EXHIBIT 1.1
EXECUTION VERSION
▇▇▇▇▇▇▇▇ CHANCE US LLP
[▇▇▇▇▇▇▇▇ CHANCE LOGO]
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PURCHASE AGREEMENT
DATED AS OF JANUARY 13, 2004
AMONG
SIMON PROPERTY GROUP, L.P.
AND
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
AND
UBS SECURITIES LLC
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TABLE OF CONTENTS
PAGE
PURCHASE AGREEMENT............................................................................1
SECTION 1. Representations and Warranties...................................................2
(a) Representations and Warranties by the Operating Partnership......................2
(1) Similar Offerings.........................................................2
(2) Offering Memorandum.......................................................3
(3) Incorporated Documents....................................................3
(4) Independent Accountants...................................................3
(5) Financial Statements......................................................3
(6) Internal Accounting Controls..............................................4
(7) No Material Adverse Change in Business....................................4
(8) Good Standing of the Company..............................................4
(9) Good Standing of the Operating Partnership................................5
(10) Good Standing of Simon Entities...........................................5
(11) Good Standing of Property Partnerships....................................5
(12) Insolvency................................................................6
(13) Capitalization............................................................6
(14) Authorization of Purchase Agreement.......................................6
(15) Authorization of the Registration Rights Agreement........................6
(16) Authorization of the Indenture............................................7
(17) Authorization of Notes....................................................7
(18) Descriptions of the Notes and the Indenture...............................8
(19) Absence of Defaults and Conflicts.........................................8
(20) Absence of Labor Dispute..................................................8
(21) ERISA Compliance..........................................................8
(22) Absence of Proceedings....................................................9
(23) REIT Qualification........................................................9
(24) Investment Company Act....................................................9
(25) Intellectual Property.....................................................9
(26) Absence of Further Requirements...........................................9
(27) Possession of Licenses and Permits.......................................10
(28) Title to Property........................................................10
(29) Environmental Laws.......................................................11
(30) Insurance................................................................11
(31) Tax Returns..............................................................11
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TABLE OF CONTENTS
(CONTINUED)
PAGE
(32) Environmental Consultants................................................11
(33) Property Information.....................................................11
(34) Rule 144A Eligibility....................................................12
(35) No General Solicitation..................................................12
(36) No Registration Required.................................................12
(37) Reporting Company........................................................12
(38) No Directed Selling Efforts..............................................12
(39) Investment Grade Rating..................................................12
(40) Statistical Data and Forward-Looking Statements..........................12
(41) Relationship with Interested Persons.....................................12
(b) Officers' Certificates..........................................................12
SECTION 2. Sale and Delivery to the Initial Purchasers; Closing............................13
(a) Notes...........................................................................13
(b) Payment.........................................................................13
(c) Qualified Institutional Buyer...................................................14
(d) Denominations; Registration.....................................................14
SECTION 3. Covenants of the Operating Partnership..........................................14
(a) Offering Memorandum.............................................................14
(b) Notice and Effect of Material Events............................................14
(c) Amendment to Offering Memorandum and Supplements................................14
(d) Blue Sky Qualifications.........................................................15
(e) Stop Order by State Securities Commission.......................................15
(f) Earnings Statement..............................................................15
(g) Reporting Requirements..........................................................15
(h) REIT Qualification..............................................................15
(i) Use of Proceeds.................................................................15
(j) Exchange Act Filings............................................................15
(k) Supplemental Indentures.........................................................16
(l) Ratings.........................................................................16
(m) DTC.............................................................................16
(n) Registration Rights Agreement...................................................16
SECTION 4. Payment of Expenses.............................................................16
(a) Expenses........................................................................16
(b) Termination of Agreement........................................................16
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 5. Conditions of Initial Purchaser's Obligations...................................16
(a) Execution of Registration Rights Agreement......................................17
(b) Opinions of Counsel for Operating Partnership...................................17
(c) Opinion of Counsel for Initial Purchasers.......................................17
(d) Officers' Certificate...........................................................17
(e) Accountant's Comfort Letter.....................................................17
(f) Bring-down Comfort Letter.......................................................18
(g) Maintenance of Rating...........................................................18
(h) Additional Documents............................................................18
(i) Termination of this Agreement...................................................18
SECTION 6. Subsequent Offers and Resales of the Notes......................................18
(a) Offer and Sale Procedures.......................................................18
(b) Covenants of the Operating Partnership..........................................19
(c) Resale Pursuant to Rule 903 of Regulation S or Rule 144A........................20
(d) Representations and Warranties of Initial Purchasers............................20
SECTION 7. Indemnification.................................................................21
(a) Indemnification of Initial Purchasers...........................................21
(b) Indemnification of Operating Partnership, Company and Company's Directors
and Officers....................................................................21
(c) Actions Against Parties; Notification...........................................21
(d) Settlement Without Consent If Failure to Reimburse..............................22
SECTION 8. Contribution....................................................................22
SECTION 9. Representations, Warranties and Agreements to Survive Delivery..................23
SECTION 10. Termination.....................................................................23
(a) Termination; General............................................................23
(b) Liabilities.....................................................................24
SECTION 11. Default by One of the Initial Purchasers........................................24
SECTION 12. Notices.........................................................................25
SECTION 13. Parties.........................................................................25
SECTION 14. GOVERNING LAW AND TIME..........................................................25
SECTION 15. Effect of Headings..............................................................25
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SIMON PROPERTY GROUP, L.P.
(a Delaware limited partnership)
$300,000,000 3.75% Notes due 2009
$200,000,000 4.90% Notes due 2014
PURCHASE AGREEMENT
January 13, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
UBS Securities LLC
Citigroup Global Markets Inc.
Credit Suisse First Boston LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
as Initial Purchasers
c/o Merrill ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Simon Property Group, L.P., a Delaware limited partnership (the
"Operating Partnership"), confirms its agreement with each of the Initial
Purchasers named in SCHEDULE 1 hereto (collectively, the "Initial Purchasers,"
which term shall also include any initial purchaser substituted as hereinafter
provided in Section 11 hereof), with respect to the issue and sale by the
Operating Partnership and the purchase by the Initial Purchasers, acting
severally and not jointly, of the respective principal amounts set forth in said
SCHEDULE 1 of $300,000,000 aggregate principal amount of its 3.75% senior
unsecured notes due 2009 (the "2009 Notes") and $200,000,000 aggregate principal
amount of its $4.90% senior unsecured notes due 2014 (the "2014 Notes" and,
together with the 2009 Notes, the "Notes").
The Notes shall be issued under an indenture, dated as of November 26,
1996 (the "Original Indenture"), between the Operating Partnership and JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank), as trustee (the
"Trustee"). The title, aggregate principal amount, rank, interest rate or
formula and timing of payments thereof, stated maturity date, redemption and/or
repayment provisions, sinking fund requirements and any other variable terms of
the Notes shall be established by or pursuant to a thirteenth supplemental
indenture to the Original Indenture (as so supplemented, and as the same may be
amended or further supplemented from time to time, the "Indenture") to be
entered into between the Operating Partnership and the Trustee on or prior to
the Closing Time (as defined in Section 2(b)). Notes issued in book-entry form
shall be issued to Cede & Co. as nominee of The Depository Trust
Company ("DTC") pursuant to a letter agreement, to be dated as of the Closing
Time (the "DTC Agreement"), among the Operating Partnership, the Trustee and
DTC.
The Operating Partnership understands that the Initial Purchasers propose
to make an offering of the Notes on the terms and in the manner set forth herein
and agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Notes to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Notes are to be
offered and sold through the Initial Purchasers without being registered under
the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon
exemptions therefrom. Pursuant to the terms of the Notes and the Indenture,
investors that acquire Notes may only resell or otherwise transfer such Notes if
such Notes are hereafter registered under the 1933 Act or if an exemption from
the registration requirements of the 1933 Act is available (including the
exemption afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S")
of the rules and regulations promulgated under the 1933 Act by the Securities
and Exchange Commission (the "Commission")).
The Operating Partnership has prepared and delivered to each Initial
Purchaser copies of an Offering Memorandum dated January 13, 2004 (the "Offering
Memorandum") for use by such Initial Purchaser in connection with its
solicitation of purchases of, or offering of, the Notes. "Offering Memorandum"
means, with respect to any date or time referred to in this Agreement, the most
recent offering memorandum, as may be amended or supplemented, including
exhibits thereto and any documents incorporated therein by reference, which has
been prepared and delivered by the Operating Partnership to the Initial
Purchasers in connection with their solicitation of purchases of, or offering
of, the Notes. Capitalized terms used but not otherwise defined shall have the
meanings given to those terms in the Offering Memorandum.
The Initial Purchasers and their direct and indirect transferees shall be
entitled to the benefits of a Registration Rights Agreement, to be dated as of
the Closing Time and to be substantially in the form attached hereto as EXHIBIT
A (the "Registration Rights Agreement").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Offering Memorandum, and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the Offering Memorandum.
The term "subsidiary" means a corporation, partnership or other entity, a
majority of the outstanding voting stock, partnership interests or other equity
interests, as the case may be, of which is owned or controlled, directly or
indirectly, by the Operating Partnership and/or Simon Property Group, Inc., a
Delaware corporation and the general partner of the Operating Partnership (the
"Company") or by one or more other subsidiaries of the Operating Partnership
and/or the Company.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE OPERATING PARTNERSHIP. The
Operating Partnership represents and warrants to each Initial Purchaser, as of
the date hereof and as of the Closing Time (as defined below) (in each case, a
"Representation Date"), and agrees with each Initial Purchaser, as follows:
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(1) SIMILAR OFFERINGS. None of the Company, the Operating
Partnership, nor any of their affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), has, directly or
indirectly, solicited any offer to buy, sold or offered to sell or
otherwise negotiated in respect of, or shall solicit any offer to buy or
offer to sell or otherwise negotiate in respect of, in the United States
or to any United States citizen or resident, any security which is or
would be integrated with the sale of the Notes in a manner that would
require the Notes to be registered under the ▇▇▇▇ ▇▇▇.
