HomeMy WebLinkAbout2006/08/22 Item 5
COUNCIL AGENDA STATEMENT
Item ~
Meeting Date 08/22/06
ITEM TITLE: Resolution Authorizing the City Engineer to issue
Encroachment Permit No. PE-704 for the installation of a
monument sign and a retaining wall proposed to be constructed
within the existing Birch Road general utility easement.
SUBMITTED BY: Acting Director OfEng~ng~
REVIEWED BY: Interim City Manager 1/ (4/S'b. Vote: Yes _ No..L)
The Final Map (No. 15037) for The Town Center shopping center project ("The Town
Center"), along with a Subdivision Improvement Agreement and Supplemental
Subdivision Improvement Agreement, was approved by City Council on May 24, 2005
(Resolution 2005-165). The project is generally located at the southwest comer of
Olympic Parkway and Eastlake Parkway, just east of future SR-125 (Exhibit "A"), and
will consist of major department stores and smaller commercial vendors sharing the site.
General Growth Properties (GGP), owners of the project, are proposing to construct a
monument sign and a retaining wall within City's general utility easement. The retaining
wall and monument sign was included in the project approval by the City's Design
Review Committee and will be maintained by GGP, Otay Ranch L.P Tonight's action is
pursuant to Section 12.28 of the Municipal Code.
RECOMMENDATION: That Council approve the resolution.
BOARDS/COMMISSIONS RECOMMENDATION: None.
DISCUSSION:
The Town Center is located at the southwest comer of Olympic Parkway and Eastlake
Parkway, just east of future SR-125
Due to the design and size of the project monument wall proposed to be located near the
intersection of Birch Road and Eastlake Parkway, and its proximity to the approved
location of the onsite Market building, a portion of the monument wall will need to be
located within the existing Birch Road general utility easement. There are no utilities
located within this area of the easement and the monument sign therefore does not pose
any conflicts with utilities. The location of the proposed monument sign is shown on the
attached exhibit (Exhibit "&").
Also, due to site design constraints for the Town Center project, some slope grading and
retaining wall construction will be required within the existing Birch Road general utility
easement along the southwesterly edge of the project. The retaining wall will vary in
5-1
Page 2, Item ..!:2....-
Meeting Date 08/22/06
height from 1 to 7 feet and approximately 193 feet of the overall retaining wall is
proposed to be located within the Birch Road general utility easement. The location of
the proposed retaining wall is shown on the attached exhibit (Exhibit "B").
After the review of the application for encroachment permit and the corresponding
construction plans, staff is recommending the approval of the encroachment permit.
This encroachment permit (Exhibit "C") will include an indemnity clause holding the
City, its agents and employees harmless from any damage that might result from the
construction and maintenance of the retaining wall and monument wall. In addition, the
permit will contain the necessary maintenance, removal and hold-harmless clauses.
GGP, Otay Ranch, L.P. has also added provisions in their CC&Rs ensuring the
maintenance of the retaining wall and monument wall, including graffiti eradication.
According to Section 12.28.020 of the Chula Vista Municipal Code, a Council resolution
must authorize the issuance of this encroachment permit.
FISCAL IMPACT: GGP, Otay Ranch, L.P. has paid the required application fee for
processing the encroachment permit and has an account with the City that will cover the
costs for City inspection.
CONFLICT OF INTEREST: Staff has reviewed the property holdings of the City
Council and has found no such holdings within 500' of the property, which is the subject
of this action.
Attachments:
Exhibit "A" Vicinity Map
Exhibit "B": Request for Encroachment Permit, Plat showing
locations of wall monument and retaining wall.
Exhibit "c'" Encroachment Permit PE-704
J:\Engineer\AGENDA\CAS2006\08~22-06\Al13 for Encroach. Pennit for Town Center. doc
5-2
EXHIBIT 'A'
OT A Y RANCH TOWN CENTER
BIRCH ROAD ENCROACHMENT
MONUMENT SIGN AND RETAINING WALL
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REGIONAL MAP
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P&D CONS1JLT....STS
8g~4 RIO SAN OIEGO DRIVE. SUITE 610
SAN DIEGO. CALIFORNIA 92108
T 619.29t.H-7~ F 819.291.1476
WWN.TC8.AECO~.COt.l
IN 17~84a AUGUST 9. 2008
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EXHIBIT B
TCB I AECOM
P&D Consultants
8954 Rio San Diego Drive, Suite 610, San Diego, California 92108
T 619,291 1475 F 619.291.1476 www.tcb.aecom.com
August 2, 2006
Mr Jim Newton
CITY OF CHULA VISTA
Engineering Department
276 Fourth Avenue
Chula Vista, CA 91910
Subject:
Otay Ranch Town Center - Grading Permit Number OR-254G
Encroachment Permit for Birch Road
Dear Jim,
On behaif of the owner, General Growth Properties, we are requesting an encroachment permit for a
monument sign and retaining wall proposed to be constructed within the existing Birch Road general
utility easement. These walls are to be built in conjunction with grading and other improvements
along Birch Roat(, for the above referenced project.
Due to the design and size of the project monument wall proposed to be iocated near the
intersection of Birch Road and Eastiake Parkway, and its proximity to the approved iocation of the
onsite Market building, a portion of the monument wall wiil need to be iocated within the existing
Birch Road easement. There are no utilities located within this area of the easement and the
monument sign therefore does not pose any conflicts with utilities. The location of the proposed
monument sign is shown on the attached exhibit. We estimate the cost of the portion of the
monument located within the easement to be approximateiy $60,000.
Aiso, due to site design constraints for the Town Center project, some siope grading wiil be required
within the existing Birch Road easement along the southwesteriy edge of the project. In order to
maintain proper clearances from utilities and also allow room for the Birch Road sidewaik, a retaining
wall varying in height from 1.0 to 7.0 feet is proposed. Approximately 193 feet of the overall retaining
wali is proposed to be located within the Birch Road easement. The location of the proposed
retaining wall is aiso shown on the attached exhibit. We estimate the construction cost for the portion
of the retaining wall within the easement to be approximately $18,500.
Owner information is as follows:
GGP - Otay Ranch, L.P
35 Century Park Way
Salt Lake City, UT 84115
(801) 486-3911
Based on prior discussions with you, we understand that this is considered a major encroachment
which will require City Council action. In our last conversation you indicated that you expect to have
this item placed on the consent calendar for the August 22 Council meeting.
5-4
Mr Jim Newton
August2,2006
Page 2
If you have any questions about this application, please call me. We appreciate your assistance with
this matter
Sincerely,
P&D CONSULTANTS
-\~
Paul R. Kane, PE
Senior Project Manager
c: Kris Longson - General Growth Properties (wi attachment)
Jim Wood - General Growth Properties (wi attachement)
TeB I AECOM
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5-14
Recording requested by and
please return to.
EXHIBIT - c ..
City Clerk
City of Chula Vista
POBox 1087
Chula Vista, CA 91912
[Xl This document benefits
permittee. Recording
fee required.
[ (This space for Recorder's use, only)
Affects Assessor's Parcel No(s) 643-061-01
C. V File No. 0710-40-PE-704
AUTHORIZATION FOR ENCROACHMENT IN CITY RIGHT OF WAY
Permit No. PE-704
Pursuant to Chapter 12.28 of the Chula Vista Municipal Code, permission is hereby granted by the City of Chula
Vista (hereinafter "City") to: GGP - Otay Ranch, L.P (hereinafter "Permittee"), an affiliate of General Growth
Properties, Inc. which Permittee has a mailing address is 35 Century Park Way, Salt Lake City, UT 84115, to do
work within.a portion of-Gity-right-of-way
All terms and conditions of this permit as to the Permittee shall be a burden upon Permittee's land and shall run with
the land. All conditions apply to Permittee and all his/her/their heirs, assigns, successors or transferees.
Whereas, the Permittee has requested the permission from City to encroach on said City's easement adjacent to and
for the direct benefit of the following described property'
ADDRESS: 2015 Birch Road
LEGAL DESCRIPTION: See Exhibit" A", Legal Description, attached hereto and by reference made a part
hereof.
PERMISSION IS HEREBY GRANTED to do the following work: install a monument sign and a retaining wall
proposed to be constructed within the existing Birch Road general Utility and Access easement. Said retaining
walls and monument sign shall be constructed under Grading Permit No. OR-254G within the 12' general
utility and access easement in accordance with attached Exhibit "B" attached hereto and incorporated herein
by this reference.
(hereinafter "Encroachment")
Now, therefore, in consideration of their mutual promises, and other good and valuable consideration, the parties hereto
agree as follows:
Permission is hereby granted to Permittee by City to install the above-mentioned Encroachment on the City Property at
the location specified in accordance with the following terms and conditions:
I. Encroachment shall, in no way interfere with any existing utility, including the maintenance or operation of
existing water meters, CATV and telephone pedestals, public storm drains and sewer lines. Any costs
arising from changes of or to any facility due to the Encroachment of the Permittee's private facilities shall be
the sole responsibility of Permittee and subject to placement of a lien on the property if incurred by the City
Page 1
5-15
2. Maintenance, removal or relocation of Encroachment shall be the sole responsibility of Permittee, and/or
Permittee's lessee, should there be any, at no expense to City
3 Encroachment shall conform to all standards and specifications as stated in the Chula Vista Municipal Code and
in accordance with Grading Permit No. OR-254G. Walls shall be built and permitted under Grading Permit
No. OR-254G. The permittee shall install the retaining walls as shown on the exhibit and not to cause
pedestrian hazard as required by City Inspector
4 Permittee shall call Underground Service Alert (One call mark-out service) at 1-800-422-4133 a minimum of
two working days prior to any excavation being done in the public right-of-way, including postholes or footing
excavations. Mark-out of existing underground facilities shall be made prior to making any excavations.
5 Encroachment shall be installed and maintained in a safe and sanitary manner by Permittee as determined by
City
6. Permittee shall not allow Encroachment to block the existing course of surface drainage to the extent that it
may endanger the public or the surrounding properties or cause ponding of water.
7 Permittee shall apply an anti-graffiti material to the encroaching object of a type and nature that is acceptable
to the Director of Public Works. Permittee shall immediately remove any graffiti from the encroaching
object.
8. City shall have the right to remove graffiti or paint the encroaching object, the paint being provided and the
cost of labor paid by Permittee.
9 Permittee shall call the Engineering Construction Inspection Section at (619) 397-6128 at least 24 hours (one
working day) prior to doing any work at the site in the City right-of-way
This permit is revocable upon thirty (30) days written notice to the Permittee, and upon such notice, the installation
must be removed or relocated, as and when specified by the City, at Permittee's cost. If Permittee fails to remove or
relocate Encroachment within the period allotted, the City may cause such work to be done and the cost thereof shall
be imposed as a lien upon Permittee's property
Permittee shall defend, indemnify, protect, hold harmless and release the City, its elected and appointed officers and
employees, from and against all past, present or future claims for damages, liability, cost and expense (including
without limitation attorneys' fees) arising out of or in anyway related to the encroachment or the conduct of the
Permittee, or any agent or employee, subcontractors, or others (including third parties) in connection with the
execution of the work covered by this agreement. Except only for those claims arising from the sole negligence or sole
willful conduct of the City, its officers, or employees. Permittee's indemnification shall include any and all costs,
expenses, attorneys' fees and liability incurred by the City, its officers, agents, or employees in defending against such
claims, whether the same proceed to judgment or not. Further, Permittee at its own expense shall, upon written
request by the City, defend any such suit or action brought against the City, its officers, agents, or employees.
Permittee's indemnification of City shall not be limited by any prior or subsequent declaration by the Permittee.
Permittee hereby agrees to and shall release, hold harmless and defend City, its elective and appointive boards,
officers, agents and employees against any claim, and in any suit or proceeding, at law or in equity, for damages
caused, or alleged to have been caused, by actions taken or alleged to have been taken, or in anyway related to or
arising from actions taken, under this permit by Permittee directly or by hislher/their agent(s), contractor(s), or agents
or employees of same. Permittee further agrees to and shall indemnify and hold harmless City, its elective and
appointive boards, officers, agents and employees, as indemnities, for any claim, suit or proceeding submitted,
brought or instimted against City as a result of actions taken, or alleged to have been taken, or in anyway related to or
arising from actions taken, under this permit, including, but not limited to, any asserted liability for loss of or damage
to property or for personal iI1iury, including death.
Page 2
5-16
The undersigned Permittee hereby accepts the foregoing Encroachment permit upon the terms and conditions stated
herein and agrees to comply with all stated terms and conditions and with all applicable laws, including any applicable
provision of the Chula Vista Municipal Code. It is further agreed that if any part of Permittee's Encroachment or
Permittee's rights under this Encroachment Permit should interfere with the future use of the City's right of way by
the general public, it must be removed or relocated at Permittee's expense and such right shall be terminated as and
when indicated by City
In the event of a dispute arising as to the terms or interpretation of this permit, the City Engineer shall resolve said
dispute \TI his sole and unfettered discretion, reasonably applied.
(End of page. Next page is signature page.)
[J:\Engineer\PERlVIITS\PE . Encroachment Permits\PE704encroachmentpermitOtay Ranch Town Center.doc
Page 3
5-17
SIGNATURE PAGE
CITY OF CHULA VISTA:
Permit approved by'
Date:
Mathew Little
Acting City Engineer
(City Clerk to attach acknowledgment.)
PERMIlTEE:
GGP-OT A Y RANCH, L.P , a Delaware limited partnership
By' GGP-OTAY RANCH L.L.C., a Delaware
limited liability company, its general partner
By'
GGP/Homart II L.L.C., a Delaware limited
liability company, its sole member
./(a/0A-~uL-
/I' An Authorized ficer
Date:~
By'
(Notary to attach acknowledgment for each signature.)
(Corporate Authority required for each Signatory, if applicable.)
[C:\Documents and Settings\ltomabeni\Local Settings\Ternporary Internet Files\0LK2366\EncroachmentPermitOtay Ranch 8M14-06.doc
P5~e148
Acknowledgment:
STATE OF ILLINOIS )
) ss
COUNTY OF COOK )
On this ~day of Av---.1v~t ,2006 beforepe a Nqtaf)' Public in
and for the jurisdiction aforesaid,~r~pnally appeaJ-~ ~~rf A. Wc..tiA..tl.,~._,
who is known to me to be the l!lrl1A flv\1Ml O~ of GGP/Homart II l.l.C, a
Delaware limited liability company, being the sole member of GGP-Otay Ranch l.L.C.,
a Delaware limited liability company, being the general partner or GGP-Otay Ranch,
l.P , a Delaware limited partnership, and the identical person who signed the foregoing
instrument on behalf of said limited partnership and acknowledged such execution to be
the voluntary act and deed of said limited partnership.
G'''" ""de' my hood ,"d ,eal 'he day ,"d you:: ~"'"
Notary Public
My commission expires:
\ \ --04. --oq
"OmClAL SEAL"
LESLEE C TORNABENI
Notary Public, State or Illinois
My COIIIIIIiRlou Expires 11/412009
5-19
EXHIBIT 'A'
OTA Y RANCH TOWN CENTER
BIRCH ROAD ENCROACHMENT
MONUMENT SIGN AND RETAINING WALL
LEGAL DESCRIPTION
Lot 1 of Map No. 15037, Chula Vista Tract No. 05-02, Otay Ranch Freeway Commercial
Sectional Planning Area, recorded June 30,2005 in the office of the County Recorder of
San Diego County
APN. 643-061-01
5-20
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GGPIHOMART II L.L.C.
Assistant Secretary's Certificate
I, the undersigned, do hereby certif'y that I am the duly elected, qualified and
acting Assistant Secretary of GGPlHomart II L.L.C., a Delaware limited liability
company (the "Company"), and as such am authorized to execute and deliver this
Certificate in the name and on behalf of the Company, and that:
1 The Company is the sole member of GGP-Otay Ranch L.L.C., a
Delaware limited liability company ("Otay LLC") which is the
sole general partner of GGP-Otay Ranch L.P., a Delaware limited
partnership ("Otay LP").
2. Attached hereto as Exhibit A-I is a true, correct and complete copy
of the Certificate of Formation of the Company, filed with the
Delaware Secretary of State, which Certificate of Formation has
not been amended and is in full force and effect on the date hereof.
3 Attached hereto as Exhibit A-2 is a true, correct and complete copy
of Article VII of the Operating Agreement of the Company
Article VII sets forth the authority of the Officers of the Company
to execute any and all documents, instruments and agreements to
be executed and delivered by the Company as the sole member of
Otay LLC, in its capacity as the sole general partner of Otay LP
Except as evidenced by the document contained in Exhibit A-2,
this document has not been further amended and is in full force and
effect as of the date hereof.
4 Attached hereto as Exhibit B-1 is a true, correct and complete copy
of the Certificate of Formation of Otay LLC, filed with the
Delaware Secretary of State, which Certificate of Formation has
not been amended and is in full force and effect on the date hereof.
5 Attached hereto as Exhibit B-2 is a true, correct and complete copy
of the Operating Agreement of Otay LLC. Except as evidenced by
the document contained in Exhibit B-2, this document has not been
amended and is in full force and effect as of the date hereof.
6. Attached hereto as Exhibit C-l is a true, correct and complete copy
of the Certificate of Partnership of Otay LP, filed with the
Delaware Secretary of State, which Certificate of Formation has
not been amended and is in full force and effect on the date hereof.
