TWENTY-FIRST SUPPLEMENTAL INDENTURE

 

TABLE OF CONTENTS

 

ARTICLE I	DEFINITIONS, CREATION, FORMS AND TERMS AND CONDITIONS OF THE SECURITIES	1
SECTION 1.01. Definitions		1
SECTION 1.02. Creation of the Notes		3
SECTION 1.03. Form of the Notes		3
SECTION 1.04. Terms and Conditions of the Notes		3
ARTICLE II	COVENANTS FOR BENEFIT OF HOLDERS OF NOTES; EVENTS AND NOTICE OF DEFAULT	5
SECTION 2.01. Covenants for Benefit of Holders of Notes		5
SECTION 2.02. Definitions		5
SECTION 2.03. Events of Default		7
SECTION 2.04. Notice of Defaults		8
ARTICLE III	TRANSFER AND EXCHANGE	8
SECTION 3.01.Transfer and Exchange		8
ARTICLE IV LEGENDS		9
SECTION 4.01. Legends		9
ARTICLE V TRUSTEE		9
SECTION 5.01. Corporate Trust Office		9
SECTION 5.02. Recitals of Fact		9
SECTION 5.03. Successor		10
ARTICLE VI	MISCELLANEOUS PROVISIONS	10
SECTION 6.01. Ratification of Original Indenture		10
SECTION 6.02. Effect of Headings		10
SECTION 6.03. Successors and Assigns		10
SECTION 6.04. Separability Clause		10
SECTION 6.05. Governing Law		10
SECTION 6.06. Counterparts		10

 

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EXHIBITS

 

EXHIBIT A	Form of Global Note
EXHIBIT B	Form of Certificated Note

 

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TWENTY-FIRST SUPPLEMENTAL INDENTURE , dated as of March 25, 2009 (the “Twenty-First Supplemental Indenture”), between SIMON PROPERTY GROUP, L.P. (formerly known as Simon DeBartolo Group, L.P.), a Delaware limited partnership (the “Issuer” or the “Operating Partnership”), having its principal offices at 225 West Washington Street, Indianapolis, Indiana 46204, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (as successor to The Chase Manhattan Bank), a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”), having its Corporate Trust Office at 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602.

 

RECITALS

 

WHEREAS , the Issuer and Simon Property Group, L.P., a Delaware limited partnership acting as a guarantor (the “Guarantor”), executed and delivered to the Trustee an Indenture, dated as of November 26, 1996 (the “Original Indenture”), providing for the issuance from time to time of debt securities evidencing unsecured and unsubordinated indebtedness of the Issuer;

 

WHEREAS , on December 31, 1997 the Guarantor was merged into the Issuer as contemplated under the Indenture;

 

WHEREAS , the Issuer changed its name from “Simon DeBartolo Group, L.P.” to “Simon Property Group, L.P.” effective as of September 24, 1998;

 

WHEREAS , the Original Indenture provides that by means of a supplemental indenture, the Issuer may create one or more series of its debt securities and establish the form and terms and conditions thereof;

 

WHEREAS , the Issuer intends by this Twenty-First Supplemental Indenture to create and provide for the following series of debt securities:

 

Simon Property Group, L.P. 10.35% Notes due 2019 (the “Notes”) initially in an aggregate principal amount of $650,000,000;

 

WHEREAS , the Board of Directors of Simon Property Group, Inc., the general partner of the Issuer, has approved the creation of the Notes and the forms, terms and conditions thereof pursuant to Sections 301 and 1701 of the Original Indenture; and

 

WHEREAS , all actions required to be taken under the Original Indenture with respect to this Twenty-First Supplemental Indenture have been taken.

 

NOW, THEREFORE, IT IS AGREED:

 

ARTICLE I

DEFINITIONS, CREATION, FORMS AND
TERMS AND CONDITIONS OF THE SECURITIES

 

SECTION 1.01.  Definitions .  Capitalized terms used in this Twenty-First Supplemental Indenture and not otherwise defined shall have the meanings ascribed to them in the Original Indenture.  Certain terms, used principally in Article II of this Twenty-First Supplemental Indenture, are defined in that Article.  In addition, the following terms shall have the following meanings to be equally applicable to both the singular and the plural forms of the terms defined:

 

 

“ Business Day ” means any day, other than a Saturday or Sunday, on which banking institutions in The City of New York are open for business.

 

“ Certificated Notes ” has the meaning set forth in Article III.

 

“ Closing Date ” means March 25, 2009.

