EX-3.1 AMENDED AND RESTATED SUPPLEMENT TO SEVENTH AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

 

 

IN WITNESS WHEREOF , the General Partner has executed this Restated Supplement or caused this Restated Supplement to be executed effective as of the date and year first above written.

 

	GENERAL PARTNER
	Simon Property Group, Inc.,
	a Delaware corporation
	By:	/s/ Stephen E. Sterrett
	Name:	Stephen E. Sterrett
	Title:	Executive Vice President and
		Chief Financial Officer

 

 

EXHIBIT A – LISTING OF LIMITED PARTNERS

 

 

EXHIBIT B-1 – GP PREFERRED UNIT DESIGNATION

 

 

CERTIFICATE OF DESIGNATION

OF

6.50% SERIES B CONVERTIBLE PREFERRED UNITS

OF

SIMON PROPERTY GROUP, L.P.

 

Pursuant to Articles 4.3(c) and 9.4 of the Seventh Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. (the “Operating Partnership”);

 

WHEREAS , Simon Property Group, Inc. (the “Corporation”) has issued 5,000,000 shares of 6.50% Series B Convertible Preferred Stock (the “Series B Convertible Preferred Stock”); and

 

WHEREAS , in accordance with the terms of the Seventh Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Partnership Agreement”), the Corporation has made a contribution of certain assets and liabilities to the Operating Partnership or its subsidiaries in exchange for preferred units having substantially the same economic rights and terms of the Series B Convertible Preferred Stock;

 

NOW THEREFORE , the Corporation, the managing general partner of the Operating Partnership (in such capacity, the “Managing General Partner”), hereby designates a series of preferred units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

 

SECTION 1.  Designation and Number .  The units of such series shall be designated “6.50% Series B Convertible Preferred Units” (the “Series B Convertible Preferred Units”) . The authorized number of shares of Series B Convertible Preferred Units shall be 5,000,000. Each share of Series B Convertible Preferred Stock, as it relates to a single Series B Convertible Preferred Unit, shall be deemed the “Related Issue” hereunder.

 

SECTION 2.  Distributions .  The holders of Series B Convertible Preferred Units, in preference to the holders of Partnership Units of the Operating Partnership (the “Common Units”), any other series of Preferred Units ranking junior to the Series B Convertible Preferred Units either as to distributions or upon liquidation, dissolution or winding up (“Junior Preferred Units”) or any other class or series of units of the Operating Partnership ranking junior to the Series B Convertible Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Other Junior Units”), shall be entitled to receive an amount equal to the aggregate dividends payable on the Related Issue at the times such dividends are paid. For this purpose, the aggregate dividends payable on the Related Issue shall be determined by assuming that adequate cash and earnings are available to the Corporation for the payment of any dividends required to be paid with respect to the Related

 

 

Issue. The Series B Convertible Preferred Units shall, with respect to allocations and distributions pursuant to Article VI of the Partnership Agreement, rank (A) junior to any other series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank prior to the Series B Convertible Preferred Units as to distributions and redemption rights, (B) pari passu with any other series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank pari passu with the Series B Convertible Preferred Units as to distributions and redemption rights and (C) prior to the Common Units, Junior Preferred Units and any Other Junior Units.

 

SECTION 3.  Conversion . (a) General .  On the terms and subject to the conditions of the Series B Convertible Preferred Stock Certificate of Designation (filed with the Corporation’s charter documents in the State of Delaware) , the Series B Convertible Preferred Stock may be converted into shares of Common Stock, par value $.0001 per share, of the Corporation (‘Common Stock”) . The Series B Convertible Preferred Units shall be converted into Common Units at the time, at the conversion price and in such number as the Related Issue is converted into Common Stock. Common Units issuable upon the conversion of Series B Convertible Preferred Units shall be deemed “Conversion Units” hereunder.

 

(b)           Warrants Issued for Fractional Conversion Units .  No fractional Conversion Units or scrip representing fractions of Conversion Units shall be issued upon conversion of Series B Convertible Preferred Units. If a fractional Conversion Unit is otherwise deliverable to a converting holder upon a conversion of Series B Convertible Preferred Units, the Operating Partnership shall in lieu thereof pay to the person entitled thereto an amount in cash equal to the current value of such fraction, calculated to the nearest 1/1000th of a unit, to be computed using the current market price of a share of Common Stock on the date of conversion, determined in accordance with subparagraph 4(11) of the Series B Convertible Preferred Stock Certificate of Designation.

 

(c)           Payment of Taxes.   The Operating Partnership shall pay all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of securities on conversion of the Series B Convertible Preferred Units; provided, however , that (i) the Operating Partnership shall not be required to pay any tax to the extent payable in respect of any transfer involved in the issue or delivery of securities in a name other than that of the holder of Series B Convertible Preferred Units to be converted and (ii) no such issue or delivery shall be made unless and until such holder has paid to the Operating Partnership the amount of any tax described in clause (i) payable in respect of the units of such holder or has established, to the satisfaction of the Operating Partnership, that such tax has been paid or provided for.

 

SECTION 4.  Status of Converted or Redeemed Series B Convertible Preferred Units . Upon any conversion or any redemption, repurchase or other acquisition by the Operating Partnership of Series B Convertible Preferred Units, the Series B Convertible Preferred Units so converted, redeemed, repurchased or acquired shall be retired and canceled.

 

SECTION 5.  Redemption . Upon the redemption of any shares of the Related Issue,

 

 

the Operating Partnership shall redeem an equal number of Series B Convertible Preferred Units for a redemption price per unit equal to the redemption price per share of the Related Issue, exclusive of any accrued unpaid dividends.

 

 

CERTIFICATE OF DESIGNATION

OF

8.00% SERIES E CUMULATIVE REDEEMABLE PREFERRED UNITS

OF

SIMON PROPERTY GROUP, L.P.

 

Pursuant to Articles 4.3(c) and 9.4 of the Seventh Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. (the “Operating Partnership”);

 

WHEREAS , Simon Property Group, Inc. (the “Corporation”) has issued 1,000,000 shares of 8.00% Series E Cumulative Redeemable Preferred Stock (the “Series E Cumulative Redeemable Preferred Stock”); and

 

WHEREAS , in accordance with the terms of the Seventh Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Partnership Agreement”), the Corporation has made a contribution of assets to the Operating Partnership in exchange for preferred units having substantially the same economic rights and terms of the Series E Cumulative Redeemable Preferred Stock.

 

NOW THEREFORE , the managing general partner of the Operating Partnership (in such capacity, the “Managing General Partner”), has designated a series of preferred units and has fixed the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

 

SECTION 1.  Designation and Number .  The units of such series shall be designated “8.00% Series E Cumulative Redeemable Preferred Units” (the “Series E Cumulative Redeemable Preferred Units”).  The authorized number of Series E Cumulative Redeemable Preferred Units shall be 1,000,000.  Each share of Series E Cumulative Redeemable Preferred Stock, as it relates to a single Series E Cumulative Redeemable Preferred Unit, shall be deemed the “Related Issue” hereunder.

 

SECTION 2.  Distributions .  The holders of Series E Cumulative Redeemable Preferred Units, in preference to the holders of Partnership Units of the Operating Partnership (the “Common Units”), any other series of Preferred Units ranking junior to the Series E Cumulative Redeemable Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Junior Preferred Units”) or any other class or series of units of the Operating Partnership ranking junior to the Series E Cumulative Redeemable Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Other Junior Units”), shall be entitled to receive an amount equal to the aggregate dividends payable on the Related Issue at the times such dividends are paid.  For this purpose, the aggregate

 

 

dividends payable on the Related Issue shall be determined by assuming that adequate cash and earnings are available to the Corporation for the payment of any dividends required to be paid with respect to the Related Issue.  The Series E Cumulative Redeemable Preferred Units shall, with respect to allocations and distributions pursuant to Article VI of the Partnership Agreement, rank (A) junior to any other series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank prior to the Series E Cumulative Redeemable Preferred Units as to distributions and redemption rights, (B) pari passu with any series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank pari passu with the Series E Cumulative Redeemable Preferred Units as to distributions and redemption rights and (C) prior to the Common Units, Junior Preferred Units and any Other Junior Units.

 

SECTION 3.  Status of Redeemed Series E Cumulative Redeemable Preferred Units .  Upon any redemption, repurchase or other acquisition by the Operating Partnership of Series E Cumulative Redeemable Preferred Units, the Series E Cumulative Redeemable Preferred Units so converted, redeemed, repurchased or acquired shall be retired and canceled.

 

SECTION 4.  Redemption .  Upon the redemption of any shares of the Related Issue, the Operating Partnership shall redeem an equal number of Series E Cumulative Redeemable Preferred Units for a redemption price per unit equal to the redemption price per share of the Related Issue, exclusive of any accrued unpaid dividends.

 

 

CERTIFICATE OF DESIGNATION

 

OF

 

8-3/4% SERIES F CUMULATIVE REDEEMABLE PREFERRED UNITS

 

OF

 

SIMON PROPERTY GROUP, L.P.

 

Pursuant to Articles 4.3(c) and 9.4 of the Seventh Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. (the “Operating Partnership”);

 

WHEREAS , pursuant to an Agreement of Merger dated May 9, 2001 (the “Agreement of Merger”) between SPG Properties, Inc., a Maryland corporation (“Properties”) and Simon Property Group, Inc., a Delaware corporation (the “Corporation”), Properties was merged with and into the Corporation, with the Corporation being the surviving corporation, effective as of July 1, 2001 (the “Effective Time”); and

 

WHEREAS , at the Effective Time, each of the issued and outstanding shares of Properties’ 8-3/4% Series B Cumulative Redeemable Preferred Stock, par value $.0001 per share (the “Series B Cumulative Redeemable Preferred Stock”), were converted into the right to receive one share of the Corporation’s 8-3/4% Series F Cumulative Redeemable Preferred Stock, par value $.0001 per share (the “Series F Cumulative Redeemable Preferred Stock”); and

 

WHEREAS , the Series F Cumulative Redeemable Preferred Stock is intended to have identical powers, designations, preferences and rights as the Series B Cumulative Redeemable Preferred Stock; and

 

WHEREAS , at the Effective Time, the Corporation issued 8,000,000 shares of the Series F Cumulative Redeemable Preferred Stock; and

 

WHEREAS , in accordance with the terms of the Seventh Amended and Restated Limited Partnership Agreement of the  Operating Partnership, Properties made a contribution of assets to the Operating Partnership in exchange for preferred units designated 8-3/4% Series B Cumulative Redeemable Preferred Units (the “Series B Cumulative Redeemable Preferred Units”) having substantially the same economic rights and terms as the Series B Cumulative Redeemable Preferred Stock; and

 

WHEREAS , the Corporation, as the general partner of the Operating Partnership (in such capacity, the “General Partner”) wishes to evidence that as of the Effective Time, the Series B Cumulative Redeemable Preferred Units previously designated by the General Partner have substantially the same economic rights and terms as the Series F Cumulative Redeemable Preferred Stock, and further wishes to re-designate such preferred units to correspond to the Series F Cumulative Redeemable Preferred Stock.

