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All references to numbered Notes are to specific footnotes to the Consolidated Financial Statements of General Growth Properties, Inc. (“General Growth” or the “Company”) as included in this Annual Report on Form 10-K (“Annual Report”). The descriptions included in such Notes are incorporated into the applicable Item response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. The terms “we,” “us” and “our” may also be used to refer to General Growth and its subsidiaries. See also the Glossary at the end of Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for definitions of selected terms used in this Annual Report.

We make all key strategic decisions for our properties. However, in connection with the Unconsolidated Properties, such strategic decisions are made with the respective stockholders, members or joint venture partners of such properties. We are also the asset manager of most of the properties in the Company Portfolio, executing the strategic decisions and overseeing the day-to-day property management functions, including leasing, construction management, data processing, maintenance, accounting, marketing, promotional services and security oversight. With respect to jointly owned properties, we generally conduct the management activities through one of our taxable REIT subsidiaries (“TRS”). As of December 31, 2005, we managed the properties for 21 of our unconsolidated joint ventures and seven of our consolidated joint ventures. Our joint venture partners managed the properties for 12 of our unconsolidated joint ventures and four of our consolidated joint ventures.

The majority of the income from the properties in the Retail Portfolio is derived from rents received through long-term leases with retail tenants. These long-term leases generally require the tenants to pay base rent which is a fixed amount specified in the lease. The base rent is often subject to scheduled increases during the term of the lease. Another component of income is overage rent. Overage rent is paid by a tenant generally if its sales exceed an agreed upon minimum amount. Overage rent is calculated by multiplying the sales in excess of the minimum amount by a percentage defined in the lease, the majority of which is earned in the fourth quarter. In addition, our long-term leases generally contain provisions for us to bill to tenants amounts to recover certain expenses incurred in the day-to-day operations of the respective properties, including common area maintenance and real estate taxes. The recovery amount is generally related to the tenant’s pro-rata share of space in the property.

In December 2005, we sold seven office buildings totaling approximately 705,000 square feet located in the Hunt Valley Business Community in Hunt Valley, Maryland and 14 office buildings totaling approximately 402,000 square feet in the Rutherford Business Center, Woodlawn, Maryland. In December 2005, we also sold a 16 building, 952,000 square foot portfolio of industrial buildings comprised of 10 buildings totaling 582,000 square feet in the Hunt Valley Business Community and six buildings totaling 370,000 square feet in the Rutherford Business Center in suburban Baltimore. The portfolio also included three land parcels totaling more than 18 acres. The aggregate sale price of the two transactions was $181 million.

Based on these criteria, we believe that the size and scope of our property portfolio, as well as the overall quality and attractiveness of our individual properties, enable us to compete effectively for retail tenants in our local markets. Because our revenue potential is linked to the success of our retailers, we indirectly share exposure to the same competitive factors that our retail tenants experience in their respective markets when trying to attract individual shoppers. These dynamics include general competition from other regional shopping centers, including outlet malls and other discount shopping centers, as well as competition with discount shopping clubs, catalog companies, internet sales and telemarketing.

With respect to our office and other properties, we experience competition in the development and management of our properties similar to that of our Retail Portfolio. Prospective tenants generally consider quality and appearance, amenities, location relative to other commercial activity and price in determining the attractiveness of our properties. Based on the quality and location of our properties, which are generally in urban markets or are concentrated in the commercial centers of our master planned communities, we believe that our properties are viewed favorably among prospective tenants.

Under various federal, state and local laws and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner’s ability to sell such real estate or to borrow using such real estate as collateral. In connection with our ownership and operation of our properties, we, or the relevant property venture through which the property is owned, may be potentially liable for such costs.

The Phase I environmental assessments included a historical review, a public records review, a preliminary investigation of the site and surrounding properties, screening for the presence of asbestos, polychlorinated biphenyls (“PCBs”) and underground storage tanks and the preparation and issuance of a written report, but do not include soil sampling or subsurface investigations. A Phase II assessment, when necessary, was conducted to further investigate any issues raised by the Phase I assessment. In each case where Phase I and/or Phase II assessments resulted in specific recommendations for remedial actions required by law, management has either taken or scheduled the recommended action.

Neither the Phase I nor the Phase II assessments have revealed any environmental liability that we believe would have a material effect on our overall business, financial condition or results of operations. Nevertheless, it is possible that these assessments do not reveal all environmental liabilities or that there are material environmental liabilities of which we are unaware. Moreover, no assurances can be given that future laws, ordinances or regulations will not impose any material environmental liability or the current environmental condition of our properties will not be adversely affected by tenants and occupants of the properties, by the condition of properties in the vicinity of our properties (such as the presence on such properties of underground storage tanks) or by third parties unrelated to us.

Our results of operations will depend on our ability to continue to lease space in our properties on economically favorable terms. If the sales of stores operating in our centers decline sufficiently, tenants might be unable to pay their existing minimum rents or expense recovery charges, since these rents and charges would represent a higher percentage of their sales. If our tenants’ sales decline, new tenants would be less likely to be willing to pay minimum rents as high as they would otherwise pay. In addition, as substantially all of our income is derived from rentals of real property, our income and cash available for distribution to our stockholders would be adversely affected if a significant number of tenants were unable to meet their obligations to us. During times of economic recession, these risks will increase.

A number of companies in the retail industry, including some of our tenants, have declared bankruptcy or voluntarily closed certain of their stores in recent years. The bankruptcy or closure of a major tenant, particularly an Anchor tenant, may have a material adverse effect on the retail properties affected and the income produced by these properties and may make it substantially more difficult to lease the remainder of the affected retail properties. Our leases generally do not contain provisions designed to ensure the creditworthiness of the tenant. As a result, the bankruptcy or closure of a major tenant could result in a lower level of revenues and cash available for distribution to our stockholders.

Department store consolidations, such as K-Mart’s acquisition of Sears and Federated’s acquisition of May Department Stores, are resulting in the closure of existing department stores and we may be unable to re-lease this area or to re-lease it on comparable or more favorable terms. Other tenants may be entitled to modify the terms of their existing leases, including those pertaining to rent payment, in the event of such closures. Additionally, department store closures could result in decreased customer traffic which could lead to decreased sales at other stores. Consolidations may also negatively affect current and future development and redevelopment projects.

Equity real estate investments are relatively illiquid, and this characteristic tends to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. In addition, significant expenditures associated with each equity investment, such as mortgage payments, real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. If income from a property declines while the related expenses do not decline, our income and cash available for distribution to our stockholders would be adversely affected. A significant portion of our properties are mortgaged to secure payment of indebtedness, and if we were unable to meet our mortgage payments, we could lose money as a result of foreclosure on the properties by the various mortgagees. In addition, if it becomes necessary or desirable for us to dispose of one or more of the mortgaged properties, we might not be able to obtain a release of the lien on the mortgaged property without payment of the associated debt. The foreclosure of a mortgage on a property or inability to sell a property could adversely affect the level of cash available for distribution to our stockholders. In certain transactions, if persons selling properties to us wish to defer the payment of taxes on the sales proceeds, we are likely to pay them in units of limited partnership interest in the Operating Partnership. In transactions of this kind, we may also agree, subject to certain exceptions, not to sell the acquired properties for significant periods of time.

Under various federal, state or local laws, ordinances and regulations, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property, and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by the parties in connection with the contamination. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous or toxic substances. The presence of contamination or the failure to remediate contamination may adversely affect the owner’s ability to sell or lease real estate or to borrow using the real estate as collateral. Other federal, state and local laws, ordinances and regulations require abatement or removal of asbestos-containing materials in the event of demolition or certain renovations or remodeling and also govern emissions of and exposure to asbestos fibers in the air. Federal and state laws also regulate the operation and removal of underground storage tanks. In connection with the ownership, operation and management of our properties, we could be held liable for the costs of remedial action with respect to these regulated substances or tanks or related claims.

We depend primarily on external financing to fund the growth of our business. This is because one of the requirements of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code,” for a REIT generally is that it distribute 90% of its taxable income, excluding net capital gains, to its stockholders. Our access to debt or equity financing depends on banks’ willingness to lend to us and on conditions in the capital markets in general. We and other companies in the real estate industry have experienced less favorable terms for bank loans and capital markets financing from time to time. Although we believe, based on current market conditions, that we will be able to finance investments we wish to make in the foreseeable future, financing might not be available on acceptable terms or may be affected by the amount of debt we have outstanding as a result of the TRC Merger.

The reports for fiscal year 2005 included in this Annual Report include material weaknesses related to the Company’s failure to maintain effective policies and procedures relating to accounting for income taxes and failure to have sufficient personnel resources with appropriate technical accounting expertise to conduct a timely and accurate financial close. Although we have implemented and continue to implement remediation efforts, a material weakness indicates that there is more than a remote likelihood that a material misstatement of our financial statements will not be prevented or detected in a future period. In addition, we cannot assure you that we will not in the future identify further material weaknesses or significant deficiencies in our internal control over financial reporting that we have not discovered to date. We are taking steps to improve our internal control over financial reporting to comply with Section 404 of the Sarbanes-Oxley Act. The efforts we have taken and continue to take are subject to continued management review supported by confirmation and testing by management and by our internal auditors as well as audit committee oversight. However, if these remediation efforts are insufficient to address the identified material weaknesses, or if additional material weaknesses are discovered in the future, we may fail to meet our future reporting obligations on a timely basis and internal control deficiencies could cause investors to lose confidence in our reported financial information.

indebtedness was unsecured, recourse indebtedness of the Operating Partnership and consolidated subsidiaries, while approximately $13.5 billion was secured by our properties. A majority of the secured indebtedness was non-recourse to us. This indebtedness does not include our proportionate share of indebtedness incurred by our Unconsolidated Properties. As a result of this substantial indebtedness, we are required to use a material portion of our cash flow to service principal and interest on our debt, which will limit the cash flow available for other desirable business opportunities, if present.

While we generally make all operating decisions for the Unconsolidated Properties, we are required to make other decisions with the other investors who have interests in the relevant property or properties. For example, the approval of certain of the other investors is required with respect to operating budgets and refinancing, encumbering, expanding or selling any of these properties. We might not have the same interests as the other investors in relation to these transactions. Accordingly, we might not be able to favorably resolve any of these issues, or we might have to provide financial or other inducement to the other investors to obtain a favorable resolution.

The bankruptcy of one of the other investors in any of our jointly owned shopping centers could materially and adversely affect the relevant property or properties. Under the bankruptcy laws, we would be precluded by the automatic stay from taking some actions affecting the estate of the other investor without prior approval of the bankruptcy court, which would, in most cases, entail prior notice to other parties and a hearing in the bankruptcy court. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than we would otherwise bear.

Substantially all of our assets are owned through our general partnership interest in the Operating Partnership, including TRCLP. The Operating Partnership holds substantially all of its properties and assets through subsidiaries, including subsidiary partnerships, limited liability companies and corporations that have elected to be taxed as REITs. The Operating Partnership therefore derives substantially all of its cash flow from cash distributions to it by its subsidiaries, and we, in turn, derive substantially all of our cash flow from cash distributions to us by the Operating Partnership. The creditors and preferred security holders, if any, of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before that subsidiary may make distributions to us. Thus, the Operating Partnership’s ability to make distributions to its partners, including us, depends on its subsidiaries’ ability first to satisfy their obligations to their creditors and preferred security holders, if any, and then to make distributions to the Operating Partnership. Similarly, our ability to pay dividends to holders of our common stock depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and preferred security holders, if any, and then to make distributions to us.

In addition, we will have the right to participate in any distribution of the assets of any of our direct or indirect subsidiaries upon the liquidation, reorganization or insolvency of the subsidiary only after the claims of the creditors, including trade creditors, and preferred security holders, if any, of the subsidiary are satisfied. Our common stockholders, in turn, will have the right to participate in any distribution of our assets upon the liquidation, reorganization or insolvency of us only after the claims of our creditors, including trade creditors, and preferred security holders, if any, are satisfied.

income tax purposes involves the application of highly technical and complex provisions of the Code for which there are only limited judicial or administrative interpretations. Therefore, the determination of various factual matters and circumstances not entirely within our control may impact our ability to qualify as a REIT. In addition, legislation, new regulations, administrative interpretations or court decisions might significantly change the tax laws with respect to the requirements for qualification as a REIT or the federal income tax consequences of qualification as a REIT.

If, with respect to any taxable year, we fail to maintain our qualification as a REIT, we would not be allowed to deduct distributions to stockholders in computing our taxable income and federal income tax. The corporate level income tax, including any applicable alternative minimum tax, would apply to our taxable income at regular corporate rates. As a result, the amount available for distribution to stockholders would be reduced for the year or years involved, and we would no longer be required to make distributions. In addition, unless we were entitled to relief under the relevant statutory provisions, we would be disqualified from treatment as a REIT for the five taxable years following the year during which qualification was lost. Notwithstanding that we currently intend to operate in a manner designed to allow us to qualify as a REIT, future economic, market, legal, tax or other considerations may cause us to determine that it is in our best interest and the best interest of our stockholders to revoke the REIT election.

The Ownership Limit. Generally, for us to maintain our qualification as a REIT under the Code, not more than 50% in value of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of our taxable year. The Code defines “individuals” for purposes of the requirement described in the preceding sentence to include some types of entities. In general, under our current certificate of incorporation, no person other than Martin Bucksbaum (deceased), Matthew Bucksbaum (the Chairman of our board of directors), their families and related trusts and entities, including M.B. Capital Partners III, may own more than 7.5% of the value of our outstanding capital stock. However, our certificate of incorporation also permits our company to exempt a person from the 7.5% ownership limit upon the satisfaction of certain conditions which are described in our certificate of incorporation.


	of the company and by employee stock plans that do not provide employees with the right to determine confidentially whether shares held under the plan will be tendered in a tender or exchange offer; or

•	following the transaction in which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock not owned by the interested stockholder.

We have assumed the obligations of TRC under a Contingent Stock Agreement, which we refer to as the “CSA.” The assumption includes the obligation under the CSA to issue shares of common stock twice a year to the beneficiaries under the CSA and certain indemnification obligations. The number of shares is based upon our stock price and upon a formula set forth in the CSA. In addition, the CSA requires a valuation of certain assets that we own as of December 31, 2009, which could result in the issuance of a significant number of additional shares to the beneficiaries under the CSA. Such issuances could be dilutive to our existing stockholders if we are unable to repurchase a corresponding number of shares through our publicly announced stock repurchase program.

As of December 31, 2005, approximately 59.6 million shares of common stock were issuable upon exercise of conversion and/or redemption rights as to units of limited partnership interest in the Operating Partnership. Under our shelf registration statement, we may offer from time to time up to approximately $1.5 billion worth of common stock, preferred stock, depositary shares, debt securities, warrants, stock purchase contracts and/or purchase units. An additional 1.7 million shares of our common stock remain reserved for issuance under the CSA we assumed in connection with the TRC Merger. In addition, we have reserved a number of shares of common stock for issuance under our option and other benefit plans for employees and directors and in connection with certain other obligations, and these shares will be available for sale from time to time. Although we have publicly announced a stock repurchase program which may offset the dilution resulting from issuances pursuant to the CSA and our employee option plan, there is no certainty that we will be successful in acquiring a sufficient number of shares at an acceptable price to accomplish this goal. No prediction can be made as to the effect, if any, that these and other future sales of our common stock, or the availability of common stock for future sales, will have on the market price of the stock. Sales in the public market of substantial amounts of our common stock, or the perception that such sales could occur, could adversely affect prevailing market prices for our common stock.

We believe that investors consider the distribution rate on REIT stocks, expressed as a percentage of the price of the stocks, relative to market interest rates as an important factor in deciding whether to buy or sell the stocks. If market interest rates go up, prospective purchasers of REIT stocks may expect a higher distribution rate. Higher interest rates would not, however, result in more funds being available for us to distribute and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution. Thus, higher market interest rates could cause the market price of our common stock to decline.

Our investment in real estate as of December 31, 2005, consisted of our interests in the properties in our Retail and Other and Master Planned Communities segments. In most cases, we also own the land underlying the retail properties. However, at certain of the properties, all or part of the underlying land is owned by a third party that leases the land to us pursuant to a long-term ground lease. The leases generally contain various purchase options and typically provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. Information regarding encumbrances on these properties is included in Schedule III of this Annual Report.

Anchors have traditionally been a major component of a regional shopping center. Anchors are frequently department stores whose merchandise appeals to a broad range of shoppers. Anchors generally either own their stores, the land under them and adjacent parking areas, or enter into long-term leases at rates that are generally lower than the rents charged to Mall Store tenants. The centers in the Retail Portfolio receive a smaller percentage of their operating income from Anchors than from Mall Stores. While the market share of many traditional department store Anchors has been declining, strong Anchors continue to play an important role in maintaining customer traffic and making the centers in the Retail Portfolio desirable locations for Mall Store tenants.

On August 3, 2005, we announced that our Board of Directors authorized, effective immediately, a $200 million per fiscal year common stock repurchase program. Stock repurchases under this program are made through open market or privately negotiated transactions through 2009, unless the program is earlier terminated. The repurchase program gives us the ability to acquire some or all of the shares of common stock to be issued upon the exercise of certain employee stock options and pursuant to the CSA. There were no repurchases under this program during the quarter ended December 31, 2005.

All references to numbered Notes are to specific footnotes to our Consolidated Financial Statements included in this Annual Report and which descriptions are incorporated into the applicable response by reference. The following discussion should be read in conjunction with such Consolidated Financial Statements and related Notes. Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) have the same meanings as in such Notes. See also the Glossary at the end of this Item 7 for definitions of selected terms used in this Annual Report.

Our primary business is acquiring, owning, managing, leasing and developing retail and office rental property. As of December 31, 2005, we had ownership interest in or management responsibility for a portfolio of over 200 regional shopping malls in 44 states. We provide on-site management and other services to substantially all of our properties, including properties which we own through joint venture arrangements and which are unconsolidated for GAAP purposes. Our management operating philosophies and strategies are generally the same whether the properties are consolidated or unconsolidated. As a result, we believe that financial information and operating statistics with respect to all properties, both consolidated and unconsolidated, provide important insights into our operating results. Collectively, we refer to our Consolidated and Unconsolidated Properties as our “Company Portfolio” and the retail portion of the Company Portfolio as the “Retail Company Portfolio.”

receivable for this net book value amount because we believe that it is probable that the insurance recovery, net of deductibles on a replacement cost basis, will exceed these amounts. While we expect the insurance proceeds will be sufficient to cover most of the replacement cost of the restoration of the properties and certain business interruption amounts, certain deductibles, limitations and exclusions are expected to apply with respect to both current and future matters. No determination has been made as to the total amount or timing of those insurance payments. As of December 31, 2005, $5 million in insurance proceeds related to the Oakwood property has been received, which has been offset against this insurance recovery receivable. In January 2006, we received an additional $5 million in insurance proceeds with respect to Oakwood and $2.5 million in insurance proceeds related to Riverwalk. As only a portion of the repairs have taken place as of December 31, 2005, substantially all of the remaining $63.4 million receivable recorded represents the recovery of the net book value of fixed assets written off. The cost recoveries have been recorded on the expense line item to which they relate, and therefore there is no significant impact to any line item or our overall results. However, included in property operating expenses in 2005 are approximately $1 million of costs which, when fully expended, are not expected to be recoverable from insurance proceeds due to insurance policy deductibles.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables, deferred taxes, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to property acquisitions and cost ratios and completion percentages used for land sales. Actual results could differ from those estimates.

Initial valuations and estimated useful lives or amortization periods for property and intangibles. When we acquire a property, we make an initial assessment of the initial valuation and composition of the assets acquired and liabilities assumed. These assessments consider fair values of the respective assets and liabilities and are primarily determined based on estimated future cash flows using appropriate discount and capitalization rates, but may also be based on independent appraisals or other market data. The estimated future cash flows that are used for this analysis reflect the historical operations of the property, known trends and changes expected in current market and economic conditions which would impact the property’s operations, and our plans for such property. These estimates are particularly important as they are used for the allocation of purchase price between depreciable and non-depreciable real estate and other identifiable intangibles including above, below and at-market leases. As a result, the impact of these estimates on our operations could be substantial.

Significant differences in annual depreciation or amortization expense may result from the differing amortization periods related to such purchased assets and liabilities. For example, the TRC Merger increased land by $1.3 billion, buildings and equipment by $8.2 billion, investment land and land held for development and sale by $1.7 billion and other tenant-related intangibles and liabilities, net, by approximately $300 million. Buildings are depreciated over 40-45 years, equipment is depreciated over 5-15 years and purchased intangibles are amortized over the related remaining lease life which is, generally, 5 years. Land and investment land and land held for development and sale are not depreciated, however, the carrying value of such land will affect the gain/ loss recognized on the sale of such land. Therefore, the majority of the acquisition cost of $14 billion is reflected over time in increased depreciation and amortization charges.

Events or changes in circumstances concerning a property may occur which could indicate that the carrying values or amortization periods of the assets and liabilities may require adjustment. The resulting recovery analysis also depends on an analysis of future cash flows to be generated from a property’s assets and liabilities. Changes in our overall plans (for example, the extent and nature of a proposed redevelopment of a property) and our views on current market and economic conditions may have a significant impact on the resulting estimated future cash flows of a property that are analyzed for these purposes.

Recoverable amounts of receivables and deferred taxes. We make periodic assessments of the collectibility of receivables (including those resulting from the difference between rental revenue recognized and rents currently due from tenants) and the recoverability of deferred taxes based on a specific review of the risk of loss on specific accounts or amounts. The receivable analysis places particular emphasis on past-due accounts and considers the nature and age of the receivables, the payment history and financial condition of the payee, the basis for any disputes or negotiations with the payee and other information which may impact collectibility. For straight-line rents, the analysis considers the probability of collection of the unbilled deferred rent receivable given our experience regarding such amounts. For deferred taxes, an assessment of the recoverability of the current tax asset considers the current expiration periods of the prior net operating loss carryforwards and the estimated future taxable income of our taxable REIT subsidiaries. The resulting estimates of any allowance or reserve related to the recovery of these items is subject to revision as these factors change and is sensitive to the effects of economic and market conditions on such payees and our taxable REIT subsidiaries.

Capitalization of development and leasing costs. We capitalize the costs of development and leasing activities of our properties. These costs are incurred both at the property location and at the regional and corporate office level. The amount of capitalization depends, in part, on the identification and justifiable allocation of certain activities to specific projects and leases. Differences in methodologies of cost identification and documentation, as well as differing assumptions as to the time incurred on projects, can yield significant differences in the amounts capitalized and, as a result, the amount of depreciation recognized.

Revenue recognition and related matters. Minimum rent revenues are recognized on a straight-line basis over the terms of the related leases. Minimum rent revenues also include amounts collected from tenants to allow the termination of their leases prior to their scheduled termination dates and accretion related to above and below-market tenant leases on acquired properties. Straight-line rents receivable represents the current net cumulative rents recognized prior to when billed and collectible as provided by the terms of the leases. Overage rents are recognized on an accrual basis once tenant sales exceed contractual tenant lease thresholds. Recoveries from tenants are established in the leases or computed based upon a formula related to real estate taxes, insurance and other shopping center operating expenses and are generally recognized as revenues in the period the related costs are incurred. Revenues from land sales are recognized using the full accrual method provided that various criteria relating to the terms of the transactions and our subsequent involvement with the land sold are met. Revenues relating to transactions that do not meet the established criteria are deferred and recognized when the criteria are met or using the installment or cost recovery methods, as appropriate in the circumstances. For land sale transactions in which we are required to perform additional services and incur significant costs after title has passed, revenues and cost of sales are recognized on a percentage of completion basis.

Cost of land sales is determined as a specified percentage of land sales revenues recognized for each community development project. The cost ratios used are based on actual costs incurred and estimates of development costs and sales revenues to completion of each project. The ratios are reviewed regularly and revised for changes in sales and cost estimates or development plans. Significant changes in these estimates or development plans, whether due to changes in market conditions or other factors, could result in changes to the cost ratio used for a specific project. The increase in the basis of the land due to purchase price accounting adjustments has resulted in a significant increase in the cost ratios of our projects. The specific identification method is used to determine cost of sales for certain parcels of land, including acquired parcels we do not intend to develop or for which development is complete at the date of acquisition.

We provide on-site management and other services to substantially all of our properties, including properties which we own through joint venture arrangements and which are unconsolidated for GAAP purposes. Our management operating philosophies and strategies are generally the same whether the properties are consolidated or unconsolidated. As a result, we believe that financial information and operating statistics with respect to all properties, both consolidated and unconsolidated, provide important insights into our operating results. As a result, we have presented the following discussion of our results of operations under the proportionate share method. Under the proportionate share method, our share of the revenues and expenses of the Unconsolidated Properties are combined with the revenues and expenses of the Consolidated Properties. See Note 16 for additional information including reconciliations of our segment basis results to GAAP basis results.

partially offset by lower debt extinguishment costs in 2005 as a result of deferred finance cost write-offs in 2004 resulting from TRC Merger funding. The weighted average interest rate on our outstanding debt was 5.64% at December 31, 2005 compared to approximately 5.16% at December 31, 2004. Amortization of purchase accounting adjustments, which increased the fair value of our debt acquired in the TRC Merger, decreased interest expense by approximately $51 million in 2005 and $1 million in 2004. See Liquidity and Capital Resources for information regarding 2006 financing activity and Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” for additional information regarding the potential impact of future interest rate increases.

As of December 31, 2005, we had 22 major approved redevelopment projects underway (each with budgeted projected expenditures, at our ownership share, in excess of $10 million). Total projected expenditures (including our share of the Unconsolidated Real Estate Affiliates) for the 22 redevelopment projects and the six new retail center development projects that are under construction were approximately $2.0 billion as of December 31, 2005. Such development and redevelopment expenditures, together with expenditures for 11 other potential new retail or mixed-use developments, are expected to result in approximately $450 to $800 million of expenditures per year for the years 2006 to 2009.

As mentioned above, GGP Capital Trust I, a Delaware statutory trust (the “Trust”) and a wholly owned subsidiary of GGPLP, completed a private placement of $200 million of floating rate Preferred Securities. The Trust also issued $6.2 million of Common Securities to GGPLP. The Trust used the proceeds from the sale of the Preferred and Common Securities to purchase $206.2 million of floating rate Junior Subordinated Notes of GGPLP due 2036. The Preferred Securities require distributions equal to LIBOR plus 1.45%. Distributions are cumulative and accrue from the date of original issuance. The Preferred Securities mature on April 30, 2036, but may be redeemed beginning on April 30, 2011 if we exercise our right to redeem a like amount of the Junior Subordinated Notes. The Junior Subordinated Notes bear interest at LIBOR plus 1.45%.

Although agreements to refinance debt maturing in 2006 have not yet been reached, we currently anticipate that all of our debt will be repaid or refinanced on a timely basis. We believe that we have sufficient sources of funds to meet our cash needs and that covenants in the 2006 Credit Facility will not materially impact our liquidity or our ability to operate our business. However, there can be no assurance that we can obtain such financing on satisfactory terms. We will continue to monitor our capital structure, investigate potential investments or joint venture partnership arrangements and purchase additional properties if they can be acquired and financed on terms that we reasonably believe will enhance long-term stockholder value. We intend to continue to evaluate the percentage of variable-rate debt to total debt in 2006.

On August 3, 2005, we announced that our Board of Directors authorized, effective immediately, a $200 million per fiscal year common stock repurchase program. Stock repurchases under this program are made through open market or privately negotiated transactions through 2009, unless the program is earlier terminated. The repurchase program gives us the ability to acquire some or all of the shares of common stock to be issued upon the exercise of certain employee stock options and pursuant to the CSA. During 2005, we repurchased 2,214,000 shares for $99.6 million under this program.

TRC acquired various assets, including Summerlin, a master planned community in suburban Las Vegas, Nevada, in the acquisition of The Hughes Corporation (“Hughes”) in 1996. In connection with the acquisition of Hughes, TRC entered into a Contingent Stock Agreement (“CSA”) for the benefit of the former Hughes owners or their successors (“beneficiaries”). Under the terms of the CSA, shares of TRC common stock were issuable to the beneficiaries based on the appraised values of defined asset groups, including Summerlin, at specified termination dates through 2009 and/or cash flows from the development and/or sale of those assets prior to the termination dates. We assumed TRC’s obligation under the CSA to deliver shares of our common stock twice a year to beneficiaries under the CSA. The amount of shares is based upon a formula set forth in the CSA and upon our stock price. Such issuances could be dilutive to our existing stockholders if the delivery obligation is satisfied by the issuance of new shares rather than from treasury stock or shares purchased on the open market. We account for the beneficiaries’ share of earnings from the assets as an operating expense. We will account for any distributions to the beneficiaries in 2009, which could be significant, in connection with a valuation related to assets that we own as of such date as additional investments in the related assets (that is, contingent consideration). A total of 1,552,385 shares of our common stock were issued in 2005 pursuant to the CSA. At December 31, 2005, 755,642 shares of common stock ($35.3 million) were issuable to the beneficiaries, representing their share of cash flows for the semi-annual period ended December 31, 2005.

Inflation has been relatively low in recent years and has not had a significant detrimental impact on us. Should inflation rates increase in the future, substantially all of our tenant leases contain provisions designed to partially mitigate the negative impact of inflation. Such provisions include clauses enabling us to receive overage rents based on tenants’ gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. In addition, many of the leases expire each year which may enable us to replace or renew such expiring leases with new leases at higher base and/or overage rents, if rents under the expiring leases are below the then-existing market rates. Finally, many of the existing leases require the tenants to pay amounts related to all, or substantially all, of their share of certain operating expenses, including common area maintenance, real estate taxes and insurance, thereby partially reducing our exposure to increases in costs and operating expenses resulting from inflation. In general, these amounts either vary annually based on actual expenditures or are set on an initial share of costs with provisions for annual increases.

Inflation also poses a risk to us due to the probability of future increases in interest rates. Such increases would adversely impact us due to our outstanding variable-rate debt which increased substantially as a result of the TRC Merger. We have limited our exposure to interest rate fluctuations related to a portion of our variable-rate debt by the use of interest rate cap and swap agreements. Finally, subject to current market conditions, we have a policy of replacing variable-rate debt with fixed-rate debt. However, in an increasing interest rate environment (which generally follows improved market conditions), the fixed rates we can obtain with such replacement fixed-rate debt will also continue to increase.

Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements often include words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “target,” “can,” “could,” “may,” “should,” “will,” “would” or similar expressions. Forward-looking statements should not be unduly relied upon. They give our expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made and we might not update them to reflect changes that occur after the date they are made.

We have not entered into any transactions using derivative commodity instruments. We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and for acquisitions. As of December 31, 2005, we had consolidated debt of $20.4 billion, including $6.5 billion of variable-rate debt of which approximately $883.1 million was subject to interest rate swap agreements, which fix the interest rate we are required to pay on such debt at approximately 5.46% per annum. Although the majority of the remaining variable-rate debt is subject to interest rate cap agreements pursuant to the loan agreements and financing terms, such interest rate caps generally limit our interest rate exposure only if LIBOR exceeds a rate per annum significantly higher (generally above 8% per annum) than current LIBOR rates (4.39% at December 31, 2005). A 25 basis point movement in the interest rate on the $5.6 billion of variable-rate debt which is not subject to interest rate swap agreements would result in an approximately $14.1 million annualized increase or decrease in consolidated interest expense and operating cash flows.