7 Attached hereto as Exhibit C-2 is a true, correct and complete copy
of the Partnersmp Agreement of Otay LP Except as evidenced by
5-24
the document contained in Exhibit C-2, this document has not been
amended and is in full force and effect as of the date hereof.
8. Attached hereto as Exhibit C-3 is a true, correct and complete copy
of the Certificate of Registration of Otay LP issued by the
California Secretary of State. Except as evidenced by the
documents contained in Exhibit C-3, this document has not been
amended, modified or terminated and is in full force and effect as
of the date hereof.
9 Attached hereto as Exhibit D are the names of the persons that are
duly elected, qualified and acting officers of the Company as of the
date hereof and the signature of each such person set forth opposite
hislher respective name and title is a true and genuine or facsimile
specimen ofhislher signature.
[Signature on Following Page]
5-25
IN WITNESS WHEREOF, the undersigned, has executed and caused this
Certificate to be delivered as of the I Y"" day of August, 2006.
5-26
..
State afDelaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF ST~E OF THE STATE OF
DELAWARE, DO HEREBY CERrIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERrIFICATE OF FORMATION OF "GGP/BOMlI.RT II L.L.C.",
FILED IN THIS OFFICE ON THE SIXTH DAY OF AUGUST, A.D. 1999, AT
12:30 O'CLOCK P.M.
.
,
:
3080085 8100
tuH~
Edward J. Freel, Secretary of State
AUTHENTICATION: 0057286
DATE:
U-01-99
991463156
5-28
01-06-89 ,'0.... "....NEJl. GERBER' ElSEftllEPG 6
31116iIUT
T-IS. P 03/03 '-III
CERTIFICATE OF FORMA nON
OF
GGP/HOMART II L.L..C.
This Certfficare of Formation of GGP/Homal11l L.L.C. (the 'Company') is being
executed by the undel$ignecl for the purpose of forming a limited liability company
pu~ant totne Delaware Wrnited Liabaity Company Act.
1. Tne name of the company is:
GGP/Homart II L.l.C.
2.
The addre&& of the registel'8Cl office of Ine Company in Delaware is 1013
Centra Road, Wilmingtan, New Castle County. Delaware. 19805-1297.
The name of its Registered Agent at that acldress is Corporation Service
Company.
~
~
IN WITNESS WHEREOF, the undersigned, an authoriZed per50n of the.
Company, lias caused this Certificate of formation to be duly executed as of the 6"' day'
of August, 1999.
-~~~~
Certificate of Formation 0I'l bellalf of
Company
this
the
C~"'a'3.Il3o\GCP .,o_T" CERTI~ICATE OF FORMATION.OOC
STAn OF llELAliARl:
Sl.'CU2'.iIlr OF S2'An
DIVISION aT C'ORPORAf'IONS
FILED I2:30 EW 06/06/1999
991327Z83 - 3080065
5-29
Exhibit A-2
GGP/Homart II L.L.C.
Section VII of the Operating Agreement of the Company
(see attached)
5-30
-;-
OPERATING AGUEHENT
OF
GGP/BOHART II L.L.C.
-9
.
-4
5-31
.'It
OPERATING AGREEMENT
OF
GGP/lIOMART II L.L.C.
Table of ~ontents
1.1 Definitions
ARTICLE I
DEFINED TERMS
,~.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
3.1
3.2
3.3
3.4
3.5
ARTICLE II
FORMATION OF COMPANY
Formation of Company
Name . . . .
Principal Place of Business
Purpose and Busines~ of the Company
Classes of Units ....
Tet1ll . . . . . . . . . . . . . . .
Nature of the Company . ....
Members' Names and Addresses; Classification
Registered Office and Registered Agent
Organization Certificates . . . .
Concurrent Transactions . . . . .
Restrictions on Other Agreements
ARTICLE III
COMPANY CAPITAL . . . .
Initial Contributions of Members
No Additional Capital Contributions.
Withdrawal; Return of Capital; Interest
Priority .... ..... . . .
Development Project Funding/Acquisition Financing;
Etc. . . . . . . . . . . .
ARTICLE IV
ALLOCATION OF COMPANY ITEMS
4.1 Maintenance of Capital Accounts
4.2 Net Income and Net Loss.
4.3 Special Allocations. . .
4.4 CUrative Allocations
4.5 Tax Allocations. . . . .
4.6 Allocations Subsequent to Assignment
..
ARTICLE V
COMPANY DISTRIBUTIONS . .
i
5-32
Page
1
1
21
21
21
21
21
22
22
22
22
22
23
23
23
24
24
24
24
24
24
2S
2S
2S
26
27
27
28
29
ARTICLE VI
ACCOUNTING MATTERS
6.1 Fiscal Year; Designation of Auditors
6.2 Books and Records ;
6.3 Reports and Statements
6.4 Tax Matters Member
6.5 Tax Elections and Returns
6.6 Interim Accounting "
.
7.1
7 2
7.3
7.4
7.5
7.6
7.7
7.8
7.9
7.10
7.11
7.12
7.13
.
8.1
8 2
8.3
8 4
8.5
8.6
8.7
8.8
8 10
8.11
8 12
'.
'9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
ARTICLE VII
GOVERNANCE; BOARD OF DIRECTORS
Action by Members to Effectuate this Agreement
Board '" "
Officers; Management; Rights in the Event
Cause.
Chairman of the Board
Committees " ..
Certificate of Formation; By-Laws.
Actions by Board
Meetings of the Board
Conduct of Business
Other Activities of Members
Right of Public to Rely on Authority of
Members. .
Standard of Care .
Waiver and Indemnification
the
30
30
30
31
33
33
33
34
34
34
of
35
39
39
40
40
46
46
48'
49
SO
SO
51
51
52
52
52
56
58
58
59
59
60
60
60
60
60
61
62
62
62
66
69
ARTICLE VIII
TRANSFERS OF COMPANY UNITS
Certain Restrictions .. .
Compliance with Securities Laws
Transfer of Ownership Interests in Affiliates
Transfers of Units by Members
Certain Prohibited Transfers of Units by Members
Expenses of Transfer .
Indemnification by Transferor
Acceptance of Prior Acts
Certain Conditions to Transfer
Dissolution of Company upon Transfer
Effect of Initiation of Certain Procedures
ARTICLE IX
PUT OPTION
Put Option . . .
Exercise '" .
Dissolution Value of the Company
Right of Offerors to Withdraw Put Notice
Option of Class A Members
Purchase of Offerors' Units
Sale of Company
Priority . .
ii
5-33
--
.
10.1
10.2
10 3
10.4
10.5
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11 8
ARTICLE -X
BUY-SELL RIGHT
Buy-Sell Right
Exercise
Option of Class B Members
Purchase Price; Payment
Closing
Priority
of
Purchase
Price;
ARTICLE XI
SPECIAL DISSOLUTION RIGHT
Special Dissolution Right
Exercise . . .
Dissolution Value of the Company . . . . . . .
Right to Withdraw DiSSOlution Commencement Notice
Option of Class A Members .
Purchase of Class B Members' Units
Distribution of Properties
Priority. .
ARTICLE XII
DISSOLUTION AND TERMINATION
12.1 Dissolution
12 2 Accounting. .
12 3 Winding-Up
12 4 Liquidating Distribution
12.5 Distributions in Accordance with Capital Accounts
12.6 Negative Capital Accounts
12.7 Distributions in Kind
12.8 No Redemption
12.9 Governance .
12.10 Return ot Capital
.
13.1
13.2
13.3
13.4
13 .5
14.1
14.2
ARTICLE XIII
MATTERS RELATING TO RETAINED DEBT .....
Payment of Retained Debt . . .. .....
Failure to Make Payments in Respect of Retained
Debt . . . . . . . . . . . . .
Indemnification . . . .. ....
Securi ty Interest . . . .
Other Matters Relating to Retained Debt
ARTICLE XIV
ADDITIONAL CAPITAL CONTRIBUTIONS . . . .
Additional Capital Contributions
Failure to Make Additional Capital Contributions
ARTICLE XV
MISCELLANEOUS
15.1 Injunctive Relief. . .
15.2 Successors and Assigns
15.3 Amendment; Waiver.
.
Hi
5-34
69
69
69
70
70
72
73
73
73
73
73
73
73
74
76
80
80
80
81
81
81
82
82
82
82
82
83
83
83
83
84
84
86
87
87
88
88
88
89
89
.
15 4 Representations by Members
15 5 Notices . . . . . .
15 6 Further Assurances
15 7 Confidentiality .
15 8 APPLICABLE LAW
15.9 Headings . . . .
15.10 Entire Agreement
15 11 Severability . .
15 12 Counterparts . .
15.13 Arbitration
15.14 Consent to Jurisdiction
15.15 Waiver of Partition.
15,16 Brokerage. . . .
15.17 Company Name . . . . . .
15.18 Litigation; No Dissolution
15.19 Ownership of Company Property
15.20 Time of the Essence. . .
15 21 Status Reports . . . . .
15.22 Disposition of Documents
15.23 Calculation of Days
15 24 Attorneys .......
89
90
91
91
91
91
91
92
92
92
93
93
93
94
94
94
95
95
95
96
96
.
.
iv
5-35
.
.
.
\
OPERATING AGREEMENT
OF
GGP/HOMART II L.L.C.
Operating Agreement, dated November 10, 1999, between GGP
Limited Partnership, a Delaware limited partnership ("GGPLP"), The
Comptroller of the State of New York as Trustee of the Common
Retirement Fund ("NYSCRF" and, together with GGPLP, the "Members")
and GGP/Homart II L.L.C., a Delaware limited liability company (the
"Company") .
WIT N E SSE T H:
A. The Members have formed the Company and own all of the
issued and outstanding Units (as defined below) .
B. Each of the Members desires to promote the interests of
the Company and the mutual interests of the Members by establishing
herein certain terms and conditions upon which the Units will be
held, including provisions relating to election of members of the
board of directors of the company, governance of the Company,
dissolution of the company, the transfer of Units and other matters
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
ARTICLE I
DEFINED TERMS
1.1 Definitions As used in this Agreement, the following
terms shall have the respective meanings indicated below:
"Act" shall mean the Delaware Limited Liability company Act,
as amended from time to time.
"Accredited Investor" shall mean any institutional accredited
investor as defined in Rule SOl(a) (1), (2), (3) or (7) under the
33 Act or as defined under Rule SOl{a) (8) under the 33 Act (if all
of the equity owners of such investor are Persons defined in Rule
SOl (a) (1), (2), (3) or (7) under the 33 Act); provided that such
institutional accredited investor has total assets in excess of
$200,000,000
"Ad;usted Caoital Account Deficit" shall mean, with respect to
any Member, the deficit balance, if any, in such Member's Capital
5-36
.
ARTICLE VII
GOVERNANCE: BOAlUl OP DIRECTORS
7.1 Action bv M~~ers to Effectuate this Aqreement. Each
Member agrees to take all actions necessary to carry out and
effectuate the provisions of this Agreement, including to vote in
a manner consistent with this As;-eement and to cause any Board
Member elected by it to take such actions as are required to be
taken by this Agreement.
7.2 Board.
(a) Except as otherwise e~ressly set forth herein, the
Board of Directors of the Company shall consist of six
members, and the holders of Class A Units (by majority vote)
shall have the right from time to time at their election to
designate three members to the Board (the "Class A Board
Members"), and the holders of Class B Units (by majority vote)
shall have the right from time to time at their election to
designate three members to the Board (the "Class B Board
Members" and, together with the Class A Board Members, the
"Board Members") .
.
(b) Members of the Board (other than Independent Board
Members) shall not receive compensation for serving as members
as the Board. Independent Board Members may be paid
reasonable and customary compensation as determined by the
Board. If he or she elects, a Board member shall be entitled
to the reasonable reimbursement of his or her actual
out-of-pocket expenses in attending Board meetings.
(c) To carry out the provisions of this Section 7.2,
GGPLP, as the sole Class A Member, and NYSCRF, as the sole
Class B Member, hereby elect the following designated persons
as the initial Class A Board Members and the initial Class B
Board Members, respectively:
Class A Board Members
Matthew Bucksbaum
John Bucksbaum
Robert A. MiChaels
Clas~ B Board Members
Marjorie Tsang
Yvonne D. Nelson
Frank L. Sullivan, Jr.
(d) Subject t'o Section 7.2 Ie), either the Class A Member
or Class B Member may. by delivering written notice to the
other, remove any Board Member designated by it and fill any
vacancy in one or more of its Board Member positions. No
Board Member otherwise may be removed and no vacancy otherwise
may be filled.
.
34
5-37
.
(e) Notwithstanding anything to the contrary contained
herein, every Class A Board Member shall also be an executive
officer of GG Properties holding the office of executive vice
president or higher, including Chairman of the Board.
(f) Except as exPressly provided herein, no Member shall
have any right to approve any action of or have any voice in
the management of the Company, and no Member shall have
authority to bind or otherwise act for the Company.
(g) Subject to the provisions of Section 7 3 (aI, the
Members agree that so long as GGPLP holds more than the Class
A Minimum Investment, the Class A Board Members shall have the
right and authority to designate and remove all of the
officers and directors or trustees of the Subsidiaries,
subject to the approval of the Class B Board Members, which
approval shall not be unreasonably withheld.
7.3 Officers. MAnaaement. Riahts in the Event of Cause.
.
(a) Subject to the provisions of Sections 7 2 (g) and
7.3(b), the officers of the Company and the Subsidiaries (to
the extent the Subsidiaries have officers) shall consist of
the Persons designated by the Board in the manner provided
herein for Board actions, and such Persons shall serve in the
offices designated by the Board until their respective
successors are duly appointed by the Board, they resign, die
or are removed (which the Board may do with or without cause
in the manner provided herein for Board actions). Officers of
the company may not be removed except as expressly provided
herein.
(b) So long as GGPLP holds more than the Class A Minimum
Investment and provided both the Class A Member and Class B
Member are entitled to designate Board Members in accordance
with the provisions of this Agreement, the Members agree to
cause the Class A Board Members and Class B Board Members to
(i) designate the Chief Executive Officer, President, Chief
Operating Officer, Chief Financial Officer, Treasurer and
Secretary of GG Properties to serve ex officio as the Chief
Executive Officer, President, Chief Operating Officer, Chief
Financial Officer, Treasurer and Secretary of the Company and
of the Subsidiaries (to the extent that the Subsidiaries have
officers) (the "General Growth Officers") (and to remove any
such Person who no longer is serving in such capacity as an
officer of General Growth) and (ii) designate certain persons
identified by any of the General Growth Officers as. vice
presidents, assistant treasurers or assistant secretar~es of
the Company and/or its Subsidiaries (and remove any such
Person that is designated to be removed by the General Gr~wth
Officers). Notwithstanding anything to the contrary contall;ed
herein and unless and to the extent the Board otherw~se
.
35
5-38
.
determines, from and after the date on which GGPLP no longer
holds the Class A Minimum Investment, the Members agree that
the General Growth Officers shall no longer be the officers of
the Company, they shall no longer manage the Company or the
Properties, they shall no longer be entitled to the fees set
forth in the Schedules attached hereto (except as expressly
provided therein) and the officers shall be selected by the
Board as reconstituted pursuant to Section 8.4(cl.
.
(c) Subject to Section 7.7 hereof, the officers of the
Company and the Subsidiaries shall be authorized to manage the
business and affairs of the Company and the Subsidiaries in
accordance with all Key Documents, legal requirements and the
terms hereof; and, subject to the foregoing, the officers of
the Company and the Subsidiaries shall have the right to take
all actions on behalf of the Company and the Subsidiaries.
The General Growth Officers, so long as they shall serve as
the management of the Company, shall manage the day to day
operations of the Company and each of the Properties in a
manner substantially consistent with the management of GGPLP
and GG Properties. Without in any way limiting the generality
of the foregoing, the officers of the Company and the
Subsidiaries shall manage the day to day operations of the
Properties in accordance with the policies and other matters
set forth on Schedule II. All costs and expenses incurred in
connection with the management of the Company and the
Subsidiaries and the ownership, operation, management and
development of the Properties shall be paid by the Company and
the Subsidiaries, or if paid by GGPLP or any of its
Affiliates, the Company and the Subsidiaries shall reimburse
GGPLP or its Affiliates therefor to the extent such costs and
expenses were incurred by reason of acts which (i) are for or
on behalf of the Company, (ii) within the scope of the
authority granted hereunder and (iii) did not constitute gross
negligence or willful misconduct on the part of GGPLP or its
Affiliates; provided, however, that for so long as the General
Growth Officers are the officers of the Company, the costs and
expenses of the Company and the Subsidiaries listed on
Schedule III shall be paid by GGPLP or its Affiliates and
shall not be reimbursed to GGPLP or its Affiliates or charged
to the Company or the Subsidiaries or paid from Company
Assets. So long as the General Growth Officers are the
officers of the Company, the Company and/or the Subsidiaries
shall pay to GGPLP and its Affiliates (as provided below) the
fees and reimbursable amounts with respect to the Company
Assets in the amounts and in the manner set forth on SChedule
:rl. Unless otherwise approved by the Board, and except as may
otherwise be provided in this Agreement, no other fee or
compensation shall be paid by the Company and/or the
Subsidiaries to GGPLP, GG Properties or any of their
Affiliates in connection with the management of the Company
and/or the SUbsidiaries and the Company Assets. So long as
'.
