Document:

Exhibit 10.2

 

STOCK
PURCHASE AGREEMENT

 

by and
among

 

NORCROSS
SAFETY PRODUCTS L.L.C.,

 

THE
FIBRE-METAL PRODUCTS COMPANY,

 

RESIDUARY
TRUST UNDER THE WILL OF CHARLES E. BOWERS, JR.,

 

TRUST UNDER
THE WILL OF CHARLES E. BOWERS, JR. FOR THE BENEFIT OF JUDITH L. BOWERS,

 

and

 

CHARLES E.
BOWERS, JR. IRREVOCABLE TRUST DATED DECEMBER 17, 1990

 

 

October 3,
2005

 

 

Table of Contents

 

	
  ARTICLE I

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Defined Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  SALE AND PURCHASE OF STOCK

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Agreement to Sell

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2.

  	
  Agreement to Purchase

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  PURCHASE PRICE

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Purchase Price

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2.

  	
  Estimated Closing Date
  Balance Sheet; Estimated Net Working Capital and Estimated Net Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3.

  	
  Closing Date Balance Sheet;
  Net Working Capital and Net Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  3.4.

  	
  Review by Stockholders and
  Grandi

  	
   

  
	
   

  	
   

  	
   

  
	
  3.5.

  	
  Independent Review

  	
   

  
	
   

  	
   

  	
   

  
	
  3.6.

  	
  Payment of Net Working
  Capital and Net Debt Adjustment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2.

  	
  Deliveries by Stockholders

  	
   

  
	
   

  	
   

  	
   

  
	
  4.3.

  	
  Deliveries by Buyer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  REPRESENTATIONS AND
  WARRANTIES OF STOCKHOLDERS AND GRANDI

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Authorization

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2.

  	
  Capitalization

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3.

  	
  Ability to Carry Out
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND
  WARRANTIES OF THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Organization

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2.

  	
  Ability to Carry Out
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3.

  	
  Authorization

  	
   

  
	
   

  	
   

  	
   

  
	
  6.4.

  	
  Permits and Licenses

  	
   

  
	
   

  	
   

  	
   

  
	
  6.5.

  	
  Compliance with Regulations

  	
   

  
	
   

  	
   

  	
   

  
	
  6.6.

  	
  Financial Statements

  	
   

  
	
   

  	
   

  	
   

  
	
  6.7.

  	
  Title to and Condition of Assets

  	
   

  
	
   

  	
   

  	
   

  
	
  6.8.

  	
  Tax Returns and Taxes

  	
   

  

 

 

	
  6.9.

  	
  Labor Relations

  	
   

  
	
   

  	
   

  	
   

  
	
  6.10.

  	
  Material Contracts

  	
   

  
	
   

  	
   

  	
   

  
	
  6.11.

  	
  Changes or Events

  	
   

  
	
   

  	
   

  	
   

  
	
  6.12.

  	
  Employees and Employee
  Benefits

  	
   

  
	
   

  	
   

  	
   

  
	
  6.13.

  	
  Real Property; Leaseholds

  	
   

  
	
   

  	
   

  	
   

  
	
  6.14.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  6.15.

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  6.16.

  	
  Accounts
  Receivable

  	
   

  
	
   

  	
   

  	
   

  
	
  6.17.

  	
  Proprietary
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  6.18.

  	
  Environmental
  Requirements

  	
   

  
	
   

  	
   

  	
   

  
	
  6.19.

  	
  Inventory

  	
   

  
	
   

  	
   

  	
   

  
	
  6.20.

  	
  Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  6.21.

  	
  Related
  Party Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  6.22.

  	
  Finders’
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  REPRESENTATIONS
  AND WARRANTIES OF BUYER

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Organization

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2.

  	
  Ability to
  Carry Out Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  7.3.

  	
  Authorization

  	
   

  
	
   

  	
   

  	
   

  
	
  7.4.

  	
  Financing

  	
   

  
	
   

  	
   

  	
   

  
	
  7.5.

  	
  Finders’
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  7.6.

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  7.7.

  	
  Purchase
  for Investment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Access

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2.

  	
  Confidentiality;
  No Publicity

  	
   

  
	
   

  	
   

  	
   

  
	
  8.3.

  	
  Non-Solicitation

  	
   

  
	
   

  	
   

  	
   

  
	
  8.4.

  	
  Governmental
  Approvals

  	
   

  
	
   

  	
   

  	
   

  
	
  8.5.

  	
  Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  8.6.

  	
  Restrictive
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  8.7.

  	
  Tax Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  8.8.

  	
  Transfer of
  Premises; Satisfaction of Indebtedness and Transaction Expenses; Retention of
  Related Party Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  8.9.

  	
  Appointment
  of Sellers Representative

  	
   

  

 

ii

 

	
  ARTICLE IX

  	
  CONDUCT OF
  BUSINESS PRIOR TO CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  9.1.

  	
  Conduct of
  Business

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  CONDITIONS
  PRECEDENT TO BUYER’S OBLIGATIONS ON THE CLOSING DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Representations
  and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2.

  	
  Compliance
  with Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  10.3.

  	
  Closing
  Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  10.4.

  	
  Consents

  	
   

  
	
   

  	
   

  	
   

  
	
  10.5.

  	
  HSR Act

  	
   

  
	
   

  	
   

  	
   

  
	
  10.6.

  	
  Resignations
  of Directors

  	
   

  
	
   

  	
   

  	
   

  
	
  10.7.

  	
  Transfer
  Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  10.8.

  	
  Material
  Adverse Effect

  	
   

  
	
   

  	
   

  	
   

  
	
  10.9.

  	
  Ancillary
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  10.10.

  	
  Incumbency
  Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  10.11.

  	
  Resolutions

  	
   

  
	
   

  	
   

  	
   

  
	
  10.12.

  	
  Good
  Standing Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  10.13.

  	
  Absence of
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  10.14.

  	
  Consulting/Employment
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  CONDITIONS
  PRECEDENT TO STOCKHOLDERS’ OBLIGATIONS ON THE CLOSING DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1.

  	
  Representations
  and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  11.2.

  	
  Compliance
  with Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  11.3.

  	
  Closing
  Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  11.4.

  	
  HSR Act

  	
   

  
	
   

  	
   

  	
   

  
	
  11.5.

  	
  Ancillary
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  11.6.

  	
  Incumbency
  Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  11.7.

  	
  Resolutions

  	
   

  
	
   

  	
   

  	
   

  
	
  11.8.

  	
  Good
  Standing Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  11.9.

  	
  Absence of
  Litigation

  	
   

  
	
   

  	
   

  	
   

  
	
  11.10.

  	
  Consulting/Employment
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  12.1.

  	
  Indemnification
  by Stockholders and Grandi

  	
   

  
	
   

  	
   

  	
   

  
	
  12.2.

  	
  Indemnification
  by Buyer

  	
   

  

 

iii

 

	
  12.3.

  	
  Claims for
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  12.4.

  	
  Defense by
  the Indemnifying Party

  	
   

  
	
   

  	
   

  	
   

  
	
  12.5.

  	
  Limitations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  13.1.

  	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  13.2.

  	
  Effect of
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  
	
  14.1.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV

  	
  GENERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  15.1.

  	
  Further
  Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  15.2.

  	
  Finder’s
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  15.3.

  	
  Expenses

  	
   

  
	
   

  	
   

  	
   

  
	
  15.4.

  	
  Governing
  Law; Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  15.5.

  	
  No Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  15.6.

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  15.7.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  15.8.

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  15.9.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  15.10.

  	
  Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  15.11.

  	
  Third Party
  Beneficiaries

  	
   

  

 

iv

 

STOCK
PURCHASE AGREEMENT

 

THIS STOCK
PURCHASE AGREEMENT (this “Agreement”)
is made and entered into as of this 3rd day of October, 2005, by and
among Norcross Safety Products L.L.C., a Delaware limited liability company (“Buyer”), The Fibre-Metal Products
Company, a Delaware corporation (“Fibre-Metal”), Residuary Trust under the Will
of Charles E. Bowers, Jr., Trust under the Will of Charles E. Bowers, Jr.
for the benefit of Judith L. Bowers, and Charles E. Bowers, Jr.
Irrevocable Trust dated December 17, 1990 (each of whom is a stockholder
of the Company and is referred to herein individually as a “Stockholder” and
collectively as the “Stockholders”), and Charles J. Grandi (“Grandi”) who is an
executive officer of Fibre-Metal who has a contractual right to receive a
portion of the proceeds of the transactions contemplated hereby.

 

RECITALS

 

WHEREAS,
Fibre-Metal, along with its wholly-owned subsidiary Fibre-Metal (Canada)
Limited (“FMC”) (Fibre-Metal and FMC are collectively referred to herein as the
“Company”), is engaged in the business of designing, manufacturing, marketing
and selling an array of high performance head (including welding helmets),
face, hearing and respiratory protective products (the “Business”).

 

WHEREAS,
Stockholders own all of the issued and outstanding capital stock of Fibre-Metal
(the “Stock”).

 

WHEREAS, Buyer
desires to purchase from Stockholders, and Stockholders desire to sell to
Buyer, all of the Stock in accordance with the terms and conditions set forth
in this Agreement.

 

NOW,
THEREFORE, in consideration of the premises, mutual covenants, promises,
agreements and undertakings contained herein, and intending to be legally
bound, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1.         Defined
Terms.  As used herein, the terms
below shall have the following meanings. 
Unless the context otherwise requires, any such terms may be used in the
singular or plural, depending upon the reference.

 

“Action”
shall mean any action, suit (whether civil or criminal), litigation,
proceeding, labor dispute, arbitration, mediation, audit, or investigation
commenced before any Governmental Entity or arbitrator.

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person; provided, however, that such term shall not
include FMC.

 

 

“Agreement”
shall have the meaning set forth in the Recitals of this Agreement.

 

“Annual
Financial Statements” shall have the meaning set forth in Section 6.6
of this Agreement.

 

“Arbiter”
shall have the meaning set forth in Section 3.5 of this Agreement.

 

“Basket”
shall have the meaning set forth in Section 12.5(b) of this Agreement.

 

“Books and
Records” shall mean all books, ledgers, files, records, plans and reports
of the Company.

 

“Business”
shall have the meaning set forth in the Recitals section.

 

“Business
Day” shall mean any day other than a Saturday or Sunday or a day that is a
bank holiday in Philadelphia, Pennsylvania or New York, New York.

 

“Buyer”
shall have the meaning set forth in the Recitals of this Agreement.

 

“Buyer’s
Target Net Working Capital Collar” shall mean the Target Net Working
Capital minus Two Hundred Thousand Dollars ($200,000).

 

“Cap”
shall have the meaning set forth in Section 12.5(b) of this
Agreement.

 

“Claims”
shall have the meaning set forth in Section 6.12(h) of this
Agreement.

 

“Closing”
shall have the meaning set forth in Section 4.1 of this Agreement.

 

“Closing
Date” shall have the meaning set forth in Section 4.1 of this
Agreement.

 

“Closing
Date Balance Sheet” shall mean a Balance Sheet of the Company as of the
Closing Date as prepared in accordance with GAAP, and consistent with the
preparation of the Annual Financial Statements (as defined in Section 6.6),
pursuant to the provisions of Section 3.3 of this Agreement.

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder.

 

“Company”
shall have the meaning set forth in the Recitals of this Agreement.

 

“Confidentiality
Agreement” shall have the meaning set forth in Section 8.1 of this
Agreement.

 

“Consent”
shall mean any consent, waiver, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental Entity
or other Person.

 

“Contract”
shall mean any agreement, contract, note, loan, evidence of indebtedness,
purchase order, letter of credit, indenture, security or pledge agreement,
franchise agreement,

 

2

 

covenant not to compete,
employment agreement, license, instrument, obligation or commitment to which
the Company is a party, whether oral or written.

 

“Court
Order” shall mean any judgment, decision, consent decree, injunction, writ,
ruling or order of any Governmental Entity, department or authority that is
binding on any Person or its property under applicable law.

 

“Employee
Claims” shall have the meaning set forth in Section 6.9(b) of
this Agreement.

 

“Employee
Plans” shall mean all employee benefit plans as defined in Section 3(3) of
ERISA, and all severance, bonus, retirement, pension, profit sharing and
deferred compensation plans, and other similar fringe or employee benefit plans
or programs, maintained or contributed to by the Company.

 

“Encumbrance”
shall mean any claim, lien, pledge, charge, easement, security interest, deed
of trust, security deed, mortgage, right-of-way, encroachment, encumbrance,
covenant, condition, restriction, indemnity, option, assignment, judgment,
stockholders agreement, right of first refusal, right of first offer or other
right of a third party.

 

“Environmental
Requirements” shall mean all applicable Regulations relating to the
protection of human health or the environment, including (a) all
requirements pertaining to reporting, licensing, permitting, investigation, and
remediation of emissions, discharges, Releases or threatened Releases of
Hazardous Materials, and (b) all other limitations, restrictions, conditions,
standards, prohibitions, obligations, schedules and timetables contained
therein or in any notice or demand letter issued, entered, promulgated or
approved thereunder.

 

“ERISA”
means the Employment Retirement Income Security Act of 1974, as amended.

 

“ERISA
Affiliate” means, with respect to any Person, any entity that is, or at any
time for which any relevant statue of limitations remains open, was, a member
of a “controlled group of corporations” with, or is under “common control”
with, or is a member of the same “affiliated service group” with such Person as
defined in Sections 414(b), 414(c) or 414(m) of the Code.

 

“Escrow
Account” shall mean the account held by the Escrow Agent under the Escrow
Agreement.

 

“Escrow
Agent” shall mean Wilmington Trust Corporation.

 

“Escrow
Agreement” shall mean the Escrow Agreement entered into on the Closing Date
by and among the Escrow Agent, Stockholders, Grandi, Sellers Representative,
and Buyer in substantially the form of Exhibit A hereto.

 

“Escrow
Amount” shall mean Three Million Four Hundred Thousand Dollars
($3,400,000).

 

“Estimated
Closing Date Balance Sheet” shall mean a pro-forma Balance Sheet of the
Company as prepared in accordance with GAAP and consistent with the preparation
of the Annual Financial Statements reflecting the Stockholders’ and Grandi’s
good faith estimate of the

 

3

 

Company’s financial position as
of the Closing, to be prepared in advance of the Closing pursuant to the
provisions of Section 3.2 of this Agreement.

 

“Estimated
Net Debt” shall mean the Net Debt as of the Closing Date as set forth on
the Estimated Closing Date Balance Sheet and calculated pursuant to the formula
set forth on Schedule 1.1(a).

 

“Estimated
Net Working Capital” shall mean the Net Working Capital as of the Closing
Date as set forth on the Estimated Closing Date Balance Sheet and calculated
pursuant to the formula set forth on Schedule 1.1(a).

 

“Fibre-Metal”
shall have the meaning set forth in the Recitals of this Agreement.

 

“FMC”
shall have the meaning set forth in the Recitals of this Agreement.

 

“Financial
Statements” shall have the meaning set forth in Section 6.6 of this
Agreement.

 

“Fixtures
and Equipment” shall mean all of the furniture, fixtures, furnishings, machinery,
supplies, equipment, molds, and other tangible personal property owned by the
Company, wherever located, except for the items set forth on Schedule 1.1(b).

 

“Formation
Documents” means, as to any entity, those instruments that (i) define
its existence, as filed or recorded with the applicable Governmental Entity,
including, without limitation, its certificate or articles of incorporation (in
the case of a corporation), its certificate of limited partnership (in the case
of a limited partnership), or its certificate of formation (in the case of a
limited liability company), and (ii) govern its internal affairs,
including, without limitation, its by-laws (in the case of a corporation), its
agreement of general or limited partnership (in the case of a general or
limited partnership), or its operating agreement (in the case of a limited
liability company), in each case as amended, supplemented or restated.

 

“Fundamental
Representations” shall have the meaning set forth in Section 12.3 of
this Agreement.

 

“GAAP”
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, which are applicable on any particular
date and are consistently applied.

 

“Governmental
Entity” means any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, federal, state
or local.

 

“Grandi”
shall have the meaning set forth in the Recitals of this Agreement.

 

“Hazardous
Materials” shall mean any (a) substances or waste classified as “hazardous,”
“toxic,” or a “pollutant” pursuant to (i) any Environmental Requirement
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 USC 9601, et
seq., the Solid Waste Disposal Act, as amended by the Resource
Conservation and

 

4

 

Recovery Act of 1976 and
Hazardous and Solid Waste Amendments of 1984, 42 USC 6901 et seq., the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et seq., the Clean Air Act of 1966, as
amended, 42 USC 7401 et seq., the
Toxic Substances Control Act of 1976, 15 USC 2601 et seq., and the Hazardous Materials Transportation Act, 49
USC 5101 et seq., and (ii) the
Pennsylvania Health and Safety Code; (b) asbestos or asbestos-containing
materials; (c) polychlorinated biphenyls; (d) petroleum, including
crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied
natural gas, methane or synthetic gas usable for fuel, and (e) radioactive
materials.

 

“HSR Act”
shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

 

“Indebtedness”
shall mean (i) all indebtedness for borrowed money of the Company, (ii) all
obligations of the Company for the deferred purchase price of property or
services, (iii) all obligations of the Company evidenced by notes, bonds,
debentures or similar instruments (other than capital lease obligations), (iv) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by the Company, (v) all
obligations, contingent or otherwise, of the Company under acceptance, letter
of credit or similar facilities, (vi) the amount of the liability in
respect of all capital lease obligations of the Company, (vii) all
indebtedness of the type described in clauses (i) through (vi) above
guaranteed directly or indirectly in any manner by the Company including
interest and penalties thereon, (viii) any indebtedness of the type
described in clauses (i) through (vi) above secured by (or for which
the holder of such indebtedness has an existing right, contingent or otherwise,
to be secured by) any lien on assets or property owned by the Company and (ix) all
accrued but unpaid interest (or interest equivalent) to the date of
determination, and all prepayment premiums or penalties or commitment fees,
related to any items of indebtedness of the type described in clauses (i) through
(viii) above.

 

“Indemnification
Claim Notice” shall have the meaning set forth in Section 12.3 of this
Agreement.

 

“Indemnified
Party” shall have the meaning set forth in Section 12.3 of this
Agreement.

 

“Indemnifying
Party” shall have the meaning set forth in Section 12.3 of this
Agreement.

 

“Indemnity
Percentages” shall have the meaning set forth in Section 12.5(e) of
this Agreement.

 

“Interest
Rate” shall have the meaning set forth in Section 3.6 of this
Agreement.

 

“Interim
Financial Statements” shall have the meaning set forth in Section 6.6
of this Agreement.

 

“IP
Contracts” shall have the meaning set forth in Section 6.17 of this
Agreement.

 

“IP
Litigation” shall have the meaning set forth in Section 12.1(e) of
this Agreement.

 

“JP/S
Patents” shall have the meaning set forth in Section 12.1(e) of
this Agreement.

 

5

 

“Knowledge
of the Company” shall mean the actual knowledge, after due inquiry
reasonable under the circumstances, of Grandi, Richard Say, Robert Ennamorato,
Dean Simpson, Alex Stefanelli or Paul Brooks.

 

“Leaseholds”
shall mean all the right, title and interest of the Company as lessee, licensee
or occupant in, to and under any lease or occupancy right of land, improvements
and/or fixtures.

 

“Leases”
shall mean leases with the Company for the Premises to be entered into on the
Closing Date in substantially the form of Exhibit B-1 hereto for the
Premises located in Concordville, Pennsylvania, in substantially the form of Exhibit B-2
hereto for the Premises located in Aston, Pennsylvania, and in substantially
the form of Exhibit B-3 hereto for the Premises located in Mississauga,
Ontario, Canada.

 

“Losses”
shall have the meaning set forth in Section 12.1 of this Agreement.

 

“Material
Adverse Effect” shall mean any change, effect, event, occurrence, state of
facts, development or circumstance that has had or will have a material adverse
effect on the business, financial condition or results of operation of the
Company, taken as a whole; provided, however, that none of the following shall
be deemed, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been or
will be a Material Adverse Effect: (a) attributable to conditions
affecting (i) the industries in which the Company participate (including fluctuating
conditions resulting from cyclicality or seasonality affecting the business of
the Company, including its customers and suppliers), (ii) the U.S. economy
as a whole, or (iii) the economy of any foreign country as a whole in
which country the Company purchases product or has operations or sales; or (b) arising
from or relating to any change after the date of this Agreement in accounting
requirements or principles or any change in applicable laws, rules or
regulations.  The parties hereto
acknowledge and agree that the Company is not making any representations,
warranties or covenants in this Agreement with regard to any internal or
published projections, forecasts, or revenue or earnings predictions for any
period ending on or after the date of this Agreement, and a failure by the
Company to meet, any internal or published projections, forecasts, or revenue
or earnings predictions for any period ending on or after the date of this
Agreement shall not be considered with respect to whether a Material Adverse
Effect has occurred or will occur.

 

“Material
Contracts” shall have the meaning set forth in Section 6.10 of this
Agreement.

 

“Net Debt”
shall be based on and calculated pursuant to the formula set forth on Schedule 1.1(a).

 

“Net
Working Capital” shall be based on and calculated pursuant to the formula
set forth on Schedule 1.1(a).

 

“Notices”
shall have the meaning set forth in Section 14.1 of this Agreement.

 

“Permits
and Licenses” shall mean all licenses (other than software or other
intellectual property licenses), permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any Governmental Entity
or any other Person.

 

6

 

“Permitted
Encumbrances” shall mean (i) liens, arising by operation of law or
otherwise, to secure obligations which arose in the ordinary course of business
and are not yet due or delinquent, to the extent such obligations are reflected
on the balance sheet as of July 31, 2005 contained in the Financial Statements,
and (ii) minor liens which in the aggregate are not substantial in amount,
do not materially detract from the value or transferability of the property or
assets subject thereto or interfere with the present use thereof and have not
arisen other than in the ordinary course of business, to the extent the
liability in respect of such liens are reflected on the balance sheet as of July 31,
2005 contained in the Financial Statements.

 

“Person”
shall mean a natural person, joint venture, corporation, partnership (general
and/or limited), limited liability company, trust, estate, sole proprietorship,
governmental agency or authority or other juridical entity.

 

“Pre-Closing
Taxes” shall mean (i) all Taxes (or the non-payment thereof), whenever
due and payable, of the Company for all taxable periods ending on or before the
Closing Date and the portion through the end of the Closing Date for any
taxable period that includes (but does not end on) the Closing Date (“Pre-Closing
Tax Period”) and all Taxes payable in connection with the transfer of the
Premises contemplated by Section 8.8 hereof.  In the case of any taxable period that
includes (but does not end on) the Closing Date (a “Straddle Period”),
the amount of any Taxes based on or measured by income, receipts or
expenditures of the Company for the Pre-Closing Tax Period shall be determined
based on an interim closing of the books as of the close of business on the
Closing Date (and for such purpose, the taxable period of any partnership or
other pass-through entity in which the Company holds a beneficial interest
shall be deemed to terminate at such time) and the amount of other Taxes of the
Company for a Straddle Period which relate to the Pre-Closing Tax Period shall
be deemed to be the amount of such Tax for the entire taxable period multiplied
by a fraction the numerator of which is the number of days in the taxable
period ending on the Closing Date and the denominator of which is the number of
days in such Straddle Period; provided, however, that if the amount of periodic
Taxes imposed for such taxable period reflects different rates of tax imposed
for different persons within such taxable period, the formula described in the
preceding clause shall be applied separately with respect to each such period
within the taxable period; (ii) all Taxes of any member of an affiliated,
consolidated, combined or unitary group of which the Company (or any
predecessor thereof) is or was a member on or prior to the Closing Date,
including pursuant to Treasury Regulation §1.1502-6 or any analogous or similar
state, local, or foreign law or regulation, and (iii) any and all Taxes of
any Person (other than the Company) imposed on the Company as a transferee or
successor, by contract or pursuant to any law, rule, or regulation, which Taxes
relate to an event or transaction occurring before the Closing.

 

“Premises”
shall mean the real property and Leaseholds described on Schedule 1.1(c) attached hereto.

 

“Proprietary
Rights” shall mean all rights in trademarks, logos, trade names, domain
name registrations and all goodwill related thereto, patents, patent
applications and, computer software (including without limitation any source or
object codes therefor or documentation relating thereto), trade secrets,
inventions and all other intellectual property rights, in addition to all
registrations, applications and common-law rights related thereto, all rights
to obtain renewals, reissues and extensions of registrations or other legal
protections related thereto and

 

7

 

any licenses, consents,
settlements or other agreements relating to the use of any of the foregoing.

 

“Purchase
Price” shall have the meaning set forth in Section 3.1 of this
Agreement.

 

“Regulations”
shall mean any laws, statutes, ordinances, rules, regulations, court decisions,
principles of law and orders of any foreign, federal, state or local
governmental and any other governmental department or agency, including without
limitation Environmental Requirements.

 

“Related
Party” shall mean any Stockholder and Grandi, any Affiliate of any
Stockholder or Grandi, or any of their respective Affiliates or any relative of
any of the foregoing.

 

“Release”
shall mean any past or present spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migration, dumping or
disposing of Hazardous Materials into the environment or any structure or
facility.

 

“Scheduled
Contracts” shall mean (a) the Material Contracts, (b) the
Leaseholds, and (c) the IP Contracts.

 

“Sellers
Representative” shall have the meaning set forth in Section 8.9 of
this Agreement.

 

“Special
Environmental Indemnity” shall have the meaning set forth in Section 12.1(c) of
this Agreement.

 

“Stock”
shall have the meaning set forth in the Recitals section.

 

“Stockholder”
shall have the meaning set forth in the Recitals section.

 

“Stockholders’
Target Net Working Capital Collar” shall mean the Target Net Working
Capital plus Two Hundred Thousand Dollars ($200,000).

 

“Target Net
Working Capital” shall mean the amount of $9,138,000, as set forth on Schedule 1.1(a), and calculated pursuant to the formula set forth on Schedule 1.1(a).

 

“Taxes”
means, with respect to any entity, all income taxes (including any tax on or
based upon net income, gross income as specially defined, earnings, profits or
selected items of income, earnings or profits) and all gross receipts, sales,
use, transfer, conveyance, value added, capital gains, franchise, license,
withholding, payroll, employment, excise, severance, stamp, occupation, or
property taxes, alternative minimum taxes, customs, duties and other taxes,
fees, assessments or charges of any kind whatsoever, together with all interest
and penalties, imposed by any taxing authority (domestic or foreign) on such
entity.

 

“Tax
Returns” shall mean all returns, reports, declarations, and information
returns and statements relating to Taxes, including any amendments thereto.

 

8

 

“Termination
Date” shall have the meaning set forth in Section 13.1(c) of this
Agreement.

 

“Transaction
Expenses” shall mean the amount of any fees and expenses in connection with
the transactions contemplated by this Agreement (other than any fees and
expenses incurred by Buyer), including any change of control payments, sale
bonuses, success fees, severance obligations, legal fees, investment banking
fees and other professional fees, payable or to be paid by the Company in
connection with the transactions contemplated by this Agreement, including any
transfer taxes or fees in connection with the transfer of the real property
comprising the Premises pursuant to Section 8.8, and one-half the HSR Act
fee as described in Section 15.3.

 

ARTICLE II

SALE AND PURCHASE OF STOCK

 

2.1.         Agreement
to Sell.  Subject to all of the
terms and conditions of this Agreement, at the Closing, Stockholders shall
sell, assign, transfer, convey and deliver to Buyer all of Stockholders’ right,
title and interest in and to the Stock, free and clear of all Encumbrances.

 

2.2.         Agreement
to Purchase.  Subject to all of
the terms and conditions of this Agreement, at the Closing, Buyer shall
purchase the Stock by paying the Purchase Price (as defined in Section 3.1)
pursuant to Section 3.1.

 

ARTICLE III

PURCHASE PRICE

 

3.1.         Purchase
Price.  In
consideration for the Stock, at the Closing, Buyer shall pay: (i) to
Stockholders and Grandi by wire transfer of immediately available funds, to the
accounts set forth on Schedule 3.1
hereto, the aggregate sum of (a) Sixty-Eight Million Dollars
($68,000,000), (b) as applicable, plus the amount by which the Estimated
Net Working Capital exceeds the Stockholders’ Target Net Working Capital
Collar, or minus the amount by which Buyer’s Target Net Working Capital Collar
exceeds the Estimated Net Working Capital (there being no increase or decrease
if the Estimated Net Working Capital is between Stockholders’ Target Net
Working Capital Collar and Buyer’s Target Net Working Capital Target Collar), (c) minus
Estimated Net Debt ((a) through (c) collectively, the “Purchase Price”),
and (d) minus the Escrow Amount, and (ii) to the Escrow Agent by wire
transfer of immediately available funds, to the account designated by the
Escrow Agent, the Escrow Amount.

 

3.2.         Estimated
Closing Date Balance Sheet; Estimated Net Working Capital and Estimated Net
Debt.  On or prior to three (3) Business Days
prior to the Closing Date, Stockholders and Grandi shall deliver to Buyer the
Estimated Closing Date Balance Sheet, together with their good faith
computation of the Estimated Net Working Capital and Estimated Net Debt.  If Buyer disagrees with the Estimated Closing
Date Balance Sheet, Estimated Net Working Capital or Estimated Net Debt,
Stockholders, Grandi and Buyer shall negotiate in good faith to resolve their
differences prior to the Closing.

 

3.3.         Closing
Date Balance Sheet; Net Working Capital and Net Debt. 
As promptly as possible following the close of business on the Closing
Date, but in no event later than forty-five (45) days after the Closing Date, the
Company shall prepare the Closing Date Balance Sheet

 

9

 

in conformity with
GAAP and historical preparation of the Annual Financial Statements, and (b) deliver
the Closing Date Balance Sheet, together with the computations of the Net
Working Capital and Net Debt, to Buyer. 
Stockholders and Grandi agree to provide, or cause to be provided, to
the Company any materials or information in their possession requested by the
Company as necessary for the preparation of the Closing Date Balance Sheet and
the computation of the Net Working Capital and the Net Debt.

 

3.4.         Review
by Stockholders and Grandi.  Stockholders and
Grandi shall have a period of thirty (30) days following delivery of the
Closing Date Balance sheet to review, at their expense, the Closing Date
Balance Sheet and the computation of the Net Working Capital and Net Debt.  Within such thirty (30) day period, Sellers
Representative shall notify Buyer in writing when Stockholders and Grandi have
completed their review and whether or not Stockholders and Grandi agree with
the Closing Date Balance Sheet and the computations of the Net Working Capital
and Net Debt.  Any objection to the
Closing Date Balance Sheet or to the computation of Net Working Capital or Net
Debt may only be made to the extent such balance sheet or computation has not
been made in accordance with GAAP and consistent with the preparation of the
Annual Financial Statements or to the extent it contains computational errors.  If Sellers Representative does not give Buyer
notice of Stockholders and Grandi’s objection within such thirty (30) day
period, the Closing Date Balance Sheet and the computations of Net Working
Capital and Net Debt shall become final and Stockholders and Grandi shall have
no further right to disagree therewith, and the payment of the Net Working
Capital adjustment and the Net Debt adjustment pursuant to Section 3.6
shall be made.  The Company agrees to
provide, or cause to be provided, to Sellers Representative or its designated
representatives any materials or information in the Company’s possession or the
possession of the Company’s accountants (upon execution of such accountants’
standard waiver letter) requested by Sellers Representative relating to the
preparation of the Closing Date Balance Sheet and the computations of the Net
Working Capital and Net Debt.

