FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-12618
SIMON PROPERTY GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland 35-1901999
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification
No.)
115 West Washington Street
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 636-1600
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
As of May 13, 1996, 55,360,225 shares of common stock, par value $0.0001 per
share, and 3,200,000 shares of Class B common stock, par value $0.0001 per
share, were outstanding.
<TABLE>
SIMON PROPERTY GROUP, INC.
Consolidated Condensed Balance Sheets
(Unaudited and dollars in thousands, except per share amounts)
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
ASSETS:
Investment properties, at cost $2,190,944 $2,162,161
Less _ accumulated depreciation 175,094 152,817
2,015,850 2,009,344
Cash and cash equivalents 45,145 62,721
Tenant receivables and accrued revenue, net 138,901 144,400
Notes receivable and advances due from 91,478 102,522
Management Company
Investment in partnerships and joint ventures, 120,069 117,332
at equity
Deferred costs, net 80,261 81,398
Other assets 40,844 38,719
Total assets $2,532,548 $2,556,436
LIABILITIES AND SHAREHOLDERS' EQUITY:
Mortgages and other notes payable $1,995,620 $1,980,759
Accounts payable and accrued expenses 91,225 113,131
Accrued distributions 47,203 48,594
Cash distributions and losses in partnerships
and joint ventures, at equity 54,709 54,120
Investment in Management Company 20,223 20,612
Other liabilities 29,120 19,582
Total liabilities 2,238,100 2,236,798
COMMITMENTS AND CONTINGENCIES
LIMITED PARTNERS' INTEREST IN OPERATING
PARTNERSHIP 78,366 86,692
SHAREHOLDERS' EQUITY:
Series A convertible preferred stock, 4,000,000
shares authorized, issued and outstanding 99,923 99,923
Common stock, $0.0001 par value, 246,000,000
shares authorized, 55,360,225 and 55,160,195
issued and outstanding at March 31, 1996 and 6 6
December 31, 1995, respectively
Class B common stock, $0.0001 par value,
12,000,000 shares authorized, 3,200,000 issued
and outstanding 1 1
Capital in excess of par value 269,771 266,718
Accumulated deficit (146,702) (131,015)
Unamortized restricted stock award (6,917) (2,687)
Total shareholders' equity 216,082 232,946
Total liabilities and shareholders' equity $2,532,548 $2,556,436
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
SIMON PROPERTY GROUP, INC.
Consolidated Condensed Statements of Operations
(Unaudited and dollars in thousands, except per share amounts)
<CAPTION>
For the three months
ended March 31,
1996 1995
<S> <C> <C>
REVENUE:
Minimum rent $ 78,454 $ 72,998
Overage rent 4,967 4,823
Tenant reimbursements 46,656 44,141
Other income 9,367 7,528
Total revenue 139,444 129,490
EXPENSES:
Property operating 26,185 25,326
Depreciation and amortization 24,672 21,107
Real estate taxes 13,808 12,920
Repairs and maintenance 7,410 5,850
Advertising and promotion 2,720 2,098
Other 3,576 3,324
Total operating expenses 78,371 70,625
OPERATING INCOME 61,073 58,865
INTEREST EXPENSE 38,566 38,933
INCOME BEFORE MINORITY INTEREST 22,507 19,932
MINORITY INTEREST (503) (377)
GAIN ON SALE OF ASSET -- 2,350
INCOME BEFORE UNCONSOLIDATED ENTITIES 22,004 21,905
INCOME FROM UNCONSOLIDATED ENTITIES 1,828 302
INCOME OF SPG OPERATING PARTNERSHIP BEFORE
EXTRAORDINARY ITEM 23,832 22,207
EXTRAORDINARY ITEMLoss on extinguishment of debt (265) --
INCOME OF SPG OPERATING PARTNERSHIP 23,567 22,207
LESS LIMITED PARTNERS' INTEREST IN SPG
OPERATING PARTNERSHIP 8,382 9,560
NET INCOME 15,185 12,647
PREFERRED DIVIDENDS 2,031 --
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 13,154 $ 12,647
EARNINGS PER COMMON SHARE:
Income before extraordinary item $ 0.23 $ 0.26
Extraordinary item -- --
Net income $ 0.23 $ 0.26
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
SIMON PROPERTY GROUP, INC.
Consolidated Condensed Statements of Cash Flows
(Unaudited and dollars in thousands)
<CAPTION>
For the three months
ended March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,185 $ 12,647
Adjustments to reconcile net income to net
cash provided by operating activities-
Depreciation and amortization 26,728 23,468
Loss on extinguishment of debt 265 --
Gain on sale of asset -- (2,350)
Limited Partners' interest in SPG Operating
Partnership 8,382 9,560
Straight-line rent 137 (169)
Minority interest 503 377
Equity in income of unconsolidated entities (1,828) (302)
Changes in assets and liabilities-
Tenant receivables and accrued revenue 5,883 12,185
Deferred costs and other assets 115 (264)
Accounts payable, accrued expenses and other
liabilities (16,122) (13,417)
Net cash provided by operating activities 39,248 41,735
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (25,249) (15,142)
Cash of consolidated joint ventures -- 3,374
Proceeds from sale of asset -- 2,550
Investments in unconsolidated entities (5,093) (3,103)
Distributions from unconsolidated entities 11,772 358
Net cash used in investing activities (18,570) (11,963)
CASH FLOWS FROM FINANCING ACTIVITIES:
Minority interest distributions (1,649) (517)
Distributions to shareholders (32,263) (22,996)
Distributions to limited partners (18,362) (17,811)
Mortgage proceeds, net of transaction costs 105,568 68,143
Mortgage, bond and other payments (91,548) (66,353)
Net cash used in financing activities (38,254) (39,534)
DECREASE IN CASH AND CASH EQUIVALENTS (17,576) (9,762)
CASH AND CASH EQUIVALENTS, beginning of period 62,721 105,139
CASH AND CASH EQUIVALENTS, end of period $ 45,145 $ 95,377
The accompanying notes are an integral part of these statements.
</TABLE>
SIMON PROPERTY GROUP, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
(Dollars in thousands, except per share amounts)
Note 1 - Basis of Presentation
The accompanying consolidated condensed financial statements are
unaudited; however, they have been prepared in accordance with generally
accepted accounting principles for interim financial information and in
conjunction with the rules and regulations of the Securities and Exchange
Commission. Accordingly, they do not include all of the disclosures required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting solely of normal
recurring matters) necessary for a fair presentation of the consolidated
condensed financial statements for these interim periods have been included.
The results for the interim period ended March 31, 1996 are not necessarily
indicative of the results to be obtained for the full fiscal year. These
unaudited consolidated condensed financial statements should be read in
conjunction with the December 31, 1995 audited financial statements and notes
thereto included in the Simon Property Group, Inc. Annual Report on Form 10-K.
The accompanying unaudited consolidated condensed financial statements of
Simon Property Group, Inc. (the "Company") include all the accounts of the
Company, its wholly owned qualified real estate investment trust ("REIT")
subsidiaries and its majority-owned subsidiary, Simon Property Group, L.P.
("SPG Operating Partnership"). Properties which are wholly owned or controlled
by SPG Operating Partnership have been consolidated. All significant
intercompany amounts have been eliminated. The income of SPG Operating
Partnership is allocated to the Company based on the Company's ownership
interest in SPG Operating Partnership during the period. The Company's
weighted average ownership interest in SPG Operating Partnership for the three
months ended March 31, 1996 and 1995 were 61.1% and 57.0%, respectively. The
Company owned 61.1% and 61.0% of SPG Operating Partnership as of March 31, 1996
and December 31, 1995, respectively.
SPG Operating Partnership equity interests in certain partnerships and
joint ventures which represent noncontrolling 14.7% to 50.0% ownership
interests and the investment in M.S. Management Associates, Inc. (the
"Management Company" - see Note 5) are accounted for under the equity method of
accounting. These investments are recorded initially at cost and subsequently
adjusted for net equity in income (loss) and cash contributions and
distributions.
Note 2 - Reclassifications
Certain reclassifications of prior period amounts have been made in the
financial statements to conform to the 1996 presentation.
Note 3 - Cash Flow Information
Cash paid for interest, net of amounts capitalized, during the three
months ended March 31, 1996 was $37,612, as compared to $37,034 for the same
period in 1995. Accrued and unpaid distributions as of March 31, 1996 and 1995
were $47,203, and $43,379, respectively. Of these amounts, $28,841 and $25,018
represented dividends payable on the Company's common stock, respectively, with
the remainders payable to the limited partners of SPG Operating Partnership.
All dividends due in 1996 on the preferred stock were paid by March 31, 1996.
Note 4 - Per Share Data
Per share data is based on the weighted average number of shares of common
stock outstanding during the period. The weighted average number of shares
used in the computation for the three months ended March 31, 1996 and 1995 was
58,382,176 and 49,378,315, respectively. Units of ownership of SPG Operating
Partnership ("Units") may be exchanged for shares of common stock of the
Company on a one-for-one basis in certain circumstances. Additionally, shares
of the Company's preferred stock may be converted into common stock of the
Company beginning in October of 1997 at an initial conversion ratio equal to
0.9524. Neither the stock options outstanding under the Stock Option Plans,
the Units nor the shares of preferred stock have been included in the
computations of per share data as they did not have a dilutive effect.
Note 5 - Investment in Unconsolidated Entities
Summary financial information of partnerships and joint ventures accounted
for using the equity method of accounting, and a summary of SPG Operating
Partnership's investment in and share of income (loss) from such partnerships
and joint ventures follows:
<TABLE>
PARTNERSHIPS AND JOINT
VENTURES
March 31, December 31,
BALANCE SHEETS 1996 1995
<S> <C> <C>
Assets:
Investment properties at cost, net $ 1,196,889 $ 1,156,066
Cash and cash equivalents 40,330 52,624
Tenant receivables 35,567 35,306
Other assets 36,887 32,626
Total assets $ 1,309,673 $ 1,276,622
Liabilities and Partners' Equity:
Mortgage and other notes payable $ 420,872 $ 410,652
Accounts payable, accrued expenses and other
liabilities 130,420 127,322
Total liabilities 551,292 537,974
Partners' equity 758,381 738,648
Total liabilities and partners' equity $ 1,309,673 $ 1,276,622
SPG Operating Partnership's Share of:
Total assets $ 303,153 $ 290,802
Partners' equity:
Investment in partnerships and joint ventures,
at equity $ 120,069 $ 117,332
Cash distributions and losses in partnerships
and joint ventures, at equity (54,709) (54,120)
----------- -----------
$ 65,360 $ 63,212
=========== ===========
</TABLE>
<TABLE>
PARTNERSHIPS AND JOINT
VENTURES
For the three months
ended March 31,
STATEMENTS OF OPERATIONS 1996 1995
<S> <C> <C>
Revenue:
Minimum rent $ 27,964 $ 19,064
Overage rent 762 511
Tenant reimbursements 14,069 9,426
Other income 4,769 1,293
Total revenue 47,564 30,294
Operating Expenses:
Operating expenses and other 17,568 10,830
Depreciation and amortization 10,670 5,444
Total operating expenses 28,238 16,274
Operating Income 19,326 14,020
Interest Expense 7,847 7,271
Net Income 11,479 6,749
Third Party Investors' Share of Net Income 10,022 6,999
SPG Operating Partnership's Share of Net
Income (Loss) $ 1,457 $ (250)
</TABLE>
The net income or net loss for each partnership and joint venture is
allocated in accordance with the provisions of the applicable partnership or
joint venture agreement. The allocation provisions in these agreements are not
always consistent with the ownership interest held by each general or limited
partner or joint venturer, primarily due to partner preferences.
Summary financial information of the Management Company accounted for
using the equity method of accounting, and a summary of SPG Operating
Partnership's investment in and share of income from the Management Company
follows:
<TABLE>
MANAGEMENT COMPANY
March 31, December 31,
BALANCE SHEETS 1996 1995
<S> <C> <C>
Assets:
Current assets $ 27,004 $ 40,964
Undeveloped land and mortgage notes 45,746 45,769
Other assets 14,930 13,813
Total assets $ 87,680 $ 100,546
Liabilities and Shareholders' Deficit:
Current liabilities $ 16,162 $ 18,435
Notes payable and advances due to SPG Operating
Partnership at 11%, due 2008 91,478 102,522
Total liabilities 107,640 120,957
Shareholders' deficit (19,960) (20,411)
Total liabilities and shareholders' deficit $ 87,680 $ 100,546
SPG Operating Partnership's Share of:
Total assets $ 78,912 $ 80,437
Shareholders' deficit $ (20,223) $ (20,612)
</TABLE>
<TABLE>
MANAGEMENT COMPANY
For the three months ended
March 31,
STATEMENTS OF OPERATIONS 1996 1995
<S> <C> <C>
Revenue:
Management fees $ 5,156 $ 4,961
Development and leasing fees 2,325 3,999
Cost-sharing income and other 2,410 1,642
Total revenue 9,891 10,602
Expenses:
Operating expenses 6,852 7,214
Depreciation 622 522
Interest 1,616 1,784
Total expenses 9,090 9,520
Net Income 801 1,082
Preferred Dividends 350 315
Net Income Available for Common Shareholders $ 451 $ 767
SPG Operating Partnership's Share of Net Income $ 371 $ 552
</TABLE>
The management, development and leasing activities related to the non-
wholly owned and other third-party properties are conducted by the Management
Company.
SPG Operating Partnership's share of allocated common costs for the three
months ended March 31, 1996 and 1995 was $7,763 and $6,552, respectively.
Note 6 - Debt
On February 23, 1996, SPG Operating Partnership borrowed the initial
$100,000 tranche of a $184,000 two tranche loan facility for the Forum Shops at
Caesar's ("Forum") and retired the existing $89,701 mortgage debt for Forum.
The initial funding bears interest at LIBOR plus 100 basis points and matures
in February 2000. The remaining proceeds will be used to provide funds for the
approximately 250,000-square-foot phase II expansion of this property.
During the first quarter of 1996, SPG Operating Partnership drew an
additional $6,364 on its construction loan for Cottonwood Mall in Albuquerque,
New Mexico. As of March 31, 1996, a total of $28,763 was outstanding on the
loan.
At March 31, 1996, SPG Operating Partnership had consolidated debt of
$1,995,619, of which $1,230,557 is fixed-rate debt and $765,062 is variable-
rate debt. As of March 31, 1996 and 1995, SPG Operating Partnership had
interest-rate protection agreements related to $551,196 and $553,183 of
variable-rate debt. The agreements are generally in effect until the related
variable-rate debt matures. As a result of the various interest rate
protection agreements, interest savings were $453 and $1,010 for the three
months ended March 31, 1996 and 1995, respectively. SPG Operating
Partnership's pro rata share of indebtedness of the unconsolidated joint
venture properties as of March 31, 1996 and 1995 was $170,801 and $166,581,
respectively.
Note 7 - Shareholders' Equity
The following table summarizes the change in the Company's shareholders'
equity since December 31, 1995.
<TABLE>
Capital in
Excess of
Class B Common Par Value,
Preferred Stock Common Stock Stock Net of
------------------- ----------------- ---------------- Predecessor Unamortized Total
Par Par Basis Accumulated Restricted Shareholders'
Shares Value Shares Value Shares Value Adjustment Deficit Stock Award Equity
--------- -------- ---------- ----- --------- ----- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1995 4,000,000 $ 99,923 55,160,195 $ 6 3,200,000 $ 1 $ 266,718 $ (131,015) $ (2,687) $ 232,946
Transfer Out of
Limited Partners'
Interest in SPG
Operating
Partnership (1,654) (1,654)
Stock Incentive
Program 200,030 4,751 (4,751) --
Amortization of
stock incentive 521 521
Net Income 15,185 15,185
Distributions (30,872) (30,872)
Other (44) (44)
Balance at --------- -------- ---------- ----- --------- ----- ---------- ---------- --------- ----------
March 31, 1996 4,000,000 $ 99,923 55,360,225 $ 6 3,200,000 $ 1 $ 269,771 $ (146,702) $ (6,917) $ 216,082
</TABLE>
Stock Incentive Program
Under the Employee Stock Plan of the Company and SPG Operating
Partnership, the Company's Compensation Committee approved a five-year Stock
Incentive Program, under which restricted stock award shares have been granted
to certain employees at no cost. The outstanding restricted stock award shares
vest in four installments of 25% each on January 1 of each year following the
year in which the restricted shares are awarded. The cost of restricted stock
awards, based on the stock's fair market value at the award dates, is charged
to shareholders' equity and subsequently amortized against earnings of SPG
Operating Partnership over the vesting period.
On March 22, 1995, an aggregate of 1,000,000 shares of restricted stock
was awarded to 50 executives, subject to the performance standards and other
terms of the Stock Incentive Program, described above. On March 22, 1995 and
1996 the board of directors of the Company approved the issuances of 144,196
and 200,030 shares of common stock of the Company, respectively, to the
eligible executives. These shares are being amortized pro-rata over the four-
year vesting period. Approximately $1,439 has been amortized through March 31,
1996.
Note 8 - Proposed DeBartolo Merger
In March 1996, the Company and DeBartolo Realty Corporation ("DeBartolo")
signed a definitive agreement to merge the two companies. The merger is
expected to be completed in the third quarter of 1996 and is subject to
approval by the shareholders of both companies as well as customary regulatory
and other conditions. Under the terms of the agreement, the shareholders of
DeBartolo will receive 0.68 shares of common stock of the Company for each
share of DeBartolo common stock held. The purchase price, including
indebtedness which would be assumed, is estimated at $2.97 billion.
Note 9 - Subsequent Events
Prior to April 11, 1996, SPG Operating Partnership held a 50% joint
venture interest in Ross Park Mall in Pittsburgh, Pennsylvania. On April 11,
1996, SPG Operating Partnership acquired the remaining economic interest. The
purchase price included approximately $44,000 cash and the assumption of the
joint venture partner's share of existing debt. The $44,000 purchase price and
the refinancing of $54,000 of existing debt were funded using SPG Operating
Partnership's revolving credit facility. Effective April 11, 1996, the
property is being accounted for using the consolidated method of accounting.
It was previously accounted for using the equity method of accounting.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
For the Three Months Ended March 31, 1996 vs. the Three Months Ended March 31,
1995
Four property ownership changes (the "Property Transactions") affect the
comparison of the three-month periods. Effective February 23, 1995, SPG
Operating Partnership acquired an additional 50% interest in White Oaks Mall
("White Oaks") and subsequently began including White Oaks in the financial
statements using the consolidated method of accounting. Effective July 31,
1995, SPG Operating Partnership acquired the remaining 50% interest in
Crossroads Mall ("Crossroads") and subsequently began including Crossroads in
the financial statements using the consolidated method of accounting.
Effective September 25, 1995, SPG Operating Partnership acquired the remaining
55% interest in East Towne Mall ("East Towne") and subsequently began including
East Towne in the financial statements using the consolidated method of
accounting. Effective July 1, 1995, SPG Operating Partnership relinquished its
ability to solely direct certain activities related to the control of North
East Mall, and as a result began accounting for the property using the equity
method of accounting.
Total revenue increased $10.0 million or 7.7% for the three months ended
March 31, 1996, as compared to the same period in 1995. Of this increase, $5.1
million is a result of the Property Transactions. The remaining increase is
the result of increases in every component of revenue, primarily minimum rent
($2.5 million) and other income ($1.8 million).
Total operating expenses increased $7.7 million, or 11.0%, for the three
months ended March 31, 1996, as compared to the same period in 1995. Of this
increase, $2.7 million is a result of the Property Transactions. The remaining
$5.0 million increase is primarily due to increases in repairs and maintenance
($1.2 million) and depreciation and amortization ($2.7 million).
The gain on sale of an asset in the three months ended March 31, 1995
($2.4 million) relates to the sale of a minority partnership interest in land
previously held for development in Denver, Colorado.
Income from unconsolidated entities increased $1.5 million for the three
months ended March 31, 1996 as compared to the same period in 1995. This is
primarily due to SPG Operating Partnership's acquisition, in December of 1995,
of a 25% share of Smith Haven Mall, resulting in additional income of $0.7
million, and SPG Operating Partnership's share of a gain on the sale of a
peripheral property ($0.8 million).
The extraordinary loss of $0.3 million in the three months ended March 31,
1996 resulted from the early extinguishment of debt.
Income of SPG Operating Partnership was $23.6 million for the three months
ended March 31, 1996 as compared to $22.2 million for the same period in 1995,
reflecting an increase of $1.4 million, for the reasons discussed above, and
was allocated to the Company based on the Company's preferred unit preference
and ownership interest in SPG Operating Partnership during the period.
Liquidity and Capital Resources
At March 31, 1996, SPG Operating Partnership's balance of cash and cash
equivalents was $45.1 million, not including its proportionate share of cash
held by the joint venture properties and the Management Company. In addition
to its cash reserves, SPG Operating Partnership had unused capacity under its
unsecured revolving credit facility totaling $204.0 million.
Financing and Refinancing. On February 23, 1996, SPG Operating
Partnership borrowed the initial $100.0 million tranche of a $184.0 million two
tranche loan facility for Forum and retired the existing $89.7 mortgage debt
for Forum. The initial funding bears interest at LIBOR plus 100 basis points
and matures in February 2000. The remaining proceeds will be used to provide
funds for the approximately 250,000-square-foot phase II expansion of this
property.
On March 8, 1996, the joint venture which owns Smith Haven Mall entered
into an agreement to refinance $115.0 million of the purchase price of Smith
Haven Mall with a 10-year interest-only mortgage which carries interest at 113
basis points over 10-year treasury bills. Proceeds from the loan, which is
expected to close early in the summer of 1996, will be used to repay a portion
of the partners' equity contributions made at the time of the property
acquisition of approximately $221 million.
During the first quarter of 1996, SPG Operating Partnership drew an
additional $6.4 million on its construction loan for Cottonwood Mall in
Albuquerque, New Mexico. As of March 31, 1996, a total of $28.8 million was
outstanding on this construction loan.
On April 11, 1996, SPG Operating Partnership drew an additional $115.0
million on its revolving credit facility primarily to finance the acquisition
of the remaining interest in Ross Park Mall ($44 million) and to refinance a
portion of the property's debt ($54 million).
Development, Expansions and Renovations. The Company is involved in
several development, expansion and renovation efforts.
Groundbreaking on The Source, a 730,000-square-foot retail development
project in Westbury (Long Island), New York, took place on February 2, 1996.
This new $145 million development will adjoin an existing Fortunoff store and
is expected to open in 1997. SPG Operating Partnership owns 50% of this joint
venture development.
SPG Operating Partnership has also begun demolition of the existing Bakery
Centre in South Miami, Florida in preparation for the development of The Shops
at Sunset Place. Pre-development efforts continue for this 75%-owned 550,000-
square-foot retail and entertainment center.
Construction also continues on the following projects:
* Cottonwood Mall, a 1.0 million-square-foot project is scheduled to open
during the summer of 1996, in Albuquerque, New Mexico. This project is
wholly-owned by SPG Operating Partnership.
* A 250,000-square-foot phase II expansion of Forum, in which SPG Operating
Partnership has a 55% ownership interest, is scheduled to open in the Fall
of 1997. The approximately $90 million costs of the Forum project will be
funded with a portion of a $184 million financing facility which closed
February 23, 1996.
* Ontario Mills, a 1.4 million-square-foot value-oriented regional mall in
Ontario, California, in which SPG Operating Partnership has a 25% ownership
interest, is scheduled to open in November 1996. This approximately $165
million project, a partnership venture with The Mills Corporation, is
anticipated to be funded with third-party financing which is not yet
finalized. SPG Operating Partnership has agreed to funding commitments of
up to $15.0 million relating to the construction of this project.
* The Tower Shops at Stratosphere, in Las Vegas, Nevada, is an approximately
$42 million, 122,000-square-foot retail development project in which SPG
Operating Partnership owns a 50% interest. This two-phase retail development
is currently under construction and phase I is scheduled to open in the
summer of 1996, with phase II scheduled to open in the fall of 1996. The
project has a 15% equity commitment to fund the initial $6.4 million of
construction costs before the remaining construction funding of approximately
$36 million will be advanced by the lender.
Management is also considering renovation and expansion projects at
various other properties. It is anticipated that these projects will be
financed principally with external borrowings, existing corporate credit
facilities and cash flows from operations.
Debt. At March 31, 1996, SPG Operating Partnership had consolidated debt
of $1,995.6 million, of which $1,230.6 million is fixed-rate debt and $765.0
million is variable-rate debt. As of March 31, 1996 and 1995, SPG Operating
Partnership had interest-rate protection agreements relating to $551.2 million
and $553.0 million of the variable-rate debt, respectively. The agreements are
generally in effect until the related variable-rate debt matures.
The Company's ratio of consolidated debt-to-market capitalization was
approximately 46.3% at March 31, 1996.
Dividends. The Company declared a dividend of $0.4925 per share of common
stock for the first quarter of 1996. Future common stock dividends will be
determined based on actual results of operations and cash available for
dividend. Preferred dividends of $0.5078 per preferred share were also
incurred during this period.
Capital Resources. Management anticipates that cash generated from
operating performance will provide the necessary funds on a short- and long-
term basis for its operating expenses, interest expense on outstanding
indebtedness, recurring capital expenditures and distributions to shareholders
in accordance with REIT requirements.
Management continues to actively review and evaluate a number of property
acquisition opportunities. Management believes that funds on hand and amounts
available under SPG Operating Partnership's unsecured revolving credit
facility, together with the ability to issue shares of common stock of the
Company and/or Units, provide the means to finance certain acquisitions. No
assurance can be given that the Company will not be required to, or will not
elect to, even if not required to, obtain funds from outside sources, including
through the sale of debt or equity securities, to finance significant
acquisitions, if any.
Investing and Financing Activities. Cash used in investing activities for
the three months ended March 31, 1996 was $18.6 million, including capital
expenditures and development related costs of $9.2 million, $4.0 million and
$12.0 at Cottonwood Mall, Forum, and various other properties, respectively;
and advances to unconsolidated joint ventures totaling $5.1 million, partially
offset by a note repayment received from M.S. Management Associates of $11.8
million. Cash used in investing activities for the three months ended March 31,
1995 included $15.1 million for tenant allowances, capital expenditures and
development related costs and $3.1 million for the acquisition of a joint
venture interest in a parcel of land to be held for development in Little Rock,
Arkansas, partially offset by $2.6 of net proceeds from the sale of a joint
venture interest in land held for development and cash of $3.4 million related
to the acquisition of interest in White Oaks Mall.
Cash used in financing activities for the three months ended March 31,
1996 was $1.3 less than the three months ended March 31, 1995. Cash used in
1996 included an increase of $9.3 million in distributions to shareholders
(including $3.5 million paid to the preferred shareholder representing
dividends from October 27, 1995 to March 31, 1996) offset by an increase in net
mortgage borrowings of $12.3 million. These borrowings included $9.7 million
from the refinancing at Forum and a $6.4 million increase on the Cottonwood
Mall construction loan.
EBITDA_Earnings from Operating Results before Interest, Taxes, Depreciation and
Amortization
Management believes that there are several important factors that
contribute to the ability of SPG Operating Partnership to increase rent and
improve profitability of its shopping centers, including aggregate tenant sales
volume, sales per square foot, occupancy levels and tenant costs. Each of
these factors has a significant effect on EBITDA. Management believes that
EBITDA is an effective measure of shopping center operating performance
because: (i) it is industry practice to evaluate real estate properties based
on operating income before interest, taxes, depreciation and amortization,
which is generally equivalent to EBITDA; and (ii) EBITDA is unaffected by the
debt and equity structure of the property owner. EBITDA: (i) does not
represent cash flow from operations as defined by generally accepted accounting
principles; (ii) should not be considered as an alternative to net income as a
measure of the Company's operating performance; (iii) is not indicative of cash
flows from operating, investing and financing activities; and (iv) is not an
alternative to cash flows as a measure of the Company's liquidity.
Total EBITDA for the portfolio properties increased from $101.8 million
for the three months ended March 31, 1995 to $115.7 million for the same period
in 1996, representing a growth rate of 13.7%. This increase is primarily
attributable to the three malls opened during 1995 and 1995 acquisitions.
During this period, operating profit margin decreased slightly from 62.2% to
61.9%.
The significant contributing factors are as follows:
Aggregate Tenant Sales Volume. For the three months ended March 31, 1995
compared to the same period in 1996, total reported retail sales for mall and
freestanding stores at the regional malls and all stores at the community
shopping centers for GLA owned by SPG Operating Partnership ("Owned GLA")
increased 10.5% from $934 million to $1,032 million. Retail sales at Owned GLA
affect revenue and profitability levels because they determine the amount of
minimum rent that can be charged, the percentage rent realized, and the
recoverable expenses (common area maintenance, real estate taxes, etc.) the
tenants can afford to pay.
Occupancy Levels. Occupancy levels for regional malls decreased from 84.3%
at March 31, 1995 to 83.0% at March 31, 1995. Occupancy levels for community
shopping centers decreased from 94.0% at March 31, 1995 to 93.1% at March 31,
1996. These decreases are the result of store closings by several retailers
which filed bankruptcy in 1995 and the de-leasing efforts at two malls in
anticipation of de-malling these properties. Management expects to re-lease
substantially all of the space lost to these bankruptcies at generally higher
rents. Owned GLA has increased 2.8 million square feet from March 31, 1995 to
March 31, 1996, primarily as a result of the 1995 opening of three new regional
malls and the acquisition of Smith Haven Mall.
Average Base Rents. Average base rents per square foot of mall and
freestanding stores at regional mall Owned GLA increased 10.7%, from $17.79 to
$19.70 in the first quarter of 1996 as compared to the same period in 1995. In
community shopping centers, average base rents per square foot of Owned GLA
increased 2.1%, from $7.21 to $7.36 during this same period.
Inflation
Inflation has remained relatively low during the past three years and has
had a minimal impact on SPG Operating Performance of the Properties.
Nonetheless, substantially all of the tenants' leases contain provisions
designed to lessen the impact of inflation. Such provisions include clauses
enabling SPG Operating Partnership to receive percentage rentals based on
tenants' gross sales, which generally increase as prices rise, and/or
escalation clauses, which generally increase rental rates during the terms of
the leases. In addition, many of the leases are for terms of less than ten
years, which may enable SPG Operating Partnership to replace existing leases
with new leases at higher base and/or percentage rentals if rents of the
existing leases are below the then-existing market rate. Substantially all of
the leases, other than those for anchors, require the tenants to pay a
proportionate share of operating expenses, including common area maintenance,
real estate taxes and insurance, thereby reducing SPG Operating Partnership's
exposure to increases in costs and operating expenses resulting from inflation.
However, inflation may have a negative impact on some of SPG Operating
Partnership's other operating items. Interest and general and administrative
expenses may be adversely affected by inflation as these specified costs could
increase at a rate higher than rents. Also, for tenant leases with stated rent
increases, inflation may have a negative effect as the stated rent increases in
these leases could be lower than the increase in inflation at any given time.
Other
In March 1996, the Company and DeBartolo Realty Corporation ("DeBartolo")
signed a definitive agreement to merge the two companies. The merger is
expected to be completed in the third quarter of 1996 and is subject to
approval by the shareholders of both companies as well as customary regulatory
and other conditions. Under the terms of the agreement, the shareholders of
DeBartolo will receive 0.68 shares of common stock of the Company for each
share of DeBartolo common stock held. The purchase price, including
indebtedness which would be assumed is estimated at $2.97 billion.
The shopping center industry is seasonal in nature, particularly in the
fourth quarter during the holiday season, when tenant occupancy and retail
sales are typically at their highest levels. In addition, shopping malls
achieve most of their temporary tenant rents during the holiday season. As a
result of the above, earnings are generally highest in the fourth quarter of
each year.
Management recognizes the retail industry is currently experiencing some
difficulty, which is reflected in sales trends and in the bankruptcies and
continued restructuring of several prominent retail organizations.
Continuation of these trends could impact future earnings performance.
Part II - Other Information
Item 1: Legal Proceedings
Neither the Company nor any of the portfolio properties is currently a
party to any material pending legal proceedings nor, to management's knowledge,
is any material legal proceeding currently contemplated by governmental
authorities against the Company or the portfolio properties. The entities that
own portfolio properties are parties to a variety of routine litigation arising
in the ordinary course of business. Most of such proceedings are covered by
liability insurance. All of such proceedings, taken together, are not expected
to have a material adverse effect on the Company's operating or financial
results.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits - The Exhibit Index attached hereto is hereby
incorporated by reference to this Item.
(b) Reports on Form 8-K
Two Forms 8-K were filed during the current period:
(1) On March 20, 1996. Under Item 5 - Other Events, the
Company reported that it made available additional ownership and
operational information concerning the Company, Simon Property
Group, L.P., and the properties owned or managed as of December
31, 1995, in the form of a Supplemental Information package. A
copy of the package was included as an exhibit to the 8-K
filing.
(2) On March 26, 1996. Under Item 5 - Other Events, the
Company reported that on March 26, 1996 it announced its
agreement in principle to merge with DeBartolo, and that on
March 28, 1996 the Company had signed a definitive merger
agreement with DeBartolo. Copies of the two press releases
which made each of these announcements were filed as exhibits to
the 8-K filing.
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 thereunto duly authorized.
SIMON PROPERTY GROUP, INC.
Date: May 13, 1996 /s/ David Simon
David Simon
Chief Executive Officer and President
Date: May 13, 1996 /s/ Dennis Cavanagh
Dennis Cavanagh
Principal Financial and Accounting Officer
INDEX TO EXHIBITS
Exhibits
- - ----------
2.01 Merger Agreement Schedules A-D
2.02 Form of Contribution Agreement
2.03 Form of Resale Agreement with Affiliates
2.04 Form of Amended and Restated Charter of Parent and Alternative
Form of Amended and Restated Charter of Parent
2.05 Form of Amended and Restated By-laws of Parent and Alternative
Form of Amended and Restated By-laws of Parent
2.06 Form of Severance Program of DeBartolo Realty Corporation and
DeBartolo Properties Management, Inc.
2.07 Form of Fifth Amended and Restated Limited Partnership Agreement
of DeBartolo Realty Partnership, L.P.
2.08 Form of Registration Rights Agreement
2.09 Form of Letters and Certificates with respect to tax opinions
of Willkie Farr & Gallagher
2.10 Form of Letters and Certificates with respect to tax opinion
of Paul, Weiss, Rifkind, Wharton & Garrison
2.11 Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
relating to Investment Company Act of 1940
27 Financial Data Schedule
EXHIBIT 2.01
Merger Agreement Schedules
Schedule A
Holders of Common Stock Delivering Proxies to Parent
BJS Capital Partners, L.P.
<PAGE>
Schedule B
Holders of Parent Stock
Delivering Proxies to the Company
Melvin Simon & Associates, Inc.
<PAGE>
Schedule C
Parent Principals
Melvin Simon
Herbert Simon
David Simon
Deborah J. Simon
Cynthia J. Simon
Irwin Katz, as Successor Trustee under Declaration of Trust and Trust Agreement
dated August 4, 1970
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
Melvin Simon & Associates, Inc.
Penn Simon Corporation
Naco Simon Corp.
Sandy Springs Properties, Inc.
Simon Enterprises, Inc.
S.F.G. Company, L.L.C.
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.
<PAGE>
Schedule D
Company Principals
The Edward J. DeBartolo Corporation
The Estate of Edward J. DeBartolo
Edward J. DeBartolo, Jr., individually, and in his capacity as Trustee under
(i) the Lisa Marie DeBartolo Revocable Trust, (ii) the Tiffanie Lynne
DeBartolo Revocable Trust and (iii) Edward J. DeBartolo Trust No. 7 for the
benefit of Nicole Anne DeBartolo
Cynthia R. DeBartolo
Marie Denise DeBartolo York, individually, and in 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
Bay Park, Inc.
Ward Plaza Associates
Cheltenham Shopping Center Associates
Summit Mall, Inc.
Tyrone Square, Inc.