36
5-39
e
the General Grow~h Offic~r~ a!e the officers of the Company,
the Company and 1tS Subs1d1ar1es shall be authorized to enter
into one or more agreements with GGPLP and any of its
Affiliates to delegate all or any portion of the managerial
responsibilities of the General Growth Officers to such
entities; provided that, (i) the General Growth Officers shall
not be relieved of their obligation to manage the Company or
any other obligation or responsibility under this Agreement by
reason of such delegation, (ii) the Company shall not incur
any additional cost by reason of such delegation and (iii)
GGPLP and any such Affiliate shall be obligated to carry out
their delegated managerial responsibilities in accordance with
the policies set forth on Schedule II to the extent applicable
and (iv) and Board shall not lose any rights provided
hereunder. Any such agreement entered into by the Company
and/or its Subsidiaries, on the one hand, and GGPLP' and/or any
of its Affiliates, on the other hand, may provide that all or
any portion of the fees and reimbursable amounts set forth on
Schedule IV shall be paid to an Affiliate of GGPLP, rather
than to GGPLP, and may contain customary indemnities from the
Company and its Subsidiaries to GGPLP and such Affiliate
against claims, losses, liabilities, costs and expenses
arising out of the operation or management of Company Assets
to the extent such management was within the scope of the
authority expressly granted to GGPLP or such Affiliate
hereunder or thereunder, other than claims, losses,
liabilities, costs and expenses caused by the gross negligence
or willful misconduct of GGPLP or such Affiliate and shall
also contain customary indemnities by GGPLP or such Affiliate
to the Company with respect to GGPLP's or such Affiliate's
gross negligence or willful misconduct. Any such agreement
shall be terminable by the Class B Board Members, in their
sole discretion, immediately following the General Growth
Officers ceasing to serve as the Company's management, GGPLP
ceasing to own the Class A Minimum Investment or the
Development Manager or the Property Manager ceasing by
operation of law or otherwise to be GGPLP, GG Properties or an
Affiliate of GGPLP or GG Properties (and otherwise are only
terminable as expressly provided herein). Unless otherwise
provided herein or approved by the Board, the Company shall
not have any employees. Notwithstanding anything to the
contrary contained herein, the Company shall (and shall cause
the Subsidiaries to) continue to engage the existing property
manager (s) for Carolina Place and Montclair Plaza through
December 31, 1999 pursuant to the existing management
agreement (s) for such Properties, and the Company and ~he
Subsidiaries shall not commence paying GGPLP and/or 1ts
Affiliates the property management fees for Montclair Plaza
and Carolina Place (which fees are set forth in Section 1 of
Schedule IV) until January 1, 2000.
e
e
37
5-40
\
.
(d) The Class B Members shall have the right, in their
sole discretion, to exercise the rights under Article IX or XI
hereof in the event that Cause exists.
(e) For purposes of this Agreement, "Cause" shall mean,
(i) the failure of the General Growth Officers to submit an
Annual Business Plan to the. Board as provided in Section
7.7(c) hereof, (ii) the failure of the General Growth Officers
to obtain prior Board approval (as part of an approved Annual
Business Plan or otherwise) for any of the matters enumerated
in Section 7.7(d) hereof (unless Board approval is not
required pursuant to the provisions of this Agreement), (iii)
the General Growth Officers taking or causing the Company to
take any action materially in contravention of an approved
Annual Business Plan (other than actions otherwise permitted
hereunder), (iv) a willful and material violation by GGPLP or
GG Properties of the provisions of Section 7.10 hereof or (v)
the engaging by any General Growth Officers, GGPLP, GG
Properties, or the Property Manager, if any, in willful
misconduct, including fraud, embezzlement or theft which is
demonstrably and materially injurious to the Company; provideli
that Cause shall not be deemed to exist until the procedures
set forth in Section 7.3(f) below have been complied with.
.
(f) If the Class B Member or Class B Board Members
believe that an event giving rise to Cause has occurred, the
Class B Members or Class B Board Members shall deliver a
notice (the "Cause Notice") to the General Growth Officers
setting forth with particularity the event giving rise to
Cause and the applicable clause of Section 7.3 (e) . If the
event giving rise to Cause is one enumerated in Section 7.3(e)
(i), (ii) or (iii), the General Growth Officers shall have
fifteen (15) days from the date of the delivery of such notice
to cure the action or failure to act (or if such action or
failure to act, or consequence of such action or failure to
act, is curable but is of such a nature that it cannot be
cured within such fifteen (15) day period, the General Growth
Officers shall commence such cure and proceed diligently to
Complete the curing thereof as promptly as practicable). The
General Growth Officers shall promptly, and, in any event, by
the end of the fifteen (15) day cure period, notify (the "Cure
Notice") the Class B Member or any Class B Board Member that
either (i) the event giving rise to Cause has been cured and
specifying the actions taken in respect thereof or (ii) the
event giving rise to Cause is curable but cannot be cured
within fifteen (15) days and specifying the actions that have
been taken and will be taken in respect thereof, in which case
upon such cure the General Growth Officers will deliver a
second notice stating that the event giving rise to Cause has
been cured and specifying the actions that have been taken in
respect thereof (the "Second Cure Notice"). Unless the Class
B Member or such Class B Board Member reasonably objects in
.
38
5-41
.
.
.
writing to the Cure Notice or the Second Cure Notice, as the
case may be, within ten (10) days of delivery thereof, the
event giving rise to Cause (to the extent such Cure Notice or
Second Cure Notice states that the events giving rise to Cause
have been cured) shall be deemed to be cured. If GGPLP wishes
to contest the existence of Cause, the General Growth Officers
shall within ten (10) days of .receipt of the Cause Notice, or,
if the Class B Member or such Class B Board Member has
reasonably objected to the Cure Notice or the Second Cure
Notice, as the case may be, the Class B Member or any Class B
Board Member shall within ten (10) days of receipt of the Cure
Notice or the Second Cure Notice, as the case may be, submit
the existence of Cause to arbitration pursuant to Section
11.13 hereof. If the question of Cause or the cure thereof
has been submitted to arbitration, Cause shall not be deemed
to have occurred unless and until the arbitrators have reached
a final decision that Cause exists or has not been cured. If
the General Growth Officers neither submit the question of
Cause to arbitration nor deliver a Cure Notice within the
fifteen (lS) day period following the date of the delivery of
the Cause Notice, then Cause shall be deemed to exist on the
day immediately following such fifteen (lS) day periOd:
During any arbitration proce~ding, the General Growth Officers
shall use all diligent and good faith efforts to act or cease
from acting in the manner that is the subject of the dispute.
Arbitration costs shall be charged to the losing party.
(g) As to the allocation among the officers of the
rights, powers, authority and duties of the officers as a
group hereunder, each officer shall have the rights, powers,
authority and duties as generally pertaiils to his or her
office or as may be specified by the Chief Executive Officer
or the President of the Company unless otherwise provided
herein. The Secretary shall have the duty to record the
proceedings of the meetings of the Board and any committees in
a book to be kept for that purpose. The Board may require any
officer, agent or employee to give security for the faithful
performance of his or her duties.
7.4 CbairmAft of the Board. So long as the General Growth
Officers are the officers of the Company, the Members agree to
cause the Class A Board Members and Class B Board Members to
designate as the Chairman of the Board and the Subsidiaries the
Boar~ Member elected by GGPLP who holds the most senior position at
GG Properties (the "General Growth Chairman") .
7.5 Committees. The Board shall have the power to create
committees, inCluding an executive committee and an audit
committee, to designate, remove and replace committee members and
to delegate to such committees such powers and authority as the
Board may determine and as may then be permitted by the Company's
Certificate of Formation and the Act; provided, however, that so
39
5-42
.
e
.
long as the Class A Member and Class B Member are entitled to
designate Board Members in accordance with the provisions of this
Agreement, (i) any committee established by the Board shall have at
least one member designated by the Class A Board Members and at
least one member designated by the Class B Board Members unless the
Board determines otherwise and (ii) subject to Section 7.2(e), the
Class A Board Members shall be exclusively entitled to designate,
remove and replace the Class A committee members and the Class B
Board Members shall be exclusively entitled to designate, remove
and replace the Class B committee members. Except as provided
herein and unless the Board otherwise provides, each committee may
adopt, amend or repeal rules for the conduct of its business that
are consistent with the terms hereof Each committee shall
otherwise conduct its business in the same manner as the Board
conducts its business pursuant to this Agreement.
7.6 Certificate of Formation, Bv-Laws. Each Member shall
take all other actions necessary and appropriate to ensure that the
Company's Certificate of Formation and By-Laws do not at any time
conflict with the provisions of this Agreement or any Key Document
and shall not consent to or approve of any amendment to the
Certificate of Formation or By-Laws which would be inconsistent
with this Agreement or any Key Document.
7.7 Actions bv Board.
(a) Actions bv Directors. (a) Except as otherwise
provided herein, at such times as both Class A Units and Class
B Units shall be outstanding, at all meetings of the Board a
quorum shall exist for the transaction of business if at least
two (2) Class A Board Members and two (2) Class B Board
Members are present At such times as both Class A Units and
Class B Units shall be outstanding, at all meetings of any
committee of the Board a quorum shall exist for the
transaction of business if at least one member designated by
the Class A Board Members and one member designated by the
Class B Board Members are present, unless the Board shall
determine otherwise. At all other times (Le.. when the Board
is constituted pursuant to Section 8.4(C)), a quorum shall
exist for the transaction of business if at least a majority
of Board or committee members are present. Actions of the
Board or any committee thereof may be taken at meetings or by
written consent, and any written consent shall be filed with
the minutes of proceedings of the Board or the appropriate
committee thereof. Attendance at any meeting may be by
conference telephone or similar communications equipment by
means of which all persons participating in the meeting can
hear each another. In case at any meeting of the Board or a
committee thereof a quorum shall not be present, the members
of the Board or such committee present may adjourn the meeting
from time to time until a quorum shall be present.
40
5-43
.
(b) When action is to be taken by vote of the Board or
any committee thereof and except as otherwise provided herein.
each member of the Board or such committee shall be accorded
one vote Except as otherwise provided herein (including
Section 7.2 and Section 8.4(c) hereof), each and every
corporate action taken by vote of the Board or any committee
thereof shall be authorized .only by the affirmative vote of
the majority of the Board or committee members. as the case
may be, present at a duly constituted meeting at which a
quorum is present and acting throughout; provided that, at
such times as both Class A Units and Class B Units shall be
/outstanding and entitled to elect Board Members pursuant to
tl1is Agreement. at least one Class A Board Member and one
Class B Board Member (in the case of Board meetings), or one
Class A committee member and one Class B committee member (in
the case of committee meetings), has voted in favor of such
action.
.
(c) On or before December 15 of each year, commencing
December 15, 2000, for each Property that is operating, is
then under construction or development or is in the planning
stage, the General Growth Officers will cause to be prepared
and submitted to the Board for approval a proposed annual
business plan (including an annual capital budget and
operating budget and leasing guidelines to permit the
execution of leases on behalf of the Company and its
Subsidiaries without specific Board approval, which shall
include figures for minimum square foot base rental, maximum
tenant improvement allowances, maximum obligations on lease
take-overs and any other leasing criteria proposed by the
General Growth Officers) for the following fiscal year, such
plan to be substantially in the form of the "Annual Business
Plans" for 1999 delivered pursuant to the Stockholders
Agreement (unless otherwise provided herein) or otherwise
approved by the Board (each, an "Annual Business Plan") (and
the General Growth Officers will cause to be prepared and
submitted to the Board for approval a proposed Annual Business
Plan for 2000 within 60 days following the date hereof). The
proposed Annual Business Plan also shall itemize each
transaction or matter requiring approval of the Board pursuant
to Section 7.7(d) below. The General Growth Officers also
shall cause the Board to be provided with quarterly updates to
the Annual Business Plans. A meeting of the Board to consider
an Annual Business Plan for approval shall, unless the Board
otherwise determines, be held no sooner than 4S days following
submission of the proposed Annual Business Plan to the Board
and no later than 7S days following submission thereof. Prior
to such meeting, the General Growth Officers shall ma~e
available to the Class B Board Members and theJ.r
representatives and advisors such backup information with
respect to the Annual Business Plan as the Class B Board
Members shall reasonably request and shall be reasonably
.
41
5-44
.
available to consult with the Class B Board Members regarding
the details of the Annual Business Plan. If the Board shall
consider for adoption a proposed Annual Business Plan for any
year and shall fail to adopt it in its entirety because of
disagreement as to one or more items although the Board shall
agree on other items, then the Board shall adopt as the Annual
Business Plan for such year su.ch proposed Annual Business Plan
exclusive of the items as to which there is disagreement,
provided, however, that if there is disagreement over any item
of expenditure in such Annual Business Plan that is
nondiscretionary, then the Board shall adopt such Annual
Business Plan as it relates to such nondiscretionary item of
expenditure, and provided further, however, that if there is
disagreement over any discretionary item of operating
expenditure in such Annual Business Plan, then the Board shall
adopt such Annual Business Plan including such discretionary
item of operating expenditure in an amount equal to the amount
reasonably proposed for such operating expenditure item by the
General Growth Officers (and, in the event that the Annual
Business Plan otherwise has not been approved for any year,
the General Growth Officers may cause the Company to mak.e
discretionary operating expenditures in such amounts as they
reasonably deem appropriate and to expend funds for
nondiscretionary items until such Annual Business Plan is
approved). Although the General Growth Officers shall use
reasonable efforts to include all nondiscretionary items in
the Annual Business Plan, expenditures for nondiscretionary
items shall not be limited by amounts set forth in an approved
Annual Business Plan. "Nondiscretionary items" shall mean
items that must be paid by the Company to avoid a material
adverse effect on the business, operations or value of the
assets of the Company and/or its Subsidiaries. Without
limiting the generality of the foregoing, the Members
acknowledge and agree that nondiscretionary items include the
minimum amount of funds needed to (i) pay and perform when due
all of the obligations of the Company and/or its Subsidiaries
under any notes, mortgages and other instruments to which the
Company or any Subsidiary is or shall be a party or by which
the Company and/or its Subsidiaries or its or their assets are
bound in connection with any financing, (ii) pay when due real
estate and other taxes affecting the Company and/or its
Subsidiaries and insurance premiums for the Company and/or
Subsidiary assets and the Company and/or its Subsidiaries, and
(iii) comply with all laws now or hereafter in force which
shall be applicable to all or any part of the assets of the
Company and/or its Subsidiaries and the operation and
management thereof (including the making of capital
expenditures required for such compliance) if the failure to
comply would (A) expose the Company, any Subsidiary, any
Member or any employee, agent, officer, director, trustee or
contractor of the Company and/or any Subsidiary, any Member,
GG Properties, the Development Manager or the property Manager
.
.
42
5-45
.
to the risk of criminal prosecution, (B) entitle any enforcing
entity to take any action which could materially and adversely
affect the business, operation or value of the Company and/or
its Subsidiaries or (C) invalidate or impair any of the
insurance maintained by the Company and/or its Subsidiaries
(d) Notwithstanding anything to the contrary contained
herein, the following matters will require approval of the
Board (either as part of an approved Annual Business Plan or
by separate Board action) unless any such matters have been
specifically approved pursuant to this Agreement (including
Articles VIII, IX, X or XI) or otherwise:
(i) The purchase or other acquisition by the
Company and/or its Subsidiaries of any material asset or
property or any direct or indirect interest therein, but
excluding purchase options where the cost of the option
does not exceed $500,000;
Iii) the sale, transfer, assignment, exchange
or other disposition by the Company or any of its
Subsidiaries of any Property or any direct or indirect
interests therein or any part thereof;
.
(iii)
expansion by
Properties;
the
the
development,
Company or any
redevelopment
Subsidiary of
or
the
(iv) the incurrence by the Company or any
Subsidiary of any indebtedness for borrowed money,
whether secured or unsecured, or the refinancing of any
indebtedness for borrowed money, whether secured or
unsecured (including any capital lease obligation) in
excess of $500,000 in the aggregate in any fiscal year
(excluding indebtedness for borrowed money that has been
approved by the Board);
(v) the pledge, encumbrance or
liens or mortgages by the Company or any
any Property in connection with a
refinancing;
subjecting
Subsidiary
financing
to
of
or
.
