the rights of the holders of
any class of Preferred Stock then outstanding, newly created directorships
resulting from any increase in the authorized number of directors shall be
filled by a vote of the stockholders or a majority of the directors in office on
the Board of Directors, and any vacancies on the Board of Directors resulting
from death, resignation, retirement, disqualification, removal from office, or
other cause shall be filled in accordance with paragraph (b) of Article FIFTH of
the Charter.
SECTION 2.05. REGULAR MEETINGS. After each meeting of stockholders at
which directors shall have been elected, the Board of Directors shall meet as
soon as practicable for the purpose of organization and the transaction of other
business. In the event that no other time and place are specified by resolution
of the Board of Directors, the President, the Chairman of the Board or a
Co-Chairman of the Board, with notice in accordance with Section 2.07, the Board
of Directors shall meet immediately following the close of, and at the place of,
such stockholders' meeting. Any other regular meeting of the Board of Directors
shall be held on such date and at any place as may be designated from time to
time by the Board of Directors.
SECTION 2.06. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, a Co-Chairman
of the Board, or the President or by a majority of the Board of Directors by
vote at a meeting, or in writing with or without a meeting. A special meeting of
the Board of Directors shall be held on such date and at any place as may be
designated from time to time by the Board of Directors.
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In the absence of designation such meeting shall be held at such place as may be
designated in the call.
SECTION 2.07. NOTICE OF MEETING. Except as provided in Section 2.05,
the Secretary shall give notice to each director of each regular and special
meeting of the Board of Directors. The notice shall state the time and place of
the meeting. Notice is given to a director when it is delivered personally to
him, left at his residence or usual place of business, or sent by telegraph,
facsimile transmission or telephone, at least 24 hours before the time of the
meeting or, in the alternative by mail to his address as it shall appear on the
records of the Corporation, at least 72 hours before the time of the meeting.
Unless the By-laws or a resolution of the Board of Directors provides otherwise,
the notice need not state the business to be transacted at or the purposes of
any regular or special meeting of the Board of Directors. No notice of any
meeting of the Board of Directors need be given to any director who attends
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened, or to any director who, in writing executed and filed with the records
of the meeting either before or after the holding thereof, waives such notice.
Any meeting of the Board of Directors, regular or special, may adjourn from time
to time to reconvene at the same or some other place, and no notice need be
given of any such adjourned meeting other than by announcement.
SECTION 2.08. ACTION BY DIRECTORS. Unless statute or the Charter or
By-Laws requires a greater proportion, the action of a majority of the directors
present at a meeting at which a quorum is present is action of the Board of
Directors. A majority of the entire Board of Directors shall constitute a quorum
for the transaction of business. In the absence of a quorum, the directors
present by majority vote and without notice other than by announcement may
adjourn the meeting from time to time until a quorum shall attend. At any such
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified. Any action required or permitted to be taken at a meeting of the Board
of Directors may be taken without a meeting, if an unanimous written consent
which sets forth the action is signed by each member of the Board and filed with
the minutes of proceedings of the Board.
SECTION 2.09. MEETING BY CONFERENCE TELEPHONE. Members of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
constitutes presence in person at a meeting.
SECTION 2.10. COMPENSATION. By resolution of the Board of Directors a
fixed sum and expenses, if any, for attendance at
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each regular or special meeting of the Board of Directors or of committees
thereof, and other compensation for their services as such or on committees of
the Board of Directors, may be paid to directors. Directors who are employees of
the Corporation need not be paid for attendance at meetings of the board or
committees thereof for which fees are paid to other directors. A director who
serves the Corporation in any other capacity also may receive compensation for
such other services, pursuant to a resolution of the directors.
SECTION 2.11. ADVISORY DIRECTORS. The Board of Directors may by
resolution appoint advisory directors to the Board, who may also serve as
directors emeriti, and shall have such authority and receive such compensation
and reimbursement as the Board of Directors shall provide. Advisory directors or
directors emeriti shall not have the authority to participate by vote in the
transaction of business.
SECTION 2.12. SURETY BONDS. Unless required by law, no director shall
be obligated to give any bond or surety or other security for the performance of
any of his or her duties.
ARTICLE III.
COMMITTEES
SECTION 3.01. COMMITTEES. In accordance with the Charter, the Board of
Directors may appoint an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating Committee and other committees composed of one or more
directors and delegate to these committees any of the powers of the Board of
Directors, except the power to declare dividends or other distributions on
stock, elect directors, issue stock other than as provided in the next sentence,
recommend to the stockholders any action which requires stockholder approval,
amend the By-Laws, or approve any merger or share exchange which does not
require stockholder approval. If the Board of Directors has given general
authorization for the issuance of stock, a committee of the Board of Directors,
in accordance with a general formula or method specified by the Board of
Directors by resolution or by adoption of a stock option or other plan, may fix
the terms of stock subject to the terms on which any stock may be issued,
including all terms and conditions required or permitted to be established or
authorized by the Board of Directors.
SECTION 3.02. COMMITTEE PROCEDURE. Each committee may fix rules of
procedure for its business. A majority of the members of a committee shall
constitute a quorum for the transaction of business and the act of a majority of
those present at a meeting at which a quorum is present shall be the act of the
committee. Any action required or permitted to be taken at a meeting of a
committee may be taken without a meeting, if a unanimous written consent which
sets forth the action is signed by each committee
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member and filed with the minutes of the committee. The members of a committee
may conduct any meeting thereof by conference telephone in accordance with the
provisions of Section 2.10.
ARTICLE IV.
OFFICERS
SECTION 4.01. EXECUTIVE AND OTHER OFFICERS. The Corporation shall have
a President, a Secretary, and a Treasurer. The Corporation may also have a
Chairman, or Co-Chairmen, of the Board, a Chief Executive Officer, a Chief
Operating Officer, one or more Vice-Presidents, assistant officers, and
subordinate officers as may be established by the Board of Directors. A person
may hold more than one office in the Corporation except that no person may serve
concurrently as both President and Vice-President of the Corporation. The
Chairman of the Board, or each of the Co-Chairmen of the Board, as the case may
be, shall be a director; the other officers may be directors.
SECTION 4.02. CHAIRMAN OF THE BOARD. The Chairman, or Co-Chairmen, of
the Board, if elected, shall preside at all meetings of the Board of Directors
and of the stockholders at which he or she or they shall be present. In general,
the Chairman of the Board and a Co-Chairman of the Board shall perform all such
duties as are from time to time assigned to him or her by the Board of
Directors.
SECTION 4.03. VICE CHAIRMAN. The Vice Chairman of the Board, if one be
elected by the Board of Directors, shall be an officer of the Corporation. In
general, the Vice Chairman of the Board shall perform all such duties as are
from time to time assigned to him or her by the Board of Directors.
SECTION 4.04. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer
shall be the principal executive officer of the Corporation and, subject to the
control of the Board of Directors and with the President, shall in general
supervise and control all of the business and affairs of the Corporation. In
general, he or she shall perform such other duties usually performed by a chief
executive officer of a corporation and such other duties as are from time to
time assigned to him or her by the Board of Directors of the Corporation. Unless
otherwise provided by resolution of the Board of Directors, the Chief Executive
Officer, if one be elected, in the absence of the Chairman of the Board or a
Co-Chairman of the Board, shall preside at all meetings of the Board of
Directors and of the stockholders at which he or she shall be present.
SECTION 4.05. PRESIDENT. Unless otherwise specified by the Board of
Directors, the President shall be the principal operating officer of the
Corporation and perform the duties customarily performed by a principal
operating officer of a corporation. If no Chief Executive Officer is appointed,
he or
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she shall also serve as the Chief Executive Officer of the Corporation. The
President may sign and execute, in the name of the Corporation, all authorized
deeds, mortgages, bonds, contracts or other instruments, except in cases in
which the signing and execution thereof shall have been expressly delegated to
some other officer or agent of the Corporation. In general, he or she shall
perform such other duties usually performed by a president of a corporation and
such other duties as are from time to time assigned to him or her by the Board
of Directors or the Chief Executive Officer of the Corporation. Unless otherwise
provided by resolution of the Board of Directors, the President, in the absence
of the Chairman of the Board, a Co-Chairman of the Board and the Chief Executive
Officer, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present.
SECTION 4.06. CHIEF OPERATING OFFICER. The Chief Operating Officer, at
the request of the Chief Executive Officer or the President, or in the
President's absence or during his inability to act, shall perform the duties and
exercise the functions of the President, and when so acting shall have the
powers of the President. Unless otherwise specified by the Board of Directors,
he or she shall perform such other duties usually performed by a chief operating
officer of a corporation and such other duties as are from time to time assigned
to him or her by the Board of Directors, the Chief Executive Officer or the
President of the Corporation.
SECTION 4.07. VICE-PRESIDENTS. The Vice-President or Vice-Presidents,
at the request of the Chief Executive Officer or the President or the Chief
Operating Officer, or in the Chief Operating Officer's absence or during his
inability to act, shall perform the duties and exercise the functions of the
Chief Operating Officer, and when so acting shall have the powers of the Chief
Operating Officer. If there be more than one Vice-President, the Board of
Directors may determine which one or more of the Vice-Presidents shall perform
any of such duties or exercise any of such functions, or if such determination
is not made by the Board of Directors, the Chief Executive Officer, or the
President may make such determination; otherwise any of the Vice-Presidents may
perform any of such duties or exercise any of such functions. The Vice-President
or Vice-Presidents shall have such other powers and perform such other duties,
and have such additional descriptive designations in their titles (if any), as
are from time to time assigned to them by the Board of Directors, the Chief
Executive Officer, or the President of the Corporation.
SECTION 4.08. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, of the Board of Directors and of any committees,
in books provided for the purpose; he or she shall see that all notices are duly
given in accordance with the provisions of the By-laws or as required by law; he
or she shall be custodian of the records of the Corporation; he or she may
witness any document on behalf of the
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Corporation, the execution of which is duly authorized, see that the corporate
seal is affixed where such document is required or desired to be under its seal,
and, when so affixed, may attest the same; and, in general, the Secretary shall
perform all duties incident to the office of a secretary of a corporation, and
such other duties as are from time to time assigned to him or her by the Board
of Directors, the Chief Executive officer, or the President of the Corporation.
SECTION 4.09. TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust companies
or other depositories as shall, from time to time, be selected by the Board of
Directors; he or she shall render to the President and to the Board of
Directors, whenever requested, an account of the financial condition of the
Corporation; and, in general, the Treasurer shall perform all the duties
incident to the office of a treasurer of a corporation, and such other duties as
are from time to time assigned to him or her by the Board of Directors, the
Chief Executive officer, or the President of the Corporation.
SECTION 4.10. ASSISTANT AND SUBORDINATE OFFICERS. The assistant and
subordinate officers of the Corporation are all officers below the office of
Vice-President, Secretary, or Treasurer. The assistant or subordinate officers
shall have such duties as are from time to time assigned to them by the Board of
Directors, the Chief Executive Officer, or the President of the Corporation.
SECTION 4.11. ELECTION, TENURE AND REMOVAL OF OFFICERS. The Board of
Directors shall elect the officers. The Board of Directors may from time to time
authorize any committee or officer to appoint assistant and subordinate
officers. Election or appointment of an officer, employee or agent shall not of
itself create contract rights. All officers shall be appointed to hold their
offices, respectively, during the pleasure of the Board. The Board of Directors
(or, as to any assistant or subordinate officer, any committee or officer
authorized by the Board) may remove an officer at any time. The removal of an
officer does not prejudice any of his contract rights. The Board of Directors
(or, as to any assistant or subordinate officer, any committee or officer
authorized by the Board) may fill a vacancy which occurs in any office for the
unexpired portion of the term.
SECTION 4.12. COMPENSATION. The Board of Directors shall have power to
fix the salaries and other compensation and remuneration, of whatever kind, of
all officers of the Corporation. No officer shall be prevented from receiving
such salary by reason of the fact that he or she is also a director of the
Corporation. The Board of Directors may authorize any committee or officer, upon
whom the power of appointing assistant and subordinate officers may have been
conferred, to fix the
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salaries, compensation and remuneration of such assistant and subordinate
officers.
ARTICLE V.
DIVISIONAL TITLES
SECTION 5.01. CONFERRING DIVISIONAL TITLES. The Board of Directors may
from time to time confer upon any employee of a division of the Corporation the
title of President, Vice President, Treasurer or Controller of such division or
any other title or titles deemed appropriate, or may authorize the Chairman of
the Board, a Co-Chairman of the Board, the Chief Executive Officer or the
President to do so. Any such titles so conferred may be discontinued and
withdrawn at any time by the Board of Directors, or by the Chairman of the
Board, or a Co-Chairman of the Board or the President if so authorized by the
Board of Directors. Any employee of a division designated by such a divisional
title shall have the powers and duties with respect to such division as shall be
prescribed by the Board of Directors, the Chairman of the Board, a Co-Chairman
of the Board, or the President.
SECTION 5.02. EFFECT OF DIVISIONAL TITLES. The conferring of divisional
titles, as described in Section 5.01 hereof, shall not create an office of the
Corporation under Article IV unless specifically designated as such by the Board
of Directors; but any person who is an officer of the Corporation may also have
a divisional title.
ARTICLE VI.
STOCK
SECTION 6.01. CERTIFICATES FOR STOCK. Each stockholder is entitled to
certificates which represent and certify the shares of stock he or she holds in
the Corporation. Each stock certificate shall include on its face the name of
the Corporation, the name of the stockholder or other person to whom it is
issued, and the class of stock and number of shares it represents. It shall be
in such form, not inconsistent with law or with the Charter, as shall be
approved by the Board of Directors or any officer or officers designated for
such purpose by resolution of the Board of Directors. Each stock certificate
shall be signed by the Chairman of the Board, a Co-Chairman of the Board, the
President, or a Vice-President, and countersigned by the Secretary, an Assistant
Secretary, the Treasurer, or an Assistant Treasurer. Each certificate may be
sealed with the actual corporate seal or a facsimile of it or in any other form
and the signatures may be either manual or facsimile signatures. A certificate
is valid and may be issued whether or not an officer who signed it is still an
officer when it is issued. A certificate may not be issued until the stock
represented by it is fully paid.
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SECTION 6.02. TRANSFERS. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient concerning
the issue, transfer and registration of certificates of stock; and may appoint
transfer agents and registrars thereof. The duties of transfer agent and
registrar may be combined.
SECTION 6.03. RECORD DATES. The Board of Directors may set a record
date for the purpose of making any proper determination with respect to
stockholders, including which stockholders are entitled to notice of a meeting,
vote at a meeting, receive a dividend, or be allotted other rights. The record
date may not be prior to the close of business on the day the record date is
fixed nor, subject to Section 1.06, more than 60 days before the date on which
the action requiring the determination will be taken; and, in the case of a
meeting of stockholders, the record date shall be at least ten days before the
date of the meeting.
SECTION 6.04. STOCK LEDGER. The Corporation shall maintain a stock
ledger which contains the name and address of each stockholder and the number of
shares of stock of each class which the stockholder holds. The stock ledger may
be in written form or in any other form which can be converted within a
reasonable time into written form for visual inspection. The original or a
duplicate of the stock ledger shall be kept at the offices of a transfer agent
for the particular class of stock, or, if none, at the principal office in the
State of Delaware or the principal executive offices of the Corporation.
SECTION 6.05. LOST STOCK CERTIFICATES. The Board of Directors of the
Corporation may determine the conditions for issuing a new stock certificate in
place of one which is alleged to have been lost, stolen, or destroyed, or the
Board of Directors may delegate such power to any officer or officers of the
Corporation. In their discretion, the Board of Directors or such officer or
officers may refuse to issue such new certificate save upon the order of some
court having jurisdiction in the premises.
ARTICLE VII.
FINANCE
SECTION 7.01. CHECKS, DRAFTS, ETC. All checks, drafts and orders for
the payment of money, notes and other evidences of indebtedness, issued in the
name of the Corporation, shall, unless otherwise provided by resolution of the
Board of Directors, be signed by the Chief Executive Officer, the President, a
Vice-President or an Assistant Vice-President and countersigned by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary.
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SECTION 7.02. FISCAL YEAR. The fiscal year of the Corporation shall be
the twelve calendar months period ending December 31 in each year, unless
otherwise provided by the Board of Directors.
SECTION 7.03. DIVIDENDS. If declared by the Board of Directors at any
meeting thereof, the Corporation may pay dividends on its shares in cash,
property, or in shares of the capital stock of the Corporation, unless such
dividend is contrary to law or to a restriction contained in the Charter.
SECTION 7.04. CONTRACTS. To the extent permitted by applicable law, and
except as otherwise prescribed by the Charter or these By-laws with respect to
certificates for shares, the Board of Directors may authorize any officer,
employee, or agent of the Corporation to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation. Such
authority may be general or confined to specific instances.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.01. PROCEDURE. Any indemnification, or payment of expenses,
for which mandatory payments must be made under the Charter, in advance of the
final disposition of any proceeding, shall be made promptly, and in any event
within 60 days, upon the written request of the director or officer entitled to
seek indemnification (the "Indemnified Party"). The right to indemnification and
advances hereunder shall be enforceable by the Indemnified Party in any court of
competent jurisdiction, if (i) the Corporation denies such request, in whole or
in part, or (ii) no disposition thereof is made within 60 days. The Indemnified
Party's costs and expenses incurred in connection with successfully establishing
his right to indemnification, in whole or in part, in any such action shall also
be reimbursed by the Corporation. It shall be a defense to any action for
advance for expenses that (a) a determination has been made that the facts then
known to those making the determination would preclude indemnification or (b)
the Corporation has not received both (i) an undertaking as required by law to
repay such advances in the event it shall ultimately be determined that the
standard of conduct has not been met and (ii) a written affirmation by the
Indemnified Party of such Indemnified Party's good faith belief that the
standard of conduct necessary for indemnification by the Corporation has been
met.
SECTION 8.02. EXCLUSIVITY, ETC. The indemnification and advance of
expenses provided by the Charter and these By-laws shall not be deemed exclusive
of any other rights to which a person seeking indemnification or advance of
expenses may be entitled under any law (common or statutory), or any agreement,
vote of stockholders or disinterested directors or other
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provision that is consistent with law, both as to action in his official
capacity and as to action in another capacity while holding office or while
employed by or acting as agent for the Corporation, shall continue in respect of
all events occurring while a person was a director or officer after such person
has ceased to be a director or officer, and shall inure to the benefit of the
estate, heirs, executors and administrators of such person. All rights to
indemnification and advance of expenses under the Charter of the Corporation and
hereunder shall be deemed to be a contract between the Corporation and each
director or officer of the Corporation who serves or served in such capacity at
any time while this By-law is in effect. Nothing herein shall prevent the
amendment of this By-law, provided that no such amendment shall diminish the
rights of any person hereunder with respect to events occurring or claims made
before its adoption or as to claims made after its adoption in respect of events
occurring before its adoption. Any repeal or modification of this By-law shall
not in any way diminish any rights to indemnification or advance of expenses of
such director or officer or the obligations of the Corporation arising hereunder
with respect to events occurring, or claims made, while this By-law or any
provision hereof is in force.
SECTION 8.03. SEVERABILITY; DEFINITIONS. The invalidity or
unenforceability of any provision of this Article VIII shall not affect the
validity or enforceability of any other provision hereof. The phrase "this
By-law" in this Article VIII means this Article VIII in its entirety.
ARTICLE IX.
SUNDRY PROVISIONS
SECTION 9.01. BOOKS AND RECORDS. The Corporation shall keep correct and
complete books and records of its accounts and transactions and minutes of the
proceedings of its stockholders and Board of Directors and of any executive or
other committee when exercising any of the powers of the Board of Directors. The
books and records of a Corporation may be in written form or in any other form
which can be converted within a reasonable time into written form for visual
inspection. Minutes shall be recorded in written form but may be maintained in
the form of a reproduction. The original or a certified copy of the By-laws
shall be kept at the principal office of the Corporation.
SECTION 9.02. CORPORATE SEAL. The Board of Directors shall provide a
suitable seal, bearing the name of the Corporation, which shall be in the charge
of the Secretary. The Board of Directors may authorize one or more duplicate
seals and provide for the custody thereof. If the Corporation is required to
place its corporate seal to a document, it is sufficient to meet the requirement
of any law, rule, or regulation relating to a corporate seal to place the word
"Seal" adjacent to the
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signature of the person authorized to sign the document on behalf of the
Corporation.
SECTION 9.03. BONDS. The Board of Directors may require any officer,
agent or employee of the Corporation to give a bond to the Corporation,
conditioned upon the faithful discharge of his duties, with one or more sureties
and in such amount as may be satisfactory to the Board of Directors.
SECTION 9.04. VOTING UPON SHARES IN OTHER CORPORATIONS. Stock of other
corporations or associations, registered in the name of the Corporation, may be
voted by the President, a Vice-President, or a proxy appointed by either of
them. The Board of Directors, however, may by resolution appoint some other
person to vote such shares, in which case such person shall be entitled to vote
such shares upon the production of a certified copy of such resolution.
SECTION 9.05. MAIL. Any notice or other document which is
required by these By-laws to be mailed shall be deposited in the
United States mails, postage prepaid.
SECTION 9.06. EXECUTION OF DOCUMENTS. A person who holds more than one
office in the Corporation may not act in more than one capacity to execute,
acknowledge, or verify an instrument required by law to be executed,
acknowledged, or verified by more than one officer.
SECTION 9.07. RELIANCE. Each director, officer, employee and agent of
the Corporation shall, in the performance of his or her duties with respect to
the Corporation, be fully justified and protected with regard to any act or
failure to act in reliance in good faith upon the books of account or other
records of the Corporation, upon an opinion of counsel or upon reports made to
the Corporation by any of its officers or employees or by the adviser,
accountants, appraisers or other experts or consultants selected by the Board of
Directors or officers of the Corporation, regardless of whether such counsel or
expert may also be a director.
SECTION 9.08. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS. The directors shall have no responsibility to devote their full time to
the affairs of the Corporation. Any director or officer, employee or agent of
the Corporation, in his or her personal capacity or in a capacity as an
affiliate, employee, or agent of any other person, or otherwise, may have
business interests and engage in business activities similar to or in addition
to those of or relating to the Corporation.
SECTION 9.09. AMENDMENTS. In accordance with the Charter, these By-laws
may be repealed, altered, amended or rescinded by the stockholders of the
Corporation (considered for this purpose as one class) by the affirmative vote
of not less than 80% of all the votes entitled to be cast generally in the
election of
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directors which are cast on the matter at any meeting of the stockholders called
for that purpose (provided that notice of such proposed repeal, alteration,
amendment or rescission is included in the notice of such meeting).
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1
Exhibit 4.1
--------------------------
SIXTH AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SIMON PROPERTY GROUP, L.P.
--------------------------
2
ARTICLE I
Definitions; Etc.
1.1 Definitions....................................................... 2
1.2 Exhibit, Etc. .................................................... 15
ARTICLE II
Continuation of Partnership
2.1 Continuation...................................................... 15
2.2 Name.............................................................. 16
2.3 Character of the Business......................................... 16
2.4 Location of the Principal Place of Business....................... 17
2.5 Registered Agent and Registered Office............................ 17
ARTICLE III
Term
3.1 Commencement...................................................... 17
3.2 Dissolution....................................................... 17
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contributions............................. 18
4.2 Limited Partner Capital Contributions............................. 18
4.3 Additional Funds.................................................. 18
4.4 Redemption; Change in Number of Shares Outstanding................ 21
4.5 Stock Option Plan; Dividend Reinvestment Plan..................... 21
4.6 No Third Party Beneficiary........................................ 22
4.7 No Interest; No Return............................................ 22
4.8 Capital Accounts.................................................. 22
ARTICLE V
Representations, Warranties and Acknowledgment
5.1 Representations and Warranties by Managing General
Partner........................................................... 24
5.2 Representations and Warranties by Non-Managing General
Partners.......................................................... 25
5.3 Representations and Warranties by the Limited Partners............ 25
5.4 Acknowledgment by Each Partner.................................... 26
3
ARTICLE VI
Allocations, Distributions and Other
Tax and Accounting Matters
6.1 Allocations....................................................... 26
6.2 Distributions..................................................... 32
6.3 Books of Account; Segregation of Funds............................ 34
6.4 Reports........................................................... 34
6.5 Audits............................................................ 35
6.6 Tax Returns....................................................... 35
6.7 Tax Matters Partner............................................... 36
6.8 Withholding....................................................... 36
ARTICLE VII
Rights, Duties and Restrictions
of the General Partners
7.1 Expenditures by Partnership....................................... 37
7.2 Powers and Duties of the General Partners......................... 37
7.3 Major Decisions................................................... 41
7.4 Managing General Partner and Non-Managing General
Partners Participation............................................ 43
7.5 Proscriptions..................................................... 44
7.6 Additional Partners............................................... 44
7.7 Title Holder...................................................... 44
7.8 Waiver and Indemnification........................................ 44
7.9 Limitation of Liability of Directors Shareholders
and Officers of the Managing General Partner and
the Non-Managing General Partners................................. 45
7.10 Distribution to Limited Partners of the
SRC Partnership................................................... 46
ARTICLE VIII
Dissolution, Liquidation and Winding-Up
8.1 Accounting........................................................ 46
8.2 Distribution on Dissolution....................................... 46
8.3 Sale of Partnership Assets........................................ 47
8.4 Distributions in Kind............................................. 47
8.5 Documentation of Liquidation...................................... 47
8.6 Liability of the Liquidation Agent................................ 48
ARTICLE IX
Transfer of Partnership Interests
and Related Matters
9.1 Non-Managing General Partners Transfers and
Deemed Transfers.................................................. 48
9.2 Managing General Partner Transfers and Deemed
Transfers......................................................... 48
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9.3 Transfers by Limited Partners..................................... 49
9.4 Issuance of Additional Partnership Units and
Preferred Units................................................... 51
9.5 Restrictions on Transfer.......................................... 51
9.6 Shelf Registration Rights......................................... 52
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management.................................... 54
10.2 Bankruptcy of a Limited Partner................................... 54
10.3 No Withdrawal..................................................... 55
10.4 Duties and Conflicts.............................................. 55
10.5 Guaranty and Indemnification Agreements........................... 56
ARTICLE XI
Grant of Rights to the Limited Partners
11.1 Grant of Rights................................................... 57
11.2 Limitation on Exercise of Rights.................................. 57
11.3 Computation of Purchase Price/Form of Payment..................... 58
11.4 Closing........................................................... 58
11.5 Closing Deliveries................................................ 58
11.6 Term of Rights.................................................... 59
11.7 Covenants of the Managing General Partner......................... 59
11.8 Limited Partners' Covenant........................................ 59
11.9 Dividends......................................................... 60
ARTICLE XII
General Provisions
12.1 Investment Representations........................................ 60
12.2 Notices........................................................... 61
12.3 Successors........................................................ 61
12.4 Liability of Limited Partners..................................... 61
12.5 Effect and Interpretation......................................... 61
12.6 Counterparts...................................................... 61
12.7 Partners Not Agents............................................... 61
12.8 Entire Understanding; Etc......................................... 61
12.9 Severability...................................................... 62
12.10 Trust Provision................................................... 62
12.11 Pronouns and Headings............................................. 62
12.12 Assumption of Liabilities......................................... 62
12.13 Assurances........................................................ 62
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EXECUTION VERSION
SIXTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF
SIMON PROPERTY GROUP, L.P.
THIS SIXTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of
September 24, 1998, is made by and among SD PROPERTY GROUP, INC., an Ohio
corporation as a non-managing general partner ("SD Property"), SPG PROPERTIES,
INC., a Maryland corporation as a non-managing general partner ("SPG Properties"
and together with SD Property, the "Non-Managing General Partners"), SIMON
PROPERTY GROUP, INC., a Delaware corporation as managing general partner (the
"Managing General Partner"), and those parties who have executed this Agreement
as limited partners and whose names and addresses are set forth on Exhibit A
hereto as limited partners (the "Limited Partners").
WITNESSETH:
WHEREAS, the Agreement of Limited Partnership of Simon DeBartolo Group,
L.P. (the "Partnership") was last amended and restated in its entirety by the
Fifth Amended and Restated Limited Partnership Agreement, dated August 9, 1996;
and
WHEREAS, concurrently with the execution hereof, SPG Merger Sub, Inc., a
Maryland corporation and a wholly-owned subsidiary of the Managing General
Partner, merged into Simon DeBartolo Group, Inc. ("SDG"), pursuant to the
Agreement and Plan of Merger, dated as of February 18, 1998 (the "Merger
Agreement"), among SDG, Corporate Property Investors (the predecessor to the
Managing General Partner) and Corporate Realty Consultants, Inc. (renamed SPG
Realty Consultants, Inc. ("SPG Realty")); and
WHEREAS, concurrently with the execution hereof, the Partnership and SPG
Realty will enter into an Agreement of Limited Partnership of SPG Realty
Consultants, L.P. (the "SRC Partnership"), pursuant to which the Partnership
will become a limited partner of the SRC Partnership and receive SRC Partnership
Units, which the Partnership will, in turn, distribute pro rata to all Limited
Partners other than any General Partner who also holds SRC Partnership Units,
whereupon such Limited Partners shall become limited partners of the SRC
Partnership; and
WHEREAS, the parties hereto wish to provide for the further amendment and
restatement of the Agreement of Limited Partnership of the Partnership to allow
for the admission of the Managing General Partner and to make various other
changes provided for below; and
WHEREAS, the Managing General Partner is concurrently herewith, in
exchange for the contribution to the Partnership and/or its subsidiaries of
substantially all of its assets and
6
liabilities, becoming the managing general partner of the Partnership, holding
Units in the amount set forth in Exhibit A; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree that the Fifth Amended and Restated
Agreement of Limited Partnership of the Partnership, as heretofore amended and
restated, is hereby further amended and restated in its entirety to read as
follows:
ARTICLE I
Definitions; Etc.
1.1 Definitions. Except as otherwise herein expressly provided the
following terms and phrases shall have the meanings set forth below:
"Accountants" shall mean the firm or firms of independent certified public
accountants selected by the Managing General Partner from time to time on behalf
of the Partnership to audit the books and records of the Partnership and to
prepare and certify statements and reports in connection therewith.
"Act" shall mean the Revised Uniform Limited Partnership Act as enacted in
the State of Delaware, as the same may hereafter be amended from time to time.
"Additional Units" shall have the meaning set forth in Section 9.4
hereof.
"Adjustment Date" shall have the meaning set forth in Section 4.3(b)
hereof.
"Administrative Expenses" shall mean (i) all administrative and operating
costs and expenses incurred by the Partnership, and (ii) those administrative
costs and expenses and accounting and legal expenses incurred by the Managing
General Partner or the Non-Managing General Partners on behalf or for the
benefit of the Partnership.
"Affected Gain" shall have the meaning set forth in Section 6.1(g)
hereof.
"Affiliate" shall mean, with respect to any Partner (or as to any other
Person the affiliates of which are relevant for purposes of any of the
provisions of this Agreement) (i) any member of the Immediate Family of such
Partner or Person; (ii) any partner, trustee, beneficiary or shareholder of such
Partner or Person; (iii) any legal representative, successor or assignee of such
Partner or any Person referred to in the preceding clauses (i) and (ii); (iv)
any trustee or trust for the benefit of such Partner or
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any Person referred to in the preceding clauses (i) through (iii); or (v) any
Entity which, directly or indirectly through one or more intermediaries,
Controls, is Controlled by or is under common Control with such Partner or any
Person referred to in the preceding clauses (i) through (iv).
"Affiliate Financing" shall mean financing or refinancing obtained from a
Partner or an Affiliate of a Partner by the Partnership.
"Agreement" shall mean this Sixth Amended and Limited Partnership
Agreement, as originally and as amended, modified, supplemented or restated from
time to time, as the context requires.
"Bankruptcy" shall mean, with respect to any Partner, (i) the commencement
by such Partner of any proceeding seeking relief under any provision or chapter
of the federal Bankruptcy Code or any other federal or state law relating to
insolvency, bankruptcy or reorganization, (ii) an adjudication that such Partner
is insolvent or bankrupt, (iii) the entry of an order for relief under the
federal Bankruptcy Code with respect to such Partner, (iv) the filing of any
petition or the commencement of any case or proceeding against such Partner
under the federal Bankruptcy Code unless such petition and the case or
proceeding initiated thereby are dismissed within ninety (90) days from the date
of such filing or commencement, (v) the filing of an answer by such Partner
admitting the allegations of any such petition, (vi) the appointment of a
trustee, receiver or custodian for all or substantially all of the assets of
such Partner unless such appointment is vacated or dismissed within ninety (90)
days from the date of such appointment but not less than five (5) days before
the proposed sale of any assets of such Partner, (vii) the execution by such
Partner of a general assignment for the benefit of creditors, (viii) the
convening by such Partner of a meeting of its creditors, or any class thereof,
for purposes of effecting a moratorium upon or extension or composition of its
debts, (ix) the failure of such Partner to pay its debts as they mature, (x} the
levy, attachment, execution or other seizure of substantially all of the assets
of such Partner where such seizure is not discharged within thirty (30) days
thereafter, or (xi) the admission by such Partner in writing of its inability to
pay its debts as they mature or that it is generally not paying its debts as
they become due.
"Capital Account" shall have the meaning set forth in Section 4.8(a)
hereof.
"Capital Contribution" shall mean, with respect to any Partner, the amount
of money and the initial Gross Asset Value of any property other than money
contributed to the Partnership with respect to the Partnership Units held by
such Partner (net of liabilities secured by such property which the Partnership
assumes or takes subject to).
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8
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State on November 18, 1993, as it has or may hereafter be amended from time
to time in accordance with the terms of this Agreement and the Act.
"Charter" shall mean the articles of incorporation of a General Partner
and all amendments, supplements and restatements thereof.
"Closing Price" on any date shall mean the last sale price per share,
regular way, of the Paired Shares or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, of the Paired
Shares in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Paired Shares are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Paired Shares are listed
or admitted to trading or, if the Paired Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System for the Paired Shares or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Paired Shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Paired Shares selected from time to time by
the Board of Directors of the Managing General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
corresponding provisions of succeeding law.
"Computation Date" shall have the meaning set forth in Section 11.3
hereof.
"Consent of the DeBartolos" shall mean consent of those Limited Partners
who are "DeBartolos" as defined herein. EJDC (in such capacity the "DeBartolo
Designee") is hereby granted authority by those Limited Partners who are
DeBartolos to grant or withhold consent on behalf of the DeBartolos whenever the
Consent of the DeBartolos is required hereunder. The DeBartolos shall have the
right, from time to time, by written notice to the Partnership signed by
DeBartolos who hold in the aggregate more than fifty percent (50%) of the
Partnership Units then held by the DeBartolos, to substitute a new Person as the
DeBartolo Designee for the Person who is then acting as such. The Partnership,
the Partners and all Persons dealing with the Partnership shall be fully
protected in relying on any written consent of the DeBartolos which is executed
by the Person who is then acting as the DeBartolo Designee. In the
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9
event that at any time there is no DeBartolo Designee, the consent of the
DeBartolos shall be given by those DeBartolos who hold in the aggregate more
than fifty percent (50%) of the Partnership Units then held by the DeBartolos.
"Consent of the Limited Partners" shall mean the written consent of a
Majority-In-Interest of the Limited Partners, which consent shall be obtained
prior to the taking of any action for which it is required by this Agreement and
may be given or withheld by a Majority-In-Interest of the Limited Partners,
unless otherwise expressly provided herein, in their sole and absolute
discretion. Whenever the Consent of the Limited Partners is sought by a General
Partner, the request for such consent, outlining in reasonable detail the matter
or matters for which such consent is being requested, shall be submitted to all
of the Limited Partners, and each Limited Partner shall have at least 15 days to
act upon such request.
"Consent of the Simons" shall mean consent of those Limited Partners who
are "Simons" as defined herein. David Simon (the "Simon Designee") is hereby
granted authority by those Limited Partners who are Simons to grant or withhold
consent on behalf of the Simons whenever the Consent of the Simons is required
hereunder. The Simons shall have the right from time to time, by written notice
to the Partnership signed by Simons who hold in the aggregate more than fifty
percent (50%) of the Partnership Units then held by the Simons, to substitute a
new Person as the Simon Designee for the Person who is then acting as such. The
Partnership, the Partners and all Persons dealing with the Partnership shall be
fully protected in relying on any written consent of the Simons which is
executed by the Person who is then acting as the Simon Designee. In the event
that at any time there is no Simon Designee, the Consent of the Simons shall be
given by those Simons who hold in the aggregate more than fifty percent (50%) of
the Partnership Units then held by the Simons.
"Contributed Funds" shall have the meaning set forth in Section 4.3(b)
hereof.
"Contribution Current Per Share Market Price" on any date shall mean the
average of the Closing Prices for a period of not less than five consecutive
Trading Days nor more than thirty consecutive Trading Days ending on such date,
such period determined in the sole and absolute discretion of the Managing
General Partner.
"Contribution Date" shall have the meaning set forth in Section 9.4
hereof.
"Contribution Deemed Partnership Unit Value" as of any date shall mean (i)
the Contribution Current Per Share Market Price as of the Trading Day
immediately preceding such date, minus (ii) the Deemed Partnership Unit Value
(as defined in the SRC Partnership agreement); provided, however, that
Contribution
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Deemed Partnership Unit Value shall be adjusted as described in Section 11.7(d)
hereof in the event of any stock dividend, stock split, stock distribution or
similar transaction.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership or otherwise to select, or have the power to remove and
then select, a majority of those Persons exercising governing authority over an
Entity. In the case of a limited partnership, the sole general partner, all of
the general partners to the extent each has equal management control and
authority, or the managing general partner or managing general partners thereof
shall be deemed to have control of such partnership and, in the case of a trust,
any trustee thereof or any Person having the right to select or remove any such
trustee shall be deemed to have control of such trust.
"Covered Sale" shall have the meaning set forth in Section 6.2(d)
hereof.
"Current Per Share Market Price" on any date shall mean the average of the
Closing Prices for the five consecutive Trading Days ending on such date.
"DeBartolos" shall mean (i) the Estate of Edward J. DeBartolo, (ii) Edward
J. DeBartolo, Jr., Marie Denise DeBartolo York, members of the Immediate Family
of either of the foregoing, any other members of the Immediate Family of Edward
J. DeBartolo, any other lineal descendants of any of the foregoing and any
trusts established for the benefit of any of the foregoing, and (iii) EJDC and
any other Entity Controlled by any one or more of the Persons listed or
specified in clauses (i) and (ii) above.
"Deemed Partnership Unit Value" as of any date shall mean (i) the Current
Per Share Market Price as of the Trading Day immediately preceding such date,
minus (ii) the Deemed Partnership Unit Value (as defined in the SRC Partnership
agreement); provided, however, that Deemed Partnership Unit Value shall be
adjusted as described in Section 11.7(d) hereof in the event of any stock
dividend, stock split, stock distribution or similar transaction.
"Depreciation" shall mean for each Partnership Fiscal Year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable under the Code with respect to a Partnership asset
for such year or other period, except that if the Gross Asset Value of a
Partnership asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost
6
11
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner.
"Development Land" shall mean any vacant land suitable for development
as a Project.
"Directors" shall mean the Board of Directors of the Managing General
Partner.
"Effective Time" shall have the meaning set forth in the Merger
Agreement.
"EJDC" shall mean The Edward J. DeBartolo Corporation, an Ohio
corporation.
"Entity" shall mean any general partnership, limited partnership, limited
liability company, limited liability partnership, corporation, joint venture,
trust, business trust, cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time (or any corresponding provisions of succeeding laws).
"Exercise Notice" shall have the meaning set forth in Section 11.1
hereof.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"General Partner" shall mean the Managing General Partner, the
Non-Managing General Partners and their respective duly admitted successors and
assigns and any other Person who is a general partner of the Partnership at the
time of reference thereto.
"Gross Asset Value" shall have the meaning set forth in Section 4.8(b)
hereof.
"Gross Income" shall mean the income of the Partnership determined
pursuant to Section 61 of the Code before deduction of items of expense or
deduction.
"Immediate Family" shall mean, with respect to any Person, such Person's
spouse, parents, parents-in-law, descendants by blood or adoption, nephews,
nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law
(in each case by whole or half-blood).
"Incurrence" shall have the meaning set forth in Section 10.5(a) hereof.
"Independent Directors" shall mean members of the Board of Directors of
the Managing General Partner, none of whom is either
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12
employed by the Managing General Partner or a member (or an Affiliate of a
member) of the Simons.
"Institutional Investors" shall have the meaning set forth in Rule
501(a)(1)-(3), (7) and (8) of Regulation D promulgated under the Securities Act.
"Institutional Lender" shall mean a commercial bank or trust company, a
savings and loan association or an insurance company.
"JCP" shall mean JCP Realty, Inc., a Delaware corporation, or Brandywine
Realty, Inc., a Delaware corporation, or any of its or their Affiliates that
becomes a Limited Partner hereunder and that is an "accredited investor" as
defined in Regulation D under the Securities Act, as amended.
"JCP Limited Partner" shall mean JCP, in its capacity as a Limited Partner
or Partners hereunder.
"JCP Property Liabilities" means any liabilities encumbering the assets of
Treasure Coast-JCP Associates, Ltd., Melbourne-JCP Associates, Ltd., Boynton-JCP
Associates, Ltd., Chesapeake-JCP Associates, Ltd., Mall of the Mainland
Associates, L.P., Port Charlotte-JCP Associates and Northfield Center Limited
Partnership, and any liability of the Partnership or any Subsidiary Partnership
with respect to which JCP has incurred the "economic risk of loss" within the
meaning of Treasury Regulation Section 1.752-2.
"Lien" shall mean any liens, security interests, mortgages, deeds of
trust, charges, claims, encumbrances, restrictions, pledges, options, rights of
first offer or first refusal and any other rights or interests of others of any
kind or nature, actual or contingent, or other similar encumbrances of any
nature whatsoever.
"Limited Partner Liability" shall mean, with respect to each Limited
Partner, each liability (or portion thereof) included in the basis of such
Limited Partner (other than as an "excess nonrecourse liability" within the
meaning of Regulations Section l.752-3(a)(3)) for federal income tax purposes.
"Limited Partners" shall mean those Persons whose names are set forth on
Exhibit A hereto as Limited Partners, their permitted successors or assigns as
limited partners hereof, and/or any Person who, at the time of reference
thereto, is a limited partner of the Partnership.
"Limited Partnership Unit" shall mean each Partnership Unit (as defined
below) held by a Limited Partner. Each Limited Partnership Unit shall be
paired with a SRC Limited Partnership Unit.
"Liquidation Agent" shall mean such Person as is selected as the
Liquidation Agent hereunder by the Managing General Partner,
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13
which Person may be the Managing General Partner or an Affiliate of the Managing
General Partner, provided such Liquidation Agent agrees in writing to be bound
by the terms of this Agreement. The Liquidation Agent shall be empowered to give
and receive notices, reports and payments in connection with the dissolution,
liquidation and/or winding-up of the Partnership and shall hold and exercise
such other rights and powers as are necessary or required to permit all parties
to deal with the Liquidation Agent in connection with the dissolution,
liquidation and/or winding-up of the Partnership.
"Liquidation Transaction" shall mean any sale of assets of the Partnership
in contemplation of, or in connection with, the liquidation of the Partnership.
"Losses" shall have the meaning set forth in Section 6.1(a) hereof.
"Major Decisions" shall have the meaning set forth in Section 7.3(b)
hereof.
"Majority-In-Interest of the Limited Partners" shall mean Limited
Partner(s) who hold in the aggregate more than fifty percent (50%) of the
Partnership Units then held by all the Limited Partners, as a class (excluding
any Partnership Units held by the Non-Managing General Partners or by the
Managing General Partner, any Person Controlled by any of such General Partners
or any Person holding as nominee for either of such General Partners).
"Managing General Partner" shall mean Simon Property Group, Inc., a
Delaware corporation.
"Merger Agreement" shall have the meaning set forth in the Recitals
hereto.
"Minimum Gain" shall have the meaning set forth in Section 6.1(d)(l)
hereof.
"Minimum Gain Chargeback" shall have the meaning set forth in Section
6.1(d)(l) hereof.
"Net Financing Proceeds" shall mean the cash proceeds received by the
Partnership in connection with any borrowing by or on behalf of the Partnership
(whether or not secured), or distributed to the Partnership in respect of any
such borrowing by any Subsidiary Entity, after deduction of all costs and
expenses incurred by the Partnership in connection with such borrowing, and
after deduction of that portion of such proceeds used to repay any other
indebtedness of the Partnership, or any interest or premium thereon.