Upper Valley Mall, Inc.
Mission Viejo Mall, Inc.
Pinellas Square, Inc.
Great Lakes Mall, Inc.
Palm Beach Mall, Inc.
Lafayette Square, Inc.
Lima Mall, Inc.
Richmond Mall, Inc.
Woodville Mall, Inc.
DeBartolo Adventura, Inc.
Boynton Beach, Inc.
The Florida Mall Corporation
DeBartolo, Inc.
D.L. Grove, Inc.
TC Mall II, Inc.
Paddock Mall, Inc.
National Industrial Development Corporation
Great Northeast Mall, Inc.
Rues Properties, Inc.
Columbia SC I, Inc.
Columbia SC II, Inc.
Northgate I Real Estate Corporation
Northgate II Real Estate Corporation
Tacoma SC I, Inc.
Tacoma SC II, Inc.
Coral Square Associates
South Bend Associates
Washington Square Associates
H-Castleton
EXHIBIT 2.02
FORM OF CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT, dated as of _________, 1996 (the
"Agreement"), by and among DeBartolo Realty Corporation, an Ohio corporation
("DeBartolo"), as the general partner of DeBartolo Realty Partnership, L.P., a
Delaware limited partnership ("DRP"), and, after the consummation of the
transactions contemplated hereby and by the Merger Agreement referred to below,
as a general partner of SDG (as hereinafter defined) (DRP simultaneously
herewith will change its name to Simon DeBartolo Group, L.P. ("SDG")), Simon
Property Group, Inc., a Maryland corporation ("Simon"), in its individual
capacity and as the general partner of Simon Property Group, L.P., a Delaware
limited partnership ("SPG L.P."), and the limited partners of SPG L.P. listed
on Schedule A (as supplemented from time to time pursuant to Section 1.2(c)
hereof) hereto ("Simon", and, together with Simon, the "Subscribers").
RECITALS
Simultaneously with the consummation of the merger of Day
Acquisition Corp. ("Subco") with and into DeBartolo (the "Merger") and the
other transactions contemplated by the Agreement and Plan of Merger (the
"Merger Agreement"), dated as of March 26, 1996, among Simon, Subco and
DeBartolo, each Subscriber shall contribute to SDG, and SDG shall accept from
each such Subscriber, certain of its respective interests in SPG
L.P. (collectively, the "Simon Interests") specified pursuant to Recital (b)
below, and in consideration for such contributions by each Subscriber, and in
exchange therefor, SDG shall issue to each Subscriber, and each Subscriber
shall receive from SDG, certain partnership interests in SDG ("Units").
Each Subscriber shall contribute to SDG, and SDG shall accept from
each such Subscriber, the Simon Interests set forth opposite the name of each
such Subscriber on Schedule B hereto (as supplemented from time to time
pursuant to Section 1.2(c) hereof). SDG shall issue to each Subscriber, and
such Subscriber shall receive from SDG, the number of Units set forth opposite
the name of each such Subscriber on Schedule C hereto (as supplemented from
time to time pursuant to Section 1.2(c) hereof).
In order to consummate the transactions contemplated by this
Agreement at the Closing (as hereinafter defined), (i) the Fourth Amended and
Restated Agreement of Limited Partnership of DRP, dated as of April 21, 1994
(the "DeBartolo Partnership Agreement"), which, among other things, will change
the name of DRP to "Simon DeBartolo Group, L.P.," shall be amended and restated
in the form attached hereto as Annex A (the "New SDG Partnership Agreement"),
and (ii) the Second Amended and Restated Agreement of Limited Partnership of
SPG L.P., dated as of December 30, 1995 (the "Old SPG Partnership Agreement"),
shall be amended and restated in the form attached hereto as Annex (the "New
SPG Partnership Agreement").
Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Merger Agreement.
NOW THEREFORE, in consideration of the mutual
agreements contained herein, the parties hereby agree as
follows:
SECTION
CONTRIBUTION AND EXCHANGE; CLOSING Contribution and Exchange.
Subject to the
receipt of the consents specified on Schedule D hereto prior to the Closing in
form and substance satisfactory to DeBartolo and Simon, upon the terms and
subject to the other conditions of this Agreement, each Subscriber shall
contribute to SDG, and SDG shall accept from each such Subscriber, its
respective Simon Interests, as set forth opposite the name of each such
Subscriber on Schedule B hereto.1 SDG shall issue to each Subscriber, and each
Subscriber shall receive from SDG, the number of Units set forth opposite the
name of each such Subscriber on Schedule C hereto.2 If prior to the Closing
SPG L.P. shall make a cash flow distribution to its partners for all or any
portion of the period covered by the first cash flow distribution made by SDG
to its partners after the Closing, each Subscriber shall be entitled to receive
in respect of its Units that portion of such distribution made by SDG which
relates to the portion of the period, if any, not covered by the distribution
made by SPG L.P. and the balance of such distribution shall be made to the
other partners of SDG. If prior to the Closing DRP shall make a cash flow
distribution to its partners for all or any portion of the period covered by
the first cash flow distribution made by SPG L.P. to its partners after the
Closing, each partner of SDG who is not a Subscriber shall be entitled to
receive in respect of its Units that portion of such distribution made by SPG
L.P. which relates to the portion of the period, if any, not covered by the
distribution made by DRP and the
balance of such distribution shall be made to the Subscribers.
The Closing. The closing for the
contribution of Simon Interests in exchange for Units as provided for
hereunder (the "Closing") shall take place concurrently with the consummation
of the Merger at the offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285
Avenue of the Americas, New York, New York. At the Closing:
Each Subscriber shall deliver to SDG
such good and sufficient instruments of conveyance and assignment as SDG and
its counsel shall deem reasonably necessary or appropriate to vest in SDG
good title in and to the Simon Interests, respectively owned by each such
Subscriber, free and clear of all Liens.
Simon, as the general partner of SPG L.P., DeBartolo, as the
managing general partner of SDG, and, to the extent necessary, existing
limited partners of SPG L.P. shall deliver a duly executed counterpart of the
New SPG Partnership Agreement, pursuant to which
(i) SDG agrees to be bound by the terms and conditions of the New SDG
Partnership Agreement, and (ii) SDG becomes a limited partner of SPG L.P.
The New SDG Partnership Agreement shall be executed and
delivered by (i) DeBartolo, as managing general partner of SDG, (ii) the
Simon Limited Partners who become limited partners of SDG (to the extent
their signatures are required), (iii) Simon, as non-managing general partner
of SDG, and (iv) by existing partners of SDG to the extent required, but in
any event, at least a Majority-in-Interest (as such terms is defined in the
DeBartolo Partnership Agreement) of the limited partners of DRP. In this
connection, it is anticipated that other limited partners of SPG L.P. will
execute Contribution
Agreements substantially in the form hereof and that at the Closing, Units will
be issued to such other limited partners of SPG L.P. in exchange for their
respective limited partnership units in SPG L.P. in the same ratio as Units are
being issued to the Simon Limited Partners hereunder. Simon shall provide from
time to time modified Schedules A, B, C, E and F to reflect the execution and
delivery from time to time of such additional contribution agreements,
whereupon such holders of interests in SPG L.P. shall become SDG Limited
Partners for the purposes hereof. Each such additional contribution agreement
shall be deemed to constitute a counterpart pursuant to Section 6.7 below. Not
less than ten business days prior to the Closing, Simon shall deliver to
DeBartolo, SDG and SPG L.P. a final, accurate composite of all contribution
agreements signed by all of the Simon Limited Partners who have signed
Contribution Agreements together with the final forms of Schedules A, B, C, E
and F reflecting all of the Simon Limited Partners that have signed
Contribution Agreements, the aggregate Simon Interests to be exchanged by such
Simon Limited Partners and other aggregate information called for by said
Schedules. To the extent such composite Contribution Agreement only reflects
the information called for by the preceding sentence, it shall not be deemed to
constitute an amendment, waiver or modification of this Agreement for the
purposes of Section 6.5 below.
Any other documents or agreements
required to admit the Subscribers as partners of SDG shall be executed and
delivered as necessary.
SECTION
REPRESENTATION AND WARRANTIES; INDEMNIFICATION
Representations and Warranties of SDG. SDG represents and
warrants to each Subscriber that:
Due Organization and Good Standing. SDG is a limited
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has the requisite power and
authority to carry on its business as now being conducted. SDG is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing
of its properties makes such qualification or licensing necessary, other than
in such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, would not have a material adverse effect on
the business, financial condition or results of operations of SDG or on the
ability of SDG to consummate the transactions contemplated in this Agreement.
The DeBartolo Partnership Agreement, a copy of which has been delivered to
Simon, as general partner of SPG L.P., has not been amended or modified
(except as permitted by the Merger Agreement), annulled, rescinded or revoked
since such delivery, and is in full force and effect as of the date hereof;
it being understood by the parties hereto that upon the Closing, the
DeBartolo Partnership Agreement shall be amended and restated and the
agreements and relationships among the partners of SDG shall thereafter be
governed by the New SDG Partnership Agreement.
Authorization and Validity of Agreement.
SDG has the requisite partnership power and authority to enter into this
Agreement and consummate the transactions contemplated thereby. The
execution, delivery and performance of this Agreement by SDG and the
consummation by SDG of the transactions contemplated hereby have been
duly authorized on behalf of SDG by DeBartolo, as the general partner of SDG.
This Agreement has been duly authorized, executed and delivered by DeBartolo,
as the general partner of SDG, and, subject to the consent of certain limited
partners of SDG as required by the DeBartolo Partnership Agreement (the "S-D
Consent"), it constitutes a legal, valid and binding obligation of SDG,
enforceable against SDG in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws at the time in effect
affecting the enforceability of rights of creditors and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Non-Contravention. The execution, delivery and performance by
SDG of this Agreement and the issuance of the Units pursuant to the New SDG
Partnership Agreement do not and will not (i) subject to the obtaining of the S-
D Consent, contravene or conflict with the DeBartolo Partnership Agreement or
the New SDG Partnership Agreement, (ii) contravene or conflict with or
constitute a violation of any provision of any Laws binding upon or applicable
to SDG, (iii) require any consent, approval or other action by any Governmental
Entity or any other person other than those consents or approvals set forth on
Schedule D hereto, (iv) constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of SDG
under any provision of any agreement, contract, indenture, lease or other
instrument binding upon SDG or
any license, franchise, permit or other similar authorization held by SDG or by
which any of SDG's assets may be bound or (v) result in the creation or
imposition of any Liens on SDG; provided, however, it is understood that the
right of SDG to execute, deliver and perform this Agreement may be deemed to
require the consents set forth on Schedule D hereto.
Litigation. There are no pending actions, suits or
proceedings pending or, to the knowledge of DRP, threatened in writing, against
or affecting DRP or any of its properties, assets or operations, or with
respect to which DRP is responsible by way of indemnity or otherwise that
could, individually or in the aggregate, reasonably be likely to have a
material adverse effect.
Units Issued Free and Clear of Liens. All of the Units
required to be issued to each Subscriber pursuant to this Agreement shall be
validly issued free and clear of any Liens, and each Subscriber shall have all
of its respective rights and privileges as provided in the New SDG Partnership
Agreement.
Capitalization. Following the consummation of the
transactions contemplated in this Agreement, the number of Units held by each
partner of SDG shall be calculated as set forth on Schedule E hereto and the
results of such calculation shall be set forth on Exhibit A to the New SDG
Partnership Agreement.
SEC Documents. The Annual Report on Form 10-K of DeBartolo
for the year ended December 31, 1995 as filed with the Securities Exchange
Commission, a copy of which has been delivered to each Subscriber, contains no
untrue statement of material fact and does not omit to state any 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.
Representations and Warranties of Simon SEC Documents. The
Annual Report on
Form 10-K of Simon for the year ended December 31, 1995 as filed with the
Securities Exchange Commission, a copy of which has been delivered to SDG,
contains no untrue statement of material fact and does not 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,
Representations and Warranties of Each
Subscriber that Is Not a Natural Person. Each Subscriber
which is not a natural person represents and warrants to SDG and DeBartolo, as
general partner of SDG, and to each other Subscriber that:
it is an organization duly organized and validly existing in
good standing under the laws of its jurisdiction of organization and
the execution, delivery and performance by such Subscriber
of this Agreement, the New SDG Partnership Agreement and the New SPG
Partnership Agreement (i) are within its power and authority and do not and
will not contravene or conflict with the certificate or articles of
incorporation, by-laws, partnership agreement or other organizational or
governance documents of such Subscriber and (ii) have been duly authorized by
all necessary action by such Subscriber.
Representations and Warranties of All Subscribers. Each
Subscriber represents and warrants to SDG and to each other Subscriber as
follows:
Authorization and Validity of Agreement. This Agreement has
been duly executed and delivered by such Subscriber and constitutes a legal,
valid and binding obligation of such Subscriber, enforceable against such
Subscriber in accordance with its terms and the New SPG Partnership Agreement
shall be duly executed and delivered by such Subscriber and shall constitute
legal, valid and binding obligations of such Subscriber, enforceable against
such Subscriber in accordance with its terms, except in each case that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws at the time in effect
affecting the enforceability of rights of creditors and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
Non-Contravention. The execution, delivery and performance by
such Subscriber of this Agreement, the New SDG Partnership Agreement and the
New SPG Partnership Agreement and the consummation of the transactions
contemplated herein and therein by such Subscriber do not and will not (i)
contravene or conflict with or constitute a violation of any provision of any
Laws binding upon or applicable to such Subscriber, (ii) require any consent,
approval or other action by any Governmental Entity or any other person other
than those consents or approvals as set forth on Schedule F, or (iii) result in
the creation or imposition of any Lien on any of the Simon Interests held by
such Subscriber.
Litigation. There are no pending
actions, suits or proceedings pending or, to the
knowledge of such Subscriber, threatened in writing, against or affecting such
Subscriber or any of its properties, assets or operations, or with respect to
which such Subscriber is responsible by way of indemnity or otherwise that
could or in any way limit the ability of such Subscriber to consummate the
transaction contemplated hereby.
Access to Information. Such Subscriber acknowledges that it
or its representative or agent (i) has been given full and complete access to
SDG 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 SDG
and its management concerning its investment in SDG and the transactions
contemplated hereby.
Investment Intent of Each Subscriber. Such Subscriber
acknowledges that it understands that the Units to be issued to such Subscriber
in exchange for the Simon Interests to be contributed by Subscriber as provided
herein (i) shall not be registered under the Securities Act in reliance upon
the exemption afforded by Section 4(2) thereof for transactions by an issuer
not involving any public offering and (ii) shall not be registered or qualified
under any applicable state securities laws. Such Subscriber represents that
(i) it is acquiring such Units for investment only and without any view toward
distribution thereof and it shall not sell or otherwise dispose of such Units
except in compliance with the registration requirements or exemption provisions
of any applicable federal or state securities laws and in accordance with the
terms of such
securities contained in the New SDG Partnership Agreement, as amended, (ii) its
economic circumstances are such that it is able to bear all risks of the
investment in the Units for an indefinite period of time, including the risk of
a complete loss of its investment in the Units, (iii) it has knowledge and
experience in financial and business matters sufficient to evaluate the risks
of investment in the Units and (iv) it has consulted with its own counsel and
tax advisor, to the extent deemed necessary by it, as to all legal and taxation
matters covered by this Agreement and has not relied upon DRP, DeBartolo, Simon
or any of their respective affiliates, officers and representatives for any
explanation of the application of the various federal or state securities laws
or tax laws with regard to its acquisition of the Units. Such Subscriber
further acknowledges and represents that it has made its own independent
investigation of SDG and the business proposed to be conducted by SDG, and that
any information relating thereto furnished to such Subscriber was supplied by
or on behalf of SDG.
Ownership and Encumbrance of the Assets.
Such Subscriber has all right,
title and interest in the respective Simon Interests to
be contributed to SDG by it free and clear of any
Liens. Except as disclosed on Schedule G such Subscriber has not granted
any rights, options or rights of first refusal, or entered into any
agreements of any kind that are currently in effect or that have not been
waived, to purchase or otherwise acquire such Simon Interests, or any part
thereof or any interest therein, except the rights of SDG under this
Agreement.
Upon consummation of the Closing,
SDG shall be the legal owner of the Summary Interests
delivered by each such Subscriber free and clear of all Liens.
Advisors. Such Subscriber has consulted with its own
counsel and tax advisor, to the extent such Subscriber deemed necessary, as
to the legal and taxation matters associated with this Agreement and the
transactions contemplated hereby and has not relied upon DRP, DeBartolo,
Simon or any of their respective affiliates, officers and representatives for
any explanation of the application of federal or state securities or tax laws
with regard to its contribution of the Simon Interests or its receipt of the
Units pursuant to the terms hereof.
Indemnification. Each Subscriber shall, subject to the
limitations hereinafter set forth, indemnify and hold SDG and its partners free
and harmless of and from any claim, loss, damage, expense, cost or liability
(including, without limitation, reasonable attorneys' fees and disbursements)
resulting from its respective breach of any representation or warranty in made
by it in Sections 24 and 2.5. SDG shall, subject to the limitations
hereinafter
set forth, indemnify and hold each Subscriber, and its partners, officers and
directors (if applicable), free and harmless of and from any claim, loss,
damage, expense, cost or liability (including without limitation, reasonable
attorneys' fees and disbursements) resulting from a breach of any
representation and warranty in Section 2.1. Simon shall, subject to the
limitations hereinafter set forth, indemnify and hold SDG and its partners free
and harmless of and from any claim, loss, damage, expense, cost or liability
(including, without limitation, reasonable attorneys' fees and disbursements)
resulting from a breach of any
representation or warranty in Section 2.2. SPG L.P. shall, subject to the
limitations hereinafter set forth, indemnify and hold SDG and its partners free
and harmless of and from any claim, loss, damage, expense, cost or liability
(including, without limitation, reasonable attorneys' fees and disbursements)
resulting from a breach of any representation or warranty in Section 2.3.
Notwithstanding anything to the contrary contained herein, (i) in no event
shall the amount that SDG may recover against any Subscriber or that any
Subscriber may recover against SDG under or in respect of this Section 2.6 for
a breach of any representation or warranty in Sections 2.2, 2.4 or 2.5 hereof
exceed the fair market value of the Units issued to such Subscriber, (ii) all
obligations and liabilities of each Subscriber under this Agreement are
enforceable solely against such Subscriber's Units and not against any of such
Subscriber's other assets, any other Subscriber or any assets of any other
Subscriber.
Transfer Taxes. SDG shall be solely responsible for the payment
of any transfer taxes or similar charges imposed by any state, county or
municipality in which any of the Simon Interests is located in connection with
the contribution of the Simon Interests to SDG. Also at the Closing, and in
addition to the delivery of any docu ments required to be delivered in
connection therewith, each Subscriber and SDG shall execute, acknowledge and
deliver such returns, questionnaires, certificates, affidavits, declarations
and other documents which may be required in connection with the sales taxes
and other taxes, fees or charges imposed by any governmental agency in
connection with the transactions contemplated hereby, and shall complete, sign
and swear to the same as may be necessary.
SECTION
CONDITIONS TO CLOSING
Conditions to Obligations of All Parties.
The obligations of DRP and each Subscriber to consummate the Closing are
subject to the simultaneous consummation of the Merger, the simultaneous
execution and delivery of the New SDG Partnership Agreement (by DeBartolo, as
managing general partner of SDG, Simon, as non-managing general partner of SDG,
and to the extent required by those limited partners of SPG L.P. who become
limited partners of SDG pursuant to the performance of this Agreement and the
other Contribution Agreements and to the simultaneous execution and delivery of
the New SPG Partnership Agreement.
Conditions to Obligations of SDG. The obligations of DRP to
consummate the Closing with respect to a particular Subscriber is subject to
the satisfaction of the further conditions that: (i) the representations and
warranties of such Subscriber as set forth herein shall be true and correct as
of the Closing Date in all material respects with the same force and effect as
if made on the Closing Date, (ii) the S-D Consent shall have been obtained and
(iii) each Subscriber shall have performed in all material respects all of its
obligations hereunder required to be performed by such Subscriber on or prior
to the Closing Date.
Conditions to Obligations of Each Subscriber. The obligations of
each Subscriber to consummate the Closing is subject to the further conditions
that: (i) the representations and warranties of DRP set forth in this
agreement shall be true and correct in all material respects as of the Closing
Date as though made on the Closing Date, (ii) DRP shall have performed in all
material respects all of its obligations hereunder required to be performed by
DRP at or prior to the Closing Date, (iii) the requisite
partners of DRP shall have consented the execution and delivery of the New SDG
Partnership Agreement and to the extent required shall have executed and
delivered counterparts of the New SDG Partnership Agreement at the Closing and
(iv) each consent set forth opposite the name of each Subscriber on Schedule F
shall have been obtained.
SECTION
COVENANTS
Further Assurances. SDG and each Subscriber agree, at any time
and from time to time after the Closing, to execute, acknowledge where
appropriate and deliver such further instruments and documents and to take such
other action as the other of them may reasonably request in order to carry out
the intents and purposes of this Agreement. The provisions of this Section 4
shall survive the Closing.
SECTION
CONSENTS TO TRANSFER
Consent of Simon Limited Partners. Pursuant to Section 9.1 of
the Old SPG Partnership Agreement, the Simon Limited Partners who are parties
hereto hereby
(i) consent to the contribution to SDG of the Simon Interests of Simon as
provided herein and (ii) consents to the admission of SDG as a special limited
partner of SPG L.P. pursuant to the Partnership Agreement.
Consent of Simon. Pursuant to Section 9.2 of the Old SPG
Partnership Agreement, Simon, as the general partner of SPG L.P., hereby (i)
consents to the contribution to SDG of the respective Simon Interests of each
Simon Limited Partner as provided herein and (ii) consents to the admission of
SDG as a limited partner of SPG L.P..
SECTION
MISCELLANEOUS
Notices. All notices and other communi cations given or made
under this Agreement shall be in writing and shall be deemed to have been duly
given or made if delivered personally or sent by registered or certified mail
(postage prepaid, return receipt requested) or by telecopier (if written
confirmation of receipt is available and provided) to the parties at the
following addresses:
If to SPG to:
Simon Realty Corporation Merchants Plaza
115 West Washington Street, Suite 15 East
Indianapolis, IN 46204
Attention: David Simon
James M. Barkley, Esq. Telecopy: (317) 685-
7221
With a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the
Americas
New York, New York 10019-6064 Attention: Toby S. Myerson,
Esq.
Edwin S. Maynard, Esq.
Telecopy: (212) 757-3990
If to each Subscriber, to the address or telecopy number
thereof that each Subscriber shall have previously indicated in writing.
or such other addresses as shall be furnished by the parties hereto by like
notice, and such notice or communication shall be deemed to have been given or
made as of the date so delivered or made.
Entire Agreement. This Agreement (together with each other
Contribution Agreement referred to in Section 1.2(c) above) constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral and
written, among the parties hereto with respect to such subject matter.
Binding Effect; Benefit. Subject to Section 6.4 hereof, this
Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto, and
their respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Assignability. This Agreement (a) shall not be assignable by
SDG without prior written consent of each Subscriber and (b) shall not be
assignable by any Subscriber without the prior written consent of SDG.
Amendment; Waiver. No provision of this Agreement may be
amended, waived or otherwise modified except by an instrument in writing
executed by the parties hereto.
Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
Counterparts. This Agreement may be executed in any number of
counterparts, including those executed from time to time by the holders of
partnership interests in SPG L.P. referred to in Section 1.2(c) above each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument. Delivery of executed signature pages
by telecopier shall be acceptable evidence of delivery to the parties hereto.
Delivery of executed signature pages by telecopier shall be followed
immediately by delivery of the original signature pages by overnight courier.
Limitation of Liability. Any obligation or liability whatsoever
of either DeBartolo or Simon or any Subscriber which is a corporation or a
partnership 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 DeBartolo, Simon, SDG or any such other
corporation or partnership only. No such obligation or liability shall be
personally binding upon, nor shall resort for the enforcement thereof be had
to, any of DeBartolo, Simon or SDG's any such other corporation's or
partnership's directors, partners, shareholders, officers, employees, or
agents, regardless of whether such obligation or liability is in the nature of
contract, tort or otherwise.
APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
SIMON DEBARTOLO GROUP, L.P.
By: DEBARTOLO REALTY CORPORATION,
as General Partner
By: ___________________________ Name:
Title:
SIMON PROPERTY GROUP, INC.
By: ___________________________ Name:
Title:
[SUBSCRIBERS]
Schedule A
SPG L.P. Limited Partners
Schedule B
SPG L.P. Interests
Name of Subscriber SPG L.P. Interest
_______________________ ____ units
_______________________ ____ units
_______________________ ____ units
Simon 10.5% of the outstanding units
in SPG L.P. plus an assignment of 49.5% of the
profits interest in SPG L.P.
Schedule C
Units
Name of Subscriber Number of Units
_______________________ ____ Units
_______________________ ____ Units
_______________________ ____ Units
Simon Calculated as set forth on
Schedule E hereto, with such calculations set forth
on Exhibit A to the New SDG Partnership Agreement
Schedule D
Required Consents of SDG
1. Consent required pursuant to (a) the SECOND AMENDED AND RESTATED
NEW FACILITY CREDIT AGREEMENT, dated as of March 31, 1994 by and among
DeBARTOLO, INC. and THE EDWARD J. DeBARTOLO CORPORATION, as the Borrowers,
WELLS FARGO BANK, N.A., as the Issuing Bank, and the Co-Lenders specified
therein, and WELLS FARGO REALTY ADVISORS FUNDING, INCORPORATED as the
Administrative Agent and (b) the pledge agreements and other documents
delivered pursuant thereto.
2. Consents required pursuant to (a) the SECOND AMENDED AND
RESTATED RESTRUCTURING FACILITY CREDIT AGREEMENT, dated as of March 31, 1994 by
and among DeBARTOLO, INC. and THE EDWARD J. DeBARTOLO CORPORATION, as the
borrowers, and the Co-Lenders specified therein, and WELLS FARGO REALTY
ADVISORS FUNDING, INCORPORATED, as the Administrative Agent and (b) the pledge
agreements and other documents delivered pursuant thereto.
3. Consents required to be obtained prior to the consummation of
the merger as specified in the Merger Agreement or in the [Solicitation
Statement distributed to the limited partners of DRP and SPG L.P.]
Schedule E
FORMULA FOR DETERMINATION OF SIMON DeBARTOLO GROUP, L.P. UNITS TO BE
OUTSTANDING AFTER THE MERGER
1. The DeBartolo Realty Partnership, L.P.
General and Limited Partners shall receive a number of Units in Simon
DeBartolo Group, L.P. equal to the total number of shares of Simon Property
Group, Inc. issued in the Merger to the shareholders DeBartolo Realty
Corporation plus the additional number of shares that would have been
issued had all Limited Partnership interests been exercised in full. Were
the closing to have occurred on March 26, 1996, this number would be
61,076,480.3
2. The total number of Units in Simon DeBartolo Group, L.P. to
be issued to Simon Property Group, L.P. General and Limited Partners shall
be a maximum of 99% of the total number of outstanding Units in Simon
Property Group, L.P. as at the date of the Merger. At March 26, 1996, the
total number of outstanding units is 95,843,000 and 99% of this number is
94,884,570. The total number of Units issuable to the DeBartolo Realty
Partnership, L.P. Limited Partners are herein referred to as "DeBartolo
Units" and the total number of Units issuable to the Simon Property Group,
L.P. General and Limited Partners are herein called the "SPG Units."1/
3. Of the DeBartolo Units, a percentage equal to its then
percentage interest in the DeBartolo Realty Partnership, L.P. (at present
61.8424%) will be allocated to DeBartolo Realty Corporation as general
partner and the remaining Units will be allocated to the DeBartolo Realty
Partnership, L.P. limited partners. The number of Units to be issued to
each DeBartolo Realty Partnership, L.P. limited partner will be a
percentage of the total number of Units to be allocated to the DeBartolo
Realty Partnership, L.P. partners equal to the percentage interest that
each such limited partner had in the DeBartolo Realty Partnership, L.P.
immediately prior to the Merger. Accordingly, if the Closing took place
March 26, 1996, 37,771,158 Units will be allocated to DeBartolo Realty
Corporation as general managing partner and 23,305,322 Units will be issued
in the aggregate to the DeBartolo Realty Partnership, L.P. limited
partners.
4. The number of Units issued to the Simon Property Group, L.P.
general and limited partners will be as follows: (x) one Unit will be
issued for each Simon Property Group, L.P. Unit exchanged by a Simon
Property Group, L.P. Limited partner and (y) Simon Property Group, Inc.,
as the general partner of Simon Property Group, L.P., will receive for the
economic interests being transferred by it a number of Units equal to the
number of Simon Property Group, L.P. Units then owned by it less a number
equal to 1% of the then outstanding Simon Property Group, L.P. Units.
Accordingly, if the Closing took place on March 26, 1996, this number would
be 58,579,241. (This number is derived by multiplying 95,843,000 by
61.22%, the present percentage interest held by Simon Property Group, Inc.
in Simon Property Group, L.P. and subtracting 95,843 Units being 1% of the
outstanding Units). To the extent that Simon Property Group, L.P. limited
partners do not exchange Simon Property Group, L.P. Units, the Simon
Property Group, L.P. Units that would have been issued in respect thereof
will not be issued. This would have the effect of increasing the
percentage interest in Simon DeBartolo Group, L.P. by DeBartolo Realty
Partnership, L.P. partners.
Schedule F
Required Consents of [Subscribers]
Partner Consents:
Circle Centre Partners, Ltd.
Re: Circle Centre Mall, Indianapolis, Indiana
Lender Consents:
CIGNA
1. Ingram Creek
2. Ingram Park Mall
3. LaPlaza Mall
Metropolitan Life Insurance Company
1. Bloomingdale Court
2. Forest Plaza
3. Fox River Plaza
4. Lake View Plaza
5. Lincoln Crossing
6. Matteson Plaza
7. Regency Plaza
8. St. Charles Towne Plaza
9. West Ridge Plaza
10. White Oaks Plaza
Union Bank of Switzerland
1. Circle Centre Mall
2. $400 Million Revolving Credit Facility
Marine Midland, Trustee
1. Jefferson Valley Mall
Citicorp
2. Eastland Mall
3. St. Charles Towne Center
Lender Consents cont.:
Principal Group
1. Cobblestone Court
2. Crystal Court
3. Fairfax Court
4. Gaitway Plaza
5. Ridgewood Court
6. Royal Eagle Plaza
7. The Plaza at Buckland Hills
8. The Yards Plaza
9. Village Park Plaza
10. West Town Corners
11. Westland Park Plaza
12. Willow Knolls Court
Revolving Credit Agreement dated as of February 27, 1996, between Melvin Simon
Associates, Inc. And Morgan Guaranty Trust Company of New York and Pledge and
Security Agreement,
also dated as of February 27, 1966, among Melvin Simon & Associates, Inc., Penn
Simon Corporation, Naco Simon Corp., Sandy Springs Properties, Inc., Simon
Enterprises, Inc. And Morgan Guaranty Trust Company of New York, pursuant to
which the Pledgors pledged to the Bank their right to receive cash
distributions attributable to their respective limited partnership units in
Simon Property Group, L.P. and Class B common stock of Simon Property Group,
Inc.
Pledge and Security Agreement dated as of December 16, 1993, made by Melvin
Simon and Herbert Simon (collectively "Simon Pledgors") to Chemical Bank, and
additional documents executed in connection therewith, pursuant to which the
Simon Pledgors pledged to the Bank 392,135 limited partnership units owned by
them in Simon Property Group, L.P.
Schedule G
Rights, Options, Etc.
Revolving Credit Agreement dated as of February 27, 1996, between Melvin Simon
Associates, Inc. And Morgan Guaranty Trust Company of New York and Pledge and
Security Agreement, also dated as of February 27, 1966, among Melvin Simon &
Associates, Inc., Penn Simon Corporation, Naco Simon Corp., Sandy Springs
Properties, Inc., Simon Enterprises, Inc. And Morgan Guaranty Trust Company of
New York, pursuant to which the Pledgors pledged to the Bank their right to
receive cash distributions attributable to their respective limited partnership
units in Simon Property Group, L.P. and Class B common stock of Simon Property
Group, Inc.
Pledge and Security Agreement dated as of December 16, 1993, made by Melvin
Simon and Herbert Simon (collectively "Simon Pledgors") to Chemical Bank, and
additional documents executed in connection therewith, pursuant to which the
Simon Pledgors pledged to the Bank 392,135 limited partnership units owned by
them in Simon Property Group, L.P.
_______________________________
1Schedule B sets forth (i) the limited partner interest of each SPG L.P.
Limited Partner in SPG L.P. being transferred to SDG and (ii) with respect to
Simon's general partner interest in SPG L.P. being transferred to SDG, units
representing 10.5% of the total outstanding units in SPG L.P. plus the
assignment of 49.5% of the interest in the profits of SPG L.P.
2Schedule C sets forth the Units being issued to each SPG L.P. Limited Partner
in SDG as well as the non managing general partner interest being issued to
Simon in SDG. It is anticipated that subsequent to the first anniversary of
the Closing, Simon will transfer to SDG for no additional consideration, all of
its remaining economic interest in SPG L.P. other than units constituting 1% of
the total
issued and outstanding units in SPG L.P. It is also anticipated that 13 months
after the Closing, all Preferred Units owned by Simon will be transferred to
SDG in exchange for the same number of Preferred Units in SDG.
3The methodology used to arrive at this formula and these numbers is as
follows. The 61,076,480 Unit number is equal to the total number of shares of
Simon Property Group, Inc. that would be issued in the Merger at the exchange
ratio if the Merger took place on March 26, 1996 and if all outstand ing
limited partnership interests in DeBartolo Realty Partnership, L.P. had been
exercised in full. The 95,843,000 Unit number is equal to the total number of
shares of stock of Sunny that would be outstanding immediately prior to the
Merger if it took place on
March 26, 1996 if all outstanding Units in the Simon Property Group, L.P. were
exercised in full. Since all or almost all of the assets of DeBartolo Realty
Corporation and Simon Property Group, Inc. consist of their general partnership
interests in the two operating partnerships, the relationship between the
shares which would be issued in the Merger if all outstanding limited
partnership interests in DeBartolo Realty Corporation were exercised in full to
the shares of Simon Property Group, Inc. that would be outstanding immediately
prior to the Merger if all Units were converted prior to the Merger establishes
the relative values of the two partnerships on March 26, 1996. As a matter of
convenience the Simon Property Group, L.P. Units will be exchanged on a 1-for-1
basis.
EXHIBIT 2.03
FORM OF RESALE AGREEMENT WITH AFFILIATE LETTER
<TABLE>
<S> <C> <C>
Simon Property Group, Inc.
Merchants Plaza
115 West Washington Street
Suite 15 East
Indianapolis, IN 46204
Ladies and Gentlemen:
I have been advised that as of the date of this letter agreement, I may be
deemed to be an "affiliate" of DeBartolo Realty Corporation, an Ohio
corporation (the "Company"), as such term is (i) defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), or (ii) used in and
for purposes of Accounting Series Releases 130 and 135, as amended, of the
Commission. Pursuant to the terms of the Agreement and Plan of Merger, dated
as of March 26, 1996 (as amended from time to time, the "Merger Agreement"), by
and among Simon Property Group, Inc., a Maryland corporation ("Parent"), Day
Acquisition Corp., an Ohio corporation and a direct subsidiary of Parent
("Sub"), and the Company, Sub will be merged with and into the Company (the
"Merger")
Pursuant to the Merger each issued and outstanding share of Common
Stock, par value $.01 per share, of the Company shall be converted into the
right to receive from Parent 0.68 of a fully paid and nonassessable share of
Parent Common Stock, par value $.0001 per share ("Parent Common Stock"):
I represent, warrant and covenant to Parent that, with respect to all
Parent Common Stock received by the undersigned as a result of the Merger:
I shall not knowingly make any sale, transfer or other
disposition of Parent Common Stock in violation of the Act or the Rules and
Regulations.