(vi) with respect to each "Major Expense
Category" (as so denominated in the Annual Business
Plan), the expenditure by the Company and/or any
Subsidiary of amounts in excess of those set forth in an
approved Annual Business Plan, unless (A) the aggregate
of all such amounts (excluding nondiscretionary items and
emergency expenditures referred to below in excess of the
amount budgeted therefor) do not exceed lOSt of the total
expenditures set forth in such Annual Business Plan for
such Major Expense Category (but the amount of the fees
43
5-46
e
identified on Schedule IV may not be increased) or (8)
,such amounts are nondiscretionary items (as defined in
Section 7.7(c)) or otherwise are required. in the
reasonable judgment of the Company's management. to be
expended because of an emergency involving an immediate
threat to the health, safety or condition of persons or
property and the Company's management is hereby
authori~ed to spend such amounts without further Board
action (but only such amounts as are required to
alleviate such immediate threat);
(vii) the merger. consolidation, reorgani~ation
or other similar transaction involving the Company or any
Subsidiary with or into another Person. in any such case,
whether in a single transaction or a series of related
transactions;
e
(viii) except as provided in 7.7 (d) (xiv). any
Company or Subsidiary transaction or agreement (or
amendment or modification to any transaction or
agreement) with, involving or benefitting GGPLP, Gq
Properties. or an Affiliate of GGPLP or GG Properties;
(ix) other than a dissolution pursuant to
Article XI. the taking of any action. including the
filing of a petition. with respect to (x) an assignment
for the benefit of creditors of the Company or any
Subsidiary, (y) the bankruptcy. insol veney.
reorgani~ation, dissolution or any similar occurrence of
the Company or any Subsidiary or (~) a liquidation or any
other similar occurrence, that might result in the
termination of the Company or any Subsidiary;
(x) the admission of additional Members or the
issuance. grant or entry into an agreement or arrangement
providing for options, warrants or other rights.
interests or securities convertible into or exchangeable
for any equity interests in the Company or any
Subsidiary;
(xi) except as otherwise expressly provided
herein (including the provisions of ArtiCle V), the
determination of the amount and timing of distributions
of Net Disposition Proceeds and Operating Cash Flow;
(xii) the determination of Reserve Amounts for
any fiscal year;
(xiii)
with respect
capitali~ation
the establishment of the Company's policy
to the appropriate levels of debt
of the Company;
.
44
5-47
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.
.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth a~ove.
GGP LIMITED PARTNERSHIP, a Delaware
limited partnership
By: General Growth Properties,
Inc., a Delaware corporation,
general partner
By: ~~
Name: "':::Ol c.. ,8 '" ""'f'Z _
Title: e.<"~,-.JN":' L/ ,.'-e.... ;;:>r(O~cT~~
THE COMPTROLLER OF THE STATE OF NEW
YORK AS TRUSTEE OF THE COMMON
RETIREMENT FUND
By
Name:
Title:
GGP /HOMART II L L C., a Delaware
limited liability company
By (~~
Name/' .J '- JOC C_ /0,<>. v "-c.
Titl'e: (/. t' __ ~::>:-"5"aJ'u,...-r-
97
5-48
.
e
IN WITNESS WHEREOF, che undersigned have execuced t:his
Agreement: as of t:he dace set: fort:h above.
GOP LIMITED PARTNERSHIP, a Delaware
limiced part:nership
By:
General Gro~h
Inc., a Delaware
general part:ner
l?ropert:ies,
.corporat:ion,
By:
Name:
Ticle:
THE COMPTROLLER OF THE STATE OJ;' NEW
YORK AS TRUSTEE OF THE COMMON
RETIREMENT FUND
By:
of
.
Delaware
.
By:
Name:
Tit:le:
.
5-49
.
.
e
(xiv) the consent to any amendments or
supplements to, or the making of elections or grant of
waivers of conditions or the enforcement of rights under,
any Contribution Agreement, provided, however, that in
connection with any Board resolutions with respect to
such matters and so long as the Class A Member and Class
B Member are entitled .to designate Board Members in
accordance with the provisions of this Agreement. (A) the
Class B Board Members shall have the exclusive right to
vote (and the Class A Board Members shall not have the
right to vote and the vote of the Class A Board Members
shall not be required) for the approval of any such
action that relates to the obligations of GGPLP and its
Affiliates under any Contribution Agreement and (B) the
Class A Board Members shall have the exclusive right to
vote (and the Class B Board Members shall not have the
right to vote and the vote of the Class Board Members
shall not be required) for the approval of any such
action that relates to the obligations of NYSCRF or its
Affiliates under any Contribution Agreement;
(xv) the engagement, retention or termination
by the Company of any property or development manager for
the Properties other than GGPLP, GG Properties, or any of
their Affiliates;
(xvi) the engagement or retention by the Company
of any financial advisor or investment banking firm for
any major capital transaction or any legal counsel for
any material litigation;
(xvii) the amendment of any of the pOlicies set
forth in Schedule II or any of the fees or other matters
set forth in Schedule IV, in each case as they relate to
the Company or any Subsidiary;
(xviii) the adoption, modification or deviation
from (Al an approved Annual Business Plan (except as
permitted hereunder, including as specified in Section
7.7 (d) (vi)) and (B) any development budget, inCluding the
Stonebriar Development Plan.
(xix) any action not in furtherance of the
Company's purpose set forth in Section 2.4.
(e) The Members hereby approve, and the Company shall be
authorized to undertake, (i) the development and leasing of
the Stonebriar Development Project and the expenditure of
funds in connection therewith pursuant to the development plan
and budget attached hereto as Exhibit C (such development plan
and budget, as the same may be modified in accordance with the
terms of this Agreement, the "Stonebriar Development Plan")
45
5-50
.
and (ii) the operation of the Company Assets (other than the
Stonebriar Development Project) and the expenditure of funds
and/or incurrence of indebtedness in connection therewith
pursuant to the existing 1999 business plans for the Company
Assets for remainder of 1999 (and each such plan shall be
deemed to be an Annual Business Plan hereunder) .
7.8 Meetinqs of the Board.
(a) The Board shall meet not less frequently than three
times per year, at such times as the Board may determine, and,
if so determined, no notice need be given. Any failure to so
meet shall not give rise to any presumption or inference that
the Members shall have any liability for the obligations of
the Company.
'.
(b) In addition, the Board shall meet upon the request
of any Board Member conveyed in writing to each other Board
Member, at a time no fewer than two (2) and no more than
twenty-one (21) business days after such notice is given, and
at the Company's principal offices or such other place as is
determined by the Board.
(c) Meetings of the Board shall be presided over by the
Chairman of the Board or in the absence of the Chairman of the
Board by the Vice Chairman of the Board, if any, or in the
absence of the Vice Chairman of the Board by the President, or
in their absence by a chairman chosen at the meeting. The
Secretary, or in the absence of the Secretary, an Assistant
Secretary, shall act as secretary of the meeting, but in the
absence of the Secretary and any Assistant Secretary the
chairman of the Board shall choose a person to act as
Secretary.
(d) Whenever notice is required to be given to the Board
members under any provision of this Agreement, a written
waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special
meeting of the Board or members of a committee of the Board
need be specified in any written waiver of notice.
7.9 Conduct of Business.
.
(a) To the extent consistent with the other provisions
of this Agreement, the Company and its Subsidiaries shall
46
5-51
.
endeavor to conduct their affairs in a manner that will not
cause the Company or any Subsidiary to be deemed to be, and
will not make any investment which could cause it to become,
an "investment company" for purposes of the Investment Company
Act.
(b) The Company and it& Subsidiaries shall operate in a
manner that will enable GG Properties and Natick Trust to
(il satisfy the requirements for qualifying as a real estate
investment trust under the Code and (iil avoid any federal
income or excise tax liability. The foregoing is not intended
to, and shall not, alter the relative distributions payable to
the Members as set forth in Article V although it may affect
the overall amount of distributions made in any year.
(cl The Company shall at all times, commencing with the
date of its formation, qualify, and each Member shall cause
the Company to operate in a manner so that it will at all
times qualify as an "operating company" under Pension and
Welfare Benefits Administration Regulation ~ 2510.3-101 (the
"Plan Asset Regulations.) issued by the Department of Labor
under Title I of the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time
("ERISA") as long as equity participation by Benefit Plan
Investors (as defined in the Plan Asset Regulations) is
"significant," as defined therein.
.
.
(d) The Company and each of its Subsidiaries shall
operate its business and structure its investments in a manner
necessary to avoid the realization of any "unrelated business
taxable income" within the meaning of Section 512 of the Code
("UBTI") to any Member, or the realization of income that
would be UBTI were a Member subject to the provisions of
Section 511 through 514 of the Code regardless of its actual
status thereunder, unless the Board otherwise approves.
Without limiting the generality of the foregoing and without
Board approval, the Company and each Subsidiary shall not
knowingly, and each Member shall not knowingly, take any
action to cause the Company or any Subsidiary to (i) incur any
indebtedness other than (A) indebtedness that is incurred to
acquire or improve real property within the meaning of Section
514(c) (9) (A) of the Code and that is not described in Section
514(c) (9) (8) (ii) of the Code, or (B) other indebtedness that
will not give rise to UBTI to any Member or will not give rise
to income that would be UBTI if a Member were subject to the
provisions of Sections 511 through 514 of ~he Code regardl~ss
of its actual status thereunder (prov1ded that noth1ng
contained in this Section 7.9(d) (i) shall prohibit the
financing or refinancing of Properties, including the
consummation of the CMBS Financing, and the distribution of
all or a portion of the proceeds thereofl, (ii) guarantee the
obligations of others unless such guarantee does not cause the
47
5-52
.
obligation guaranteed to become a "recourse liability" within
the meaning of Treasury Regulation Section 1.7S2-1(a)), or
(Hi) incur any indebtedness that would be included as a
"partner non-recourse debt" as set forth in Treasury
Regulations Section 1.704-2(b) (4) (provided that nothing
contained in Section 7.9(d) (ii) or (iii) shall prohibit
guarantees or indebtedness that is "partner non-recourse debt"
.(as defined above) merely because of guarantees by any of the
Company, the Subsidiaries, GGP/Homart and/or the subsidiaries
of GGP/Homart of Obligations of any of the others or because
any such person is otherwise liable for the obligations of any
of the others). In furtherance of the foregoing and not in
limitation thereof and without Board approval, the Company
shall not knowingly, after making due inquiry (i) enter into
any lease with, or borrow any amounts for the acquisition or
improvement of any property (or any portion thereof) from, any
person described in Section S14(c) (9) (B) (iii) or (v) of the
Code; or (ii) enter into any lease or other arrangement with
respect to any Property or any portion thereof if such lease
or arrangement would result in (A) the payment of rent or any
other amount to the landlord which depends in whole or in part
on the income or profits derived by any person (including a
tenant or a subtenant) from any portion of such Property
(other than an amount based upon a fixed percentage of the
receipts or sales of the tenant and, if any, the subtenants),
(B) an obligation of the landlord to furnish or render any
service not customarily furnished or rendered in connection
with the rental of space for occupancy, as determined under
Section S12(b) of the Code and any applicable Treasury
regulations or (C) any portion of the Company's income (or
loss) otherwise being UBTI. In the event that NYSCRF
determines, in its reasonable judgment, that (i) as the result
of any change in applicable statute, regulation or
administrative or judicial interpretation thereof (including
private letter rulings, technical advice memoranda and other
similar pronouncements), any lease would cause the Company to
have UBTI or (ii) any other arrangement entered into with
respect to a Property or any portion thereof would cause the
Company to have UBTI, the parties hereto agree to use their
reasonable efforts (without any obligation to pay any amount
or incur any obligation) to reform such lease or other
arrangement, or to take any other action necessary or
appropriate, to prevent the Company from having any UBTI.
'.
7.10 Other Activities of MAm~ers.
.
(a) Neither GGPLP nor GG Properties nor any of their
Affiliates shall, directly or indirectly, as an owner,
managing or general partner, majority or controlling
stockholder, consultant, jOint venturer, manager or otherwise,
acquire, develop, redevelop, improve, construct or manage any
regional shopping mall project, that is, in any such case,
48
5-53
.
.
.
\
located within the -trade area (as shown in red on the maps
attached hereto as Exhibit E) of any of the mall shopping
centers listed on Exhibit E hereto (the "Relevant Trade
Area"); provided, however, that nothing herein shall prohibit
or restrict GGPLP or GG Properties or any of their Affiliates
from owning, operating, developing, improving, expanding or
managing any of the mall shopping centers owned (in whole or
in part), operated, being developed or managed, directly or
indirectly, by any of them on the date hereof and listed on
Schedule V hereto.
(b) Notwithstanding anything to the contrary in Section
7.10 (a), neither GGPLP nor GG Properties shall be in breach of
Section 7.10(a} if, in connection with the acquisition of a
portfolio of three or more regional shopping malls or
management contracts therefor, GGPLP, GG Properties or any of
their Affiliates acquires directly or indirectly, or becomes
the property manager or development manager for, any regional
shopping mall project that is located within the Relevant
Trade Area (the "Competing Asset"); provided GGPLP, GG
Properties or such Affiliate terminates any management
position with respect to such Competing Asset as soon a's
possible but no later than within one year after acquiring the
same.
(cl Subject to Section 7.10(a) and (b), each Member and
its Affiliates may engage or invest in any other activity or
venture or possess any direct or indirect interest therein
independently or with others. None of the Members, the
Company or any other Person employed by, related to or in any
way affiliated with any Member or the Company shall have any
duty or obligation to disclose or offer to the Company or any
of the Members, or obtain for the benefit of the Company or
any of the Members, any such other activity or venture or
interest therein None of the Company, the Members, the
creditors of the Company or any other person having any
interest in the Company shall have (i) any claim, right or
cause of action against any of the Members or any other Person
employed by, related to or in any way affiliated with, any of
the Members by reason of any direct or indirect investment or
other participation, whether active or passive, in any such
activity or venture therein or (ii) any right to any such
activity or venture or interest therein or the income or
profits derived therefrom.
7.11 Riaht of Public to Relv on Authoritv of the Members.
Nothing herein contained shall impose any Obligations on any Person
or firm doing business with the Company to inquire as ~o whether,or
not a Member or a General Growth Officer has exceeded ~ts author~ty
in executing any contract, lease, mortgage, deed or other
instrument on behalf of the Company, and any such third person
shall be fully protected in relying upon such authority.
49
5-54
.
7.12 Standard of Care. Subject to the other provisions hereof
(including Section 7 13), each of the Board Members and officers
shall discharge his or her duties in that capacity in good faith,
with the care that a director or officer, as the case may be, of a
Delaware corporation would be required to exercise and in a manner
he or she believes to be in the best interests of the Company.
7.13 Waiver and Ind-~"ification.
.
(a) Notwithstanding anything to the contrary contained
in this Agreement (including Section 7.12 and the SChedules
attached hereto). neither the Members nor any Person acting on
their behalf pursuant hereto (including the Board Members and
General Growth Officers), shall be liable, responsible or
accountable in damages or otherwise to the Company, any
Subsidiary or to any Member for any acts or omissions
performed or omitted to be performed by them (or any Person
acting on their behalf, including the Board Members and the
General Growth Officers) in connection with the management of
the Company and/or the Subsidiaries and within the scope of
the authority conferred upon them by this Agreement, the Boar~
and/or the Act, provided that the Member's or such other
Person's conduct or omission to act was taken in good faith
and in the belief that such conduct or omission was in the
best interests of the Company and/or the Subsidiaries and,
provided further, that the Member or such other Person shall
not be guilty of intentional misconduct or gross negligence.
The Company shall, and hereby does, indemnify and hold
harmless the Members and their Affiliates and any individual
acting on their behalf (including the Board Members and the
General Growth Officers) from any loss, damage, claims or
liability, including reasonable attorneys' fees and expenses,
incurred by them (i) by reason of any act performed by them or
any Person acting on their behalf (including the Board Members
and the General Growth Officers) in connection with the
management of the Company and/or its Subsidiaries and/or any
predecessors or successors thereof or thereto and in
accordance with the standards set forth above or (ii) in
enforcing the provisions of this indemnity. For purposes of
this 7.13, the term "General Growth Officers" shall include
the officers, directors and trustees of the Subsidiaries.
(b) Any Person entitled to indemnification under this
Agreement shall be entitled to receive, upon application
therefor (such application to include (i) a written
affirmation of such person's good faith belief that he or she
met the standard of conduct necessary for entitlement to
indemnification by the Company and (ii) his or her written
agreement to immediately repay such amount if it should
ultimately be determined that he or she has not met such
standard), advances to cover the reasonable costs of defending
any proceeding against such Person; provided, however, that
.
50
5-55
.
.
.
such advances shall be immediately repaid to the Company,
without interest, if such Person is found by a court of
competent jurisdiction upon entry of a final judgment not to
be entitled to such indemnification.
(cl The indemnity obligations under this Section '.13
shall be in addition to any liability which the Company
otherwise may have to any Person entitled to receive
indemnification under this Agreement, shall extend upon the
same terms and conditions to the stockholders. officers,
directors, partners, employees and controlling Persons of any
such Person, and shall be binding upon and inure to the
benefit of any successors, assigns, heirs, and personal
representatives of the Company, any Member, and any such other
Person. The foregoing provisions shall survive any
termination of this Agreement or dissolution of the Company.
(d) The Company and the other Members shall be
indemnified and held harmless by each Member from and against
any and all claims, demands, liabilities, costs, damages,
expenses (including reasonable attorneys' fees an9
disbursements) and causes of action of any nature whatsoever
arising out of or incidental to the fraud, willful misconduct
or gross negligence of such Member or any Affiliate of such
Member.
ARTICLE VIII
TRANSPERS OP COKPANY UNITS
8.1 Certain Restrictions. No Member shall, directly or
indirectly, Transfer any Units to any Person (any such Person in
whose favor a Transfer of Units is made, and all subsequent
permitted transferees of any such Person being referred to
collectively as "Transferees" and individually as a "Transferee"),
unless approved by the Board or unless such Transfer is made
pursuant to this Article VIII or Article IX, X or XI hereof;
provided, however, that nothing in this Agreement shall restrict
the Transfer of any ownership interest in any Member unless such
Member's assets consist substantially of its membership interest in
the Company, in which case the Transfer shall be deemed a Transfer
of Units. Each Member hereby agrees that it will not Transfer all
or any portion of its Units except as permitted by this Agreement,
that the Company shall not reflect on its books any Transfer of
Units to any Person except in accordance with this Agreement, and
that any Transfer of Units not permitted by the provisions of this
Agreement shall be null and void aQ initio.