 

 

NOW THEREFORE , the Corporation, as general partner of the Operating Partnership (in such capacity, the “General Partner”), has designated a series of preferred units and has fixed the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

 

Section 1.               Designation and Number.   The units of such series shall be designated “8-3/4% Series F Cumulative Redeemable Preferred Units” (the “Series F Cumulative Redeemable Preferred Units”).  The authorized number of shares of Series F Cumulative Redeemable Preferred Units shall be 8,000,000.  Each share of Series F Cumulative Redeemable Preferred Stock, as it relates to a single Series F Cumulative Redeemable Preferred Unit, shall be deemed the “Related Issue” hereunder.

 

Section 2.               Distributions.   The holders of Series F Cumulative Redeemable Preferred Units, in preference to the holders of Partnership Units (as that term is defined in the Partnership Agreement) of the Operating Partnership (the “Common Units”), any other series of Preferred Units ranking junior to the Series F Cumulative Redeemable Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Junior Preferred Units”) or any other class or series of units of the Operating Partnership ranking junior to the Series F Cumulative Redeemable Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Other Junior Units”), shall be entitled to receive an amount equal to the aggregate dividends payable on the Related Issue at the times such dividends are paid.  For this purpose, the aggregate dividends payable on the Related Issue shall be determined by assuming that adequate cash and earnings are available to the Corporation for the payment of any dividends required to be paid with respect to the Related Issue.  The Series F Cumulative Redeemable Preferred Units shall, with respect to allocations and distributions pursuant to Article VI of the Partnership Agreement, rank (A) junior to any other series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank prior to the Series F Cumulative Redeemable Preferred Units as to distributions and redemption rights, (B) pari passu with any series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank pari passu with the Series F Cumulative Redeemable Preferred Units as to distributions and redemption rights and (C) prior to the Common Units, Junior Preferred Units and any Other Junior Units.

 

Section 3.               Status of Redeemed Series F Cumulative Redeemable Preferred Units.   Upon any redemption, repurchase or other acquisition by the Operating Partnership of Series F Cumulative Redeemable Preferred Units, the Series F Cumulative Redeemable Preferred Units so converted, redeemed, repurchased or acquired shall be retired and canceled.

 

Section 4.               Redemption.   Upon the redemption of any shares of the Related Issue, the Operating Partnership shall redeem an equal number of Series F Cumulative Redeemable Preferred Units for a redemption price per unit equal to the redemption price per share of the Related Issue, exclusive of any accrued unpaid dividends.

 

 

CERTIFICATE OF DESIGNATION

 

OF

 

7.89% SERIES G CUMULATIVE STEP-UP PREMIUM RATE PREFERRED UNITS

 

OF

 

SIMON PROPERTY GROUP, L.P.

 

Pursuant to Articles 4.3(c) and 9.4 of the Seventh Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. (the “Operating Partnership”);

 

WHEREAS , pursuant to an Agreement of Merger dated May 9, 2001 (the “Agreement of Merger”) between SPG Properties, Inc., a Maryland corporation (“Properties”) and Simon Property Group, Inc., a Delaware corporation (the “Corporation”), Properties were merged with and into the Corporation, with the Corporation being the surviving corporation, effective as of July 1, 2001 (the “Effective Time”); and

 

WHEREAS , at the Effective Time, each of the issued and outstanding shares of Properties’ 7.89% Series C Cumulative Step-Up Premium Rate Preferred Stock, par value $.0001 per share (the “Series C Cumulative Step-Up Premium Rate Preferred Stock”), were converted into the right to receive one share of the Corporation’s 7.89% Series G Cumulative Step-Up Premium Rate Preferred Stock, par value $.0001 per share (the “Series G Cumulative Step-Up Premium Rate Preferred Stock”); and

 

WHEREAS , the Series G Cumulative Step-Up Premium Rate Preferred Stock is intended to have identical powers, designations, preferences and rights as the Series C Cumulative Step-Up Premium Rate Preferred Stock; and

 

WHEREAS , at the Effective Time, the Corporation issued 3,000,000 shares of the Series G Cumulative Step-Up Premium Rate Preferred Stock; and

 

WHEREAS , in accordance with the terms of the Seventh Amended and Restated Limited Partnership Agreement of the Operating Partnership, Properties made a contribution of assets to the Operating Partnership in exchange for preferred units designated 7.89% Series C Cumulative Step-Up Premium Rate Preferred Units (the “Series C Cumulative Step-Up Premium Rate Preferred Units”) having substantially the same economic rights and terms as the Series C Cumulative Step-Up Premium Rate Preferred Stock; and

 

WHEREAS , the Corporation, as the general partner of the Operating Partnership (in such capacity, the “General Partner”) wishes to evidence that as of the Effective Time, the Series C Cumulative Step-Up Premium Rate Preferred Units previously designated by the General Partner have substantially the same economic rights and terms as the Series G Cumulative Step-Up Premium Rate Preferred Stock, and further wishes to re-designate such preferred units to correspond to the Series G Cumulative Step-Up Premium Rate Preferred Stock.

 

 

NOW THEREFORE , the General Partner has designated a series of preferred units and has fixed the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

 

SECTION 1.           Designation and Number.   The units of such series shall be designated “7.89% Series G Cumulative Step-Up Premium Rate Preferred Units” (the “Series G Cumulative Step-Up Premium Rate Preferred Units”).  The authorized number of shares of Series G Cumulative Step-Up Premium Rate Preferred Units shall be 3,000,000.  Each share of Series G Cumulative Step-Up Premium Rate Preferred Stock, as it relates to a single Series G Cumulative Step-Up Premium Rate Preferred Unit, shall be deemed the “Related Issue” hereunder.

 

SECTION 2.           Distributions.   The holders of Series G Cumulative Step-Up Premium Rate Preferred Units, in preference to the holders of Partnership Units (as that term is defined in the Partnership Agreement) of the Operating Partnership (the “Common Units”), any other series of Preferred Units ranking junior to the Series G Cumulative Step-Up Premium Rate Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Junior Preferred Units”) or any other class or series of units of the Operating Partnership ranking junior to the Series G Cumulative Step-Up Premium Rate Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Other Junior Units”), shall be entitled to receive an amount equal to the aggregate dividends payable on the Related Issue at the times such dividends are paid.  For this purpose, the aggregate dividends payable on the Related Issue shall be determined by assuming that adequate cash and earnings are available to the Corporation for the payment of any dividends required to be paid with respect to the Related Issue.  The Series G Cumulative Step-Up Premium Rate Preferred Units shall, with respect to allocations and distributions pursuant to Article VI of the Partnership Agreement, rank (A) junior to any other series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank prior to the Series G Cumulative Step-Up Premium Rate Preferred Units as to distributions and redemption rights, (B) pari passu with any series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank pari passu with the Series G Cumulative Step-Up Premium Rate Preferred Units as to distributions and redemption rights and (C) prior to the Common Units, Junior Preferred Units and any Other Junior Units.

 

SECTION 3.           Status of Redeemed Series G Cumulative Step-Up Premium Rate Preferred Units.    Upon any redemption, repurchase or other acquisition by the Operating Partnership of Series G Cumulative Step-Up Premium Rate Preferred Units, the Series G Cumulative Step-Up Premium Rate Preferred Units so converted, redeemed, repurchased or acquired shall be retired and canceled.

 

SECTION 4.           Redemption.   Upon the redemption of any shares of the Related Issue, the Operating Partnership shall redeem an equal number of Series G Cumulative Step-Up Premium Rate Preferred Units for a redemption price per unit equal to the redemption price per share of the Related Issue, exclusive of any accrued unpaid dividends.

 

 

CERTIFICATE OF DESIGNATION
OF
SERIES H VARIABLE RATE PREFERRED UNITS
OF
SIMON PROPERTY GROUP, L.P.

 

Pursuant to Articles 4.3(c) and 9.4 of the Seventh Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. (the “Operating Partnership”):

 

WHEREAS , on December 15, 2003, Simon Property Group, Inc., a Delaware corporation (the “Corporation”), issued 3,328,540 shares of Series H Variable Rate Preferred Stock, par value $.0001 per share (the “Series H Preferred Stock”); and

 

WHEREAS , in accordance with the terms of the Seventh Amended and Restated Limited Partnership Agreement of the Operating Partnership, the Corporation will contribute an amount equal to the proceeds of the sale of the Series H Preferred Stock to the Operating Partnership in exchange for preferred units having substantially the same economic rights and terms as the Series H Preferred Stock; and

 

WHEREAS , the Corporation, as the general partner of the Operating Partnership (in such capacity, the “General Partner”) wishes to designate as of December 15, 2003, the terms of the preferred units having substantially the same economic rights and terms as the Series H Preferred Stock.

 

NOW THEREFORE , the Corporation, as general partner of the Operating Partnership (in such capacity, the “General Partner”), hereby designates a series of preferred units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

 

Designation and Number.   The units of such series shall be designated “Series H Variable Rate Preferred Units” (the “Series H Preferred Units”).  The authorized number of Series H Preferred Units shall be 3,328,540.  Each share of Series H Preferred Stock, as it relates to a single Series H Preferred Unit, shall be deemed the “Related Issue” hereunder.

 

Distributions.   The holders of Series H Preferred Units, in preference to the holders of Partnership Units (as that term is defined in the Partnership Agreement) of the Operating Partnership (the “Common Units”), any other series of Preferred Units ranking junior to the Series H Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Junior Preferred Units”) or any other class or series of units of the Operating Partnership ranking junior to the Series H Preferred Units either as to distributions or upon liquidation, dissolution or winding-up (“Other Junior Units”), shall be entitled to receive as distributions an amount equal to the aggregate dividends payable on the Related Issue at the times such dividends are paid.  For this purpose, the aggregate dividends payable on the Related Issue shall be determined by assuming that adequate cash and earnings are available to the Corporation for the payment of any dividends required to be paid with respect to the Related

 

 

Issue.  The Series H Preferred Units shall, with respect to allocations and distributions pursuant to Article VI of the Partnership Agreement, rank (A) junior to any other series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank prior to the Series H Preferred Units as to distributions and redemption rights, (B) pari passu with any series of Preferred Units hereafter duly established, the terms of which shall specifically provide that such series shall rank pari passu with the Series H Preferred Units as to distributions and redemption rights and (C) prior to the Common Units, Junior Preferred Units and any Other Junior Units.

 

Status of Redeemed Series H Preferred Units.   Upon any redemption, repurchase or other acquisition by the Operating Partnership of Series H Preferred Units, the Series H Preferred Units so converted, redeemed, repurchased or acquired shall be retired and canceled.

 

Redemption.   Upon the redemption of any shares of the Related Issue, the Operating Partnership shall redeem an equal number of Series H Preferred Units for a redemption price per unit equal to the redemption price per share of the Related Issue, exclusive of any accrued unpaid dividends.

 

 

CERTIFICATE OF DESIGNATION
OF
8 3/8% SERIES J CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
SIMON PROPERTY GROUP, L.P.