(2) OFFERING MEMORANDUM. The Offering Memorandum does not, and
at the Closing Time shall not, include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, that this representation, warranty
and agreement shall not apply to statements in or omissions from the
Offering Memorandum made in reliance upon and in conformity with
information furnished to the Operating Partnership in writing by any
Initial Purchaser expressly for use in the Offering Memorandum.
(3) INCORPORATED DOCUMENTS. The Offering Memorandum shall
incorporate by reference the most recent Annual Report of the Company and
the Operating Partnership on Form 10-K filed with the Commission and each
Quarterly Report of the Company and the Operating Partnership on Form
10-Q and each Current Report of the Company and the Operating Partnership
on Form 8-K filed with the Commission since the filing of the end of the
fiscal year to which such Annual Report relates. The documents
incorporated or deemed to be incorporated by reference in the Offering
Memorandum at the time they were or hereafter are filed with the
Commission, complied and shall comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Offering Memorandum, at the
time the Offering Memorandum was issued and at the Closing Time, did not
and shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(4) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included, or incorporated
by reference, in the Offering Memorandum were independent public
accountants with respect to the Operating Partnership and its
subsidiaries and the current accountants of the Operating Partnership are
independent public accountants with respect to the Operating Partnership
and its subsidiaries, in each case, as required by the rules and
regulations of the Commission under the 1933 Act.
(5) FINANCIAL STATEMENTS. The financial statements included, or
incorporated by reference, in the Offering Memorandum, together with the
related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included therein, present fairly
the financial position of the respective entity or entities or group
presented therein at the respective dates indicated and the statement of
operations, stockholders' equity and cash flows of such entity, as the
case may be, for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The supporting schedules, if any, included, or incorporated by reference,
in the Offering Memorandum present fairly, in accordance with GAAP, the
information stated therein. The selected financial data, the summary
financial information and other financial information and data included,
or incorporated by reference, in the Offering Memorandum present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included, or
incorporated by
3
reference, in the Offering Memorandum. In addition, any pro forma
financial information and the related notes thereto, if any, included, or
incorporated by reference, in the Offering Memorandum present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines and the guidelines of the American
Institute of Certified Public Accountants ("AICPA") with respect to pro
forma information and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(6) INTERNAL ACCOUNTING CONTROLS. The Operating Partnership
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that: (a) transactions are properly authorized; (b)
assets are safeguarded against unauthorized or improper use; and (c)
transactions are properly recorded and reported as necessary to permit
preparation of its financial statements in conformity with United States
GAAP.
(7) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (a) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, assets, business affairs or business prospects of the
Company, the Operating Partnership, M.S. Management Associates, Inc., a
Delaware corporation ("SPG Management Company"), M.S. Management
Associates (Indiana), Inc., an Indiana corporation ("Management
(Indiana)"), Simon MOA Management Company, Inc., an Indiana corporation
("MOA"), ▇▇▇▇▇▇▇▇▇ Properties Management, Inc., an Ohio corporation ("DRC
Management Company," and together with SPG Management Company, Management
(Indiana) and MOA, the "Management Companies"), and Simon Property Group
(Delaware), Inc., ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Property, Inc., SDG Forum Developers,
Inc., ▇▇▇▇▇▇▇▇▇ Properties, Inc., ▇▇▇▇▇▇▇▇▇ Properties II, Inc., and
▇▇▇▇▇▇▇▇▇ Properties III, Inc. and any other subsidiary of the Company
(collectively, the "REIT Subs") or any subsidiary of the Operating
Partnership (other than any Property Partnership (as defined below)) not
listed among the foregoing entities, (the Company, the Operating
Partnership, the Management Companies, the REIT Subs and such
subsidiaries being sometimes hereinafter collectively referred to as the
"Simon Entities" and individually as a "Simon Entity"), or of any entity
which owns any Portfolio Property (as such term is defined in the
Offering Memorandum) or any direct interest in any Portfolio Property
(the "Property Partnerships") whether or not arising in the ordinary
course of business, which, taken as a whole, would be material to the
Company, the Operating Partnership and the other Simon Entities taken as
a whole (anything which, taken as a whole, would be material to the
Company, the Operating Partnership and the other Simon Entities taken as
a whole, being hereinafter referred to as "Material;" and such a material
adverse change, a "Material Adverse Effect"), (b) no casualty loss or
condemnation or other adverse event with respect to the Portfolio
Properties has occurred which would be Material, (c) there have been no
transactions or acquisitions entered into by the Simon Entities or the
Property Partnerships, other than those in the ordinary course of
business, which would be Material, (d) except for distributions in
amounts per unit that are consistent with past practices, there has been
no distribution of any kind declared, paid or made by the Operating
Partnership on any of its respective general, limited and/or preferred
partnership interests, and (e) there has been no change in the capital
stock of the corporate Simon Entities or in the partnership interests of
the Operating Partnership or any Property Partnership, or any increase in
the indebtedness of the Simon Entities, the Property Partnerships or the
Portfolio Properties which would be Material.
(8) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority
to own, lease and operate its properties and to conduct its business
4
as described in the Offering Memorandum. The Company is duly qualified as
a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not result in a Material Adverse Effect.
(9) GOOD STANDING OF THE OPERATING PARTNERSHIP. The Operating
Partnership is duly organized and validly existing as a limited
partnership in good standing under the laws of the State of Delaware,
with the requisite power and authority to own, lease and operate its
properties, to conduct the business in which it is engaged and proposes
to engage as described in the Offering Memorandum and to enter into and
perform its obligations under this Agreement. The Operating Partnership
is duly qualified or registered as a foreign partnership and is in good
standing in each jurisdiction in which such qualification or registration
is required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or
register would not have a Material Adverse Effect. The Company is the
sole general partner of the Operating Partnership. The amended and
restated agreement of limited partnership of the Operating Partnership
(the "OP Partnership Agreement") is in full force and effect in the form
in which it was filed as an exhibit to the Operating Partnership's Annual
Report on Form 10-K for the year ended December 31, 2002, except for
subsequent amendments relating to the admission of new partners to the
Operating Partnership.
(10) GOOD STANDING OF SIMON ENTITIES. Each of the Simon Entities
other than the Operating Partnership has been duly organized and is
validly existing as a corporation, limited partnership, limited liability
company or other entity, as the case may be, in good standing under the
laws of the state of its jurisdiction of incorporation or organization,
as the case may be, with the requisite power and authority to own, lease
and operate its properties, and to conduct the business in which it is
engaged or proposes to engage as described in the Offering Memorandum.
Each such entity is duly qualified or registered as a foreign
corporation, limited partnership or limited liability company or other
entity, as the case may be, to transact business and is in good standing
in each jurisdiction in which such qualification or registration is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or
register would not have a Material Adverse Effect. Except as otherwise
stated in the Offering Memorandum, all of the issued and outstanding
capital stock or other equity interests of each such entity have been
duly authorized and validly issued and are fully paid and non-assessable,
have been offered and sold in compliance with all applicable laws
(including without limitation, federal or state securities laws) and are
owned by the Company, the Management Companies or the Operating
Partnership, in each case free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (collectively,
"Liens"). No shares of capital stock or other equity interests of such
entities are reserved for any purpose, and there are no outstanding
securities convertible into or exchangeable for any capital stock or
other equity interests of such entities and no outstanding options,
rights (preemptive or otherwise) or warrants to purchase or to subscribe
for shares of such capital stock or any other securities of such
entities, except as disclosed in the Offering Memorandum. No such shares
of capital stock or other equity interests of such entities were issued
in violation of preemptive or other similar rights arising by operation
of law, under the charter or by-laws of such entity or under any
agreement to which any Simon Entity is a party.
(11) GOOD STANDING OF PROPERTY PARTNERSHIPS. Each of the
Property Partnerships is duly organized and validly existing as a limited
or general partnership, as the case may be, in good standing under the
laws of its respective jurisdiction of formation. Each of the Property
Partnerships has the requisite power and authority to own, lease and
operate its properties, and to
5
conduct the business in which it is engaged. Each of the partnership
agreements of the Property Partnerships is in full force and effect. Each
of the Property Partnerships is duly qualified or registered as a foreign
partnership to transact business and is in good standing in each
jurisdiction in which such qualification or registration is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify or register would not
have a Material Adverse Effect.
(12) INSOLVENCY. Neither the Operating Partnership nor the
Company (a) is "insolvent" as that term is defined in Section 101(32) of
the United States Bankruptcy Code (the "Bankruptcy Code") (11
U.S.C.101(32)), Section 2 of the Uniform Fraudulent Transfer Act ("UFTA")
or Section 2 of the Uniform Fraudulent Conveyance Act ("UFCA"), (b) has
"unreasonably small capital" as that term is used in Section
548(a)(2)(ii) of the Bankruptcy Code or Section 5 of the UFCA, (C) is
engaged or about to engage in a business or transaction for which its
remaining property is "unreasonably small" in relation to the business or
transaction as that term is used in Section 4 of the UFTA or (d) is
unable to pay its debts as they mature or become due, within the meaning
of Section 548(a)(2)(B)(iii) of the Bankruptcy Code, Section 4 of the
UFTA and Section 6 of the UFCA. The Operating Partnership and the Company
now own assets having a value both at "fair valuation" and at "present
fair saleable value" greater than the amount required to pay its "debts"
as such terms are used in Section 2 of the UFTA and Section 2 of the
UFCA. Neither the Operating Partnership nor the Company will be rendered
insolvent by the execution and delivery of this Agreement or by the
transactions contemplated hereunder.
(13) CAPITALIZATION. The issued and outstanding units of
general, limited and/or preferred partner interests of the Operating
Partnership are as set forth in the Company's Current Report on Form 8-K
filed on October 31, 2003 (except for subsequent issuances thereof, if
any, contemplated under this Agreement or referred to in the Offering
Memorandum). Such units of partners' equity have been duly authorized and
validly issued by the Operating Partnership and are fully paid and
non-assessable and have been offered and sold or exchanged in compliance
with all applicable laws (including, without limitation, federal and
state securities laws), and none of such units of partners' equity were
issued in violation of preemptive or other similar rights arising by
operation of law, under the certificate of limited partnership and the OP
Partnership Agreement of the Operating Partnership or under any agreement
to which the Operating Partnership or any of the other Simon Entities is
a party or otherwise. There are no units of partners' equity of the
Operating Partnership reserved for any purpose and there are no
outstanding securities convertible into or exchangeable for any units of
partners' equity of the Operating Partnership and, other than this
Agreement, there are no outstanding options, rights (preemptive or
otherwise) or warrants to purchase from the Operating Partnership or to
subscribe for with the Operating Partnership such units of partners'
equity or any other securities of the Operating Partnership.