8.2 Comcliance with Securities Laws. Notwithstanding
anything to the contrary contained herein, no Member shall Transfer
any Units, and the Company shall not reflect on its books any
Transfer of Units, unless (a) the Transfer is pursuant to an
51
5-56
PAGE 1
'I1ie :First State
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF FORMATION OF "GGP-OTAY RANCH L. L. C. " ,
FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY OF DECEMBER, A.D.
2004, AT 3:50 O'CLOCK P.M.
3901047 8100
040927835
, . .
...~~~.
/(f~~~,~~~,:?
:;?:,,~,r;':-.<o~.'!{'"'""'\'?'~\ y
Jf~~~2~ ' " R~,~-' "
'~~;~~~i~1
...1t~ ~~, _: ~ ~ -91z:- eJ 4.~-..)
HarTlet Smith Windsor. Secretary of Stale
AUTHENTICATION: 3569771
DATE: 12-22-04
5-58
. .
CERTIFICATE OF FORMATION
OF
GGP-OTAY RANCH L.L.C.
This Certificate of Formation of GGP-Otay Ranch L.LC. (the 'Company; is
being executed by the undersigned for the purpose of forming a limited liability company
pursuant to the Delaware Umited Uabinty Company Act.
1. The name of the company is:
GGP-Otay Ranch L.L.C.
2. The address of the registered office of the Company in Delaware is 2711
Centerville Road, Suite 400, Wilmington, New Castle County, Delaware, 19808. The
name of its Registered Agent at that address is Corporation Service Company.
IN WITNESS WHEREOF, the undersigned, an authorized person of the
Company, has caused this Certificate of Formation to be duly executed as of the 201ll
day of December, 2004.
Is! Marcela Godov
Marcela Godoy, authorized to sign this
Certificate of Formation on behalf of the
Company
NGEDOCS; 015179_0001 :1111569.2
st<ote ~ llIol~
Sec::ntazy ~ St<ot.
Divisi"" ~ Co<po....ticns
L\t.1.i.......:l 03:48 1'N 1.2/21/2004
FILED 03 :50 PM 1.2/21/2004
SR<7040927835 - 3901047 FJIE
5-59
Exhibit B-2
GGP-Otay Ranch L.L.C.
Operating Agreement
(see attached)
5-60
OPERATING AGREEMENT
OF
GGP-OT A Y RANCH L.L.C.
NGEDOCS: 1 tll969.1
5-61
TABLE OF CONTENTS
Page
ARTICLE I ............................................................................................................. DEFINITIONS 1
ARTICLE II ............................................................................................................. FORMATION 3
2.1 Fonnation of the Company .................................................................................... 3
2.2 Name ................. .................... ................... ................. .................. ................. ... ....... 3
2.3 Principal Office. ...... .............................. .............. ........ ............................... ............ 3
2.4 Registered Agent and Registered Office................................................................ 3
2.5 Tax Status of Company...................................................................................... .... 3
ARTIC~E III......................................................................................PURPOSES AND POWERS 3
3.1 Purposes ............. ..... ............. ..... ............ ......... ........... ....... ........... ................... ........ 3
3.2 General Powers .................................................................................................... 3
ARTICLE N ................................................................................................................MEMBERS 3
4.1 Membership Interest .............................................................................................. 3
4.2 Meetings............. ...... ............ .......................... ......... .................... ........................... 3
4.3 Place of Meeting .................................................................................................... 4
4 4 Notice of Meetings.. .............. .... ............ ......... ............................. ........................... 4
4.5 Closing of Transfer Books or Fixing of Record Date............................................ 4
4.6 Quorum .............. ..... .............................. .................. ....... ........................................ 4
47 Voting ....................................................................................................................4
4.8 Action by Written Consent .................................................................................... 4
4.9 Telephone Meetings ................................ ...... ......................................................... 4
ARTICLE V ...............................:........................................................................ MANAGEMENT 5
5.1 Management....... ..... ......... ..... ............... ........ ............ ...... ................................. ....... 5
5.2 No Exclusive Duty to the Company...................................................................... 5
5.3 Compensation ....... ................... ............. ......... ........... ............ ......... ............. ...... ..... 5
5.4 Expenses ............. .... .............. .... ..... ......... ............... ..................... ................. .......... 5
ARTICLE VI................................. LIMITATION ON LIABILITY AND INDEMNIFICATION 5
6.1 Limitation on Liability........................................................................................... 5
6.2 Indemnification of Members...... .......... .................... .................... .......................... 5
6.3 Payment of Expenses in Advance.......................................................................... 5
6.4 Provisions Not Excluslve.......................................................................................6
NGEDOCS: 1111969.1
-i-
5-62
TABLE OF CONTENTS
(continued)
Page
6.5 Insurance .................................... ................. ....................................................... .... 6
6.6 Continuation.................................................... ............................ .................. ......... 6
6.7 Other Persons Covered .......................................................................................... 6
6.8 Notice of Indemnification and/or Advancement of Expenses............................... 6
ARTICLE VII ................................................CONTRIBUTIONS AND CAPITAL ACCOUNTS 6
71 Capital Contributions.............................................................................................6
7.2 Member Loans ....................................................................................................... 6
7.3 Interest; Priority; Return of Capital....................................................................... 7
7 4 Negative Capital Accounts .................................................................................... 7
ARTICLE VIII........ ............................................................. ........... ...... ............... ALLOCATIONS 7
8.1 Distributions............................... ..................... ......... ..... ................................. ........ 7
8.2 Computation and Determination............................................................................7
ARTICLE IX .................................................................. ACCOUNTING AND TAX MATTERS 7
9.1 Fiscal Year ............................................................................................................. 7
9.2 Tax Assessed or Amounts Withheld...................................................................... 7
9.3 Books of Account and Records.............................................................................. 8
9.4 Financial and Tax Information............................................................................... 8
ARTICLE X..........................................................RESTRICTIONS ON TRANSFER OF UNITS 8
10.1 Transfer of Units .................................................................................................... 8
10.2 Approval of Substitute Members ........................................................................... 9
10.3 Record Owner of Unit....................................................................... .....................9
ARTICLE XI
DISSOLUTION AND TERMINATION, FINAL ACCOUNTING AND
DISTRIBUTIONS ..................... ......... ..................... .............. ............................. ...... .... ..... 9
11.1 Dissolution and Termination of the Company....................................................... 9
11.2 Distributions After Dissolution and Termination ................................................10
ARTICLE XII ........................................................................ AMENDMENT OF AGREEMENT II
ARTICLE XIII................................................................................................MISCELLANEOUS 11
13.1 Notices ................................................................................................................ 11
13.2 Law Governing .................................................................................................... 11
13.3 Representatives and Assigns................................................................................ 11
NGEDOCS: 1111969.1
-ii-
5-63
TABLE OF CONTENTS
(continued)
Page
13.4 Entire Agreement................................................................................................. 11
13.5 Counterparts .................. .................... .................. ....................... .................. ........ II
13.6 Severability .......................................................................................................... II
13.7 Construction .................... .................. ....................... ............................................ 11
13.8 Third Party Beneficiary........................................................................................12
13.9 Waiver of Action for Partition............................................................................. 12
13.10 Attorneys' Fees .................................................................................................... 12
NGEDOCS: 11 I J969.\
-iii-
5-64
OPERATING AGREEMENT
OF
GGP-OTAY RANCH L.L.C.
This Operating Agreement, dated December 21, 2004, is made and entered into by
GGP/Homart II L.L.C., a Delaware limited liability company, and any other Persons who may be
admitted to the Company and become signatories hereto.
RECIT ALS
WHEREAS, the parties hereto desire to form a Delaware limited liability company
known as GGP-Otay Ranch L.L.C. (the "Company") pursuant to the Delaware Limited Liability
Company Act, as amended (the "Act"), and to set forth herein their understandings in respect of
the Company
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt, adequacy and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
Definitions
The following are definitions of certain terms capitalized and used throughout this
Operating Agreement:
"Act" shall have the meaning set forth in the recitals.
"Affiliate" shall mean, as to any Member (or as to any other Person the affiliates 9f
whom are relevant for purposes of any of the provisions of this Agreement), any Person
controlled by, under common control with or controlling, directly or indirectly through one or
more intermediaries, such Member or such other Person.
"Agreement" shall mean this Agreement as originally executed and as amended In
writing from time to time.
"Capital Contribution" shall mean the amount of cash or property contributed to the
capital of the Company by each Member.
"Certificate" shall mean the certificate of formation, articles of organization or other
similar document of the Company, as the same is amended from time to time.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time (or
the corresponding provisions of succeeding law).
"Company" shall have the meaning set forth in the recitals.
NGEDOCS: 1111969.1
5-65
"Entitv" shall mean any partnership, corporation, trust, limited liability company,
business association, court, governmental agency or other entity.
"Fair Market Value" or "Fair Market Value of the Companv" shall mean the maximum
amount that a single buyer would reasonably be expected to pay to acquire the Company, an
asset of the Company or a Unit in the Company, as the case may be, on the date of
detennination, free and clear of all liens and encumbrances, in a single cash purchase, taking into
account the current condition and use of the asset or all of the assets and business of the
Company, as the case may be.
In situations under .this Agreement in which it is necessary to determine Fair Market
Value, such determination shall be made in good faith by the Members (or, if specified, by the
Liquidating Trustee).
"Fiscal Year" shall mean the Company's fiscal year, which shall be the calendar year.
"LiQuidatim! Trustee" shall have the meaning set forth in Section 11.2.
"Member" shall mean each of the Persons listed on Schedule A and each party who may
hereafter become an additional or substituted Member.
"Person" shall mean any individual or Entity.
"Regulations" shall mean Department of Treasury Regulations, including Temporary
Regulations and Proposed Regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding regulations).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"State" shall mean the State of Delaware.
''Transfer'' shall mean any assignment, sale, transfer, conveyance, pledge, grant of an
option 'or other disposition or act of alienation, whether voluntary or involuntary or by operation
ofIaw.
"Unit(s)" shall mean a unit of membership interest entitling the holder to an equal share,
with every other holder of a Unit, in the allocations and distributions ofthe Company pursuant to
Article VIII and the rights of management, consent, approval or participation, if any, granted to
holders of Units as provided in this Agreement.
All other capitalized terms not specifically defined in this Agreement shall have the
meanings ascribed to them in the Act.
NGEDOCS: 1111969.1
-2-
5-66
ARTICLE II
Formation
2.1 Formation of the Comoanv. The parties do hereby agree to form the Company as
a limited liability company under and pursuant to the provisions of the Act and all other laws of
the State for the purposes and upon the terms and conditions hereinafter set forth. The rights and
liabilities of the Members, except as expressly stated herein or in the Certificate, shall be as
provided in the Act.
2.2 Name. The name of the Company is "GGP-Otay Ranch L.L.C." or such other
name as may be selected by the Members from time to time.
2.3 Princioal Office. The principal office of the Company shall be located at 110
North Wacker Drive, Chicago, Illinois 60606. The location of the Company's office may be
changed from time to time by the Members.
2.4 Registered Agent and Registered Office. The Company shall at all times maintain
a registered agent and a registered office in the State as provided in the Act.
2.5 Tax Status of Company. The parties intend that the Company shall be
disregarded for federal and state income tax purposes.
ARTICLE III
Purposes and Powers
3.1 PUrPoses. The purposes of the Company are to, directly or indirectly (through a
partnership or other entity), engage in any lawful transaction or conduct any lawful business for
which limited liability companies may be organized under the Act.
3.2 General Powers. The Company shall have all powers granted to limited liability
companies under the Act.
ARTICLE IV
Members
4.1 Membership Interest. The names and addresses of the Members and the number
of Unit(s) owned by each are set forth on attached Schedule A, which Schedule shall be revised
from time to time as necessary to reflect the admission of additional or substitute Members and
the withdrawal of Members.
4.2 Meetings. Meetings of the Members may be called at any time by any Member.
The Member calling a meeting shall cause notice of such meeting to be given to the Members.
NGEDOCS: II 11969.1
- 3 -
5-67
4.3 Place of Meeting. Unless othelWise agreed by all Members, the place of meeting
shaH be the principal office of the Company in the state oflllinois.
4.4 Notice of Meetings. Notice stating the place, day and hour of any meeting of
Members and the purpose(s) of the meeting shall be given to each Member not less than five (5)
days before the meeting. A waiver of notice in writing, signed at any time by the Member
entitled to such notice, shall be deemed equivalent to the giving of such notice.
4.5 Closing of Transfer Books or Fixing of Record Date. For the purpose of
determining Members entitled to notice of or to vote at any meeting of the Members or payment
of distributions or for any other purpose, the Members may provide that the records relating to
Transfers of Units shall be closed for a stated period not to exceed sixty (60) days. In lieu of
closing such Transfer records, the Members may fix, in advance, a date as the record date for any
such determination of Members, such date in any case to be not more than sixty (60) days prior
to the date of such meeting or the payment of such distributions. If such Transfer records are not
closed and no record date is fixed for the determination of Members entitled to notice of or to
vote at a meeting of Members or to receive payment of a distribution, the date on which notice of
the meeting is mailed or on which the Members adopt a resolution to pay such distribution, as the
case may be, shall be the record date for such determination of Members.
4.6 Quorum. The holders of a majority of the Units, present in person or represented
by proxy, shall constitute a quorum of the Members for all purposes except in those instances
where a larger number shall be required by law or by the Certificate. If a quorum of Members is
not present at any meeting, such meeting may be adjourned by those present to any day, not
exceeding thirty (30) days thereafter, and no further caH or notice of such adjourned meeting
shaH be necessary.
4.7 Voting. Each outstanding Unit shall be entitled to one vote upon each matter
submitted to a vote of the Members. A Member may vote in person or by proxy appointed in
writing by such Member or its duly authorized attorney-in-fact. Such proxy shall be filed with
the Company prior to the vote in question. No proxy shall be valid after eleven (II) months
from the date of its execution, unless othelWise provided in the proxy. The affirmative vote of
the holders of a majority of the Units shaH be the act of the Members, unless the vote of a greater
number or class thereof is required by law, the Certificate or this Agreement.
4.8 Action bv Written Consent. Any action required or permitted to be taken at a
meeting of the Members may be taken without a meeting and without a vote if a consent in
writing, setting forth the action so taken, shaH be signed by the holders of outstanding Units
having not less than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which aH Units entitled to vote thereon were present and voting.
4.9 Teleohone Meetings. Any meeting of the Members may be held, or any Member
may participate in any meeting of the Members, by conference telephone or similar
communications equipment by means of which all Persons participating in the meeting can hear
each other.
NGEDOCS, 1111969.1
- 4.
5-68
ARTICLE V
Mana2ement
5.1 Mana2ement. The business and affairs of the Company shall be vested in and
directed and managed by the Members, and the Members shall have the full, complete and
exclusive authority, power and discretion to make any and all decisions with respect to the
business and affairs of the Company. All actions shall be taken only with the approval of the
Members as provided in Article IV or other applicable sections hereof. Any Member shall have
the power to act for or bind the Company
5.2 No Exclusive Dutv to the Companv. No Member shall be required to manage the
Company as its sole and exclusive function. A Member may have other business interests and
may engage in other activities in addition to those relating to the Company. Neither the
Company nor any Member shall have any right, by virtue of this Agreement, to share or
participate in other investments or activities of any Member or to the income or proceeds derived
therefrom.
5.3 Compensation. No Member shall receive compensation for its services to the
Company in such capacity.
5 4 Expenses. Upon proper substantiation, any Member shall be entitled to
reimbursement out of Company funds of any amounts paid by it personally on behalf of the
Company.
ARTICLE VI
Limitation on Liabilitv and Indemnification
6.1 Limitation on Liability. No Member shall be liable to the Company or any other
Member for any act or omission in connection with the management of the business or affairs of
the Company unless such act or omission was taken or made in bad faith or constitutes gross
negligence or willful misconduct.
6.2 Indemnification of Members. The Company shall indemnify and hold harmless
each Member against any losses, judgments, liabilities or expenses incurred in settling any claim
or incurred in any'finally adjudicated legal proceeding, including reasonable attorneys' fees and
costs of removing any liens affecting property of the indemnitee, and/or amounts paid in
settlement of any claims sustained by it arising from or relating to the management of the
Company, provided that the same were not the result of actions or omissions of such Member
taken or made in bad faith or which constitute gross negligence or willful misconduct.
6.3 Payment of Expenses in Advance. Expenses incurred in <jefending a civil or
criminal action, suit or proceeding may be paid by the Company in advance of the final
disposition of such action, suit or proceeding, as authorized by the Members in the specific case,
upon receipt of an undertaking by the Member or Members, as the case may be, to repay such
amount unless it shall ultimately be determined that such Member or Members are entitled. to be
indemnified by the Company
NGEOOCS: 1111969.1
- 5 -
5-69
6.4 Provisions Not Exclusive. The indemnification provided by this Article shall not
be deemed exclusive of any other rights to which those seeking indemnification may be entitled
under any statute, agreement, vote of Members or otherwise, both as to action in an official
capacity and as to action in another capacity while holding such office.