I have carefully read this letter and the Merger Agreement and
have had an opportunity to discuss the requirements of such documents and any
other applicable limitations upon my ability to sell, transfer or otherwise
dispose of Parent Common Stock with my counsel or counsel for the Company.
I have been advised that the issuance of Parent Common Stock to me
pursuant to the Merger has been registered with the Commission under the Act.
However, I have also been advised that, since at the time the Merger was submitted
for a vote of the stockholders of the Company, I may be deemed to have been an
affiliate of the Company and the distribution by me of Parent Common Stock has not
been registered under the Act, I may not offer to sell, sell, transfer or otherwise
dispose of Parent Common Stock issued to me in the Merger unless (i) such offer,
sale, transfer or other disposition has been registered under the Act or is made in
conformity with Rule 145 under the Act, or (ii) in the opinion of counsel reasonably
acceptable to Parent, or pursuant to a "no action" letter obtained by the
undersigned from the staff of the Commission, such sale, transfer or other
disposition is otherwise exempt from
registration under the Act.
I understand that, except as provided in the Registration Rights
Agreement to be entered into by Parent and the undersigned (the "Registration Rights
Agreement") as contemplated by the Merger Agreement or as provided in this letter,
Parent is under no obligation to register under the Act the sale, transfer or other
disposition of Parent Common Stock by me or on my behalf or to take any other action
necessary in order to make compliance with an exemption from such registration
available.
I understand that Parent will give stop transfer instructions to
Parent's transfer agents with respect to Parent Common Stock, that the Parent Common
Stock issued to me will all be in certificated form and that the certificates
therefor, or any substitutions therefor, will bear a legend substantially to the
following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
WERE ISSUED IN A TRANSACTION TO WHICH RULE 145 UNDER THE
SECURITIES ACT OF 1933 APPLIES. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY
ONLY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN ACCORDANCE
WITH THE TERMS OF AN AGREEMENT, DATED _________________, 1996, BETWEEN THE
REGISTERED HOLDER HEREOF AND SIMON PROPERTY GROUP, INC., A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF SIMON PROPERTY GROUP,
INC."
I also understand that unless the transfer by me of my Parent Common
Stock has been registered under the Act or is a sale made in conformity with the
Rules promulgated thereunder, Parent reserves the right to place a legend
substantially to the following effect on the certificates issued to any transferee:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND WERE ACQUIRED
BY A PERSON WHO RECEIVED SUCH SECURITIES IN A TRANSACTION TO WHICH RULE
145 UNDER THE ACT APPLIES. THE SECURITIES HAVE NOT BEEN ACQUIRED BY THE
HOLDER WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE ACT AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT."
It is understood and agreed that the legends set forth in
paragraphs 5 and 6 above shall be removed by delivery of substitute certificates
without such legend if such legend is not required for the purposes of the Act. It
is understood and agreed that such legends and the stop orders referred to above
will be removed if (i) the Securities evidenced by such certificates are registered
under the Act, (ii) two years shall have elapsed from the date the undersigned
acquired Parent Common Stock received in the Merger and the provisions of Rule
145(d)(2) are then available to the undersigned, (iii) three years shall have
elapsed from the date the undersigned acquired Parent Common Stock received in the
Merger and the provisions of Rule 145(d)(3) are then available to the undersigned,
or (iv) Parent has received either an opinion of counsel, reasonably satisfactory to
Parent, or a "no action" letter obtained by the undersigned from the staff of the
Commission to the effect that the sale, transfer or disposition of the securities
evidenced by such certificates is exempt from registration under the Act.
Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of the Company as described in the first paragraph of this
letter.
</TABLE>
Sincerely,
___________________________________
Name:
Accepted this _____ day of _________________, 1996
[ ]
By:_______________________
Name:
Title:
EXHIBIT 2.04
SIMON PROPERTY GROUP, INC.
ARTICLES OF AMENDMENT
SIMON PROPERTY GROUP, INC., a Maryland corporation, having its principal
office in Baltimore City, Maryland (which is hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended by changing the
following provisions:
1. Article SECOND is hereby replaced in its entirety by the following:
SECOND: The name of the corporation (which is hereinafter called the
"Corporation") is:
Simon DeBartolo Group, Inc.
2. Paragraph (a) of Article SIXTH is hereby replaced in its entirety by
the following:
SIXTH: (a) The total number of shares of stock of all classes which the
Corporation has authority to issue is 650,000,000 shares of capital stock (par
value $.000l per share), amounting in aggregate par value to $65,000.00, of
which shares 384,000,000 are classified as "Common Stock", 12,000,000 are
classified as "Class B Common Stock", 4,000,000 are classified as "Series A
Preferred Stock," and 250,000,000 are classified as "Excess Stock". The Board
of Directors may classify and reclassify any unissued shares of capital stock
by setting or changing in any one or more respects the preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of redemption of such shares of stock.
3. Article NINTH is hereby replaced in its entirety by the following:
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, and the Units on the
assumption that all shares of Class B 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.
"By-Laws" shall mean the By-Laws of the Corporation.
"Capital Stock" shall mean stock that is Common Stock, Class B
Common Stock, Excess Stock or Preferred Stock.
"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 Merger.
"Exchange Rights" shall mean any rights granted to limited
partners of Simon DeBartolo Group, L.P., a Delaware limited
partnership (including pursuant to an Exchange Rights Agreement) and
Simon Property Group L.P., a Delaware limited partnership, to
exchange (subject to the Ownership Limit) limited partnership
interests in such Partnership for shares of Capital Stock.
"Independent Director" shall mean a director of the Corporation
who is neither employed by the Corporation nor a member (or an
affiliate of a member) of the Simon Family Group.
"Market Price" of any class of Capital Stock on any date shall
mean the average of the Closing Price for the five consecutive
Trading Days ending on such date, or if such date is not a Trading
Date, the five consecutive Trading Days preceding such date. The
"Closing Price" on any date shall mean (i) the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, 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 (ii) if such class of Capital Stock
is 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 such class of capital stock is listed or
admitted to trading, or (iii) if such class of capital stock is 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
Quotation System or, if such system is no longer in use, the
principal other automated quotations systems that may then be in use,
or (iv) if such class of Capital Stock is 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 such
class of Capital Stock selected by the Board of Directors.
"Merger" shall mean the merger, pursuant to the Agreement and
Plan of Merger dated March 26, 1996 among the Corporation, Day
Acquisition Corp., an Ohio corporation and a wholly owned subsidiary
of the Corporation ("Sub"), and DeBartolo Realty Corporation, an Ohio
corporation ("DeBartolo"), pursuant to which merger Sub shall be
merged with and into DeBartolo.
"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, 24%, and (y) in the case of any other Person,
6%, 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.
"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 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 Merger.
"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. or DeBartolo Realty
Partnership L.P.
(2) (A) Except as provided in subparagraph (a)(9) of this
Article NINTH, from the effective date of the 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 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 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 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 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
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
Merger and prior to the Restriction Termination Date, there is a
purported Transfer 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 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 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 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 the effective date of the Merger and until the
Restriction Terminate Date, each certificate for the respective class
of Capital Stock shall bear the following legend:
The shares of Capital Stock 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.
Unless excepted by the Board of Directors of the Corporation, no
Person may (1) Beneficially Own or Constructively Own shares of
Capital Stock in excess of 6% (other than members of the Simon
Family Group, whose relevant percentage is 24%) of the value of
any class of outstanding Capital Stock of the Corporation, or
any combination thereof, determined as provided in the
Corporation's Charter, 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 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.
(b) (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 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 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 or Preferred Stock from which such shares of
Excess 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 Stock 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
Stock 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 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 Stock shall be entitled to such voting rights as are
ascribed to shares of Common Stock or Preferred Stock from which such
shares of Excess 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 Stock 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 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, statue, 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 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.
SECOND: (a) As of immediately before the amendment the total number of
shares of stock of all classes which the Corporation has authority to issue is
412,000,000 shares, of which shares 246,000,000 are Common Stock, 12,000,000
are Class B Common Stock, 4,000,000 are Series A Preferred Stock, and
150,000,000 are Excess Stock.
(b) As amended the total number of shares of stock of all
classes which the Corporation has authority to issue is 650,000,000 shares, of
which 384,000,000 shares are Common Stock (par value $.0001 per share),
12,000,000 shares are Class B Common Stock (par value $.0001 per share),
4,000,000 shares are Series A Preferred Stock (par value $.0001 per share), and
250,000,000 shares are Excess Stock (par value $.0001 per share).
(c) The aggregate par value of all shares having a par value is
$41,200 before the amendment and $65,000.00 as amended.
(d) The shares of stock of the Corporation are divided into
classes, and the amendment contains a description, as amended, of each class,
including the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption.
THIRD: The foregoing amendment to the Charter of the Corporation has
been approved by a majority of the entire Board of Directors and by the
requisite number of shares entitled to vote on the matter.
IN WITNESS WHEREOF, SIMON PROPERTY GROUP, INC. has caused these presents to be
signed in its name and on its behalf by its President and witnessed by its
Secretary on [ ], 1996.
WITNESS:
Secretary
SIMON PROPERTY GROUP, INC.
By
President
THE UNDERSIGNED, President of SIMON PROPERTY GROUP, INC., who executed on
behalf of the Corporation the foregoing Articles of Amendment and Restatement
of which this certificate is made a part, hereby acknowledges in the name and
on behalf of said Corporation the foregoing Articles of Amendment and
Restatement to be the corporate act of said Corporation and hereby certifies
that to the best of his knowledge, information, and belief the matters and
facts set forth therein with respect to the authorization and approval thereof
are true in all material respects under the penalties of perjury.
By
______________________
President
<PAGE>
SIMON PROPERTY GROUP, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
SIMON PROPERTY GROUP, INC., a Maryland corporation, having its principal
office in Baltimore City, Maryland (which is hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Charter of the Corporation is hereby amended and restated to
read in its entirety as follows:
SIMON DeBARTOLO GROUP, INC.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
FIRST: THE UNDERSIGNED, James J. Winn, Jr., whose address is Charles
Center South, 36 South Charles Street, Baltimore, Maryland 21201, being at
least eighteen years of age, acting as incorporator, does hereby form a
corporation under the General Laws of the State of Maryland.
SECOND: The name of the corporation (which is hereinafter called the
"Corporation") is:
Simon DeBartolo Group, Inc.
THIRD: (a) 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:
(1) 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"), and to engage in any lawful act or
activity for which corporations may be organized under the Maryland
General Corporation Law.
(2) To engage in any one or more businesses or transactions, or
to acquire all or any portion of any entity engaged in any one or
more businesses or transactions, which the Board of Directors may
from time to time authorize or approve, whether or not related to the
business described elsewhere in this Article or to any other business
at the time or theretofore engaged in by the Corporation.
(b) The foregoing enumerated purposes and objects shall be in no way
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,
and each shall be regarded as independent; and they are intended to be and
shall be construed as powers as well as purposes and objects of the Corporation
and shall be in addition to and not in limitation of the general powers of
corporations under the General Laws of the State of Maryland.
FOURTH: The present address of the principal office of the Corporation
in the State of Maryland is c/o The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202.
FIFTH: The name and address of the resident agent of the Corporation in
this State is The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. Said resident agent is a Maryland corporation.
SIXTH: (a) The total number of shares of stock of all classes which the
Corporation has authority to issue is 650,000,000 shares of capital stock (par
value $.000l per share), amounting in aggregate par value to $65,000.00, of
which shares 383,996,000 are classified as "Common Stock", 12,000,000 are
classified as "Class B Common Stock", 4,000 are classified as "Class C Common
Stock," 4,000,000 are classified as "Series A Preferred Stock," and 250,000,000
are classified as "Excess Stock". The Board of Directors may classify and
reclassify any unissued shares of capital stock by setting or changing in any
one or more respects the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications or terms or
conditions of redemption of such shares of 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 class of stock hereafter
classified or reclassified, 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 Series A Preferred Stock, voting together as
a single class. Shares of Common Stock shall not have cumulative
voting rights.
(2) Subject to the provisions of law and any preferences of any
class of stock hereafter classified or reclassified, 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-1)(2), respectively, of this Article Sixth.
(3) 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 Stock and any
other class of stock hereafter classified or reclassified 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 class of stock hereafter classified or
reclassified 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 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 SIXTH) 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 class of stock
hereafter classified or reclassified 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, the Common Stock, and the
Series A Preferred Stock voting together as a single class. Shares
of Class B Common Stock shall not have cumulative voting 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, the Common Stock, and the Series A Preferred 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. 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
Series A Preferred Stock and of any class of stock hereafter
classified or reclassified, 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).
(3) (A) Each share of Class B Common Stock is convertible into
Excess 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 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 SIXTH) 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 SIXTH), 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.
(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 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
SIXTH, 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 SIXTH, 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
as Class B Common Stock but such shares so retired and cancelled
shall resume the status of authorized and unclassified shares of
Common Stock.
(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
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
Series A Preferred Stock and of any class of stock hereafter
classified or reclassified, 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 Stock and any other class of stock hereafter classified or
reclassified 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 Series A
Preferred Stock and of any class of stock hereafter classified or
reclassified 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 SIXTH) 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 class of stock
hereafter classified or reclassified 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, the Common Stock, and the
Series A Preferred 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 SEVENTH, the holders of the
shares of Class C Common Stock shall have the 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, the Common Stock,
and the Series A Preferred 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. 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
Series A Preferred Stock and of any class of stock hereafter
classified or reclassified, 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 Stock as provided in Article 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 SIXTH) 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-1)(2) of
this Article SIXTH), 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.
(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.
(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
SIXTH, 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-1)(3)(F) of this Article SIXTH, 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
as Class C Common Stock but such shares so retired and cancelled
shall resume the status of authorized and unclassified shares of
Common Stock.
(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.
(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
Series A Preferred Stock and of any class of stock hereafter
classified or reclassified, 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 Stock and any other class of stock hereafter classified or
reclassified 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 Series A
Preferred Stock and any class of stock hereafter classified or
reclassified 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, 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 Preferred Stock of the Corporation:
(1) All shares of Series A Preferred Stock redeemed, purchased,
exchanged or otherwise acquired by the Corporation as provided in
this paragraph (c-2) 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
reclassified as Common Stock, and may thereafter be issued or
reclassified, but not as Series A Preferred Stock.
(2) The Series A Preferred Stock shall, with respect to
dividend rights, rights upon liquidation, winding up or 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 A Preferred
Stock as to the payment of dividends and distribution of assets upon
liquidation (the "Senior Preferred Stock"), (B) pari passu with 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 A Preferred Stock as to the payment of
dividends and distribution of assets upon liquidation (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
existing 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, all $0.0001 par value, of the
Corporation are collectively referred to herein as the "Junior
Securities").
(3) (A) Except as may be required by law or as otherwise
expressly provided in this subparagraph (c-2)(3), on all matters upon
which the holders of shares of Common Stock shall be entitled to
vote, the shares of Common Stock and Series A Preferred Stock shall
be voted together as a single class, and each share of Series A
Preferred Stock shall be entitled to one vote (or fraction thereof)
for each share (or fraction thereof) of Common Stock issuable upon
conversion, pursuant to subparagraph (c-2)(5), of such share of
Series A Preferred Stock, determined as of the close of business on
the record date established by the Board of Directors of the
Corporation for the purpose of voting on such matter.
(B) If, and whenever, at any time or times, dividends
payable on shares of Series A Preferred Stock shall have been in
arrears and unpaid (whether or not declared and whether or not there
are funds of the Corporation legally available for the payment of
dividends) for four consecutive quarterly dividend periods, then the
holders of record of shares of Series A Preferred Stock, as reflected
in the stock transfer records of the Corporation (the "Holders")
shall, in addition to any other voting rights, have the right to vote
separately as a single class with respect to (i) any acquisition of
the Corporation by another entity by means of any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or consolidation, but excluding any merger
effected exclusively for the purpose of changing the domicile of the
Corporation) or (ii) any sale of all or substantially all of the
assets of the Corporation; unless, in each such case, either (A) the
Holders of record of the Corporation's securities as constituted
immediately prior to such acquisition or sale will, immediately after
such acquisition or sale (by virtue of securities issued as
consideration for such acquisition or sale or otherwise), hold at
least 50% of the aggregate voting power of all classes of voting
securities of the surviving or acquiring entity or (B) the terms of
such acquisition or sale require, as a condition precedent to the
consummation thereof, the payment in full of all accrued and unpaid
dividends (whether or not declared and whether or not there are funds
of the Corporation legally available for the payment of dividends) on
the Series A Preferred Stock.
(C) So long as any shares of Series A Preferred Stock are
outstanding, the Corporation will not, without the affirmative vote
of at least 80% of the outstanding shares of Series A Preferred Stock
(or such greater number as may be required by law), voting separately
as a single class, in person or by proxy, at a special or annual
meeting called for the purpose, or by unanimous written consent in
lieu of a meeting: (i) effect or allow any amendment, alteration or
repeal of any of the provisions of the Charter of the Corporation or
of any articles amendatory thereof or supplement thereto which in any
manner would adversely affect, alter or change the powers,
preferences or rights of any share of Series A Preferred Stock; or
(ii) create, authorize or issue any class or series of Senior
Preferred Stock.
(4) (A) The Holders of shares of Series A Preferred Stock
shall be entitled to receive, when and as declared by the Board of
Directors of the Corporation, quarterly dividends on the shares of
Series A Preferred Stock, cumulative from the initial date of
issuance of such shares (the "Issue Date"), in an amount equal to the
greater of (i) $0.5078125 per share per calendar quarter or (ii) an
amount per share equal to the dividends paid since the last Dividend
Payment Date (as hereinafter defined) with respect to the number of
shares of Common Stock then issuable upon conversion of a share of
Series A Preferred Stock. Dividends on the shares of Series A
Preferred Stock shall be payable on the last Business Day (as
hereinafter defined) of each calendar quarter, commencing on the last
Business Day of the fourth calendar quarter of 1995 (each such last
Business Day of a calendar quarter being a "Dividend Payment Date").
Such dividends shall be paid to the Holders of record at the close of
business on the record date specified by the Board of Directors of
the Corporation at the time such dividend is declared; provided,
however, that such record date shall not be more than 60 days nor
less than 10 days prior to the respective Dividend Payment Date.
Dividends on the shares of Series A Preferred Stock shall be fully
cumulative and shall accrue (whether or not declared and whether or
not there are funds of the Corporation legally available for the
payment of dividends) from the Issue Date, based on a 91-day quarter
and the actual number of days elapsed. As used in this paragraph (c-
2), "Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which
banks are authorized to be open for business in New York City.
(B) Any dividend payment made on shares of Series A
Preferred Stock shall first be credited against the dividends accrued
with respect to the earliest quarterly period for which dividends
have not been paid.
(C) All dividends paid with respect to shares of Series A
Preferred Stock pursuant to this subparagraph (c-2)(4) shall be paid
pro rata to the Holders entitled thereto.
(5) The Holders of shares of Series A Preferred Stock shall
have the right, at their option, to convert such shares into shares
of Common Stock at any time on or after the second anniversary of the
Issue Date, subject to the following terms and conditions:
(A) Each share of Series A Preferred Stock shall be
convertible, at the option of the Holder thereof, into such number of
fully paid and nonassessable shares of Common Stock of the
Corporation equal to $25.00 divided by the Conversion Price (as
hereinafter defined) in effect at the time of conversion. The price
at which shares of Common Stock shall be delivered upon conversion
(herein called the "Conversion Price") shall be initially $26.25 per
share of Common Stock. The Conversion Price shall be reduced and
increased in certain instances as provided in subparagraph (c-2)(7)
below. The number of shares of Common Stock into which each share of
Series A Preferred Stock is convertible on the Issue Date is
0.9523809.
(B) In order to convert shares of Series A Preferred Stock
into Common Stock the Holder thereof shall surrender to the
Corporation the certificate or certificates therefor, duly endorsed
or assigned to the Corporation or in blank, and give written notice
to the Corporation that such Holder elects to convert such shares.
No payment or adjustment shall be made upon any conversion on account
of any dividends accrued on the shares of Series A Preferred Stock
being surrendered for conversion or on account of any dividends on
the Common Stock issued upon such conversion.
(C) Shares of Series A Preferred Stock shall be deemed to
have been converted immediately prior to the close of business on the
day of the surrender of such shares for conversion in accordance with
subsection (c-2)(5)(B) above, and the person or persons entitled to
receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the records holder or holders of such
Common Stock at such time. As promptly as practicable on or after
the conversion date, the Corporation shall issue and deliver a
certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with payment in lieu of
any fraction of a share, as hereinafter provided, to the person or
persons entitled to receive the same. In case shares of Series A
Preferred Stock are called for redemption, the right to convert such
shares shall cease and terminate at the close of business on the date
fixed for redemption, unless default shall be made in payment of the
redemption price on the redemption date.
(D) No fractional shares of Common Stock shall be issued
upon conversion of any shares of Series A Preferred Stock, but,
instead of any fraction of a share which would otherwise be issuable,
the Corporation shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the Average
Trading Price (as hereinafter defined) of the Common Stock for the
ten (10) trading days ending on the day of conversion if the day of
conversion is a trading day (as hereinafter defined) or, if such day
is not a trading day, the most recent trading day immediately
preceding the day of conversion. As used in this paragraph (c-2),
(i) "Average Trading Price" shall mean the average of the Closing
Sale Price (as hereafter defined) reported for each trading day
within the period; (ii) "Closing Sale Price" on any trading day shall
mean, with respect to one share of Common Stock, the last reported
sale price regular way or, in case no such reported sale takes place
on such day, the average of the closing bid and asked prices regular
way for such day, in each case on the New York Stock Exchange, or, if
the Common Stock is not listed or admitted to trading on such
exchange, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading, or, if the Common
Stock is not listed or admitted to trading on any national securities
exchange, the average of the highest reported bid and lowest reported
asked prices as furnished by the National Association of Securities
Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is
no longer reporting such information. If on any such trading day the
shares of Common Stock are not quoted by any such organization, the
Closing Sale Price of one share on such day shall be the fair market
value of one share of Common Stock on such day, as determined in good
faith by the Board of Directors of the Corporation, whose
determination shall be evidenced by a duly adopted resolution of the
Board of Directors and shall be conclusive; and (iii) "Trading Day"
shall mean a day on which the New York Stock Exchange, or, if the
Common Stock is not listed or admitted to trading on such exchange,
such other exchange or market upon which the Closing Sale Price is to
be determined as hereinabove provided, is open for trading.
(E) The Corporation shall at all times reserve and keep
available, free from pre-emptive rights, out of its authorized but
unissued Common Stock, for the purposes of effecting the conversion
of shares of Series A Preferred Stock, the full number of shares of
Common Stock then deliverable upon the conversion of all shares of
Series A Preferred Stock then outstanding.
(F) Each share of Series A Preferred Stock is convertible
into Excess Stock as provided in Article NINTH.
(6) (A) Upon a liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the
Holders of Series A Preferred Stock shall be entitled, before any
assets of the Corporation shall be distributed among or paid over the
holders of any Junior Securities, but after distributions of such
assets among, or payment thereof over to, creditors of the
Corporation and to Holders of any Senior Preferred Stock, to receive
from the assets of the Corporation available for distribution to
stockholders an amount in cash or property (valued at its fair market
value), or a combination thereof, equal to $25.00 per share (prorated
for fractional shares), plus, in each such case, an amount in cash or
property (valued at its fair market value) equal to all accrued and
unpaid dividends thereon (whether or not declared and whether or not
there are funds of the Corporation legally available for the payment
of dividends) to and including the date of final distribution. After
any such payment in full, the Holders of Series A Preferred Stock
shall not, as such, be entitled to any further participation in any
distribution of assets of the Corporation. As used in this
subparagraph (c-2)(6), the terms "liquidation preference" and
"liquidation value" (and other terms of similar import) shall mean
$25.00 per share.
(B) Neither the merger or consolidation of the Corporation
into or with any other corporation or the merger or consolidation of
any other corporation into or with the Corporation, nor the sale of
all or substantially all the assets of the Corporation, shall be
deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, for the purposes of this subparagraph (c-2)(6).
(C) If, upon any such liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the assets
of the Corporation shall be insufficient to make the full payments
required by subparagraph (c-2)(6)(A) and all full distributions with
respect to all Parity Preferred Stock, no such distribution shall be
made on account of any shares of any Parity Preferred Stock or Series
A Preferred Stock unless proportionate distributive amounts shall be
paid on account of the shares of Series A Preferred Stock and Parity
Preferred Stock, ratably, in proportion to the full distributable
amounts to which Holders of the Series A Preferred Stock and holders
of all such Parity Preferred Stock are respectively entitled upon
such dissolution, liquidation or winding up.
(7) Shares of Series A Preferred Stock shall be redeemable by
the Corporation as provided below (with all references in this
subparagraph (c-2)(7) to a redemption price per share to be adjusted
proportionally in respect of fractional shares):
(A) (i) At the option of the Corporation, shares of
Series A Preferred Stock may be redeemed, as a whole or from time to
time in part, at any time from and after the fifth anniversary of the
Issue Date, at the following redemption prices per share: If
redeemed during the 12-month period beginning on the anniversary date
of the Issue Date indicated,
Redemption Redemption
Anniversary Price Anniversary Price
Fifth $26.75 Ninth $25.75
Sixth $26.50 Tenth $25.50
Seventh $26.25 Eleventh $25.25
Eighth $26.00
and thereafter at a redemption price of $25.00 per share, in each
case payable in cash.
(ii) At the option of any Holder, at any time
specified by such Holder upon not less than 10 days notice after
receiving 60 days prior written notice of the Corporation stating
that the Corporation intends to issue shares of Common Stock or other
equity securities of the Corporation to any "foreign person" (as such
term is used in Section 897(h)(4)(B) of the Internal Revenue Code of
1986, as amended, or any successor provision), directly or
indirectly, if such issuance would result in ownership of 48% or more
of the value of all outstanding shares of Common Stock and other
equity securities of the Corporation, directly or indirectly, by
"foreign persons". The redemption price shall equal $25.00 per share
plus all accrued and unpaid dividends (whether or not declared and
whether or not there are funds of the Corporation legally available
for the payment of dividends) on such share.
(B) In addition to the redemption option set forth in
subparagraph (c-2)(7)(A) above, at the option of the Corporation,
shares of Series A Preferred Stock may be redeemed, as a whole or
from time to time in part, from and after the second anniversary of
the Issue Date and during any period that the Closing Sale Price of
the Common Stock exceeds 120% of the Conversion Price for any 20
trading days within a period of 30 consecutive trading days, at a
redemption price, payable in shares of Common Stock, equal to that
number of shares of Common Stock then issuable upon conversion,
pursuant to subparagraph (c-2)(5) above, of the shares of Series A
Preferred Stock to be redeemed.
(C) The Corporation shall not redeem any shares of Series
A Preferred Stock pursuant to subparagraph (c-2)(7)(A)(i) or
subparagraph (c-2)(7)(B) above, unless and until all accrued and
unpaid dividends (whether or not declared and whether or not there
are funds of the Corporation legally available for the payment of
dividends) on the Series A Preferred Stock have been or
contemporaneously are declared and paid in full.
(D) Whenever shares of Series A Preferred Stock are to be
redeemed pursuant to subparagraph (c-2)(7)(A)(i) or subparagraph (c-
2)(7)(B) above, a notice of such redemption shall be mailed,
addressed to each Holder of the shares to be redeemed, by first class
mail, postage prepaid, or delivered to each Holder of the shares to
be redeemed at such Holder's address as the same appears on the stock
transfer records of the Corporation. Such notice shall be mailed or
delivered (i) in the case of a redemption pursuant to subparagraph (c-
2)(7)(A)(i) above, not less than 60 days prior to the date fixed for
redemption or (ii) in the case of a redemption pursuant to
subparagraph (c-2)(7)(B) above, not less than 10 days prior to the
date fixed for redemption. Each such notice shall state: (i) the
date fixed for redemption; (ii) the number of shares to be redeemed;
(iii) the redemption price; (iv) the place or places where such
shares are to be surrendered for payment of the redemption price; and
(v) that dividends on the shares to be redeemed will cease to accrue
on such date fixed for redemption unless default shall be made in
payment of the redemption price on such date. If fewer than all
shares of Series A Preferred Stock held by a Holder are to be
redeemed, the notice mailed to such Holder shall specify the number
of shares to be redeemed from such Holder.
(E) Notice having been given as provided in subparagraph
(c-2)(7)(A)(ii) or subparagraph (c-2)(7)(D) above, as applicable:
(i) in the case of a redemption pursuant to
subparagraphs (c-2)(7)(A)(i) or (ii) above, if on or before the
redemption date specified in such notice an amount in cash sufficient
to redeem in full, on the redemption date and at the applicable
redemption price, all shares of Series A Preferred Stock called for
redemption shall have been set apart and deposited in trust so as to
be available for such purpose and only for such purpose, or shall
have been paid to the Holders thereof, then effective as of the close
of business on such redemption date, the shares of Series A Preferred
Stock so called for redemption shall cease to accrue dividends, and
said shares shall no longer be deemed to be outstanding and shall
have the status of authorized but unissued shares of capital stock
and be reclassified as Common Stock of the Corporation, and all
rights of the Holders thereof, as such as stockholders of the
Corporation (except the right to receive from the Corporation the
redemption price) shall cease;
(ii) in the case of redemption pursuant to
subparagraph (c-2)(7)(B) above, all shares of Series A Preferred
Stock called for redemption shall be deemed to have been converted
into shares of Common Stock in accordance with subparagraph (c-2)(5)
above immediately prior to the close of business on the redemption
date specified in such notice, 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 at such time; and effective as of the close of business
on such redemption date, the shares of Series A Preferred Stock so
called for redemption shall cease to accrue dividends, and said
shares shall no longer be deemed to be outstanding and shall have the
status of authorized but unissued shares of Common Stock of the
Corporation, and all rights of the Holders thereof, as such as
stockholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease; and
(iii) in either such case, upon surrender in
accordance with said notice of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the notice
shall so state), such shares shall be redeemed by the Corporation at
the redemption price as aforesaid. In the case of redemption
pursuant to subparagraph (c-2)(7)(B) above, as promptly as
practicable on or after the date of such surrender, the Corporation
shall issue and deliver a certificate or certificates for the number
of full shares of Common Stock issuable upon such redemption,
together with payment in lieu of any fraction of a share, to the
person or persons entitled to receive the same, all in accordance
with the provisions of subparagraph (c-2)(5) above. In case fewer
than all the shares of Series A Preferred Stock represented by any
certificate so surrendered are redeemed, a new certificate of like
terms and having the same date of original issuance shall be issued
representing the unredeemed shares of Series A Preferred Stock
without cost to the Holder thereof.
(F) In the event that fewer than all the shares of Series
A Preferred Stock are to be redeemed pursuant to subparagraph (c-
2)(7)(A)(i) or subparagraph (c-2)(7)(B) above, the Corporation shall
redeem shares of Series A Preferred Stock pro rata among the Holders,
based on the number of shares of Series A Preferred Stock held by
each Holder.
(G) Nothing contained in this subparagraph (c-2)(7) shall
limit any legal right of the Corporation to purchase or otherwise
acquire any shares of Series A Preferred Stock at any price, whether
higher or lower than the redemption price.
(8) (A) The Conversion Price and the number of shares of
Common Stock issuable upon the conversion of shares of Series A
Preferred Stock shall be subject to adjustment in case the
Corporation shall at any time after the Issue Date (i) pay a dividend
or make any other distribution to all holders of its outstanding
Common Stock, Class B Common Stock, or Class C Common Stock in shares
of Common Stock, Class B Common Stock, or Class C Common Stock such
that the total number of shares of Common Stock, Class B Common
Stock, and Class C Common Stock outstanding is increased; (ii)
subdivide or split-up its outstanding shares of Common Stock, Class B
Common Stock, or Class C Common Stock into a greater total number of
shares of Common Stock, Class B Common Stock, and Class C Common
Stock; (iii) combine its outstanding shares of Common Stock, Class B
Common Stock, or Class C Common Stock into a smaller total number of
shares of Common Stock, Class B Common Stock, and Class C Common
Stock; (iv) issue by reclassification of its shares of Common Stock,
Class B Common Stock, or Class C Common Stock other shares of capital
stock of the Corporation; (v) issue rights or warrants to all holders
of its outstanding Common Stock, Class B Common Stock, or Class C
Common Stock entitling them to subscribe for or purchase shares of
Common Stock, Class B Common Stock, or Class C Common Stock at a
price per share less than the Closing Sale Price of the Common Stock
on the trading day preceding the record date of such issuance or (vi)
in case the Corporation shall distribute to all holders of its
outstanding Common Stock, Class B Common Stock, or Class C Common
Stock evidences of its indebtedness or assets (excluding cash
dividends, dividends or distributions in shares of Common Stock,
Class B Common Stock, or Class C Common Stock or rights or warrants
to subscribe for or purchase securities referred to in the preceding
clause (v)). In any such event, the number of shares of Common Stock
issuable upon conversion of each share of Series A Preferred Stock
immediately prior thereto shall be adjusted so that the Holder
thereof shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Corporation that such Holder
would have owned or would have been entitled to receive after the
happening of any of the events described above had such share of
Series A Preferred Stock been converted immediately prior to the
happening of such event or any record date with respect thereto. An
adjustment made pursuant to this subparagraph (c-2)(8)(A) shall
become effective immediately after the effective date of such event,
retroactive to the record date, if any, for such event.
(B) Whenever the number of shares of Common Stock issuable
upon the conversion of shares of Series A Preferred Stock is
adjusted, as provided in subparagraph (c-2)(8)(A) above, the
Conversion Price shall be adjusted (calculated to the nearest $.0001)
by multiplying such Conversion Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number
of shares of Common Stock issuable upon conversion of each share of
Series A Preferred Stock immediately prior to such adjustment, and
the denominator of which shall be the number of shares of Common
Stock so issuable immediately thereafter.
(C) Notwithstanding anything in this subparagraph (c-
2)(8), in no event will any adjustment be made to the Conversion
Price or the number of shares of Common Stock issuable upon the
conversion of shares of Series A Preferred Stock solely as a result
of any conversion of any shares of Class B Common Stock or Class C
Common Stock into shares of Common Stock on a one-for-one basis.
(D) For purposes of this subparagraph (c-2)(8), the term
"shares of Common Stock" shall mean the class of stock designated as
the Common Stock of the Corporation at the Issue Date. In the event
that at any time, as a result of an adjustment made pursuant to
subparagraph (c-2)(8)(A) above, the shares of Series A Preferred
Stock shall become convertible into any securities of the Corporation
other than shares of Common Stock, thereafter the number of such
other securities so issuable upon such conversion and the Conversion
Price of such securities 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 the shares of Common Stock.
(9) In case at any time:
(A) the Corporation shall set a record date for the
purpose of declaring a dividend (or any other distribution) on the
Common Stock, Class B Common Stock, or Class C Common Stock payable
otherwise than in cash out of its retained earnings; or
(B) the Corporation shall set a record date for the
granting to the holders of the Common Stock, Class B Common Stock, or
Class C Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights; or
(C) of any reclassification of the capital stock of the
Corporation (other than a subdivision or combination of its
outstanding shares of Common Stock, Class B Common Stock, or Class C
Common Stock), or of any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of
the Corporation is required, or of the sale or transfer of all or
substantially all of the assets of the Corporation;
then, in any such case, the Corporation shall cause to be mailed to
the Holders of the Series A Preferred Stock, at least 20 days (or 10
days in any case specified in subparagraphs (c-2)(9)(A) or (B) above)
prior to the applicable record or effective date hereinafter
specified, a notice stating (i) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which
the holders of Common Stock, Class B Common Stock, or Class C Common
Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock, Class B
Common Stock, or Class C Common Stock of record shall be entitled to
exchange their shares of Common Stock, Class B Common Stock, or Class
C Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. In no event shall the giving
of such notice limit the Corporation's obligations to adjust the
Conversion Price and number of shares of Common Stock issuable upon
the conversion of shares of Series A Preferred Stock upon the
occurrence of the events specified in subparagraph (c-2)(8) above.