 

“ Dollar ” or “ $ ” means the lawful currency of the United States of America.

 

“ DTC ” means The Depository Trust Company, its nominees and their successors and assigns.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time.

 

“ Global Note ” means a single permanent fully-registered global note in book-entry form, without coupons, substantially in the form of Exhibit A attached hereto.

 

“ Indenture ” means the Original Indenture as supplemented by this Twenty-First Supplemental Indenture.

 

“ Interest Payment Date ” has the meaning set forth in Section 1.04(c).

 

“ Issuer ” has the meaning set forth in the Recitals hereto.

 

“ Make-Whole Amount ” means, in connection with any optional redemption or accelerated payment of any Notes, the excess, if any, of (i) the aggregate present value, as of the date of such redemption or accelerated payment, of each Dollar of principal being redeemed or paid and the amount of interest (exclusive of interest accrued to the date of redemption or accelerated payment) that would have been payable in respect of each such Dollar if such redemption or accelerated payment had not been made, determined by discounting, on a semi-annual basis, such principal and interest at the Reinvestment Rate, determined on the third Business Day preceding the date notice of such redemption or accelerated payment is given, from the respective dates on which such principal and interest would have been payable if such redemption or accelerated payment had not been made, to the date of redemption or accelerated payment, over (ii) the aggregate principal amount of the Notes being redeemed or accelerated.

 

“ Notes ” has the meaning set forth in the Recitals hereto.

 

“ Operating Partnership ” has the meaning set forth in the Recitals hereto.

 

“ Original Indenture ” has the meaning set forth in the Recitals hereto.

 

“ Prior Supplemental Indentures ” has the meaning set forth in Section 2.01.

 

“ Redemption Price ” has the meaning set forth in Section 1.04(d).

 

“ Regular Record Date ” has the meaning set forth in Section 1.04(c).

 

“ Reinvestment Rate ” means, in connection with any optional redemption or accelerated payment of any Notes, the yield on treasury securities at a constant maturity corresponding to the remaining life (as of the date of redemption or accelerated payment, and rounded to the nearest month) to Stated Maturity of the principal being redeemed (the “Treasury Yield”), plus 0.50%.  For purposes hereof, the Treasury Yield shall be equal to the arithmetic mean of the yields published in the Statistical Release under the heading “Week Ending” for “U.S. Government Securities — Treasury Constant Maturities” with a

 

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maturity equal to such remaining life; provided , that if no published maturity exactly corresponds to such remaining life, then the Treasury Yield shall be interpolated or extrapolated on a straight-line basis from the arithmetic means of the yields for the next shortest and next longest published maturities, rounding each of such relevant periods to the nearest month.  For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used.  If the format or content of the Statistical Release changes in a manner that precludes determination of the Treasury Yield in the above manner, then the Treasury Yield shall be determined in the manner that most closely approximates the above manner, as reasonably determined by the Operating Partnership.

 

“ Securities Act ” means the Securities Act of 1933, as amended from time to time.

 

“ Statistical Release ” means the statistical release designated “H.15(519)” or any successor publication which is published weekly by the Federal Reserve System and which reports yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical release is not published at the time of any required determination, then such other reasonably comparable index which shall be designated by the Operating Partnership.

 

“ Trustee ” has the meaning set forth in the Recitals hereto.

 

“Underwriters” means, collectively, Banc of America Securities LLC, Goldman, Sachs & Co., J.P. Morgan Securities Inc., Credit Suisse Securities (USA) LLC and Greenwich Capital Markets, Inc.

 

“ Underwriting Agreement ” means the Underwriting Agreement, dated March 20, 2009, among the Operating Partnership and those Underwriters executing such agreement, as representatives for the other Underwriters named therein.

 

SECTION 1.02.  Creation of the Notes .  In accordance with Section 301 of the Original Indenture, the Issuer hereby creates the Notes as a separate series of its securities issued pursuant to the Indenture.  The Notes shall be issued initially in an aggregate principal amount of $650,000,000, except as permitted by Sections 301, 304, 305 or 306 of the Original Indenture.