"Net Operating Cash Flow" shall mean, with respect to any fiscal period of
the Partnership, the aggregate amount of all cash received by the Partnership
from any source for such fiscal period
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(including Net Sale Proceeds and Net Financing Proceeds but excluding
Contributed Funds), less the aggregate amount of all expenses or other amounts
paid with respect to such period and such additional cash reserves as of the
last day of such period as the Managing General Partner deems necessary for any
capital or operating expenditure permitted hereunder.
"Net Sale Proceeds" shall mean the cash proceeds received by the
Partnership in connection with a sale or other disposition of any asset by or on
behalf of the Partnership or a sale or other disposition of any asset by or on
behalf of any Subsidiary Entity, after deduction of any costs or expenses
incurred by the Partnership, or payable specifically out of the proceeds of such
sale or other disposition (including, without limitation, any repayment of any
indebtedness required to be repaid as a result of such sale or other disposition
or which the Managing General Partner elects to repay out of the proceeds of
such sale or other disposition, together with accrued interest and premium, if
any, thereon and any sales commissions or other costs and expenses due and
payable to any Person), in connection with such sale or other disposition.
"Non-Managing General Partners" shall mean, collectively, SD Property
Group, Inc. and SPG Properties, Inc.
"Nonrecourse Liabilities" shall have the meaning set forth in Section
6.l(d)(l) hereof.
"Offered Units" shall have the meaning set forth in Section 11.1 hereof.
"Ownership Limit" shall have the meaning set forth in Article Ninth of the
Charter of the Managing General Partner.
"Paired Shares" shall mean one Share and a pro rata beneficial interest in
the trust which owns all of the outstanding shares of the Common Stock, par
value $0.0001 per share, of SPG Realty that are subject to a trust agreement
among certain stockholders of the Managing General Partner, a trustee and SPG
Realty, pursuant to which holders of Shares are beneficiaries of such trust
agreement.
"Partner Nonrecourse Debt" shall have the meaning set forth in Section
6.1(d)(2) hereof.
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning set forth
in Section 6.1(d)(2) hereof.
"Partner Nonrecourse Deduction" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"Partners" shall mean the Managing General Partner, the Non-Managing
General Partners and the Limited Partners, their duly admitted successors or
assigns or any Person who is a partner of the Partnership at the time of
reference thereto.
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"Partnership" shall mean Simon Property Group, L.P., a Delaware limited
partnership, as such limited partnership may from time to time be constituted.
"Partnership Fiscal Year" shall mean the calendar year.
"Partnership Interest" shall mean the interest of a Partner in the
Partnership.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b)(2) of the Regulations.
"Partnership Record Date" shall mean the record date established by the
Managing General Partner for a distribution of Net Operating Cash Flow pursuant
to Section 6.2 hereof, which record date shall be the same as the record date
established by the Managing General Partner for distribution to its shareholders
of some or all of its share of such distribution.
"Partnership Units" or "Units" shall mean the interest in the Partnership
of any Partner which entitles a Partner to the allocations (and each item
thereof) specified in Section 6.1(b) hereof and all distributions from the
Partnership, and its rights of management, consent, approval, or participation,
if any, as provided in this Agreement. Partnership Units do not include
Preferred Units. Each Partner's percentage ownership interest in the Partnership
shall be determined by dividing the number of Partnership Units then owned by
each Partner by the total number of Partnership Units then outstanding. The
number of Partnership Units held by each Partner at the date hereof is as set
forth opposite its name on attached Exhibit A.
"Person" shall mean any individual or Entity.
"Pledge" shall mean granting of a Lien on a Partnership Interest.
"Post-Exchange Distribution" shall have the set forth in Section 6.2(a)
hereof.
"Preferred Contributed Funds" shall have the set forth in Section
4.3(c) hereof.
"Preferred Distribution Requirement" shall have the meaning set forth in
Section 4.3(c) hereof.
"Preferred Distribution Shortfall" shall have the set forth in Section
6.2(b)(i) hereof.
"Preferred Redemption Amount" shall mean, with respect to any class or
series of Preferred Units, the sum of (i) the amount of any accumulated
Preferred Distribution Shortfall with respect to such class or series of
Preferred Units, (ii) the Preferred Distribution Requirement with respect to
such class or series of
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Preferred Units to the date of redemption and (iii) the Preferred Redemption
Price indicated in the Preferred Unit Designation with respect to such class or
series of Preferred Units.
"Preferred Redemption Price" shall have the meaning set forth in Section
4.3(c) hereof.
"Preferred Shares" shall mean any class of equity securities of any of the
General Partners now or hereafter authorized or reclassified having dividend
rights that are superior or prior to dividends payable on the Shares or any
other shares of common stock of such General Partners.
"Preferred Unit Designation" shall have the set forth in Section 4.3(c)
hereof.
"Preferred Unit Issue Price" shall mean the amount of the Required Funds
contributed or deemed to have been contributed by a General Partner in exchange
for a Preferred Unit.
"Preferred Units" shall mean interests in the Partnership issued to a
General Partner pursuant to Section 4.3(c) hereof. The holder of Preferred Units
shall have such rights to the allocations of Profits and Losses as specified in
Section 6.1 hereof and to distributions pursuant to Section 6.2 hereof, but
shall not, by reason of its ownership of such Preferred Units, be entitled to
participate in the management of the Partnership or to consent to or approve any
action which is required by the Act or this Agreement to be approved by any or
all of the Partners.
"Profits" shall have the meaning set forth in Section 6.1(a) hereof.
"Project" shall mean any property that is or is planned to be used
primarily for retail purposes, and shall include, but is not limited to, a
regional mall, a community shopping center, a specialty retail center and a
mixed-use property which contains a major retail component.
"Property or Properties" shall mean any Development Land or Project in
which the Partnership acquires ownership of (a) the fee or leasehold interest or
(b) an indirect fee or leasehold interest through an interest in any other
Entity.
"Purchase Price" shall have the meaning set forth in Section 11.3
hereof.
"Qualified REIT Subsidiaries" shall have the meaning set forth in Section
856(i)(2) of the Code.
"Registration Rights Agreements" shall mean the agreements, in effect as
of the Effective Time, among the Managing General Partner, certain of its
stockholders and certain holders of Units.
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"Regulations" shall mean the final, temporary or proposed income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"Regulatory Allocations" shall have the meaning set forth in Section
6.l(d)(5) hereof.
"REIT" shall mean a real estate investment trust as defined in Section 856
of the Code.
"REIT Expenses" shall mean (i) costs and expenses relating to the
continuity of existence of the Managing General Partner and the Non-Managing
General Partners and their respective subsidiaries, including taxes, fees and
assessments associated therewith, and any and all costs, expenses or fees
payable to any director or trustee of the Managing General Partner, the
Non-Managing General Partners or such subsidiaries, (ii) costs and expenses
relating to any offer or registration of securities by the Managing General
Partner, the Non-Managing General Partners or their respective subsidiaries and
all statements, reports, fees and expenses incidental thereto, including
underwriting discounts, selling commissions and placement fees applicable to any
such offer of securities; provided, however, that in the case of any such
registration of securities on behalf of one or more of the security holders of
the Managing General Partner, the Non-Managing General Partners or their
respective subsidiaries, REIT Expenses shall not include underwriting discounts
or selling commissions), (iii) costs and expenses associated with the
preparation and filing of any periodic reports by the Managing General Partner,
the Non-Managing General Partners or their respective subsidiaries under
federal, state or local laws or regulations, including tax returns and filings
with the SEC and any stock exchanges on which the Shares are listed, (iv) costs
and expenses associated with compliance by the Managing General Partner, the
Non-Managing General Partners or their respective subsidiaries with laws, rules
and regulations promulgated by any regulatory body, including the SEC, (v) costs
and expenses associated with any 401(k) Plan, incentive plan, bonus plan or
other plan providing for compensation for the employees of the Managing General
Partner, the Non-Managing General Partners or their respective subsidiaries, and
(vi) all operating, administrative and other costs incurred by the Managing
General Partner, the Non-Managing General Partners or their respective
subsidiaries (including attorney's and accountant's fees, income and franchise
taxes and salaries paid to officers of the Managing General Partner, the
Non-Managing General Partners or their respective subsidiaries, but excluding
costs of any repurchase by the General Partners of any of their securities and
excluding costs associated with activities and business operations not conducted
directly or indirectly through the Partnership or any Subsidiary Partnership);
provided, however that amounts described herein shall be considered REIT
Expenses hereunder (1) only if and to the extent during the fiscal year in
question the aggregate amount of such expenses for such fiscal year and all
prior fiscal years exceeds
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the aggregate of (a) all amounts theretofore distributed or distributable to the
Managing General Partner or a Non-Managing General Partner by any wholly-owned
subsidiary thereof and (b) all amounts theretofore paid to the Managing General
Partner or a Non-Managing General Partner pursuant to Section 7.1 hereof and (2)
with respect to a Non-Managing General Partner, only if the Managing General
Partner holds, directly or indirectly, substantially all of the equity interests
of the Non-Managing General Partner and controls, directly or indirectly, the
Non-Managing General Partner.
"REIT Requirements" shall mean all actions or omissions as may be
necessary (including making appropriate distributions from time to time) to
permit each of the Managing General Partner, the Non-Managing General Partners
and, where applicable, their respective subsidiaries to qualify or continue to
qualify as a real estate investment trust within the meaning of Section 856 et
seq. of the Code, as such provisions may be amended from time to time, or the
corresponding provisions of succeeding law.
"Related Issues" shall mean, with respect to a class or series of
Preferred Units, the class or series of Preferred Shares the sale of which
provided a General Partner with the proceeds to contribute to the Partnership in
exchange for such Preferred Units.
"Required Funds" shall have the meaning set forth in Section 4.3(a)
hereof.
"Rights" shall have the meaning set forth in Section 11.1 hereof.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean the shares of Common Stock, par value $0.0001 per
share, of the Managing General Partner.
"Simons" shall mean Melvin Simon, Herbert Simon and David Simon, other
members of the Immediate Family of any of the foregoing, any other lineal
descendants of any of the foregoing, any trusts established for the benefit of
any of the foregoing, and any Entity Controlled by any one or more of the
foregoing.
"SPG Realty" shall mean SPG Realty Consultants, Inc.
"SPG Properties" shall mean SPG Properties, Inc.
"SD Property" shall mean SD Property Group, Inc.
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"SRC Limited Partnership Units" shall mean interests in the SRC
Partnership (as defined below) held by a Limited Partner, each of which is
paired with a Limited Partnership Unit.
"SRC Partnership" shall mean SPG Realty Consultants, L.P., a Delaware
limited partnership.
"SRC Partnership Units" shall mean interests in the SRC Partnership.
"Subsidiary Entity" shall mean any Entity in which the Partnership owns a
direct or indirect equity interest.
"Subsidiary Partnership" shall mean any partnership in which the
Partnership owns a direct or indirect equity interest.
"Substituted Limited Partner" shall have the meaning set forth in the
Act.
"Tax Matters Partner" shall have the meaning set forth in Section 6.7
hereof.
"Third Party" or "Third Parties" shall mean a Person or Persons who is or
are neither a Partner or Partners nor an Affiliate or Affiliates of a Partner or
Partners.
"Third Party Financing" shall mean financing or refinancing obtained from
a Third Party by the Partnership.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Shares are listed or admitted to trading is open for the
transaction of business or, if the Shares are not listed or admitted to trading
on any national securities exchange, shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Transfer" shall mean any assignment, sale, transfer, conveyance or other
disposition or act of alienation (other than a Pledge), whether voluntary or
involuntary or by operation of law.
1.2 Exhibit. Etc. References in this Agreement to an "Exhibit" are, unless
otherwise specified, to one of the Exhibits attached to this Agreement, and
references in this Agreement to an "Article" or a "Section" are, unless
otherwise specified, to one of the Articles or Sections of this Agreement. Each
Exhibit attached hereto and referred to herein is hereby incorporated herein by
reference.
ARTICLE II
Continuation of Partnership
2.1 Continuation. The parties hereto do hereby agree to continue the
Partnership as a limited partnership pursuant to the
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provisions of the Act, and all other pertinent laws of the State of Delaware,
for the purposes and upon the terms and conditions hereinafter set forth. The
Partners agree that the rights and liabilities of the Partners shall be as
provided in the Act except as otherwise herein expressly provided. Promptly upon
the execution and delivery of this Agreement, the Managing General Partner shall
cause each notice, instrument, document or certificate as may be required by
applicable law, and which may be necessary to enable the Partnership to continue
to conduct its business, and to own its properties, under the Partnership name
to be filed or recorded in all appropriate public offices. Upon request of the
Managing General Partner, the Partners shall execute any assumed or fictitious
name certificate or certificates required by law to be filed in connection with
the Partnership. The Managing General Partner shall properly cause the execution
and delivery of such additional documents and shall perform such additional acts
consistent with the terms of this Agreement as may be necessary to comply with
the requirements of law for the continued operation of a limited partnership
under the laws of the State of Delaware (it being understood that the Managing
General Partner shall be required to provide the General Partners and Limited
Partners with copies of any amended Certificates of Limited Partnership required
to be filed under such laws only upon request) and for the continued operation
of a limited partnership in each other jurisdiction in which the Partnership
shall conduct business.
2.2 Name. The name of the Partnership is Simon Property Group, L.P., and
all business of the Partnership shall be conducted under the name of Simon
Property Group, L.P. or such other name as the Managing General Partner may
select; provided, however, that the Managing General Partner may not choose the
name (or any derivative thereof) of any Limited Partner (other than the names
"DeBartolo" or "Simon") without the prior written consent of such Limited
Partner. All transactions of the Partnership, to the extent permitted by
applicable law, shall be carried on and completed in such name (it being
understood that the Partnership may adopt assumed or fictitious names in certain
jurisdictions).
2.3 Character of the Business. The purpose of the Partnership is and shall
be to acquire, hold, own, develop, redevelop, construct, reconstruct, alter,
improve, maintain, operate, sell, lease, Transfer, encumber, convey, exchange
and otherwise dispose of or deal with the Properties and any other real and
personal property of all kinds; to undertake such other activities as may be
necessary, advisable, desirable or convenient to the business of the
Partnership; and to engage in such other ancillary activities as shall be
necessary or desirable to effectuate the foregoing purposes. The Partnership
shall have all powers necessary or desirable to accomplish the purposes
enumerated. In connection with the foregoing, but subject to all of the terms,
covenants, conditions and limitations contained in this Agreement and any other
agreement entered into by the Partnership, the Partnership shall have full power
and authority to enter into, perform and carry out contracts of any kind, to
borrow
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or lend money and to issue evidences of indebtedness, whether or not secured by
mortgage, trust deed, pledge or other Lien and, directly or indirectly, to
acquire and construct additional Properties necessary or useful in connection
with its business.
2.4 Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be at 115 West Washington
Street, Indianapolis, Indiana 46204 or such other location as shall be selected
from time to time by the Managing General Partner in its sole discretion;
provided, however, that the Managing General Partner shall promptly notify the
Partners of any change in the location of the principal place of business of the
Partnership.
2.5 Registered Agent and Registered Office. The Registered Agent of the
Partnership shall be The Corporation Trust Company, or such other Person as the
Managing General Partner may select in its sole discretion. The Registered
Office of the Partnership in the State of Delaware shall be c/o The Corporation
Trust Company, 1209 Orange Street, in the City of Wilmington, County of New
Castle, Delaware 19801, or such other location as the Managing General Partner
may select in its sole and absolute discretion. The Managing General Partner
shall promptly notify the Partners of any change in the Registered Agent or
Registered Office of the Partnership.
ARTICLE III
Term
3.1 Commencement. The Partnership commenced business as a limited
partnership on November 18, 1993 upon the filing of the Certificate with the
Secretary of State of the State of Delaware.
3.2 Dissolution. The Partnership shall continue until dissolved and
terminated upon the earlier of (i) December 31, 2096, or (ii) the earliest to
occur of the following events:
(a) the dissolution, termination, withdrawal, retirement or
Bankruptcy of a General Partner unless the Partnership is continued as provided
in Section 9.1 hereof;
(b) the election to dissolve the Partnership made in writing by the
Managing General Partner, but only if the consent required by Section 7.3 and
the consent of the Non-Managing General Partners are obtained;
(c) the sale or other disposition of all or substantially all the
assets of the Partnership; or
(d) dissolution required by operation of law.
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ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contributions.
(a) Simultaneously with the execution and delivery hereof, the
Managing General Partner is contributing to the Partnership substantially all of
its assets and liabilities in exchange for a managing general partnership
interest in the Partnership and admission to the Partnership as a Limited
Partner with the number of Units set forth on Exhibit A. The Partnership may
direct the transfer of certain of such assets and/or liabilities to one or more
of its subsidiaries.
(b) The Managing General Partner shall contribute to the capital of
the Partnership, in exchange for Units as provided in Section 4.3(b) hereof, the
proceeds of the sale of any Shares.
(c) All transfer, stamp or similar taxes payable upon any
contribution provided for in this Section 4.1 shall be paid by the Partnership.
4.2 Limited Partner Capital Contributions. Except as expressly provided in
Sections 4.3, 4.4, 4.5 and 4.8 below, no Partner may make, and no Partner shall
have the obligation to make, additional contributions to the capital of the
Partnership without the consent of the General Partners.
4.3 Additional Funds.
(a) The Partnership may obtain funds ("Required Funds") which it
considers necessary to meet the needs, obligations and requirements of the
Partnership, or to maintain adequate working capital or to repay Partnership
indebtedness, and to carry out the Partnership's purposes, from the proceeds of
Third Party Financing or Affiliate Financing, in each case pursuant to such
terms, provisions and conditions and in such manner (including the engagement of
brokers and/or investment bankers to assist in providing such financing) and
amounts as the Managing General Partner and as the Non-Managing General Partners
shall determine to be in the best interests of the Partnership, subject to the
terms and conditions of this Agreement. Any and all funds required or expended,
directly or indirectly, by the Partnership for capital expenditures may be
obtained or replenished through Partnership borrowings. Any Third Party
Financing or Affiliate Financing obtained by the General Partners for and on
behalf of the Partnership may be convertible in whole or in part into Additional
Units (to be issued in accordance with Section 9.4 hereof), may be unsecured,
may be secured by mortgage(s) or deed(s) of trust and/or assignments on or in
respect of all or any portion of the assets of the Partnership or any other
security made available by the Partnership, may include or be obtained through
the public or private placement of debt and/or other instruments, domestic and
foreign may include provision for the option to acquire Additional Units (to be
issued in accordance with Section 9.4 hereof), and may
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include the acquisition of or provision for interest rate swaps, credit
enhancers and/or other transactions or items in respect of such Third Party
Financing or Affiliate Financing; provided, however, that in no event may the
Partnership obtain any Affiliate Financing or Third Party Financing that is
recourse to any Partner or any Affiliate, partner, shareholder, beneficiary,
principal officer or director of any Partner without the consent of the affected
Partner and any other Person or Persons to whom such recourse may be had.
(b) To the extent the Partnership does not borrow all of the
Required Funds (and whether or not the Partnership is able to borrow all or part
of the Required Funds), the Managing General Partner or any of the Non-Managing
General Partners (or an Affiliate thereof) (i) may itself borrow such Required
Funds, in which case the Managing General Partner or such Non-Managing General
Partner shall lend such Required Funds to the Partnership on the same economic
terms and otherwise on substantially identical terms, or (ii) may raise such
Required Funds in any other manner, in which case, unless such Required Funds
are raised by the Managing General Partner or any Non-Managing General Partner
through the sale of Preferred Shares, the Managing General Partner or such
Non-Managing General Partner shall contribute to the Partnership as an
additional Capital Contribution the amount of the Required Funds so raised
("Contributed Funds") (hereinafter, each date on which the Managing General
Partner or the Non-Managing General Partners so contributes Contributed Funds
pursuant to this Section 4.3(b) is referred to as an "Adjustment Date"). Any
Required Funds raised from the sale of Preferred Shares shall either be
contributed to the Partnership as Contributed Funds or loaned to the Partnership
pursuant to Section 4.3(c) below. In the event the Managing General Partner or a
Non-Managing General Partner advances Required Funds to the Partnership pursuant
to this Section 4.3(b) as Contributed Funds, then the Partnership shall assume
and pay (or reflect on its books as additional Contributed Funds) the expenses
(including any applicable underwriting discounts) incurred by the Managing
General Partner or a Non-Managing General Partner (or such Affiliate) in
connection with raising such Required Funds through a public offering of its
securities or otherwise. If the Managing General Partner advances Required Funds
to the Partnership as Contributed Funds pursuant to this Section 4.3(b) from any
offering or sale of Shares (including, without limitation, any issuance of
Shares pursuant to the exercise of options, warrants, convertible securities or
similar rights to acquire Shares), the Partnership shall issue additional
Partnership Units to the Managing General Partner to reflect its contribution of
the Contributed Funds equal in number to such number of Shares issued in such
offering or sale.
(c) In the event any General Partner contributes to the Partnership
any Required Funds obtained from the sale of Preferred Shares ("Preferred
Contributed Funds"), then the Partnership shall assume and pay the expenses
(including any applicable underwriter discounts) incurred by the Managing
General Partner in connection
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with raising such Required Funds. In addition, the Managing General Partner
shall be issued Preferred Units of a designated class or series to reflect its
contribution of such funds. Each class or series of Preferred Units so issued
shall be designated by the Managing General Partner to identify such class or
series with the class or series of Preferred Shares which constitutes the
Related Issue. Each class or series of Preferred Units shall be described in a
written document (the "Preferred Unit Designation") attached as Exhibit B that
shall set forth, in sufficient detail, the economic rights, including dividend,
redemption and conversion rights and sinking fund provisions, of the class or
series of Preferred Units and the Related Issue. The number of Preferred Units
of a class or series shall be equal to the number of shares of the Related Issue
sold. The Preferred Unit Designation shall provide for such terms for the class
or series of preferred Units that shall entitle the Managing General Partner to
substantially the same economic rights as the holders of the Related Issue.
Specifically, the Managing General Partner shall receive distributions on the
class or series of Preferred Units pursuant to Section 6.2 equal to the
aggregate dividends payable on the Related Issue at the times such dividends are
paid (the "Preferred Distribution Requirement"). The Partnership shall redeem
the class or series of Preferred Units for a redemption price per Preferred Unit
equal to the redemption price per share of the Related Issue, exclusive of any
accrued unpaid dividends (the "Preferred Redemption Price") upon the redemption
of any shares of the Related Issue. Each class or series of Preferred Units
shall also be converted into additional Partnership Units at the time and on
such economic terms and conditions as the Related Issue is converted into
Shares. Upon the issuance of any class or series of Preferred Units pursuant to
this Section 4.3(c), the Managing General Partner shall provide the Limited
Partners with a copy of the Preferred Unit Designation relating to such class or
series. The Managing General Partner shall have the right, in lieu of
contributing to the Partnership proceeds from the sale of Preferred Shares as
Preferred Contributed Funds, to lend such proceeds to the Partnership. Any such
loan shall be on the same terms and conditions as the Related Issue except that
dividends payable on the Related Issue shall be payable by the Partnership to
the Managing General Partner as interest, any mandatory redemptions shall take
the form of principal payments and no Preferred Units shall be issued to the
Managing General Partner. If any such loan is made, the Partnership shall
promptly reimburse the Managing General Partner for all expenses (including any
applicable underwriter discounts) incurred by the Managing General Partner in
connection with raising the Required Funds. Any such loan made by the Managing
General Partner to the Partnership may at any time be contributed to the
Partnership as Preferred Contributed Funds in exchange for Preferred Units as
above provided; and if the Related Issue is by its terms convertible into
Shares, such loan shall be so contributed to the Partnership prior to the
effectuation of such conversion.
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4.4 Redemption; Change in Number of Shares Outstanding.
(a) If the Managing General Partner shall redeem any of its
outstanding Shares, the Partnership shall concurrently therewith redeem an equal
number of Units held by the Managing General Partner for the same price (as
determined in good faith by the Board of Directors of the Managing General
Partner) as paid by the Managing General Partner for the redemption of such
Shares.
(b) In the event of any change in the outstanding number of Shares
by reason of any share dividend, split, reverse split, recapitalization, merger,
consolidation or combination, the number of Units held by each Partner (or
assignee) shall be proportionately adjusted such that, to the extent possible,
one Unit remains the equivalent of one Share without dilution.
4.5 Stock Option Plan; Dividend Reinvestment Plan. (a) If at any time a
stock option granted by the Partnership in connection with a stock option plan
is exercised in accordance with its terms, and the Partnership chooses not to
acquire any or all of the stock required to satisfy such option through open
market purchases, the Managing General Partner shall, as soon as practicable
after such exercise, sell to the Partnership for use in satisfying such stock
option, at a purchase price equal to the Current Per Share Market Price on the
date such stock option is exercised, the number of newly issued Shares for which
such option is exercised (or, if such stock option is to be satisfied in part
through open market purchases, the remaining number of newly issued Shares) and
the Managing General Partner shall contribute to the capital of the Partnership,
in exchange for additional Partnership Units, an amount equal to the price paid
to the Managing General Partner by the Partnership in connection with the
Partnership's purchase of newly issued Shares upon exercise of such stock
option. The number of Partnership Units to be so issued shall be determined by
dividing the amount of such capital contribution by the Deemed Partnership Unit
Value, computed as of the Trading Day immediately preceding the date of such
capital contribution. The Managing General Partner shall promptly give each
Limited Partner written notice of the number of Partnership Units so issued. The
Partnership shall retain the exercise or purchase price paid by the holder of
such option for the Shares such holder is entitled to receive upon such
exercise.
(b) All amounts received by the Managing General Partner in respect of its
dividend reinvestment plan, if any, either (a) shall be utilized by the Managing
General Partner to effect open market purchases of Paired Shares, or (b) if the
Managing General Partner elects instead to issue new shares with respect to such
amounts, shall be contributed by the Managing General Partner to the Partnership
in exchange for additional Partnership Units. The number of Partnership Units so
issued shall be determined by dividing the amount of funds so contributed by the
Deemed Partnership Unit Value, computed as of the Trading Day immediately
preceding the date such funds are contributed. The Managing
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General Partner shall promptly give each Limited Partner written notice of the
number of Partnership Units so issued.
4.6 No Third Party Beneficiary. No creditor or other Third Party having
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or to pursue any other
right or remedy hereunder or at law or in equity, it being understood and agreed
that the provisions of this Agreement shall be solely for the benefit of, and
may be enforced solely by, the parties hereto and their respective successors
and assigns. None of the rights or obligations of the Partners herein set forth
to make Capital Contributions to the Partnership shall be deemed an asset of the
Partnership for any purpose by any creditor or other third party, nor may such
rights or obligations be sold, transferred or assigned by the Partnership or
pledged or encumbered by the Partnership to secure any debt or other obligation
of the Partnership or of any of the Partners.
4.7 No Interest; No Return. No Partner shall be entitled to interest on
its Capital Contribution or on such Partner's Capital Account. Except as
provided herein or by law, no Partner shall have any right to withdraw any part
of its Capital Account or to demand or receive the return of its Capital
Contribution from the Partnership.
4.8 Capital Accounts.
(a) The Partnership shall establish and maintain a separate capital
account ("Capital Account") for each Partner, including a Partner who shall
pursuant to the provisions hereof acquire a Partnership Interest, which Capital
Account shall be:
(1) credited with the amount of cash contributed by such
Partner to the capital of the Partnership; the initial Gross Asset Value (net of
liabilities secured by such contributed property that the Partnership assumes or
takes subject to) of any other property contributed by such Partner to the
capital of the Partnership; such Partner's distributive share of Profits; and
any other items in the nature of income or gain that are allocated to such
Partner pursuant to Section 6.1 hereof, but excluding tax items described in
Regulations Section 1.704-1(b)(4)(i); and
(2) debited with the amount of cash distributed to such
Partner pursuant to the provisions of this Agreement; the Gross Asset Value (net
of liabilities secured by such distributed property that such Partner assumes or
takes subject to) of any Partnership property distributed to such Partner
pursuant to any provision of this Agreement; the amount of unsecured liabilities
of such Partner assumed by the Partnership; such Partner's distributive share of
Losses; in the case of the General Partners, payments of REIT Expenses by the
Partnership; and any other items in the nature of expenses or losses that are
allocated to such Partner pursuant to Section 6.1 hereof, but excluding tax
items described in Regulations Section 1.704-1(b)(4)(i).
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In the event that any or all of a Partner's Partnership Units or
Preferred Units are transferred within the meaning of Regulations Section
1.704-l(b)(2)(iv)(l), the transferee shall succeed to the Capital Account of the
transferor to the extent that it relates to the Units so transferred.
In the event that the Gross Asset Values of Partnership assets are
adjusted pursuant to Section 4.8(b)(ii) hereof, the Capital Accounts of the
Partners shall be adjusted to reflect the aggregate net adjustments as if the
Partnership sold all of its properties for their fair market values and
recognized gain or loss for federal income tax purposes equal to the amount of
such aggregate net adjustment.
A Limited Partner shall be liable unconditionally to the Partnership
for all or a portion of any deficit in its Capital Account if it so elects to be
liable for such deficit or portion thereof. Such election may be for either a
limited or unlimited amount and may be amended or withdrawn at any time. The
election, and any amendment thereof, shall be made by written notice to the
Managing General Partner (and the Managing General Partner shall promptly upon
receipt deliver copies thereof to the other Partners) stating that the Limited
Partner elects to be liable, and specifying the limitations, if any, on the
maximum amount or duration of such liability. Said election, or amendment
thereof, shall be effective only from the date 25 days after written notice
thereof is received by the Managing General Partner, and shall terminate upon
the date, if any, specified therein as a termination date or upon delivery to
the Managing General Partner of a subsequent written notice terminating such
election. A termination of any such election, or an amendment reducing the
Limited Partner's maximum liability thereunder or the duration thereof, shall
not be effective to avoid responsibility for any loss incurred prior to such
termination or the effective date of such amendment. Except as provided in this
Section 4.8 or as required by law, no Limited Partner shall be liable for any
deficit in its Capital Account or be obligated to return any distributions of
any kind received from the Partnership.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Section 1.704-1(b) of the Regulations, and shall be interpreted and applied as
provided in the Regulations.
(b) The term "Gross Asset Value" or "Gross Asset Values" means, with
respect to any asset of the Partnership, such asset's adjusted basis for federal
income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such asset
as reasonably determined by the Managing General Partner;
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(ii) the Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the General Partner, immediately prior to the following events:
(A) a Capital Contribution (other than a de minimis
Capital Contribution, within the meaning of Section l.704-l(b)(2)(iv)(f)(5)(i)
of the Regulations) to the Partnership by a new or existing Partner as
consideration for Partnership Units;
(B) the distribution by the Partnership to a
Partner of more than a de minimis amount (within the meaning of Section
1.704-1(b)(2)(iv)(f)(5)(ii) of the Regulations) of Partnership property as
consideration for the redemption of Partnership Units; and
(C) the liquidation of the Partnership within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; and
(iii) the Gross Asset Values of Partnership assets distributed
to any Partner shall be the gross fair market values of such assets as
reasonably determined by the Managing General Partner as of the date of
distribution. At all times, Gross Asset Values shall be adjusted by any
Depreciation taken into account with respect to the Partnership's assets for
purposes of computing Profits and Losses. Any adjustment to the Gross Asset
Values of Partnership property shall require an adjustment to the Partners'
Capital Accounts as described in Section 4.8(a) above.
ARTICLE V
Representations, Warranties and Acknowledgment
5.1 Representations and Warranties by Managing General Partner. The
Managing General Partner represents and warrants to the Limited Partners, the
other General Partners and to the Partnership that (i) it is a corporation duly
formed, validly existing and in good standing under the laws of its state of
incorporation, with full right, corporate power and authority to fulfill all of
its obligations hereunder or as contemplated herein; (ii) all transactions
contemplated by this Agreement to be performed by it have been duly authorized
by all necessary action; (iii) this Agreement has been duly executed and
delivered by and is the legal, valid and binding obligation of the Managing
General Partner and is enforceable against it in accordance with its terms,
except as such enforcement may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other laws of
general application affecting the rights and remedies of creditors and (b)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law); (iv) no authorization,
approval, consent or order of any court or governmental authority or agency or
any other Entity is required in connection with the execution and delivery of
this Agreement by the Managing General Partner, except as may have been received
prior to the date of this
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Agreement; (v) the execution and delivery of this Agreement by the Managing
General Partner and the consummation of the transactions contemplated hereby
will not conflict with or constitute a breach or violation of, or a default
under, any contract, indenture, mortgage, loan agreement, note, lease, joint
venture or partnership agreement or other instrument or agreement to which
either the Managing General Partner or the Partnership is a party; and (vi) the
Partnership Units, upon payment of the consideration therefore pursuant to this
Agreement, will be validly issued, fully paid and, except as otherwise provided
in accordance with applicable law, non-assessable.
5.2 Representations and Warranties by Non-Managing General Partners. Each
of the Non-Managing General Partners represents and warrants to the Limited
Partners, the other General Partners and to the Partnership that (i) it is a
corporation duly formed, validly existing and in good standing under the laws of
its state of incorporation, with full right, corporate power and authority to
fulfill all of its obligations hereunder or as contemplated herein; (ii) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action; (iii) this Agreement has been duly executed
and delivered by and is the legal, valid and binding obligation of the
Non-Managing General Partner and is enforceable against it in accordance with
its terms, except as such enforcement may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other laws of general application affecting the rights and remedies of creditors
and (b) general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law); (iv) no authorization,
approval, consent or order of any court or governmental authority or agency or
any other Entity is required in connection with the execution and delivery of
this Agreement by the Non-Managing General Partner, except as may have been
received prior to the date of this Agreement; and (v) the execution and delivery
of this Agreement by the Non-Managing General Partner and the consummation of
the transactions contemplated hereby will not conflict with or constitute a
breach or violation of, or default under, any contract, indenture, mortgage,
loan agreement, note, lease, joint venture or partnership agreement or other
instrument or agreement to which the Non-Managing General Partner is a party.
5.3 Representations and Warranties by the Limited Partners. Each Limited
Partner, for itself only, represents and warrants to the General Partners, the
other Limited Partners and the Partnership that (i) all transactions
contemplated by this Agreement to be performed by such Limited Partner have been
duly authorized by all necessary action; and (ii) this Agreement is binding
upon, and enforceable against, such Limited Partner in accordance with its
terms, except as such enforcement may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other laws of
general application affecting the rights and remedies of creditors and (b)
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general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
5.4 Acknowledgment by Each Partner. Each Partner hereby acknowledges that
no representations as to potential profit, cash flows or yield, if any, in
respect of the Partnership or any one or more or all of the Projects owned,
directly or indirectly, by the Partnership have been made to it by any other
Partner or its Affiliates or any employee or representative of any other Partner
or its Affiliates, and that projections and any other information, including,
without limitation, financial and descriptive information and documentation,
which may have been in any manner submitted to such Partner shall not constitute
a representation or warranty, express or implied.
ARTICLE VI
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations.
(a) For the purpose of this Agreement, the terms "Profits" and
"Losses" mean, respectively, for each Partnership Fiscal Year or other period,
the Partnership's taxable income or loss for such Partnership Fiscal Year or
other period, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a)(l) of the Code shall be included in
taxable income or loss), adjusted as follows:
(1) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses pursuant
to this Section 6.1(a) shall be added to such taxable income or loss;
(2) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Partnership Fiscal Year
or other period;
(3) any items that are specially allocated pursuant to Section
6.1(d) hereof shall not be taken into account in computing Profits or Losses;
and
(4) any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code (or treated as such under Regulation Section
1.704-l(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits
or Losses pursuant to this Section 6.1(a) shall be deducted in calculating such
taxable income or loss.
(b) Except as otherwise provided in Section 6.1(d) hereof and this
Section 6.1(b), the Profits and Losses of the Partnership (and each item
thereof) for each Partnership Fiscal Year shall be allocated among the Partners
in the following order of priority:
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(1) First, Profits shall be allocated to the holder of Preferred
Units in an amount equal to the excess of (A) the amount of Net Operating Cash
Flow distributed to such holder pursuant to Sections 6.2(b)(i) and (ii) and
Section 6.2(c)(but only to the extent of the Preferred Distribution Requirement
and Preferred Distribution Shortfalls) for the current and all prior Partnership
Fiscal Years over (B) the amount of Profits previously allocated to such holder
pursuant to this subparagraph (1).
(2) Second, for any Partnership Fiscal Year ending on or after a
date on which Preferred Units are redeemed, Profits (or Losses) shall be
allocated to the holder of such Preferred Units in an amount equal to the excess
(or deficit) of the sum of the applicable Preferred Redemption Amounts for the
Preferred Units that have been or are being redeemed during such Partnership
Fiscal Year over the Preferred Unit Issue Price of such Preferred Units. In
addition, in the event that the Partnership is liquidated pursuant to Article
VIII, the allocation described above shall be made to the holder of Preferred
Units with respect to all Preferred Units then outstanding.
(3) Third, any remaining Profits and Losses shall be allocated among
the Partners in accordance with their proportionate ownership of Partnership
Units except as otherwise required by the Regulations.
(4) Notwithstanding subparagraphs (1), (2) and (3), Profits and
Losses from a Liquidation Transaction shall be allocated as follows:
First, Profits (or Losses) shall be allocated to the
holder of Preferred Units in an amount equal to the excess (or deficit) of the
sum of the applicable Preferred Redemption Amounts of the Preferred Units which
have been or will be redeemed with the proceeds of the Liquidation Transaction
over the Preferred Unit Issue Price of such Preferred Units;
Second, Profits (or Losses) shall be allocated among
the Partners so that the Capital Accounts of the Partners (excluding from the
Capital Account of any Partner the amount attributable to its Preferred Units)
are proportional to the number of Partnership Units held by each Partner; and
Third, any remaining Profits and Losses shall be
allocated among the Partners in accordance with their proportionate ownership of
Partnership Units.
(c) For the purpose of Section 6.1(b) hereof, gain or loss
resulting from any disposition of Partnership property shall be computed by
reference to the Gross Asset Value of the property disposed of, notwithstanding
that the adjusted tax basis of such property for federal income tax purposes
differs from its Gross Asset Value.
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(d) Notwithstanding the foregoing provisions of this Section 6.1,
the following provisions shall apply:
(1) A Partner shall not receive an allocation of any Partnership
deduction that would result in total loss allocations attributable to
"Nonrecourse Liabilities" (as defined in Regulations Section 1.704-2(b)(3)) in
excess of such Partner's share of Minimum Gain (as determined under Regulations
Section 1.704-2(g)). The term "Minimum Gain" means an amount determined in
accordance with Regulations Section 1.704-2(d) by computing, with respect to
each Nonrecourse Liability of the Partnership, the amount of gain, if any, that
the Partnership would realize if it disposed of the property subject to such
liability for no consideration other than full satisfaction thereof, and by then
aggregating the amounts so computed. If the Partnership makes a distribution
allocable to the proceeds of a Nonrecourse Liability, in accordance with
Regulation Section 1.704-2(h), the distribution will be treated as allocable to
an increase in Partnership Minimum Gain to the extent the increase results from
encumbering Partnership property with aggregate Nonrecourse Liabilities that
exceeds the property's adjusted tax basis. If there is a net decrease in
Partnership Minimum Gain for a Partnership Fiscal Year, in accordance with
Regulations Section 1.704-2(f) and the exceptions contained therein, the
Partners shall be allocated items of Partnership income and gain for such
Partnership Fiscal Year (and, if necessary, for subsequent Partnership Fiscal
Years) equal to the Partners' respective shares of the net decrease in Minimum
Gain within the meaning of Regulations Section l.704-2(g)(2) (the "Minimum Gain
Chargeback"). The items to be allocated pursuant to this Section 6.1(d)(1) shall
be determined in accordance with Regulations Section 1.704-2(f) and (j).
(2) Any item of "Partner Nonrecourse Deduction" (as defined in
Regulations Section 1.704-2(i)) with respect to a "Partner Nonrecourse Debt" (as
defined in Regulations Section l.704-2(b)(4)) shall be allocated to the Partner
or Partners who bear the economic risk of loss for such Partner Nonrecourse Debt
in accordance with Regulations Section l.704-2(i)(l). If the Partnership makes a
distribution allocable to the proceeds of a Partner Nonrecourse Debt, in
accordance with Regulation Section l.704-2(i)(6) the distribution will be
treated as allocable to an increase in Partner Minimum Gain to the extent the
increase results from encumbering Partnership property with aggregate Partner
Nonrecourse Debt that exceeds the property's adjusted tax basis. Subject to
Section 6.1(d)(1) hereof, but notwithstanding any other provision of this
Agreement, in the event that there is a net decrease in Minimum Gain
attributable to a Partner Nonrecourse Debt (such Minimum Gain being hereinafter
referred to as "Partner Nonrecourse Debt Minimum Gain") for a Partnership Fiscal
Year, then after taking into account allocations pursuant to Section 6.1(d)(1)
hereof, but before any other allocations are made for such taxable year, and
subject to the exceptions set forth in Regulations Section 1.704-2(i)(4), each
Partner with a share of Partner Non-recourse Debt Minimum Gain at the beginning
of such Partnership
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Fiscal Year shall be allocated items of income and gain for such Partnership
Fiscal Year (and, if necessary, for subsequent Partnership Fiscal Years) equal
to such Partner's share of the net decrease in Partner Nonrecourse Debt Minimum
Gain as determined in a manner consistent with the provisions of Regulations
Section l.704-2(g)(2). The items to be allocated pursuant to this Section
6.1(d)(2) shall be determined in accordance with Regulations Section
1.704-2(i)(4) and (j).
(3) Pursuant to Regulations Section 1.752-3(a)(3), for the purpose
of determining each Partner's share of excess nonrecourse liabilities of the
Partnership, and solely for such purpose, each Partner's interest in Partnership
profits is hereby specified to be the quotient of (i) the number of Partnership
Units then held by such Partner, and (ii) the aggregate amount of Partnership
Units then outstanding.
(4) No Limited Partner shall be allocated any item of deduction or
loss of the Partnership if such allocation would cause such Limited Partner's
Capital Account to become negative by more than the sum of (i) any amount such
Limited Partner is obligated to restore upon liquidation of the Partnership,
plus (ii) such Limited Partner's share of the Partnership's Minimum Gain and
Partner Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot
be allocated to a Limited Partner pursuant to this Section 6.1(d)(4) shall be
allocated to the General Partners in accordance with the number of Partnership
Units held by each General Partner. For this purpose, in determining the Capital
Account balance of such Limited Partner, the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) shall be taken into account. In the
event that (A) any Limited Partner unexpectedly receives any adjustment,
allocation, or distribution described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), (5), or (6), and (B) such adjustment, allocation, or
distribution causes or increases a deficit balance (net of amounts which such
Limited Partner is obligated to restore or deemed obligated to restore under
Regulations Section 1.704-2(g)(l) and l.704-2(i)(5) and determined after taking
into account any adjustments, allocations, or distributions described in
Regulations Sections 1.704-l(b)(2)(ii)(d)(4), (5), or (6) that, as of the end of
the Partnership Fiscal Year, reasonably are expected to be made to such Limited
Partner) in such Limited Partner's Capital Account as of the end of the
Partnership Fiscal Year to which such adjustment, allocation, or distribution
relates, then items of Gross Income (consisting of a pro rata portion of each
item of Gross Income) for such Partnership Fiscal Year and each subsequent
Partnership Fiscal Year shall be allocated to such Limited Partner until such
deficit balance or increase in such deficit balance, as the case may be, has
been eliminated. In the event that this Section 6.1(d)(4) and Section 6.1(d)(1)
and/or (2) hereof apply, Section 6.1(d)(1) and/or (2) hereof shall be applied
prior to this Section 6.l(d)(4).
(5) The Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss, and
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deduction among the Partners so that, to the extent possible, the cumulative net
amount of allocations of Partnership items under this Section 6.1 shall be equal
to the net amount that would have been allocated to each Partner if the
Regulatory Allocations had not been made. This Section 6.1(d)(5) is intended to
minimize to the extent possible and to the extent necessary any economic
distortions which may result from application of the Regulatory Allocations and
shall be interpreted in a manner consistent therewith. For purposes hereof,
"Regulatory Allocations" shall mean the allocations provided under this Section
6.1(d) (other than this Section 6.l(d)(5)).