 

Pursuant to Article 4.3(c) of the Seventh Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. (the “ Operating Partnership ”):

 

WHEREAS , it is currently contemplated that, pursuant to the Agreement and Plan of Merger, dated June 20, 2004, (the “ Agreement of Merger ”) between Simon Property Group, Inc. (the “ Corporation ”), the Operating Partnership, Simon Acquisition I, LLC, (“ Merger Sub ”), an indirect wholly owned subsidiary of the Corporation, Simon Acquisition II, LLC (“ L.P. Merger Sub ”), an indirect wholly owned subsidiary of the Corporation, Chelsea Property Group, Inc., (“ Chelsea ”), and CPG Partners, L.P., (“ Chelsea L.P. ”), each holder of 8 3/8% Series A Cumulative Redeemable Preferred Stock of Chelsea will receive one share of 8 3/8% Series J Cumulative Redeemable Preferred Stock of the Corporation (the “ Series J Preferred Stock ”);

 

WHEREAS , the Corporation, in its capacity as the managing general partner of the Operating Partnership (in such capacity, the “ Managing General Partner ”), has determined that it is in the best interests of the Operating Partnership and its partners to designate a new series of preferred units of the Operating Partnership having substantially the same powers, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as the Series J Preferred Stock, as set forth herein;

 

NOW, THEREFORE, in accordance with the terms of the Seventh Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated as of August 27, 1999, by and among the Corporation, as managing general partner, SD Property Group, Inc., as a non-managing general partner, SPG Properties, Inc., as a non-managing general partner, and the limited partners named therein (as amended, the “ Partnership Agreement ”), the Managing General Partner hereby designates a series of preferred units and fixes the designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a new series of preferred units as follows:

 

SECTION. 1.           Designation .  The series of preferred units are hereby designated as the “8 3/8% Series J Cumulative Redeemable Preferred Units” (the “ Series J Preferred Units ”).  Each share of Series J Preferred Stock, as it relates to a single Series J Preferred Unit, shall be deemed the “ Related Issue ” hereunder.

 

SECTION. 2.          Number .  The maximum number of authorized units of the Series J Preferred Units shall be 1,000,000.

 

SECTION. 3.          Relative Seniority .  In respect of rights to receive distributions and to participate in distributions of payments in the event of any liquidation, dissolution or winding up of the Operating Partnership, the Series J Preferred Units shall rank (i) senior to the

 

 

Partnership Units (the “ Common Units ”) and any other class or series of units of the Operating Partnership which, by their terms rank junior to the Series J Preferred Units (collectively, “ Junior Units ”), (ii) on a parity with all other Preferred Units of the Operating Partnership which are not by their terms Junior Units or Senior Units, and (iii) junior to any Preferred Units which by their terms rank senior to the Series J Preferred Units (collectively, “ Senior Units ”) and were issued in accordance with Section 7 below.

 

SECTION. 4.          Distributions .

 

(a)           The holders of the then outstanding Series J Preferred Units shall be entitled to receive an amount equal to the dividends payable per share on the Related Issue at the times such dividends are paid.

 

(b)           Except as otherwise expressly provided herein, the Series J Preferred Units will not be entitled to any distributions in excess of the distributions as described above and shall not be entitled to participate in the earnings or assets of the Operating Partnership, and no interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on the Series J Preferred Units which may be in arrears.

 

(c)           Any distribution made on the Series J Preferred Units shall first be credited against the earliest accumulated but unpaid distribution due with respect to such units which remains payable.

 

(d)           No distributions on the Series J Preferred Units shall be authorized, paid or set apart for payment by the Operating Partnership at such time as the terms and provisions of any agreement of the Operating Partnership, including any agreement relating to its indebtedness, prohibits such authorization, payment or setting apart for payment or provides that such authorization, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such authorization or payment shall be restricted or prohibited by law.

 

(e)           No distributions shall be declared or paid or set apart for payment on any equity interests of the Operating Partnership ranking, as to distributions, on a parity with or junior to the Series J Preferred Units for any period unless full cumulative distributions pursuant to Section 3(a) hereof have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment therefor set apart for such payment on the Series J Preferred Units for all past Dividend Periods (as defined in the Certificate of Designation of the Related Issue) and the then current Dividend Period.  When distributions are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series J Preferred Units and any other Preferred Units ranking on a parity as to distributions with the Series J Preferred Units, all distributions declared on the Series J Preferred Units and any Preferred Units ranking on a parity as to distributions with the Series J Preferred Units shall be declared pro rata so that the amount of distributions declared per Series J Preferred Unit and such other Preferred Units shall in all cases bear to each other the same ratio that accumulated distributions per Series J Preferred Units and such other Preferred Units bear to each other.

 

 

(f)            Except as provided in subparagraph (e), unless full cumulative distributions on the Series J Preferred Units have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment therefor set apart for such payment on the Series J Preferred Units for all past Dividend Periods and the then current Dividend Period, no distributions (other than in Junior Units) shall be declared or paid or set aside for payment nor shall any other distribution be declared or made upon the Junior Units or any other equity interest of the Operating Partnership ranking on a parity with the Series J Preferred Units as to distributions or upon liquidation, nor shall any Junior Units or any other capital stock of the Operating Partnership ranking on a parity with the Series J Preferred Units as to distributions or upon liquidation be redeemed, purchased or otherwise acquired for any consideration  (or any moneys be paid or made available for a sinking fund for the redemption of such units) by the Operating Partnership (except by conversion into or exchange for other Junior Units).

 

SECTION. 5.          Liquidation Rights .

 

(a)           Upon the voluntary or involuntary dissolution, liquidation or winding up of the Corporation or the Operating Partnership (a “liquidation”), the holders of the Series J Preferred Units then outstanding shall be entitled to receive in cash or property (at its fair market value determined by the Managing General Partner of the Operating Partnership) and to be paid out of the assets of the Operating Partnership legally available for distribution to its partners, before any payment or distribution shall be made on any Junior Units, the amount of $50.00 per unit, plus accumulated and unpaid distributions, if any, thereon to and including the date of liquidation.

 

(b)           After the payment to the holders of the Series J Preferred Units of the full liquidation amounts provided for in paragraph (a), the holders of the Series J Preferred Units, as such, shall have no right or claim to any of the remaining assets of the Operating Partnership.

 

(c)           If, upon any voluntary or involuntary dissolution, liquidation, or winding up of the Operating Partnership, the amounts payable with respect to the preference distributions on the Series J Preferred Units and each other series of Preferred Units of the Operating Partnership ranking, as to liquidation rights, on a parity with the Series J Preferred Units are not paid in full, the holders of the Series J Preferred Units and any other Preferred Units of the Operating Partnership ranking, as to liquidation rights, on a parity with the Series J Preferred Units shall share ratably in any such distribution of assets of the Operating Partnership in proportion to the full respective preference amounts to which they would otherwise be respectively entitled.

 

(d)           Neither the sale, lease, transfer or conveyance of all or substantially all of the property or business of the Operating Partnership, nor the merger or consolidation of the Operating Partnership into or with any other entity or the merger or consolidation of any other entity into or with the Operating Partnership, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 5.

 

 

SECTION. 6.          Redemption .  Upon the redemption of any shares of the Related Issue, the Operating Partnership shall redeem an equal number of Series J Preferred Units for a redemption price per unit equal to the redemption price per share of the Related Issue, exclusive of any accrued unpaid dividends.  The Series J Preferred Units have no stated maturity and will not be subject to any sinking fund or mandatory redemption provisions, except as provided for in Section 9 below.

 

SECTION. 7.          Voting Rights .

 

(a)           The holders of record the Series J Preferred Units shall not be entitled to any voting rights except as hereinafter provided in this Section 7, as otherwise provided in the Partnership Agreement, or as otherwise provided by law.

 

(b)           So long as any Series J Preferred Units remain outstanding, the Operating Partnership will not, without the affirmative vote or consent of the holders of at least two-thirds of the Series J Preferred Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), (i) authorize or create, or increase the authorized or issued amount of, any class or series of units ranking senior to the Series J Preferred Units with respect to the payment of distributions or the distribution of assets upon liquidation, dissolution or winding up of the Operating Partnership or reclassify any authorized units of the Operating Partnership into such units, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such units; or (ii) amend, alter or repeal the provisions of the Partnership Agreement, including this Certificate of Designation, whether by merger, consolidation or otherwise (an “ Event ”), so as to materially and adversely affect any right, preference, privilege or voting power of the Series J Preferred Units or the holders thereof; provided, however, with respect to the occurrence of any of the Events set forth in (ii) above, so long as the Series J Preferred Units remain outstanding with the terms thereof materially unchanged, taking into account that upon the occurrence of an Event the Operating Partnership may not be the surviving entity, the occurrence of any such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of Series J Preferred Units; and provided, further, that (x) any increase in the amount of the authorized Preferred Units or the creation or issuance of any other series of Preferred Units, or (y) any increase in the amount of authorized Series J Preferred Units, in each case ranking on a parity with or junior to the Series J Preferred Units with respect to payment of distributions and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.

 

(c)           The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote or consent would otherwise be required shall be effected, all outstanding Series J Preferred Units shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption.

 

(d)           On each matter submitted to a vote of the holders of Series J Preferred Units in accordance with this Section 7, or as otherwise required by law, each Series J Preferred Unit shall be entitled to one vote.  With respect to each Series J Preferred Unit, the

 

 

holder thereof may designate a proxy, with each such proxy having the right to vote on behalf of the holder.

 

SECTION. 8.          Conversion .  The Series J Preferred Units are not convertible into or exchangeable for any other property or securities of the Operating Partnership.

 

SECTION. 9.          Restrictions On Ownership .  The Series J Preferred Units shall be subject to the restrictions on transfer set forth in Sections 9.3 and 9.5 of the Partnership Agreement as if such units were “Partnership Units”.  Any transfer or attempted transfer (direct or indirect) in violation of the provisions of this Section 9 shall be null and void.

 

 

CERTIFICATE OF DESIGNATION
OF
6% SERIES I CONVERTIBLE PERPETUAL PREFERRED UNITS
OF
SIMON PROPERTY GROUP, L.P.

 

Pursuant to Articles 4.3(c) and 9.4 of the Seventh Amended and Restated Limited Partnership Agreement of Simon Property Group, L.P. (the “ Operating Partnership ”);

 

WHEREAS , it is currently contemplated that, pursuant to the Agreement and Plan of Merger, dated June 20, 2004, (the “ Agreement of Merger ”) between Simon Property Group, Inc. (the “ Corporation ”), the Operating Partnership, Simon Acquisition I, LLC, (“ Merger Sub ”), a wholly owned subsidiary of the Corporation, Simon Acquisition II, LLC (“ L.P. Merger Sub ”), an indirect wholly owned subsidiary of the Corporation, Chelsea Property Group, Inc., (the “ Chelsea ”), and CPG Partners, L.P., (“ Chelsea L.P. ”), each holder of a common unit of Chelsea L.P. will receive, in a transaction intended to qualify for non-recognition of any taxable gain or loss to such holder under Section 721(a) of the Internal Revenue Code, 0.6459 of a common partnership interest in the Operating Partnership and 0.6600 of a 6% Series I Convertible Perpetual Preferred Unit (as defined below) of the Operating Partnership, either upon a contribution of such common units of Chelsea L.P. or upon completion of a merger of L.P. Merger Sub with and into Chelsea L.P.;

 

WHEREAS , the Corporation, in its capacity as the managing general partner of the Operating Partnership (in such capacity, the “ Managing General Partner ”), has agreed to designate a series of preferred partnership units having the powers, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as set forth herein;

 

WHEREAS , the Managing General Partner has determined that it is in the best interests of the Operating Partnership and its partners to designate a new series of preferred units of the Operating Partnership;

 

NOW, THEREFORE, in accordance with the terms of the Seventh Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated as of August 27, 1999, by and among the Corporation, as managing general partner, SD Property Group, Inc., as a non-managing general partner, SPG Properties, Inc., as a non-managing general partner, and the limited partners named therein (as amended, the “ Partnership Agreement ”), the Managing General Partner hereby designates a series of preferred units and fixes the designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a new series of preferred units as follows:

 

SECTION 1.   Number and Designation.   19,000,000 units of preferred units of the Operating Partnership shall be designated as the “6% Series I Convertible Perpetual Preferred Units” (the “ Series I Preferred Units ”).