 

3.5.         Independent
Review.  In the event Sellers Representative and Buyer
do not agree upon the Closing Date Balance Sheet or the computation of the Net
Working Capital or Net Debt within ten (10) Business Days after delivery
by Sellers Representative of a notice of disagreement pursuant to Section 3.4,
Sellers Representative and Buyer shall submit to PricewaterhouseCoopers, LLP
(the “Arbiter”) such Closing Date Balance Sheet and computations of the Net
Working Capital and Net Debt, and any other documents or information that the
Arbiter deems pertinent to make a final and binding determination of any issues
as to which the parties are in disagreement. 
The Arbiter shall advise the parties of its decision relative to the
controversy within thirty (30) days after its receipt of the applicable
statements and other documents or information that it has requested.  Such firm shall be acting as an arbitrator
and not as an auditor and shall decide only those issues as to which the
parties are not in agreement on the grounds that the Closing Date Balance Sheet
or the relevant computation of Net Working Capital or Net Debt delivered by the
Company pursuant to Section 3.3 was not prepared in accordance with GAAP
consistent with the preparation of the Annual Financial Statements or contained
computational errors.  The fees and
expenses of the Arbiter shall be equally apportioned between the Stockholders
and Grandi, on the one hand, and Buyer, on the other hand.

 

10

 

3.6.         Payment
of Net Working Capital and Net Debt Adjustment.  Within five (5) Business
Days after the final determination of the Net Working Capital and Net Debt as
provided for in Sections 3.4 or 3.5, as the case may be (provided that any
undisputed amount shall be paid within five (5) Business Days of Sellers
Representative’s notice of objection pursuant to Section 3.4), (i) if
the Purchase Price as calculated pursuant to the formula set forth in Section 3.1
substituting such Net Working Capital and Net Debt for Estimated Net Working
Capital and Estimated Net Debt (the “Final Purchase Price”) is greater than the
Purchase Price determined at Closing using Estimated Net Working Capital and
Estimated Net Debt (the “Closing Purchase Price”), Buyer shall pay to an
account designated by Stockholders and Grandi an amount in cash equal to the
difference.  If the Final Purchase Price
is less than the Closing Purchase Price, Stockholders and Grandi shall pay to
Buyer an amount in cash equal to the difference.  In each of the
foregoing, interest shall accrue thereon from the date of Closing to the date
of payment thereof, at an interest rate equal to the “Prime Rate” as published
in the Wall Street Journal on the Closing Date plus one percent (1%) (the “Interest
Rate”).

 

ARTICLE IV

CLOSING

 

4.1.         Closing.  The closing for the sale and purchase of the
Stock (“Closing”) shall take place at the offices of Stradley, Ronon, Stevens &
Young, LLP, 2600 One Commerce Square, Philadelphia, Pennsylvania, at 10:00 a.m.
(local time) on the fifth (5th) Business Day following the
satisfaction of the conditions contained in Article X and Article XI
of this Agreement (except those conditions which by their terms require
performance at Closing), or such other date and time as is mutually agreed upon
by the parties hereto.  The date and time
of Closing are hereinafter referred to as the “Closing Date.”  The Closing shall be effective as of 11:59 p.m.
(local time) on the Closing Date.

 

4.2.         Deliveries
by Stockholders.  At Closing,
Stockholders shall deliver to Buyer:

 

(a)           Stock
certificates for the Stock, which certificates shall be duly endorsed to Buyer,
or accompanied by duly executed stock powers; and

 

(b)           Such
documents listed in Article X of this Agreement, as are to be delivered to
Buyer by Stockholders.

 

4.3.         Deliveries
by Buyer.  At Closing, Buyer
shall deliver to Stockholders:

 

(a)           The
Purchase Price, as specified in Section 3.1; and

 

(b)           Such documents
listed in Article XI of this Agreement, as are to be delivered to
Stockholders by Buyer.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS AND GRANDI

 

Stockholders
hereby represent and warrant, and Grandi represents and warrants solely with respect
to the provisions contained in Sections 5.1(b), to Buyer as follows:

 

11

 

5.1.         Authorization.  (a) The execution, delivery and
performance of this Agreement, and the consummation of the transactions contemplated
hereby, have been duly and validly authorized and approved by all necessary
action on the part of Stockholders.  This
Agreement constitutes a valid and binding obligation of Stockholders,
enforceable in accordance with its terms, except as the enforceability hereof
may be limited by bankruptcy, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable
principles.  No Consent is required with
respect to Stockholders in connection with the execution, delivery and
performance of this Agreement, except (i) Consent under the HSR Act, or (ii) as
set forth on Schedule 5.1.

 

(b)           Grandi
has full capacity to enter into this Agreement, and it constitutes a valid and
binding obligation of Grandi, enforceable in accordance with its terms, except
as the enforceability hereof may be limited by bankruptcy, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles.  The
execution, delivery and performance of this Agreement, does not constitute a
violation of, default under, or conflict with, any Court Order applicable to
Grandi.

 

5.2.         Capitalization.  The authorized number of shares of capital
stock of Fibre-Metal, the par value per share, and the number of shares of
capital stock of Fibre-Metal issued and outstanding, and the holders thereof,
as of the date of this Agreement are as set forth on Schedule 5.2.  Except as set forth on Schedule 5.2,
each Stockholder is the sole record and beneficial owner of each share of Stock
indicated on Schedule 5.2 as
owned by such Stockholder, free and clear of any and all Encumbrances.  All of the outstanding shares of the Stock
have been duly and validly issued and are fully paid and non-assessable.  None of the outstanding shares of the Stock
were issued in violation of applicable state or federal securities laws.  Other than as set forth on Schedule 5.2, there are no outstanding options,
warrants, calls, commitments, agreements, pre-emptive or other rights to subscribe
for, purchase or otherwise acquire any capital stock of the Company, or
securities convertible into or exchangeable for any capital stock of the
Company, to which the Company or any Stockholder is bound.

 

5.3.         Ability
to Carry Out Agreement.  Except
as set forth on Schedule 5.3, the
consummation of the transactions contemplated hereby, including, but not
limited to, the execution, delivery and performance of this Agreement, does
not: (a) constitute a violation of or default under, conflict with or result
in a breach of (i) the Formation Documents for any Stockholder, (ii) the
terms of any contract, agreement or understanding to which any Stockholder is
bound (except where any such breach would not have a material adverse effect on
the Stockholders’ ability to consummate the transactions contemplated hereby), (iii) any
Court Order to which such Stockholder is subject, or (iv) any Regulation
applicable to such Stockholder; (b) result in the creation or imposition
of any Encumbrance on, or give to any Person any interest or right in any of
the Stock; or (c) accelerate the maturity of, or otherwise modify, or give
to others any right of termination, amendment, acceleration, suspension,
revocation or cancellation of any rights under, any material contract, agreement
or understanding to which any Stockholder is bound (except where any such
breach would not have a material adverse effect on the Stockholders’ ability to
consummate the transactions contemplated hereby).

 

12

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company
hereby represents and warrants to Buyer as follows:

 

6.1.         Organization.  Fibre-Metal is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and FMC is a corporation duly organized, validly existing and in good standing
under the laws of Canada.  The Company
has full power and authority to own its assets and to carry on its business as
and where such business is now conducted. 
The Company is duly qualified or licensed to do business and is in good
standing in all jurisdictions in which the nature of its business or the
character of its properties or assets requires such qualification or license,
all such jurisdictions are set forth on Schedule 6.1,
except where the failure to so qualify would not constitute a Material Adverse
Effect.  Copies of the Formation
Documents for the Company heretofore delivered to Buyer are true, accurate and
complete as of the date of this Agreement.

 

6.2.         Ability
to Carry Out Agreement.  Except
as set forth on Schedule 6.2, the
consummation of the transactions contemplated hereby, including, but not
limited to, the execution, delivery and performance of this Agreement, does
not: (a) constitute a violation of or default under, conflict with or
result in a breach of (i) the Formation Documents for the Company, (ii) the
terms of any of the Scheduled Contracts (except where any such breach would not
have a material adverse effect on the Company’s ability to consummate the
transactions contemplated hereby), (iii) any Court Order to which the
Company is subject, or (iv) any Regulation applicable to the Company; (b) result
in the creation or imposition of any Encumbrance on, or give to any Person any
interest or right in any of the Stock or any of the Company’s assets; or (c) accelerate
the maturity of, or otherwise modify, or give to any Person any right of
termination, amendment, acceleration, suspension, revocation or cancellation of
any rights under, any of the Scheduled Contracts (except where any such breach
would not have a material adverse effect on the Company’s ability to consummate
the transactions contemplated hereby).

 

6.3.         Authorization.  The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly and validly authorized and approved by all necessary action on
the part of the Company.  This Agreement
constitutes the valid and binding obligation of the Company, enforceable in
accordance with its terms, except as the enforceability hereof may be limited
by bankruptcy, reorganization, moratorium or similar laws relating to or
limiting creditors’ rights generally or by equitable principles relating to
enforceability.  No Consent is required
with respect to the Company in connection with the execution, delivery and
performance of this Agreement, except (i) Consent under the HSR Act, (ii) as
set forth on Schedule 6.3, or (iii) such
Consents which, if not obtained, would not constitute a Material Adverse
Effect.

 

6.4.         Permits
and Licenses.  The Company holds
all Permits and Licenses that are necessary for the operation of the Business
as now conducted and as presently planned to be conducted as of the date of
this Agreement, except for Permits and Licenses which, if not in full force and
effect and currently valid, would not constitute a Material Adverse
Effect.  The

 

13

 

Company is in
material compliance with all of the terms and conditions of all material
Permits and Licenses.

 

6.5.         Compliance
with Regulations.  The Company is
in compliance with all material Regulations and the Company has not received
written notice of any violation of any material Regulations.

 

6.6.         Financial
Statements.  Attached as Schedule 6.6 are copies of the audited balance sheets,
statements of income, statements of cash flows and statements of Stockholder’s
equity for the Company for the fiscal years ending December 31, 2003 and
2004 (collectively, the “Annual
Financial Statements”) and copies of the unaudited balance sheets and
statements of income for the Company for the six (6) month period ending June 30,
2005 and the seven (7) month period ending July 31, 2005 (the “Interim Financial Statements” and,
together with the Annual Financial Statements, sometimes collectively referred
to herein as the “Financial Statements”).  Except as described on Schedule 6.6,
or as disclosed in the Financial Statements, as of their respective dates, the
Financial Statements (i) were prepared from the Books and Records, (ii) were
prepared in accordance with GAAP, consistently applied from period to period
(except for changes, if any, permitted by GAAP and disclosed therein), (iii) fairly
present in all material respects in accordance with GAAP consistently applied,
the financial position and results of operations of the Company as of the dates
and for the periods covered thereby, subject, in the case of the Interim
Financial Statements, to normal year end adjustments and the absence of
footnotes, and (iv) in the case of the Annual Financial Statements, are
accompanied by a report of the Company’s independent auditors prepared in
accordance with generally accepted auditing standards.  The Company does not have any material
liability or obligation of any nature, whether due or to become due, absolute,
contingent or otherwise, including liabilities for or in respect of federal,
state, local and foreign Taxes and any interest or penalties relating thereto,
except (a) to the extent reflected as a liability contained in the balance
sheet as of July 31, 2005 included in the Financial Statements, (b) liabilities
incurred in the ordinary course of business since July 31, 2005 and fully
reflected as liabilities on the Books and Records, which are consistent in
amounts and consistent with the type as those set forth on such July 31,
2005 balance sheet, and (c) liabilities disclosed on Schedule 6.6A.

 

6.7.         Title
to and Condition of Assets.  The
Company has good, valid and marketable title to all of its assets, tangible and
intangible, including, without limitation, the assets set forth on the Interim
Financial Statements, free and clear of all Encumbrances, other than Permitted
Encumbrances and except as set forth on Schedule 6.7
(which items set forth on Schedule 6.7
shall be removed at or prior to the Closing). 
All Fixtures and Equipment are, and shall on the Closing Date be, in a
condition sufficient for the operation of the Business as currently conducted,
and there are no material defects in such Fixtures and Equipment that would
constitute a Material Adverse Effect. 
Except as set forth on Schedule 6.7,
none of the Company’s assets consist of any capital stock or debt security of,
or other debt or equity interest in, any other Person, and the Company has not
entered into any agreement requiring it to acquire any such interest or
otherwise contribute to the capital of any other Person.  The Company has sufficient right, title and
interest in and to all assets necessary for the operation of the Business as
now conducted.

 

14

 

6.8.         Tax
Returns and Taxes.  The Company
has duly and timely filed (taking into account all extensions of due dates)
with the appropriate Governmental Entity all tax and other returns and reports
required to be filed, all of which have been accurately prepared in all
material respects.  All Taxes due, owing
and payable, or which may be due, owing and payable, have been fully paid or
reserved for by the Company in the Financial Statements.  Except as set forth on Schedule 6.8,
all Taxes arising from January 1, 2005 to the Closing Date will be, on the
Closing Date, fully paid or reserved for on the Closing Balance Sheet.  The Company has not received, with respect to
the Company’s tax returns, notice from any Governmental Entity of any
deficiency or other adjustment that has not been satisfied.  Except as set forth on Schedule 6.8,
the Company (i) is not presently under audit by the Internal Revenue
Service (“IRS”) or any other tax
authority for any Taxes, (ii) has not been the subject of an IRS audit
during the past five (5) years, and (iii) has not received any notice
of a proposed IRS audit.  There are no
agreements, waivers, or other arrangements providing for an extension of time
with respect to the assessment of any Taxes or deficiency against the Company,
nor are there any Actions, now pending or, to the Knowledge of the Company,
threatened against the Company in respect of any Taxes.  The Company has withheld, and will withhold
prior to Closing, proper and accurate amounts from employees of the Company in
compliance in all material respects with all withholding and similar provisions
of any and all applicable federal, foreign, state, and local laws, statutes,
codes, ordinances, rules and regulations. 
No liens for Taxes exist with respect to any assets or properties of the
Company, except for statutory liens for Taxes not yet due.  The Company has duly elected to be an S
corporation for purposes of Sections 1361 through 1379 of the Code (the “S
Election”).  The S Election has been
effective from September 1, 2002 and continuously thereafter.  The Company is treated as an S corporation
for state and local income tax purposes as set forth on Schedule 6.8,
which indicates the effective date of such tax status in each listed
jurisdiction.  During the last three
fiscal years, the Company has not distributed stock of another Person, or has
had its stock distributed by another Person, in a transaction that was
purported or intended to be governed in whole or in part by Section 355 of
the Code; since the date of the latest balance sheet, the Company has not
incurred any material liability for Taxes arising from extraordinary gains or
losses, as the term is used in GAAP, outside the ordinary course of business
consistent with past practice; the Company (A) has not been a member of an
affiliated group of corporations, within the meaning of Section 1504 of
the Code, and (B) has no liability for the Taxes of any Person under
Treas. Reg. §1.1502-6 (or any similar provision of state, local or foreign
income Tax law), as a transferee or successor, by contract, or otherwise; no
claim has been made in writing by a tax authority in a jurisdiction where the
Company does not file Tax Returns that the Company is or may be subject to
Taxes assessed by such jurisdiction; the unpaid income Taxes of the Company did
not, as of the date of the latest balance sheet, exceed the reserve for income
Tax liability set forth on the latest balance sheet; the Company has not
entered into any transaction which is a “reportable transaction” (as defined in
Treasury Regulation Section 1.6011-4) or a “potentially abusive tax
shelter” (as defined in Treasury Regulation Section 1.6112-1); the Company
is not a party to any contract, plan or arrangement (written or otherwise)
covering any Person that, individually or collectively, would, in whole or in
part resulting from the consummation of the transactions contemplated hereby,
result in the payment of any amount that will not be deductible pursuant to the
terms of Section 280G of the Code; the Company is not nor has the Company
been, a United States real property holding corporation within the meaning of
Code Section 897(c)(2) during the applicable period described in Code
Section 897(c)(1)(A)(ii).  The
Company has not filed a consent under Code

 

15

 

Section 341(f);
the Company will not be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period ending after
the Closing Date as a result of any change in accounting method for any taxable
period ending on or prior to the Closing Date, any installment sale or open
transaction disposition made on or prior to the Closing Date or, any prepaid
amount received on or prior to the Closing Date.

 

6.9.         Labor
Relations.

 

(a)           The
Company is party to the collective bargaining agreements set forth on Schedule 6.9. 
During the most recent twelve (12) month period prior to the date of
this Agreement, the Company has not received any notice of, and there have not
been, any strikes, slowdowns, work stoppages or lock-outs, or threats
thereof, by or with respect to any of the Company’s employees.  There are no unfair labor practice complaints
pending or, to the Knowledge of the Company, threatened against the
Company.  Other than the collective
bargaining agreement listed on Schedule 6.9, to the Knowledge of the
Company, there are no present activities or proceedings by any labor union to
organize any of the Company’s employees.

 

(b)           Except as set forth on Schedule 6.9(b),
there are no controversies, grievances or claims by any, or on behalf of any,
of the Company’s employees pending with respect to their employment or benefits
incident thereto, including, but not limited to, sexual harassment and
discrimination claims and claims arising under workers’ compensation laws
(collectively, “Employee Claims”), and to the Company’s Knowledge, there is no
state of facts or event which could reasonably be expected to form the basis
for any Employee Claims.

 

6.10.       Material
Contracts.  Schedule 6.10
identifies each Contract between the Company and any third party that (i) involves
the future payment by the Company thereunder of an amount in excess of $50,000 during
a one-year period or $100,000 during the term of the Contract, (ii) was
entered into not in the ordinary course of the Business, (iii) contains
any provision or covenant prohibiting or limiting the ability of the Company to
operate the Business or pursuant to which the Company has agreed not to compete
with any other Person or to solicit the customers of employees of any other
Person, (iv) is a sales representative or distribution Contract that
involves or will reasonably involve payments in excess of $50,000 during a
one-year period or $100,000 during the term of the Contract, (v) is a
supply Contract with any customer or vendor that involves or will reasonably
involve payments in excess of $50,000 during a one-year period or $100,000
during the term of the Contract, (vi) is a Contract pursuant to which the
Company has acquired or disposed of any business that involves or will
reasonably involve payments in excess of $50,000 during a one-year period or
$100,000 during the term of the Contract, or (vii) is a Contract relating
to any Indebtedness ((i) through (vii) collectively, “Material Contracts”).  Each Material Contract is in full force and
effect and constitutes the valid and binding obligation of the Company and, to
the knowledge of the Company, the other parties thereto, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, reorganization, moratorium or similar laws relating to or
limiting creditors’ rights generally or by equitable principles.  Except as set forth on Schedule 6.10,
the Company is not in default under, the Company has not received or delivered
any written notice of default, cancellation or termination of, and, to the
Knowledge of the Company, no other party is in material default under, any
Material Contract.

 

16

 

6.11.       Changes
or Events.  Except as set forth
on Schedule 6.11 and except for the
transfer of the Premises contemplated by Section 8.8, since January 1,
2005, the Company has conducted its business in the ordinary course and none of
the following has occurred with respect to the Company:

 

(a)           Any
amendments to the Company’s Formation Documents;

 

(b)           Any
disposition of, or agreement to dispose of, or placement of an Encumbrance
upon, any of the Company’s assets, other than dispositions of inventory and
obsolete equipment in the regular, normal and ordinary course of business,
consistent with past custom or practice;

 

(c)           Any
acquisition, by merger, consolidation, purchase of stock or assets or
otherwise, of any corporation, partnership, association or other business
organization or of all or substantially all of its assets, or any sale or
agreement to sell the Company, by merger, consolidation, sale of stock or sale
of all or substantially all of the Company’s assets;

 

(d)           Any (i) issuance
or sale (or agreement to issue or sell) any of the Company’s capital stock or
any options, warrants or other rights to purchase any such shares or any
securities convertible into or exchangeable for such shares, (ii) declaration,
setting aside or payment of any distributions, dividends or similar payments
(other than cash dividends) in respect of the Stock or any other capital stock
(or similar equity interest) of the Company; or (iii) redemption, purchase
or other acquisition of the Stock or any other capital stock (or similar equity
interest) of the Company;

 

(e)           Any
incurrence of any Indebtedness or making of loans or advances by the Company to
any Person other than advances to employees in the ordinary course of business
consistent with past practice;

 

(f)            Any
increase in the compensation or other payment to any director, officer or
employee, whether now or hereafter payable or granted (other than increases in
base compensation in the ordinary course consistent in timing and amount with
past practices), or entry into or variation of the terms of any employment or
incentive agreement with any such person;

 

(g)           Any
commencement, entering into, or altering of any Scheduled Contract, or any Employee
Plan, stock option, stock purchase, or incentive plan for employees of the
Company;

 

(h)           Any
capital expenditure or commitment to any capital expenditure in excess of
$100,000;

 

(i)            Any
termination of employees of the Company, except in the ordinary course of
business;

 

(j)            Any
change in the Company’s accounting procedures or practices;

 

17

 

(k)           Any
development, change or occurrence that constitutes a Material Adverse Effect;

 

(l)            Any
cancellation of any debts or waiver of any material rights or payment,
discharge or satisfaction of any claim, liabilities or obligations (absolute,
accrued, contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business consistent with past practice
of liabilities and obligations reflected on or reserved against on the
Financial Statements or incurred in the ordinary course of business consistent
with past practice since July 31, 2005;

 

(m)          Any
disposition of or permission to lapse of any rights to the use of any material
Proprietary Rights or disposition of or disclosure of (except as necessary in
the conduct of its business) to any Person, of any trade secret, formula,
process or know-how not a matter of public knowledge prior to such disclosure;

 

(n)           Any
entering into or termination of any agreement or transaction with any Related
Party;

 

(o)           Any making
or revoking of any election for Tax purposes by the Company or on its behalf or
any change in the Company’s status as an S corporation;

 

(p)           Any
incurrence of any material damage, destruction or loss, whether or not covered
by insurance, adversely affecting the properties, business or assets of the
Company; or

 

(q)           Any
agreement or commitment by the Company to do or take any of the foregoing
actions.

 

6.12.       Employees
and Employee Benefits.

 

(a)           Set forth
on Schedule 6.12(a) is a true
and complete listing of (i) all written employment and consulting
agreements to which the Company is a party; (ii) all confidentiality or
other agreements between the Company and its employees protecting proprietary
processes or information; and (iii) all Employee Plans.  A true and complete copy of each agreement,
plan or arrangement listed on Schedule 6.12(a),
and, where applicable, a copy of the most recent IRS Determination Letter
received, and the three most recent IRS Forms 5500 filed, including all
schedules and exhibits filed with that 5500, with respect to each such
agreement, plan or arrangement, has been furnished to Buyer.

 

(b)           Except as
set forth on Schedule 6.12(b),
the Employee Plans have been administered in accordance with their terms and
all applicable provisions of ERISA, the Code and state law.  The Company has made all payments to all
Employee Plans as required by the terms of each such plan and applicable law.

 

(c)           Except as
set forth on Schedule 6.12(c),
the IRS has issued a letter for each Employee Plan that is an employee pension
benefit plan, as defined in Section 3(2) of ERISA, which is intended
to be a qualified plan, determining that such plan is so qualified under Section 401(a) of
the Code as amended through the effective dates of the legislation referred to

 

18

 

as “GUST” and is exempt
from United States Federal Income Tax under Section 501(a) of the
Code, and there has been no occurrence, including any amendment or failure to
amend, since the date of any such determination letter that has adversely
affected such qualification.

 

(d)           Except as
set forth on Schedule 6.12(d), neither the
Company nor any ERISA Affiliate has contributed
to, or been required to contribute to, during any period with respect to which
any relevant statute of limitations remains open, any multiemployer plan as
defined by Section 3(37) of ERISA, nor has the Company or any ERISA
Affiliate incurred any withdrawal liability within the meaning of Section 4201
of ERISA with respect to any multiemployer plan or have any potential
withdrawal liability arising from a transaction described in Section 4204
of ERISA.

 

(e)           None of
the Employee Plans which is an employee welfare benefit plan, within the
meaning of Section 3(l) of ERISA, provides benefits to retirees or other
former employees of the Company, regardless of whether such benefits are vested
and the Company has not terminated any employee welfare benefit plan providing
benefits to retirees.  The Company and
each ERISA Affiliate have complied with the notice and continuation coverage
requirements of section 4980B of the Code and the regulations thereunder,
including, without limitation, the “M&A regulations” issued as Treasury
Regulations § 54.4980B-9, with respect to each Employee Welfare Benefit
Plan that is, or was during any taxable year of the Company or any ERISA
Affiliate for which the statute of limitations on the assessment of federal
income taxes remains open, by consent or otherwise, a group health plan within
the meaning of section 5000(b)(1) of the Code.

 

(f)            No ERISA
Affiliate has incurred any liability which could subject Buyer or the Company
to liability under Section 4062, 4063, 4064 or 4069 of ERISA, nor has any
ERISA Affiliate, during any period with respect to which any relevant statute
of limitations remains open, been required to contribute to, or incurred any
withdrawal liability, within the meaning of Section 4201 of ERISA to any
multiemployer pension plan, within the meaning of Section 3(37) of ERISA
nor does any ERISA Affiliate have any potential withdrawal liability arising
from a transaction described in Section 4204 of ERISA.

 

(g)           Except as
set forth on Schedule 6.12(g),
the assets of each Employee Plan that is a defined benefit pension plan, as
defined by Section 3(35) of ERISA maintained or contributed to by the
Company or any ERISA Affiliate and subject to Title IV of ERISA (other than any
multiemployer plan) are at least equal to the liabilities for accrued benefits
under such Employee Plan, determined in accordance with Statement of Financial
Accounting Standards No. 87.  No
such Employee Plan has incurred any accumulated funding deficiency or requested
a waiver of the minimum funding standards of section 412 of the Code or Section 302
of ERISA.  The Company has furnished to
Buyer the most recent actuarial report with respect to each such Employee Plan.

 

(h)           Other than
routine claims for benefits made in the ordinary course of business, there are
no pending claims, investigations or causes of action (“Claims”) and to the
Knowledge of the Company, no such Claims are threatened, against any Employee
Plan or fiduciary of any such Employee Plan by any participant, beneficiary or
Governmental Entity

 

19

 

with respect to the
qualification or administration of any such Employee Plan and there is no basis
to anticipate that any such claims will be made.

 

(i)            Except as
described on Schedule 6.12(i), neither the execution and delivery of this Agreement,
nor the sale of the Stock or any of the transactions contemplated herein, will
terminate or modify, or give a third party a right to terminate or modify, the
provisions or terms of any Employee Plan (including employment agreements) and
will not constitute a stated triggering event under any Employee Plan
(including employment agreements) that will result in any payment (including
parachute payments, severance payments or any similar payments) becoming due to
any employees of the Company.  No payment
which is or may be made by from or with respect to any Employee Plan, to any
employee, former employee, director or agent of the Company or any ERISA Affiliate,
either alone or in conjunction with any other payment, will or could properly
be characterized as an excess parachute payment under section 280G of the
Code, provided that the Company remains a small business corporation (as
defined in Section 1361(b) of the Code) until the Closing.

 

(j)            No
Employee Plan or other arrangement listed on Schedule 6.12(a),
is maintained outside the jurisdiction of the United States or Canada.

 

6.13.       Real
Property; Leaseholds.

 

(a)           The
Company does not own any interest in any real property other than the real
property constituting the Premises.  No
portion of the real property constituting the Premises is subject to any
pending condemnation proceeding by any public or quasi-public authority and, to
the Knowledge of the Company, there is no threatened condemnation proceeding
with respect thereto, except as set forth on Schedule 6.13.  The Company has not received written notice
of any outstanding violation of any Regulation respecting any portion of the
Premises.  The real property constituting
the Premises is supplied with utilities and other services necessary for the
operation of the facilities located thereon as presently conducted, and all of
such services are adequate to conduct that portion of the Business as is presently
conducted at such facility.  The Company
has not sublet, underlet or assigned any portion of the Premises and no third
party is in possession of any portion of the Premises other than the Company.  The zoning of the real property constituting
the Premises permits the presently existing improvements and the Business
presently being conducted thereon as a conforming use.

 

(b)           Schedule 1.1(c) includes a list of all
Leaseholds.  The Company is the holder of
each Leasehold and each Leasehold is in full force and effect and constitutes a
valid and binding obligation of the Company and, to the Knowledge of the
Company, all other parties thereto and is enforceable in accordance with its
terms.  The Company has the sole right to
use or occupy the realty subject of each Leasehold and, upon consummation of
the transactions contemplated hereby, each Leasehold will continue in full
force and effect and constitute a valid and binding obligation on the part of
the Company and all other parties thereto enforceable in accordance with its
terms.  The Company has not received any
notice of any default related to a Leasehold and, to the Knowledge of the
Company, no party currently has the right to cancel or terminate a Leasehold.

 

20

 

6.14.       Insurance.

 

(a)           Schedule 6.14
lists:

 

(i)            All
policies of insurance pertaining to the Company, including policies covering
the Company’s public and product liability and its personnel, properties,
buildings, machinery, equipment, furniture, fixtures and operations, specifying
with respect to each such policy, the name of the insurer, type of coverage,
term of policy, limits of liability and annual premium.  All such policies are presently in full force
and effect, all premiums with respect thereto have been fully paid, and no
notice of cancellation or termination has been received by the Company with
respect to any such policy. With respect to each such insurance policy:  (i) the policy is legal, valid, binding,
enforceable, and in full force and effect; (ii) there are no outstanding
claims under the policy; (iii) neither the Company nor, to the Knowledge
of the Company, any other party to the policy is in breach or default
(including with respect to the payment of premiums or the giving of notices), and
no event has occurred which, with notice or the lapse of time, would constitute
such a breach or default, or permit termination or modification, under the
policy; (iv) the Company is not subject to a retroactive rate adjustment,
loss sharing arrangement or other actual or contingent liability; and (v) in
the past two years, no notice of cancellation or non-renewal with respect to,
or disallowance (other than reservation of rights by the insurer) of any
material claim under, the policy has been received.  All such insurance policies are sufficient for
compliance with all material Regulations applicable to the Company and the
Company’s obligations under the Contracts. 
There has been no failure to give any notice or present any claim under
any insurance policy in a timely fashion or in the manner or detail required by
the policy.  The Company has not been
refused any property and casualty insurance, nor has any of its coverages been
limited by any insurance carrier to which it has applied for insurance or with
which has carried insurance during the last five years and the Company has been
fully covered at all times during the past five years by insurance in scope and
amount customary and reasonable for the businesses in which it has engaged and
the nature and amount of the liabilities it has incurred during the
aforementioned period; and

 

(ii)           All
insurance claims by the Company for damage to or loss of property or income, or
against the Company, that have been referred to its insurers for coverage
during the last four (4) years.