(e) In accordance with Sections 704(b) and 704(c) of the Code and
the Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for federal
income tax purposes, be allocated among the Partners on a property by property
basis so as to take account of any variation between the adjusted basis of such
property to the Partnership for federal income tax purposes and the initial
Gross Asset Value of such property. If the Gross Asset Value of any Partnership
property is adjusted as described in the definition of Gross Asset Value,
subsequent allocations of income, gains or losses from taxable sales or other
dispositions and deductions with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and the Gross Asset Value of such asset in the manner prescribed under
Sections 704(b) and 704(c) of the Code and the Regulations thereunder. In
furtherance of the foregoing, the Partnership shall employ the method prescribed
in Regulation S 1.704-3(b) (the "traditional method") or the equivalent
successor provision(s) of proposed, temporary or final Regulations. The
Partnership shall allocate items of income, gain, loss and deduction allocated
to it by a Subsidiary Entity to the Partner or Partners contributing the
interest or interests in such subsidiary Entity, so that, to the greatest extent
possible and consistent with the foregoing, such contributing Partner or
Partners are allocated the same amount and character of items of income, gain,
loss and deduction with respect to such Subsidiary Entity that they would have
been allocated had they contributed undivided interests in the assets owned by
such Subsidiary Entity to the Partnership in lieu of contributing the interest
or interests in the Subsidiary Entity to the Partnership.
(f) Notwithstanding anything to the contrary contained in this
Section 6.1, the allocation of Profits and Losses for any Partnership Fiscal
Year during which a Person acquires a Partnership Interest (other than upon
formation of the Partnership) pursuant to Section 4.3(b) or otherwise, shall
take into account the Partners' varying interests for such Partnership Fiscal
Year pursuant to any method permissible under Section 706 of the Code that is
selected by the Managing General Partner (notwithstanding any agreement between
the assignor and assignee of such Partnership Interest although the Managing
General Partner may recognize any such agreement), which method may take into
account the date on
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which the Transfer or an agreement to Transfer becomes irrevocable pursuant to
its terms, as determined by the Managing General Partner; provided, that the
allocation of Profits and Losses with respect to a Partnership Unit acquired
during a fiscal quarter of the Partnership shall be appropriately adjusted in
accordance with Section 6.2(c)(ii) below.
(g) If any portion of gain from the sale of property is treated as
gain which is ordinary income by virtue of the application of Code Sections 1245
or 1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among
the Partners in the same proportion that the depreciation and amortization
deductions giving rise to the Affected Gain were allocated and (B) other tax
items of gain of the same character that would have been recognized, but for the
application of Code Sections 1245 and/or 1250, shall be allocated away from
those Partners who are allocated Affected Gain pursuant to clause (A) so that,
to the extent possible, the other Partners are allocated the same amount, and
type, of capital gain that would have been allocated to them had Code Sections
1245 and/or 1250 not applied. For purposes hereof, in order to determine the
proportionate allocations of depreciation and amortization deductions for each
Fiscal Year or other applicable period, such deductions shall be deemed
allocated on the same basis as Profits or Losses for such respective period.
(h) The Profits, Losses, gains, deductions and credits of the
Partnership (and all items thereof) for each Partnership Fiscal Year shall be
determined in accordance with the accounting method followed by the Partnership
for federal income tax purposes.
(i) Except as provided in Sections 6.1(e) and 6.1(g) hereof, for
federal income tax purposes, each item of income, gain, loss, or deduction shall
be allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction has been allocated pursuant to this
Section 6.1.
(j) To the extent permitted by Regulations Sections 1.704-2(h)(3)
and 1.704-2(i)(6), the Managing General Partner shall endeavor to treat
distributions as having been made from the proceeds of Nonrecourse Liabilities
or Partner Nonrecourse Debt only to the extent that such distributions would
cause or increase a deficit balance in any Partner's Capital Account that
exceeds the amount such Partner is otherwise obligated to restore (within the
meaning of Regulations Section 1.704-l(b)(2)(ii)(c)) as of the end of the
Partnership's taxable year in which the distribution occurs.
(k) If any Partner sells or otherwise disposes of any property,
directly or indirectly, to the Partnership, and as a result thereof, gain on a
subsequent disposition of such property by the Partnership is reduced pursuant
to Section 267(d) of the Code, then, to the extent permitted by applicable law,
gain for federal income tax purposes attributable to such subsequent disposition
shall first be allocated among the Partners other than the selling Partner in an
amount equal to such Partners'
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allocations of "book" gain on the property pursuant to this Section 6.1, and any
remaining gain for federal income tax purposes shall be allocated to the selling
Partner.
6.2 Distributions. (a) Except with respect to the liquidation of the
Partnership and subject to the priority set forth in Sections 6.2(b) and (c),
the Managing General Partner shall cause the Partnership to distribute all or a
portion of Net Operating Cash Flow to the Partners who are such on the relevant
Partnership Record Date from time to time as determined by the Managing General
Partner, but in any event not less frequently than quarterly, in such amounts as
the Managing General Partner shall determine in its sole discretion; provided,
however, that, except as provided in Sections 6.2(b) and (c) below, all such
distributions shall be made pro rata in accordance with the outstanding
Partnership Units on the relevant Partnership Record Date. In no event may a
Limited Partner receive a distribution of Net Operating Cash Flow with respect
to a Partnership Unit that such Partner has exchanged on or prior to the
relevant Partnership Record Date for a Share, pursuant to the Rights granted
under Section 11.1 (a "Post-Exchange Distribution"); rather, all such
Post-Exchange Distributions shall be distributed to the Managing General
Partner.
(b) Except to the extent Net Operating Cash Flow is distributed
pursuant to Section 6.2(c), and except with respect to the liquidation of the
Partnership, distributions of Net Operating Cash Flow shall be made in the
following order of priority;
(i) First, to the extent that the amount of Net Operating Cash
Flow distributed to the holder of Preferred Units for any prior quarter was less
than the Preferred Distribution Requirement for such quarter, and has not been
subsequently distributed pursuant to this Section 6.2(b)(i) (a "Preferred
Distribution Shortfall"), Net Operating Cash Flow shall be distributed to the
holder of Preferred Units in an amount necessary to satisfy such Preferred
Distribution Shortfall for the current and all prior Partnership Fiscal Years.
In the event that the Net Operating Cash Flow distributed for a particular
quarter is less than the Preferred Distribution Shortfall, then all Net
Operating Cash Flow for the current quarter shall be distributed to the holder
of Preferred Units.
(ii) Second, Net Operating Cash Flow shall be distributed to
the holder of Preferred Units in an amount equal to the Preferred Distribution
Requirement for the then current quarter for each outstanding Preferred Unit. In
the event that the amount of Net Operating Cash Flow distributed for a
particular quarter pursuant to this subparagraph (b)(ii) is less than the
Preferred Distribution Requirement for such quarter, then all such Net Operating
Cash Flow for such quarter shall be distributed to the holder of Preferred
Units.
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(iii) The balance of the Net Operating Cash Flow to be
distributed, if any, shall be distributed to holders of Partnership Units, in
proportion to their ownership of Partnership Units.
(c) (i) If in any quarter the Partnership redeems any outstanding
Preferred Units, unless and except to the extent that such redemption is
effected out of borrowed funds, Capital Contributions or other sources, Net
Operating Cash Flow shall be distributed to the Managing General Partner in an
amount equal to the applicable Preferred Redemption Amount for the Preferred
Units being redeemed before being distributed pursuant to Section 6.2(b).
(ii) Notwithstanding anything to the contrary contained in
this Section 6.2, unless expressly waived in writing by the Managing General
Partner, the distribution of Net Operating Cash Flow with respect to a
Partnership Unit acquired during a fiscal quarter of the Partnership shall be an
amount equal to the product of (i) the amount of Net Operating Cash Flow
otherwise distributable to a Partnership Unit held during such fiscal quarter
and (ii) (a) the number of days remaining in such fiscal quarter, determined as
of the date such Partnership Unit was acquired, divided by (b) the total number
of days in such fiscal quarter.
(d) Notwithstanding the provision of the first sentence of Section
6.2(a), (i) the Managing General Partner shall use its best efforts to cause the
Partnership to distribute sufficient amounts, in accordance with Section 6.2(a)
above, to enable the Managing General Partner and the Non-Managing General
Partners to pay shareholder dividends that will (A) satisfy the REIT
Requirements, and (B) avoid any federal income or excise tax liability of the
Managing General Partner or any of the Non-Managing General Partners; and (ii)
in the event of a Covered Sale which occurs on a date on or after August 9,
1996, and before but not including August 9, 2001, and which gives rise to a
special allocation of taxable income or gain to one or more Limited Partners
pursuant to Section 6.1(e), (A) the Managing General Partner shall cause the
Partnership to distribute to all of the Partners, pro rata in accordance with
ownership of Partnership Units, the Net Sale Proceeds therefrom up to an amount
sufficient to enable each such Limited Partner, from the share of such
distribution made to it, to pay in full any income tax liability, computed at
the maximum applicable federal and state statutory rates, with respect to the
income or gain so specially allocated and on the distribution required by this
Section 6.2(d) (or, if any such Limited Partner is a partnership or Subchapter S
corporation, to enable such Limited Partner to distribute sufficient amounts to
its equity owners to enable such owners to pay in full any income tax liability,
computed at the maximum applicable federal and state statutory rates, with
respect to their share of such taxable income or gain and such distributions)
and (B) if the amounts distributed to each such Limited Partner in accordance
with the preceding clause (A) are insufficient to enable it to pay in full such
income
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tax liabilities, the Managing General Partner shall cause the Partnership to
distribute sufficient funds from other sources to all of the Partners, pro rata
in accordance with ownership of Partnership Units, in an amount sufficient to
enable each such Limited Partner to pay in full such income tax liabilities and
any income tax liabilities of such Limited Partner(s) with respect to such
additional distribution. As used in this Section 6.2, the term "Covered Sale"
means a sale or other taxable disposition of any Property described on Exhibit
C.
6.3 Books of Account; Segregation of Funds
(a) At all times during the continuance of the Partnership, the
Managing General Partner shall maintain or cause to be maintained full, true,
complete and correct books of account in accordance with GAAP wherein shall be
entered particulars of all monies, goods or effects belonging to or owing to or
by the Partnership, or paid, received, sold or purchased in the course of the
Partnership's business, and all of such other transactions, matters and things
relating to the business of the Partnership as are usually entered in books of
account kept by Persons engaged in a business of a like kind and character. In
addition, the Partnership shall keep all records as required to be kept pursuant
to the Act. The books and records of account shall be kept at the principal
office of the Partnership, and each Partner and its representatives shall at all
reasonable times have access to such books and records and the right to inspect
and copy the same.
(b) The Partnership shall not commingle its funds with those of any
other Person or Entity; funds and other assets of the Partnership shall be
separately identified and segregated; all of the Partnership's assets shall at
all times be held by or on behalf of the Partnership and, if held on behalf of
the Partnership by another Entity, shall at all times be kept identifiable (in
accordance with customary usages) as assets owned by the Partnership; and the
Partnership shall maintain its own separate bank accounts, payroll and books of
account. The foregoing provisions of this Section 6.3(b) shall not apply with
respect to funds or assets of any Subsidiary Entities of the Partnership.
6.4 Reports. Within ninety (90) days after the end of each Partnership
Fiscal Year, the Partnership shall cause to be prepared and transmitted to each
Partner an annual report of the Partnership relating to the previous Partnership
Fiscal Year containing a balance sheet as of the year then ended, a statement of
financial condition as of the year then ended, and statements of operations,
cash flow and Partnership equity for the year then ended, which annual
statements shall be prepared in accordance with GAAP and shall be audited by the
Accountants. The Partnership shall also cause to be prepared and transmitted to
each Partner within forty-five (45) days after the end of each of the first
three (3) quarters of each Partnership Fiscal Year a quarterly unaudited report
containing a balance sheet, a statement of the Partnership's financial condition
and statements of operations, cash flow and Partnership equity, in each case
relating to the fiscal quarter
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then just ended, and prepared in accordance with GAAP. The Partnership shall
further cause to be prepared and transmitted to the Managing General Partner and
the Non-Managing General Partners (i) such reports and/or information as are
necessary for each to fulfill its obligations under the Securities Act of 1933,
the Securities and Exchange Act of 1934 and the applicable stock exchange rules,
and under any other regulations to which such Partners or the Partnership may be
subject, and (ii) such other reports and/or information as are necessary for
each of the Managing General Partner and the Non-Managing General Partners to
determine and maintain its qualification as a REIT under the REIT Requirements,
its earnings and profits derived from the Partnership, its liability for a tax
as a consequence of its Partnership Interest and distributive share of taxable
income or loss and items thereof, in each case in a manner that will permit the
Managing General Partner and the Non-Managing General Partners to comply with
their respective obligations to file federal, state and local tax returns and
information returns and to provide their shareholders with tax information. The
Managing General Partner shall provide to each Partner copies of all reports it
provides to its stockholders at the same time such reports are distributed to
such stockholders. The Managing General Partner shall also promptly notify the
Partners of all actions taken by the Managing General Partner for which it has
obtained the Consent of the Limited Partners.
6.5 Audits. Not less frequently than annually, the books and records of
the Partnership shall be audited by the Accountants.
6.6 Tax Returns.
(a) Consistent with all other provisions of this Agreement, the
Managing General Partner shall determine the methods to be used in the
preparation of federal, state, and local income and other tax returns for the
Partnership in connection with all items of income and expense, including, but
not limited to, valuation of assets, the methods of Depreciation and cost
recovery, credits and tax accounting methods and procedures and, with the
consent of the Non-Managing General Partners, all tax elections.
(b) The Managing General Partner shall, at least 30 days prior to
the due dates (as extended) for such returns, but in no event later than July 15
of each year, cause the Accountants to prepare and submit to the DeBartolo
Designee, the Simon Designee and the JCP Limited Partner for their review,
drafts of all federal and state income tax returns of the Partnership for the
preceding year, and the Managing General Partner shall consult in good faith
with the DeBartolo Designee, the Simon Designee and the JCP Limited Partner
regarding any proposed modifications to such tax returns of the Partnership.
(c) The Partnership shall timely cause to be prepared and
transmitted to the Partners federal and appropriate state and local Partnership
Income Tax Schedules "K-l" or any substitute
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therefor, with respect to each Partnership Fiscal Year on appropriate forms
prescribed. The Partnership shall make reasonable efforts to prepare and submit
such forms before the due date for filing federal income tax returns for the
fiscal year in question (determined without extensions), and shall in any event
prepare and submit such forms on or before July 15 of the year following the
fiscal year in question.
6.7 Tax Matters Partner
The Managing General Partner is hereby designated as the Tax Matters
Partner within the meaning of Section 6231(a)(7) of the Code for the
Partnership; provided, however, that (i) in exercising its authority as Tax
Matters Partner it shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; (ii) the Managing General Partner
shall give prompt notice to the Partners of the receipt of any written notice
that the Internal Revenue Service or any state or local taxing authority intends
to examine Partnership income tax returns for any year, receipt of written
notice of the beginning of an administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, receipt of written
notice of the final Partnership administrative adjustment relating to the
Partnership pursuant to Section 6223 of the Code, and receipt of any request
from the Internal Revenue Service for waiver of any applicable statute of
limitations with respect to the filing of any tax return by the Partnership;
(iii) the Managing General Partner shall promptly notify the Partners if it does
not intend to file for judicial review with respect to the Partnership; and (iv)
as Tax Matters Partner, the Managing General Partner shall not be entitled to
bind a Partner by any settlement agreement (within the meaning of Section 6224
of the Code) unless such Partner consents thereto in writing and shall notify
the Partners in a manner and at such time as is sufficient to allow the Partners
to exercise their rights pursuant to Section 6224(c)(3) of the Code; (v) the
Managing General Partner shall consult in good faith with the Simon Designee,
the DeBartolo Designee and the JCP Limited Partner regarding the filing of a
Code Section 6227(b) administrative adjustment request with respect to the
Partnership or a Property before filing such request, it being understood,
however, that the provisions hereof shall not be construed to limit the ability
of any Partner, including the Managing General Partner, to file an
administrative adjustment request on its own behalf pursuant to Section 6227(a)
of the Code; and (vi) the Managing General Partner shall consult in good faith
with the Simon Designee, the DeBartolo Designee and the JCP Limited Partner
regarding the filing of a petition for judicial review of an administrative
adjustment request under Section 6228 of the Code, or a petition for judicial
review of a final partnership administrative judgment under Section 6226 of the
Code relating to the Partnership before filing such petition.
6.8 Withholding. Each Partner hereby authorizes the Partnership to
withhold or pay on behalf of or with respect to such Partner any amount of
federal, state, local or foreign taxes that
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the Managing General Partner determines the Partnership is required to withhold
or pay with respect to any amount distributable or allocable to such Partner
pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Code Sections 1441, 1442,
1445, or 1446. Any amount paid on behalf of or with respect to a Partner shall
constitute a loan by the Partnership to such Partner, which loan shall be due
within fifteen (15) days after repayment is demanded of the Partner in question,
and shall be repaid through withholding of subsequent distributions to such
Partner. Nothing in this Section 6.8 shall create any obligation on the Managing
General Partner to advance funds to the Partnership or to borrow funds from
Third Parties in order to make payments on account of any liability of the
Partnership under a withholding tax act. Any amounts payable by a Limited
Partner hereunder shall bear interest at the lesser of (i) the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, or (ii) the maximum
lawful rate of interest on such obligation, such interest to accrue from the
date such amount is due (i.e., fifteen (15) days after demand) until such amount
is paid in full. To the extent the payment or accrual of withholding tax results
in a federal, state or local tax credit to the Partnership, such credit shall be
allocated to the Partner to whose distribution the tax is attributable.
ARTICLE VII
Rights, Duties and Restrictions of the General Partners
7.1 Expenditures by Partnership. The Managing General Partner
is hereby authorized to pay compensation for accounting, administrative, legal,
technical, management and other services rendered to the Partnership. All of the
aforesaid expenditures shall be made on behalf of the Partnership and the
Managing General Partner shall be entitled to reimbursement by the Partnership
for any expenditures incurred by it on behalf of the Partnership which shall
have been made other than out of the funds of the Partnership. The Partnership
shall also assume, and pay when due, the Administrative Expenses and such
portion of the Managing General Partners', the Non-Managing General Partners'
and their respective subsidiaries' REIT Expenses as shall be appropriately
allocated to the Partnership by the Managing General Partner in the exercise of
its reasonable business judgment.
7.2 Powers and Duties of the General Partners. The Managing General
Partner shall be responsible for the management of the Partnership's business
and affairs. Except as otherwise herein expressly provided, and subject to the
limitations contained in Section 7.3 hereof with respect to Major Decisions, the
Managing General Partner shall have, and is hereby granted, full and complete
power, authority and discretion to take such action for and on behalf of the
Partnership and in its name as the Managing General Partner shall, in its sole
and absolute discretion, deem necessary or appropriate to carry out the purposes
for which the Partnership was organized. Any action by the Managing General
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Partner relating to (i) transactions between the Partnership or a Subsidiary
Entity and M.S. Management Associates, Inc., Simon MOA Management Company, Inc.
and/or M.S. Management Associates (Indiana), Inc., (ii) transactions between the
Partnership or a Subsidiary Entity and DeBartolo Properties Management, Inc. or
(iii) transactions involving the Partnership or a Subsidiary Entity in which the
Simons, the DeBartolos or any Affiliate of the Simons or the DeBartolos has an
interest (other than a non-controlling minority equity interest, which has no
management or veto powers, in a Person, other than the Partnership or a
Subsidiary entity, which is engaged in such transaction) other than through
ownership of Partnership Units, shall require the prior approval of a majority
of the Independent Directors. Except as otherwise expressly provided herein and
subject to Section 7.3 hereof, the Managing General Partner shall have, for and
on behalf of the Partnership, the right, power and authority:
(a) To manage, control, hold, invest, lend, reinvest, acquire by
purchase, lease, sell, contract to purchase or sell, grant, obtain, or exercise
options to purchase, options to sell or conversion rights, assign, transfer,
convey, deliver, endorse, exchange, pledge, mortgage or otherwise encumber,
abandon, improve, repair, construct, maintain, operate, insure, lease for any
term and otherwise deal with any and all property of whatsoever kind and nature,
and wheresoever situated, in furtherance of the purposes of the Partnership, and
in addition, without limiting the foregoing, upon the affirmative vote of no
fewer than three (3) of the Independent Directors of the Managing General
Partner who are not Affiliates of the DeBartolos, the Managing General Partner
shall authorize and require the sale of any property owned by the Partnership or
a Subsidiary Entity.
(b) To acquire, directly or indirectly, interests in real or
personal property (collectively, "property") of any kind and of any type, and
any and all kinds of interests therein, and to determine the manner in which
title thereto is to be held; to manage, insure against loss, protect and
subdivide any property, interests therein or parts thereof; to improve, develop
or redevelop any property; to participate in the ownership and development of
any property; to dedicate for public use, to vacate any subdivisions or parts
thereof, to resubdivide, to contract to sell, to grant options to purchase or
lease and to sell on any terms; to convey, to mortgage, pledge or otherwise
encumber any property, or any part thereof; to lease any property or any part
thereof from time to time, upon any terms and for any period of time, and to
renew or extend leases, to amend, change or modify the terms and provisions of
any leases and to grant options to lease and options to renew leases and options
to purchase; to partition or to exchange any property, or any part thereof, for
other property; to grant easements or charges of any kind; to release, convey or
assign any right, title or interest in or about or easement appurtenant to any
property or any part thereof; to construct and reconstruct, remodel, alter,
repair, add to or take from buildings on any property; to insure any Person
having an
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interest in or responsibility for the care, management or repair of any
property; to direct the trustee of any land trust to mortgage, lease, convey or
contract to convey any property held in such land trust or to execute and
deliver deeds, mortgages, notes and any and all documents pertaining to the
property subject to such land trust or in any matter regarding such trust; and
to execute assignments of all or any part of the beneficial interest in such
land trust;
(c) To employ, engage or contract with or dismiss from employment or
engagement Persons to the extent deemed necessary by the Managing General
Partner for the operation and management of the Partnership business, including
but not limited to, employees, contractors, subcontractors, engineers,
architects, surveyors, mechanics, consultants, accountants, attorneys, insurance
brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow or lend money, procure loans and advances from any
Person for Partnership purposes, and to apply for and secure from any Person
credit or accommodations; to contract liabilities and obligations, direct or
contingent and of every kind and nature with or without security; and to repay,
discharge, settle, adjust, compromise or liquidate any such loan, advance,
credit, obligation or liability (including by deeding property to a lender in
lieu of foreclosure);
(f) To Pledge, hypothecate, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security or as
additional or substitute security or for sale or other disposition any and all
Partnership property, tangible or intangible, including, but not limited to,
real estate and beneficial interests in land trusts, and to make substitutions
thereof, and to receive any proceeds thereof upon the release or surrender
thereof; to sign, execute and deliver any and all assignments, deeds and other
contracts and instruments in writing; to authorize, give, make, procure, accept
and receive moneys, payments, property, notices, demands, vouchers, receipts,
releases, compromises and adjustments; to waive notices, demands, protests and
authorize and execute waivers of every kind and nature; to enter into, make,
execute, deliver and receive written agreements, undertakings and instruments of
every kind and nature; to give oral instructions and make oral agreements; and
generally to do any and all other acts and things incidental to any of the
foregoing or with reference to any dealings or transactions which any attorney
for the Partnership may deem necessary, proper or advisable;
(g) To acquire and enter into any contract of insurance which the
Managing General Partner deems necessary or appropriate for the protection of
the Partnership or any Affiliate thereof, for the conservation of the
Partnership's assets (or the assets of any Affiliate thereof) or for any purpose
convenient or beneficial to the Partnership or any Affiliate thereof;
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(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings and other accounts with such
institutions as the Managing General Partner shall deem appropriate; to draw,
sign, execute, accept, endorse, guarantee, deliver, receive and pay any checks,
drafts, bills of exchange, acceptances, notes, obligations, undertakings and
other instruments for or relating to the payment of money in, into or from any
account in the Partnership's name; to execute, procure, consent to and authorize
extensions and renewals of the same; to make deposits and withdraw the same and
to negotiate or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts;
(i) To demand, sue for, receive, and otherwise take steps to collect
or recover all debts, rents, proceeds, interests, dividends, goods, chattels,
income from property, damages and all other property to which the Partnership
may be entitled or which are or may become due the Partnership from any Person;
to commence, prosecute or enforce, or to defend, answer or oppose, contest and
abandon all legal proceedings in which the Partnership is or may hereafter be
interested; and to settle, compromise or submit to arbitration any accounts,
debts, claims, disputes and matters which may arise between the Partnership and
any other Person and to grant an extension of time for the payment or
satisfaction thereof on any terms, with or without security;
(j) To make arrangements for financing, including the taking of all
action deemed necessary or appropriate by the Managing General Partner to cause
any approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance
by the Partnership with contractual obligations and other arrangements entered
into by the Partnership from time to time in accordance with the provisions of
this Agreement, including periodic reports as required to lenders and using all
due diligence to insure that the Partnership is in compliance with its
contractual obligations;
(1) To maintain the Partnership's books and records;
(m) To create or maintain Affiliates engaged in activities that the
Partnership could itself undertake; and
(n) To prepare and deliver, or cause to be prepared and delivered by
the Accountants, all financial and other reports with respect to the operations
of the Partnership, and preparation and filing of all federal, state and local
tax returns and reports.
Except as otherwise provided herein, to the extent the duties of the
Managing General Partner require expenditures of funds to be paid to Third
Parties, the Managing General Partner shall not have any obligations hereunder
except to the extent that Partnership funds are reasonably available to it for
the performance of such duties, and nothing herein contained shall be
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deemed to authorize or require the Managing General Partner, in its capacity as
such, to expend its individual funds for payment to Third Parties or to
undertake any individual liability or obligation on behalf of the Partnership.
Notwithstanding any other provisions of this Agreement or the Act,
any action of the Managing General Partner on behalf of the Partnership or any
decision of the Managing General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect or further the ability of the
Managing General Partner, the Non-Managing General Partners and their respective
Subsidiary Entities, as applicable, to continue to qualify as REITs or (ii) to
avoid the Managing General Partner's or the Non-Managing General Partners'
incurring any taxes under Section 857 or Section 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners. Nothing, however, in this Agreement shall be deemed to give rise to
any liability on the part of a Limited Partner for the Managing General
Partner's, the Non-Managing General Partner's or any of their applicable
Subsidiary Entity's failure to qualify or continue to qualify as a REIT or a
failure to avoid incurring any taxes under the foregoing sections of the Code,
unless such failure or failures result from an act of the Limited Partner which
constitutes a breach of this Agreement (including, without limitation, Section
10.4(b)).
7.3 Major Decisions.
(a) The Managing General Partner shall not, without the Consent of
the Limited Partners, and the consent of the Non-Managing General Partners, (y)
on behalf of the Partnership, amend, modify or terminate this Agreement other
than to reflect (A) the admission of Additional Limited Partners pursuant to
Section 9.4 hereof, (B) the making of additional Capital Contributions and the
issuance of additional Partnership Units by reason thereof, all in accordance
with the terms of this Agreement, (C) the withdrawal or assignment of the
interest of any Partner in accordance with the terms of this Agreement, or (D)
any changes necessary to satisfy the REIT Requirements, or (z) permit the
Partnership, on behalf of any Subsidiary Partnership, to amend, modify or
terminate the organizing agreement pursuant to which such Subsidiary Partnership
operates other than to reflect (A) the admission of additional limited partners
therein pursuant to the terms thereof, (B) the making of additional capital
contributions thereto pursuant to the terms thereof, (C) the withdrawal or
assignment of the interest of any partner thereof pursuant to the terms thereof,
or (D) any changes necessary to satisfy the REIT Requirements. Notwithstanding
the foregoing, this Agreement shall not be modified or amended without the prior
written consent of each Partner adversely affected if such modification or
acquisition would (i) convert a Limited Partner's interest in the Partnership to
a general partnership interest, (ii) modify the limited liability of a Limited
Partner, (iii) reduce the interest of any Partner in the Partnership, (iv)
reduce any Partner's share of distributions made
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by the Partnership, (v) amend this Section 7.3 or Section 7.5 or (vi) create any
obligations for any Limited Partner or deprive any Limited Partner of (or
otherwise impair) any other rights it may have under this Agreement (including
in respect of tax allocations, rights to indemnification under Section 7.8,
rights of the Limited Partner or a Secured Creditor of a Limited Partner under
Section 9.3 (which rights are subject to the restrictions set forth in Section
9.5), rights of a Limited Partner under Section 9.6 or Article XI, or the rights
of a Limited Partner under Section 10.4(a) or 10.5); provided, however, that an
amendment that reduces the percentage ownership interest of any Partner in the
Partnership or reduces any Partner's share of distributions made by the
Partnership (including tax allocations in respect of such distributions) shall
not require the consent of any Partner if such change is made on a uniform or
pro-rata basis with respect to all Partners.
(b) The Managing General Partner shall not, without the consent of
the Non-Managing General Partners, and for all periods during which the Simons
hold at least ten percent of the Partnership Units then outstanding, the
Managing General Partner shall not, without the prior Consent of the Simons, and
for all periods during which the DeBartolos hold at least ten percent of the
Partnership Units then outstanding, the Managing General Partner shall not,
without the prior Consent of the DeBartolos, on behalf of the Partnership,
undertake any of the following actions (together with any act described in
paragraph (a) hereof, the "Major Decisions"):
(i) Make a general assignment for the benefit of creditors (or cause
or permit (if permission of the Partnership or any Subsidiary Partnership is
required) such an assignment to be made on behalf of a Subsidiary Partnership)
or appoint or acquiesce in the appointment of a custodian, receiver or trustee
for all or any part of the assets of the Partnership (or any Subsidiary
Partnership);
(ii) take title to any personal or real property, other than in the
name of the Partnership or a Subsidiary Entity or pursuant to Section 7.7
hereof;
(iii) institute any proceeding for Bankruptcy on behalf of the
Partnership, or cause or permit (if permission of the Partnership or any
Subsidiary Partnership is required) the institution of any such proceeding on
behalf of any Subsidiary Partnership;
(iv) act or cause the taking or refraining of any action with
respect to the dissolution and winding up of the Partnership (or any Subsidiary
Partnership) or an election to continue the Partnership (or any Subsidiary
Partnership) or to continue the business of the Partnership (or any Subsidiary
Partnership); or
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(v) sell, exchange, Transfer or otherwise dispose of all or
substantially all of the Partnership's assets.
(c) The Managing General Partner shall not, without the prior
Consent of the Limited Partners,
(i) after the Effective Time, amend the Charter of the Managing
General Partner to increase or decrease the Ownership Limit or alter any other
provision of said Charter or of any of the definitions of defined terms
contained in such Charter which would have the effect of changing the Ownership
Limit in any way;
(ii) except in connection with the dissolution and winding-up of the
Partnership by the Liquidation Agent, agree to or consummate the merger or
consolidation of the Partnership or the voluntary sale or other Transfer of all
or substantially all of the Partnership's assets in a single transaction or
related series of transactions (without limiting the transactions which will not
be deemed to be a voluntary sale or Transfer, the foreclosure of a mortgage lien
on any Property or the grant by the Partnership of a deed in lieu of foreclosure
for such Property shall not be deemed to be such a voluntary sale or other
Transfer ); or
(iii) dissolve the Partnership; or
(iv) issue additional shares of common stock of the Non-Managing
General Partners other than to any of the General Partners or as may be
necessary or desirable in order for the General Partners to comply with REIT
Requirements.
Without the consent of all the Limited Partners, the General
Partners shall have no power to do any act in contravention of this Agreement or
applicable law.
7.4 Managing General Partner and Non-Managing General Partners
Participation. The Managing General Partner and the Non-Managing General
Partners agree that (a) substantially all activities and business operations of
the Managing General Partner and the Non-Managing General Partners, including
but not limited to, activities pertaining to the acquisition, development,
redevelopment and ownership of properties, shall be conducted directly or
indirectly through the Partnership or any Subsidiary Partnership, (b) except for
a property acquisition authorized by the Managing General Partner with the
Consent of the Limited Partners, all property acquisitions shall henceforth be
made through the Partnership or any Subsidiary Partnership, and (c) except as
provided below any funds raised by the Managing General Partner or the
Non-Managing General Partners, whether by issuance of stock, borrowing or
otherwise, will be made available to the Partnership whether as capital
contributions, loans or otherwise, as appropriate. Notwithstanding the
provisions of the preceding sentence, each of the Managing General Partner and
the Non-Managing General Partners shall have the right to form Qualified REIT
subsidiaries to act as general partners of Subsidiary Partnerships
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of the Partnership. The Managing General Partner and the Non Managing General
Partner agree to conduct their respective affairs, to the extent they are so
able to do, in a manner which will preserve the equivalence in value between a
Share and a Partnership Unit.
7.5 Proscriptions. The Managing General Partner shall not have the
authority to:
(a) Do any act in contravention of this Agreement;
(b) Possess any Partnership property or assign rights in specific
Partnership property for other than Partnership purposes; or
(c) Do any act in contravention of applicable law.
Nothing herein contained shall impose any obligation on any Person
doing business with the Partnership to inquire as to whether or not the Managing
General Partner has properly exercised its authority in executing any contract,
lease, mortgage, deed or any other instrument or document on behalf of the
Partnership, and any such Person shall be fully protected in relying upon such
authority.
7.6 Additional Partners. Additional Partners may be admitted to the
Partnership only as provided in Section 9.4 hereof.
7.7 Title Holder. To the extent allowable under applicable law, title to
all or any part of the Properties of the Partnership may be held in the name of
the Partnership or any other individual, corporation, partnership, trust or
otherwise, the beneficial interest in which shall at all times be vested in the
Partnership. Any such title holder shall perform any and all of its respective
functions to the extent and upon such terms and conditions as may be determined
from time to time by the Managing General Partner.
7.8 Waiver and Indemnification. Neither the Managing General Partner, the
Non-Managing General Partners nor any of their Affiliates, directors, trust
managers, officers, shareholders, nor any Person acting on their behalf pursuant
hereto, shall be liable, responsible or accountable in damages or otherwise to
the Partnership or to any Partner for any acts or omissions performed or omitted
to be performed by them within the scope of the authority conferred upon the
Managing General Partner or the Non-Managing General Partners by this Agreement
and the Act, provided that the Managing General Partner's, the Non-Managing
General Partners' or such other Person's conduct or omission to act was taken in
good faith and in the belief that such conduct or omission was in the best
interests of the Partnership and, provided further, that the Managing General
Partner, the Non-Managing General Partners or such other Person shall not be
guilty of fraud, willful misconduct or gross negligence. The Managing General
Partner acknowledges that it owes fiduciary duties both to its shareholders and
to the Limited Partners and it shall use its reasonable efforts
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to discharge such duties to each; provided, however, that in the event of a
conflict between the interests of the shareholders of the Managing General
Partner and the interests of the Limited Partners, the Limited Partners agree
that the Managing General Partner shall discharge its fiduciary duties to the
Limited Partners by acting in the best interests of the Managing General
Partner's shareholders. Nothing contained in the preceding sentence shall be
construed as entitling either the Managing General Partner or the Non-Managing
General Partners to realize any profit or gain from any transaction between such
Partner and the Partnership (except as may be required by law upon a
distribution to the Managing General Partner or the Non-Managing General
Partners), including from the lending of money by the Managing General Partner
or the Non-Managing General Partners to the Partnership or the contribution of
property by the Managing General Partner or the Non-Managing General Partners to
the Partnership, it being understood that in any such transaction the Managing
General Partner or the Non-Managing General Partners, as the case may be, shall
be entitled to cost recovery only. The Partnership shall, and hereby does,
indemnify and hold harmless each of the Managing General Partner and the
Non-Managing General Partners and its Affiliates, their respective directors,
officers, shareholders and any other individual acting on its or their behalf to
the extent such Persons would be indemnified by the Managing General Partner
pursuant to the Charter of the Managing General Partner if such persons were
directors, officers, agents or employees of the Managing General Partner (or the
Charter of SDG or the Amended and Restated Regulations of SD Property, if such
Persons were directors, officers, agents or employees of the Non-Managing
General Partners); provided, however, that no Partner shall have any personal
liability with respect to the foregoing indemnification, any such
indemnification to be satisfied solely out of the assets of the Partnership. The
Partnership shall, and hereby does, indemnify each Limited Partner and its
Affiliates, their respective directors, officers, shareholders and any other
individual acting on its or their behalf, from and against any costs (including
costs of defense) incurred by it as a result of any litigation or other
proceeding in which any Limited Partner is named as a defendant or any claim
threatened or asserted against any Limited Partner, in either case which relates
to the operations of the Partnership or any obligation assumed by the
Partnership, unless such costs are the result of misconduct on the part of, or a
breach of this Agreement by, such Limited Partner; provided, however, no Partner
shall have any personal liability with respect to the foregoing indemnification,
any such indemnification to be satisfied solely out of the assets of the
Partnership.
7.9 Limitation of Liability of Directors Shareholders and Officers of the
Managing General Partner and the Non-Managing General Partners. Any obligation
or liability whatsoever of the General Partners which may arise at any time
under this Agreement or any other instrument, transaction, or undertaking
contemplated hereby shall be satisfied, if at all, out of the assets of the
General Partners or the Partnership only. No such obligation or
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liability shall be personally binding upon, nor shall resort for the enforcement
thereof be had to, any of the General Partners' directors, shareholders,
officers, employees, or agents, regardless of whether such obligation or
liability is in the nature of contract, tort or otherwise.
7.10 Distribution to Limited Partners of the SRC Partnership. Pursuant to
the terms of the Agreement of Limited Partnership of the SRC Partnership, the
Partnership will contribute assets to the SRC Partnership, become a limited
partner of the SRC Partnership and receive SRC Partnership Units, which the
Partnership will, in turn, distribute pro rata to all Limited Partners other
than any General Partner who also holds SRC Partnership Units, whereupon the
Limited Partners shall become limited partners of the SRC Partnership.
ARTICLE VIII
Dissolution, Liquidation and Winding-Up
8.1 Accounting. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting (which shall be certified by
the Accountants) shall be made of the Capital Account of each Partner and of the
Profits or Losses of the Partnership from the date of the last previous
accounting to the date of dissolution. Financial statements presenting such
accounting shall include a report of the Accountants.
8.2 Distribution on Dissolution. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership (other than Partners) in
the order of priority as provided by law;
(b) Establishment of reserves as determined by the Managing General
Partner to provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Partners, if any, in the
order of priority provided by law;
(d) To the Partners in accordance with the positive balances in
their Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods, including the period in which such distribution
occurs (other than those distributions made pursuant to this Section 8.2(d),
Section 8.3 or Section 8.4 hereof).
If upon dissolution and termination of the Partnership the Capital
Account of any Partner is less than zero, then such Partner shall have no
obligation to restore the negative balance in its Capital Account unless and
except to the extent that such Partner has so elected under Section 4.8.
Whenever the Liquidation
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Agent reasonably determines that any reserves established pursuant to paragraph
(b) above are in excess of the reasonable requirements of the Partnership, the
amount determined to be excess shall be distributed to the Partners in
accordance with the above provisions.
8.3 Sale of Partnership Assets. In the event of the liquidation of the
Partnership in accordance with the terms of this Agreement, the Liquidation
Agent may sell Partnership property; provided, however, that all sales, leases,
encumbrances or transfers of Partnership assets shall be made by the Liquidation
Agent solely on an "arm's length" basis, at the best price and on the best terms
and conditions as the Liquidation Agent in good faith believes are reasonably
available at the time and under the circumstances and on a non-recourse basis to
the Limited Partners. The liquidation of the Partnership shall not be deemed
finally terminated until the Partnership shall have received cash payments in
full with respect to obligations such as notes, purchase money mortgages,
installment sale contracts or other similar receivables received by the
Partnership in connection with the sale of Partnership assets and all
obligations of the Partnership have been satisfied or assumed by the Managing
General Partner or the Non-Managing General Partners. The Liquidation Agent
shall continue to act to enforce all of the rights of the Partnership pursuant
to any such obligations until paid in full or otherwise discharged or settled.
8.4 Distributions in Kind. In the event that it becomes necessary to make
a distribution of Partnership property in kind in connection with the
liquidation of the Partnership, the Managing General Partner may, if it
determines that to do so would be in the best interest of the Partners and
obtains the Consent of the Limited Partners and consent of the Non-Managing
General Partners, transfer and convey such property to the distributees as
tenants in common, subject to any liabilities attached thereto, so as to vest in
them undivided interests in the whole of such property in proportion to their
respective rights to share in the proceeds of the sale of such property (other
than as a creditor) in accordance with the provisions of Section 8.2 hereof.
Immediately prior to the distribution of Partnership property in kind, the
Capital Account of each Partner shall be increased or decreased, as the case may
be, to reflect the manner in which the unrealized income, gain, loss and
deduction inherent in such property (to the extent not previously reflected in
the Capital Accounts) would be allocated among the Partners if there were a
taxable disposition of such property for its fair market value as of the date of
the distribution.
8.5 Documentation of Liquidation. Upon the completion of the dissolution
and liquidation of the Partnership, the Partnership shall terminate and the
Liquidation Agent shall have the authority to execute and record any and all
documents or instruments required to effect the dissolution, liquidation and
termination of the Partnership.
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8.6 Liability of the Liquidation Agent. The Liquidation Agent shall be
indemnified and held harmless by the Partnership from and against any and all
claims, demands, liabilities, costs, damages and causes of action of any nature
whatsoever arising out of or incidental to the Liquidation Agent's taking of any
action authorized under or within the scope of this Agreement; and provided,
however, that no Partner shall have any personal liability with respect to the
foregoing indemnification, any such indemnification to be satisfied solely out
of the assets of the Partnership; and provided further, however, that the
Liquidation Agent shall not be entitled to indemnification, and shall not be
held harmless, where the claim, demand, liability, cost, damage or cause of
action at issue arose out of:
(a) A matter entirely unrelated to the Liquidation Agent's action or
conduct pursuant to the provisions of this Agreement; or
(b) The proven misconduct or gross negligence of the Liquidation
Agent.
ARTICLE IX
Transfer of Partnership Interests and Related Matters
9.1 Non-Managing General Partners Transfers and Deemed Transfers. Neither
of the Non-Managing General Partners shall (i) withdraw from the Partnership,
(ii) merge, consolidate or engage in any combination with another Person, (iii)
sell all or substantially all of its assets or (iv) sell, assign, pledge,
encumber or otherwise dispose of all or any portion of its Partnership Units
except where such merger, consolidation, sale, assignment, pledge or other
disposal is to another General Partner as its sole successor. In the event of
the withdrawal by a General Partner from the Partnership, in violation of this
Agreement or otherwise, or the dissolution, termination or Bankruptcy of a
General Partner, within 90 days after the occurrence of any such event, the
remaining General Partners or a majority in interest of the remaining Partners
may elect in writing to continue the Partnership business and may, or if there
is then no General Partner other than one that has withdrawn or as to which
dissolution, termination or Bankruptcy has occurred shall, select a substitute
general partner effective as of the date of the occurrence of any such event.
9.2 Managing General Partner Transfers and Deemed Transfers. The Managing
General Partner shall not (i) withdraw from the Partnership, (ii) merge,
consolidate or engage in any combination with another Person other than another
General Partner, (iii) sell all or substantially all of its assets or (iv) sell,
assign, pledge, encumber or otherwise dispose of all or any portion of its
Partnership Units or Preferred Units except to the Partnership, in each case
without the Consent of the Limited Partners. Upon any transfer of any
Partnership Units (not Preferred Units) in accordance with the provisions of
this Section 9.2, the transferee
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General Partner shall become vested with the powers and rights of the transferor
General Partner with respect to the Partnership Units transferred, and shall be
liable for all obligations and responsible for all duties of the transferor
General Partner, once such transferee has executed such instruments as may be
necessary to effectuate such admission and to confirm the agreement of such
transferee to be bound by all the terms and provisions of this Agreement with
respect to the Partnership Units so acquired. It is a condition to any transfer
otherwise permitted hereunder that the transferee assumes by operation of law or
express agreement all of the obligations of the transferor Managing General
Partner under this Agreement with respect to such transferred Partnership Units
and no such transfer (other than pursuant to a statutory merger or consolidation
wherein all obligations and liabilities of the transferor General Partner are
assumed by a successor corporation by operation of law) shall relieve the
transferor General Partner of its obligations under this Agreement accruing
prior to the date of such transfer.