 

 

SECTION 2.   Certain Definitions.   As used in this Certificate, the following terms shall have the meanings defined in this Section 2. Any capitalized term not otherwise defined herein shall have the meaning set forth in the Partnership Agreement, unless the context otherwise requires:

 

“ Affiliate ” of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. For the purposes of this definition, “ control ” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

 

“ Board of Directors ” means the board of directors of the Corporation.

 

“ Business Day ” means any day other than a Saturday, Sunday or a day on which state or U.S. federally chartered banking institutions in New York, New York are not required to be open.

 

“ Capital Stock ” of any Person means any and all shares, interests, participations or other equivalents however designated of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to acquire an equity interest in such Person.

 

“ Certificate ” means this Certificate of Designation.

 

“ Change of Control ” means the occurrence of any of the following events:

 

(a)           any “ person ” or “ group ” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) acquires beneficial ownership (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have “ beneficial ownership ” of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, through a purchase, merger or other acquisition transaction, of more than 50% of the total voting power of the Corporation’s total outstanding voting stock other than an acquisition by the Corporation, any of its subsidiaries or any of the Corporation’s employee benefit plans;

 

(b)           the Corporation consolidates with, or merges with or into, another Person or conveys, transfers, leases or otherwise disposes of all or substantially all of its assets to any Person, or any Person consolidates with, or merges with or into, the Corporation, other than: (i) any transaction pursuant to which holders of the Corporation’s Capital Stock immediately prior to the transaction have the entitlement to exercise, directly or indirectly, more than 50% of the total voting power of all shares of Capital Stock entitled to vote generally in the election of directors of the continuing or surviving person immediately after the transaction

 

 

and (ii) any merger solely for the purpose of changing the Corporation’s jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving entity;

 

(c)           during any consecutive two-year period, individuals who at the beginning of such period constituted the Board of Directors of the Corporation (together with any new directors whose election to such Board of Directors of the Corporation, or whose nomination for election by the stockholders of the Corporation, was approved by a vote of a majority of the directors of the Corporation then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Corporation then in office; or

 

(d)           the Corporation adopts a plan of liquidation or dissolution.

 

“ Change of Control Purchase Date ” shall have the meaning assigned to it in Section 11(a) hereof.

 

“ Closing Sale Price ” of the shares of Common Stock or other Capital Stock or similar equity interests on any date means the closing sale price per share (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported on the principal United States securities exchange on which shares of Common Stock or such other Capital Stock or similar equity interests are traded or, if the shares of Common Stock or such other capital stock or similar equity interests are not listed on a United States national or regional securities exchange, as reported by Nasdaq or by the National Quotation Bureau Incorporated. In the absence of such quotations, the Board of Directors of the Corporation shall be entitled to determine the Closing Sale Price on the basis it considers appropriate, which determination shall be conclusive. The Closing Sale Price shall be determined without reference to any extended or after hours trading.

 

“ Common Stock ” means any stock of any class of the Corporation that has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation and that is not subject to redemption by the Corporation.

 

“Common Units” shall mean the Partnership Units (as defined in the Partnership Agreement).

 

“ Computation Date ” shall have the meaning assigned to it in Section 10(c) hereof.

 

“ Conversion Price ” per unit of the Series I Preferred Units means, on any date, the Liquidation Preference divided by the Conversion Rate in effect on such date.

 

 

“ Conversion Rate ” per unit of the Series I Preferred Units means 0.783 of a Common Unit, subject to adjustment pursuant to Section 8 hereof.

 

“ Corporation ” shall have the meaning assigned to it in the preamble to this Certificate, and shall include any successor to such Corporation.

 

“ Current Market Price ” means the average of the daily Closing Sale Prices per share of Common Stock for the ten consecutive Trading Days ending on the earlier of such date of determination and the day before the ex-date with respect to the issuance, distribution, subdivision or combination requiring such computation immediately prior to the date in question. For purpose of this paragraph, the term “ ex-date ,” (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades, regular way, on the relevant exchange or in the relevant market from which the Closing Sale Price was obtained without the right to receive such issuance or distribution, and (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades, regular way, on such exchange or in such market after the time at which such subdivision or combination becomes effective.

 

“ Distribution Payment Date ” means February 28, May 31, August 31 and November 30 of each year, commencing November 30, 2004, or if any such date is not a Business Day, on the next succeeding Business Day.

 

“ Distribution Period ” means the period beginning on, and including, a Distribution Payment Date and ending on, and excluding, the immediately succeeding Distribution Payment Date.

 

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

 

“ Exchange Option ” shall have the meaning assigned to it in Section 10(a) hereof.

 

“ Fair Market Value ” means the amount which a willing buyer would pay a willing seller in an arm’s-length transaction.

 

“ Junior Units ” shall have the meaning assigned to it in Section 3(a) hereof.

 

“ Liquidation Preference ” shall have the meaning assigned to it in Section 5(a) hereof.

 

“ Managing General Partner ” shall have the meaning assigned to it in the preamble to this Certificate.

 

“ Notice of Exchange ” shall have the meaning assigned to it in Section 10(a) hereof.

 

“ Offered Units ” shall have the meaning assigned to it in Section 10(a) hereof.

 

 

“ Offered Units Purchase Price ” shall have the meaning assigned to it in Section 10(c) hereof.

 

“ Outstanding ” means, when used with respect to Series I Preferred Units, as of any date of determination, all Series I Preferred Units outstanding as of such date; provided, however, that, if such Series I Preferred Units are to be redeemed, notice of such redemption has been duly given pursuant to this Certificate and the Redemption Price for such Series I Preferred Units to be redeemed has been paid, then immediately after such Redemption Date such Series I Preferred Units shall cease to be Outstanding; provided further that, in determining whether the holders of Series I Preferred Units have given any request, demand, authorization, direction, notice, consent or waiver or taken any other action hereunder, Series I Preferred Units owned by the Operating Partnership, the Corporation or any of their Affiliates shall be deemed not to be Outstanding.

 

“ Parity Units ” shall have the meaning assigned to it in Section 3(b) hereof.

 

“ Person ” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

“ Purchase Price ” means an amount equal to 100% of the Liquidation Preference per Series I Preferred Unit being purchased, plus an amount equal to any accumulated and unpaid distributions, if any (whether or not declared), thereon to, but excluding, the Change of Control Purchase Date; provided that if a Change of Control Purchase Date falls after a Record Date and on or prior to the corresponding Distribution Payment Date, the Purchase Price will only be an amount equal to the Liquidation Preference per Series I Preferred Unit being purchased and will not include any amount in respect of distributions declared and payable on such corresponding Distribution Payment Date.

 

“ Record Date ” means not more than 60 days and not less than 10 days preceding the applicable Distribution Payment Date, as shall be fixed by the Managing General Partner.

 

“ Redemption Date ” means a date that is fixed for redemption of the Series I Preferred Units by the Operating Partnership in accordance with Section 6 hereof.

 

“ Redemption Price ” means an amount equal to 100% of the Liquidation Preference per Series I Preferred Unit being redeemed, plus an amount equal to all accumulated and unpaid distributions, if any (whether or not declared), thereon to, but excluding, the Redemption Date; provided that if the Redemption Date shall occur after a Record Date and before the related Distribution Payment Date, the Redemption Price shall be only an amount equal to the Liquidation Preference per Series I Preferred Unit being redeemed and will not include any amount in respect of distributions declared and payable on such corresponding Distribution Payment Date.

 

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

 

 

“ Senior Units ” shall have the meaning assigned to it in Section 3(c) hereof.

 

“ Series I Preferred Stock ” means the 6% Series I Convertible Perpetual Preferred Stock of the Corporation.

 

“ Settlement Date ” shall have the meaning assigned to it in Section 10(d) hereof.

 

“ 6%  Preferred Units ” shall have the meaning assigned to it in Section 1 hereof.

 

“ Trading Day ” means a day during which trading in securities generally occurs on the New York Stock Exchange or, if the Common Stock is not listed on the New York Stock Exchange, on the principal other national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not listed on a national or regional securities exchange, on Nasdaq or, if the Common Stock is not quoted on Nasdaq, on the principal other market on which the Common Stock is then traded.

 

SECTION 3.   Rank.   The Series I Preferred Units shall, with respect to distribution rights and rights upon liquidation, winding-up or dissolution, rank:

 

(a)           senior to the Common Units and any other equity securities of the Operating Partnership which by their terms expressly provide that such equity securities rank junior to the Series I Preferred Units as to distribution rights and rights on liquidation, winding up and dissolution of the Operating Partnership (together with the Common Units, the “ Junior Units ”);

 

(b)           on a parity with any other preferred units which are not by their terms junior or senior to the Series I Preferred Units, including, without limitation, the 6.50% Series B Convertible Preferred Units, 8.00% Series E Cumulative Redeemable Preferred Units, 8 ³ / ₄ % Series F Cumulative Redeemable Preferred Units, 7.89% Series G Cumulative Step-up Premium Rate Preferred Units, 7.00% Cumulative Convertible Preferred Units, and 8.00% Cumulative Redeemable Preferred Units, which are the only preferred units of the Operating Partnership authorized as of the date hereof (the “ Parity Units ”); and

 

(c)           junior to each class or series of units of the Operating Partnership, the terms of which expressly provide that such class or series ranks senior to the Series I Preferred Units as to distribution rights and rights on liquidation, winding-up and dissolution of the Operating Partnership (the “ Senior Units ”).

 

SECTION 4.   Distributions.

 

(a)           Holders of Series I Preferred Units shall be entitled to receive, when, as and if declared by the Managing General Partner, out of funds legally available for the payment of distributions, cash distributions on each unit of Series I Preferred Units at the annual rate of 6% of the Liquidation Preference per unit.  Such distributions shall be payable in arrears in equal amounts quarterly on each Distribution Payment Date, beginning November 30,

 

 

2004, in preference to and in priority over distribution on any Junior Units but subject to the rights of any holders of Senior Units or Parity Units.

 

(b)           Distributions shall be cumulative from the initial date of issuance or the last Distribution Payment Date for which accumulated distributions were paid, whichever is later, whether or not funds of the Operating Partnership are legally available for the payment of such distributions.  Each such distribution shall be payable to the holders of record of Series I Preferred Units, as they appear on the Operating Partnership’s books and records at the close of business on a Record Date.  Accumulated and unpaid distributions for any past Distribution Periods may be declared and paid at any time, without reference to any Distribution Payment Date, to holders of record on such date, not more than 60 days preceding the payment date thereof, as may be fixed by the Managing General Partner.

 

(c)           Accumulated and unpaid distributions for any past Distribution Period (whether or not declared) shall cumulate at the annual rate of 6% and shall be payable in the manner set forth in this Section 4.

 

(d)           The amount of distributions payable for each full Distribution Period for the Series I Preferred Units shall be computed by dividing the annual distribution rate by four. The amount of distributions payable for the initial Distribution Period, or any other period shorter or longer than a full Distribution Period, on the Series I Preferred Units shall be computed on the basis of 30-day months and a 12-month year. Holders of Series I Preferred Units shall not be entitled to any distributions, whether payable in cash, property or stock, in excess of cumulative distributions, as herein provided, on the Series I Preferred Units.