In addition, we are subject to interest rate exposure as a result of variable-rate debt collateralized by the Unconsolidated Properties for which similar interest rate swap agreements have not been obtained. Our share (based on our respective equity ownership interests in the Unconsolidated Real Estate Affiliates) of such remaining variable-rate debt was approximately $455.6 million at December 31, 2005. A similar 25 basis point annualized movement in the interest rate on the variable-rate debt of the Unconsolidated Real Estate Affiliates would result in an approximately $1.1 million annualized increase or decrease in our equity in the income and operating cash flows from Unconsolidated Real Estate Affiliates.

We are further subject to interest rate risk with respect to our fixed-rate financing in that changes in interest rates will impact the fair value of our fixed-rate financing. To determine fair value, the fixed-rate debt is discounted at a rate based on an estimate of current lending rates, assuming the debt is outstanding through maturity and considering the collateral. At December 31, 2005, the fair value of our debt is estimated to be approximately $28.8 million lower than the carrying value of $20.4 billion. If LIBOR were to increase by 25 basis points, the fair value of our debt would be approximately $158.0 million lower than the carrying value and the fair value of our swap agreements would increase by approximately $1.6 million. For additional information concerning our debt, reference is made to Item 7, Liquidity and Capital Resources and Note 6.

Disclosure Controls and Procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)). Based on that evaluation, the CEO and the CFO have concluded that our disclosure controls and procedures are effective to ensure that information that we are required to disclose in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

As of December 31, 2005, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework utilizing the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Controls — Integrated Framework.” Based on this assessment management believes that, as of December 31, 2005, the Company did not maintain effective internal control over financial reporting because of the effect of material weaknesses in the Company’s system of internal controls. During the closing process for the year ended December 31, 2005, management determined that:

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that General Growth Properties, Inc. and subsidiaries (the “Company”) did not maintain effective internal control over financial reporting as of December 31, 2005, because of the effect of the material weaknesses identified in management’s assessment, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


	conduct a timely and accurate review of the tax provision. The consolidated financial statements were adjusted prior to the Company filing this Annual Report on Form 10-K to properly reflect several financial statement line items, including current and deferred taxes, as well as goodwill.

	As of December 31, 2005, the Company’s controls over the financial close process did not operate effectively. There are insufficient personnel resources with technical accounting expertise to conduct a timely and accurate financial close. The consolidated financial statements were corrected prior to the Company filing this Annual Report on Form 10-K. These error corrections affected various items within the consolidated statement of cash flows and a number of financial statement line items, including buildings and equipment, goodwill, investment in unconsolidated real estate affiliates, accounts payable and accrued expenses, equity in net income of unconsolidated affiliates and interest expense.

In our opinion, management’s assessment that the Company did not maintain effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, because of the effect of the material weaknesses described above on the achievement of the objections of the control criteria, the Company has not maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have a Code of Business Conduct and Ethics which applies to all of our employees, officers and directors, including our Chairman, Chief Executive Officer and Chief Financial Officer. The Code of Business Conduct and Ethics is available on the Corporate Governance page of our website at www.generalgrowth.com and we will provide a copy of the Code of Business Conduct and Ethics without charge to any person who requests it in writing to: General Growth Properties, Inc., 110 N. Wacker Dr., Chicago, IL 60606, Attn: Director of Investor Relations. We will post on our website amendments to or waivers of our Code of Ethics for executive officers, in accordance with applicable laws and regulations.

We have audited the accompanying consolidated balance sheets of General Growth Properties, Inc. and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the consolidated financial statements of GGP/ Homart, Inc., GGP/ Homart II L.L.C., and GGP-TRS L.L.C., the Company’s investments in which are accounted for by use of the equity method. The Company’s equity of $70,175,000 and $126,855,000 in GGP/ Homart Inc.’s net assets as of December 31, 2005 and 2004, respectively, and of $31,425,000, $21,148,000 and $23,815,000 in GGP/ Homart Inc.’s net income for each of the three years in the respective period ended December 31, 2005 are included in the accompanying financial statements. The Company’s equity of $259,716,000 and $319,537,000 in GGP/ Homart II L.L.C.’s net assets as of December 31, 2005 and 2004, respectively, and of $33,849,000, $36,724,000 and $33,448,000 in GGP/ Homart II L.L.C.’s net income for each of the three years in the respective period ended December 31, 2005 are included in the accompanying financial statements. The Company’s equity of $3,764,000 in GGP-TRS L.L.C.’s net assets as of December 31, 2005, and of $19,308,000 in GGP-TRS L.L.C.’s net income for the year then ended are included in the accompanying financial statements. The financial statements of GGP/ Homart, Inc., GGP/ Homart II L.L.C., and GGP-TRS L.L.C. were audited by other auditors related to the periods listed above whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such companies, is based solely on the reports of such other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 31, 2006 expressed an unqualified opinion on management’s assessment on the effectiveness of the Company’s internal control over financial reporting and an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of material weaknesses.

We have audited the consolidated balance sheets of GGP/ Homart, Inc. (a Delaware Corporation) and subsidiaries (the Company) as of December 31, 2005 and 2004, and the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2005 (not presented separately herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We have audited the consolidated balance sheets of GGP/ Homart II L.L.C. (a Delaware Limited Liability Company) and subsidiaries (the Company) as of December 31, 2005 and 2004, and the related consolidated statements of income and comprehensive income, changes in members’ capital, and cash flows for each of the years in the three-year period ended December 31, 2005 (not presented separately herein). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

General Growth Properties, Inc. (“General Growth”), a Delaware corporation, is a self-administered and self-managed real estate investment trust, referred to as a “REIT.” General Growth was organized in 1986 and through its subsidiaries and affiliates owns, operates, manages, leases, acquires, develops, expands and finances operating properties located primarily throughout the United States and develops and sells land for residential, commercial and other uses primarily in master planned communities. The operating properties consist of retail centers, office and industrial buildings and mixed-use and other properties. Land development and sales operations are predominantly related to large-scale, long-term community development projects in and around Columbia, Maryland; Summerlin, Nevada; and Houston, Texas. In these notes, the terms “we,” “us” and “our” refer to General Growth and its subsidiaries (the “Company”).

if a person or group acquires or announces a tender or exchange offer for 15% or more of our common stock. Each Right will initially entitle the holder to purchase from General Growth one-third of one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $100 per share (the “Preferred Stock”), at an exercise price of $148 per one one-thousandth of a share, subject to adjustment. If a person or group acquires 15% or more of our common stock, each Right will entitle the holder (other than the acquirer) to purchase shares of our common stock (or, in certain circumstances, cash or other securities) having a market value of twice the exercise price of a Right at such time. Under certain circumstances, each Right will entitle the holder (other than the acquirer) to purchase the common stock of the acquirer having a market value of twice the exercise price of a Right at such time. In addition, under certain circumstances, our Board of Directors may exchange each Right (other than those held by the acquirer) for one share of our common stock, subject to adjustment. If the Rights become exercisable, holders of common units of partnership interest in the Operating Partnership, other than General Growth, will receive the number of Rights they would have received if their units had been redeemed and the purchase price paid in our common stock. The Rights expire on November 18, 2008, unless earlier redeemed by our Board of Directors for one-third of $0.01 per Right or such expiration date is extended.

We have reserved up to 3.0 million shares of our common stock for issuance under the Dividend Reinvestment and Stock Purchase Plan (“DRSP”). In general, the DRSP allows participants to make purchases of our common stock from dividends received or additional cash investments. Although the purchase price of the common stock is determined by the current market price, the purchases are made without fees or commissions charged to the participant. We have and will continue to satisfy DRSP common stock purchase needs through the issuance of new shares of our common stock or by repurchases of currently outstanding common stock. As of December 31, 2005, an aggregate of 535,528 shares of our common stock have been issued under the DRSP.

Real estate assets are stated at cost. Construction and improvement costs incurred in connection with the development of new properties or the redevelopment of existing properties are capitalized to the extent the total carrying value of the property does not exceed the estimated fair value of the completed property. Real estate taxes and interest costs incurred during construction periods are capitalized. Capitalized interest costs are based on qualified expenditures and interest rates in place during the construction period. Capitalized real estate taxes and interest costs are amortized over lives which are consistent with the constructed assets.

Acquisitions of properties are accounted for utilizing the purchase method and, accordingly, the results of operations of acquired properties are included in our results of operations from the respective dates of acquisition. Estimates of future cash flows and other valuation techniques are used to allocate the purchase price of acquired property between land, buildings and improvements, equipment and identifiable intangible assets and liabilities such as amounts related to in-place at-market tenant leases, acquired above and below-market tenant and ground leases and tenant relationships. Initial valuations are subject to change until such information is finalized no later than 12 months from the acquisition date.

The estimated fair value of acquired in-place at-market tenant leases are the costs we would have incurred to lease the property to the occupancy level of the property at the date of acquisition. Such estimate includes the fair value of leasing commissions, legal costs and tenant coordination costs that would be incurred to lease the property to this occupancy level. Additionally, we evaluate the time period over which such occupancy level would be achieved and include an estimate of the net operating costs (primarily real estate taxes, insurance and utilities) incurred during the lease-up period, which generally ranges up to one year. Acquired in-place at-market tenant leases are amortized over the average lease term.

Intangible assets and liabilities are also recorded for above-market and below-market in-place tenant and ground leases where we are either the lessor or the lessee. Above-market and below-market in-place tenant and ground lease values are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be received or paid pursuant to the in-place leases and our estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the leases. Above and below-market lease values are amortized over the remaining non-cancelable terms of the respective leases (approximately five years for tenant leases and approximately 50 years for ground leases).

The excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed is recorded as goodwill. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. An impairment loss for an asset group is allocated to the long-lived assets of the group on a pro-rata basis using the relative carrying amounts of those assets, unless the fair value of specific components of the reporting group are determinable without undue cost and effort.

We account for investments in joint ventures where we own a non-controlling joint interest using the equity method. Under the equity method, the cost of our investment is adjusted for our share of the equity in earnings of such Unconsolidated Real Estate Affiliates from the date of acquisition and reduced by distributions received. Generally, the operating agreements with respect to our Unconsolidated Real Estate Affiliates provide that assets, liabilities and funding obligations are shared in accordance with our ownership percentages. Therefore, we generally also share in the profit and losses, cash flows and other matters relating to our Unconsolidated Real Estate Affiliates in accordance with our respective ownership percentages. Except for Retained Debt (as described in Note 5), differences between the carrying value of our investment in the Unconsolidated Real Estate Affiliates and our share of the underlying equity of such Unconsolidated Real Estate Affiliates are amortized over lives ranging from five to forty years.

Investments in marketable securities with maturities at dates of purchase in excess of three months are carried at amortized cost as it is our intention to hold these investments until maturity. Most investments in marketable securities are held in an irrevocable trust for participants in our non-qualified defined contribution plans which were acquired with the TRC Merger, are classified as trading securities and are carried at market value with changes in values recognized in earnings. Other investments in marketable equity securities subject to significant restrictions on sale or transfer are classified as available-for-sale and are carried at market value with unrealized changes in values recognized in other comprehensive income.

Deferred expenses consist principally of financing fees and leasing costs and commissions. Deferred financing fees are amortized to interest expense using the interest method (or other methods which approximate the interest method) over the terms of the respective agreements. Deferred leasing costs and commissions are amortized using the straight-line method over the average life of the tenant leases. Deferred expenses in our Consolidated Balance Sheets are shown at cost, net of accumulated amortization of $147.5 million as of December 31, 2005 and $128.3 million as of December 31, 2004.

Income is allocated to the holders of the Common Units (the “OP Minority Interests”) based on their ownership percentage of the Operating Partnership. This ownership percentage, as well as the total net assets of the Operating Partnership, change when additional shares of our common stock or Common Units are issued. Such changes result in an allocation between stockholders’ equity and Minority Interests — Common in the Consolidated Balance Sheets. Due to the number of such capital transactions that occur each period, we have presented a single net effect of all such allocations for the period as the “Adjustment for Minority Interest in Operating Partnership” in our Consolidated Statements of Stockholders’ Equity (rather than separately allocating the minority interest for each individual capital transaction).

We provide an allowance for doubtful accounts against the portion of accounts receivable, including straight-line rents, which is estimated to be uncollectible. Such allowances are reviewed periodically based upon our recovery experience. We also evaluate the probability of collecting future rent which is recognized currently under a straight-line methodology. This analysis considers the long-term nature of our leases, as a certain portion of the straight-line rent currently recognizable will not be billed to the tenant until many years into the future. Our experience relative to unbilled deferred rent receivable is that a certain portion of the amounts straight-lined into revenue are never collected from (or billed to) the tenant due to early lease terminations. For that portion of the otherwise recognizable deferred rent that is not deemed to be probable of collection, no revenue is recognized. Accounts receivable in our Consolidated Balance Sheets are shown net of an allowance for doubtful accounts of $54.6 million as of December 31, 2005 and $48.6 million as of December 31, 2004.

Revenues from land sales are recognized using the full accrual method provided that various criteria relating to the terms of the transactions and our subsequent involvement with the land sold are met. Revenues relating to transactions that do not meet the established criteria are deferred and recognized when the criteria are met or using the installment or cost recovery methods, as appropriate in the circumstances. For land sale transactions in which we are required to perform additional services and incur significant costs after title has passed, revenues and cost of sales are recognized on a percentage of completion basis.

Cost of land sales is determined as a specified percentage of land sales revenues recognized for each community development project. The cost ratios used are based on actual costs incurred and estimates of development costs and sales revenues to completion of each project. The ratios are reviewed regularly and revised for changes in sales and cost estimates or development plans. Significant changes in these estimates or future development plans, whether due to changes in market conditions or other factors, could result in changes to the cost ratio used for a specific project. The specific identification method is used to determine cost of sales for certain parcels of land, including acquired parcels we do not intend to develop or for which development is complete at the date of acquisition.

Deferred income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. An increase or decrease in the valuation allowance that results from a change in circumstances, and which causes a change in our judgment about the realizability of the related deferred tax asset, is included in the current tax provision.

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding. Diluted EPS is computed after adjusting the numerator and denominator of the basic EPS computation for the effects of all potentially dilutive common shares. The dilutive effects of convertible securities are computed using the “if-converted” method and the dilutive effects of options, warrants and their equivalents (including fixed awards and nonvested stock issued under stock-based compensation plans) are computed using the “treasury stock” method.

Under interest rate cap agreements, we make initial premium payments to the counterparties in exchange for the right to receive payments from them if interest rates exceed specified levels during the agreement period. Under interest rate swap agreements, we and the counterparties agree to exchange the difference between fixed-rate and variable-rate interest amounts calculated by reference to specified notional principal amounts during the agreement period. Notional principal amounts are used to express the volume of these transactions, but the cash requirements and amounts subject to credit risk are substantially less.

Substantially all of our interest rate swap and other derivative financial instruments that we used in 2005, 2004 and 2003 qualified as cash flow hedges and hedged our exposure to forecasted interest payments on variable-rate LIBOR-based debt. Accordingly, the effective portion of the instruments’ gains or losses is reported as a component of other comprehensive income and reclassified into earnings when the related forecasted transactions affect earnings. If we discontinue a cash flow hedge because it is no longer probable that the original forecasted transaction will occur, the net gain or loss in accumulated other comprehensive income (loss) is immediately reclassified into earnings. If we discontinue a cash flow hedge because the variability of the probable forecasted transaction has been eliminated, the net gain or loss in accumulated other comprehensive income (loss) is reclassified to earnings.

The fair values of our financial instruments approximate their carrying value in our financial statements except for debt. We estimated the fair value of our debt based on quoted market prices for publicly-traded debt and on the discounted estimated future cash payments to be made for other debt. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assume the debt is outstanding through maturity and consider the debt’s collateral (if applicable). We have utilized market information as available or present value techniques to estimate the amounts required to be disclosed. Since such amounts are estimates, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.

During the second quarter of 2002, we elected to prospectively adopt the fair value based employee stock-based compensation expense recognition provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). We had previously applied the intrinsic value based expense recognition provisions set forth in APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Under APB 25, compensation cost is recognized for awards of shares of common stock or stock options only if the quoted market price of the stock as of the grant date (or other measurement date, if later) is greater than the amount the grantee must pay to acquire the stock. Had compensation costs for options granted prior to second quarter of 2002 been determined in accordance with SFAS 123, our net income available to common stockholders would have been nominally reduced but there would have been no effect on reported basic or diluted earnings per share.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. For example, significant estimates and assumptions have been made with respect to useful lives of assets, capitalization of development and leasing costs, provision for income taxes, recoverable amounts of receivables, deferred taxes, initial valuations and related amortization periods of deferred costs and intangibles, particularly with respect to acquisitions, and cost ratios and completion percentages used for land sales. Actual results could differ from these and other estimates.

Certain amounts in the 2004 and 2003 consolidated financial statements, including discontinued operations (Note 4), have been reclassified to conform to the current year presentation. In addition, in the Consolidated Statement of Cash Flows for the year ended December 31, 2005, certain expenditures relating to our master planned communities are presented as operating activities. Such changes were previously presented as investing activities. Additionally, proceeds from the sale of marketable securities designated as trading, have been presented as operating activities. Such proceeds were previously presented as investing activities. The accompanying Consolidated Statements of Cash Flows for the years ended December 31, 2004, have been restated for such land sales amounts, and proceeds from the sale of marketable securities designated as trading and certain other minor items consistent with the 2005 presentation. This restatement resulted in a $32.5 million decrease to operating cash flows and corresponding increases to investing and financing cash flows from the amounts previously reported in 2004.

In addition to the acquisitions discussed above, we have entered into a separate agreement (the “Phase II Agreement”) to acquire the multi-level retail space that is planned to be part of The Palazzo in Las Vegas, Nevada that will be connected to the existing Venetian and the Sands Expo and Convention Center facilities (the “Phase II Acquisition”) and the Grand Canal Shoppes listed above. The Palazzo is currently under construction and is expected to be completed in 2007. If completed as specified under the terms of the Phase II Agreement, we will purchase, payable upon grand opening, the Phase II Acquisition retail space at a price computed on a 6% capitalization rate on the projected net operating income of the Phase II retail space, as defined by the Phase II Agreement (“Phase II NOI”), up to $38 million and on a capitalization rate of 8% on Phase II NOI in excess of $38 million, all subject to a minimum purchase price of $250 million. Based on current construction plans, progress and estimated rents, we believe the actual purchase price will be approximately $600 million. The Phase II Agreement is subject to the satisfaction of customary closing conditions.

On December 21, 2005, as approved in December 2005 by our Board of Directors, we sold 7 buildings totaling approximately 705,000 square feet located in the Hunt Valley Business Community in Hunt Valley, Maryland and 14 office buildings totaling approximately 402,000 square feet in the Rutherford Business Center, Woodlawn, Maryland. These 21 properties in Baltimore County were sold at an aggregate sale price of approximately $124.5 million, which was paid in cash at closing. We recognized approximately $4.9 million in gain, before minority interest, on the disposition of these office properties.

On December 23, 2005, as approved in December 2005 by our Board of Directors, we sold a sixteen building, 952,000 square foot portfolio of industrial buildings for approximately $57 million, which was paid in cash at closing. The portfolio is comprised of 10 buildings totaling 582,000 square feet in the Hunt Valley Business Community and six buildings totaling 370,000 square feet in the Rutherford Business Center in suburban Baltimore. The portfolio also includes three land parcels totaling more than 18 acres. We recognized gain of approximately $1.4 million, before minority interest, on the disposition of these industrial properties.

The Unconsolidated Real Estate Affiliates constitute our non-controlling investment in real estate joint ventures that own and/or develop shopping centers, residential and commercial land, and other retail and investment property. Generally, we share in the profits and losses, cash flows and other matters relating to our investments in Unconsolidated Real Estate Affiliates in accordance with our respective ownership percentages. We manage most of the properties owned by these joint ventures. Some of the joint ventures have elected to be taxed as REITs. Since we have joint interest and control of the Unconsolidated Properties with our venture partners, we account for these joint ventures using the equity method.

We own 50% of the common stock of GGP/ Homart Inc. (“GGP/ Homart”), a REIT. The remaining 50% interest in GGP/ Homart is owned by NYSCRF. GGP/Homart owns 23 retail properties. We own 50% of the membership interest of GGP/ Homart II L.L.C. (“GGP/ Homart II”), a limited liability company. The remaining 50% interest in GGP/ Homart II is owned by NYSCRF. GGP/Homart II owns 12 retail properties. In addition, we own 50% of the membership interest in GGP-TRS, L.L.C. (“GGP/ Teachers”), a limited liability company. The remaining 50% interest in GGP/ Teachers is owned by the Teachers’ Retirement System of the State of Illinois. GGP/ Teachers owns six retail properties. Our investment in such affiliates varies from a strict 50% ownership due to capital or basis differences on loans and related amortization.

Under the terms of the 2006 Credit Facility, we are subject to customary affirmative and negative covenants as we were under the 2004 Credit Facility. If a default occurs, the lenders will have the option of declaring all outstanding amounts immediately due and payable. These events of default include a failure to maintain our REIT status under the Internal Revenue Code, a failure to remain listed on the New York Stock Exchange and such customary events as nonpayment of principal, interest, fees or other amounts, breach of representations and warranties, breach of covenant, cross-default to other indebtedness and certain bankruptcy events.

As a REIT, we will generally not be subject to corporate level Federal income tax on taxable income we distribute currently to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income or property, and to federal income and excise taxes on our undistributed taxable income. In addition, we are subject to rules which may impose corporate income tax on certain built-in gains recognized upon the disposition of assets owned by our subsidiaries where such subsidiaries (or other predecessors) had formerly been C corporations. These rules apply only where the disposition occurs within certain specified recognition periods. Specifically, in the case of the TRC assets, we may be subject to tax on built-in gain recognized upon the disposition prior to January 1, 2008 of assets owned by TRC on January 1, 1998, the effective date of TRC’s REIT election. At December 31, 2005, the total amount of built-in gains with respect to our assets is substantial. However, to the extent that any such properties are to be sold, we intend to utilize tax strategies such as dispositions through like-kind exchanges and the use of net operating loss carryforwards to limit or offset the amount of such gains and therefore the amount of tax paid.

We also have subsidiaries which we have elected to be treated as taxable real estate investment trust subsidiaries (a “TRS” or “TRS entities”) and which are, therefore, subject to federal and state income taxes. Our primary TRS entities include GGMI, entities which own our master planned community properties and other TRS entities acquired in the TRC Merger. Current federal income taxes of certain of these TRS entities are likely to increase in future years as we exhaust the net loss carry-forwards of these entities and as certain master planned community developments are completed. Such increases could be significant.

Realization of a deferred tax asset is dependent upon generating sufficient taxable income in future periods. Our net operating loss carryforwards are currently scheduled to expire in subsequent years through 2025. Some of the net operating loss carryforward amounts are subject to annual limitations under Section 382 of the Internal Revenue Code. This annual limitation under Section 382 is subject to modification if a taxpayer recognizes what are called “built-in gain items.” For 2004, the benefit of the entire amount of the net operating loss was recorded and a reserve was established to reflect the limitations caused by Section 382. For 2005, the presentation has changed, but the net amount has remained the same. For 2005, the benefit amount has been reduced to reflect the sum of the annual Section 382 limitations. The valuation amount has likewise been reduced, thereby maintaining the same net deferred tax benefit amount for the net operating loss carryforwards.

As of April 30, 2002, our Board of Directors terminated the availability of such loans to officers. In conjunction with this decision, the terms of the promissory notes, including approximately $2.8 million related to income tax withholding payments which we had made on behalf of the officers, were restructured. As of April 30, 2002, each officer repaid at least 60% of the principal and 100% of the interest due under such officer’s note and the remaining amounts, approximately $10.1 million, were represented by amended and restated promissory notes. These amended and restated, full recourse notes were payable in monthly installments of principal and interest (at a market rate which varied monthly computed at LIBOR plus 125 basis points) and were scheduled to be fully repaid in May 2009 (or within 90 days of the officer’s separation from the Company, if earlier). In 2005, voluntary repayments of $.6 million were received in December, $.5 million in September and $4.2 million in February and, therefore, all amounts have been repaid as of December 31, 2005.

We grant stock options and restricted stock to attract and retain officers and key employees through the 2003 Incentive Stock Plan and, prior to April 2003, the 1993 Stock Incentive Plan. Stock options are granted by the Compensation Committee of the Board of Directors at an exercise price of not less than 100% of the fair market value of our common stock on the date of the grant. The terms of the options are fixed by the Compensation Committee. Options granted to officers and key employees under the 2003 Incentive Stock Plan are for 5-year terms and under the 1993 Incentive Stock Plan are for 10-year terms. Stock options are generally exercisable in either 33¹/3 % or 20% annual increments beginning on the date of the grants. Options granted to non-employee directors are exercisable in full commencing on the date of grant and are scheduled to expire on the fifth anniversary of the date of the grant. The 2003 Incentive Stock Plan provides for the issuance of up to 9.0 million shares of our common stock.

Under the 1998 Incentive Stock Plan (the “1998 Incentive Plan”), we may also grant stock incentive awards to employees in the form of threshold-vesting stock options (“TSOs”). The exercise price of the TSO is the Fair Market Value (“FMV”) of a share of our common stock on the date the TSO is granted. The threshold price (the “Threshold Price”) which must be achieved for the TSO to vest is determined by multiplying the FMV on the date of grant by the Estimated Annual Growth Rate (currently 7%) and compounding the product over a five-year period. Shares of our common stock must achieve and sustain the Threshold Price for at least 20 consecutive trading days at any time over the five years following the date of grant for the TSO to vest. TSOs granted in 2004 and thereafter must be exercised within 30 days of the vesting date. TSOs granted prior to 2004, all of which have vested, have a term of up to 10 years. As of December 31, 2005, 5,562,235 shares were available for future grants, subject to certain customary adjustments to prevent dilution.

The General Growth Properties, Inc. Employee Stock Purchase Plan (the “ESPP”) was established to assist eligible employees in acquiring stock ownership interest in General Growth. Under the ESPP, eligible employees make payroll deductions over a six-month purchase period. At the end of the six-month purchase period, the amounts withheld are used to purchase shares of our common stock at a purchase price equal to 85% of the lesser of the closing price of a share of our common stock on the first or last trading day of the purchase period. A maximum of 1.5 million shares of our common stock are reserved for issuance under the ESPP. Since the inception of the ESPP, an aggregate of 1,215,661 shares of our common stock have been sold under the ESPP, including 65,395 shares for the purchase period ending December 31, 2005 which were purchased at a price of $35.54 per share.

We sponsor the General Growth Management Savings and Employee Stock Ownership Plan (the “401(k) Plan”) which permits all eligible employees to defer a portion of their compensation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. Subject to certain limitations (including an annual limit imposed by the Internal Revenue Code), each participant is allowed to make before-tax contributions up to 50% of gross earnings, as defined. We add to a participant’s account through a matching contribution up to 5% of the participant’s annual earnings contributed to the 401(k) Plan. We match 100% of the first 4% of earnings contributed by each participant and 50% of the next 2% of earnings contributed by each participant. We made matching contributions of approximately $7.5 million in 2005, $5.3 million in 2004, and $4.4 million in 2003.

As a result of the TRC Merger, we assumed a retiree benefits plan that provides postretirement medical and life insurance benefits to former TRC employees who met minimum age and service requirements. We pay a portion of the cost of participants’ life insurance coverage and make contributions to the cost of participants’ medical coverage based on years of service, subject to a maximum annual contribution. Amounts related to this plan, which was terminated as of December 31, 2005, as to all unvested participants were not material as of or for the period ended December 31, 2005 and 2004.

Holders of the RPUs and CPUs are entitled to receive cumulative preferential cash distributions prior to any distributions by the LLC to the Operating Partnership. Subject to certain limitations, the RPUs may be redeemed in cash by the LLC in April 2007 for the liquidation preference amount plus accrued and unpaid distributions and may be exchanged by the holders of the RPUs for an equivalent amount of redeemable preferred stock of General Growth. Such preferred stock provides for an equivalent 8.95% annual preferred distribution and is redeemable at our option for cash equal to the liquidation preference amount plus accrued and unpaid distributions.

We lease land or buildings at certain properties from third parties. The leases generally provide us with a right of first refusal in the event of a proposed sale of the property by the landlord. All of our ground leases are classified as operating leases. Accordingly, rental payments are expensed as incurred and have, to the extent applicable, been straight-lined over the term of the lease. Rental expense, including participation rent and excluding amortization of above and below-market ground leases, was $10.5 million in 2005, $3.6 million in 2004 and $2.5 million in 2003.

We assumed TRC’s obligation under the CSA to deliver shares of General Growth common stock twice a year to beneficiaries under the CSA and certain indemnification obligations. The amount of shares is based upon a formula set forth in the CSA and upon our stock price. Such issuances could be dilutive to our existing stockholders if the delivery obligation is satisfied by the issuance of shares, new or treasury, rather than from shares purchased on the open market. We account for the beneficiaries’ share of earnings from the assets as an operating expense. We will account for any distributions to the beneficiaries in 2009, which are likely to be significant, in connection with a valuation related to assets that we own as of such termination date as additional investments in the related assets (that is, contingent consideration). A total of 1,552,385 shares of our common stock were issued in 2005 pursuant to the CSA. At December 31, 2005, 755,642 shares of common stock were issuable to the beneficiaries, representing their share of cash flows for the semi-annual period ending December 31, 2005.

Two of our operating retail properties (Oakwood Center in Gretna, Louisiana and Riverwalk, located near the convention center in downtown New Orleans) were closed in September 2005, when a hurricane struck the area. Although property damage in the New Orleans area was generally due to hurricane effects, the damage to Oakwood Center and Riverwalk was from arson and vandalism. Riverwalk partially re-opened on November 21, 2005 at a substantially reduced occupancy level. The Sears store at Oakwood Center is operating at a reduced level. Two other anchor stores at Oakwood Center are expected to re-open in 2006 and following repair and restoration, the remainder of the property is expected to open on or before Fall 2007. We have comprehensive insurance coverage for both property damage and business interruption. The restoration effort at the properties is expected to include replacing portions of the building, landscaping and furnishings. The net book value of the property damage is currently estimated to be approximately $53 million; however, we are still assessing the damage estimates and the actual net book value write-off could vary from this estimate. Changes to these estimates will be recorded in the periods in which they are determined. As of December 31, 2005, we have recorded a net fixed asset write-off and a corresponding insurance claim recovery receivable for this net book value amount because we believe that it is probable that the insurance recovery, net of deductibles on a replacement cost basis, will exceed these amounts. While we expect the insurance proceeds will be sufficient to cover most of the replacement cost of the restoration of the properties and certain business interruption amounts, certain deductibles, limitations and exclusions are expected to apply with respect to both current and future matters. No determination has been made as to the total amount or timing of those insurance payments. As of December 31, 2005, $5 million in insurance proceeds related to the Oakwood property has been received, which has been offset against this insurance recovery receivable. In January 2006, we received an additional $5 million in insurance proceeds with respect to Oakwood and $2.5 million in insurance proceeds related to Riverwalk. As only a portion of the repairs have taken place as of December 31, 2005, substantially all of the remaining $63.4 million receivable recorded represents the recovery of the net book value of fixed assets written off. The cost recoveries have been recorded on the expense line item to which they relate, and therefore there is no significant impact to any line item or our overall results. However, included in property operating expenses in 2005 are approximately $1 million of costs which, when fully expended, are not expected to be recoverable from insurance proceeds due to insurance policy deductibles.