9.3 Transfers by Limited Partners. Except as otherwise provided in this
Section 9.3, the Limited Partners shall not Transfer all or any portion of their
Partnership Units to any transferee without the consent of the Managing General
Partner, which consent may be withheld in its sole and absolute discretion;
provided, however, that the foregoing shall not be considered a limitation on
the ability of the Limited Partners to exercise their Rights pursuant to Article
XI hereof.
(a) Notwithstanding the foregoing, but subject to the provisions of
Section 9.5 hereof, any Limited Partner may at any time, without the consent of
the Managing General Partner, (i) Transfer all or a portion of its Partnership
Units to an Affiliate of such Limited Partner, or (ii) Pledge some or all of its
Partnership Units to any Institutional Lender. Any Transfer to an Affiliate
pursuant to clause (i) and any Transfer to a pledgee of Partnership Units
Pledged pursuant to clause (ii) may be made without the consent of the Managing
General Partner but, except as provided in subsequent provisions of this Section
9.3, such transferee or such pledgee shall hold the Units so transferred to it
(and shall be admitted to the Partnership as a Substitute Limited Partner)
subject to all the restrictions set forth in this Section 9.3. It is a condition
to any Transfer otherwise permitted under any provision of this Section 9.3 that
the transferee assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such transferred Partnership Units arising after the effective date of the
Transfer and no such Transfer (other than pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor Partner
are assumed by a successor corporation by operation of law, and other than
pursuant to an exercise of the Rights pursuant to Article XI wherein all
obligations and liabilities of the transferor Partner arising from and after the
date of such Transfer shall be assumed by the Managing General Partner) shall
relieve the transferor Partner of
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its obligations under this Agreement prior to the effective date of such
Transfer. Upon any such Transfer or Pledge permitted under this Section 9.3, the
transferee or, upon foreclosure on the Pledged Partnership Units, each
Institutional Lender which is the pledgee shall be admitted as a Substituted
Limited Partner as such term is defined in the Act and shall succeed to all of
the rights, including rights with respect to the Rights, of the transferor
Limited Partner under this Agreement in the place and stead of such transferor
Limited Partner; provided, however, that notwithstanding the foregoing, any
transferee of any transferred Partnership Unit shall, unless the Ownership Limit
is waived in writing by the Managing General Partner, be subject to the
Ownership Limit applicable to Persons other than the Limited Partners and/or
their Affiliates which may limit or restrict such transferee's ability to
exercise the Limited Partner's Rights, if any. Any transferee, whether or not
admitted as a Substituted Limited Partner, shall take subject to the obligations
of the transferor hereunder. No transferee pursuant to a Transfer which is not
expressly permitted under this Section 9.3 and is not consented to by the
Managing General Partner, whether by a voluntary Transfer, by operation of law
or otherwise, shall have any rights hereunder, other than the right to receive
such portion of the distributions and allocations of Profits and Losses made by
the Partnership as are allocable to the Partnership Units so transferred.
(b) In addition to the Rights granted to the JCP Limited Partner and
any other Transfers permitted under this Article IX, the JCP Limited Partner
shall have the right to transfer all of its Partnership Units to a single
accredited investor, as defined in Rule 501 promulgated under the Securities
Act, subject to the provisions of Section 9.5, and such transferee shall be
admitted to the Partnership as a Substitute Limited Partner. Any transferee of
the Partnership Units owned by the JCP Limited Partner shall be subject to all
of the restrictions set forth in Section 9.3(a) above; provided, however, that
if the JCP Limited Partner hereafter Pledges its Partnership Units pursuant to
Section 9.3(a), then provided that the JCP Limited Partner has not previously
exercised the right provided for above in this Section 9.3(b), the Institutional
Lender or Lenders which are the pledgee(s) may exercise such right, whether by
taking title to the JCP Limited Partner's Partnership Units and then
transferring the same or by effecting such transfer upon foreclosure of the
Pledge.
(c) The Limited Partners acknowledge that the Partnership Units have
not been registered under any federal or state securities laws and, as a result
thereof, they may not be sold or otherwise transferred, except in accordance
with Article XI or otherwise in compliance with such laws. Notwithstanding
anything to the contrary contained in this Agreement, no Partnership Units may
be sold or otherwise transferred except pursuant to Article XI unless such
Transfer is exempt from registration under any applicable securities laws or
such Transfer is registered under such laws, it being acknowledged that the
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Partnership has no obligation to take any action which would cause any such
interests to be registered.
9.4 Issuance of Additional Partnership Units and Preferred Units. At any
time after the date hereof, subject to the provisions of Section 9.5 hereof, the
Managing General Partner may, upon its determination that the issuance of
additional Partnership Units ("Additional Units") is in the best interests of
the Partnership, cause the Partnership to issue Additional Units to any existing
Partner or issue Additional Units to and admit as a partner in the Partnership
any Person in exchange for the contribution by such Person of cash and/or
property which the Managing General Partner determines is desirable to further
the purposes of the Partnership under Section 2.3 hereof and which the Managing
General Partner determines has a value that justifies the issuance of such
Additional Units. In the event that Additional Units are issued by the
Partnership pursuant to this Section 9.4, the number of Partnership Units issued
shall be determined by dividing the Gross Asset Value of the property
contributed (reduced by the amount of any indebtedness assumed by the
Partnership or to which such property is subject) as of the date of contribution
to the Partnership (the "Contribution Date") by the Contribution Deemed
Partnership Unit Value, computed as of the Trading Day immediately preceding the
Contribution Date.
In addition, the Managing General Partner may, upon its
determination that the issuance of Preferred Units is in the best interests of
the Partnership, issue Preferred Units in accordance with Section 4.3(c) hereof.
The Managing General Partner shall be authorized on behalf of each
of the Partners to amend this Agreement to reflect the admission of any Partner
or any increase in the Partnership Units or Preferred Units of any Partner in
accordance with the provisions of this Section 9.4, and the Managing General
Partner shall promptly deliver a copy of such amendment to the Non-Managing
General Partners and each Limited Partner. The Limited Partners hereby
irrevocably appoint the Managing General Partner as their attorney-in-fact,
coupled with an interest, solely for the purpose of executing and delivering
such documents, and taking such actions, as shall be reasonably necessary in
connection with the provisions of this Section 9.4 or making any modification to
this Agreement permitted by Section 7.3 (including, without limitation, any
modification which, under Section 7.3 hereof, requires the Consent of the
Limited Partners where such consent has been obtained). Nothing contained in
this Section 9.4 shall be construed as authorizing the Managing General Partner
to grant any consent on behalf of the Limited Partners, or any of them.
9.5 Restrictions on Transfer.
(a) In addition to any other restrictions on Transfer herein
contained, in no event may any Transfer or assignment of a Partnership Unit or
Preferred Unit by any Partner be made nor may any new Partnership Unit or
Preferred Unit be issued by the
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Partnership (i) to any Person which lacks the legal right, power or capacity to
own a Partnership Unit or Preferred Unit; (ii) in violation of applicable law;
(iii) if such Transfer would immediately or with the passage of time cause
either the Managing General Partner or the Non-Managing General Partners to fail
to comply with the REIT Requirements, such determination to be made assuming
that such Partners do comply with the REIT Requirements immediately prior to the
proposed Transfer; (iv) if such Transfer would cause the Partnership to become,
with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(e) of the Code); (v) if such Transfer would,
in the opinion of counsel to the Partnership, cause any portion of the
underlying assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.3-101;
(vi) if such Transfer would result in a deemed distribution to any Partner
attributable to a failure to meet the requirements of Regulations Section
l.752-2(d)(l), unless such Partner consents thereto, (vii) if such Transfer
would cause any lender to the Partnership to hold in excess of ten (10) percent
of the Partnership Interest that would, pursuant to the regulations under
Section 752 of the Code or any successor provision, cause a loan by such a
lender to constitute Partner Nonrecourse Debt, (viii) if such Transfer, other
than to an Affiliate, is of a Partnership Interest the value of which would have
been less than $20,000 when issued, (ix) if such Transfer would, in the opinion
of counsel to the Partnership, cause the Partnership to cease to be classified
as a Partnership for federal income tax purposes or (x) if such Transfer is
effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Section 7704(b)
of the Code.
(b) No Preferred Unit may be Transferred by the Managing General
Partner to any Person who is not a General Partner of the Partnership.
(c) No Limited Partnership Unit may be transferred by any Partner
without a Transfer of the corresponding SRC Limited Partnership Unit to the same
transferee.
9.6 Shelf Registration Rights. The Managing General Partner agrees that,
upon the request of any Limited Partner that has not entered into a Registration
Rights Agreement with the Managing General Partner substantially in the form of
Exhibit D hereto (each, a "Shelf Rights Holder"), made at any time, the Managing
General Partner will, if it has not already done so, within 60 days thereafter
file a "shelf" registration statement (the "Shelf Registration"), on an
appropriate form pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act"), or any similar rule that may be adopted by the
SEC, with respect to the sale of Registrable Securities (as defined below) by
the Shelf Rights Holders in ordinary course brokerage or dealer transactions not
involving an underwritten public offering. The Managing
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General Partner shall use all reasonable efforts to have the Shelf Registration
declared effective as soon as practicable after such filing and to keep such
Shelf Registration continuously effective following the date on which such Shelf
Registration is declared effective for so long as any Units are outstanding. The
Managing General Partner further agrees, if necessary, to supplement or make
amendments to the Shelf Registration, if required by the registration form used
by the Managing General Partner for the Shelf Registration or by the
instructions applicable to such registration form or by the Securities Act or
the rules and regulations thereunder, and the Managing General Partner agrees to
furnish to each Shelf Rights Holder copies of any such supplement or amendment
at least three days prior to its being used and/or filed with the SEC.
Notwithstanding the foregoing, if the Managing General Partner shall furnish to
the Unit holder a certificate signed by the Chief Executive Officer of the
Managing General Partner stating that in the good faith judgment of the
Directors it would be significantly disadvantageous to the Managing General
Partner and its stockholders for any such Shelf Registration to be amended or
supplemented, the Managing General Partner may defer such amending or
supplementing of such Shelf Registration for not more than 45 days and in such
event the Unit holder shall be required to discontinue disposition of any
Registrable Securities covered by such Shelf Registration during such period.
Notwithstanding the foregoing, if the Managing General Partner irrevocably
elects, or the Partnership is so required under Section 11.3, prior to the
filing of any Shelf Registration to issue all cash in lieu of Shares upon the
exchange of Units by the holder requesting the tiling of such Shelf
Registration, the Managing General Partner shall not be obligated to file such
Shelf Registration Statement. The Managing General Partner shall make available
to its security holders, as soon as reasonably practicable, a statement of
operations covering a period of twelve (12) months, commencing on the first day
of the fiscal quarter next succeeding each sale of any Registrable Securities
pursuant to the Shelf Registration, in a manner which shall satisfy the
provisions of Section 11(a) of the Securities Act.
(a) Securities Subject to this Section 9.6. The securities entitled
to the benefits of this Section 9.6 are the Shares that have been or may be
issued from time to time upon the exchange of Units pursuant to Article XI
hereof and any other securities issued by the Managing General Partner in
accordance with the terms of this Agreement in exchange for any of the Shares
(collectively, the "Registrable Securities") but, with respect to any particular
Registrable Security, only so long as it continues to be a Registrable Security.
Registrable Securities shall include any securities issued in accordance with
the terms of this Agreement as a dividend or distribution on account of
Registrable Securities or resulting from a subdivision of the outstanding Shares
of Registrable Securities into a greater number of shares (by reclassification,
stock split or otherwise). For the purposes of this Agreement, a security that
was at one time a Registrable Security shall cease to be a Registrable Security
when (i) such
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security has been effectively registered under the Securities Act, and either
(A) the registration statement with respect thereto has remained continuously
effective for 150 days or (B) such security has been disposed of pursuant to
such registration statement, (ii) such security is or can be immediately sold to
the public in reliance on Rule 144 (or any similar provision then in force)
under the Securities Act, (iii) such security has been otherwise transferred and
(a) the Managing General Partner has delivered a new certificate or other
evidence of ownership not bearing the legend set forth on the Shares upon the
initial issuance thereof (or other legend of similar import) and (b) in the
opinion of counsel to the Managing General Partner, the subsequent disposition
of such security would not require the registration or qualification under the
Securities Act or any similar state law then in force, or (iv) such security has
ceased to be outstanding.
(b) Registration Expenses. The Managing General Partner shall pay,
as REIT Expenses, all expenses incident to the Shelf Registration, including,
without limitation, (i) all SEC, stock exchange and National Association of
Securities Dealers, Inc. registration, filing and listing fees, (ii) all fees
and expenses incurred in complying with securities or "blue sky" laws (including
reasonable tees and disbursements of counsel in connection with "blue sky"
qualifications of the Registrable Securities), (iii) all printing, messenger and
delivery expenses, (iv) all fees and disbursements of the Managing General
Partner's independent public accountants and counsel and (v) all fees and
expenses of any special experts retained by the Managing General Partner in
connection with the Shelf Registration pursuant to the terms of this Section
9.6, regardless of whether such Shelf Registration becomes effective, unless
such Shelf Registration fails to become effective as a result of the fault of
the Shelf Rights Holders; provided, however, that the Managing General Partner
shall not pay the costs and expenses of any Shelf Rights Holder relating to
brokerage or dealer fees, transfer taxes or the fees or expenses of any
counsel's accountants or other representatives retained by the Shelf Rights
Holders, individually or in the aggregate.
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management. Except as expressly permitted
hereunder, the Limited Partners shall not take part in the management of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership; provided,
that the foregoing shall not be deemed to limit the ability of a Limited Partner
(or any officer or director thereof) who is an officer, director or employee of
the Partnership, either the Managing General Partner or Non-Managing General
Partners, or any Affiliate thereof, to act in such capacity.
10.2 Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership,
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but the rights of such Limited Partner to share in the Profits or Losses of the
Partnership and to receive distributions of Partnership funds shall, on the
happening of such event, devolve to its successors or assigns, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership. However, in no event shall such assignee(s) become a
Substituted Limited Partner except in accordance with Article IX.
10.3 No Withdrawal. No Limited Partner may withdraw from the Partnership
without the prior written consent of the Managing General Partner and of the
Non-Managing General Partners, other than as expressly provided in this
Agreement.
10.4 Duties and Conflicts. (a) The Partners recognize that each of the
other Partners and their Affiliates have or may have other business interests,
activities and investments, some of which may be in conflict or competition with
the business of the Partnership, and that such Persons are entitled to carry on
such other business interests, activities and investments. In addition, the
Partners recognize that certain of the Limited Partners and their Affiliates are
and may in the future be tenants of the Partnership, Subsidiary Entities or
other Persons or own anchor or other stores in the Properties of the
Partnership, or Subsidiary Entities or other properties and in connection
therewith may have interests that conflict with those of the Partnership or
Subsidiary Entities. In deciding whether to take any actions in such capacity,
such Limited Partners and their Affiliates shall be under no obligation to
consider the separate interests of the Partnership or Subsidiary Entities and
shall have no fiduciary obligations to the Partnership or Subsidiary Entities
and shall not be liable for monetary damages for losses sustained, liabilities
incurred or benefits not derived by the other Partners in connection with such
acts; nor shall the Partnership, the Non-Managing General Partners, the Managing
General Partner or any Subsidiary Entities be under any obligation to consider
the separate interests of the Limited Partners and their Affiliates in such
Limited Partners' independent capacities or have any fiduciary obligations to
the Limited Partners and their Affiliates in such capacity or be liable for
monetary damages for losses sustained, liabilities incurred or benefits not
derived by the Limited Partners and their Affiliates in such independent
capacities arising from actions or omissions taken by the Partnership or
Subsidiary Entities. The Limited Partners and their Affiliates may engage in or
possess an interest in any other business or venture of any kind, independently
or with others, on their own behalf or on behalf of other Entities with which
they are affiliated or associated, and such Persons may engage in any
activities, whether or not competitive with the Partnership or Subsidiary
Entities, without any obligation to offer any interest in such activities to the
Partnership or Subsidiary Entities or to any Partner or otherwise. Neither the
Partnership nor any Partner shall have any right, by virtue of this Agreement,
in or to such activities, or the income or profits derived therefrom, and the
pursuit of such activities, even if competitive
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with the business of the Partnership or Subsidiary Entities, shall not be deemed
wrongful or improper.
(b) Notwithstanding the foregoing, without the prior consents of the
Managing General Partner and the Non-Managing General Partners, no Limited
Partner shall knowingly take any action, including acquiring, directly or
indirectly, an interest in any tenant of a Property which would have, through
the actual or constructive ownership of any tenant of any Property, the effect
of causing the percentage of the gross income of either of the Managing General
Partner or the Non-Managing General Partners that fails to be treated as "rents
from real property" within the meaning of Section 856(d) of the Code to exceed
such percentage on the date hereof. Each Limited Partner shall have a duty to
notify the Managing General Partner and the Non-Managing General Partners on a
timely basis of any potential acquisition or change in ownership that could
reasonably be expected to have such effect.
10.5 Guaranty and Indemnification Agreements.
(a) The Partnership shall notify the Limited Partners no less than
45 days (or, if the Partnership itself has less than 45 days' prior notice, as
promptly as practicable) prior to the occurrence of any event that the
Partnership reasonably expects will reduce the amount of Partnership liabilities
(including liabilities of any Subsidiary Partnership) that the Limited Partners
may include in their individual tax bases of their respective Partnership
Interests pursuant to Treasury Regulation Section 1.752-2 and Treasury
Regulations Section 1.752-3(a)(2) and (3). Upon receipt of such notice, each
Limited Partner shall inform the Partnership of any action it desires to take in
its sole and absolute discretion in order to increase the "economic risk of
loss" (within the meaning of Treasury Regulation 5 1.752-2) (the "Incurrence")
that it has with respect to liabilities of the Partnership or any other
Subsidiary Partnerships. The Partnership shall cooperate with each Limited
Partner to facilitate the Incurrence by such Limited Partner with respect to
Partnership Liabilities or liabilities of any Subsidiary Partnerships in such a
way that the Incurrence has the least amount of real economic risk to such
Limited Partner and provided that the Incurrence does not have a material
adverse impact on any other Partner in the Partnership or any such Partner's
Affiliates.
No direct or indirect Partner in the Partnership or any partnership
which is the obligor on a JCP Property Liability shall incur the "economic risk
of loss" (within the meaning of Treasury Regulation Section 752-2) with respect
to any JCP Property Liability without the prior written consent of the JCP
Limited Partner.
(b) Notwithstanding the provisions of Section 10.5(a) above, no
Limited Partners shall have any right to negotiate directly with any lender of
the Partnership or any other Subsidiary Partnership, any such negotiation to be
undertaken in good faith by the Managing General Partner or the Non-Managing
General Partners on behalf of, and at the request of, all affected Limited
Partners.
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ARTICLE XI
Grant of Rights to the Limited Partners
11.1 Grant of Rights. The Managing General Partner does hereby grant
to each of the Limited Partners (other than The Retail Property Trust) and each
of the Limited Partners does hereby accept the right, but not the obligation
(hereinafter such right sometimes referred to as the "Rights"), to convert all
or a portion of such Limited Partner's Limited Partnership Units into Shares or
cash, as selected by the Managing General Partner, at any time or from time to
time, on the terms and subject to the conditions and restrictions contained in
this Article XI; provided, however, that no Limited Partnership Unit may be
converted pursuant to this Article XI without a conversion of the corresponding
SRC Limited Partnership Unit; and provided, further that each Limited
Partnership Unit converted pursuant to this Article XI shall be converted into
the same form of consideration as the corresponding SRC Limited Partnership
Unit. The Rights granted hereunder may be exercised by a Limited Partner, on the
terms and subject to the conditions and restrictions contained in this Article
XI, upon delivery to the Managing General Partner of a notice in the form of
Exhibit E (an "Exercise Notice"), which notice shall specify the number of such
Limited Partner's Limited Partnership Units to be converted by such Limited
Partner (the "Offered Units"). Once delivered, the Exercise Notice shall be
irrevocable, subject to payment by the Managing General Partner or the
Partnership of the Purchase Price for the Offered Units in accordance with the
terms hereof and subject to Section 1 of the Registration Rights Agreements. In
the event the Managing General Partner elects to cause the Offered Units to be
converted into cash, the Managing General Partner shall effect such conversion
by causing the Partnership to redeem the Offered Units for cash.
11.2 Limitation on Exercise of Rights. If an Exercise Notice is delivered
to the Managing General Partner but, as a result of the Ownership Limit or as a
result of other restrictions contained in the Charter of the Managing General
Partner, the Rights cannot be exercised in full for Shares, the Exercise Notice,
if the Purchase Price is to be payable in Shares, shall be deemed to be modified
such that the Rights shall be exercised only to the extent permitted under the
Ownership Limit or under other restrictions in the Charter of the Managing
General Partner. Notwithstanding the foregoing, any Person shall be permitted to
exercise its Rights hereunder during the first half of a taxable year of the
Managing General Partner even if upon conversion of the Offered Units into
Shares, the Shares held by such Person will exceed the Ownership Limit, so long
as such Person shall immediately following such conversion sell so many of such
Shares as shall cause the Ownership Limit not to be exceeded upon consummation
of such sale. The Managing General Partner hereby agrees to exercise its right
pursuant to its Charter to permit the Ownership Limit to be exceeded in the
circumstances described in the preceding sentence.
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11.3 Computation of Purchase Price/Form of Payment. The purchase price
("Purchase Price") payable to a tendering Limited Partner shall be equal to the
Deemed Partnership Unit Value multiplied by the number of Offered Units computed
as of the date on which the Exercise Notice was delivered to the Managing
General Partner (the "Computation Date"). Subject to the following paragraph,
the Purchase Price for the Offered Units shall be payable, at the option of the
Managing General Partner, by causing the Partnership to redeem the Offered Units
for cash in the amount of the Purchase Price, or by the issuance by the Managing
General Partner of the number of Shares equal to the number of Offered Units
(adjusted as appropriate to account for stock splits, stock dividends or other
similar transactions between the Computation Date and the closing of the
purchase and sale of the Offered Units in the manner specified in Section
11.7(d) below).
Where a Limited Partner exercising its rights pursuant to this
Section on or after August 9, 2001, up to, but not including, August 9, 2004, is
a DeBartolo, and such Limited Partner has received a special allocation of
taxable income or gain from a Covered Sale pursuant to Section 6.1(e) within 90
days prior to the date of such exercise, then to the extent of any tax due on
such allocation and on the redemption of such Limited Partner's Units, the
Managing General Partner shall, if such Limited Partner so requests in the
Exercise Notice, cause the Partnership to redeem its Units for cash in
accordance with this Section 11.3.
11.4 Closing. The closing of the acquisition or redemption of Offered
Units shall, unless otherwise mutually agreed, be held at the principal offices
of the Managing General Partner, on the date agreed to by the Managing General
Partner and the relevant Limited Partner, which date (the "Settlement Date")
shall in no event be on a date which is later than the later of (i) ten (10)
days after the date of the Exercise Notice and (ii) five (5) days after the
expiration or termination of the waiting period applicable to the Limited
Partner, if any, under the Hart-Scott-Rodino Act (the "HSR Act"). The Managing
General Partner agrees to use its best efforts to obtain an early termination of
the waiting period applicable to any such acquisition, if any, under the HSR
Act. Until the Settlement Date, each tendering Partner shall continue to own his
Offered Units, and will continue to be treated as the holder of such Offered
Units for all purposes of this Agreement, including, without limitation, for
purposes of voting, consent, allocations and distributions. Offered Units will
be transferred to the Managing General Partner only upon receipt by the
tendering Partner of Shares or cash in payment in full therefor.
11.5 Closing Deliveries. At the closing of the purchase and sale or
redemption of Offered Units, payment of the Purchase Price shall be accompanied
by proper instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the tendering Limited Partner with respect
to its due authority to sell all of the right, title and interest in and
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to such Offered Units to the Managing General Partner or the Partnership, as
applicable, and with respect to the ownership by the Limited Partner of such
Units, free and clear of all Liens, and (B) the Managing General Partner with
respect to its due authority to acquire such Units for Shares or to cause the
Partnership to redeem such Units for cash and, in the case of payment by Shares,
(ii) (A) an opinion of counsel for the Managing General Partner, reasonably
satisfactory to such Limited Partner, to the effect that such Shares have been
duly authorized, are validly issued, fully-paid and non-assessable, and (B) a
stock certificate or certificates evidencing the Shares to be issued and
registered in the name of the Limited Partner or its designee.
11.6 Term of Rights. The rights of the parties with respect to the Rights
shall remain in effect, subject to the terms hereof, throughout the existence of
the Partnership.
11.7 Covenants of the Managing General Partner. To facilitate the Managing
General Partner's ability fully to perform its obligations hereunder, the
Managing General Partner covenants and agrees as follows:
(a) At all times while the Rights are in existence, the Managing
General Partner shall reserve for issuance such number of Shares as may be
necessary to enable the Managing General Partner to issue such Shares in full
payment of the Purchase Price in regard to all Partnership Units which are from
time to time outstanding and held by the Limited Partners.
(b) As long as the Managing General Partner shall be obligated to
file periodic reports under the Exchange Act, the Managing General Partner will
timely file such reports in such manner as shall enable any recipient of Shares
issued to a Limited Partner hereunder in reliance upon an exemption from
registration under the Securities Act to continue to be eligible to utilize Rule
144 promulgated by the SEC pursuant to the Securities Act, or any successor rule
or regulation or statute thereunder, for the resale thereof.
(c) During the pendency of the Rights, the Limited Partners shall
receive in a timely manner all reports filed by the Managing General Partner
with the SEC and all other communications transmitted from time to time by the
Managing General Partner to the owners of its Shares.
(d) Under no circumstances shall the Managing General Partner
declare any stock dividend, stock split, stock distribution or the like, unless
fair and equitable arrangements are provided, to the extent necessary, fully to
adjust, and to avoid any dilution in, the Rights of any Limited Partner under
this Agreement.
11.8 Limited Partners' Covenant. Each of the Limited Partners covenants
and agrees with the Managing General Partner that all Offered Units tendered to
the Managing General Partner or
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the Partnership, as the case may be, in accordance with the exercise of Rights
herein provided shall be delivered free and clear of all Liens and should any
Liens exist or arise with respect to such Offered Units, the Managing General
Partner or the Partnership, as the case may be, shall be under no obligation to
acquire the same unless, in connection with such acquisition, the Managing
General Partner has elected to cause the Partnership to pay such portion of the
Purchase Price in the form of cash consideration in circumstances where such
consideration will be sufficient to cause such existing Lien to be discharged in
full upon application of all or a part of such consideration and the Partnership
is expressly authorized to apply such portion of the Purchase Price as may be
necessary to satisfy any indebtedness in full and to discharge such Lien in
full. In the event any transfer tax is payable by the Limited Partner as a
result of a transfer of Partnership Units pursuant to the exercise by a Limited
Partner of the Rights, the Limited Partner shall pay such transfer tax.
11.9 Dividends. If a Limited Partner shall exchange any Partnership Units
for Shares pursuant to this Article XI on or prior to the Partnership Record
Date for any distribution to be made on such Partnership Units, in accordance
with the Charter of the Managing General Partner such Limited Partner will be
entitled to receive the corresponding distribution to be paid on such Shares and
shall not be entitled to receive the distribution made by the Partnership in
respect of the exchanged Partnership Units.
ARTICLE XII
General Provisions
12.1 Investment Representations.
(a) Each Limited Partner acknowledges that it (i) has been given
full and complete access to the Partnership and those person who will manage the
Partnership in connection with this Agreement and the transactions contemplated
hereby, (ii) has had the opportunity to review all documents relevant to its
decision to enter into this Agreement, and (iii) has had the opportunity to ask
questions of the Partnership and those persons who will manage the Partnership
concerning its investment in the Partnership and the transactions contemplated
hereby.
(b) Each Limited Partner acknowledges that it understands that the
Partnership Units to be purchased or otherwise acquired by it hereunder will not
be registered under the Securities Act of 1933 in reliance upon the exemption
afforded by Section 4(2) thereof for transactions by an issuer not involving any
public offering, and will not be registered or qualified under any applicable
state securities laws. Each Limited Partner represents that (i) it is acquiring
such Partnership Units for investment only and without any view toward
distribution thereof, and it will not sell or otherwise dispose of such
Partnership Units except pursuant to the exercise of the Rights or otherwise in
accordance with the terms hereof and in compliance with the registration
requirements or exemption provisions of any applicable
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state securities laws, (ii) its economic circumstances are such that it is able
to bear all risks of the investment in the Partnership Units for an indefinite
period of time including the risk of a complete loss of its investment in the
Units and (iii) it has knowledge and experience in financial and business
matters sufficient to evaluate the risks of investment in the Partnership Units.
Each Limited Partner further acknowledges and represents that it has made its
own independent investigation of the Partnership and the business conducted and
proposed to be conducted by the Partnership, and that any information relating
thereto furnished to the Limited Partner was supplied by or on behalf of the
Partnership.
12.2 Notices. All notices, offers or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and may be
personally delivered or sent by United States mail or by reputable overnight
delivery service and shall be deemed to have been given when delivered in
person, upon receipt when delivered by overnight delivery service or three
business days after deposit in United States mail, registered or certified,
postage prepaid, and properly addressed, by or to the appropriate party. For
purposes of this Section 12.2, the addresses of the parties hereto shall be as
set forth on Exhibit A hereof. The address of any party hereto may be changed by
a notice in writing given in accordance with the provisions hereof.
12.3 Successors. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of all Partners, and their
legal representatives, heirs, successors and permitted assigns, except as
expressly herein otherwise provided.
12.4 Liability of Limited Partners. The liability of the Limited Partners
for their obligations, covenants representations and warranties under this
Agreement shall be several and not joint.
12.5 Effect and Interpretation. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN CONFORMITY WITH THE LAWS OF THE STATE OF DELAWARE.
12.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.
12.7 Partners Not Agents. Nothing contained herein shall be construed to
constitute any Partner the agent of another Partner, except as specifically
provided herein, or in any manner to limit the Partners in the carrying on of
their own respective businesses or activities.
12.8 Entire Understanding; Etc. This Agreement and the other agreements
referenced herein or therein or to which the signatories hereto or thereto are
parties constitute the entire agreement and understanding among the Partners and
supersede any prior
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understandings and/or written or oral agreements among them respecting the
subject matter within.
12.9 Severability. If any provision of this Agreement, or the application
of such provision to any Person or circumstance, shall be held invalid by a
court of competent jurisdiction, the remainder of this Agreement, or the
application of such provision to Persons or circumstances other than those to
which it is held invalid by such court, shall not be affected thereby.
12.10 Trust Provision. This Agreement, to the extent executed by the
trustee of a trust, is executed by such trustee solely as trustee and not in a
separate capacity. Nothing herein contained shall create any liability on, or
require the performance of any covenant by, any such trustee individually, nor
shall anything contained herein subject the individual property of any trustee
to any liability.
12.11 Pronouns and Headings As used herein, all pronouns shall include the
masculine, feminine and neuter, and all defined terms shall include the singular
and plural thereof wherever the context and facts require such construction. The
headings, titles and subtitles herein are inserted for convenience of reference
only and are to be ignored in any construction of the provisions hereof. Any
references in this Agreement to "including" shall be deemed to mean "including
without limitation."
12.12 Assumption of Liabilities. Nothing contained in this Agreement shall
have the effect of terminating, negating or modifying in any respect the
assumption of liabilities by the Partnership set forth in Section 10.8 of the
Fourth Amended and Restated Limited Partnership Agreement of the Partnership
dated as of April 21, 1994 and the Partnership reaffirms its obligations
thereunder.
12.13 Assurances. Each of the Partners shall hereafter execute and deliver
such further instruments (provided such instruments are in form and substance
reasonably satisfactory to the executing Partner) and do such further acts and
things as may be reasonably required or useful to carry out the intent and
purpose of this Agreement and as are not inconsistent with the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed effective as of the date and year first
above written.
GENERAL PARTNERS:
SD PROPERTY GROUP, INC.
By: /s/ David Simon
_____________________
Name: David Simon
Title: Chief Executive Officer
SPG PROPERTIES, INC.
By: /s/ David Simon
_____________________
Name: David Simon
Title: Chief Executive Officer
SIMON PROPERTY GROUP, INC.
By: /s/ David Simon
_____________________
Name: David Simon
Title: Chief Executive Officer
LIMITED PARTNERS:
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1
Exhibit 4.2
--------------------------
LIMITED PARTNERSHIP AGREEMENT
OF
SPG REALTY CONSULTANTS, L.P.
--------------------------
2
ARTICLE I
Definitions; Etc.
1.1 Definitions........................................................ 2
ARTICLE II
Continuation of Partnership
2.1 Continuation....................................................... 13
2.2 Name............................................................... 14
2.3 Character of the Business.......................................... 14
2.4 Location of the Principal Place of Business........................ 14
2.5 Registered Agent and Registered Office............................. 14
ARTICLE III
Term
3.1 Commencement....................................................... 15
3.2 Dissolution........................................................ 15
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contributions.............................. 15
4.2 Limited Partner Capital Contributions.............................. 15
4.3 Additional Funds................................................... 16
4.4 Redemption; Change in Number of Shares Outstanding................. 18
4.5 Dividend Reinvestment Plan......................................... 18
4.6 No Third Party Beneficiary......................................... 18
4.7 No Interest; No Return............................................. 19
4.8 Capital Accounts................................................... 19
ARTICLE V
Representations, Warranties and Acknowledgment
5.1 Representations and Warranties by Managing
General Partner.................................................... 21
5.2 Representations and Warranties by the Limited
Partners........................................................... 22
5.3 Acknowledgment by Each Partner..................................... 22
ARTICLE VI
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations........................................................ 22
6.2 Distributions...................................................... 28
6.3 Books of Account; Segregation of Funds............................. 29
6.4 Reports............................................................ 30
6.5 Audits............................................................. 31
3
6.6 Tax Returns........................................................ 31
6.7 Tax Matters Partner................................................ 31
6.8 Withholding........................................................ 32
ARTICLE VII
Rights, Duties and Restrictions of the
Managing General Partners
7.1 Expenditures by Partnership........................................ 33
7.2 Powers and Duties of the Managing General Partner.................. 33
7.3 Major Decisions.................................................... 37
7.4 Managing General Partner Participation............................. 38
7.5 Proscriptions...................................................... 39
7.6 Additional Partners................................................ 39
7.7 Title Holder....................................................... 39
7.8 Waiver and Indemnification......................................... 39
7.9 Limitation of Liability of Directors, Shareholders
and Officers of the Managing General Partner....................... 40
ARTICLE VIII
Dissolution, Liquidation and Winding-Up
8.1 Accounting......................................................... 41
8.2 Distribution on Dissolution........................................ 41
8.3 Sale of Partnership Assets......................................... 41
8.4 Distributions in Kind.............................................. 42
8.5 Documentation of Liquidation....................................... 42
8.6 Liability of the Liquidation Agent................................. 42
ARTICLE IX
Transfer of Partnership Interests
and Related Matters
9.1 [INTENTIONALLY OMITTED]............................................ 43
9.2 Managing General Partner Transfers and
Deemed Transfers................................................... 43
9.3 Transfers by Limited Partners...................................... 43
9.4 Issuance of Additional Partnership Units and
Preferred Units.................................................... 45
9.5 Restrictions on Transfer........................................... 46
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management..................................... 47
10.2 Bankruptcy of a Limited Partner.................................... 47
10.3 No Withdrawal...................................................... 47
10.4 Duties and Conflicts............................................... 47
10.5 Guaranty and Indemnification Agreements............................ 48
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ARTICLE XI
Grant of Rights to the Limited Partners
11.1 Grant of Rights.................................................... 49
11.2 [INTENTIONALLY OMITTED]............................................ 49
11.3 Computation of Purchase Price/Form of Payment...................... 49
11.4 Closing............................................................ 50
11.5 Closing Deliveries................................................. 50
11.6 Term of Rights..................................................... 50
11.7 Covenants of the Managing General Partner.......................... 50
11.8 Limited Partners' Covenant......................................... 51
11.9 Dividends.......................................................... 51
ARTICLE XIII
General Provisions
12.1 Investment Representations......................................... 51
12.2 Notices............................................................ 52
12.3 Successors......................................................... 52
12.4 Liability of Limited Partners...................................... 52
12.5 Effect and Interpretation.......................................... 53
12.6 Counterparts....................................................... 53
12.7 Partners Not Agents................................................ 53
12.8 Entire Understanding; Etc.......................................... 53
12.9 Severability....................................................... 53
12.10 Trust Provision.................................................... 53
12.11 Pronouns and Headings.............................................. 53
12.12 Assurances......................................................... 53
3
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EXECUTION VERSION
LIMITED PARTNERSHIP AGREEMENT
OF
SPG REALTY CONSULTANTS, L.P.
THIS LIMITED PARTNERSHIP AGREEMENT, dated as of September 24, 1998, is
made by and among SPG REALTY CONSULTANTS, INC., a Delaware corporation, as
managing general partner (the "Managing General Partner"), and those parties who
have executed this Agreement as limited partners and whose names and addresses
are set forth on Exhibit A hereto as limited partners (the "Limited Partners").
WITNESSETH:
WHEREAS, concurrently with the execution hereof, SPG Merger Sub, Inc., a
Maryland corporation and a wholly-owned subsidiary of Simon Property Group, Inc.
("Simon Group"), merged into Simon DeBartolo Group, Inc. pursuant to the
Agreement and Plan of Merger, dated as of February 18, 1998 (the "Merger
Agreement"), among Simon DeBartolo Group, Inc., Corporate Property Investors
(the predecessor to Simon Group) and Corporate Realty Consultants, Inc. (renamed
SPG Realty Consultants, Inc.); and
WHEREAS, concurrently with the execution hereof, the Simon Group
Partnership (as defined below) will become a limited partner of the Partnership
and receive Partnership Units, which the Simon Group Partnership will, in turn,
distribute pro rata to all of its limited partners other than any general
partner of the Simon Group Partnership who also holds Partnership Units,
whereupon such limited partners shall become Limited Partners of the
Partnership; and
WHEREAS, the Managing General Partner is concurrently herewith, in
exchange for the contribution to the Partnership and its subsidiaries of
substantially all of its assets and liabilities, becoming the managing general
partner of the Partnership, holding Units in the amount set forth in Exhibit A;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
6
ARTICLE I
Definitions; Etc.
1.1 Definitions. Except as otherwise herein expressly provided the
following terms and phrases shall have the meanings set forth below:
"Accountants" shall mean the firm or firms of independent certified
public accountants selected by the Managing General Partner from time to time on
behalf of the Partnership to audit the books and records of the Partnership and
to prepare and certify statements and reports in connection therewith.
"Act" shall mean the Revised Uniform Limited Partnership Act as enacted
in the State of Delaware, as the same may hereafter be amended from time to
time.
"Additional Units" shall have the meaning set forth in Section 9.4
hereof.
"Adjustment Date" shall have the meaning set forth in Section 4.3(b)
hereof.
"Administrative Expenses" shall mean (i) all administrative and operating
costs and expenses incurred by the Partnership, and (ii) those administrative
costs and expenses and accounting and legal expenses incurred by the Managing
General Partner on behalf or for the benefit of the Partnership.
"Affected Gain" shall have the meaning set forth in Section 6.1(g)
hereof.
"Affiliate" shall mean, with respect to any Partner (or as to any other
Person the affiliates of which are relevant for purposes of any of the
provisions of this Agreement) (i) any member of the Immediate Family of such
Partner or Person; (ii) any partner, trustee, beneficiary or shareholder of such
Partner or Person; (iii) any legal representative, successor or assignee of such
Partner or any Person referred to in the preceding clauses (1) and (ii); (iv)
any trustee or trust for the benefit of such Partner or any Person referred to
in the preceding clauses (i) through (iii); or (v) any Entity which, directly or
indirectly through one or more intermediaries, Controls, is Controlled by or is
under common Control with such Partner or any Person referred to in the
preceding clauses (i) through (iv).
"Affiliate Financing" shall mean financing or refinancing obtained from a
Partner or an Affiliate of a Partner by the Partnership.
"Agreement" shall mean this Limited Partnership Agreement, as amended,
modified, supplemented or restated from time to time, as the context requires.
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"Bankruptcy" shall mean, with respect to any Partner, (i) the commencement
by such Partner of any proceeding seeking relief under any provision or chapter
of the federal Bankruptcy Code or any other federal or state law relating to
insolvency, bankruptcy or reorganization, (ii) an adjudication that such Partner
is insolvent or bankrupt, (iii) the entry of an order for relief under the
federal Bankruptcy Code with respect to such Partner, (iv) the filing of any
petition or the commencement of any case or proceeding against such Partner
under the federal Bankruptcy Code unless such petition and the case or
proceeding initiated thereby are dismissed within ninety (90) days from the date
of such filing or commencement, (v) the filing of an answer by such Partner
admitting the allegations of any such petition, (vi) the appointment of a
trustee, receiver or custodian for all or substantially all of the assets of
such Partner unless such appointment is vacated or dismissed within ninety (90)
days from the date of such appointment but not less than five (5) days before
the proposed sale of any assets of such Partner, (vii) the execution by such
Partner of a general assignment for the benefit of creditors, (viii) the
convening by such Partner of a meeting of its creditors, or any class thereof,
for purposes of effecting a moratorium upon or extension or composition of its
debts, (ix) the failure of such Partner to pay its debts as they mature, (x} the
levy, attachment, execution or other seizure of substantially all of the assets
of such Partner where such seizure is not discharged within thirty (30) days
thereafter, or (xi) the admission by such Partner in writing of its inability to
pay its debts as they mature or that it is generally not paying its debts as
they become due.
"Capital Account" shall have the meaning set forth in Section 4.8(a)
hereof.
"Capital Contribution" shall mean, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any property other than
money contributed to the Partnership with respect to the Partnership Units held
by such Partner (net of liabilities secured by such property which the
Partnership assumes or takes subject to).
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State on September 17, 1998, as it may hereafter be amended from time to time
in accordance with the terms of this Agreement and the Act.
"Charter" shall mean the articles of incorporation of a General Partner
and all amendments, supplements and restatements thereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
corresponding provisions of succeeding law.
"Computation Date" shall have the meaning set forth in Section 11.3
hereof.
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"Consent of the DeBartolos" shall mean consent of those Limited Partners
who are "DeBartolos" as defined herein. EJDC (in such capacity the "DeBartolo
Designee") is hereby granted authority by those Limited Partners who are
DeBartolos to grant or withhold consent on behalf of the DeBartolos whenever the
Consent of the DeBartolos is required hereunder. The DeBartolos shall have the
right, from time to time, by written notice to the Partnership signed by
DeBartolos who hold in the aggregate more than fifty percent (50%) of the
Partnership Units then held by the DeBartolos, to substitute a new Person as the
DeBartolo Designee for the Person who is then acting as such. The Partnership,
the Partners and all Persons dealing with the Partnership shall be fully
protected in relying on any written consent of the DeBartolos which is executed
by the Person who is then acting as the DeBartolo Designee. In the event that at
any time there is no DeBartolo Designee, the consent of the DeBartolos shall be
given by those DeBartolos who hold in the aggregate more than fifty percent
(50%) of the Partnership Units then held by the DeBartolos.
"Consent of the Limited Partners" shall mean the written consent of a
Majority-In-Interest of the Limited Partners, which consent shall be obtained
prior to the taking of any action for which it is required by this Agreement and
may be given or withheld by a Majority-In-Interest of the Limited Partners,
unless otherwise expressly provided herein, in their sole and absolute
discretion. Whenever the Consent of the Limited Partners is sought by a General
Partner, the request for such consent, outlining in reasonable detail the matter
or matters for which such consent is being requested, shall be submitted to all
of the Limited Partners, and each Limited Partner shall have at least 15 days to
act upon such request.