 

SECTION 1.03.  Form of the Notes .  The Notes shall be issued in the form of a Global Note, duly executed by the Operating Partnership and authenticated by the Trustee without the necessity of the reproduction thereon of the corporate seal of the General Partner (as defined in the Original Indenture), which shall be deposited with, or on behalf of, DTC and registered in the name of “Cede & Co.,” as the nominee of DTC.  The Notes shall be substantially in the form of Exhibit A attached hereto.  So long as DTC, or its nominee, is the registered owner of a Global Note, DTC or its nominee, as the case may be, shall be considered the sole owner or Holder of the Notes represented by such Global Note for all purposes under the Indenture.  Ownership of beneficial interests in such Global Note shall be shown on, and transfers thereof will be effected only through, records maintained by DTC (with respect to beneficial interests of participants) or by participants or Persons that hold interests through participants (with respect to beneficial interests of beneficial owners).

 

SECTION 1.04.  Terms and Conditions of the Notes .  The Notes shall be governed by all the terms and conditions of the Original Indenture, as supplemented by this Twenty-First Supplemental Indenture.  In particular, the following provisions shall be terms of the Notes:

 

(a)           Title and Aggregate Principal Amount .  The title of the Notes shall be as specified in the Recitals; and the aggregate principal amount of the Notes shall be as specified in

 

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Section 1.02 of this Twenty-First Supplemental Indenture, except as permitted by Sections 301, 304, 305 or 306 of the Original Indenture.

 

(b)           Stated Maturity .  The Notes shall mature, and the unpaid principal thereon shall be payable, on April 1, 2019, subject to the provisions of the Original Indenture and Section 1.04(d) below.

 

(c)           Interest .  The rate per annum at which interest shall be payable on the Notes shall be 10.35%.  Interest on the Notes shall be payable semi-annually in arrears on each April 1 and October 1, commencing on October 1, 2009 (each, an “Interest Payment Date”), to the Persons in whose names the applicable Notes are registered in the Security Register applicable to the Notes at the close of business on the 15 th  calendar day immediately prior to the applicable Interest Payment Date regardless of whether such day is a Business Day (each, a “Regular Record Date”).  Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.  Interest on the Notes shall accrue from and including March 25, 2009.

 

(d)           Sinking Fund, Redemption or Repayment .  No sinking fund shall be provided for the Notes and the Notes shall not be repayable at the option of the Holders thereof prior to Stated Maturity.  The Notes may be redeemed at any time at the option of the Issuer, in whole or from time to time in part, at a redemption price equal to the sum of (i) 100% of the principal amount of the Notes being redeemed plus accrued interest thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to such Notes (collectively, the “Redemption Price”), all in accordance with the provisions of Article XI of the Original Indenture; provided, however, that if the Notes are redeemed on or after 90 days prior to the Stated Maturity of the Notes, the Redemption Price shall not include the Make-Whole Amount.

 

If notice of redemption has been given as provided in the Original Indenture and funds for the redemption of any Notes called for redemption shall have been made available on the Redemption Date referred to in such notice, such Notes shall cease to bear interest on the Redemption Date and the only right of the Holders of the Notes from and after the Redemption Date shall be to receive payment of the Redemption Price upon surrender of such Notes in accordance with such notice.

 

(e)           Registration and Form .  The Notes shall be issuable as Registered Securities as provided in Section 1.03 of this Twenty-First Supplemental Indenture.  The Notes shall be issued and may be transferred only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.  All payments of principal, premium, if any, and interest in respect of the Notes shall be made by the Issuer in immediately available funds.

 

(f)            Defeasance and Covenant Defeasance .  The provisions for defeasance in Section 1402 of the Original Indenture, and the provisions for covenant defeasance (which provisions shall apply, without limitation, to the covenants set forth in Article II of this Twenty-First Supplemental Indenture) in Section 1403 of the Original Indenture, shall be applicable to the Notes.

 

(g)           Make-Whole Amount Payable Upon Acceleration .  Upon any acceleration of the Stated Maturity of the Notes in accordance with Section 502 of the Original Indenture, the Make-Whole Amount on the Notes shall become immediately due and payable, subject to the terms and conditions of the Indenture.

 

(h)           Further Issues .  Notwithstanding anything to the contrary contained herein or in the Original Indenture, the Issuer may, from time to time, without the consent of or notice to the Holders, create and issue further securities under the Indenture having the same terms and conditions as the Notes

 

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in all respects, except for issue date, issue price and, to the extent applicable, first payment of interest.  Additional securities issued in this manner shall be consolidated with and shall form a single series with the previously outstanding Notes.  Notice of any such issuance shall be given to the Trustee and a new supplemental indenture shall be executed in connection with the issuance of such additional securities.

 

(i)            Other Terms and Conditions .  The Notes shall have such other terms and conditions as provided in the form thereof attached as Exhibit A.