 

(b)           The
Company has not manufactured, sold or distributed manganese welding rods.

 

6.15.       Litigation.  Except as disclosed on Schedule 6.15,
there is no Action or Court Order pending or, to the Knowledge of the Company,
threatened against the Company that constitutes a Material Adverse Effect or
materially impairs the Company’s ability to perform its obligations hereunder
or to consummate the transactions contemplated hereby.

 

6.16.       Accounts
Receivable.  All accounts
receivable of the Company shown on the Interim Financial Statements or arising
thereafter, to the extent uncollected on the date hereof, represent obligations
arising from bona fide transactions in the ordinary course of the
Business.  Except as set forth on Schedule 6.16, there are no refunds, rights of setoff,
discounts or other adjustments payable in respect of any of the accounts
receivable of the Company.  Schedule 6.16

 

21

 

contains a summary
of accounts receivable due the Company, specifying the name, amount, age, and
any amount written off or reserved against, as of August 31, 2005.

 

6.17.       Proprietary
Rights.  Schedule 6.17
contains a listing of all Proprietary Rights that the Company owns or licenses
(the “IP Contracts”), pursuant to which the Company has rights to any
Proprietary Rights, setting forth as to each such item of owned Proprietary
Rights: the item, owner, jurisdiction, registration or issuance date, as
applicable, and as to each licensed item of Proprietary Rights, the identity of
the licensor, date and subject matter of the license.  Each IP Contract is in full force and effect
and constitutes the valid and binding obligation of the Company and, to the
knowledge of the Company, the other parties thereto, enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally or by equitable principles.  The Company is not in default under, the
Company has not received or delivered any written notice of default,
cancellation or termination of, and, to the Knowledge of the Company, no other
party is in material default under, any such IP Contract.  Except as disclosed on Schedule 6.17:

 

(a)           The
Company (i) owns or has the right to use in the Business all Proprietary
Rights used in the conduct of the Business as now conducted, and (ii) owns
all right, title and interest in the Proprietary Rights described on Schedule 6.17 as Company-owned Proprietary Rights
(including, without limitation, exclusive rights to use and license the same)
free and clear of any Encumbrances;

 

(b)           The
Company is not in default under any agreement relating to the Proprietary
Rights and, to the Knowledge of the Company, no other party is in default
thereunder and the transactions contemplated hereby will not result in any
default under, or trigger any right of renegotiation, rescission or other
modification under any such agreements;

 

(c)           There is
no written claim or demand of any Person pertaining to, or any proceeding
pending or, to the Knowledge of the Company, threatened in writing, which
challenges the rights of the Company in respect of the Proprietary Rights or
that seeks to invalidate, cancel or otherwise challenge the extent or validity
of the Proprietary Rights;

 

(d)           To the
Knowledge of the Company, the operation of the Business as it is currently
conducted, including but not limited to the design, development, use, import,
manufacture and sale of the products, technology or services of the Company,
does not infringe, dilute, misappropriate or otherwise violate the Proprietary
Rights of any third party, or constitute unfair competition or trade practices
under the laws of any jurisdiction, and no claim has been made, notice given,
or dispute arisen to that effect.  To the
Knowledge of the Company, the Company has not benefited from any other Person’s
misappropriation of the Proprietary Rights of any third party.  The Company does not have any pending claims
that a third party has violated or infringed any of the Company’s Proprietary
Rights;

 

(e)           All of the
patents, trademark registrations, and domain name registrations indicated in Schedule 6.17 are valid and in full force and effect,
and are held of record in the name of the Company;

 

22

 

(f)            To the
Knowledge of the Company, none of the trade secrets, material know-how or other
confidential or proprietary information of the Company has been disclosed to any
Person unless such disclosure was necessary and made pursuant to an appropriate
confidentiality agreement, and to the Knowledge of the Company there has been
no unauthorized release or disclosure of the Company’s trade secrets or other
confidential or proprietary information; and

 

(g)           All of the
computer software used in the Business is adequately documented.  Except as set forth in Schedule 6.17,
all of the computer software used in the Business performs in material
conformance with the applicable documentation for such software.  The information technology systems owned,
licensed, leased, operated on behalf of, or otherwise held for use in the
Business by Company, including all computer hardware, software, firmware and
telecommunications systems used in the Business, perform reliably in the
operation of the Business.

 

6.18.       Environmental
Requirements.  Except as
specifically disclosed on Schedule 6.18:

 

(a)           Neither the Company nor, to the Knowledge of
the Company, any predecessor or other Person has engaged in or permitted any
operations or activities or any use or occupancy of the Premises resulting in
the storage, emission, Release, discharge, dumping, transportation or disposal
of any Hazardous Materials on, under, in or about the Premises or in connection
with the operation of the Business, in any case in such a way as to give rise
to, or that would reasonably be expected to give rise to, any material
liability (contingent or otherwise) under any applicable Environmental
Requirements (including without limitation for response costs, corrective
action costs, personal injury, property damage, natural resources damages or
attorney fees, or any investigative, corrective or remedial obligations);

 

(b)           (i)  Each of the Premises and its
existing and prior uses and activities comply, and have for the applicable
statute of limitations complied, in all material respects with all
Environmental Requirements, except for such violations that have been resolved,
and the Company has obtained and complied with all material Permits and
Licenses necessary under applicable Environmental Requirements and (ii) the
Company has not received any notice or other communication in writing
concerning any alleged violation of or liability under Environmental
Requirements, whether or not corrected to the satisfaction of the appropriate
Governmental Entity, and no Action or Court Order exists or is threatened
relating to the ownership, use, maintenance or operation of the Premises
arising from an alleged violation of Environmental Requirements, or from the
suspected presence of Hazardous Materials thereon;

 

(c)           The
Company has not received notice that it has been identified as a potentially
responsible party at any federal or state site that requires remedial, response
or other action as a result of a Release or threat of Release of Hazardous
Substances, including without limitation any such site listed or proposed for
listing on the National Priority List of Superfund sites or any similar list of
sites;

 

(d)           The Company has not entered into any consent
decree or other written agreement in settlement of any alleged violation of or
liability under any Environmental

 

23

 

Requirements under which
decree or agreement the Company has any unfulfilled obligations, and the
Company has not assumed or retained any such liabilities by contract, law or
otherwise; and

 

(e)           The
Company has furnished to Buyer all environmental audits, reports and other
environmental documents in the Company’s possession or control prepared during
the twenty (20) year period prior to the date of this Agreement relating to the
Business, the Company, or the Premises, except such reports that only identify
conditions or violations (i) that have been resolved and where the statute
of limitations for such liabilities has expired, or (ii) that are not
material.

 

6.19.       Inventory.  Attached hereto as Schedule 6.19
is a summary of the inventory of raw materials, work-in-process and finished
goods of the Company as of August 31, 2005.  Except as disclosed on Schedule 6.19,
the Company’s inventory of raw materials, work-in-process and finished goods
are of a quality and quantity that is usable or saleable in the ordinary course
of business.  Except as disclosed on Schedule 6.19, none of the Company’s inventory is
obsolete.

 

6.20.       Consents.  Except for the Consents set forth on Schedule 6.20, no Consent is required to be obtained
pursuant to any of the Scheduled Contracts in connection with the execution,
delivery and performance of this Agreement by the Company.

 

6.21.       Related
Party Transactions.  Except as
set forth on Schedule 6.21, no Related
Party or other Affiliate of the Company has: (a) borrowed
money from or loaned money to the Company; (b) any
contractual or other claims of any kind against the Company; (c) any interest in any assets used by the Company;
or (d) engaged in any other transaction with
the Company.

 

6.22.       Finders’
Fees.  No investment banker,
agent, broker, finder or other intermediary is entitled to any fee, commission
or expense reimbursement from the Company in connection with the transactions
contemplated by this Agreement, except for Harris Williams & Co.  Any fee, commission or expense due to Harris
Williams & Co. under its arrangements with the Company shall be the exclusive
liability of the Company, and Buyer shall not be liable for any such fees or
expenses.

 

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer hereby
represents and warrants to each Stockholder as follows:

 

7.1.         Organization.  Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware.  Buyer has full power and
authority to enter into this Agreement and to consummate the transactions contemplated
by this Agreement.

 

7.2.         Ability
to Carry Out Agreement.  The
consummation of the transactions contemplated hereby, including, but not
limited to, the execution, delivery and performance of this Agreement does not:
(a) constitute a violation of or default under, or result in a breach of (i) the
Formation Documents of Buyer, (ii) any contract to which the Buyer is
bound or constitute a

 

24

 

default thereunder
(except where any such breach would not have a material adverse effect on Buyer’s
ability to consummate the transactions contemplated hereby), (iii) any
Court Order to which Buyer is subject, or (iv) any Regulation applicable
to Buyer.

 

7.3.         Authorization.  The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly and validly authorized and approved by all necessary limited
liability company action on the part of Buyer. 
This Agreement will constitute valid and binding obligations of Buyer,
enforceable in accordance with its terms, except as the enforceability hereof
may be limited by bankruptcy, reorganization, moratorium or similar laws
relating to or limiting creditors’ rights generally or by equitable principles
relating to enforceability.  No Consent
is required with respect to Buyer in connection with the execution, delivery
and performance of this Agreement, except for the Consent under the HSR Act and
such Consents which, if not obtained, would not and would not reasonably be
expected to materially impair Buyer’s ability to consummate the transactions
hereby.

 

7.4.         Financing.  Buyer has cash on hand or financing
commitments that are sufficient to satisfy all of its obligations under this
Agreement to be performed at Closing.

 

7.5.         Finders’
Fees.  No investment banker,
agent, broker, finder or other intermediary has been retained by or is
authorized to act on behalf of Buyer, or is entitled to any fee, commission or
expense reimbursement from Buyer, in connection with the transactions
contemplated by this Agreement.

 

7.6.         Litigation.  There is no Action or Court Order pending,
or, to the knowledge of Buyer, threatened that could reasonably be anticipated
to materially impair Buyer’s ability to consummate the transactions
contemplated by this Agreement.

 

7.7.         Purchase
for Investment.  Buyer will
acquire the Stock for its own account for investment and not with a view toward
any resale or distribution thereof.

 

ARTICLE VIII

COVENANTS

 

8.1.         Access.  (a) Prior
to the Closing, the Company shall afford Buyer and its representatives
(including its lenders) reasonable access during normal business hours and upon
reasonable advance notice, to the Books and Records of the Company; provided,
however, that such access shall not unreasonably disrupt or interfere
with the normal operations of the Company, and shall be subject to the terms
and conditions of the Confidentiality Agreement between Buyer and the
Company dated as of May 2, 2005 (the “Confidentiality
Agreement”).

 

(b)           Prior to the Closing, the Company shall
reasonably assist, and shall use reasonable efforts to obtain the assistance of
the Company’s accountants, in preparing financial statement information
relating to the Company to be included in Buyer’s public filings, provided that
Buyer shall provide reasonable advance notice to the Company setting forth the
assistance requested by Buyer, and Buyer shall reimburse the Company for all
out-of-pocket costs and expenses in connection with such assistance.

 

25

 

8.2.         Confidentiality; No
Publicity.  Buyer acknowledges
and agrees that the transactions contemplated by this Agreement, including,
without limitation, the information and access with regard to the Company
provided hereunder, is subject to all of the terms and conditions of the
Confidentiality Agreement.  Buyer, the Company, Stockholders and Grandi
agree that, from the date hereof through the Closing Date, no public release or
announcement concerning this Agreement or the transactions contemplated hereby
shall be issued by any party without the prior consent of all other parties,
except as such release or announcement may be required by law or the rules or
regulations of any securities exchange, in which case the party required to
make the release or announcement shall use reasonable efforts to allow the
other parties to comment on such release or announcement in advance of such
issuance.

 

8.3.         Non-Solicitation.  Until such time, if any, that this Agreement
is terminated pursuant to Section 12.1, the Company, Stockholders and
Grandi shall not, and shall cause each of their respective officers, directors,
agents, and representatives not to, directly or indirectly, make, solicit,
initiate, assist or encourage any inquiries, proposals, offers or bids from,
discuss or negotiate with, or provide any non-public information to any Person
(other than Buyer) relating to any transaction involving the sale of the
Company, or substantially all of its assets, or any merger, consolidation,
business combination or similar transaction involving the Company and agree to
promptly notify Buyer if any of them receives any such inquiry, proposal, offer
or bid specifying the party making such inquiry, proposal, offer or bid and the
terms thereof.

 

8.4.         Governmental Approvals.  Buyer and
the Company shall as promptly as practicable, but in no event later than five (5) Business
Days following the execution and delivery of this Agreement, file with the
United States Federal Trade Commission (the “FTC”) and the United States
Department of Justice (the “DOJ”) the notification and report form, if any,
required for the transactions contemplated hereby and any supplemental
information requested in connection therewith pursuant to the HSR Act and will
request early termination of the waiting period under the HSR Act.  Any such notification and report form and
supplemental information shall be in substantial compliance with the
requirements of the HSR Act.  Buyer and
the Company shall as promptly as practicable comply with any other laws of any
other country that are applicable to any of the transactions contemplated
hereby and pursuant to which any Consent in connection with such transactions
is necessary.  Buyer and the Company
shall furnish to the other such necessary information and reasonable assistance
as the other may request in connection with preparation of any filing,
submission, registration or declaration that is necessary under the HSR Act or
any other law.  Buyer and the Company
shall keep each other apprised of the status of any communications with, and
any inquiries or requests for additional information from, the FTC and the DOJ
and any other Governmental Entity and shall comply promptly with any such
inquiry or request.  Buyer and the
Company shall each use its reasonable best efforts to obtain any clearance
required under the HSR Act or any other consent, approval, order or
authorization of any Governmental Entity necessary for the consummation of the
transactions contemplated by this Agreement. 
For purposes of this Section 8.4, the “reasonable best efforts” of
Buyer shall not include Buyer’s agreement to hold separate and divest any
business or assets of the Company or of Buyer or its Affiliates.

 

8.5.         Consents.  Schedule 6.20
identifies Scheduled Contracts that require Consent in connection with the
consummation of the transactions contemplated by this Agreement.  To the extent that such Consents have not
been obtained prior to Closing, Stockholders and Grandi shall

 

26

 

use commercially
reasonable efforts to obtain any such required Consent as promptly as possible
after Closing (without requiring the payment of any money or the institution of
legal proceedings).  If any such Consent
shall not be obtained, Stockholders and Grandi shall use commercially
reasonable efforts to act as Buyer’s agent in order to obtain for it the
benefits thereunder and to cooperate with Buyer in any other reasonable
arrangement designed to provide such benefits exclusively to Buyer (absent the
institution of legal proceedings).

 

8.6.         Restrictive Covenants

 

(a)           From and
after the Closing Date, each Stockholder and Grandi will not and will cause its
Affiliates not to, for its own account or for the account of others, directly
or indirectly, own, manage, operate, join, control or participate in the
ownership, management, operation or control of any business conducting business
under the name “Fibre Metal,” or any variant thereof.  For a period of five (5) years from and
after the Closing Date, each Stockholder and Grandi will not and will cause its
Affiliates not to, for its own account or for the account of others, directly
or indirectly, (i) engage in any business which competes with the
Business, or (ii) own, manage, operate, join, control or participate in
the ownership, management, operation or control of any Person who or which at
any relevant time during such period is engaged in any business which competes
with the Business, except for investments in publicly traded securities where
the beneficial ownership by the Stockholder or Grandi is five percent (5%) or
less of all of the issued and outstanding publicly traded securities of the
particular entity.

 

(b)           For a
period of five (5) years from and after the Closing Date, each Stockholder
and Grandi will not and will cause its Affiliates not to, directly or
indirectly, solicit or attempt to solicit any Person who is or has been a
customer, supplier, licensor, licensee of the Business prior to or during such
period to cease its particular business relationship with the Company that
relates to the Business.

 

(c)           For a
period of five (5) years from and after the Closing Date, each Stockholder
and Grandi will not and will cause its Affiliates not to, directly or
indirectly, solicit or induce any Person who is then a director, officer,
employee or agent of the Company to terminate his, her or its relationship
with, or employment by the Company.

 

(d)           From and
after the Closing, each Stockholder and Grandi shall, and shall cause its
Affiliates and representatives to, keep confidential and not disclose to any
other Person or use for its own benefit or the benefit of any other Person any
confidential proprietary information, technology, know-how, trade secrets
(including, without limitation, all results of research and development),
product formulas, industrial designs, franchises, inventions or other
industrial and intellectual property in its possession or control regarding the
Company or the Business.  The obligations
of each Stockholder and Grandi under this Section 8.6(d) shall not
apply to information which (i) is or becomes generally available to the
public without breach of the commitment provided for in this Section 6.8(d),
(ii) is made available to Stockholders or Grandi by an independent third
party, provided, however, that such information was not obtained by said third
party in violation of a confidentiality agreement or a fiduciary relationship;
or (iii) is required to be disclosed by law, order or regulation of a
court or tribunal or governmental authority; provided, however, that, in any
such case, any Stockholder or Grandi shall in such circumstance notify the
Company as early as reasonably practicable prior to disclosure to allow the
Company to take

 

27

 

appropriate measures to
preserve the confidentiality of such information at the cost of the Company.

 

(e)           The restrictive covenants contained in this Section 6.8
are covenants independent of any other provision of this Agreement and the
existence of any claim which any Stockholder or Grandi may allege against any
other party to this Agreement, whether based on this Agreement or otherwise,
shall not prevent the enforcement of these covenants.  Stockholders and Grandi agree that Buyer’s
remedies at law for any breach or threat of breach by Stockholders or Grandi of
the provisions of this Section will be inadequate, and that Buyer shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Section 6.8 and to enforce specifically the terms and provisions
hereof, in addition to any other remedy to which Buyer may be entitled at law
or equity.  In the event of litigation
regarding the covenant not to compete, the prevailing party in such litigation
shall, in addition to any other remedies the prevailing party may obtain in
such litigation, be entitled to recover from the other party its reasonable
legal fees and out of pocket costs incurred by such party in enforcing or
defending its rights hereunder.  The
length of time for which this covenant not to compete shall be in force shall
not include any period of violation or any other period required for litigation
during which Buyer seeks to enforce this covenant.  Should any provisions of this Section be
adjudged to any extent invalid by any competent tribunal, such provision will
be deemed modified to the extent necessary to make it enforceable.

 

8.7.         Tax
Matters.

 

(a)           Buyer
shall prepare or cause to be prepared in a manner consistent with past
practice, and file or cause to be filed, all Tax Returns of the Company with
respect to periods ending on or before the Closing Date.  Such Tax Returns shall be subject to the
review and approval by Stockholders and Grandi. 
Such Tax Returns shall be delivered to Stockholders and Grandi at least
thirty (30) days prior to the due date for approval.  Buyer shall prepare or cause to be prepared,
and file or cause to be filed, all Tax Returns of the Company with respect to
periods ending after the Closing Date. 
Stockholders shall timely pay any income Taxes with respect to income
reported to them on Schedule K-1. 
Stockholders and Grandi shall reimburse the Company for any Taxes
payable with respect to such Tax Returns that are the responsibility of
Stockholders and Grandi pursuant to Section 12.1(d) within ten (10) Business
days of the payment thereof by the Company, provided that such Taxes have not
otherwise been accrued in calculating the Net Working Capital.

 

(b)           Whenever
any taxing authority sends a notice of an audit, initiates an examination of
the Company, or otherwise asserts a claim, makes an assessment, or disputes the
amounts of Taxes for which Stockholders and Grandi are or may be liable under
this Agreement, Buyer or the Company shall promptly give Notice to Stockholders
and Grandi, and Stockholders and Grandi shall have the right to control, at
their cost, any resulting proceedings and to determine whether and when to
settle any such claim, assessment or dispute to the extent such proceedings or
determinations affect the amount of Taxes for which Stockholders and Grandi are
or may be liable under this Agreement; provided, however, that in the event
that Stockholders and Grandi desire to settle any such claim, assessment or
dispute in such a manner that reasonably may negatively impact Buyer or the Company,
then Stockholders and Grandi shall obtain the prior consent of Buyer, which
shall not be unreasonably withheld. 
Whenever any

 

28

 

taxing authority sends a
notice of an audit, initiates an examination of the Company, or otherwise
asserts a claim, makes an assessment or disputes the amount of Taxes for which
Buyer is or may be liable under this Agreement and Stockholders and Grandi
receive such notice, Stockholders and Grandi shall promptly inform Buyer, and,
except to the extent such proceedings affect the amount of taxes for which
Stockholders and Grandi are liable under this Agreement, Buyer shall have the
right to control, at its cost, any resulting proceedings and to determine
whether and when to settle any such claim, assessment or dispute.

 

(c)           Buyer,
Stockholders and Grandi and the Company will provide each other with such
assistance as may reasonably be requested by any of them in connection with the
preparation of any Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and provide the other with any records or
information that may be relevant to such Tax Return, audit or examination,
proceedings or determination.  Such
assistance shall include making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder and shall include providing copies of any relevant Tax
Return and supporting work schedules. 
The party requesting assistance hereunder shall reimburse the other for
reasonable expense incurred in providing such assistance.  Without limiting in any way the foregoing
provisions of this Section 8.7(c), Buyer hereby agrees that it will retain
or cause the Company to retain, until the applicable statutes of limitation
(including any extensions thereof) expire, copies of all Tax Returns,
supporting work schedules and other records or information which it possesses
and which may be relevant to such Tax Returns of the Company for all taxable
periods ending on or prior to the Closing Date. 
Further, Buyer will not (and will assure that the Company will not)
destroy or otherwise dispose of such records without first providing
Stockholders and Grandi with a reasonable opportunity to review and copy such
records.

 

(d)           Buyer
covenants that it will not, nor will it cause or permit any other Affiliate of
Buyer to (i) take any action on or after the Closing Date that will give
rise to any Tax liability of Stockholders or Grandi, (ii) make any
election or deemed election under Section 338 of the Code, or (iii) make
or change any Tax election, file any amended Tax Return or take any Tax
position on any Tax Return, take any action, omit to take any action or enter
into any transaction that results in any increased Tax liability or reduction
of any net operating loss, net capital loss, investment tax credit, foreign tax
credit, charitable deduction or any other credit or Tax attribute which
attribute could increase Taxes (including, without limitation, deductions and
credits related to alternative minimum Taxes) of the Stockholders or Grandi in
respect of any Pre-Closing Tax Period. 
Buyer agrees that neither Stockholders nor Grandi is to have liability
for any Tax resulting from any action referred to in the preceding sentence,
and agrees to indemnify and hold harmless Stockholders and Grandi against any
such Tax.

 

(e)           Stockholders
shall be entitled to any Tax refunds pertaining to the activities or income of
the Company for periods ending on or before the Closing Date.  Buyer agrees to assign and promptly remit
(and to cause the Company to assign and promptly remit) to the Stockholders all
such refunds (including interest thereon) received by the Company, the Buyer or
any Affiliate of the Company or the Buyer.

 

29

 

8.8.         Transfer
of Premises; Satisfaction of Indebtedness and Transaction Expenses; Retention
of Related Party Obligations. 
Prior to Closing, the Company shall transfer to Stockholders or
Affiliates of Stockholders all of its right, title and interest in and to the
Premises located in Concordville, Pennsylvania; Aston, Pennsylvania; and
Mississauga, Ontario, Canada; in accordance with deeds substantially in the
forms attached hereto as Exhibit C,
and all beneficial rights thereto, including the effluent discharge units
issued by Concord Township with respect to Premises located in Concordville,
Pennsylvania.  At or prior to the
Closing, the Stockholders or the Company shall pay-off and fully satisfy all
Indebtedness and Transaction Expenses, and cause the removal of the
Encumbrances set forth on Schedule 6.7, and at or prior to the Closing,
the Stockholders shall retain all obligations to any Related Party, including,
without limitation, all such items set forth on Schedule 8.8.

 

8.9.         Appointment
of Sellers Representative.  Stockholders
and Grandi hereby irrevocably appoint Robert Shoemaker, Jr. (“Sellers
Representative”), as Stockholders’ and Grandi’s representative,
attorney-in-fact and agent, with full power of substitution to act in the name,
place and stead of Stockholders and Grandi, and to act on behalf of
Stockholders and Grandi in all matters involving this Agreement, including,
without limitation, the power: (a) to give and receive all notices and
communications to be given or received under this Agreement and to receive
service of process in connection with any notices under this Agreement; (b) to
execute and deliver all ancillary agreements, certificates, statements,
notices, approvals, extensions, waivers, undertakings, amendments and other
documents required or permitted to be given in connection with this Agreement;
and (c) to act for each Seller and Grandi with regard to matters
pertaining to indemnification referred to in this Agreement, including the
power to compromise any claim on behalf of Stockholders and Grandi, to bring
and transact matters of litigation and to refer matters to arbitration.

 

ARTICLE IX

CONDUCT OF BUSINESS PRIOR TO CLOSING

 

9.1.         Conduct
of Business.  During the period
from the date of this Agreement until the Closing Date, except as otherwise
consented to in writing by Buyer and except for the transfer of the Premises
contemplated by Section 8.8, the Company agrees, and Stockholders agree to
cause the Company, to operate its Business only in the ordinary course and that
the Company will not:

 

(a)           Amend the
Company’s Formation Documents;

 

(b)           Dispose
of, or agree to dispose of, or place an Encumbrance upon, any of the Company’s
assets, other than dispositions of inventory and obsolete equipment in the
regular, normal and ordinary course of business, consistent with past custom or
practice;

 

(c)           Acquire,
by merger, consolidation, purchase of stock or assets or otherwise, any
corporation, partnership, association or other business organization, or all or
substantially all of its assets, or sell or agree to sell the Company, by
merger, consolidation, sale of stock or sale of all or substantially all of the
Company’s assets;

 

30

 

(d)           (i) Issue
or sell (or agree to issue or sell) any of the Company’s capital stock or any
options, warrants or other rights to purchase any such shares or any securities
convertible into or exchangeable for such shares; (ii) declare, set aside
or pay any distributions, dividends or similar payments (other than cash
dividends) in respect of the Stock or any other capital stock (or similar
equity interest) of the Company; or (iii) redeem, repurchase or otherwise
acquire the Stock or any other capital stock (or similar equity interest) of
the Company;

 

(e)           Incur any
Indebtedness (including through the issuance of debt securities) or make any
loans or advances to any Person other than advances to employees in the
ordinary course of business consistent with past practice;

 

(f)            Increase
the base compensation or other payment to any director, officer or employee,
whether now or hereafter payable or granted (other than increases in base compensation
for employees who are not officers of the Company in the ordinary course
consistent in timing and amount with past practices), or enter into or vary the
terms of any employment or incentive agreement with any such person;

 

(g)           Commence,
enter into, or alter any Scheduled Contract, or any Employee Plan, stock
option, stock purchase, or incentive plan for employees of the Company, except
that the Company shall permit Grandi to resign as a trustee of Employee Plans
as of the Closing without regard to any advance notice or resignation that
otherwise would be required;

 

(h)           Make any
capital expenditure or commit to any capital expenditure in excess of $100,000;

 

(i)            Terminate
any employees of the Company, except in the ordinary course of business;

 

(j)            Make any
change in its account procedures or practices unless required by GAAP;

 

(k)           Cancel any
debts or waive any material rights or pay, discharge or satisfy any claim,
liabilities or obligations (absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of business
consistent with past practice of liabilities and obligations reflected on or
reserved against on the Financial Statements or incurred in the ordinary course
of business consistent with past practice since July 31, 2005;

 

(l)            Dispose
of or permit to lapse any rights to the use of any material Proprietary Rights
or dispose of or disclosure (except as necessary in the conduct of its
business) to any Person, any trade secret, formula, process or know-how not a
matter of public knowledge prior to such disclosure;

 

(m)          Enter into
and, except with respect to any agreement or transaction disclosed on Schedule 8.8, terminate any agreement or transaction
with any Related Party;

 

(n)           Make or revoke any election for Tax purposes
by the Company or on its behalf or allow the Company’s status as an S
corporation to change; or

 

31

 

(o)           Agree or
commit to do or take any of the foregoing actions.

 

Notwithstanding anything herein to the contrary, Buyer acknowledges and
agrees that, prior to or at the Closing, the Company may distribute all of its
cash and cash equivalents to Stockholders, and shall (i) satisfy any
outstanding long-term debt of the Company, (ii) pay any fees and expenses
in connection with the transactions contemplated hereby (other than any fees
and expenses incurred by Buyer), including any change of control payments, sale
bonuses, success fees, severance obligations incurred at or prior to the
Closing, legal fees, investment banking fees and other professional fees, or
obligations to or for the benefit of any Related Party, and (iii) pay any
fiscal year-end bonuses accrued by the Company solely with respect to Grandi.

 

ARTICLE X

CONDITIONS PRECEDENT TO BUYER’S

OBLIGATIONS ON THE CLOSING DATE

 

Each and every
obligation of Buyer to be performed on the Closing Date shall be subject to the
satisfaction, prior to or concurrently with the performance of such obligation,
of all the following conditions precedent (any of which may be waived by Buyer,
in whole or in part, and if waived by Buyer, the circumstance being waived
shall not be used as the basis for indemnification pursuant to Article XIII):

 

10.1.       Representations
and Warranties.  The representations
and warranties made by Stockholders and Grandi in Article V of this
Agreement and by the Company in Article VI of this Agreement, shall each
be true, correct and accurate, in all material respects on, as of, and with
respect to, the Closing Date, with the same force and effect as though they had
been made as of the Closing Date, except those qualified by materiality or
Material Adverse Effect which shall be true and correct in all respects.

 

10.2.       Compliance
with Obligations.  Stockholders
and the Company shall have performed and complied with, in all material
respects, all of their respective obligations under this Agreement, which are
to be performed or complied with by them prior to or on the Closing Date, as
the case may be.

 

10.3.       Closing
Certificate.  Buyer shall have
been furnished with a certificate of Stockholders, Grandi and the Company,
dated as of the Closing Date, certifying compliance with the applicable
provisions of Sections 10.1 and 10.2.

 

10.4.       Consents.  Stockholders or Grandi shall have obtained
all Consents listed on Schedule 10.4.

 

10.5.       HSR
Act.  The waiting period under
the HSR Act shall have expired or been earlier terminated.

 

10.6.       Resignations.  Buyer shall have received resignations dated
the Closing Date duly executed by all directors of the Company.

 

10.7.       Transfer
Documents.  Buyer shall have
received good and sufficient instruments and documents dated as of the Closing
Date as shall be necessary and effective to convey,

 

32

 

transfer and
assign to, and vest in Buyer all of Stockholders’ right, title and interest in
and to the Stock, free and clear of all Encumbrances.

 

10.8.       Material
Adverse Effect.  There shall not
have been any Material Adverse Effect from January 1, 2005 to the Closing
Date.

 

10.9.       Ancillary
Agreements.  Buyer shall have
received (a) the Leases duly executed by the Stockholders or Affiliates of
Stockholders, as applicable, and (b) the Escrow Agreement duly executed by
Stockholders and Grandi.