(14) AUTHORIZATION OF
PURCHASE AGREEMENT. This Agreement has
been duly authorized, executed and delivered by the Operating Partnership
and, assuming due authorization, execution and delivery by or on behalf
of the Initial Purchasers, shall constitute a valid and legally binding
agreement of the Operating Partnership, enforceable against the Operating
Partnership in accordance with its terms except (a) to the extent that
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether considered at
law or in equity); and (b) to the extent that rights to indemnification
and contribution contained in this Agreement may be limited by state or
federal securities laws or public policy.
6
(15) AUTHORIZATION OF THE REGISTRATION RIGHTS AGREEMENT. The
Registration Rights Agreement has been duly authorized, executed and
delivered by the Operating Partnership and, assuming the due
authorization, execution and delivery thereof by or on behalf of the
Initial Purchasers, shall constitute a valid and legally binding
agreement of the Operating Partnership, enforceable against the Operating
Partnership in accordance with its terms except (a) to the extent that
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether considered at
law or in equity); (b) that rights to indemnity and contribution
contained in the Registration Rights Agreement may be limited by state or
federal securities laws or pubic policy and (c) that rights to receive
the Special Interest Premium (as such term is defined therein) contained
therein, to the extent it may be construed as liquidated damages, may be
unenforceable, in whole or in part.
(16) AUTHORIZATION OF THE INDENTURE. For the Notes being sold
pursuant to this Agreement, the Indenture has been, or prior to the
issuance of the Notes thereunder shall have been, duly authorized,
executed and delivered by the Operating Partnership and, upon such
authorization, execution and delivery, shall constitute a valid and
legally binding agreement of the Operating Partnership, enforceable
against the Operating Partnership, in accordance with its terms, except
as the enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally, (b) general equitable principles (regardless
of whether enforcement is considered in a proceeding in equity or at
law), (c) requirements that a claim with respect to any Notes issued
under the Indenture that are payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law, or (d) governmental authority to
limit, delay or prohibit the making of payments outside the United
States. The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended, (the "1939 Act") and conforms, in all material
respects, to the descriptions thereof contained in the Offering
Memorandum.
(17) AUTHORIZATION OF NOTES. The Notes being sold pursuant to
this Agreement have been, duly authorized by the Operating Partnership
for issuance and sale pursuant to this Agreement. Such Notes, when issued
and authenticated in the manner provided for in the applicable Indenture
and delivered by the Operating Partnership pursuant to this Agreement
against payment of the consideration therefor specified in this
Agreement, shall constitute valid and legally binding, unsecured
obligations of the Operating Partnership, enforceable against the
Operating Partnership, in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles, and
except further as enforcement thereof may be limited by (a) requirements
that a claim with respect to any Notes denominated other than in U.S.
dollars (or a foreign or composite currency judgment in respect of such
claim) be converted into U.S. dollars at a rate of exchange prevailing on
a date determined pursuant to applicable law or (b) governmental
authority to limit, delay or prohibit the making of payments outside the
United States. Such Notes shall be in the form contemplated by, and each
registered holder thereof shall be entitled to the benefits of, the
applicable Indenture. Such Notes rank and shall rank equally with all
unsecured indebtedness (other than subordinated indebtedness) of the
Operating Partnership that is outstanding on a Representation Date or
that may be incurred thereafter and senior to all subordinated
indebtedness that is outstanding on a Representation Date or that may be
incurred thereafter, except that such Notes shall be effectively
subordinate to the prior claims of each secured mortgage lender to any
specific Portfolio Property
7
which secures such lender's mortgage and any claims of creditors of
entities wholly or partly owned, directly or indirectly, by the Operating
Partnership.
(18) DESCRIPTIONS OF THE NOTES AND THE INDENTURE. The Notes
being sold pursuant to this Agreement and the Indenture shall conform in
all material respects to the statements relating thereto contained in the
Offering Memorandum and shall be in substantially the respective forms
previously delivered to the Initial Purchasers.
(19) ABSENCE OF DEFAULTS AND CONFLICTS. None of the Simon
Entities or any Property Partnership is in violation of its charter,
by-laws, certificate of limited partnership or partnership agreement or
other organizational document, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which each entity is a party or by which or any of them may be bound, or
to which any of its property or assets or any Portfolio Property may be
bound or subject (collectively, "Agreements and Instruments"), except for
such violations (other than with respect to the charter, by-laws,
partnership agreement, or other organizational document of such entities)
or defaults that would not result in a Material Adverse Effect. The
execution, delivery and performance of this Agreement, the Notes, the
Indenture, the Registration Rights Agreement and any other agreement or
instrument entered into or issued or to be entered into or issued by the
Operating Partnership in connection with the transactions contemplated
hereby or thereby or in the Offering Memorandum and the consummation of
the transactions contemplated herein and in the Offering Memorandum
(including the issuance and sale of the Notes and the use of the proceeds
from the sale of the Notes as described under the caption "Use of
Proceeds") and compliance by the Operating Partnership with its
obligations hereunder and thereunder have been duly authorized by all
necessary partnership action, and do not and shall not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the Operating
Partnership or any other Simon Entity or any Property Partnership
pursuant to, any Agreements and Instruments, except for such conflicts,
breaches, defaults, Repayment Events or liens, charges or encumbrances
that, singly or in the aggregate, would not result in a Material Adverse
Effect, nor shall such action result in any violation of the provisions
of the partnership agreement and certificate of limited partnership of
the Operating Partnership or the organizational documents of any other
Simon Entity or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Operating
Partnership, any other Simon Entity or any Property Partnership or any of
their assets, properties or operations, except for such violations that
would not have a Material Adverse Effect. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a material portion of such indebtedness by the
Operating Partnership, any other Simon Entity or any Property
Partnership.
(20) ABSENCE OF LABOR DISPUTE. Except as otherwise described in
the Offering Memorandum, no labor dispute with the employees of the
Operating Partnership or any other Simon Entity or any Property
Partnership exists or, to the knowledge of the Operating Partnership, is
imminent, and the Operating Partnership is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or
contractors, which dispute or disturbance, in either case, may reasonably
be expected to result in a Material Adverse Effect.
8
(21) ERISA COMPLIANCE. The Operating Partnership is in
compliance in all material respects with, as applicable, all presently
applicable provisions of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Operating Partnership would have any liability; the Operating
Partnership has not incurred or does not expect to incur liability under
(a) Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (b) Section 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" that is
maintained or contributed to by the Operating Partnership that is
intended to be qualified under Section 401(a) of the Code is so qualified
and nothing has occurred, whether by action or by failure to act, that
would cause the loss of such qualification.
(22) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or by any court or
governmental agency or body, domestic or foreign, now pending, or to the
knowledge of the Operating Partnership threatened against or affecting
the Operating Partnership, any other Simon Entity, or any Property
Partnership or any officer or director of the Operating Partnership which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the
assets, properties or operations thereof or the consummation of this
Agreement, the Indenture or the Registration Rights Agreement or the
transactions contemplated herein or therein. The aggregate of all pending
legal or governmental proceedings to which the Operating Partnership or
any other Simon Entity, or any Property Partnership is a party or of
which any of their respective assets, properties or operations is the
subject which are not described in the Offering Memorandum including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(23) REIT QUALIFICATION. At all times since January 1, 1973, the
Company (including as Corporate Property Investors, a Massachusetts
business trust) has been, and upon the sale of the applicable Notes, the
Company shall continue to be, organized and operated in conformity with
the requirements for qualification as a real estate investment trust
under the Code, and its proposed methods of operation shall enable it to
continue to meet the requirements for taxation as a real estate
investment trust under the Code.
(24) INVESTMENT COMPANY ACT. Each of the Operating Partnership,
the other Simon Entities and the Property Partnerships is not, and upon
the issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum shall not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(25) INTELLECTUAL PROPERTY. To the knowledge of the Operating
Partnership, none of the Simon Entities or the Property Partnerships is
required to own, possess or obtain the consent of any holder of any
trademarks, service marks, trade names or copyrights not now lawfully
owned, possessed or licensed in order to conduct the business now
operated by such entity.
(26) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
or any other entity or person is necessary or required for the
performance by the Operating Partnership of its obligations under this
Agreement, the Indenture or the Registration Rights Agreement or in
connection with the transactions contemplated under this Agreement, the
Indenture or the Registration Rights Agreement, except such as have been
already
9
obtained under the 1933 Act or the 1933 Act Regulations or as may be
required under state securities laws or under the by-laws and rules of
the National Association of Securities Dealers, Inc. (the "NASD").