"Consent of the Simons" shall mean consent of those Limited Partners who
are "Simons" as defined herein. David Simon (the "Simon Designee") is hereby
granted authority by those Limited Partners who are Simons to grant or withhold
consent on behalf of the Simons whenever the Consent of the Simons is required
hereunder. The Simons shall have the right from time to time, by written notice
to the Partnership signed by Simons who hold in the aggregate more than fifty
percent (50%) of the Partnership Units then held by the Simons, to substitute a
new Person as the Simon Designee for the Person who is then acting as such. The
Partnership, the Partners and all Persons dealing with the Partnership shall be
fully protected in relying on any written consent of the Simons which is
executed by the Person who is then acting as the Simon Designee. In the event
that at any time there is no Simon Designee, the Consent of the Simons shall be
given by those Simons who hold in the aggregate more than fifty percent (50%) of
the Partnership Units then held by the Simons.
"Contributed Funds" shall have the meaning set forth in Section 4.3(b)
hereof.
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"Contribution Date" shall have the meaning set forth in Section 9.4
hereof.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership or otherwise to select, or have the power to remove and
then select, a majority of those Persons exercising governing authority over an
Entity. In the case of a limited partnership, the sole general partner, all of
the general partners to the extent each has equal management control and
authority, or the managing general partner or managing general partners thereof
shall be deemed to have control of such partnership and, in the case of a trust,
any trustee thereof or any Person having the right to select or remove any such
trustee shall be deemed to have control of such trust.
"DeBartolos" shall mean (i) the Estate of Edward J. DeBartolo, (ii)
Edward J. DeBartolo, Jr., Marie Denise DeBartolo York, members of the Immediate
Family of either of the foregoing, any other members of the Immediate Family of
Edward J. DeBartolo, any other lineal descendants of any of the foregoing and
any trusts established for the benefit of any of the foregoing, and (iii) EJDC
and any other Entity Controlled by any one or more of the Persons listed or
specified in clauses (i) and (ii) above.
"Deemed Partnership Unit Value" with respect to a particular Trust
Interest as of any date shall mean the value of the Shares underlying such Trust
Interest, which shall be an amount equal to the greater of (i) the aggregate par
value of the Share underlying the Trust Interest and (ii) the amount determined
in good faith by the Board of Directors of the Managing General Partner to
represent the fair market net asset value of the Share underlying the Trust
Interest.
"Depreciation" shall mean for each Partnership Fiscal Year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable under the Code with respect to a Partnership asset
for such year or other period, except that if the Gross Asset Value of a
Partnership asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the General Partner.
"Directors" shall mean the Board of Directors of the Managing General
Partner.
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"Effective Time" shall have the meaning set forth in the Merger
Agreement.
"EJDC" shall mean The Edward J. DeBartolo Corporation, an Ohio
corporation.
"Entity" shall mean any general partnership, limited partnership, limited
liability company, limited liability partnership, corporation, joint venture,
trust, business trust, cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time (or any corresponding provisions of succeeding
laws).
"Exercise Notice" shall have the meaning set forth in Section 11.1
hereof.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"General Partner" shall mean the Managing General Partner and its duly
admitted successors and assigns and any other Person who is a general partner of
the Partnership at the time of reference thereto.
"GP Expenses" shall mean (i) costs and expenses relating to the
continuity of existence of the Managing General Partner and its subsidiaries,
including taxes, fees and assessments associated therewith, and any and all
costs, expenses or fees payable to any director or trustee of the Managing
General Partner or such subsidiaries, (ii) costs and expenses relating to any
offer or registration of securities by the Managing General Partner or its
subsidiaries and all statements, reports, fees and expenses incidental thereto,
including underwriting discounts, selling commissions and placement fees
applicable to any such offer of securities; provided, however, that in the case
of any such registration of securities on behalf of one or more of the security
holders of the Managing General Partner or its subsidiaries, GP Expenses shall
not include underwriting discounts or selling commissions), (iii) costs and
expenses associated with the preparation and filing of any periodic reports by
the Managing General Partner or its subsidiaries under federal, state or local
laws or regulations, including tax returns and filings with the SEC and any
stock exchanges on which the Shares are listed, (iv) costs and expenses
associated with compliance by the Managing General Partner or its subsidiaries
with laws, rules and regulations promulgated by any regulatory body, including
the SEC, (v) costs and expenses associated with any 401(k) Plan, incentive plan,
bonus plan or other plan providing for compensation for the employees of the
Managing General Partner or its subsidiaries, and (vi) all operating,
administrative and other costs incurred by the Managing General Partner or its
subsidiaries (including attorney's and accountant's fees, income and franchise
taxes and salaries paid to
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officers of the Managing General Partner or its subsidiaries, but excluding
costs of any repurchase by the General Partners of any of their securities and
excluding costs associated with activities and business operations not conducted
directly or indirectly through the Partnership or any Subsidiary Partnership);
provided, however that amounts described herein shall be considered GP Expenses
hereunder only if and to the extent during the fiscal year in question the
aggregate amount of such expenses for such fiscal year and all prior fiscal
years exceeds the aggregate of (a) all amounts theretofore distributed or
distributable to the Managing General Partner by any wholly-owned subsidiary
thereof and (b) all amounts theretofore paid to the Managing General Partner
pursuant to Section 7.1 hereof.
"Gross Asset Value" shall have the meaning set forth in Section 4.8(b)
hereof.
"Gross Income" shall mean the income of the Partnership determined
pursuant to Section 61 of the Code before deduction of items of expense or
deduction.
"Immediate Family" shall mean, with respect to any Person, such Person's
spouse, parents, parents-in-law, descendants by blood or adoption, nephews,
nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law
(in each case by whole or half-blood).
"Incurrence" shall have the meaning set forth in Section 10.5(a)
hereof.
"Independent Directors" shall mean members of the Board of Directors of
the Managing General Partner, none of whom is either employed by the Managing
General Partner or a member (or an Affiliate of a member) of the Simons.
"Institutional Investors" shall have the meaning set forth in Rule
501(a)(1)-(3), (7) and (8) of Regulation D promulgated under the Securities Act.
"Institutional Lender" shall mean a commercial bank or trust company, a
savings and loan association or an insurance company.
"JCP" shall mean JCP Realty, Inc., a Delaware corporation, or Brandywine
Realty, Inc., a Delaware corporation, or any of its or their Affiliates that
becomes a Limited Partner hereunder and that is an "accredited investor" as
defined in Regulation D under the Securities Act, as amended.
"JCP Limited Partner" shall mean JCP, in its capacity as a Limited
Partner or Partners hereunder.
"Lien" shall mean any liens, security interests, mortgages, deeds of
trust, charges, claims, encumbrances, restrictions, pledges, options, rights of
first offer or first refusal and any
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other rights or interests of others of any kind or nature, actual or contingent,
or other similar encumbrances of any nature whatsoever.
"Limited Partner Liability" shall mean, with respect to each Limited
Partner, each liability (or portion thereof) included in the basis of such
Limited Partner (other than as an "excess nonrecourse liability" within the
meaning of Regulations Section l.752-3(a)(3)) for federal income tax purposes.
"Limited Partners" shall mean those Persons whose names are set forth on
Exhibit A hereto as Limited Partners, their permitted successors or assigns as
limited partners hereof, and/or any Person who, at the time of reference
thereto, is a limited partner of the Partnership.
"Limited Partnership Unit" shall mean each Partnership Unit (as defined
below) held by a Limited Partner. Each Limited Partnership Unit shall be paired
with a Simon Group Partnership Unit.
"Liquidation Agent" shall mean such Person as is selected as the
Liquidation Agent hereunder by the Managing General Partner, which Person may be
the Managing General Partner or an Affiliate of the Managing General Partner,
provided such Liquidation Agent agrees in writing to be bound by the terms of
this Agreement. The Liquidation Agent shall be empowered to give and receive
notices, reports and payments in connection with the dissolution, liquidation
and/or winding-up of the Partnership and shall hold and exercise such other
rights and powers as are necessary or required to permit all parties to deal
with the Liquidation Agent in connection with the dissolution, liquidation
and/or winding-up of the Partnership.
"Liquidation Transaction" shall mean any sale of assets of the
Partnership in contemplation of, or in connection with, the liquidation of the
Partnership.
"Losses" shall have the meaning set forth in Section 6.1(a) hereof.
"Major Decisions" shall have the meaning set forth in Section 7.3(b)
hereof.
"Majority-In-Interest of the Limited Partners" shall mean Limited
Partner(s) who hold in the aggregate more than fifty percent (50%) of the
Partnership Units then held by all the Limited Partners, as a class (excluding
any Partnership Units held by the Managing General Partner, any Person
Controlled by the Managing General Partner or any Person holding as nominee for
the General Partners).
"Managing General Partner" shall mean SPG Realty Consultants, Inc., a
Delaware corporation.
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"Merger Agreement" shall have the meaning set forth in the Recitals
hereto.
"Minimum Gain" shall have the meaning set forth in Section 6.1(d)(l)
hereof.
"Minimum Gain Chargeback" shall have the meaning set forth in Section
6.1(d)(l) hereof.
"Net Financing Proceeds" shall mean the cash proceeds received by the
Partnership in connection with any borrowing by or on behalf of the Partnership
(whether or not secured), or distributed to the Partnership in respect of any
such borrowing by any Subsidiary Entity, after deduction of all costs and
expenses incurred by the Partnership in connection with such borrowing, and
after deduction of that portion of such proceeds used to repay any other
indebtedness of the Partnership, or any interest or premium thereon.
"Net Operating Cash Flow" shall mean, with respect to any fiscal period
of the Partnership, the aggregate amount of all cash received by the Partnership
from any source for such fiscal period (including Net Sale Proceeds and Net
Financing Proceeds but excluding Contributed Funds), less the aggregate amount
of all expenses or other amounts paid with respect to such period and such
additional cash reserves as of the last day of such period as the Managing
General Partner deems necessary for any capital or operating expenditure
permitted hereunder.
"Net Sale Proceeds" shall mean the cash proceeds received by the
Partnership in connection with a sale or other disposition of any asset by or on
behalf of the Partnership or a sale or other disposition of any asset by or on
behalf of any Subsidiary Entity, after deduction of any costs or expenses
incurred by the Partnership, or payable specifically out of the proceeds of such
sale or other disposition (including, without limitation, any repayment of any
indebtedness required to be repaid as a result of such sale or other disposition
or which the Managing General Partner elects to repay out of the proceeds of
such sale or other disposition, together with accrued interest and premium, if
any, thereon and any sales commissions or other costs and expenses due and
payable to any Person), in connection with such sale or other disposition.
"Nonrecourse Liabilities" shall have the meaning set forth in Section
6.l(d)(l) hereof.
"Offered Units" shall have the meaning set forth in Section 11.1
hereof.
"Paired Shares" shall mean one share of Simon Group Common Stock and a
pro rata Trust Interest.
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"Partner Nonrecourse Debt" shall have the meaning set forth in Section
6.1(d)(2) hereof.
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning set forth
in Section 6.1(d)(2) hereof.
"Partner Nonrecourse Deduction" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"Partners" shall mean the Managing General Partner and the Limited
Partners, their duly admitted successors or assigns or any Person who is a
partner of the Partnership at the time of reference thereto.
"Partnership" shall mean SPG Realty Consultants, L.P., a Delaware limited
partnership, as such limited partnership may from time to time be constituted.
"Partnership Fiscal Year" shall mean the calendar year.
"Partnership Interest" shall mean the interest of a Partner in the
Partnership.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b)(2) of the Regulations.
"Partnership Record Date" shall mean the record date established by the
Managing General Partner for a distribution of Net Operating Cash Flow pursuant
to Section 6.2 hereof, which record date shall be the same as the record date
established by the Managing General Partner for distribution to its shareholders
of some or all of its share of such distribution.
"Partnership Units" or "Units" shall mean the interest in the Partnership
of any Partner which entitles a Partner to the allocations (and each item
thereof) specified in Section 6.1(b) hereof and all distributions from the
Partnership, and its rights of management, consent, approval, or participation,
if any, as provided in this Agreement. Partnership Units do not include
Preferred Units. Each Partner's percentage ownership interest in the Partnership
shall be determined by dividing the number of Partnership Units then owned by
each Partner by the total number of Partnership Units then outstanding. The
number of Partnership Units held by each Partner at the date hereof is as set
forth opposite its name on attached Exhibit A.
"Person" shall mean any individual or Entity.
"Pledge" shall mean granting of a Lien on a Partnership Interest.
"Post-Exchange Distribution" shall have the set forth in Section
6.2(a) hereof.
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"Preferred Contributed Funds" shall have the set forth in Section
4.3(c) hereof.
"Preferred Distribution Requirement" shall have the meaning set forth in
Section 4.3(c) hereof.
"Preferred Distribution Shortfall" shall have the set forth in Section
6.2(b)(i) hereof.
"Preferred Redemption Amount" shall mean, with respect to any class or
series of Preferred Units, the sum of (i) the amount of any accumulated
Preferred Distribution Shortfall with respect to such class or series of
Preferred Units, (ii) the Preferred Distribution Requirement with respect to
such class or series of Preferred Units to the date of redemption and (iii) the
Preferred Redemption Price indicated in the Preferred Unit Designation with
respect to such class or series of Preferred Units.
"Preferred Redemption Price" shall have the meaning set forth in Section
4.3(c) hereof.
"Preferred Shares" shall mean any class of equity securities of the
Managing General Partner now or hereafter authorized or reclassified having
dividend rights that are superior or prior to dividends payable on the Shares.
"Preferred Unit Designation" shall have the set forth in Section
4.3(c) hereof.
"Preferred Unit Issue Price" shall mean the amount of the Required Funds
contributed or deemed to have been contributed by the Managing General Partner
in exchange for a Preferred Unit.
"Preferred Units" shall mean interests in the Partnership issued to the
Managing General Partner pursuant to Section 4.3(c) hereof. The holder of
Preferred Units shall have such rights to the allocations of Profits and Losses
as specified in Section 6.1 hereof and to distributions pursuant to Section 6.2
hereof, but shall not, by reason of its ownership of such Preferred Units, be
entitled to participate in the management of the Partnership or to consent to or
approve any action which is required by the Act or this Agreement to be approved
by any or all of the Partners.
"Profits" shall have the meaning set forth in Section 6.1(a) hereof.
"Purchase Price" shall have the meaning set forth in Section 11.3
hereof.
"Regulations" shall mean the final, temporary or proposed income tax
regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
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"Regulatory Allocations" shall have the meaning set forth in Section
6.l(d)(5) hereof.
"REIT" shall mean a real estate investment trust as defined in Section
856 of the Code.
"REIT Requirements" shall mean all actions or omissions as may be
necessary (including making appropriate distributions from time to time) to
permit each of Simon Group and its REIT subsidiaries to qualify or continue to
qualify as a real estate investment trust within the meaning of Section 856 et
seq. of the Code, as such provisions may be amended from time to time, or the
corresponding provisions of succeeding law.
"Related Issues" shall mean, with respect to a class or series of
Preferred Units, the class or series of Preferred Shares the sale of which
provided the Managing General Partner with the proceeds to contribute to the
Partnership in exchange for such Preferred Units.
"Required Funds" shall have the meaning set forth in Section 4.3(a)
hereof.
"Rights" shall have the meaning set forth in Section 11.1 hereof.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean the Common Stock, par value $0.0001 per share, of the
Managing General Partner.
"Simon Group" shall mean Simon Property Group, Inc., a Delaware
corporation.
"Simon Group Common Stock" shall mean the shares of Common Stock, par
value $0.0001 per share, of Simon Group.
"Simon Group Limited Partnership Units" shall mean interests in the Simon
Group Partnership (as defined below) held by a Limited Partner, each of which is
paired with a Limited Partnership Unit.
"Simon Group Partnership" shall mean Simon Property Group, L.P., a
Delaware limited partnership.
"Simon Group Partnership Units" shall mean interests in the Simon Group
Partnership.
"Simons" shall mean Melvin Simon, Herbert Simon and David Simon, other
members of the Immediate Family of any of the foregoing, any other lineal
descendants of any of the foregoing,
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any trusts established for the benefit of any of the foregoing, and any Entity
Controlled by any one or more of the foregoing.
"Subsidiary Entity" shall mean any Entity in which the Partnership owns a
direct or indirect equity interest.
"Subsidiary Partnership" shall mean any partnership in which the
Partnership owns a direct or indirect equity interest.
"Substituted Limited Partner" shall have the meaning set forth in the
Act.
"Tax Matters Partner" shall have the meaning set forth in Section 6.7
hereof.
"Third Party" or "Third Parties" shall mean a Person or Persons who is or
are neither a Partner or Partners nor an Affiliate or Affiliates of a Partner or
Partners.
"Third Party Financing" shall mean financing or refinancing obtained from
a Third Party by the Partnership.
"Transfer" shall mean any assignment, sale, transfer, conveyance or other
disposition or act of alienation (other than a Pledge), whether voluntary or
involuntary or by operation of law.
"Trust" shall mean the trust owning all of the outstanding Shares subject
to a trust agreement among certain stockholders of Simon Group, a trustee and
the Managing General Partner, pursuant to which all holders of Simon Group
Common Stock are beneficiaries of such Trust.
"Trust Interest" shall mean a beneficial interest in the Trust associated
with or attached to a Share.
1.2 Exhibit. Etc. References in this Agreement to an "Exhibit" are, unless
otherwise specified, to one of the Exhibits attached to this Agreement, and
references in this Agreement to an "Article" or a "Section" are, unless
otherwise specified, to one of the Articles or Sections of this Agreement. Each
Exhibit attached hereto and referred to herein is hereby incorporated herein by
reference.
ARTICLE II
Continuation of Partnership
2.1 Continuation. The parties hereto do hereby agree to continue the
Partnership as a limited partnership pursuant to the provisions of the Act, and
all other pertinent laws of the State of Delaware, for the purposes and upon the
terms and conditions hereinafter set forth. The Partners agree that the rights
and liabilities of the Partners shall be as provided in the Act except as
otherwise herein expressly provided. Promptly upon the
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execution and delivery of this Agreement, the Managing General Partner shall
cause each notice, instrument, document or certificate as may be required by
applicable law, and which may be necessary to enable the Partnership to continue
to conduct its business, and to own its properties under the Partnership name to
be filed or recorded in all appropriate public offices. Upon request of the
Managing General Partner, the Partners shall execute any assumed or fictitious
name certificate or certificates required by law to be filed in connection with
the Partnership. The Managing General Partner shall properly cause the execution
and delivery of such additional documents and shall perform such additional acts
consistent with the terms of this Agreement as may be necessary to comply with
the requirements of law for the continued operation of a limited partnership
under the laws of the State of Delaware (it being understood that the Managing
General Partner shall be required to provide the General Partners and Limited
Partners with copies of any amended Certificates of Limited Partnership required
to be filed under such laws only upon request) and for the continued operation
of a limited partnership in each other jurisdiction in which the Partnership
shall conduct business.
2.2 Name. The name of the Partnership is SPG Realty Consultants, L.P., and
all business of the Partnership shall be conducted under the name of SPG Realty
Consultants, L.P. or such other name as the Managing General Partner may select;
provided, however, that the Managing General Partner may not choose the name (or
any derivative thereof) of any Limited Partner (other than the names "DeBartolo"
or "Simon") without the prior written consent of such Limited Partner. All
transactions of the Partnership, to the extent permitted by applicable law,
shall be carried on and completed in such name (it being understood that the
Partnership may adopt assumed or fictitious names in certain jurisdictions).
2.3 Character of the Business. The purpose of the Partnership is and shall
be to conduct any business that may be conducted by the Managing General
Partner.
2.4 Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be at 115 West Washington
Street, Indianapolis, Indiana 46204 or such other location as shall be selected
from time to time by the Managing General Partner in its sole discretion;
provided, however, that the Managing General Partner shall promptly notify the
Partners of any change in the location of the principal place of business of the
Partnership.
2.5 Registered Agent and Registered Office. The Registered Agent of the
Partnership shall be The Corporation Trust Company or such other Person as the
Managing General Partner may select in its sole discretion. The Registered
Office of the Partnership in the State of Delaware shall be c/o The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware 19801, or such other
location as the Managing General Partner may select in its sole and absolute
discretion. The Managing General Partner shall promptly notify the
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Partners of any change in the Registered Agent or Registered Office of the
Partnership.
ARTICLE III
Term
3.1 Commencement. The Partnership shall commence business upon the filing
of the Certificate with the Secretary of State of the State of Delaware.
3.2 Dissolution. The Partnership shall continue until dissolved and
terminated upon the earlier of (i) December 31, 2096, or (ii) the earliest to
occur of the following events:
(a) the dissolution, termination, withdrawal, retirement or
Bankruptcy of a General Partner unless the Partnership is continued as provided
in Section 9.1 hereof;
(b) the election to dissolve the Partnership made in writing by the
Managing General Partner, but only if the consent required by Section 7.3 is
obtained;
(c) the sale or other disposition of all or substantially all the
assets of the Partnership; or
(d) dissolution required by operation of law.
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contributions.
(a) Simultaneously with the execution and delivery hereof, the
Managing General Partner is contributing to the Partnership and its subsidiaries
substantially all of its assets and liabilities in exchange for a managing
general partnership interest in the Partnership and admission to the Partnership
as a Limited Partner with the number of Units set forth on Exhibit A.
(b) The Managing General Partner shall contribute to the capital of
the Partnership, in exchange for Units as provided in Section 4.3(b) hereof, the
proceeds of the sale of any Shares.
(c) All transfer, stamp or similar taxes payable upon any
contribution provided for in this Section 4.1 shall be paid by the Partnership.
4.2 Limited Partner Capital Contributions. Except as expressly provided in
Sections 4.3, 4.4, 4.5 and 4.8 below, no Partner may make, and no Partner shall
have the obligation to make, additional contributions to the capital of the
Partnership without the consent of the General Partners.
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4.3 Additional Funds.
(a) The Partnership may obtain funds ("Required Funds") which it
considers necessary to meet the needs, obligations and requirements of the
Partnership, or to maintain adequate working 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 shall determine to be in the best
interests of the Partnership, subject to the terms and conditions of this
Agreement. Any and all funds required or expended, directly or indirectly, by
the Partnership for capital expenditures may be obtained or replenished through
Partnership borrowings. Any Third Party Financing or Affiliate Financing
obtained by the General Partners for and on behalf of the Partnership may be
convertible in whole or in part into Additional Units (to be issued in
accordance with Section 9.4 hereof), may be unsecured, may be secured by
mortgage(s) or deed(s) of trust and/or assignments on or in respect of all or
any portion of the assets of the Partnership or any other security made
available by the Partnership, may include or be obtained through the public or
private placement of debt and/or other instruments, domestic and foreign may
include provision for the option to acquire Additional Units (to be issued in
accordance with Section 9.4 hereof), and may include the acquisition of or
provision for interest rate swaps, credit enhancers and/or other transactions or
items in respect of such Third Party Financing or Affiliate Financing; provided,
however, that in no event may the Partnership obtain any Affiliate Financing or
Third Party Financing that is recourse to any Partner or any Affiliate, partner,
shareholder, beneficiary, principal officer or director of any Partner without
the consent of the affected Partner and any other Person or Persons to whom such
recourse may be had.
(b) To the extent the Partnership does not borrow all of the
Required Funds (and whether or not the Partnership is able to borrow all or part
of the Required Funds), the Managing General Partner (or an Affiliate thereof)
(i) may itself borrow such Required Funds, in which case the Managing General
Partner shall lend such Required Funds to the Partnership on the same economic
terms and otherwise on substantially identical terms, or (ii) may raise such
Required Funds in any other manner, in which case, unless such Required Funds
are raised by the Managing General Partner through the sale of Preferred Shares,
the Managing General Partner shall contribute to the Partnership as an
additional Capital Contribution the amount of the Required Funds so raised
("Contributed Funds") (hereinafter, each date on which the Managing General
Partner so contributes Contributed Funds pursuant to this Section 4.3(b) is
referred to as an "Adjustment Date"). Any Required Funds raised from the sale of
Preferred Shares shall either be contributed to the Partnership as Contributed
Funds or loaned to the Partnership pursuant to Section 4.3(c) below. In the
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event the Managing General Partner advances Required Funds to the Partnership
pursuant to this Section 4.3(b) as Contributed Funds, then the Partnership shall
assume and pay (or reflect on its books as additional Contributed Funds) the
expenses (including any applicable underwriting discounts) incurred by the
Managing General Partner (or such Affiliate) in connection with raising such
Required Funds through a public offering of its securities or otherwise. If the
Managing General Partner advances Required Funds to the Partnership as
Contributed Funds pursuant to this Section 4.3(b) from any offering or sale of
Shares (including, without limitation, any issuance of Shares pursuant to the
exercise of options, warrants, convertible securities or similar rights to
acquire Shares), the Partnership shall issue additional Partnership Units to the
Managing General Partner to reflect its contribution of the Contributed Funds
equal in number to the number of Shares issued in such offering or sale.
(c) In the event the Managing General Partner contributes to the
Partnership any Required Funds obtained from the sale of Preferred Shares
("Preferred Contributed Funds"), then the Partnership shall assume and pay the
expenses (including any applicable underwriter discounts) incurred by the
Managing General Partner in connection with raising such Required Funds. In
addition, the Managing General Partner shall be issued Preferred Units of a
designated class or series to reflect its contribution of such funds. Each class
or series of Preferred Units so issued shall be designated by the Managing
General Partner to identify such class or series with the class or series of
Preferred Shares which constitutes the Related Issue. Each class or series of
Preferred Units shall be described in a written document (the "Preferred Unit
Designation") attached as Exhibit B that shall set forth, in sufficient detail,
the economic rights, including dividend, redemption and conversion rights and
sinking fund provisions, of the class or series of Preferred Units and the
Related Issue. The number of Preferred Units of a class or series shall be equal
to the number of shares of the Related Issue sold. The Preferred Unit
Designation shall provide for such terms for the class or series of preferred
Units that shall entitle the Managing General Partner to substantially the same
economic rights as the holders of the Related Issue. Specifically, the Managing
General Partner shall receive distributions on the class or series of Preferred
Units pursuant to Section 6.2 equal to the aggregate dividends payable on the
Related Issue at the times such dividends are paid (the "Preferred Distribution
Requirement"). The Partnership shall redeem the class or series of Preferred
Units for a redemption price per Preferred Unit equal to the redemption price
per share of the Related Issue, exclusive of any accrued unpaid dividends (the
"Preferred Redemption Price") upon the redemption of any shares of the Related
Issue. Each class or series of Preferred Units shall also be converted into
additional Partnership Units at the time and on such economic terms and
conditions as the Related Issue is converted into Shares. Upon the issuance of
any class or series of Preferred Units pursuant to this Section 4.3(c), the
Managing General Partner shall provide the Limited Partners with a
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copy of the Preferred Unit Designation relating to such class or series. The
Managing General Partner shall have the right, in lieu of contributing to the
Partnership proceeds from the sale of Preferred Shares as Preferred Contributed
Funds, to lend such proceeds to the Partnership. Any such loan shall be on the
same terms and conditions as the Related Issue except that dividends payable on
the Related Issue shall be payable by the Partnership to the Managing General
Partner as interest, any mandatory redemptions shall take the form of principal
payments and no Preferred Units shall be issued to the Managing General Partner.
If any such loan is made, the Partnership shall promptly reimburse the Managing
General Partner for all expenses (including any applicable underwriter
discounts) incurred by the Managing General Partner in connection with raising
the Required Funds. Any such loan made by the Managing General Partner to the
Partnership may at any time be contributed to the Partnership as Preferred
Contributed Funds in exchange for Preferred Units as above provided; and if the
Related Issue is by its terms convertible into Shares, such loan shall be so
contributed to the Partnership prior to the effectuation of such conversion.
4.4 Redemption; Change in Number of Shares Outstanding.
(a) If the Managing General Partner shall redeem any of its outstanding
Shares, the Partnership shall concurrently therewith redeem the number of Units
underlying the Trust Interests holding such Shares held by the Managing General
Partner for the same price (as determined in good faith by the Board of
Directors of the Managing General Partner) as paid by the Managing General
Partner for the redemption of such Shares.
(b) In the event of any change in the outstanding number of Shares by
reason of any share dividend, split, reverse split, recapitalization, merger,
consolidation or combination, the number of Units held by each Partner (or
assignee) shall be proportionately adjusted such that, to the extent possible,
one Unit remains the equivalent of one Trust Interest without dilution.
4.5 Dividend Reinvestment Plan. All amounts received by the Managing
General Partner in respect of its dividend reinvestment plan, if any, either (a)
shall be utilized by the Managing General Partner to effect open market
purchases of Paired Shares, or (b) if the Managing General Partner elects
instead to issue new shares with respect to such amounts, shall be contributed
by the Managing General Partner to the Partnership in exchange for additional
Partnership Units. The number of Partnership Units so issued shall be determined
by dividing the amount of funds so contributed by the Deemed Partnership Unit
Value. The Managing General Partner shall promptly give each Limited Partner
written notice of the number of Partnership Units so issued.
4.6 No Third Party Beneficiary. No creditor or other Third Party having
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital
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Contributions or to pursue any other right or remedy hereunder or at law or in
equity, it being understood and agreed that the provisions of this Agreement
shall be solely for the benefit of, and may be enforced solely by, the parties
hereto and their respective successors and assigns. None of the rights or
obligations of the Partners herein set forth to make Capital Contributions to
the Partnership shall be deemed an asset of the Partnership for any purpose by
any creditor or other third party, nor may such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or of any
of the Partners.
4.7 No Interest; No Return. No Partner shall be entitled to interest on
its Capital Contribution or on such Partner's Capital Account. Except as
provided herein or by law, no Partner shall have any right to withdraw any part
of its Capital Account or to demand or receive the return of its Capital
Contribution from the Partnership.
4.8 Capital Accounts.
(a) The Partnership shall establish and maintain a separate capital
account ("Capital Account") for each Partner, including a Partner who shall
pursuant to the provisions hereof acquire a Partnership Interest, which Capital
Account shall be:
(1) credited with the amount of cash contributed by such
Partner to the capital of the Partnership; the initial Gross Asset Value (net of
liabilities secured by such contributed property that the Partnership assumes or
takes subject to) of any other property contributed by such Partner to the
capital of the Partnership; such Partner's distributive share of Profits; and
any other items in the nature of income or gain that are allocated to such
Partner pursuant to Section 6.1 hereof, but excluding tax items described in
Regulations Section 1.704-1(b)(4)(i); and
(2) debited with the amount of cash distributed to such
Partner pursuant to the provisions of this Agreement; the Gross Asset Value (net
of liabilities secured by such distributed property that such Partner assumes or
takes subject to) of any Partnership property distributed to such Partner
pursuant to any provision of this Agreement; the amount of unsecured liabilities
of such Partner assumed by the Partnership; such Partner's distributive share of
Losses; in the case of the General Partners, payments of GP Expenses by the
Partnership; and any other items in the nature of expenses or losses that are
allocated to such Partner pursuant to Section 6.1 hereof, but excluding tax
items described in Regulations Section 1.704-1(b)(4)(i).
In the event that any or all of a Partner's Partnership Units or
Preferred Units are transferred within the meaning of Regulations Section
1.704-l(b)(2)(iv)(l), the transferee shall
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succeed to the Capital Account of the transferor to the extent that it relates
to the Units so transferred.
In the event that the Gross Asset Values of Partnership assets are
adjusted pursuant to Section 4.8(b)(ii) hereof, the Capital Accounts of the
Partners shall be adjusted to reflect the aggregate net adjustments as if the
Partnership sold all of its properties for their fair market values and
recognized gain or loss for federal income tax purposes equal to the amount of
such aggregate net adjustment.
A Limited Partner shall be liable unconditionally to the Partnership
for all or a portion of any deficit in its Capital Account if it so elects to be
liable for such deficit or portion thereof. Such election may be for either a
limited or unlimited amount and may be amended or withdrawn at any time. The
election, and any amendment thereof, shall be made by written notice to the
Managing General Partner (and the Managing General Partner shall promptly upon
receipt deliver copies thereof to the other Partners) stating that the Limited
Partner elects to be liable, and specifying the limitations, if any, on the
maximum amount or duration of such liability. Said election, or amendment
thereof, shall be effective only from the date 25 days after written notice
thereof is received by the Managing General Partner, and shall terminate upon
the date, if any, specified therein as a termination date or upon delivery to
the Managing General Partner of a subsequent written notice terminating such
election. A termination of any such election, or an amendment reducing the
Limited Partner's maximum liability thereunder or the duration thereof, shall
not be effective to avoid responsibility for any loss incurred prior to such
termination or the effective date of such amendment. Except as provided in this
Section 4.8 or as required by law, no Limited Partner shall be liable for any
deficit in its Capital Account or be obligated to return any distributions of
any kind received from the Partnership.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Section 1.704-1(b) of the Regulations, and shall be interpreted and applied as
provided in the Regulations.
(b) The term "Gross Asset Value" or "Gross Asset Values" means,
with respect to any asset of the Partnership, such asset's adjusted basis for
federal income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross fair market value of such asset
as reasonably determined by the Managing General Partner;
(ii) the Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective gross fair
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market values, as reasonably determined by the General Partner, immediately
prior to the following events:
(A) a Capital Contribution (other than a de minimis
Capital Contribution, within the meaning of Section l.704-l(b)(2)(iv)(f)(5)(i)
of the Regulations) to the Partnership by a new or existing Partner as
consideration for Partnership Units;
(B) the distribution by the Partnership to a
Partner of more than a de minimis amount (within the meaning of Section
1.704-1(b)(2)(iv)(f)(5)(ii) of the Regulations) of Partnership property as
consideration for the redemption of Partnership Units; and
(C) the liquidation of the Partnership within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; and
(iii) the Gross Asset Values of Partnership assets
distributed to any Partner shall be the gross fair market values of such assets
as reasonably determined by the Managing General Partner as of the date of
distribution. At all times, Gross Asset Values shall be adjusted by any
Depreciation taken into account with respect to the Partnership's assets for
purposes of computing Profits and Losses. Any adjustment to the Gross Asset
Values of Partnership property shall require an adjustment to the Partners'
Capital Accounts as described in Section 4.8(a) above.
ARTICLE V
Representations, Warranties and Acknowledgment
5.1 Representations and Warranties by Managing General Partner. The
Managing General Partner represents and warrants to the Limited Partners and to
the Partnership that (i) it is a corporation duly formed, validly existing and
in good standing under the laws of its state of incorporation, with full right,
corporate power and authority to fulfill all of its obligations hereunder or as
contemplated herein; (ii) all transactions contemplated by this Agreement to be
performed by it have been duly authorized by all necessary action; (iii) this
Agreement has been duly executed and delivered by and is the legal, valid and
binding obligation of the Managing General Partner and is enforceable against it
in accordance with its terms, except as such enforcement may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or other laws of general application affecting the rights and remedies
of creditors and (b) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law); (iv) no
authorization, approval, consent or order of any court or governmental authority
or agency or any other Entity is required in connection with the execution and
delivery of this Agreement by the Managing General Partner, except as may have
been received prior to the date of this Agreement; (v) the execution and
delivery of this Agreement by the Managing General Partner and the consummation
of
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the transactions contemplated hereby will not conflict with or constitute a
breach or violation of, or a default under, any contract, indenture, mortgage,
loan agreement, note, lease, joint venture or partnership agreement or other
instrument or agreement to which either the Managing General Partner or the
Partnership is a party; and (vi) the Partnership Units, upon payment of the
consideration therefore pursuant to this Agreement, will be validly issued,
fully paid and, except as otherwise provided in accordance with applicable law,
non-assessable.
5.2 Representations and Warranties by the Limited Partners. Each Limited
Partner, for itself only, represents and warrants to the Managing General
Partner, the other Limited Partners and the Partnership that (i) all
transactions contemplated by this Agreement to be performed by such Limited
Partner have been duly authorized by all necessary action; and (ii) this
Agreement is binding upon, and enforceable against, such Limited Partner in
accordance with its terms, except as such enforcement may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or other laws of general application affecting the rights and remedies
of creditors and (b) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
5.3 Acknowledgment by Each Partner. Each Partner hereby acknowledges that
no representations as to potential profit, cash flows or yield, if any, in
respect of the Partnership or any assets owned, directly or indirectly, by the
Partnership have been made to it by any other Partner or its Affiliates or any
employee or representative of any other Partner or its Affiliates, and that
projections and any other information, including, without limitation, financial
and descriptive information and documentation, which may have been in any manner
submitted to such Partner shall not constitute a representation or warranty,
express or implied.
ARTICLE VI
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations.
(a) For the purpose of this Agreement, the terms "Profits" and
"Losses" mean, respectively, for each Partnership Fiscal Year or other period,
the Partnership's taxable income or loss for such Partnership Fiscal Year or
other period, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a)(l) of the Code shall be included in
taxable income or loss), adjusted as follows:
(1) any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in
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computing Profits or Losses pursuant to this Section 6.1(a) shall be added to
such taxable income or loss;
(2) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Partnership Fiscal Year
or other period;
(3) any items that are specially allocated pursuant to Section
6.1(d) hereof shall not be taken into account in computing Profits or Losses;
and
(4) any expenditures of the Partnership described in Section
705(a)(2)(B) of the Code (or treated as such under Regulation Section
1.704-l(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits
or Losses pursuant to this Section 6.1(a) shall be deducted in calculating such
taxable income or loss.
(b) Except as otherwise provided in Section 6.1(d) hereof and this
Section 6.1(b), the Profits and Losses of the Partnership (and each item
thereof) for each Partnership Fiscal Year shall be allocated among the Partners
in the following order of priority:
(1) First, Profits shall be allocated to the holder of Preferred
Units in an amount equal to the excess of (A) the amount of Net Operating Cash
Flow distributed to such holder pursuant to Sections 6.2(b)(i) and (ii) and
Section 6.2(c)(but only to the extent of the Preferred Distribution Requirement
and Preferred Distribution Shortfalls) for the current and all prior Partnership
Fiscal Years over (B) the amount of Profits previously allocated to such holder
pursuant to this subparagraph (1).
(2) Second, for any Partnership Fiscal Year ending on or after a
date on which Preferred Units are redeemed, Profits (or Losses) shall be
allocated to the holder of such Preferred Units in an amount equal to the excess
(or deficit) of the sum of the applicable Preferred Redemption Amounts for the
Preferred Units that have been or are being redeemed during such Partnership
Fiscal Year over the Preferred Unit Issue Price of such Preferred Units. In
addition, in the event that the Partnership is liquidated pursuant to Article
VIII, the allocation described above shall be made to the holder of Preferred
Units with respect to all Preferred Units then outstanding.
(3) Third, any remaining Profits and Losses shall be allocated
among the Partners in accordance with their proportionate ownership of
Partnership Units except as otherwise required by the Regulations.
(4) Notwithstanding subparagraphs (1), (2) and (3), Profits and
Losses from a Liquidation Transaction shall be allocated as follows:
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First, Profits (or Losses) shall be allocated to the
holder of Preferred Units in an amount equal to the excess (or deficit) of the
sum of the applicable Preferred Redemption Amounts of the Preferred Units which
have been or will be redeemed with the proceeds of the Liquidation Transaction
over the Preferred Unit Issue Price of such Preferred Units;
Second, Profits or Losses shall be allocated among
the Partners so that the Capital Accounts of the Partners (excluding from the
Capital Account of any Partner the amount attributable to its Preferred Units)
are proportional to the number of Partnership Units held by each Partner; and
Third, any remaining Profits and Losses shall be
allocated among the Partners in accordance with their proportionate ownership of
Partnership Units.
(c) For the purpose of Section 6.1(b) hereof, gain or loss
resulting from any disposition of Partnership property shall be computed by
reference to the Gross Asset Value of the property disposed of, notwithstanding
that the adjusted tax basis of such property for federal income tax purposes
differs from its Gross Asset Value.
(d) Notwithstanding the foregoing provisions of this Section 6.1,
the following provisions shall apply:
(1) A Partner shall not receive an allocation of any Partnership
deduction that would result in total loss allocations attributable to
"Nonrecourse Liabilities" (as defined in Regulations Section 1.704-2(b)(3)) in
excess of such Partner's share of Minimum Gain (as determined under Regulations
Section 1.704-2(g)). The term "Minimum Gain" means an amount determined in
accordance with Regulations Section 1.704-2(d) by computing, with respect to
each Nonrecourse Liability of the Partnership, the amount of gain, if any, that
the Partnership would realize if it disposed of the property subject to such
liability for no consideration other than full satisfaction thereof, and by then
aggregating the amounts so computed. If the Partnership makes a distribution
allocable to the proceeds of a Nonrecourse Liability, in accordance with
Regulation Section 1.704-2(h), the distribution will be treated as allocable to
an increase in Partnership Minimum Gain to the extent the increase results from
encumbering Partnership property with aggregate Nonrecourse Liabilities that
exceeds the property's adjusted tax basis. If there is a net decrease in
Partnership Minimum Gain for a Partnership Fiscal Year, in accordance with
Regulations Section 1.704-2(f) and the exceptions contained therein, the
Partners shall be allocated items of Partnership income and gain for such
Partnership Fiscal Year (and, if necessary, for subsequent Partnership Fiscal
Years) equal to the Partners' respective shares of the net decrease in Minimum
Gain within the meaning of Regulations Section l.704-2(g)(2) (the "Minimum Gain
Chargeback"). The items to be allocated pursuant to
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this Section 6.1(d)(1) shall be determined in accordance with Regulations
Section 1.704-2(f) and (j).
(2) Any item of "Partner Nonrecourse Deduction" (as defined in
Regulations Section 1.704-2(i)) with respect to a "Partner Nonrecourse Debt" (as
defined in Regulations Section l.704-2(b)(4)) shall be allocated to the Partner
or Partners who bear the economic risk of loss for such Partner Nonrecourse Debt
in accordance with Regulations Section l.704-2(i)(l). If the Partnership makes a
distribution allocable to the proceeds of a Partner Nonrecourse Debt, in
accordance with Regulation Section l.704-2(i)(6) the distribution will be
treated as allocable to an increase in Partner Minimum Gain to the extent the
increase results from encumbering Partnership property with aggregate Partner
Nonrecourse Debt that exceeds the property's adjusted tax basis. Subject to
Section 6.1(d)(1) hereof, but notwithstanding any other provision of this
Agreement, in the event that there is a net decrease in Minimum Gain
attributable to a Partner Nonrecourse Debt (such Minimum Gain being hereinafter
referred to as "Partner Nonrecourse Debt Minimum Gain") for a Partnership Fiscal
Year, then after taking into account allocations pursuant to Section 6.1(d)(1)
hereof, but before any other allocations are made for such taxable year, and
subject to the exceptions set forth in Regulations Section 1.704-2(i)(4), each
Partner with a share of Partner Non-recourse Debt Minimum Gain at the beginning
of such Partnership Fiscal Year shall be allocated items of income and gain for
such Partnership Fiscal Year (and, if necessary, for subsequent Partnership
Fiscal Years) equal to such Partner's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain as determined in a manner consistent with the
provisions of Regulations Section l.704-2(g)(2). The items to be allocated
pursuant to this Section 6.1(d)(2) shall be determined in accordance with
Regulations Section 1.704-2(i)(4) and (j).
(3) Pursuant to Regulations Section 1.752-3(a)(3), for the purpose
of determining each Partner's share of excess nonrecourse liabilities of the
Partnership, and solely for such purpose, each Partner's interest in Partnership
profits is hereby specified to be the quotient of (i) the number of Partnership
Units then held by such Partner, and (ii) the aggregate amount of Partnership
Units then outstanding.
(4) No Limited Partner shall be allocated any item of deduction or
loss of the Partnership if such allocation would cause such Limited Partner's
Capital Account to become negative by more than the sum of (i) any amount such
Limited Partner is obligated to restore upon liquidation of the Partnership,
plus (ii) such Limited Partner's share of the Partnership's Minimum Gain and
Partner Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot
be allocated to a Limited Partner pursuant to this Section 6.1(d)(4) shall be
allocated to the General Partners in accordance with the number of Partnership
Units held by each General Partner. For this purpose, in determining the Capital
Account balance of such Limited Partner, the items described in Regulations
Section
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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)(l)
and l.704-2(i)(5) and determined after taking into account any adjustments,
allocations, 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 6.1(d)(4) and Section 6.1(d)(1) and/or (2) hereof apply, Section
6.1(d)(1) and/or (2) hereof shall be applied prior to this Section 6.1(d)(4).