 

10.10.     Incumbency
Certificate.  Buyer shall have
received an incumbency certificate for the officers of the Company and the
trustees of the Stockholders dated as of the Closing Date, including specimen
signatures.

 

10.11.     Resolutions.  Buyer shall have received a copy of all
resolutions adopted by (a) the trustees of the Stockholders relating to
the transactions contemplated by this Agreement, and (b) the Company’s
board of directors relating to the transactions contemplated by this Agreement,
certified on the Closing Date to be complete and correct by the Secretary of
the Company.

 

10.12.     Good
Standing Certificate.  Buyer
shall have received a good standing certificate for the Company dated not more
than five (5) Business Days prior to the Closing Date issued by the Secretary
of State of Delaware.

 

10.13.     Absence
of Litigation.  No Court Order or
Regulation shall be in effect that restrains or prohibits the transactions
contemplated hereby or that would limit or adversely affect Buyer’s ability to
acquire the Stock and there shall not have been threatened, nor shall there be
pending, any action or proceeding by or before any Governmental Authority (i) challenging
any of the transactions contemplated hereby or seeking monetary relief by
reason of the consummation of such transactions, or (ii) which constitutes
a Material Adverse Effect.

 

10.14.     Consulting/Employment
Agreements.  At the Closing,
Grandi, Robert Ennamorato and Paul Brooks shall have entered into a consulting
or employment agreement, as applicable, with Buyer or the Company on the terms
set forth on Schedule 10.14, as
applicable.  Stockholders and Grandi
shall have used reasonable efforts (without making or committing to make any
payments to any Person) to cause Richard Say, Dean Simpson and Alex Stefanelli
to enter into employment agreements with Buyer or the Company at the Closing on
the terms set forth on Schedule 10.14,
as applicable.

 

ARTICLE XI

CONDITIONS PRECEDENT TO STOCKHOLDERS’

OBLIGATIONS ON THE CLOSING DATE

 

Each and every
obligation of Stockholders and Grandi to be performed on the Closing Date shall
be subject to the satisfaction, prior to or concurrently with the performance
of such obligation, of all the following conditions precedent (any of which may
be waived by Sellers Representative, in whole or in part, and if waived by
Sellers Representative, the circumstance being waived shall not be used as the
basis for indemnification pursuant to Article XIII):

 

33

 

11.1.       Representations
and Warranties.  The
representations and warranties made by Buyer in this Agreement shall each be
true, correct and accurate in all material respects on, as of, and with respect
to the Closing Date with the same force and effect as though they had been made
as of the Closing Date, except those qualified by materiality which shall be
true and correct in all respects.

 

11.2.       Compliance
with Obligations.  Buyer shall
have performed and complied with, in all material respects, all of its
obligations under this Agreement, which are to be performed or complied with by
it prior to or on the Closing Date, as the case may be.

 

11.3.       Closing
Certificate.  Stockholders shall
have been furnished with a Certificate of the Chief Executive Officer of Buyer,
dated as of the Closing Date, certifying compliance with Sections 11.1 and
11.2.

 

11.4.       HSR
Act.  The waiting period under
the HSR Act shall have expired or been earlier terminated.

 

11.5.       Ancillary
Agreements.  Stockholders shall
have received the Leases and the Escrow Agreement duly executed by Buyer.

 

11.6.       Incumbency
Certificate.  Stockholders shall
have received an incumbency certificate for the officers of Buyer dated as of
the Closing Date, including specimen signatures.

 

11.7.       Resolutions.  Stockholders shall have received a copy of
all resolutions adopted by Buyer’s board of directors relating to the
transactions contemplated by this Agreement, certified on the Closing Date to
be complete and correct by the Secretary of Buyer.

 

11.8.       Good
Standing Certificate. 
Stockholders shall have received a good standing certificate for Buyer
dated not more than five (5) Business Days prior to the Closing Date
issued by the Secretary of State of Delaware.

 

11.9.       Absence
of Litigation.  No Court Order or
Regulation shall be in effect that restrains or prohibits the transactions
contemplated hereby or that would limit or adversely affect Buyer’s ability to
acquire the Stock and there shall not have been threatened, nor shall there be
pending, any action or proceeding by or before any Governmental Authority
challenging any of the transactions contemplated hereby or seeking monetary
relief by reason of the consummation of such transactions.

 

11.10.     Consulting/Employment
Agreements.  At the Closing,
Buyer or the Company shall have entered into a consulting or employment
agreement, as applicable, with Grandi, Robert Ennamorato, and Paul Brooks on
the terms set forth on Schedule 10.14,
as applicable.  Buyer shall have used
reasonable efforts to enter into employment agreements with Richard Say, Dean
Simpson and Alex Stefanelli at the Closing on the terms set forth on Schedule 10.14, as applicable.

 

34

 

ARTICLE XII

INDEMNIFICATION

 

12.1.       Indemnification
by Stockholders and Grandi. 
Stockholders and Grandi shall severally in accordance with their
applicable Indemnity Percentages, and not jointly, indemnify and hold harmless
Buyer and the Company and their respective officers, directors, employees,
stockholders, members, agents, advisors and other representatives, from and
against all claims, damages, losses, liabilities, costs and expenses (including
reasonable legal fees and expenses), after offset by any recovery of insurance
proceeds (net of any premium increases), any tax-related benefits, or any
recovery from third parties, actually received or realized (collectively, the “Losses”), in connection with each and
all of the following:

 

(a)           Any breach
of a representation, warranty or covenant made by Stockholders, Grandi or the
Company in this Agreement;

 

(b)           Any
misrepresentation contained in any certificate or schedule furnished by
Stockholders, Grandi or the Company pursuant to this Agreement;

 

(c)           Any Losses for any environmental condition or
violation of any Environmental Requirements relating to the Premises located in
Concordville, Pennsylvania and Aston, Pennsylvania, or the real property
located at 5th & Tilghman Streets, Chester, Pennsylvania,
where the Company conducted its operations prior to moving to Concordville,
Pennsylvania, as a result of conditions, acts, events or circumstances that
first occurred or existed prior to the Closing (including the costs of
investigation and remediation, or liabilities for personal injury, property
damage or natural resources damages) (the “Special Environmental Indemnity”);

 

(d)           Pre-Closing
Taxes; and

 

(e)           any liability, claim or obligation arising
with respect to U.S. Patent No. 5,208,688, U.S. Patent No. 5,751,258,
or U.S. Patent No. 5,315,099, Swiss Patent No. 688 292 A5, EPO No. 0
550 384 (collectively, the “JP/S Patents”)
(including any foreign equivalents, extensions, continuations, continuations in
part, or divisionals of the foregoing), including any cross claims,
counterclaims, appeals, interlocutory proceedings or other actions brought in
connection with such action, or any other suits, claims or actions alleging
that Company products infringe the JP/S Patents (the “IP Litigation”).  The foregoing indemnification shall extend to
all Losses incurred, paid or resulting from the manufacture, sale, importation,
or distribution, by or on behalf of the Company, of Company products occurring
at any time prior to the one hundred eightieth (180th) day after the
Closing Date (the “IP Indemnification Period”). 
As provided in Section 12.4(b),
the Company and Buyer shall be responsible for any Losses with respect to
claims related to the JP/S Patents based on Company products manufactured,
sold, imported or distributed by or on behalf of Company at any time on or
after the one hundred eighty first (181st) day after the Closing
Date.

 

It being
understood and agreed that for purposes of determining whether there has been
any misrepresentation or breach of any representation or warranty and for
purposes of calculating the amount of any Losses arising therefrom under this Article XII,
the representations

 

35

 

and warranties shall not be deemed to be qualified by any concept of “material,”
“materiality,” “Material Adverse Effect” or similar qualification.

 

12.2.       Indemnification
by Buyer.  Buyer hereby
indemnifies and agrees to defend and hold harmless Stockholders and Grandi and
their respective trustees, officers, directors, employees, stockholders,
members, agents, advisors and other representatives from and against all Losses
in connection with each and all of the following:

 

(a)           Any breach
of a representation, warranty or covenant made by Buyer in this Agreement;

 

(b)           Any
misrepresentation contained in any certificate or schedule furnished by
Buyer pursuant to this Agreement;

 

(c)           Any
liability for or arising out of any Taxes for taxable periods ending after the
Closing Date; and

 

(d)           As provided in Section 12.4(b),
any Losses with respect to claims related to the JP/S Patents based on Company
products manufactured, sold, imported or distributed by or on behalf of Company
at any time on or after the one hundred eighty first (181st) day
after the Closing Date.

 

It being
understood and agreed that for purposes of determining whether there has been
any misrepresentation or breach of any representation or warranty and for
purposes of calculating the amount of any Losses arising therefrom under this Article XII,
the representations and warranties shall not be deemed to be qualified by any
concept of “material,” “materiality,” “Material Adverse Effect” or similar
qualification.

 

12.3.       Claims
for Indemnification.  Whenever
any claim shall arise for indemnification under this Article XII, the
party (parties) seeking indemnification (the “Indemnified Party”), shall notify the party (parties) from whom
indemnification is sought (the “Indemnifying
Party”) of the claim and, when known, the facts constituting the basis
for such claim (an “Indemnification
Claim Notice”); provided that the failure of the Indemnified Party to
give the Indemnification Claim Notice promptly shall not relieve the
Indemnifying Party of any liability hereunder in respect of such claim (or the
facts or circumstances giving rise thereto) except to the extent that such
Indemnifying Party is materially prejudiced or harmed as a consequence of such
failure.  Claims for indemnification
under Sections 12.1(a), 12.1(b), 12.2(a) and 12.(b) with respect to a
breach of a representation or warranty may not be brought pursuant to an
Indemnification Claim Notice or otherwise after the date that is twenty-four
(24) months from the date hereof, except for claims for indemnification with
respect to (a) the representations and warranties contained in Sections
5.1, 5.2, 5.3 and 6.1 (the “Fundamental Representations”) which may be brought
at any time; (b) the representations and warranties contained in Section 6.18
which may not be brought after the date that is three (3) years after the
Closing Date; (c) the representations and warranties contained in Section 6.8
and the indemnification pursuant to Sections 12.1(d) and 12.2(c), which
may not be brought more than sixty (60) days after the statute of limitations
has expired with respect to an Action relating to the Tax Returns and Taxes by
the Company; and (d) covenants contained in Article VIII, which may
not be brought more

 

36

 

than sixty (60)
days after the time period for performing such covenant has expired.  In the event of any such claim for
indemnification hereunder resulting from or in connection with any claim or
legal proceedings by a third party, the Indemnification Claim Notice shall
specify, if known, the amount or an estimate of the amount of the liability
arising therefrom.  The Indemnified Party
shall not settle or compromise any claim by a third party for which it is
entitled to indemnification hereunder without the prior written consent of the
Indemnifying Party; provided, however, that if suit shall have been instituted
against the Indemnified Party and the Indemnifying Party shall not have taken
control of such suit after notification thereof as provided in Section 12.4
of this Agreement, the Indemnified Party shall have the right to settle or
compromise such claim upon giving notice to the Indemnifying Party, as provided
in Section 12.4.

 

12.4.       Defense
by the Indemnifying Party.  (a) In
connection with any claim which may give rise to indemnity hereunder resulting
from or arising out of any claim or legal proceeding, the Indemnifying Party,
at its sole cost and expense, may, upon written notice to the Indemnified
Party, assume the defense of any such claim or legal proceeding if the
Indemnifying Party acknowledges to the Indemnified Party in writing the
obligation of the Indemnifying Party to indemnify the Indemnified Party with
respect to all elements of such claim, such claim is solely for monetary
damages or relates to the IP Litigation, and, if requested, the Indemnifying
Party gives the Indemnified Party reasonable assurances of its ability to pay
any adverse judgment resulting from such claim. 
If the Indemnifying Party assumes the defense of any such claim or legal
proceeding, the Indemnifying Party shall select counsel reasonably acceptable
to the Indemnified Party to conduct the defense of such claims or legal
proceeding and at the sole cost and expense of the Indemnifying Party shall
take all steps necessary in the defense or settlement thereof.  The Indemnifying Party shall not consent to a
settlement of, or the entry of any judgment arising from, any such claim or
legal proceeding, without the prior written consent of the Indemnified Party
(which consent shall not be unreasonably withheld, conditioned or delayed it
being understood that it shall not be unreasonable for the Indemnified Party to
withhold its consent from any settlement that (1) commits the Indemnified
Party to take, or to forbear to take, any action, or (2) does not provide
for a complete release of the Indemnified Party by such third party).  The Indemnified Party shall be entitled to
participate in (but not control) the defense of any such action, with its own
counsel and at its own expense.  If the
Indemnifying Party does not assume the defense of any such claim or litigation
resulting therefrom within fifteen (15) Business Days after the date of the
Indemnification Claim Notice:

 

(i)            The
Indemnified Party may defend against such claim or litigation in such manner as
it may deem appropriate, including, but not limited to, settling such claim or
litigation, after giving notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may reasonably deem appropriate and all costs of
litigation incurred by the Indemnified Party shall be included in the
calculation of the Indemnified Party’s Loss; and

 

(ii)           The
Indemnifying Party shall be entitled to participate in (but not control) the
defense of such action, with its counsel and at its own expense.  If the Indemnifying Party thereafter seeks to
question the manner in which the Indemnified Party defended such third party
claim or the amount or nature of any such settlement, the Indemnifying Party
shall have the burden to prove by a preponderance of the evidence that the
Indemnified Party did not defend or settle such third party claim in a
reasonably prudent manner.

 

37

 

(b)           Notwithstanding the
foregoing, in the event the IP Litigation is not finally concluded upon the
expiration of the IP Indemnification Period, then the IP Litigation shall be
controlled by the Company and/or Buyer at the time at which the Company’s
aggregate sales of products alleged to infringe the JP/S Patents exceed sales
of such allegedly infringing products by the Company during the IP
Indemnification Period.  Each of the
Buyer and the Company, on the one hand, and the Stockholders and Grandi, on the
other hand, must consent in writing to any settlement or compromise of the IP
Litigation (such consent not to be unreasonably withheld).  Upon the entry of any final, non-appealable
judgment or order related to the IP Litigation resulting in Losses, then the
parties agree that each shall be responsible for its attorney’s fees and costs
incurred as set forth in this Section 12.4, and that Losses shall be
apportioned, on a per-unit basis based on the number of product units sold, (i) to
Stockholder and Grandi, for sales during the IP Indemnification Period, and (ii) to
Company/Buyer for sales after the expiration of the IP Indemnification Period.

 

12.5.       Limitations.  (a) The parties agree that
indemnification under this Article XII shall be the sole and exclusive
remedy with respect to any actual or alleged breach of the provisions of this
Agreement.

 

(b)           Notwithstanding
anything contained in this Agreement to the contrary, neither Buyer nor the
Company shall be entitled to indemnification by Stockholders and Grandi for
breaches of representations and warranties pursuant to Section 12.1 (other
than Fundamental Representations and the representations and warranties
contained in Section 6.8 and Section 6.14(b)), until its Losses
exceed $680,000 in the aggregate (the “Basket”), and only to the extent of
Losses in excess of such amount.  As
such, Stockholders’ and Grandi’s indemnification for (1) breaches of
Fundamental Representations, (2) breaches of the representations and
warranties contained in Section 6.8, (3) breaches of the
representations and warranties contained in Section 6.14(b), (4) breaches
of covenants pursuant to Section 12.1, (5) Losses pursuant to the
Special Environmental Indemnity pursuant to Section 12.1(c), (6) Losses
with respect to Pre-Closing Taxes pursuant to Section 12.1(d), and (7) any
breaches that come within Section 12.5(f), shall not be subject to the
Basket.

 

(c)           Notwithstanding
anything contained in this Agreement to the contrary, the indemnification by
Stockholders and Grandi for breaches of representations and warranties pursuant
to Section 12.1 (other than Fundamental Representations and the
representations and warranties contained in Section 6.8 and Section 6.14(b))
shall in no event exceed $6,800,000 in the aggregate (the “Cap”).  As such, Stockholders’ and Grandi’s
indemnification for (1) breaches of Fundamental Representations, (2) breaches
of the representations and warranties contained in Section 6.8, (3) breaches
of the representations and warranties contained in Section 6.14(b), (4) breaches
of covenants pursuant to Section 12.1, (5) Losses pursuant to the
Special Environmental Indemnity pursuant to Section 12.1(c), (6) Losses
with respect to Pre-Closing Taxes pursuant to Section 12.1(d), and (7) any
breaches that come within Section 12.5(f), shall not be subject to the
Cap.

 

(d)           Stockholders and Grandi
shall not be entitled to indemnification by Buyer for breaches of
representations and warranties pursuant to Section 12.2 until their Losses
exceed the Basket in the aggregate, and only to the extent of Losses in excess
of such amount, provided

 

38

 

that such indemnification for
breaches of representations and warranties shall in no event exceed the Cap in
the aggregate.

 

(e)           In addition to the
foregoing limitations, each Stockholder and Grandi shall only be liable for the
portion of any Losses that is equal to the proportion of the Purchase Price
received by the Stockholder or Grandi, as set forth on Schedule 12.5(e) (the
“Indemnity Percentages”).

 

(f)            Notwithstanding
anything to the contrary in this Article XII, no limitation or condition
of liability provided in this Article XII (including, without limitation,
the time limitations set forth in Section 12.3 and the monetary
limitations and conditions set forth in Section 12.5) shall apply to the
breach of any of the representations and warranties contained herein if such
representation or warranty was made with actual knowledge of any Stockholder,
Grandi or the Company that it contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements or facts
therein not misleading or to any claim for fraud.

 

ARTICLE XIII

TERMINATION

 

13.1.       Termination.  This Agreement may be terminated at any time
prior to the Closing Date:

 

(a)           By the
mutual written consent of Stockholders, Grandi and Buyer;

 

(b)           By
Stockholders and Grandi if a material breach of any provision of this Agreement
has been committed by Buyer and such breach has not been waived by Stockholders
and Grandi, or by Buyer if a material breach of any provision of this Agreement
has been committed by either Stockholders or the Company and such breach has
not been waived by Buyer;

 

(c)           By
Stockholders and Grandi, collectively, if the Closing shall not have been
consummated by November 17, 2005 (the “Termination Date”); provided,
however, that Stockholders and Grandi may not terminate this Agreement pursuant
to this Section 13.1(c) if the Closing shall not have been consummated
by the Termination Date by reason of the failure of the Stockholders or the
Company to perform in all material respects any of their respective covenants
or agreements contained in this Agreement;

 

(d)           By Buyer
if the Closing shall not have been consummated by the Termination Date; provided, however, that Buyer may not
terminate this Agreement pursuant to this Section 13.1(c) if the
Closing shall not have been consummated by the Termination Date by reason of
the failure of Buyer to perform in all material respects any of its respective
covenants or agreements contained in this Agreement; or

 

(e)           By
Stockholders and Grandi, or Buyer, if (i) any Governmental Entity, the
Consent of which is a condition to the obligations of Stockholders to
consummate the transactions contemplated hereby, shall have determined not to
grant its Consent and all appeals of such determination shall have been taken
and have been unsuccessful, or (ii) any court of

 

39

 

competent jurisdiction in
the United States or any State shall have issued a Court Order restraining,
enjoining or otherwise prohibiting the transactions subject to this Agreement.

 

13.2.       Effect
of Termination.  In the event of
termination of this Agreement by either Stockholders and Grandi, or Buyer, as
provided for in Section 13.1, this Agreement shall forthwith become null,
void and of no further force or effect (except as set forth in Sections 15.2,
15.3 and 15.4, which shall survive the termination) and there shall be no
liability on the part of Stockholders and Grandi, or Buyer, or their respective
officers or directors, except for any breach of any of its obligations under
Sections 15.2 and 15.3.  Notwithstanding
the foregoing, neither Stockholders nor Buyer shall be relieved from liability
for any willful and material breach of this Agreement.

 

ARTICLE XIV

NOTICES

 

14.1.       Notices.  All notices, requests and other
communications hereunder (“Notices”) shall be in writing and shall either be
mailed (by registered or certified mail, postage prepaid, return receipt
requested), or sent by an overnight courier service guaranteeing next day
delivery (i.e., Federal Express), or by facsimile transmission, and shall be
effective upon receipt, in each instance, addressed as follows:

 

If to Buyer,
to:

 

Norcross Safety Products L.L.C.

2001 Spring Road

Suite 425

Oak Brook IL 60523

Attention: Robert A. Peterson

Fax:  (630) 572-8518

 

with a copy
to:

 

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103

Attention: Geraldine A. Sinatra

Fax: (215) 994-2222

 

If to the
Company, to:

 

The Fibre-Metal Products Company

Baltimore Pike at Brinton Lake Road

Concordville, Pennsylvania  19331

Attention: Charles J. Grandi

Fax: (610) 459-3884

 

40

 

with a copy
to:

 

Stradley, Ronon, Stevens & Young, LLP

2600 One Commerce Square

Philadelphia, Pennsylvania  19103

Attention:  John F. Dougherty, Jr.,
Esquire

Fax: (215) 564-8120

 

If to
Stockholders, to:

 

1800 East Lancaster Avenue

Paoli, Pennsylvania  19301

Attention:  Robert Shoemaker

Fax: (610) 296-4389

 

with a copy
to:

 

Morris, Nichols, Arsht & Tunnell

1201 N. Market Street

P.O. Box 1347

Wilmington, Delaware  19899

Attention:  David Ley Hamilton,
Esquire

Fax: (302) 658-3989

 

If to Grandi,
to:

 

140 Jaffrey Road

Malvern, Pennsylvania  19355

Attention:  Charles J. Grandi

Fax: (610) 722-9561

 

If to Sellers
Representative, to:

 

1800 East Lancaster Avenue

Paoli, Pennsylvania  19301

Attention:  Robert Shoemaker

Fax: (610) 296-4389

 

ARTICLE XV

GENERAL

 

15.1.       Further
Assurances.  From the date hereof
through the Closing Date and thereafter Stockholders and Buyer will execute and
deliver to one another such further instruments of transfer and conveyance and
take such action and deliver such other documents, certifications and further
assurances as may reasonably be required to carry out more effectively the sale
and transfer of the Stock.  In addition,
following Closing, Buyer will provide Stockholders and Grandi, and its
authorized accountants, attorneys and appraisers with access to

 

41

 

financial records
(including accountant’s work papers), and the tax returns of the Company to the
extent reasonably necessary, during regular business hours.

 

15.2.       Finder’s
Fees.  Stockholders and Grandi,
on the one hand, and Buyer, on the other, agree to indemnify and hold the other
harmless from and against any claim for a broker’s or finder’s fee relative to
this Agreement arising by, through or under such party.

 

15.3.       Expenses.  Stockholders, Grandi, the Company and Buyer
shall each pay all of the costs and expenses of their performance of and
compliance with all agreements and conditions contained in this Agreement on
their part to be performed or complied with; provided, however, that (i) the
Transaction Expenses shall be paid by the Stockholders or the Company at the
Closing, and (ii) Buyer has agreed to pay all filing fees under the HSR
Act for all parties, but one-half the amount of the filing fee shall be
included in the Transaction Expenses.

 

15.4.       Governing
Law; Jurisdiction.  This
Agreement shall be governed by and construed in accordance with the substantive
laws of the Commonwealth of Pennsylvania without giving effect to the conflict
of law principles thereof.  Except as
otherwise provided in Article III, the parties hereto agree to submit any
dispute or controversy arising out of or relating to this Agreement exclusively
to a federal or state court in the Eastern District of Pennsylvania.

 

15.5.       No
Waiver.  No failure or delay on
the part of any party to exercise any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
remedy preclude any other or further exercise thereof or of any other right,
power, or remedy.

 

15.6.       Entire
Agreement.  This Agreement,
including the Schedules thereto, sets forth the entire understanding of the
parties relating to the subject matter hereof and supersedes all prior oral or
written understandings relating hereto, other than the Confidentiality
Agreement, which shall continue in force according to its terms.  This Agreement shall not be modified,
supplemented or terminated orally and shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns including without limitation any successor to a party hereto by merger,
consolidation or otherwise by operation of law. 
Neither this Agreement nor any rights hereunder may be assigned by a
party hereto except that Buyer may assign any of its rights and obligations
hereunder in whole or in part to any Affiliate of Buyer and may collaterally
assign its rights hereunder to any lender or financing source to Buyer, in each
case, without the consent of Stockholders and Grandi; provided, however, that no such assignment by Buyer shall relieve the
Buyer from any of its obligations hereunder.

 

15.7.       Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original hereof, and
all of which, when taken together, shall constitute one and the same
instrument.

 

15.8.       Headings.  The headings of the several articles,
sections and subsections of this Agreement are inserted for convenience of
reference only and shall not constitute a part of this Agreement.

 

42

 

15.9.       Severability.  If any portion of this Agreement is construed
to be invalid or unenforceable, the remaining portions hereof shall not be
affected thereby and shall be enforceable without regard to the invalid or
unenforceable portions.

 

15.10.     Amendments.  This Agreement may be modified only by an
agreement in writing signed by each of the parties hereto.

 

15.11.     Third
Party Beneficiaries.  Each party
hereto intends that this Agreement shall not benefit or create any right or
cause of action in or on behalf of any Person other than the parties hereto.

 

 

[Remainder of the page intentionally left blank]

 

43

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered on the date first above written.

 

	
   

  	
  NORCROSS SAFETY PRODUCTS L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Robert A. Peterson

  	
   

  
	
   

  	
  Name: Robert
  A. Peterson

  
	
   

  	
  Title:
  President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  THE FIBRE-METAL PRODUCTS COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Charles J. Grandi

  	
   

  
	
   

  	
  Name:
  Charles J. Grandi

  
	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  RESIDUARY
  TRUST UNDER THE WILL OF CHARLES E. BOWERS, JR.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Robert Shoemaker, Trustee and Authorized Representative

  	
   

  
	
   

  	
   

  
	
   

  	
  TRUST
  UNDER THE WILL OF CHARLES E. BOWERS, JR.

  FOR THE BENEFIT OF JUDITH L. BOWERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Robert Shoemaker, Trustee and Authorized Representative

  	
   

  
	
   

  	
   

  
	
   

  	
  CHARLES
  E. BOWERS, JR. IRREVOCABLE TRUST

  DATED DECEMBER 17, 1990

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Robert Shoemaker, Trustee and Authorized Representative

  	
   

  
	
   

  	
   

  
	
   

  	
  CHARLES J. GRANDI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Charles J. Grandi

  	
   

  
					

 

44Exhibit 4.1

 

	
  

  	
  CLIFFORD CHANCE US LLP

  

 

 

EXECUTION COPY

 

 

SIMON PROPERTY GROUP, L.P.

ISSUER

TO

JPMORGAN CHASE BANK, N.A.

TRUSTEE

SIXTEENTH SUPPLEMENTAL INDENTURE

DATED AS OF NOVEMBER 15, 2005

$500,000,000  5.375% NOTES due 2011

$600,000,000  5.75% NOTES due 2015

 

SUPPLEMENT TO INDENTURE,

DATED AS OF NOVEMBER 26, 1996,

BETWEEN

SIMON PROPERTY GROUP, L.P.

AND

JPMORGAN CHASE BANK, N.A.

(AS SUCCESSOR TO THE CHASE MANHATTAN BANK),

AS TRUSTEE

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

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

  	
   

  
	
  SECTION 1.01.
  Definitions

  	
   

  
	
  SECTION 1.02.
  Creation of the Notes

  	
   

  
	
  SECTION 1.03.
  Form of the Notes

  	
   

  
	
  SECTION 1.04.
  Terms and Conditions of the 2011 Notes

  	
   

  
	
  SECTION 1.05.
  Terms and Conditions of the 2015 Notes

  	
   

  
	
  ARTICLE II

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

  	
   

  
	
  SECTION 2.01.
  Covenants for Benefit of Holders of Notes

  	
   

  
	
  SECTION 2.02.
  Definitions

  	
   

  
	
  SECTION 2.03.
  Events of Default

  	
   

  
	
  SECTION 2.04.
  Notice of Defaults

  	
   

  
	
  ARTICLE III

  	
  REGISTRATION RIGHTS

  	
   

  
	
  SECTION 3.01.
  Registration Rights Agreement

  	
   

  
	
  SECTION 3.02.
  Special Interest Premium

  	
   

  
	
  SECTION 3.03.
  Legend

  	
   

  
	
  ARTICLE IV

  	
  TRANSFER AND EXCHANGE

  	
   

  
	
  SECTION 4.01.
  Transfer and Exchange

  	
   

  
	
  ARTICLE V

  	
  LEGENDS

  	
   

  
	
  SECTION 5.01.
  Legends

  	
   

  
	
  ARTICLE VI

  	
  TRUSTEE

  	
   

  
	
  SECTION 6.01.
  Corporate Trust Office

  	
   

  
	
  SECTION 6.02.
  Recitals

  	
   

  
	
  ARTICLE VII

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
  SECTION 7.01.
  Ratification of Original Indenture

  	
   

  
	
  SECTION 7.02.
  Effect of Headings

  	
   

  
	
  SECTION 7.03.
  Successors and Assigns

  	
   

  
	
  SECTION 7.04.
  Separability Clause

  	
   

  
	
  SECTION 7.05.
  Governing Law

  	
   

  
	
  SECTION 7.06.
  Counterparts

  	
   

  

 

i

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of Initial Restricted Global Note

  	
   

  
	
  EXHIBIT B

  	
  Form of Initial Regulation S Global Note

  	
   

  
	
  EXHIBIT C

  	
  Form of Initial Certificated
  Note

  	
   

  
	
  EXHIBIT D

  	
  Form of Exchange Global Note

  	
   

  
	
  EXHIBIT E

  	
  Form of Exchange Certificated
  Note

  	
   

  

 

ii

 

SIXTEENTH SUPPLEMENTAL INDENTURE,
dated as of November 15, 2005 (the “Sixteenth Supplemental Indenture”),
between SIMON PROPERTY GROUP, L.P. (formerly known as Simon DeBartolo Group,
L.P.), a Delaware limited partnership (the “Issuer” or the “Operating
Partnership”), having its principal offices at National City Center, 115 West
Washington Street, Suite 15 East, Indianapolis, Indiana 46204, and
JPMORGAN CHASE BANK, N.A. (as successor to The Chase Manhattan Bank), a
national banking association organized and existing under the laws of the
United States of America, as trustee (the “Trustee”), having its Corporate
Trust Office at 4 New York Plaza, 15th Floor, New York, New York 10004.