(d) 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 Excess Stock of the Corporation is
set forth in Article NINTH hereof.
(e) Subject to the foregoing, the power of the Board of Directors to
classify and reclassify any of the shares of capital stock shall include,
without limitation, subject to the provisions of the Charter, authority to
classify or reclassify any unissued shares of such stock into a class or
classes of preferred stock, preference stock, special stock or other stock, and
to divide and classify shares of any class into one or more series of such
class, by determining, fixing, or altering one or more of the following:
(1) The distinctive designation of such class or series and the
number of shares to constitute such class or series; provided that,
unless otherwise prohibited by the terms of such or any other class
or series, the number of shares of any class or series may be
decreased by the Board of Directors in connection with any
classification or reclassification of unissued shares and the number
of shares of such class or series may be increased by the Board of
Directors in connection with any such classification or
reclassification, and any shares of any class or series which have
been redeemed, purchased, otherwise acquired or converted into shares
of Common Stock or any other class or series shall become part of the
authorized capital stock and be subject to classification and
reclassification as provided in this subparagraph.
(2) Whether or not and, if so, the rates, amounts and times at
which, and the conditions under which, dividends shall be payable on
shares of such class or series, whether any such dividends shall rank
senior or junior to or on a parity with the dividends payable on any
other class or series of stock, and the status of any such dividends
as cumulative, cumulative to a limited extent or non- cumulative and
as participating or non-participating.
(3) Whether or not shares of such class or series shall have
voting rights, in addition to any voting rights provided by law and,
if so, the terms of such voting rights provided that, there shall be
no increase in the number of directors except as set forth in
paragraph (a) of Article SEVENTH and such voting rights shall not
effect the rights of the holders of the Class B Common Stock or the
Class C Common Stock with respect to the election of directors.
(4) Whether or not shares of such class or series shall have
conversion or exchange privileges and, if so, the terms and
conditions thereof, including provision for adjustment of the
conversion or exchange rate in such events or at such times as the
Board of Directors shall determine.
(5) Whether or not shares of such class or series shall be
subject to redemption and, if so, the terms and conditions of such
redemption, including the date or dates upon or after which they
shall be redeemable and the amount per share payable in case of
redemption, which amount may vary under different conditions and at
different redemption dates; and whether or not there shall be any
sinking fund or purchase account in respect thereof, and if so, the
terms thereof.
(6) The rights of the holders of shares of such class or series
upon the liquidation, dissolution or winding up of the affairs of, or
upon any distribution of the assets of, the Corporation, which rights
may vary depending upon whether such liquidation, dissolution or
winding up is voluntary or involuntary and, if voluntary, may vary at
different dates, and whether such rights shall rank senior or junior
to or on a parity with such rights of any other class or series of
stock.
(7) Whether or not there shall be any limitations applicable,
while shares of such class or series are outstanding, upon the
payment of dividends or making of distributions on, or the
acquisition of, or the use of moneys for purchase or redemption of,
any stock of the Corporation, or upon any other action of the
Corporation, including action under this subparagraph, and, if so,
the terms and conditions thereof.
(8) Any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications of shares of such
class or series, not inconsistent with law and the Charter of the
Corporation.
(f) For the purposes hereof and of any articles supplementary to the
Charter providing for the classification or reclassification of any shares of
capital stock or of any other charter document of the Corporation (unless
otherwise provided in any such articles or document), any class or series of
stock of the Corporation shall be deemed to rank:
(1) prior to another class or series either as to dividends or
upon liquidation, if the holders of such class or series shall be
entitled to the receipt of dividends or of amounts distributable on
liquidation, dissolution or winding up, as the case may be, in
preference or priority to holders of such other class or series;
(2) on a parity with another class or series either as to
dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation price per share
thereof be different from those of such others, if the holders of
such class or series of stock shall be entitled to receipt of
dividends or amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in proportion to their respective
dividend rates or redemption or liquidation prices, without
preference or priority over the holders of such other class or
series; and
(3) junior to another class or series either as to dividends or
upon liquidation, if the rights of the holders of such class or
series shall be subject or subordinate to the rights of the holders
of such other class or series in respect of the receipt of dividends
or the amounts distributable upon liquidation, dissolution or winding
up, as the case may be.
SEVENTH: (a) The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors. The number of directors
of the Corporation shall never be less than the minimum number permitted by the
General Laws of the State of Maryland 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; and
(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.
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) at any time after the closing date of the Merger, any
vacancy resulting from death or disability shall be filled by holders
of Class C Common Stock, voting as a separate class to elect as a
replacement director a candidate who (i) is the Chief Executive
Officer of The Edward J. DeBartolo Corporation (or any successor to
such corporation), provided that the right granted pursuant to this
subparagraph (b)(2)(A)(i) may be exercised only once and may only be
exercised to fill a vacancy resulting from the death or disability of
Edward J. DeBartolo, Jr. or Marie Denise DeBartolo York, or (ii) 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 the 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 the Independent Directors;
(B) at any time prior to the fourth anniversary of the
closing date of the Merger, any vacancy other than one resulting from
a death or disability shall, subparagraph (c-1)(1) of Article SIXTH
notwithstanding, reduce by such vacancy an equivalent number of the
directors that holders of Class C Common Stock may, voting as a
separate class, elect, and such a vacancy shall be filled by a
majority of the entire Board of Directors. If as a result of this
subparagraph (b)(2)(B) the number of directors that holders of Class
C Common Stock may elect is reduced to zero, then immediately and
automatically each share of Class C Common Stock shall be converted
into one share of Common Stock;
(C) at any time during the period from and including the
fourth anniversary to but not including the fifth anniversary of the
closing date of the Merger, any vacancy other than one resulting from
a death or disability shall be filled by holders of Class C Common
Stock, voting as a separate class, to elect as a replacement director
a candidate who meets the qualifications and has been selected in
accordance with the procedures set forth in subparagraph
(b)(2)(A)(ii) above; provided if during such period vacancies result
other than from death or disability with respect to both of the
directors who were directors on the fourth anniversary date, then,
subparagraph (c-1)(1) of Article SIXTH notwithstanding, the number of
directors that the holders of Class C Common Stock may, voting as a
separate class, elect shall be reduced to one, and the vacancy with
respect to the second resigned director shall be filled by a majority
of the entire Board of Directors; and
(D) at any time after the fifth anniversary of the closing
date of the Merger, any vacancy other than one resulting from a death
or disability shall be filled by holders of Class C Common Stock,
voting as a separate class, to elect as a replacement director a
candidate who meets the qualifications and has been selected in
accordance with the procedures set forth in subparagraph
(b)(2)(A)(ii) above.
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
consist of said directors so elected in addition to the number of directors
fixed as provided in paragraph (a) of this Article SEVENTH 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 a directors to be elected by the
combined holders of the Common Stock, the Class B Common Stock, the Class C
Common Stock, and the Series A Preferred 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 the rights of the holders of any class separately
entitled to elect one or more directors, any director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and then
only 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) The following are the names of the current directors of the
Corporation, each of whom shall serve until the annual meeting of stockholders
indicated next to his or her name, and who thereafter will serve (or whose
replacement will serve) until the next following annual meeting of
stockholders.
Current
Term Ends
with
Name of Current Director Election at
Director Stock Classes Entitled Class Annual
to Elect Meeting in:
- - ---------------- ---------------------- -------- -----------
(person from Common Stock, Class B A 1997(1)
current Simon Common Stock, Class C
Board) Common Stock, Series A
Preferred Stock
(person from Common Stock, Class B A 1998(2)
current Simon Common Stock, Class C
Board) Common Stock, Series A
Preferred Stock
(person from Common Stock, Class B A 1998(2)
current Simon Common Stock, Class C
Board) Common Stock, Series A
Preferred Stock
(person from Common Stock, Class B A 1998(2)
current DeBartolo Common Stock, Class C
Board) Common Stock, Series A
Preferred Stock
(person from Common Stock, Class B A 1999(2)
current Simon Common Stock, Class C
Board) Common Stock, Series A
Preferred Stock
(person from Common Stock, Class B A 1999(2)
current DeBartolo Common Stock, Class C
Board) Common Stock, Series A
Preferred Stock
(person from Common Stock, Class B A 1999(2)
current DeBartolo Common Stock, Class C
Board) Common Stock, Series A
Preferred Stock
(Simon director) Class B Common Stock B 1997(1)
(Simon director) Class B Common Stock B 1997(1)
(Simon director) Class B Common Stock B 1997(1)
(Simon director) Class B Common Stock B 1997(1)
(DeBartolo Class C Common Stock C 1997(1)
director)
(DeBartolo Class C Common Stock C 1997(1)
director)
(1) In the event that proposed amendments to this section are submitted to the
stockholders subsequent to 1996, this date shall be adjusted such that (a) if
the proposal is submitted in 1997, this date will be changed to one that is the
sum of this date plus one year; and (b) if the proposal is submitted in 1998,
this date will be changed to one that is the sum of this date plus two years.
(2) In the event that proposed amendments to this section are submitted to the
stockholders subsequent to 1996, whether in 1997 or 1998, this date will be
changed to one that is the sum of this date plus one year.
(f) 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 DeBartolo 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
DeBartolo 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.
EIGHTH: (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 other than such, if any, as the Board
of Directors, in its sole discretion, may determine 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) The Board of Directors shall, in connection with the
exercise of its business judgment involving a Business Combination
(as defined in Section 3-601 of the Corporations and Associations
Article of the Annotated Code of Maryland) or any actual or proposed
transaction which would or may involve a change in control of the
Corporation (whether by purchases of shares of stock or any other
securities of the Corporation in the open market, or otherwise,
tender offer, merger, consolidation, dissolution, liquidation, sale
of all or substantially all of the assets of the Corporation, proxy
solicitation or otherwise), in determining what is in the best
interests of the Corporation and its stockholders and in making any
recommendation to its stockholders, give due consideration to all
relevant factors, including, but not limited to (A) the economic
effect, both immediate and long-term, upon the Corporation's
stockholders, including stockholders, if any, who do not participate
in the transaction; (B) the social and economic effect on the
employees, customers of, and others dealing with, the Corporation and
its subsidiaries and on the communities in which the Corporation and
its subsidiaries operate or are located; (C) whether the proposal is
acceptable based on the historical and current operating results or
financial condition of the Corporation; (D) whether a more favorable
price could be obtained for the Corporation's stock or other
securities in the future; (E) the reputation and business practices
of the offeror and its management and affiliates as they would affect
the employees of the Corporation and its subsidiaries; (F) the future
value of the stock or any other securities of the Corporation; (G)
any antitrust or other legal and regulatory issues that are raised by
the proposal; and (H) the business and financial condition and
earnings prospects of the acquiring person or entity, including, but
not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with
the acquisition, and other likely financial obligations of the
acquiring person or entity. If the Board of Directors determines
that any proposed Business Combination (as defined in Section 3-601
of the Corporations and Associations Article of the Annotated Code of
Maryland) or actual or proposed transaction which would or may
involve a change in control of the Corporation should be rejected, it
may take any lawful action to defeat such transaction, including, but
not limited to, any or all of the following: advising stockholders
not to accept the proposal; instituting litigation against the party
making the proposal; filing complaints with governmental and
regulatory authorities; acquiring the stock or any of the securities
of the Corporation; selling or otherwise issuing authorized but
unissued stock, other securities or granting options or rights with
respect thereto; acquiring a company to create an antitrust or other
regulatory problem for the party making the proposal; and obtaining a
more favorable offer from another individual or entity.
(5) The Corporation shall provide any indemnification permitted
by the laws of Maryland and shall indemnify directors, officers,
agents and employees as follows: (A) the Corporation shall indemnify
its directors and officers, whether serving the Corporation or at its
request any other entity, to the full extent required or permitted by
the General Laws of the State of Maryland now or hereafter in force,
including the advance of expenses under the procedures and to the
full extent permitted by law and (B) the Corporation shall indemnify
other employees and agents, whether serving the Corporation or at its
request any other entity, to such extent as shall be authorized by
the Board of Directors or the Corporation's By-Laws and be permitted
by law. The foregoing rights of indemnification shall not be
exclusive of any other rights to which those seeking indemnification
may be entitled. The Board of Directors may take such action as is
necessary to carry out these indemnification provisions and is
expressly empowered to adopt, approve and amend from time to time
such by-laws, resolutions or contracts implementing such provisions
or such further indemnification arrangements as may be permitted by
law. No amendment of the Charter of the Corporation or repeal of any
of its provisions shall limit or eliminate the right to
indemnification provided hereunder with respect to acts or omissions
occurring prior to such amendment or repeal or shall limit or
eliminate the rights granted under indemnification agreements entered
into by the Corporation and its directors, officers, agents and
employees.
(6) To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, no director or officer of
the Corporation shall be personally liable to the Corporation or its
stockholders for money damages. No amendment of the Charter of the
Corporation or repeal of any of its provisions shall limit or
eliminate the benefits provided to directors and officers under this
provision with respect to any act or omission which occurred prior to
such amendment or repeal.
(7) 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 Section 2-502 of
the Corporations and Associations Article of the Annotated Code of
Maryland.
(b) 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 classification, 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.
Unless otherwise provided herein, the proposed change will be effective only if
it is adopted upon the affirmative vote of the holders of not less than a
majority of the aggregate votes entitled to be cast thereon (considered for
this purpose as a single class); provided however, that any amendment to,
repeal of or adoption of any provision inconsistent with subparagraphs (a)(4),
(a)(6) or (a)(7) or this paragraph (b) of Article EIGHTH 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 SIXTH or Article SEVENTH
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
SIXTH or Article SEVENTH) or by the holders of the Class C Common Stock (in the
case of paragraph (c-1) of Article SIXTH or Article SEVENTH).
(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) 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 Laws of the State of Maryland now
or hereafter in force.
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.
"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.
"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 Merger.
"Exchange Rights" shall mean any rights granted to limited
partners of Simon DeBartolo Group, L.P., a Delaware limited
partnership (including pursuant to an Exchange Rights Agreement) and
Simon Property Group L.P., a Delaware limited partnership, to
exchange (subject to the Ownership Limit) limited partnership
interests in such Partnership for shares of Capital Stock.
"Independent Director" shall mean a director of the Corporation
who is neither employed by 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 of the Closing Price for the five consecutive
Trading Days ending on such date, or if such date is not a Trading
Date, the five consecutive Trading Days preceding such date. The
"Closing Price" on any date shall mean (i) the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, 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 (ii) if such class of Capital Stock
is 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 such class of capital stock is listed or
admitted to trading, or (iii) if such class of capital stock is 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
Quotation System or, if such system is no longer in use, the
principal other automated quotations systems that may then be in use,
or (iv) if such class of Capital Stock is 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 such
class of Capital Stock selected by the Board of Directors.
"Merger" shall mean the merger, pursuant to the Agreement and
Plan of Merger dated March 26, 1996, among the Corporation, Day
Acquisition Corp., an Ohio corporation and a wholly owned subsidiary
of the Corporation ("Sub"), and DeBartolo Realty Corporation, an Ohio
corporation ("DeBartolo"), pursuant to which merger Sub shall be
merged with and into DeBartolo.
"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, 24%, and (y) in the case of any other Person,
6%, 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.
"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 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 Merger.
"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. or DeBartolo Realty
Partnership L.P.
(2) (A) Except as provided in subparagraph (a)(9) of this
Article NINTH, from the effective date of the 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 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 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 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 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
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
Merger and prior to the Restriction Termination Date, there is a
purported Transfer 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 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 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 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 the effective date of the Merger and until the
Restriction Terminate Date, each certificate for the respective class
of Capital Stock shall bear the following legend:
The shares of Capital Stock 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.
Unless excepted by the Board of Directors of the Corporation, no
Person may (1) Beneficially Own or Constructively Own shares of
Capital Stock in excess of 6% (other than members of the Simon
Family Group, whose relevant percentage is 24%) of the value of
any class of outstanding Capital Stock of the Corporation, or
any combination thereof, determined as provided in the
Corporation's Charter, 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 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.
(b) (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 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 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 or Preferred Stock from which such shares of
Excess 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 Stock 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
Stock 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 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 Stock shall be entitled to such voting rights as are
ascribed to shares of Common Stock or Preferred Stock from which such
shares of Excess 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 Stock 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 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, statue, 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 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 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.
ELEVENTH: The duration of the Corporation shall be perpetual. The
Corporation shall be subject to termination at any time by the vote of the
holders of a majority of the outstanding shares of Common Stock, Class B Common
Stock, Class C Common Stock, and Series A Preferred Stock entitled to vote
thereon.
TWELFTH: 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.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation,
acknowledging the same to be my act, on [ ], 1996.
Witness:
SECOND: (a) As of immediately before the amendment the total number of
shares of stock of all classes which the Corporation has authority to issue is
412,000,000 shares, of which shares 246,000,000 are Common Stock, 12,000,000
are Class B Common Stock, 4,000,000 are Series A Preferred Stock, and
150,000,000 are Excess Stock.
(b) As amended the total number of shares of stock of all
classes which the Corporation has authority to issue is 650,000,000 shares, of
which 383,996,000 shares are Common Stock (par value $.0001 per share),
12,000,000 shares are Class B Common Stock (par value $.0001 per share), 4,000
shares are Class C Common Stock (par value $.0001 per share), 4,000,000 shares
are Series A Preferred Stock (par value $.0001 per share), and 250,000,000
shares are Excess Stock (par value $.0001 per share).
(c) The aggregate par value of all shares having a par value is
$41,200 before the amendment and $65,000.00 as amended.
(d) The shares of stock of the Corporation are divided into
classes, and the amendment contains a description, as amended, of each class,
including the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption.
THIRD: The foregoing amendment to the Charter of the Corporation has
been approved by a majority of the entire Board of Directors and by the
requisite number of shares entitled to vote on the matter.
IN WITNESS WHEREOF, SIMON PROPERTY GROUP, INC. has caused these presents to be
signed in its name and on its behalf by its President and witnessed by its
Secretary on [ ], 1996.
WITNESS:
Secretary SIMON PROPERTY GROUP, INC.
By
President
THE UNDERSIGNED, President of SIMON PROPERTY GROUP, INC., who executed on
behalf of the Corporation the foregoing Articles of Amendment and Restatement
of which this certificate is made a part, hereby acknowledges in the name and
on behalf of said Corporation the foregoing Articles of Amendment and
Restatement to be the corporate act of said Corporation and hereby certifies
that to the best of his knowledge, information, and belief the matters and
facts set forth therein with respect to the authorization and approval thereof
are true in all material respects under the penalties of perjury.
By
______________________
President
EXHIBIT 2.05
SIMON DeBARTOLO GROUP, INC.
AMENDED AND RESTATED BY-LAWS
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. Annual Meeting. The Corporation shall hold an annual
meeting of its stockholders to elect directors and transact any other business
within its powers, either at 10:00 a.m. on the second Wednesday of May in each
year if not a legal holiday, or at such other time on such other day falling on
or before the 30th day thereafter as shall be set by the Board of Directors.
Except as the Charter 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 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; provided that 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 from any cause among
the directors elected by the holders of the Class B Common Stock or Class C
Common Stock, as the case may be, and that a special meeting of holders of the
Series A Preferred Stock, 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 from any cause among the directors elected by the holders
of the Series A Preferred Stock, 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. Special meetings of
the stockholders shall be called at the request of the stockholders as may be
required by law.
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 90 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.
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 constitutes a quorum, and 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 without further notice by a majority vote of the
stockholders present in person or by proxy to a date not more than 120 days
after the original record date. 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 written proxy
signed by the stockholder or by his or her duly authorized attorney in fact.
Unless a proxy provides otherwise, it is not valid more than 11 months after
its date.
SECTION 1.08. List of Stockholders. At each meeting of stockholders, a
full, true and complete list of all stockholders entitled to vote at such
meeting, showing the number and class of shares held by each and certified by
the transfer agent for such class or by the Secretary, shall be furnished by
the Secretary.
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 1.12, 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
nomination or proposal be disregarded.
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. If
demanded by stockholders, present in person or by proxy, entitled to cast 10%
in number of votes entitled to be cast, or if ordered by the chairman, the vote
upon any election or question shall be taken by ballot and, upon like demand or
order, the voting shall be conducted by two inspectors, in which event the
proxies and ballots shall be received, and all questions touching the
qualification of voters and the validity of proxies and the acceptance or
rejection of votes shall be decided, by such inspectors. Unless so demanded or
ordered, no vote need be by ballot and voting need not be conducted by
inspectors. The stockholders at any meeting may choose an inspector or
inspectors to act at such meeting, and in default of such election the chairman
of the meeting may appoint an inspector or inspectors. No candidate for
election as a director at a meeting shall serve as an inspector thereat.
SECTION 1.11. Informal Action by Stockholders. Any action required or
permitted to be taken at a meeting of stockholders may be taken without a
meeting if there is filed with the records of stockholders meetings an
unanimous written consent which sets forth the action and is signed by each
stockholder entitled to vote on the matter and a written waiver of any right to
dissent signed by each stockholder entitled to notice of the meeting but not
entitled to vote at it.
SECTION 1.12. 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 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 SEVENTH of its
Charter.
SECTION 2.03. Election and Tenure of Directors. Subject to the rights of
holders of Class B Common Stock and Class C Common Stock, and subject to
paragraph (e) of Article SEVENTH of the Charter, at each annual meeting the
stockholders shall elect directors to hold office until the next annual meeting
and until their successors are elected and qualify.
SECTION 2.04. Removal of Director. Any director or the entire Board of
Directors may be removed only in accordance with the provisions of the Charter.
SECTION 2.05. 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 entire 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 SEVENTH of the
Charter. A director elected by the stockholders or by the Board of Directors
to fill a vacancy which results from the removal of a director serves for the
balance of the term of the removed director.
SECTION 2.06. 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, the President or the Chairman, with notice in
accordance with Section 2.08, 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 2.07. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the 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. In the absence of designation such
meeting shall be held at such place as may be designated in the call.
SECTION 2.08. Notice of Meeting. Except as provided in Section 2.06, 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 2.09. 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 addition, 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. 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 2.10. 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 2.11. Compensation. By resolution of the Board of Directors a
fixed sum and expenses, if any, for attendance at 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 full-time 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 2.12. 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 2.13. Loss of Deposits. No director shall be liable for any loss
which may occur by reason of the failure of any bank, trust company, savings
and loan association, or other institution with whom moneys or stock of the
Corporation have been deposited.
SECTION 2.14. 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. The Board of Directors may appoint from among
its members an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating Committee and other committees composed of two 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. Each committee except 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 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 SEVENTH 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. If the Board of Directors has given general authorization for
the issuance of stock, a committee of the Board, in accordance with a general
formula or method specified by the Board by resolution or by adoption of a
stock option or other plan, may fix the terms of stock subject to
classification or reclassification and 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 an unanimous written consent which
sets forth the action is signed by each member of the committee 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 of the Board, a Chief Executive 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 shall be a director; the other
officers may be directors.
SECTION 4.02. Chairman of the Board. The Chairman of the Board, if one
be elected, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present. In general, the 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. 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, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present.
SECTION 4.04. President. Unless otherwise specified by the Board of
Directors, the President shall be the chief operating officer of the
Corporation and perform the duties customarily performed by a chief operating
officer of a corporation. If no Chief Executive Officer is appointed, he or
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 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 4.05. Vice-Presidents. The Vice-President or Vice-Presidents, 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. 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.
SECTION 4.06. 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 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.
SECTION 4.07. 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.
SECTION 4.08. 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.
SECTION 4.09. 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 4.10. 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 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 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 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 or the
President.
SECTION 5.02. Effect of Divisional Titles. The conferring of divisional
titles 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, 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.
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 and Closing of Transfer Books. The Board of
Directors may set a record date or direct that the stock transfer books be
closed for a stated period 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 90 days
before the date on which the action requiring the determination will be taken;
the transfer books may not be closed for a period longer than 20 days; and, in
the case of a meeting of stockholders, the record date or the closing of the
transfer books 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 Maryland or the principal executive offices of the Corporation.
SECTION 6.05. Certification of Beneficial Owners. The Board of Directors
may adopt by resolution a procedure by which a stockholder of the Corporation
may certify in writing to the Corporation that any shares of stock registered
in the name of the stockholder are held for the account of a specified person
other than the stockholder. The resolution shall set forth the class of
stockholders who may certify; the purpose for which the certification may be
made; the form of certification and the information to be contained in it; if
the certification is with respect to a record date or closing of the stock
transfer books, the time after the record date or closing of the stock transfer
books within which the certification must be received by the Corporation; and
any other provisions with respect to the procedure which the Board considers
necessary or desirable. On receipt of a certification which complies with the
procedure adopted by the Board in accordance with this Section, the person
specified in the certification is, for the purpose set forth in the
certification, the holder of record of the specified stock in place of the
stockholder who makes the certification.
SECTION 6.06. 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.
SECTION 6.07. Exemption from Control Share Acquisition Statute. The
provisions of Sections 3-701 to 3-709 of the Corporations and Associations
Article of the Annotated Code of Maryland shall not apply to any share of the
capital stock of the Corporation and such shares of capital stock are exempted
from such Sections to the fullest extent permitted by Maryland law.
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.
SECTION 7.02. Annual Statement of Affairs. The President or chief
accounting officer shall prepare annually a full and correct statement of the
affairs of the Corporation, to include a balance sheet and a financial
statement of operations for the preceding fiscal year. The statement of
affairs shall be submitted at the annual meeting of the stockholders and,
within 20 days after the meeting, placed on file at the Corporation's principal
office.
SECTION 7.03. 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 7.04. 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 7.05. 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 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 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 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
cor-porations 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 (a) by the stockholders of the
Corporation only by vote of not less than 80% of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast 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) or (b) except for the provision of Section 2.09 which relates to the
sale of property owned by partnerships in which the Corporation acts as a
general partner, by vote of two-thirds of the Board of Directors (including at
least a majority of the directors elected by the Class B Common Stock and at
least one director elected by Class C Common Stock) at a meeting held in
accordance with the provisions of these By-Laws.
<PAGE>
SIMON DeBARTOLO GROUP, INC.
AMENDED AND RESTATED BY-LAWS
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. Annual Meeting. The Corporation shall hold an annual
meeting of its stockholders to elect directors and transact any other business
within its powers, either at 10:00 a.m. on the second Wednesday of May in each
year if not a legal holiday, or at such other time on such other day falling on
or before the 30th day thereafter as shall be set by the Board of Directors.
Except as the Charter 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 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; provided that 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 from any cause among
the directors elected by the holders of the Class B Common Stock or Class C
Common Stock, as the case may be, and that a special meeting of holders of the
Series A Preferred Stock, 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 from any cause among the directors elected by the holders
of the Series A Preferred Stock, 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. Special meetings of
the stockholders shall be called at the request of the stockholders as may be
required by law.
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 90 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.
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 constitutes a quorum, and 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 without further notice by a majority vote of the
stockholders present in person or by proxy to a date not more than 120 days
after the original record date. 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 written proxy
signed by the stockholder or by his or her duly authorized attorney in fact.
Unless a proxy provides otherwise, it is not valid more than 11 months after
its date.
SECTION 1.08. List of Stockholders. At each meeting of stockholders, a
full, true and complete list of all stockholders entitled to vote at such
meeting, showing the number and class of shares held by each and certified by
the transfer agent for such class or by the Secretary, shall be furnished by
the Secretary.
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 1.12, 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
nomination or proposal be disregarded.
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. If
demanded by stockholders, present in person or by proxy, entitled to cast 10%
in number of votes entitled to be cast, or if ordered by the chairman, the vote
upon any election or question shall be taken by ballot and, upon like demand or
order, the voting shall be conducted by two inspectors, in which event the
proxies and ballots shall be received, and all questions touching the
qualification of voters and the validity of proxies and the acceptance or
rejection of votes shall be decided, by such inspectors. Unless so demanded or
ordered, no vote need be by ballot and voting need not be conducted by
inspectors. The stockholders at any meeting may choose an inspector or
inspectors to act at such meeting, and in default of such election the chairman
of the meeting may appoint an inspector or inspectors. No candidate for
election as a director at a meeting shall serve as an inspector thereat.
SECTION 1.11. Informal Action by Stockholders. Any action required or
permitted to be taken at a meeting of stockholders may be taken without a
meeting if there is filed with the records of stockholders meetings an
unanimous written consent which sets forth the action and is signed by each
stockholder entitled to vote on the matter and a written waiver of any right to
dissent signed by each stockholder entitled to notice of the meeting but not
entitled to vote at it.
SECTION 1.12. 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 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 SEVENTH of the
Charter.
SECTION 2.03. Election and Tenure of Directors. Subject to the rights of
holders of Class B Common Stock and Class C Common Stock, and subject to
paragraph (e) of Article SEVENTH of the Charter, at each annual meeting the
stockholders shall elect directors to hold office until the next annual meeting
and until their successors are elected and qualify.
SECTION 2.04. Removal of Director. Any director or the entire Board of
Directors may be removed only in accordance with the provisions of the Charter.
SECTION 2.05. 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 entire 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 SEVENTH of the
Charter. A director elected by the stockholders to fill a vacancy which
results from the removal of a director serves for the balance of the term of
the removed director. A director elected by the Board of Directors to fill a
vacancy serves until the next annual meeting of stockholders and until his
successor is elected and qualifies.
SECTION 2.06. 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, the President or the Chairman, with notice in
accordance with Section 2.08, 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 2.07. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the 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. In the absence of designation such
meeting shall be held at such place as may be designated in the call.
SECTION 2.08. Notice of Meeting. Except as provided in Section 2.06, 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 2.09. 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 addition, 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. 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 2.10. 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 2.11. Compensation. By resolution of the Board of Directors a
fixed sum and expenses, if any, for attendance at 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 full-time 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 2.12. 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 2.13. Loss of Deposits. No director shall be liable for any loss
which may occur by reason of the failure of any bank, trust company, savings
and loan association, or other institution with whom moneys or stock of the
Corporation have been deposited.
SECTION 2.14. 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. The Board of Directors may appoint from among
its members an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating Committee and other committees composed of two 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. Each committee except 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 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 SEVENTH 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. If the Board of Directors has given general authorization for
the issuance of stock, a committee of the Board, in accordance with a general
formula or method specified by the Board by resolution or by adoption of a
stock option or other plan, may fix the terms of stock subject to
classification or reclassification and 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 an unanimous written consent which
sets forth the action is signed by each member of the committee 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 of the Board, a Chief Executive 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 shall be a director; the other
officers may be directors.
SECTION 4.02. Chairman of the Board. The Chairman of the Board, if one
be elected, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present. In general, the 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. 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, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present.
SECTION 4.04. President. Unless otherwise specified by the Board of
Directors, the President shall be the chief operating officer of the
Corporation and perform the duties customarily performed by a chief operating
officer of a corporation. If no Chief Executive Officer is appointed, he or
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 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 4.05. Vice-Presidents. The Vice-President or Vice-Presidents, 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. 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.
SECTION 4.06. 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 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.
SECTION 4.07. 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.
SECTION 4.08. 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.
SECTION 4.09. 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 4.10. 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 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 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 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 or the
President.
SECTION 5.02. Effect of Divisional Titles. The conferring of divisional
titles 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, 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.
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 and Closing of Transfer Books. The Board of
Directors may set a record date or direct that the stock transfer books be
closed for a stated period 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 90 days
before the date on which the action requiring the determination will be taken;
the transfer books may not be closed for a period longer than 20 days; and, in
the case of a meeting of stockholders, the record date or the closing of the
transfer books 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 Maryland or the principal executive offices of the Corporation.
SECTION 6.05. Certification of Beneficial Owners. The Board of Directors
may adopt by resolution a procedure by which a stockholder of the Corporation
may certify in writing to the Corporation that any shares of stock registered
in the name of the stockholder are held for the account of a specified person
other than the stockholder. The resolution shall set forth the class of
stockholders who may certify; the purpose for which the certification may be
made; the form of certification and the information to be contained in it; if
the certification is with respect to a record date or closing of the stock
transfer books, the time after the record date or closing of the stock transfer
books within which the certification must be received by the Corporation; and
any other provisions with respect to the procedure which the Board considers
necessary or desirable. On receipt of a certification which complies with the
procedure adopted by the Board in accordance with this Section, the person
specified in the certification is, for the purpose set forth in the
certification, the holder of record of the specified stock in place of the
stockholder who makes the certification.
SECTION 6.06. 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.
SECTION 6.07. Exemption from Control Share Acquisition Statute. The
provisions of Sections 3-701 to 3-709 of the Corporations and Associations
Article of the Annotated Code of Maryland shall not apply to any share of the
capital stock of the Corporation and such shares of capital stock are exempted
from such Sections to the fullest extent permitted by Maryland law.
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.
SECTION 7.02. Annual Statement of Affairs. The President or chief
accounting officer shall prepare annually a full and correct statement of the
affairs of the Corporation, to include a balance sheet and a financial
statement of operations for the preceding fiscal year. The statement of
affairs shall be submitted at the annual meeting of the stockholders and,
within 20 days after the meeting, placed on file at the Corporation's principal
office.
SECTION 7.03. 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 7.04. 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 7.05. 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 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 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 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
cor-porations 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. Subject to the special provisions of Section
2.02, in accordance with the Charter, these By-Laws may be repealed, altered,
amended or rescinded (a) 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 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) or (b) except for the
provision of Section 2.09 which relates to the sale of property owned by
partnerships in which the Corporation acts as a general partner, by vote of two-
thirds of the Board of Directors (including at least a majority of the
directors elected by the Class B Common Stock and at least one director elected
by Class C Common Stock) at a meeting held in accordance with the provisions of
these By-Laws.
Exhibit 2.06
FORM OF
SEVERANCE PROGRAM
OF
DEBARTOLO REALTY CORPORATION
AND
DEBARTOLO PROPERTIES MANAGEMENT, INC.
SEVERANCE PROGRAM
OF
DEBARTOLO REALTY CORPORATION AND
DEBARTOLO PROPERTIES MANAGEMENT, INC.
DeBartolo Realty Corporation (the "Company") believes that the best
interests of the Company and DeBartolo Property Management, Inc. ("DPMI") will
be served if certain employees are encouraged to remain with the Company and
DPMI after the consummation of the merger of Day Acquisition Corp. into the
Company pursuant to the Agreement and Plan of Merger Dated as of March __, 1996
among Simon Property Group, Inc., Day Acquisition Corp. and the Company (the
"Merger Agreement"). Accordingly, the Company hereby establishes this
"Severance Program of DeBartolo Realty Corporation and DeBartolo Properties
Management, Inc." (the "Program") for the benefit of such employees.
SECTION DEFINITIONS
In addition to the terms defined in the preceding paragraph, the following
definitions shall apply for purposes of the Program.
"Annual Salary" means an Eligible Employee's annual rate of base
salary as in effect immediately prior to the Effective Time.
"Board" means the Board of Directors of the Company.
"Bonus" means the maximum annual bonus which would be payable to the
Eligible Employee for the calendar year in which an Eligible Termination
occurs, calculated on the assumption of full achievement of the applicable
target performance goals established under the applicable bonus plan with
respect to that year; provided, however, that in no event shall the Bonus be
less than the highest annual bonus paid to the Eligible Employee during the
three years immediately preceding the year in which an Eligible Termination
occurs.
"Cause" means any of the following, other than due to an Eligible
Employee's Permanent Disability or death:
an Eligible Employee's continuing willful neglect of, or refusal to
perform, the duties required or associated with the Eligible Employee's
employment; or
conviction of a felony, or a misdemeanor involving fraud, theft,
larceny, or embezzlement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Common Stock" means the common stock of Simon, par value $0.0001 per
share.
"Committee" means the Committee of the Board designated to administer
the Plan.
"DRC Companies" means the Company, DPMI, and their
respective successors.
"Effective Time" means the "Effective Time" as defined in Section 1.3
of the Merger Agreement.