(5) The Regulatory Allocations shall be taken into account in
allocating other items of income, gain, loss, and deduction among the Partners
so that, to the extent possible, the cumulative net amount of allocations of
Partnership items under this Section 6.1 shall be equal to the net amount that
would have been allocated to each Partner if the Regulatory Allocations had not
been made. This Section 6.1(d)(5) is intended to minimize to the extent possible
and to the extent necessary any economic distortions which may result from
application of the Regulatory Allocations and shall be interpreted in a manner
consistent therewith. For purposes hereof, "Regulatory Allocations" shall mean
the allocations provided under this Section 6.1(d) (other than this Section
6.1(d)(5)).
(e) In accordance with Sections 704(b) and 704(c) of the Code and
the Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the capital of the Partnership shall, solely for federal
income tax purposes, be allocated among the Partners on a property by property
basis so as to take account of any variation between the adjusted basis of such
property to the Partnership for federal income tax purposes and the initial
Gross Asset Value of such property. If the Gross Asset Value of any Partnership
property is adjusted as described in the definition of Gross Asset Value,
subsequent allocations of income, gains or losses from taxable sales or other
dispositions and deductions with respect to such asset shall take account of any
variation between the adjusted basis of such asset for federal income tax
purposes and the Gross Asset Value of such asset in the manner prescribed under
Sections 704(b) and 704(c) of the Code and the Regulations thereunder. In
furtherance of the foregoing, the Partnership shall employ the method prescribed
in Regulation S
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1.704-3(b) (the "traditional method") or the equivalent successor provision(s)
of proposed, temporary or final Regulations. The Partnership shall allocate
items of income, gain, loss and deduction allocated to it by a Subsidiary Entity
to the Partner or Partners contributing the interest or interests in such
subsidiary Entity, so that, to the greatest extent possible and consistent with
the foregoing, such contributing Partner or Partners are allocated the same
amount and character of items of income, gain, loss and deduction with respect
to such Subsidiary Entity that they would have been allocated had they
contributed undivided interests in the assets owned by such Subsidiary Entity to
the Partnership in lieu of contributing the interest or interests in the
Subsidiary Entity to the Partnership.
(f) Notwithstanding anything to the contrary contained in this
Section 6.1, the allocation of Profits and Losses for any Partnership Fiscal
Year during which a Person acquires a Partnership Interest (other than upon
formation of the Partnership) pursuant to Section 4.3(b) or otherwise, shall
take into account the Partners' varying interests for such Partnership Fiscal
Year pursuant to any method permissible under Section 706 of the Code that is
selected by the Managing General Partner (notwithstanding any agreement between
the assignor and assignee of such Partnership Interest although the Managing
General Partner may recognize any such agreement), which method may take into
account the date on which the Transfer or an agreement to Transfer becomes
irrevocable pursuant to its terms, as determined by the Managing General
Partner; provided, that the allocation of Profits and Losses with respect to a
Partnership Unit acquired during a fiscal quarter of the Partnership shall be
appropriately adjusted in accordance with Section 6.2(c)(ii) below.
(g) If any portion of gain from the sale of property is treated as
gain which is ordinary income by virtue of the application of Code Sections 1245
or 1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among
the Partners in the same proportion that the depreciation and amortization
deductions giving rise to the Affected Gain were allocated and (B) other tax
items of gain of the same character that would have been recognized, but for the
application of Code Sections 1245 and/or 1250, shall be allocated away from
those Partners who are allocated Affected Gain pursuant to clause (A) so that,
to the extent possible, the other Partners are allocated the same amount, and
type, of capital gain that would have been allocated to them had Code Sections
1245 and/or 1250 not applied. For purposes hereof, in order to determine the
proportionate allocations of depreciation and amortization deductions for each
Fiscal Year or other applicable period, such deductions shall be deemed
allocated on the same basis as Profits or Losses for such respective period.
(h) The Profits, Losses, gains, deductions and credits of the
Partnership (and all items thereof) for each Partnership Fiscal Year shall be
determined in accordance with the accounting method followed by the Partnership
for federal income tax purposes.
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(i) Except as provided in Sections 6.1(e) and 6.1(g) hereof, for
federal income tax purposes, each item of income, gain, loss, or deduction shall
be allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction has been allocated pursuant to this
Section 6.1.
(j) To the extent permitted by Regulations Sections 1.704-2(h)(3)
and 1.704-2(i)(6), the Managing General Partner shall endeavor to treat
distributions as having been made from the proceeds of Nonrecourse Liabilities
or Partner Nonrecourse Debt only to the extent that such distributions would
cause or increase a deficit balance in any Partner's Capital Account that
exceeds the amount such Partner is otherwise obligated to restore (within the
meaning of Regulations Section 1.704-l(b)(2)(ii)(c)) as of the end of the
Partnership's taxable year in which the distribution occurs.
(k) If any Partner sells or otherwise disposes of any property,
directly or indirectly, to the Partnership, and as a result thereof, gain on a
subsequent disposition of such property by the Partnership is reduced pursuant
to Section 267(d) of the Code, then, to the extent permitted by applicable law,
gain for federal income tax purposes attributable to such subsequent disposition
shall first be allocated among the Partners other than the selling Partner in an
amount equal to such Partners' allocations of "book" gain on the property
pursuant to this Section 6.1, and any remaining gain for federal income tax
purposes shall be allocated to the selling Partner.
6.2 Distributions. (a) Except with respect to the liquidation of the
Partnership and subject to the priority set forth in Sections 6.2(b) and (c),
the Managing General Partner shall cause the Partnership to distribute all or a
portion of Net Operating Cash Flow to the Partners who are such on the relevant
Partnership Record Date from time to time as determined by the Managing General
Partner, but in any event not less frequently than quarterly, in such amounts as
the Managing General Partner shall determine in its sole discretion; provided,
however, that, except as provided in Sections 6.2(b) and (c) below, all such
distributions shall be made pro rata in accordance with the outstanding
Partnership Units on the relevant Partnership Record Date. In no event may a
Limited Partner receive a distribution of Net Operating Cash Flow with respect
to a Partnership Unit that such Partner has exchanged on or prior to the
relevant Partnership Record Date for a Share, pursuant to the Rights granted
under Section 11.1 (a "Post-Exchange Distribution"); rather, all such
Post-Exchange Distributions shall be distributed to the Managing General
Partner.
(b) Except to the extent Net Operating Cash Flow is distributed
pursuant to Section 6.2(c), and except with respect to the liquidation of the
Partnership, distributions of Net Operating Cash Flow shall be made in the
following order of priority;
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(i) First, to the extent that the amount of Net Operating
Cash Flow distributed to the holder of Preferred Units for any prior quarter was
less than the Preferred Distribution Requirement for such quarter, and has not
been subsequently distributed pursuant to this Section 6.2(b)(i) (a "Preferred
Distribution Shortfall"), Net Operating Cash Flow shall be distributed to the
holder of Preferred Units in an amount necessary to satisfy such Preferred
Distribution Shortfall for the current and all prior Partnership Fiscal Years.
In the event that the Net Operating Cash Flow distributed for a particular
quarter is less than the Preferred Distribution Shortfall, then all Net
Operating Cash Flow for the current quarter shall be distributed to the holder
of Preferred Units.
(ii) Second, Net Operating Cash Flow shall be distributed to
the holder of Preferred Units in an amount equal to the Preferred Distribution
Requirement for the then current quarter for each outstanding Preferred Unit. In
the event that the amount of Net Operating Cash Flow distributed for a
particular quarter pursuant to this subparagraph (b)(ii) is less than the
Preferred Distribution Requirement for such quarter, then all such Net Operating
Cash Flow for such quarter shall be distributed to the holder of Preferred
Units.
(iii) The balance of the Net Operating Cash Flow to be
distributed, if any, shall be distributed to holders of Partnership Units, in
proportion to their ownership of Partnership Units.
(c) (i) If in any quarter the Partnership redeems any outstanding
Preferred Units, unless and except to the extent that such redemption is
effected out of borrowed funds, Capital Contributions or other sources, Net
Operating Cash Flow shall be distributed to the Managing General Partner in an
amount equal to the applicable Preferred Redemption Amount for the Preferred
Units being redeemed before being distributed pursuant to Section 6.2(b).
(ii) Notwithstanding anything to the contrary contained in
this Section 6.2, unless expressly waived in writing by the Managing General
Partner, the distribution of Net Operating Cash Flow with respect to a
Partnership Unit acquired during a fiscal quarter of the Partnership shall be an
amount equal to the product of (i) the amount of Net Operating Cash Flow
otherwise distributable to a Partnership Unit held during such fiscal quarter
and (ii) (a) the number of days remaining in such fiscal quarter, determined as
of the date such Partnership Unit was acquired, divided by (b) the total number
of days in such fiscal quarter.
6.3 Books of Account; Segregation of Funds
(a) At all times during the continuance of the Partnership, the
Managing General Partner shall maintain or cause to be maintained full, true,
complete and correct books of account
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in accordance with GAAP wherein shall be entered particulars of all monies,
goods or effects belonging to or owing to or by the Partnership, or paid,
received, sold or purchased in the course of the Partnership's business, and all
of such other transactions, matters and things relating to the business of the
Partnership as are usually entered in books of account kept by Persons engaged
in a business of a like kind and character. In addition, the Partnership shall
keep all records as required to be kept pursuant to the Act. The books and
records of account shall be kept at the principal office of the Partnership, and
each Partner and its representatives shall at all reasonable times have access
to such books and records and the right to inspect and copy the same.
(b) The Partnership shall not commingle its funds with those of any
other Person or Entity; funds and other assets of the Partnership shall be
separately identified and segregated; all of the Partnership's assets shall at
all times be held by or on behalf of the Partnership and, if held on behalf of
the Partnership by another Entity, shall at all times be kept identifiable (in
accordance with customary usages) as assets owned by the Partnership; and the
Partnership shall maintain its own separate bank accounts, payroll and books of
account. The foregoing provisions of this Section 6.3(b) shall not apply with
respect to funds or assets of any Subsidiary Entities of the Partnership.
6.4 Reports. Within ninety (90) days after the end of each Partnership
Fiscal Year, the Partnership shall cause to be prepared and transmitted to each
Partner an annual report of the Partnership relating to the previous Partnership
Fiscal Year containing a balance sheet as of the year then ended, a statement of
financial condition as of the year then ended, and statements of operations,
cash flow and Partnership equity for the year then ended, which annual
statements shall be prepared in accordance with GAAP and shall be audited by the
Accountants. The Partnership shall also cause to be prepared and transmitted to
each Partner within forty-five (45) days after the end of each of the first
three (3) quarters of each Partnership Fiscal Year a quarterly unaudited report
containing a balance sheet, a statement of the Partnership's financial condition
and statements of operations, cash flow and Partnership equity, in each case
relating to the fiscal quarter then just ended, and prepared in accordance with
GAAP. The Partnership shall further cause to be prepared and transmitted to the
Managing General Partner such reports and/or information as are necessary for
the Managing General Partner to determine its earnings and profits derived from
the Partnership, its liability for a tax as a consequence of its Partnership
Interest and distributive share of taxable income or loss and items thereof, in
each case in a manner that will permit the Managing General Partner to comply
with its obligations to file federal, state and local tax returns and
information returns and to provide its shareholders with tax information. The
Managing General Partner shall provide to each Partner copies of all reports it
provides to its stockholders at the same time such reports are distributed to
such stockholders. The Managing General Partner shall also promptly
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notify the Partners of all actions taken by the Managing General Partner for
which it has obtained the Consent of the Limited Partners.
6.5 Audits. Not less frequently than annually, the books and records of
the Partnership shall be audited by the Accountants.
6.6 Tax Returns.
(a) Consistent with all other provisions of this Agreement, the
Managing General Partner shall determine the methods to be used in the
preparation of federal, state, and local income and other tax returns for the
Partnership in connection with all items of income and expense, including, but
not limited to, valuation of assets, the methods of Depreciation and cost
recovery, credits and tax accounting methods and procedures and all tax
elections.
(b) The Managing General Partner shall, at least 30 days prior to
the due dates (as extended) for such returns, but in no event later than July 15
of each year, cause the Accountants to prepare and submit to the DeBartolo
Designee, the Simon Designee and the JCP Limited Partner for their review,
drafts of all federal and state income tax returns of the Partnership for the
preceding year, and the Managing General Partner shall consult in good faith
with the DeBartolo Designee, the Simon Designee and the JCP Limited Partner
regarding any proposed modifications to such tax returns of the Partnership.
(c) The Partnership shall timely cause to be prepared and
transmitted to the Partners federal and appropriate state and local Partnership
Income Tax Schedules "K-l" or any substitute therefor, with respect to each
Partnership Fiscal Year on appropriate forms prescribed. The Partnership shall
make reasonable efforts to prepare and submit such forms before the due date for
filing federal income tax returns for the fiscal year in question (determined
without extensions), and shall in any event prepare and submit such forms on or
before July 15 of the year following the fiscal year in question.
6.7 Tax Matters Partner
The Managing General Partner is hereby designated as the Tax Matters
Partner within the meaning of Section 6231(a)(7) of the Code for the
Partnership; provided, however, that (i) in exercising its authority as Tax
Matters Partner it shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; (ii) the Managing General Partner
shall give prompt notice to the Partners of the receipt of any written notice
that the Internal Revenue Service or any state or local taxing authority intends
to examine Partnership income tax returns for any year, receipt of written
notice of the beginning of an administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, receipt of written
notice of the
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final Partnership administrative adjustment relating to the Partnership pursuant
to Section 6223 of the Code, and receipt of any request from the Internal
Revenue Service for waiver of any applicable statute of limitations with respect
to the filing of any tax return by the Partnership; (iii) the Managing General
Partner shall promptly notify the Partners if it does not intend to file for
judicial review with respect to the Partnership; and (iv) as Tax Matters
Partner, the Managing General Partner shall not be entitled to bind a Partner by
any settlement agreement (within the meaning of Section 6224 of the Code) unless
such Partner consents thereto in writing and shall notify the Partners in a
manner and at such time as is sufficient to allow the Partners to exercise their
rights pursuant to Section 6224(c)(3) of the Code; (v) the Managing General
Partner shall consult in good faith with the Simon Designee, the DeBartolo
Designee and the JCP Limited Partner regarding the filing of a Code Section
6227(b) administrative adjustment request with respect to the Partnership before
filing such request, it being understood, however, that the provisions hereof
shall not be construed to limit the ability of any Partner, including the
Managing General Partner, to file an administrative adjustment request on its
own behalf pursuant to Section 6227(a) of the Code; and (vi) the Managing
General Partner shall consult in good faith with the Simon Designee, the
DeBartolo Designee and the JCP Limited Partner regarding the filing of a
petition for judicial review of an administrative adjustment request under
Section 6228 of the Code, or a petition for judicial review of a final
partnership administrative judgment under Section 6226 of the Code relating to
the Partnership before filing such petition.
6.8 Withholding. Each Partner hereby authorizes the Partnership to
withhold or pay on behalf of or with respect to such Partner any amount of
federal, state, local or foreign taxes that the Managing General Partner
determines the Partnership is required to withhold or pay with respect to any
amount distributable or allocable to such Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code Sections 1441, 1442, 1445, or 1446. Any amount paid
on behalf of or with respect to a Partner shall constitute a loan by the
Partnership to such Partner, which loan shall be due within fifteen (15) days
after repayment is demanded of the Partner in question, and shall be repaid
through withholding of subsequent distributions to such Partner. Nothing in this
Section 6.8 shall create any obligation on the Managing General Partner to
advance funds to the Partnership or to borrow funds from Third Parties in order
to make payments on account of any liability of the Partnership under a
withholding tax act. Any amounts payable by a Limited Partner hereunder shall
bear interest at the lesser of (i) the base rate on corporate loans at large
United States money center commercial banks, as published from time to time in
The Wall Street Journal, or (ii) the maximum lawful rate of interest on such
obligation, such interest to accrue from the date such amount is due (i.e.,
fifteen (15) days after demand) until such amount is paid in full. To the extent
the payment or accrual of withholding tax results in a federal, state or local
tax
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credit to the Partnership, such credit shall be allocated to the Partner to
whose distribution the tax is attributable.
ARTICLE VII
Rights, Duties and Restrictions of the Managing General Partners
7.1 Expenditures by Partnership. The Managing General Partner is hereby
authorized to pay compensation for accounting, administrative, legal, technical,
management and other services rendered to the Partnership. All of the aforesaid
expenditures shall be made on behalf of the Partnership and the Managing General
Partner shall be entitled to reimbursement by the Partnership for any
expenditures incurred by it on behalf of the Partnership which shall have been
made other than out of the funds of the Partnership. The Partnership shall also
assume, and pay when due, the Administrative Expenses and such portion of the
Managing General Partner's and its subsidiaries' GP Expenses as shall be
appropriately allocated to the Partnership by the Managing General Partner in
the exercise of its reasonable business judgment.
7.2 Powers and Duties of the Managing General Partner. The Managing
General Partner shall be responsible for the management of the Partnership's
business and affairs. Except as otherwise herein expressly provided, and subject
to the limitations contained in Section 7.3 hereof with respect to Major
Decisions, the Managing General Partner shall have, and is hereby granted, full
and complete power, authority and discretion to take such action for and on
behalf of the Partnership and in its name as the Managing General Partner shall,
in its sole and absolute discretion, deem necessary or appropriate to carry out
the purposes for which the Partnership was organized. Any action by the Managing
General Partner relating to (i) transactions between the Partnership or a
Subsidiary Entity and M.S. Management Associates, Inc., Simon MOA Management
Company, Inc. and/or M.S. Management Associates (Indiana), Inc., (ii)
transactions between the Partnership or a Subsidiary Entity and DeBartolo
Properties Management, Inc. or (iii) transactions involving the Partnership or a
Subsidiary Entity in which the Simons, the DeBartolos or any Affiliate of the
Simons or the DeBartolos has an interest (other than a non-controlling minority
equity interest, which has no management or veto powers, in a Person, other than
the Partnership or a Subsidiary entity, which is engaged in such transaction)
other than through ownership of Partnership Units, shall require the prior
approval of a majority of the Independent Directors. Except as otherwise
expressly provided herein and subject to Section 7.3 hereof, the Managing
General Partner shall have, for and on behalf of the Partnership, the right,
power and authority:
(a) To manage, control, hold, invest, lend, reinvest, acquire by
purchase, lease, sell, contract to purchase or sell, grant, obtain, or exercise
options to purchase, options to sell or conversion rights, assign, transfer,
convey, deliver, endorse, exchange, pledge, mortgage or otherwise encumber,
abandon, improve,
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repair, construct, maintain, operate, insure, lease for any term and otherwise
deal with any and all property of whatsoever kind and nature, and wheresoever
situated, in furtherance of the purposes of the Partnership, and in addition,
without limiting the foregoing, upon the affirmative vote of no fewer than three
(3) of the Independent Directors of the Managing General Partner who are not
Affiliates of the DeBartolos, the Managing General Partner shall authorize and
require the sale of any property owned by the Partnership or a Subsidiary
Entity.
(b) To acquire, directly or indirectly, interests in real or
personal property (collectively, "property") of any kind and of any type, and
any and all kinds of interests therein, and to determine the manner in which
title thereto is to be held; to manage, insure against loss, protect and
subdivide any property, interests therein or parts thereof; to improve, develop
or redevelop any property; to participate in the ownership and development of
any property; to dedicate for public use, to vacate any subdivisions or parts
thereof, to resubdivide, to contract to sell, to grant options to purchase or
lease and to sell on any terms; to convey, to mortgage, pledge or otherwise
encumber any property, or any part thereof; to lease any property or any part
thereof from time to time, upon any terms and for any period of time, and to
renew or extend leases, to amend, change or modify the terms and provisions of
any leases and to grant options to lease and options to renew leases and options
to purchase; to partition or to exchange any property, or any part thereof, for
other property; to grant easements or charges of any kind; to release, convey or
assign any right, title or interest in or about or easement appurtenant to any
property or any part thereof; to construct and reconstruct, remodel, alter,
repair, add to or take from buildings on any property; to insure any Person
having an interest in or responsibility for the care, management or repair of
any property; to direct the trustee of any land trust to mortgage, lease, convey
or contract to convey any property held in such land trust or to execute and
deliver deeds, mortgages, notes and any and all documents pertaining to the
property subject to such land trust or in any matter regarding such trust; and
to execute assignments of all or any part of the beneficial interest in such
land trust;
(c) To employ, engage or contract with or dismiss from employment
or engagement Persons to the extent deemed necessary by the Managing General
Partner for the operation and management of the Partnership business, including
but not limited to, employees, contractors, subcontractors, engineers,
architects, surveyors, mechanics, consultants, accountants, attorneys, insurance
brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow or lend money, procure loans and advances from any
Person for Partnership purposes, and to apply for and secure from any Person
credit or accommodations; to contract
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liabilities and obligations, direct or contingent and of every kind and nature
with or without security; and to repay, discharge, settle, adjust, compromise or
liquidate any such loan, advance, credit, obligation or liability (including by
deeding property to a lender in lieu of foreclosure);
(f) To Pledge, hypothecate, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security or as
additional or substitute security or for sale or other disposition any and all
Partnership property, tangible or intangible, including, but not limited to,
real estate and beneficial interests in land trusts, and to make substitutions
thereof, and to receive any proceeds thereof upon the release or surrender
thereof; to sign, execute and deliver any and all assignments, deeds and other
contracts and instruments in writing; to authorize, give, make, procure, accept
and receive moneys, payments, property, notices, demands, vouchers, receipts,
releases, compromises and adjustments; to waive notices, demands, protests and
authorize and execute waivers of every kind and nature; to enter into, make,
execute, deliver and receive written agreements, undertakings and instruments of
every kind and nature; to give oral instructions and make oral agreements; and
generally to do any and all other acts and things incidental to any of the
foregoing or with reference to any dealings or transactions which any attorney
for the Partnership may deem necessary, proper or advisable;
(g) To acquire and enter into any contract of insurance which the
Managing General Partner deems necessary or appropriate for the protection of
the Partnership or any Affiliate thereof, for the conservation of the
Partnership's assets (or the assets of any Affiliate thereof) or for any purpose
convenient or beneficial to the Partnership or any Affiliate thereof;
(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings and other accounts with such
institutions as the Managing General Partner shall deem appropriate; to draw,
sign, execute, accept, endorse, guarantee, deliver, receive and pay any checks,
drafts, bills of exchange, acceptances, notes, obligations, undertakings and
other instruments for or relating to the payment of money in, into or from any
account in the Partnership's name; to execute, procure, consent to and authorize
extensions and renewals of the same; to make deposits and withdraw the same and
to negotiate or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts;
(i) To demand, sue for, receive, and otherwise take steps to
collect or recover all debts, rents, proceeds, interests, dividends, goods,
chattels, income from property, damages and all other property to which the
Partnership may be entitled or which are or may become due the Partnership from
any Person; to commence, prosecute or enforce, or to defend, answer or oppose,
contest and abandon all legal proceedings in which the Partnership is or may
hereafter be interested; and to settle, compromise or submit to
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arbitration any accounts, debts, claims, disputes and matters which may arise
between the Partnership and any other Person and to grant an extension of time
for the payment or satisfaction thereof on any terms, with or without security;
(j) To make arrangements for financing, including the taking of all
action deemed necessary or appropriate by the Managing General Partner to cause
any approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance
by the Partnership with contractual obligations and other arrangements entered
into by the Partnership from time to time in accordance with the provisions of
this Agreement, including periodic reports as required to lenders and using all
due diligence to insure that the Partnership is in compliance with its
contractual obligations;
(1) To maintain the Partnership's books and records;
(m) To create or maintain Affiliates engaged in activities that the
Partnership could itself undertake; and
(n) To prepare and deliver, or cause to be prepared and delivered
by the Accountants, all financial and other reports with respect to the
operations of the Partnership, and preparation and filing of all federal, state
and local tax returns and reports.
Except as otherwise provided herein, to the extent the duties of the
Managing General Partner require expenditures of funds to be paid to Third
Parties, the Managing General Partner shall not have any obligations hereunder
except to the extent that Partnership funds are reasonably available to it for
the performance of such duties, and nothing herein contained shall be deemed to
authorize or require the Managing General Partner, in its capacity as such, to
expend its individual funds for payment to Third Parties or to undertake any
individual liability or obligation on behalf of the Partnership.
Notwithstanding any other provisions of this Agreement or the Act,
any action of the Managing General Partner on behalf of the Partnership or any
decision of the Managing General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect or further the ability of Simon
Group, the non-managing General Partners of the Simon Group Partnership and
their Subsidiary Entities (as defined in the Sixth Amended and Restated Limited
Partnership Agreement of Simon Group Partnership) to continue to qualify as
REITs or (ii) to avoid Simon Group, the non-managing General Partners of the
Simon Group Partnership and their Subsidiary Entities (as defined in the Sixth
Amended and Restated Limited Partnership Agreement of Simon Group Partnership)
incurring any taxes under Section 857 or Section 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners. The Managing
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General Partner agrees and acknowledges that it shall take all reasonable
actions necessary to satisfy the REIT Requirements.
7.3 Major Decisions.
(a) The Managing General Partner shall not, without the Consent of
the Limited Partners, (y) on behalf of the Partnership, amend, modify or
terminate this Agreement other than to reflect (A) the admission of Additional
Limited Partners pursuant to Section 9.4 hereof, (B) the making of additional
Capital Contributions and the issuance of additional Partnership Units by reason
thereof, all in accordance with the terms of this Agreement, (C) the withdrawal
or assignment of the interest of any Partner in accordance with the terms of
this Agreement, or (D) any changes necessary to satisfy the REIT Requirements,
or (z) permit the Partnership, on behalf of any Subsidiary Partnership, to
amend, modify or terminate the organizing agreement pursuant to which such
Subsidiary Partnership operates other than to reflect (A) the admission of
additional limited partners therein pursuant to the terms thereof, (B) the
making of additional capital contributions thereto pursuant to the terms
thereof, (C) the withdrawal or assignment of the interest of any partner thereof
pursuant to the terms thereof, or (D) any changes necessary to satisfy the REIT
Requirements. Notwithstanding the foregoing, this Agreement shall not be
modified or amended without the prior written consent of each Partner adversely
affected if such modification or acquisition would (i) convert a Limited
Partner's interest in the Partnership to a general partnership interest, (ii)
modify the limited liability of a Limited Partner, (iii) reduce the interest of
any Partner in the Partnership, (iv) reduce any Partner's share of distributions
made by the Partnership, (v) amend this Section 7.3 or Section 7.5 or (vi)
create any obligations for any Limited Partner or deprive any Limited Partner of
(or otherwise impair) any other rights it may have under this Agreement
(including in respect of tax allocations, rights to indemnification under
Section 7.8, rights of the Limited Partner or a Secured Creditor of a Limited
Partner under Section 9.3 (which rights are subject to the restrictions set
forth in Section 9.5), rights of a Limited Partner under Article XI, or the
rights of a Limited Partner under Section 10.4(a) or 10.5); provided, however,
that an amendment that reduces the percentage ownership interest of any Partner
in the Partnership or reduces any Partner's share of distributions made by the
Partnership (including tax allocations in respect of such distributions) shall
not require the consent of any Partner if such change is made on a uniform or
pro-rata basis with respect to all Partners.
(b) The Managing General Partner shall not, for all periods during
which the Simons hold at least ten percent of the Partnership Units then
outstanding, and the Managing General Partner shall not, without the prior
Consent of the Simons, and for all periods during which the DeBartolos hold at
least ten percent of the Partnership Units then outstanding, the Managing
General Partner shall not, without the prior Consent of the DeBartolos, on
behalf of the Partnership, undertake any of the following actions
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(together with any act described in paragraph (a) hereof, the "Major
Decisions"):
(i) Make a general assignment for the benefit of creditors (or
cause or permit (if permission of the Partnership or any Subsidiary Partnership
is required) such an assignment to be made on behalf of a Subsidiary
Partnership) or appoint or acquiesce in the appointment of a custodian, receiver
or trustee for all or any part of the assets of the Partnership (or any
Subsidiary Partnership);
(ii) take title to any personal or real property, other than in the
name of the Partnership or a Subsidiary Entity or pursuant to Section 7.7
hereof;
(iii) institute any proceeding for Bankruptcy on behalf of the
Partnership, or cause or permit (if permission of the Partnership or any
Subsidiary Partnership is required) the institution of any such proceeding on
behalf of any Subsidiary Partnership;
(iv) act or cause the taking or refraining of any action with
respect to the dissolution and winding up of the Partnership (or any Subsidiary
Partnership) or an election to continue the Partnership (or any Subsidiary
Partnership) or to continue the business of the Partnership (or any Subsidiary
Partnership); or
(v) sell, exchange, Transfer or otherwise dispose of all or
substantially all of the Partnership's assets.
(c) The Managing General Partner shall not, without the prior
Consent of the Limited Partners:
(i) except in connection with the dissolution and winding-up of the
Partnership by the Liquidation Agent, agree to or consummate the merger or
consolidation of the Partnership or the voluntary sale or other Transfer of all
or substantially all of the Partnership's assets in a single transaction or
related series of transactions (without limiting the transactions which will not
be deemed to be a voluntary sale or Transfer, the foreclosure of a mortgage lien
on any property or the grant by the Partnership of a deed in lieu of foreclosure
for such property shall not be deemed to be such a voluntary sale or other
Transfer ); or
(ii) dissolve the Partnership.
Without the consent of all the Limited Partners, the General
Partners shall have no power to do any act in contravention of this Agreement or
applicable law.
7.4 Managing General Partner Participation. The Managing General Partner
agrees that (a) substantially all activities and business operations of the
Managing General Partner shall be
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conducted directly or indirectly through the Partnership or any Subsidiary
Partnership, (b) except for a property acquisition authorized by the Managing
General Partner with the Consent of the Limited Partners, all property
acquisitions shall henceforth be made through the Partnership or any Subsidiary
Partnership and (c) except as provided below any funds raised by the Managing
General Partner, whether by issuance of stock, borrowing or otherwise, will be
made available to the Partnership whether as capital contributions, loans or
otherwise, as appropriate.
7.5 Proscriptions. The Managing General Partner shall not have the
authority to:
(a) Do any act in contravention of this Agreement;
(b) Possess any Partnership property or assign rights in specific
Partnership property for other than Partnership purposes; or
(c) Do any act in contravention of applicable law.
Nothing herein contained shall impose any obligation on any Person
doing business with the Partnership to inquire as to whether or not the Managing
General Partner has properly exercised its authority in executing any contract,
lease, mortgage, deed or any other instrument or document on behalf of the
Partnership, and any such Person shall be fully protected in relying upon such
authority.
7.6 Additional Partners. Additional Partners may be admitted to the
Partnership only as provided in Section 9.4 hereof.
7.7 Title Holder. To the extent allowable under applicable law, title to
all or any part of the Properties of the Partnership may be held in the name of
the Partnership or any other individual, corporation, partnership, trust or
otherwise, the beneficial interest in which shall at all times be vested in the
Partnership. Any such title holder shall perform any and all of its respective
functions to the extent and upon such terms and conditions as may be determined
from time to time by the Managing General Partner.
7.8 Waiver and Indemnification. Neither the Managing General Partner nor
any of its Affiliates, directors, trust managers, officers, shareholders, nor
any Person acting on their behalf pursuant hereto, shall be liable, responsible
or accountable in damages or otherwise to the Partnership or to any Partner for
any acts or omissions performed or omitted to be performed by them within the
scope of the authority conferred upon the Managing General Partner by this
Agreement and the Act, provided that the Managing General Partner's or such
other Person's conduct or omission to act was taken in good faith and in the
belief that such conduct or omission was in the best interests of the
Partnership and, provided further, that the Managing General Partner or such
other Person shall not be guilty of fraud, willful misconduct or
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gross negligence. The Managing General Partner acknowledges that it owes
fiduciary duties both to its shareholders and to the Limited Partners and it
shall use its reasonable efforts to discharge such duties to each; provided,
however, that in the event of a conflict between the interests of the
shareholders of the Managing General Partner and the interests of the Limited
Partners, the Limited Partners agree that the Managing General Partner shall
discharge its fiduciary duties to the Limited Partners by acting in the best
interests of the Managing General Partner's shareholders. Nothing contained in
the preceding sentence shall be construed as entitling the Managing General
Partner to realize any profit or gain from any transaction between such Partner
and the Partnership (except as may be required by law upon a distribution to the
Managing General Partner), including from the lending of money by the Managing
General Partner to the Partnership or the contribution of property by the
Managing General Partner to the Partnership, it being understood that in any
such transaction the Managing General Partner shall be entitled to cost recovery
only. The Partnership shall, and hereby does, indemnify and hold harmless each
of the Managing General Partner and its Affiliates, their respective directors,
officers, shareholders and any other individual acting on its or their behalf to
the extent such Persons would be indemnified by the Managing General Partner
pursuant to the Charter of the Managing General Partner if such persons were
directors, officers, agents or employees of the Managing General Partner;
provided, however, that no Partner shall have any personal liability with
respect to the foregoing indemnification, any such indemnification to be
satisfied solely out of the assets of the Partnership. The Partnership shall,
and hereby does, indemnify each Limited Partner and its Affiliates, their
respective directors, officers, shareholders and any other individual acting on
its or their behalf, from and against any costs (including costs of defense)
incurred by it as a result of any litigation or other proceeding in which any
Limited Partner is named as a defendant or any claim threatened or asserted
against any Limited Partner, in either case which relates to the operations of
the Partnership or any obligation assumed by the Partnership, unless such costs
are the result of misconduct on the part of, or a breach of this Agreement by,
such Limited Partner; provided, however, no Partner shall have any personal
liability with respect to the foregoing indemnification, any such
indemnification to be satisfied solely out of the assets of the Partnership.
7.9 Limitation of Liability of Directors, Shareholders and Officers of the
Managing General Partner. Any obligation or liability whatsoever of the General
Partners which may arise at any time under this Agreement or any other
instrument, transaction, or undertaking contemplated hereby shall be satisfied,
if at all, out of the assets of the General Partners or the Partnership only. No
such obligation or liability shall be personally binding upon, nor shall resort
for the enforcement thereof be had to, any of the General Partners' directors,
shareholders, officers, employees, or agents, regardless of whether such
obligation or liability is in the nature of contract, tort or otherwise.
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ARTICLE VIII
Dissolution, Liquidation and Winding-Up
8.1 Accounting. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting (which shall be certified by
the Accountants) shall be made of the Capital Account of each Partner and of the
Profits or Losses of the Partnership from the date of the last previous
accounting to the date of dissolution. Financial statements presenting such
accounting shall include a report of the Accountants.
8.2 Distribution on Dissolution. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership (other than Partners)
in the order of priority as provided by law;
(b) Establishment of reserves as determined by the Managing General
Partner to provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Partners, if any, in the
order of priority provided by law;
(d) To the Partners in accordance with the positive balances in
their Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods, including the period in which such distribution
occurs (other than those distributions made pursuant to this Section 8.2(d),
Section 8.3 or Section 8.4 hereof).
If upon dissolution and termination of the Partnership the Capital
Account of any Partner is less than zero, then such Partner shall have no
obligation to restore the negative balance in its Capital Account unless and
except to the extent that such Partner has so elected under Section 4.8.
Whenever the Liquidation Agent reasonably determines that any reserves
established pursuant to paragraph (b) above are in excess of the reasonable
requirements of the Partnership, the amount determined to be excess shall be
distributed to the Partners in accordance with the above provisions.
8.3 Sale of Partnership Assets. In the event of the liquidation of the
Partnership in accordance with the terms of this Agreement, the Liquidation
Agent may sell Partnership property; provided, however, that all sales, leases,
encumbrances or transfers of Partnership assets shall be made by the Liquidation
Agent solely on an "arm's length" basis, at the best price and on the best terms
and conditions as the Liquidation Agent in good faith believes are reasonably
available at the time and under the circumstances and on a non-recourse basis to
the Limited Partners.
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The liquidation of the Partnership shall not be deemed finally terminated until
the Partnership shall have received cash payments in full with respect to
obligations such as notes, purchase money mortgages, installment sale contracts
or other similar receivables received by the Partnership in connection with the
sale of Partnership assets and all obligations of the Partnership have been
satisfied or assumed by the Managing General Partner. The Liquidation Agent
shall continue to act to enforce all of the rights of the Partnership pursuant
to any such obligations until paid in full or otherwise discharged or settled.
8.4 Distributions in Kind. In the event that it becomes necessary to make
a distribution of Partnership property in kind in connection with the
liquidation of the Partnership, the Managing General Partner may, if it
determines that to do so would be in the best interest of the Partners and
obtains the Consent of the Limited Partners, transfer and convey such property
to the distributees as tenants in common, subject to any liabilities attached
thereto, so as to vest in them undivided interests in the whole of such property
in proportion to their respective rights to share in the proceeds of the sale of
such property (other than as a creditor) in accordance with the provisions of
Section 8.2 hereof. Immediately prior to the distribution of Partnership
property in kind, the Capital Account of each Partner shall be increased or
decreased, as the case may be, to reflect the manner in which the unrealized
income, gain, loss and deduction inherent in such property (to the extent not
previously reflected in the Capital Accounts) would be allocated among the
Partners if there were a taxable disposition of such property for its fair
market value as of the date of the distribution.
8.5 Documentation of Liquidation. Upon the completion of the dissolution
and liquidation of the Partnership, the Partnership shall terminate and the
Liquidation Agent shall have the authority to execute and record any and all
documents or instruments required to effect the dissolution, liquidation and
termination of the Partnership.
8.6 Liability of the Liquidation Agent. The Liquidation Agent shall be
indemnified and held harmless by the Partnership from and against any and all
claims, demands, liabilities, costs, damages and causes of action of any nature
whatsoever arising out of or incidental to the Liquidation Agent's taking of any
action authorized under or within the scope of this Agreement; and provided,
however, that no Partner shall have any personal liability with respect to the
foregoing indemnification, any such indemnification to be satisfied solely out
of the assets of the Partnership; and provided further, however, that the
Liquidation Agent shall not be entitled to indemnification, and shall not be
held harmless, where the claim, demand, liability, cost, damage or cause of
action at issue arose out of:
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(a) A matter entirely unrelated to the Liquidation Agent's action
or conduct pursuant to the provisions of this Agreement; or
(b) The proven misconduct or gross negligence of the Liquidation
Agent.
ARTICLE IX
Transfer of Partnership Interests and Related Matters
9.1 [INTENTIONALLY OMITTED].
9.2 Managing General Partner Transfers and Deemed Transfers. The Managing
General Partner shall not (i) withdraw from the Partnership, (ii) merge,
consolidate or engage in any combination with another Person, (iii) sell all or
substantially all of its assets or (iv) sell, assign, pledge, encumber or
otherwise dispose of all or any portion of its Partnership Units or Preferred
Units except to the Partnership, in each case without the Consent of the Limited
Partners. Upon any transfer of any Partnership Units (not Preferred Units) in
accordance with the provisions of this Section 9.2, the transferee Managing
General Partner shall become vested with the powers and rights of the transferor
Managing General Partner with respect to the Partnership Units transferred, and
shall be liable for all obligations and responsible for all duties of the
Transferor Managing General Partner, once such transferee has executed such
instruments as may be necessary to effectuate such admission and to confirm the
agreement of such transferee to be bound by all the terms and provisions of this
Agreement with respect to the Partnership Units so acquired. It is a condition
to any transfer otherwise permitted hereunder that the transferee assumes by
operation of law or express agreement all of the obligations of the transferor
Managing General Partner under this Agreement with respect to such transferred
Partnership Units and no such transfer (other than pursuant to a statutory
merger or consolidation wherein all obligations and liabilities of the
transferor Managing General Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Managing General Partner of its
obligations under this Agreement accruing prior to the date of such transfer.
9.3 Transfers by Limited Partners. Except as otherwise provided in this
Section 9.3, the Limited Partners shall not Transfer all or any portion of their
Partnership Units to any transferee without the consent of the Managing General
Partner, which consent may be withheld in its sole and absolute discretion;
provided, however, that the foregoing shall not be considered a limitation on
the ability of the Limited Partners to exercise their Rights pursuant to Article
XI hereof.
(a) Notwithstanding the foregoing, but subject to the provisions of
Section 9.5 hereof, any Limited Partner may at any time, without the consent of
the Managing General Partner, (i)
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Transfer all or a portion of its Partnership Units to an Affiliate of such
Limited Partner, or (ii) Pledge some or all of its Partnership Units to any
Institutional Lender. Any Transfer to an Affiliate pursuant to clause (i) and
any Transfer to a pledgee of Partnership Units Pledged pursuant to clause (ii)
may be made without the consent of the Managing General Partner but, except as
provided in subsequent provisions of this Section 9.3, such transferee or such
pledgee shall hold the Units so transferred to it (and shall be admitted to the
Partnership as a Substitute Limited Partner) subject to all the restrictions set
forth in this Section 9.3. It is a condition to any Transfer otherwise permitted
under any provision of this Section 9.3 that the transferee assumes by operation
of law or express agreement all of the obligations of the transferor Limited
Partner under this Agreement with respect to such transferred Partnership Units
arising after the effective date of the Transfer and no such Transfer (other
than pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor Partner are assumed by a successor corporation by
operation of law, and other than pursuant to an exercise of the Rights pursuant
to Article XI wherein all obligations and liabilities of the transferor Partner
arising from and after the date of such Transfer shall be assumed by the
Managing General Partner) shall relieve the transferor Partner of its
obligations under this Agreement prior to the effective date of such Transfer.
Upon any such Transfer or Pledge permitted under this Section 9.3, the
transferee or, upon foreclosure on the Pledged Partnership Units, each
Institutional Lender which is the pledgee shall be admitted as a Substituted
Limited Partner as such term is defined in the Act and shall succeed to all of
the rights, including rights with respect to the Rights, of the transferor
Limited Partner under this Agreement in the place and stead of such transferor
Limited Partner. Any transferee, whether or not admitted as a Substituted
Limited Partner, shall take subject to the obligations of the transferor
hereunder. No transferee pursuant to a Transfer which is not expressly permitted
under this Section 9.3 and is not consented to by the Managing General Partner,
whether by a voluntary Transfer, by operation of law or otherwise, shall have
any rights hereunder, other than the right to receive such portion of the
distributions and allocations of Profits and Losses made by the Partnership as
are allocable to the Partnership Units so transferred.
(b) In addition to the Rights granted to the JCP Limited Partner and
any other Transfers permitted under this Article IX, the JCP Limited Partner
shall have the right to transfer all of its Partnership Units to a single
accredited investor, as defined in Rule 501 promulgated under the Securities
Act, subject to the provisions of Section 9.5, and such transferee shall be
admitted to the Partnership as a Substitute Limited Partner. Any transferee of
the Partnership Units owned by the JCP Limited Partner shall be subject to all
of the restrictions set forth in Section 9.3(a) above; provided, however, that
if the JCP Limited Partner hereafter Pledges its Partnership Units pursuant to
Section 9.3(a), then provided that the JCP Limited Partner has not
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previously exercised the right provided for above in this Section 9.3(b), the
Institutional Lender or Lenders which are the pledgee(s) may exercise such
right, whether by taking title to the JCP Limited Partner's Partnership Units
and then transferring the same or by effecting such transfer upon foreclosure of
the Pledge.
(c) The Limited Partners acknowledge that the Partnership Units
have not been registered under any federal or state securities laws and, as a
result thereof, they may not be sold or otherwise transferred, except in
accordance with Article XI or otherwise in compliance with such laws.
Notwithstanding anything to the contrary contained in this Agreement, no
Partnership Units may be sold or otherwise transferred except pursuant to
Article XI unless such Transfer is exempt from registration under any applicable
securities laws or such Transfer is registered under such laws, it being
acknowledged that the Partnership has no obligation to take any action which
would cause any such interests to be registered.
9.4 Issuance of Additional Partnership Units and Preferred Units. At any
time after the date hereof, subject to the provisions of Section 9.5 hereof, the
Managing General Partner may, upon its determination that the issuance of
additional Partnership Units ("Additional Units") is in the best interests of
the Partnership, cause the Partnership to issue Additional Units to any existing
Partner or issue Additional Units to and admit as a partner in the Partnership
any Person in exchange for the contribution by such Person of cash and/or
property which the Managing General Partner determines is desirable to further
the purposes of the Partnership under Section 2.3 hereof and which the Managing
General Partner determines has a value that justifies the issuance of such
Additional Units. In the event that Additional Units are issued by the
Partnership pursuant this Section 9.4, the number of Partnership Units issued
shall be determined by dividing the Gross Asset Value of the property
contributed (reduced by the amount of any indebtedness assumed by the
Partnership or to which such property is subject) as of the date of contribution
to the Partnership (the "Contribution Date") by the Deemed Partnership Unit
Value.