 

(e)           No distribution shall be declared or paid, or funds set apart for the payment of any distribution, whether in cash, obligations or units of the Operating Partnership or other property, directly or indirectly, upon any Junior Units or Parity Units, nor shall any units of Junior Units or Parity Units be redeemed, repurchased or otherwise acquired for consideration by the Operating Partnership through a sinking fund or otherwise, unless all accumulated and unpaid distributions (whether or not declared), if any, through the most recent Distribution Payment Date (whether or not there are funds of the Operating Partnership legally available for the payment of distributions) on the Series I Preferred Units and any Parity Units have been paid in full or set apart for payment; provided, however, that, notwithstanding any provisions of this Section 4(e) to the contrary, the Operating Partnership may redeem, repurchase or otherwise acquire for consideration Series I Preferred Units and Parity Units pursuant to a purchase or exchange offer made on the same terms to all holders of such Series I Preferred Units and Parity Units. When distributions are not paid in full, as aforesaid, upon the Series I Preferred Units, all distributions declared on the Series I Preferred Units and any other Parity Units shall be paid either (A) pro rata so that the amount of distributions so declared on the Series I Preferred Units and each such other class or series of Parity Units shall in all cases bear to each other the same ratio as accumulated distributions on the Series I Preferred Units and such class or series of Parity Units bear to each other or (B) on another basis that is at least as favorable to the holders of the Series I Preferred Units entitled to receive such distributions.

 

 

SECTION 5.   Liquidation Preference.

 

(a)            In the event of any liquidation, dissolution or winding-up of the Operating Partnership, whether voluntary or involuntary, before any payment or distribution of the Operating Partnership’s assets shall be made to or set apart for the holders of Junior Units, holders of Series I Preferred Units shall be entitled to receive $50.00 per unit of Series I Preferred Units (the “ Liquidation Preference ”) plus an amount equal to all distributions (whether or not declared) accumulated and unpaid thereon to the date of final distribution to such holders, but shall not be entitled to any further payment or other participation in any distribution of the assets of the Operating Partnership.  If, upon any liquidation, dissolution or winding-up of the Operating Partnership, the Operating Partnership’s assets, or proceeds thereof, distributable among the holders of Series I Preferred Units are insufficient to pay in full the preferential amount aforesaid and liquidating payments on any Parity Units, then such assets, or the proceeds thereof, shall be distributed among the holders of the Series I Preferred Units and any other Parity Units ratably in proportion to the respective amounts that would be payable on such Series I Preferred Units and any such other Parity Units if all amounts payable thereon were paid in full.

 

(b)            Neither the voluntary sale, conveyance, exchange or transfer, for cash, shares of stock, securities or other consideration, of all or substantially all of the Operating Partnership’s property or assets, nor the consolidation, merger or amalgamation of the Operating Partnership with or into any person or the consolidation, merger or amalgamation of any person with or into the Operating Partnership shall be deemed to be a voluntary or involuntary liquidation, dissolution or winding-up of the Operating Partnership.

 

(c)            After payment has been made in full to the holders of the Series I Preferred Units, as provided in this Section 5, holders of Series I Preferred Units shall have no right or claim to any remaining assets of the Operating Partnership.

 

SECTION 6.   Optional Redemption of the Series I Preferred Units.   Units of Series I Preferred Units shall be redeemable by the Operating Partnership in accordance with this Section 6.

 

(a)            The Operating Partnership may not redeem any Series I Preferred Units before October 14, 2009.  On or after October 14, 2009, the Operating Partnership shall have the option to redeem, subject to Section 6(g) hereof, for cash only (i) some or all the Series I Preferred Units at the Redemption Price, but only if the Closing Sale Price of the Common Stock for 20 Trading Days within a period of 30 consecutive Trading Days ending on the Trading Day prior to the date the Operating Partnership gives notice of such redemption pursuant to this Section 6 exceeds 130% of the Conversion Price in effect on each such Trading Day and (ii) all the Outstanding Series I Preferred Units at the Redemption Price, but only if, on any Distribution Payment Date, the total number of Outstanding Series I Preferred Units is less than 15% of the total number of Outstanding Series I Preferred Units on October 14, 2004.

 

 

(b)            In the event the Operating Partnership elects to redeem any Series I Preferred Units, the Operating Partnership shall:

 

(i)             send a written notice by first class mail to each holder of record of the Series I Preferred Units at such holder’s registered address, not fewer than 20 nor more than 90 days prior to the Redemption Date, stating:

 

(A)           the Redemption Date;

 

(B)            the Redemption Price;

 

(C)            the Conversion Price and the Conversion Rate;

 

(D)           that Series I Preferred Units called for redemption may be converted into Common Units at any time before 5:00 p.m., New York City time on the second Business Day immediately preceding the Redemption Date;

 

(E)            that holders who want to convert Series I Preferred Units into Common Units must satisfy the requirements set forth in Section 7 of this Certificate;

 

(F)            if fewer than all the Outstanding units of the Series I Preferred Units are to be redeemed by the Operating Partnership, the number of units to be redeemed;

 

(G)            that, unless the Operating Partnership defaults in making payment of such Redemption Price, distributions in respect of the Series I Preferred Units called for redemption will cease to accumulate on and after the Redemption Date; and

 

(H)           any other information the Operating Partnership wishes to present; and

 

(ii)            publish such information on the Corporation’s web site on the World Wide Web.

 

(c)            If the Operating Partnership calls for redemption Series I Preferred Units pursuant to the procedures set forth in Section 6(b) above, then, to the extent sufficient funds are legally available, the Operating Partnership shall pay the Redemption Price to holders of Series I Preferred Units called for redemption and outstanding on the Redemption Date.  Upon payment of the Redemption Price, the Series I Preferred Units so redeemed shall cease to be outstanding and shall be retired and cancelled on the books and records of the Operating Partnership.  Distributions shall cease to accumulate as of the Redemption Date on those Series I Preferred Units called for redemption and all rights of

 

 

holders of such units shall terminate, except for the right to receive the Redemption Price pursuant to this Section 6.

 

(d)            If any Series I Preferred Units selected for partial redemption are submitted for conversion in part after such selection, such Series I Preferred Units submitted for conversion shall be deemed (so far as may be possible) to be a portion of the units selected for redemption.

 

(e)            If the Redemption Date falls after a Record Date and before the related Distribution Payment Date, holders of Series I Preferred Units at the close of business on that Record Date shall be entitled to receive the distribution payable on those units on the corresponding Distribution Payment Date.

 

(f)             If fewer than all the Outstanding Series I Preferred Units are to be redeemed, the number of units to be redeemed shall be determined by the Managing General Partner and the units to be redeemed shall be selected by lot, on a pro rata basis (with any fractional units being rounded to the nearest whole unit), or by any other method as may be determined by the Managing General Partner to be fair and appropriate.

 

(g)            Notwithstanding the foregoing provisions of this Section 6, unless full cumulative distributions (whether or not declared) on all Outstanding Series I Preferred Units and Parity Units have been paid or set apart for payment for all Distribution Periods terminating on or before the Redemption Date, none of the Series I Preferred Units shall be redeemed, and no sum shall be set aside for such redemption, unless pursuant to a purchase or exchange offer made on the same terms to all holders of Series I Preferred Units and any Parity Units.

 

SECTION 7.   Conversion.

 

(a)            Right to Convert.   Each Series I Preferred Unit shall be convertible, only on or after the occurrence of one of the conversion triggering events described in Section 7(b), into a number of fully paid and non-assessable Common Units equal to the Conversion Rate in effect at such time. Notwithstanding the foregoing, if any Series I Preferred Units are to be redeemed pursuant to Section 6, such conversion right shall cease and terminate, as to the Series I Preferred Units to be redeemed, at 5:00 p.m., New York City time, two Business Days immediately preceding the Redemption Date, unless the Operating Partnership shall default in the payment of the Redemption Price therefore, as provided herein.

 

(b)            A holder may convert Series I Preferred Units into Common Units:

 

(i)             if called for redemption pursuant to Section 6 hereof;

 

(ii)            if the Corporation is a party to a Change of Control, in which case each Series I Preferred Unit may be surrendered for conversion at any time from and after the date that is 15 days prior to the anticipated effective date of the

 

 

Change of Control until 15 days after the actual date of such Change of Control and, at such effective date, the right to convert the Series I Preferred Units into Common Units shall be changed into a right to convert such Series I Preferred Units into the kind and amount of cash, securities or other property that the holder would have received if the holder had converted such Series I Preferred Units immediately prior to the transaction; or

 

(iii)           during any fiscal quarter after the fiscal quarter ending December 31, 2004 (and only during such fiscal quarter) if the Closing Sale Price of Common Stock for at least 20 Trading Days in a period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter is more than 125% of the Conversion Price on such Trading Day.  If this Closing Sale Price condition is not satisfied at the end of any fiscal quarter, then conversion pursuant to this Section 7(b)(iii) will not be permitted in the following fiscal quarter. The Managing General Partner shall determine for each Trading Day during the 30 consecutive Trading Day period specified in this Section 7(b)(iii) whether the Closing Sale Price exceeds 125% of the Conversion Price and whether the Series I Preferred Units shall be convertible as a result of the occurrence of the event set forth in this Section 7(b)(iii).  Upon determination that holders of Series I Preferred Units are or will be entitled to convert their units into Common Units in accordance with the provisions of  this Section 7(b)(iii), the Operating Partnership will mail a written notice to the holders thereof and publish such information on the Corporation’s website on the World Wide Web.

 

(c)            Conversion Procedures.   Conversion of Series I Preferred Units may be effected by any holder thereof upon the surrender to the Operating Partnership, at the principal office of the Operating Partnership a complete and manually signed Notice of Conversion (in the form included as Exhibit A to this Certificate) along with, if required pursuant to Section 7(d), funds equal to the distribution payable on the next Distribution Payment Date.  In case such Notice of Conversion shall specify a name or names other than that of such holder, such notice shall be accompanied by payment of all transfer taxes payable upon the issuance of Common Units in such name or names (or proof that no such taxes are payable).  Other than such taxes, the Operating Partnership shall pay any documentary, stamp or similar issue or transfer taxes that may be payable in respect of any issuance of Common Units upon conversion of Series I Preferred Units pursuant hereto.  The conversion of the Series I Preferred Units will be deemed to have been made as of the close of business on the date (the “ Conversion Date ”) such Notice of Conversion is received and all required transfer taxes, if any, are paid (or the demonstration to the satisfaction of the Operating Partnership that such taxes have been paid) and shall be recorded on the books and records of the Operating Partnership as of such Conversion Date.  The Operating Partnership shall promptly, and in any event within five Business Days after receipt of a Notice of Conversion from a holder of Series I Preferred Units, notify such holder of the effectiveness of such conversion in writing to such holder’s address set forth on the books and records of the Operating Partnership (or that such conversion was not given effect due to a failure to satisfy the conditions for conversion set forth in this Section 7).