"Eligible Employee" means a full-time employee of any of the DRC
Companies, other than Richard S. Sokolov.
"Eligible Termination" means an involuntary termination of employment
without Cause (other than by reason of Permanent Disability or death), or a
resignation for Good Reason, which occurs within the two-year period following
the Effective Time; provided, however, that the transfer of employment to
another employer that is one of the DRC Companies or the Simon Companies shall
not in itself constitute an Eligible Termination (but any such transfer will
not preclude another or accompanying event or reason from constituting or
causing an Eligible Termination, and the protections of the Program and
corresponding obligations of the Company will remain in effect following any
such transfer of employment).
"Good Reason" means any one or more of the following actions, without an
Eligible Employee's express prior written consent or approval, other than due
to an Eligible Employee's Permanent Disability or death:
any removal of the Eligible Employee from any of the positions he or
she holds immediately prior to the Effective Time or an elimination of any such
positions, when the effect of such removal or elimination is a material
diminution of status, responsibilities or duties; or
any reduction of an Eligible Employee's Annual Salary.
"Permanent Disability" means an Eligible Employee's
inability, by reason of any physical or mental impairment, to substantially
perform the significant aspects of his or her regular duties, which inability
is reasonably contemplated to continue for at least one (1) year from its
incurrence.
"Program" means the Severance Program of DeBartolo Realty Corporation and
DeBartolo Properties Management, Inc., as set forth herein.
"Simon" means Simon Property Group, Inc.
"Simon Companies" means Simon and its subsidiaries and
affiliates, and any successor or successors thereto.
"Years of Service" means the number of full and partial years that an
Eligible Employee served as a full-time employee or any DRC Company or any
predecessor thereto including, without limitation, The Edward J. DeBartolo
Corporation.
SECTION EFFECT OF AN ELIGIBLE TERMINATION
If an Eligible Employee incurs an Eligible Termination, the Eligible
Employee shall be entitled to all applicable benefits provided hereafter in
this Section 2 or as otherwise set forth in this Program.
Payment of Severance Benefit: Within five (5) business days after
the date of his or her Eligible Termination, either Simon or the Company shall
pay or cause to be paid to the Eligible Employee a single lump sum amount, in
cash, as follows:
(i) in the case of an Eligible Employee whose title is Senior Vice
President or higher, the sum of (A) the Eligible Employee's Annual
Salary, and (B) the Eligible Employee's Bonus;
(ii) in the case of an Eligible Employee whose title is Vice
President, the sum of (A) one-half of the Eligible Employee's Bonus,
and (B) the higher of (1) the Base Severance Benefit, or (2) one-half
of the Eligible Employee's Annual Salary;
(iii) in the case of an Eligible Employee who is neither a Senior
Vice President nor a Vice President but who is a participant in the
Company's Short-Term Incentive Plan, the sum of (A) one-quarter of
the Eligible Employee's Bonus, and (B) the higher of (1) the Base
Severance Benefit, or (2) one-quarter of the Eligible Employee's
Annual Salary; and
(iv) in the case of any other Eligible Employee, the Base Severance
Benefit. For purposes of the Program, the "Base Severance Benefit"
shall mean a severance benefit based on an Eligible Employee's Years
of Service, determined as follows:
Years of Service Severance Benefit
---------------- -----------------
1 - 5 1/4 Annual Salary
6 - 10 1/3 Annual Salary
11 - 15 1/2 Annual Salary
16 - 20 3/4 Annual Salary
21 or more 1 x Annual Salary
Amounts payable to an Eligible Employee under this Section 2.1(a) shall not be
duplicative of amounts payable as severance to such Eligible Employee pursuant
to a written employment agreement or employment letter with any DRC Company,
provided that (1) any such Eligible Employee shall be entitled to the higher of
the amount payable under this Section 2.1(a) or under such agreement or letter,
and (2) any amounts so payable to such Eligible Employee shall be paid in a
single lump sum as provided in this Section 2.1(a).
Payment of Accrued But Unpaid Amounts: Within twenty (20) business
days after the date of his or her Eligible Termination, the Company shall pay
the Eligible Employee any unpaid portion of the Eligible Employee's bonus
accrued with respect to the full calendar year ended prior to the date of the
Eligible Termination and all compensation earned by such Eligible Employee but
not yet paid (including cash compensation for vacation days, sick days and
personal days accrued but not taken as of the date of the Eligible Termination,
based on the Annual Salary amount converted to a per diem equivalent in
accordance with the Company's normal payroll practices as in effect prior to
the Effective Time), except that any compensation deferred by the Eligible
Employee under any qualified or non-qualified deferred compensation plans shall
be paid in accordance with the terms and provisions of such plans.
Vesting of Deferred Stock Stay Bonus: With respect to an Eligible
Employee who received a stay bonus of deferred shares of Common Stock described
in Section 5.12(b)(iii) of the Merger Agreement (a "Deferred Stock Stay
Bonus"), any shares of Common Stock subject to such Deferred Stock Stay Bonus
which have not vested as the date of his or her Eligible Termination shall
immediately vest and be issued by Simon to the Eligible Employee within five
(5) business days after such Eligible Termination, provided that Simon may
elect to pay cash in lieu of such shares of Common Stock equal to the aggregate
fair market value of such shares of Common Stock as of the date of such
Eligible Termination. For this purpose, the "fair market value" of a share of
Common Stock shall be the mean between the highest and lowest sales prices of
the Common Stock on the New York Stock Exchange on such date.
Each Eligible Employee who incurs an Eligible Termination shall also
receive continued health care coverage and outplacement services, each at the
Company's expense for a period of three months following such Eligible
Termination.
Maximum Benefits: Anything in Section 2.1 to the contrary
notwithstanding, payments under Section 2.1 shall not exceed the maximum amount
which can be paid to an Eligible Employee without causing such payments to be
treated as "parachute payments" for purposes of Section 280G of the Code
(determined by taking into account all payments made to the Eligible Employee
under any other plan or arrangement that are taken into account for purposes of
Section 280G).
Mitigation: An Eligible Employee shall not be required to mitigate
damages or the amount of any payment provided for under this Program by seeking
other employment or otherwise, and compensation earned from such employment or
otherwise shall not reduce the amounts otherwise payable under this Program.
No amounts payable under this Program shall be subject to reduction or offset
in respect of any claims which the Company or any
member of the DRC Companies (or any other person or entity) may have against
the Eligible Employee.
Withholding: The Company may, to the extent required by law, withhold
applicable federal and state income, employment and other taxes from any
payments due to any Eligible Employee hereunder.
SECTION LIMITS ON AMENDMENT OR TERMINATION; EFFECT ON OTHER PLANS
The Company may terminate this Program prior to the
Effective Time. As of the Effective Time, this Program (expressly including,
but not limited to, this Section 3) shall remain in effect, and may not be
altered or amended in any way which would adversely affect the rights of any
Eligible Employee hereunder, for two (2) years following the Effective Time,
and for such additional time as may be necessary to give effect to the terms of
the Program as in effect at the Effective Time. Thereafter, the Company may
amend or terminate this Program in any manner which does not adversely affect
the rights of any Eligible Employee who has incurred an Eligible Termination.
An Eligible Employee shall, after the date of his or her Eligible
Termination, retain all rights (to the extent any such rights existed at any
time prior to the Effective Time) to indemnification under applicable law or
under the applicable DRC Companies' Certificate of Incorporation or By-Laws, as
they may be amended or restated from time to time. In addition, to the extent
coverage had been otherwise available to the Eligible Employee prior to the
Effective Time, the Company shall maintain Director's and Officer's liability
insurance on behalf of the Eligible Employee as set forth in Section 5.14 of
the Merger Agreement.
SECTION ADMINISTRATION OF THE PROGRAM
The Committee shall be the Administrator of this Program and shall have
the exclusive right, power and authority to:
interpret, in its sole discretion, any and all of the provisions of
the Program;
establish a claims review procedure, if necessary and advisable; and
consider and decide conclusively any questions (whether of fact or
otherwise) arising in connection with the administration of the Program or any
claim for a benefit arising under the Program.
SECTION MISCELLANEOUS
Neither the establishment of the Program nor any action of the Company,
any other member of the DRC Companies or the Simon Companies, the Committee, or
any fiduciary shall be held or construed to confer upon any person any legal
right to continued employment with the Company or with any of the DRC Companies
or the Simon Companies. Nothing in the Program shall be construed to prevent
the Company or any of the DRC Companies or the Simon Companies from terminating
an Eligible Employee's employment for Cause. If an Eligible Employee is
terminated for Cause, the Company shall have no obligation to make any payments
under this
Program, except for payments that may otherwise be payable under then existing
employee benefit plans, programs and arrangements of any of the DRC Companies
or the Simon Companies.
Benefits payable under the Program shall be paid out of the general
assets of the Company. The Company is not required to fund the benefits
payable under this Program; provided, however, nothing in this Section 5.2
shall be interpreted as precluding the Company from funding or setting aside
amounts in anticipation of paying any such benefits.
Benefits payable under the Program shall not be subject to assignment,
alienation, transfer, pledge, encumbrance, commutation or anticipation by any
Eligible Employee. Any attempt to assign, alienate, transfer, pledge,
encumber, commute or anticipate Program benefits shall be void. In addition,
no rights or interest under the Program shall be in any manner subject to levy,
attachment or other legal process to enforce payment of any claim against any
Eligible Employee except to the extent required by law.
Except as otherwise provided herein, this Program shall be binding upon,
inure to the benefit of and be enforceable by the Company and the Eligible
Employees and their respective heirs, legal representatives, successors and
assigns. If the Company shall be merged into or consolidated with another
entity, the provisions of this Program shall be binding upon and inure to the
benefit of the entity surviving such merger or resulting from such
consolidation, and such provisions shall also be binding upon and inure to the
benefit of any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company, and such successor shall assume and perform the
obligations, responsibilities and liabilities to which the Company or any of
the DRC Companies is subject under this Program in the same manner and to the
same extent that the Company or any of the DRC Companies would be required to
perform if no such succession had taken place. The provisions of this Section
5.4 shall continue to apply to each subsequent employer of any Eligible
Employee in the event of any subsequent merger, consolidation or transfer of
assets of any such subsequent employer.
This Program shall be governed by and construed in accordance with the
laws of the State of Ohio (without reference to rules relating to conflicts of
laws), except to the extent superseded by applicable federal law.
Any action required or permitted to be taken by the Company under this
Plan shall be taken by the Board or by the Committee, or any designee of the
Committee pursuant to Section 4, in each case subject to the limits on
amendment and termination contained in Section 3 hereof.
The payment of benefits under this Program to an Eligible Employee who
has incurred an Eligible Termination may, at the time of payment, be
conditioned upon the Eligible Employee agreeing to and signing (i) a customary
exit letter that may contain confidentiality, future cooperation and other
similar and customary provisions, if requested, and (ii) a general release of
employment and other claims that the Eligible Employee may have; provided,
however, that in no event shall entitlement to benefits under this Program be
conditioned upon an Eligible Employee's agreement to refrain from seeking or
accepting employment with a competitor of any of the DRC Companies or the Simon
Companies or otherwise seeking or accepting any gainful employment with any
employer.
Benefits payable to an Eligible Employee under this Program shall not be
taken into account for purposes of determining such Eligible Employee's
entitlement to, or amount of, benefits under any other employee benefit plan or
arrangement of the DRC Companies or the Simon Companies.
EXHIBIT 2.07
FIFTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF
DeBARTOLO REALTY PARTNERSHIP, L.P.
THIS FIFTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated
as of _________, 1996, is made by and among DeBartolo Realty Corporation, an
Ohio corporation having an office at 7620 Market Street, Youngstown, Ohio
44513, as general partner (the "Managing General Partner"), Simon Property
Group, Inc., a Maryland corporation having an office at Merchant's Plaza, 115
West Washington Street, Indianapolis, Indiana 46204, as nonmanaging general
partner (the "Non-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").
W I T N E S S E T H :
WHEREAS, DeBartolo Realty Partnership, L.P., a Delaware limited
partnership (the "Partnership"), was organized on November 18, 1993, and a
Certificate in respect of the Partnership was filed in the office of the
Secretary of State of the State of Delaware. The Limited Partnership Agreement
was last amended and restated by instrument dated April 21, 1994; and
WHEREAS, Day Acquisition Corp., an Ohio corporation which was formed
as a wholly-owned subsidiary of
the Non-Managing General Partner on _________, 1996, merged into the Managing
General Partner on March __, 1996, which Managing General Partner was the
surviving corporation after giving effect to the transactions completed on that
date pursuant to the Merger Agreement and Plan of Merger among the Non-Managing
General Partner, Day Acquisition Corp. and the Managing General Partner dated
March __, 1996 (the "Merger Agreement"); and
WHEREAS, the parties hereto wish to provide for the further amendment
and restatement of the Agreement of Limited Partnership of the Partnership, as
heretofore amended and restated, to allow for the admission of the NonManaging
General Partner and certain Limited Partners and to make various other changes
provided for below; and
WHEREAS, the persons whose names appear on
Exhibit A hereto as Limited Partners consist of the existing limited partners
in the Partnership and certain of the existing limited partners of Simon
Property Group, L.P., a Delaware limited partnership ("Simon, L.P."), it being
understood that such limited partners of Simon, L.P., in exchange for the
contribution to the Partnership of their interests in Simon, L.P., are becoming
Limited Partners in the Partnership; and
WHEREAS, concurrently with the execution hereof, the Non-Managing
General Partner is contributing to the Partnership a portion of its interests
in Simon, L.P., as set forth on Exhibit A, in exchange for its interest as non
managing general partner of the Partnership.
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
Agreement of Limited Partnership of the Partnership, as
heretofore amended and restated, is hereby amended and
restated in its entirety to read as follows:
ARTICLE
Definitions; Etc.
Definitions. Except as otherwise herein expressly provided, the
following terms and phrases shall have the meanings set forth below or in the
preamble to this Agreement set forth above:
"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 Part nership 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 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 Part ner (or as to any
other Person the affiliates of whom 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 any Person referred to in the
preceding clauses (i) and (ii); (iv) any trustee or trust for the benefit of
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 Fifth Amended and Restated Limited
Partnership Agreement, as originally executed and as amended, modified,
supplemented or restated from time to time, as the context requires.
"Amortization Requirements" shall have the meaning set forth in
Section 12.1(d) hereof.
"Bankruptcy" shall mean, with respect to any Part ner, (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 adjudi
cation that such Partner is insolvent or bankrupt, (iii) the entry of an order
for relief under the federal Bankruptcy Code with respect to such Partner, (iv)
the filing of any such petition or the commencement of any such case or pro
ceeding against such Partner, unless such petition and the case or proceeding
initiated thereby are dismissed within ninety (90) days from the date of such
filing, (v) the
filing of an answer by such Partner admitting the allega tions 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 Lim
ited Partnership establishing the Partnership, as filed with the office of the
Delaware Secretary of State on Novem
ber 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 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 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 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 Shares are listed or admitted to trading or,
if the 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 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 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
Shares as such Person is selected from time to time by the Board of Directors
of the Non-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. ________ DeBartolo (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 Agree ment 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 reason able 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.
"Contributed General Partner Interest" shall mean Partnership Units
and interests in the profits of Simon, L.P. contributed by the Non-Managing
General Partner pursuant to the Contribution Agreement.
"Contributed Limited Partner Interests" shall mean Partnership Units
in Simon, L.P. contributed by the Limited Partners to the Partnership pursuant
to the Contribution Agreement.
"Contribution Agreement" shall mean the Agreement dated ______
between the Partnership and the several partners of Simon, L.P. pursuant to
which such partners agree to contribute their partnership interests in Simon,
L.P., or portions thereof, to the Partnership in exchange for Units.
"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 part
ner 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 Price for the five consecu tive Trading Days ending on such
date.
"DeBartolo Group Limited Partners" shall mean, collectively, (i)
EJDC, an Ohio corporation or any successor to EJDC by merger or corporate
reorganization, (ii) the Estate of Edward J. DeBartolo, Edward J. DeBartolo
Jr., Marie Denise DeBartolo York, their children and trusts created for the
benefit of descendants of Edward J. DeBartolo and (iii) the Affiliates of the
foregoing.
"DeBartolos" shall mean the Estate of Edward J.
DeBartolo, Edward J. DeBartolo, Jr., Marie Denise DeBartolo
York and 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 other Entity Controlled by any one
or more of the foregoing.
"Deemed Partnership Unit Value" as of any date shall mean the Current
Per Share Market Price as of the Trading Day immediately preceding such date;
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 depreci ation, amortization, or other cost
recovery deduction allow able 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.
"Development Land" shall mean any vacant land suitable for
development as a Project.
"Directors" shall mean the Board of Directors of the Non-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.
"EJDC Lender" shall mean the Persons described as lenders in Exhibit
F.
"EJDC Loan Transaction" shall mean the loans documented in Exhibit F.
"EJDC Option" shall have the meaning set forth in Section 12.1 hereof.
"EJDC Option Termination Date" shall have the meaning set forth in
Section 12.1(e) hereof.
"Entity" shall mean any general partnership, lim ited 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 Partner 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 Non-Managing General Partner who are neither employed by the Non-
Managing General Partner nor a member (or an Affiliate of a member) of the
Simons.1
"Initial EJDC Notice" shall have the meaning set
forth in Section 12.1(a) hereof.
"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 any of
its 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 hereunder.
"JCP Property Liabilities" means any liabilities encumbering the
assets of Treasure Coast-JCP Associates, Ltd., Pinellas Square Associates,
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 with
respect to which JCP has incurred the "economic risk of
loss" within the meaning of Treasury Regulation 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 1.752-3(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.
"Liquidating Agent" shall mean such Person as is
selected as the Liquidating Agent hereunder by the Managing General Partner,
which Person may include the Managing General Partner or an Affiliate of the
Managing General Partner, provided such Liquidating Agent agrees in writing to
be bound by the terms of this Agreement. The Liquidating 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 neces sary or required to
permit all parties to deal with the Liquidating 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 connec tion 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 or Preferred Units held by the NonManaging General
Partner or by the Managing General Partner or any Person Controlled by or any
Person holding as nominee for either of such Partners).
"Managing General Partner" shall mean the
DeBartolo Realty Corporation, an Ohio corporation. "Minimum Gain" shall have
the meaning set forth in
Section 6.1(d)(1) hereof.
"Minimum Gain Chargeback" shall have the meaning set forth in Section
6.1(d)(1) 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), 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 of any asset by or on behalf of the
Partnership or a sale of any asset by or on behalf of any Subsidiary Entity,
after deduction of any costs or expenses incurred by the Part nership, or
payable specifically out of the proceeds of such sale (including, without
limitation, any repayment of any indebtedness required to be repaid as a result
of such sale or which the Managing General Partner elects to repay out of the
proceeds of such sale, 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 a sale).
"Non-Managing General Partner" shall mean the Simon Property Group,
Inc., a Maryland corporation.
"Nonrecourse Liabilities" shall have the meaning
set forth in Section 6.1(d)(1) hereof.
"Offered Units" shall mean the Partnership Units of a Limited Partner
identified in an Exercise Notice which, pursuant to the exercise of Rights, are
to be acquired by the Non-Managing General Partner under the terms hereof.
"Ownership Limit" shall have the meaning set forth
in Article Ninth of the Charter of the Non-Managing General Partner.
"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 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 the limited partnership hereby constituted,
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 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(a) 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 of 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 initial number of Partnership Units held by each
Partner at the date hereof is as set forth opposite its name on attached
Exhibit A.
"Payment Period" shall have the meaning set forth in Section 12.1(a)
hereof.
"Person" shall mean any individual or Entity.
"Pledge" shall mean granting of a Lien on a
Partnership Interest.
"Post-Exchange Distribution" shall have the
meaning set forth in Section 6.2(a) hereof.
"Preferred Contributed Funds" shall have the meaning set forth in
Section 4.3(e) hereof.
"Preferred Distribution Requirement" shall have the meaning set forth
in Section 4.3(e) hereof.
"Preferred Distribution Shortfall" shall have the meaning 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 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(e) hereof.
"Preferred Shares" shall mean any class of equity securities of the
Non-Managing General Partner now or hereafter authorized or reclassified, other
than the Shares or the Excess Stock, having dividend rights that are superior
or prior to dividends payable on the Shares.
"Preferred Unit Designation" shall have the
meaning set forth in Section 4.3(e) hereof.
"Preferred Unit Issue Price" shall mean the amount of the Required
Funds contributed or deemed to have been contributed by the Non-Managing
General Partner in exchange for a Preferred Unit.
"Preferred Units" shall mean interests in the Partnership issued to
the Non-Managing General Partner
pursuant to Section 4.3(c) hereof. Holders 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 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.
"Principal Group" shall mean, as of any date, a Limited Partner, or
two or more Limited Partners which are Affiliates, and which individually or
collectively own 5% or more of the Partnership Units outstanding as of such
date.
"Principal Group Representative" shall mean, as of
any date, the designated representative of any Principal Group.
"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, community shopping center, 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 interest through any other
partnership or other Entity in the fee or leasehold interest.
"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 Non-Managing General
Partner, certain of its stockholders and certain holders of Units.
"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 regula tions).
"Regulatory Allocation" shall have the meaning set forth in Section
6.1(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
formation and continuity of existence of the Managing General Partner and the
Non-Managing General Partner 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 Partner or such subsidiaries, (ii) costs and
expenses relating to any offer or registration of securities by the General
Partner or the Non-Managing General Partner 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 registration of securities
effectuated by the Managing General Partner or the Non-Managing General Partner
on behalf of one or more of its security holders, 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 or the Non-Managing General Partner 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 the Non-Managing
General Partner 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 Partner
or Simon Property Group (Delaware), Inc., and
(vi) all operating, administrative and other costs incurred by the Managing
General Partner or the Non-Managing General Partner (including attorney's and
accountant's fees, income and franchise taxes and salaries paid to officers of
the Managing General Partner or the Non-Managing General Partner, but excluding
costs of any repurchase by the General Partners of any of their securities);
provided, however, that amounts described herein shall be considered REIT
Expenses hereunder only if and to the extent the aggregate amount of such
expenses incurred during the fiscal year in question and during all prior
fiscal years exceeds the aggregate of all amounts distributed or distributable
to the Managing General Partner or the Non-Managing General Partner by any
subsidiary thereof (including, without limitation, in the case of the Non-
Managing General Partner, by Simon Property (Delaware), Inc.) other than the
Partnership or Simon, L.P., as appropriately apportioned between the
Partnership and Sunny, L.P., during such fiscal years.
"REIT Requirements" shall mean all actions or omissions as may be
necessary (including making appropriate distributions from time to time) to
permit the Managing General Partner and the Non-Managing General Partner to
qualify or continue to qualify as real estate investment trusts within the
meaning of Section 856 et seq. of the Code, as such provisions may be amended
from time to time, or corresponding provisions of succeeding law.
"Related Issue" 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 Non-Managing General Partner with the proceeds to contribute to
the Partnership.
"Required Funds" shall have the meaning set forth in Section 4.3(a)
hereof.
"Response Note" shall have the meaning set forth in Section 12.1(b).
"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 $.0001 per
share, of the Non-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 other Entity Controlled by any one or more of the
foregoing.
"Subsequent EJDC Notice" shall have the meaning set forth in Section
12.1(c) hereof.
"Subsidiary Entity" shall mean any Entity in which the Partnership
owns a direct or indirect equity interest.
"Subsidiary Partnership" shall mean any partner
ship 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 prin
cipal 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 bank ing institutions
in the State of New York are authorized or obligated by law or executive order
to close.
"Transfer" means 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 to "Exhibit" are, unless otherwise
specified, to one of the Exhibits attached to this Agreement, and references 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 incorpo rated herein by reference.
ARTICLE
Organization
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 execution and delivery hereof, 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 NonManaging General Partner 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.
Name. The name of the Partnership is hereby
changed to Simon-DeBartolo Group, L.P., and henceforth all business of the
Partnership shall be conducted under the name of Simon-DeBartolo 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).
Character of the Business. The purpose of the Partnership is
and shall be to acquire, hold, own, sell, 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 Partner ship
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 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.
Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be at
__________________________________ 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.
Registered Agent and Registered Office. The
Registered Agent of the Partnership shall be The PrenticeHall Corporation
System, Inc. 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 Prentice-Hall Corporation System, Inc., 32 Loockerman
Square, Suite L-100, Dover, DE 19901, 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
Term
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.
Dissolution. The Partnership shall continue until dissolved and
terminated upon the earlier of
(i) December 31, 2096, or (ii) the occurrence of the earliest of the following
events:
the dissolution, termination, retirement or Bankruptcy of
the last remaining General Partner
unless the Partnership is continued as provided in Section 9.1 hereof;
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 Partner are obtained;
the sale or other disposition of all or substantially all
the assets of the Partnership; or
dissolution required by operation of
law.
ARTICLE
Contributions to Capital
General Partner Capital Contributions.
(a) Simultaneously with the execution and delivery hereof, the Non-Managing
General Partner is contributing to the Partnership, Simon, L.P. units
representing 10.5% of the outstanding Simon, L.P. units
(excluding preferred units) and is contributing to the Partnership a 49.5%
interest in the profits of Simon, L.P., both in exchange for a non-managing
general partnership interest in the Partnership with the number of Units set
forth on Exhibit A.
(b) The Non-Managing General Partner shall hereafter 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.
Limited Partner Capital Contributions. Concurrently herewith,
the Limited Partners identified on Exhibit A as limited partners of Simon, L.P.
are contributing or causing to be contributed, to the capital of the
Partnership in exchange for Partnership Units, their limited partnership
interests in Simon, L.P. Except as
expressly provided in Sections 4.3, 4.4 and 4.5, below, no Partner may make
additional contributions to the capital of the Partnership without the consent
of the General Partner.
Additional Funds.
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 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 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 the 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, share holder, 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.
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 the Non-Managing General
Partner (or an Affiliate thereof) (i) may itself borrow such Required Funds, in
which case the Managing General Partner or the 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 Non-Managing General Partner through the sale of Preferred Shares, the
Managing General Partner or the 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 Partner so contributes
Contributed Funds pursuant to this paragraph (b) is referred to as an
"Adjustment Date"). Any Required Funds raised from the sale of Preferred
Shares shall be contributed to the Partnership as Contributed
Funds pursuant to Section 4.3(e), below. In the event the Managing General
Partner or the Non-Managing General Partner advance Required Funds to the
Partnership pursuant to this paragraph (b), then the Partnership shall assume
and pay (or reflect on its books as additional Required Funds) the expenses
(including any applicable underwriting discounts) incurred by the Managing
General Partner or the 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 or the Non-Managing
General Partner advances Required Funds to the Partnership as Contributed Funds
pursuant to this paragraph (b), additional Partnership Units shall be issued to
the Managing General Partner or the NonManaging General Partner to reflect its
contribution of the Contributed Funds. The number of Partnership Units so
issued shall be determined by dividing the amount of Contributed Funds by the
Deemed Partnership Unit Value, computed as of the Trading Day immediately
preceding the
Adjustment Date. The Managing General Partner or the NonManaging General
Partner shall promptly give each Limited Partner written notice of the number
of Partnership Units so issued.
With respect to the making of a loan to the Partnership by the
Managing General Partner or the Non-Managing General Partner which (i) is in
the aggregate principal amount of at least $20 million and (ii) which, by its
terms, is to mature in more than 12 months (or which is to mature in less than
12 months but is subject to extension solely at the discretion of the lender,
which extension shall cause the loan to mature in more than 12 months), the
Managing General Partner shall
give each Principal Group Representative not less than 20 days prior written
notice of each Funding Date for each such loan and of the principal amount of
such loan to be advanced by the Managing General Partner or the NonManaging
General Partner, as the case may be, and each Limited Partner in any Principal
Group shall have the right to provide simultaneously with the Managing General
Partner or the Non-Managing General Partner, as the case may be, its pro-rata
share (computed based upon the number of Units held by such Limited Partner
compared to the total number of Units then outstanding, computed as of the day
immediately preceding such Funding Date) of such loan on the same terms and
conditions. To the extent that any lending Limited Partner's proportionate
share of Units increases or decreases, as a result of an action taken by the
Managing General Partner after such notice is given but prior to the day
immediately preceding such Funding Date, the Managing General Partner will as
promptly as practicable notify such Limited Partner of its respective revised
proportionate share of such loan.
With respect to the making of any additional Capital
Contributions by either the Managing General Partner or the Non-Managing
General Partner, each Limited Partner in any Principal Group shall, subject to
compliance with the notice requirements set forth in the following sentence,
have the right to provide simultaneously with the Managing General Partner or
the Non-Managing General Partner, as the case may be, its pro-rata share
(computed based upon the number of Units held by such Limited Partner compared
to the total number of Units then outstanding, computed as of the day
immediately preceding such Adjustment Date) of the
Contributed Funds to be contributed on any such Adjustment Date on the same
terms and conditions as the Contributed Funds of the Managing General Partner
or the Non-Managing General Partner, as the case may be. Any Limited Partner
in a given Principal Group that, not less than 20 days prior to the next
Adjustment Date, has given written notice (such notice to be valid only until
the next Adjustment Date), to the Managing General Partner and the Non-Managing
General Partner of its intention to make such pro-rata contributions shall have
(i) the right to receive from the Managing General Partner not less than 20
days prior written notice of the next Adjustment Date for the Contributed Funds
and of the amount of funds to be so contributed and (ii) the right, but not the
obligation, to make a Capital Contribution on or before such Adjustment Date
equal to its pro-rata share of the Contributed Funds, as described in the
preceding sentence. To the extent that any contributing Limited Partner's
proportionate share of Units increases or decreases, as a result of action
taken by the Managing General Partner or the Non-Managing General Partner,
after such notice is given but prior to the date immediately preceding the
Adjustment Date, the Managing General Partner will as promptly as practicable
notify such Limited Partner of its respective revised proportionate share of
the Contributed Funds in question.
In the event the Non-Managing General
Partner contributes to the Partnership as Preferred Contributed Funds any
Required Funds obtained from the sale of Preferred Shares ("Preferred
Contributed Funds"), then the Partnership shall assume and pay (or reflect on
its books as additional Required Funds) the expenses (including any applicable
underwriter discounts) incurred
by the Non-Managing General Partner in connection with raising such Required
Funds. In addition, the NonManaging 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 shall be designated by the Non-
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 Non-Managing General
Partner to substantially the same economic rights as the holders of the Related
Issue. Specifically, the Non-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, together with any rights to accumulation thereof (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 paragraph, the Non-Managing
General Partner shall provide the Limited Partners with a copy of the
Preferred Unit Designation relating to such class or series.
Stock Option Plan. If at any time a stock option granted by
the Partnership in connection with the 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 Non-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 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 shares) and the Non-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 Non-
Managing General Partner by the Partnership in connection with the
Partnership's purchase of 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 Non-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.
Dividend Reinvestment Plan. All amounts received by the Non-
Managing General Partner in respect of its dividend reinvestment plan, if any,
(a) either shall be utilized by the Non-Managing General Partner to effect open
market purchases of its stock, or (b) if the Non-Managing General Partner
elects instead to issue new shares with respect to such amounts, shall be
contributed by the NonManaging 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 Non-Managing General
Partner shall promptly give each Limited Partner written notice of the number
of Partnership Units so issued.
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 succes sors 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.
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.
Capital Accounts.
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 the 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).
In the event that any or all of a Partner's
Partnership Units or Preferred Units are transferred within the meaning of
Regulations Section 1.704-1(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 Part nership 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 with drawn at any time.
The election, and any amendment thereof, shall be made by written notice to the
Managing General Partner delivered 25 days in advance of any such election
(which the Managing General Partner shall promptly upon receipt deliver copies
of 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 the written notice 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 withdrawing or otherwise
amending such election. A withdrawal, or an amendment reducing the Limited
Partner's maximum liability, shall not be effective to avoid responsibility for
any loss incurred prior to such amendment or withdrawal. Except as provided in
this Section 4.6 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.
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 Partner
ship 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 1.704-1(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 1.7041(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 Partner
ship within the meaning of Sec
tion 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 Part ners' Capital Accounts as
described in Section 4.8(a) above.
ARTICLE
Conditions/Representations and Warranties
Representations and Warranties by Managing General Partner. The
Managing General Partner represents and warrants to the Limited Partners, the
Non-Managing General Partner and to the Partnership that (i) it is a
corporation duly formed, validly existing and in good standing under the laws
of the State of Ohio, 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 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 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 Managing
General Partner 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.
Representations and Warranties by Non-
Managing General Partner. The Non-Managing General Partner represents and
warrants to the Limited Partners, the
Managing General Partner and to the Partnership that (i) it is a corporation
duly formed, validly existing and in good standing under the laws of the State
of Maryland, 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 NonManaging
General Partner and is enforceable 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 NonManaging General Partner is a party.
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) general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
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, Simon, L.P., or any one or more
or all of the Projects owned, directly or indirectly, by the Partnership or
Simon, L.P., have been made by any Partner or its Affiliates or any employee or
representative of any 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
Allocations, Distributions and Other
Tax and Accounting Matters
Allocations.
For the purpose of this Agreement, the terms "Profits" and
"Losses" mean, respectively, for each Partnership Fiscal Year or other
period, the Partnership's taxable income or loss for such Partnership Fiscal
Year or other period, determined in accordance with Section 703(a) of the
Code (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a)(1) of the Code shall be included in taxable income
or loss), adjusted as follows:
(1) any income of the Partnership
that is exempt from federal income tax and not other wise 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 and the income allocation under
Section 6.1(b) hereof shall not be taken into account in computing Profits
or Losses; and
(4) any expenditures of the Partner
ship described in Section 705(a)(2)(B) of the Code (or
treated as such under Regulation Section 1.7041(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 from such taxable income or loss.
Except as otherwise provided in Sec tion 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 accordance with their proportionate ownership of Partnership Units and
Preferred Units in the following order of priority:
(1) First, Profits shall be allocated to the holder(s) of
Preferred Units in an amount equal to the excess of (A) the amount of Net
Operating Cash Flow distributed to such holders pursuant to
Section 6.2(b) and Section 6.2(c) (but only to the extent attributable to 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 holders pursuant to this subparagraph (1).
(2) Second, for any Partnership Fiscal Year ending on or after
a date in which Preferred Units are redeemed, Profits (or Losses) shall be
allocated to the holder(s) 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 the
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(s)
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 holders 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 the Partners the amount attributable to their Preferred
Units) are proportional to the number of Partnership Units held by the
Partners; and
Third, any remaining Profits and Losses shall
be allocated among the Partners in accordance with their proportionate
ownership of Partnership Units.
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.
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 1.704-2(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 1.7042(i)) with respect to a "Partner Nonrecourse Debt"
(as defined in Regulations Section 1.704-2(b)(4)) shall be allocated to the
Partner or Partners who bear the economic risk of loss for such Partner
Nonrecourse Debt
in accordance with Regulations Section 1.704-2(i)(1). If the Partnership makes
a distribution allocable to the proceeds of a Partner Nonrecourse Debt, in
accordance with Regulation Section 1.704-2(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 alloca tions 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 1.704-2(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 Sec tion 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 allo cated 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 their
respective Partnership Interests. 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-
1(b)(2)(ii)(d)(4), (5), or (6), and (B) such adjustment, allocation, or
distribution causes or increases a deficit balance (net of amounts which such
Limited Partner is obligated to restore or deemed obligated to restore under
Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5) and determined after taking
into account any adjustments, allocations, 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)).
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 pre scribed 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 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 Partnership to the Partner or
Partners contributing the interest or interests in such Subsidiary Partnership,
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
Property Partnership that they would have been allocated had they contributed
undivided interests in the assets owned by such Subsidiary Partnership to the
Partnership in lieu of contributing the interest or interests in the Subsidiary
Partnership to the Partnership.
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 Unit (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 Unit 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.
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 Net Income or Net Loss for such respective period.
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.
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.
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 Liabil ities
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 1.7041(b)(2)(ii)(c)) as of the end of the
Partnership's taxable year in which the distribution occurs.