In addition, the Managing General Partner may, upon its
determination that the issuance of Preferred Units is in the best interests of
the Partnership, issue Preferred Units in accordance with Section 4.3(c) hereof.
The Managing General Partner shall be authorized on behalf of each
of the Partners to amend this Agreement to reflect the admission of any Partner
or any increase in the Partnership Units or Preferred Units of any Partner in
accordance with the provisions of this Section 9.4, and the Managing General
Partner shall promptly deliver a copy of such amendment to each Limited Partner.
The Limited Partners hereby irrevocably appoint the Managing General Partner as
their attorney-in-fact, coupled with an interest, solely for the purpose of
executing and delivering such
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documents, and taking such actions, as shall be reasonably necessary in
connection with the provisions of this Section 9.4 or making any modification to
this Agreement permitted by Section 7.3 (including, without limitation, any
modification which, under Section 7.3 hereof, requires the Consent of the
Limited Partners where such consent has been obtained). Nothing contained in
this Section 9.4 shall be construed as authorizing the Managing General Partner
to grant any consent on behalf of the Limited Partners, or any of them.
9.5 Restrictions on Transfer.
(a) In addition to any other restrictions on Transfer herein
contained, in no event may any Transfer or assignment of a Partnership Unit or
Preferred Unit by any Partner be made nor may any new Partnership Unit or
Preferred Unit be issued by the Partnership (i) to any Person which lacks the
legal right, power or capacity to own a Partnership Unit or Preferred Unit; (ii)
in violation of applicable law; (iii) if such Transfer would immediately or with
the passage of time violate the REIT Requirements, such determination to be made
assuming that the REIT Requirements are satisfied immediately prior to the
proposed Transfer; (iv) if such Transfer would cause the Partnership to become,
with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(e) of the Code); (v) if such Transfer would,
in the opinion of counsel to the Partnership, cause any portion of the
underlying assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.3-101;
(vi) if such Transfer would result in a deemed distribution to any Partner
attributable to a failure to meet the requirements of Regulations Section
l.752-2(d)(l), unless such Partner consents thereto, (vii) if such Transfer
would cause any lender to the Partnership to hold in excess of ten (10) percent
of the Partnership Interest that would, pursuant to the regulations under
Section 752 of the Code or any successor provision, cause a loan by such a
lender to constitute Partner Nonrecourse Debt, (viii) if such Transfer, other
than to an Affiliate, is of a Partnership Interest the value of which would have
been less than $20,000 when issued, (ix) if such Transfer would, in the opinion
of counsel to the Partnership, cause the Partnership to cease to be classified
as a Partnership for federal income tax purposes or (x) if such Transfer is
effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Section 7704(b)
of the Code.
(b) No Preferred Unit may be transferred by the Managing General
Partner to any Person who is not a General Partner of the Partnership.
(c) No Limited Partnership Unit may be transferred by any Partner
without a Transfer of the corresponding Simon Group Limited Partnership Unit to
the same transferee.
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ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management. Except as expressly permitted
hereunder, the Limited Partners shall not take part in the management of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership; provided,
that the foregoing shall not be deemed to limit the ability of a Limited Partner
(or any officer or director thereof) who is an officer, director or employee of
the Partnership, either the Managing General Partner or any Affiliate thereof,
to act in such capacity.
10.2 Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership, but the rights of such
Limited Partner to share in the Profits or Losses of the Partnership and to
receive distributions of Partnership funds shall, on the happening of such
event, devolve to its successors or assigns, subject to the terms and conditions
of this Agreement, and the Partnership shall continue as a limited partnership.
However, in no event shall such assignee(s) become a Substituted Limited Partner
except in accordance with Article IX.
10.3 No Withdrawal. No Limited Partner may withdraw from the Partnership
without the prior written consent of the Managing General Partner, other than as
expressly provided in this Agreement.
10.4 Duties and Conflicts. The Partners recognize that each of the other
Partners and their Affiliates have or may have other business interests,
activities and investments, some of which may be in conflict or competition with
the business of the Partnership, and that such Persons are entitled to carry on
such other business interests, activities and investments. In addition, the
Partners recognize that certain of the Limited Partners and their Affiliates are
and may in the future be tenants of the Partnership, Subsidiary Entities or
other Persons or own anchor or other stores in the Properties of the
Partnership, or Subsidiary Entities or other properties and in connection
therewith may have interests that conflict with those of the Partnership or
Subsidiary Entities. In deciding whether to take any actions in such capacity,
such Limited Partners and their Affiliates shall be under no obligation to
consider the separate interests of the Partnership or Subsidiary Entities and
shall have no fiduciary obligations to the Partnership or Subsidiary Entities
and shall not be liable for monetary damages for losses sustained liabilities
incurred or benefits not derived by the other Partners in connection with such
acts; nor shall the Partnership, the Managing General Partner or any Subsidiary
Entities be under any obligation to consider the separate interests of the
Limited Partners and their Affiliates in such Limited Partners' independent
capacities or have any fiduciary obligations to the Limited Partners and their
Affiliates in such capacity or be liable for monetary damages for losses
sustained, liabilities
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incurred or benefits not derived by the Limited Partners and their Affiliates in
such independent capacities arising from actions or omissions taken by the
Partnership or Subsidiary Entities. The Limited Partners and their Affiliates
may engage in or possess an interest in any other business or venture of any
kind, independently or with others, on their own behalf or on behalf of other
Entities with which they are affiliated or associated, and such Persons may
engage in any activities, whether or not competitive with the Partnership or
Subsidiary Entities, without any obligation to offer any interest in such
activities to the Partnership or Subsidiary Entities or to any Partner or
otherwise. Neither the Partnership nor any Partner shall have any right, by
virtue of this Agreement, in or to such activities, or the income or profits
derived therefrom, and the pursuit of such activities, even if competitive with
the business of the Partnership or Subsidiary Entities, shall not be deemed
wrongful or improper.
10.5 Guaranty and Indemnification Agreements.
(a) The Partnership shall notify the Limited Partners no less than
45 days (or, if the Partnership itself has less than 45 days' prior notice, as
promptly as practicable) prior to the occurrence of any event that the
Partnership reasonably expects will reduce the amount of Partnership liabilities
(including liabilities of any Subsidiary Partnership) that the Limited Partners
may include in their individual tax bases of their respective Partnership
Interests pursuant to Treasury Regulation Section 1.752-2 and Treasury
Regulations Section 1.752-3(a)(2) and (3). Upon receipt of such notice, each
Limited Partner shall inform the Partnership of any action it desires to take in
its sole and absolute discretion in order to increase the "economic risk of
loss" (within the meaning of Treasury Regulation 5 1.752-2) (the "Incurrence")
that it has with respect to liabilities of the Partnership or any other
Subsidiary Partnerships. The Partnership shall cooperate with each Limited
Partner to facilitate the Incurrence by such Limited Partner with respect to
Partnership Liabilities or liabilities of any Subsidiary Partnerships in such a
way that the Incurrence has the least amount of real economic risk to such
Limited Partner and provided that the Incurrence does not have a material
adverse impact on any other Partner in the Partnership or any such Partner's
Affiliates.
(b) Notwithstanding the provisions of Section 10.5(a) above, no
Limited Partners shall have any right to negotiate directly with any lender of
the Partnership or any other Subsidiary Partnership, any such negotiation to be
undertaken in good faith by the Managing General Partner on behalf of, and at
the request of, all affected Limited Partners.
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ARTICLE XI
Grant of Rights to the Limited Partners
11.1 Grant of Rights. The Managing General Partner does hereby grant to
each of the Limited Partners and each of the Limited Partners does hereby accept
the right, but not the obligation (hereinafter such right sometimes referred to
as the "Rights"), to convert all or a portion of such Limited Partner's Limited
Partnership Units into Shares (which will be contributed by the Managing General
Partner to the Trust in consideration for Trust Interests attached to the Simon
Group Common Stock issued upon the concurrent conversion of the Simon Group
Limited Partnership Unit referred to in the proviso below) or cash, as selected
by the Managing General Partner, at any time or from time to time, on the terms
and subject to the conditions and restrictions contained in this Article XI;
provided, however, that no Limited Partnership Unit may be converted pursuant to
this Article XI without a conversion of the corresponding Simon Group Limited
Partnership Unit; and provided, further that each Limited Partnership Unit
converted pursuant to this Article XI shall be converted into the same form of
consideration as the corresponding Simon Group Limited Partnership Unit. The
Rights granted hereunder may be exercised by a Limited Partner, on the terms and
subject to the conditions and restrictions contained in this Article XI, upon
delivery to the Managing General Partner of a notice in the form of Exhibit C
(an "Exercise Notice"), which notice shall specify the number of such Limited
Partner's Limited Partnership Units to be converted by such Limited Partner (the
"Offered Units"). Once delivered, the Exercise Notice shall be irrevocable,
subject to payment by the Managing General Partner or the Partnership of the
Purchase Price for the Offered Units in accordance with the terms hereof. In the
event the Managing General Partner elects to cause the Offered Units to be
converted into cash, the Managing General Partner shall effect such conversion
by causing the Partnership to redeem the Offered Units for cash.
11.2 [INTENTIONALLY OMITTED].
11.3 Computation of Purchase Price/Form of Payment. The purchase price
("Purchase Price") payable to a tendering Limited Partner shall be equal to the
Deemed Partnership Unit Value multiplied by the number of Offered Units computed
as of the date on which the Exercise Notice was delivered to the Managing
General Partner (the "Computation Date"). Subject to the following paragraph,
the Purchase Price for the Offered Units shall be payable, at the option of the
Managing General Partner, by causing the Partnership to redeem the Offered Units
for cash in the amount of the Purchase Price, or by the issuance by the Managing
General Partner of the number of Shares (which will be contributed by the
Managing General Partner to the Trusts in return for Trust Interests attached to
the Simon Group Common Stock issued upon the concurrent conversion of a Simon
Group Partnership Unit) equal to the number of Offered Units (adjusted as
appropriate to account for
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stock splits, stock dividends or other similar transactions between the
Computation Date and the closing of the purchase and sale of the Offered Units
in the manner specified in Section 11.7(d) below).
11.4 Closing. The closing of the acquisition or redemption of Offered
Units shall, unless otherwise mutually agreed, be held at the principal offices
of the Managing General Partner, on the date agreed to by the Managing General
Partner and the relevant Limited Partner, which date (the "Settlement Date")
shall in no event be on a date which is later than the later of (i) ten (10)
days after the date of the Exercise Notice and (ii) five (5) days after the
expiration or termination of the waiting period applicable to the Limited
Partner, if any, under the Hart-Scott-Rodino Act (the "HSR Act"). The Managing
General Partner agrees to use its best efforts to obtain an early termination of
the waiting period applicable to any such acquisition, if any, under the HSR
Act. Until the Settlement Date, each tendering Partner shall continue to own his
Offered Units, and will continue to be treated as the holder of such Offered
Units for all purposes of this Agreement, including, without limitation, for
purposes of voting, consent, allocations and distributions. Offered Units will
be transferred to the Managing General Partner only upon receipt by the
tendering Partner of Shares or cash in payment in full therefor.
11.5 Closing Deliveries. At the closing of the purchase and sale or
redemption of Offered Units, payment of the Purchase Price shall be accompanied
by proper instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the tendering Limited Partner with respect
to its due authority to sell all of the right, title and interest in and to such
Offered Units to the Managing General Partner or the Partnership, as applicable,
and with respect to the ownership by of the Limited Partner of such Units, free
and clear of all Liens, and (B) the Managing General Partner with respect to its
due authority to acquire such Units for Shares or to cause the Partnership to
redeem such Units for cash and, in the case of payment by Shares, (ii) an
opinion of counsel for the Managing General Partner, reasonably satisfactory to
such Limited Partner, to the effect that such Shares have been duly authorized,
are validly issued, fully-paid and non-assessable.
11.6 Term of Rights. The rights of the parties with respect to the Rights
shall remain in effect, subject to the terms hereof, throughout the existence of
the Partnership.
11.7 Covenants of the Managing General Partner. To facilitate the Managing
General Partner's ability fully to perform its obligations hereunder, the
Managing General Partner covenants and agrees as follows:
(a) At all times while the Rights are in existence, the Managing
General Partner shall reserve for issuance such number of
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Shares as may be necessary to enable the Managing General Partner to issue such
Shares underlying the Trust Interests in full payment of the Purchase Price in
regard to all Partnership Units which are from time to time outstanding and held
by the Limited Partners.
(b) Under no circumstances shall the Managing General Partner
declare any stock dividend, stock split, stock distribution or the like, unless
fair and equitable arrangements are provided, to the extent necessary, fully to
adjust, and to avoid any dilution in, the Rights of any Limited Partner under
this Agreement.
11.8 Limited Partners' Covenant. Each of the Limited Partners covenants
and agrees with the Managing General Partner that all Offered Units tendered to
the Managing General Partner or the Partnership, as the case may be, in
accordance with the exercise of Rights herein provided shall be delivered free
and clear of all Liens and should any Liens exist or arise with respect to such
Offered Units, the Managing General Partner or the Partnership, as the case may
be, shall be under no obligation to acquire the same unless, in connection with
such acquisition, the Managing General Partner has elected to cause the
Partnership to pay such portion of the Purchase Price in the form of cash
consideration in circumstances where such consideration will be sufficient to
cause such existing Lien to be discharged in full upon application of all or a
part of such consideration and the Partnership is expressly authorized to apply
such portion of the Purchase Price as may be necessary to satisfy any
indebtedness in full and to discharge such Lien in full. In the event any
transfer tax is payable by the Limited Partner as a result of a transfer of
Partnership Units pursuant to the exercise by a Limited Partner of the Rights,
the Limited Partner shall pay such transfer tax.
11.9 Dividends. If a Limited Partner shall exchange any Partnership Units
for Shares pursuant to this Article XI on or prior to the Partnership Record
Date for any distribution to be made on such Partnership Units, in accordance
with the Charter of the Managing General Partner such Limited Partner will be
entitled to receive the corresponding distribution to be paid on such Shares and
shall not be entitled to receive the distribution made by the Partnership in
respect of the exchanged Partnership Units.
ARTICLE XIII
General Provisions
12.1 Investment Representations.
(a) Each Limited Partner acknowledges that it (i) has been given
full and complete access to the Partnership and those person who will manage the
Partnership in connection with this Agreement and the transactions contemplated
hereby, (ii) has had the opportunity to review all documents relevant to its
decision to enter into this Agreement, and (iii) has had the opportunity to ask
questions of the Partnership and those persons who will manage the
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Partnership concerning its investment in the Partnership and the transactions
contemplated hereby.
(b) Each Limited Partner acknowledges that it understands that the
Partnership Units to be purchased or otherwise acquired by it hereunder will not
be registered under the Securities Act of 1933 in reliance upon the exemption
afforded by Section 4(2) thereof for transactions by an issuer not involving any
public offering, and will not be registered or qualified under any applicable
state securities laws. Each Limited Partner represents that (i) it is acquiring
such Partnership Units for investment only and without any view toward
distribution thereof, and it will not sell or otherwise dispose of such
Partnership Units except pursuant to the exercise of the Rights or otherwise in
accordance with the terms hereof and in compliance with the registration
requirements or exemption provisions of any applicable state securities laws,
(ii) its economic circumstances are such that it is able to bear all risks of
the investment in the Partnership Units for an indefinite period of time
including the risk of a complete loss of its investment in the Units and (iii)
it has knowledge and experience in financial and business matters sufficient to
evaluate the risks of investment in the Partnership Units. Each Limited Partner
further acknowledges and represents that it has made its own independent
investigation of the Partnership and the business conducted and proposed to be
conducted by the Partnership, and that any information relating thereto
furnished to the Limited Partner was supplied by or on behalf of the
Partnership.
12.2 Notices. All notices, offers or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and may be
personally delivered or sent by United States mail or by reputable overnight
delivery service and shall be deemed to have been given when delivered in
person, upon receipt when delivered by overnight delivery service or three
business days after deposit in United States mail, registered or certified,
postage prepaid, and properly addressed, by or to the appropriate party. For
purposes of this Section 12.2, the addresses of the parties hereto shall be as
set forth on Exhibit A hereof. The address of any party hereto may be changed by
a notice in writing given in accordance with the provisions hereof.
12.3 Successors. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of all Partners, and their
legal representatives, heirs, successors and permitted assigns, except as
expressly herein otherwise provided.
12.4 Liability of Limited Partners. The liability of the Limited Partners
for their obligations, covenants representations and warranties under this
Agreement shall be several and not joint.
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12.5 Effect and Interpretation. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN CONFORMITY WITH THE LAWS OF THE STATE OF DELAWARE.
12.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.
12.7 Partners Not Agents. Nothing contained herein shall be construed to
constitute any Partner the agent of another Partner, except as specifically
provided herein, or in any manner to limit the Partners in the carrying on of
their own respective businesses or activities.
12.8 Entire Understanding; Etc. This Agreement and the other agreements
referenced herein or therein or to which the signatories hereto or thereto are
parties constitute the entire agreement and understanding among the Partners and
supersede any prior understandings and/or written or oral agreements among them
respecting the subject matter within.
12.9 Severability. If any provision of this Agreement, or the application
of such provision to any Person or circumstance, shall be held invalid by a
court of competent jurisdiction, the remainder of this Agreement, or the
application of such provision to Persons or circumstances other than those to
which it is held invalid by such court, shall not be affected thereby.
12.10 Trust Provision. This Agreement, to the extent executed by the
trustee of a trust, is executed by such trustee solely as trustee and not in a
separate capacity. Nothing herein contained shall create any liability on, or
require the performance of any covenant by, any such trustee individually, nor
shall anything contained herein subject the individual property of any trustee
to any liability.
12.11 Pronouns and Headings As used herein, all pronouns shall include the
masculine, feminine and neuter, and all defined terms shall include the singular
and plural thereof wherever the context and facts require such construction. The
headings, titles and subtitles herein are inserted for convenience of reference
only and are to be ignored in any construction of the provisions hereof. Any
references in this Agreement to "including" shall be deemed to mean "including
without limitation."
12.12 Assurances. Each of the Partners shall hereafter execute and deliver
such further instruments (provided such instruments are in form and substance
reasonably satisfactory to the executing Partner) and do such further acts and
things as may be reasonably required or useful to carry out the intent and
purpose of this Agreement and as are not inconsistent with the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed effective as of the date and year first
above written.
GENERAL PARTNERS:
SPG REALTY CONSULTANTS, INC.
By: /s/ David Simon
_____________________
Name: David Simon
Title: Chief Executive Officer
LIMITED PARTNERS:
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1
Exhibit 4.3
EXECUTION VERSION
AGREEMENT BETWEEN OPERATING PARTNERSHIPS
This Agreement Between Operating Partnerships (this "Agreement") is
made as of September 24, 1998 by and among Simon Property Group, L.P. (formerly
known as Simon-DeBartolo Group, L.P.), a Delaware limited partnership (the
"Simon Group Partnership"), SPG Realty Consultants, L.P., a Delaware limited
partnership (the "SRC Partnership"), Simon Property Group, Inc., a Delaware
corporation ("Simon Group"), and SPG Realty Consultants, Inc. (formerly known as
Corporate Realty Consultants, Inc.), a Delaware corporation ("SPG Realty").
Unless otherwise indicated, capitalized terms used herein are used herein as
defined in Section 3.
WHEREAS, the parties hereto are entering into this Agreement in
connection with the rights held by the limited partners of Simon Group
Partnership and the SRC Partnership to tender Units of the Simon Group
Partnership ("Simon Group Units") and Units of the SRC Partnership ("SRC Units"
and, together with the Simon Group Units, the "Simon Units"), respectively, in
exchange for either Paired Shares or cash;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
SECTION 1. AGREEMENT UPON EXCHANGE.
Within nine (9) days after the valid tender of Simon Units pursuant
to each of (i) the Sixth Amended and Restated Limited Partnership Agreement of
the Simon Group Partnership, dated as of September 24, 1998 (the "Simon Group
Partnership Agreement"), and (ii) the Limited Partnership Agreement of the SRC
Partnership, dated as of September 24, 1998 (the "SRC Partnership Agreement"),
Simon Group and SPG Realty shall make an election to pay for any of such Simon
Units by delivering either Paired Shares or cash. Such election shall be made
pursuant to an agreement as to such election between Simon Group and SPG Realty.
If Simon Group and SPG Realty do not agree upon the form of consideration for
any Simon Unit within such 9-day period, they shall be deemed to have elected to
pay for such Simon Units by delivering cash.
SECTION 2. REDEMPTION.
With respect to Section 4.4 of each of the Simon Group Partnership
Agreement and the SRC Partnership Agreement, (i) Simon Group and SPG Realty
agree that if the Managing General Partner (as defined in the Simon Group
Partnership Agreement) shall redeem any of its outstanding Shares (as defined in
the Simon Group Partnership Agreement), the Managing General Partner (as defined
in the SRC Partnership Agreement) shall redeem a pro
2
rata amount of its outstanding Shares (as defined in the SRC Partnership
Agreement), and (ii) if the Managing General Partner (as defined in the SRC
Partnership Agreement) shall redeem any of its outstanding Shares (as defined in
the SRC Partnership Agreement), the Managing General Partner (as defined in the
Simon Group Partnership Agreement) shall redeem a pro rata amount of its
outstanding Shares (as defined in the Simon Group Partnership Agreement).
SECTION 3. DIVIDEND REINVESTMENT PLAN.
With respect to Section 4.5 of each of the Simon Group Partnership
Agreement and the SRC Partnership Agreement, Simon Group and SPG Realty agree
that all amounts received by each of Simon Group and SPG Realty in respect of
its dividend reinvestment plan shall be, pursuant to an agreement between such
parties, either (i) used to effect open market purchases of Paired Shares or
(ii) upon issuance of additional Paired Shares, contributed to the respective
parties in exchange for additional Simon Units. If Simon Group and SPG Realty do
not agree within a reasonable period of time, they shall be deemed to have
elected to use such amounts to effect open market purchases of Paired Shares.
SECTION 4. DEFINITIONS. For purposes of this Agreement:
"Paired Share" means one share of Simon Group Common Stock and a pro
rata Trust Interest.
"Partnership Agreements" mean the Simon Group Partnership
Agreement and the SRC Partnership Agreement.
"Simon Group Common Stock" means the shares of Common Stock, par
value $0.0001 per share, of Simon Group.
"SRC Shares" means the Common Stock, par value $0.0001 per share, of
SPG Realty.
"Trust" shall mean the trust owning all of the outstanding SRC
Shares subject to a trust agreement between certain stockholders of Simon Group,
a trustee and SPG Realty pursuant to which all shareholders of Simon Group are
beneficiaries of such Trust.
"Trust Interest" shall mean a beneficial interest in one or more
Trusts associated with or attached to a SRC Share.
SECTION 5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors or assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement shall be for
the
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benefit of and enforceable by any current and subsequent holder of any Simon
Units.
SECTION 6. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in one or more counterparts, each of which shall be considered an original
counterpart, and shall become a binding agreement when Simon Group, SPG Realty,
Simon Group Partnership, and SRC Partnership shall have each executed a
counterpart of this Agreement.
SECTION 7. TITLES AND HEADINGS. Titles and headings to Articles
and Sections herein are inserted for convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation of
this Agreement.
SECTION 8. GOVERNING LAW. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
internal laws of the State of Delaware, without regard to principles of
conflicts of laws as applied in the State of Delaware or any other jurisdiction
which, if applied, would result in the application of any laws other than the
internal laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto or by their duly authorized officers, all as of
the date first above written.
SIMON PROPERTY GROUP, L.P.
By: Simon Property Group, Inc., as
Managing General Partner
By: /s/ David Simon
-------------------------------
Name: David Simon
Title: Chief Executive Officer
SPG REALTY CONSULTANTS, L.P.,
By: SPG Realty Consultants, Inc., as
Managing General Partner
By: /s/ David Simon
-------------------------------
Name: David Simon
Title: Chief Executive Officer
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SIMON PROPERTY GROUP, INC.
By: /s/ David Simon
-------------------------------
Name: David Simon
Title: Chief Executive Officer
SPG REALTY CONSULTANTS, INC.
By: /s/ David Simon
-------------------------------
Name: David Simon
Title: Chief Executive Officer
1
Exhibit 4.4
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of September 24, 1998 (the
"Agreement"), by and among Simon Property Group, Inc. (the "Company") and the
persons set forth on Schedule A (the "Rights Holders"). The Rights Holders and
their respective successors-in-interest and permitted assigns are hereinafter
sometimes referred to as the "Holders."
Upon execution of the Sixth Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement") of Simon Property Group, L.P.,
a Delaware limited partnership (the "Operating Partnership"), dated as of the
date hereof, among the Company, SPG Properties, Inc., SD Property Group, Inc.
and its limited partners (the "Limited Partners"), the Limited Partners have the
right at any time to exchange all or any portion of their units of partnership
interest ("Units") in the Operating Partnership and in SPG Realty Consultants,
L.P., a Delaware limited partnership (together with the Operating Partnerships
the "Operating Partnerships"), for shares ("Shares") of the Company's common
stock, par value $.0001 per share (including beneficial interest in shares of
common stock, par value $.0001 per share, of SPG Realty Consultants, Inc. ("SPG
Realty") the "Common Stock"), or cash, at the election of the Company and SPG
Realty, and, except as provided herein, any Shares issued upon such exchange
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"). The Company has agreed to provide certain registration rights
with respect to the Shares held or to be held by certain Limited Partners.
Upon execution of this Agreement and upon consummation of the
transactions contemplated by the Agreement and Plan of Merger, dated as of
February 18, 1998 (the "Merger Agreement"), by and among Simon DeBartolo Group,
Inc. (the predecessor to SPG Properties, Inc.), Corporate Property Investors
(the predecessor to the Company) and Corporate Realty Consultants, Inc., the
Company has agreed to provide certain registration rights with respect to the
Shares held or to be held by certain former stockholders of Corporate Property
Investors, Inc., which stockholders shall constitute "Holders" for purposes of
this Agreement.
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Securities Subject to this Agreement. The securities entitled to
the benefits of this Agreement are (a) the Shares issued by the Company to the
Holders, (b) the Shares issued by the Company to the Holders upon conversion of
the Series A Convertible Preferred Stock, par value $.0001 per share ("Series A
Preferred Stock"), of the Company and the Shares
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issued by the Company to the Holders upon conversion of the Series B Convertible
Preferred Stock, par value $.0001 per share ("Series B Preferred Stock"), of the
Company, and (c) the Shares issued by the Company to the Holders upon exchange
of the Units pursuant to the Partnership Agreements (collectively, the
"Registrable Securities") but, with respect to any particular Registrable
Security, only so long as it continues to be a Registrable Security. Registrable
Securities shall include any securities issued as a dividend or distribution on
account of Registrable Securities or resulting from a subdivision of the
outstanding shares of Registrable Securities into a greater number of shares (by
reclassification, stock split or otherwise). For the purposes of this Agreement,
a security that was at one time a Registrable Security shall cease to be a
Registrable Security when (a) such security has been effectively registered
under the Securities Act, other than pursuant to Section 4 of this Agreement,
and either (i) the registration statement with respect thereto has remained
continuously effective for 150 days or (ii) such security has been disposed of
pursuant to such registration statement, (b) such security is sold to the public
in reliance on Rule 144 (or any similar provision then in force) under the
Securities Act, (c) such security has been otherwise transferred, and (i) the
Company has delivered a new certificate or other evidence of ownership not
bearing the legend set forth on the Shares upon the initial issuance thereof (or
other legend of similar import) and (ii) in the opinion of counsel to the
Company reasonably acceptable to the Holders and addressed to the Company and
the holder of such security, the subsequent disposition of such security shall
not require the registration or qualification under the Securities Act, or (d)
such security has ceased to be outstanding.
Notwithstanding anything to the contrary herein, any Holder may
exercise any of its rights hereunder prior to its receipt of Shares, provided
that such Holder, simultaneously with the delivery of any notice requesting
registration hereunder, shall deliver an Exercise Notice to the Company
requesting (i) exchange of Units exchangeable into such number of Shares as such
Limited Partner has requested to be registered, or (ii) conversion of the Series
A Preferred Stock or Series B Preferred Stock into such number of Shares as such
Holder has requested to be registered. Any such Exercise Notice so delivered
shall be (a) conditioned on the effectiveness of the requested registration in
connection with which it was delivered and (b) deemed to cover only such number
of Units, Series A Preferred Stock or Series B Preferred Stock as are
exchangeable or convertible into the number of Shares actually sold pursuant to
the requested registration. Any Shares to be issued in connection with any such
Exercise Notice shall be issued upon the closing of the requested registration.
In the event that the Company elects to issue all cash in lieu of Shares upon
the exchange of the Units covered by any such Exercise Notice, the registration
requested by the Limited Partner that delivered such
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Exercise Notice, if a Demand Registration, shall not constitute a Demand
Registration under Section 2.1 hereof.
In the event a Holder holding shares of Series B Preferred Stock
exercises its rights to have Registrable Securities included in a registration
statement pursuant to Section 2, 3 or 4 of this Agreement, it may also request
that shares of Series B Preferred Stock be included therein, subject in all
respects to the terms and conditions of this Agreement, except that,
notwithstanding any provision to the contrary contained in this Agreement, (a)
in the event that the number of Registrable Securities requested to be included
in a registration statement pursuant to Section 2 or 3 is reduced as provided
therein, the shares of Series B Preferred Stock requested to be included shall
be reduced, to zero if so requested by the managing underwriters, before the
number of Registrable Securities is reduced and (b) in no event shall the
Company be required to maintain or extend the effectiveness of a registration
statement solely as a result of the fact that shares of Series B Preferred Stock
covered by such registration statement remain unsold.
Nothing contained herein shall create any obligation on the part of
the Company to issue Shares, rather than cash, upon the exchange of any Units.
2. Demand Registration.
2.1. Request for Registration. At any time, each Holder (or,
with respect to each Holder that is a member of the DeBartolo entities listed on
Schedule B (the "DeBartolo Group"), EJDC LLC) may make a written request per
12-month period (specifying the intended method of disposition) for registration
under the Securities Act (each, a "Demand Registration") of all or part of such
Holder's Registrable Securities (but such part, together with the number of
securities requested by other Holders to be included in such Demand Registration
pursuant to this Section 2.1, shall have an estimated market value at the time
of such request (based upon the then market price of a share of Common Stock of
the Company) of at least $10,000,000). Notwithstanding the foregoing, the
Company shall not be required to file any registration statement on behalf of
any Holder within six months after the effective date of any earlier
registration statement so long as the Holder requesting the Demand Registration
was given a notice offering it the opportunity to sell Registrable Securities
under the earlier registration statement and such Holder did not request that
all of its Registrable Securities be included; provided, however, that if a
Holder requested that all of its Registrable Securities be included in the
earlier registration statement but not all were so included through no fault of
the Holder, such Holder may, but shall not be obligated to, require the Company
to file another registration statement pursuant to a Demand Registration
(subject, in the event of a Demand Registration for less than all
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such remaining Registrable Securities, to the same $10,000,000 limitation set
forth above) exercised by such Holder within six months of the effective date of
such earlier registration statement. Within ten days after receipt of a request
for a Demand Registration, the Company shall give written notice (the "Notice")
of such request to all other Holders and shall include in such registration all
Registrable Securities that the Company has received written requests for
inclusion therein within 15 days after the Notice is given (the "Requested
Securities"). Thereafter, the Company may elect to include in such registration
additional Shares to be issued by the Company. In such event for purposes only
of Section 2.3 (other than the first sentence thereof) and not for purposes of
any other provision or Section hereof (including, without limitation, Section
3), (a) such shares to be issued by the Company in connection with a Demand
Registration shall be deemed to be Registrable Securities and (b) the Company
shall be deemed to be a Holder thereof. All requests made pursuant to this
Section 2.1 shall specify the aggregate number of Registrable Securities to be
registered.
2.2. Effective Registration and Expenses. A registration shall
not constitute a Demand Registration under Section 2.1 hereof until it has
become effective. In any registration initiated as a Demand Registration, the
Company shall pay all Registration Expenses (as defined in Section 8) incurred
in connection therewith, whether or not such Demand Registration becomes
effective, unless such Demand Registration fails to become effective as a result
of the fault of one or more Holders other than the Company, in which case the
Company will not be required to pay the Registration Expenses incurred with
respect to the offering of such Holder or Holders' Registrable Securities. The
Registration Expenses incurred with respect to the offering of such Holder or
Holders' Registrable Securities shall be the product of (a) the aggregate amount
of all Registration Expenses incurred in connection with such registration and
(b) the ratio that the number of such Registrable Securities bears to the total
number of Registrable Securities included in the registration.
2.3. Priority on Demand Registrations. The Holder making the
Demand Registration may elect whether the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of a firm
commitment underwritten offering or otherwise; provided, however, that such
Holder may not elect that such offering be made on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act. In any case in which an offering
is in the form of a firm commitment underwritten offering, if the managing
underwriter or underwriters of such offering advise the Company in writing that
in its or their opinion the number of Registrable Securities proposed to be sold
in such offering exceeds the number of Registrable Securities that can be sold
in such offering without adversely affecting the market for the Company's common
stock, the Company will include in such registration the number of Registrable
Securities that in the opinion of such managing underwriter or underwriters can
be sold without adversely affecting the market for the Company's common stock.
In such event, the number of
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Registrable Securities that in the opinion of such managing underwriter or
underwriters can be sold without adversely affecting the market for the
Company's common stock. In such event, the number of Registrable Securities, if
any, to be offered for the accounts of Holders (including the Holder making the
Demand Registration) shall be reduced pro rata on the basis of the relative
number of any Registrable Securities requested by each such Holder to be
included in such registration to the extent necessary to reduce the total number
of Registrable Securities to be included in such offering to the number
recommended by such managing underwriter or underwriters. In the event the
Holder making the Demand shall receive notice pursuant to this Section 2.3 that
the amount of Registrable Securities to be offered for the account of such
Holder shall be reduced, such Holder shall be entitled to withdraw the Demand by
written notice to the Company within seven (7) days after receipt of such
notice, with the effect that such Demand shall be deemed not to have been made.
2.4. Selection of Underwriters. If any of the Registrable
Securities covered by a Demand Registration are to be sold in an underwritten
offering, the Holders, in the aggregate, that own or will own a majority of the
Registrable Securities that the Company has been requested to register
(including the Requested Securities but excluding any securities to be issued by
the Company), shall have the right to select the investment banker or investment
bankers and manager or managers that will underwrite the offering; provided,
however, that such investment bankers and managers must be reasonably
satisfactory to the Company.
3. Piggyback Registration. Whenever the Company proposes to file a
registration statement under the Securities Act with respect to an underwritten
public offering of Common Stock by the Company for its own account or for the
account of any stockholders of the Company (other than a registration statement
filed pursuant to either Section 2 or 4 hereof), the Company shall give written
notice (the "Offering Notice") of such proposed filing to each of the Holders at
least 30 days before the anticipated filing date. Such Offering Notice shall
offer all such Holders the opportunity to register such number of Registrable
Securities as each such Holder may request in writing, which request for
registration (each, a "Piggyback Registration") must be received by the Company
within 15 days after the Offering Notice is given. The Company shall use all
reasonable efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering, if any, to permit the holders of the Registrable
Securities requested to be included in the registration for such offering to
include such Registrable Securities in such offering on the same terms and
conditions as the common stock of the Company or, if such offering is for the
account of other stockholders, the common stock of such stockholders included
therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of a
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proposed underwritten offering advise the Company in writing that in its or
their opinion the number of Registrable Securities proposed to be sold in such
offering exceeds the number of Registrable Securities that can be sold in such
offering without adversely affecting the market for the Common Stock, the
Company will include in such registration the number of Registrable Securities
that in the opinion of such managing underwriter or underwriters can be sold
without adversely affecting the market for the Common Stock. In such event, the
number of Registrable Securities, if any, to be offered for the accounts of
Holders shall be reduced pro rata on the basis of the relative number of any
Registrable Securities requested by each such Holder to be included in such
registration to the extent necessary to reduce the total number of Registrable
Securities to be included in such offering to the number recommended by such
managing underwriter or underwriters. The Company shall pay all Registration
Expenses incurred in connection with any Piggyback Registration.
4. Shelf Registration. Following the Effective Time, the Company
shall use reasonable efforts to qualify for registration on Form S-3 for
secondary sales. The Company agrees that, upon the request of any Holder, the
Company shall promptly after receipt of such request notify each other Holder of
receipt of such request and shall cause to be filed on or as soon as practicable
thereafter, but not sooner than 35 days after the receipt of such notice from
such Holder, a registration statement (a "Shelf Registration Statement") on Form
S-1, Form S-3 or any other appropriate form under the Securities Act for an
offering to be made on a delayed or continuous basis pursuant to Rule 415
thereunder or any similar rule that may be adopted by the Securities and
Exchange Commission (the "Commission") and permitting sales in any manner not
involving an underwritten public offering (and shall register or qualify the
shares to be sold in such offering under such other securities or "blue sky"
laws as would be required pursuant to Section 7(g) hereof) covering up to the
aggregate number of (a) Shares to be issued to such Holder and all other Holders
who request that the Shares to be issued to them upon the exchange of Units held
by them be included in the Shelf Registration Statement upon the exchange of
Units so that the Shares issuable upon the exchange of such Units will be
registered pursuant to the Securities Act and (b) the Shares to be issued to
them upon the conversion of Series A Preferred Stock or Series B Preferred Stock
held by them be included in the Shelf Registration Statement upon the conversion
of Series A Preferred Stock or Series B Preferred Stock so that the Shares
issuable upon the conversion will be registered pursuant to the Securities Act,
and (c) Registrable Securities held by such Holders. The Company shall use its
best efforts to cause the Shelf Registration Statement to be declared effective
by the Commission within three months after the filing thereof. The Company
shall use its reasonable efforts to keep the Shelf Registration Statement
continuously effective (and to register or qualify the shares to be sold in such
offering under such other securities or "blue sky" laws as would be required
pursuant to
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Section 7(g) hereof) for so long as any Holder holds any Shares, Units that may
be exchanged for Shares under the Partnership Agreement, Series A Preferred
Stock or Series B Preferred Stock that may be converted into Shares or until the
Company has caused to be delivered to each Holder an opinion of counsel, which
counsel must be reasonably acceptable to such Holders, stating that such Shares
or Shares issued upon such exchange or conversion may be sold by the Holders
pursuant to Rule 144 promulgated under the Securities Act without regard to any
volume limitations and that the Company has satisfied the informational
requirements of Rule 144. The Company shall file any necessary listing
applications or amendments to existing applications to cause the Shares issuable
upon exchange of Units or conversion of Series A Preferred Stock or Series B
Preferred Stock to be listed on the primary exchange on which the Common Stock
is then listed, if any. Notwithstanding the foregoing, if the Company determines
that it is necessary to amend or supplement such Shelf Registration Statement
and if the Company shall furnish to the Holders a certificate signed by the
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board of Directors of the Company it would be significantly
disadvantageous to the Company and its stockholders for any such Shelf
Registration Statement to be amended or supplemented, the Company may defer such
amending or supplementing of such Shelf Registration Statement for not more than
45 days and in such event the Holders shall be required to discontinue
disposition of any Registrable Securities covered by such Shelf Registration
Statement during such period. Notwithstanding the foregoing, if the Company
irrevocably elects prior to the filing of any Shelf Registration Statement to
issue all cash in lieu of Shares upon the exchange of Units by the Holder
requesting the filing of such Shelf Registration Statement, the Company shall
not be obligated to file such Shelf Registration Statement.
5. Rights of Other Stockholders. The Company shall not grant any
person, for so long as any securities convertible into or exchangeable for
Registrable Securities are outstanding, any rights to have their securities
included in any registration statement to be filed by the Company if such rights
are greater than the rights of the Holders granted herein without extending such
greater rights to the Holders. Subject to the penultimate sentence of Section
2.3 and the last sentence of Section 3, to the extent the securities of such
other stockholders are entitled to be included in any such registration
statement and the managing underwriter or underwriters believe that the number
of securities proposed to be sold in such offering exceeds the number of
securities that can be sold in such offering without adversely affecting the
market for the Company's common stock, the number of securities to be offered
for the accounts of such other stockholders shall be reduced to zero before the
number of securities to be offered for the accounts of the Holders is reduced.
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6. Holdback Agreements.
6.1. Restrictions on Public Sale by Holders of
Registrable Securities. Each Holder (a) participating in an underwritten
offering covered by any Demand Registration or Piggyback Registration or (b) in
the event the Company is issuing shares of its capital stock to the public in an
underwritten offering, agrees, if requested by the managing underwriter or
underwriters for such underwritten offering, not to effect (except as part of
such underwritten offering or pursuant to Article XII of the Partnership
Agreement) any public sale or distribution of Registrable Securities or any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 (or any similar provision then
in force) under the Securities Act, during the period (a "Lock-Out Period")
commencing 14 days prior to and ending no more than 90 days subsequent to the
date (an "Execution Date") specified in the Lock-Out Notice (as defined below)
as the anticipated date of the execution and delivery of the underwriting
agreement (or, if later, a pricing or terms agreement signed pursuant to such
underwriting agreement) to be entered into in connection with such Demand
Registration or Piggyback Registration or other underwritten offering. The
Execution Date shall be no fewer than 21 days subsequent to the date of delivery
of written notice (a "Lock-Out Notice") by the Company to each Holder of the
anticipated execution of an underwriting agreement (or pricing or terms
agreement), and the Execution Date shall be specified in the Lock-Out Notice.
The Company may not deliver a Lock-Out Notice unless it is making a good faith
effort to effect the offering with respect to which such Lock-Out Notice has
been delivered. Notwithstanding the foregoing, the Company may not (a) establish
Lock-Out Periods in effect for more than 208 days in the aggregate within any of
the consecutive fifteen-month periods commencing on August 7, 1997 and (b) cause
any Lock-Out Period to commence (i) during the 45-day period immediately
following the expiration of any Lock-Out Period, such 45-day period to be
extended by one day for each day of delay pursuant to Section 7(a); provided,
however, that in no event shall such extension exceed 90 days; provided,
further, however, that such 90-day limit on extensions shall terminate on
December 31, 1998; or (ii) if the Company shall have been requested to file a
Registration Statement pursuant to Section 2 during such 45-day period (as
extended), until the earlier of (x) the date on which all Registrable Securities
thereunder shall have been sold and (y) 45 days after the effective date of such
Registration Statement. Notwithstanding the foregoing, any Lock-Out Period may
be shortened at the Company's sole discretion by written notice to the Holders,
and the applicable Lock-Out Period shall be deemed to have ended on the date
such notice is received by the Holders. For the purposes of this Section 6.1, a
Lock-Out Period shall be deemed to not have occurred, and a Lock-Out Notice
shall be deemed to not have been delivered, if, within 30 days of the delivery
of a Lock-Out Notice, the Company delivers a written notice (the "Revocation
Notice") to the Holders stating
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that the offering (the "Aborted Offering") with respect to which such Lock-Out
Notice was delivered has not been, or shall not be, consummated; provided,
however, that any Lock-Out Period that the Company causes to commence within 45
days of the delivery of such Revocation Notice shall be reduced by the number of
days pursuant to which the Holders were subject to restrictions on transfer
pursuant to this Section 6.1 with respect to such Aborted Offering.
6.2. Restrictions on Public Sale by the Company. If,
but only if, the managing underwriter or underwriters for any underwritten
offering of Registrable Securities made pursuant to a Demand Registration so
request, the Company agrees not to effect any public sale or distribution of any
of its securities similar to those being registered, or any securities
convertible into or exchangeable or exercisable for such securities (except
pursuant to registrations on Form S-4 or S-8 or any successor or similar forms
thereto) during the 14 days prior to, and during the 180-day period beginning
on, the effective date of such Demand Registration.