 

RECITALS

 

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

 

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

 

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

 

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

 

WHEREAS, the
Issuer intends by this Sixteenth Supplemental Indenture to create and provide
for the following series of debt securities (the “Initial Notes”):

 

(i)                                     Simon
Property Group, L.P. 5.375% Notes due 2011 (the “Initial 2011 Notes”) in
an aggregate principal amount of $500,000,000; and

 

(ii)                                  Simon
Property Group, L.P. 5.75% Notes due 2015 (the “Initial 2015 Notes”) in an
aggregate principal amount of $600,000,000;

 

WHEREAS, the
Issuer further intends by this Sixteenth Supplemental Indenture to create and
provide for, if and when issued in exchange for the Initial Notes pursuant to
this Sixteenth Supplemental Indenture and the Registration Rights Agreement
(defined below), the following additional series of debt securities (the “Exchange
Notes”):

 

(i)                                     Simon
Property Group, L.P. 5.375% Notes due 2011 (the “Exchange 2011 Notes,” and
together with the Initial 2011 Notes, the “2011 Notes”), in an aggregate
principal amount of up to $500,000,000; and

 

(ii)                                  Simon
Property Group, L.P. 5.75% Notes due 2015 (the “Exchange 2015 Notes,” and
together with the Initial 2015 Notes, the “2015 Notes”), in an aggregate
principal amount of up to $600,000,000;

 

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

 

 

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

 

NOW, THEREFORE, IT IS AGREED:

 

ARTICLE I

 

DEFINITIONS, CREATION,
FORMS AND

TERMS AND CONDITIONS OF THE SECURITIES

 

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

 

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

 

“Clearstream
Banking” means Clearstream Banking, société
anonyme, its successors and assigns.

 

“Closing Date”
means November 15, 2005.

 

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

 

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

 

“Euroclear”
means Euroclear Bank S.A./N.V., as operator of the Euroclear System, its
successors and assigns.

 

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

 

“Exchange
Certificated Notes” means a note in definitive, fully registered
form, without coupons, substantially in the form of Exhibit E hereto.

 

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

 

“Exchange Offer”
means the offer by the Operating Partnership to exchange all of the Initial
Notes of a series for Exchange Notes of the same series.

 

“Exchange
Global Notes” has the meaning set forth in Section 1.03(e).

 

“Exchange
Offer Registration Statement” has the meaning set forth in Section 3.01(a).

 

“Exchange
2011 Notes” has the meaning set forth in the Recitals hereto.

 

“Exchange
2015 Notes” has the meaning set forth in the Recitals hereto.

 

“Global Notes”
means the Initial Global Notes and the Exchange Global Notes.

 

2

 

“Indenture”
means the Original Indenture as supplemented by this Sixteenth Supplemental
Indenture.

 

“Initial
Certificated Notes” has the meaning set forth in Section 1.03(d).

 

“Initial
Global Notes” has the meaning set forth in Section 1.03(c).

 

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

 

“Initial 2011
Notes” has the meaning set forth in the Recitals hereto.

 

“Initial 2015
Notes” has the meaning set forth in the Recitals hereto.

 

“Initial
Purchasers” means Citigroup Global Markets Inc., J.P. Morgan
Securities Inc., UBS Securities LLC and Wachovia Capital Markets, LLC.

 

“Initial
Regulation S Global Note” means a single fully registered
global note in book-entry form, substantially in the form of Exhibit B
attached hereto.

 

“Initial
Restricted Global Note” means a single fully registered global note
in book-entry form, substantially in the form of Exhibit A attached
hereto.

 

“Institutional
Accredited Investor” means an institutional “accredited investor” as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.

 

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

 

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

 

“Non-U.S.
Person” means a Person that is not a U.S. Person as defined in
Regulation S, and includes dealers or other professional fiduciaries in
the United States acting on a discretionary basis for foreign beneficial owners
(other than an estate or trust) in offshore transactions meeting the
requirements of Rule 904 of Regulation S.

 

“Notes”
means the Initial Notes and the Exchange Notes.

 

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

 

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

 

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

 

3

 

“Purchase
Agreement” means the Purchase Agreement dated November 8, 2005
between the Operating Partnership and the Initial Purchasers.

 

“QIB”
means a qualified institutional buyer, as defined in Rule 144A under the
Securities Act.

 

“Registration
Rights Agreement” means the Registration Rights Agreement, dated November 15,
2005, between the Operating Partnership and the Initial Purchasers.

 

“Regulation S”
means Regulation S under the Securities Act.

 

“Reinvestment
Rate” means, in connection with any optional redemption or
accelerated payment of any Notes, the yield on treasury securities at a
constant maturity corresponding to the remaining life (as of the date of
redemption or accelerated payment, and rounded to the nearest month) to
Stated Maturity of the principal being redeemed (the “Treasury Yield”) as
stated in such Notes, plus (i) 0.20%, in the case of the 2011 Notes or (ii) 0.25%,
in the case of the 2015 Notes.  For
purposes hereof, the Treasury Yield shall be equal to the arithmetic mean of
the yields published in the Statistical Release under the heading “Week Ending”
for “U.S. Government Securities — Treasury Constant Maturities” with a maturity
equal to such remaining life; provided, that if no published maturity
exactly corresponds to such remaining life, then the Treasury Yield shall be
interpolated or extrapolated on a straight-line basis from the arithmetic means
of the yields for the next shortest and next longest published maturities,
rounding each of such relevant periods to the nearest month.  For purposes of calculating the Reinvestment
Rate, the most recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.  If the format or content of the Statistical
Release changes in a manner that precludes determination of the Treasury Yield
in the above manner, then the Treasury Yield shall be determined in the manner
that most closely approximates the above manner, as reasonably determined by
the Operating Partnership.

 

“Rule 144A”
means Rule 144A under the Securities Act.

 

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

 

“Shelf
Registration Statement” has the meaning set forth in Section 3.01(c).

 

“Special
Interest Premium” has the
meaning set forth in Section 3.02.

 

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

 

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

 

“2011
Interest Payment Date” has the
meaning set forth in Section 1.04(c).

 

“2015
Interest Payment Date” has the
meaning set forth in Section 1.05(c).

 

“2011 Notes” has the meaning set forth in the Recitals hereto.

 

“2015 Notes” has the meaning set forth in the Recitals hereto.

 

“2011
Redemption Price” has the
meaning set forth in Section 1.04(f).

 

4

 

“2015
Redemption Price” has the
meaning set forth in Section 1.05(f).

 

“2011 Regular
Record Date” has the
meaning set forth in Section 1.04(c).

 

“2015 Regular
Record Date” has the
meaning set forth in Section 1.05(c).

 

SECTION 1.02.                 Creation of
the Notes.

 

(a)                                  Initial
Notes.  In accordance with Section 301
of the Original Indenture, the Issuer hereby creates each of the Initial 2011
Notes and the Initial 2015 Notes as a separate series of its securities issued
pursuant to the Indenture.  The Initial
2011 Notes shall be issued initially in an aggregate principal amount of
$500,000,000 and the Initial 2015 Notes shall be issued initially in an
aggregate principal amount of $600,000,000, except as permitted by
Sections 304, 305 or 306 of the Original Indenture.

 

(b)                                 Exchange
Notes.  In accordance with Section 301
of the Original Indenture, the Issuer hereby creates each of the Exchange Notes
as a separate series of its securities issued pursuant to the Indenture.  Each series of the Exchange Notes is to be
issued in exchange for the corresponding series of the Initial Notes as
provided in this Sixteenth Supplemental Indenture and the Registration Rights
Agreement.  The Exchange 2011 Notes may
be issued initially in an aggregate principal amount of up to $500,000,000 (but
in no event in excess of the principal amount of the Initial 2011 Notes
tendered in exchange therefor in an Exchange Offer), except as permitted by
Sections 304, 305 or 306 of the Original Indenture.  The Exchange 2015 Notes may be issued
initially in an aggregate principal amount of up to $600,000,000 (but in no
event in excess of the principal amount of the Initial 2015 Notes tendered in
exchange therefor in an Exchange Offer), except as permitted by
Sections 304, 305 or 306 of the Original Indenture.

 

SECTION 1.03.                 Form of
the Notes.

 

(a)                                  The
Initial Notes shall be in the form of Exhibit A, Exhibit B or Exhibit C
hereto, as applicable, and the Exchange Notes shall be in the form of Exhibit D
or Exhibit E hereto, as applicable.

 

(b)                                 Initial
Notes offered and sold to QIBs in reliance on Rule 144A as provided in the
Purchase Agreement shall be issued in book-entry form and shall be represented
by a single, permanent global note in fully registered form, without coupons,
substantially in the form of Exhibit A hereto and shall bear the legends
set forth in Section 5.01(a) and Section 5.01(b) (the “Initial
Restricted Global Note”).  Upon issuance,
the Initial Restricted Global Note shall be registered in the name of “Cede &
Co.,” as nominee of DTC, duly executed by the Operating Partnership and
authenticated by the Trustee and deposited with or on behalf of DTC.

 

(c)                                  Initial
Notes offered and sold to Non-U.S. Persons in reliance on Regulation S as
provided in the Purchase Agreement shall be issued in book-entry form and shall
be represented by a single, permanent global note in definitive, fully
registered form, without coupons, substantially in the form of Exhibit B
hereto and shall bear the legends set forth in Section 5.01(a) and Section 5.01(b) (the
“Initial Regulation S Global Note,” and together with the Initial
Restricted Global Note, the “Initial Global Notes”).  Upon issuance, the Initial Regulation S
Global Note shall be registered in the name of “Cede & Co.,” as
nominee for DTC, duly executed by the Operating Partnership and authenticated
by the Trustee and deposited with or on behalf of DTC for the accounts of
Euroclear or Clearstream Banking. 
Interests in the Initial Regulation S Global Note may only be held
through Euroclear or Clearstream Banking.

 

5

 

(d)                                 Initial
Notes offered and sold to Institutional Accredited Investors that are not QIBs
or Non-U.S. Persons as provided in the Purchase Agreement shall be issued in
definitive, fully registered certificated form, without coupons, substantially
in the form of Exhibit C hereto and shall bear the legends set forth in Section 5.01(a) hereof
(the “Initial Certificated Notes”).  Upon
issuance, any such Initial Certificated Note or the transfer thereof shall be
duly executed by the Operating Partnership and authenticated by the
Trustee.  Upon the registration of the
transfer of any Initial Certificated Note to a QIB or Non-U.S. Person, such
Initial Certificated Note shall be exchanged for a beneficial interest in the
applicable Initial Global Note.  Except
as provided in Section 4.01(b), interests in an Initial Global Note may
not be exchanged for Initial Certificated Notes and the Operating Partnership
waives any discretionary right it may otherwise have to cause the Notes to be
issued in certificated form.

 

(e)                                  In
the event all or a portion of the Initial Notes of any series are tendered in
an Exchange Offer, such Notes or the portions thereof being exchanged shall be
exchanged for a single, permanent global note in definitive, fully registered
form, without coupons, substantially in the form of Exhibit D hereto (the “Exchange
Global Notes”) and shall bear the legends set forth in Section 5.01(c) hereof.  Upon issuance, each Exchange Global Note
shall be registered in the name of “Cede & Co.,” as nominee of DTC,
duly executed by the Operating Partnership and authenticated by the Trustee and
deposited with or on behalf of DTC. 
Except as provided in Section 4.01(b), Exchange Certificated Notes
shall not be issued and the Operating Partnership waives any discretionary
right it may otherwise have to cause the Notes to be issued in certificated
form.

 

SECTION 1.04.                 Terms and
Conditions of the 2011 Notes.  The
2011 Notes shall be governed by all the terms and conditions of the Original
Indenture, as supplemented by this Sixteenth Supplemental Indenture.  In particular, the following provisions shall
be terms of the 2011 Notes:

 

(a)                                  Title
and Aggregate Principal Amount.  The
title of the Initial 2011 Notes and the Exchange 2011 Notes shall be as
specified in the Recitals; and the aggregate principal amount of the Initial
2011 Notes and the Exchange 2011 Notes shall be as specified in Section 1.02
of this Sixteenth Supplemental Indenture, except as permitted by
Sections 304, 305 or 306 of the Original Indenture.

 

(b)                                 Stated
Maturity.  The 2011 Notes shall
mature, and the unpaid principal thereon shall be payable, on June 1,
2011, subject to the provisions of the Original Indenture.

 

(c)                                  Interest.  The rate per annum at which interest shall be
payable on the 2011 Notes shall be 5.375%. 
Interest on the 2011 Notes shall be payable semi-annually in arrears on
each June 1 and December 1, commencing on June 1, 2006 (each, a “2011
Interest Payment Date”), and on the Stated Maturity as specified in Section 1.04(b) of
this Sixteenth Supplemental Indenture, to the Persons in whose names the
applicable 2011 Notes are registered in the Security Register applicable to the
2011 Notes at the close of business on the 15th calendar day
immediately prior to such payment date regardless of whether such day is a
Business Day (each, a “2011 Regular Record Date”).  Interest on the 2011 Notes shall be computed
on the basis of a 360-day year of twelve 30-day months.  Interest on the 2011 Notes shall accrue from November 15,
2005.

 

If an Initial 2011 Note
is exchanged in an Exchange Offer prior to the Regular Record Date for the
first Interest Payment Date following such exchange, accrued and unpaid
interest, if any, on such 2011 Note, up to but not including the date of
issuance of the Exchange 2011 Note(s) issued in exchange for such Initial
2011 Note, shall be paid on the first Interest Payment Date for such Exchange
2011 Note(s) to the Holder or Holders of such Exchange 2011
Note(s) on the first Regular Record Date with respect to such Exchange
2011 Note(s).  If such Initial 2011 Note
is exchanged in an Exchange Offer subsequent to the Regular Record Date for the
first Interest Payment Date following such exchange but on or prior to such
Interest Payment Date, then any such accrued and unpaid interest with respect
to such

 

6

 

Initial 2011 Note and any accrued and unpaid interest
on the Exchange 2011 Note(s) issued in exchange for such Initial 2011
Note, through the day before such Interest Payment Date, shall be paid on such
Interest Payment Date to the Holder of such Initial 2011 Note on such Regular
Record Date.

 

(d)                                 Registration
Rights.  The Holders of the Initial
2011 Notes shall be entitled to the benefits of the Registration Rights
Agreement, as described in Article III hereof.

 

(e)                                  Special
Interest Premium.  If the Operating
Partnership fails to comply with certain provisions of the Registration Rights
Agreement, then a Special Interest Premium shall become payable in respect of
the 2011 Notes as provided in Article III hereof.

 

(f)                                    Sinking
Fund, Redemption or Repayment.  No
sinking fund shall be provided for the 2011 Notes and the 2011 Notes shall not
be repayable at the option of the Holders thereof prior to Stated
Maturity.  The 2011 Notes may be redeemed
at any time at the option of the Issuer, in whole or from time to time in part,
at a redemption price equal to the sum of (i) 100% of the principal amount
of the 2011 Notes being redeemed plus accrued interest thereon to the
Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such 2011 Notes (collectively, the “2011 Redemption Price”), all in accordance
with the provisions of Article XI of the Original Indenture.

 

If the 2011 Notes are
redeemed within 90 days of the Stated Maturity of the 2011 Notes, the 2011
Redemption Price shall not include the Make-Whole Amount.

 

If notice of redemption
has been given as provided in the Original Indenture and funds for the
redemption of any 2011 Notes called for redemption shall have been made
available on the Redemption Date referred to in such notice, such 2011 Notes
shall cease to bear interest on the Redemption Date and the only right of the
Holders of the 2011 Notes from and after the Redemption Date shall be to
receive payment of the Redemption Price upon surrender of such 2011 Notes in
accordance with such notice.

 

(g)                                 Registration
and Form.  The 2011 Notes shall be
issuable as Registered Securities as provided in Section 1.03 of this
Sixteenth Supplemental Indenture. 
Initial 2011 Notes shall be issued and may be transferred only in
minimum denominations of $2,000 ($100,000 for Institutional Accredited
Investors) and integral multiples of $1,000 in excess thereof.  Exchange 2011 Notes shall be issued in
minimum denominations of $2,000 ($100,000 for Institutional Accredited
Investors) and integral multiples of $1,000 in excess thereof.  All payments of principal and interest in
respect of the 2011 Notes shall be made by the Issuer in immediately available
funds.

 

(h)                                 Defeasance
and Covenant Defeasance.  The
provisions for defeasance in Section 1402 of the Original Indenture, and
the provisions for covenant defeasance (which provisions shall apply, without
limitation, to the covenants set forth in Article II of this Sixteenth
Supplemental Indenture) in Section 1403 of the Original Indenture,
shall be applicable to the 2011 Notes.

 

(i)                                     Make-Whole
Amount Payable Upon Acceleration. 
Upon any acceleration of the Stated Maturity of the 2011 Notes in
accordance with Section 502 of the Original Indenture, the Make-Whole
Amount on the 2011 Notes shall become immediately due and payable, subject to
the terms and conditions of the Indenture.

 

(j)                                     Further
Issues.  The Issuer may, from time to
time, without the consent of the Holders, create and issue further securities
having the same terms and conditions as the 2011 Notes in all respects, except
for issue date and issue price. 
Additional 2011 Notes issued in this manner shall be consolidated with
and shall form a single series with the previously outstanding 2011 Notes.  Notice of

 

7

 

any such issuance shall be given to the Trustee and a
new supplemental indenture shall be executed in connection with the issuance of
such securities.

 

(k)                                  Other
Terms and Conditions.  The 2011 Notes
shall have such other terms and conditions as provided in the forms thereof
attached as Exhibits A, B, C, D and E hereto.

 

SECTION 1.05.                 Terms and
Conditions of the 2015 Notes.  The
2015 Notes shall be governed by all the terms and conditions of the Original
Indenture, as supplemented by this Sixteenth Supplemental Indenture.  In particular, the following provisions shall
be terms of the 2015 Notes:

 

(a)                                  Title
and Aggregate Principal Amount.  The
title of the Initial 2015 Notes and the Exchange 2015 Notes shall be as
specified in the Recitals; and the aggregate principal amount of the Initial
2015 Notes and the Exchange 2015 Notes shall be as specified in Section 1.02
of this Sixteenth Supplemental Indenture, except as permitted by
Sections 304, 305 or 306 of the Original Indenture.

 

(b)                                 Stated
Maturity.  The 2015 Notes shall
mature, and the unpaid principal thereon shall be payable, on December 1,
2015, subject to the provisions of the Original Indenture.

 

(c)                                  Interest.  The rate per annum at which interest shall be
payable on the 2015 Notes shall be 5.75%. 
Interest on the 2015 Notes shall be payable semi-annually in arrears on
each June 1 and December 1, commencing on June 1, 2006 (each, a “2015
Interest Payment Date”), and on the Stated Maturity as specified in Section 1.04(b) of
this Sixteenth Supplemental Indenture, to the Persons in whose names the
applicable 2015 Notes are registered in the Security Register applicable to the
2015 Notes at the close of business on the 15th calendar day
immediately prior to such payment date regardless of whether such day is a
Business Day (each, a “2015 Regular Record Date”).  Interest on the 2015 Notes shall be computed
on the basis of a 360-day year of twelve 30-day months.  Interest on the 2015 Notes shall accrue from November 15,
2005.

 

If an Initial 2015 Note
is exchanged in an Exchange Offer prior to the Regular Record Date for the
first Interest Payment Date following such exchange, accrued and unpaid
interest, if any, on such 2015 Note, up to but not including the date of
issuance of the Exchange 2015 Note(s) issued in exchange for such Initial
2015 Note, shall be paid on the first Interest Payment Date for such Exchange
2015 Note(s) to the Holder or Holders of such Exchange 2015 Note(s) on
the first Regular Record Date with respect to such Exchange 2015 Note(s).  If such Initial 2015 Note is exchanged in an
Exchange Offer subsequent to the Regular Record Date for the first Interest
Payment Date following such exchange but on or prior to such Interest Payment
Date, then any such accrued and unpaid interest with respect to such Initial
2015 Note and any accrued and unpaid interest on the Exchange 2015
Note(s) issued in exchange for such Initial 2015 Note, through the day
before such Interest Payment Date, shall be paid on such Interest Payment Date
to the Holder of such Initial 2015 Note on such Regular Record Date.

 

(d)                                 Registration
Rights.  The Holders of the Initial
2015 Notes shall be entitled to the benefits of the Registration Rights
Agreement, as described in Article III hereof.

 

(e)                                  Special
Interest Premium.  If the Operating
Partnership fails to comply with certain provisions of the Registration Rights
Agreement, then a Special Interest Premium shall become payable in respect of the
2015 Notes as provided in Article III hereof.

 

(f)                                    Sinking
Fund, Redemption or Repayment.  No
sinking fund shall be provided for the 2015 Notes and the 2015 Notes shall not
be repayable at the option of the Holders thereof prior to Stated
Maturity.  The 2015 Notes may be redeemed
at any time at the option of the Issuer, in whole or from time to time in part,
at a redemption price equal to the sum of (i) 100% of the principal amount
of

 

8

 

the 2015 Notes being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any,
with respect to such 2015 Notes (collectively, the “Redemption Price”), all in
accordance with the provisions of Article XI of the Original Indenture.

 

If the 2015 Notes are
redeemed within 90 days of the Stated Maturity of the 2015 Notes, the 2015
Redemption Price shall not include the Make-Whole Amount.

 

If notice of redemption
has been given as provided in the Original Indenture and funds for the redemption
of any 2015 Notes called for redemption shall have been made available on the
Redemption Date referred to in such notice, such 2015 Notes shall cease to bear
interest on the Redemption Date and the only right of the Holders of the 2015
Notes from and after the Redemption Date shall be to receive payment of the
Redemption Price upon surrender of such 2015 Notes in accordance with such
notice.

 

(g)                                 Registration
and Form.  The 2015 Notes shall be
issuable as Registered Securities as provided in Section 1.03 of this
Sixteenth Supplemental Indenture. 
Initial 2015 Notes shall be issued and may be transferred only in
minimum denominations of $2,000 ($100,000 for Institutional Accredited
Investors) and integral multiples of $1,000 in excess thereof.  Exchange 2015 Notes shall be issued in
minimum denominations of $2,000 ($100,000 for Institutional Accredited
Investors) and integral multiples of $1,000 in excess thereof.  All payments of principal and interest in respect
of the 2015 Notes shall be made by the Issuer in immediately available funds.

 

(h)                                 Defeasance
and Covenant Defeasance.  The
provisions for defeasance in Section 1402 of the Original Indenture, and
the provisions for covenant defeasance (which provisions shall apply, without
limitation, to the covenants set forth in Article II of this Sixteenth
Supplemental Indenture) in Section 1403 of the Original Indenture,
shall be applicable to the 2015 Notes.

 

(i)                                     Make-Whole
Amount Payable Upon Acceleration. 
Upon any acceleration of the Stated Maturity of the 2015 Notes in
accordance with Section 502 of the Original Indenture, the Make-Whole
Amount on the 2015 Notes shall become immediately due and payable, subject to
the terms and conditions of the Indenture.

 

(j)                                     Further
Issues.  The Issuer may, from time to
time, without the consent of the Holders, create and issue further securities
having the same terms and conditions as the 2015 Notes in all respects, except
for issue date and issue price. 
Additional 2015 Notes issued in this manner shall be consolidated with
and shall form a single series with the previously outstanding 2015 Notes.  Notice of any such issuance shall be given to
the Trustee and a new supplemental indenture shall be executed in connection
with the issuance of such securities.

 

(k)                                  Other
Terms and Conditions.  The 2015 Notes
shall have such other terms and conditions as provided in the forms thereof
attached as Exhibits A, B, C, D and E hereto.

 

ARTICLE II

 

COVENANTS FOR BENEFIT OF
HOLDERS OF NOTES;

EVENTS AND NOTICE OF DEFAULT

 

SECTION 2.01.                 Covenants for
Benefit of Holders of Notes.  In addition to the covenants set forth in Article Ten
of the Original Indenture, there are established pursuant to Section 901(2) of
the Original Indenture the following covenants for the benefit of the Holders
of the Notes and to which the Notes shall be subject; provided, however, that
the covenants set forth in Article II of any Supplemental Indenture dated
prior to the date hereof (“Prior Supplemental Indentures”) as the same may
be amended or modified

 

9

 

from time to time hereafter shall apply to the Notes
only for so long as any Securities issued pursuant to any Prior Supplemental
Indentures remain outstanding.

 

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

 

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

 

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

 

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

 

SECTION 2.02.                 Definitions.  As used herein:

 

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

 

“Annualized
Interest Expense” means, for the four consecutive quarters ending on
each Reporting Date, the Operating Partnership’s Pro Rata Share of interest
expense, with other adjustments as are necessary to exclude the effect of items
classified as extraordinary items, in accordance with generally accepted
accounting principles, reduced by amortization of debt issuance costs and
adjusted to reflect the assumption that (i) any interest expense related
to indebtedness incurred since the first day of such four-quarter period is
computed as if such indebtedness had been incurred as of the beginning of such
period, and (ii) any interest expense related to indebtedness that was
repaid or retired since the first day of such four-quarter period is computed
as if such indebtedness had been repaid or retired as of the beginning of such
period (except that, in making such computation, the amount of interest expense
related to indebtedness under any revolving credit facility shall be computed
based upon the average daily balance of such indebtedness during such
four-quarter period).

 

“Capitalization
Rate” means 7.00%.

 

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

 

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

 

“Debt”
means the Operating Partnership’s Pro Rata Share of the aggregate principal
amount of indebtedness in respect of (i) borrowed money evidenced by
bonds, notes, debentures or similar instruments, as determined in accordance
with generally accepted accounting principles, (ii) indebtedness

 

10

 

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

 

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

 

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

 

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

 

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

 

“Stabilized
Asset” means (i) with respect to an acquisition of an asset,
such asset becomes stabilized when the Operating Partnership or its
Subsidiaries or an unconsolidated joint venture in which the Operating
Partnership or any Subsidiary has an interest has owned the asset as of at
least six Reporting Dates, and (ii) with respect to a new construction or
development asset, such asset becomes stabilized four Reporting Dates after the
earlier of (a) six Reporting Dates after substantial completion of
construction or development or (b) the first Reporting Date on which the
asset is at least 90% leased.

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

“(5)                            a
default under any evidence of recourse indebtedness of the Issuer, or under any
mortgage, indenture or other instrument of the Issuer (including a default with
respect to Securities of any series other than that series) under which
there may be issued or by which there may be secured any recourse indebtedness
of the Issuer (or of any Subsidiary, the repayment of which the Issuer has
guaranteed or for which the Issuer is directly responsible or liable as obligor
or guarantor), whether such indebtedness now exists or shall hereafter be
created, which default shall constitute a failure to pay an aggregate principal
amount exceeding $50,000,000 of such indebtedness when due and payable after
the expiration of any applicable grace period with respect thereto and shall
have resulted in such indebtedness in an aggregate principal amount exceeding
$50,000,000 becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or annulled,
within a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by
the Holders of at least 25% in principal amount of the Outstanding Securities
of that series a written notice specifying such default and requiring the
Issuer to cause such indebtedness to be discharged or cause such acceleration
to be rescinded or annulled and stating that such notice is a “Notice of
Default” hereunder; or”

 

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

 

“Notice of Defaults.  Within 90 days after the occurrence of any
default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default

 

12

 

hereunder known to
the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on or any Additional Amounts with
respect to any Security of such series, or in the payment of any sinking fund
installment with respect to the Securities of such series, the Trustee shall be
protected in withholding such notice if an so long as a trust committee of
Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Securities
and Coupons of such series; and provided further that in the case of any
default or breach of the character specified in Section 501(4) with
respect to the Securities and Coupons of such series, no such notice to Holders
shall be given until at least 90 days after the occurrence thereof.  For the purpose of this Section, the term “default”
means any event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to the Securities of such series.”

 

ARTICLE III

 

REGISTRATION RIGHTS

 

SECTION 3.01.                 Registration
Rights Agreement.

 

(a)                                  The
Operating Partnership shall enter into the Registration Rights Agreement with
the Initial Purchasers for the benefit of the Holders of the Notes wherein the
Operating Partnership shall agree, for the benefit of the Holders of the Notes,
to use its reasonable best efforts (i) to file with the Commission within
180 calendar days after the date on which the Operating Partnership delivers
the Notes to the Initial Purchasers (the “Closing Date”) a
registration statement (the “Exchange Offer Registration Statement”) with
respect to the Exchange Notes and (ii) to cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act within
210 calendar days after the Closing Date. 
Promptly after the Exchange Offer Registration Statement has been declared
effective, the Operating Partnership shall offer to the Holders the opportunity
to exchange all their Notes of a series for Exchange Notes of the same series
pursuant to the Exchange Offer.  The
Operating Partnership shall keep the Exchange Offer open for not less than 30
calendar days (or longer, if required by applicable law) after the date on
which the notice of the Exchange Offer is mailed to the Holders of the Notes
but shall, in any event, use its reasonable best efforts to cause the Exchange
Offer to be completed within 240 days of the Closing Date.  For each Note validly tendered to the
Operating Partnership pursuant to the Exchange Offer, the Holder of such Note
shall receive an Exchange Note of the same series having a principal amount
equal to the principal amount of the tendered Note.

 

(b)                                 Each
Holder of the Notes (other than certain specified Holders) that wishes to
exchange the Notes for Exchange Notes in the Exchange Offer shall be required
to represent that (i) it is not an Affiliate of the Operating Partnership,
(ii) the Exchange Notes to be received by it were acquired in the ordinary
course of its business and (iii) at the time of the Exchange Offer, it has
no arrangement with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes.

 

(c)                                  The
Registration Rights Agreement also shall provide that if, (i) because of
any change in law or in currently prevailing interpretations of the staff of
the Commission, the Operating Partnership is not permitted to effect the
Exchange Offer, (ii) the Exchange Offer is not completed within 240 days
of the Closing Date, or (iii) in the case of any Holder that participates
in the Exchange Offer, such Holder does not receive Exchange Notes on the date
of the exchange that may be sold without restriction under state and federal
securities laws (other than due solely to the status of such Holder as an
affiliate of the Operating Partnership within the meaning of the Securities Act
or as a broker-dealer), then

 

13

 

in each case, the Operating Partnership shall
(x) promptly deliver to the Holders written notice thereof and (y) at
the Operating Partnership’s sole expense (a) as promptly as practicable
(but in no event more than 60 days after so required or requested pursuant to
the Registration Rights Agreement), file a shelf registration statement
covering resales of the Notes (the “Shelf Registration Statement”), (b) use
its reasonable best efforts to cause the Shelf Registration Statement to be
declared effective under the Securities Act (but in no event more than 60 days
after such filing) and (c) use its reasonable best efforts to keep
effective the Shelf Registration Statement until the earlier of two years (or,
if Rule 144(k) is amended to provide a shorter restrictive period,
the end of such shorter period) after the Closing Date or such time as all
of the applicable Notes have been sold thereunder.  The Operating Partnership shall, if a Shelf
Registration Statement is filed, provide to each Holder of the Notes copies of
the prospectus that is a part of the Shelf Registration Statement, notify each
such Holder when the Shelf Registration Statement for the Notes has become
effective and take certain other actions as are required to permit unrestricted
resales of the Notes.  A Holder that
sells Notes pursuant to the Shelf Registration Statement shall be required to
be named as a selling security Holder in the related prospectus, to provide
information related thereto and to deliver such prospectus to purchasers, shall
be subject to certain of the civil liability provisions under the Securities
Act in connection with such sales and shall be bound by the provisions of the
Registration Rights Agreement that are applicable to such a Holder (including
certain indemnification rights and obligations).