In October 2005, the FASB Issued Staff Position No. FAS 13-1, “Accounting for Rental Costs Incurred during a Construction Period” (“FSP 13-1”). This FSP requires that rental costs associated with ground or building operating leases incurred during a construction period be recognized as rental expense. However, FSP 13-1 does not address lessees that account for the sale or rental of real estate projects under FASB Statement No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects.” As we generally own rather than lease property upon which we construct new real estate ventures and our policy would be to capitalize rental costs associated with ground leases incurred during construction periods under Statement No. 67, FSP 13-1 will not have a material effect on our results of operations when it becomes effective in 2006.

In June 2005, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor Is the Sole General Partner and the Limited Partners Have Certain Rights” (“EITF 04-05”) which provides guidance on when a sole general partner should consolidate a limited partnership. A sole general partner in a limited partnership is presumed to control that limited partnership and therefore should include the limited partnership in its consolidated financial statements, regardless of the sole general partner’s ownership interest in the limited partnership. The control presumption may be overcome if the limited partners have the ability to remove the sole general partner or otherwise dissolve the limited partnership. Other substantive participating rights by the limited partners may also overcome the control presumption. This consensus is effective for general partners of all newly formed limited partnerships and existing limited partnerships for which the partnership agreements are modified. For general partners in all other limited partnerships, this consensus is effective no later than the beginning of the first reporting period in fiscal years beginning after December 15, 2005. We do not expect EITF 04-05 to have a significant impact on our financial statements.

In March 2005, the FASB issued FASB Interpretation No. 47 (“FIN 47”) “Accounting for Conditional Asset Retirement Obligations, an interpretation of SFAS No. 143” which clarifies that a liability for the performance of an asset retirement activity should be recorded if the obligation to perform such activity is unconditional, whether or not the timing or method of settlement may be conditional on a future event. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005, and therefore, is applicable to our December 31, 2005 consolidated financial statements. Under previous guidance, it was generally accepted that if the enterprise had no current plans or present obligation to perform such asset retirement activity, the liability could not reasonably be estimated and only a disclosure obligation, if material, was present. Although we may have an ultimate legal obligation to remediate any asbestos contained in any of our investment properties, either in the course of future remodeling, demolition or tenant construction, or as a transferred liability to a buyer, we do not believe that the current estimation of that liability, and the related asset and cumulative catch-up of any accretion or depreciation, is material to our consolidated financial statements. The time period for any of this work is indeterminate as we are not obligated to perform any amount of such work that is material to our consolidated financial statements in conjunction with any current renovation or construction project. Accordingly, amounts recorded relating to FIN 47 are not material to our consolidated financial statements.

On February 7, 2005, the SEC staff published certain views concerning the accounting by lessees for leasehold improvements, rent holidays, lessor funding of lessee expenditures and other tenant inducements. Although the application of these views to lessors was not specified by the SEC and a formal accounting standard modifying existing practice on these items has not been issued or proposed, we have conducted a review of our accounting relative to such items. We believe that our leasing practices and agreements with a majority of our tenants provide that leasehold improvements that we fund represent fixed assets that we own and control. We

also believe that leases with such arrangements are properly accounted for as commencing at the completion of construction of such assets. A smaller percentage of our tenant leases do not provide for landlord funding but rather provide for tenant funded construction and furnishing of the leased premises prior to the formal commencement of the lease. We have concluded that the cumulative incremental straight-line rental revenue that would have been recognized on such leases if they had commenced on tenant possession of such space rather than the lease-specified commencement date to be approximately $10.1 million at December 31, 2004 which was recognized in the three months ended March 31, 2005. The recognition of straight-line rental revenue on this accelerated basis will have no effect on periodic or cumulative cash flows to be received pursuant to a tenant lease.

On December 16, 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets-An Amendment of APB Opinion No. 29” (“SFAS 153”). The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of SFAS 153 on June 15, 2005 did not have a material effect on our consolidated financial statements.

On December 16, 2004, the FASB issued SFAS No. 123 (Revised 2004), “Share-Based Payment” (“SFAS 123R”). SFAS 123R replaces SFAS 123, which we adopted in the second quarter of 2002. SFAS 123R requires that compensation cost relating to share-based payment transactions be recognized in financial statements and measured based on the fair value of the equity or liability instruments used. SFAS 123R, as provided by SEC regulation, is not required to be adopted until the first interim or annual reporting period that begins after December 15, 2005. Although we are still evaluating the provisions of SFAS 123R, we do not expect its adoption to have a material effect on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” (“SFAS 150”) which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability. The effective date of a portion of SFAS 150 has been indefinitely postponed by the FASB. We did not enter into new financial instruments subsequent to May 2003 which would fall within the scope of this statement. None of our transactions, arrangements or financial instruments, except for certain ventures acquired in the TRC Merger, have been identified that appear to meet the criteria for liability recognition in accordance with paragraphs 9 and 10 under SFAS 150 due to the indefinite life of the joint venture arrangements. Therefore, if the effectiveness of the measurement and classification provisions is no longer postponed, we would reclassify to liabilities approximately $15 million of minority interest with respect to such TRC Merger acquired ventures, but no amount for any of our other ventures.

The accounting policies of the segments are the same as those described in Note 2, except that we account for unconsolidated real estate ventures using the proportionate share method rather than the equity method. Under the proportionate share method, our share of the revenues and expenses of the Unconsolidated Properties are combined with the revenues and expenses of the Consolidated Properties. Under the equity method, our share of the net revenues and expenses of the Unconsolidated Properties are reported as a single line item, “Equity in income of unconsolidated affiliates,” in our Consolidated Statements of Income and Comprehensive Income.

We have audited the consolidated financial statements of General Growth Properties, Inc. and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and for each of the three years in the period ended December 31, 2005, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, and have issued our reports thereon dated March 31, 2006 (which report expresses an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of material weaknesses); such consolidated financial statements and reports are included elsewhere in this Form 10-K. Our audits also included the consolidated financial statement schedule of the Company listed in the Index to Consolidated Financial Statements and Consolidated Financial Statement Schedule on page F-1 of this Form 10-K. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