6.5 Insurance. The Company shall have the power to purchase and maintain
insurance on behalf of the Members against any liability asserted against it or incurred by it in
such. capacity or arising out of its status as such, whether or not the. Company would have the
power to indemnify it against such liability under the provisions of this Article.
6.6 Continuation. The provisions of this Article shall continue as to a Person who has
ceased to be a Member as to claims arising out of activities related to its prior capacity and shall
inure to the benefit of il$ successors and obligors. The provisions of this Article also shall
survive the liquidation, dissolution and termination of the Company and the termination of this
Agreement and shall be binding on the Company's successors and assigns.
6.7 Other Persons Covered. The provisions of this Article shall apply in all respects
to any Liquidating Trustee appointed pursuant to Section 11.2.
6.8 Notice of Indemnification and/or Advancement of Exoenses. If the Company has
indemnified and/or advanced any expenses to any Person pursuant to this Article VI, the
Company shall, within 30 days of such indemnification or advancement or sooner as required by
the Act, provide the Members with written notice thereof.
ARTICLE VII
Contributions and CaDi tal Accounts
7.1 CaDital Contributions.
(a) Each Member has made, or is deemed to have made, a Capital
Contribution to the Company of the cash and/or property set forth in the books and
records of the Company
(b) No further contributions of capital to, or financial accommodations for the
benefit of, the Company shall be required.
7.2 Member Loans.
(a) The Company may borrow funds from any Member for proper business
purposes at any time and from time to time on such terms and conditions, including,
without limitation, the rate of interest, any participation rights and any security, as the
Members deem appropriate. Any such loan shall not increase such Member's Capital
Account but shall be a debt due from the Company to such Member payable in
accordance with its terms. In the event of default, the Member, as lender, shall be
entitled to exercise and pursue all rights and remedies available to it in accordance with
such terms or applicable law.
NGEDOCS: II 11969.\
- 6 -
5-70
(b) Notwithstanding the foregoing, no Member shall be required to loan funds
to the Company.
7.3 Interest: Prioritv: Return ofCauital. No interest shall be paid by the Compapy on
Capital Contributions. No Member shall be entitled to priority over any other Member as to a
return of its Capital Contribution or as to allocations of net profits, net losses or distributions.
No Member shall be entitled to the return of its Capital Contributions except (a) as provide~ for
herein, (b) as required by law, (c) to the extent, if any, that distributions made pursuant to the
express terms of this Agreement may be considered as such by law, or (d) upon dissolution of the
Company, and then only to the extent expressly provided for in this Agreement. No Member
shall have any right to demand or receive property other than cash in return for its Capital
Contribution.
7.4 Negative Caoital Accounts. No Member shall have an obligation to the Company
to restore to zero any negative balance in its capital account, if any.
ARTICLE vm
Distributions: Etc.
8.1 Distributions. The timing and amount of distributions to the Members shall be
determined by the Members. All distributions shall be made pro rata to the Members in
accordance with the number of Units then owned by each Member in relation to the total number
of Units then outstanding.
8.2 Comuutation and Determination. The Members.may rely upon, and shall have no
liability to the Members or the Company if they rely upon, the advice of the independent public
accountants retained by the Compapy from time to time with respect to all matters (including
disputes with respect thereto) relating to computations and determinations required to be made
under this Article.
ARTICLE IX
Accounting and Tax Matters
9.1 Fiscal Year. The Company's Fiscal Year shall be the calendar year or such other
period as the Members shall determine.
9.2 Tax Assessed or Amounts Withheld. Any tax assessed on the Company with
respect to any Member's allocable share of the income of the Company and/or all amounts
required to be withheld with respect to the income of the Company allocable to any payment or
distribution to the Company or the Members pursuant to the Code or any provision of any state
or local tax law, shall be treated as amounts distributed to the Members for all purposes under
this Agreement. The Company may allocate any such amounts among the Members in any
manner so that the capital account, if any, of the Member whose status gives rise to such
assessment or withholding is properly debited or credited.
,
NGElXlCS: 1111969.\
-7-
5-71
9.3 Books of Account and Records. The Members shall cause proper and complete
records and books of account of the Company to be kept in which shall be entered fully and
accurately all transactions and other matters relating to the Company's business in such detail
and completeness as is required by the Act and is customary and usual for businesses of the type
engaged in by the Company. The books and records at all times shall be maintained at the
principal office of the Company (and, to the extent required to be kept at the registered office,
also maintained at the registered office) and shall be open to the reasonable inspection and
examination of the Members or their duly authorized representatives during reasonable business
hours.
9.4 Financial and Tax Information. Within ninety (90) days after the end of each
Fiscal Year, the Company shall furnish to each Person who was a Member during such period
financial statements of the Company and all other information necessary for the preparation of
such Person's federal income tax return.
ARTICLE X
Restrictions on Transfer of Units
10.1 Transfer of Units. A member may Transfer a Unit only in accordance with the
following terms:
(a) the Company shall not be required to recognize any Transfer of all or any
portion of a Unit until the instrument conveying such Unit has been delivered to the
non-Transferring Member for recordation on the books of the Company;
(b) unless an assignee is admitted to the Company as a substitute Member in
accordance with Section 10.2, such assignee shall not be entitled to any of the rights
granted to a Member hereunder other than the right to receive the distributions and return
of contributions to which the assignor otherwise would be entitled with respect to the
Unit (or portion thereot) Transferred;
(c) the assignor shall notify the non-Transferring Member of such Transfer
and provide it with such information regarding the assignee and the Transfer (including,
but not limited to, the name, address and taxpayer identification number of the assignor
and assignee and the date of the Transfer) as is required under Section 60S0K of the Code
(if the transfer is a sale or exchange described in Section 7S1(a) of the Code) and
Regulations promulgated thereunder in the manner and at the time prescribed by law;
(d) the assignor shall deliver to the other Member an opinion of counselor
other evidence satisfactory to such Member that the Unit to be Transferred is registered
under the Securities Act of 1933, as amended, and applicable state securities laws or that
exemptions from such registration are available; and
(e) the assignee shall pay all costs and expenses reasonably incurred by the
Company in connection with such Transfer.
NGEDOCS: 1111969.\
- 8-
5-72
The effective date of any Transfer shall be the date on which all of the prerequisites to the
Transfer specified in this Section have been made, provided that for purposes of any required
amendment by the Company of the Certificate and of any filings made in other jurisdictions, the
Company may refuse to recognize the effectiveness of a Transfer until the end of the current
monthly, quarterly, semi-annual or annual accounting period.
10.2 Approval of Substitute Members. An assignee of a Unit shall be admitted to the
Company as a substitute Member entitled to all the rights of a Member if, and only if, all of the
following requirements are met:
(a) the assignor agrees to such substitution;
(b) the holders of all outstanding Units (other than the Unites) being
Transferred) approve such substitution, which approval may be granted or withheld in the
sole discretion of each Person from whom such approval is sought;
( c) the assignee pays to the Company all costs and expenses incurred in
connection with such substitution, including, without limitation, costs incurred in making
any required amendment to any filings; and
(d) the assignee executes and delivers such instruments, in form and substance
satisfactory to the non-Transferring Member, as such Member may deem necessary or
desirable to effect such substitution and to confirm the agreement of the assignee to be
bound by all of the terms and provisions of this Agreement.
10.3 Record Owner ofUni!. The Company shall be entitled to treat the Person whose
name appears on the records of the Company as the absolute owner of a Unit in the Company in
all respects, and shall incur no liability for distributions of cash or other property made in good
faith to such record owner, until such time as a written assignment of such Unit has been
received and accepted by the non-Transferring Member and recorded on the books of the
Company.
ARTICLE XI
Dissolution and Termination,
Final Accounting and Distributions
11 I Dissolution and Termination of the Companv.
(a) The term of the Company shall end, and the Company shall be
immediately dissolved, upon the occurrence of any of the following:
(i) the death, bankruptcy, retirement, resignation, expulsion,
liquidation or dissolution of, or court declaration of incompetence with respect to,
the last remaining Member or upon the occurrence of any other event that
terminates the continued membership of the last remaining Member in the
Company;
NGEOOCS: 1111969.1
-9-
5-73
(ii) the sale of all or substantially all assets of the Company; or
(iii) the decision of the holders of a majority of the outstanding Units to
dissolve.
(b) Upon the dissolution of the Company, no further business shall be
conducted by the Company except the taking of action necessary for the winding up of
the affairs of the Company and the liquidation and distribution of its assets. Actions
taken by the Company to effectuate or facilitate the orderly winding up of the Company's
affairs shall not be construed to involve a continuation of the Company.
11.2 Distributions After Dissolution and Termination.
(a) Upon the dissolution of the Company, the Members shall appoint a Person
(who may be a Member) who shall act as liquidating trustee (the "Liquidating Trustee")
and shall proceed to wind-up the business of the Company The Liquidating Trustee
shall first determine or have determined the Fair Market Value of the Company The
Liquidating Trustee shall use its best efforts to sell such Company assets (except cash and
current receivables) as are necessary to satisfy the claims of creditors or as cannot be
readily divided among the Members at such prices, and on such terms, as the Liquidating
Trustee, in the exercise of its best judgment under the circumstances then presented,
deems in the best interest of the Members. The Liquidating Trustee is specifically
authorized to accept an installment obligation in connection with the sale of any assets of
the Company if the Liquidating Trustee, in its sole discretion, deems it to be in the best
interest of the Members. Any Member shall have the right to purchase any Company
property to be sold on liquidation, provided that the terms on which such sale is made are
no less favorable than would otherwise be available from third parties.
(b) In settling accounts after dissolution of the Company, the assets of the
Company shall be paid to creditors of the Company and to the Members in the following
order:
(i) to creditors, including Members who are creditors, to the extent
permitted by law, in satisfaction of liabilities of the Company in the order of
priority as provided by law;
(ii) to the establishment of reserves for payment of creditors pursuant
to clause (i) above; and
(iii) to the Members, pro rata in accordance the number of Units owned
by them relative to the total number of Units outstanding.
NGEDOCS: 1111969.1
- 10-
5-74
ARTICLE XII
Amendment of Agreement
Units.
This Agreement may be amended only upon the approval of the holders of all outstanding
ARTICLE XIII
Miscellaneous
13 I Notices. All notices or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be considered as properly given when
deposited in the United States mail, first class postage prepaid, addressed to a Member at its
address as it appears in the records of the Company or when delivered personally (including
delivery by messenger or overnight courier service) to the Member at such address.
13.2 Law Governing. The construction and enforcement of this Agreement shall be
governed by the laws of the State (without regard to the conflicts oflaw principles thereof).
13.3 Reoresentatives and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Members and their respective heirs, personal or legal representatives,
successors arid permitted assigns.
13.4 Entire Agreement. This Agreement contains the entire understanding among the
parties with respect to the subject matter hereof and supersedes any prior understandings or
written or oral agreements among them, or any of them, respecting the subject matter contained
herein.
13.5 Counteroarts. This Agreement may be executed in multiple counterparts, each of
which shall be an original, but all of which shall constitute one document.
13.6 Severabilitv. This Agreement is intended to be performed in accordance with,
and only to the extent permitted by, all applicable laws, ordinances, rules and regulations. If any
provision of this Agreement or the application thereof to any Person or circumstance is, for any
reason and to any extent, invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be affected thereby, but
rather shall be enforced to the fullest extent permitted by law.
13 7 Construction. The Article and Section titles used in this Agreement are solely for
convenience and neither modify nor limit the provisions of this Agreement. Any references
herein to Articles and Sections shall be deemed to refer to the Articles and Sections hereof, as the
case may be, unless otherwise specified. If the context so requires, the masculine shall include
the feminine and the neuter, and the singular shall include the plural, and vice versa.
NGEDOCS: 1111969.1
- 11 -
5-75
13.8 Third Partv Beneficiarv No Person other than a Member shall have any legal or
equitable right, remedy or claim under or in respect of this Agreement or be entitled to status as a
third party beneficiary of any obligation arising under this Agreement or to enforce the
obligation of any Member under this Agreement.
] 3.9 Waiver of Action for Partition. Each Member irrevocably waives any right that it
may have to maintain any action for partition with respect to the property of the Company.
13.]0 Attornevs' Fees. If any legal action, including an action for declaratory relief, is
brought to enforce any provision of this Agreement, the prevailing party or parties, as the case
may be, shall be entitled to recover his, its or their respective reasonable attorneys' fees from the
non-prevailing party or parties, as the case may be. These fees, which may be set by the court in
the siune action or in a separate action brought for that purpose, are in addition to any other relief
to which any prevailing party may be entitled.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
NGEDOCS: 1111969.1
- 12-
5-76
IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date first
above written.
GGPIHOMART n L.L.C., a Delaware limited
liability com any
Gem, Executive Vice President
By:
NGEDOCS: 1111969.1
5-77
Member
GGP/Homart II L.L.C.
110 North Wacker Drive
Chicago, lllinois 60606
NGEDOCS: 1111969.1
SCHEDULE A
TO
OPERATING AGREEMENT
OF
GGP-OTAY RANCH L.L.C.
A-J
5-78
Number of
Units Owned
100
Exhibit C-l
GGP-Otay Ranch L.P
Delaware Certificate of Partnership
(see attached)
5-79
PAGE 1
'Tne :first State
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO Jw.J)l7.~Y CERTIFY THE ATTACHED IS A TRUE' AND CORRECT
COPY OF THE CERTIFICATE OF LIMITED PARTNERSHIP OF "GGP-OTAY
RANCH, L.P. ", FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY OF
DECEMBER, A.D. 2004, AT 3:51 O'CLOCK P.M.
3901055 8100
040927848
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Harriet Smid1 Windsor, Sec.....ry of S....,
AUTHENTICATION: 3569795
DATE: 12-22-04
5-80
'1
. '.
CERTlRCATE OF LIMITED PARTNERSHIP
OF
GGP-OTAY RANCH, LP.
This Certificate (the "Certificate") of Limited Partnership of GGp.otay Ranch,
L.P., a Delaware limited partnership (the "Partnershipj, is being executed on
December 20, 2004.
It is. therefore. certified as follows:
1. ~. The name of the Partnership is:
GGP-Otay Ranch, L.P.
2. Realstered Office and Realstered AaenL The registered office of the
Partnership in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington,
New Castle County, Delaware. 19808. Tha nama of the rsglstered agent of the
Partnership for Service of Process at such address is Corporation Service Company.
3. Name and Address of General Partner. The name and address of the
General Partner of the Partnership is as follows:
GGP-Otay Ranch L.L.C.
110 North Wacker Drive
Chicago, Illinois 60606
4. Certificate. This Certificate has been duly executed and filed in accordance
with the provisions of Section 17-201 of the Delaware Revised Uniform Limited
Partnership Act
IN WITNESS WHEREOF, the undersigned has duly executed this Certificale as
of the day and year first above written.
GGP-OTAY RANCH L.L.C., a Delaware limited
liability company, its general partner
By:
Is! Marcela Godov
Marcela Godoy, authorized person
State of J:le:L-=
Se-=-f:azy ae seat.
DivisiOD o-f Cozp;t.nlt:iOAS
Dalivezacf 03:48 m 12/2l!2/X)'
l'IUD 03:'1. PH 12/21/2004
SfN 040927848 - 3901055 EIIE
NGECOCS: 0151711.llOO1:11115702
5-81
Exhibit B-2
GGP-Otay Ranch L.P
Partnership Agreement
(see attached)
5-82
AGREEMENT OF LIMITED PARTNERSHIP
OF
GGP-OTAY RANCH, L.P.