 

ARTICLE II

COVENANTS FOR BENEFIT OF HOLDERS OF NOTES;
EVENTS AND NOTICE OF DEFAULT

 

SECTION 2.01.  Covenants for Benefit of Holders of Notes .   In addition to the covenants set forth in Article X of the Original Indenture, there are established pursuant to Section 901(2) of the Original Indenture the following covenants for the benefit of the Holders of the Notes and to which the Notes shall be subject.  Furthermore, the covenants set forth in Article II of any Supplemental Indenture dated prior to June 7, 2005 (“Prior Supplemental Indentures”) as the same may be amended or modified from time to time hereafter shall apply to the Notes only for so long as any Securities issued pursuant to any Prior Supplemental Indentures remain outstanding.

 

(a)           Limitation on Debt .  As of each Reporting Date (as defined below), Debt (as defined below) shall not exceed 65% of Total Assets (as defined below).

 

(b)           Limitation on Secured Debt .  As of each Reporting Date, Secured Debt (as defined below) shall not exceed 50% of Total Assets.

 

(c)           Fixed Charge Coverage Ratio .  For the four consecutive quarters ending on each Reporting Date, the ratio of Annualized EBITDA (as defined below) to Annualized Interest Expense (as defined below) shall be at least 1.50 to 1.00.

 

(d)           Maintenance of Unencumbered Assets .  As of each Reporting Date, Unencumbered Assets (as defined below) shall be at least 125% of Unsecured Debt (as defined below).

 

SECTION 2.02.  Definitions .  As used herein:

 

“ Annualized EBITDA ” means, for the four consecutive quarters ending on each Reporting Date, the Operating Partnership’s Pro Rata Share (as defined below) of earnings before interest, taxes, depreciation and amortization (“EBITDA”), with other adjustments as are necessary to exclude the effect of all realized or unrealized gains and losses related to hedging obligations, items classified as extraordinary items and impairment charges in accordance with generally accepted accounting principles, adjusted to reflect the assumption that (i) any EBITDA related to any assets acquired or placed in service since the first day of such four-quarter period had been earned, on an annualized basis, from the beginning of such period, and (ii) any assets disposed of during such four-quarter period had been disposed of as of the first day of such period and no EBITDA related to such assets had been earned during such period.

 

“ Annualized Interest Expense ” means, for the four consecutive quarters ending on each Reporting Date, the Operating Partnership’s Pro Rata Share of interest expense, with other adjustments as are necessary to exclude the effect of items classified as extraordinary items, in accordance with generally accepted accounting principles, reduced by amortization of debt issuance costs and adjusted to reflect the

 

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assumption that (i) any interest expense related to indebtedness incurred since the first day of such four-quarter period is computed as if such indebtedness had been incurred as of the beginning of such period, and (ii) any interest expense related to indebtedness that was repaid or retired since the first day of such four-quarter period is computed as if such indebtedness had been repaid or retired as of the beginning of such period (except that, in making such computation, the amount of interest expense related to indebtedness under any revolving credit facility shall be computed based upon the average daily balance of such indebtedness during such four-quarter period).

 

“ Capitalization Rate ” means 7.00%.

 

“ Capitalized Value ” means, as of any date, Annualized EBITDA divided by the Capitalization Rate.

 

“ Company ” means Simon Property Group, Inc., a Delaware corporation and the sole general partner of the Operating Partnership.

 

“ Debt ” means the Operating Partnership’s Pro Rata Share of the aggregate principal amount of indebtedness in respect of (i) borrowed money evidenced by bonds, notes, debentures or similar instruments, as determined in accordance with generally accepted accounting principles, (ii) indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or any security interest existing on property owned by the Operating Partnership or any Subsidiary directly, or indirectly through unconsolidated joint ventures, as determined in accordance with generally accepted accounting principles, (iii) reimbursement obligations in connection with any letters of credit actually issued and called, (iv) any lease of property by the Operating Partnership or any Subsidiary as lessee which is reflected in the Operating Partnership’s balance sheet as a capitalized lease, in accordance with generally accepted accounting principles; provided , that Debt also includes, to the extent not otherwise included, any obligation by the Operating Partnership or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise, items of indebtedness of another Person (other than the Operating Partnership or any Subsidiary) described in clauses (i) through (iv) above (or, in the case of any such obligation made jointly with another Person, the Operating Partnership’s or Subsidiary’s allocable portion of such obligation based on its ownership interest in the related real estate assets); and provided , further , that Debt excludes Intercompany Debt (as defined below).