 

SECTION 3.02.                 Special
Interest Premium.  If the Operating
Partnership fails to comply with certain provisions of the Registration Rights
Agreement, in each case as described below, then a special interest premium
(the “Special Interest Premium”) shall become payable in respect of the
Notes as follows:

 

(a)                                  If
(i) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to the 180th day following the Closing Date, (ii) the
Exchange Offer Registration Statement is not declared effective on or prior to
the 210th day following the Closing Date, (iii) the Exchange Offer is not
completed on or prior to the 240th day following the Closing Date, (iv) the
Shelf Registration Statement is not filed with the SEC on or prior to the 60th
day following the date the obligation arises or (v) the Shelf Registration
Statement is not declared effective on or prior to the 60th day
following the date the Shelf Registration Statement was filed, the Special Interest
Premium shall accrue from and including the next day following each of (a) such
180-day period in the case of clause (i) above, (b) such 210-day
period in the case of clause (ii) above, (c) such 240-day period
in the case of clause (iii) above, and (d) such 60-day periods
in the case of clauses (iv) and (v) above, in each case at a rate
equal to 0.25% per annum.  The aggregate
amount of the Special Interest Premium payable pursuant to the above provisions
shall in no event exceed 0.25% per annum. 
If the Exchange Offer Registration Statement is not declared effective
on or prior to the 210th day following the Closing Date and the Operating
Partnership shall request Holders of Notes to provide the information called
for by the Registration Rights Agreement for inclusion in the Shelf
Registration Statement, the Notes owned by Holders who do not deliver such
information to the Operating Partnership when required pursuant to the
Registration Rights Agreement shall not be entitled to any such increase in the
interest rate for any day after the Operating Partnership has filed the Shelf
Registration Statement.  Upon (1) the
filing of the Exchange Offer Registration Statement after the 180-day period
described in clause (i), (2) the effectiveness of the Exchange Offer
Registration Statement after the 210-day period described in clause (ii) above,
(3) the completion of the Exchange Offer after the 240-day period
described in clause (iii) above, (4) the filing of the Shelf
Registration Statement after the 60-day period described in clause (iv) above
or (5) the effectiveness of the Shelf Registration Statement after the 60-day
period described in clause (v) above, the interest rate on each series of
Notes from the date of such effectiveness or completion, as the case may be,
shall be reduced to the original interest rate provided for herein for such
series of Notes.

 

14

 

(b)                                 If
a Shelf Registration Statement is declared effective, and if the Operating
Partnership fails to keep such Shelf Registration Statement continuously
(x) effective or (y) useable for resales for the period required by
the Registration Rights Agreement due to certain circumstances relating to
pending corporate developments, public filings with the Commission and similar
events, or because the prospectus contains an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and such
failure continues for more than 60 days (whether or not consecutive) in
any 12-month period (the 61st day being referred to as the “Default Day”), then
from the Default Day until the earlier of (i) the date that the Shelf
Registration Statement is again deemed effective or is useable, (ii) the
date that is the second anniversary of the Closing Date (or, if Rule 144(k) is
amended to provide a shorter restrictive period, the end of such shorter
period) or (iii) the date as of which all of the Notes are sold
pursuant to the Shelf Registration Statement, the Special Interest Premium
shall accrue at a rate equal to 0.25% per annum.

 

SECTION 3.03.                 Legend.  Each Note shall contain a legend to the
effect that the Holder thereof, by its acceptance thereof, shall be deemed to have
agreed to be bound by the provisions of the Registration Rights Agreement.  Such legend shall be in the form set forth in
Section 5.01(a) hereof.

 

ARTICLE IV

 

TRANSFER AND EXCHANGE

 

SECTION 4.01.                 Transfer and
Exchange.

 

(a)                                  By
its acceptance of any Initial Note represented by a certificate bearing the
legend set forth in Section 5.01(a) hereof (the “Private Placement
Legend”), each Holder of, and beneficial bearer of an interest in, such Initial
Note acknowledges the restrictions on transfer of such Initial Note and agrees
that it shall transfer such Initial Note only in accordance with such
restrictions.  Each purchaser (other than
the Initial Purchasers) of the Notes and each Person to whom the Notes are
transferred shall, prior to the Resale Restriction Termination Date (as defined
in the Private Placement Legend), be deemed to have acknowledged, represented
and agreed to the matters and restrictions on transfer described under the
heading “Notice to Investors” in the Offering Memorandum of the Operating
Partnership, dated November 8, 2005, relating to the Initial Notes.  Upon the registration of transfer, exchange
or replacement of an Initial Note not bearing the Private Placement Legend, the
Trustee shall deliver an Initial Note or Initial Notes that do not bear the
Private Placement Legend.  Upon the
registration of transfer, exchange or replacement of an Initial Note bearing
the Private Placement Legend, the Trustee shall deliver an Initial Note or
Initial Notes bearing the Private Placement Legend, unless such legend may be
removed from such Note as provided in this Section 4.01(a).  If the Private Placement Legend has been
removed from an Initial Note, as provided herein, no other Initial Note issued
in exchange for all or any part of such Initial Note shall bear such legend,
unless the Operating Partnership has reasonable cause to believe that such
other Initial Note represents a “restricted security” within the meaning of Rule 144
under the Securities Act and instructs the Trustee in writing to cause a legend
to appear thereon.  Each Initial Note
shall bear the Private Placement Legend unless and until:

 

(i)                                     a
transfer of such Initial Note is made pursuant to an effective Shelf
Registration Statement, in which case the Private Placement Legend shall be
removed from such Initial Note so transferred at the request of the Holder; or

 

(ii)                                  there
is delivered to the Operating Partnership such satisfactory evidence, which may
include an opinion of independent counsel licensed to practice law in the State
of New York, as may reasonably be requested by the Operating Partnership
confirming that neither such legend nor the restrictions on transfer set forth
therein are required to ensure that transfers of such

 

15

 

Initial Note shall
not violate the registration and prospectus delivery requirements of the
Securities Act; provided, that the Trustee shall not be required to
determine (but may rely on a determination made by the Operating Partnership
with respect to) the sufficiency of any such evidence; and upon written
direction of the Operating Partnership, the Trustee shall authenticate and
deliver in exchange for such Initial Note, an Initial Note or Initial Notes
representing the same aggregate principal amount of the Initial Note being
exchanged) without such legend.

 

(b)                                 The
Initial Global Note or Exchange Global Note, as the case may be, shall be
exchanged by the Operating Partnership for one or more Initial Certificated
Notes or Exchange Certificated Notes, as applicable, if (i) DTC (1) has
notified the Operating Partnership that it is unwilling or unable to continue
as, or ceases to be, a clearing agency registered under Section 17A of the
Exchange Act and (2) a successor to DTC registered as a clearing agency
under Section 17A of the Exchange Act is not able to be appointed by the
Operating Partnership within 90 calendar days or (ii) DTC is at any time
unwilling or unable to continue as depositary and the Operating Partnership is
not able to appoint a successor to DTC within 90 calendar days.  If an Event of Default occurs and is
continuing, the Operating Partnership shall, at the request of the Trustee or
the Holder thereof, exchange all or part of the Initial Global Note or Exchange
Global Note, as the case may be, for one or more Initial Certificated Notes or
Exchange Certificated Notes, as applicable. 
Whenever a Global Note is exchanged for one or more Initial Certificated
Notes or Exchange Certificated Notes, as the case may be, it shall be
surrendered by the Holder thereof to the Trustee and cancelled by the
Trustee.  All Initial Certificated Notes
or Exchange Certificated Notes issued in exchange for a Global Note or a
portion thereof shall be registered in such names, and delivered, as DTC shall
instruct the Trustee.  Any Initial
Certificated Notes issued pursuant to this Section 4.01(b) shall
include the Private Placement Legend, except as set forth in Section 4.01(a) hereof.

 

(c)                                  Any
Initial Notes that are presented to the Trustee for exchange pursuant to an
Exchange Offer shall be exchanged for Exchange Notes of equal principal amount
upon surrender to the Trustee in accordance with the terms of the Exchange
Offer.  Whenever any Initial Notes are so
surrendered for exchange, the Operating Partnership shall execute, and the
Trustee shall authenticate and deliver to the surrendering Holder thereof,
Exchange Notes in the same aggregate principal amount as the Initial Notes so
surrendered.

 

(d)                                 Any
Holder of a Global Note shall, by acceptance of such Global Note, agree that
transfers of beneficial interests in such Global Note may be effected only
through a book-entry system maintained by such Holder (or its agent), and that
ownership of a beneficial interest in the Notes represented thereby shall be
required to be reflected in book-entry form. 
Transfers of a Global Note shall be limited to transfers in whole and
not in part, to DTC, its successors and their respective nominees.  Interests of beneficial owners in a Global
Note shall be transferred in accordance with the rules and procedures of
DTC (or its successors).

 

ARTICLE V

 

LEGENDS

 

SECTION 5.01.                 Legends.  The following legends shall appear on each
Initial Note and each Exchange Note.

 

(a)                                  Except
as provided in Section 4.01(a) hereof, each Initial Note shall bear
the following legends on the face thereof:

 

16

 

THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. 
THIS NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $2,000 ($100,000 FOR INSTITUTIONAL ACCREDITED
INVESTORS) AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR
TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE (OR ANY SUBSEQUENT
REOPENING OF THE NOTES OF THIS SERIES) AND THE LAST DATE ON WHICH THE OPERATING
PARTNERSHIP OR ANY AFFILIATE OF THE OPERATING PARTNERSHIP WAS THE OWNER OF THIS
NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (a) TO THE OPERATING
PARTNERSHIP OR ONE OF THE INITIAL PURCHASERS OR BY, THROUGH OR IN A TRANSACTION
APPROVED BY, AN INITIAL PURCHASER, (b) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (c) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (d) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES
ACT) ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS MUST ALSO BE INSTITUTIONAL ACCREDITED INVESTORS
UNLESS SUCH TRANSFEREE IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, (e) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
TO AN INSTITUTION THAT IS NOT A U.S. PERSON (AND WAS NOT PURCHASING FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON) WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, OR (f) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS NOTE BEING COMPLETED AND DELIVERED BY THE TRANSFEROR
AND, IF APPLICABLE, THE TRANSFEREE TO THE TRUSTEE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT RELATING TO ALL NOTES OF THE SERIES.

 

(b)                                 In
addition to the legends set forth in Section 4.01(a), each Initial Global
Note shall also bear the following legends on the face thereof:

 

17

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS CERTIFICATE
IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS
CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE
THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

 

(c)                                  The
Exchange Global Note shall bear the following legends on the face thereof:

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS CERTIFICATE
IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS
CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE
THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

 

ARTICLE VI

 

TRUSTEE

 

SECTION 6.01.                 Corporate
Trust Office.  The Trustee is
appointed as the principal paying agent, transfer agent and registrar for the
Notes and for the purposes of Section 1002 of the Indenture.  The Notes may be presented for payment at the
Corporate Trust Office of the Trustee or at any other agency as may be
appointed from time to time by the Operating Partnership in The City of New
York.

 

SECTION 6.02.                 Recitals.  The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Sixteenth Supplemental Indenture or the due execution thereof by the
Issuer.  The recitals of fact contained
herein shall be taken as the statements solely of the Issuer and the Trustee
assumes no responsibility for the correctness thereof.

 

18

 

ARTICLE VII

 

MISCELLANEOUS PROVISIONS

 

SECTION 7.01.                 Ratification
of Original Indenture.  This
Sixteenth Supplemental Indenture is executed and shall be construed as an
indenture supplemental to the Original Indenture, and as supplemented and
modified hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Sixteenth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.

 

SECTION 7.02.                 Effect of
Headings.  The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.

 

SECTION 7.03.                 Successors and
Assigns.  All covenants and
agreements in this Sixteenth Supplemental Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.

 

SECTION 7.04.                 Separability
Clause.  In case any one or more of
the provisions contained in this Sixteenth Supplemental Indenture shall for any
reason be held to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

 

SECTION 7.05.                 Governing Law.  This Sixteenth Supplemental Indenture shall
be governed by and construed in accordance with the laws of the State of New
York.  This Sixteenth Supplemental
Indenture is subject to the provisions of the Trust Indenture Act that are
required to be part of this Sixteenth Supplemental Indenture and shall, to the
extent applicable, be governed by such provisions.

 

SECTION 7.06.                 Counterparts.  This Sixteenth Supplemental Indenture may be
executed in any number of counterparts, and each of such counterparts shall for
all purposes be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.

 

19

 

* * * *

IN WITNESS WHEREOF,
the parties hereto have caused this Sixteenth Supplemental Indenture to be duly
executed all as of the date first above written.

 

	
   

  	
  SIMON PROPERTY GROUP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Simon Property Group, Inc.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Simon

  	
   

  
	
   

  	
   

  	
  Name: David Simon

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. Heaney

  	
   

  
	
   

  	
   

  	
  Name: James D. Heaney

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

Exhibit A

 

FORM OF INITIAL RESTRICTED GLOBAL NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. 
THIS NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $2,000 ($100,000 FOR INSTITUTIONAL ACCREDITED
INVESTORS) AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR
TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE (OR ANY SUBSEQUENT
REOPENING OF THE NOTES OF THIS SERIES) AND THE LAST DATE ON WHICH THE OPERATING
PARTNERSHIP OR ANY AFFILIATE OF THE OPERATING PARTNERSHIP WAS THE OWNER OF THIS
NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (a) TO THE OPERATING
PARTNERSHIP OR ONE OF THE INITIAL PURCHASERS OR BY, THROUGH OR IN A TRANSACTION
APPROVED BY, AN INITIAL PURCHASER, (b) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (c) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (d) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES
ACT) ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS MUST ALSO BE INSTITUTIONAL ACCREDITED INVESTORS
UNLESS SUCH TRANSFEREE IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, (e) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
TO AN INSTITUTION THAT IS NOT A U.S. PERSON (AND WAS NOT PURCHASING FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON) WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, OR (f) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS NOTE BEING COMPLETED AND DELIVERED BY THE TRANSFEROR
AND, IF APPLICABLE, THE TRANSFEREE TO THE TRUSTEE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT RELATING TO ALL NOTES OF THE SERIES.

 

A-1

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS CERTIFICATE
IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS
CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE
THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

 

	
  REGISTERED

  	
  REGISTERED

  
	
  NO. [     ]

  	
  PRINCIPAL AMOUNT

  
	
  CUSIP NO. [                    ]

  	
  $[                                           ]

  

 

RESTRICTED GLOBAL SECURITY

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

Simon Property Group,
L.P., a Delaware limited partnership (the “Issuer,” which term includes any
successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co. or its registered assigns, the
principal sum of [                                  ]
dollars on [June 1, 2011/December 1, 2015] (the “Maturity Date”), and
to pay interest thereon from November 15, 2005, semi-annually in arrears
on June 1 and December 1 of each year (each, an “Interest Payment
Date”), commencing on June 1, 2006, and on the Maturity Date, at the rate
of [5.375/5.75]% per annum, until payment of said principal sum has been made
or duly provided for.

 

The interest so payable
and punctually paid or duly provided for on any Interest Payment Date and on
the Maturity Date shall be paid to the Holder in whose name this Note (or one
or more predecessor Notes) is registered in the Security Register
applicable to this Note at the close of business on the “Record Date” for such
payment, which shall be the 15th calendar day immediately prior to
such payment date or the Maturity Date, as the case may be, regardless of
whether such day is a Business Day (as defined below).  Any interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Holder in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on a
subsequent record date for the payment of such defaulted interest (which shall
be not less than 10 calendar days prior to the date of the payment of such
defaulted interest) established by notice given by mail by or on behalf of
the Issuer to the Holders of the Notes not less than 10 calendar days preceding
such subsequent record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture (as defined below).  Interest on this Note shall be computed on
the basis of a 360-day year of twelve 30-day months.

 

A-2

 

Interest payable on this
Note on any Interest Payment Date and on the Maturity Date, as the case may be,
shall be the amount of interest accrued from and including the immediately
preceding Interest Payment Date (or from and including November 15, 2005,
in the case of the initial Interest Payment Date) to but excluding the
applicable Interest Payment Date or the Maturity Date, as the case may be.  If any date for the payment of principal,
premium, if any, interest on, or any other amount with respect to, this Note
(each a “Payment Date”) falls on a day that is not a Business Day, the
principal, premium, if any, or interest payable with respect to such Payment
Date shall be made on the next succeeding Business Day with the same force and
effect as if made on such Payment Date, and no interest shall accrue on the
amount so payable for the period from and after such Payment Date to such next
succeeding Business Day.  “Business Day”
means any day, other than a Saturday or a Sunday on which banking institutions
in New York, New York are open for business.

 

If this Note is exchanged
in an Exchange Offer prior to the Record Date for the first Interest Payment Date
following such exchange, accrued and unpaid interest, if any, on this Note, up
to but not including the date of issuance of the Note(s) issued in
exchange (the “Exchange Note”) for this Note, shall be paid on the first
Interest Payment Date for such Exchange Note(s) to the Holder or Holders
of such Exchange Note(s) on the first Record Date with respect to such
Exchange Note(s).  If this Note is
exchanged in an Exchange Offer subsequent to the Record Date for the first
Interest Payment Date following such exchange but on or prior to the Interest
Payment Date, then any such accrued and unpaid interest with respect to this
Note and any accrued and unpaid interest on the Exchange Note(s) issued in
exchange for this Note, through the day before such Interest Payment Date,
shall be paid on such Interest Payment Date to the Holder of this Note on the
Record Date.

 

The Holder of this Note
is entitled to the benefits of the Registration Rights Agreement dated November 15,
2005 (the “Registration Rights Agreement”) among the Issuer and Citigroup
Global Markets Inc., J.P. Morgan Securities Inc., UBS Securities LLC and
Wachovia Capital Markets, LLC (collectively, the “Initial Purchasers”).

 

If the Operating
Partnership fails to comply with certain provisions of the Registration Rights
Agreement, in each case as described below, then a special interest premium
(the “Special Interest Premium”) shall become payable in respect of the
Notes as follows:

 

If (i) a
registration statement with respect to the Exchange Notes (the “Exchange Offer
Registration Statement”) is not filed with the Commission on or prior to
the 180th day following the Closing Date, (ii) the Exchange Offer
Registration Statement is not declared effective on or prior to the 210th day
following the Closing Date, (iii) the Exchange Offer is not completed on
or prior to the 240th day following the Closing Date, (iv) the shelf
registration statement covering resales of the Notes (the “Shelf Registration
Statement”) is not filed with the SEC on or prior to the 60th day following the
date the obligation arises or (v) the Shelf Registration Statement is not
declared effective on or prior to the 60th day following the date the Shelf
Registration Statement was filed, the Special Interest Premium shall accrue
from and including the next day following each of (a) such 180-day period
in the case of clause (i) above, (b) such 210-day period in the case
of clause (ii) above, (c) such 240-day period in the case of clause (iii) above,
and (d) such 60-day periods in the case of clauses (iv) and (v) above,
in each case at a rate equal to 0.25% per annum.  The aggregate amount of the Special Interest
Premium payable pursuant to the above provisions shall in no event exceed 0.25%
per annum.  If the Exchange Offer
Registration Statement is not declared effective on or prior to the 210th day
following the Closing Date and the Operating Partnership shall request the
Holder of this Note to provide the information called for by the Registration
Rights Agreement for inclusion in the Shelf Registration Statement and the
Holder of this Note does not deliver such information to the Operating
Partnership when required pursuant to the Registration Rights Agreement, then
the Holder of this Note shall not be entitled to any such increase in the
interest rate for any day after the Operating Partnership has filed the Shelf
Registration Statement.

 

A-3

 

Upon (1) the filing of the Exchange Offer
Registration statement after the 180-day period described in clause (i), (2) the
effectiveness of the Exchange Offer Registration Statement after the 210-day
period described in clause (ii) above, (3) the completion of the
Exchange Offer after the 240-day period described in clause (iii) above, (4) the
filing of the Shelf Registration Statement after the 60-day period described in
clause (iv) above or (5) the effectiveness of the Shelf Registration
Statement after the 60-day period described in clause (v) above, the
interest rate on this Note from the date of such effectiveness or completion,
as the case may be, shall be reduced to the original interest rate provided for
herein.

 

If a Shelf Registration
Statement is declared effective, and if the Operating Partnership fails to keep
such Shelf Registration Statement continuously (x) effective or
(y) useable for resales for the period required by the Registration Rights
Agreement due to certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events, or because
the prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, and such failure continues for more
than 60 days (whether or not consecutive) in any 12-month period (the 61st
day being referred to as the “Default Day”), then from the Default Day until
the earlier of (i) the date that is the second anniversary of the Closing
Date (or, if Rule 144(k) of the Securities Act is amended to provide
a shorter restrictive period, the end of such shorter period) or (ii) the
date as of which this Note is sold pursuant to the Shelf Registration
Statement, the Special Interest Premium shall accrue at a rate equal to 0.25%
per annum.

 

The principal of this
Note payable on the Maturity Date shall be paid against presentation and
surrender of this Note at the office or agency of the Issuer maintained for
that purpose in The Borough of Manhattan, The City of New York.  The Issuer hereby initially designates the
Corporate Trust Office of the Trustee in The City of New York as the office to
be maintained by it where Notes may be presented for payment, registration of
transfer or exchange, and where notices to or demands upon the Issuer in
respect of the Notes or the Indenture referred to on the reverse hereof may be
served.

 

Payments of principal and
interest in respect of this Note shall be made by wire transfer of immediately
available funds in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private
debts.

 

Reference is made to the
further provisions of this Note set forth on the reverse hereof after the
Trustee’s Certificate of Authentication. 
Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.

 

This Note shall not be
entitled to the benefits of the Indenture or be valid or obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by the Trustee under such Indenture.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

A-4

 

IN WITNESS WHEREOF,
the Issuer has caused this instrument to be signed manually or by facsimile by
its authorized officers.

 

Dated:  November 15, 2005

 

	
   

  	
  SIMON PROPERTY GROUP, L.P.

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  SIMON PROPERTY GROUP, INC.

  
	
   

  	
   

  	
  as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

A-5

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

A-6

 

[REVERSE OF NOTE]

 

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

This security is one of a
duly authorized issue of debt securities of the Issuer (hereinafter called the “Securities”),
issued or to be issued under and pursuant to an Indenture dated as of November 26,
1996 (herein called the “Indenture”), duly executed and delivered by the Issuer
to JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as
Trustee (herein called the “Trustee,” which term includes any successor trustee
under the Indenture with respect to the series of Securities of which this Note
is a part), to which Indenture and all indentures supplemental thereto relating
to this Note (including, without limitation, the Sixteenth Supplemental
Indenture, dated as of November 15, 2005, between the Issuer and the
Trustee) reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Issuer and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered and for
the definition of capitalized terms used hereby and not otherwise defined.  The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any),
and may otherwise vary as provided in the Indenture or any indenture
supplemental thereto.  This Security is
one of a series designated as the Simon Property Group, L.P. [5.375/5.75]%
Notes due [2011/2015], initially limited in aggregate principal amount to
$[500,000,000/600,000,000] (the “Notes”).

 

In case an Event of
Default with respect to the Notes shall have occurred and be continuing, the
principal amount of the Notes and the Make-Whole Amount may be declared
accelerated and thereupon become due and payable, in the manner, with the
effect, and subject to the conditions provided in the Indenture.

 

The Notes may be redeemed
at any time at the option of the Issuer, in whole or from time to time in part,
at a redemption price equal to the sum of (i) 100% of the principal amount
of the Notes being redeemed plus accrued interest thereon to the Redemption
Date and (ii) the Make-Whole Amount, if any, with respect to such
Notes.  If the Notes are redeemed within
90 days of the Maturity Date, the redemption price shall not include the
Make-Whole Amount.  Notice of any
optional redemption shall be given to Holders at their addresses, as shown in
the Security Register for the Notes, not more than 60 nor less than 30 days
prior to the date fixed for redemption. 
The notice of redemption shall specify, among other items, the
redemption price and the principal amount of the Notes to be redeemed.

 

The Indenture contains
provisions permitting the Issuer and the Trustee, with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as one
class), evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or
modifying in any manner the rights of the Holders of the Securities of each
series; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security so affected, (i) change
the Stated Maturity of the principal of, or premium, (if any) or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate or amount of interest thereon or any
premium payable upon the redemption or acceleration thereof, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, the principal of any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the

 

A-7

 

enforcement of any such payment on or after the Stated
Maturity thereof, or (ii) reduce the aforesaid percentage of Securities
the Holders of which are required to consent to any such supplemental
indenture, or (iii) reduce the percentage of Securities the Holders of
which are required to consent to any waiver of compliance with certain
provisions of the Indenture or any waiver of certain defaults and consequences
thereunder or to reduce the quorum or voting requirements set forth in the
Indenture, or (iv) effect certain other changes to the Indenture or any
supplemental indenture or in the rights of Holders of the Securities.  The Indenture also permits the Holders of a
majority in principal amount of the Outstanding Securities of any series (or,
in the case of certain defaults or Events of Default, all series of
Securities), on behalf of the Holders of all the Securities of such series (or
all of the Securities, as the case may be), to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults or Events of
Default under the Indenture and their consequences, prior to any declaration
accelerating the maturity of such Securities, or subject to certain conditions,
rescind a declaration of acceleration and its consequences with respect to such
Securities.  Any such consent or waiver
by the Holder of this Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note that may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Note or
such other Note.

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note in the manner,
at the respective times, at the rate and in the coin or currency herein
prescribed.

 

Notwithstanding any other
provision of the Indenture to the contrary, no recourse shall be had, whether
by levy or execution or otherwise, for the payment of any sums due under the
Securities, including, without limitation, the principal of, premium, if any,
or interest payable under the Securities, or for the payment or performance of
any obligation under, or for any claim based on, the Indenture or otherwise in
respect thereof, against any partner of the Issuer, whether limited or general,
including Simon Property Group, Inc. or such partner’s assets or against
any principal, shareholder, officer, director, trustee or employee of such
partner.  It is expressly understood that
the sole remedies under the Securities and the Indenture or under any other
document with respect to the Securities, against such parties with respect to
such amounts, obligations or claims shall be against the Issuer.

 

This Note is issuable
only in registered form without Coupons in denominations of $2,000 and integral
multiples of $1,000 in excess thereof. 
This Note may be exchanged for a like aggregate principal amount of
Notes of other authorized denominations at the office or agency of the Issuer
in The Borough of Manhattan, The City of New York, in the manner and subject to
the limitations provided in the Indenture, but without the payment of any
service charge, except for any tax or other governmental charge imposed in
connection therewith.

 

Upon due presentment for
registration of transfer of this Note at the office or agency of the Issuer in
The Borough of Manhattan, The City of New York, one or more new Notes of
authorized denominations in an equal aggregate principal amount shall be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Indenture, without charge, except for any tax or other governmental charge
imposed in connection therewith.

 

The Issuer, the
Trustee and any authorized agent of the Issuer or the Trustee may deem and treat
the Person in whose name this Note is registered as the absolute owner of this
Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon), for the purpose of receiving
payment of, or on account of, the principal and any premium hereof or hereon,
and subject to the provisions on the face hereof, interest hereon, and for all
other purposes, and neither the

 

A-8

 

Issuer nor the Trustee nor any authorized agent of the
Issuer or the Trustee shall be affected by any notice to the contrary.

 

This Note, including the
validity hereof, and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York, and for all purposes shall
be construed in accordance with the laws of such state, except as may otherwise
be required by mandatory provisions of law.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

A-9

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

TEN COM – as tenants in common

UNIF GIFT MIN ACT –             Custodian       (Cust)        

(minor) under Uniform Gifts to Minors Act                               
(State)

TEN ENT – as tenants by the entireties

JT TEN – as joint tenants with right of survivorship and not as tenants
in common

 

Additional abbreviations
may also be used though not in the above list.

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto

	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE

  
	
   

  

(Please print or
typewrite name and address including postal zip code of assignee.)

 

This Note and all rights thereunder hereby irrevocably constituting and
appointing Attorney to transfer this Note on the books of the Trustee, with
full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice: The signature(s) on this Assignment
  must correspond with the name(s) as written upon the face of this Note
  in every particular, without alteration or enlargement or any change
  whatsoever.

  

 

A-10

 

ASSIGNMENT & TRANSFER CERTIFICATE

 

TO BE COMPLETED AND DELIVERED
WITH THIS NOTE TO THE TRUSTEE IF THE UNDERSIGNED REGISTERED HOLDER WISHES TO
SELL, ASSIGN AND TRANSFER NOTE:

 

In connection with the resale or other transfer of
this Note occurring prior to the time the legend originally set forth on the
face of this Note (or one or more predecessor Notes) restricting resales
and other transfers thereof has been removed in accordance with the procedures
set forth in the Indenture (other than a resale or other transfer made to the
Operating Partnership or to, by, through, or in a transaction approved by an
Initial Purchaser), the undersigned registered holder certifies that without
utilizing any general solicitation or general advertising:

 

[CHECK ONE]

 

o                                    (a)                                  Such
Note is being transferred by the undersigned registered holder to a “qualified
institutional buyer,” as defined in Rule 144A under the Securities Act of
1933, as amended, pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Rule 144A thereunder.

 

or

 

o                                    (b)                                 Such
Note is being transferred by the undersigned registered holder to an
institutional investor which is an “accredited investor,” as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended, and
that the undersigned has been advised by the prospective transferee that such
transferee shall hold such Note for its own account, or as a fiduciary or agent
for others (which others are also institutional accredited investors, unless
such transferee is a bank acting in its fiduciary capacity), for investment
purposes and not for distribution, subject to any requirement of law that the
disposition of such transferee’s property shall at all times be and remain
within its control.

or

 

o                                    (c)                                  Such
Note is being transferred by the undersigned registered holder to an
institutional investor which is a person that is not a “U.S. person” (or
acquiring such Note for the account or benefit of a U.S. person) in an “offshore
transaction,” as such terms are defined in Regulation S under the
Securities Act of 1933, as amended, pursuant to the exemption from registration
under the Securities Act of 1933, as amended, provided by Regulation S
thereunder.

 

A-11

 

If none of the foregoing
boxes are checked, then, so long as this Note shall bear a legend on the face
thereof restricting resales and other transfers thereof (except in the case of
a resale or other transfer made to the Operating Partnership or to, by,
through, or in a transaction approved by, an Initial Purchaser), the Trustee
shall not be obligated to register such Note in the name of any Person other
than the registered holder thereof and until the conditions to any such
registration of transfer set forth in this Note and in the Indenture shall have
been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  The signature of the registered holder must
  correspond with the name as written upon the face of this Note in every
  particular, without alteration or enlargement or any change whatsoever.