S-4 EX-3.1 2 c02442exv3w1.txt RESTATED CERTIFICATE OF INCORPORATION EXHIBIT 3.1 RESTATED CERTIFICATE OF INCORPORATION OF GENERAL GROWTH PROPERTIES, INC. ------------------------------------------ 1. The name of the corporation (which is hereinafter referred to as the "Corporation") is "General Growth Properties, Inc." 2. The Corporation's original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on September 22, 1986, under the name "General Growth Partners, Inc." 3. An Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 6, 1993. 4. A Second Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 24, 1995 (the "Original Certificate"). 5. The provisions of the Original Certificate as heretofore amended and/or supplemented are hereby restated and integrated into the single instrument which is hereinafter set forth, and which is entitled Restated Certificate of Incorporation of General Growth Properties, Inc., without further amendment and without any discrepancy between the provisions of the Original Certificate as heretofore amended and/or supplemented and the provisions of the said single instrument hereinafter set forth. 6. The Board of Directors of the Corporation has duly adopted this Restated Certificate of Incorporation pursuant to the provisions of Section 245 of the General Corporation Law of the State of Delaware in the form set forth as follows: ARTICLE I The name of the corporation (which is hereinafter referred to as the "Corporation") shall be General Growth Properties, Inc. ARTICLE II The address of the Corporation's registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware, 19808. The name of the Corporation's registered agent at such address is The Prentice-Hall Corporation System, Inc. ARTICLE III The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "GCL"). ARTICLE IV A. Classes and Number of Shares. The total number of shares of all classes of capital stock that the Corporation shall have authority to issue is Eight Hundred Eighty Million (880,000,000) shares, consisting of (i) Five Million (5,000,000) shares of preferred stock, par value $100.00 per share (the "Preferred Stock") and (ii) Eight Hundred Seventy-Five Million (875,000,000) shares of common stock, par value $0.01 per share (the "Common Stock"). B. Preferred Stock. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized to provide for the issuance of shares of Preferred Stock in series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as a "Preferred Stock Designation"), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: (i) The designation of the series, which may be by distinguishing number, letter or title. (ii) The number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding). (iii) Whether dividends, if any, shall be cumulative or noncumulative and the dividend rate of the series. (iv) Dates at which dividends, if any, shall be payable. (v) The redemption rights and price or prices, if any, for shares of the series. (vi) The terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series. (vii) The amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation. 2 (viii) Whether the shares of the series shall be convertible into shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series of such other security, the conversion price or prices, or rate or rates, any adjustments thereof, the date or dates of which such shares shall be convertible and all other terms and conditions upon which such conversion may be made. (ix) Restrictions on the issuance of shares of the same series or of any other class or series. (x) The voting rights, if any, of the holders of shares of the series. The powers, designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Corporation's Series A Junior Participating Preferred Stock as originally filed with the Secretary of State of the State of Delaware on November 18, 1998 are as set forth in Appendix A hereto and are incorporated by reference. The powers, designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Corporation's 8.5% Cumulative Convertible Preferred Stock, Series C as originally filed with the Secretary of State of the State of Delaware on July 10, 2002 are as set forth in Appendix B hereto and are incorporated by reference. The powers, designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Corporation's 8.95% Cumulative Redeemable Preferred Stock, Series G as originally filed with the Secretary of State of the State of Delaware on April 17, 2002 and as subsequently corrected are as set forth in Appendix C hereto and are incorporated by reference. The powers, designations, preferences and relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Corporation's 7% Cumulative Convertible Preferred Stock, Series H as originally filed with the Secretary of State of the State of Delaware on November 27, 2002 are as set forth in Appendix D hereto and are incorporated by reference. C. Common Stock. (1) Common Stock Subject to Terms of Preferred Stock. The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. (2) Dividend Rights. Except as otherwise provided in this Certificate of Incorporation, the holders of shares of the Common Stock shall be entitled to receive such dividends as may be declared by the Board of Directors of the Corporation out of funds legally available therefor. 3 (3) Rights Upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of, or any distribution of the assets of, the Corporation, each holder of shares of the Common Stock shall be entitled to receive, ratably with each other holder of shares of Common Stock, that portion of the assets of the Corporation available for distribution to the holders of its Common Stock, as the number of shares of the Common Stock held by such holder bears to the total number of shares of Common Stock then outstanding. (4) Voting Rights. Except as may be provided in this Certificate of Incorporation or in a Preferred Stock Designation, the holders of shares of the Common Stock shall have the exclusive right to vote on all matters (for which a common stockholder shall be entitled to vote thereon) at all meetings of the stockholders of the Corporation, and shall be entitled to one vote for each share of the Common Stock entitled to vote at such meeting. D. Restrictions on Transfer: Designation of Shares-in-Trust. (1) Definitions. The following terms shall have the following meanings: "Beneficial Ownership" shall mean ownership of Equity Stock by a Person who would be treated as an owner of such shares of Equity Stock either directly or indirectly through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner", "Beneficially Owns", and "Beneficially Owned" shall have correlative meanings. "Beneficiary" shall mean, with respect to any Trust, one or more organizations described in each of Section 170(b)(1)(A) and Section 170(c) of the Code which are named by the Corporation as the beneficiary or beneficiaries of such Trust, in accordance with the provisions of subparagraph E(1) of this Article IV. "Board of Directors" shall mean the Board of Directors of the Corporation. "Bucksbaum Group" shall mean (i) Martin Bucksbaum and Matthew Bucksbaum (the "Bucksbaums"); and (ii) any stockholder of the Corporation whose shares of Equity Stock are Beneficially Owned and/or Constructively Owned by the Bucksbaums. "Bylaws" shall mean the Bylaws of the Corporation. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Constructive Ownership" shall mean ownership of Equity Stock by a Person who would be treated as an owner of such shares of Equity Stock either directly or indirectly through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms "Constructive Owner", "Constructively Owns" and "Constructively Owned" shall have correlative meanings. 4 "Equity Stock" shall mean stock that is either Preferred Stock or Common Stock and shall include all shares of Preferred Stock or Common Stock that are held as Shares-in-Trust in accordance with the provisions of paragraph E of this Article IV. "Existing Holder" shall mean the Bucksbaum Group. "Existing Holder Limit" shall mean, initially, the greater of the Ownership Limit and the percentage of the value of the outstanding Common Stock Beneficially Owned by the Existing Holder immediately after the Initial Public Offering, and after any adjustment pursuant to subparagraph D(10) of this Article IV, shall mean such percentage of the outstanding Equity Stock as so adjusted. "GGP Partnership Agreement" shall mean the agreement of limited partnership establishing GGP Limited Partnership, a Delaware limited partnership. "Initial Public Offering" means the sale of shares of Common Stock pursuant to the Corporation's first effective registration statement for such Common Stock filed under the Securities Act of 1933, as amended. "Market Price" on any date shall mean the average of the Closing Price for the five consecutive Trading Days ending on such date. The "Closing Price" on any date shall mean the last sale price, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Equity Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Equity Stock is listed or admitted to trading or, if the Equity Stock is not listed or admitted to trading on any national securities exchange the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the Equity Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Equity Stock selected by the Board of Directors of the Company. "Trading Day" shall mean a day on which the principal national securities exchange on which the Equity Stock is listed or admitted to trading is open for the transaction of business or, if the Equity Stock is not listed or admitted to trading on any national securities exchange, shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "Non-Transfer Event" shall mean an event other than a purported Transfer that would cause any Person to Beneficially Own or Constructively Own shares of Equity Stock in excess of the Ownership Limit (in the case of any Person other than an Existing Holder) or the applicable Existing Holder Limit (in the case of an Existing Holder), including, but not limited to, the granting of any option or entering into any agreement for the sale, transfer or other 5 disposition of Equity Stock or the sale, transfer, assignment or other disposition of any securities or rights convertible into or exchangeable for Equity Stock. "Ownership Limit" shall initially mean 7.5% of the value of the outstanding Equity Stock of the Corporation, and after any adjustment as set forth in subparagraph D(11) of this Article IV, shall mean such greater percentage (but not more than 9.8%) of the value of the outstanding Equity Stock as so adjusted. "Permitted Transferee" shall mean any Person designated as a Permitted Transferee in accordance with the provisions of subparagraph E(5) hereof. "Person" shall mean an individual, corporation, partnership, estate, trust (other than a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "Prohibited Owner" shall mean, with respect to any purported Transfer or Non-Transfer Event, any Person who, but for the provisions of subparagraph (D)(3) of this Article IV, would own record title to shares of Equity Stock. "REIT" shall mean a Real Estate Investment Trust under Section 856 of the Code. "Restriction Termination Date" shall mean the first day after the date of the Initial Public Offering on which the Board of Directors and the stockholders of the Corporation determine that it is no longer in the best interests of the Corporation to attempt to, or continue to, qualify as a REIT. "Rights" shall mean the rights granted under the GGP Partnership Agreement to the limited partners, including members of the Bucksbaum Group, to acquire Common Stock. "Transfer" shall mean any sale, transfer, gift, assignment, devise or other disposition of Equity Stock, whether voluntary or involuntary, whether of record, constructively or beneficially and whether by operation of law or otherwise. "Trust" shall mean any separate trust created pursuant to subparagraph D(3) of this Article IV and administered in accordance with the terms of subparagraph E of this Article IV, for the exclusive benefit of any Beneficiary. "Trustee" shall mean any person or entity unaffiliated with both the Corporation and any Prohibited Owner, such Trustee to be designated by the Corporation to act as trustee of any Trust, or any successor trustee thereof. 6 "Voting Stock" shall mean the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. (2) Restriction on Transfers. (a) Except as provided in subparagraph D(9) of this Article IV, from the date of the Initial Public Offering and prior to the Restriction Termination Date, no Person (other than an Existing Holder) shall Beneficially Own or Constructively Own shares of the outstanding Equity Stock in excess of the Ownership Limit, and no Existing Holder shall Beneficially Own or Constructively Own shares of Equity Stock in excess of the Existing Holder Limit for such Existing Holder. (b) Except as provided in subparagraph D(9) of this Article IV, from the date of the Initial Public Offering and prior to the Restriction Termination Date, any Transfer that, if effective, would result in any Person (other than an Existing Holder) Beneficially Owning or Constructively Owning Equity Stock in excess of the Ownership Limit shall be void ab initio as to the Transfer of that number of shares of Equity Stock which would be otherwise Beneficially Owned or Constructively Owned by such Person in excess of the Ownership Limit; and the intended transferee shall acquire no rights in such excess shares of Equity Stock. (c) Except as provided in subparagraph D(9) of this Article IV, from the date of the Initial Public Offering and prior to the Restriction Termination Date, any Transfer that, if effective, would result in any Existing Holder Beneficially Owning or Constructively Owning Equity Stock in excess of the applicable Existing Holder Limit shall be void ab initio as to the Transfer of that number of shares of Equity Stock which would be otherwise Beneficially Owned or Constructively Owned by such Person in excess of the applicable Existing Holder Limit; and such Existing Holder shall acquire no rights in such excess shares of Equity Stock. (d) Except as provided in subparagraph D(9) of this Article IV, from the date of the Initial Public Offering and prior to the Restriction Termination Date, any Transfer that, if effective, would result in the Equity Stock being Beneficially Owned by fewer than 100 Persons (determined without reference to any rules of attribution) shall be void ab initio as to the Transfer of that number of shares which would be otherwise Beneficially or Constructively Owned (determined without reference to any rules of attribution) by the transferee; and the intended transferee shall acquire no rights in such excess shares of Equity Stock. (e) From the date of the Initial Public Offering and prior to the Restriction Termination Date, any Transfer of shares of Equity Stock that, if effective, would result in the Corporation being "closely held" within the meaning of Section 856(h) of the Code shall be void ab initio as to the Transfer of that number of shares of Equity Stock which would cause the Corporation to be "closely held" within the meaning of Section 856(h) of the Code; and the intended transferee shall acquire no rights in such excess shares of Equity Stock. 7 (3) Transfer in Trust. (a) If, notwithstanding the other provisions contained in this Article IV, at any time after the date of the Initial Public Offering and prior to the Restriction Termination Date, there is a purported Transfer or Non-Transfer Event such that any Person would either Beneficially Own or Constructively Own Equity Stock in excess of the Ownership Limit (in the case of any Person other than an Existing Holder) or Existing Holder Limit (in the case of an Existing Holder), then, (i) except as otherwise provided in subparagraph D(9), the purported transferee shall acquire no right or interest (or, in the case of a Non-Transfer Event, the person holding record title to the Equity Shares Beneficially Owned or Constructively Owned by such Beneficial Owner or Constructive Owner, shall cease to own any right or interest) in such number of shares of Equity Stock which would cause such Beneficial Owner or Constructive Owner to Beneficially Own or Constructively Own shares of Equity Stock in excess of the Ownership Limit or the Existing Holder Limit, as the case may be; and (ii) such number of shares of Equity Stock in excess of the Ownership Limit or the Existing Holder Limit (rounded up to the nearest whole share) shall be designated Shares-in-Trust and, in accordance with subparagraph E of this Article IV, transferred automatically and by operation of law to a Trust. Such transfer to a Trust and the designation of the shares as Shares-in-Trust shall be effective as of the close of business on the business day prior to the date of the purported Transfer or Non-Transfer Event, as the case may be. (b) If, notwithstanding the other provisions contained in this Article IV, at any time after the date of the Initial Public Offering and prior to the Restriction Termination Date, there is a purported Transfer or Non-Transfer Event that, if effective, would cause the Corporation to become "closely held" within the meaning of Section 856(h) of the Code, then (i) the purported transferee shall not acquire any right or interest (or, in the case of a Non-Transfer Event, the person holding record title of the Equity Stock with respect to which such Non-Transfer Event occurred, shall cease to own any right or interest) in such number of shares of Equity Stock, the ownership of which by such purported transferee or record holder would cause the Corporation to be "closely held" within the meaning of Section 856(h) of the Code; and (ii) such number of shares of Equity Stock (rounded up to the nearest whole share) shall be designated Shares-in-Trust and, in accordance with the provisions of subparagraph E of this Article IV, transferred automatically and by operation of law to the Trust to be held in accordance with that subparagraph E. Such transfer to a Trust and the designation of shares as Shares-in-Trust shall be effective as of the close of business on the business day prior to the date of the Transfer or Non-Transfer Event, as the case may be. (4) Remedies for Breach. If the Corporation or its designees shall at any time determine in good faith that a Transfer has taken place in violation of subparagraph D(2) of this Article IV or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Equity Stock in violation of subparagraph D(2) of this Article IV, the Corporation or its designees shall take such action as it or they deem advisable to refuse to give effect to or to prevent such Transfer or acquisition, including but not limited to, refusing to give effect to such Transfer or acquisition on the books of the Corporation or instituting proceedings to enjoin such Transfer or acquisition. 8 (5) Notice of Restricted Transfer. Any Person who acquires or attempts to acquire shares of Equity Stock in violation of subparagraph D(2) of this Article IV, or any Person who owned shares of Equity Stock that were transferred to the Trust pursuant to the provisions of subparagraph D(3) of this Article IV, shall immediately give written notice to the Corporation of such event and shall provide to the Corporation such other information as the Corporation may request in order to determine the effect, if any, of such Transfer or the Non-Transfer Event, as the case may be, on the Corporation's status as a REIT. (6) Owners Required to Provide Information. From the date of the Initial Public Offering and prior to the Restriction Termination Date: (a) every Beneficial Owner or Constructive Owner of more than 1%, or such lower percentages as required pursuant to regulations under the Code, of the outstanding Equity Stock of the Corporation shall, within 30 days after each of January 1 and June 30 of each year, give written notice to the Corporation stating the name and address of such Beneficial Owner or Constructive Owner, the number of shares of Equity Stock Beneficially Owned or Constructively Owned, and a description of how such shares are held. Each such Beneficial Owner or Constructive Owner shall provide to the Corporation such additional information as the Corporation may request in order to determine the effect, if any, of such Beneficial Ownership on the Corporation's status as a REIT and to ensure compliance with the Ownership Limit and Existing Holder Limit. (b) each Person who is a Beneficial Owner or Constructive Owner of Equity Stock and each Person (including the stockholder of record) who is holding Equity Stock for a Beneficial Owner or Constructive Owner shall provide to the Corporation such information as the Corporation may request in order to determine the Corporation's status as a REIT and to ensure compliance with the Ownership Limit and Existing Holder Limit. (7) Remedies Not Limited. Nothing contained in this Article IV shall limit the authority of the Corporation to take such other action as it deems necessary or advisable to protect the Corporation and the interests of its stockholders by preservation of the Corporation's status as a REIT and ensure compliance with the Ownership Limit and Existing Holder Limit. (8) Ambiguity. In the case of an ambiguity in the application of any of the provisions of subparagraph D of this Article IV, including any definition contained in subparagraph D(1), the Board of Directors shall have the power to determine the application of the provisions of this subparagraph D with respect to any situation based on the facts known to it. (9) Exception. The Corporation, upon receipt of a ruling from the Internal Revenue Service or an opinion of counsel in each case to the effect that the restrictions contained in subparagraph D(2)(d) and/or subparagraph D(2)(e) will not be violated, may exempt a Person from the Ownership Limit or Existing Holder Limit, as the case may be, if such Person is not an individual for purposes of Section 542(a)(2) of the Code or is an underwriter which participates in a public offering of the Equity Stock for a period of 90 days following the purchase by such underwriter of the Equity Stock and the Corporation obtains such representations and undertakings from such Person as are reasonably necessary to ascertain that no individual's 9 Beneficial Ownership of Equity Stock will violate the Ownership Limit or Existing Holder Limit, as the case may be, and agrees that any violation or attempted violation will result in such transfer to the Trust of shares of Equity Stock pursuant to subparagraph D(3) of this Article IV. (10) Modifications of Existing Holding Limits. The Existing Holder Limit shall be modified as follows: (a) Upon any exercise of Rights pursuant to the GGP Partnership Agreement, or the acquisition of Equity Stock by the Bucksbaum Group, the Ownership Limit and/or the Existing Holder Limit for each affected Person shall be increased, pro rata in accordance with the number of shares of Common Stock to be received by such Person, to the maximum extent possible under subparagraph D(12) to permit the Beneficial Ownership or Constructive Ownership of the shares of Common Stock issuable upon such exercise or acquisition. (b) Subject to the limitations contained in subparagraph D(12), the Board of Directors may grant stock options which result in Beneficial Ownership or Constructive Ownership of Equity Stock by an Existing Holder pursuant to a stock option plan approved by the stockholders of the Corporation. Any such grant of stock options shall increase the Existing Holder Limit for the affected Existing Holder to the maximum extent possible under subparagraph D(12) to permit the Beneficial Ownership or Constructive Ownership of the shares of Equity Stock issuable upon exercise of such stock options. (c) The Board of Directors may reduce the Existing Holder Limit for any Existing Holder, with the written consent of such Existing Holder, after any Transfer permitted in this subparagraph D by such Existing Holder to a Person other than an Existing Holder or after the lapse (without exercise) of a stock option described in subparagraph D(10)(b). (11) Modification of Ownership Limit. Subject to the limitations contained in subparagraph D(12), the Board of Directors may from time to time increase or decrease the Ownership Limit. (12) Limitations on Modifications. (a) Neither the Ownership Limit nor any Existing Holder Limit may be increased or decreased (nor may any additional Existing Holder Limit be created) if, after giving effect to such increase (or creation), five Beneficial Owners of Equity Stock (including all of the then Existing Holders) could (assuming ownership of shares by all Persons other than Existing Holders equal to the Ownership Limit) Beneficially Own, in the aggregate, more than 50% of the outstanding Equity Stock. (b) Prior to any modifications of any Existing Holder Limit or Ownership Limit, the Board of Directors of the Corporation may require such opinions of counsel, affidavits, undertakings or agreements as it may deem necessary or advisable in order to determine or ensure the Corporation's status as a REIT. 10 (c) No Existing Holder Limit shall be reduced to a percentage that is less than the Ownership Limit. (d) The Ownership Limit may not be increased to a percentage that is greater than 9.8%. (13) Legend. Each certificate for Equity Stock shall bear the following legend: "The shares of Equity Stock represented by this certificate are subject to restrictions on transfer for the purpose of the Corporation's maintenance of its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the "Code"). No Person may (1) Beneficially Own or Constructively Own shares of Equity Stock in excess of 7.5% (or such other percentage as may be determined by the Board of Directors of the Corporation) of the value of the outstanding Equity Stock of the Corporation unless such Person is an Existing Holder (in which case the Existing Holder Limit shall be applicable); or (2) Beneficially Own Equity Stock which would result in the Corporation being "closely held" under Section 856(h) of the Code. Any Person who attempts to Beneficially Own or Constructively Own shares of Equity Stock in excess of the above limitations must immediately notify the Corporation in writing. If the restrictions above are violated, the shares of Equity Stock represented hereby will be transferred automatically and by operation of law to a Trust and shall be designated Shares-in-Trust. All capitalized terms in this legend have the meanings defined in the Corporation's Amended and Restated Certificate of Incorporation, as the same may be further amended from time to time, a copy of which, including the restrictions on transfer, will be sent without charge to each stockholder who so requests." (14) Severability. If any provision of this Article IV or any application of any such provision is determined to be invalid by any Federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court. E. Shares-in-Trust. (1) Trust. Any shares of Equity Stock transferred to a Trust and designated Shares-in-Trust pursuant to subparagraph D(3) of this Article IV shall be held for the exclusive benefit of the Beneficiary. The Corporation shall name a beneficiary of each Trust within five (5) days after discovery of the existence thereof. Any transfer to a Trust, and subsequent designation of shares of Equity Stock as Shares-in-Trust, pursuant to subparagraph D(3) of this Article IV shall be effective as of the close of business on the business day prior to the date of the Transfer or Non-Transfer Event that results in the transfer to the Trust. Shares-in-Trust shall remain issued and outstanding shares of Equity Stock of the Corporation and shall be entitled to the same rights and privileges on identical terms and conditions as are all other issued and outstanding shares of Equity Stock of the same class and series. When transferred to the Permitted Transferee in accordance with the provisions of subparagraph E(5) of this Article IV, such Shares-in-Trust shall cease to be designated as Shares-in-Trust. 11 (2) Dividend Rights. The Trustee, as record holder of Shares-in-Trust, shall be entitled to receive all dividends and distributions as may be declared by the Board of Directors of the Corporation on such shares of Equity Stock and shall hold such dividends or distributions in trust for the benefit of the Beneficiary. The Prohibited Owner with respect to Shares-in-Trust shall repay to the Trustee the amount of any dividends or distributions received by it that (i) are attributable to any shares of Equity Stock designated Shares-in-Trust and (ii) the record date of which was on or after the date that such shares became Shares-in-Trust. The Corporation shall take all measures that it determines reasonably necessary to recover the amount of any such dividend or distribution paid to a Prohibited Owner, including, if necessary, withholding any portion of future dividends or distributions payable on shares of Equity Stock Beneficially Owned or Constructively Owned by the Person who, but for the provisions of subparagraph D(3) of this Article IV, would Constructively Own or Beneficially Own the Shares-in-Trust; and, as soon as reasonably practicable following the Corporation's receipt or withholding thereof, shall pay over to the Trustee for the benefit of the Beneficiary the dividends so received or withheld, as the case may be. (3) Rights Upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of, or any distribution of the assets of, the Corporation, each holder of Shares-in-Trust shall be entitled to receive, ratably with each other holder of Equity Stock of the same class or series, that portion of the assets of the Corporation which is available for distribution to the holders of such class and series of Equity Stock. The Trustee shall distribute to the Prohibited Owner the amounts received upon such liquidation, dissolution, or winding up, or distribution; provided, however, that the Prohibited Owner shall not be entitled to receive amounts pursuant to this subparagraph E(3) in excess of, in the case of a purported Transfer in which the Prohibited Owner gave value for shares of Equity Stock and which Transfer resulted in the transfer of the shares to the Trust, the price per share, if any, such Prohibited Owner paid for the Equity Stock and, in the case of a Non-Transfer Event or Transfer in which the Prohibited Owner did not give value for such shares (e.g., if the shares were received through a gift or devise) and which Non-Transfer Event or Transfer, as the case may be, resulted in the transfer of shares to the Trust, the price per share equal to the Market Price on the date of such Non-Transfer Event or Transfer. Any remaining amount in such Trust shall be distributed to the Beneficiary. (4) Voting Rights. The Trustee shall be entitled to vote all Shares-in-Trust. Any vote by a Prohibited Owner as a holder of shares of Equity Stock prior to the discovery by the Corporation that the shares of Equity Stock are Shares-in-Trust shall, subject to applicable law, be rescinded and shall be void ab initio with respect to such Shares-in-Trust and the Prohibited Owner shall be deemed to have given, as of the close of business on the business day prior to the date of the purported Transfer or Non-Transfer Event that results in the transfer to the Trust of the shares of Equity Stock under subparagraph D(3) of this Article IV, an irrevocable proxy to the Trustee to vote the Shares-in-Trust in the manner in which the Trustee, in its sole and absolute discretion, desires. (5) Designation of Permitted Transferee. The Trustee shall have the exclusive and absolute right to designate a Permitted Transferee of any and all Shares-in-Trust. As reasonably practicable as possible, in an orderly fashion so as not to materially adversely affect 12 the Market Price of the Shares-in-Trust, the Trustee shall designate any Person as Permitted Transferee, provided, however, that (i) the Permitted Transferee so designated purchases for valuable consideration (whether in a public or private sale) the Shares-in-Trust and (ii) the Permitted Transferee so designated may acquire such Shares-in-Trust without such acquisition resulting in a transfer to a Trust and the redesignation of such shares of the Equity Stock so acquired as Shares-in-Trust under subparagraph D(3) of this Article IV. Upon the designation by the Trustee of a Permitted Transferee in accordance with the provisions of this subparagraph, the Trustee of a Trust shall (i) cause to be transferred to the Permitted Transferee that number of Shares-in-Trust acquired by the Permitted Transferee; (ii) cause to be recorded on the books of the Corporation that the Permitted Transferee is the holder of record of such number of shares of Equity Stock; and (iii) distribute to the Beneficiary any and all amounts held with respect to the Shares-in-Trust after making that payment to the Prohibited Owner pursuant to subparagraph E(6) of this Article IV. (6) Compensation to Record Holder of Shares of Equity Stock that Become Shares-In-Trust. Any Prohibited Owner shall be entitled (following discovery of the Shares-In-Trust and subsequent designation of the Permitted Transferee in accordance with subparagraph D(5) of this Article IV) to receive from the Trustee the lesser of (i) in the case of (a) a purported Transfer in which the Prohibited Owner gave value for shares of Equity Stock and which Transfer resulted in the transfer of the shares to the Trust, the price per share, if any, such Prohibited Owner paid for the Equity Stock, or (b) a Non-Transfer Event or Transfer in which the Prohibited Owner did not give value for such shares (e.g., if the shares were received through a gift or devise) and which Non-Transfer Event or Transfer, as the case may be, resulted in the transfer of shares to the Trust, the price per share equal to the Market Price on the date of such Non-Transfer Event or Transfer, and (ii) the price per share received by the Trustee of the Trust from the sale or other disposition of such Shares-in-Trust in accordance with subparagraph E(5) of this Article IV. Any amounts received by the Trustee in respect of such Shares-in-Trust and in excess of such amounts to be paid the Prohibited Owner pursuant to this subparagraph E(6) of this Article IV shall be distributed to the Beneficiary in accordance with the provisions of subparagraph E(5) of this Article IV. Each Beneficiary and Prohibited Owner waive any and all claims that they may have against the Trustee and the Corporation arising out of the disposition of Shares-in-Trust, except for claims arising out of the gross negligence or willful misconduct of, or any failure to make payments in accordance with paragraph E of this Article IV by, such Trustee or the Corporation. (7) Purchase Right in Shares-in-Trust. Shares-in-Trust shall be deemed to have been offered for sale to the Corporation, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that created such Shares-in-Trust (or, in the case of devise, gift or Non-Transfer Event, the Market Price at the time of such devise, gift or Non-Transfer Event) and (ii) the Market Price on the date the Corporation, or its designee, accepts such offer. The Corporation shall have the right to accept such offer for a period of ninety days after the later of (i) the date of the Non-Transfer Event or purported Transfer which resulted in such Shares-in-Trust and (ii) the date the Corporation determines in good faith that a Transfer or Non-Transfer Event resulting in Shares-in-Trust has occurred, if the Corporation does not receive a notice of such Transfer or Non-Transfer Event pursuant to subparagraph D(5) of this Article IV. 13 F. Issuance of Rights to Purchase Securities and Other Property. Subject to the rights of the holders of any series of Preferred Stock, the Board of Directors is hereby authorized to create and to authorize and direct the issuance (on either a pro rata or a non-pro rata basis) by the Corporation of rights, options and warrants for the purchase of shares of capital stock of the Corporation, other securities of the Corporation, or shares or other securities of any successor in interest of the Corporation (a "Successor"), at such times, in such amounts, to such persons, for such consideration (if any), with such form and content (including without limitation the consideration for which any shares of capital stock of the Corporation, other securities of the Corporation, or shares or other securities of any Successor are to be issued) and upon such terms and conditions as it may, from time to time, determine upon, subject only to the restrictions, limitations, conditions and requirements imposed by the GCL, other applicable laws and this Certificate. ARTICLE V (a) In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to (i) make, alter, amend or repeal the By-laws of the Corporation; provided, however, that a majority of the voting power of the then outstanding Voting Stock, voting together as a single class, may alter, amend or repeal any provision of the By-laws, and (ii) from time to time determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the Corporation, or any of them, shall be open to inspection of stockholders; and, except as so determined or as provided in any Preferred Stock Designation, no stockholder shall have any right to inspect any account, book or document of the Corporation other than such rights as may be conferred by applicable law. (b) The Corporation may in its By-laws confer powers upon the Board of Directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board of Directors by applicable law. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of a majority of the then outstanding Voting Stock, voting together as a single class, shall be required to amend, repeal or adopt any provision inconsistent with paragraph (a) of this Article V. ARTICLE VI (a) Subject to the rights of the holders of any series of Preferred Stock as set forth in a Preferred Stock Designation to elect additional directors under specified circumstances, the number of directors of the Corporation shall be fixed by the By-laws of the Corporation and may be increased or decreased from time to time in such a manner as may be prescribed by the By-laws. (b) Unless and except to the extent that the By-laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. 14 (c) The directors, other than those who may be elected by the holders of any series of Preferred Stock, shall be divided into three classes, as nearly equal in number as possible. One class of directors shall be initially elected for a term expiring at the annual meeting of stockholders to be held in 1994, another class shall be initially elected for a term expiring at the annual meeting of stockholders to be held in 1995, and another class shall be initially elected for a term expiring at the annual meeting of stockholders to be held in 1996. Members of each class shall hold office until their successors are elected and qualified. At each succeeding annual meeting of the stockholders of the Corporation, the successors of the class of directors whose term expires at that meeting shall be elected by a plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. (d) Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, any director may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of 75% of the then outstanding Voting Stock, voting together as a single class. (e) Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of a majority of the then outstanding Voting Stock, voting together as a single class, shall be required to amend, repeal or adopt any provision inconsistent with this Article VI. (f) Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of the holders of a majority of the then outstanding Voting Stock, voting as a single class, and the approval of the Board of Directors shall be required to terminate the Corporation's status as a real estate investment trust. ARTICLE VII Each person who is or was or who agrees to become a director or officer of the Corporation, or each such person who is or was serving or who agrees to serve at the request of the Board of Directors or an officer of the Corporation as an employee or agent of the Corporation or as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person), shall be indemnified by the Corporation, in accordance with the Bylaws of the Corporation, to the full extent permitted from time to time by the GCL as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) or any other applicable laws presently or hereafter in effect. Without limiting the generality or the effect of the foregoing, the Corporation may enter into one or more agreements with any person which provide for indemnification greater or different than that provided in this Article VII. Any amendment or repeal of this Article VII shall not adversely affect any right or protection existing hereunder immediately prior to such amendment or repeal. 15 ARTICLE VIII No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the GCL or (iv) for any transaction from which the director derived an improper personal benefit. ARTICLE IX In determining what is in the best interest of the Corporation, a director of the Corporation shall consider the interests of the stockholders of the Corporation and, in his or her discretion, may consider (a) the interests of the Corporation's employees, suppliers, creditors and customers, (b) the economy of the nation, (c) community and societal interests and (d) the long-term as well as short-term interests of the Corporation and its stockholders, including the possibility that these interests may be best served by the continued independence of the Corporation. ARTICLE X The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation or a Preferred Stock Designation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted in the manner now or hereafter prescribed herein or by applicable law, and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this Article IX, provided, however, that any amendment or repeal of Article VII or Article VIII of this Certificate of Incorporation shall not adversely affect any right or protection existing hereunder immediately prior to such amendment or repeal. ARTICLE XI Subject to the rights of the holders of any series of Preferred Stock as set forth on a Preferred Stock Designation to elect additional directors under specific circumstances, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing of such stockholders. Notwithstanding anything contained in this Certificate of Incorporation to the contrary, the affirmative vote of at least 80% of the then outstanding Voting Stock, voting together as a single class, shall be required to amend, repeal, or adopt any provision inconsistent with this Article XI. 16 IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be signed by its Executive Vice President and Chief Financial Officer this 9th day of February, 2006. GENERAL GROWTH PROPERTIES, INC. By: /s/ Bernard Freibaum ------------------------------------- Bernard Freibaum, Executive Vice President and Chief Financial Officer 17 APPENDIX A CERTIFICATE OF DESIGNATION of SERIES A JUNIOR PARTICIPATING PREFERRED STOCK of GENERAL GROWTH PROPERTIES, INC. ---------------------------------------------- (Pursuant to Section 151 of the Delaware General Corporation Law) ---------------------------------------------- General Growth Properties, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the "Company"), hereby certifies that the following resolution was adopted by the Board of Directors of the Company as required by Section 151 of the General Corporation Law at a meeting duly called and held on November 18, 1998: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Company (hereinafter called the "Board of Directors" or the "Board") in accordance with the provisions of the Second Amended Restated Certificate of Incorporation of the Company, as amended (the "Restated Certificate of Incorporation"), the Board of Directors hereby creates a series of Preferred Stock, par value $100.00 per share (the "Preferred Stock"), of the Company and hereby states the designation and number of shares, and fixes the relative rights, preferences and limitations thereof as follows: Section 1. Designation and Amount. The shares of this series shall be designated as "Series A Junior Participating Preferred Stock" (the "Series A Preferred Stock") and the number of shares constituting the Series A Preferred Stock shall be 100,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Company convertible into Series A Preferred Stock. Section 2. Dividends and Distributions. (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any other stock) ranking prior and superior to the Series A Preferred Stock with respect A-1 to dividends, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount (if any) per share (rounded to the nearest cent), subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate per share amount of all cash dividends, and 1000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock, par value $.10 per share (the "Common Stock"), of the Company or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Company shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). (C) Dividends due pursuant to paragraph (A) of this Section shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof. A-2 Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:- (A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 1000 votes on all matters submitted to a vote of the stockholders of the Company. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided the Restated Certificate of Incorporation, including any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Company. (C) Except as set forth herein, or as otherwise required by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Company shall not: (i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; (ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to A-3 the Series A Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Company ranking junior (as to dividends and upon dissolution, liquidation or winding up) to the Series A Preferred Stock. (B) The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein or in the Restated Certificate of Incorporation, including any Certificate of Designations creating a series of Preferred Stock or any similar stock, or as otherwise required by law. Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount to be distributed per share to holders of shares of Common Stock plus an amount equal to any accrued and unpaid dividends. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth A-4 in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. Amendment. The Restated Certificate of Incorporation shall not be amended in any manner, including in a merger or consolidation, which would alter, change or repeal the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class. Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and upon liquidation, dissolution and winding up, junior to all series of Preferred Stock. IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Company by its Executive Vice President and Chief Financial Officer this 18th day of November, 1998. GENERAL GROWTH PROPERTIES, INC. By: /s/ Bernard Freibaum ------------------------------ Bernard Freibaum Executive Vice President and Chief Financial Officer A-5 APPENDIX B CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF 8.5% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES C OF GENERAL GROWTH PROPERTIES, INC. Pursuant to Section 151 of the General Corporation Law of the State Of Delaware General Growth Properties, Inc., a Delaware corporation (the "Company"), hereby certifies that the following resolution creating a series of its preferred stock, par value $100 per share, liquidation preference $1,000 per share, designated as the 8.5% Cumulative Convertible Preferred Stock, Series C, has been adopted by the Board of Directors of the Corporation (the "Board") on June 28, 2002 pursuant to the authority contained in Article IV of its Second Amended and Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), and in accordance with Section 151 of the General Corporation Law of the State of Delaware (the "DGCL") and by the Preferred Stock Pricing Committee of the Board on July 9, 2002 pursuant to the authority conferred upon such Committee by the Board in accordance with Section 141(c) of the DGCL. WHEREAS, the Board of Directors of the Company is authorized, within the limitations and restrictions stated in its Certificate of Incorporation, to provide for the issuance of preferred stock in series and to establish the number of shares to be included in such series and to fix the designation, powers, preferences and rights of the shares of such series and the qualifications, limitations and restrictions thereof; and WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to authorize and fix the terms of the preferred stock to be designated the "8.5% Cumulative Convertible Preferred Stock, Series C" and the number of shares constituting such preferred stock. NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized the 8.5% Cumulative Convertible Preferred Stock, Series C on the terms and with the provisions herein set forth : I. Certain Definitions As used herein, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires: B-1 "Capital Stock" shall mean Common Stock or Preferred Stock. The term "Capital Stock" shall not include convertible debt securities. "Common Stock" shall mean the common stock, par value $.10 per share, of the Company. "Dividend Payment Date" shall mean, with respect to any Dividend Period, the payment date for the dividend declared by the Company on its shares of Common Stock for such Dividend Period or, if no such payment date is established, the last business day of such Dividend Period. "Dividend Period" shall mean the quarterly period that is then the dividend period with respect to the Common Stock or, if no such dividend period is established, the calendar quarter shall be the Dividend Period; provided that the initial dividend period with respect to any share of Series C Preferred Stock shall commence on the date of issuance thereof and end on and include the last day of the then current quarterly period that is then the dividend period with respect to the Common Stock and the dividend period in which the final liquidation payment is made shall commence on the first day following the immediately preceding Dividend Period and end on the date of such final liquidation payment). "Fair Market Value" shall mean the average of the daily Closing Price during the five consecutive Trading Days selected by the Company commencing not more than 20 Trading Days before, and ending not later than, the day in question with respect to the issuance or distribution requiring such computation. "Fifteenth Anniversary Date" shall mean July 10, 2017. "Ownership Limitations" shall mean the restrictions on transferability and ownership described in Article IV of the Certificate of Incorporation, specifically, that ownership of more than 7.5% of the value of the outstanding shares of Capital Stock of the Company, including the Series C Preferred Stock, is restricted. "Preferred Stock" shall mean the preferred stock, par value $100 per share, of the Company. "Series A Preferred Stock" shall mean the Preferred Stock designated as 7.25% Preferred Income Equity Redeemable Stock, Series A. "Series B Preferred Stock" shall mean the Preferred Stock designated as 8.95% Cumulative Redeemable Preferred Stock, Series B. "Series G Preferred Stock" shall mean the Preferred Stock designated as 8.95% Cumulative Redeemable Preferred Stock, Series G. B-2 "Series B Preferred Units" shall mean the 8.5% Series B Cumulative Convertible Preferred Units of limited partnership in GGP Limited Partnership, a Delaware limited partnership. Capitalized terms used herein without definition shall have the meanings set forth in the Certificate of Incorporation. II. Designation and Number of Shares A series of Preferred Stock, designated the "8.5% Cumulative Convertible Preferred Stock, Series C" (the "Series C Preferred Stock"), is hereby established. The par value of the Series C Preferred Stock is $100 per share, which is not a change in the par value of the shares of Preferred Stock as set forth in the Certificate of Incorporation. The authorized number of shares of Series C Preferred Stock shall be 71,320. III. Rank The Series C Preferred Stock, with respect to payment of dividends and amounts upon voluntary or involuntary liquidation, dissolution or winding-up of the Company, shall be deemed to rank: (a) senior to all classes or series of Common Stock and to all Capital Stock of the Company the terms of which provide that such Capital Stock shall rank junior to the Series C Preferred Stock; (b) on a parity with the Series A Preferred Stock, the Series B Preferred Stock, the Series G Preferred Stock and each other series of Preferred Stock issued by the Company which does not provide by its express terms that it ranks junior in right of payment to the Series C Preferred Stock with respect to payment of dividends or amounts upon liquidation, dissolution or winding-up; and (c) junior to any class or series of Capital Stock issued by the Company that ranks senior to the Series C Preferred Stock in accordance with Section IV(d). IV. Voting (a) Holders of shares of the Series C Preferred Stock shall not have any voting rights, except as provided by applicable law and as described below in this Section IV. (b) If and whenever six quarterly dividends on the Series C Preferred Stock, whether or not earned or declared, shall be in arrears (which shall, with respect to any such quarterly dividend, mean that any such dividend has not been paid in full) (a "Preferred Dividend Default"), the number of directors then constituting the Board shall be increased by two and the holders of shares of the Series C Preferred Stock (voting separately as a single class (regardless of series) with all other Capital Stock of the Company upon which like voting rights have been conferred and are exercisable ("Parity Preferred Stock")) shall be entitled to elect two additional directors (the "Preferred Stock Directors") to serve on the Board at any annual meeting of B-3 stockholders or special meeting held in place thereof, or at a special meeting of the holders of the Series C Preferred Stock and the Parity Preferred Stock called as hereinafter provided. Whenever all arrears in dividends on the Series C Preferred Stock and the Parity Preferred Stock then outstanding shall have been paid and dividends thereon for the current Dividend Period shall have been paid or declared and set apart for payment, then the right of the holders of the Series C Preferred Stock and the Parity Preferred Stock to elect such additional two directors shall cease (but subject always to the same provisions for the vesting of such voting rights in the case of any similar future arrearages in six quarterly dividends), and the terms of office of all persons elected as directors by the holders of the Series C Preferred Stock and the Parity Preferred Stock shall forthwith terminate and the number of the Board shall be reduced accordingly. At any time after such voting power shall have been so vested in the holders of shares of Series C Preferred Stock and Parity Preferred Stock, the secretary of the Corporation may, and upon the written request of any holder of Series C Preferred Stock (addressed to the secretary at the principal office of the Corporation) shall, call a special meeting of the holders of the Series C Preferred Stock and of the Parity Preferred Stock for the election of the two directors to be elected by them as herein provided, such call to be made by notice similar to that provided in the By-Laws of the Corporation for a special meeting of the stockholders or as required by law. If any such special meeting required to be called as above provided shall not be called by the secretary within 20 days after receipt of any such request, then any holder of shares of Series C Preferred Stock may call such meeting, upon the notice above provided, and for that purpose shall have access to the stock books of the Corporation. The directors elected at any such special meeting shall hold office until the next annual meeting of the stockholders or special meeting held in lieu thereof if such office shall not have previously terminated as above provided. (c) So long as a Preferred Dividend Default shall continue, any vacancy in the office of a Preferred Stock Director may be filled by written consent of the Preferred Stock Director remaining in office, or if there is no such remaining director, by the holders of a majority of the votes of the outstanding Series C Preferred Stock and the other series of Parity Preferred Stock voting as a single class. Any Preferred Stock Director may be removed only for cause and only by the holders of record of seventy-five percent (75%) of the votes of the outstanding shares of Series C Preferred Stock voting separately as a class with all other series of Parity Preferred Stock. The Preferred Stock Directors shall each be entitled to one vote per director on any matter. (d) So long as any shares of Series C Preferred Stock remain outstanding, the Company shall not, without the affirmative vote or consent of the holders of at least a majority of the shares of Series C Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class), (i) authorize, create or issue, or increase the authorized or issued amount of, any class or series of shares of Capital Stock ranking prior to the Series C Preferred Stock with respect to the payment of dividends or the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Company or reclassify any authorized shares of Capital Stock of the Company into such Capital Stock, or create, authorize or issue any obligation or security convertible or exchangeable into or evidencing the right to purchase any such Capital Stock; or (ii) amend, alter or repeal the provisions of the Certificate of Incorporation or this Certificate of Designations, whether by merger or consolidation or otherwise (an "Event"), so as to materially and adversely affect any B-4 right, preference, privilege or voting power of the Series C Preferred Stock or the holders thereof. Notwithstanding anything to the contrary contained herein, none of the following shall be deemed to materially and adversely affect any such right, preference, privilege or voting power or otherwise require the vote or consent of the holders of shares of Series C Preferred Stock: (X) the occurrence of any Event so long as either (1) the Company is the surviving entity and the Series C Preferred Stock remains outstanding with the terms thereof materially unchanged or (2) interests in an entity having substantially the same rights and terms as the Series C Preferred Stock are substituted for the Series C Preferred Stock, (Y) any increase in the amount of the authorized Preferred Stock or Common Stock or the creation or issuance of any other series of Preferred Stock or Common Stock or any increase in the amount of authorized or issued Common Stock, Series C Preferred Stock or any other series of Preferred Stock, in each case ranking on a parity with or junior to the Series C Preferred Stock with respect to payment of dividends and the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Company, and (Z) the dissolution, liquidation and/or winding up of the Company. (e) For purposes of the foregoing provisions of this Section IV, each share of Series C Preferred Stock shall have one (1) vote per share, except that when any other series of preferred stock shall have the right to vote with the Series C Preferred Stock as a single class on any matter, then the Series C Preferred Stock and such other series shall have with respect to such matters one (1) vote per $25.00 of stated liquidation preference. Except as otherwise required by applicable law or as set forth herein, the shares of Series C Preferred Stock shall not have any voting rights or powers and the consent of the holders thereof shall not be required for the taking of any corporate action. V. Dividends (a) With respect to each Dividend Period and subject to the rights of the holders of shares of Preferred Stock ranking senior to or on parity with the Series C Preferred Stock, the holders of shares of Series C Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of assets of the Company legally available for the payment of dividends, quarterly cumulative cash dividends in an amount per share of Series C Preferred Stock equal to the greater of (i) $21.25 and (ii) the amount of the regular quarterly cash dividends for such Dividend Period upon the number of shares of Common Stock (or portion thereof) into which such Series C Preferred Stock is then convertible in accordance with Section VII hereof (but, with respect to any Dividend Period ending after the Fifteenth Anniversary Date, no amount shall be paid in respect of clause (ii) of this paragraph in respect of the portion of such Dividend Period occurring after the Fifteenth Anniversary Date). Notwithstanding anything to the contrary contained herein, the amount of dividends described under each of clause (i) and (ii) of this paragraph for the initial Dividend Period, or any other period shorter than a full Dividend Period, shall be prorated and computed on the basis of twelve 30-day months and a 360-day year. The dividends on the Series C Preferred Stock for each Dividend Period shall, if and to the extent declared or authorized by the Board, be paid in arrears (without interest or other amount) on the Dividend Payment Date with respect thereto, and, if not paid on such date, shall accumulate, whether or not there are funds legally available for the payment thereof and whether or not such dividends are declared or authorized. The record date for dividends to the holders of shares of Series C Preferred Stock for any Dividend Period shall be the same as the record date for the B-5 dividends to the holders of shares of Common Stock for such Dividend Period (or, if no such record is set for the Common Stock, the fifteenth day of the calendar month in which the applicable Dividend Payment Date falls). Accrued and unpaid dividends for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board. Any dividend payment made on the shares of Series C Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect to such shares which remains payable. No interest, or sum of money in lieu of interest, shall be owing or payable in respect of any dividend payment or payments on the Series C Preferred Stock, whether or not in arrears. (b) No dividend on the Series C Preferred Stock shall be declared by the Board or paid or set apart for payment by the Company at such time as the terms and provisions of any agreement of the Company, including any agreement relating to its indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law. Notwithstanding the foregoing, dividends on the Series C Preferred Stock shall accumulate whether or not any of the foregoing restrictions exist (c) Except as provided in subsection V(d) herein, so long as any shares of Series C Preferred Stock are outstanding, (i) no dividends (other than in Common Stock or other Capital Stock of the Company ranking junior to the Series C Preferred Stock as to payment of dividends and amounts upon liquidation, dissolution or winding-up of the Company) shall be declared or paid or set apart for payment upon the Common Stock or any other class or series of Capital Stock of the Company ranking, as to payment of dividends or amounts distributable upon liquidation, dissolution or winding-up of the Company, on a parity with or junior to the Series C Preferred Stock, for any period and (ii) no Common Stock or other Capital Stock of the Company ranking junior to or on a parity with the Series C Preferred Stock as to payment of dividends or amounts upon liquidation, dissolution or winding-up of the Company, shall be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Capital Stock) by the Company (except by conversion into or exchange for other Capital Stock of the Company ranking junior to the Series C Preferred Stock as to payment of dividends and amounts upon liquidation, dissolution or winding-up of the Company or by redemptions for the purpose of maintaining the Company's qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes) unless, in the case of either clause (i) or (ii), full cumulative dividends have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payment on the Series C Preferred Stock for all Dividend Periods ending on or prior to the dividend payment date for the Common Stock or such other class or series of Capital Stock or the date of such redemption, purchase or other acquisition. (d) When dividends are not paid in full (or a sum sufficient for such full payment is not set apart for such payment) upon the Series C Preferred Stock and any other Capital Stock ranking on a parity as to payment of dividends with the Series C Preferred Stock, all dividends declared upon the Series C Preferred Stock and any other Capital Stock ranking on a parity as to payment of dividends with the Series C Preferred Stock shall be declared pro rata so that the B-6 amount of dividends declared per share of Series C Preferred Stock and such other Capital Stock shall in all cases bear to each other the same ratio that accrued dividends per share on the Series C Preferred Stock and such other Capital Stock (which shall not include any accumulation in respect of unpaid dividends for prior dividend periods if such Capital Stock does not have a cumulative dividend) bear to each other. (e) The holders of the shares of Series C Preferred Stock shall not be entitled to any dividends in excess of full cumulative dividends as described in V(a) above. VI. Liquidation Preference (a) In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of Common Stock or any other Capital Stock ranking junior to the Series C Preferred Stock as to the distribution of assets upon the liquidation, dissolution or winding-up of the Company, the holders of shares of the Series C Preferred Stock shall, with respect to each such share, be entitled to receive, out of the assets of the Company available for distribution to stockholders after payment or provision for payment of all debts and other liabilities of the Company, an amount equal to the greater of (i) $1,000.00, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution and (ii) the amount that a holder of such share of Series C Preferred Stock would have received upon final distribution in respect of the number of shares of Common Stock into which such share of Series C Preferred Stock was convertible immediately prior to such date of final distribution (but no amount shall be paid in respect of the foregoing clause (ii) after the Fifteenth Anniversary Date). If, upon any such voluntary or involuntary liquidation, dissolution or winding-up of the Company, the assets of the Company, or proceeds thereof, distributable among the holders of the shares of Series C Preferred Stock, are insufficient to pay in full the preferential amount aforesaid on the shares of Series C Preferred Stock and liquidating payments on any other shares of any class or series of Capital Stock ranking, as to payment of dividends and amounts upon the liquidation, dissolution or winding-up of the Company, on a parity with the Series C Preferred Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series C Preferred Stock and any such other parity stock ratably in accordance with the respective amounts that would be payable on such shares of Series C Preferred Stock and such other stock if all amounts payable thereon were paid in full. For the purposes of this Section VI, none of (i) a consolidation or merger of the Company with or into another entity, (ii) a merger of another entity with or into the Company, (iii) a statutory share exchange by the Company or (iv) a sale, lease or conveyance of all or substantially all of the Company's assets, properties or business shall be deemed to be a liquidation, dissolution or winding-up of the Company. (b) Written notice of such liquidation, dissolution or winding-up of the Company, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series C Preferred Stock at the respective addresses of such holders as the same shall appear on the stock transfer records of the Company. B-7 (c) After payment of the full amount of liquidating distributions to which they are entitled, the holders of shares of Series C Preferred Stock shall have no right or claim to any of the remaining assets of the Company. VII. Conversion. Holders of shares of Series C Preferred Stock shall have the right to convert all or a portion of such shares into shares of Common Stock, as follows: (a) A holder of shares of Series C Preferred Stock shall have the right, at such holder's option, at any time (subject to the proviso contained in the immediately succeeding sentence), to convert any whole number of shares of Series C Preferred Stock, in whole or in part, into shares of Common Stock. Each share of Series C Preferred Stock shall be convertible into the number of shares of Common Stock determined by dividing (i) the $1,000 face amount per each share of Series C Preferred Stock plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the end of the last Dividend Period ending prior to the conversion (but without duplication of the dividends, if any, which the holder of such share of Series C Preferred Stock is entitled to receive for such last Dividend Period pursuant to the third paragraph of Section VII (b) hereof or in respect of the shares of Common Stock into which such Series C Preferred Stock is converted) by (ii) a conversion price of $50 per share of Common Stock (equivalent to an initial anticipated conversion rate of 20 shares of Common Stock for each share of Series C Preferred Stock), subject to adjustment as described in Section VII(c) hereof (the "Conversion Price"); provided, however, that the right to convert shares of Series C Preferred Stock may not be exercised after the Fifteenth Anniversary Date. No fractional shares of Common Stock will be issued upon any conversion of shares of Series C Preferred Stock. Instead, the number of shares of Common Stock to be issued upon each conversion shall be rounded to the nearest whole number of shares of Common Stock. (b) To exercise the conversion right, the holder of each share of Preferred Stock to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Company or in blank, at the principal office of the Company accompanied by a written notice to the Company (the "Conversion Notice") indicating that the holder thereof elects to convert such share of Series C Preferred Stock. Unless the shares issuable on conversion are to be issued in the same name as the name in which such share of Series C Preferred Stock is registered, each share of Series C Preferred Stock surrendered for conversion shall be accompanied by instruments of transfer, in form reasonably satisfactory to the Company, duly executed by the holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Company demonstrating that such taxes have been paid). As promptly as practicable after the surrender of certificates for shares of Series C Preferred Stock and delivery of the Conversion Notice as aforesaid, the Company shall issue and shall deliver at such office to such holder, or on the holder's written order, a certificate or certificates for the number of shares of Common Stock issuable upon the conversion of such shares of Series C Preferred Stock in accordance with the provisions of this Section VII. In addition, the Company shall issue and deliver to such holder a certificate or certificates evidencing any shares of Series C Preferred Stock that were evidenced by the certificate or certificates delivered to the Company in connection with such conversion but that were not converted. B-8 A holder of shares of Series C Preferred Stock at the close of business on the record date for any Dividend Period shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion of such shares of Series C Preferred Stock following such record date and prior to such Dividend Payment Date and shall have no right to receive any dividend for such Dividend Period in respect of the shares of Common Stock into which such shares of Series C Preferred Stock were converted. Except as provided herein, the Company shall make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Series C Preferred Stock or for dividends on the shares of Common Stock that are issued upon such conversion. Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of Series C Preferred Stock shall have been surrendered and the Conversion Notice is received by the Company as aforesaid, and the person or persons in whose name or names any shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of such shares at such time on such date, and such conversion shall be at the Conversion Price in effect at such time and on such date unless the transfer books of the Company shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such shares have been surrendered and such notice received by the Company. (c) The Conversion Price shall be adjusted from time to time as follows: (i) If the Company shall, after the date on which any shares of Series C Preferred Stock are first issued (the "Issue Date"), (A) pay or make a dividend to holders of its Common Stock in Common Stock, (B) subdivide its outstanding Common Stock into a greater number of shares of Common Stock or (C) combine its outstanding Common Stock into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of holders entitled to receive such dividend or at the opening of business on the day next following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any share of Series C Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock that such holder would have owned or have been entitled to receive after the happening of any of the events described above had such share of Series C Preferred Stock been converted immediately prior to the record date in the case of a dividend or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subsection (i) shall become effective immediately after the opening of business on the day next following the record date (except as provided in subsection (g) below) in the case of a dividend and shall become effective immediately after the opening of business on the day next following the effective date in the case of a subdivision, combination or reclassification. (ii) If the Company shall issue after the Issue Date rights, options or warrants to all holders of shares of Common Stock entitling them to subscribe for or purchase B-9 shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock) at a price per share less than the Fair Market Value per share of Common Stock on the record date for the determination of holders of shares of Common Stock entitled to receive such rights, options or warrants, then the Conversion Price in effect at the opening of business on the day next following such record date shall be adjusted to equal the price determined by multiplying (I) the Conversion Price in effect immediately prior to the opening of business on the day following the date fixed for such determination by (II) a fraction, the numerator of which shall be the sum of (A) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and (B) the number of shares of Common Stock that the aggregate proceeds to the Company from the exercise of such rights, options or warrants for shares of Common Stock would purchase at such Fair Market Value, and the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and (B) the number of additional shares of Common Stock offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in subsection (g) below). In determining whether any rights, options or warrants entitle the holders of shares of Common Stock to subscribe for or purchase shares of Common Stock at less than the Fair Market Value, there shall be taken into account any consideration received by the Company upon issuance and upon exercise of such rights, options or warrants, the value of such consideration, if other than cash, to be determined in good faith by the Board of the Company. (iii) If the Company shall distribute after the Issue Date to all holders of shares of Common Stock any other securities or evidences of its indebtedness or assets (excluding those rights, options and warrants referred to in and treated under subsection (ii) above, and excluding dividends paid exclusively in cash) (any of the foregoing being hereinafter in this subsection (iii) called the "Securities"), then in each case the Conversion Price shall be adjusted so that it shall equal the price determined by multiplying (I) the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of holders of shares of Common Stock entitled to receive such dividend by (II) a fraction, the numerator of which shall be the Fair Market Value per share of Common Stock on the record date mentioned below less the then fair market value (as determined in good faith by the Board of the Company) of the portion of the Securities so distributed applicable to one share of Common Stock, and the denominator of which shall be the Fair Market Value per share of Common Stock on the record date mentioned below. Such adjustment shall become effective immediately at the opening of business on the business day next following (except as provided in subsection (g) below) the record date for the determination of holders of shares of Common Stock entitled to receive such distribution. For the purposes of this subsection (iii), a dividend in the form of a Security, which is distributed not only to the holders of the shares of Common Stock on the date fixed for the determination of holders of shares of Common Stock entitled to such distribution of such Security, but also is distributed with each share of Common Stock delivered to a person converting a share of Series C Preferred Stock after such determination date, shall not require an adjustment of the Conversion Price pursuant to this subsection (iii); provided that on the date, if any, on which a person B-10 converting a share of Series C Preferred Stock would no longer be entitled to receive such Security with a share of Common Stock, a distribution of such Securities shall be deemed to have occurred, and the Conversion Price shall be adjusted as provided in this subsection (iii) (and such day shall be deemed to be "the date fixed for the determination of the holders of shares of Common Stock entitled to receive such dividend" and "the record date" within the meaning of the two preceding sentences). (iv) No adjustment in the Conversion Price shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in such price; provided, however, that any adjustments that by reason of this subsection (iv) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and provided, further, that any adjustment shall be required and made in accordance with the provisions of this Section VII (other than this subsection (iv)) not later than such time as may be required in order to preserve the tax-free nature of a dividend to the holders of shares of Common Stock. Notwithstanding any other provisions of this Section VII, the Company shall not be required to make any adjustment to the Conversion Price for the issuance of any Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in Common Stock under such plan. All calculations under this Section VII shall be made to the nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be. Anything in this subsection (c) to the contrary notwithstanding, the Company shall be entitled, to the extent permitted by law, to make such reductions in the Conversion Price, in addition to those required by this subsection (c), as it in its discretion shall determine to be advisable in order that any Capital Stock dividend, subdivision of Capital Stock, reclassification or combination of Capital Stock, distribution of rights, options or warrants to purchase Capital Stock or securities, or a distribution consisting of other assets (other than cash distributions) hereafter made by the Company to its holders of Capital Stock shall not be taxable but any such adjustment shall not adversely affect the value of the Series C Preferred Stock. (d) If the Company shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, self tender offer for all or substantially all of the shares of Common Stock, sale of all or substantially all of the Company's assets or recapitalization of the Common Stock and excluding any transaction as to which subsection (c)(i) of this Section VII applies) (each of the foregoing being referred to herein as a "Transaction"), in each case as a result of which shares of Common Stock shall be converted into the right to receive shares, stock, securities or other property (including cash or any combination thereof), each share of Series C Preferred Stock which is not converted into the right to receive shares, stock, securities or other property in connection with such Transaction shall thereafter be convertible into the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of shares of Common Stock into which one share of Series C Preferred Stock was convertible immediately prior to such Transaction, assuming such holder of Common Stock is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (a "Constituent Person"), or an affiliate of a Constituent Person. The Company shall not be a B-11 party to any Transaction unless the terms of such Transaction are consistent with the provisions of this subsection (d), and it shall not consent or agree to the occurrence of any Transaction until the Company has entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the shares of Series C Preferred Stock that will contain provisions enabling the holders of shares of Series C Preferred Stock that remain outstanding after such Transaction to convert into the consideration received by holders of shares of Common Stock at the Conversion Price in effect immediately prior to such Transaction (with the holder having the option to elect the type of consideration if a choice is offered in the Transaction). The provisions of this subsection (d) shall similarly apply to successive Transactions. (e) If: (i) the Company shall declare a dividend on the shares of Common Stock (other than a cash dividend) or there shall be a reclassification, subdivision or combination of Common Stock; or (ii) the Company shall authorize the granting to the holders of the shares of Common Stock of rights, options or warrants to subscribe for or purchase any Capital Stock of any class or any other rights, options or warrants; or (iii) there shall be any reclassification of the shares of Common Stock or any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or a statutory share exchange involving the conversion or exchange of shares of Common Stock into securities or other property, or a self tender offer by the Company for all or substantially all of the shares of Common Stock, or the sale or transfer of all or substantially all of the assets of the Company as an entirety; or (iv) there shall occur the voluntary or involuntary liquidation, dissolution or winding-up of the Company, then the Company shall cause to be mailed to the holders of the shares of Series C Preferred Stock at their addresses as shown on the records of the Company, as promptly as possible a notice stating (A) the date on which a record is to be taken for the purpose of such distribution of rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such distribution of rights, options or warrants are to be determined or (B) the date on which such reclassification, subdivision, combination, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up is expected to become effective, and the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up. Failure to give or receive such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section VII. B-12 (f) Whenever the Conversion Price is adjusted as herein provided, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the effective date such adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Price to the holder of each share of Series C Preferred Stock at such holder's last address as shown on the records of the Company. (g) In any case in which subsection (c) of this Section VII provides that an adjustment shall become effective on the date next following the record date for an event, the Company may defer until the occurrence of such event issuing to the holder of any share of Series C Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such conversion before giving effect to such adjustment. (h) For purposes of this Section VII, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Company. The Company shall not make any distribution on shares of Common Stock held in the treasury of the Company. (i) If any action or transaction would require adjustment of the Conversion Price pursuant to more than one subsection of this Section VII, only one adjustment shall be made, and such adjustment shall be the amount of adjustment that has the highest absolute value. (j) If the Company shall take any action affecting the shares of Common Stock, other than action described in this Section VII, that in the reasonable judgment of the Company would materially and adversely affect the conversion rights of the holders of the shares of Series C Preferred Stock, the Conversion Price for the shares of Series C Preferred Stock may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Company, determines to be equitable in the circumstances. (k) The Company covenants that shares of Common Stock issued upon conversion of the shares of Series C Preferred Stock shall be validly issued, fully paid and nonassessable. Prior to the delivery of any securities that the Company shall be obligated to deliver upon conversion of the shares of Series C Preferred Stock, the Company shall endeavor to comply with all federal and state laws and regulations thereunder requiring the registration of such securities with, or any approval of or consent to the delivery thereof, by any governmental authority. (l) The Company will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock or other securities or property on conversion of the shares of Series C Preferred Stock pursuant hereto; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or other securities or property in a name other than that of the holder of the Series C Preferred Stock to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax or established, to the reasonable satisfaction of the Company, that such tax has been paid. B-13 (m) Notwithstanding anything to the contrary contained herein (but subject to the provisions of Section VII (n) hereof), the Company agrees that it will apply the adjustment provisions of this Section VII and any related provisions as if the Series C Preferred Stock were issued and outstanding as of July 10, 2002. Thus, for example, if an event were to occur on December 31, 2002 that would adjust the number of shares of Common Stock into which the shares of Series C Preferred Stock would have been convertible had such shares of Series C Preferred Stock been outstanding as of such date, but the Series C Preferred Stock were not actually issued until December 31, 2003, then such adjustment would be applied so that, upon such issuance (but subject to further adjustment for subsequent events), the Series C Preferred Stock would be immediately convertible into the number of shares of Common Stock into which the Series C Preferred Stock would have been convertible had such shares of Series C Preferred Stock been outstanding on December 31, 2002. (n) Notwithstanding anything to the contrary contained herein, the adjustment provisions contained in this Section VII shall be applied so that there is no duplication of adjustments made pursuant to any other document. VIII. Ownership Limitations The shares of Series C Preferred Stock are subject to the restrictions on transferability and ownership provisions described in Article IV of the Certificate of Incorporation. The ownership limit as described in Article IV of the Certificate of Incorporation (the "Ownership Limit") shall mean that ownership of more than 7.5% of the value of the outstanding shares of Capital Stock of the Company, including the Series C Preferred Stock, is restricted in order to preserve the Company's status as a REIT for U.S. federal income tax purposes. Subject to certain limitations described in Article IV of the Certificate of Incorporation, the Board may modify the Ownership Limit, though the Ownership Limit may not be increased by the Board to more than 9.8%. In addition, Article IV of the Certificate of Incorporation limits the ownership of "Existing Holders" (the "Existing Holder Limit") and also limits transfers that would cause the Company to become "closely held" within the meaning of Section 856(h) of the Code. IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to be executed in its name and on its behalf by its Executive Vice President and attested to by its Secretary on this 10th day of July, 2002. GENERAL GROWTH PROPERTIES, INC., a Delaware corporation By: /s/ Bernard Freibaum ------------------------------------- Name: Bernard Freibaum Title: Executive Vice President ATTEST: By: /s/ Marshall E. Eisenberg ------------------------------ Name: Marshall E. Eisenberg Title: Secretary B-14 APPENDIX C CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF 8.95% CUMULATIVE REDEEMABLE PREFERRED STOCK, SERIES G OF GENERAL GROWTH PROPERTIES, INC. PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE General Growth Properties, Inc., a Delaware corporation (the "Company"), hereby certifies that pursuant to the authority contained in Article IV of its Second Amended and Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), and in accordance with Section 151 of the General Corporation Law of the State of Delaware (the "DGCL"), its Board of Directors (the "Board"), on April 9, 2002, adopted the following resolution creating a series of its preferred stock, par value $100 per share, liquidation preference $1,000 per share, designated as the "8.95% Cumulative Redeemable Preferred Stock, Series G"; WHEREAS, the Board of Directors of the Company is authorized, within the limitations and restrictions stated in its Certificate of Incorporation, to provide for the issuance of preferred stock in series and to establish the number of shares to be included in such series and to fix the designation, powers, preferences and rights of the shares of such series and the qualifications, limitations and restrictions thereof; and WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to authorize and fix the terms of the preferred stock to be designated the "8.95% Cumulative Redeemable Preferred Stock, Series G" and the number of shares constituting such preferred stock. NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized the 8.95% Cumulative Redeemable Preferred Stock, Series G on the terms and with the provisions herein set forth. I. Certain Definitions As used herein, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires: "Act" shall mean the Securities Act of 1933, as amended. C-1 "Business Day" shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open. "Capital Stock" shall mean Common Stock or Preferred Stock. The term "Capital Stock" shall not include convertible debt securities. "Common Stock" shall mean the common stock, par value $.10 per share, of the Company. "Company" shall mean General Growth Properties, Inc., a Delaware corporation. "Dividend Period" shall mean quarterly dividend periods commencing on (and including) the fifteenth day of each January, April, July and October of each year and ending on (and including) the day preceding the first day of the next succeeding Dividend Period. "GGPLP L.L.C." shall mean GGPLP L.L.C., a Delaware limited liability company. "NYSE" shall mean the New York Stock Exchange. "Ownership Limitations" shall mean the restrictions on transferability and ownership described in Article IV of the Certificate of Incorporation, specifically, that ownership of more than 7.5% of the value of the outstanding shares of Capital Stock of the Company, including the Series G Preferred Stock, is restricted. "Redemption Date" shall mean any date fixed for redemption of the shares of Series G Preferred Stock by the Company. "Preferred Stock" shall mean the preferred stock, $100 par value per share, of the Company. "Series A Preferred Stock" shall mean the 7.25% Preferred Income Equity Redeemable Stock, Series A of the Company. "Series B Preferred Stock" shall mean the 8.95% Cumulative Redeemable Preferred Stock, Series B. "Series B Preferred Units" shall mean the 8.95% Series B Cumulative Redeemable Preferred Units of membership interest in GGPLP L.L.C. "Series G Preferred Stock" shall mean the 8.95% Cumulative Redeemable Preferred Stock, Series G. "Transfer Agent" shall mean ChaseMellon Shareholder Services, L.L.C., the principal corporate trust office of which currently is located at 150 North Wacker Drive, Suite 2120, Chicago, Illinois 60606, or such other agent or agents of the Company as may be designated by the Board or its designee as the transfer agent for the Series G Preferred Stock. C-2 II. Designation and Number of Shares A series of preferred stock, designated the "8.95% Cumulative Redeemable Preferred Stock, Series G" (the "Series G Preferred Stock"), is hereby established. The par value of the Series G Preferred Stock is $100 per share, which is not a change in the par value per share of the Preferred Stock as set forth in the Certificate of Incorporation. The liquidation preference per share of the Series G Preferred Stock is $1,000. The authorized number of shares of Series G Preferred Stock is 75,000. The Series G Preferred Stock shall not have any relative, participating, optional or other special rights and powers other than as set forth herein. III. Rank The Series G Preferred Stock, with respect to payment of dividends and amounts upon voluntary or involuntary liquidation, dissolution or winding-up of the Company, shall be deemed to rank: (a) senior to all classes or series of Common Stock and to all Capital Stock of the Company other than each series of Preferred Stock referred to in Section III(b) or (c); (b) on a parity with the Series A Preferred Stock, Series B Preferred Stock, and each other series of Preferred Stock issued by the Company which provides by its express terms that it ranks on parity with the Series G Preferred Stock with respect to payment of dividends or amounts upon liquidation, dissolution or winding-up of the Company; and (c) junior to any class or series of Capital Stock that is issued by the Company in accordance with Section IV(a). IV. Voting (a) So long as any shares of Series G Preferred Stock remain outstanding, the Company shall not, without the affirmative vote or consent of the holders of at least fifty-one percent (51%) of the shares of Series G Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class), (i) authorize or create, or increase the authorized or issued amount of, any class or series of shares of Capital Stock ranking senior to the Series G Preferred Stock with respect to the payment of dividends or the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Company or reclassify any Common Stock into Capital Stock ranking senior to or on parity with the Series G Preferred Stock with respect to the payment of dividends or the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Company, (ii) issue additional shares of Series G Preferred Stock (other than those issued in exchange for Series B Preferred Units pursuant to the operating agreement of GGPLP L.L.C.) or (iii) amend, alter or repeal the provisions of the Certificate of Incorporation or this Certificate of Designations, whether by merger, consolidation or otherwise (an "Event"), so as to negate the provisions of clause (i) or (ii) of this paragraph or materially and adversely affect any special right, preference, privilege or voting power of the holders of Series G Preferred Stock; provided, however, (A) with respect to the occurrence of any of the Events set forth in clause (iii) of this C-3 paragraph, so long as shares of Series G Preferred Stock remain outstanding with the terms thereof materially unchanged, taking into account that, upon the occurrence of an Event, the Company may not be the surviving entity, the occurrence of any such Event shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting power of holders of the Series G Preferred Stock and (B) any increase in the amount of the authorized Preferred Stock or any series of the Preferred Stock or the creation or issuance of any other series of Preferred Stock, in each case ranking on a parity with or junior to the Series G Preferred Stock with respect to payment of dividends and the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Company, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers. (b) Notwithstanding anything to the contrary contained herein, the foregoing voting provisions shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding Series G Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been deposited in trust to effect such redemption. (c) For purposes of the foregoing provisions of this Section IV, each share of Series G Preferred Stock shall have one (1) vote per share. Except as otherwise required by applicable law or as set forth herein, the shares of Series G Preferred Stock shall not have any relative, participating, optional or other voting rights and powers or the right to receive notice of meetings and the consent of the holders thereof shall not be required for the taking of any corporate action. V. Dividends. (a) The holders of shares of the Series G Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of assets legally available for the payment of dividends and subject to the right to payment of holders of Capital Stock ranking senior to or on parity with the Series G Preferred Stock as to payment of dividends and amounts upon liquidation, dissolution or winding-up of the Company, quarterly cumulative cash dividends in an amount per share of Series G Preferred Stock equal to 8.95% of the $1,000 liquidation preference thereof per annum (or $22.375 per quarter). Dividends on the shares of the Series G Preferred Stock are cumulative and shall accrue from and after the date of issuance thereof (the "Series G Initial Issuance Date"), whether or not in any Dividend Period or Periods there shall be funds of the Company legally available for the payment of such dividends. Dividends on the shares of the Series G Preferred Stock shall be payable in arrears quarterly when, as and if declared by the Board, on the fifteenth day of each January, April, July and October or, if not a Business Day, the next succeeding Business Day, beginning on the first such date following the Initial Series G Issuance Date (each, a "Dividend Payment Date"). Each such dividend shall be payable in arrears to holders of record of shares of the Series G Preferred Stock, as such holders appear in the stock records of the Company at the close of business on the applicable record date, which shall be the first day of the calendar month in which the applicable Dividend Payment Date falls or such other date designated by the Board for the payment of dividends that is not more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a "Dividend Record Date"). Accrued and unpaid dividends for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on C-4 such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board. (b) The amount of dividends payable per share of Series G Preferred Stock for each full Dividend Period shall equal the quotient of 8.95% of the $1,000 liquidation preference thereof divided by four (or $22.375). The amount of dividends payable for the initial Dividend Period, or any other period shorter or longer than a full Dividend Period, on the Series G Preferred Stock, shall be prorated and computed on the basis of twelve 30-day months and a 360-day year. Holders of shares of Series G Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of cumulative dividends, as provided in this Section V, on the Series G Preferred Stock. Any dividend payment made on the Series G Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect to such shares which remains payable. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series G Preferred Stock that may be in arrears. (c) Notwithstanding the foregoing, dividends on the Series G Preferred Stock shall accumulate whether or not there are funds legally available for the payment thereof and whether or not such distributions are authorized. (d) Except as provided in Section V(e) herein, so long as any shares of Series G Preferred Stock are outstanding, no dividends (other than in Common Stock or other Capital Stock of the Company ranking junior to the Series G Preferred Stock as to payment of dividends and amounts upon liquidation, dissolution or winding-up of the Company) shall be declared or paid or set apart for payment upon the Common Stock or any other class or series of Capital Stock of the Company ranking, as to payment of dividends or amounts distributable upon liquidation, dissolution or winding-up of the Company, on a parity with or junior to the Series G Preferred Stock, for any period nor shall any Common Stock or other Capital Stock of the Company ranking junior to or on a parity with the Series G Preferred Stock as to payment of dividends or amounts upon liquidation, dissolution or winding-up of the Company, be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Capital Stock) by the Company (except by conversion into or exchange for other Capital Stock of the Company ranking junior to the Series G Preferred Stock as to payment of dividends and amounts upon liquidation, dissolution or winding-up of the Company or by redemptions for the purpose of maintaining the Company's qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes) unless full cumulative dividends have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payment on the Series G Preferred Stock for all Dividend Periods ending on or prior to the dividend payment date for such other class or series of capital stock or the date of such redemption, purchase or other acquisition, as the case may be. (e) When dividends are not paid in full (or a sum sufficient for such full payment is not set apart for such payment) upon the Series G Preferred Stock and any other Capital Stock ranking on a parity as to payment of dividends with the Series G Preferred Stock, all dividends declared upon the Series G Preferred Stock and any other Capital Stock ranking on a parity as to payment of dividends with the Series G Preferred Stock shall be declared pro rata so that the C-5 amount of dividends declared per share of Series G Preferred Stock and such other Capital Stock shall in all cases bear to each other the same ratio that accumulated dividends per share on the Series G Preferred Stock and such other Capital Stock (which shall not include any accumulation in respect of unpaid dividends for prior dividend periods if such Capital Stock does not have a cumulative dividend) bear to each other. VI. Liquidation Preference. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and subject to the rights of holders of Capital Stock ranking senior to the Series G Preferred Stock as to the distribution of assets upon the liquidation, dissolution or winding-up of the Company, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of Common Stock or any other Capital Stock ranking junior to the Series G Preferred Stock as to the distribution of assets upon the liquidation, dissolution or winding-up of the Company, the holders of shares of the Series G Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders remaining after payment or provisions for payment of all debts and other liabilities of the Company a liquidation preference of $1,000 per share, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution to such holders; but such holders shall not be entitled to any further payment. If, upon any such voluntary or involuntary liquidation, dissolution or winding-up of the Company, the assets of the Company, or proceeds thereof, distributable among the holders of the shares of Series G Preferred Stock, are insufficient to pay in full the preferential amount aforesaid on the shares of Series G Preferred Stock and liquidating payments on any other shares of any class or series of Capital Stock ranking, as to payment of amounts upon the liquidation, dissolution or winding-up of the Company, on a parity with the Series G Preferred Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series G Preferred Stock and any such other parity stock ratably in accordance with the respective amounts that would be payable on such shares of Series G Preferred Stock and such other stock if all amounts payable thereon were paid in full. For the purposes of this Section VI, none of (i) a consolidation or merger of the Company with or into another entity, (ii) a merger of another entity with or into the Company, (iii) a statutory share exchange by the Company or (iv) a sale, lease or conveyance of all or substantially all of the Company's assets, properties or business shall be deemed to be a liquidation, dissolution or winding-up of the Company. (b) Written notice of such liquidation, dissolution or winding-up of the Company, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series G Preferred Stock at the respective addresses of such holders as the same shall appear on the stock transfer records of the Company. (c) After payment of the full amount of liquidating distributions to which they are entitled, the holders of Series G Preferred Stock shall have no right or claim to any of the remaining assets of the Company. C-6 VII. Redemption. (a) General. The shares of Series G Preferred Stock are not redeemable prior to April 17, 2007. To ensure that the Company remains a qualified REIT for U.S. federal income tax purposes, however, the Series G Preferred Stock shall be subject to the provisions of Article IV of the Certificate of Incorporation pursuant to which Series G Preferred Stock owned by a stockholder (i) in excess of the Ownership Limit or the Existing Holder Limit (as defined in Section VIII hereof) or (ii) that would cause the Company to become "closely held" within the meaning of Section 856(h) of the Internal Revenue Code of 1986, as amended (the "Code") shall automatically be transferred to a Trust (as defined in Article IV of the Certificate of Incorporation) and the Company shall have the right to purchase such shares, as provided in Article IV of the Certificate of Incorporation, notwithstanding the first sentence of this paragraph (a). (b) Cash Redemption Right. On and after April 17, 2007, the Company, at its option, upon giving notice as provided below, may redeem the Series G Preferred Stock, in whole or from time to time in part, at the redemption price per share of Series G Preferred Stock of $1,000, plus, in each case, all dividends accumulated and unpaid on such Series G Preferred Stock to the date of such redemption (the "Redemption Right"). (c) Limitations on Redemption. (i) If fewer than all of the outstanding shares of Series G Preferred Stock are to be redeemed pursuant to the Redemption Right, the shares to be redeemed shall be determined pro rata or by lot. If such redemption is to be by lot and, as a result of such redemption, (i) any holder of Series G Preferred Stock would become a holder of a number of shares of Series G Preferred Stock in excess of the Ownership Limit or the Existing Holder Limit or (ii) the Company would become "closely held" within the meaning of Section 856(h) of the Code because such holder's Series G Preferred Stock were not redeemed, or were only redeemed in part, then, except as otherwise provided in the Certificate of Incorporation, the Company will redeem the requisite number of shares of Series G Preferred Stock of such holder such that the holder of such shares (i) will not hold in excess of the Ownership Limit or the Existing Holder Limit subsequent to such redemption or (ii) will not cause the Company to become "closely held" within the meaning of Section 856(h) of the Code. (ii) Notwithstanding anything to the contrary contained herein, unless full cumulative dividends on all outstanding shares of Series G Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all Dividend Periods ending on or prior to the date of redemption or purchase, no shares of Series G Preferred Stock shall be redeemed unless all outstanding shares of Series G Preferred Stock are simultaneously redeemed; provided, however, that the foregoing shall not prevent the purchase or acquisition of Series G Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series G Preferred Stock. In addition, unless full cumulative dividends on all outstanding shares of Series G Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for payment thereof set apart for payment for all past Dividend Periods, the Company shall not purchase or otherwise acquire directly or C-7 indirectly any Series G Preferred Stock, or any shares of any class or series of Capital Stock of the Company ranking, as to payment of dividends or amounts distributable upon liquidation, dissolution or winding-up of the Company, junior to or on a parity with the Series G Preferred Stock (except by conversion into or exchange for Common Stock or other Capital Stock of the Company ranking junior to or on a parity with the Series G Preferred Stock as to payment of dividends or amounts upon liquidation, dissolution or winding-up of the Company and except for redemptions for the purposes of maintaining the Company's qualification as a REIT). (iii) Immediately prior to any redemption of any Series G Preferred Stock, the Company shall pay, in cash, any accumulated and unpaid dividends with respect thereto through the Redemption Date, unless a Redemption Date falls after a Dividend Record Date and on or prior to the corresponding Dividend Payment Date, in which case each holder of shares of Series G Preferred Stock at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares on or prior to such Dividend Payment Date. Except as provided above, the Company will make no payment, or allowance for unpaid dividends, whether or not in arrears, on Series G Preferred Stock for which a notice of redemption has been given. (d) Procedures for Redemption. (i) Notice of redemption pursuant to the Redemption Right shall be mailed, not less than 20 nor more than 60 days prior to the Redemption Date, to each holder of record of shares of Series G Preferred Stock to be redeemed, notifying such holder of the Company's election to redeem such shares. Such notice shall be provided by first class mail, postage prepaid, at such holder's address as the same appears on the stock records of the Company, or by publication in The Wall Street Journal or The New York Times, or, if neither such newspaper is then being published, any other daily newspaper of national circulation. If the Company elects to provide such notice by publication, it shall also promptly mail notice of such redemption to holders of the shares of Series G Preferred Stock to be redeemed. No failure to give such notice or any defect thereto or in the mailing thereof, to any particular holder, shall affect the sufficiency of notice or the validity of the proceedings for the redemption of any shares of Series G Preferred Stock with respect to any other holder. (ii) In addition to any information required by law or by the applicable rules of any exchange upon which the Series G Preferred Stock may be listed or admitted to trading, such notice shall state, as appropriate: (i) the Redemption Date, (ii) the cash redemption price per share of Series G Preferred Stock, (iii) the number of shares of Series G Preferred Stock to be redeemed from such holder (and, if fewer than all the shares of Series G Preferred Stock are to be redeemed from such holder, the number of shares to be redeemed from such holder), (iv) the place or places where certificates for shares of such Series G Preferred Stock are to be surrendered for payment of the redemption price in cash and (v) that dividends on the shares to be redeemed will cease to accumulate on such Redemption Date. (iii) On or after the Redemption Date, each holder of shares of Series G Preferred Stock to be redeemed shall present and surrender the certificates representing his Series G Preferred Stock to the Company at the place designated in the notice of redemption and thereupon the redemption price of such shares shall be paid to or on the order of the person C-8 whose name appears on such certificate representing shares of Series G Preferred Stock as the owner thereof and each surrendered certificate shall be canceled. If fewer than all the shares represented by any such certificate representing shares of Series G Preferred Stock are to be redeemed, a new certificate shall be issued representing the unredeemed shares. (iv) From and after the Redemption Date (unless the Company fails to make available an amount in cash necessary to effect such redemption), all dividends on the Series G Preferred Stock designated for redemption in such notice shall cease to accumulate and all rights of the holders thereof, except the right to receive the redemption price (including all accumulated and unpaid dividends up to the Redemption Date), shall cease and terminate and such shares shall not thereafter be transferred (except with the consent of the Company) on the Company's books, all rights of the holders of shares of the Series G Preferred Stock shall cease (except the right to receive the cash payable upon such redemption) and such shares shall not be deemed to be outstanding for any purpose whatsoever. The Company's obligation to provide cash in accordance with this Section VII shall be deemed fulfilled if, on or before the Redemption Date, the Company elects to deposit the cash necessary for redemption of the shares of Series G Preferred Stock so called with a bank or trust company that has, or is an affiliate of a bank or trust company that has, a capital and surplus of at least $50,000,000, in trust, with irrevocable instructions that such cash be applied to the redemption of the shares of Series G Preferred Stock so called for redemption. No interest shall accrue for the benefit of the holders of Series G Preferred Stock to be redeemed on any cash so set aside by the Company. Any such cash unclaimed at the end of two years from the Redemption Date shall revert to the general funds of the Company. If the Company elects to deposit the cash necessary for redemption with a bank or trust company, in accordance with this subsection (d)(iv), the redemption notice to holders of the shares of Series G Preferred Stock to be redeemed shall (i) state the date of such deposit, (ii) specify the office of such bank or trust company as the place of redemption and (iii) require such holders to surrender the certificates representing such shares at such place on or about the date fixed in such redemption notice (which may not be later than the Redemption Date) against payment of the redemption price (including all accumulated and unpaid dividends to the Redemption Date). (e) Status of Redeemed Shares of Series G Preferred Stock. Subject to the provisions of Section III, any shares of Series G Preferred Stock that shall at any time have been redeemed shall, after such redemption, have the status of authorized but unissued Preferred Stock, without designation as to series until such shares are once more designated as part of a particular series by the Board. VIII. Ownership Limitations. The shares of Series G Preferred Stock are subject to the restrictions on transferability and ownership provisions described in Article IV of the Certificate of Incorporation. The ownership limit as described in Article IV of the Certificate of Incorporation (the "Ownership Limit") shall mean that ownership of more than 7.5% of the value of the outstanding shares of Capital Stock of the Company, including the Series G Preferred Stock, is restricted in order to preserve the Company's status as a REIT for U.S. federal income tax purposes. Subject to C-9 certain limitations described in Article IV of the Certificate of Incorporation, the Board may modify the Ownership Limit, though the Ownership Limit may not be increased by the Board to more than 9.8%. In addition, Article IV of the Certificate of Incorporation limits the ownership of "Existing Holders" (the "Existing Holder Limit") and also limits transfers that would cause the Company to become "closely held" within the meaning of Section 856(h) of the Code. Notwithstanding anything to the contrary contained herein, the provisions hereof shall not limit or prohibit the purchase by the Company of shares of any class or series of Capital Stock pursuant to Article IV of the Certificate of Incorporation. IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to be executed in its name and on its behalf and attested to by its duly authorized officers on this 16th day of April, 2002. GENERAL GROWTH PROPERTIES, INC. By: /s/ Bernard Freibaum ---------------------------------- Name: Bernard Freibaum Title: Executive Vice President C-10 APPENDIX D CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF 7% CUMULATIVE CONVERTIBLE PREFERRED STOCK, SERIES H OF GENERAL GROWTH PROPERTIES, INC. Pursuant to Section 151 of the General Corporation Law of the State Of Delaware General Growth Properties, Inc., a Delaware corporation (the "Company"), hereby certifies that the following resolution creating a series of its preferred stock, par value $100 per share, liquidation preference $1,000 per share, designated as the 7% Cumulative Convertible Preferred Stock, Series H, has been adopted by the Board of Directors of the Company (the "Board") pursuant to the authority contained in Article IV of its Second Amended and Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), and in accordance with Section 151 of the General Corporation Law of the State of Delaware (the "DGCL") and by the Preferred Stock Pricing Committee of the Board (the "Pricing Committee") pursuant to the authority conferred on the Pricing Committee by the Board in accordance with Section 141(c) of the DGCL. WHEREAS, the Board of Directors of the Company is authorized, within the limitations and restrictions stated in its Certificate of Incorporation, to provide for the issuance of preferred stock in series and to establish the number of shares to be included in such series and to fix the designation, powers, preferences and rights of the shares of such series and the qualifications, limitations and restrictions thereof; and WHEREAS, it is the desire of the Board of Directors and the Pricing Committee, pursuant to its authority as aforesaid, to authorize and fix the terms of the preferred stock to be designated the "7% Cumulative Convertible Preferred Stock, Series H" and the number of shares constituting such preferred stock. NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized the 7% Cumulative Convertible Preferred Stock, Series H on the terms and with the provisions herein set forth: I. Certain Definitions As used herein, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the context otherwise requires: D-1 "Capital Stock" shall mean Common Stock or Preferred Stock. The term "Capital Stock" shall not include convertible debt securities. "Common Stock" shall mean the common stock, par value $.10 per share, of the Company. "Dividend Payment Date" shall mean, with respect to any Dividend Period, the payment date for the dividend declared by the Company on its shares of Common Stock for such Dividend Period or, if no such payment date is established, the last business day of the first full month following such Dividend Period. "Dividend Period" shall mean the quarterly period that is then the dividend period with respect to the Common Stock or, if no such dividend period is established, the calendar quarter shall be the Dividend Period; provided that (a) the initial Dividend Period with respect to any share of Series H Preferred Stock shall commence on the date of issuance thereof and end on and include the last day of the then current quarterly period that is then the dividend period with respect to the Common Stock and (b) the Dividend Period in which the final liquidation payment is made shall commence on the first day following the immediately preceding Dividend Period and end on the date of such final liquidation payment. "Fair Market Value" shall mean the average of the daily Closing Price during the ten consecutive Trading Days ending on the earlier of (i) the business day immediately preceding the day in question with respect to the issuance or distribution requiring such computation and (ii) the day before the "ex" date with respect to the issuance or distribution requiring such computation. The term "'ex' date," when used with respect to any issuance or distribution, means the first day on which shares of Common Stock trade regular way, without the right to receive such issuance or distribution, on the exchange or in the market, as the case may be, used to determine that day's Closing Price. "Ownership Limitations" shall mean the restrictions on transferability and ownership described in Article IV of the Certificate of Incorporation, specifically, that ownership of more than 7.5% of the value of the outstanding shares of Capital Stock of the Company, including the Series H Preferred Stock, is restricted. "Preferred Stock" shall mean the preferred stock, par value $100 per share, of the Company. "Relevant Dividend Periods" shall mean (a) each of the three (3) consecutive Dividend Periods the last of which ends during the 90-day period referred to in the last paragraph of Section VII(b) and (b) the next immediately following Dividend Period after the third Dividend Period described in clause (a) above. "Series A Preferred Stock" shall mean the Preferred Stock designated as 7.25% Preferred Income Equity Redeemable Stock, Series A. "Series B Preferred Stock" shall mean the Preferred Stock designated as 8.95% Cumulative Redeemable Preferred Stock, Series B. D-2 "Series C Preferred Stock" shall mean the Preferred Stock designated as 8.5% Cumulative Convertible Preferred Stock, Series C. "Series D Preferred Stock" shall mean the Preferred Stock designated as 8.75% Cumulative Redeemable Preferred Stock, Series D. "Series E Preferred Stock" shall mean the Preferred Stock designated as 8.95% Cumulative Redeemable Preferred Stock, Series E. "Series F Preferred Stock" shall mean the Preferred Stock designated as 8.75% Cumulative Redeemable Preferred Stock, Series F. "Series G Preferred Stock" shall mean the Preferred Stock designated as 8.95% Cumulative Redeemable Preferred Stock, Series G. "Series C Preferred Units" shall mean the 7% Series C Cumulative Convertible Preferred Units of limited partnership in GGP Limited Partnership, a Delaware limited partnership. "Twelfth Anniversary Date" shall mean the twelfth anniversary of the date hereof. Capitalized terms used herein without definition shall have the meanings set forth in the Certificate of Incorporation. II. Designation and Number of Shares A series of Preferred Stock, designated the "7% Cumulative Convertible Preferred Stock, Series H" (the "Series H Preferred Stock"), is hereby established. The par value of the Series H Preferred Stock is $100 per share, which is not a change in the par value of the shares of Preferred Stock as set forth in the Certificate of Incorporation. The authorized number of shares of Series H Preferred Stock shall be 41,131. III. Rank The Series H Preferred Stock, with respect to payment of dividends and amounts upon voluntary or involuntary liquidation, dissolution or winding-up of the Company, shall be deemed to rank: (a) senior to all classes or series of Common Stock and to all Capital Stock the terms of which provide that such Capital Stock shall rank junior to the Series H Preferred Stock; (b) on a parity with the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, the Series E Preferred Stock, the Series F Preferred Stock, the Series G Preferred Stock and each other series of Preferred Stock issued by the Company which does not provide by its express terms that it ranks junior or senior in right of payment to the Series H Preferred Stock with respect to payment of dividends or amounts upon liquidation, dissolution or winding-up; and D-3 (c) junior to any class or series of Capital Stock issued by the Company that ranks senior to the Series H Preferred Stock and has been approved in accordance with Section IV(b). IV. Voting (a) Holders of shares of the Series H Preferred Stock shall not have any voting rights, except as required by applicable law and as described below in this Section IV. (b) So long as any shares of Series H Preferred Stock remain outstanding, the Company shall not, without the affirmative vote or consent of the holders of at least a majority of the shares of Series H Preferred Stock outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class), (i) authorize, create or issue, or increase the authorized or issued amount of, any class or series of shares of Capital Stock ranking senior to the Series H Preferred Stock with respect to the payment of dividends or the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Company or reclassify any authorized shares of Capital Stock of the Company into such Capital Stock, or create, authorize or issue any obligation or security convertible or exchangeable into or evidencing the right to purchase any such Capital Stock; or (ii) amend, alter or repeal the provisions of the Certificate of Incorporation or this Certificate of Designations, whether by merger or consolidation or otherwise (an "Event"), so as to negate the provisions of clause (i) or (ii) of this paragraph or so as to materially and adversely affect any special right, preference, privilege or voting power of the Series H Preferred Stock or the holders thereof. Notwithstanding anything to the contrary contained herein, each of the following shall be deemed not to (i) materially and adversely affect any special right, preference, privilege or voting power of the Series H Preferred Stock or (ii) otherwise require the vote or consent of the holders of shares of Series H Preferred Stock: (X) the occurrence of any merger, consolidation, entity conversion, share exchange, recapitalization of the Capital Stock or other business combination or reorganization so long as either (1) the Company is the surviving entity and the Series H Preferred Stock remains outstanding with the terms thereof materially unchanged or (2) if the Company is not the surviving entity in such transaction, interests in an entity having substantially the same rights and terms with respect to rights to dividends, voting, redemption and conversion as the Series H Preferred Stock are exchanged or substituted for the Series H Preferred Stock without any income, gain, or loss expected to be recognized by the holder upon the exchange or substitution for federal income tax purposes (and with the terms of the Common Stock or such other securities for which the Series H Preferred Stock (or the substitute or exchanged security therefor) is convertible or redeemable materially the same with respect to rights to dividends, voting, and redemption), (Y) any increase in the amount of the authorized Preferred Stock or Common Stock or the creation or issuance of any other series of Preferred Stock or Common Stock or any increase in the amount of authorized or issued Common Stock, Series H Preferred Stock or any other series of Preferred Stock, in each case so long as such Capital Stock ranks on a parity with or junior to the Series H Preferred Stock with respect to payment of dividends and the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding-up of the Company, and (Z) the dissolution, liquidation and/or winding up of the Company. (c) The foregoing voting provisions shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of Series H Preferred Stock shall have been converted or redeemed. D-4 (d) For purposes of the foregoing provisions of this Section IV, each share of Series H Preferred Stock shall have one (1) vote per share. Except as otherwise required by applicable law or as set forth herein, the shares of Series H Preferred Stock shall not have any voting rights or powers and the consent of the holders thereof shall not be required for the taking of any corporate action. V. Dividends (a) With respect to each Dividend Period and subject to the rights of the holders of shares of Preferred Stock ranking senior to or on parity with the Series H Preferred Stock, the holders of shares of Series H Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of assets of the Company legally available for the payment of dividends, quarterly cumulative cash dividends in an amount per share of Series H Preferred Stock equal to the greater of (i) $17.50 (the "Base Quarterly Dividend") and (ii) the amount of the regular quarterly cash dividends for such Dividend Period upon the number of shares of Common Stock (or portion thereof) into which such share of Series H Preferred Stock is then convertible in accordance with Section VII hereof. Notwithstanding anything to the contrary contained herein, the amount of dividends described under each of clause (i) and (ii) of this paragraph for the initial Dividend Period, or any other period shorter than a full Dividend Period, shall be prorated and computed on the basis of twelve 30-day months and a 360-day year. Such dividends shall, with respect to each share of Series H Preferred Stock, accrue from its issue date, whether or not in, or with respect to, any Dividend Period or Periods (A) the dividends described above are declared, (B) the Company is contractually prohibited from paying such dividends or (C) there shall be assets of the Company legally available for the payment of such dividends. The dividends on the Series H Preferred Stock for each Dividend Period shall, if and to the extent declared or authorized by the Board, be paid in arrears (without interest or other amount) on the Dividend Payment Date with respect thereto, and, if not paid on such date, shall accumulate, whether or not in, or with respect to, any Dividend Period or Periods (X) the dividends are declared, (Y) the Company is contractually prohibited from paying such dividends or (Z) there shall be assets of the Company legally available for the payment of such dividends. The record date for dividends to the holders of shares of Series H Preferred Stock for any Dividend Period shall be the same as the record date for the dividends to the holders of shares of Common Stock for such Dividend Period (or, if no such record date is set for the Common Stock, the fifteenth day of the calendar month in which the applicable Dividend Payment Date falls if prior to such Dividend Payment Date; otherwise, the fifteenth day of the immediately preceding calendar month). Accumulated and unpaid dividends for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed by the Board. Any dividend payment made upon shares of Series H Preferred Stock shall first be credited against the earliest accrued but unpaid dividends due with respect to such shares of Series H Preferred Stock which remains payable. No interest, or sum of money in lieu of interest, shall be owing or payable in respect of any dividend payment or payments on the Series H Preferred Stock, whether or not in arrears. (b) No dividend on the Series H Preferred Stock shall be declared by the Board or paid or set apart for payment by the Company at such time as the terms and provisions of any bona fide agreement of the Company, including any agreement relating to its bona fide D-5 indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law (and such failure to pay dividends on the Series H Preferred Stock shall prohibit other dividends by the Company as described in Sections V(c) or (d) hereof). Notwithstanding the foregoing, dividends on the Series H Preferred Stock shall accumulate whether or not any of the foregoing restrictions exist. (c) Except as provided in subsection V(d) herein, so long as any shares of Series H Preferred Stock are outstanding, (i) no dividends (other than in Common Stock or other Capital Stock of the Company ranking junior to the Series H Preferred Stock as to payment of dividends and amounts upon liquidation, dissolution or winding-up of the Company) shall be declared or paid or set apart for payment upon the Common Stock or any other class or series of Capital Stock of the Company ranking, as to payment of dividends or amounts distributable upon liquidation, dissolution or winding-up of the Company, on a parity with or junior to the Series H Preferred Stock, for any period and (ii) no Common Stock or other Capital Stock of the Company ranking junior to or on a parity with the Series H Preferred Stock as to payment of dividends or amounts upon liquidation, dissolution or winding-up of the Company, shall be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Capital Stock) by the Company (except by conversion into or exchange for other Capital Stock of the Company ranking junior to the Series H Preferred Stock as to payment of dividends and amounts upon liquidation, dissolution or winding-up of the Company or by redemptions for the purpose of maintaining the Company's qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes) unless, in the case of either clause (i) or (ii), full cumulative dividends have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payment on the Series H Preferred Stock for all Dividend Periods ending on or prior to the dividend payment date for the Common Stock or such other class or series of Capital Stock or the date of such redemption, purchase or other acquisition. (d) When dividends are not paid in full (or a sum sufficient for such full payment is not set apart for such payment) upon the Series H Preferred Stock and any other Capital Stock ranking on a parity as to payment of dividends with the Series H Preferred Stock, all dividends declared upon the Series H Preferred Stock and any other Capital Stock ranking on a parity as to payment of dividends with the Series H Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series H Preferred Stock and such other Capital Stock shall in all cases bear to each other the same ratio that accrued and unpaid dividends per share on the Series H Preferred Stock and such other Capital Stock (which shall not include any accumulation in respect of unpaid dividends for prior dividend periods if such Capital Stock does not have a cumulative dividend) bear to each other. (e) The holders of the shares of Series H Preferred Stock shall not be entitled to any dividends in excess of full cumulative dividends as described in V(a) above. D-6 VI. Liquidation Preference (a) In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of Common Stock or any other Capital Stock ranking junior to the Series H Preferred Stock as to the distribution of assets upon the liquidation, dissolution or winding-up of the Company, the holders of shares of the Series H Preferred Stock shall, with respect to each such share, be entitled to receive, out of the assets of the Company available for distribution to stockholders after payment or provision for payment of all debts and other liabilities of the Company and subject to the rights of the holders of any shares of Preferred Stock ranking senior to or on parity with the Series H Preferred Stock with respect to payment of amounts upon liquidation, dissolution or winding-up of the Company, an amount equal to the greater of (i) $1,000.00, plus an amount equal to all dividends (whether or not earned or declared) accrued and unpaid thereon to the date of final distribution (including all accumulated and unpaid distributions) and (ii) the amount that a holder of such share of Series H Preferred Stock would have received upon final distribution in respect of the number of shares of Common Stock into which such share of Series H Preferred Stock (including all accumulated and unpaid dividends (whether or not earned or declared) with respect thereto) was convertible immediately prior to such date of final distribution. If, upon any such voluntary or involuntary liquidation, dissolution or winding-up of the Company, the assets of the Company, or proceeds thereof, distributable among the holders of the shares of Series H Preferred Stock, are insufficient to pay in full the preferential amount aforesaid on the shares of Series H Preferred Stock and liquidating payments on any other shares of any class or series of Capital Stock ranking, as to payment of dividends and amounts upon the liquidation, dissolution or winding-up of the Company, on a parity with the Series H Preferred Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series H Preferred Stock and any such other parity stock ratably in accordance with the respective amounts that would be payable on such shares of Series H Preferred Stock and such other stock if all amounts payable thereon were paid in full. For the purposes of this Section VI, none of (i) a consolidation or merger of the Company with or into another entity, (ii) a merger of another entity with or into the Company, (iii) a statutory share exchange by the Company or (iv) a sale, lease or conveyance of all or substantially all of the Company's assets, properties or business shall be deemed to be a liquidation, dissolution or winding-up of the Company. (b) Written notice of such liquidation, dissolution or winding-up of the Company, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first class mail, postage pre-paid, not less than 30 nor more than 60 days prior to the payment date stated therein, to each record holder of the Series H Preferred Stock at the respective addresses of such holders as the same shall appear on the stock transfer records of the Company. (c) After payment of the full amount of liquidating distributions to which they are entitled as provided in Section VI(a) above, the holders of shares of Series H Preferred Stock shall have no right or claim to any of the remaining assets of the Company. VII. Conversion. Holders of shares of Series H Preferred Stock shall have the right to convert all or a portion of such shares into shares of Common Stock, as follows: D-7 (a) A holder of shares of Series H Preferred Stock shall have the right, at such holder's option, at any time, to convert any whole number of shares of Series H Preferred Stock, into fully paid and non-assessable shares of Common Stock; provided, however, that the conversion right may not be exercised at any one time by a holder of shares of Series H Preferred Stock with respect to less than 50 shares of Series H Preferred Stock (or all the shares of Series H Preferred Stock then owned by such holder if such holder owns less than 50 shares of Series H Preferred Stock). Each share of Series H Preferred Stock shall be convertible into the number of shares of Common Stock determined by dividing (i) the $1,000 base liquidation preference per each share of Series H Preferred Stock, plus an amount equal to all accumulated and unpaid dividends (whether or not earned or declared) with respect thereto by (ii) a conversion price of $61.6575 per share of Common Stock (equivalent to an initial anticipated conversion rate of 16.2186 shares of Common Stock for each share of Series H Preferred Stock), subject to adjustment as described in Section VII(c) hereof (the "Conversion Price"). No fractional shares of Common Stock will be issued upon any conversion of shares of Series H Preferred Stock. Instead, the number of shares of Common Stock to be issued upon each conversion shall be rounded down to the nearest whole number of shares of Common Stock, and the Company shall pay cash for the fractional share based on the Fair Market Value. (b) To exercise the conversion right, the holder of each share of Preferred Stock to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Company or in blank, at the principal office of the Company accompanied by a written notice to the Company (the "Conversion Notice") indicating that the holder thereof elects to convert such share of Series H Preferred Stock and containing representations and warranties of such holder that (i) such holder has good and marketable title to such share of Series H Preferred Stock, free and clear of all liens, claims and encumbrances, (ii) such holder has such knowledge and experience in financial and business matters such that such holder is capable of evaluating the merits and risks of receiving and owning the shares of Common Stock that may be issued to it in exchange for such share of Series H Preferred Stock, (iii) such holder is able to bear the economic risk of such ownership and (iv) such shares of Common Stock to be acquired by such holder pursuant to this Section VII would be acquired by such holder for its own account, for investment purposes only and not with a view to, and with no present intention of, selling or distributing the same in violation of federal or state securities laws. Unless the shares issuable on conversion are to be issued in the same name as the name in which such share of Series H Preferred Stock is registered, each share of Series H Preferred Stock surrendered for conversion shall be accompanied by instruments of transfer, in form reasonably satisfactory to the Company, duly executed by the holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Company demonstrating that such taxes have been paid). As promptly as practicable after the surrender of certificates for shares of Series H Preferred Stock and delivery of the Conversion Notice as aforesaid, the Company shall issue and shall deliver at such office to such holder, or on the holder's written order, a certificate or certificates for the number of shares of Common Stock issuable upon the conversion of such shares of Series H Preferred Stock in accordance with the provisions of this Section VII. In addition, the Company shall issue and deliver to such holder a certificate or certificates evidencing any shares of Series H Preferred Stock that were evidenced by the certificate or D-8 certificates delivered to the Company in connection with such conversion but that were not converted. A holder of shares of Series H Preferred Stock at the close of business on the record date for any Dividend Period shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion of such shares of Series H Preferred Stock following such record date and prior to such Dividend Payment Date and shall have no right to receive any dividend for such Dividend Period in respect of the shares of Common Stock into which such shares of Series H Preferred Stock were converted. Except as provided herein, the Company shall make no payment or allowance for unpaid dividends, whether or not in arrears, on converted shares of Series H Preferred Stock or for dividends on the shares of Common Stock that are issued upon such conversion. Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of Series H Preferred Stock shall have been surrendered and the Conversion Notice is received by the Company as aforesaid, and the person or persons in whose name or names any shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of such shares at such time on such date, and such conversion shall be at the Conversion Price in effect at such time and on such date unless the transfer books of the Company shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such shares have been surrendered and such notice received by the Company. Notwithstanding anything to the contrary contained herein, all holders of shares of Series H Preferred Stock shall be deemed to have delivered a Conversion Notice (and therefore exercised their conversion rights effective as of the time specified in the next sentence) as to all shares of Series H Preferred Stock if (a) with respect to any period of 90 consecutive calendar days following the Twelfth Anniversary Date, the trading price of a share of Common Stock (calculated based on the average of the intra-day high and low) exceeds on each trading day during such 90-day period the Conversion Price then in effect and (b) the amount of the dividend (as calculated in accordance with Section V(a)(ii) hereof) for each of the four (4) Relevant Dividend Periods upon the number of shares of Common Stock (or portion thereof) into which a share of Series H Preferred Stock is then convertible in accordance with this Section VII exceeds the Base Quarterly Dividend. The forced conversion referred to in this paragraph shall be effective at the close of business on the Dividend Payment Date for the last Relevant Dividend Period. (c) The Conversion Price shall be adjusted from time to time as follows: (i) If the Company shall, after the date on which any shares of Series H Preferred Stock are first issued (the "Issue Date"), (A) pay or make a dividend to holders of its Common Stock in Common Stock, (B) subdivide its outstanding Common Stock into a greater number of shares of Common Stock, (C) combine its outstanding Common Stock into a smaller number of shares of Common Stock or (D) issue any shares of Capital Stock by reclassification of its Common Stock, the Conversion Price in effect at the opening of business on the day D-9 following the date fixed for the determination of holders entitled to receive such dividend or at the opening of business on the day next following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any share of Series H Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock that such holder would have owned or have been entitled to receive after the happening of any of the events described above had such share of Series H Preferred Stock been converted immediately prior to close of business on the record date in the case of a dividend or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subsection (i) shall become effective immediately after the opening of business on the day next following the record date (except as provided in subsection (g) below) in the case of a dividend and shall become effective immediately after the opening of business on the day next following the effective date in the case of a subdivision, combination or reclassification. (ii)If the Company shall issue after the Issue Date rights, options or warrants to all holders of shares of Common Stock entitling them to subscribe for or purchase shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock) at a price per share less than the Fair Market Value per share of Common Stock on the record date for the determination of holders of shares of Common Stock entitled to receive such rights, options or warrants, then the Conversion Price in effect at the opening of business on the day next following such record date shall be adjusted to equal the price determined by multiplying (I) the Conversion Price in effect immediately prior to the opening of business on the day following the date fixed for such determination by (II) a fraction, the numerator of which shall be the sum of (A) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and (B) the number of shares of Common Stock that the aggregate proceeds to the Company from the exercise of such rights, options or warrants for shares of Common Stock would purchase at such Fair Market Value, and the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and (B) the number of additional shares of Common Stock offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in subsection (g) below). In determining whether any rights, options or warrants entitle the holders of shares of Common Stock to subscribe for or purchase shares of Common Stock at less than the Fair Market Value, there shall be taken into account any consideration received by the Company upon issuance and upon exercise of such rights, options or warrants, the value of such consideration, if other than cash, to be determined in good faith by the Board of the Company. (iii) If the Company shall distribute after the Issue Date to all holders of shares of Common Stock any other securities or evidences of its indebtedness or assets (excluding those rights, options and warrants referred to in and treated under subsection (ii) above, and excluding dividends paid exclusively in cash) (any of the foregoing being hereinafter in this subsection (iii) called the "Securities"), then in each case the Conversion Price shall be adjusted so that it shall equal the price determined by multiplying (I) the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of holders of shares of Common Stock entitled to receive such dividend by (II) a fraction, the numerator of which shall be the Fair Market Value per share of Common Stock on the record date mentioned below less the then D-10 fair market value (as determined in good faith by the Board of the Company) of the portion of the Securities so distributed applicable to one share of Common Stock, and the denominator of which shall be the Fair Market Value per share of Common Stock on the record date mentioned below. Such adjustment shall become effective immediately at the opening of business on the business day next following (except as provided in subsection (g) below) the record date for the determination of holders of shares of Common Stock entitled to receive such distribution. For the purposes of this subsection (iii), a dividend in the form of a Security, which is distributed not only to the holders of the shares of Common Stock on the date fixed for the determination of holders of shares of Common Stock entitled to such distribution of such Security, but also is distributed with each share of Common Stock delivered to a person converting a share of Series H Preferred Stock after such determination date (together with dividends thereon paid to holders of shares of Common Stock prior thereto), shall not require an adjustment of the Conversion Price pursuant to this subsection (iii); provided that on the date, if any, on which a person converting a share of Series H Preferred Stock would no longer be entitled to receive such Security with a share of Common Stock, a distribution of such Securities shall be deemed to have occurred, and the Conversion Price shall be adjusted as provided in this subsection (iii) (and such day shall be deemed to be "the date fixed for the determination of the holders of shares of Common Stock entitled to receive such dividend" and "the record date" within the meaning of the two preceding sentences). (iv)Notwithstanding the foregoing, no adjustment shall be made pursuant to the preceding clauses (ii) and (iii) that would result in an increase in the Conversion Price. No adjustment in the Conversion Price shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in such price; provided, however, that any adjustments that by reason of this subsection (iv) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and provided, further, that any adjustment shall be required and made in accordance with the provisions of this Section VII (other than this subsection (iv)) not later than such time as may be required in order to preserve the tax-free nature of a dividend to the holders of shares of Common Stock. Notwithstanding any other provisions of this Section VII, the Company shall not be required to make any adjustment to the Conversion Price for the issuance of any (i) shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in Common Stock under such plan or (ii) any options, rights or shares of Common Stock pursuant to any stock option, stock purchase or any stock-based compensation plan maintained by the Corporation. All calculations under this Section VII shall be made to the nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be. (d) If the Company shall be a party to any transaction (including, without limitation, a merger, consolidation, entity conversion, share exchange, statutory share exchange, self tender offer for all or substantially all of the shares of Common Stock, sale of all or substantially all of the Company's assets or recapitalization of the Common Stock or other business combination or reorganization and excluding any transaction as to which subsection (c)(i) of this Section VII applies) (each of the foregoing being referred to herein as a "Transaction"), in each case as a result of which shares of Common Stock shall be exchanged for or converted into the right, or the holders of such shares shall otherwise be entitled, to receive shares, stock, securities or other D-11 property (including cash or any combination thereof), each share of Series H Preferred Stock which is not converted into the right to receive shares, stock, securities or other property in connection with such Transaction (and thus remains outstanding) shall thereafter be convertible into the kind and amount of shares, stock, securities and other property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of shares of Common Stock into which one share of Series H Preferred Stock (including all dividends (whether or not earned or declared) accumulated and unpaid thereon) was convertible immediately prior to such Transaction, assuming such holder of Common Stock is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (a "Constituent Person"), or an affiliate of a Constituent Person. In the event that holders of shares of Common Stock have the opportunity to elect the form or type of consideration to be received upon consummation of the Transaction, prior to such transaction the Company shall give prompt written notice to each holder of shares of Series H Preferred Stock of such election, and each holder of shares of Series H Preferred Stock shall also have the right to elect, by written notice to the Company, the form or type of consideration to be received upon conversion of each share of Series H Preferred Stock held by such holder following consummation of such Transaction. If a holder of shares of Series H Preferred Stock fails to make such an election, such holder (and any of its transferees) shall receive upon conversion of each share of Series H Preferred Stock held by such holder (or by any of its transferees) the same consideration that a holder of that number of shares of Common Stock into which one share of Series H Preferred Stock was convertible immediately prior to such Transaction would receive if such holder failed to make such an election. The Company shall not be a party to any Transaction unless the terms of such Transaction are consistent with the provisions of this subsection (d), and it shall not consent or agree to the occurrence of any Transaction until the Company has entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the shares of Series H Preferred Stock that will contain provisions enabling the holders of shares of Series H Preferred Stock that remain outstanding after such Transaction to convert into the consideration received by holders of shares of Common Stock at the Conversion Price in effect immediately prior to such Transaction (with the holder having the option to elect the type of consideration if a choice is offered in the Transaction as specified above). The provisions of this subsection (d) shall similarly apply to successive Transactions. (e) If: (i) the Company shall declare a dividend on the shares of Common Stock (other than a cash dividend) or there shall be a reclassification, subdivision or combination of Common Stock; or (ii)the Company shall authorize the granting to the holders of the shares of Common Stock of rights, options or warrants to subscribe for or purchase any Capital Stock of any class or any other rights, options or warrants; or (iii) there shall be any reclassification of the shares of Common Stock or any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or a statutory share exchange involving the conversion or exchange of shares of Common Stock into securities or other property, or a share exchange D-12 involving the conversion or exchange of shares of Common Stock into securities or other property, a self tender offer by the Company for all or substantially all of the shares of Common Stock, or the sale or transfer of all or substantially all of the assets of the Company as an entirety; or (iv) there shall occur the voluntary or involuntary liquidation, dissolution or winding-up of the Company, then the Company shall cause to be mailed to the holders of the shares of Series H Preferred Stock at their addresses as shown on the records of the Company, as promptly as possible a notice stating (A) the date on which a record is to be taken for the purpose of such distribution of rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such distribution of rights, options or warrants are to be determined or (B) the date on which such reclassification, subdivision, combination, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up is expected to become effective, and the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up. Failure to give or receive such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section VII. (f) Whenever the Conversion Price is adjusted as herein provided, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the effective date such adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Price to the holder of each share of Series H Preferred Stock at such holder's last address as shown on the records of the Company. (g) In any case in which subsection (c) of this Section VII provides that an adjustment shall become effective on the date next following the record date for an event, the Company may defer until the occurrence of such event (i) issuing to the holder of any share of Series H Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holder any amount of cash in lieu of fractions pursuant to subsection (a) of this Section VII. (h) For purposes of this Section VII, the number of shares of Common Stock at any time outstanding shall not include any shares of Common Stock then owned or held by or for the account of the Company. The Company shall not make any distribution on shares of Common Stock held in the treasury of the Company. (i) If any action or transaction would require adjustment of the Conversion Price pursuant to more than one subsection of this Section VII, only one adjustment shall be made, and such adjustment shall be the amount of adjustment that has the highest absolute value. D-13 (j) If the Company shall take any action affecting the Common Stock, other than action described in this Section VII, that in the reasonable judgment of the Company would materially affect the conversion rights of the holders of the shares of Series H Preferred Stock, the Conversion Price for the Series H Preferred Stock may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Company, determines to be equitable in the circumstances. (k) The Company covenants that shares of Common Stock issued upon conversion of the shares of Series H Preferred Stock shall be validly issued, fully paid and non-assessable and the holder thereof shall be entitled to rights of a holder of shares of Common Stock specified in the Certificate of Incorporation. Prior to the delivery of any securities that the Company shall be obligated to deliver upon conversion of the Series H Preferred Stock, the Company shall endeavor to comply with all federal and state laws and regulations in respect thereof. (l) The Company will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock or other securities or property on conversion of the shares of Series H Preferred Stock pursuant hereto; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or other securities or property in a name other than that of the holder of the Series H Preferred Stock to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such tax or established, to the reasonable satisfaction of the Company, that such tax has been paid. (m) Notwithstanding anything to the contrary contained herein (but subject to the provisions of Section VII(n) hereof), the Company agrees that it will apply the adjustment provisions of this Section VII and any related provisions as if the Series H Preferred Stock were issued and outstanding as of November 27, 2002. Thus, for example, if an event were to occur on December 31, 2002 that would adjust the number of shares of Common Stock into which the shares of Series H Preferred Stock would have been convertible had such shares of Series H Preferred Stock been outstanding as of such date, but the Series H Preferred Stock were not actually issued until December 31, 2003, then such adjustment would be applied so that, upon such issuance (but subject to further adjustment for subsequent events), the Series H Preferred Stock would be immediately convertible into the number of shares of Common Stock into which the Series H Preferred Stock would have been convertible had such shares of Series H Preferred Stock been outstanding on December 31, 2002. (n) Notwithstanding anything to the contrary contained herein, the adjustment provisions contained in this Section VII shall be applied so that there is no duplication of adjustments made pursuant to any other document. VIII. Ownership Limitations The shares of Series H Preferred Stock are subject to the restrictions on transferability and ownership provisions described in Article IV of the Certificate of Incorporation. The ownership limit as described in Article IV of the Certificate of Incorporation (the "Ownership Limit") shall mean that ownership of more than 7.5% of the value of the outstanding shares of D-14 Capital Stock of the Company, including the Series H Preferred Stock, is restricted in order to preserve the Company's status as a REIT for U.S. federal income tax purposes. Subject to certain limitations described in Article IV of the Certificate of Incorporation, the Board may modify the Ownership Limit, though the Ownership Limit may not be increased by the Board to more than 9.8%. In addition, Article IV of the Certificate of Incorporation limits the ownership of "Existing Holders" (the "Existing Holder Limit") and also limits transfers that would cause the Company to become "closely held" within the meaning of Section 856(h) of the Code. IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to be executed in its name and on its behalf by its Executive Vice President and attested to by its Secretary on this 27th day of November, 2002. GENERAL GROWTH PROPERTIES, INC., a Delaware corporation By: /s/ Bernard Freibaum --------------------------------------- Bernard Freibaum, Executive Vice President ATTEST: By: /s/ Marshall E. Eisenberg ------------------------------------------- Marshall E. Eisenberg, Secretary D-15 EX-3.2 3 c02442exv3w2.txt BYLAWS Exhibit 3.2 ARTICLE IV, SECTION 4.1 amended on May 3, 1994 ARTICLE III, SECTION 3.9 amended on February 5, 2003 BYLAWS OF GENERAL GROWTH PROPERTIES, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE ARTICLE I OFFICES AND RECORDS SECTION 1.1. DELAWARE OFFICE. The principal office of the Corporation in the State of Delaware shall be located in the City of Wilmington, County of New Castle, and the name and address of its registered agent is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware. SECTION 1.2. OTHER OFFICES. The Corporation may have such other offices, either within or without the State of Delaware, as the Board of Directors may designate or as the business of the Corporation may from time to time require. SECTION 1.3. BOOKS AND RECORDS. The books and records of the Corporation may be kept outside the State of Delaware at such place or places as may from time to time be designated by the Board of Directors. ARTICLE II STOCKHOLDERS SECTION 2.1. ANNUAL MEETING. The annual meeting of the stockholders of the Corporation shall be held on the last Friday in April of each year, if not a legal holiday, and if a legal holiday then on the next succeeding business day, at 10:00 a.m., local time, at the principal executive offices of the Corporation, or at such other date, place and/or time as may be fixed by, resolution of the Board of Directors. SECTION 2.2. SPECIAL MEETING. Subject to the rights of the holders of any series of preferred stock, par value $.01 per share, of the Corporation (the "Preferred Stock") to elect additional directors under specified circumstances, special meetings of the stockholders may be called only by the Chairman of the Board or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies (the "Whole Board"). SECTION 2.3. PLACE OF MEETING. The Board of Directors may designate the place of meeting for any meeting of the stockholders. If no designation is made by the Board of Directors, the place of meeting shall be the principal office of the Corporation. SECTION 2.4. NOTICE OF MEETING. Written or printed notice, stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called, shall be prepared and delivered by the Corporation not less than ten days nor more than sixty days before the date of the meeting, either personally, or by mail, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his address as it appears on the stock transfer books of the Corporation. Such further notice shall be given as may be required by law. Meetings may be held without notice if all stockholders entitled to vote are present, or if notice is waived by those not present. Any previously scheduled meeting of the stockholders may be postponed by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting of stockholders. SECTION 2.5. QUORUM AND ADJOURNMENT. Except as otherwise provided by law or by the Restated Certificate of Incorporation, the holders of a majority of the outstanding shares of the Corporation entitled to vote generally in the election of directors (the "Voting Stock"), represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum for the transaction of such business. The chairman of the meeting or a majority of the shares so represented may adjourn the meeting from time to time, whether or not there is such a quorum. No notice of the time and place of adjourned meetings need be given except as required by law. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. SECTION 2.6. PROXIES. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder, or by his duly authorized attorney-in-fact. Such proxy must be filed with the Secretary of the Corporation or his representative at or before the time of the meeting. SECTION 2.7. NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS. (A) ANNUAL MEETINGS OF STOCKHOLDERS. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of -2- stockholders (a) pursuant to the Corporation's notice of meeting delivered pursuant to Section 2.4 of these Bylaws, (b) by or at the direction of the Chairman or the Board of Directors or (c) by any stockholder of the Corporation who is entitled to vote at the meeting, who complied with the notice procedures set forth in clauses (2) and (3) of this paragraph (A) of this Bylaw and who was a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Bylaw the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than sixty days nor more than ninety days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than thirty days or delayed by more than sixty days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the ninetieth day prior to such annual meeting and not later than the close of business on the later of the sixtieth day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner. (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of -3- the increased Board of Directors made by the Corporation at least seventy days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation. (B) SPECIAL MEETINGS OF STOCKHOLDERS. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting pursuant to Section 2.4 of these Bylaws. nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in this Bylaw and who is a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. Nominations by stockholders of persons for election to the Board of Directors may be made at such a special meeting of stockholders if the stockholder's notice is required by paragraph (A)(2) of this Bylaw shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the ninetieth day prior to such special meeting and not later than the close of business on the later of the seventieth day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. (C) GENERAL. (1) Only persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. Except as otherwise provided by law, the Restated Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Bylaw and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that such defective proposal or nomination shall be disregarded. (2) For purposes of this Bylaw, "public announcement" shall mean disclosure in a press release reported by the Dow Jones -4- News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. (3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-5 under the Exchange Act. SECTION 2.8. PROCEDURE FOR ELECTION OF DIRECTORS. Election of directors at all meetings of the stockholders at which directors are to be elected shall be by written ballot, and, except as otherwise set forth in any Preferred Stock Designation (as defined in Article IV of the Restated Certificate of Incorporation) with respect to the right of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, a plurality of the votes cast thereat shall elect. SECTION 2.9. INSPECTORS OF ELECTIONS; OPENING AND CLOSING THE POLLS. (A) The Board of Directors by resolution may appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives of the Corporation, to act at the meeting and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act, or if all inspectors or alternates who have been appointed are unable to act, at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by the General Corporation Law of the State of Delaware (the "GLC"). (B) The chairman of the meeting shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the meeting. SECTION 2.10. NO STOCKHOLDER ACTION BY WRITTEN CONSENT. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specific circumstances, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of -5- stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. SECTION 2.11. VOTE OF STOCKHOLDERS. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, each stockholder having the right to vote shall be entitled at every meeting of stockholders to one vote for every share standing in his name on the record date fixed by the Board of Directors pursuant to Section 6.8 of these Bylaws. Except as otherwise provided by law, the Restated Certificate of Incorporation, any Preferred Stock Designation, these Bylaws or any resolution adopted by a majority of the Whole Board, all matters submitted to the stockholders at any meeting (other than the election of directors) shall be decided by a majority of the votes cast with respect thereto. ARTICLE III BOARD OF DIRECTORS SECTION 3.1. GENERAL POWERS. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Restated Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. SECTION 3.2. NUMBER, TENURE AND QUALIFICATIONS. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Whole Board, but shall consist of not more than fifteen nor less than three directors. The directors, other than those who may be elected by the holders of any series of Preferred Stock, shall be divided, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, with the term of office of the first class to expire at the 1994 annual meeting of stockholders, the term of office of the second class to expire at the 1995 annual meeting of stockholders and the term of office of the third class to expire at the 1996 annual meeting of stockholders. Each director shall hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the 1993 annual meeting, (i) directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified and (ii) if -6- authorized by a resolution of the Board of Directors, directors may be elected to fill any vacancy on the Board of Directors, regardless of how such vacancy shall have been created. SECTION 3.3. REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place as, each annual meeting of stockholders. The Board of Directors may, by resolution, provide the time and place for the holding of additional regular meetings without other notice than such resolution. SECTION 3.4. SPECIAL MEETINGS. Special meetings of the Board of Directors shall be called at the request of the Chairman of the Board, the President or a majority of the Board of Directors. The person or persons authorized to call special meetings of the Board of Directors may fix the place and time of the meetings. SECTION 3.5. NOTICE. Notice of any special meeting shall be given to each director at his business or residence in writing or by telegram or by telephone communication. If mailed, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least five days before such meeting. If by telegram, such notice shall be deemed adequately delivered when the telegram is delivered to the telegraph company at least twenty-four hours before such meeting. If by telephone, the notice shall be given at least twelve hours prior to the time set for the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice of such meeting, except for amendments to these Bylaws as provided under Section 7.1 hereof. A meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in writing, either before or after such meeting. SECTION 3.6. QUORUM. A whole number of directors equal to at least a majority of the Whole Board shall constitute a quorum for the transaction of business, but if at any meeting of the Board of Directors there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without further notice. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum. SECTION 3.7. VACANCIES. Subject to the rights of the holders of any series of Preferred Stock, and unless the Board of Directors otherwise determines, vacancies resulting from death, -7- resignation, retirement, disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled only by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, and directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires and until such director's successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the Whole Board shall shorten the term of any incumbent director. SECTION 3.8. REMOVAL. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 75 percent of the then outstanding Voting Stock, voting together as a single class. SECTION 3.9. COMMITTEES. The Board of Directors may, by resolution or resolutions passed by a majority of the Whole Board, designate one or more committees, each committee to consist of two or more directors of the Corporation, including the following committees: (a) An Executive Committee, which shall have such authority as shall be delegated by the Board of Directors and shall advise the Board of Directors from time to time with respect to such matter as the Board of Directors shall direct. (b) An Audit Committee which shall consist of Independent Directors (as defined below). The Audit Committee shall make recommendations concerning the engagement of independent public accountants, review with the independent public accountants the plans and results of the audit engagement, approve professional services provided by the independent public accountants, review the independence of the independent public accountants, consider the range of audit and non-audit fees and review the adequacy of the Corporation's internal accounting controls. (c) A Compensation Committee, which shall determine compensation for the Corporation's executive officers and shall administer a stock incentive plan adopted by the Corporation. For purposes of this Section 3.9, "Independent Directors" shall mean directors who are not (i) officers of the Corporation, (ii) employees of the Corporation, (iii) holders of more than 5 percent of the outstanding Voting Stock of the Corporation of (iv) with reference to any particular transaction, interested directors -8- within the meaning of Section 144 of the GCL. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. Any such committee, to the extent provided in the resolution establishing such committee and not inconsistent with the GCL, shall have any may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation. Unless the Board of Directors shall provide. otherwise, the presence of one-half of the total membership of any committee of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of such committee and the act of a majority of those present shall be necessary and sufficient for the taking of any action thereat. SECTION 3.10. HONORARY DIRECTORS. The Board of Directors may from time to time appoint one or more persons to serve at the pleasure of the Board of Directors as honorary directors of the Corporation. Honorary directors shall be entitled to receive notice of and attend all regular and special meetings of the Board of Directors but shall not be deemed to be present at any such meeting for the purpose of determining whether a quorum is present and shall not be entitled to vote on any matter submitted to a vote of the directors. ARTICLE IV OFFICERS SECTION 4.1. ELECTED OFFICERS. The elected officers of the Corporation shall be a Chairman of the Board, a President, a Secretary, a Treasurer and such other officers as the Board of Directors from time to time may deem proper. The Chairman of the Board shall be chosen from the directors. All officers chosen by the Board of Directors shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article IV. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or by any committee thereof. SECTION 4.2. ELECTION AND TERM OF OFFICE. The elected officers of the Corporation shall be elected annually by the Board of Directors at the regular meeting of the Board of Directors held after each annual meeting of the stockholders. If the election of officers shall not be held at such meeting such election shall be held as soon thereafter as convenient. Subject to Section 4.7 of these Bylaws, each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign. SECTION 4.3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at all meetings of the stockholders and of -9- the Board of Directors. The Chairman of the Board shall be responsible for the general management of the affairs of the Corporation and shall perform all duties incidental to his office which may be required by law and all such other duties as are properly required of him by the Board of Directors. Except where by law the signature of the President is required, the Chairman of the Board shall possess the same power as the President to sign all certificates, contracts, and other instruments of the Corporation which may be authorized by the Board of Directors. He shall make reports to the Board of Directors and the stockholders, and shall perform all such other duties as are properly required of him by the Board of Directors. He shall see that all orders and resolutions of the Board of Directors and of any committee thereof are carried into effect. SECTION 4.4. PRESIDENT. The President shall act in a general executive capacity and shall assist the Chairman of the Board in the administration and operation of the Corporation's business and general supervision of its policies and affairs. The President shall, in the absence of or because of the inability to act of the Chairman of the Board, perform all duties of the Chairman of the Board and preside at all meetings of stockholders and of the Board of Directors. The President may sign, alone or with the Secretary, or an Assistant Secretary or any other proper, officer of the Corporation authorized by the Board of Directors, certificates, contracts and other instruments of the Corporation as authorized by the Board of Directors. SECTION 4.5. SECRETARY. The Secretary shall give, or cause to be given, notice of all meetings of stockholders and Directors and all other notices required by law or by these Bylaws, and in case of his absence or refusal or neglect so to do, any such notice may be given by any person thereunto directed by the Chairman of the Board or the President, or by the Board of Directors, upon whose request the meeting is called as provided in these Bylaws. He shall record all the proceedings of the meetings of the Board of Directors, any committees thereof and the stockholders of the Corporation in a book to be kept for that purpose, and shall perform such other duties as may be assigned to him by the Board of Directors, the Chairman of the Board or the President. He shall have the custody of the seal of the Corporation and shall affix the same to all instruments requiring it, when authorized by the Board of Directors, the Chairman of the Board or the President, and attest to the same. SECTION 4.6. TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate account of receipts and disbursements in books belonging to the Corporation. The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation in such depositaries as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the -10- Corporation as may be ordered by the Board of Directors, the Chairman of the Board, or the President, taking proper vouchers for such disbursements. The Treasurer shall render to the Chairman of the Board, the President and the Board of Directors, whenever requested, an account of all his transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond for the faithful discharge of his duties in such amount and with such surety as the Board of Directors shall prescribe. SECTION 4.7. REMOVAL. Any officer elected by the Board of Directors may be removed by a majority of the members of the Whole Board whenever, in their judgment, the best interests of the Corporation would be served thereby. No elected officer shall have any contractual rights against the Corporation for compensation by virtue of such election beyond the date of the election of his successor, his death, his resignation or his removal, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan. SECTION 4.8. VACANCIES. A newly created office and a vacancy in any office because of death, resignation, or removal may be filled by the Board of Directors for the unexpired portion of the term at any meeting of the Board of Directors. ARTICLE V STOCK CERTIFICATES AND TRANSFERS SECTION 5.1. STOCK CERTIFICATES AND TRANSFERS. (A) The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the appropriate officers of the Corporation may from time to time prescribe. The shares of the stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his attorney, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require. (B) The certificates of stock shall be signed, countersigned and registered in such manner as the Board of Directors may by resolution prescribe, which resolution may permit all or any of the signatures on such certificates to be in facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by -11- the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. ARTICLE VI MISCELLANEOUS PROVISIONS SECTION 6.1. FISCAL YEAR. The fiscal year of the Corporation shall begin on the first clay of January and end on the thirty-first day of December of each year. SECTION 6.2. DIVIDENDS. The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Restated Certificate of Incorporation. Section 6.3. SEAL. The corporate seal may bear in the center of the emblem of some object, and shall have inscribed thereunder the words "Corporate Seal" and around the margin thereof the words "General Growth Properties, Inc. - -- Delaware 1986". Section 6.4. WAIVER OF NOTICE. Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of the GCL, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders of the Board of Directors need be specified in any waiver of notice of such meeting. Section 6.5. AUDITS. The accounts, books and records of the Corporation shall be audited upon the conclusion of each fiscal year by an independent certified public accountant selected by the Board of Directors, and it shall be the duty of the Board of Directors to cause such audit to be made annually. Section 6.6. RESIGNATIONS. Any director or any officer, whether elected or appointed, may resign at any time by serving written notice of such resignation on the Chairman of the Board, the President or the Secretary, and such resignation shall be deemed to be effective as of the close of business on the date said notice is received by the Chairman of the Board, the President or the Secretary. No action shall be required of the Board of Directors or the stockholders to make any such resignation effective. Section 6.7. INDEMNIFICATION AND INSURANCE. (A) Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether -12- civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the GCL as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including, without limitation, attorneys, fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (B) of this Bylaw with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. (B) If a claim under paragraph (A) of this Bylaw is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the GCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the GCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or -13- stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (C) Following any "change in control" of the Corporation of the type required to be reported under Item 1 of Form 8-K promulgated under the Exchange Act, any determination as to entitlement to indemnification shall be made by independent legal counsel selected by the claimant, which such independent legal counsel shall be retained by the Board of Directors on behalf of the Corporation. (D) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Bylaw shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Restated Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. (E) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the GCL. (F) The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any agent of the Corporation to the fullest extent of the provisions of this Bylaw with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation. (G) The right to indemnification conferred in this Bylaw shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition; provided, however, that if the GCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Bylaw or otherwise. -14- SECTION 6.8 RECORD DATES. (A) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholder shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. (B) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders of any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. ARTICLE VII AMENDMENTS SECTION 7.1. AMENDMENTS. These Bylaws may be amended, added to, rescinded or repealed at any meeting of the Board of Directors or of the stockholders, provided that notice of the proposed change was given (a) in the case of a meeting of the stockholders, in the notice of the meeting delivered pursuant to Section 2.4 of these Bylaws and, (b) in the case of a meeting of the Board of Directors, in a notice given no less than two days prior to the meeting; provided, however, that, in the case of amendments by stockholders, notwithstanding any other provisions of these Bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the Voting Stock required by law, the Restated Certificate of Incorporation, -15- any Preferred Stock Designation or these Bylaws, the affirmative vote of the holders of at least 80 percent of the then outstanding Voting Stock, voting together as a single class, shall be required to alter, amend or repeal any provision of these Bylaws. -16- AMENDED AND RESTATED SECTION 3.9 OF THE BYLAWS OF GENERAL GROWTH PROPERTIES, INC. (AS OF FEBRUARY 5, 2003) SECTION 3.9. COMMITTEES. The Board of Directors may, by resolution or resolutions passed by a majority of the Whole Board, designate one or more committees, each committee to consist of two (or such other minimum number, if any, mandated by law and the applicable listing requirements of the New York Stock Exchange) or more directors of the Corporation, including the following committees: (a) An Executive Committee, which shall have such authority as shall be delegated by the Board of Directors and shall advise the Board of Directors from time to time with respect to such matters as the Board of Directors shall direct; and (b) An Audit Committee, a Compensation Committee and a Nominating & Governance Committee, each of which committees shall: (i) consist of Independent Directors (as defined below), to the extent required by law and the listing requirements of the New York Stock Exchange, as in effect from time to time, and (ii) have such authority (A) as shall be set forth in the charter for such committee (as approved by the Board of Directors), which authority shall at all times be not less than that mandated by law and the applicable listing requirements of the New York Stock Exchange, and (B) as shall otherwise be delegated by the Board of Directors. For purposes of this Section 3.9, "Independent Directors" shall mean directors who (i) satisfy the definition of "independent director" set forth in the applicable listing requirements of the New York Stock Exchange and (ii) in the case of the Audit Committee, satisfy the independence requirements for Audit Committee membership mandated by law and such listing requirements. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee, provided that any such alternate member must satisfy any applicable membership eligibility requirements of the relevant committee mandated by law, the applicable listing requirements of the New York Stock Exchange and the charter, if any, of such committee. Any such committee, to the extent provided in the resolution establishing such committee and not inconsistent with the GCL, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation. Unless the Board of Directors shall provide otherwise, the presence of a whole number of directors equal to a majority of the total membership of any committee of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of such committee and the act of a majority of those present at a meeting at which a quorum is present shall be necessary and sufficient for the taking of any action thereat. AMENDMENT TO ARTICLE IV SECTION 4.1 OF BY-LAWS OF GENERAL GROWTH PROPERTIES, INC. RESOLVED, that the first sentence of Article IV, Section 4.1 of the Corporation's By-laws be, and it hereby is amended to read as follows: 'Section 4.1. Elected Officers. The elected officers of the Corporation shall be a Chairman of the Board, a President, one or more Executive Vice Presidents (regardless of designation), one or more Senior Vice Presidents (regardless of designation), one or more Vice Presidents (regardless of designation), a Secretary, a Treasurer and such other officers as the Board of Directors may deem proper from time to time.' EX-4.1 4 c02442exv4w1.txt FORM OF COMMON STOCK CERTIFICATE EX-4.1 FORM OF COMMON STOCK CERTIFICATE Exhibit 4.1 NUMBER M [____] COMMON STOCK PAR VALUE $.01 [PICTURE] COMMON STOCK [SPACE] THIS CERTIFICATE IS TRANSFERABLE IN JERSEY CITY, NJ CUSIP 370021 10 7 OR NEW YORK, NY SEE REVERSE FOR CERTAIN DEFINITIONS GENERAL GROWTH PROPERTIES, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE THIS CERTIFIES THAT ____________________________________________________________ ______________________________________________________________________[SPECIMEN] IS THE OWNER OF __________ FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF General Growth Properties, Inc. transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar. Witness the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. [SEAL] PAR VALUE CHANGED TO $.01 Dated: -------------------------------- COUNTERSIGNED AND REGISTERED: MELLON INVESTOR SERVICES LLC TRANSFER AGENT AND REGISTRAR /s/ MARSHALL E. EISENBERG /s/ JOHN BUCKSBAUM - ------------------------------------ ------------------------------------ SECRETARY CHIEF EXECUTIVE OFFICER AUTHORIZED SIGNATURE [BANKNOTE CORPORATION OF AMERICA] GENERAL GROWTH PROPERTIES, INC. The shares of Equity Stock represented by this certificate are subject to restrictions on transfer for the purpose of the Corporation's maintenance of its status as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the "Code"). No Person may (1) Beneficially Own or Constructively Own shares of Equity Stock in excess of 7.5% (or such other percentage as may be determined by the Board of Directors of the Corporation) of the value of the outstanding Equity Stock of the Corporation unless such Person is an Existing Holder (in which case the Existing Holder Limit shall be applicable); or (2) Beneficially Own Equity Stock which would result in the Corporation being "closely held" under Section 856(h) of the Code. Any Person who attempts to Beneficially Own or Constructively Own shares of Equity Stock in excess of the above limitations must immediately notify the Corporation in writing. If the restrictions above are violated, the shares of Equity Stock represented hereby will be transferred automatically and by operation of law to a Trust and shall be designated Shares-in-Trust. All capitalized terms in this legend have the meanings defined in the Corporation's Restated Certificate of Incorporation, as the same may be further amended from time to time, a copy of which, including the restrictions on transfer, will be sent without charge to each stockholder who so requests. This certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between General Growth Properties, Inc. and Mellon Investor Services LLC, as successor to Norwest Bank Minnesota, N.A., as Rights Agent, dated as of November 18, 1998 (as amended, the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of General Growth Properties, Inc. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. General Growth Properties, Inc. will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, Rights that are or were acquired or beneficially owned by Acquiring Persons (as defined in the Rights Agreement) may become null and void. The Corporation will furnish to any stockholder upon request and without charge a statement of the designations, preferences, limitations and relative rights of the shares of each class or series authorized to be issued, so far as they have been determined, and the authority of the Board of Directors to determine the relative rights and preferences of subsequent classes or series. Such requests may be made to the Secretary of the Corporation. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT -- _____________ Custodian ___________ (Cust) (Minor) under Uniform Gifts to Minors TEN ENT -- as tenants by the entireties Act __________________ (State) JT TEN -- as joint tenants with right of survivorship and not as tenants in common