(27) POSSESSION OF LICENSES AND PERMITS. The Operating
Partnership and the other Simon Entities and each Property Partnership
possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them except for
such Governmental Licenses the failure to obtain would not, singly or in
the aggregate, result in a Material Adverse Effect. The Operating
Partnership and the other Simon Entities and each Property Partnership
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, result in a Material Adverse Effect. All of the
Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not result in
a Material Adverse Effect. None of the Operating Partnership, any of the
other Simon Entities or any Property Partnership has received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(28) TITLE TO PROPERTY. The Operating Partnership, the other
Simon Entities and the Property Partnerships have good and marketable
title to the Portfolio Properties free and clear of Liens, except (a) as
otherwise stated in the Offering Memorandum, or referred to in any title
policy for such Portfolio Property, or (b) those which do not, singly or
in the aggregate, Materially (i) affect the value of such property or
(ii) interfere with the use made and proposed to be made of such property
by the Operating Partnership, any other Simon Entity or any Property
Partnership. All leases and subleases under which the Operating
Partnership, any other Simon Entity or any Property Partnerships hold
properties are in full force and effect, except for such which would not
have a Material Adverse Effect. None of the Operating Partnership, the
other Simon Entities or the Property Partnerships has received any notice
of any Material claim of any sort that has been asserted by anyone
adverse to the rights of the Operating Partnership, any other Simon
Entity or the Property Partnerships under any material leases or
subleases, or affecting or questioning the rights of the Operating
Partnership, such other Simon Entity or the Property Partnerships of the
continued possession of the leased or subleased premises under any such
lease or sublease, other than claims that would not have a Material
Adverse Effect. All liens, charges, encumbrances, claims or restrictions
on or affecting any of the Portfolio Properties and the assets of any
Simon Entity or any Property Partnership which are required to be
disclosed in the Offering Memorandum are disclosed therein. None of the
Simon Entities, the Property Partnerships or any tenant of any of the
Portfolio Properties is in default under any of the ground leases (as
lessee) or space leases (as lessor or lessee, as the case may be)
relating to, or any of the mortgages or other security documents or other
agreements encumbering or otherwise recorded against, the Portfolio
Properties, and the Operating Partnership knows of no event which, but
for the passage of time or the giving of notice, or both, would
constitute a default under any of such documents or agreements, in each
case, other than such defaults that would not have a Material Adverse
Effect. No tenant under any of the leases, pursuant to which the
Operating Partnership or any Property Partnership, as lessor, leases its
Portfolio Property, has an option or right of first refusal to purchase
the premises demised under such lease, the exercise of which would have a
Material Adverse Effect. Each of the Portfolio Properties complies with
all applicable codes, laws and regulations (including, without
limitation, building and zoning codes, laws and regulations and laws
relating to access to the Portfolio Properties), except for such failures
to comply that would not in the aggregate have a Material Adverse Effect.
The Operating
10
Partnership has no knowledge of any pending or threatened condemnation
proceeding, zoning change, or other proceeding or action that will in any
manner affect the size of, use of, improvements on, construction on or
access to, the Portfolio Properties, except such proceedings or actions
that would not have a Material Adverse Effect.
(29) ENVIRONMENTAL LAWS. Except as otherwise stated in the
Offering Memorandum and except such violations as would not, singly or in
the aggregate, result in a Material Adverse Effect, (a) none of the
Operating Partnership, the other Simon Entities or any Property
Partnership is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law and any judicial or administrative interpretation thereof including
any judicial or administrative order, consent, decree of judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) including, without limitation, laws
and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (b) the Operating
Partnership, the other Simon Entities and the Property Partnerships have
all permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(c) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices
of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Operating Partnership, any of the other
Simon Entities or the Property Partnerships and (D) there are no events
or circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Operating Partnership, any of the other Simon Entities or any
Property Partnership relating to any Hazardous Materials or the violation
of any Environmental Laws.
(30) INSURANCE. Each of the Operating Partnership, the Company
and the Property Partnerships maintains insurance covering its
properties, assets, operations, personnel and businesses, and such
insurance is of such type and in such amounts in accordance with
customary industry practice to protect it and its business.
(31) TAX RETURNS. Each of the Simon Entities and the Property
Partnerships has filed all federal, state, local and foreign income tax
returns which have been required to be filed (except in any case in which
an extension has been granted or the failure to so file would not have a
Material Adverse Effect) and has paid all taxes required to be paid and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except, in all cases, for
any such tax, assessment, fine or penalty that is being contested in good
faith.
(32) ENVIRONMENTAL CONSULTANTS. None of the environmental
consultants which prepared environmental and asbestos inspection reports
with respect to certain of the Portfolio Properties was employed for such
purpose on a contingent basis or has any substantial interest in any
Simon Entity or any Property Partnership and none of them nor any of
their directors, officers or employees is connected with any Simon Entity
or any Property Partnership as a promoter, selling agent, voting trustee,
director, officer or employee.
(33) PROPERTY INFORMATION. Information in respect of the
Portfolio Properties presented in the Offering Memorandum is true and
accurate in all Material respects as of the date of Offering Memorandum.
11
(34) RULE 144A ELIGIBILITY. The Notes are eligible for resale
pursuant to Rule 144A and shall not be, at the Closing Time, of the same
class as any securities listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a U.S. automated
interdealer quotation system.
(35) NO GENERAL SOLICITATION. None of the Operating Partnership,
its Affiliates or any person acting on any of their behalf (other than
the Initial Purchasers, as to whom the Operating Partnership makes no
representation) has engaged or shall engage, in connection with the
offering of the Notes, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act.
(36) NO REGISTRATION REQUIRED. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the Notes to
the Initial Purchasers and to each Subsequent Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum to register
the Notes under the 1933 Act or to qualify the Indenture under the 1939
Act.
(37) REPORTING COMPANY. The Operating Partnership is subject to
the reporting requirements of Section 13 or Section 15(d) of the 1934
Act.
(38) NO DIRECTED SELLING EFFORTS. With respect to those Notes
sold in reliance on Regulation S, (a) none of the Operating Partnership,
its Affiliates or any person acting on any of their behalf (other than
the Initial Purchasers, as to whom the Operating Partnership makes no
representation) has engaged or shall engage in any directed selling
efforts within the meaning of Regulation S and (b) each of the Operating
Partnership and its Affiliates and any person acting on any of their
behalf (other than the Initial Purchasers, as to whom the Operating
Partnership makes no representation) has complied and shall comply with
the offering restrictions requirement of Regulation S.
(39) INVESTMENT GRADE RATING. The Notes shall have an investment
grade rating from one or more nationally recognized statistical rating
organizations at each applicable Representation Date.
(40) STATISTICAL DATA AND FORWARD-LOOKING STATEMENTS. The
statistical and market-related data and forward-looking statements
(within the meaning of Section 27A of the Act and Section 21E of the ▇▇▇▇
▇▇▇) included in the Offering Memorandum are based on or derived from
sources that the Operating Partnership believes to be reliable and
accurate in all material respects and represent its good faith estimates
that are made on the basis of data derived from such sources.
(41) RELATIONSHIP WITH INTERESTED PERSONS. No relationship,
direct or indirect, exists between the Operating Partnership on the one
hand, and the directors, officers or stockholders of the Company or the
customers or suppliers of the Operating Partnership on the other hand,
which is required to be described in the Offering Memorandum which is not
so described.
(b) OFFICERS' CERTIFICATES. Any certificate signed by any officer of
the Operating Partnership or any authorized representative of the Company
delivered to the Initial Purchasers or to counsel for the Initial Purchasers in
connection with the offering of the Notes shall be deemed a representation and
warranty by such entity or person, as the case may be, to each Initial Purchaser
as to the matters covered
12
thereby on the date of such certificate and, unless subsequently amended or
supplemented, at each Representation Date subsequent thereto.
SECTION 2. SALE AND DELIVERY TO THE INITIAL PURCHASERS; CLOSING.
(a) NOTES. On the basis of the representations and warranties
contained herein and subject to the terms and conditions herein set forth, the
Operating Partnership agrees to sell to each Initial Purchaser, severally and
not jointly, and each Initial Purchaser, severally and not jointly, agrees to
purchase from the Operating Partnership, at the price set forth in SCHEDULE 2,
the aggregate principal amount of Notes set forth in SCHEDULE 1 opposite the
name of such Initial Purchaser, plus any additional principal amount of Notes
which such Initial Purchaser may become obligated to purchase pursuant to the
provisions of Section 11 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of, the
Notes shall be made at the office of ▇▇▇▇▇▇▇▇ Chance US LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as shall be agreed upon by
the Initial Purchasers and the Operating Partnership, at 10:00 A.M. (Eastern
time) on the fourth business day after the date hereof (unless postponed in
accordance with the provisions of Section 11), or such other time not later than
ten business days after such date as shall be agreed upon by the Initial
Purchasers and the Operating Partnership (such time and date of payment and
delivery being herein called the "Closing Time").
Payment shall be made to the Operating Partnership by wire transfer of
same day funds payable to the order of the Operating Partnership, against
delivery to the Initial Purchasers or their designee for the respective accounts
of the Initial Purchasers of the Notes to be purchased by them. Each Initial
Purchaser may (but shall not be obligated to) make payment of the purchase price
for the Notes to be purchased by the other Initial Purchaser whose check has not
been received by the Closing Time, but such payment shall not relieve such
Initial Purchaser from its obligations hereunder.
Notwithstanding anything herein to the contrary, the Operating
Partnership agrees that the Initial Purchasers' obligation to purchase and pay
for the Notes pursuant to this Agreement at the price set forth in SCHEDULE 2
shall only be satisfied in full at Closing Time only by (i) the tender by or on
behalf of UBS Securities LLC of $113,100,000 aggregate principal amount of the
Operating Partnership's Notes due 2004, issued pursuant to the Twelfth
Supplemental Indenture dated as of November 17, 2003 (the "Exchange Securities")
with a fair market value of $113,129,846 (the "Purchase Price Securities
Component") and (ii) payment by the Initial Purchasers, severally and not
jointly, of an aggregate amount in cash equal to $383,416,154 (the "Purchase
Price Cash Component"), which amount represents the aggregate initial offering
price of the Notes, less the (A) aggregate underwriting discount applicable to
the Notes, and (B) the aggregate initial offering price of the Notes issued in
exchange for the Exchange Securities.
Payment of the Purchase Price Cash Component shall be made to the
Operating Partnership by wire transfer of immediately available funds to a bank
account designated by the Operating Partnership. Payment of the Purchase Price
Securities Component shall be made to the Operating Partnership by transfer by
or on behalf of UBS Securities LLC of the Exchange Securities to the Operating
Partnership. Payment of the Purchase Price Cash Component and the Purchase Price
Securities Component shall each be made against delivery to you for the
respective accounts of the Initial Purchasers of certificates for the Notes to
be purchased by them. The Notes shall be delivered in the form of one or more
global certificates in aggregate denomination equal to the aggregate principal
amount of Notes upon original issuance and registered in the name of Cede & Co.,
as nominee for The Depository Trust Company ("DTC").
13
Pursuant to the terms of the Exchange Securities, the Operating
Partnership expressly consents to transfer of the Exchange Securities by UBS AG,
London Branch to UBS Securities LLC and from UBS Securities LLC to the Trustee
on behalf of the Operating Partnership.