NGEOOCS: 1111855.1
5-83
TABLE OF CONTENTS
Page
DEFINITIONS; ETC ... ..................... ................................. ................... ........... 1
Definitions............ ............................................................................. ..................... I
Exhibit, Etc ....... .................... ............................. ............... ...... ... ............................ 3
FORMATION OF PARTNERSHIP................................................................ 3
Formation of Partnership ... ....................................... ...........~..... ..... ........... ............ 3
Documents .......... ......... ........ ............. .................. ................. ......... ......................... 4
Name ................................................... ............................................ ....................... 4
Character of the Business.. ............... ............ ............................................... ...........4
Location of the Principal Place of Business ..........................................................4
Registered Agent and Registered Office................................................................ 4
Tax Status... ..... ............................................................................................ ........... 4
TERM ..............................................................................................................5
Commencement. ................ ................ ... .................... ................. ............................ 5
Dissolution ......... .............. ............ .......................................................................... 5
CONTRIBUTIONS TO CAPITAL ...............................................................5
Capital Contributions...................................................................................... ....... 5
Additional Contributions. .... ........................... ...... .......................... ........ ............... 5
No Third Party Beneficiary....................................................................................5
No Interest; No Return........................................................................................... 5
DISTRIBUTIONS ................................................................................ ........... 6
RECORDS, REPORTS AND ACCOUNTING ............................................6
Books of Account .................................................................................................. 6
Annual Statements ................................................................................................. 6
RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL
PARTNER .......................................................................................................7
7.1 Powers and Duties of General Partner ............................m.................................... 7
"'.2 Duties and Conflicts............................................................................................... 9
7.3 Authority ofthe General Partner.......................................................................... 10
7.4 Additional Partners .............................................................................................. 10
7.5 Waiver and Indemnification ............................................................................... 10
ARTICLE I
1.I
1.2
ARTICLE II
2.1
2.2
2.3
2.4
2.5
2.6
2.7
ARTICLE III
3.1
3.2
ARTICLE N
4.1
4.2
4.3
4.4
ARTICLE V
ARTICLE VI
6.1
6.2
ARTICLE VII
ARTICLE VIII DISSOLUTION, LIQUIDATION AND WINDING-UP.............................. 11
8.1 Accounting...........................................................................................................11
8.2 Distribution on Dissolution.................................................................................. 11
NGEDOCS: 1111855.1
-)-
5-84
TABLE OF CONTENTS
(continued) Page
8.3 No Obligation to Restore Deficit Capital Account Balance ................................ 11
8.4 Sale of Partnership Assets.................................................................................... 1 I
ARTICLE IX TRANSFER OF PARTNERSHIP INTERESTS ......................................... 12
9.1 Restriction on Transfer ........................................................................................12
9.2 Substituted Limited Partners ...............................................................................12
ARTICLE X RlGHTS AND OBLIGATIONS OF THE LIMITED PARTNER................ 13
10.1 No Participation in Management ......................................................................... 13
10.2 Bankruptcy, Death, Dissolution or Termination of the Limited Partner ............. 13
ARTICLE Xl GENERAL PROVISIONS ............................................................................ 13
11.1 Notices .................................................................................................................13
11.2 Waiver of Right of Partition ................................................................................ 14
11.3 Successors ............................................................................................................ 14
11.4 Effect and Interpretation ......................................................................................14
11.5 Counterparts ................. ....................... .................. ............................................... 14
11.6 Partners Not Agents ............................................................................................. 14
11.7 Entire Understanding ...........................................................................................14
11.8 Severability ..........................................................................................................14
11.9 Assurances ........................................................................................................... 15
NOEOOCS: 1111855.1
-11-
5-85
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NGEDOCS: IlIlSSS.\
5-86
AGREEMENT OF LIMITED PARTNERSHIP
OF
GGP-OTAY RANCH, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into as of the
21st day of December, 2004, by and between the undersigned parties.
RECITALS
WHEREAS, the parties hereto desire to form a Delaware limited partnership known as
GGP-Olay Ranch, L.P. (the "Partnership") pursuant to the Delaware Revised Uniform Limited
Partnership Act, as amended (the "Act"), and to set forth herein their understandings in respect
of the Partnership.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt, adequacy and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
Definitions: Etc.
1.1 Definitions. Except as otherwise herein expressly provided, the following terms
and phrases shall have the meanings set forth below:
"Act" shall have the meaning set forth in the recitals.
"AlO'eement" shall mean this Agreement of Limited Partnership, as the same may
hereafter be amended, modified, supplemented or restated from time to time, .as the context
requires.
"Caoital Contribution" shall mean, with respect to any Partner, the amount of money and
the initial fair market value of any property (less the amount of indebtedness, if any, of such
Partner which is assumed by the Partnership and/or the amount of indebtedness, if any, to which
NGEDOCS, 11118.55.1
5-87
such property is subject, as of the date of contribution) actually contributed to the Partnership by
such Partner as well as any additional contributions actually made or deemed made by a Partner.
"Cash Flow" shall mean, with respect to any fiscal period, (a) all cash receipts of the
Partnership received from any source during such period less (b) cash expended for Partnership
debts, costs and expenses (including, without limitation, capital expenditures and interest and
principal payments on any indebtedness) and reasonable operating and replacement reserves for
such fiscal period, all as determined in the sole and absolute discretion of the General Partner to
be reasonably necessary in the conduct of the Partnership's business; provided, however,
reserves previously set aside, shall, where and to the extent the General Partner no longer regards
such reserves as necessary, be considered cash revenues of the Partnership as of the time of such
determination.
"Certificate" shall mean the Certificate of Limited Partnership of the Partnership, as the
same may be amended from time to time.
"General Partner" shall mean GGP-Otay Ranch L.L.C., a Delaware limited liability
company, its duly admitted successors and assigns, or any Person who is a general partner at the
time of reference thereto.
"Limited Partner" shall mean GGP/Homart II L.L.C., a Delaware limited liability
company, its duly admitted successors and assigns, or any Person who is a limited partner at the
time of reference thereto.
"Liouidating Trustee" shall mean such individual as is selected by the General Partner
with the written approval of the Limited Partner, which individual may include an affiliate of the
General Partner. The Liquidating Trustee shall be empowered to give and receive notices,
reports and payments in connection with the dissolution, liquidation andlor winding-up of the '
Partnership, and shall hold and exercise such other rights and powers as are necessary or required
NOEDOCS: 1111855.1
2
5-88
to permit all parties to deal with the Liquidating Trustee in connection with the dissolution,
liquidation and/or winding-up of the Partnership.
"Partners" shall mean the General Partner and the Limited Partner, their duly admitted
successors or assigns, or any Person who is a partner at the time of reference thereto.
"Partnershiu" shall have the meaning set forth in the recitals.
"Partnershiu Interest" shall have the meaning ascribed to it in Section 9.1 hereo[
"Percentage Interest" shall mean, with respect to each Partner, the percentage interest of
such Partner in the Partnership as set forth opposite its respective name under the heading
"Percentage Interest" on Schedule A.
"Person" shall mean any individual, partnership, corporation, limited liability company,
trust, business association or other entity.
"Substituted Limited Partner" shall have the meaning set forth in Section 9 I hereof
1.2 Exhibit. Etc. References to an "Exhibit" or a "Schedule" are, unless otherwise
specified, to one of the Exhibits or Schedules attached to this Agreement, and references to an
"Article" or a "Section" are, unless otherwise specified, to one of the Articles or Sections of this
Agreement.
ARTICLE II
Formation of Partnership
2.1 Formation of Partnership. The Partners do hereby agree to form the Partnership
as a limited partnership under and pursuant to the provisions of the Act and all other pertinent
laws of the State of Delaware for the purposes and upon the terms and conditions hereinafter set
forth. The Partners agree that the rights and liabilities of the Partners shall be as provided herein
and, to the extent not provided herein, in the Act.
NGEDOCS.1111855.1
3
5-89
2.2 Documents. The Partnership shall cause such notices, instruments, documents or
certificates as may be required by applicable law and which may be necessary to form the
partnership and enable the Partnership to conduct its business and to own its properties in the
Partnership name (including without limitation to the Certificate) to be filed or recorded in all
appropriate public offices.
2.3 Name. The business of the Partnership shall be conducted under the name of
"GGP-Otay Ranch, L.P." or such other name as the General Partner may select.
2.4 Character of the Business. The purpose of the Partnership shall be to own,
redevelop, operate, finance, sell and otherwise deal with real and personal property and to
engage in one or more other businesses as are permissible under the Act. The Partnership shall
have all powers necessary or desirable to accomplish these purposes.
2.5 Location of thePrinciDal Place of Business. The location of the principal place
of business of the Partnership shall be at 110 North Wacker Drive, Chicago, Illinois 60606, or
such other location as shall be selected from time to time by the General Partner in its sole
discretion.
2.6 Rel!istered Al!ent and RCl!istered Office. The Registered Agent of the
Partnership shall be Corporation Service Company or such other Person as the General Partner
may select in its sole discretion. The Registered Office of the Partnership shall be 2711
Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808, or such other
location as the General Partner may select in its sole and absolute discretion.
2.7 Tax Status. The parties intend that the Partnership shall be disregarded for
Federal tax purposes.
NGEOOCS: 1111855.1
4
5-90
ARTICLE III
Term
3.1 Commencement. The Partnership shall commence business on the dale hereof.
3.2 Dissolution. The Partnership shall continue until dissolved upon the occurrence
of the earliest of the following events:
(a)
Partner;
The dissolution, tennination, removal or bankruptcy oflhe General
(b) The affirmative decision of the General Partner and the Limited
Partner during the term of the Partnership to terminate the Partnership; or
(c) Dissolution required by operation oflaw.
ARTICLE IV
Contributions to Capital
4.1 Capital Contributions. The Partners have made, or are deemed to have made,
Capital Contributions as set forth in the books and records of the Partnership.
4.2 Additional Contributions. The Partners shall not be obligated to contribute any
additional amounts to the Partnership.
4.3 No Tbird PartY Beneficiary No creditor or other third party having dealings
with the Partnership shall have the right to enforce the right or obligation of any Partner to make
Capital Contributions or to pursue any other right or remedy hereunder or at law or in equity, it
being understood and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective successors and assigns.
4.4 No Interest; No Return. No Partner shall be entitled to interest on any Capital
Contribution to the Partnership. Except as provided herein or by law, no Partner shall have any
right to demand or receive the return of its Capital Contribution to the Partnership.
NGEOOCS: IllmS.1
5
5-91
ARTICLE V
Distributions
Subject to the provisions of Section 8.2 hereof respecting distributions on the dissolution
of the Partnership, the Cash Flow of the Partnership shall be distributed to the Partners, at such
times as shall be determined in the sole and absolute discretion of the General Partner, pro rata in
accordance with their Percentage Interests.
ARTICLE VI
Records. Reports and Accountine
6.1 Books of Account. At all times during the continuance of the Partnership, the
General Partner shall cause proper and true books of account to be kept, such books of account to
be of the types usually kept by Persons engaged in a business of a like kind and character. In
addition, the Partnership shall keep all records as required to be kept pursuant to the Act. The
books and records of account shall be kept at the principal office of the Partnership, and each
Partner shall at all reasonable times have access to such books and records and the right to
inspect the same.
6.2 Annual Statements. The Partnership's books of account shall be closed
promptly after the end of each fiscal year. Promptly thereafter, a written report shall be made to
each Partner by the General Partner, which may include a balance sheet of the Partnership as of
the end of such year, a statement of income and expenses for such year, a statement of Partners'
equity as of the end of such year and such statements with respect to the Partnership as shall be
necessary to advise all Partners properly about their investment in the Partnership for federal
income tax reporting purposes.
NGEDOCS; II 1 1855.1
6
5-92
ARTICLE VII
Ril!hts, Duties and Restrictions of the General Partner
7.1 Powers and Duties of General Partner The General Partner shall be
responsible for the management of the Partnership's business and affairs and shall devote such
time and effort to the Partnership as it shall deem reasonably necessary. Except as otherwise
herein expressly provided, the General Partner shall have, and is hereby granted, full and
complete power, authority and discretion to take such action for and on behalf of the Partnership
and in its name as the General Partner shall, in its sole and absolute discretion, deem necessary
or appropriate to carry out the purposes for Which the Partnership was organized, including, but
not limited to, the following:
l
I
,.
(a) To manage, control, invest, reinvest, acquire by purchase, lease or
otherwise, sell, contract to purchase or sell, grant, obtain, or exercise options to
purchase, options to sell or conversion rights, assign, transfer, convey, deliver,
endorse, exchange, pledge, mortgage, abandon, improve, repair, maintain, insure,
lease for any term and otherwise deal with any and all real property of whatsoever
kind and nature, and wheresoever situated, in furtherance of the purposes of the
Partnership;
(b) To acquire real estate of any kind and of any type, and any and all
kinds of interests therein, and to determine the manner in which title thereto is to
be held; to manage, insure against loss, protect and subdivide any of the real
estate, interests therein or parts thereof; to improve develop or redevelop any such
real estate; to participate in the ownership and development of any property; to
dedicate for public use, to vacate any subdivisions or parts thereof, to resubdivide,
to contract to sell, to grant options to purchase, to sell on any terms; to convey,
mortgage, pledge or otherwise encumber said property, or any part thereof; to
lease said property or any part thereof from time to time, upon any term.s and for
any period of time, and to renew or extend leases, to amend, change or modify the
terms and provisions of any leases and to grant options to lease and options to
renew leases and options to purchase; to partition or to exchange said real
property, or any part thereof, for other real or personal property; to grant
easements or charges of any kind; to release, conveyor assign any right, title or
interest in or about or easement appurtenant to said property or any part thereof;
to construct and reconstruct, remodel, alter, repair, add to or take from buildings
on said premises; to insure any person having an interest in or responsibility for
the care, management or repair of such property; to direct the trustee of any land
trust to mortgage, lease, conveyor contract to convey the real estate held in such
land trust or to execute and deliver deeds, mortgages, notes, and any and all
documents pertaining to the property subject to such land trust or in any matter
regarding such trust; and to execute assiguments of all or any part of the
beneficial interest in such land trust;
NGEDOCS: 1111855.1
7
5-93
(c) To employ, engage or contract with or dismiss from employment
or engagement persons deemed necessary by the General Partner for the operation
and management of the Partnership business, including but not limited to,
contractors, subcontractors, engineers, architects, surveyors, mechanics,
consultants, accountants, attorneys, insurance brokers, real estate brokers and
others;
(d) To enter into and/or assume contracts on behalf of the Partnership;
(e) To borrow money, procure loans and advances from any person for
Partnership purposes, and to apply for and secure, from any person, credit or
accommodations; to contract liabilities and obligations, direct or contingent and
of every kind and nature with or without security; and to repay, discharge, settle,
adjust, compromise, or liquidate any such loan, advance, credit, obligation or
liability;
(f) To pledge, hypothecate, mortgage, assign, deposit, deliver, enter
into sale and leaseback arrangements or otherwise give as security or as additional
or substitute security, or for sale or other disposition any and all Partnership
property, tangible or intangible, including, but not limited to, real estate and
beneficial interests in land trusts, and to make substitutions thereof, and to receive
any proceeds thereof upon the release or surrender thereof; to sign, execute and
deliver any and all assignments, deeds and other contracts and instruments in
writing; to authorize, give, make, procure, accept and receive moneys, payments,
property, notices, demands, vouchers, receipts, releases, compromises and
adjustments; to waive notices, demands, protests and authorize and execute
waivers of every kind and nature; to enter into, make, execute, deliver and receive
written agreements, undertakings and instruments of every kind and nature; to
give oral instructions and make oral agreements; and generally to do any and all
other acts and things incidental to any of the foregoing or with reference to any
dealings or transactions which any attorney may deem necessary, proper or
advisable;
(g) To acquire and enter into any contract of insurance which the
General Partner deems necessary or appropriate for the protection of the
Partnership, for the conservation of the Partnership's assets or for any purpose
convenient or beneficial to the Partnership;
(h) To conduct any and all banking transactions on behalf of the
Partnership to adjust and settle checking, savings, and other accounts with such
institutions as the General Partner shall deem appropriate; to draw, sign, execute,
accept, endorse, guarantee, deliver, receive and pay any checks, drafts, bills of
exchange, acceptances, notes, obligations, undertakings and other instruments for
or relating to the payment, of money in, into, or from any account in the
Partnership's name; to execute, procure, consent to and authorize extensions and
renewals of the same; and to make deposits and withdraw the same and to
negotiate or discount commercial paper, acceptances, negotiable instruments, bills
of exchange and dollar drafts;
(i) To demand, sue for, receive, and otherwise take steps to collect or
recover all debts, rents, proceeds, interests, dividends, goods, chattels, income
from property, damages and all other property, to which the Partnership may be
entitl~d ~r which are or may become due the Partnership from any person or
orgarnzatIon; to commence, prosecute or enforce, or to defend, answer or oppose,
NGEOOCS: 1111855.1
8
5-94
contest and abandon all legal proceedings in which the Partnership is or may
hereafter be interested; and to settle, compromise or submit to arbitration any
accounts, debts, claims, disputes and matters which may arise between the
Partnership and any other person or organization and to grant an extension of time
for the payment or satisfaction thereof on any terms, with or without security;
U) To make arrangements for financing, including the taking of all
action deemed necessary or appropriate by the General Partner to cause any
approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance by
the Partnership with applicable arrangements, and other contractual obligations
and arrangements entered into by the Partnership from time to time in accordance
with the provisions of this Agreement, including periodic reports as required to
lenders and using all due diligence to insure that the Partnership is in compliance
with its contractual obligations;
(I) To maintain the Partnership's books and records;
(m) To prepare budgets and forecasts with respect to the cash needs of
the Partnership;
(n) To prepare and deliver, or cause to be prepared and delivered by
the Partnership's accountants, (i) all financial and other reports with respect to the
operations of the Partnership and (ii) any Federal and state tax returns and reports;
and
(0) To pay all expenditures of the Partnership and to invest the funds
of the Partnership in such interest bearing or non-interest bearing accounts,
including, without limitation, checking and savings accounts, certificates of
deposit and time or demand deposits in such institutions, or in other safe and
liquid investments as the General Partner shall deem appropriate.
7.2 Duties and Conflicts. The General Partner shall devote such time and efforts to
the business and activities of the Partnership as the General Partner shall deem reasonably
necessary to promote adequately the interests of the Partnership and the Partners. Each Partner
recognizes that each other Partner has or may have other business interests, activities and
investments, some of which may be in conflict or competition with the business of the
Partnership, and that each Partner is entitled to carry on such other business interests, activities
and investments. Each Partner may engage in any activities, whether or not competitive with the
Partnership, without any obligation to offer any interest in such activities to the Partnership or to
any Partner.
NGEDOCS: 1111 855.1
9
5-95
7.3 Authority of the General Partner Nothing herein contained shall impose any
obligation on any Person or firm doing business with the Partnership to inquire as to whether or
not the General Partner has properly exercised its authority in executing any instrument on behalf
of the Partnership, and any such third Person shall be fully protected in relying upon such
authority.