 

 

(d)            Distribution and Other Payments Upon Conversion .  If a holder of Series I Preferred Units exercises conversion rights, such units will cease to accumulate distributions as of the end of the day immediately preceding the Conversion Date.  On conversion of the Series I Preferred Units, except for conversion during the period from the close of business on any Record Date corresponding to a Distribution Payment Date to the close of business on the Business Day immediately preceding such Distribution Payment Date, in which case the holder on such Distribution Record Date shall receive the distributions payable on such Distribution Payment Date, accumulated and unpaid distributions on the converted Series I Preferred Units shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the holder thereof through issuance of the Common Units (together with the cash payment, if any, in lieu of fractional units) in exchange for the Series I Preferred Units being converted pursuant to the provisions hereof.  Any Series I Preferred Units surrendered for conversion after the close of business on any Record Date for the payment of distributions declared and before the opening of business on the Distribution Payment Date corresponding to that Record Date must be accompanied by a payment to the Operating Partnership in cash of an amount equal to the distribution payable in respect of those units on such Distribution Payment Date; provided that a holder of Series I Preferred Units on a Record Date who converts such units into Common Units on the corresponding Distribution Payment Date shall be entitled to receive the distribution payable on such Series I Preferred Units on such Distribution Payment Date, and such holder need not include payment to the Operating Partnership of the amount of such distribution upon surrender of the Series I Preferred Units for conversion. Notwithstanding the foregoing, if Series I Preferred Units are converted during the period between the close of business on any Record Date and the opening of business on the corresponding Distribution Payment Date and the Operating Partnership has called such Series I Preferred Units for redemption during such period, or the Operating Partnership has designated a Change of Control Purchase Date during such period, then, in each case, the holder who tenders such units for conversion shall receive the distribution payable on such Distribution Payment Date and need not include payment of the amount of such distribution upon surrender of such Series I Preferred Units for conversion.

 

(e)  Fractional Units .  In connection with the conversion of any Series I Preferred Units, no fractions of Common Units shall be issued, but the Operating Partnership shall pay a cash adjustment in respect of any fractional interest in an amount equal to the fractional interest multiplied by the Closing Sale Price of the Common Stock on the Conversion Date, rounded to the nearest whole cent.

 

(f)  Total Units .  If more than one Series I Preferred Unit shall be surrendered for conversion by the same holder at the same time, the number of full Common Units issuable on conversion of those Series I Preferred Units shall be computed on the basis of the total number of Series I Preferred Units so surrendered.

 

 

SECTION 8.  Conversion Rate Adjustments.

 

(a)            If the conversation rate of the Series I Preferred Stock of the Corporation set forth in the Certificate of Designations of the Series I Preferred Stock shall be adjusted at any time and from time to time on or after the date hereof, then, as of the date of such adjustment, the Conversion Rate for the Series I Preferred Units shall be similarly adjusted without the requirement of any further action by the Operating Partnership such that  the conversation rate of the Series I Preferred Stock and the Conversion Rate of the Series I Preferred Units shall at all times be equal and the same.

 

(b)            Whenever the Conversion Rate is adjusted as herein provided, the Operating Partnership shall promptly and in any event within 20 days after the effectiveness of such adjustment, deliver a notice to each holder of the Series I Preferred Units to such holder’s address as it appears on the books and records of the Operating Partnership setting forth the adjusted Conversion Rate, the date on which such adjustment became effective and a brief statement of the facts requiring such adjustment.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

 

SECTION 9.   Effect of Consolidation, Merger or Sale on Conversion Privilege.   (a)  If any of (i) any reclassification (other than a change in par value, or from par value to no par value, or from no par value to par value, and other than a subdivision or combination to which Section 8(c) of the Certificate of Designations of the Series I Preferred Stock applies) of the outstanding shares of Common Stock, (ii) any consolidation, merger or combination of the Corporation with another Person, in each case as a result of which holders of Common Units shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Units, or (iii) any sale or conveyance of all or substantially all of the properties and assets of the Corporation to any other Person as a result of which holders of Common Units shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Units, then each Series I Preferred Unit shall be convertible into the kind and amount of shares of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance by a holder of a number of Common Units issuable upon conversion of such Series I Preferred Units immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance assuming such holder of Common Units did not exercise his rights of election, if any, as to the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance is not the same for each Common Unit in respect of which such rights of election shall not have been exercised (“ non-electing unit ”), then for the purposes of this Section 9 the kind and amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance for each non-electing unit shall be deemed to be the kind and amount so receivable per unit by a plurality of the non-electing units).

 

 

(b)            The Operating Partnership shall cause notice of the application of this Section 9 to be delivered to each holder of the Series I Preferred Units at the address of such holder as it appears on the books and records of the Operating Partnership within twenty (20) days after the occurrence of any of the events specified in Section 9(a) and shall publish such information on the Corporation’s web site on the World Wide Web.  Failure to deliver such notice shall not affect the legality or validity of any conversion right pursuant to this Section 9.

 

(c)            The above provisions of this Section 9 shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances.

 

SECTION 10.   Optional Exchange for Shares of Series I Preferred Stock.

 

(a)            A holder of Series I Preferred Units may exchange all or any number of such holder’s Series I Preferred Units for an equal number of shares of Series I Preferred Stock or cash, as selected by the Managing General Partner, upon the terms and subject to the conditions set forth in this Section 10 (the “ Exchange Option ”).  The Exchange Option may be exercised by a Limited Partner, on the terms and subject to the conditions and restrictions contained in this Section 10, upon delivery to the Managing General Partner of a notice in the form of Exhibit B (a “ Notice of Exchange ”), which notice shall specify the number of such holder’s Series I Preferred Units to be exchanged (the “ Offered Units ”).  Once delivered, the Notice of Exchange shall be irrevocable, subject to payment by the Managing General Partner or the Partnership of the Offered Units Purchase Price for the Offered Units in accordance with the terms hereof.  In the event the Managing General Partner elects to cause the Offered Units to be exchanged for cash, the Managing General Partner shall effect such exchange by causing the Partnership to redeem the Offered Units for cash.

 

(b)            If a Notice of Exchange is delivered to the Managing General Partner but, as a result of the Ownership Limit (as defined in the Partnership Agreement) or as a result of other restrictions contained in the Charter of the Managing General Partner, the Exchange Option cannot be exercised in full for shares of Series I Preferred Stock, the Notice of Exchange, if the Offered Units Purchase Price is to be payable in shares of Series I Preferred Stock, shall be deemed to be modified such that the Exchange Option shall be exercised only to the extent permitted under the Ownership Limit or under other restrictions in the Charter of the Managing General Partner.

 

(c)            The purchase price (“ Offered Units Purchase Price ”) payable to a tendering holder of Series I Preferred Units shall be equal to the Closing Sale Price of the Series I Preferred Stock multiplied by the number of Offered Units computed as of the date on which the Notice of Exchange was delivered to the Managing General Partner (the “ Computation Date ”).  The Offered Units Purchase Price for the Offered Units shall be payable, at the option of the Managing General Partner, by causing the Partnership to redeem the Offered Units for cash in the amount of the Offered Units Purchase Price, or by the issuance by the Managing General Partner of the number of shares of Series I Preferred Stock equal to the number of Offered Units (adjusted as appropriate to account for stock

 

 

splits, stock dividends or other similar transactions between the Computation Date and the closing of the purchase and sale of the Offered Units in the manner specified in Section 10(f)(ii) below).

 

(d)            The closing of the acquisition or redemption of Offered Units shall, unless otherwise mutually agreed, be held at the principal offices of the Managing General Partner, on the date agreed to by the Managing General Partner and the relevant holder of Series I Preferred Units, which date (the “ Settlement Date ”) shall in no event be on a date which is later than ten (10) days after the date of the Notice of Exchange.  Until the Settlement Date, each tendering holder of Series I Preferred Units shall continue to own his Offered Units, and will continue to be treated as the holder of such Offered Units for all purposes of this Certificate of Designations and the Partnership Agreement, including, without limitation, for purposes of voting, consent, allocations and distributions.  Offered Units will be transferred to the Managing General Partner only upon receipt by the tendering holder of Series I Preferred Units of shares of Series I Preferred Stock or cash in payment in full therefor.

 

(e)            At the closing of the purchase and sale or redemption of Offered Units, payment of the Offered Units Purchase Price shall be accompanied by proper instruments of transfer and assignment and by the delivery of (i) representations and warranties of (A) the tendering holder of Series I Preferred Units with respect to its due authority to sell all of the right, title and interest in and to such Offered Units to the Managing General Partner or the Partnership, as applicable, and with respect to the ownership by the holder of such Offered Units, free and clear of all Liens, and (B) the Managing General Partner with respect to its due authority to acquire such Offered Units for shares of Series I Preferred Stock or to cause the Partnership to redeem such Offered Units for cash and, in the case of payment by shares of Series I Preferred Stock, (ii) a stock certificate or certificates evidencing the shares of Series I Preferred Stock to be issued and registered in the name of the holder or its designee.

 

(f)             To facilitate the Managing General Partner’s ability fully to perform its obligations hereunder, the Managing General Partner covenants and agrees as follows:

 

(i)             The Managing General Partner shall (A) reserve for issuance such number of shares of Series I Preferred Stock as may be necessary to enable the Managing General Partner to issue such shares in full payment of the Offered Units Purchase Price in regard to all Series I Preferred Units which are from time to time outstanding, (B) prior to the delivery of any securities that the Managing General Partner may be obligated to deliver upon exercise of the Exchange Option, comply with all applicable federal and state laws and regulations that require action to be taken by the Managing General Partner in connection with such delivery, (C) use its commercially reasonable best efforts to ensure that any shares of Series I Preferred Stock delivered upon exercise of the Exchange Option will, upon delivery, be listed on the New York Stock Exchange (or such other national exchange, if any, on which the Series I Preferred Stock is then listed), and (D) ensure that all shares of Series I Preferred Stock delivered upon exercise of the Exchange Option will, upon

 

 

delivery, be duly and validly issued and fully paid and nonassessable, free of all liens and charges and not subject to any preemptive rights.

 

(ii)            Under no circumstances shall the Managing General Partner declare any stock dividend, stock split, stock distribution or the like (whether as to the Series I Preferred Units or the Series I Preferred Stock), unless fair and equitable arrangements are provided, to the extent necessary, fully to adjust, and to avoid any dilution in, the Exchange option of any holder of Series I Preferred Units under this Certificate of Designation.

 

(g)            Each of holder of Series I Preferred Units covenants and agrees with the Managing General Partner that all Offered Units tendered to the Managing General Partner or the Partnership, as the case may be, in accordance with the exercise of the Exchange Option shall be delivered free and clear of all Liens and should any Liens exist or arise with respect to such Offered Units, the Managing General Partner or the Partnership, as the case may be, shall be under no obligation to acquire the same unless, in connection with such acquisition, the Managing General Partner has elected to cause the Partnership to pay such portion of the Offered Units 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 Offered Units 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 a holder of Offered Units as a result of a transfer of Offered Units pursuant to the exercise of such holder’s Exchange Option, such holder shall pay such transfer tax.

 

(h)            If a holder of Series I Preferred Units shall exchange any Series I Preferred Units for shares of Series I Preferred Stock pursuant to this Section 10 on or prior to the Record Date for any distribution to be made on such Series I Preferred Units, in accordance with the Charter of the Managing General Partner such holder of Series I Preferred Units will be entitled to receive the corresponding distribution to be paid on such shares of Series I Preferred Stock and shall not be entitled to receive the distribution made by the Partnership in respect of the exchanged Series I Preferred Units.