(c) QUALIFIED INSTITUTIONAL BUYER. Each Initial Purchaser severally
and not jointly represents and warrants to, and agrees with, the Operating
Partnership that it is a "qualified institutional buyer" within the meaning of
Rule 144A under the 1933 Act (a "Qualified Institutional Buyer") and an
"accredited investor" within the meaning of Rule 501(a) under the 1933 Act (an
"Accredited Investor").
(d) DENOMINATIONS; REGISTRATION. The Notes shall be in such
denominations and registered in such names as the Initial Purchasers may request
in writing at least one full business day prior to the Closing Time. The Notes
shall be made available for examination and packaging by the Initial Purchasers
in The City of
New York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time.
SECTION 3. COVENANTS OF THE OPERATING PARTNERSHIP.
The Operating Partnership covenants with each Initial Purchaser as
follows:
(a) OFFERING MEMORANDUM. The Operating Partnership, as promptly as
possible, shall furnish to each Initial Purchaser, without charge, such number
of copies of the Offering Memorandum and any amendments and supplements thereto
and documents incorporated by reference therein as such Initial Purchaser may
reasonably request.
(b) NOTICE AND EFFECT OF MATERIAL EVENTS. The Operating Partnership
shall immediately notify each Initial Purchaser, and confirm such notice in
writing, of (x) any filing made by the Operating Partnership of information
relating to the offering of the Notes with any securities exchange or any other
regulatory body in the United States or any other jurisdiction, and (y) prior to
the completion of the placement of the Notes by the Initial Purchasers as
evidenced by a notice in writing from the Initial Purchasers to the Operating
Partnership, any material changes in or affecting the condition, financial or
otherwise, or the earnings, business affairs or business prospects of any Simon
Entity or Property Partnership which (i) make any statement in the Offering
Memorandum false or misleading or (ii) are not disclosed in the Offering
Memorandum. In such event or if during such time any event shall occur as a
result of which it is necessary, in the reasonable opinion of any of the
Operating Partnership, its counsel, the Initial Purchasers or counsel for the
Initial Purchasers, to amend or supplement the Offering Memorandum in order that
the Offering Memorandum not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances then existing, the Operating
Partnership shall forthwith amend or supplement the Offering Memorandum by
preparing and furnishing to each Initial Purchaser an amendment or amendments
of, or a supplement or supplements to, the Offering Memorandum (in form and
substance satisfactory in the reasonable opinion of counsel for the Initial
Purchasers) so that, as so amended or supplemented, the Offering Memorandum
shall not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) AMENDMENT TO OFFERING MEMORANDUM AND SUPPLEMENTS. The Operating
Partnership shall advise each Initial Purchaser promptly of any proposal to
amend or supplement the Offering Memorandum and shall not effect such amendment
or supplement without the consent of the Initial Purchasers. Neither the consent
of the Initial Purchasers, nor the Initial Purchasers' delivery of any such
amendment or supplement, shall constitute a waiver of any of the conditions set
forth in Section 5 hereof.
14
(d) BLUE SKY QUALIFICATIONS. The Operating Partnership shall use its
best efforts, in cooperation with the Initial Purchasers, to qualify the Notes
for offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Initial Purchasers may
designate and to maintain such qualifications in effect for a period of not less
than one year from the date of this Agreement; PROVIDED, HOWEVER, that the
Operating Partnership shall not be obligated to file any general consent to
service of process or to qualify or register as a foreign partnership or as a
dealer in securities in any jurisdiction in which it is not so qualified or
registered, or provide any undertaking or make any change in its charter or
by-laws that the Board of Directors of the Company reasonably determines to be
contrary to the best interests of the Operating Partnership and its unitholders
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Notes have been so qualified or registered, the Operating Partnership
shall file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date of this Agreement.
(e) STOP ORDER BY STATE SECURITIES COMMISSION. The Operating
Partnership shall advise the Initial Purchasers promptly and, if requested by
any Initial Purchaser, to confirm such advice in writing, of the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of any of the Notes for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority. The Operating Partnership
shall use its reasonable best efforts to prevent the issuance of any stop order
or order suspending the qualification or exemption of any of the Notes under any
state securities or Blue Sky laws, and if at any time any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption of any of the Notes under any state securities or
Blue Sky laws, the Operating Partnership shall use its reasonable best efforts
to obtain the withdrawal or lifting of such order at the earliest possible time.
(f) EARNINGS STATEMENT. The Operating Partnership shall timely file
such reports pursuant to the 1934 Act as are necessary in order to make
generally available to its security holders as soon as practicable an earnings
statement (in form complying with Rule 158 of the 1933 Act Regulations) for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(g) REPORTING REQUIREMENTS. The Operating Partnership, during the
period when the Notes are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the 1933 Act, shall file all documents required
to be filed with the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
(h) REIT QUALIFICATION. The Company shall use its best efforts to
continue to meet the requirement to qualify as a "real estate investment trust"
under the Code for the taxable year in which sales of the Notes are to occur and
for its future taxable years.
(i) USE OF PROCEEDS. The Operating Partnership shall use the net
proceeds received by it from the sale of the Notes in the manner specified in
the Offering Memorandum under "Use of Proceeds."
(j) EXCHANGE ACT FILINGS. During the period from the Closing Time
until one year after the Closing Time, the Operating Partnership shall deliver
to the Initial Purchasers, (i) promptly upon their becoming available, copies of
all current, regular and periodic reports of the Operating Partnership filed
with any securities exchange or with the Commission or any governmental
authority succeeding to any of the Commission's functions, and (ii) such other
information concerning the Operating Partnership as the Initial Purchasers may
reasonably request.
15
(k) SUPPLEMENTAL INDENTURES. In respect of the offering of the Notes,
the Operating Partnership shall execute a supplemental indenture designating the
series of debt securities to be offered and its related terms and provisions in
accordance with the provisions of the Indenture.
(l) RATINGS. The Operating Partnership shall take all reasonable
action necessary to enable Standard & Poor's Ratings Services ("S&P"), ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's") or any other nationally recognized
statistical rating organization, as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, to provide their respective
credit ratings of the Notes.
(m) DTC. The Operating Partnership shall cooperate with the Initial
Purchasers and use commercially reasonable efforts to permit the Notes to be
eligible for clearance and settlement through the facilities of DTC.
(n) REGISTRATION RIGHTS AGREEMENT. The Operating Partnership shall
comply with all of the terms and conditions of the Registration Rights
Agreement.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Operating Partnership shall pay all expenses
incident to the performance of its obligations under this Agreement and the
Registration Rights Agreement, including (i) the preparation, printing and
delivery to the Initial Purchasers of this Agreement, the Registration Rights
Agreement, any Agreement between the Initial Purchasers, any Indenture and such
other documents as may be required in connection with the offering, purchase,
sale and delivery of the Notes, (ii) the preparation, issuance and delivery of
the Notes, or any certificates for the Notes to the Initial Purchasers,
including any transfer taxes, any stamp or other duties payable upon the sale,
issuance and delivery of the Notes to the Initial Purchasers and any charges of
DTC in connection herewith, (iii) the fees and disbursements of the Operating
Partnership's counsel, accountants and other advisors or agents (including
transfer agents and registrars), as well as the reasonable fees and
disbursements of any Trustee, and their respective counsel, (iv) the
qualification of the Notes under state securities and real estate syndication
laws in accordance with the provisions of Section 3(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Initial
Purchasers in connection therewith and in connection with the preparation,
printing and delivery of a blue sky survey, (v) the printing and delivery to the
Initial Purchasers of copies of the Offering Memorandum (including financial
statements and any schedules or exhibits and any document incorporated by
reference) and any amendments or supplements thereto, (vi) the fees charged by
nationally recognized statistical rating organizations for the rating of the
Notes, if applicable; and (vii) fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Initial Purchasers in accordance with the provisions of Section 5 or Section
10(a)(i), the Operating Partnership shall reimburse the Initial Purchasers for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchasers.
SECTION 5. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS.
The obligations of the Initial Purchasers are subject to the accuracy of
the representations and warranties of the Operating Partnership contained in
Section 1 hereof or in certificates of any officer or authorized representative
of the Operating Partnership or any other Simon Entity delivered pursuant to the
provisions hereof, to the performance by the Operating Partnership of its
covenants and other obligations hereunder, and to the following further
conditions:
16
(a) EXECUTION OF REGISTRATION RIGHTS AGREEMENT. At Closing Time, the
Operating Partnership shall have executed and delivered the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A.
(b) OPINIONS OF COUNSEL FOR OPERATING PARTNERSHIP. At Closing Time,
the Initial Purchasers shall have received the favorable opinions, dated as of
Closing Time, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Operating Partnership
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the General Counsel of the Operating Partnership, or such
other counsel as is designated by the Operating Partnership, in form and
substance satisfactory to counsel for the Initial Purchasers, together with
signed or reproduced copies of such opinion for each of the Initial Purchasers.
Such opinions shall address such of the items set forth in Exhibits B-1 and B-2.
(c) OPINION OF COUNSEL FOR INITIAL PURCHASERS. At Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Initial Purchasers, or
such other counsel as may be designated by the Initial Purchasers, together with
signed or reproduced copies of such opinion for each of the Initial Purchasers,
with respect to the matters set forth in (1), (3) (with respect to the first
clause only), (9), (11), (12), (13) and the last two paragraphs of Exhibit B-1
hereto. In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of
New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the Initial
Purchasers. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers or authorized representatives of the Operating
Partnership and the other Simon Entities and certificates of public officials.
(d) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date of this Agreement or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Operating Partnership and the other Simon Entities
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Initial Purchasers shall have received a certificate of (x)
the Chief Executive Officer, President or a Vice President and of the Chief
Financial Officer or Chief Accounting Officer of the Company, as the sole
general partner of the Operating Partnership, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 are true and correct, in all
material respects, with the same force and effect as though expressly made at
and as of the Closing Time, (iii) the Operating Partnership has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, (iv) no order suspending the sale of
the Notes in any jurisdiction has been issued and no proceedings for that
purpose have been initiated or threatened by the state securities authority of
any jurisdiction, (v) the Offering Memorandum did not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading and (vi) none of the events listed in Section
10(a) shall have occurred, and (y) the Chief Financial Officer, the Chief
Accounting Officer or other relevant or appropriate officers of the Company, as
the sole general partner of the Operating Partnership, dated as of Closing Time,
as to any other matters requested by the Initial Purchasers.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Initial Purchasers shall have received from Ernst & Young LLP a
letter, dated such date, in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers, containing statements and
information of the type ordinarily included in accountants' "comfort letters" as
set forth in the AICPA's Statement on Auditing Standards 72 to Initial
Purchasers with respect to the financial statements and certain financial
information contained or incorporated by reference in the Offering Memorandum.