7.4 Additional Partners. Additional partners may be admitted to the Partnership
only with the prior written consent of all Partners.
7.5 Waiver and Indemnification. Neither the General Partner nor any Person acting
on its behalf, pursuant hereto, shall be liable, responsible or accountable in damages or otherwise
to the Partnership or to any Partner for any acts or omissions performed or omitted to be
performed by them within the scope of the authority conferred upon the General Partner by this
Agreement and the Act provided that the General Partner's conduct or omission to act was taken
in good faith and, provided further, that the General Partner shall not be guilty of fraud, willful
misconduct or gross negligence. The Partnership shall, and hereby does, indemnify and hold
harmless the General Partner and its affiliates and any individual acting on their behalf from any
loss, damage, claim or liability including, but not limited to, reasonable attorneys' fees and
expenses incurred by them by reason of any act performed by them in accordance with the
standards set forth above or in enforcing the provisions of this indemnity; provided, however, no
Partner shall have any personal liability with respect to the foregoing indemnification liabilities,
any such indemnification to be satisfied solely out of the assets of the Partnership.
NGEOOCS: 1111855.1
10
5-96
ARTICLE VIII
Dissolution. LiQuidation and Windine-Uo
8.1 Accountine. In the event of the dissolution, liquidation and winding-up of the
Partnership, a proper accounting (which need not be certified) shall be made of the net income or
net loss of the Partnership from the date of the last previous accounting to the date of dissolution.
8.2 Distribution on Dissolution. In the event of the dissolution and liquidation of
the Partnership for any reason, the assets of the Partnership shall be liquidated for distribution in
the following rank and order:
(a) Payment of creditors of the Partnership (including, but not limited
to, Partners) in the order of priority as provided by law;
(b) Establishment of reserves to provide for contingent liabilities, if
any; and
Interests.
(d) To tjJ.e Partners in accordance with their respective Percentage
Whenever the Liquidating Trustee reasonably determines that any reserves established
pursuant to subsection (b) above are in excess ofthe reasonable requirements of the Partnership,
the amount determined to be excess shall be distributed to the Partners in accordance with the
provisions of this Section 8.2.
8.3 No Oblieation to Restore Deficit Caoital Account Balance. No Partner shall
have an obligation to restore a deficit balance in its capital account, if any, at dissolution and
termination of the Partnership or at any other time.
8.4 Sale of Partnershio Assets. To the extent that it is required to payor provide for
payment of Partnership debts, the Liquidating Trustee may, without the consent of the Partners,
sell Partnership property. The Liquidating Trustee shall in good faith solicit bids from unrelated
third parties and obtain independent appraisals before making any sale that has not been
consented to by all of the Partners. Subject to the foregoing, all sales, leases, ~cumbrances or
NGEDOCS: 1111855.1
11
5-97
transfers of Partnership assets shall be made by the Liquidating Trustee solely on an "arms-
length" basis and on the best price, terms and conditions reasonably available at the time and
under the circwnstances.
ARTICLE IX
Transfer of Partnershio Interests
9.1 Restriction on Transfer. Except to the extent permitted by this Article IX or as
otherwise provided herein, no Partner may sell, assign, pledge, encumber or othelWise dispose of
all or any portion of his or its interest in the Partnership (the "Partnership Interest") without, in
the case of a transfer by the Limited Partner, the prior written consent of the General Partner,
and, in the case of a transfer by the General Partner, the prior written consent of the Limited
Partner. Upon the transfer of a Partnership Interest in accordance with the provisions of this
Section 9.1, the transferee Partner, in the case of a transferee General Partner, shall become
vested with the powers and rights of the transferor General Partner once such transferee has
executed such instruments as may be necessary to effectuate such admission and to confirm the
agreement of such transferee to be bound by all the terms and provisions of this Agreement with
respect to the Partnership Interest so acquired, and, in the case of a transferee Limited Partner,
shall become a substituted limited partner entitled to all the rights and benefits of the transferee
under this Agreement (the "Substituted Limited Partner") only in accordance with the provisions
of Section 9.2 hereof.
9.2 Substituted Limited Partners.
(a) The General Partner may, but need not, in its sole and absolute
discretion, permit an assignee or transferee (whether such assignee or transferee
has acquired its Partnership Interest by virtue of a voluntary transfer or
assignment pursuant to Sections 9.1, an involuntary transfer or assigrunent or a
transfer or assignment by operation of law) of a Partnership Interest (or a part
thereof) of the Limited Partner to be and become a Substituted Limited Partner in
the Partnership.
NGEDOCS: 1111855.1
12
5-98
(b) Each Substituted Limited Partner, as a condition to its admission
as a Substituted Limited Partner, shall execute and acknowledge such instruments,
in form and substance satisfactory to the General Partner, as the General Partner
shall deem necessary or desirable to effectuate such admission and to confirm the
agreement of the Substituted Limited Partner to be bound by all the terms and
provisions of this Agreement with respect to the Partnership Interest acquired.
All reasonable expenses, including attorneys' fees, incurred by the Partnership in
this connection shall be borne by such Substituted Limited Partner.
ARTICLE X
Ril!hts and Oblil!ations of the Limited Partner
10.1 No Participation in Manal!ement. The Limited Partner shall not take part in the
management of the Partnership's business, transact any business in the Partnership's name or
have the power to sign documents for or otherwise bind the Partnership.
10.2 Bankruptcv. Death. Dissolution or Termination of the Limited Partner. The
bankruptcy, death, dissolution or termination of the Limited Partner shall not cause a dissolution
of the Partnership, but, the rights of the Limited Partner to share in the net income or net loss of
the Partnership, to receive distributions of Partnership funds and to assign its Partnership Interest
or cause the substitution of a Substituted Limited Partner shall, on the happening of such event,
devolve on its successors or assigns, and the Partnership shall continue as.a limited partnership.
,.
However, such designee(s) shall not become a Substituted Limited Partner without the prior
written consent of the General Partner
ARTICLE XI
General Provisions
11.1 Notices. All notices, offers or other communications required or permitted to be
given pursuant to this Agreement shall be in writing and shall be considered as properly given or
made if delivered personally, mailed from within the United States by first class United States
mail, postage prepaid, or sent by prepaid telegram or facsimile transmission (with written receipt
NGEDOCS, 1111855.1
13
5-99
..
of confirmation) to the addresses of the parties as set forth on Schedule A. The address of any
party hereto may be changed by a notice in writing given in accordance with the provisions
hereo f.
11.2 Waiver of Rie:bt of Partition. Each of the Partners does hereby agree to and
does hereby waive any right it may have to cause the Partnership's property to be partitioned or
divided among the Partners, or to file a complaint or institute any proceeding at law or in equity
to cause the Partnership's property to be partitioned or otherwise divided among the Partners.
11.3 Successors. This Agreement and all the terms and provisions hereof shall be
binding upon and shan inure to the benefit of all Partners, and their legal representatives, heirs,
successors and assigns, except as expressly herein otherwise provided.
11.4 Effect and Internretation. This Agreement shall be governed by and construed
in conformity with the laws of the State of Delaware (without regard to its conflicts of law
principles).
11.5 Counternarts. This Agreement may be executed in counterparts, each .of which
shan be an original, but an of which shall constitute one and the same document.
11.6 Partners Not Ae:ents. Nothing contained herein shall be construed to make any
Partner the agent of another Partner, except as specifically provided herein, or in any manner to
limit the Partners in the carrying on of their own respective businesses or activities.
11.7 Entire Understandine:. This Agreement constitutes the entire understanding
among the Partners and supersedes any prior understandings and/or written or oral agreements
among them respecting the subject matter within.
11.8 Severabilitv. If any provision of this Agreement, or the application of such
provision to any person or circumstance, s.hall be held invalid by a court of competent
jurisdiction, the remainder of this Agreement, or the application of such provision to persons or
NGEDOCS: 1111855.1
14
5-100
circumstances other than those to which it is held invalid by such court, shall not be affected
thereby.
11.9 Assurances. Each of the Partners shall hereafter execute and deliver such further
instruments and do such further acts and things as may be required or useful to carry out the
intent and purpose of this Agreement and as are not inconsistent with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused
this Agreement to be executed as of the date and year first above written.
GENERAL PARTNER:
GGP-OT A Y RANCH L.L.C., a Delaware limited
liability company
By: GGP/HOMART II L.L.C., a Delaware limited
liability com any, its sole member
LIMIT
GGP/HOMART II LP L.L.C., a Delaware limited
liability company
NOEDQCS: 1111855.1
15
5-101
SCHEDULE A
TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
GGP-OTAY RANCH, L.P.
General Partner
Percentage Interest
0.5%
GGP-Otay Ranch L.L.C.
110 North Wacker Drive
Chicago, Illinois 60606
Limited Partner
GGPIHomart II L.L.C.
110 North Wacker Drive
Chicago, Illinois 60606
99.5%
A-I
NGEDOCS: 1111855.1
5-102
Exhibit B-2
GGP-Otay Ranch L.P
California Certificate of Registration
(see attached)
5-103
. . ~" "'-
4.
SECRETARY OF STATE
ta
I, Kevin Shelley, Secretary of State of the State of
California, hereby certify:
That the attached transcript of 2... page(s) has
been compared with the record on file in this office, of
which it purports to be a copy, and that it is full, true
and correct.
SeclStm. Form CE-101 {f811. 1103)
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal of
the State of California this day of
JAN 2 5 2005
7(:::m~
5$; OSP0380510
. "
'.
. State of California FII.POOS024OOOO8
.. .
. .
& . Kevin Shelley
.:.:". Secretary of State ENDORSED. FILED
In the office Of lhe Secretary 01 Slale
al1l1e State of CaUfornla
FOREIGN LIMITED PARTNERSHIP JAN 1 9 2005
APPLlCA TrON FOR REGISTRA TJON KEVIN SHELLEY
A $70.00 lifing lee must accompany this fonn. Seoretary of State
IMPORTANT - Read instrucUons balon! completing thIS forin. ThIs Space For FII&w Use OnlY
ENTITY NAME (EnD tJ1e riame./n Item ,_ "'e word. 'UmIle<l Partnelsh/p" or!he..-a1lDn "\..P.')
1. NAME UNDER WHICH llfE FOREIGN LIMITED PARTNERSHIP PROPOSES TO REGSn:R AHD TRANSACT BUSINESS IN CAUFDRNlA
GGP-Ollly RJIncb, 1..P.
2. NAME OF mE FOREIGN LIMITED P~TNERSHIP.IF DIFFERENT FROM ntAT ENTERED IN ITEM , ABOVE
OFFICE ADDRESSES (Do nolabbrevfalelhe name of II1e city.)
3. ADDRESS OF THE PRINCIPAl EXECUTlIIE OFRCE CliY AND STATE ZIP CODE
110 Nann Wacker Drive, Chicago,lIIinai. 60606
.. ACDRES!rOF THE PRINClPAl OFFlCE.IN CALIFORNIA. IF ANY CliY STATE .ZlPCOOE
I CA
DATE AND. PLACE OF OR~rtON
5. nilS FOREIGN LIMITED PARTNERSHIP WAS FORMED ON -1L - -lL - ...llL- IN Delaware
(IIONTH) (04') (YEAR) (STATEatOJlMTRY)
AND IS AUTHORIZED TO EXERClSE rTS POWERS ""0 PRMLEGES IN THAT STATE OR COUNTRY.
AGENT FOR SERVICE OF PROCESS (1ft"" ;,genii. on Individuill, the agent nillS/reslde In cellli>mla and both Items 6 and 7 must be colT1llele<l. Ir
lI1e agent Is a oorpora1lon. !he agetll must have en /iIe will1l11e CaJIIcmla seaetal'f Of Sl;J1e a c:er1Incate purouanl to Corporations Code IIOl:Iion 1505 and
Item 6 mtlS' be ccmplefed (leave It.... 7 btanl<).)
.. NAME OF AGENT FOR SERVICE OF PROCESS
Corporation Service Company whi<;/! will do businc;ss.in California as CSe-Lnwyers Inool'Jl9mting Service
7. IF AN lNOMOUAI.. ADDRESS OF AGENT FOR SERVICE OF PROCESS. IN CALIFORNIA CITY STATE ZJPCOOE
CA
APPOINTMENT (The IoItcwlng .latement Is requlied by staMltand mal' net be _.)
.. IN THE EVENT TIiE ABOVE AGEHT FOR SERVICE OF PROCESS RESIGNS AND IS NOT REPLACED, OR IF THE AGENT CANNOT BE FOUNO OR
SERVEO WITH THE EXERCISE OF Re;,soiJAsLE DIUGENCE, THE SECRETARY OF STATE OF THE STATE OF CALIFORNIA IS HERESY APPOlNTED
AS THE AGENT FOR SERVICE OF PROCESS OF THIS FOREIGN LlMITED.PARTNERSHIP,
GENERAL PARTNERS IEntertlle ..me....nd ad_ uf an oIl1le.general par1ners. _maddilonal pages.lr"""""..ry.)
go. NAME ADDRESS ClTY AND STATE ZIP COOE
GGP-OUlY Ranch LL.C. 110 Nonh Wacker Drive Chicago, Dlinoi. 60606
9" NAME ADORESS CITY AND STATE ZlPcOoE
EXECUTION
10. I DECLARE I AM THE PERSON \'MO I;XECUTED THIS INSTRUMENT. WHICH EXEGUTlON IS MY ACT AND DEED.
~AP a~~~rhmA"~ A TYPE OR PRINT NAME OF GENERA!- PARTNER
SIGNA TUm; OF GENERAL PARTNER DATE
.
RETURN TO (Enter !he name and Ihe address olthe _ or firm to wIlem.a copy clll1e Died document sIloultlbe returned.) ,
11. NAME r M:ucel. Godoy 1
RRM Neal, Gerber & Eisenberg LLP
ADDRESS Two Nonh LaS.lle Slree!, Sic. 2200
Chicago, lIIinQis 60602
ClTYISTATEIZlP L J
,
,,~ (REV 1212OO4} APPROVED BY SeCRETARY OF STATE
5-105
,
....... ...
ATTACHMENT A
TO FOREIGN LIMITED PARTNERSHIP
APPLICA 1ION FOR REGISTRA TlON OF
GGP-OT A Y RANCH. .L.P.
10. GGP-OTA Y RANCH, L.P.. a Delaware limited partnership
By: GGP-OTA Y RANCH LL.C., a Delaware limited liability
Company, its general partner
By: GGP/HOMART II L.L.C., a Delaware limited liability
comParr> its sol~ m.Tbn
By: ~~ ~~
Bem3rd Freibaum, Executive Vice President
Dated: January~, 2005
NCiEOOC'_"i: OISJ7I).OOOl:112C78l.1
5-106
NAME
John Bucksbaum
Robert A. Michaels
Bernard Freibaum
Ronald L. Gem
Carol A. Williams
Linda J. Wight
Chief Executive Officer n./ /J
, '-1'-1'" /L._./,/
~~
Executive Vice President n J (
and Treasurer ~~
Exhibit D
GGPIHomart II L.L.C.
Incumbency Signatures
TITLE
President
SIGNATURE
Senior Vice President
and Secretary
Assistant Secret
Assistant Secretary
5-107
.
~1~V
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CHULA VISTA AUTHORIZING THE
CITY ENGINEER TO ISSUE ENCROACHMENT
PERMIT NO. PE-704 FOR THE INSTALLATION OF
A MONUMENT SIGN AND A RETAINING WALL
PROPOSED TO BE CONSTRUCTED WITIllN THE
EXISTING BIRCH ROAD GENERAL UTILITY
EASEMENT.
WHEREAS, General Growth Properties (GGP), owners of the Otay Ranch Town
Center, located at the southwest corner of Olympic Parkway and Eastlake Parkway, just
east of future SR-125, are proposing to construct a monument sign and a retaining wall
within City's general utility easement; and
WHEREAS, due to the design and size of the project monument wall proposed to
be located near the intersection of Birch Road and Eastlake Parkway, and its proximity to
the approved location of the onsite Market building, a portion of the monument wall will
need to be located within the existing Birch Road general utility easement; and
WHEREAS, due to site design constraints for the Town Center project, some
slope grading and retaining wall construction will be required within the existing Birch
Road general utility easement along the southwesterly edge of the project; and
WHEREAS, the retaining wall will vary in height from 1 to 7 feet and
approximately 193 feet of the overall retaining wall is proposed to be located within the
Birch Road general utility easement; and
WHEREAS, according to Section 12.28.020 of the Chula Vista Municipal Code,
a Council resolution must authorize the issuance of this encroachment permit, since the
retaining wall exceeds 5 ft in height.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Chula Vista that it authorizes the issuance of Encroachment Permit PE-704 for
installation of a monument sign and a retaining wall proposed to be constructed within
the existing Birch Road general utility easement.
BE IT FURTHER RESOLVED, that the City Clerk is directed to record this
Resolution and Encroachment Permit No. PE-704
Presented by
Approved as to form by
'---f"~ tL ,~IA .-?.:b-
Ann Moore
City Attorney
Leah Browder
Acting Director of Engineering
H:\ENGINEER\RESOS\Resos2006\08~22-06\Reso for Encroachment Permit Otay Ranch Town Center
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