 

(i)             In the event that the Managing General Partner elects to redeem all or any portion of the Series I Preferred Stock, the Managing General Partner shall deliver a copy of the notice of redemption required by Section 6(b) of the Certificate of Designations of the Series I Preferred Stock to each holder of Series I Preferred Units.  Such notice shall be delivered to the holders of Series I Preferred Units at the same time such notice is delivered to the holders of the Series I Preferred Stock.  Upon receipt of such notice, if a holder of Series I Preferred Units elects to exercise its Exchange Option and receives shares of Series I Preferred Stock in connection therewith on a Settlement Date that occurs prior to the specified redemption date for the Series I Preferred Stock, then, if such shares of Series I Preferred Stock remain outstanding as of such redemption date, such holder shall be entitled to participate in such redemption with respect to such shares of  Series I Preferred Stock.

 

 

SECTION 11.  Change of Control.

 

(a)           Repurchase Right .  If there shall occur a Change of Control, Series I Preferred Units shall be purchased, subject to satisfaction by or on behalf of any holder of the requirements set forth in Section 11(c), by the Operating Partnership at the option of the holders thereof as of the date specified by the Operating Partnership (the “ Change of Control Purchase Date ”) that is not less than 30 calendar days nor more than 60 calendar days after the mailing of written notice of the Change of Control pursuant to Section 11(b) below.  The Purchase Price shall be paid in cash.

 

(b)           Notice to Holders .  As promptly as practicable thereafter but not later than 20 days after the occurrence of a Change of Control, the Operating Partnership shall mail a written notice of the Change of Control to each holder at such holder’s address set forth on the books and records of the Operating Partnership and publish such notice on the Corporation’s web site on the World Wide Web.  The notice shall include the form of a Change of Control Purchase Notice (as defined in Section 11(c) below) to be completed by the holder and shall state:

 

(i)             the date of such Change of Control and, briefly, the events causing such Change of Control;

 

(ii)            the date by which the Change of Control Purchase Notice pursuant to this Section must be given;

 

(iii)           the Change of Control Purchase Date;

 

(iv)           the Conversion Rate and any adjustments thereto;

 

(v)            that Series I Preferred Units as to which a Change of Control Purchase Notice has been given may not thereafter be converted into Common Units; and

 

(vi)           the procedures that the holder of Series I Preferred Units must follow to exercise rights under this Section 11.

 

(c)            Conditions to Purchase.   (i) A holder of Series I Preferred Units may exercise its rights specified in Section 11(a) upon delivery of a written notice (which shall be in substantially the form included as Exhibit C to this Certificate and which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any other written form) of the exercise of such rights (a “ Change of Control Purchase Notice ”) to the Operating Partnership at any time prior to the close of business on the Business Day immediately before the Change of Control Purchase Date.

 

(ii)            Any purchase by the Operating Partnership contemplated pursuant to the provisions of this Section 11(c) shall be consummated by the delivery of the

 

 

consideration to be received by the holder promptly following the Change of Control Purchase Date.

 

(d)            Effect of Change of Control Purchase Notice.   Upon receipt by the Operating Partnership of a valid Change of Control Purchase Notice, the holder of Series I Preferred Units in respect of which such Change of Control Purchase Notice was given shall thereafter be entitled to receive the Purchase Price with respect to such Series I Preferred Units.  Such Purchase Price shall be paid to such holder promptly on the Change of Control Purchase Date with respect to such Series I Preferred Units.  Any Series I Preferred Units in respect of which a Change of Control Purchase Notice has been given by the holder thereof may not be converted into Common Units on or after the date of the delivery of such Change of Control Purchase Notice

 

(e)           Cancellation of Series I Preferred Units.   Upon the payment of the Purchase Price to a holder of Series I Preferred Units electing to have his Series I Preferred Units purchased pursuant to this Section 11, such Series I Preferred Units shall be retired and canceled, distributions will cease to accrue and all other rights of the holder in respect thereof shall terminate (other than the right to receive the Purchase Price as aforesaid), in each case on and as of the Change of Control Purchase Date.

 

SECTION 12.   Voting Rights.

 

(a)            The holders of record the Series I Preferred Units shall not be entitled to any voting rights except as hereinafter provided in this Section 12, as otherwise provided in the Partnership Agreement, or as otherwise provided by law.

 

(b)            The affirmative consent or approval of holders of at least two-thirds of the outstanding Series I Preferred Units, voting as a single class, shall be required to alter, repeal or amend any provisions of the Partnership Agreement or this Certificate, whether by merger, consolidation, combination, reclassification or otherwise (an “ Event ”), if the amendment would materially and adversely affect the rights, powers, or preferences of the holders of Series I Preferred Units; provided, however, that (i) an Event will not be deemed to materially and adversely affect such rights, powers or preferences, in each such case, where each Series I Preferred Units remains outstanding without a material change to its terms and rights or is converted into or exchanged for preferred units of the surviving entity having preferences, conversion and other rights, privileges, voting powers, restrictions, limitations and terms or conditions of redemption thereof identical to that of a Series I Preferred Unit; (ii) any increase in the amount of the authorized Common Units or Parity Units or the creation and issuance of any class or series of Common Units, other Junior Units or Parity Units will not be deemed to materially and adversely affect such rights, powers or preferences; and (iii) the creation of, or increase in the authorized number of, units of any class or series of Senior Units shall be deemed to materially and adversely affect such rights, powers and preferences.

 

SECTION 13.   Restrictions On Transfer.   The Series I Preferred Units shall be subject to the restrictions on transfer set forth in Sections 9.3 and 9.5 of the Partnership Agreement of the

 

 

Operating Partnership as if such units were “Partnership Units”.  Any transfer or attempted transfer (direct or indirect) in violation of the provisions of this Section 13 shall be null and void.

 

SECTION 14.   Currency.   All Series I Preferred Units shall be denominated in U.S. currency, and all payments and distributions thereon or with respect thereto shall be made in U.S. currency.  All references herein to “ $ ” or “ dollars ” refer to U.S. currency.

 

SECTION 15.   Headings.   The headings of the Sections of this Certificate are for convenience of reference only and shall not define, limit or affect any of the provisions hereof.

 

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Holder in Order to Convert

 

the 6% Series I Convertible Perpetual Preferred Units)

 

The undersigned hereby irrevocably elects to convert (the “ Conversion ”)              units of 6% Series I Convertible Perpetual Preferred Units (the “ Series I Preferred Units ”) into Common Units of Simon Property Group, L.P. (the “ Operating Partnership ”) according to the conditions of the Certificate of Designation establishing the terms of the Series I Preferred Units (the “ Certificate of Designation ”), as of the date written below.  If shares are to be issued in the name of a person other than the undersigned, the undersigned shall designate such persons name below and will pay all transfer taxes payable with respect thereto (unless it can be established that no such taxes are payable).  No fee will be charged to the holder for any conversion, except for transfer taxes, if any.

 

The Operating Partnership is not required to issue Common Units unless the conditions for conversion of the Series I Preferred Units set forth in Section 7(b) of the Certificate of Designation have been satisfied.  If the foregoing conditions have been satisfied, the Operating Partnership shall issue Common Units to the undersigned (or its designee identified below) on the books and records of the Operating Partnership effective upon receipt of this Notice of Conversion and shall, within 5 Business Days of receipt of this Notice of Conversion, notify such holder of the effectiveness of such conversion in writing to such holder’s address set forth on the books and records of the Operating Partnership.  If the aforementioned conditions to conversion have not been satisfied, the Operating Partnership shall promptly notify the undersigned in writing.

 

Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or pursuant to the Certificate of Designation.

 

Date of Conversion:

Applicable Conversion Rate:

Number of Series I Preferred Units to be Converted:

Number of Common Units to be Issued:

Signature:

Name:

Name of Transferee (if applicable):

Address:(1)

Fax No.:

 

(1)            Address of the holder where any notices and payments shall be sent by the Operating Partnership.

 

 

EXHIBIT B

 

NOTICE OF EXCHANGE

 

(To be Executed by the Holder in Order to Exchange
6% Series I Convertible Perpetual Preferred Units for
Series I Convertible Perpetual Preferred Stock of Simon Property Group, Inc.)

 

Date:

 

The undersigned hereby irrevocably elects to exchange              6% Series I Convertible Perpetual Preferred Units (the “ Series I Preferred Units ”) of Simon Property Group, L.P. (the “ Operating Partnership ”) into that number of shares of 6% Series I Convertible Perpetual Preferred Stock (the “ Series I Preferred Stock ”) of Simon Property Group, Inc. (the “ Managing General Partner ”) in accordance with the Certificate of Designation establishing the terms of the Series I Preferred Units (the “ Certificate of Designation ”), effective as of the date written below or such later date as may be determined by the Managing General Partner in accordance with the Certificate of Designation).  If shares are to be issued in the name of a person other than the undersigned, the undersigned shall designate such person’s name below and will pay all transfer taxes payable with respect thereto (unless it can be established that no such taxes are payable).

 

Capitalized terms used but not defined herein shall have the meanings ascribed thereto in or pursuant to the Certificate of Designation.

 

Proposed Effective Date of Exchange (1):

Number of Series I Preferred Units to be exchanged:

Signature:

Name:

Name of Transferee (if applicable):

Address:(2)

Fax No.:

 

(1)            As may be agreed by the Managing General Partner in accordance with Section 10(d) of the Certificate of Designation.

(2)            Address of the holder where notices and payments shall be sent by the Operating Partnership.

 

 

EXHIBIT C

 

FORM OF NOTICE OF ELECTION OF REDEMPTION
UPON A CHANGE OF CONTROL

 

Simon Property Group, L.P.

115 West Washington Street, Suite 15 East

Indianapolis, Indiana 46204

Attn:  General Counsel

 

Re:           Simon Property Group, L.P.
6% Series I Convertible Perpetual Preferred Units
(the “ Series I Preferred Units ”)

 

The undersigned hereby irrevocably acknowledges receipt of a notice from Simon Property Group, L.P. (the “ Operating Partnership ”) as to the occurrence of a Change of Control with respect to Simon Property Group, Inc. and requests and instructs the Operating Partnership to purchase              Series I Preferred Units in accordance with the terms of the Certificate of Designation at the Purchase Price.

 

Capitalized terms used but not defined herein shall have the meanings ascribed thereto pursuant to the Certificate of Designation.

 

Dated:
Signature(s):
Print Name and Address:
Social Security or Other Taxpayer Identification Number:

 

 

EXHIBIT B-2 – LP PREFERRED UNIT DESIGNATION

 

 

CERTIFICATE OF DESIGNATION

 

OF

 

7.00% CUMULATIVE CONVERTIBLE PREFERRED UNITS

 

OF

 

SIMON PROPERTY GROUP, L.P.