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.
Distributions. Except with respect to a liquidation of the
Partnership pursuant to Section 3.2 hereof, and subject to the priority set
forth in paragraphs (b) and (c) of the Section 6.2, the Managing General
Partner shall cause the Partnership to distribute all or a portion of Net
Operating Cash Flow to the Partners 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 (b) and (c)
below, all such distributions shall be made pro rata in accordance with the
outstanding Partnership Units as of the date that is five business days before
the date such distribution is made. In no event may a Partner receive a
distribution of Net Operating Cash Flow with respect to a Partnership Unit that
such Partner has exchanged prior to the date of such distribution for a Share,
pursuant to the Rights granted under Section 11.1 or the EJDC Option granted
under Section 12.1,(a "Post-Exchange Distribution"); rather, all such Post-
Exchange Distributions shall be distributed to the Non-Managing General
Partner.
Except to the extent Net Operating Cash Flow is distributed
pursuant to subsection (c) of this Section 6.2 distributions of Net Operating
Cash Flow shall be made in the following order of priority:
(i) First, to the extent that the amount of cash distributed to
the holders 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 subparagraph (b)(i) or pursuant to
paragraph (c)
(a "Preferred Distribution Shortfall"), Net Operating Cash Flow shall be
distributed to the holders 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 shall be distributed to the holder(s) of Preferred
Units in proportion to their respective Preferred Distribution Shortfalls.
(ii) Second, Net Operating Cash Flow shall be distributed to
the holder(s) of Preferred Units in an amount equal to the applicable Preferred
Distribution Requirement for each outstanding Preferred Unit. In the event
that the amount of Net Operating Cash Flow distributed for a particular quarter
is less than the Preferred Distribution Requirement, then all Net Operating
Cash Flow shall be distributed to the holder(s) of Preferred Units in
proportion to their Preferred Distribution Requirements for such quarter.
(iii) Except as provided in the last
sentence of Section 6.2(a), 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, as of the date that is five
business days before the date
such distribution is made.
If in any quarter the Partnership redeems any outstanding
Preferred Units, Net Operating Cash Flow shall first be distributed to the Non-
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).
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 (a),
above, to enable the Managing General Partner and the Non-Managing General
Partner 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 the NonManaging General Partner; and (ii) in the
event of a Covered Sale which occurs on a date on or after the Effective Time,
and before but not including the fifth anniversary of the Effective Time, 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, pro rata in accordance with
the Partnership Units, the Net Sale Proceeds therefrom up to an amount
sufficient to enable such Limited Partner(s) to pay any income tax liability,
computed at the maximum applicable federal and state statutory rate, with
respect to the income or gain so specially allocated and on the distribution
required by this clause (c) (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 any
income tax liability, computed at the maximum applicable federal and state
statutory rate, with respect to their share of such taxable income or gain
and such distributions) and (B) if the amounts distributed in accordance with
the preceding clause (A) are insufficient to fund such income tax
liabilities, the Managing General Partner shall cause the Partnership to
distribute sufficient funds from other sources to fund such income tax
liabilities. 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.
Books of Account. 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.
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 and the Non-Managing
General Partner
(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 Partner to determine and maintain
their qualifications as REITs under the REIT Requirements, their earnings and
profits derived from the Partnership, their 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 NonManaging General Partner 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 Non-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.
Audits. Not less frequently than annually, the books and
records of the Partnership shall be audited by the Accountants.
Tax Returns.
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 Partner, all tax elections.
The Managing General Partner shall, at least 30 days prior
to the due dates for such returns, 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, 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.
The Partnership shall timely cause to be
prepared and transmitted to the Partners federal and appropriate state and
local Partnership Income Tax Schedules "K-1," or any substitute therefor,
with respect to each Partnership Fiscal Year on appropriate forms prescribed.
Beginning with its taxable year ending December 31, 1996, 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.
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, (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, 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, 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.
Withholding. Each Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Partner any amount of
federal, state, local, or foreign taxes that the 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 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
Rights, Duties and Restrictions of the
General Partners
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, all Administrative Expenses and REIT Expenses.
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:
To manage, control, hold, invest, lend, reinvest, acquire by
purchase, lease or otherwise 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, 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,
by the affirmative vote of no less than three (3) out of five (5) of the
Independent Directors of the Non-Managing General Partner, the Managing
General Partner may authorize and require the sale of any property owned by
the Partnership or a Subsidiary Entity;
To acquire, directly or indirectly,
interests in real or personal 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 of the real or personal property, interests therein or parts
thereof; to improve, develop or redevelop any such real or personal 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 said property, or
any part thereof; to lease said 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 said real property, or any
part thereof, for other real or personal 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 said property or any part thereof; to
construct and reconstruct, remodel, alter, repair, add to or take from
buildings on said property; to insure any Person having an interest in or
responsibility for the care, management or repair of such property; to direct
the trustee of any land trust to mortgage, lease, convey or contract to convey
the real estate 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 assign
ments of all or any part of the beneficial interest in such land trust;
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;
To enter into contracts on behalf of the Partnership;
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);
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
may deem necessary, proper or advisable;
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;
To conduct any and all banking transac tions 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;
To demand, sue for, receive, and other wise 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;
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;
To take all reasonable measures neces sary to insure
compliance by the Partnership with applicable arrangements, and other
contractual obligations and 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;
To maintain the Partnership's books and records;
To create or maintain Affiliates engaged in activities that
the Partnership could itself undertake; and
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
and state 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 the Managing General Partner and the Non-Managing General Partner to
continue to qualify as REITs or (ii) to avoid the Managing General Partner's or
the Non-Managing General Partner's 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 or the Non-Managing General
Partner'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)).
Major Decisions.
The Managing General Partner shall not, without the Consent
of the Limited Partners, and the consent of the Non-Managing General Partner,
(i) 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 (ii) 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
in such manner as to reduce the interest of any Partner in the Partnership, to
reduce any Partner's share of distributions made by the Partnership, to create
any obligations for any Partner or to deprive any Partner of (or otherwise
impair) any other rights it may have under this Agreement (including in respect
of tax allocations) unless the affected Partner shall execute or consent in
writing to the modification or amendment in question; provided, however, that
an amendment that reduces the 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.
The Managing General Partner shall not, without the consent of
the Non-Managing General Partner, 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"):
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);
take title to any personal or real property, other than in
the name of the Partnership or a Subsidiary Partnership or pursuant to
Section 7.7 hereof;
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;
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
sell, exchange, transfer or
otherwise dispose of all or substantially all of the
Partnership's assets.
The Managing General Partner shall not, without the prior Consent
of the Limited Partners,
after the Effective Time, increase or decrease the
Ownership Limit or, except as provided in this Agreement, agree to an
exemption under Article NINTH of the Charter of Simon Property Group, Inc.
(except that it is understood that the Non-Managing General Partner may
grant certain waivers at the Effective Time), or alter any provision of
Article NINTH of the Charter of Simon Property Group, Inc. or of any of
the definitions of defined terms contained in such article;
except in connection with the dissolu tion and winding-up
of the Partnership by the liquidating 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
dissolve the Partnership.
Without the consent of all the Limited Partners, the Managing General
Partner shall have no power to do any act in the contravention of this
Agreement or applicable law.
Managing General Partner and Non-Managing
General Partner Participation. The Managing General Partner and the Non-
Managing General Partner agree that all activities and business operations of
the Managing General Partner and the Non-Managing General Partner, 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 Simon, L.P. or any Subsidiary
Partnership, that any property acquisitions shall be acquired through the
Partnership or any Subsidiary Partnership and not through the Simon, L.P. and
that any funds raised by the Managing General Partner or the Non-Managing
General Partner, whether by issuance of stock, borrowing or otherwise, will be
made available to the Partnership whether as capital contribu tions, loans or
otherwise, as appropriate. Without the Consent of the Limited Partners neither
the Managing General Partner nor the Non-Managing General Partner shall,
directly or indirectly, participate in or otherwise acquire any interest in any
real or personal property other than in accordance with this Section 7.4. In
addition, 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.
Proscriptions. The Managing General Partner
shall not have the authority to:
Do any act in contravention of this Agreement;
Possess any Partnership property or assign rights in
specific Partnership property for other than Partnership purposes; or
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 third Person shall be fully protected in relying upon
such authority.
Additional Partners. Additional Partners may be admitted to the
Partnership only as provided in Sec tion 9.4 hereof.
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 Partner ship 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.
Waiver and Indemnification. Neither the Managing General Partner,
the Non-Managing General Partner 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 NonManaging General Partner
by this Agreement and the Act, provided that the Managing General Partner's,
the NonManaging 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, the Non-Managing General
Partner or such other Person shall not be guilty of fraud, willful misconduct
or gross negligence. The Non-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 Non-Managing General Partner and the interests of the
Limited Partners, the Limited Partners agree that the Non-Managing General
Partner shall discharge its fiduciary duties to the Limited Partners by acting
in the best interests of the Non-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 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 or the Non-Managing General Partner), including from
the lending of money by the Managing General Partner or the Non-Managing
General Partner to the Partnership or the contribution of property by the
Managing General Partner or the Non-Managing General Partner to the
Partnership, it being understood that in any such transaction the Managing
General Partner or the Non-Managing General Partner, 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 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 Non-Managing General Partner pursuant to
Article Eighth of the Charter of the NonManaging General Partner if such
persons were directors, officers, agents or employees of the Non-Managing
General Partner (or Article __ of the Charter of the Managing General Partner,
if such individuals 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 indemnifi cation, 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 in which any
Limited Partner is named as a defendant and which relates to the operations of
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.
Limitation of Liability of Directors, Shareholders and Officers
of the Managing General Partner and the Non-Managing General Partner. Any
obligation or liability whatsoever of either of the Managing General Partner or
the Non-Managing General Partner 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 Managing General
Partner, the Non-Managing General Partner 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 either of
the Managing General Partner's or the Non-Managing General Partner's Directors,
shareholders, officers, employees, or agents, regardless of whether such
obligation or liability is in the nature of contract, tort or otherwise.
ARTICLE
Dissolution, Liquidation and Winding-Up
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.
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 provided by the Managing General
Partner to provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Part ners, if any, in the
order of priority provided by law;
(d) To the Partners in accordance with the posi
tive balances in their Capital Accounts after giving effect to all
contributions, distributions and alloca
tions for all periods, including the period in which
such distribution occurs (other than those distribu
tions made pursuant to this Section 8.2(d) and
Section 8.3 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 such Partner has so
elected under Section 4.8. Whenever the Liquidating 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.
Sale of Partnership Assets. In the event of the liquidation of
the Partnership in accordance with the terms of this Agreement, the Liquidating
Agent may sell Partnership property; provided, however, all sales, leases,
encumbrances or transfers of Partnership assets shall be made by the
Liquidating Agent solely on an "arm's-length" basis, at the best price and on
the best terms and condi tions as the Liquidating 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 Partner.
The Liquidating 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.
Distributions in Kind. In the event that it becomes necessary
to make a distribution of Partnership property in kind, the Managing General
Partner may, with the Consent of the Limited Partners and consent of the Non
Managing General Partner, 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 propor tion
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 prop
erty in kind to a Partner, 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 disposi tion of such property for
its fair market value as of the date of the distribution.
Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating 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.
Liability of the Liquidating Agent. The Liquidating 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 Liquidating Agent's taking of
any action authorized under or within the scope of this Agreement; 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; provided further, however, that the
Liquidating 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 Liqui dating Agent's action
or conduct pursuant to the provi sions of this Agreement; or
(b) The proven misconduct or gross negligence of the Liquidating
Agent.
ARTICLE
Transfer of Partnership Interests and Related Matters
Managing General Partner Transfers and Deemed Transfers. The
Managing General Partner shall not (i) with draw 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 the Non-Managing General Partner, as its sole successor. In the event of the
withdrawal by the last remaining General Partner from the Partnership, in
violation of this Agreement or otherwise, or the dissolution, termination or
Bankruptcy of the last remaining General Partner, within 90 days after the
occurrence of any such event, all the remaining Partners
may elect in writing to continue the Partnership business by selecting a
substitute general partner effective as of the date of the occurrence of any
such event.
Non-Managing General Partner Transfers and Deemed Transfers.
The Non-Managing General Partner shall not (i) withdraw from the Partnership,
(ii) merge, consolidate or engage in any combination with another Person other
than the Managing 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 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 NonManaging General Partner shall become vested with the powers and
rights of the transferor Non-Managing General Partner, and shall be liable for
all obligations and responsible for all duties of the Transferor Non-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 Non-
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 Non-Managing General Partner are assumed by a successor corporation
by operation of law) shall relieve the transferor Non-Managing General Partner
of its obligations under this Agreement
accruing prior to the date of such transfer.
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 and the Non-Managing General Partner, which consent may be
withheld in their 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 or their EJDC
Options pursuant to Article XII hereof.
Notwithstanding the foregoing, but
subject to the provisions of Section 9.4 hereof, any Limited Partner may at
any time, without the consent of the Managing General Partner or the Non-
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 (and, in the case of EJDC and its Affiliates, any EJDC
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 or the Non-
Managing General Partner but, except as provided in Article XII, 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 hereunder 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 pur suant 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 Non-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, the
transferee 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 trans feror 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
Non-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.
Unless admitted as a Substituted Limited Partner, no transferee of a
Partnership Unit pursuant to this Section 9.3 pursuant to a transfer which is
not consented to by the General Partners, whether by a voluntary transfer, by
operation of law or otherwise,
shall have rights hereunder, other than to receive such portion of the
distributions made by the Partnership as are allocable to the Partnership Units
transferred.
Any exercise of the EJDC Option by a
DeBartolo Group Limited Partner other than EJDC or Marie Denise DeBartolo York
must be consented to in writing by EJDC (or by the EJDC Lenders following a
foreclosure by such Lenders under the EJDC Loan Transaction). Any such
transfer not so consented to shall be void ab initio. To the extent it was a
pledgee as of the Effective Time, an EJDC Lender that forecloses on such Pledge
has the right to freely transfer the Partnership Units received in such
foreclosure, subject to the provisions of Section 9.5 hereof, to third parties
without the consent of the Managing General Partner or the Non-Managing General
Partner, and any transferee of an EJDC Lender shall be admitted as Substitute
Limited Partner, subject to all rights and obligations of this Agreement, and
subject to all of the restrictions set forth in this Section 9.3.
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 Partnership
Interests to a single accredited investor, as defined in Rule 501 promulgated
under the Securities Act. Upon receipt of a certificate signed by any of The
First National Bank of Chicago, NationsBank or Bank of America stating that, as
pledgee of a JCP Limited Partner, it has acquired the Partnership Interest(s)
of one or more of the JCP Limited Partners or naming the purchaser of such
Partnership Interest(s) at a foreclosure sale (and, in either case, specifying
the applicable Limited Partner(s) and Partnership Interest(s)), be admitted as
a Substituted Limited
Partner under this Article IX, and the transferring
Limited Partner shall withdraw from the Partnership. The Partnership shall
not be required in any way to determine the validity of any written
instrument referred to in the immediately preceding sentence, and shall be
authorized to rely upon any such written instrument signed by the necessary
parties.
The Limited Partners acknowledge that the Partnership
Interests 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 with compliance with such laws. Notwithstanding anything to the
contrary contained in this Agreement, no Partnership Interests may be sold or
otherwise transferred 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.
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, with the consent of
the Non-Managing General Partner, 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 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 Partner and each Limited Partner. The Limited Partners hereby
irrevocably appoint the Managing General Partner as their attorney-infact,
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.
Restrictions on Transfer.
In addition to any other restrictions on transfer herein
contained, in no event may any Transfer or assignment of a Partnership Unit
by any Partner be
made nor may any new Partnership Unit be issued by the Partnership (i) to any
Person which lacks the legal right, power or capacity to own a Partnership
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 Partner 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 1.752-2(d)(1), unless such Partner consents thereto, (vii) such
Transfer would cause any lender to the Partnership (except the EJDC Lenders) 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
or (viii) a Transfer, other than to an Affiliate, of a Partnership Interest the
value of which would have been less than $20,000 when issued.
No Preferred Unit may be transferred by
the Non-Managing General Partner to any Person who is not
a General Partner of the Partnership.
Shelf Registration Rights.
The Non-Managing General Partner agrees that, upon the request of any
Limited Partner that has not entered into a Registration Rights Agreement with
the Non-Managing
General Partner substantially in the form of Exhibit D hereto (each, a "Shelf
Rights Holder"), made at any time, the Non-Managing General Partner will 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 Non-Managing 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 Non-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 Non-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
Non-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
Non-Managing
General Partner shall furnish to the Unit holder a certificate signed by the
Chief Executive Officer of the NonManaging General Partner stating that in the
good faith judgment of the Directors it would be significantly disad vantageous
to the Non-Managing General Partner and its stockholders for any such Shelf
Registration to be amended or supplemented, the Non-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 Non-
Managing General Partner irrevocably elects, or is so required under Section
11.3(a), 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 filing
of such Shelf Registration, the Non-Managing General Partner shall not be
obligated to file such Shelf Registration Statement. The Non-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.
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 Non-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 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 (except
in connection with the exercise of the EJDC Option) and (a) the Non-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 Non-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.
Registration Expenses. The Non-Managing General Partner shall
pay 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 fees 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 Non-Managing
General Partner's independent public accountants and counsel and (v) all fees
and expenses of any special experts retained by the Non-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
Non-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, accountants or other repre sentatives
retained by the Shelf Rights Holders, individu ally or in the aggregate.
ARTICLE
Rights and Obligations of the Limited Partners
No Participation in Management. Except as expressly permitted
hereunder, the Limited Partners shall not take part in the management of the
Partnership's busi ness, 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
Partner, or any Affiliate thereof, to act in such capacity.
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.
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 Partner, other than as expressly provided in
this Agreement.
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 or other Persons or
own anchor or other stores in the Partnership's Properties or other
properties and in connection therewith may have interests that conflict with
those of the Partnership. 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 and shall have no fiduciary obligations to the Partnership and
shall not be liable for monetary damages for losses sustained, liabili ties
incurred or benefits not derived by the other Partners as the result of such
Limited Partner's acting exclusively in its independent capacity; nor shall the
Partnership, the Non-Managing General Partner or the Managing General Partner
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. 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,
without any obligation to offer any interest in such activities to the
Partnership 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, shall not
be deemed wrongful or improper.
Notwithstanding the foregoing, without
the prior consents of the Managing General Partner and the Non-Managing General
Partner, 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 NonManaging General Partner that
fails to be treated as "rents from real property" within the meaning of Section
856(d)(2) of the Code to exceed such percentage on the date hereof (which
currently provides that ownership of a tenant of the Partnership will not be
attributed to a Person unless such Person directly or indirectly owning the
tenant also directly or indirectly owns 10% or more of the Managing General
Partner or the Non-Managing General Partner). Each Limited Partner shall have
a duty to notify the Managing General Partner and the NonManaging General
Partner on a timely basis of any potential acquisition or change in ownership
that could reasonably be expected to have such effect.
Guaranty and Indemnification Agreements.
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 that the Limited Partners may include in their individual tax bases
of their respective Partnership Interests pursuant to Treasury Regulation
1.752-3(a)(2). 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
1.752-2) (the "Incurrence") that it has with respect to liabilities of the
Partnership or applicable 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
Subsidiary Partnerships in such a way so 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 752-2) with respect to
any JCP Property Liability without the prior written consent of the JCP Limited
Partner.
Notwithstanding the provisions of para graph (a), no Limited
Partners shall have any right to negotiate directly with any lender of the
Partnership, any such negotiation to be undertaken in good faith by the
Managing General Partner or the Non-Managing General Partner on behalf of,
and at the request of, all affected Limited Partners.
ARTICLE
Grant of Rights to the Limited Partners
Grant of Rights. The Non-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 Partnership Units into Shares or cash, as selected by the Non-
Managing General Partner, any time or from time to time, on the terms and
subject to the conditions and restrictions contained in this Article XI. 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 Non-Managing General Partner of a notice in the form of
Exhibit E (an "Exercise Notice"), which notice shall specify the Partnership
Interests to be converted by such Limited Partner. Once delivered, the
Exercise Notice shall be irrevocable, subject to payment by the Non-Managing
General Partner of the Purchase Price in respect of such Partnership Units in
accordance with the terms hereof and subject to Section 1 of the Registration
Rights Agreements. In the event the Non-Managing General Partner elects to
cause such Units to be converted into cash, the Non-Managing General Partner
shall effect such conversion by redeeming the Partnership Units subject to the
Exercise Notice for cash.
Limitation on Exercise of Rights. Rights may be exercised at any
time and from time to time. In addition, if an Exercise Notice is delivered to
the Non-Managing General Partner but, as a result of the Ownership Limit or as
a result of other restrictions contained in the Charter of the Non-Managing
General Partner, the Rights cannot be exercised in full for Shares, the
Exercise Notice shall be deemed to be modified such that the Rights shall be
exer cised only to the extent permitted under the Ownership Limit or under the
Charter of the Non-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 Non-Managing General Partner even if upon conversion of the
Units that are the subject of an Exercise Notice 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 Non-Managing General Partner hereby agrees to exercise its right pursuant
to Article Ninth of its Charter to permit the Ownership Limit to be exceeded in
the circumstances described in the preceding sentence.
Computation of Purchase Price/Form of Payment. The purchase price
("Purchase Price") payable to the Limited Partners shall be equal to the Deemed
Partnership Unit Value multiplied by the number of Partnership Units with
respect to which the Rights are being exercised computed as of the date on
which the Exercise Notice was delivered to the NonManaging 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 NonManaging
General Partner, by causing the Partnership to redeem the Partnership Units for
cash in the amount of the Purchase Price, or by the issuance by the Non-
Managing General Partner of the number of Shares equal to the number of
Partnership Units with respect to which the Rights are being exercised
(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 the fifth anniversary of the Effective Time, up to, but not
including, the eighth
anniversary of such date, was a DeBartolo Group Limited Partner as of the
Effective Time, and such Limited Partner has received a special allocation of
taxable income or gain from a Covered Sale within 90 days prior to such
exercise, then to the extent of any tax due on such allocation and on the
redemption of such Units, the Managing General Partner shall, if the Limited
Partner so requested in the Exercise Notice, cause the Partnership to redeem
the Units for cash in accordance with this Section 11.3.
Closing. The closing of the acquisition of Offered Units shall,
unless otherwise mutually agreed, be held at the principal offices of the Non-
Managing General Partner, on the date agreed to by the Non-Managing General
Partner and the relevant Limited Partner, which date (the "Settlement Date")
shall in no event be on the date which is the later of (i) ten (10) days after
the date of the Exercise Notice and (ii) 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 Non-Managing General Partner agrees to use its
best efforts to obtain an early termination of the waiting period applicable to
each tender, if any, under the HSR Act. Until the Settlement Date, each
tendering Partner shall continue to own his respective tendered 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 NonManaging General
Partner only upon receipt by the tendering Partner of Shares or cash in payment
in full therefor.
Closing Deliveries. At the closing of the
purchase and sale 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 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 Non-Managing General
Partner and with respect to the status of the Limited Partner Interest being
sold, free and clear of all Liens, and (B) the Non-Managing General Partner
with respect to due authority to acquire such Units for Shares or to cause the
Partnership to redeem Partnership Units subject to an Exercise Notice for cash
and, in the case of payment by Shares, (ii)(A) an opinion of counsel for the
Non-Managing General Partner, reasonably satisfactory to the Limited Partner,
to the effect that such Shares have been duly authorized, are validly issued,
fully-paid and non-assess able, 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.
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.
Covenants of the Non-Managing General Partner.
To facilitate the Non-Managing General Partner's ability to fully perform its
obligations hereunder, the Non-Managing General Partner covenants and agrees as
follows:
At all times during the pendency of the Rights, the Non-
Managing General Partner shall reserve for issuance such number of Shares as
may be necessary to enable the Non-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
Partner.
As long as the Non-Managing General Partner shall be
obligated to file periodic reports under
the Exchange Act, the Non-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.
During the pendency of the Rights, the relevant Limited
Partners shall receive in a timely manner all reports filed by the Non-
Managing General Partner with the SEC and all other communications
transmitted from time to time by the Non-Managing General Partner to the
owners of its Shares.
Under no circumstances shall the NonManaging General Partner
declare any stock dividend, stock split, stock distribution or the like,
unless fair and equitable arrangements are provided, to the extent necessary,
to fully adjust, and to avoid any dilution in, the Rights of any Limited
Partner under this Agreement.
Limited Partners' Covenant. Each of the Limited
Partners covenants and agrees with the Non-Managing General Partner that all
Offered Units tendered to the Non-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 Non-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 NonManaging 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.
ARTICLE
EJDC Option
Grant and Terms of Option. In addition to the rights granted in
Article XI, the Non-Managing General Partner does hereby grant to EJDC and its
Affiliates, and EJDC and its Affiliates do hereby accept the right, but not the
obligation (the "EJDC Option"), to dispose of a certain number of Units held by
EJDC and its Affiliates, in certain circumstances and at certain times, subject
to the terms and conditions set forth below:
(a) If, prior to the EJDC Option Termination Date (as defined
in paragraph (e) below), EJDC elects to dispose of Units (other than by
exchanging them for Shares pursuant to Article XI) to satisfy any Amortization
Requirements (as defined in paragraph (d) below), EJDC shall provide a written
Notice (an "Initial EJDC Notice") to the Non-Managing General Partner with
respect to the period (a "Payment Period"), commencing upon the Non-Managing
General Partner's receipt of an Initial EJDC Notice and ending on the earlier
of (x) the first anniversary of the date of such receipt and (y) the date on
which the next Amortization Requirement is satisfied specifying:
(i) the number of Units (which number shall not, in any event,
exceed 30% of the number of Units owned by EJDC and its Affiliates at the
Effective Time) that are required to be disposed of solely to pay taxes and
expenses payable on or in connection with such disposition and to satisfy the
Amortization Requirement (as set forth in paragraph (d) below) for the Payment
Period in respect of which the Initial EJDC Notice is being given; and
(ii) the date on which such Amortization Requirement is required
to be satisfied.
(b) Within 10 days of its receipt of an Initial EJDC Notice, the Non-
Managing General Partner shall provide written notice (a "Response Notice") to
EJDC specifying the Non-Managing General Partner's election to take one (but
not more than one) of the following actions in the Non-Managing General
Partner's sole discretion:
(i) agree not to exercise any "blackout" or "carveback" rights
or other Non-Managing General Partner imposed limitations on the availability
or exercise of registration rights of EJDC and its Affiliates under the
Registration Rights Agreement so as to permit EJDC and its Affiliates to
exchange up to the number of Units specified in the Initial EJDC Notice with
the Non-Managing General Partner for Shares and sell the Shares in a registered
offering in time for EJDC to satisfy the Amortization Requirement specified in
the Initial EJDC Notice and pay the taxes and expenses payable on or in
connection with such exchange; provided, that the Non-Managing General Partner
shall not have the option to elect the actions specified in this paragraph (i)
in any Payment Period commencing in 1996;
(ii) pay on a date specified by EJDC cash to
EJDC and its Affiliates upon tender by EJDC and its Affiliates of up to the
number of Units specified in the
Initial EJDC Notice at a Purchase Price per Unit and in accordance with the
closing procedures that would be applicable upon the exercise of Rights as
specified in Sections 11.3, 11.4 and 11.5 above; or
(iii) permit EJDC and its Affiliates to sell up to the number of
Units specified in the Initial EJDC Notice to up to three Institutional
Investors in the then current Payment Period.
Failure by the Non-Managing Partner to provide a timely notice shall be deemed
to constitute an election of clause (iii).
(c) If the sale of Units permitted to be sold under clause (iii) of
paragraph (b) above does not occur or is not completed within 120 days of
receipt by EJDC of the Response Notice, then EJDC and its Affiliates may not
sell Units after the expiration of such 120-day period. In order for EJDC and
its Affiliates to dispose of Units in such Payment Period after the expiration
of such 120-day period, a new written notice (a "Subsequent EJDC Notice") shall
have been delivered by EJDC to the Non-Managing General Partner which
Subsequent EJDC Notice shall specify the same information as shall have been
specified in the Initial EJDC Notice for the then current Payment Period,
except that the number of units specified for disposition shall not exceed 30%
of the number of Units held by EJDC and its Affiliates at the Effective Time
minus the number of Units previously disposed of by EJDC and its Affiliates in
such Payment Period. Upon receipt of a Subsequent EJDC Notice the NonManaging
General Partner shall within 10 days of receipt thereof deliver to EJDC a
Response Notice (a new Subsequent EJDC Notice being required at each 120 day
interval in order for Units to continue to be disposed of by EJDC and its
Affiliates during the then current Payment Period). In any
event, upon the end of a Payment Period, EJDC shall be required to deliver to
the Non-Managing General Partner a new Initial EJDC Notice with respect to the
disposition of Units in the new Payment Period, subject to the same limitations
as were set forth in the original Initial EJDC Notice as to such new Payment
Period.
(d) EJDC covenants that the proceeds from the disposition of Units
pursuant to the exercise of the EJDC Option will be used only to pay any taxes
or expenses payable on or in connection with the sale, tender or exchange of
the Units in connection with any such exercise or to satisfy amortization
payments (the "Amortization Requirements") to a holder of EJDC's indebtedness
actually due, but only to the extent of indebtedness to such holder as of the
Effective Time, which shall not exceed the following amounts for each Payment
Period:
(i) A Payment Period Commencing in 1996 - up to
$150,000,000
(ii) A Payment Period Commencing in 1997 - up to
$150,000,000 minus the amount of the Amortization
Requirement actually satisfied in a Payment Period
commencing in 1996 (such that, by way of example, (x) if a
$150,000,000 payment is made by EJDC to satisfy the
Amortization Requirement for a Payment Period commencing in
1996 then the Amortization Requirement for any Payment
Period commencing in 1997 would be zero and no EJDC Option
would be exercisable by EJDC in 1997 and (y) if a
$60,000,000 payment is made by EJDC to satisfy the
Amortization Requirement
for a Payment Period commencing in 1996 then the
Amortization Requirement for a Payment Period commencing in
1997 would be $90,000,000, etc.).
(iii) A Payment Period Commencing in 1998 -
up to $170,000,000
No other use of such proceeds shall be permitted.
(e) The EJDC Option will terminate at the earlier to occur of (i)
the date on which the indebtedness of EJDC having the Amortization Requirements
is repaid and
(ii) December 31, 1998 (the "EJDC Option Termination Date"), and at such time
the disposition of Units by EJDC and its Affiliates pursuant to an Initial EJDC
Notice or a Subsequent EJDC Notice shall terminate.
ARTICLE
General Provisions
Investment Representations.
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.
Each Limited Partner acknowledges that it understands that
the Units to be purchased 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 Units for investment
only and without any view toward distribution thereof, and it will not sell
or otherwise dispose of such Units except pursuant to the exercise of the
Rights, or otherwise in accordance with the terms hereof, and it will not
sell or otherwise dispose of such Units except 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 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 Units. Each Limited
Partner further acknowledges and represents that it has made its own
independent investigation of the Partnership and the business 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.
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 13.1, 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.
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 represent atives, heirs, successors and permitted assigns, except as
expressly herein otherwise provided.
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.
Effect and Interpretation. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN CONFORMITY WITH THE LAWS OF THE STATE OF DELAWARE.
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.
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 carry ing on of their own respective businesses or activities.
Entire Understanding; Etc. This Agreement and
the other agreements referenced herein or therein or to which the signatories
hereto or thereto are parties consti tute 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.
Severability. If any provision of this Agree ment, 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 appli cation of such provision to persons or circumstances other than
those to which it is held invalid by such court, shall not be affected thereby.
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 personal property of any
trustee to any liability.
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 con
struction. 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."
Non-Effect on Certain Limited Partners. As to any Limited Partner
who was a Limited Partner of the Partnership prior to the Effective Time and
who does not execute this Agreement, the provisions of the Fourth Amended and
Restated Partnership Agreement of the Partnership dated April 21, 1994 which,
under the terms thereof, cannot, in certain circumstances, be Amended without
the consent of such non-signing Limited Partner, shall continue in effect
as to such Limited Partner to the extent such provisions are inconsistent with
this Agreement.
Assurances. Each of the Partners shall here after 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.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement or caused this Agreement to be executed as of the date
and year first above written, which Agreement shall be effective on the date it
is executed and delivered by the Parties hereto.
GENERAL PARTNER:
DeBARTOLO REALTY CORPORATION,
an Ohio Corporation
7655 Market Street
P.O. Box 3287
Youngstown, OH 44513-3287
By:__________________________
Name:
Title:
SIMON PROPERTY GROUP, INC.,
a Maryland corporation
Merchants Plaza
115 West Washington Street
Suite 15 East
Indianapolis, IN 46204
By:__________________________
Name:
Title:
LIMITED PARTNERS:
By:__________________________
EXHIBIT "A"
PARTNERSHIP UNITS
GENERAL PARTNER(S) NUMBER OF UNITS PERCENTAGE INTEREST Simon Property
Group, Inc., a
Maryland
corporation
DeBartolo Realty
Corporation, an
Ohio corporation
LIMITED PARTNER(S)
This exhibit will
identify which
Limited Partners
were former
limited partners
of Simon Property
Group, L.P. and
which Limited
Partners were
former limited
partners of
DeBartolo Realty
Partnership, L.P.
The number of
Units and
Percentage
Interests for each
Partner shall be
calculated in
accordance with
the Formula,
attached hereto.
EXHIBIT "B" PREFERRED UNIT DESIGNATIONS
None.
EXHIBIT "C" COVERED SALES
Mission Viejo Mall Aventura Mall
Boynton Beach Mall Coral Square
Florida Mall Grove at Lakeland Square
Gulf View Square Highland Lakes Plaza
Lakeland Square Melbourne Square
Miami International Mall Paddock Mall
Palm Beach Mall Port Charlotte Town Center
Terrace at Florida Mall Treasure Coast Square
Northfield Square Castleton Square
Lafayette Square University Park Mall
Ward Plaza Washington Plaza
Great Lakes Mall Great Lakes Plaza
Lima Plaza Lima Mall
Century III Mall Randall Park Mall
Mainland Crossing Philadelphia Center
Chesapeake Square Chesapeake Center
Northgate Shopping Center Columbia Center
Bay Park Tacoma Mall
Tyrone Square Summit Mall
Washington Square Upper Valley Mall
Brunswick Square Richardson Square
New Orleans Centre/CNG Tower* Eastern Hills Biltmore Square
Woodville Mall
Cheltenham Square Glen Burnie Mall
TC Peripheral Richmond Mall
(Mainland Peripheral)
* If sold together, such properties will not constitute
"Covered Properties."
EXHIBIT "D"
REGISTRATION RIGHTS AGREEMENT
EXHIBIT "E"
FORM OF EXERCISE NOTICE
[Limited Partner], as of [date of exercise],
hereby irrevocably (except as set forth in the Agreement referred to below)
elects, pursuant to the rights granted to it in Section 11.1 of the Agreement
of Limited Partnership of Simon-DeBartolo Group, L.P. (the "Agreement") to
convert [ ]% of its Partnership Units (as such term is defined in the
Agreement) into shares of common stock of Simon Property Group, Inc. or cash,
as selected by Simon Property Group, Inc.
[Limited Partner]
By:___________________________ Name:
Title:
EXHIBIT "F"
EJDC LENDERS AND EJDC LOAN DOCUMENTATION
The EJDC Lenders are each and every lender (and their trustees or
agents) party from time to time to:
1. the SECOND AMENDED AND RESTATED NEW FACILITY CREDIT AGREEMENT,
dated as of March 31, 1994 by and among DeBARTOLO, INC. and THE EDWARD J.