7. Registration Procedures. Whenever the Holders have
requested that any Registrable Securities be registered pursuant to Section 2, 3
or 4, the Company shall use its best efforts to effect the registration of
Registrable Securities in accordance with the intended method of disposition
thereof as expeditiously as practicable, and in connection with any such
request, the Company shall as expeditiously as possible:
(a) in connection with a request pursuant to Section
2, prepare and file with the Commission, not later than 40 days (or such longer
period as may be required in order for the Company to comply with the provisions
of Regulation S-X under the Securities Act) after receipt of a request to file a
registration statement with respect to Registrable Securities, a registration
statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate and which form shall be available for the
sale of such Registrable Securities in accordance with the intended method of
distribution thereof and, if the offering is an underwritten offering, shall be
reasonably satisfactory to the managing underwriter or underwriters, and use its
best efforts to cause such registration statement to become effective; provided,
however, that if the Company shall within five (5) Business Days after receipt
of such request furnish to the Holders making such a request a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company it would be
significantly disadvantageous to the Company and its stockholders for such a
registration statement to be filed on or before the date filing would be
required, the Company shall have an additional period of not more than 45 days
within which to file such registration statement (provided that only one such
notice may be given during any 12 month period); and provided, further, that
before filing a
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registration statement or prospectus or any amendments or supplements thereto,
the Company shall (a) furnish to the counsel selected by the Holder making the
demand, or if no demand, then, by the Holders, in the aggregate, that own or
will own a majority of the Registrable Securities covered by such registration
statement, copies of all such documents proposed to be filed, which documents
will be subject to the review of such counsel, and (b) notify each seller or
prospective seller of Registrable Securities of any stop order issued or
threatened by the Commission or withdrawal of any state qualification and take
all reasonable actions required to prevent such withdrawal or the entry of such
stop order or to remove it if entered;
(b) in connection with a registration pursuant to
Section 2, prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
of not less than 150 days (or such shorter period that will terminate when all
Registrable Securities covered by such registration statement have been sold,
but not before the expiration of the applicable period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder, if applicable), and comply
with the provisions of the Securities Act applicable to it with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended method of disposition by the sellers
thereof set forth in such registration statement;
(c) notify each seller of Registrable Securities and
the managing underwriter, if any, promptly, and (if requested by any such
Person) confirm such advice in writing,
(i) when the prospectus or any supplement
thereto or amendment or post-effective amendment to the registration
statement has been filed, and, with respect to the registration
statement or any post-effective amendment, when the same has become
effective,
(ii) of any request by the Commission for
amendments or post-effective amendments to the registration statement
or supplements to the prospectus or for additional information,
(iii) of the issuance by the Commission of
any stop order suspending the effectiveness of the registration
statement or the initiation or threatening of any proceedings for that
purpose,
(iv) if at any time during the distribution
of securities by the managing underwriter the representations and
warranties of the Company to be contained in the underwriting agreement
cease to be true and correct in all material respects, and
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(v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(d) use its best efforts to prevent the issuance of
any stop order suspending the effectiveness of the registration statement or any
state qualification or any order preventing or suspending the use of any
preliminary prospectus, and use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of the registration statement or any state
qualification or of any order preventing or suspending the use of any
preliminary prospectus at the earliest possible moment;
(e) if requested by the managing underwriter or a
seller of Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment to the registration statement such
information as the managing underwriter or a seller of Registrable Securities
reasonably request to have included therein relating to the plan of distribution
with respect to the Registrable Securities, including, without limitation,
information with respect to the amount of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the underwritten offering of the
Registrable Securities to be sold in such offering; and make all required
filings of such prospectus supplement or post-effective amendment promptly after
being notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment;
(f) furnish to each seller of Registrable Securities
and the managing underwriter one signed copy of the registration statement and
each amendment thereto as filed with the Commission, and such number of copies
of such registration statement, each amendment (including post-effective
amendments) and supplement thereto (in each case including all documents
incorporated by reference and all exhibits thereto whether or not incorporated
by reference), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as each seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
(g) use reasonable efforts to register or qualify
such Registrable Securities under such other securities or "blue sky" laws of
such jurisdictions as any seller or underwriter reasonably requests in writing
and to do any and all other acts and things that may be reasonably necessary or
advisable to register or qualify for sale in such jurisdictions the Registrable
Securities owned by such seller; provided, however, that the Company shall not
be required to (a) qualify generally
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to do business in any jurisdiction where it is not then so qualified, (b)
subject itself to taxation in any such jurisdiction, (c) consent to general
service of process in any such jurisdiction or (d) provide any undertaking
required by such other securities or "blue sky" laws or make any change in its
charter or bylaws that the Board of Directors determines in good faith to be
contrary to the best interest of the Company and its stockholders;
(h) use reasonable efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of the Company to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such Registrable Securities;
(i) notify each seller of such Registrable Securities
at any time when a prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and prepare and file
with the Commission a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an 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, in light of the circumstances under which they were made,
not misleading;
(j) enter into customary agreements (including an
underwriting agreement in customary form, if the offering is an underwritten
offering) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities and in
such connection:
(i) make such representations and warranties
to the underwriters in form, substance and scope, reasonably
satisfactory to the managing underwriter, as are customarily made by
issuers to underwriters in primary underwritten offerings on the form
of registration statement used in such offering;
(ii) obtain opinions and updates thereof of
counsel, which counsel and opinions to the Company (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriter, addressed to the managing underwriter, covering the
matters customarily covered in opinions requested in primary
underwritten offerings on the form of registration statement used in
such offering and such other
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matters as may be reasonably requested by the managing underwriter;
(iii) obtain so-called "cold comfort"
letters and updates thereof from the Company's independent public
accountants addressed to the managing underwriter in customary form and
covering matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with primary underwritten
offerings and such other matters as may be reasonably requested by the
managing underwriter;
(iv) cause the underwriting agreements to
set forth in full the indemnification provisions and procedures of
Section 9 (or such other substantially similar provisions and
procedures as the managing underwriter shall reasonably request) with
respect to all parties to be indemnified pursuant to said Section; and
(v) deliver such documents and certificates
as may be reasonably requested by the Participating Holder or Holders
to evidence compliance with the provisions of this Section 7(j) and
with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
The above shall be done at the effectiveness of such
registration statement (when consistent with customary industry practice), each
closing under any underwriting or similar agreement as and to the extent
required thereunder and from time to time as may reasonably be requested by the
sellers of Registrable Securities, all in a manner consistent with customary
industry practice.
(k) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement, the counsel referred to in clause (a)
of Section 7(a) and any attorney, accountant or other agent retained by any such
seller or underwriter (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors, employees and agents to supply all information reasonably requested
by any such Inspector in connection with such registration statement. Records
that the Company determines, in good faith, to be confidential and that it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (a) the disclosure of such Records is, in the reasonable
judgment of any Inspector, necessary to avoid or correct a misstatement or
omission of a material fact in the registration statement or (b) the release of
such Records is ordered pursuant to a subpoena or other order from a court or
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governmental agency of competent jurisdiction or required (in the written
opinion of counsel to such seller or underwriter, which counsel shall be
reasonably acceptable to the Company) pursuant to applicable state or federal
law. Each seller of Registrable Securities agrees that it will, upon learning
that disclosure of such Records are sought by a court or governmental agency,
give notice to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of the Records deemed
confidential;
(l) if such sale is pursuant to an under-written
offering, use reasonable efforts to obtain a "cold comfort" letter and updates
thereof from the Company's independent public accountants in customary form and
covering such matters of the type customarily covered by "cold comfort" letters
as the holders, in the aggregate, of a majority of the Registrable Securities
being sold and the managing underwriter or underwriters reasonably request;
(m) otherwise use reasonable efforts to comply with
the Securities Act, the Exchange Act, all applicable rules and regulations of
the Commission and all applicable state securities and real estate syndication
laws, and make generally available to its security holders, as soon as
reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act;
(n) use reasonable efforts to cause all Registrable
Securities covered by the registration statement to be listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed, provided that the applicable listing requirements are satisfied;
(o) cooperate with the sellers of Registrable
Securities and the managing underwriter to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing underwriter may
reasonably request at least 2 business days prior to any sale of Registrable
Securities to the underwriters;
(p) cooperate and assist in any filings required to
be made with the NASD and in the performance of any due diligence investigation
by any underwriter;
(q) prior to the filing of any document which is to
be incorporated by reference into the registration statement or the prospectus
(after the initial filing of the registration statement) provide copies of such
document to the sellers of Registrable Securities, the underwriters and their
respective counsel, make the Company representatives available for
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discussion of such document with such persons and, to the extent changes may be
made to such document without the consent of a third party (other than the
Company's accountants or any affiliate of the Company), make such changes in
such document prior to the filing thereof as any such persons may reasonably
request to the extent and only to the extent that such changes relate to a
description of a DeBartolo Group Holder or the Plan or Distribution being
effected by a DeBartolo Group Holder; and
(r) participate, if so requested, in a "road show" in
connection with the sale of the Registrable Securities but only to the extent
reasonably requested by the managing underwriter, if such sale is pursuant to an
underwritten offering.
The Company may require each seller or prospective seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding the distribution of such securities
and other matters as may be required to be included in the registration
statement.
Each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Paragraph (i) of this Section 7, such holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Paragraph
(i) of this Section 7, and, if so directed by the Company, such holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice, the Company shall extend the
period during which such registration statement shall be maintained effective
pursuant to this Agreement (including the period referred to in Paragraph (b) of
this Section 7) by the number of days during the period from and including the
date of the giving of such notice pursuant to Paragraph (i) of this Section 7 to
and including the date when each seller of Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Paragraph (i) of this Section 7.
The Company shall keep the sellers of Registrable Securities
to be offered in a given registration advised of the status of any registration
in which they are participating. In addition, the Company and each such seller
of Registrable Securities may enter into understandings in writing whereby such
seller of Registrable Securities will agree in advance as to the acceptability
of the price or range of prices per share at which the Registrable Securities
included in such registration are to be offered to the public. Furthermore, the
Company shall
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establish pricing notification procedures reasonably acceptable to each such
seller of Registrable Securities and shall, as promptly as practicable after
learning the same from the managing underwriter, use reasonable efforts to give
oral notice to each such seller of Registrable Securities of the anticipated
date on which the Company expects to receive a notification from the managing
underwriter (and any changes in such anticipated date) of the price per share at
which the Registrable Securities included in such registration are to be offered
to the public.
8. Registration Expenses. The Company shall pay all expenses
incident to its performance of or compliance with this Agreement, including,
without limitation, (a) all Commission, stock exchange and National Association
of Securities Dealers, Inc. registration, filing and listing fees, (b) all fees
and expenses incurred in complying with securities or "blue sky" laws (including
reasonable fees and disbursements of counsel in connection with "blue sky"
qualifications of the Registrable Securities), (c) all printing, messenger and
delivery expenses, (d) all fees and disbursements of the Company's independent
public accountants and counsel and (e) all fees and expenses of any special
experts retained by the Company in connection with any Demand Registration or
Piggyback Registration pursuant to the terms of this Agreement, regardless of
whether such registration becomes effective; provided, however, that the Company
shall not pay the costs and expenses of any Holder relating to underwriters'
commissions and discounts relating to Registrable Securities to be sold by such
Holder (but such costs and expenses shall be paid by the Holders on a pro rata
basis), brokerage fees, transfer taxes, or the fees or expenses of any counsel,
accountants or other representatives retained by the Holders, individually or in
the aggregate. All of the expenses described in this Section 8 that are to be
paid by the Company are herein called "Registration Expenses."
9. Indemnification; Contribution.
9.1. Indemnification by the Company. The Company
agrees to indemnify, to the fullest extent permitted by law, each Holder and
each secured creditor referred to in Section 12.4(c)(ii) hereof (a "Secured
Creditor"), each of their respective officers, directors, agents, advisors,
employees and trustees, and each person, if any, who controls such Holder or
Secured Creditor (within the meaning of the Securities Act), against any and all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in light of the circumstances under which
they were made) not misleading, except insofar as the same are caused by or
contained in any information with respect to such Holder or Secured Creditor
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furnished in writing to the Company by such Holder or Secured Creditor expressly
for use therein or by such Holder's or Secured Creditor's failure to deliver a
copy of the prospectus or any supplements thereto after the Company has
furnished such Holder or Secured Creditor with a sufficient number of copies of
the same or by the delivery of prospectuses by such Holder or Secured Creditor
after the Company notified such Holder or Secured Creditor in writing to
discontinue delivery of prospectuses. The Company also shall indemnify any
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters (within the meaning of the Securities
Act) to the same extent as provided above with respect to the indemnification of
the Holders.
9.2. Indemnification by Holders. In connection with
any registration statement in which a Holder is participating, each such Holder
shall furnish to the Company in writing such information and affidavits with
respect to such Holder as the Company reasonably requests for use in connection
with any such registration statement or prospectus and agrees to indemnify,
severally and not jointly, to the fullest extent permitted by law, the Company,
its officers, directors and agents and each person, if any, who controls the
Company (within the meaning of the Securities Act) against any and all losses,
claims, damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of a material fact or any omission or alleged omission of a
material fact required to be stated in any registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein (in the case of a prospectus, in light
of the circumstances under which they were made) not misleading, to the extent,
but only to the extent, that such untrue or alleged untrue statement or omission
is contained in or omitted from, as the case may be, any information or
affidavit with respect to such Holder so furnished in writing by such Holder
specifically for use in the Registration Statement. Each Holder also shall
indemnify any underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the Company.
9.3. Conduct of Indemnification Proceedings. Any
party that proposes to assert the right to be indemnified under this Section 9
shall, promptly after receipt of notice of commencement of any action against
such party in respect of which a claim is to be made against an indemnifying
party or parties under this Section 9, notify each such indemnifying party of
the commencement of such action, enclosing a copy of all papers served, but the
omission so to notify such indemnifying party will not relieve it from any
liability that it may have to any indemnified party under the foregoing
provisions of this Section 9 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
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indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. If the indemnifying party
assumes the defense, the indemnifying party shall have the right to settle such
action without the consent of the indemnified party; provided, however, that the
indemnifying party shall be required to obtain such consent (which consent shall
not be unreasonably withheld) if the settlement includes any admission of
wrongdoing on the part of the indemnified party or any decree or restriction on
the indemnified party or its officers or directors; provided, further, that no
indemnifying party, in the defense of any such action, shall, except with the
consent of the indemnified party (which consent shall not be unreasonably
withheld), consent to entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability with respect
to such action. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified party unless (a) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (b) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available in the indemnifying party, (c) a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party) or (d) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time from all such indemnified party or parties unless
(a) the employment of more than one counsel has
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been authorized in writing by the indemnifying party or parties, (b) an
indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it that are different from or in
addition to those available to the other indemnified parties or (c) a conflict
or potential conflict exists (based on advice of counsel to an indemnified
party) between such indemnified party and the other indemnified parties, in each
of which cases the indemnifying party shall be obligated to pay the reasonable
fees and expenses of such additional counsel or counsels. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent shall not be unreasonably withheld).
9.4. Contribution. If the indemnification provided
for in this Section 9 from the indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the indemnifying party, to the
extent such indemnification is unavailable, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
that resulted in such losses, claims, damages, liabilities or expenses. The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 9.3, any legal or other fees or expenses reasonably incurred by such
party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9.4 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person.
If indemnification is available under this Section 9, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 9.1 and 9.2 without regard
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to the relative fault of said indemnifying parties or indemnified party.
10. Participation in Underwritten Registrations. No person may
participate in any underwritten registration hereunder unless such person (i)
agrees to sell such person's securities on the basis provided in any
underwriting agreements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
11. Rule 144. The Company covenants that it shall use its best
efforts to file the reports required to be filed by it under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder if and when the Company becomes obligated to file such
reports (or, if the Company ceases to be required to file such reports, it
shall, upon the request of any Holder, make publicly available other
information), and it shall, if feasible, take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such Rule may be amended from time to time or (ii)
any similar rules or regulations hereafter adopted by the Commission. Upon the
written request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such requirements.
12. Miscellaneous.
12.1. Remedies. Each Holder, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
12.2. Amendments and Waivers. Except as otherwise
provided herein, the provisions of this Agreement may not be amended, modified
or supplemented, and waivers or consents to departures from the provisions
hereof may not be given unless the Company has obtained the written consent of
all Holders.
12.3. Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, or sent by certified or registered or express mail, postage prepaid.
Any such notice shall be deemed given when so delivered personally, or, if
mailed, five days (or,
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in the case of express mail, one day) after the date of deposit in the United
States mail, as follows:
(i) if to the Company, to:
Simon Property Group, Inc.
Merchants Plaza
115 West Washington Street
Suite 15 East
Indianapolis, Indiana 46204
Attention: David Simon
James M. Barkley, Esq.
Facsimile No.: (317) 685-7221
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019
Attention: Richard L. Posen, Esq.
Facsimile: (212) 728-8111
(ii) if to any Holder, to the most current address of
such Holder given by such Holder to the Company in writing.
Any party may by notice given in accordance with this Section
12.3 to the other parties designate another address or person for receipt of
notice hereunder.
12.4. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and
be binding upon the Holders and their respective successors and assigns and the
successors and assigns of the Company; provided, however, that, except as
otherwise provided in Sections 12.4(b) and (c) hereof, no Limited Partner Holder
may assign its rights hereunder to any person who is not a permitted transferee
of such Holder pursuant to the terms of the Partnership Agreement; provided
further, that, except as otherwise provided in Section 12.4(b) or (c) hereof, no
Holder may assign its rights hereunder to any person who does not acquire all or
substantially all of such Holder's Registrable Securities or Units, as the case
may be, or, (i) in the case of the Simon Family Entities, to any person who does
not acquire at least $10,000,000 worth of the Simon Family Entities' Registrable
Securities or Units and (ii) in the case of the DeBartolo Group to any person
who does not acquire at least $10,000,000 worth of DeBartolo Group's Registrable
Securities or Units, (iii) in the case of State Street Bank and Trust Company
(the "TREET Trustee"), not individually but solely in its capacity as trustee of
the Telephone Real Estate Equity Trust ("TREET"), to any person who does not
acquire at least $10,000,000 worth of TREET's Registrable Securities, (iv) in
the case of Stichting Pensioen
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fonds Voor de Gezondheid Geestelijke en Maatschappelijke Belangan ("PGGM"), to
any person who does not acquire at least $10,000,000 worth of PGGM's Registrable
Securities, and (v) in the case of Kuwait Investment Authority, as agent for the
government of Kuwait ("Kuwait"), to any person who does not acquire at least
$10,000,000 worth of Kuwait's Registrable Securities. Notwithstanding the
foregoing, it is understood and agreed that the TREET Trustee shall have the
right to assign its rights hereunder to the beneficial owners of TREET in
connection with any distribution of TREET's Registrable Securities to such
beneficial owners.
(b) Affiliates. It is understood that JCP Realty, Inc. ("JCP")
and Brandywine Realty, Inc. ("Brandywine") are affiliates and that under the
terms of the Partnership Agreement, Limited Partners have the right to assign
their partnership interests, in whole or in part, to their affiliates. The
provisions of this Agreement shall inure to the benefit of all such affiliates
and, for all purposes of this Agreement, a party to this Agreement (other than
the Company) and all of its affiliates which at the time in question are Limited
Partners of the Operating Partnership shall be deemed to be one party, with the
consequence that (i) they may aggregate their Units for the purpose of
exercising their rights under this Agreement and (ii) to assign the benefits of
this Agreement to a third party which is not an affiliate of them, except as
otherwise provided with respect to the Simon Family Entities in Section 12.4(a)
above, they must together assign to such third party all or substantially all of
the aggregate amount of Units held by all of them.
(c) Transfer of Exchange and Registration Rights. (i) The
rights of each DeBartolo Group Holder to make a request and to cause the Company
to register Registrable Securities owned by such Holder under Section 2 hereof
and the right to cause the Company to include Registrable Securities in a
registration for the account of the Company under Section 3 hereof (the
"Rights") may be assigned, from time to time and reassigned, in whole or in
part, to a transferee or assignee receiving (except as provided in Section
12.4(c)(ii) below) at least three percent (3%) of the outstanding shares of
Common Stock or Units exchangeable into at least such number of shares of Common
Stock (the "Three Percent Requirement") in connection with a transfer or
assignment of shares of Common Stock received upon exchange of Units in
connection with a substantially contemporaneous resale of all such Units or
Units which is not prohibited under any other agreement to which the transferor
or assignor is a party or any pledge of Units or Common Stock which is not
prohibited under any other agreement to which the transferor or assignor is a
party, provided that (x) such transfer may otherwise be effected in accordance
with applicable securities law, (y) the Company is given written notice of such
assignment prior to such assignment or promptly thereafter, and (z) the
transferee or assignee by written agreement acknowledges that he is bound by the
terms of
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this Agreement. From and after the occurrence of any such transfer, the defined
term "Holder" shall include such transferees or assignees.
(ii) The Rights granted to each member of the DeBartolo Group hereunder
may be assigned pursuant to this Section 12.4(c) to a secured creditor to whom
such Holder has pledged Units (or other securities exchangeable or convertible
into Registrable Securities) or Registrable Securities prior to the date hereof,
which pledge shall be permitted hereunder, and the Three Percent Requirement
shall not apply to any such assignment. Such rights may, to the extent provided
in the pledge, security or other agreement or instrument pursuant to which such
rights have been assigned and to the extent permitted by the Securities Act and
the rules and regulations thereunder, be exercised by any such secured creditor
even though it does not become an assignee of the pledged Units of such Holder
pursuant to Section 12.4(c)(i) hereof. The Company acknowledges and consents to
the pledge by each of Rues Properties LLC, Great Lakes Mall LLC, NIDC LLC, EJDC
LLC and DeBartolo LLC (the "DeBartolo Pledgors") of the rights, as described in
the two preceding sentences, to Bank One, N.A., or such other institution
serving as indenture trustee under the Indenture dated as of July 8, 1998 among
the DeBartolo Pledgors and Bank One, N.A., as indenture trustee, as such
indenture may be supplemented or amended from time to time (the "Indenture" and
Bank One, N.A. or such other institution, the "Trustee") with respect to the
Units pledged to the Trustee pursuant to the Indenture, and that the Trustee
shall be deemed to be a Secured Creditor as such term is used herein. Upon
notice to the Company by any such secured creditor that it has become authorized
to exercise such Rights, no further written instrument shall be required under
this Agreement; provided that such secured creditor provides the Company at the
time it exercises any rights with such indemnification and certifications as are
reasonably satisfactory to the Company in form and substance as to its
authorization to exercise such rights. It is further expressly understood and
agreed that (i) the Company shall not be required in any way to determine the
validity or sufficiency, whether in form or in substance, of any certification
from a secured creditor that it is authorized to exercise Rights so transferred
to it, (ii) the Company shall have no liability to any Holder for acting in
accordance with any such certification and (iii) no further indemnification to
the Company shall be required pursuant to this Section 12.4(c). The Company
shall not be required in any way to determine the validity or sufficiency,
whether in form or in substance, of any written instrument referred to in the
second sentence of this Section 12.4(c)(ii), and it shall be sufficient if any
writing purporting to be such an instrument is delivered to the Company and
purports on its face to be correct in form and signed or otherwise executed by
such Holder. The Company may continue to rely on such written instrument until
such time, if any, that it receives a written instrument from the secured
creditor named therein (or its successor) revoking, or
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acknowledging the revocation or other termination of, the authority granted by
such written instrument.
(iii) The rights of each of JCP and Brandywine to make a
request and cause the Company to register Registrable Securities owned by such
Holder under Section 2 hereof and the right of such Holder to cause the Company
to include Registrable Securities in a registration for the account of the
Company under Section 3 hereof (the "JCP Rights") may be assigned (i) to a
secured creditor to whom such Holder has pledged Units or, if such Holder has
not previously exercised the right provided for in the first sentence of Section
9.3(c) of the Operating Partnership Agreement, to any Person to whom the secured
creditor has transferred the pledged Units pursuant to Section 9.3(c) of the
Operating Partnership Agreement (such secured creditor or such transferee being
referred to as the "Assignee"), in each case subject to the further terms and
provision of this Section 12.4(c)(iii). The JCP Rights may be exercised by the
Assignee after the Assignee has become a substitute Limited Partner of the
Operating Partnership and only if the Assignee provides the Company at the time
it exercises the JCP Rights with such indemnification and certifications as are
reasonably satisfactory to the Company in form and substance as to its
authorization to exercise such JCP Rights. It is further expressly understood
and agreed that (i) the Company shall not be required in any way to determine
the validity or sufficiency, whether in form or in substance, of any
certification from the Assignee that it is authorized to exercise the JCP Rights
so transferred to it, (ii) the Company shall have no liability to such Holder
for acting in accordance with any such certification and (iii) except as set
forth above in this paragraph, no further indemnification to the Company shall
be required pursuant to this Section 12.4(c).
12.5. Mergers, Etc. In addition to any other restriction on
mergers, consolidations and reorganizations contained in the articles of
incorporation, by-laws, code of regulations or agreements of the Company, the
Company covenants and agrees that it shall not, directly or indirectly, enter
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless all the Registrable Securities and all of
the outstanding shares of Common Stock of the Company and Units are exchanged or
purchased upon substantially equivalent economic terms for cash or freely
marketable securities of the surviving corporation unless the surviving
corporation shall, prior to such merger, consolidation or reorganization, agree
in a writing to assume in full and without modification other than conforming
changes necessary to reflect the new issuer of the Registrable Securities all of
the obligations of the Company under this Agreement, and for that purpose
references hereunder to "Registrable Securities" shall be deemed to include the
securities which holders of Common Stock would be entitled to receive in
exchange for Registrable Securities pursuant to any such merger, consolidation,
sale of
24
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all or substantially all of its assets or business, liquidation, dissolution or
reorganization.
12.6. Intentionally Omitted.
12.7. Intentionally Omitted.
12.8. Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
12.9. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
12.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
12.11. Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, it being
intended that all of the rights of the Holders shall be enforceable to the full
extent permitted by law.
12.12. Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. Upon execution by any of the
parties hereto, such party irrevocably waives (i) all of its rights under the
Registration Rights Agreement, dated as of August 9, 1996, by and among certain
of the parties hereto and/or (ii) any registration rights (including demand,
piggy back and shelf registration rights) it may hold relating to the Company
(including any predecessor such as Corporate Property Investors). There are no
restrictions, promises, warranties or undertakings other than those set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the date first written above.
SIMON PROPERTY GROUP, INC.
By: /s/ David Simon
-------------------------------
Name: David Simon
Title: Chief Executive Officer
MELVIN SIMON & ASSOCIATES, INC.
By: /s/ David Simon
-------------------------------
Name: David Simon
Title: Vice President
JCP REALTY, INC.
By: /s/ Jack Garvey
-------------------------------
Name: Jack Garvey
Title: Executive Vice President
BRANDYWINE REALTY, INC.
By: /s/ Jack Garvey
-------------------------------
Name: Jack Garvey
Title: Executive Vice President
/s/ Melvin Simon
-------------------------------
MELVIN SIMON
/s/ Herbert Simon
-------------------------------
HERBERT SIMON
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27
/s/ David Simon
-------------------------------------
DAVID SIMON
/s/ Deborah J. Simon
-------------------------------------
DEBORAH J. SIMON
/s/ Cynthia J. Simon Skjodt
-------------------------------------
CYNTHIA J. SIMON SKJODT
/s/ Irwin Katz
-------------------------------------
IRWIN KATZ, as Successor Trustee Under
Declaration of Trust and Trust Agreement
Dated August 4, 1970
/s/ Irwin Katz
-------------------------------------
IRWIN KATZ, as Trustee of the Melvin Simon
Trust No. 1, the Melvin Simon Trust No. 6,
the Melvin Simon Trust No. 7 and the Herbert
Simon Trust No. 3
NORTHEAST PROPERTIES, LLC
By: /s/ Herbert Simon
-----------------------------
Name: Herbert Simon, Member
S.F.G. COMPANY, L.L.C.
By: MELVIN SIMON & ASSOCIATES, INC., its
manager
By: /s/ David Simon
--------------------------
Name: David Simon
Title: Vice President
27
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[INTENTIONALLY LEFT BLANK]
28
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MELVIN SIMON, HERBERT SIMON
AND DAVID SIMON, NOT
INDIVIDUALLY BUT AS VOTING
TRUSTEES UNDER THAT CERTAIN
VOTING TRUST AGREEMENT,
VOTING AGREEMENT AND PROXY
DATED AS OF DECEMBER 1,
1993, BETWEEN MELVIN SIMON
& ASSOCIATES, INC., AND
MELVIN SIMON, HERBERT SIMON
AND DAVID SIMON:
/s/ Melvin Simon
------------------------------------
Melvin Simon
/s/ Herbert Simon
------------------------------------
Herbert Simon
/s/ David Simon
------------------------------------
David Simon
ESTATE OF EDWARD J. DeBARTOLO, SR.
By: /s/ Marie Denise DeBartolo York
----------------------------------
Name: Marie Denise DeBartolo York
Title: Co-Executor
By: /s/ Edward J. DeBartolo, Jr.
----------------------------------
Name: Edward J. DeBartolo, Jr.
Title: Co-Executor
/s/ Edward J. DeBartolo, Jr.
--------------------------------------------
Edward J. DeBartolo, Jr., individually, and
in his capacity as Trustee under (1) the
Lisa M. DeBartolo Revocable Trust-successor
by assignment from Edward J. DeBartolo Trust
No. 5, (ii) the Tiffanie L. DeBartolo
Revocable Trust-successor by assignment from
Edward J. DeBartolo Trust No. 6 and (iii)
Edward J. DeBartolo Trust No.
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7 for the Benefit of Nicole A. DeBartolo
/s/ Cynthia R. DeBartolo
----------------------------------
Cynthia R. DeBartolo
/s/ Marie Denise DeBartolo York
-------------------------------------------
Marie Denise DeBartolo York, individually,
and in his/her capacity as Trustee under (i)
Edward J. DeBartolo Trust No. 8 for the
benefit of John Edward York, (ii) Edward J.
DeBartolo Trust No. 9 for the benefit of
Anthony John York, (iii) Edward J. DeBartolo
Trust No. 10 for the benefit of Mara Denise
York and (iv) Edward J. DeBartolo Trust No.
11 for the benefit of Jenna Marie York
EJDC LLC
By: /s/ Lynn E. Davenport
----------------------------------
Name: Lynn E. Davenport
Title:
DeBARTOLO LLC
By: /s/ Lynn E. Davenport
----------------------------------
Name: Lynn E. Davenport
Title:
NIDC LLC
By: /s/ Lynn E. Davenport
----------------------------------
Name: Lynn E. Davenport
Title:
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31
GREAT LAKES MALL LLC
By: /s/ Lynn E. Davenport
----------------------------------
Name: Lynn E. Davenport
Title:
RUES PROPERTIES LLC
By: /s/ Lynn E. Davenport
----------------------------------
Name: Lynn E. Davenport
Title:
RUES PROPERTIES, INC.
By: /s/ Lynn E. Davenport
----------------------------------
Name: Lynn E. Davenport
Title:
CHELTENHAM SHOPPING CENTER ASSOCIATES
By: /s/ Lynn E. Davenport
----------------------------------
Name: Lynn E. Davenport
Title:
STICHTING PENSIOENFONDS VOOR DE GEZONDHEID
GEESTELIJKE EN MAATSCHAPPELIJKE BELANGEN
By: /s/ D.J. de Beus
----------------------------------
Name: D.J. de Beus
Title: Chairman, Board of
Managing Directors
By: /s/ E.A. Brassem
----------------------------------
Name: E.A. Brassem
Title: Tax Adviser
31
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KUWAIT FUND FOR ARAB ECONOMIC DEVELOPMENT
By: /s/ Bader Al-Humaidhi
----------------------------------
Name: Bader Al-Humaidhi
Title: Director-General
ARAB FUND FOR ECONOMIC AND SOCIAL
DEVELOPMENT
By: /s/ Abdlatif Al-Humad
----------------------------------
Name: Abdlatif Al-Humad
Title: Chairman/D.A.
KUWAIT INVESTMENT AUTHORITY AS AGENT FOR
GOVERNMENT OF KUWAIT
By: /s/ Dr. Adnan Al-Sultan
----------------------------------
Name: Dr. Adnan Al-Sultan
Title: Chief Investment Manager
Direct Investments Department
STATE STREET BANK AND TRUST
COMPANY, not individually
but solely in its capacity
as Trustee of the Telephone
Real Estate Equity Trust,
By: /s/ Kathy Rohan
----------------------------------
Name: Kathy Rohan
Title: Vice President
32
1
EXHIBIT 4.5
EXECUTION COPY
ISSUANCE AGREEMENT dated as of September 23,
1998, between CORPORATE PROPERTY INVESTORS, INC., a
Delaware corporation to be renamed Simon Property
Group, Inc. at the effective time of the Merger
("C1"), and CORPORATE REALTY CONSULTANTS, INC., a
Delaware corporation to be renamed SPG Realty
Consultants, Inc. at the effective time of the Merger
("C2").
The parties hereto hereby agree as follows:
SECTION 1. Definitions. As used herein, the following terms
shall have the following meanings:
"C1 Common Equivalent" with respect to a share of a series of
C1 Special Preferred Stock at any date shall mean the number of shares of C1
Common Stock (the "Conversion Rate") that would be issued to the holder of such
share of C1 Special Preferred Stock if all outstanding shares of such series
were converted into C1 Common Stock on such date in accordance with their terms,
regardless of whether such share of C1 Special Preferred Stock could not
actually be converted until a later date; provided, however, that if no
Conversion Rate has been fixed as of such date, the "C1 Common Equivalent" of
such a share of C1 Special Preferred Stock shall be determined by the Board of
Directors of C1 in good faith so as to achieve, insofar as is possible, the
intent and purposes of this Agreement.
"C1 Common Stock" shall mean the Common Stock, par value $.01
per share, of C1 prior to the effective time of the Merger and the Common Stock,
par value $.0001 per share, of Simon Property Group, Inc. from and after the
effective time of the Merger.
"C1 Special Preferred Stock" shall mean (i) prior to the
effective time of the Merger, the 6.50% First Series Preferred Stock, par value
$1,000 per share, of C1, (ii) from and after the effective time of the Merger,
the 6.50% Series A Convertible Preferred Stock, par value $.0001 per share, of
Simon Property Group, Inc. and (iii) any series of preferred stock of C1
convertible into C1 Common Stock, the terms of which expressly provide that such
stock shall be "Special Preferred Stock" of C1 for purposes of this Agreement.
"C2 Common Stock" shall mean the Common Stock, par value $.10
per share, of C2 prior to the effective time of the Merger and the Common Stock,
par value $.0001 per share,
2
2
of SPG Realty Consultants, Inc. from and after the effective time of the Merger.
"C1 Proportionate Interest" shall mean (i) with respect to the
C1 Common Stock at any date, a fraction, the numerator of which shall be the
number of shares of C1 Common Stock outstanding at such date and the denominator
of which shall be the sum of such number of shares of C1 Common Stock and the
aggregate C1 Common Equivalents of all outstanding shares of C1 Special
Preferred Stock at such date, and (ii) with respect to any series of C1 Special
Preferred Stock, a fraction, the numerator of which shall be the C1 Common
Equivalent of the outstanding shares of such series at such date and the
denominator of which shall be the sum of the number of shares of C1 Common Stock
outstanding at such date and the aggregate C1 Common Equivalents of all
outstanding shares of C1 Special Preferred Stock at that date.
"C2 Common Trust" shall mean the trust for the ratable benefit
of all or substantially all the holders of C1 Common Stock established pursuant
to that certain Trust Agreement dated as of October 30, 1979, among the
shareholders of Corporate Property Investors, a Massachusetts business trust,
whose executions appear at the foot thereof, C2 and Bank of Montreal Trust
Company, as successor trustee thereunder.
"C2 Permitted Preferred Stock" shall mean a series of
preferred stock of C2, (i) the dividends on which shall not be determined by
reference to the dividends on C2 Common Stock or to the financial performance of
C2 or any of its affiliates or any particular line of business of any of them
(other than to provide that such dividends shall be payable to the extent the
Board of Directors of C2 determines that sufficient surplus shall be available
to pay them), (ii) that does not carry any voting rights (other than the right
to vote on amendments to the terms thereof or the Certificate of Incorporation
of C2, if such amendments shall be materially prejudicial to the holders of such
series of preferred stock) and (iii) that is not convertible into C2 Common
Stock.
"C2 Preferred Trust" shall mean a trust for the ratable
benefit of all the holders of a single series of C1 Special Preferred Stock
under which C2 Common Shares are held by a corporate trustee on terms
substantially the same as those of the trust established pursuant to the Trust
Agreement dated as of August 26, 1994, among the holders of the 6.50% First
Series Preference Shares of Corporate Property Investors, a Massachusetts
business trust, whose
3
3
executions appear at the foot thereof, C2 and Bank of Montreal Trust Company, as
trustee thereunder.
"C2 Trust" shall mean each of the C2 Common Trust and the C2
Preferred Trusts.
"C2 Proportionate Interest" for any C2 Trust at any date shall
mean a fraction, the numerator of which shall be the number of shares of C2
Common Stock held in such C2 Trust at such date and the denominator of which
shall be the number of shares of C2 Common Stock outstanding at such date.
"Merger" means the merger of a substantially
wholly owned subsidiary of C1 with and into Simon DeBartolo
Group, Inc. pursuant to an Agreement and Plan of Merger
dated as of February 18, 1998 among Simon DeBartolo Group,
Inc. and C1 and C2.
Two numbers shall be "equal" if such numbers, when rounded to
the nearest 1/10,000th, are the same.
A series of capital stock of C1 shall be "related" to a C2
Trust, and vice versa, if the C2 Common Stock held in such trust is
held for the ratable benefit of the holders of all or substantially all
the outstanding shares of such series of capital stock of C1.
SECTION 2. Establishment of C2 Trusts. C1 shall not issue any
shares of any series of C1 Special Preferred Stock unless either a C2 Trust
related to such series shall then exist or C1 shall contemporaneously cause such
a C2 Trust to be established and give C2 notice of such establishment, along
with the details thereof.
SECTION 3. Issuance of C2 Shares. (a) Whenever C1 shall issue
shares of C1 Common Stock or C1 Special Preferred Stock, including upon the
conversion of any security other than the C1 Special Preferred Stock, C2 shall
issue to the C2 Trusts numbers of shares of C2 Common Stock such that,
immediately after such issuance of C2 Common Stock (giving effect to any
transfers of shares of C2 Common Stock among the C2 Trusts pursuant to the terms
of such trusts occurring by reason of the issuance of such shares of stock by
C1) the C2 Proportionate Interest of each C2 Trust shall equal the C1
Proportionate Interest of the series of capital stock of C1 related to such C2
Trust. The issuance of shares of C1 Common Stock or C1 Special Preferred Stock
in connection with a merger, consolidation or similar transaction in which C1
shall be the survivor shall be deemed to occur when the holders of the
securities to be
4
4
exchanged for such shares surrender the Certificates evidencing such securities
to C1 or an exchange agent for exchange.
(b) C2 shall issue no shares of C2 Common Stock other than to
the C2 Trusts.
SECTION 4. Payment for C2 Shares Issued. Whenever C2 shall
issue shares of C2 Common Stock pursuant to Section 3, C1 shall simultaneously
pay to C2 an amount equal to the greater of (x) the aggregate par value of the
shares of C2 Common Stock issued and (y) the amount determined in good faith by
the Board of Directors of C2 to represent the fair market net asset value of the
shares of C2 Common Stock issued (less, in the case of this clause (y), the
aggregate consideration paid to C2 by parties other than C1 in connection with
such issuance of C2 Common Stock).
SECTION 5. Limitation on Issuance; Reservation of Shares. (a)
C2 shall not (i) issue, or propose or contract to issue, any shares of any
series of capital stock other than C2 Common Stock and C2 Permitted Preferred
Stock, or (ii) increase the par value of the C2 Common Stock.
(b) All authorized shares of C2 Common Stock that are not
outstanding from time to time shall be reserved for issuance pursuant to the
terms of this Agreement.
SECTION 6. Third Party Beneficiaries. The only intended third
party beneficiaries hereof shall be the holders from time to time of the
outstanding shares of C1 Common Stock, C1 Special Preferred Stock and C1
preferred stock convertible into C1 Common Stock; provided, however, that this
Agreement may be amended as set forth herein, and all such third party
beneficiaries shall be bound by the terms of any such amendment.
SECTION 7. Amendment. This Agreement and the rights of the
parties hereunder may not be waived, modified or otherwise amended other than by
a written amendment signed by the parties and either approved in writing by the
trustees of each C2 Trust then existing or approved by the affirmative vote of
the holders of 66.67% of (i) the shares of C1 Common Stock then outstanding,
(ii) each series of C1 Special Preferred Stock then outstanding and (iii) each
series of preferred stock of C1 convertible into C1 Common Stock then
outstanding, each such series voting as a separate class, at a stockholders'
meeting duly called for the purpose thereof or by a written consent in lieu
thereof
5
5
executed in accordance with Section 228 of the General Corporation Law of the
State of Delaware.
SECTION 8. Assignment. Neither this Agreement nor any rights
hereunder shall be assigned by any party hereto, whether voluntarily or
involuntarily, by operation of law or otherwise; provided, however, that a party
may assign this Agreement if it shall merge or consolidate with another entity
with such other entity being the surviving entity, so long as such entity
assumes in writing, by an instrument delivered to the other party and the
trustees of any C2 Trusts then in existence, all the assigning party's
obligations hereunder, and in such an event all references herein to such party,
its capital stock and its Board of Directors shall thereafter be deemed
references to such person, its capital stock and its Board of Directors, as
applicable.
SECTION 9. Termination. This Agreement shall remain in full
force and effect until there shall be no C2 Trusts in existence, whereupon it
shall immediately terminate.
SECTION 10. Notices. (a) C2 shall give C1 prompt notice of any
issuance of C2 Common Stock and of the dissolution of any C2 Trust. C1 shall
give C2 prompt notice of any issuance of C1 Common Stock or C1 Special Preferred
Stock and of the entry by C1 into any agreement obligating C1 to make any such
issuance in the future.
(b) All notices hereunder shall be in writing; shall be hand
delivered, or mailed, postage prepaid, or sent by recognized overnight courier
to the address specified below (as the same may be changed by a party on notice
to the other party):
If to C1:
Simon Property Group, Inc.
National City Center
115 West Washington Street, Suite 15 East
Indianapolis, Indiana 46204
Attn: Corporate Secretary; and
If to C2:
SPG Realty Consultants, Inc.
National City Center
115 West Washington Street, Suite 15 East
Indianapolis, Indiana 46204
6
6
Attn: Corporate Secretary
and shall be deemed delivered when received.
SECTION 11. Governing Law. This Agreement shall be construed
in accordance with, and governed by, the laws of the State of New York, without
regard to conflicts of laws principles.
7
IN WITNESS WHEREOF the undersigned have executed this Issuance
Agreement as of the date first written above.
CORPORATE PROPERTY INVESTORS,
INC.,
by /s/ Harold Rolfe
------------------------------
Name: Harold Rolfe
Title: Vice President and
General Counsel
CORPORATE REALTY CONSULTANTS,
INC.,
by /s/ Harold Rolfe
------------------------------
Name: Harold Rolfe
Title: Vice President and
General Counsel
1
Exhibit 99.1
FOR IMMEDIATE RELEASE
SIMON COMPLETES MERGER WITH CORPORATE PROPERTY INVESTORS
INDIANAPOLIS, INDIANA September 24, 1998 -- Simon Property Group, Inc.
(NYSE: SPG) announced today the completion of its merger with Corporate
Property Investors, Inc. ("CPI"). The Company's stock will continue to trade
under the existing SPG ticker symbol.
"We are extremely pleased to complete our acquisition of CPI," said David
Simon, SPG Chief Executive Officer. "The CPI portfolio of high-quality, market
dominant regional malls, coupled with the existing SPG assets and management
team, creates a retail real estate powerhouse and the unquestioned industry
leader."
Simon Property Group, headquartered in Indianapolis, Indiana, is a
self-administered and self-managed real estate investment trust which, through
its subsidiary partnerships, is engaged primarily in the ownership,
development, management, leasing, acquisition and expansion of income-producing
properties, primarily regional malls and community shopping centers. It
currently owns or has an interest in 241 properties containing an aggregate of
165 million square feet of gross leasable area in 35 states. Together with its
affiliated management company, SPG owns or manages approximately 180 million
square feet of gross leasable area in retail and mixed-use properties. SPG is
the largest publicly traded retail real estate company in North America as
measured by
2
market capitalization.
Additional SPG information is available on the Company's website at
www.simon.com.
/CONTACT: Investors, Shelly Doran, 317-685-7330, or Media, Billie Scott,
317-263-7148, both of Simon Property Group/
/Web site: http://www.simon.com/