17
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Initial Purchasers
shall have received from Ernst & Young LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section 5, except that the specified date
referred to shall be a date not more than three business days prior to the
Closing Time.
(g) MAINTENANCE OF RATING. At the Closing Time, the Notes shall be
rated at least "Baa2" by Moody's and "BBB" by S&P, and the Operating Partnership
shall have delivered to the Initial Purchasers a letter dated the Closing Time,
from each such rating agency, or other evidence satisfactory to the Initial
Purchasers, confirming that the Notes have such ratings; and since the date of
this Agreement, there shall not have occurred a downgrading in the rating
assigned to the Notes or any of the Operating Partnership's other Notes by any
"nationally recognized statistical rating organization," as that term is defined
by the Commission for purposes for Rule 436(g)(2) under the 1933 Act, and no
such securities rating agency shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of the
Notes or any of the Operating Partnership's other securities.
(h) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may require for the purpose of enabling them to pass upon the issuance and sale
of the Notes as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Operating
Partnership in connection with the issuance and sale of the Notes as herein
contemplated shall be satisfactory in form and substance to the Initial
Purchasers and counsel for the Initial Purchasers.
(i) TERMINATION OF THIS AGREEMENT. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Initial Purchasers by notice to the
Operating Partnership at any time at or prior to the Closing Time, and such
termination shall be without liability of any party to any other party except as
provided in Section 4, and except that Sections 1, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. SUBSEQUENT OFFERS AND RESALES OF THE NOTES.
(a) OFFER AND SALE PROCEDURES. Each of the Initial Purchasers and the
Operating Partnership hereby establishes and agrees to observe the following
procedures in connection with the offer and sale of the Notes:
(i) OFFERS, SALES AND DELIVERIES. Offers, sales and deliveries
of the Notes shall only be made (a) to persons whom the offeror or seller
reasonably believes to be "qualified institutional buyers" (as defined in
Rule ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇), (▇) to a limited number of other
institutional "Accredited Investors" (as such term is defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D) that the offeror or seller
reasonably believes to be and, with respect to sales and deliveries, that
are Accredited Investors ("Institutional Accredited Investors") or (c)
non-U.S. persons outside the United States, as defined in Regulation S
under the 1933 Act, to whom the offeror or seller reasonably believes
offers and sales of the Notes may be made in reliance upon Regulation S
under the 1933 Act. Each Initial Purchaser agrees that it shall not
offer, sell or deliver any of the Notes in any jurisdiction outside the
United States except under circumstances that will result in compliance
with the applicable laws thereof, and that it shall take at its own
expense whatever action is required to permit its purchase and resale of
the Notes in such jurisdictions.
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(ii) NO GENERAL SOLICITATION. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the ▇▇▇▇ ▇▇▇) shall
be used in the United States in connection with the offering or sale of
the Notes.
(iii) PURCHASES BY NON-BANK FIDUCIARIES. In the case of a
non-bank Subsequent Purchaser of a Note acting as a fiduciary for one or
more third parties, each such third party shall, in the judgment of the
applicable Initial Purchaser, be an Institutional Accredited Investor, a
Qualified Institutional Buyer or a non-U.S. person outside the United
States.
(iv) SUBSEQUENT PURCHASER NOTIFICATION. Each Initial Purchaser
shall take reasonable steps to inform, and cause each of its U.S.
Affiliates to take reasonable steps to inform, persons acquiring Notes
from such Initial Purchaser or affiliate, as the case may be, in the
United States that the Notes (a) have not been and shall not be
registered under the 1933 Act, (b) are being sold to them without
registration under the 1933 Act in reliance on Rule 144A or in accordance
with another exemption from registration under the 1933 Act, as the case
may be, and (c) may not be offered, sold or otherwise transferred except
(1) to the Operating Partnership, (2) outside the United States in
accordance with Regulation S, or (3) inside the United States in
accordance with (x) Rule 144A to a person whom the seller reasonably
believes is a Qualified Institutional Buyer that is purchasing such Notes
for its own account or for the account of a Qualified Institutional Buyer
to whom notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.
(v) MINIMUM PRINCIPAL AMOUNT. No sale of the Notes to any one
Subsequent Purchaser shall be for less than U.S. $1,000 ($100,000 for
Institutional Accredited Investors) principal amount and no Note shall be
issued in a smaller principal amount. If the Subsequent Purchaser is a
non-bank fiduciary acting on behalf of others, each person for whom it is
acting must purchase at least U.S. $100,000 principal amount of the
Notes.
(vi) RESTRICTIONS ON TRANSFER. The transfer restrictions and the
other provisions set forth in the Offering Memorandum under the heading
"Notice to Investors," including the legend required thereby, shall apply
to the Notes except as otherwise agreed by the Operating Partnership and
the Initial Purchasers.
(vii) DELIVERY OF OFFERING MEMORANDUM. Each Initial Purchaser
shall deliver to each Subsequent Purchaser of the Notes, in connection
with its original distribution of the Notes, a copy of the Offering
Memorandum, as amended and supplemented at the date of such delivery, if
required by applicable law.
(b) COVENANTS OF THE OPERATING PARTNERSHIP. The Operating Partnership
covenants with each Initial Purchaser as follows:
(i) INTEGRATION. The Operating Partnership agrees that it shall
not and shall cause its Affiliates not to solicit, directly or
indirectly, any offer to buy or make any offer or sale of, or otherwise
negotiate in respect of, securities of the Operating Partnership of any
class if, as a result of the doctrine of "integration" referred to in
Rule 502 under the 1933 Act, such offer or sale would render invalid (for
the purpose of (i) the sale of the Notes by the Operating Partnership to
the Initial Purchasers, (ii) the resale of the Notes by the Initial
Purchasers to Subsequent Purchasers or (iii) the resale of the Notes by
such Subsequent Purchasers to others) the exemption from the registration
requirements of the 1933 Act provided by Section 4(2) thereof or by Rule
144A or by Regulation S thereunder or otherwise.
19
(ii) RULE 144A INFORMATION. The Operating Partnership agrees
that, in order to render the Notes eligible for resale pursuant to Rule
144A under the 1933 Act, while any of the Notes remain outstanding, it
shall make available, upon request, to any holder of Notes or prospective
purchasers of Notes the information specified in Rule 144A(d)(4), unless
the Operating Partnership furnishes information to the Commission
pursuant to Section 13 or 15(d) of the 1934 Act (such information,
whether made available to holders or prospective purchasers or furnished
to the Commission, is herein referred to as "Additional Information").
(iii) RESTRICTION ON REPURCHASES. Until the expiration of two
years after the original issuance of the Notes, the Operating Partnership
shall not, and shall cause its Affiliates not to, purchase or agree to
purchase or otherwise acquire any Notes which are "restricted securities"
(as such term is defined under Rule 144(a)(3) under the 1933 Act),
whether as beneficial owner or otherwise (except as agent acting as a
securities broker on behalf of and for the account of customers in the
ordinary course of business in unsolicited broker's transactions), unless
such repurchased Notes are promptly retired.
(c) RESALE PURSUANT TO RULE 903 OF REGULATION S OR RULE 144A. Each
Initial Purchaser understands that the Notes have not been and shall not be
registered under the 1933 Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the 1933 Act or pursuant to an exemption from
the registration requirements of the 1933 Act. Each Initial Purchaser severally
represents and agrees, that, except as permitted by Section 6(a) above, it has
offered and sold Notes and shall offer and sell Notes (i) as part of their
distribution at any time and (ii) otherwise until forty days after the later of
the date upon which the offering of the Notes commences and the Closing Time,
only in accordance with Rule 903 of Regulation S, or another applicable
exemption from the registration provisions of the 1933 Act or Rule 144A under
the 1993 Act. Accordingly, none of the Initial Purchasers, their affiliates or
any persons acting on their behalf have engaged or shall engage in any directed
selling efforts with respect to Notes, and the Initial Purchasers, their
affiliates and any person acting on their behalf have complied and shall comply
with the offering restriction requirements of Regulation S. Each Initial
Purchaser agrees that, at or prior to confirmation of a sale of Notes (other
than a sale of Notes pursuant to Rule 144A) it shall have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it or through it during the restricted
period a confirmation or notice to substantially the following effect:
"The Notes covered hereby have not been registered under the 1933
Act and may not be offered or sold within the United States or to
or for the Account or benefit of U.S. persons (i) as part of their
distribution at any time and (ii) otherwise until forty days after
the later of the date upon which the offering of the Notes
commenced and the date of closing, except in either case in
accordance with Regulation S, Rule 144A under the 1933 Act or
another exemption from the registration requirements of the 1933
Act. Terms used above have the meaning given to them by Regulation
S."
Terms used in the above paragraph have the meanings given to them by Regulation
S.
(d) REPRESENTATIONS AND WARRANTIES OF INITIAL PURCHASERS. Each Initial
Purchaser severally represents and agrees that it has not entered and shall not
enter into any contractual arrangements with respect to the distribution of the
Notes, except with its affiliates or with the prior written consent of the
Operating Partnership.
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SECTION 7. INDEMNIFICATION.
(a) INDEMNIFICATION OF INITIAL PURCHASERS. The Operating Partnership
agrees to indemnify and hold harmless each Initial Purchaser and each person, if
any, who controls any Initial Purchaser within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act and their respective officers, directors
and employees as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Offering
Memorandum or in any amendment or supplement thereto, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; PROVIDED, that (subject to
Section 7(d) below) any such settlement is effected with the written
consent of the Operating Partnership; and
(3) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Initial
Purchasers), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (1) or (2) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Operating
Partnership by any Initial Purchaser expressly for use in the Offering
Memorandum (or any amendment or supplement thereto).