DeBARTOLO CORPORATION, as the borrowers, WELLS FARGO BANK, N.A., as the issuing
bank, and the co-lenders specified therein, and WELLS FARGO REALTY ADVISORS
FUNDING, INCORPORATED as the administrative agent; or
2. the SECOND AMENDED AND RESTATED RESTRUCTURING FACILITY CREDIT
AGREEMENT, dated as of March 31, 1994 by and among DeBARTOLO, INC. and THE
EDWARD J. DeBARTOLO CORPORATION, as the borrowers, and the co-lenders specified
therein, and WELLS FARGO REALTY ADVISORS FUNDING, INCORPORATED, as the
administrative agent.
The EJDC Loan Documentation are the aforementioned credit agreements
and the other loan and collateral documents delivered in connection therewith.
Exhibit I FORM OF
FIFTH AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
SIMON-DeBARTOLO GROUP, L.P.
TABLE OF CONTENTS
Page ARTICLE I
Definitions; Etc. 3
1.1 Definitions 3
1.2 Exhibit, Etc. 28
ARTICLE II Organization 29
2.1 Continuation. 29
2.2 Name. 30
2.3 Character of the Business. 30
2.4 Location of the Principal Place of
Business 31
2.5 Registered Agent and Registered Office. 31
ARTICLE III Term 32
3.1 Commencement. 32
3.2 Dissolution. 32
ARTICLE IV Contributions to Capital 33
4.1 General Partner Capital Contributions. 33
4.2 Limited Partner Capital Contributions. 33
4.3 Additional Funds. 34
4.4 Stock Option Plan 41
4.5 Dividend Reinvestment Plan 42
4.6 No Third Party Beneficiary. 43
4.7 No Interest; No Return. 43
4.8 Capital Accounts 44
ARTICLE V Conditions/Representations and Warranties 48
5.1 Representations and Warranties by
Managing General Partner 48
5.2 Representations and Warranties by
Non-Managing General Partner 50
5.3 Representations and Warranties by the
Limited Partners 51
5.4 Acknowledgment by Each Partner 52
ARTICLE VI Allocations, Distributions and Other
Tax and Accounting Matters 52
6.1 Allocations 52
6.2 Distributions 65
6.3 Books of Account. 69
6.4 Reports. 70
6.5 Audits. 71
6.6 Tax Returns. 72
6.7 Tax Matters Partner. 73
6.8 Withholding. 75
ARTICLE VII Rights, Duties and Restrictions
of the General Partners 76
7.1 Expenditures by Partnership. 76
7.2 Powers and Duties of the Managing General
Partner. 76
7.3 Major Decisions. 84
7.4 Managing General Partner and Non-Managing
General Partner Participation. 88
7.5 Proscriptions 89
7.6 Additional Partners 90
7.7 Title Holder 90
7.8 Waiver and Indemnification. 90
7.9 Limitation of Liability of Directors,
Shareholders and Officers of the Managing
General Partner and the Non-Managing
General Partner 93
ARTICLE VIII Dissolution, Liquidation and Winding-Up 94
8.1 Accounting 94
8.2 Distribution on Dissolution 94
8.3 Sale of Partnership Assets. 95
8.4 Distributions in Kind 96
8.5 Documentation of Liquidation. 97
8.6 Liability of the Liquidating Agent 97
ARTICLE IX Transfer of Partnership Interests and
Related Matters 98
9.1 Managing General Partner Transfers and
Deemed Transfers 98
9.2 Non-Managing General Partner Transfers
and Deemed Transfers 99
9.3 Transfers by Limited Partners 100
9.4 Issuance of Additional Partnership Units
and Preferred Units. 104
9.5 Restrictions on Transfer 106
9.6 Shelf Registration Rights 107
ARTICLE X Rights and Obligations of the Limited
Partners 112
10.1 No Participation in Management 112
10.2 Bankruptcy of a Limited Partner 112
10.3 No Withdrawal 113
10.4 Duties and Conflicts 113
10.5 Guaranty and Indemnification Agreements 115
ARTICLE XI Grant of Rights to the Limited Partners 117
11.1 Grant of Rights 117
11.2 Limitation on Exercise of Rights 118
11.3 Computation of Purchase Price/Form of
Payment 119
11.4 Closing 120
11.5 Closing Deliveries 121
11.6 Term of Rights 122
11.7 Covenants of the Non-Managing General
Partner 122
11.8 Limited Partners' Covenant 123
ARTICLE XII EJDC Option 124
12.1 Grant and Terms of Option 124
ARTICLE XIII General Provisions 129
13.1 Investment Representations 129
13.2 Notices 131
13.3 Successors 131
13.4 Liability of Limited Partners. 132
13.5 Effect and Interpretation 132
13.6 Counterparts 132
13.7 Partners Not Agents 132
13.8 Entire Understanding; Etc. 132
13.9 Severability 133
13.10 Trust Provision 133
13.11 Pronouns and Headings 133
13.12 Non-Effect on Certain Limited Partners 133
13.13 Assurances 134
_______________________________
1In the event the requisite stockholder approval is obtained to amend the
Charter of Simon-DeBartolo Group, Inc. to provide for a 13-person board,
directors elected by the DeBartolo holders of Class C Common Stock will also be
excluded from the definition of Independent Directors.
Exhibit 2.08
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of _______, 1996 (the
"Agreement"), by and among the persons set forth on Schedule 1 (the "Simon
Family Members"), SIMON PROPERTY GROUP, INC., a Maryland corporation (the
"Company"), MELVIN SIMON & ASSOCIATES, INC., an Indiana corporation ("MSA"),
JCP REALTY, INC., a Delaware corporation ("JCP"), BRANDYWINE REALTY, INC., a
Delaware corporation ("Brandywine"), and the Estate of Edward J. DeBartolo,
Sr., Edward J. DeBartolo, Jr., Marie Denise DeBartolo York, and the Trusts and
other entities listed on Schedule 2 and (collectively, the "DeBartolo Group"),
and any of their respective successors-in-interest and permitted assigns. MSA
and the Simon Family Members are hereinafter referred to as the "Simon Family
Entities." The Simon Family Entities, JCP, Brandywine and each member of the
DeBartolo Group are hereinafter sometimes referred to as the "Limited
Partners." With respect to any request pursuant to Section 2.1 on behalf of
any party hereto that is a member of the DeBartolo Group, The Edward J.
DeBartolo Corporation shall act as the sole representative (in such capacity
the "DeBartolo Representative") of all the members of the DeBartolo Group for
the purpose of making such request. The Limited Partners are hereinafter
sometimes referred to as 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 Fifth Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement") of DeBartolo Realty Partnership,
L.P., a Delaware limited partnership (the "Operating Partnership"), dated as of
March __, 1996, among DeBartolo Realty Corporation, as its managing general
partner (the "General Partner"), the Company, as its non-managing general
partner, and its limited partners, and the consummation of the transactions
contemplated thereby, each of the Limited Partners will be a limited partner
holding (individually or together with its affiliates) in excess of 1.75% of
the units of partnership interest (the "Units") in the Operating Partnership
controlled by the General Partner. Pursuant to the Partnership Agreement, the
Limited Partners now have the right at any time to exchange all or any portion
of their Units for shares (the "Shares") of the Company's common stock, par
value $.0001 per share (the "Common Stock"), or cash, at the election of the
Company, 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").
In order to induce the Limited Partners to enter into the Partnership
Agreement, the Company has agreed to provide certain registration rights with
respect to the Shares as set forth in 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 upon
exchange of Units, (b) the Shares issued by the Company to the Holders upon
conversion of the Class B Common Stock, par value $.0001 per share, if any of
the Company (c) the Shares issued by the Company held by said Holders upon the
conversion of Class C Common Stock, par value $.0001 per share, if any, of the
Company and (d) any other securities issued by the Company in exchange for or
upon conversion of any such 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 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, except in connection with the
exercise of the EJDC Option (as defined in the Partnership Agreement), 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 Limited Partner
may exercise any of its rights hereunder prior to its receipt of Shares,
provided that such Limited Partner, simultaneously with the delivery of any
notice requesting registration hereunder, shall deliver an Exercise Notice to
the Company requesting exchange of Units exchangeable into such number of
Shares as such Limited Partner 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 as are exchangeable 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 Exercise Notice, if a Demand Registration, shall not constitute
a Demand Registration under Section 2.1 hereof.
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 Group, the
DeBartolo Representative)
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 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 of Common Stock to be
issued by the Company. In such event, such shares to be issued by the Company
in connection with a Demand Registration shall be deemed to be Registrable
Securities and 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
commit ment 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
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 this connection, it is understood that Teachers' Retirement
System of the State of Illinois ("Teachers'") and Homart San Antonio Investment
Co. ("Homart") have entered into a Registration Rights Agreement dated December
1, 1993, as amended (the "First Agreement"), providing for rights to register
certain securities held by Teachers' and Homart on similar terms to the terms
hereof. The Company hereby agrees to use its commercially reasonable efforts to
secure the consent of Teachers' (a) to waive the provisions of the following
two sentences with respect to the securities held by it, and (b) to participate
pro rata
with the Holders in any reduction of the Registrable Securities to be offered
hereunder as provided in the preceding sentence above in this Section 2.3. In
the event Teachers' (if no such consent is secured) or Homart have exercised
their rights pursuant to the First Agreement to have any of their shares of
Common Stock included in such registration statement and in the opinion of the
managing underwriter the number of Registrable Securities proposed to be sold
in such offering plus the number of shares of Common Stock to be sold by
Teachers' and/or Homart exceeds the total number of shares of Common Stock that
can be sold in such offering without adversely affecting the market for the
Company's Common Stock, then the number of Registrable Securities to be offered
for the account of the Holders shall be reduced pro rata as aforesaid to zero
before any reduction in the number of shares of Common Stock to be offered by
Teachers' and/or Homart. Each of the Holders agrees and acknowledges that
Teachers' and Homart are third party beneficiaries of this Agreement and that
this Sec tion 2.3 cannot be amended in a manner adverse to Teachers' or Homart
without the consent of Teachers' and Homart.
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 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 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 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 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. In this connection, it is understood that if Teachers' and/or
Homart have exercised their rights pursuant to the First Agreement to have any
of their shares of Common Stock included in such registration statement and in
the opinion of the managing underwriter the number of Registrable Securities
proposed to be sold in such offering plus the number of shares of Common Stock
to be offered by Teachers' and/or Homart exceeds the total number of shares of
Common Stock that can sold in such offering without adversely affecting the
market for the Company's Common Stock, then the number of Registrable
Securities to be offered for the account of the Holders shall be reduced pro
rata as aforesaid to zero before any reduction in the number of shares of
Common Stock to be offered by Teachers' and/or Homart.
4. Shelf Registration. The Company agrees that, upon the request
of any Holder, the Company shall cause to be filed on or as soon as practicable
thereafter a registration statement (a "Shelf Registration Statement") on 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
ordinary course broker or dealer transactions 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 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) Registrable Securities held by such Holder. 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 continu ously 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 Section 7(g) hereof) for so long as any
Holder holds any Units that may be exchanged for Shares under the Partnership
Agreement 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 the Shares issued upon exchange of Units 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 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 the
extent necessary before the number of securities to be offered for the accounts
of the Holders is reduced. It is understood that the Company has heretofore
granted registration rights pursuant to the First Agreement to Teachers' and
Homart which rights will remain outstanding following the execution of the this
Agreement and that under the terms of the First Agreement, the Company is not
permitted to grant to any person for so long as any securities convertible into
or exchangeable for shares of Common Stock held by Teachers' and/or Homart are
outstanding registration rights which are greater than the rights granted to
Teachers' and Homart in the First Agreement. In this connection, the Simon
Family Entities, JSP and Brandywine, each of whom is also a signatory to the
First Agreement, hereby irrevocably waive all of their rights under such First
Agreement, it being understood that all of their rights to have their
securities included in any registration statement filed by the Company shall
flow from this Agreement.
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 either of the two consecutive twelve-
month periods commencing on August 7, 1995 (or such earlier date as the Company
may file a Shelf Registration for the benefit of one or more of the Holders),
(b) establish Lock-Out Periods in effect for more than 208 days in the
aggregate within any of the consecutive fifteenmonth periods commencing on
August 7, 1997 and (c) 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 LockOut Notice, the
Company delivers a written notice (the "Revocation Notice") to the Holders
stating 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 under writers 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 exchange able 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 or 3, 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 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 state ment 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 there under, if applicable), and comply
with the provisions of the Securities Act applicable to it with respect to the
disposi tion of all securities covered by such registration state ment 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
(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 securi ties 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 neces sary 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 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 Com pany and its stockholders;
(h) use reasonable efforts to cause the Registrable Securities
covered by such registration state ment to be registered with or approved by
such other govern mental 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 pur chasers 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 (includ
ing 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 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 partici pating in any disposition pursuant to such
registration statement, the counsel referred to in clause (a) of Sec tion 7(a)
and any attorney, accountant or other agent retained by any such seller or
underwriter (collectively,
the "Inspectors"), all financial and other records, perti nent corporate
documents and properties of the Company (collectively, the "Records") as shall
be reasonably neces sary 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 dis closed 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 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 Com pany's expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential;
(l) if such sale is pursuant to an underwrit ten offering, use
reasonable efforts to obtain a "cold comfort" letter and updates thereof from
the Company's independent public accountants in customary form and cover ing
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 provi sions 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 satis fied;
(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 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 registra tion 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
disposi tion 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 registra tion 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 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 account ants 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 repre sentatives 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 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 partici pating, 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 con nection 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 state ment 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 writ ing 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 indemnify ing 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 lia bility 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 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
indemni fied 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 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 Sec
tion 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 mis representation (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 Sec tion 9, the
indemnifying parties shall indemnify each indem nified party to the full extent
provided in Section 9.1 and 9.2 without regard to the relative fault of said
indemnify ing 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 per son'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, under writing 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 reason ably 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 Securi ties 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 communi
cation 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, 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, IN 46204
Attention: David Simon
James M. Barkley, Esq. Facsimile No.: (317) 685-7221
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the
Americas
New York, New York 10019-6064 Attention: Toby S. Myerson, Esq.
Edwin S. Maynard, Esq.
Facsimile: (212) 757-3990
(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 Section 12.4(b) hereof, no 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.
(b) Affiliates. It is understood that JCP and 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 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. Each of the Estate of Edward J. DeBartolo, Edward J.
DeBartolo, Jr., The Edward J. DeBartolo Corporation and each corporate or other
person or legal
entity, other than Marie Denise DeBartolo York specified on Schedule B to the
Stockholders Agreement does hereby grant the rights, as described in the two
preceding sentences, to Wells Fargo Realty Advisors Funding, Incorporated, as
the Administrative Agent, under (A) the Second Amended and Restated New
Facility Credit Agreement, dated as of
March 31, 1994 by and among DeBartolo, Inc. and The Edward J. DeBartolo
Corporation, as the Borrowers, Wells Fargo Bank, N.A., as the issuing Bank, and
the Co-Lenders specified therein, and Wells Fargo Realty Advisors Funding,
Incorporated, in its capacity as the Administrative Agent thereunder, and (B)
the Second Amended and Restated Restructuring Facility Credit Agreement, dated
as of March 31, 1994 by and among DeBartolo, Inc. and The
Edward J. DeBartolo Corporation, as the borrowers, and the Co-Lenders specified
therein, and Wells Fargo Realty Advisors Funding, Incorporated, in its capacity
as the Administrative Agent thereunder. 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 on behalf of a Holder 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 an Administrative Agent that it is authorized to exercise Rights
transferred by any Holder, (ii) the Company shall have no liability to any such
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 acknowledging the revocation or other termination
of, the authority granted by such written instrument.
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 all or substantially all of its assets or
business, liquidation, dissolution or reorganization.
12.6 Consent of Teachers'. Notwithstanding
anything to the contrary contained herein, the Company hereby agrees to use its
commercially reasonable best efforts to cause Teachers' to execute this
Agreement at the Closing and to waive all of its rights under the First
Agreement.
12.7 BJS Registration Rights Agreement. The
parties hereto agree that the provisions of Section 5 hereof shall not apply to
the Registration Rights Agreement, dated March 26, 1996, between the Company
and BJS Capital Partners L.P. ("BJS"), copies of which have been delivered to
the parties hereto.
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 state ment of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or under takings other than those set
forth or referred to herein. This Agreement supersedes all prior agreements and
under standings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
SIMON PROPERTY GROUP, INC.
By:_____________________________ Name:
Title:
MELVIN SIMON & ASSOCIATES, INC.
By:_____________________________ Name:
Title:
JCP REALTY, INC.
By:_____________________________ Name:
Title: Executive Vice President
BRANDYWINE REALTY, INC.
By:_____________________________
Name:
Title: Executive Vice President
_______________________________
MELVIN SIMON
______________________________
HERBERT SIMON
______________________________
DAVID SIMON
______________________________
DEBORAH J. SIMON
______________________________
CYNTHIA J. SIMON
______________________________
IRWIN KATZ, as Successor Trustee
Under Declaration of Trust and Trust Agreement Dated August 4, 1970
______________________________
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
MELVIN SIMON & ASSOCIATES, INC.
By:
Name:
Title:
PENN SIMON CORPORATION
By: ________________________
Name:
Title:
NACO SIMON CORP.
By: ________________________
Name:
Title:
SANDY SPRINGS PROPERTIES, INC.
By: ________________________
Name:
Title:
SIMON ENTERPRISES, INC.
By: _______________________
Name:
Title:
S.F.G. COMPANY, L.L.C.
By: MELVIN SIMON & ASSOCIATES, INC., its
manager
By: __________________
Name:
Title:
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:
____________________________ Melvin Simon
____________________________ Herbert Simon
____________________________ David Simon
THE EDWARD J. DeBARTOLO CORPORATION
By: ________________________ Name:
Title:
THE ESTATE OF EDWARD J. DeBARTOLO
By: ________________________ Name:
Title:
By: ________________________ Name:
Title:
________________________________ Edward J. DeBartolo, Jr., individually, and in
his capacity as Trustee under (i) the Lisa Marie DeBartolo Revocable Trust
successor by assignment from Edward J. DeBartolo Trust No. 5, (ii) the Tiffanie
Lynne DeBartolo Revocable Trust-successor by assignment from Edward J.
DeBartolo Trust No. 6 and (iii) Edward J. DeBartolo Trust No. 7 for the Benefit
of Nicole Anne DeBartolo
________________________________ Cynthia R. DeBartolo
________________________________ Marie Denise DeBartolo York, individually, and
in 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
CORAL SQUARE ASSOCIATES
By: __________________________
Name:
Title:
By: __________________________
Name:
Title:
SOUTH BEND ASSOCIATES
By: DeBartolo, Inc.
By: _____________________
Name:
Title:
By: The Estate of Edward J. DeBartolo
By: ______________________
Name:
Title:
By: ______________________
Name:
Title:
WASHINGTON SQUARE ASSOCIATES
By: The Edward J. DeBartolo Corporation
By: ______________________
Name:
Title:
H-CASTLETON
By: Altamonte, Inc.
By: ______________________ Name:
Title:
BAY PARK, INC.
WARD PLAZA ASSOCIATES CHELTENHAM SHOPPING CENTER
ASSOCIATES
SUMMIT MALL, INC.
TYRONE SQUARE, INC. UPPER VALLEY MALL, INC. MISSION
VIEJO MALL, INC. PINELLAS SQUARE, INC. GREAT LAKES
MALL, INC. PALM BEACH MALL, INC. LAFAYETTE SQUARE,
INC. LIMA MALL, INC. RICHMOND MALL, INC. WOODVILLE
MALL, INC. DeBARTOLO AVENTURA, INC. BOYNTON BEACH,
INC.
THE FLORIDA MALL CORPORATION DeBARTOLO, INC.
D.L. GROVE, INC.
TC MALL II, INC. PADDOCK MALL, INC.
NATIONAL INDUSTRIAL DEVELOPMENT CORPORATION GREAT NORTHEAST MALL, INC.
By: __________________________
Name:
Title:
RUES PROPERTIES, INC.
By: __________________________
Name:
Title:
COLUMBIA SC I, INC.
COLUMBIA SC II, INC.
NORTHGATE I REAL ESTATE CORPORATION
NORTHGATE II REAL ESTATE CORPORATION
TACOMA SC I, INC.
TACOMA SC II, INC.
By: __________________________ Name:
Title:
EXHIBIT 2.09
SIMON PROPERTY GROUP, INC.
and
DAY ACQUISITION CORP. OFFICER'S CERTIFICATE
The undersigned officer of Simon Property Group, Inc., a
Maryland corporation ("Parent")1 and Day Acquisition Corp., an Ohio corporation
and Controlled subsidiary of Parent ("Sub"), in connection with the rendering
by Willkie Farr & Gallagher and Paul, Weiss, Rifkind, Wharton & Garrison of the
written opinions required by Sections 6.2(e) and 6.3(e),
respectively, of the
Agreement and Plan of Merger (the "Agreement") dated as of March 26, 1995, as
amended, between Parent, Sub, and DeBartolo Realty Corporation, an Ohio
corporation ("Company"), and
recognizing that said law firms will rely on this Certificate in rendering such
opinions, hereby certifies as follows:
1. The fair market value of Parent Common Stock and other consideration
received by each Company stockholder will be approximately equal to the fair
market value of the Company stock surrendered in exchange therefor, and the
aggregate consideration received by Company stockholders in exchange for their
Company stock will be approximately equal to the fair market value of all of
the outstanding shares of Company stock immediately prior to the Merger.
2. Pursuant to the Merger, Sub will merge with and into
Company, and Company will acquire and continue to hold following the Merger
substantially all of the assets and liabilities of Sub. Specifically, the
assets of Sub transferred to Company pursuant to the Merger will represent at
least 90 percent (90%) of the fair market value of the net assets and at least
seventy percent (70%) of the fair market value of the gross assets held by Sub
immediately prior to the Merger. In addition, at least ninety percent (90%) of
the fair market value of the of the net assets and at least seventy percent
(70%) of the fair market value of the gross assets held by Company immediately
prior to the Merger will continue to be held by Company immediately after the
Merger. For purposes of this representation, the following assets will be
treated as assets held by Sub or Company, as the case may be, immediately prior
but not subsequent to the Merger: (i) assets disposed of by Company or Sub
(other than assets
transferred from Sub to Company in the Merger) prior to or
subsequent to the Merger and in contemplation thereof (including without
limitation any asset disposed of by Company, other than in the ordinary course
of business, pursuant to a plan or intent existing during the period ending at
the Effective Time of the Merger and beginning with the commencement of
negotiations (whether formal or informal) with Parent regarding the Merger (the
"Pre-Merger Period"), (ii) assets used by Company or Sub to pay stockholders
receiving cash in lieu of fractional shares of Parent Common Stock, or to pay
other expenses or liabilities incurred in connection with the Merger, and (iii)
assets used to make distribution, redemption or other payments in respect of
Company stock or rights to acquire such stock (including payments
treated as such for tax purposes) except amounts paid as normal, regular
dividends.
3. Prior to the Merger, Parent will be in control of Sub within
the meaning of Section 368(c) of the Code.
4. Parent has no plan or intention to cause Company to issue
additional shares of its stock that would result in Parent losing control of
Company within the meaning of Section 368(c) of the
Code.
5. Parent has no plan or intention to reacquire any Parent
Stock issued in the Merger.
6. Parent has no plan or intention to: liquidate Company; to
merge Company with or into another corporation (including Parent or its
affiliates) except for transfers of stock to corporations controlled by Parent,
as described in both 368(a)(2)(C) of the Code and Treasury Regulation Section
1.368(2)(j)(4); to cause Company to sell, distribute or otherwise dispose of
the stock of Company; or to cause Company to sell or otherwise dispose of any
of its assets or any of the assets acquired from Sub in the Merger, except for
dispositions made in the ordinary course of business, or transfers of assets to
a corporation controlled by Company, as described in both Section 368(a)(2)(C)
of the Code and Treasury Regulation Section 1.3682(j)(4).
7. Sub will have no liabilities assumed by Company, and will
not transfer to Company any assets subject to liabilities in the Merger.
8. Following the Merger, Company will continue its historic business or use a
significant portion of its historic business assets in a business.
9. Parent and Sub will pay their respective expenses, if any
incurred in connection with the Merger.
10. There is no intercorporate indebtedness existing between Parent and
Company or between Sub and Company that was issued, acquired, or will be
settled at a discount. Parent will assume no liabilities of any Company
stockholder in connection with the Merger.
11. In the Merger, shares of Company stock representing control of
Company, as defined in Section 368(c) of the Code, will be exchanged solely for
voting stock of Parent. For purposes of
this representation and the representation in paragraph 23 below, shares of
Company stock exchanged in the Merger for cash or other property (including,
without limitation, cash paid to Company stockholders in lieu of fractional
shares of Parent common stock but not including any cash or property provided
by Company) will be treated as Company stock outstanding at the Effective Time
of the Merger. The term "Control" means the direct ownership of stock
possessing at least 80 percent (80%) of the total combined voting power of all
classes of stock entitled to vote and at least eighty percent (80%) of the
total number of shares of each class of non-voting stock of Company.
12. During the past five (5) years, and at the present, none of the
outstanding shares of Company stock, including the right to acquire or vote any
such shares have, directly or indirectly,
been owned by Parent or to the best of the knowledge of the management of
Parent, Parent affiliates, other than as disclosed in the [Joint Proxy
Statement] of Parent and Company for the Merger.
13. Neither Parent nor Sub are investment companies as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
14. The payment of cash in lieu of fractional shares of Parent Common
Stock is solely for the purpose of avoiding the expense
and inconvenience to Parent of issuing fractional shares and does not represent
separately bargained-for consideration. The total cash consideration that will
be paid in the Merger to the stockholders of Company instead of issuing
fractional shares of Parent Common Stock will not exceed one percent (1%) of
the total consideration that will be issued in the Merger to the shareholders
of Company in exchange for their shares of Company stock. The fractional share
interests of each stockholder of Company will be aggregated, and no stockholder
of Company will receive cash in an amount equal to or greater than the value of
one full share of Parent stock.
15. The Merger is being undertaken by Parent and Sub for valid business
purposes and not for the purpose of tax avoidance.
16. No stockholder of Company is acting as agent for Parent in connection with
the Merger or approval thereof; Parent will not reimburse any Company
stockholder for Company stock such stockholder may have purchased or for other
obligations such stockholder may have incurred.
17. Neither Parent nor Sub is, or will be at the Effective Time of the Merger,
under the jurisdiction of a court in a Title 11 or similar case within the
meaning of Section 368(a)(3)(A) of the Code.
18. No shares of Sub have been or will be used as consideration or issued to
stockholders of Company in the Merger.
19. The terms of the Agreement are the product of arm'slength negotiations.
20. No compensation received by any stockholder-employees of Company will be
separate consideration for, or allocable to, any of their shares of Company
Stock.
21. With respect to each instance, if any, in which shares of Company Stock
have been purchased by a stockholder of Parent (a "Stockholder") during the Pre-
Merger Period (a "Stock Purchase"), to the best of the knowledge of the
management of Parent: (i) the Stock Purchase was made by such Stockholder on
its own behalf and not as a representative, or for the benefit of Parent; (ii)
the purchase price paid by such Stockholder pursuant to the Stock Purchase was
the product of arm's length negotiations, was funded by such Stockholder's own
assets, was not advanced, and will not be reimbursed either directly or
indirectly, by Parent; (ii) at no time was such Stockholder or any other party
required or obligated to surrender to Parent the Company stock acquired in the
Stock Purchase, and neither such Stockholder nor any other party will be
required to surrender to Parent the Parent Common Stock for which such shares
of Company stock will be exchanged in the Merger; and (iv) the Stock Purchase
was not a formal or informal condition to consummation of the Merger and was
entered into solely to satisfy the separate interests of such Stockholder and
the seller.
22. To the best of the knowledge of the management of Parent, there is no plan
or intention ("Plan") on the part of the stockholders of Company to engage in a
sale, exchange, transfer, distribution, pledge, disposition or any other
transaction, including a transaction or arrangement that reduces the risk of
loss such as a short sale, hedge, swap or otherwise, of the shares of Parent
stock to be received upon consumation of the Merger (a "Sale") of shares of
Parent Common Stock received in the Merger that would reduce the Company
stockholders' ownership of Parent Common Stock to a number of shares having a
value, as of the Effective Time of the Merger of less than 50 percent (50%) of
the aggregate fair market value, immediately prior to the
Merger, of all outstanding shares of Company stock. For purposes of this
representation, shares of Company stock with respect to which a Company
stockholder receives consideration in the Merger other than Parent Common Stock
(including, without limitation, cash or other property received in lieu of
fractional shares of Parent Common Stock) and with respect to which a Sale
occurs prior to, or subsequent to and in contemplation of the Merger, shall be
considered shares of outstanding Company stock exchanged for Parent Common
Stock in the Merger and then disposed of pursuant to a Plan.
23. Except with respect to payments of cash to Company stockholders in lieu of
fractional shares of Parent Common Stock, cash payments to dissenting Company
stockholders and transfer and similar taxes paid on behalf of Company
stockholders, if any, one hundred percent (100%) of the Company stock
outstanding immediately prior to the Merger will be exchanged solely for Parent
Common Stock. Thus, except as set forth in the preceding sentence, Sub and
Parent intend that no consideration be paid or received (directly or
indirectly, actually or constructively) for Company stock other than Parent
Common Stock.
Parent and Sub recognize that: (i) your opinions will be
based on the representations set forth herein and on the statements contained
in the Agreement and documents related thereto, (ii) your opinions will be
subject to certain limitations and qualifications including that they may not
be relied upon if any such representations are not accurate in all material
respects; and your opinions will not address any tax consequences of the Merger
of any action taken in connection therewith except as set forth in such
opinions.
In rendering this Officer's Certificate, Parent and Sub have relied on
their counsel and auditors, and on the representations set forth in: (i) the
Officer's Certificate of Company, and (ii) the Stockholder's Certificate, both
of which are to be furnished to Willkie Farr & Gallagher and Paul, Weiss,
Rifkind, Wharton & Garrison.
[intentionally left blank]
To the best of the knowledge of Parent and Sub, the
foregoing facts are now true and will continue to be true through and as of the
Effective Time of the Merger. If any of the representations contained herein
ceases to be true at any time prior to the Effective Time of the Merger, Parent
and Sub agree to deliver to Company a written notice to that effect. Parent
and Sub are authorized to make the representations set forth herein.
IN WITNESS WHEREOF, we have signed this certificate this
____ day of _________ 1996.
Simon Property Group, Inc.
By: ____________________ Name:
Title:
Day Acquisition Corp.
By: ____________________
Name: Title:
DEBARTOLO REALTY CORPORATION OFFICER'S CERTIFICATE
The undersigned officer of DeBartolo Realty Corporation, an Ohio
Corporation ("Company"),2 in connection with the rendering by Willkie Farr &
Gallagher and Paul, Weiss, Rifkind, Wharton & Garrison of the written opinions
required by Sections 6.2(e) and 6.3(e), respectively, of the Agreement and Plan
of Merger dated as of March 26, 1996, as amended, between Simon Property Group,
Inc., a Maryland corporation ("Parent"), Day Acquisition Corp., a Delaware
corporation ("Sub"), and Company, (the "Agreement") and recognizing that said
law firms will rely on this Certificate in rendering such opinions hereby
certifies as follows:
The fair market value of the Parent Common Stock and other consideration
received by each Company stockholder will be approximately equal to the fair
market value of the Company stock surrendered in exchange therefore, and the
aggregate consideration received by Company stockholders in exchange for their
Company stock will be approximately equal to the fair market value of all of
the outstanding shares of Company Stock immediately prior to the merger.
To the best of the knowledge of the management of Company
there is no plan or intention ("Plan") on the part of the stockholders of
Company who own five percent (5%) or more of the Company Stock and the
remaining stockholders of Company to engage in a sale, exchange, transfer,
distribution, pledge, disposition or any other transaction that would reduce or
limit the risk of loss such as a short sale, hedge, swap, or otherwise, of the
shares of Parent stock to be received upon consumation of the Merger (a "Sale")
of shares of Parent Common Stock received in the Merger that would reduce the
Company stockholders' ownership of Parent Common Stock to a number of shares
having a value as of the Effective Time of the Merger of less than fifty
percent (50%) of the aggregate fair market value, immediately prior to the
Merger, of all outstanding shares of Company stock. For purposes of this
representation, shares of Company stock with respect to which a Company
stockholder receives consideration in the Merger other than Parent Common Stock
(including, without limitation, cash or other property received in lieu of
fractional shares of Parent Common Stock) and with respect to which a Sale
occurs prior to, or subsequent to and in contemplation of, the Merger, shall be
considered shares of outstanding Company stock exchanged for Parent Common
Stock in the Merger and then disposed of pursuant to a Plan.
Pursuant to the Merger, Sub will merge with and into Company. At least
ninety percent (90%) of the fair market value of the net assets and at least
seventy percent (70%) of the fair market value of the gross assets held by
Company immediately
prior to the Merger will continue to be held by Company following
the Merger. For purposes of this representation, the following assets will be
treated as assets held by Company immediately
prior to the Merger: (i) assets disposed of by Company prior to or subsequent
to the Merger and in contemplation thereof (including, without limitation, any
assets disposed of by Company, other than in the ordinary course of business,
pursuant to a plan or intent existing during the period ending at the Effective
Time of the Merger and beginning with the commencement of negotiations (whether
formal or informal) with Parent regarding the Merger) (the "Pre-Merger
Period"); (ii) assets used
by Company to pay stockholders cash in lieu of fractional shares of Parent
Common Stock, or to pay other expenses or liabilities incurred in connection
with the Merger; and (iii) assets used to make distributions, redemptions or
other payments in respect of Company stock or rights to acquire such stock
(including payments treated as such for tax purposes) except amounts paid as
normal, regular dividends.
Company has no plan or intention to issue additional shares of its stock
that would result in Parent losing control of Company within the meaning of
Section 368(c) of the Code.
Company and the stockholders of Company will pay their respective
expenses, if any, incurred in connection with the Merger.
Following the Merger, Company will continue its historic business or use a
significant portion of its historic business assets in a business.
There is no intercorporate indebtedness existing between Parent and
Company or between Sub and Company that was issued, acquired, or will be
settled at a discount.
In the Merger, shares of Company representing control of
Company will be exchanged solely for voting Common Stock of Parent. For
purposes of this representation and the representation in paragraph 24 below,
shares of Company stock exchanged in the Merger for cash or other property
(including, without limitation, cash paid to Company stockholders in lieu of
fractional shares of Parent Common Stock but not including any cash or other
property provided by Company) will be treated as Company stock outstanding at
the Effective Time of the Merger but not exchanged for voting Common Stock of
Parent. As used in this Certificate, "Control" shall consist of the direct
ownership of stock possessing at least 80 percent (80%) of the total combined
voting power of all classes of stock entitled to vote and at least eighty
percent (80%) of the total number of shares of each class of non-voting stock
of Company. For purposes of determining Control, a person shall not be
considered to own voting stock if rights to vote such stock (or to restrict or
otherwise control the voting of such stock) are held by a third party
(including a voting trust) other than as agent of such person.
At the Effective Time of the Merger, other than in Section ____ of the
Agreement, there will not be outstanding any equity interest in Company, any
other warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in Company or any other equity
interest in Company that, if exercised or converted, would affect Parent's
acquisition or retention of Control of Company.
Company is not an investment company as defined in Sections
368(a)(2)(F)(iii) and (iv) of the Code.
On the date of the Merger, the fair market value of the assets of Company
will exceed the sum of its liabilities plus the amount of liabilities, if any,
to which such assets are subject.
Company is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Section 368(a)(3)(A) of the Code.
Other than in the ordinary course of business or pursuant to its
obligations under the Agreement, Company has made no transfer
of any or its assets (including any distribution of assets with respect to, or
in redemption of, stock) in contemplation of the Merger (or any other corporate
acquisition) or during the PreMerger Period.
The Merger is being undertaken by Company for valid business purposes and
not for the purpose of tax avoidance.
Company has no plan or intention to sell, distribute or otherwise dispose
of any of its assets or any of the assets acquired from Sub in the Merger,
except for dispositions made in the ordinary course of business or transfers of
assets to a corporation controlled by Company, as described in both Section
368(a)(2)(c) of the Code and Treasury Regulation Section 1.3682(j)(4).