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (a) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that (i) it is a “qualified
institutional buyer,” as defined in Rule 144A under the Securities Act of
1933, as amended, and acknowledges that the undersigned either has received
such information regarding the Operating Partnership as the undersigned
transferee has requested pursuant to Rule 144A or has determined not to
request such information, (ii) this instrument has been executed on behalf
of the undersigned transferee by one of its executive officers and (iii) it
is aware that the registered holder of this Note is relying upon the
undersigned transferee’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.  The undersigned transferee acknowledges and
agrees that this Note has not been registered under the Securities Act of 1933,
as amended, and may not be transferred except in accordance with the resale and
other transfer restrictions set forth in the legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (b) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that it is an institutional investor and an “accredited
investor,” as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act of 1933, as amended, and that this instrument has been
executed on behalf of the undersigned transferee by one of its executive
officers.  The undersigned transferee
undertakes to hold this Note acquired from the registered holder thereof for
its own account, or as a fiduciary or agent for others (which others are also
institutional accredited investors, unless such transferee is a bank acting in
its fiduciary capacity), for investment purposes and not for distribution,
subject to any requirement of law that the disposition of the undersigned
transferee’s property shall at all times be and remain within its control.  The undersigned acknowledges and agrees that
this Note has not been registered under the Securities Act of 1933, as amended,
and may

 

A-12

 

not be transferred except in accordance with the
resale and other transfer restrictions set forth in the legend on the face
thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (c) ABOVE IS CHECKED:

 

The undersigned transferee represents and warrants
that it is an institutional investor and that it is not a U.S. person (as defined
in Regulation S under the Securities Act of 1933, as amended) and it
is acquiring this Note from the registered holder thereof in an “offshore
transaction” (as defined in Regulation S) pursuant to the exemption
from registration under the Securities Act of 1933, as amended, provided by
Regulation S thereunder.  The
undersigned transferee acknowledges and agrees that this Note has not been
registered under the Securities Act of 1933, as amended, and may not be
transferred except in accordance with the resale and other transfer
restrictions set forth in the legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

A-13

 

Exhibit B

 

FORM OF INITIAL REGULATION S GLOBAL
NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THIS NOTE WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $2,000 ($100,000 FOR INSTITUTIONAL
ACCREDITED INVESTORS) AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR
TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE (OR ANY SUBSEQUENT
REOPENING OF THE NOTES OF THIS SERIES) AND THE LAST DATE ON WHICH THE OPERATING
PARTNERSHIP OR ANY AFFILIATE OF THE OPERATING PARTNERSHIP WAS THE OWNER OF THIS
NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (a) TO THE OPERATING
PARTNERSHIP OR ONE OF THE INITIAL PURCHASERS OR BY, THROUGH OR IN A TRANSACTION
APPROVED BY, AN INITIAL PURCHASER, (b) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (c) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (d) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES
ACT) ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS MUST ALSO BE INSTITUTIONAL ACCREDITED INVESTORS
UNLESS SUCH TRANSFEREE IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, (e) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
TO AN INSTITUTION THAT IS NOT A U.S. PERSON (AND WAS NOT PURCHASING FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON) WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, OR (f) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS NOTE BEING COMPLETED AND DELIVERED BY THE TRANSFEROR
AND, IF APPLICABLE, THE TRANSFEREE TO THE TRUSTEE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT RELATING TO ALL NOTES OF THE SERIES.

 

B-1

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS CERTIFICATE
IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS
CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE
THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

 

	
  REGISTERED

  	
  REGISTERED

  
	
  NO. [      ]

  	
  PRINCIPAL AMOUNT

  
	
  CUSIP NO. [                           ]

  	
  $[                                       ]

  

 

REGULATION S GLOBAL SECURITY

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

Simon Property Group,
L.P., a Delaware limited partnership (the “Issuer,” which term includes any
successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co. or its registered assigns, the
principal sum of [                                            ]
dollars on [June 1, 2011/December 1, 2015] (the “Maturity Date”), and
to pay interest thereon from November 15, 2005, semi-annually in arrears
on June 1 and December 1 of each year (each, an “Interest Payment
Date”), commencing on June 1, 2006,
and on the Maturity Date, at the rate of [5.375/5.75]% per annum, until payment
of said principal sum has been made or duly provided for.

 

The interest so payable
and punctually paid or duly provided for on any Interest Payment Date and on
the Maturity Date shall be paid to the Holder in whose name this Note (or one
or more predecessor Notes) is registered in the Security Register
applicable to this Note at the close of business on the “Record Date” for such
payment, which shall be the 15th calendar day immediately prior to
such payment date or the Maturity Date, as the case may be, regardless of
whether such day is a Business Day (as defined below).  Any interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Holder in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on a
subsequent record date for the payment of such defaulted interest (which shall
be not less than 10 calendar days prior to the date of the payment of such
defaulted interest) established by notice given by mail by or on behalf of
the Issuer to the Holders of the Notes not less than 10 calendar days preceding
such subsequent record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture (as defined below).  Interest on this Note shall be computed on
the basis of a 360-day year of twelve 30-day months.

 

B-2

 

Interest payable on this
Note on any Interest Payment Date and on the Maturity Date, as the case may be,
shall be the amount of interest accrued from and including the immediately
preceding Interest Payment Date (or from and including November 15, 2005,
in the case of the initial Interest Payment Date) to but excluding the
applicable Interest Payment Date or the Maturity Date, as the case may be.  If any date for the payment of principal,
premium, if any, interest on, or any other amount with respect to, this Note
(each a “Payment Date”) falls on a day that is not a Business Day, the
principal, premium, if any, or interest payable with respect to such Payment
Date shall be made on the next succeeding Business Day with the same force and
effect as if made on such Payment Date, and no interest shall accrue on the
amount so payable for the period from and after such Payment Date to such next
succeeding Business Day.  “Business Day”
means any day, other than a Saturday or a Sunday on which banking institutions
in New York, New York are open for business.

 

If this Note is exchanged
in an Exchange Offer prior to the Record Date for the first Interest Payment
Date following such exchange, accrued and unpaid interest, if any, on this
Note, up to but not including the date of issuance of the Note(s) issued
in exchange (the “Exchange Note”) for this Note, shall be paid on the
first Interest Payment Date for such Exchange Note(s) to the Holder or
Holders of such Exchange Note(s) on the first Record Date with respect to
such Exchange Note(s).  If this Note is
exchanged in an Exchange Offer subsequent to the Record Date for the first
Interest Payment Date following such exchange but on or prior to the Interest
Payment Date, then any such accrued and unpaid interest with respect to this
Note and any accrued and unpaid interest on the Exchange Note(s) issued in
exchange for this Note, through the day before such Interest Payment Date,
shall be paid on such Interest Payment Date to the Holder of this Note on the
Record Date.

 

The Holder of this Note
is entitled to the benefits of the Registration Rights Agreement dated November 15,
2005 (the “Registration Rights Agreement”) among the Issuer and Citigroup
Global Markets Inc., J.P. Morgan Securities Inc., UBS Securities LLC and
Wachovia Capital Markets, LLC (collectively, the “Initial Purchasers”).

 

If the Operating
Partnership fails to comply with certain provisions of the Registration Rights
Agreement, in each case as described below, then a special interest premium
(the “Special Interest Premium”) shall become payable in respect of the Notes as
follows:

 

If (i) a
registration statement with respect to the Exchange Notes (the “Exchange Offer
Registration Statement”) is not filed with the Commission on or prior to
the 180th day following the Closing Date, (ii) the Exchange Offer
Registration Statement is not declared effective on or prior to the 210th day
following the Closing Date, (iii) the Exchange Offer is not completed on
or prior to the 240th day following the Closing Date, (iv) the shelf
registration statement covering resales of the Notes (the “Shelf Registration
Statement”) is not filed with the SEC on or prior to the 60th day
following the date the obligation arises or (v) the Shelf Registration
Statement is not declared effective on or prior to the 60th day following the
date the Shelf Registration Statement was filed, he Special Interest Premium
shall accrue from and including the next day following each of (a) such 180-day
period in the case of clause (i) above, (b) such 210-day period in
the case of clause (ii) above, c) such 240-day period in the case of
clause (iii) above, and (d) such 60-day periods in the case of
clauses (iv) and (v) above, in each case at a rate equal to 0.25% per
annum.  The aggregate amount of the
Special Interest Premium payable pursuant to the above provisions shall in no
event exceed 0.25% per annum.  If the
Exchange Offer Registration Statement is not declared effective on or prior to
the 210th day following the Closing Date and the Operating Partnership shall
request the Holder of this Note to provide the information called for by the
Registration Rights Agreement for inclusion in the Shelf Registration Statement
and the Holder of this Note does not deliver such information to the Operating
Partnership when required pursuant to the Registration Rights Agreement, then
the Holder of this Note shall not be entitled to any such increase in the
interest rate for any day after the Operating Partnership has filed the Shelf
Registration Statement.

 

B-3

 

Upon (1) the filing of the Exchange Offer
Registration statement after the 180-day period described in clause (i), (2) the
effectiveness of the Exchange Offer Registration Statement after the 210-day
period described in clause (ii) above, (3) the completion of the
Exchange Offer after the 240-day period described in clause (iii) above, (4) the
filing of the Shelf Registration Statement after the 60-day period described in
clause (iv) above or (5) the effectiveness of the Shelf Registration
Statement after the 60-day period described in clause (v) above, the
interest rate on this Note from the date of such effectiveness or completion,
as the case may be, shall be reduced to the original interest rate provided for
herein.

 

If a Shelf Registration
Statement is declared effective, and if the Operating Partnership fails to keep
such Shelf Registration Statement continuously (x) effective or
(y) useable for resales for the period required by the Registration Rights
Agreement due to certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events, or because
the prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, and such failure continues for more
than 60 days (whether or not consecutive) in any 12-month period (the 61st
day being referred to as the “Default Day”), then from the Default Day until
the earlier of (i) the date that is the second anniversary of the Closing
Date (or, if Rule 144(k) of the Securities Act is amended to provide
a shorter restrictive period, the end of such shorter period) or (ii) the
date as of which this Note is sold pursuant to the Shelf Registration
Statement, the Special Interest Premium shall accrue at a rate equal to 0.25%
per annum.

 

The principal of this
Note payable on the Maturity Date shall be paid against presentation and
surrender of this Note at the office or agency of the Issuer maintained for
that purpose in The Borough of Manhattan, The City of New York.  The Issuer hereby initially designates the
Corporate Trust Office of the Trustee in The City of New York as the office to
be maintained by it where Notes may be presented for payment, registration of
transfer or exchange, and where notices to or demands upon the Issuer in
respect of the Notes or the Indenture referred to on the reverse hereof may be
served.

 

Payments of principal and
interest in respect of this Note shall be made by wire transfer of immediately
available funds in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private
debts.

 

Reference is made to the
further provisions of this Note set forth on the reverse hereof after the
Trustee’s Certificate of Authentication. 
Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.

 

This Note shall not be
entitled to the benefits of the Indenture or be valid or obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by the Trustee under such Indenture.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

B-4

 

IN WITNESS WHEREOF,
the Issuer has caused this instrument to be signed manually or by facsimile by
its authorized officers.

 

Dated:  November 15, 2005

 

	
   

  	
  SIMON PROPERTY GROUP, L.P.

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  SIMON PROPERTY GROUP,
  INC.

  
	
   

  	
   

  	
  as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

B-5

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

B-6

 

[REVERSE OF NOTE]

 

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

This security is one of a
duly authorized issue of debt securities of the Issuer (hereinafter called the “Securities”),
issued or to be issued under and pursuant to an Indenture dated as of November 26,
1996 (herein called the “Indenture”), duly executed and delivered by the Issuer
to JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as
Trustee (herein called the “Trustee,” which term includes any successor trustee
under the Indenture with respect to the series of Securities of which this Note
is a part), to which Indenture and all indentures supplemental thereto relating
to this Note (including, without limitation, the Sixteenth Supplemental
Indenture, dated as of November 15, 2005, between the Issuer and the
Trustee) reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Issuer and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered and for
the definition of capitalized terms used hereby and not otherwise defined.  The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any),
and may otherwise vary as provided in the Indenture or any indenture
supplemental thereto.  This Security is
one of a series designated as the Simon Property Group, L.P. [5.375/5.75]%
Notes due [2011/2015], initially limited in aggregate principal amount to $[500,000,000/600,000,000]
(the “Notes”).

 

In case an Event of
Default with respect to the Notes shall have occurred and be continuing, the
principal amount of the Notes and the Make-Whole Amount may be declared
accelerated and thereupon become due and payable, in the manner, with the
effect, and subject to the conditions provided in the Indenture.

 

The Notes may be redeemed
at any time at the option of the Issuer, in whole or from time to time in part,
at a redemption price equal to the sum of (i) 100% of the principal amount
of the Notes being redeemed plus accrued interest thereon to the Redemption
Date and (ii) the Make-Whole Amount, if any, with respect to such
Notes.  If the Notes are redeemed within
90 days of the Maturity Date, the redemption price shall not include the
Make-Whole Amount.  Notice of any
optional redemption shall be given to Holders at their addresses, as shown in
the Security Register for the Notes, not more than 60 nor less than 30 days
prior to the date fixed for redemption. 
The notice of redemption shall specify, among other items, the
redemption price and the principal amount of the Notes to be redeemed.

 

The Indenture contains
provisions permitting the Issuer and the Trustee, with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as one
class), evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or
modifying in any manner the rights of the Holders of the Securities of each
series; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security so affected, (i) change
the Stated Maturity of the principal of, or premium, (if any) or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate or amount of interest thereon or any
premium payable upon the redemption or acceleration thereof, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, the principal of any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the

 

B-7

 

enforcement of any
such payment on or after the Stated Maturity thereof, or (ii) reduce the
aforesaid percentage of Securities the Holders of which are required to consent
to any such supplemental indenture, or (iii) reduce the percentage of
Securities the Holders of which are required to consent to any waiver of compliance
with certain provisions of the Indenture or any waiver of certain defaults and
consequences thereunder or to reduce the quorum or voting requirements set
forth in the Indenture, or (iv) effect certain other changes to the
Indenture or any supplemental indenture or in the rights of Holders of the
Securities.  The Indenture also permits
the Holders of a majority in principal amount of the Outstanding Securities of
any series (or, in the case of certain defaults or Events of Default, all
series of Securities), on behalf of the Holders of all the Securities of such
series (or all of the Securities, as the case may be), to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
or Events of Default under the Indenture and their consequences, prior to any
declaration accelerating the maturity of such Securities, or subject to certain
conditions, rescind a declaration of acceleration and its consequences with
respect to such Securities.  Any such
consent or waiver by the Holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note that may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is
made upon this Note or such other Note.

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note in the manner,
at the respective times, at the rate and in the coin or currency herein
prescribed.

 

Notwithstanding any other
provision of the Indenture to the contrary, no recourse shall be had, whether
by levy or execution or otherwise, for the payment of any sums due under the
Securities, including, without limitation, the principal of, premium, if any,
or interest payable under the Securities, or for the payment or performance of
any obligation under, or for any claim based on, the Indenture or otherwise in
respect thereof, against any partner of the Issuer, whether limited or general,
including Simon Property Group, Inc. or such partner’s assets or against
any principal, shareholder, officer, director, trustee or employee of such
partner.  It is expressly understood that
the sole remedies under the Securities and the Indenture or under any other
document with respect to the Securities, against such parties with respect to
such amounts, obligations or claims shall be against the Issuer.

 

This Note is issuable
only in registered form without Coupons in denominations of $2,000 and integral
multiples of $1,000 in excess thereof. 
This Note may be exchanged for a like aggregate principal amount of Notes
of other authorized denominations at the office or agency of the Issuer in The
Borough of Manhattan, The City of New York, in the manner and subject to the
limitations provided in the Indenture, but without the payment of any service
charge, except for any tax or other governmental charge imposed in connection
therewith.

 

Upon due presentment for
registration of transfer of this Note at the office or agency of the Issuer in
The Borough of Manhattan, The City of New York, one or more new Notes of
authorized denominations in an equal aggregate principal amount shall be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Indenture, without charge, except for any tax or other governmental charge
imposed in connection therewith.

 

The Issuer, the Trustee
and any authorized agent of the Issuer or the Trustee may deem and treat the
Person in whose name this Note is registered as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal and any premium hereof or hereon, and subject to
the provisions on the face hereof, interest hereon, and for all other purposes,
and neither the

 

B-8

 

Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.

 

This Note, including the
validity hereof, and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York, and for all purposes shall
be construed in accordance with the laws of such state, except as may otherwise
be required by mandatory provisions of law.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

B-9

 

ABBREVIATIONS

 

The following abbreviations,
when used in the inscription on the face of this Note, shall be construed as
though they were written out in full according to applicable laws or
regulations:

 

TEN COM – as tenants in common

UNIF GIFT MIN ACT –
            Custodian
      (Cust)        

(minor) under Uniform Gifts to Minors Act
                              
(State)

TEN ENT – as tenants by the entireties

JT TEN – as joint tenants with right of survivorship and not as tenants
in common

 

Additional abbreviations
may also be used though not in the above list.

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto

	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE

  
	
   

  

(Please print or
typewrite name and address including postal zip code of assignee.)

 

This Note and all rights thereunder hereby irrevocably constituting and
appointing Attorney to transfer this Note on the books of the Trustee, with
full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice:    The signature(s) on
  this Assignment must correspond with the name(s) as written upon the
  face of this Note in every particular, without alteration or enlargement or
  any change whatsoever.

  

 

B-10

 

ASSIGNMENT & TRANSFER CERTIFICATE

 

TO BE COMPLETED AND DELIVERED
WITH THIS NOTE TO THE TRUSTEE IF THE UNDERSIGNED REGISTERED HOLDER WISHES TO
SELL, ASSIGN AND TRANSFER NOTE:

 

In connection with the
resale or other transfer of this Note occurring prior to the time the legend originally
set forth on the face of this Note (or one or more predecessor
Notes) restricting resales and other transfers thereof has been removed in
accordance with the procedures set forth in the Indenture (other than a resale
or other transfer made to the Operating Partnership or to, by, through, or in a
transaction approved by an Initial Purchaser), the undersigned registered
holder certifies that without utilizing any general solicitation or general
advertising:

 

[CHECK ONE]

 

	
  o

  	
   

  	
  (a)

  	
   

  	
  Such Note is being transferred by the undersigned registered holder
  to a “qualified institutional buyer,” as defined in Rule 144A under the
  Securities Act of 1933, as amended, pursuant to the exemption from
  registration under the Securities Act of 1933, as amended, provided by Rule 144A
  thereunder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (b)

  	
   

  	
  Such Note is being transferred by the undersigned registered holder
  to an institutional investor which is an “accredited investor,” as defined in
  Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933,
  as amended, and that the undersigned has been advised by the prospective
  transferee that such transferee shall hold such Note for its own account, or
  as a fiduciary or agent for others (which others are also institutional
  accredited investors, unless such transferee is a bank acting in its
  fiduciary capacity), for investment purposes and not for distribution,
  subject to any requirement of law that the disposition of such transferee’s
  property shall at all times be and remain within its control.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (c)

  	
   

  	
  Such Note is being transferred by the undersigned registered holder
  to an institutional investor which is a person that is not a “U.S. person”
  (or acquiring such Note for the account or benefit of a U.S. person) in
  an “offshore transaction,” as such terms are defined in Regulation S
  under the Securities Act of 1933, as amended, pursuant to the exemption from
  registration under the Securities Act of 1933, as amended, provided by
  Regulation S thereunder.

  

 

B-11

 

If none of the foregoing
boxes are checked, then, so long as this Note shall bear a legend on the face
thereof restricting resales and other transfers thereof (except in the case of
a resale or other transfer made to the Operating Partnership or to, by,
through, or in a transaction approved by, an Initial Purchaser), the Trustee
shall not be obligated to register such Note in the name of any Person other
than the registered holder thereof and until the conditions to any such
registration of transfer set forth in this Note and in the Indenture shall have
been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  The signature of the registered holder must
  correspond with the name as written upon the face of this Note in every
  particular, without alteration or enlargement or any change whatsoever.

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (a) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that (i) it is a “qualified
institutional buyer,” as defined in Rule 144A under the Securities Act of
1933, as amended, and acknowledges that the undersigned either has received
such information regarding the Operating Partnership as the undersigned
transferee has requested pursuant to Rule 144A or has determined not to
request such information, (ii) this instrument has been executed on behalf
of the undersigned transferee by one of its executive officers and (iii) it
is aware that the registered holder of this Note is relying upon the
undersigned transferee’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.  The undersigned transferee acknowledges and
agrees that this Note has not been registered under the Securities Act of 1933,
as amended, and may not be transferred except in accordance with the resale and
other transfer restrictions set forth in the legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (b) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that it is an institutional investor and an “accredited
investor,” as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act of 1933, as amended, and that this instrument has been
executed on behalf of the undersigned transferee by one of its executive
officers.  The undersigned transferee
undertakes to hold this Note acquired from the registered holder thereof for
its own account, or as a fiduciary or agent for others (which others are also
institutional accredited investors, unless such transferee is a bank acting in
its fiduciary capacity), for investment purposes and not for distribution,
subject to any requirement of law that the disposition of the undersigned transferee’s
property shall at all times be and remain within its control.  The undersigned acknowledges and agrees that
this Note has not been registered under the Securities Act of 1933, as amended,
and may

 

B-12

 

not be transferred
except in accordance with the resale and other transfer restrictions set forth
in the legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (c) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that it is an institutional investor and
that it is not a U.S. person (as defined in Regulation S under the
Securities Act of 1933, as amended) and it is acquiring this Note from the
registered holder thereof in an “offshore transaction” (as defined in
Regulation S) pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Regulation S
thereunder.  The undersigned transferee
acknowledges and agrees that this Note has not been registered under the
Securities Act of 1933, as amended, and may not be transferred except in
accordance with the resale and other transfer restrictions set forth in the
legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

B-13

 

Exhibit C

 

FORM OF INITIAL CERTIFICATED NOTE

 

THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, NEITHER THIS NOTE NOR ANY
INTEREST HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION, THIS
NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS
OF $100,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR
TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE (OR ANY SUBSEQUENT
REOPENING OF THE NOTES OF THIS SERIES) AND THE LAST DATE ON WHICH THE OPERATING
PARTNERSHIP OR ANY AFFILIATE OF THE OPERATING PARTNERSHIP WAS THE OWNER OF THIS
NOTE (OR ANY PREDECESSOR OF SUCH NOTE), ONLY (a) TO THE OPERATING
PARTNERSHIP OR ONE OF THE INITIAL PURCHASERS OR BY, THROUGH OR IN A TRANSACTION
APPROVED BY, AN INITIAL PURCHASER, (b) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (c) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (d) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN
RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES
ACT) ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS MUST ALSO BE INSTITUTIONAL ACCREDITED INVESTORS
UNLESS SUCH TRANSFEREE IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, (e) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
TO AN INSTITUTION THAT IS NOT A U.S. PERSON (AND WAS NOT PURCHASING FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON) WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, OR (f) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS NOTE BEING COMPLETED AND DELIVERED BY THE TRANSFEROR
AND, IF APPLICABLE, THE TRANSFEREE TO THE TRUSTEE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT RELATING TO ALL NOTES OF THE SERIES.

 

C-1

 

	
  REGISTERED

  	
  REGISTERED

  
	
  NO. [        ]

  	
  PRINCIPAL AMOUNT

  
	
  CUSIP NO. [                 ]

  	
  $[                                              ]

  

 

DEFINITIVE SECURITY

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

Simon Property Group,
L.P., a Delaware limited partnership (the “Issuer,” which term includes any
successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to                                               ,
or registered assigns, the principal sum of                                               
dollars on [June 1, 2011/December 1, 2015] (the “Maturity Date”), and
to pay interest thereon from November 15, 2005, semi-annually in arrears
on June 1 and December 1 of each year (each, an “Interest
Payment Date”), commencing on June 1, 2006, and on the Maturity Date, at
the rate of [5.375/5.75]% per annum, until
payment of said principal sum has been made or duly provided for.

 

The interest so payable and
punctually paid or duly provided for on any Interest Payment Date and on the
Maturity Date shall be paid to the Holder in whose name this Note (or one or
more predecessor Notes) is registered in the Security Register applicable
to this Note at the close of business on the “Record Date” for such payment,
which shall be the 15th calendar day immediately prior to such
payment date or the Maturity Date, as the case may be, regardless of whether
such day is a Business Day (as defined below). 
Any interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may be paid
to the Holder in whose name this Note (or one or more predecessor
Notes) is registered at the close of business on a subsequent record date
for the payment of such defaulted interest (which shall be not less than 10
calendar days prior to the date of the payment of such defaulted
interest) established by notice given by mail by or on behalf of the
Issuer to the Holders of the Notes not less than 10 calendar days preceding
such subsequent record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture (as defined below).  Interest on this Note shall be computed on
the basis of a 360-day year of twelve 30-day months.

 

Interest payable on this
Note on any Interest Payment Date and on the Maturity Date, as the case may be,
shall be the amount of interest accrued from and including the immediately
preceding Interest Payment Date (or from and including November 15, 2005,
in the case of the initial Interest Payment Date) to but excluding the
applicable Interest Payment Date or the Maturity Date, as the case may be.  If any date for the payment of principal,
premium, if any, interest on, or any other amount with respect to, this Note
(each a “Payment Date”) falls on a day that is not a Business Day, the
principal, premium, if any, or interest payable with respect to such Payment
Date shall be made on the next succeeding Business Day with the same force and
effect as if made on such Payment Date, and no interest shall accrue on the amount
so payable for the period from and after such Payment Date to such next
succeeding Business Day.  “Business Day”
means any day, other than a Saturday or a Sunday on which banking institutions
in New York, New York are open for business.

 

If this Note is exchanged
in an Exchange Offer prior to the Record Date for the first Interest Payment
Date following such exchange, accrued and unpaid interest, if any, on this
Note, up to but not including the date of issuance of the Note(s) issued
in exchange (the “Exchange Note”) for this Note, shall be paid on the
first Interest Payment Date for such Exchange Note(s) to the Holder or
Holders of such Exchange Note(s) on the first Record Date with respect to
such Exchange Note(s).  If this Note is

 

C-2

 

exchanged in an
Exchange Offer subsequent to the Record Date for the first Interest Payment
Date following such exchange but on or prior to the Interest Payment Date, then
any such accrued and unpaid interest with respect to this Note and any accrued
and unpaid interest on the Exchange Note(s) issued in exchange for this
Note, through the day before such Interest Payment Date, shall be paid on such
Interest Payment Date to the Holder of this Note on the Record Date.

 

The Holder of this Note
is entitled to the benefits of the Registration Rights Agreement dated November 15,
2005 (the “Registration Rights Agreement”) among the Issuer and Citigroup
Global Markets Inc., J.P. Morgan Securities Inc., UBS Securities LLC and
Wachovia Capital Markets, LLC (collectively, the “Initial Purchasers”).

 

If the Operating
Partnership fails to comply with certain provisions of the Registration Rights
Agreement, in each case as described below, then a special interest premium
(the “Special Interest Premium”) shall become payable in respect of the
Notes as follows:

 

If (i) a
registration statement with respect to the Exchange Notes (the “Exchange Offer
Registration Statement”) is not filed with the Commission on or prior to
the 180th day following the Closing Date, (ii) the Exchange Offer
Registration Statement is not declared effective on or prior to the 210th day
following the Closing Date, (iii) the Exchange Offer is not completed on
or prior to the 240th day following the Closing Date, (iv) the shelf
registration statement covering resales of the Notes (the “Shelf Registration
Statement”) is not filed with the SEC on or prior to the 60th day following the
date the obligation arises or (v) the Shelf Registration Statement is not
declared effective on or prior to the 60th day following the date the Shelf
Registration Statement was filed the Special Interest Premium shall accrue from
and including the next day following each of (a) such 180-day period in
the case of clause (i) above, (b) such 210-day period in the case of
clause (ii) above, (c) such 240-day period in the case of clause (iii) above,
and (d) such 60-day periods in the case of clauses (iv) and (v) above,
in each case at a rate equal to 0.25% per annum.  The aggregate amount of the Special Interest
Premium payable pursuant to the above provisions shall in no event exceed 0.25%
per annum.  If the Exchange Offer
Registration Statement is not declared effective on or prior to the 210th day
following the Closing Date and the Operating Partnership shall request the
Holder of this Note to provide the information called for by the Registration
Rights Agreement for inclusion in the Shelf Registration Statement and the
Holder of this Note does not deliver such information to the Operating Partnership
when required pursuant to the Registration Rights Agreement, then the Holder of
this Note shall not be entitled to any such increase in the interest rate for
any day after the Operating Partnership has filed the Shelf Registration
Statement.  Upon (1) the filing of
the Exchange Offer Registration statement after the 180-day period described in
clause (i), (2) the effectiveness of the Exchange Offer Registration
Statement after the 210-day period described in clause (ii) above (3) the
completion of the Exchange Offer after the 240-day period described in clause (iii) above,
(4) the filing of the Shelf Registration Statement after the 60-day period
described in clause (iv) above or (5) the effectiveness of the Shelf
Registration Statement after the 60-day period described in clause (v) above,
the interest rate on this Note from the date of such effectiveness or
completion, as the case may be, shall be reduced to the original interest rate
provided for herein.

 

If a Shelf Registration
Statement is declared effective, and if the Operating Partnership fails to keep
such Shelf Registration Statement continuously (x) effective or
(y) useable for resales for the period required by the Registration Rights
Agreement due to certain circumstances relating to pending corporate
developments, public filings with the Commission and similar events, or because
the prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, and such failure continues for more
than 60 days (whether or not consecutive) in any 12-month period (the 61st
day being referred to as the “Default Day”), then from the Default Day until
the earlier of (i) the date that is the second anniversary of the Closing
Date (or, if Rule 144(k) of the Securities Act is amended to provide
a shorter restrictive

 

C-3

 

period, the end of
such shorter period) or (ii) the date as of which this Note is sold
pursuant to the Shelf Registration Statement, the Special Interest Premium
shall accrue at a rate equal to 0.25% per annum.

 

The principal of this
Note payable on the Maturity Date shall be paid against presentation and
surrender of this Note at the office or agency of the Issuer maintained for
that purpose in The Borough of Manhattan, The City of New York.  The Issuer hereby initially designates the
Corporate Trust Office of the Trustee in The City of New York as the office to
be maintained by it where Notes may be presented for payment, registration of
transfer or exchange, and where notices to or demands upon the Issuer in
respect of the Notes or the Indenture referred to on the reverse hereof may be
served.

 

Payments of principal and
interest in respect of this Note shall be made by wire transfer of immediately
available funds in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private
debts.

 

Reference is made to the further
provisions of this Note set forth on the reverse hereof after the Trustee’s
Certificate of Authentication.  Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.

 

This Note shall not be
entitled to the benefits of the Indenture or be valid or obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by the Trustee under such Indenture.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

C-4

 

IN WITNESS WHEREOF,
the Issuer has caused this instrument to be signed manually or by facsimile by
its authorized officers.

 

Dated:  November 15, 2005

 

	
   

  	
  SIMON PROPERTY GROUP, L.P.

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  SIMON PROPERTY GROUP,
  INC.