 

WHEREAS , Simon Property Group, L.P. (the “Operating Partnership”) has agreed to designate a series of preferred units having the powers, preferences and relative, participating, optional or other special rights set forth herein and to issue the units so designated solely as partial consideration for the NED Portfolio Properties as defined in certain contribution agreements with respect to properties the sale of which was arranged by NED Management Limited Partnership and WellsPark Management LLC and, under certain circumstances, as partial consideration for Pheasant Lane Mall in Nashua New Hampshire and Cambridgeside Galleria in Cambridge, Massachusetts pursuant to contribution agreements with respect to those properties (the contribution agreements for the NED Portfolio Properties. Pheasant Lane Mall and Cambridgeside Galleria are referred to herein as the “Contribution Agreements”); and

 

WHEREAS , the designation of the preferred units of the Operating Partnership hereby is permitted by the terms of the Seventh Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Partnership Agreement”); and

 

WHEREAS , Simon Property Group, Inc. (the “Corporation”), the managing general partner of the Operating Partnership (in such capacity, the “Managing General Partner”), has determined that it is in the best interest of the Operating Partnership to designate a new series of preferred units of the Operating Partnership;

 

NOW THEREFORE , the Managing General Partner hereby designates a series of preferred units and fixes the designations, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, of such preferred units, as follows:

 

SECTION 1.  Designation and Number .  The units of such series shall be designated “7.00% Cumulative Convertible Preferred Units” (the “7.00% Cumulative Convertible Preferred Units”).  The authorized number of 7.00% Cumulative Convertible Preferred Units shall be 1,500,000 but such 7.00% Cumulative Convertible Preferred Units shall only be issuable as consideration pursuant to the Contribution Agreements.  Subject to Sections 5 and 6 hereof, each 7.00% Cumulative Convertible Preferred Unit shall be paired with one (1) 8.00% Cumulative Redeemable Preferred Unit of the Operating Partnership (“8.00% Cumulative Redeemable Preferred Unit”) or, if issued, with New Preferred Units as permitted under Section 5 of the Certificate of Designation of 8.00% Cumulative

 

 

Redeemable Preferred Units (the “8.00% Certificate of Designation”) and such paired units shall be subject to the transfer restrictions set forth in Section 9 hereof (as such, “Paired Units”); provided that in the event of (i) the redemption by the Operating Partnership of 8.00% Cumulative Redeemable Preferred Units for Common Units; (ii) the conversion of 8.00% Cumulative Redeemable Preferred Units into 8.00% Cumulative Redeemable Preferred Stock (as defined in the 8.00% Certificate of Designation) as permitted under Section 6 of such 8.00% Certificate of Designation or (iii) the repurchase of 8.00% Cumulative Redeemable Preferred Units payable in Paired Shares as permitted under Section 7 of such 8.00% Certificate of Designation, then in each such case, the 7% Cumulative Convertible Preferred Units shall cease to be paired with such Common Units issuable upon such redemption, such 8.00% Cumulative Redeemable Preferred Stock issuable upon such conversion, or such Paired Shares issuable upon repurchase, as the case may be, of the 8.00% Cumulative Redeemable Preferred Units and the provisions of Section 9(b) hereof shall no longer apply to the 7.00% Cumulative Convertible Preferred Units which had been paired with the 8.00% Cumulative Redeemable Preferred Stock which were so redeemed or converted.

 

SECTION 2.  Ranking .  The 7.00% Cumulative Convertible Preferred Units shall, with respect to the payment of distributions pursuant to Section 6.2 of the Partnership Agreement or rights upon the dissolution, liquidation or winding-up of the Operating Partnership, rank: (i) senior to the holders of Partnership Units of the Operating Partnership (the “Common Units”) and any other equity securities of the Operating Partnership which by their terms rank junior to the 7.00% Cumulative Convertible Preferred Units as to distributions pursuant to Section 6.2 of the Partnership Agreement or rights upon the dissolution, liquidation or winding-up of the Operating Partnership (such Common Units and such other equity securities, collectively, the “Junior Units”), (ii) pari passu with any other preferred units which are not by their terms junior or, subject to Section 11 hereof, senior to the 7.00% Cumulative Convertible Preferred Units as to distributions pursuant to Section 6.2 of the Partnership Agreement or rights upon the dissolution, liquidation or winding-up of the Operating Partnership, and in all respects shall rank pari passu with the 6.50% Series A Convertible Preferred Units, Series B Convertible Preferred Units, 8-3/4% Series B Cumulative Redeemable Preferred Units, 7.89% Series C Cumulative Step-Up Premium Rate Preferred Units and 8.00% Cumulative Redeemable Preferred Units, which are the only preferred units of the Operating Partnership authorized as of the date hereof (“Parity Units”) and (iii) subject to Section 11 hereof, junior to any other preferred units which by their terms are senior to the 7.00% Cumulative Convertible Preferred Units as to distributions pursuant to Section 6.2 of the Partnership Agreement or rights upon the dissolution, liquidation or winding-up of the Operating Partnership (“Senior Units”).

 

SECTION 3.  Distributions . (a)  Distributions on the 7.00% Cumulative Convertible Preferred Units are cumulative from the date of issuance and are payable quarterly on or about the last day of March, June, September and December of each year in an amount in cash equal to 7.00% of the Liquidation Preference (as defined herein) per annum.

 

(b)  Distributions on the 7.00% Cumulative Convertible Preferred Units, without any additional return on unpaid distributions, will accrue, whether or not the Operating

 

 

Partnership has earnings, whether or not there are funds legally available for the payment of such distribution and whether or not such distributions are declared or paid when due. All such distributions accumulate from the first date of issuance of any such 7.00% Cumulative Convertible Preferred Units. Distributions on the 7.00% Cumulative Convertible Preferred Units shall cease to accumulate on such units on the date of their earlier conversion or redemption.

 

(c)  In allocating items of income, gain, loss and deductions which could have an effect upon the determination of the federal income tax liability of any holder of a 7.00% Cumulative Convertible Preferred Unit, except as otherwise required by Section 704(c) of the Internal Revenue Code of 1986, as amended, or any other applicable provisions thereof, the Operating Partnership shall allocate each such item proportionately, based on the distributive share of profits or losses, as the case may be, of the Operating Partnership allocated to holders of the 7.00% Cumulative Convertible Preferred Units as compared to the total of the distributive shares of such profits and losses, as the case may be, allocated to all partners of the Operating Partnership.

 

(d)  If any 7.00% Cumulative Convertible Preferred Units are outstanding, then, except as provided in the following sentence, no distributions shall be declared or paid or set apart for payment on any Parity Units or Junior Units for any period unless full cumulative distributions have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payments on the 7.00% Cumulative Convertible Preferred Units for all past distribution periods and the then current distribution period.  When distributions are not paid in full (or a sum sufficient for such full payment is not set apart) upon the 7.00% Cumulative Convertible Preferred Units and any Parity Units, all distributions declared upon the 7.00% Cumulative Convertible Preferred Units and any other Parity Units shall be declared pro rata so that the amount of distributions declared per 7.00% Cumulative Convertible Preferred Unit and such other Parity Units shall in all cases bear to each other the same ratio that accrued distributions per 7.00% Cumulative Convertible Preferred Unit and such other series of Parity Units bear to each other.

 

(e)  Except as provided in subparagraph (d) above, unless full cumulative distributions on the 7.00% Cumulative Convertible Preferred Units have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past distribution periods and the then current distribution period, no distributions (other than in Junior Units) shall be declared, set aside for payment or paid and no other distribution shall be declared or made upon any Junior Units, nor shall any Junior Units be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any such Junior Units) by the Operating Partnership (except by conversion into or exchange for Junior Units).

 

SECTION 4.  Liquidation Preference .  (a)  Each 7.00% Cumulative Convertible Preferred Unit shall be entitled to a liquidation preference of $28.00 per 7.00% Cumulative Convertible Preferred Unit (“Liquidation Preference”).

 

 

(b)  In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Operating Partnership pursuant to Article VIII of the Partnership Agreement, the holders of 7.00% Cumulative Convertible Preferred Units then outstanding shall be entitled to be paid out of the assets of the Operating Partnership available for distribution, after and subject to the payment in full of all amounts required to be distributed to the holders of Senior Units, but before any payment shall be made to the holders of Junior Units, an amount equal to the aggregate Liquidation Preference of the 7.00% Cumulative Convertible Preferred Units held by such holder, plus an amount equal to accrued and unpaid distributions thereon, if any.  If upon any such liquidation, dissolution or winding up of the Operating Partnership the remaining assets of the Operating Partnership available for the distribution after payment in full of amounts required to be paid or distributed to holders of Senior Units shall be insufficient to pay the holders of the 7.00% Cumulative Convertible Preferred Units the full amount to which they shall be entitled, the holders of the 7.00% Cumulative Convertible Preferred Units and the holders of any series of Parity Units shall share ratably with other holders of Parity Units in any distribution of the remaining assets and funds of the Operating Partnership in proportion to the respective amounts which would otherwise be payable in respect to the Parity Units held by each of the said holders upon such distribution if all amounts payable on or with respect to said Parity Units were paid in full.  After payment in full of the Liquidation Preference and accumulated and unpaid distributions to which they  are entitled, the holders of 7.00% Cumulative Convertible Preferred Units shall not be entitled to any further participation in any distribution of the assets of the Operating Partnership.

 

SECTION 5.  Redemption .   (a)  General .  The 7.00% Cumulative Convertible Preferred Units are not redeemable, except as permitted under Sections 6 and 7 herein, prior to August 27, 2009.

 

(b)  Optional Redemption .  (i) On and after August 27, 2009, the Operating Partnership may, at its option, at any time, redeem the 7.00% Cumulative Convertible Preferred Units, in whole or in part, at the Liquidation Preference, plus accrued and unpaid distributions thereon, if any, to and including the date of redemption (the “Redemption Price”).  The Redemption Price (other than the portion thereof consisting of accrued and unpaid distributions, which shall be payable in cash) is payable in Common Units at the Deemed Partnership Unit Value, as of the Redemption Date (as defined below), of the Common Units to be issued.

 

(ii) Provided that no later than the Redemption Date the Operating Partnership shall have (A) set apart the funds necessary to pay the accrued and unpaid distribution on all the 7.00% Cumulative Convertible Preferred Units then called for redemption and (B) reserved for issuance a sufficient number of authorized Common Units, the Operating Partnership may give the holders of the 7.00% Cumulative Convertible Preferred Units written notice (“Redemption Notice”) of a redemption pursuant to Section 5(b) (a “Redemption”) not more than 70 nor less than 40 calendar days prior to the date fixed for redemption (the “Redemption Date”) at the address of such holders on the books of the Operating Partnership (provided that failure to give such notice or any defect therein shall not affect the validity of the proceeding for a Redemption except as to the holder to whom the Operating Partnership has failed to give such notice or whose notice was defective).  The 7.00% Cumulative

 

 

Convertible Preferred Units for which the Redemption Price has been paid shall no longer be deemed outstanding from and after the date of payment and all rights with respect to such units shall forthwith cease and terminate.  In case fewer than all of the outstanding 7.00% Cumulative Convertible Preferred Units are called for redemption, such units shall be redeemed pro rata, as nearly as practicable, among all holders of 7.00% Cumulative Convertible Preferred Units, provided that, if within 20 business days of the Redemption Notice the Contributor Representative (as such term is defined in the Tax Protection Agreement entered into on or prior to the date hereof between Operating Partnership and certain other parties (the “Tax Protection Agreement”)) notifies the Operating Partnership of an alternative allocation (“Allocation Notice”), then the redemption of the 7.00% Cumulative Preferred Units shall be allocated in accordance with such Allocation Notice.  On or before the Redemption Date, a holder of 7.00% Cumulative Convertible Preferred Units shall have the conversion right set forth in Section 6 hereof notwithstanding anything in this Section 5 to the contrary.

 

(c)  In the event of the redemption of a 7.00% Cumulative Convertible Preferred Unit pursuant to this Section 5 for Common Units (but not any Paired Shares issued upon conversion thereof in exchange therefore), then such Common Units issuable upon such conversion shall be paired with 8.00% Cumulative Redeemable Preferred Units so that they are transferable, redeemable or convertible as a paired unit consisting of the Common Units so issued