To the best of Company's knowledge, during the past five years, and at
present, none of the outstanding shares of Company stock including the right to
acquire or vote such shares have, directly or indirectly, been owned by Parent
or Parent affiliates, other than as disclosed in the [Joint Proxy Statement].
The liabilities of Company and any liabilities to which the assets of
Company are subject have been incurred by Company in the ordinary course of its
business.
Under Section 2.2(g) of the Agreement, in lieu of issuing fractional
shares of Parent Common Stock that would otherwise be issued, each stockholder
of Company shall receive cash. The payment of cash in lieu of fractional
shares of Parent Common Stock will be made solely for the purpose of avoiding
the expense and inconvenience to Parent of issuing fractional shares and will
not represent separately bargained-for consideration. The total cash
consideration that will be paid in the Merger to stockholders of Company in
lieu of issuing fractional shares of Parent Common stock will not exceed one
percent (1%) of the total consideration that will be issued in the Merger to
the stockholders of Company in exchange for their shares of Company stock. The
fractional share interests of each holder of Company stock will be aggregated,
and no holder of Company stock will receive cash in an amount equal to or
greater than the value of one full share of Parent Common Stock.
The terms of the Agreement are the product of arm's-length negotiations.
No compensation received by any stockholder employees of Company will be
separate consideration for, or allocable to, any of their shares of Company
stock.
Other than shares of Company stock or options to acquire Company stock
issued as compensation to present or former service providers (including,
without limitation, employees and directors) of Company in the ordinary course
of business, if any, no issuances of Company stock or rights to acquire Company
stock have occurred or will occur during the Pre-Merger period other than
pursuant to options, warrants or agreements outstanding prior to the Pre-Merger
Period.
Cash or other property paid to employees of Company during the Pre-Merger
period has been or will be in the ordinary course of business or pursuant to
agreements entered into prior to the Pre-Merger period and constitutes
reasonable compensation for services rendered.
During the Pre-Merger Period, no indebtedness or other obligation of
Company or its subsidiaries has been or will be guaranteed by any stockholder
of Company (or any person or entity related to a stockholder of Company) in
contemplation of the Merger.
Except with respect to payments of cash to Company stockholders in lieu of
fractional shares of Parent Common Stock, cash payments to dissenting Company
stockholders and transfer and similar taxes paid on behalf of Company
stockholders, if any, one hundred percent (100%) of the Company stock
outstanding immediately prior to the Merger will be exchanged solely for Parent
Common Stock. Thus, except as set forth in the preceding sentence, Company
intends that no consideration be paid or received (directly or indirectly,
actually or constructively) for Company stock other than Parent Common Stock.
Company recognizes that: (i) your opinions will be based on the
representations set forth herein and on the statements contained in the
Agreement and documents related thereto; and (ii) your opinions will be subject
to certain limitations and qualifications including that they may not be relied
upon if any such representations are not accurate in all material respects.
Company recognizes that your opinions will not address any tax consequences of
the Merger or any action taken in connection therewith except as expressly set
forth in such opinions.
Notwithstanding anything herein to the contrary, Company makes no
representations regarding the actions or conduct of Company pursuant to
Parent's exercise of control over Company after the Merger.
In rendering this Officer's Certificate, Company has relied on its counsel
and auditors, and on the representations set forth in: (i) the Parent and Sub
Officer's Certificate; and (ii) the Stockholder's Certificate(s), both of which
are to be furnished to Willkie Farr & Gallagher and Paul, Weiss, Rifkind,
Wharton & Garrison.
To the best of the knowledge of Company, the foregoing representations and
the representations made by Company in the Agreement and other documents
associated therewith are true and accurate and will continue to be true and
accurate in all material respects through and as of the Effective Time of the
Merger. If any of the representations contained herein ceases to be true at
any time prior to the Effective Time of the Merger, Company agrees to deliver
to Parent a written notice to that effect. Company is authorized to make all
of the representations set forth herein.
IN WITNESS WHEREOF, I have signed this certificate this
day of ______________ 1996.
DEBARTOLO REALTY CORPORATION
By:
Name:
Title:
Form of Stockholder's Certificate
(For Individuals holding 5% or more of Company stock)
STOCKHOLDER'S CERTIFICATE
In connection with the opinions rendered by Willkie Farr & Gallagher and
Paul, Weiss, Rifkind, Wharton & Garrrison as required by Sections 6.2(e) and
6.3(e) of the Agreement and Plan of Merger (the "Agreement") dated as of March
26, 1996, as amended, between Simon Property Group, Inc., a Maryland
corporation ("Parent"), Day Acquisition Corp., an Ohio corporation and
Controlled subsidiary of Parent ("Sub"), and DeBartolo Realty Corporation, an
Ohio corporation ("Company"), the undersigned stockholder of Company certifies
as follows:
1. I have, and as of the Effective Time3 of the Merger will have, no
present plan or intention to engage in a sale, exchange, transfer, pledge,
disposition or any other transaction or arrangement that would reduce or limit
the risk of loss, such as a short sale, hedge, swap or otherwise, of the shares
of Parent stock I am receive upon consummation of the Merger (collectively, a
"Sale"). For purposes of this representation, a Sale of Parent stock shall be
considered to have occurred pursuant to a plan or intention if such Sale occurs
in a transaction that is in contemplation of, or related or pursuant to, the
Merger.
2. I am currently the legal and beneficial owner of the shares of stock
listed in CompanyOs share register, and I have not acquired such shares in
contemplation of the Merger.
While the representations contained herein indicate my
present plans and intentions, my plans and intentions may change at any time
after the Effective Time of the Merger. The representations contained in this
Certificate may not be relied upon by any person to constrain or otherwise
limit my actions with regard to the Parent stock I am to receive in the Merger
at any time after the Effective Time of the Merger.
I understand and acknowledge that Parent and Company and their respective
legal counsel may rely on the truth and accuracy of my representations
contained herein in rendering the above referenced opinions. If any of the
representations contained herein ceases to be true at any time prior to the
Effective Time of the Merger, I agree to deliver to Parent and Company a
written notice to that effect.
IN WITNESS WHEREOF, I have signed this Certificate this ___ day of
_____________, 1996.
__________________________________ Form of
Stockholder's Certificate
(For Entities holding 5% or more of Company stock)
STOCKHOLDER'S CERTIFICATE
In connection with the opinions rendered by Willkie Farr & Gallagher and
Paul, Weiss, Rifkind, Wharton & Garrrison as required by Sections 6.2(e) and
6.3(e) of the Agreement and Plan of Merger (the "Agreement") dated as of March
26, 1996, as amended, between Simon Property Group, Inc., a Maryland
corporation ("Parent"), Day Acquisition Corp., an Ohio corporation and
Controlled subsidiary of Parent ("Sub"), and DeBartolo Realty Corporation, an
Ohio corporation ("Company"), the undersigned officer of ___________________ ("
") certifies as follows:
1. _________________________ has, and as of the Effective Time4 of the
Merger will have, no present plan or intention to engage
in a sale, exchange, transfer, pledge, disposition or any other transaction or
arrangement that would reduce or limit the risk of loss, such as a short sale,
hedge, swap or otherwise, of the shares of Parent stock to be received by
__________________________ upon consummation of the Merger (collectively, a
"Sale"). For purposes of this representation, a Sale of Parent stock shall be
considered to have occurred pursuant to a plan or intention if such Sale occurs
in a transaction that is in contemplation of, or related or pursuant to, the
Merger.
2. _________________________ is currently the legal and
beneficial owner of the shares of stock listed in Company's share register, and
has not acquired such shares in contemplation of the Merger.
While the representations contained herein indicate __________________'s
present plans and intentions, those plans and intentions may change at any time
after the Effective Time of the Merger. The representations contained in this
Certificate may not be relied upon by any person to constrain or otherwise
limit ___________________'s actions with regard to the Parent stock to be
received in the Merger at any time after the Effective Time of the Merger.
____________________ understands and acknowledges that Parent and Company
and their respective legal counsel may rely on the truth and accuracy of the
representations contained herein in rendering the above referenced opinions.
If any of the representations contained herein ceases to be true at any time
prior to the Effective Time of the Merger, ______________________
agrees to deliver to Parent and Company a written notice to that
effect. ___________________ is authorized to make all of the representations
set forth herein.
IN WITNESS WHEREOF, I have signed this Certificate this ___
day of _____________, 1996.
________________________________
By: __________________________
Name:
Title:
_______________________________
1 Defined terms used and not defined herein have the same
meanings ascribed to them as in the Agreement.
2 Defined terms used and not defined herein have the same
meanings ascribed to them as in the Agreement.
3 Defined terms used and not defined herein have the same meanings ascribed to
them as in the Agreement.
4 Defined terms used and not defined herein have the same meanings ascribed to
them as in the Agreement.
EXHIBIT 2.10
FORMS OF LETTERS
AND CERTIFICATES
SIMON PROPERTY GROUP, INC.
and
DAY ACQUISITION CORP.
OFFICER'S CERTIFICATE
The undersigned officer of Simon Property Group, Inc., a Maryland
corporation ("Parent")1 and Day Acquisition Corp., an Ohio corporation and
Controlled subsidiary of Parent ("Sub"), in connection with the rendering by
Willkie Farr & Gallagher and Paul, Weiss, Rifkind, Wharton & Garrison of the
written opinions required by Sections 6.2(e) and 6.3(e), respectively, of the
Agreement and Plan of Merger (the "Agreement") dated as of March 26, 1995, as
amended, between Parent, Sub, and DeBartolo Realty Corporation, an Ohio
corporation ("Company"), and recognizing that said law firms will rely on this
Certificate in rendering such opinions, hereby certifies as follows:
1. The fair market value of Parent Common Stock and other consideration
received by each Company stockholder will be approximately equal to the fair
market value of the Company stock surrendered in exchange therefor, and the
aggregate consideration received by Company stockholders in exchange for their
Company stock will be approximately equal to the fair market value of all of
the outstanding shares of Company stock immediately prior to the Merger.
2. Pursuant to the Merger, Sub will merge with and into Company, and Company
will acquire and continue to hold following the Merger substantially all of the
assets and liabilities of Sub. Specifically, the assets of Sub transferred to
Company pursuant to the Merger will represent at least 90 percent (90%) of the
fair market value of the net assets and at least seventy percent (70%) of the
fair market value of the gross assets held by Sub immediately prior to the
Merger. In addition, at least ninety percent (90%) of the fair market value of
the of the net assets and at least seventy percent (70%) of the fair market
value of the gross assets held by Company immediately prior to the Merger will
continue to be held by Company immediately after the Merger. For purposes of
this representation, the following assets will be treated as assets held by Sub
or Company, as the case may be, immediately prior but not subsequent to the
Merger: (i) assets disposed of by Company or Sub (other than assets transferred
from Sub to Company in the Merger) prior to or subsequent to the Merger and in
contemplation thereof (including without limitation any asset disposed of by
Company, other than in the ordinary course of business, pursuant to a plan or
intent existing during the period ending at the Effective Time of the Merger
and beginning with the commencement of negotiations (whether formal or
informal) with Parent regarding the Merger (the "Pre-Merger Period"), (ii)
assets used by Company or Sub to pay stockholders receiving cash in lieu of
fractional shares of Parent Common Stock, or to pay other expenses or
liabilities incurred in connection with the Merger, and (iii) assets used to
make distribution, redemption or other payments in respect of Company stock or
rights to acquire such stock (including payments treated as such for tax
purposes) except amounts paid as normal, regular dividends.
3. Prior to the Merger, Parent will be in control of Sub within the meaning
of Section 368(c) of the Code.
4. Parent has no plan or intention to cause Company to issue additional
shares of its stock that would result in Parent losing control of Company
within the meaning of Section 368(c) of the Code.
5. Parent has no plan or intention to reacquire any Parent Stock issued in
the Merger.
6. Parent has no plan or intention to: liquidate Company; to merge Company
with or into another corporation (including Parent or its affiliates) except
for transfers of stock to corporations controlled by Parent, as described in
both 368(a)(2)(C) of the Code and Treasury Regulation Section 1.368(2)(j)(4);
to cause Company to sell, distribute or otherwise dispose of the stock of
Company; or to cause Company to sell or otherwise dispose of any of its assets
or any of the assets acquired from Sub in the Merger, except for dispositions
made in the ordinary course of business, or transfers of assets to a
corporation controlled by Company, as described in both Section 368(a)(2)(C) of
the Code and Treasury Regulation Section 1.3682(j)(4).
7. Sub will have no liabilities assumed by Company, and will not transfer to
Company any assets subject to liabilities in the Merger.
8. Following the Merger, Company will continue its historic business or use a
significant portion of its historic business assets in a business.
9. Parent and Sub will pay their respective expenses, if any incurred in
connection with the Merger.
10. There is no intercorporate indebtedness existing between Parent and
Company or between Sub and Company that was issued, acquired, or will be
settled at a discount. Parent will assume no liabilities of any Company
stockholder in connection with the Merger.
11. In the Merger, shares of Company stock representing control of Company, as
defined in Section 368(c) of the Code, will be exchanged solely for voting
stock of Parent. For purposes of this representation and the representation in
paragraph 23 below, shares of Company stock exchanged in the Merger for cash or
other property (including, without limitation, cash paid to Company
stockholders in lieu of fractional shares of Parent common stock but not
including any cash or property provided by Company) will be treated as Company
stock outstanding at the Effective Time of the Merger. The term "Control"
means the direct ownership of stock possessing at least 80 percent (80%) of the
total combined voting power of all classes of stock entitled to vote and at
least eighty percent (80%) of the total number of shares of each class of non-
voting stock of Company.
12. During the past five (5) years, and at the present, none of the
outstanding shares of Company stock, including the right to acquire or vote any
such shares have, directly or indirectly, been owned by Parent or to the best
of the knowledge of the management of Parent, Parent affiliates, other than as
disclosed in the [Joint Proxy Statement] of Parent and Company for the Merger.
13. Neither Parent nor Sub are investment companies as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
14. The payment of cash in lieu of fractional shares of Parent Common Stock is
solely for the purpose of avoiding the expense and inconvenience to Parent of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the Merger to
the stockholders of Company instead of issuing fractional shares of Parent
Common Stock will not exceed one percent (1%) of the total consideration that
will be issued in the Merger to the shareholders of Company in exchange for
their shares of Company stock. The fractional share interests of each
stockholder of Company will be aggregated, and no stockholder of Company will
receive cash in an amount equal to or greater than the value of one full share
of Parent stock.
15. The Merger is being undertaken by Parent and Sub for valid business
purposes and not for the purpose of tax avoidance.
16. No stockholder of Company is acting as agent for Parent in connection with
the Merger or approval thereof; Parent will not reimburse any Company
stockholder for Company stock such stockholder may have purchased or for other
obligations such stockholder may have incurred.
17. Neither Parent nor Sub is, or will be at the Effective Time of the Merger,
under the jurisdiction of a court in a Title 11 or similar case within the
meaning of Section 368(a)(3)(A) of the Code.
18. No shares of Sub have been or will be used as consideration or issued to
stockholders of Company in the Merger.
19. The terms of the Agreement are the product of arm's-length negotiations.
20. No compensation received by any stockholder-employees of Company will be
separate consideration for, or allocable to, any of their shares of Company
Stock.
21. With respect to each instance, if any, in which shares of Company Stock
have been purchased by a stockholder of Parent (a "Stockholder") during the Pre-
Merger Period (a "Stock Purchase"), to the best of the knowledge of the
management of Parent: (i) the Stock Purchase was made by such Stockholder on
its own behalf and not as a representative, or for the benefit of Parent; (ii)
the purchase price paid by such Stockholder pursuant to the Stock Purchase was
the product of arm's length negotiations, was funded by such Stockholder's own
assets, was not advanced, and will not be reimbursed either directly or
indirectly, by Parent; (ii) at no time was such Stockholder or any other party
required or obligated to surrender to Parent the Company stock acquired in the
Stock Purchase, and neither such Stockholder nor any other party will be
required to surrender to Parent the Parent Common Stock for which such shares
of Company stock will be exchanged in the Merger; and (iv) the Stock Purchase
was not a formal or informal condition to consummation of the Merger and was
entered into solely to satisfy the separate interests of such Stockholder and
the seller.
22. To the best of the knowledge of the management of Parent, there is no plan
or intention ("Plan") on the part of the stockholders of Company to engage in a
sale, exchange, transfer, distribution, pledge, disposition or any other
transaction, including a transaction or arrangement that reduces the risk of
loss such as a short sale, hedge, swap or otherwise, of the shares of Parent
stock to be received upon consummation of the Merger (a "Sale") of shares of
Parent Common Stock received in the Merger that would reduce the Company
stockholders' ownership of Parent Common Stock to a number of shares having a
value, as of the Effective Time of the Merger of less than 50 percent (50%) of
the aggregate fair market value, immediately prior to the Merger, of all
outstanding shares of Company stock. For purposes of this representation,
shares of Company stock with respect to which a Company stockholder receives
consideration in the Merger other than Parent Common Stock (including, without
limitation, cash or other property received in lieu of fractional shares of
Parent Common Stock) and with respect to which a Sale occurs prior to, or
subsequent to and in contemplation of the Merger, shall be considered shares of
outstanding Company stock exchanged for Parent Common Stock in the Merger and
then disposed of pursuant to a Plan.
23. Except with respect to payments of cash to Company stockholders in lieu of
fractional shares of Parent Common Stock, cash payments to dissenting Company
stockholders and transfer and similar taxes paid on behalf of Company
stockholders, if any, one hundred percent (100%) of the Company stock
outstanding immediately prior to the Merger will be exchanged solely for Parent
Common Stock. Thus, except as set forth in the preceding sentence, Sub and
Parent intend that no consideration be paid or received (directly or
indirectly, actually or constructively) for Company stock other than Parent
Common Stock.
Parent and Sub recognize that: (i) your opinions will be based on the
representations set forth herein and on the statements contained in the
Agreement and documents related thereto, (ii) your opinions will be subject to
certain limitations and qualifications including that they may not be relied
upon if any such representations are not accurate in all material respects; and
your opinions will not address any tax consequences of the Merger of any action
taken in connection therewith except as set forth in such opinions.
In rendering this Officer's Certificate, Parent and Sub have relied on
their counsel and auditors, and on the representations set forth in: (i) the
Officer's Certificate of Company, and (ii) the Stockholder's Certificate, both
of which are to be furnished to Willkie Farr & Gallagher and Paul, Weiss,
Rifkind, Wharton & Garrison.
[intentionally left blank]
To the best of the knowledge of Parent and Sub, the foregoing facts are
now true and will continue to be true through and as of the Effective Time of
the Merger. If any of the representations contained herein ceases to be true
at any time prior to the Effective Time of the Merger, Parent and Sub agree to
deliver to Company a written notice to that effect. Parent and Sub are
authorized to make the representations set forth herein.
IN WITNESS WHEREOF, we have signed this certificate this ____ day of
_________ 1996.
Simon Property Group, Inc.
By: ____________________
Name:
Title:
Day Acquisition Corp.
By: ____________________
Name:
Title:
DEBARTOLO REALTY CORPORATION
OFFICER'S CERTIFICATE
The undersigned officer of DeBartolo Realty Corporation, an Ohio
Corporation ("Company"),2 in connection with the rendering by Willkie Farr &
Gallagher and Paul, Weiss, Rifkind, Wharton & Garrison of the written opinions
required by Sections 6.2(e) and 6.3(e), respectively, of the Agreement and Plan
of Merger dated as of March 26, 1996, as amended, between Simon Property Group,
Inc., a Maryland corporation ("Parent"), Day Acquisition Corp., a Delaware
corporation ("Sub"), and Company, (the "Agreement") and recognizing that said
law firms will rely on this Certificate in rendering such opinions hereby
certifies as follows:
The fair market value of the Parent Common Stock and other consideration
received by each Company stockholder will be approximately equal to the fair
market value of the Company stock surrendered in exchange therefore, and the
aggregate consideration received by Company stockholders in exchange for their
Company stock will be approximately equal to the fair market value of all of
the outstanding shares of Company Stock immediately prior to the merger.
To the best of the knowledge of the management of Company there is no plan
or intention ("Plan") on the part of the stockholders of Company who own five
percent (5%) or more of the Company Stock and the remaining stockholders of
Company to engage in a sale, exchange, transfer, distribution, pledge,
disposition or any other transaction that would reduce or limit the risk of
loss such as a short sale, hedge, swap, or otherwise, of the shares of Parent
stock to be received upon consummation of the Merger (a "Sale") of shares of
Parent Common Stock received in the Merger that would reduce the Company
stockholders' ownership of Parent Common Stock to a number of shares having a
value as of the Effective Time of the Merger of less than fifty percent (50%)
of the aggregate fair market value, immediately prior to the Merger, of all
outstanding shares of Company stock. For purposes of this representation,
shares of Company stock with respect to which a Company stockholder receives
consideration in the Merger other than Parent Common Stock (including, without
limitation, cash or other property received in lieu of fractional shares of
Parent Common Stock) and with respect to which a Sale occurs prior to, or
subsequent to and in contemplation of, the Merger, shall be considered shares
of outstanding Company stock exchanged for Parent Common Stock in the Merger
and then disposed of pursuant to a Plan.
Pursuant to the Merger, Sub will merge with and into Company. At least
ninety percent (90%) of the fair market value of the net assets and at least
seventy percent (70%) of the fair market value of the gross assets held by
Company immediately prior to the Merger will continue to be held by Company
following the Merger. For purposes of this representation, the following
assets will be treated as assets held by Company immediately prior to the
Merger: (i) assets disposed of by Company prior to or subsequent to the Merger
and in contemplation thereof (including, without limitation, any assets
disposed of by Company, other than in the ordinary course of business, pursuant
to a plan or intent existing during the period ending at the Effective Time of
the Merger and beginning with the commencement of negotiations (whether formal
or informal) with Parent regarding the Merger) (the "Pre-Merger Period"); (ii)
assets used by Company to pay stockholders cash in lieu of fractional shares of
Parent Common Stock, or to pay other expenses or liabilities incurred in
connection with the Merger; and (iii) assets used to make distributions,
redemptions or other payments in respect of Company stock or rights to acquire
such stock (including payments treated as such for tax purposes) except amounts
paid as normal, regular dividends.
Company has no plan or intention to issue additional shares of its stock
that would result in Parent losing control of Company within the meaning of
Section 368(c) of the Code.
Company and the stockholders of Company will pay their respective
expenses, if any, incurred in connection with the Merger.
Following the Merger, Company will continue its historic business or use a
significant portion of its historic business assets in a business.
There is no intercorporate indebtedness existing between Parent and
Company or between Sub and Company that was issued, acquired, or will be
settled at a discount.
In the Merger, shares of Company representing control of Company will be
exchanged solely for voting Common Stock of Parent. For purposes of this
representation and the representation in paragraph 24 below, shares of Company
stock exchanged in the Merger for cash or other property (including, without
limitation, cash paid to Company stockholders in lieu of fractional shares of
Parent Common Stock but not including any cash or other property provided by
Company) will be treated as Company stock outstanding at the Effective Time of
the Merger but not exchanged for voting Common Stock of Parent. As used in
this Certificate, "Control" shall consist of the direct ownership of stock
possessing at least 80 percent (80%) of the total combined voting power of all
classes of stock entitled to vote and at least eighty percent (80%) of the
total number of shares of each class of non-voting stock of Company. For
purposes of determining Control, a person shall not be considered to own voting
stock if rights to vote such stock (or to restrict or otherwise control the
voting of such stock) are held by a third party (including a voting trust)
other than as agent of such person.
At the Effective Time of the Merger, other than in Section ____ of the
Agreement, there will not be outstanding any equity interest in Company, any
other warrants, options, convertible securities, or any other type of right
pursuant to which any person could acquire stock in Company or any other equity
interest in Company that, if exercised or converted, would affect Parent's
acquisition or retention of Control of Company.
Company is not an investment company as defined in Sections
368(a)(2)(F)(iii) and (iv) of the Code.
On the date of the Merger, the fair market value of the assets of Company
will exceed the sum of its liabilities plus the amount of liabilities, if any,
to which such assets are subject.
Company is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Section 368(a)(3)(A) of the Code.
Other than in the ordinary course of business or pursuant to its
obligations under the Agreement, Company has made no transfer of any or its
assets (including any distribution of assets with respect to, or in redemption
of, stock) in contemplation of the Merger (or any other corporate acquisition)
or during the Pre-Merger Period.
The Merger is being undertaken by Company for valid business purposes and
not for the purpose of tax avoidance.
Company has no plan or intention to sell, distribute or otherwise dispose
of any of its assets or any of the assets acquired from Sub in the Merger,
except for dispositions made in the ordinary course of business or transfers of
assets to a corporation controlled by Company, as described in both Section
368(a)(2)(c) of the Code and Treasury Regulation Section 1.368-2(j)(4).
To the best of Company's knowledge, during the past five years, and at
present, none of the outstanding shares of Company stock including the right to
acquire or vote such shares have, directly or indirectly, been owned by Parent
or Parent affiliates, other than as disclosed in the [Joint Proxy Statement].
The liabilities of Company and any liabilities to which the assets of
Company are subject have been incurred by Company in the ordinary course of its
business.
Under Section 2.2(g) of the Agreement, in lieu of issuing fractional
shares of Parent Common Stock that would otherwise be issued, each stockholder
of Company shall receive cash. The payment of cash in lieu of fractional
shares of Parent Common Stock will be made solely for the purpose of avoiding
the expense and inconvenience to Parent of issuing fractional shares and will
not represent separately bargained-for consideration. The total cash
consideration that will be paid in the Merger to stockholders of Company in
lieu of issuing fractional shares of Parent Common stock will not exceed one
percent (1%) of the total consideration that will be issued in the Merger to
the stockholders of Company in exchange for their shares of Company stock. The
fractional share interests of each holder of Company stock will be aggregated,
and no holder of Company stock will receive cash in an amount equal to or
greater than the value of one full share of Parent Common Stock.
The terms of the Agreement are the product of arm's-length negotiations.
No compensation received by any stockholder employees of Company will be
separate consideration for, or allocable to, any of their shares of Company
stock.
Other than shares of Company stock or options to acquire Company stock
issued as compensation to present or former service providers (including,
without limitation, employees and directors) of Company in the ordinary course
of business, if any, no issuances of Company stock or rights to acquire Company
stock have occurred or will occur during the Pre-Merger period other than
pursuant to options, warrants or agreements outstanding prior to the Pre-Merger
Period.
Cash or other property paid to employees of Company during the Pre-Merger
period has been or will be in the ordinary course of business or pursuant to
agreements entered into prior to the Pre-Merger period and constitutes
reasonable compensation for services rendered.
During the Pre-Merger Period, no indebtedness or other obligation of
Company or its subsidiaries has been or will be guaranteed by any stockholder
of Company (or any person or entity related to a stockholder of Company) in
contemplation of the Merger.
Except with respect to payments of cash to Company stockholders in lieu of
fractional shares of Parent Common Stock, cash payments to dissenting Company
stockholders and transfer and similar taxes paid on behalf of Company
stockholders, if any, one hundred percent (100%) of the Company stock
outstanding immediately prior to the Merger will be exchanged solely for Parent
Common Stock. Thus, except as set forth in the preceding sentence, Company
intends that no consideration be paid or received (directly or indirectly,
actually or constructively) for Company stock other than Parent Common Stock.
Company recognizes that: (i) your opinions will be based on the
representations set forth herein and on the statements contained in the
Agreement and documents related thereto; and (ii) your opinions will be subject
to certain limitations and qualifications including that they may not be relied
upon if any such representations are not accurate in all material respects.
Company recognizes that your opinions will not address any tax consequences of
the Merger or any action taken in connection therewith except as expressly set
forth in such opinions.
Notwithstanding anything herein to the contrary, Company makes no
representations regarding the actions or conduct of Company pursuant to
Parent's exercise of control over Company after the Merger.
In rendering this Officer's Certificate, Company has relied on its counsel
and auditors, and on the representations set forth in: (i) the Parent and Sub
Officer's Certificate; and (ii) the Stockholder's Certificate(s), both of which
are to be furnished to Willkie Farr & Gallagher and Paul, Weiss, Rifkind,
Wharton & Garrison.
To the best of the knowledge of Company, the foregoing representations and
the representations made by Company in the Agreement and other documents
associated therewith are true and accurate and will continue to be true and
accurate in all material respects through and as of the Effective Time of the
Merger. If any of the representations contained herein ceases to be true at
any time prior to the Effective Time of the Merger, Company agrees to deliver
to Parent a written notice to that effect. Company is authorized to make all
of the representations set forth herein.
IN WITNESS WHEREOF, I have signed this certificate this day of
______________ 1996.
DEBARTOLO REALTY CORPORATION
By:
Name:
Title:
Form of Stockholder's Certificate
(For Individuals holding 5% or more of Company stock)
STOCKHOLDEROS CERTIFICATE
In connection with the opinions rendered by Willkie Farr & Gallagher and
Paul, Weiss, Rifkind, Wharton & Garrrison as required by Sections 6.2(e) and
6.3(e) of the Agreement and Plan of Merger (the "Agreement") dated as of March
26, 1996, as amended, between Simon Property Group, Inc., a Maryland
corporation ("Parent"), Day Acquisition Corp., an Ohio corporation and
Controlled subsidiary of Parent ("Sub"), and DeBartolo Realty Corporation, an
Ohio corporation ("Company"), the undersigned stockholder of Company certifies
as follows:
1. I have, and as of the Effective Time3 of the Merger will have, no present
plan or intention to engage in a sale, exchange, transfer, pledge, disposition
or any other transaction or arrangement that would reduce or limit the risk of
loss, such as a short sale, hedge, swap or otherwise, of the shares of Parent
stock I am receive upon consummation of the Merger (collectively, a "Sale").
For purposes of this representation, a Sale of Parent stock shall be considered
to have occurred pursuant to a plan or intention if such Sale occurs in a
transaction that is in contemplation of, or related or pursuant to, the Merger.
2. I am currently the legal and beneficial owner of the shares of stock
listed in Company's share register, and I have not acquired such shares in
contemplation of the Merger.
While the representations contained herein indicate my present plans and
intentions, my plans and intentions may change at any time after the Effective
Time of the Merger. The representations contained in this Certificate may not
be relied upon by any person to constrain or otherwise limit my actions with
regard to the Parent stock I am to receive in the Merger at any time after the
Effective Time of the Merger.
I understand and acknowledge that Parent and Company and their respective
legal counsel may rely on the truth and accuracy of my representations
contained herein in rendering the above referenced opinions. If any of the
representations contained herein ceases to be true at any time prior to the
Effective Time of the Merger, I agree to deliver to Parent and Company a
written notice to that effect.
IN WITNESS WHEREOF, I have signed this Certificate this ___ day of
_____________, 1996.
__________________________________
Form of StockholderOs Certificate
(For Entities holding 5% or more of Company stock)
STOCKHOLDEROS CERTIFICATE
In connection with the opinions rendered by Willkie Farr & Gallagher and
Paul, Weiss, Rifkind, Wharton & Garrrison as required by Sections 6.2(e) and
6.3(e) of the Agreement and Plan of Merger (the "Agreement") dated as of March
26, 1996, as amended, between Simon Property Group, Inc., a Maryland
corporation ("Parent"), Day Acquisition Corp., an Ohio corporation and
Controlled subsidiary of Parent ("Sub"), and DeBartolo Realty Corporation, an
Ohio corporation ("Company"), the undersigned officer of ______________________
(" ") certifies as follows:
1. _________________________ has, and as of the Effective Time4 of the Merger
will have, no present plan or intention to engage in a sale, exchange,
transfer, pledge, disposition or any other transaction or arrangement that
would reduce or limit the risk of loss, such as a short sale, hedge, swap or
otherwise, of the shares of Parent stock to be received by
__________________________ upon consummation of the Merger (collectively, a
"Sale"). For purposes of this representation, a Sale of Parent stock shall be
considered to have occurred pursuant to a plan or intention if such Sale occurs
in a transaction that is in contemplation of, or related or pursuant to, the
Merger.
2. _________________________ is currently the legal and beneficial owner of
the shares of stock listed in Company's share register, and has not acquired
such shares in contemplation of the Merger.
While the representations contained herein indicate __________________'s
present plans and intentions, those plans and intentions may change at any time
after the Effective Time of the Merger. The representations contained in this
Certificate may not be relied upon by any person to constrain or otherwise
limit ___________________'s actions with regard to the Parent stock to be
received in the Merger at any time after the Effective Time of the Merger.
____________________ understands and acknowledges that Parent and Company
and their respective legal counsel may rely on the truth and accuracy of the
representations contained herein in rendering the above referenced opinions.
If any of the representations contained herein ceases to be true at any time
prior to the Effective Time of the Merger, ______________________ agrees to
deliver to Parent and Company a written notice to that effect.
___________________ is authorized to make all of the representations set forth
herein.
IN WITNESS WHEREOF, I have signed this Certificate this ___ day of
_____________, 1996.
________________________________
By: __________________________
Name:
Title:
_______________________________
1 Defined terms used and not defined herein have the same meanings ascribed to
them as in the Agreement.
2 Defined terms used and not defined herein have the same
meanings ascribed to them as in the Agreement.
3 Defined terms used and not defined herein have the same meanings ascribed to
them as in the Agreement.
4 Defined terms used and not defined herein have the same meanings ascribed to
them as in the Agreement.
EXHIBIT 2.11
Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison with regard to
status of special limited partnership interest under the Investment Company
Act.
Capitalized terms used herein without definition shall have the meaning
assigned to them in the Merger Agreement to which this Exhibit N is attached.
[appropriate introductory language and recitals, including the following:]
We have examined the Amended and Restated Agreement of Limited Partnership of
the Parent Operating Partnership and the rights and powers that will be granted
to the special limited partnership interest (the "Special Limited Partnership
Interest") that will be held by the Operating Partnership in connection
therewith, which will include the following:
The right to receive information concerning any matter affecting
the Parent Operating Partnership.
The right to approve the acquisition, disposition or encumbrance
(other than as a result of operating leases or in the ordinary course
of business) of partnership real property.
The right to approve a merger, liquidation or dissolution of the
Parent Operating Partnership and the sale of all or substantially all
of its assets.
The right to approve any borrowing or lending.
The right to approve the admission of additional general or
limited partners, the making of additional capital contributions, the
withdrawal of any part of a partner's capital contribution and the
transfer or assignment of any partnership interests.
The right to approve the making, modification or withdrawal of
tax elections.
* * * * * * *
Based upon and subject to the foregoing, we are of the opinion that the Special
Limited Partnership Interest will not constitute a "security," as that term is
defined in the Investment Company Act of 1940, as amended.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This financial data schedule is prepared for use by the United States Securities
and Exchange Commission only, and is unaudited.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 45,145
<SECURITIES> 0
<RECEIVABLES> 138,901 <F1>
<ALLOWANCES> 0 <F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F2>
<PP&E> 2,190,944
<DEPRECIATION> 175,094
<TOTAL-ASSETS> 2,532,548
<CURRENT-LIABILITIES> 0 <F2>
<BONDS> 1,995,620
0
99,923
<COMMON> 7
<OTHER-SE> 116,152
<TOTAL-LIABILITY-AND-EQUITY> 2,532,548 <F3>
<SALES> 0
<TOTAL-REVENUES> 139,444
<CGS> 0
<TOTAL-COSTS> 78,371
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,566
<INCOME-PRETAX> 23,832
<INCOME-TAX> 23,832
<INCOME-CONTINUING> 23,832
<DISCONTINUED> 0
<EXTRAORDINARY> (265)
<CHANGES> 0
<NET-INCOME> 15,185
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0.23
<FN>
<F1>Receivables are stated net of allowances and also include accrued revenues.
<F2>The Company does not report using a classified balance sheet.
<F3>Includes limited partners' interest in SPG Operating Partnership of $78,366.
</FN>
</TABLE>