  
	
   

  	
   

  	
  as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

Attest:

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
				

 

C-5

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
					

 

C-6

 

[REVERSE OF NOTE]

 

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

This security is one of a
duly authorized issue of debt securities of the Issuer (hereinafter called the “Securities”),
issued or to be issued under and pursuant to an Indenture dated as of November 26,
1996 (herein called the “Indenture”), duly executed and delivered by the Issuer
to JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as
Trustee (herein called the “Trustee,” which term includes any successor trustee
under the Indenture with respect to the series of Securities of which this Note
is a part), to which Indenture and all indentures supplemental thereto relating
to this Note (including, without limitation, the Sixteenth Supplemental
Indenture, dated as of November 15, 2005, between the Issuer and the
Trustee) reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Trustee,
the Issuer and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered and for the
definition of capitalized terms used hereby and not otherwise defined.  The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any),
and may otherwise vary as provided in the Indenture or any indenture
supplemental thereto.  This Security is
one of a series designated as the Simon Property Group, L.P. [5.375/5.75]% Note
due [2011/2015], initially limited in aggregate principal amount to
$[500,000,000/600,000,000] (the “Notes”).

 

In case an Event of
Default with respect to the Notes shall have occurred and be continuing, the
principal amount of the Notes and the Make-Whole Amount may be declared
accelerated and thereupon become due and payable, in the manner, with the
effect, and subject to the conditions provided in the Indenture.

 

The Notes may be redeemed
at any time at the option of the Issuer, in whole or from time to time in part,
at a redemption price equal to the sum of (i) 100% of the principal amount
of the Notes being redeemed plus accrued interest thereon to the Redemption
Date and (ii) the Make-Whole Amount, if any, with respect to such
Notes.  If the Notes are redeemed within
90 days of the Maturity Date, the redemption price shall not include the
Make-Whole Amount.  Notice of any
optional redemption shall be given to Holders at their addresses, as shown in
the Security Register for the Notes, not more than 60 nor less than 30 days
prior to the date fixed for redemption. 
The notice of redemption shall specify, among other items, the
redemption price and the principal amount of the Notes to be redeemed.

 

The Indenture contains
provisions permitting the Issuer and the Trustee, with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as one
class), evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or
modifying in any manner the rights of the Holders of the Securities of each
series; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security so affected, (i) change
the Stated Maturity of the principal of, or premium, (if any) or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate or amount of interest thereon or any
premium payable upon the redemption or acceleration thereof, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, the principal of any
Security or any premium or interest thereon is payable, or impair the right to
institute suit for the

 

C-7

 

enforcement of any
such payment on or after the Stated Maturity thereof, or (ii) reduce the
aforesaid percentage of Securities the Holders of which are required to consent
to any such supplemental indenture, or (iii) reduce the percentage of
Securities the Holders of which are required to consent to any waiver of
compliance with certain provisions of the Indenture or any waiver of certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the Indenture, or (iv) effect certain other
changes to the Indenture or any supplemental indenture or in the rights of
Holders of the Securities.  The Indenture
also permits the Holders of a majority in principal amount of the Outstanding
Securities of any series (or, in the case of certain defaults or Events of Default,
all series of Securities), on behalf of the Holders of all the Securities of
such series (or all of the Securities, as the case may be), to waive compliance
by the Issuer with certain provisions of the Indenture and certain past
defaults or Events of Default under the Indenture and their consequences, prior
to any declaration accelerating the maturity of such Securities, or subject to
certain conditions, rescind a declaration of acceleration and its consequences
with respect to such Securities.  Any
such consent or waiver by the Holder of this Note (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note that may be issued in
exchange or substitution hereof, irrespective of whether or not any notation
thereof is made upon this Note or such other Note.

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note in the manner,
at the respective times, at the rate and in the coin or currency herein
prescribed.

 

Notwithstanding any other
provision of the Indenture to the contrary, no recourse shall be had, whether
by levy or execution or otherwise, for the payment of any sums due under the
Securities, including, without limitation, the principal of, premium, if any,
or interest payable under the Securities, or for the payment or performance of
any obligation under, or for any claim based on, the Indenture or otherwise in
respect thereof, against any partner of the Issuer, whether limited or general,
including Simon Property Group, Inc. or such partner’s assets or against
any principal, shareholder, officer, director, trustee or employee of such
partner.  It is expressly understood that
the sole remedies under the Securities and the Indenture or under any other
document with respect to the Securities, against such parties with respect to
such amounts, obligations or claims shall be against the Issuer.

 

This Note is issuable
only in registered form without Coupons in denominations of $100,000 and
integral multiples of $1,000 in excess thereof. 
This Note may be exchanged for a like aggregate principal amount of
Notes of other authorized denominations at the office or agency of the Issuer
in The Borough of Manhattan, The City of New York, in the manner and subject to
the limitations provided in the Indenture, but without the payment of any
service charge, except for any tax or other governmental charge imposed in
connection therewith.

 

Upon due presentment for
registration of transfer of this Note at the office or agency of the Issuer in
The Borough of Manhattan, The City of New York, one or more new Notes of
authorized denominations in an equal aggregate principal amount shall be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Indenture, without charge, except for any tax or other governmental charge
imposed in connection therewith.

 

The Issuer, the Trustee
and any authorized agent of the Issuer or the Trustee may deem and treat the
Person in whose name this Note is registered as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal and any premium hereof or hereon, and subject to
the provisions on the face hereof, interest hereon, and for all other purposes,
and neither the

 

C-8

 

Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.

 

This Note, including the
validity hereof, and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York, and for all purposes shall
be construed in accordance with the laws of such state, except as may otherwise
be required by mandatory provisions of law.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

C-9

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

TEN COM – as tenants in common

UNIF GIFT MIN ACT –             Custodian
      (Cust)        

(minor) under Uniform Gifts to Minors Act
                              
(State)

TEN ENT – as tenants by the entireties

JT TEN – as joint tenants with right of survivorship and not as tenants
in common

 

Additional abbreviations
may also be used though not in the above list.

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto

	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE

  
	
   

  

(Please print or
typewrite name and address including postal zip code of assignee.)

 

This Note and all rights thereunder hereby irrevocably constituting and
appointing Attorney to transfer this Note on the books of the Trustee, with
full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice: The signature(s) on this Assignment
  must correspond with the name(s) as written upon the face of this Note
  in every particular, without alteration or enlargement or any change
  whatsoever.

  
					

 

C-10

 

ASSIGNMENT & TRANSFER CERTIFICATE

 

TO BE COMPLETED AND DELIVERED
WITH THIS NOTE TO THE TRUSTEE IF THE UNDERSIGNED REGISTERED HOLDER WISHES TO
SELL, ASSIGN AND TRANSFER NOTE:

 

In connection with the
resale or other transfer of this Note occurring prior to the time the legend
originally set forth on the face of this Note (or one or more predecessor
Notes) restricting resales and other transfers thereof has been removed in
accordance with the procedures set forth in the Indenture (other than a resale
or other transfer made to the Operating Partnership or to, by, through, or in a
transaction approved by an Initial Purchaser), the undersigned registered
holder certifies that without utilizing any general solicitation or general
advertising:

 

[CHECK ONE]

 

	
  o

  	
   

  	
  (a)

  	
   

  	
  Such Note is being transferred by the undersigned registered holder
  to a “qualified institutional buyer,” as defined in Rule 144A under the
  Securities Act of 1933, as amended, pursuant to the exemption from
  registration under the Securities Act of 1933, as amended, provided by Rule 144A
  thereunder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (b)

  	
   

  	
  Such Note is being transferred by the undersigned registered holder
  to an institutional investor which is an “accredited investor,” as defined in
  Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
  1933, as amended, and that the undersigned has been advised by the
  prospective transferee that such transferee shall hold such Note for its own
  account, or as a fiduciary or agent for others (which others are also
  institutional accredited investors, unless such transferee is a bank acting
  in its fiduciary capacity), for investment purposes and not for distribution,
  subject to any requirement of law that the disposition of such transferee’s
  property shall at all times be and remain within its control.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  (c)

  	
   

  	
  Such Note is being transferred by the undersigned registered holder
  to an institutional investor which is a person that is not a “U.S. person”
  (or acquiring such Note for the account or benefit of a U.S. person) in
  an “offshore transaction,” as such terms are defined in Regulation S
  under the Securities Act of 1933, as amended, pursuant to the exemption from
  registration under the Securities Act of 1933, as amended, provided by
  Regulation S thereunder.

  

 

C-11

 

If none of the foregoing
boxes are checked, then, so long as this Note shall bear a legend on the face
thereof restricting resales and other transfers thereof (except in the case of
a resale or other transfer made to the Operating Partnership or to, by,
through, or in a transaction approved by, an Initial Purchaser), the Trustee
shall not be obligated to register such Note in the name of any Person other
than the registered holder thereof and until the conditions to any such
registration of transfer set forth in this Note and in the Indenture shall have
been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of registered holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  The signature of the registered holder must
  correspond with the name as written upon the face of this Note in every
  particular, without alteration or enlargement or any change whatsoever.

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (a) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that (i) it is a “qualified institutional
buyer,” as defined in Rule 144A under the Securities Act of 1933, as
amended, and acknowledges that the undersigned either has received such
information regarding the Operating Partnership as the undersigned transferee
has requested pursuant to Rule 144A or has determined not to request such
information, (ii) this instrument has been executed on behalf of the
undersigned transferee by one of its executive officers and (iii) it is
aware that the registered holder of this Note is relying upon the undersigned
transferee’s foregoing representations in order to claim the exemption from
registration provided by Rule 144A. 
The undersigned transferee acknowledges and agrees that this Note has
not been registered under the Securities Act of 1933, as amended, and may not
be transferred except in accordance with the resale and other transfer
restrictions set forth in the legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (b) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that it is an institutional investor and an “accredited
investor,” as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act of 1933, as amended, and that this instrument has been
executed on behalf of the undersigned transferee by one of its executive
officers.  The undersigned transferee
undertakes to hold this Note acquired from the registered holder thereof for
its own account, or as a fiduciary or agent for others (which others are also
institutional accredited investors, unless such transferee is a bank acting in
its fiduciary capacity), for investment purposes and not for distribution,
subject to any requirement of law that the disposition of the undersigned transferee’s
property shall at all times be and remain within its control.  The undersigned acknowledges and agrees that
this Note has not been registered under the Securities Act of 1933, as amended,
and may

 

C-12

 

not be transferred
except in accordance with the resale and other transfer restrictions set forth
in the legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

TO BE COMPLETED BY TRANSFEREE

IF (c) ABOVE IS CHECKED:

 

The undersigned
transferee represents and warrants that it is an institutional investor and
that it is not a U.S. person (as defined in Regulation S under the
Securities Act of 1933, as amended) and it is acquiring this Note from the
registered holder thereof in an “offshore transaction” (as defined in
Regulation S) pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Regulation S
thereunder.  The undersigned transferee
acknowledges and agrees that this Note has not been registered under the
Securities Act of 1933, as amended, and may not be transferred except in
accordance with the resale and other transfer restrictions set forth in the
legend on the face thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Type or print name of transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Executive Officer

  
						

 

C-13

 

Exhibit D

 

FORM OF EXCHANGE GLOBAL NOTE

 

UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC,
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL THIS CERTIFICATE
IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS
CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE
THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

 

	
  REGISTERED

  	
  REGISTERED

  
	
  NO. [            ]

  	
  PRINCIPAL AMOUNT

  
	
  CUSIP NO. [                        ]

  	
  $[                                          ]

  

 

GLOBAL SECURITY

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

Simon Property Group,
L.P., a Delaware limited partnership (the “Issuer,” which term includes any
successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co. or its registered assigns, the
principal sum of [                      ]
dollars on [June 1, 2011/December 1, 2015]  (the “Maturity Date”), and to pay interest
thereon from November 15, 2005, semi-annually in arrears on June 1 and
December 1 of each year (each, an “Interest Payment Date”), commencing on June 1,
2006, and on the Maturity Date, at the rate of [5.375/5.75]% per annum, until
payment of said principal sum has been made or duly provided for.

 

The interest so payable
and punctually paid or duly provided for on any Interest Payment Date and on
the Maturity Date shall be paid to the Holder in whose name this Note (or one
or more predecessor Notes) is registered in the Security Register
applicable to this Note at the close of business on the “Record Date” for such
payment, which shall be the 15th calendar day immediately prior to
such payment date or the Maturity Date, as the case may be, regardless of
whether such day is a Business Day (as defined below).  Any interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Holder in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on a subsequent
record date for the payment of such defaulted interest (which shall be not less
than 10 calendar days prior to the date of the payment of such defaulted
interest) established by notice given by mail by or on behalf of the
Issuer to the Holders of the Notes not less than 10 calendar days preceding
such subsequent record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more

 

D-1

 

fully provided in
the Indenture (as defined below). 
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.

 

Interest payable on this
Note on any Interest Payment Date and on the Maturity Date, as the case may be,
shall be the amount of interest accrued from and including the immediately
preceding Interest Payment Date (or from and including November 15, 2005,
in the case of the initial Interest Payment Date) to but excluding the
applicable Interest Payment Date or the Maturity Date, as the case may be.  If any date for the payment of principal,
premium, if any, interest on, or any other amount with respect to, this Note
(each a “Payment Date”) falls on a day that is not a Business Day, the
principal, premium, if any, or interest payable with respect to such Payment
Date shall be made on the next succeeding Business Day with the same force and
effect as if made on such Payment Date, and no interest shall accrue on the
amount so payable for the period from and after such Payment Date to such next
succeeding Business Day.  “Business Day”
means any day, other than a Saturday or a Sunday on which banking institutions
in New York, New York are open for business.

 

The principal of this
Note payable on the Maturity Date shall be paid against presentation and
surrender of this Note at the office or agency of the Issuer maintained for
that purpose in The Borough of Manhattan, The City of New York.  The Issuer hereby initially designates the
Corporate Trust Office of the Trustee in The City of New York as the office to
be maintained by it where Notes may be presented for payment, registration of
transfer or exchange, and where notices to or demands upon the Issuer in
respect of the Notes or the Indenture referred to on the reverse hereof may be
served.

 

Payments of principal and
interest in respect of this Note shall be made by wire transfer of immediately
available funds in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private
debts.

 

Reference is made to the
further provisions of this Note set forth on the reverse hereof after the
Trustee’s Certificate of Authentication. 
Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.

 

This Note shall not be
entitled to the benefits of the Indenture or be valid or obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by the Trustee under such Indenture.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

D-2

 

IN WITNESS WHEREOF,
the Issuer has caused this instrument to be signed manually or by facsimile by
its authorized officers.

 

Dated:                                   ,
20    

 

	
   

  	
  SIMON PROPERTY GROUP, L.P.

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  SIMON PROPERTY GROUP,
  INC.

  
	
   

  	
   

  
	
   

  	
  as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

Attest:

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

D-3

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

D-4

 

[REVERSE OF NOTE]

 

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

This security is one of a
duly authorized issue of debt securities of the Issuer (hereinafter called the “Securities”),
issued or to be issued under and pursuant to an Indenture dated as of November 26,
1996 (herein called the “Indenture”), duly executed and delivered by the Issuer
to JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as
Trustee (herein called the “Trustee,” which term includes any successor trustee
under the Indenture with respect to the series of Securities of which this Note
is a part), to which Indenture and all indentures supplemental thereto relating
to this Note (including, without limitation, the Sixteenth Supplemental
Indenture, dated as of November 15, 2005, between the Issuer and the
Trustee) reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Issuer and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered and for
the definition of capitalized terms used hereby and not otherwise defined.  The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any),
and may otherwise vary as provided in the Indenture or any indenture
supplemental thereto.  This Security is
one of a series designated as the Simon Property Group, L.P. [5.375/5.75]% Note
due [2011/2015], initially limited in aggregate principal amount to
$[500,000,000/600,000,000] (the “Notes”).

 

In case an Event of
Default with respect to the Notes shall have occurred and be continuing, the
principal amount of the Notes and the Make-Whole Amount may be declared
accelerated and thereupon become due and payable, in the manner, with the
effect, and subject to the conditions provided in the Indenture.

 

The Notes may be redeemed
at any time at the option of the Issuer, in whole or from time to time in part,
at a redemption price equal to the sum of (i) 100% of the principal amount
of the Notes being redeemed plus accrued interest thereon to the Redemption
Date and (ii) the Make-Whole Amount, if any, with respect to such
Notes.  If the Notes are redeemed within
90 days of the Maturity Date, the redemption price shall not include the
Make-Whole Amount.  Notice of any
optional redemption shall be given to Holders at their addresses, as shown in
the Security Register for the Notes, not more than 60 nor less than 30 days
prior to the date fixed for redemption. 
The notice of redemption shall specify, among other items, the
redemption price and the principal amount of the Notes to be redeemed.

 

The Indenture contains
provisions permitting the Issuer and the Trustee, with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as one
class), evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or
modifying in any manner the rights of the Holders of the Securities of each
series; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security so affected, (i) change
the Stated Maturity of the principal of, or premium, (if any) or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate or amount of interest thereon or any
premium payable upon the redemption or acceleration thereof, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, the principal of any

 

D-5

 

Security or any
premium or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity
thereof, or (ii) reduce the aforesaid percentage of Securities the Holders
of which are required to consent to any such supplemental indenture, or (iii) reduce
the percentage of Securities the Holders of which are required to consent to
any waiver of compliance with certain provisions of the Indenture or any waiver
of certain defaults and consequences thereunder or to reduce the quorum or
voting requirements set forth in the Indenture, or (iv) effect certain
other changes to the Indenture or any supplemental indenture or in the rights
of Holders of the Securities.  The
Indenture also permits the Holders of a majority in principal amount of the
Outstanding Securities of any series (or, in the case of certain defaults or
Events of Default, all series of Securities), on behalf of the Holders of all the
Securities of such series (or all of the Securities, as the case may be), to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults or Events of Default under the Indenture and their
consequences, prior to any declaration accelerating the maturity of such
Securities, or subject to certain conditions, rescind a declaration of
acceleration and its consequences with respect to such Securities.  Any such consent or waiver by the Holder of
this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note that may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Note or
such other Note.

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note in the manner,
at the respective times, at the rate and in the coin or currency herein
prescribed.

 

Notwithstanding any other
provision of the Indenture to the contrary, no recourse shall be had, whether
by levy or execution or otherwise, for the payment of any sums due under the
Securities, including, without limitation, the principal of, premium, if any,
or interest payable under the Securities, or for the payment or performance of
any obligation under, or for any claim based on, the Indenture or otherwise in
respect thereof, against any partner of the Issuer, whether limited or general,
including Simon Property Group, Inc. or such partner’s assets or against
any principal, shareholder, officer, director, trustee or employee of such
partner.  It is expressly understood that
the sole remedies under the Securities and the Indenture or under any other
document with respect to the Securities, against such parties with respect to
such amounts, obligations or claims shall be against the Issuer.

 

This Note is issuable
only in registered form without Coupons in denominations of $2,000 and integral
multiples of $1,000 in excess thereof. 
This Note may be exchanged for a like aggregate principal amount of
Notes of other authorized denominations at the office or agency of the Issuer
in The Borough of Manhattan, The City of New York, in the manner and subject to
the limitations provided in the Indenture, but without the payment of any
service charge, except for any tax or other governmental charge imposed in
connection therewith.

 

Upon due presentment for
registration of transfer of this Note at the office or agency of the Issuer in
The Borough of Manhattan, The City of New York, one or more new Notes of
authorized denominations in an equal aggregate principal amount shall be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Indenture, without charge, except for any tax or other governmental charge
imposed in connection therewith.

 

The Issuer, the Trustee
and any authorized agent of the Issuer or the Trustee may deem and treat the
Person in whose name this Note is registered as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal and any premium hereof or hereon, and subject to
the provisions on the face hereof, interest hereon, and for all other purposes,
and neither the

 

D-6

 

Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.

 

This Note, including the
validity hereof, and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York, and for all purposes shall
be construed in accordance with the laws of such state, except as may otherwise
be required by mandatory provisions of law.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

D-7

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

TEN COM – as tenants in common

UNIF GIFT MIN ACT –
            Custodian
      (Cust)        

(minor) under Uniform Gifts to Minors Act
                              
(State)

TEN ENT – as tenants by the entireties

JT TEN – as joint tenants with right of survivorship and not as tenants
in common

 

Additional abbreviations
may also be used though not in the above list.

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto

	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE

  
	
   

  

(Please print or typewrite name and address including postal zip code
of assignee.)

 

This Note and all rights thereunder hereby irrevocably constituting and
appointing Attorney to transfer this Note on the books of the Trustee, with
full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice:    The
  signature(s) on this Assignment must correspond with the name(s) as
  written upon the face of this Note in every particular, without alteration or
  enlargement or any change whatsoever.

  

 

D-8

 

Exhibit E

 

FORM OF EXCHANGE CERTIFICATED NOTE

 

	
  REGISTERED

  	
  REGISTERED

  
	
  NO. [            ]

  	
  PRINCIPAL AMOUNT

  
	
  CUSIP NO. [                   ]

  	
  $[                                          ]

  

 

DEFINITIVE SECURITY

 

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

Simon Property Group,
L.P., a Delaware limited partnership (the “Issuer,” which term includes any successor under the Indenture
hereinafter referred to), for value received, hereby promises to pay to                                           ,
or registered assigns, the principal sum of                                           
dollars on [June 1, 2011/December 1, 2015] (the “Maturity
Date”), and to pay interest thereon from November 15,
2005, semi-annually in arrears on June 1 and December 1 of each year
(each, an “Interest Payment Date”), commencing on June 1, 2006, and on the
Maturity Date, at the rate of [5.375/5.75]% per annum, until payment of said
principal sum has been made or duly provided for.

 

The interest so payable
and punctually paid or duly provided for on any Interest Payment Date and on
the Maturity Date shall be paid to the Holder in whose name this Note (or one
or more predecessor Notes) is registered in the Security Register
applicable to this Note at the close of business on the “Record Date” for such
payment, which shall be the 15th calendar day immediately prior to
such payment date or the Maturity Date, as the case may be, regardless of
whether such day is a Business Day (as defined below).  Any interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid to the Holder in whose name this Note (or one or
more predecessor Notes) is registered at the close of business on a
subsequent record date for the payment of such defaulted interest (which shall
be not less than 10 calendar days prior to the date of the payment of such
defaulted interest) established by notice given by mail by or on behalf of
the Issuer to the Holders of the Notes not less than 10 calendar days preceding
such subsequent record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture (as defined below).  Interest on this Note shall be computed on
the basis of a 360-day year of twelve 30-day months.

 

Interest payable on this
Note on any Interest Payment Date and on the Maturity Date, as the case may be,
shall be the amount of interest accrued from and including the immediately
preceding Interest Payment Date (or from and including November 15, 2005,
in the case of the initial Interest Payment Date) to but excluding the
applicable Interest Payment Date or the Maturity Date, as the case may be.  If any date for the payment of principal,
premium, if any, interest on, or any other amount with respect to, this Note
(each a “Payment Date”) falls on a day that
is not a Business Day, the principal, premium, if any, or interest payable with
respect to such Payment Date shall be made on the next succeeding Business Day
with the same force and effect as if made on such Payment Date, and no interest
shall accrue on the amount so payable for the period from and after such
Payment Date to such next succeeding Business Day.  “Business Day”
means any day, other than a Saturday or a Sunday on which banking institutions
in New York, New York are open for business.

 

E-1

 

The principal of this
Note payable on the Maturity Date shall be paid against presentation and
surrender of this Note at the office or agency of the Issuer maintained for
that purpose in The Borough of Manhattan, The City of New York.  The Issuer hereby initially designates the
Corporate Trust Office of the Trustee in The City of New York as the office to
be maintained by it where Notes may be presented for payment, registration of
transfer or exchange, and where notices to or demands upon the Issuer in
respect of the Notes or the Indenture referred to on the reverse hereof may be
served.

 

Payments of principal and
interest in respect of this Note shall be made by wire transfer of immediately
available funds in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private
debts.

 

Reference is made to the
further provisions of this Note set forth on the reverse hereof after the
Trustee’s Certificate of Authentication. 
Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.

 

This Note shall not be
entitled to the benefits of the Indenture or be valid or obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by the Trustee under such Indenture.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

E-2

 

IN WITNESS WHEREOF,
the Issuer has caused this instrument to be signed manually or by facsimile by
its authorized officers.

 

Dated:                           ,
20    

 

	
   

  	
  SIMON PROPERTY GROUP, L.P.

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
   SIMON PROPERTY
  GROUP, INC.

  
	
   

  	
   

  	
  as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

Attest:

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

E-3

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
					

 

E-4

 

[REVERSE OF NOTE]

 

SIMON PROPERTY GROUP, L.P.

 

[5.375/5.75]% Note due [2011/2015]

 

This security is one of a
duly authorized issue of debt securities of the Issuer (hereinafter called the “Securities”),
issued or to be issued under and pursuant to an Indenture dated as of November 26,
1996 (herein called the “Indenture”), duly executed and delivered by the Issuer
to JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as
Trustee (herein called the “Trustee,” which term includes any successor trustee
under the Indenture with respect to the series of Securities of which this Note
is a part), to which Indenture and all indentures supplemental thereto relating
to this Note (including, without limitation, the Sixteenth Supplemental
Indenture, dated as of November 15, 2005, between the Issuer and the
Trustee) reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Issuer and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered and for the
definition of capitalized terms used hereby and not otherwise defined.  The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption provisions (if any),
and may otherwise vary as provided in the Indenture or any indenture
supplemental thereto.  This Security is
one of a series designated as the Simon Property Group, L.P. [5.375/5.75]% Note
due [2011/2015], initially limited in aggregate principal amount to
$[500,000,000/600,000,000] (the “Notes”).

 

In case an Event of
Default with respect to the Notes shall have occurred and be continuing, the
principal amount of the Notes and the Make-Whole Amount may be declared
accelerated and thereupon become due and payable, in the manner, with the
effect, and subject to the conditions provided in the Indenture.

 

The Notes may be redeemed
at any time at the option of the Issuer, in whole or from time to time in part,
at a redemption price equal to the sum of (i) 100% of the principal amount
of the Notes being redeemed plus accrued interest thereon to the Redemption
Date and (ii) the Make-Whole Amount, if any, with respect to such Notes.  If the Notes are redeemed within 90 days of
the Maturity Date, the redemption price shall not include the Make-Whole
Amount.  Notice of any optional
redemption shall be given to Holders at their addresses, as shown in the
Security Register for the Notes, not more than 60 nor less than 30 days prior
to the date fixed for redemption.  The
notice of redemption shall specify, among other items, the redemption price and
the principal amount of the Notes to be redeemed.

 

The Indenture contains
provisions permitting the Issuer and the Trustee, with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as one
class), evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or
modifying in any manner the rights of the Holders of the Securities of each series;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security so affected, (i) change
the Stated Maturity of the principal of, or premium, (if any) or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate or amount of interest thereon or any
premium payable upon the redemption or acceleration thereof, or adversely
affect any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies, currency unit
or units or composite currency or currencies in which, the principal of any

 

E-5

 

Security or any
premium or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity
thereof, or (ii) reduce the aforesaid percentage of Securities the Holders
of which are required to consent to any such supplemental indenture, or (iii) reduce
the percentage of Securities the Holders of which are required to consent to
any waiver of compliance with certain provisions of the Indenture or any waiver
of certain defaults and consequences thereunder or to reduce the quorum or
voting requirements set forth in the Indenture, or (iv) effect certain
other changes to the Indenture or any supplemental indenture or in the rights
of Holders of the Securities.  The
Indenture also permits the Holders of a majority in principal amount of the
Outstanding Securities of any series (or, in the case of certain defaults or
Events of Default, all series of Securities), on behalf of the Holders of all
the Securities of such series (or all of the Securities, as the case may be),
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults or Events of Default under the Indenture and their
consequences, prior to any declaration accelerating the maturity of such
Securities, or subject to certain conditions, rescind a declaration of
acceleration and its consequences with respect to such Securities.  Any such consent or waiver by the Holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of
any Note that may be issued in exchange or substitution hereof, irrespective of
whether or not any notation thereof is made upon this Note or such other Note.

 

No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note in the manner,
at the respective times, at the rate and in the coin or currency herein
prescribed.

 

Notwithstanding any other
provision of the Indenture to the contrary, no recourse shall be had, whether
by levy or execution or otherwise, for the payment of any sums due under the
Securities, including, without limitation, the principal of, premium, if any,
or interest payable under the Securities, or for the payment or performance of
any obligation under, or for any claim based on, the Indenture or otherwise in
respect thereof, against any partner of the Issuer, whether limited or general,
including Simon Property Group, Inc. or such partner’s assets or against
any principal, shareholder, officer, director, trustee or employee of such
partner.  It is expressly understood that
the sole remedies under the Securities and the Indenture or under any other
document with respect to the Securities, against such parties with respect to
such amounts, obligations or claims shall be against the Issuer.

 

This Note is issuable
only in registered form without Coupons in denominations of $2,000 and integral
multiples of $1,000 in excess thereof. 
This Note may be exchanged for a like aggregate principal amount of
Notes of other authorized denominations at the office or agency of the Issuer
in The Borough of Manhattan, The City of New York, in the manner and subject to
the limitations provided in the Indenture, but without the payment of any
service charge, except for any tax or other governmental charge imposed in
connection therewith.

 

Upon due presentment for
registration of transfer of this Note at the office or agency of the Issuer in
The Borough of Manhattan, The City of New York, one or more new Notes of
authorized denominations in an equal aggregate principal amount shall be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Indenture, without charge, except for any tax or other governmental charge
imposed in connection therewith.

 

The Issuer, the Trustee
and any authorized agent of the Issuer or the Trustee may deem and treat the
Person in whose name this Note is registered as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal and any premium hereof or hereon, and subject to
the provisions on the face hereof, interest hereon, and for all other purposes,
and neither the

 

E-6

 

Issuer nor the
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.

 

This Note, including the
validity hereof, and the Indenture shall be governed by and construed in
accordance with the laws of the State of New York, and for all purposes shall
be construed in accordance with the laws of such state, except as may otherwise
be required by mandatory provisions of law.

 

Capitalized terms used
herein which are not otherwise defined shall have the respective meanings
assigned to them in the Indenture and the Sixteenth Supplemental Indenture
referred to herein.

 

E-7

 

ABBREVIATIONS

 

The following
abbreviations, when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

TEN COM – as tenants in common

UNIF GIFT MIN ACT –
            Custodian
      (Cust)        

(minor) under Uniform Gifts to Minors Act
                              
(State)

TEN ENT – as tenants by the entireties

JT TEN – as joint tenants with right of survivorship and not as tenants
in common

 

Additional abbreviations
may also be used though not in the above list.

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto

	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
  NUMBER OF ASSIGNEE

  
	
   

  

(Please print or
typewrite name and address including postal zip code of assignee.)

 

This Note and all rights thereunder hereby irrevocably constituting and
appointing Attorney to transfer this Note on the books of the Trustee, with
full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice:    The
  signature(s) on this Assignment must correspond with the name(s) as
  written upon the face of this Note in every particular, without alteration or
  enlargement or any change whatsoever.

  

 

E-8

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