 

“ Intercompany Debt ” means Debt to which the only parties are the Company, the Operating Partnership and any of their Subsidiaries or affiliates (but only so long as such Debt is held solely by any of the Company, the Operating Partnership and any Subsidiary or affiliate) and provided that, in the case of Debt owed by the Operating Partnership to any Subsidiary or affiliate, the Debt is subordinated in right of payment to the Notes.

 

“ Pro Rata Share ” means any applicable figure or measure of the Operating Partnership and its Subsidiaries on a consolidated basis, less any portion attributable to minority interests, plus the Operating Partnership’s or its Subsidiaries’ allocable portion of such figure or measure, based on their ownership interest, of unconsolidated joint ventures.

 

“ Reporting Date ” means March 31, June 30, September 30 and December 31 of each year.

 

“ Secured Debt ” means Debt secured by any mortgage, lien, pledge, encumbrance or security interest of any kind upon any of the property of the Operating Partnership or any Subsidiary.

 

“ Stabilized Asset ” means (i) with respect to an acquisition of an asset, such asset becomes stabilized when the Operating Partnership or its Subsidiaries or an unconsolidated joint venture in which

 

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the Operating Partnership or any Subsidiary has an interest has owned the asset as of at least six Reporting Dates, and (ii) with respect to a new construction or development asset, such asset becomes stabilized four Reporting Dates after the earlier of (a) six Reporting Dates after substantial completion of construction or development or (b) the first Reporting Date on which the asset is at least 90% leased.

 

“ Total Assets ” means, as of any Reporting Date, the sum of (i) for Stabilized Assets, Capitalized Value; (ii) for all other assets of the Operating Partnership and its Subsidiaries, the Operating Partnership’s Pro Rata Share of undepreciated book value as determined in accordance with generally accepted accounting principles; and (iii) the Operating Partnership’s Pro Rata Share of cash and cash equivalents.

 

“ Unencumbered Annualized EBITDA ” means Annualized EBITDA less any portion thereof attributable to assets serving as collateral for Secured Debt.

 

“ Unencumbered Assets ” as of any Reporting Date shall be equal to Total Assets as of such date multiplied by a fraction, the numerator of which is Unencumbered Annualized EBITDA and the denominator of which is Annualized EBITDA.

 

“ Unsecured Debt ” means Debt which is not secured by any mortgage, lien, pledge, encumbrance or security interest of any kind.

 

SECTION 2.03.  Events of Default .  For the purposes of the Notes, Section 501 of the Original Indenture is hereby amended by, supplemented with, and where inconsistent replaced by, the following provisions; provided, however, that Section 501 of the Original Indenture, as the same may be amended or modified from time to time hereafter, shall also apply to the Notes only for so long as any Securities issued pursuant to any Prior Supplemental Indentures remain outstanding:

 

(a)                                   Section 501(4) of the Original Indenture is replaced in its entirety by the following:

 

“(4)                             default in the performance, or breach, of any covenant or warranty of the Issuer in this Indenture with respect to any Security of that series (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or”

 

(b)                                  Section 501(5) of the Original Indenture is replaced in its entirety by the following:

 

“(5)                             a default under any evidence of recourse indebtedness of the Issuer, or under any mortgage, indenture or other instrument of the Issuer (including a default with respect to Securities of any series other than that series) under which there may be issued or by which there may be secured any recourse indebtedness of the Issuer (or of any Subsidiary, the repayment of which the Issuer has guaranteed or for which the Issuer is directly responsible or liable as obligor or guarantor), whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay an aggregate principal amount exceeding $50,000,000 of such indebtedness when due and

 

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payable after the expiration of any applicable grace period with respect thereto and shall have resulted in such indebtedness in an aggregate principal amount exceeding $50,000,000 becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default and requiring the Issuer to cause such indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a “Notice of Default” hereunder; or”

 

SECTION 2.04.  Notice of Defaults .  For the purposes of the Notes, Section 601 of the Original Indenture is hereby replaced in its entirety by the following; provided, however, that Section 601 of the Original Indenture, as the same may be amended or modified from time to time hereafter, shall also apply to the Notes only for so long as any Securities issued pursuant to any Prior Supplemental Indentures remain outstanding:

 

“ Notice of Defaults .  Within 90 days after the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit in the manner and to the extent provided in TIA Section 313(c), notice of such default hereunder known to the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any) or interest on or any Additional Amounts with respect to any Security of such series, or in the payment of any sinking fund installment with respect to the Securities of such series, the Trustee sha