(b) INDEMNIFICATION OF OPERATING PARTNERSHIP, COMPANY AND COMPANY'S
DIRECTORS AND OFFICERS. Each Initial Purchaser severally, and not jointly,
agrees to indemnify and hold harmless the Operating Partnership, the Company,
each of the Company's directors, and each person, if any, who controls the
Operating Partnership or the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Operating Partnership by
such Initial Purchaser expressly for use in the Offering Memorandum (or any
amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 7(a)
above, counsel to the indemnified parties shall be selected by the Initial
Purchasers, and, in
21
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Operating Partnership. An
indemnifying party may participate at its own expense in the defense of any such
action; PROVIDED, HOWEVER, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel in accordance with the
provisions hereof, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 7(a)(2) effected without
its written consent if (i) such settlement is entered into in good faith by the
indemnified party more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. CONTRIBUTION.
If the indemnification provided for in Section 7 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Operating Partnership, on the one hand, and
the Initial Purchasers, on the other hand, from the offering of the Notes
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Operating Partnership, on the one hand, and of the Initial
Purchasers, on the other hand, in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Operating Partnership, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
offering of the Notes pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of such
Notes (before deducting expenses) received by the Operating Partnership and the
total discount received by the Initial Purchasers, bear to the aggregate initial
offering price of the Notes.
The relative fault of the Operating Partnership, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Operating Partnership or by the Initial Purchasers
and the parties' relative
22
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Operating Partnership and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 8. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
8 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes purchased by it and sold to a Subsequent
Purchaser were sold to such Subsequent Purchaser exceeds the amount of any
damages which such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, and each person, if any, who
controls the Operating Partnership or the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Operating Partnership. The Initial Purchasers' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the number, or aggregate principal amount, as the case may be, of Notes set
forth opposite their respective names in Schedule 1 hereto and not joint.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Operating Partnership or the
Company or authorized representatives of each of the Operating Partnership or
the Company submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless or any investigation made by or on behalf of
any Initial Purchaser or any controlling person, or by or on behalf of the
Operating Partnership or the Company, and shall survive delivery of and payment
for the Notes.
SECTION 10. TERMINATION.
(a) TERMINATION; GENERAL. The Initial Purchasers may terminate this
Agreement, by notice to the Operating Partnership, at any time at or prior to
the Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Operating Partnership and the other Simon Entities considered as one enterprise,
whether or not arising in the ordinary course of business, the effect of which
is such as to make it, in the reasonable judgment of the Initial Purchasers,
impracticable or inadvisable to market the Notes or to enforce contracts for the
sale of the Notes, or (ii) if there has occurred (A) any
23
material adverse change in the financial markets in the United States or
internationally, (B) any outbreak of hostilities or escalation thereof or other
calamity or crisis, (C) a declaration by the United States of a national
emergency or war, or (D) any change or development involving a prospective
change in national or international political, financial, or economic
conditions, in each case, the effect of which is such as to make it, in the
judgment of the Initial Purchasers, impracticable or inadvisable to market the
Notes or to enforce contracts for the sale of the Notes, or (iii) if trading in
any securities of the Company has been suspended or materially limited by the
Commission or the
New York Stock Exchange, or if trading generally on the
New
York Stock Exchange, the Nasdaq National Market or the American Stock Exchange
or in the over-the-counter market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal,
New York, or Delaware authorities, or (v) a material disruption
in commercial banking or securities settlement or clearance services in the
United States has occurred, or (vi) if the rating assigned by any nationally
recognized statistical rating organization to any debt securities of the
Operating Partnership as of the date hereof shall have been downgraded since
such date or if any such rating organization shall have publicly announced that
it has placed any series of debt securities of the Operating Partnership under
surveillance or review, with possible negative implications, as to the rating of
such debt securities or any of the Operating Partnership's other securities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section 10, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and PROVIDED, FURTHER, that
Sections 7, 8 and 9 hereof shall survive such termination and remain in full
force and effect.
SECTION 11. DEFAULT BY ONE OF THE INITIAL PURCHASERS. If one of the
Initial Purchasers shall fail at the Closing Time to purchase the Notes which it
is obligated to purchase under this Agreement (the "Defaulted Notes"), the other
Initial Purchaser shall have the right, within 24 hours thereafter, to make
arrangements for any other Initial Purchasers to purchase all, but not less than
all, of the Defaulted Notes in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the non-defaulting Initial Purchaser shall
not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Notes does not exceed 10% of the
aggregate principal amount of the Notes to be purchased hereunder, the
non-defaulting Initial Purchaser shall be obligated to purchase the full
amount thereof , or
(b) if the number of Defaulted Notes exceeds 10% of the
aggregate principal amount of the Notes to be purchased hereunder, this
Agreement shall terminate without liability on the part of the
non-defaulting Initial Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Initial Purchasers or the Operating Partnership
shall have the right to postpone the Closing Time for a period not exceeding
seven days in order to effect any required changes in the Offering Memorandum or
in any other documents or arrangements. As used herein, the term "Initial
Purchaser" includes any person substituted for an Initial Purchaser under this
Section 11.
24
SECTION 12. NOTICES.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchasers shall be directed
to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Managing
Director; and notices to the Simon Entities shall be directed to any of them at
National City Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of Mr. ▇▇▇▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
SECTION 13. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Initial Purchasers, the Operating Partnership, the
Company and their respective successors and the controlling persons and officers
and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto and thereto and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives and the Company, and for the benefit of no other
person, firm or corporation. No purchaser of Notes from any Initial Purchaser
shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Operating Partnership a counterpart
hereof, whereupon this Agreement, along with all counterparts, shall become a
binding agreement between the Initial Purchasers and the Operating Partnership
in accordance with its terms.
Very truly yours,
SIMON PROPERTY GROUP, L.P.
By: Simon Property Group, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
SIMON PROPERTY GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
CONFIRMED AND ACCEPTED,
as of the date first
above written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
UBS SECURITIES LLC
By: /s/ ▇▇▇▇▇▇▇▇ BLUE
---------------------------------
Name: ▇▇▇▇▇▇▇▇ Blue
Title: Authorized Signatory
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
For themselves and for the
other Initial Purchasers named
in Schedule 1 hereto.
SCHEDULE 1
PRINCIPAL PRINCIPAL
INITIAL PURCHASER AMOUNT OF 2009 NOTES AMOUNT OF 2014 NOTES
--------------------------------------- -------------------- --------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ $ 153,000,000 $ 21,000,000
Incorporated
UBS Securities LLC $ 51,000,000 $ 115,000,000
Citigroup Global Markets Inc. $ 24,000,000 $ 16,000,000
Credit Suisse First Boston LLC $ 24,000,000 $ 16,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. $ 24,000,000 $ 16,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated $ 24,000,000 $ 16,000,000
------------- -------------
TOTAL............................. $ 300,000,000 $ 200,000,000
============= =============
SCHEDULE 2
SIMON PROPERTY GROUP, L.P.
$300,000,000 3.75% Notes due 2009
$200,000,000 4.90% Notes due 2014
1. The initial public offering price of the 2009 Notes shall be
99.972% of the principal amount of the 2009 Notes. The initial public offering
price of the 2014 Notes shall be 99.865% of the principal amount of the 2014
Notes.
2. The purchase price to be paid by the Initial Purchasers for the
2009 Notes shall be 99.372% of the principal amount of the 2009 Notes. The
purchase price to be paid by the Initial Purchasers for the 2014 Notes shall be
99.215% of the principal amount of the 2014 Notes.
3. The interest rate on the 2009 Notes shall be 3.75% per annum. The
interest rate on the 2014 Notes shall be 4.90% per annum.
Exhibit A
FORM OF REGISTRATION RIGHTS AGREEMENT
(Please see attached copy of the Registration Rights Agreement.)
Exhibit B-1
FORM OF OPINION OF SPECIAL COUNSEL
FOR THE COMPANY AND THE OPERATING PARTNERSHIP
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(1) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(2) The Company has the corporate power and authority to own, lease
and operate its properties, to conduct the business in which it is engaged or
proposes to engage as described below, and to enter into and perform its
obligations under, or as contemplated under, this Agreement.
(3) The Operating Partnership has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware, with the requisite power and authority to own, lease and operate
its properties and to conduct the business in which it is engaged or proposes to
engage as described in the Offering Memorandum.
(4) This Agreement has been duly and validly authorized by the
Operating Partnership and the Company. Any one of the Co-Chairmen of the Board,
Chief Executive Officer, President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary, or any Assistant Secretary of the Company
(hereinafter, collectively, the "Authorized Officers") has been duly authorized
to execute and deliver this Agreement for the Company and as the general partner
of the Operating Partnership, and, assuming each has been executed and delivered
by any one of the Authorized Officers, this Agreement is duly and validly
executed and delivered by the Operating Partnership and the Company.
(5) The execution, delivery and performance of this Agreement, the
Indenture and the Registration Rights Agreement, the consummation of the
transactions contemplated in this Agreement, and compliance by the Operating
Partnership with its obligations under this Agreement, the Indenture and the
Registration Rights Agreement does not and will not, whether with or without the
giving of notice or the passage of time or both, conflict with or constitute a
breach of, or default under (i) any provisions of the certificate or agreement
of limited partnership of the Operating Partnership; (ii) any applicable law,
statute, rule, regulation of Delaware; or (iii) to such counsel's knowledge, any
Delaware order or Delaware administrative or court decree, binding upon the
Operating Partnership or to which the Operating Partnership is subject, except,
in the case of (ii) and (iii) above, for conflicts, breaches, violations or
defaults that in the aggregate would not have a Material Adverse Effect.
(6) The documents filed pursuant to the 1934 Act and incorporated by
reference in the Offering Memorandum (other than the financial statements and
supporting schedules therein and other financial data, as to which no opinion
need be rendered), when they were filed with the Commission, complied as to form
in all material respects with the requirements of the 1933 Act or the 1934 Act,
as applicable, and the rules and regulations of the Commission thereunder. In
passing upon compliance as to the form of such documents, such counsel may have
assumed that the statements made or incorporated by reference therein are
complete and correct.
(7) The information in the Offering Memorandum under "Description of
Notes," "Certain Federal Income Tax Consequences," and "State and Local Tax
Considerations" and the description of the Notes included therein, to the extent
that it purports to summarize matters of law, descriptions of statutes,
B-1-1
rules or regulations, summaries of legal matters, the Operating Partnership's
organizational documents or legal proceedings, or legal conclusions, has been
reviewed by such counsel, is correct and presents fairly the information
required to be disclosed therein in all material respects.
(8) None of the Operating Partnership, any of the Simon Entities or
any Property Partnership is required to be registered as an investment company
under the ▇▇▇▇ ▇▇▇.
(9) The Notes being sold pursuant to this Agreement have been duly
authorized on behalf of the Operating Partnership by the Company as the general
partner of the Operating Partnership for issuance and sale to the Initial
Purchasers pursuant to this Agreement and the Indenture and, when executed and
issued and authenticated in the manner provided for in the Indenture and
delivered by the Operating Partnership pursuant to this Agreement against
payment of the consideration therefor, (i) the Notes will constitute valid and
legally binding obligations of the Operating Partnership enforceable against the
Operating Partnership in accordance with their terms, except as the enforcement
thereof may be limited (A) by bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or other similar laws relating to or
affecting creditors' rights generally, (B) by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or law), or (C) by federal courts with respect to the enforceability in
such courts of forum selection clauses, and (ii) each holder of the Notes will
be entitled to the benefits of the Indenture. The Notes are in the form
contemplated by the Indenture.
(10) The Company has, at all times since the effective date of its
election to be taxed as a "real estate investment trust" under the Code, been
organized and operated in conformity with the requirements for qualification and
taxation as a "real estate investment trust" under the Code and its proposed
organization structure and method of operation will permit it to remain so
qualified.
(11) The Indenture has been duly qualified under the 1939 Act and has
been duly and validly authorized, executed and delivered by the Operating
Partnership and (assuming due authorization, execution and delivery thereof by
the Trustee) constitutes a valid and legally binding agreement of the Operating
Partnership, enforceable against the Operating Partnership in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles and
except further as enforcement thereof may be limited by (i) requirements that a
claim with respect to any Notes denominated other than in U.S. Dollars (or a
foreign currency or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law, (ii) governmental authority to limit,
delay or prohibit the making of payments outside the United States, or (iii)
federal courts with respect to the enforceability in such courts of forum
selection clauses.
(12) Assuming the correctness of the representations and warranties and
the compliance by the Operating Partnership and the Initial Purchasers with
their respective covenants set forth in the
Purchase Agreement, the offer and
sale of the Notes to the Initial Purchasers and to each Subsequent Purchaser
solely in the manner and under the circumstances contemplated by this Agreement
and the Offering Memorandum are exempt from the registration requirements of the
1933 Act.
(13) The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the parties thereto and is a valid and
binding agreement, enforceable against the parties thereto in accordance with
its terms, except as such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
similar laws affecting creditors' rights generally and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (iii) limitations under state or federal
securities laws
B-1-2
or public policy with respect to the rights to indemnity and contribution
contained in the Registration Rights Agreement.
In connection with the preparation of the Offering Memorandum, such
counsel has participated in conferences with officers and other representatives
of the Operating Partnership and the independent public accountants for the
Operating Partnership and the Company at which the contents of the Offering
Memorandum and related matters were discussed. On the basis of such
participation and review, but without independent verification by such counsel
of, and without assuming any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Offering Memorandum or any
amendments or supplements thereto, no facts have come to the attention of such
counsel that would lead such counsel to believe that the Offering Memorandum or
any amendment or supplement thereto (except for financial statements, the
schedules and other financial data included therein, as to which such counsel
need make no statement), at the time the Offering Memorandum was issued, at the
time any such amended or supplemented Offering Memorandum was issued or at the
Closing Time, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Operating Partnership and public
officials. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF THE OPERATING PARTNERSHIP'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company has been duly organized and is validly existing as a
corporation in good standing under the State of Delaware and has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum.
(2) The Company is duly qualified or registered as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification or registration is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or register or be in good standing would not result in a
Material Adverse Effect.
(3) The Operating Partnership has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware, with the requisite power and authority to own, lease and operate
its properties and to conduct the business in which it is engaged or proposes to
engage as described in the Offering Memorandum and to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement and the
Indenture and is duly qualified or registered as a foreign limited partnership
to transact business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not result in a Material Adverse Effect.
The Partnership Agreement of the Operating Partnership has been duly and validly
authorized, executed and delivered by the parties thereto and is a valid and
binding agreement, enforceable against the parties thereto in accordance with
its terms, except as such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
similar laws affecting creditors' rights generally and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and except as rights to indemnity thereunder
may be limited by applicable law.
(4) Each Simon Entity other than the Company and the Operating
Partnership has been duly incorporated or organized and is validly existing as a
corporation, limited partnership or other legal entity, as the case may be, in
good standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite power and authority to
own, lease and operate its properties and to conduct the business in which it is
engaged or proposes to engage as described in the Offering Memorandum and is
duly qualified or registered as a foreign corporation, limited partnership or
other legal entity, as the case may be, to transact business and is in good
standing in each jurisdiction in which such qualification or registration is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or register or to be
in good standing would not result in a Material Adverse Effect. Except as
otherwise stated in the Offering Memorandum, all of the issued and outstanding
capital stock or other equity interests of each Simon Entity other than the
Operating Partnership has been duly authorized and is validly issued, fully paid
and non-assessable and has been offered and sold in compliance with all
applicable laws of the United States and the organizational laws of the
jurisdiction of organization of such entity, and is owned by the Company, the
Management Companies or the Operating Partnership, directly or through
subsidiaries, in each case, free and clear of any Liens. There are no
outstanding securities convertible into or exchangeable for any capital stock or
other equity interests of such entities and no outstanding options, rights
(preemptive or
B-2-1
otherwise) or warrants to purchase or to subscribe for shares of such capital
stock or any other securities of such entities. None of the outstanding shares
of capital stock or other equity interests of such entity was issued in
violation of preemptive or other similar rights of any security holder of such
entity.
(5) Each of the Property Partnerships is duly organized and validly
existing as a limited or general partnership, as the case may be, in good
standing under the laws of its respective jurisdiction of formation, with the
requisite power and authority to own, lease and operate its properties and to
conduct the business in which it is engaged and proposes to engage as described
in the Offering Memorandum. Each Property Partnership is duly qualified or
registered as a foreign partnership and is in good standing in each jurisdiction
in which such qualification or registration is required, whether by reason of
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or register would not have a Material Adverse Effect. The
general or limited partnership agreement of each of the Property Partnerships
has been duly and validly authorized, executed and delivered by the parties
thereto and is a valid and binding agreement, enforceable against the parties
thereto in accordance with its terms, except as such enforceability may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer or similar laws affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and except as rights to
indemnity thereunder may be limited by applicable law.
(6) The Notes being sold pursuant to this Agreement and the Indenture
each conform, in all material respects, to the statements relating thereto
contained in the Offering Memorandum and are in substantially the form
contemplated by the Indenture.
(7) None of the Operating Partnership, any of the other Simon Entities
or any Property Partnership is in violation of its charter, by-laws, partnership
agreement, or other organizational document, as the case may be, and no default
by the Operating Partnership or any other Simon Entity or any Property
Partnership exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Offering Memorandum or filed
or incorporated by reference therein, except in each case for violations (other
than with respect to the charter, by-laws, partnership agreement, or other
organizational document of such entities) or defaults which in the aggregate are
not reasonably expected to result in a Material Adverse Effect.
(8) The execution, delivery and performance of this Agreement, the
Indenture and the Registration Rights Agreement and the consummation of the
transactions contemplated thereby did not and do not, conflict with or
constitute a breach or violation of, or default or Repayment Event under, or
result in the creation or imposition of any Lien upon any Portfolio Property,
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, to which the
Operating Partnership or any Property Partnership is a party or by which it of
any of them may be bound, or to which any of the assets, properties or
operations of the Operating Partnership or any Property Partnership is subject,
nor will such action result in any violation of the provisions of the charter,
by-laws, partnership agreement or other organizational document of the Operating
Partnership, any other Simon Entity or any Property Partnership or any
applicable laws, statutes, rules or regulations of the United States or any
jurisdiction of incorporation or formation of any of the Operating Partnership
or any Property Partnership or any judgement, order, writ or decree binding upon
the Operating Partnership, any other Simon Entity or any Property Partnership,
which judgement, order, writ or decree, is known to such counsel, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Operating Partnership, any other Simon Entity or any
Property Partnership or any of their assets, properties or operations, except
for such conflicts, breaches, violations (other than with respect to the
charter, by-laws, partnership agreement, or other organizational document of
such entities), defaults, events or Liens that would not result in a Material
Adverse Effect.
B-2-2
(9) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than such as may be required under the applicable
securities laws of the various jurisdictions in which the Notes will be offered
or sold, as to which such counsel need express no opinion) is required in
connection with the due authorization, execution and delivery of this Agreement,
the Indenture or the Registration Rights Agreement by the Operating Partnership
or for the offering, issuance, sale or delivery of the Notes to the Initial
Purchasers and to each Subsequent Purchaser in the manner contemplated by this
Agreement.
(10) There is no action, suit, proceeding, inquiry or investigation
before or by any court or governmental agency or body, domestic or foreign, now
pending or threatened, against or affecting the Operating Partnership or any
other Simon Entity or any Property Partnership thereof which is required to be
disclosed in the Offering Memorandum (other than as stated or incorporated by
reference therein), or which might reasonably be expected to result in a
Material Adverse Effect or which might reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in this
Agreement, the Indenture or the Registration Rights Agreement, the performance
by the Operating Partnership of its obligations thereunder or the transactions
contemplated by the Offering Memorandum.
(11) All descriptions in the Offering Memorandum of contracts and other
documents to which the Operating Partnership or any other Simon Entity is a
party are accurate in all material respects. To the best knowledge and
information of such counsel, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described or
referred to in the Offering Memorandum other than those described or referred to
therein, and the descriptions thereof or references thereto are correct in all
material respects.
(12) To the best of such counsel's knowledge and information, there are
no statutes or regulations that are required to be described in the Offering
Memorandum that are not described as required.
B-2-3