Additional abbreviations may also be used though not in the above list. For value received, __________ hereby sell, assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE [______________________________________________________________________________] - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- shares of common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint ___________________________________ Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated: ------------------------------ SIGNATURE GUARANTEED: - ------------------------------------- NOTICE: THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM) PURSUANT TO S.E.C. RULE 17Ad-15. Signature: -------------------------- Signature: -------------------------- NOTICE: The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement, or any change whatever. EX-4.2 5 c02442exv4w2.txt RIGHTS AGREEMENT Exhibit 4.2 RIGHTS AGREEMENT THIS RIGHTS AGREEMENT is made and entered into this 27th day of July, 1993, among GENERAL GROWTH PROPERTIES, INC., a Delaware limited partnership (the "REIT"), and the persons whose names are set forth under the caption "Limited Partners" on the signature pages hereto (collectively, the "Limited Partners"). WITNESSETH WHEREAS, the REIT, as general partner, and the Limited Partners, as limited partners, have heretofore formed a Delaware limited partnership known as GGP Limited Partnership (the "Partnership") pursuant to that certain Agreement of Limited Partnership dated April 6, 1993 (the "Original Partnership Agreement"); WHEREAS, the common stock of the REIT, $.10 par value (the "Common Stock"), is publicly traded on the New York Stock Exchange; WHEREAS, pursuant to the Original Partnership Agreement, the REIT granted to the Limited Partners certain rights to convert a portion of their partnership interests in the Partnership into shares of Common Stock and to sell all or a portion of the remainder of their partnership interests to the REIT for cash or Common Stock, at the option of the REIT; WHEREAS, concurrently herewith, the parties hereto, being all of the current partners of the Partnership, are entering WHEREAS, the parties hereto desire to set forth herein the terms and conditions upon which the Limited Partners can convert and/or sell their partnership interests in the Partnership into Common Stock and/or cash in lieu of setting forth such provisions in the Partnership Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows: 1. DEFINITIONS. For purposes of this Agreement, the following terms and phrases shall have the meanings set forth below: "AFFILIATE" shall have the meaning set forth in the Partnership Agreement. "ANNUAL LIMITATION" shall have the meaning set forth in. Section 6 hereof. "BENEFICIALLY OWN" shall mean the ownership of shares of Common Stock by a Person who would be treated as an owner of such shares of Common Stock either directly or constructively through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. "CHARTER" shall mean the Certificate of Incorporation of the REIT as filed with the Delaware Secretary of State, as the same may be amended from time to time. 2 "COMMON STOCK" shall have the meaning set forth in the preliminary statement hereof. "COMPUTATION DATE" shall have the meaning set forth in Section 7 hereof. "CONVERSION COMPONENT EXERCISE NOTICE" shall have the meaning set forth in Section 3(a) hereof. "CONVERSION FACTOR" shall, subject to adjustment as provided in Section 15 hereof, mean 1.0. "CONVERSION RIGHTS" shall have the meaning set forth in Section 3(a) hereof. "CODE" shall mean the Internal Revenue Code of 1986, as amended. "CURRENT PER SHARE MARKET PRICE" shall have the meaning set forth in the Partnership Agreement. "ELECTION NOTICE" shall mean the written notice to be given by the REIT to the Exercising Partners in response to the receipt by the REIT of a Sale Component Exercise Notice from such Exercising Partners, the form of which Election Notice is attached hereto as Schedule B. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "EXERCISE NOTICE" shall mean a Conversion Component Exercise Notice or a Sale Component Exercise Notice. "EXERCISING PARTNERS" shall have the meaning set forth in Section 3 hereof. 3 "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. 'LIENS" shall have the meaning set forth in the Partnership Agreement. "LIMITED PARTNERSHIP REPRESENTATIVES" shall have the meaning set forth in the Partnership Agreement. "MAJORITY-IN-INTEREST OF THE LIMITED PARTNERS" shall mean Limited Partner(s) who hold in the aggregate more than fifty-percent (50%) of the Percentage Interests then allocable to and held by the Limited Partners. "OFFERED UNITS" shall mean the Units of the Exercising Partners identified in a Conversion Component Exercise Notice or a Sale Component Exercise Notice which, pursuant to the exercise of Conversion Rights or Sale Rights, can be acquired by the REIT under the terms hereof. "OWNERSHIP LIMIT" shall have the meaning set forth in Section 5 hereof. "PERCENTAGE INTERESTS" shall have the meaning set forth in the Partnership Agreement. "PERSON" shall mean any natural person, corporation, partnership, trust or other entity. "PROPERTY PARTNERSHIPS" shall have the meaning set forth in the Partnership Agreement. "PURCHASE PRICE" shall have the meaning set forth in Section 7 hereof. 4 "REIT SHARES" shall mean shares of the Common Stock. "RIGHTS" shall have the meaning set forth in Section 2 hereof. "SALE COMPONENT EXERCISE NOTICE" shall have the meaning set forth in Section 3(b) hereof. "SALE RIGHTS" shall have the meaning set forth in Section 3(b) hereof. "SEC" shall mean the Securities and Exchange Commission. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any successor statute. "STOCK INCENTIVE PLAN" shall have the meaning set forth, in the Partnership Agreement. "TRANSACTION EXPENSES" shall have the meaning set forth in Section 9 hereof. "UNITS" shall mean, with respect to any Limited Partner, the units in the Partnership owned by such Limited Partner. 2. GRANT OF RIGHTS. Upon the terms and subject to the conditions contained herein, the REIT hereby grants to the Limited Partners (and their successors and assigns) the right to convert all or a portion of their Units (including fractional Units) into REIT Shares and, once the Conversion Rights have, been exercised to the fullest extent permissible hereunder, to sell all or a portion of the remainder of their Units (including fractional Units) to the REIT (collectively the "Rights"). 5 3. DELIVERY OF EXERCISE NOTICES. Any one or more Limited Partners ("Exercising Partners") may, subject to the limitations set forth herein: (a) deliver to the REIT written notice (the "Conversion Component Exercise Notice") pursuant to which such Exercising Partners elect to exercise their Rights to convert (the "Conversion Rights"), subject to the limitations contained in Sections 4 and 5 hereof, all or any portion of their Units (including fractional units) into the number of REIT Shares equal to the product of (i) the number of Units as to which the Conversion Rights are being exercised and (ii) the Conversion Factor; and (b) deliver to the REIT written notice (the "Sale Component Exercise Notice") pursuant to which such Exercising Partners elect to exercise their Rights to sell (the "Sale Rights"), subject to the limitations contained in Sections 4 and 6 hereof, all or any portion of their Units (including fractional Units) to the REIT (or the REIT's designee). 4. LIMITATIONS ON DELIVERY OF EXERCISE NOTICES. The ability of Limited Partners to exercise Rights shall be restricted as follows: (a) Only one (1) Exercise Notice may be delivered to the REIT during any calendar year; provided, however, such Exercise Notice may be delivered by or on behalf of one or more Exercising Partners; (b) Exercise Notices may only be delivered on or after April 1 of any calendar year; and. (c) The first Sale Component Exercise Notice may not be delivered to the REIT prior to April 16, 1996; provided, however, notwithstanding the foregoing, the Sale Rights may not be exercised prior to the time that Conversion Rights have been exercised to the fullest extent permissible under Section 5 below. 5. LIMITATION ON EXERCISE OF CONVERSION RIGHTS. Conversion Rights may be exercised at any time and from time to time, subject 6 to the limitations contained in Section 4 above, to the extent that, upon exercise of the Conversion Rights, the number of REIT Shares Beneficially Owned by Limited Partners and/or their Affiliates, in the aggregate, including REIT Shares to be issued in connection with the exercise of such Conversion Rights, shall not exceed twenty-five percent (25%) of the aggregate number of REIT Shares issued and outstanding (the "Ownership Limit"). For purposes of computing the Ownership Limit as of any date, the Limited Partners and their Affiliates shall be deemed to own all REIT Shares issuable to the Limited Partners and their Affiliates upon the exercise of stock options granted on or before such date under the Stock Incentive Plan. If a Conversion Component Exercise Notice is delivered to the REIT but, as a result of the Ownership Limit or as a result of restrictions contained in the Charter, the Conversion Rights cannot be exercised in full, the Conversion Component Exercise Notice shall be deemed to be modified such that the Conversion Rights shall be exercised only to the extent permitted under the Ownership Limit or under the Charter, with the remainder of such Conversion Rights being deemed to be Sale Rights with the corresponding portion of the Conversion Component Exercise Notice being deemed to be a Sale Component Exercise Notice (or being deemed to have been withdrawn to the extent a Sale Component Exercise Notice may not yet have been deliverable pursuant to Section 4(c) above). 7 6. LIMITATION ON EXERCISE OF SALE RIGHTS. Sale Rights may be exercised at any time and from time to time, subject to the limitations contained in Section 4 hereof, and subject further to the limitation that, in any calendar year, Offered Units which may, in the aggregate, be the subject of a Sale Component Exercise Notice shall not exceed the number of Units equal to the quotient of (a) the number of Units held by all Limited Partners immediately after Conversion Rights have been exercised to the fullest extent permissible under Section 5 divided by (b) four (4) (the "Annual Limitation"). In the event Offered Units which are the subject of a Sale Component Exercise Notice would exceed the Annual Limitation, the Exercising Partners shall be deemed to have withdrawn their Sale Component Exercise Notice to the extent necessary such that the Annual Limitation is not exceeded. 7. COMPUTATION OF PURCHASE PRICE/FORM OF PAYMENT. The purchase price ("Purchase Price") payable by the REIT to each Exercising Partner with respect to the exercise of Sale Rights shall be equal to the product of (a) the number of Offered Units, (b) the Conversion Factor and (c) the Current Per Share Market Price as of the date that the Exercise Notice was delivered to the REIT (the "Computation Date"). The Purchase Price shall, in the sole and absolute discretion of the REIT, be paid in the form of (a) cash or cashier's or certified check or by wire transfer of immediately available funds to the Exercising Partners' designated account(s), (b) by the issuance by the REIT of a number of REIT 8 Shares equal to the product of the (i) number of Offered Units and (ii) the Conversion Factor or (c) any combination of cash and REIT Shares (such REIT Shares to be valued at the Current Per Share Market Price). 8. CLOSING; DELIVERY OF ELECTION NOTICE. The closing of the acquisition of Offered Units shall, unless otherwise mutually agreed, be held at the principal offices of the REIT, on the following date(s): (a) With respect to the exercise of Conversion Rights, the closing shall occur on the date agreed to by the REIT and the Exercising Partners, which date shall in no event be later than the date which is the later of (i) ten (10) days after the date of the Conversion Component Exercise Notice and (ii) the expiration or termination of the waiting period applicable to each Exercising Partner, if any, under the HSR Act; and (b) With respect to the exercise of Sale Rights, the REIT shall, within thirty (30) days after receipt by the REIT of any Sale Component Exercise Notice delivered in accordance with the requirements hereof, deliver to the Exercising Partners an Election Notice, which Election Notice shall set forth the computation of the Purchase Price and shall specify the form of the Purchase Price (which shall be in accordance with Section 7 hereof) to be paid by the REIT to such Exercising Partners and the date, time and location for completion of the purchase and sale of the Offered Units, which date shall, to the extent required, in no event be more than (i) ten (10) days after delivery by the REIT of the Election Notice for Offered Units with respect to which the REIT has elected to pay the Purchase Price by issuance of shares of its Common Stock or (ii) sixty (60) days after the initial date of receipt by the REIT of the Sale Component Exercise Notice for Offered Units with respect to which the REIT has elected to pay the Purchase Price in cash; provided, however, that such sixty (60) day period may be extended for an additional period to the extent required for the REIT to cause additional REIT Shares to be issued to provide financing to be used to acquire the Offered Units. Notwithstanding the foregoing, the REIT agrees to use its best efforts to cause the closing of the acquisition of Offered Units hereunder to occur as quickly as possible. 9 9. ADJUSTMENT TO PURCHASE PRICE. If, with respect to the exercise of Sale Rights, the REIT elects to pay all or any portion of the Purchase Price in cash and if as a result thereof the REIT elects to raise such cash through a public offering of its securities, borrowings or otherwise, the aggregate Purchase Price computed under Section 7 above for a given calendar year shall be reduced by an amount ("Transaction Expenses") equal to the expenses incurred by the REIT in connection with such raising of funds allocable to the amounts required to pay the Purchase Price hereunder; provided, however, notwithstanding the foregoing, the Purchase Price shall not be reduced hereunder by an amount exceeding 5% of the Purchase Price computed without regard to the adjustment for Transaction Expenses. 10. CLOSING DELIVERIES. At the closing of the acquisition of Offered Units, payment of the Purchase Price or delivery of REIT Shares shall be accompanied by proper instruments of transfer and assignment and by the delivery of (i) representations and warranties of (A) the Exercising Partners with respect to their due authority to sell all of the right, title and interest in and to such Offered Units to the REIT and with respect to the status of the Offered Units being sold, free and clear of all Liens, and (B) the REIT with respect to due authority for the purchase of such Offered Units, and (ii) to the extent that any REIT Shares are issued in connection therewith, (A) an opinion of counsel for the REIT, reasonably satisfactory to the Exercising Partners, to the 10 effect that such REIT Shares have been duly authorized, are validly issued, fully-paid and non-assessable, and (B) a stock certificate or certificates evidencing the REIT Shares to be issued and registered in the name of the Exercising Partner or its designee. 11. TERM OF RIGHTS. The rights of the parties hereunder commenced on April 16, 1993 and shall lapse for all purposes and in all respects on April 16, 2023; provided, however, that the parties hereto shall continue to be bound by an Exercise Notice delivered to the REIT prior to such date. 12. ADDITIONAL COVENANTS OF THE REIT. To facilitate the REIT's ability to fully perform its obligations hereunder, the REIT covenants and agrees as follows: (a) At all times during the pendency of the Rights, the REIT shall reserve for issuance such number of REIT Shares as may be necessary to enable the REIT to issue REIT Shares upon the exercise of the Conversion Rights in regard to all Units of the Limited Partners which are from time to time outstanding. (b) As long as the REIT shall be obligated to file periodic reports under the Exchange Act, the REIT will timely file such reports in such manner as shall enable any recipient of Common Stock issued to Limited Partners hereunder in reliance upon an exemption from registration under the Securities Act to continue to be eligible to utilize Rule 144 promulgated by the SEC pursuant to the Securities Act, or any successor rule or regulation or statute thereunder, for the resale thereof. (c) During the pendency of the Rights, the Limited Partner Representatives shall receive in a timely manner all reports filed by the REIT with the SEC and all other communications transmitted from time to time by the REIT to its stockholders generally. (d) The REIT shall not issue or sell any REIT Shares or other equity securities or any instrument convertible into any 11 equity security for a consideration less than the fair value of such REIT Shares or other equity security, as determined in each case by the Board of Directors of the REIT, in consultation with the REIT's professional advisors. (e) Notwithstanding the REIT's determination as to the form in which the Purchase Price shall be payable, the REIT shall be required to pay the Purchase Price, or, in lieu of issuing REIT Shares upon the exercise of Conversion Rights, pay an amount equal to the product of (i) the number of REIT Shares to be issued and (ii) the Current Per Share Market Price as of the Computation Date, by cashier's check or wire transfer of immediately available funds to the extent that issuance of REIT Shares would disqualify the REIT from being characterized as a REIT. 13. ADDITIONAL COVENANTS OF LIMITED PARTNERS. Each Limited Partner covenants and agrees with the REIT that all Offered Units tendered to the REIT in accordance with the exercise of Rights herein provided shall be delivered to the REIT free and clear of all Liens and should any Liens exist or arise with respect to such Offered Units, the REIT shall be under no obligation to acquire the same unless, in connection, with such acquisition, the REIT has elected to pay such portion of the Purchase Price in the form of cash consideration in circumstances where such consideration will be sufficient to cause such existing Lien to be discharged in full upon application of all or a part of such consideration and the REIT is expressly authorized to apply such portion of the Purchase Price as may be necessary to satisfy any indebtedness in full and to discharge such Lien in full. Each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Offered Units to the 12 REIT (or its designee), such Limited Partner shall assume and pay such transfer tax. 14. ARBITRATION. Notwithstanding anything to the contrary contained in this Agreement, all claims, disputes and controversies between any of the parties hereto arising out of or in connection with this Agreement shall be resolved by binding arbitration in New York, New York, in accordance with the procedures set forth in Article XII of the Partnership Agreement and, to the extent not inconsistent herewith and therewith, the Expedited Procedures and Commercial Arbitration Rules of the American Arbitration Association. Any decision rendered by the arbitration panel pursuant to this Section 14 shall be final and binding on the parties hereto, and judgment thereon may be entered by any state or federal court of competent jurisdiction. Arbitration shall be the exclusive method available for resolution of claims, disputes and controversies described in this Section 14, and the parties hereto stipulate that the provisions hereof shall be a complete defense to any suit, action, or proceeding in any court or before any administrative or arbitration tribunal with respect to any such claim, controversy or dispute. 15. ADJUSTMENT TO CONVERSION FACTOR. The Conversion Factor shall be subject to adjustment from time to time effective upon the occurrence of the following events and shall be expressed as a percentage, calculated to the nearest one-thousandth of one percent (.001%): (a) In case the REIT shall pay or make a dividend or other distribution on any class of shares of beneficial 13 interest of the General Partner in REIT Shares, the Conversion Factor in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be increased by multiplying the Conversion Factor by a fraction (i) the denominator of which shall be the number of REIT Shares outstanding at the close of business on the date fixed for such determination and (ii) the numerator of which shall be the sum of such number of REIT Shares specified in clause (i) plus the total number of REIT Shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. (b) In case outstanding REIT Shares shall be subdivided into a greater number of REIT Shares, the Conversion Factor in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall, be proportionately increased, and, conversely, in case outstanding REIT Shares shall be combined into a smaller number of REIT Shares, the Conversion Factor in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (c) In the event that the REIT issues or distributes evidences of indebtedness, equity securities or other property to existing equity holders or others or any rights, options or warrants to acquire such evidences of indebtedness or equity securities (other than an issuance or distribution described in subsection (a) of this Section 15, an issuance of indebtedness or equity securities all of the proceeds of which are, or are deemed to be, contributed or loaned to the Partnership (other than a pro rata portion thereof contributed to the Property Partnerships in respect of the REIT's interest therein), an issuance of REIT Shares pursuant to the Stock Incentive Plan or a distribution paid entirely in cash), the Conversion Factor shall be adjusted and/or the securities to which the Limited Partners are entitled hereunder shall be adjusted, to the extent necessary, to avoid any dilution or material adverse change in the rights of the Limited Partners under this Agreeement. 16. CONSOLIDATION, MERGER OR SALE OF ASSETS. The REIT shall not effect any merger, consolidation, reorganization, share 14 exchange, recapitalization or the like unless fair and equitable arrangements are provided, to the extent necessary, to fully adjust, and to avoid any dilution in, the rights of the Limited Partners under this Agreement. 17. NOTICES. All notices, offers or other communications required or permitted to be given pursuant to this Agreement shall be in writing and may be personally served, telecopied or sent by United States mail and shall be deemed to have been given when delivered in person, upon receipt of telecopy or three business days after deposit in United States mail, registered or certified, postage prepaid, and properly addressed, by or to the appropriate party. For purposes of this Section 17, the addresses of the parties hereto shall be as set forth in the Partnership Agreement. The address of any party hereto may be changed by a notice in writing given in accordance with the provisions hereof. 18. ASSIGNMENT. No party hereto may assign this Agreement or its rights hereunder; provided, however, that the rights of any Limited Partner hereunder shall automatically devolve upon any Person to the extent that such Person succeeds to the rights of such Limited Partner to Units in accordance with the Partnership Agreement. 19. SUCCESSORS. This Agreement and all the terms and provisions hereof shall be binding upon and shall inure to the benefit of all parties hereto, and their legal representatives, 15 heirs, successors and permitted assigns, except as expressly herein otherwise provided. 20. EFFECT AND INTERPRETATION. This Agreement shall be governed by and construed in conformity with the laws of the State of Delaware. 21. COUNTERPARTS. This Agreement may be executed in counter parts, each of which shall be an original, but all of which shall constitute one and the same instrument. 22. ENTIRE UNDERSTANDING; ETC. This Agreement constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any prior understandings and/or written or oral agreements among them with respect thereto, including, but not limited to, the Original Partnership Agreement. 23. AMENDMENTS. This Agreement may not be amended, and no provision benefiting the REIT may be waived, except by a written instrument signed by the REIT (and approved on behalf of the REIT by at least a majority of its directors who are not Affiliates of any of the Limited Partners) and a Majority-In-Interest of the Limited Partners. 24. SEVERABILITY. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid by a court of competent jurisdiction, the remainder of this Agreement, or the application of such provision to persons 16 or circumstances other than those to which it is held invalid by such court, shall not be affected thereby. 25. TRUST PROVISION. This Agreement, to the extent executed by the trustee of a trust, is executed by such trustee solely as trustee and not in a separate capacity. Nothing herein contained shall create any liability on, or require the performance of any covenant by, any such trustee individually, nor shall anything contained herein subject the individual personal property of any trustee to any liability. 26. PRONOUNS AND HEADINGS. As used herein, all pronouns shall include the masculine, feminine and neuter, and all defined terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings, titles and subtitles herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to "including" shall be deemed to mean "including without limitation". 27. FURTHER ASSURANCES. Each of the parties hereto 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. 17 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written. REIT: GENERAL GROWTH PROPERTIES, INC., a Delaware corporation By: /s/ Martin Bucksbaum --------------------------------- Its: -------------------------------- LIMITED PARTNERS: APPLETON TRUST By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES FALLBROOK TRUST By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MARTIN INVESTMENT TRUST A By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES 18 MARTIN INVESTMENT TRUST B By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MARTIN INVESTMENT TRUST C By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MARTIN INVESTMENT TRUST D By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES By: MARTIN INVESTMENT TRUST E By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MARTIN INVESTMENT TRUST F By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MATTHEW INVESTMENT TRUST A By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES 19 MATTHEW INVESTMENT TRUST B By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MATTHEW INVESTMENT TRUST C By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MATTHEW INVESTMENT TRUST D By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MATTHEW INVESTMENT TRUST E By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MATTHEW INVESTMENT TRUST F By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MBA TRUST By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES 20 MBB TRUST By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MBC TRUST By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES FALLBROOK INVESTORS, a California general partnership By: MATTHEW FAMILY TRUST A, a partner By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES M.B. CAPITAL PARTNERS, a South Dakota general partnership By: MBA TRUST, a partner By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES MB CAPITAL PARTNERS, II, a South Dakota general partnership By: MBA TRUST, a partner By: GENERAL TRUST COMPANY, Trustee By: /s/ General Trust Company --------------------------------- Its: VICE PRES 21 STANLEY RICHARDS REVOCABLE TRUST By: /s/ Stanley Richards --------------------------------- Stanley Richards, Trustee 22 SCHEDULE A EXERCISE NOTICE To: General Growth Properties, Inc. Reference is made to that certain Rights Agreement dated __________, 1993 (the "Rights Agreement"), pursuant to which General Growth Properties, Inc., a Delaware corporation (the "REIT"), granted certain rights to the undersigned to convert or sell to the REIT all or a portion of their partnership units (the "Units") of GGP Limited Partnership (the "Partnership"). Capitalized terms used but not defined herein shall have the meanings set forth in the Rights Agreement. Pursuant to Sections 2 and 3 of the Rights Agreement, each of the undersigned, being a limited partner of the Partnership (an "Exercising Partner"), hereby elects to exercise its Conversion Rights and/or Sale Rights as to the number of Units set forth below: Dated: --------------------
Type of Rights Being Exercised (Conversion Rights Exercising Partner or Sale Rights) Number of Units - ------------------ -------------------- ---------------
Exercising Partners: _____________________________________ _____________________________________ SCHEDULE B ELECTION NOTICE To: Exercising Partners Reference is made to that certain Rights Agreement dated _________, 1993 (the "Rights Agreement"), pursuant to which the undersigned granted certain rights to the other parties thereto, including the Exercising Partners, to convert and/or sell their partnership units (the "Units") in GGP Limited Partnership (the "Partnership"). All capitalized terms used but not defined herein shall have the meanings set forth in the Rights Agreement. Pursuant to subsection (b) of Section 8 of the Rights Agreement, the undersigned hereby notifies the Exercising Partners that (a) the Purchase Price for the Offered Units as to which the Sale Rights are being or are deemed to be exercised is $_________________, the computation of which is set forth on an attachment hereto; (b) $__________________ of the Purchase Price is payable in cash and the balance thereof is payable by issuance of _________________________________ shares of Common Stock; and (c) the closing of the purchase and sale of the Offered Units as to which the Sale Rights are being or are deemed to be exercised shall take place at the offices of__________________________ at ______________ a.m., local time, on ______________________. Dated: -------------------- GENERAL GROWTH PROPERTIES, INC., a Delaware corporation By: ------------------------------------ Its: ----------------------------------- EX-4.4 6 c02442exv4w4.txt REDEMPTION RIGHTS AGREEMENT EXHIBIT 4.4 REDEMPTION RIGHTS AGREEMENT Redemption Rights Agreement, dated July 13, 1995, among GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), General Growth Properties, Inc., a Delaware corporation (the "General Partner"), and the persons whose names are set forth under the caption "Contributing Partners" on the signature pages hereto (collectively, "Contributing Partners"). RECITALS WHEREAS, concurrently herewith, Contributing Partners are being admitted as limited partners of the Partnership, the general partner of which is the General Partner; WHEREAS, shares of the common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange; and WHEREAS, the parties desire to set forth herein the terms and conditions upon which the Contributing Partners can cause the Partnership to redeem their limited partnership units in the Partnership. NOW, THEREFORE, the parties hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: "Acts" shall mean the Securities Act and the Exchange Act, collectively. "Bucksbaum Limited Partners" shall have the meaning set forth in the Partnership Agreement. "Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois. "Cash Purchase Price" shall mean, with respect to any redeemed or purchased Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares) that would be payable with respect to such Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price of such Units. "Closing Price" shall have the meaning set forth in the Partnership Agreement. "Common Stock" shall have the meaning set forth in the recitals. "Computation Date" shall mean the date on which the applicable Exercise Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. "Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a). "Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time. "Contribution Agreement" shall mean that certain Contribution Agreement dated June 7, 1995, among the Partnership and Contributing Partners, pursuant to which this Agreement is being executed. "Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act. "Expiration Date" shall mean the earlier of (a) the 30th anniversary of the date hereof and (b) the date upon which all Units have been redeemed or purchased in accordance with the terms hereof. Notwithstanding the foregoing, Contributing Partners shall continue to have the right to have their Units redeemed or purchased and the General Partner shall have the obligation to register Shares (if the Contributing Partners then hold Units and the General Partner then is an Exchange Act Reporting Company) in accordance with this Agreement during any period of time that any other present or future holder of limited partnership units in the Partnership has any right to convert its units into Shares or require the Partnership to redeem them in exchange for cash or Shares and the Partnership shall give Contributing Partners no less than 30 days' written 2 notice of the expiration or termination of the rights of such other present or future holders. "Liens" shall have the meaning set forth in the Contribution Agreement. "Major Transaction Event" shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6(a)); (b) a merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner's assets. "Notice" shall have the meaning set forth in Section 3.1. "Partnership Agreement" shall mean that certain Amended and Restated Agreement of Limited Partnership of the Partnership, dated July 27, 1993, as amended by that certain First Amendment thereto dated the date hereof and as the same may be further amended from time to time. "Person" shall mean any natural person, corporation, partnership, limited liability company, trust or other entity. "Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof. "Redemption Rights" shall have the meaning set forth in Section 2. "REIT Requirements" shall have the meaning set forth in the Partnership Agreement. "Registration Expenses" shall mean all expenses incident to the General Partner's performance of or compliance with the registration requirements set forth in this Agreement, including without limitation (a) the fees, disbursements and expenses of the General Partner's counsel and accountants in connection with the registration of Shares issuable upon the exercise of the Redemption Rights; (b) all expenses in connection with the preparation, printing and filing of the registration statement or statements, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements 3 thereto; (c) the cost of printing or producing any blue sky or legal investment memoranda or other documents in connection with the offering, sale or delivery of such Shares; (d) all expenses in connection with the qualification of such Shares under state securities laws; and (e) the fees and expenses incurred in connection with the listing of such Shares on each securities exchange on which securities of the same class are then listed. Notwithstanding the foregoing, Registration Expenses shall not include any costs incurred by the Partnership or the General Partner in preparing any document that is incorporated by reference in a registration statement or any professional fee or other expenses that would have been incurred apart from the obligation of the General Partner hereunder to file a Registration Statement. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. "Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights, a number of Shares equal to the product of (a) the number of Units being redeemed or purchased multiplied by (b) the Conversion Factor. "Shares" shall mean shares of the Common Stock. "Units" shall mean the limited partnership units in the Partnership issued to Contributing Partners pursuant to the Contribution Agreement. 2. Grant of Redemption Rights. (a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to each Contributing Partner, and each Contributing Partner does hereby accept, the right, but without obligation to such Contributing Partner, to require the Partnership to redeem from time to time part or all of its Units for the Cash Purchase Price ("Redemption Rights"). (b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume the obligation of the Partnership with respect to and satisfy a Contributing Partner's exercise of a Redemption Right by paying to the exercising Contributing Partner, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share 4 Purchase Price. If the General Partner assumes such obligations with respect to an exercise of a Redemption Right and makes the required payment, then the Partnership shall have no obligation to pay any amount to the Contributing Partner with respect to such Contributing Partner's exercise of a Redemption Right, and any Units purchased shall be owned by the General Partner for all purposes. (c) If the General Partner shall assume the obligations of the Partnership with respect to and satisfy a Redemption Right, the Partnership, the exercising Contributing Partner and the General Partner each shall treat the transaction between the General Partner and such Contributing Partner as a sale of such Contributing Partner's Units (or a portion thereof) to the General Partner for federal income tax purposes. (d) Upon the redemption or purchase of part or all of a Contributing Partner's Units and the payment of the Purchase Price with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Units. (e) No fractional Shares shall be issued hereunder; in lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price on the relevant Computation Date. 3. Exercise of Redemption Rights. 3.1 Time for Exercise of Redemption Rights. A Contributing Partner may exercise its Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof but prior to the Expiration Date; provided, however, that the Redemption Rights may not be exercised at any one time with respect to less than 1,000 Units (or all the Units then owned by the exercising Contributing Partner if such Contributing Partner owns less than 1,000 Units). Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Units specified therein in accordance with the terms hereof. 3.2 Method of Exercise. The Redemption Rights shall be exercised by written notice (the "Notice") to the Partnership (a) specifying the identity of the exercising Contributing Partner, the number of Units to be redeemed, the name or names 5 (with address) in which any Shares issuable upon such exercise shall be registered if different than the exercising Contributing Partner and that the representations and warranties set forth on Schedule A are true and correct and (b) accompanied by an instrument, duly executed by the exercising Contributing Partner and in form reasonably satisfactory to the Partnership, transferring such Units to the Partnership free and clear of all Liens. 3.3 Closing. The closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights shall occur within 30 days following the receipt of the Notice and the instrument of transfer referred to in Section 3.2. 3.4 Payment of Cash or Issuance of Shares. At the closing of the redemption or purchase and sale of Units pursuant to the exercise of Redemption Rights, the Partnership shall deliver to the exercising Contributing Partner the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights, the General Partner shall deliver to the Partnership, at the election of the General Partner (which may be exercised in the General Partner's sole discretion), either (a) the Cash Purchase Price or (b) a certificate representing the Shares constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e). 4. Matters Relating to Shares. 4.1 Registration. (a) The General Partner shall (i) prepare, file and use reasonable best efforts to cause to become effective on or before the first anniversary of the date hereof a registration statement, which may be on Form S-3, under the Securities Act relating to the Shares to be issued upon exercise of the Redemption Rights assuming full satisfaction of the Redemption Rights by delivery of Shares (and, in the sole discretion of the General Partner, any other Shares) and (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act. The General Partner may, but shall not be obligated to, include any such Shares under its current registration statement on Form S-3. 6 (b) The General Partner shall pay all Registration Expenses incurred prior to the sixth anniversary of the date hereof with respect to filing and keeping effective the registration statement through such date, and the Contributing Partners who are then Unitholders, severally in proportion to the number of Units owned by them in relation to the total number of shares covered by the registration statement, shall reimburse the General Partner for Registration Expenses which are incurred after the sixth anniversary of the date hereof in respect of maintaining effective such registration statement; provided, however, that such Contributing Partners shall not be required to reimburse any costs (i) of preparing any documents filed with the SEC that are incorporated by reference in the Registration Statement or (ii) that become necessary because the General Partner is unable to use Form S-3 (or any equivalent short form that relies on incorporation by reference) for the reason that the General Partner has failed to comply on a timely basis with any requirement of the Acts or Form S-3. (c) If under the Acts or then current SEC policy, the registration of Shares delivered pursuant hereto will not permit the public resale thereof without further registration of such Shares for resale by the Contributing Partners, the General Partner may deregister the Shares previously registered for issuance to Contributing Partners pursuant to Section 4.1(a) and shall register such Shares for resale, which may be accomplished by means of a shelf registration, and Contributing Partners and the General Partner will enter into customary agreements with respect thereto which contain provisions similar to those contained in Section 4.1(a) and (b) (except that after the sixth anniversary of the date hereof, the Contributing Partners whose Shares are being registered for resale shall pay, severally in proportion to the number of their Shares registered in relation to the total number of shares covered by the registration statement, the Registration Expenses) and other customary provisions, including customary indemnification agreements. (d) Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep such registration statement effective after the Expiration Date or if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated. (e) If the General Partner does not use reasonable best efforts, or despite using its reasonable best efforts is unable, to cause such registration statement to become effective on or before the second anniversary of the date hereof or the General 7 Partner thereafter does not maintain such registration statement in accordance with the terms hereof (unless the Contributing Partners have defaulted hereunder), the General Partner shall have no right to deliver the Share Purchase Price upon exercise of Redemption Rights during the time when such registration statement is not so effective and in that event the Partnership or the General Partner must deliver the Cash Purchase Price for Units as to which Redemption Rights have been exercised. 4.2 Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to time outstanding (assuming no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights). 4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights upon issue shall be duly and validly issued and fully paid and non-assessable. 5. Transfer and Other Taxes. In the event that any state or local property transfer or other tax is payable as the result of or in connection with any exercise of the Redemption Rights by an exercising Contributing Partner, the Partnership shall pay such transfer tax, but the exercising Contributing Partner shall pay such tax to the extent that such tax results from registration of Shares in the name of a person other than the registered owner of the Units and no Shares shall be issued pursuant hereto until such exercising Contributing Partner has paid to the General Partner the amount of such tax or has provided evidence, in form reasonably satisfactory to the General Partner, as to the payment thereof. 6. Anti-Dilution and Adjustment Provisions. (a) If the General Partner or the Partnership increases or decreases the number of its issued and outstanding Shares or limited partnership units, as the case may be, by means of (i) the payment of a stock dividend or the making of any other distribution on the Shares (or limited partnership units) payable in its Common Stock (or limited partnership units), (ii) a subdivision of Shares or limited partnership units or (iii) a 8 consolidation or combination of Shares or limited partnership units, the Conversion Factor shall be adjusted so as to result in the Redemption Rights not being diluted or expanded thereby. (b) If at any time the General Partner grants to its stockholders any right to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that Contributing Partners would have been entitled to subscribe for if, immediately prior to such grant, Contributing Partners had exercised their Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any readjustment under any other subsection of this Section 6, then the General Partner also shall grant to Contributing Partners the same subscription rights that Contributing Partners would be entitled to if Contributing Partners had exercised their Redemption Rights in full and received the Share Purchase Price in satisfaction thereof prior to such grant. (c) Upon the occurrence of a Major Transaction Event where all or a portion of the consideration received by stockholders of the General Partner in connection with such Major Transaction Event is in the form of securities in a successor entity, the General Partner shall cause effective provision to be made so that, upon exercise of the Redemption Rights and payment of the Purchase Price by means of the Share Purchase Price, Contributing Partners shall have the right thereafter to acquire, in lieu of the Shares which would have been surrendered therefor, the kind and amount of shares of stock and other securities and property and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event. (d) In the event of any Major Transaction Event where no portion of the consideration received by stockholders of the General Partner in connection with such Major Transaction Event is in the form of securities in a successor entity, each Unitholder shall be entitled to exercise the Redemption Rights in full prior to the consummation of such Major Transaction Event, and, with respect to any Shares acquired upon exercise thereof, shall be entitled to all of the rights of the other holders of Shares with respect to any distribution by the General Partner (or the other party to such Major Transaction Event) in connection with such Major Transaction Event. If not 9 exercised within forty-five days after written notice from the General Partner of such Major Transaction Event (which shall be given promptly after such Major Transaction Event is announced to the public) or such shorter period between the date of such notice and the effective date of such Major Transaction Event, the Redemption Rights shall terminate at the expiration of such period, but the Redemption Rights shall be revived if such Major Transaction Event is not consummated. (e) The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. (f) Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner and mailed to the holders of the Redemption Rights within 30 days of the date of the adjustment. (g) Notwithstanding anything above to the contrary, the Contributing Partners will be entitled to adjustments to protect against dilution, and to protect against deferral of receipt of benefits, that are no less favorable than the adjustments and protection against deferral of receipt of benefits which are received by any other holder of limited partnership units in the Partnership. 7. Miscellaneous Provisions. 7.1 Notices. All notices or other communications given pursuant to this Agreement shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service or facsimile or delivered by hand with receipt acknowledged in writing. All notices (a) shall be deemed given when received and (b) may be given either by a party or by such party's attorneys. For purposes of this Section 7.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 215 Keo Way, Des Moines, Iowa 50309, Attention: Martin Bucksbaum, and, in the case of 10 Contributing Partners, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof. 7.2 Assignment. Contributing Partners may not assign this Agreement or their rights hereunder; provided, however, that the rights of Contributing Partners hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Units, and becomes a substituted partner with respect to such Units, in accordance with the Partnership Agreement and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof. Subject to the provisions of Section 6, the General Partner may assign this Agreement without the consent of Contributing Partners, provided that no such assignment shall relieve the General Partner of its obligation to file and maintain effective a registration statement for the Shares as set forth herein or to make the required payment of the Cash Purchase Price. 7.3 Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns, except as expressly herein otherwise provided. 7.4 Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles). 7.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document. 7.6 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto. 7.7 Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any 11 references in this Agreement to a "Section" or "Schedule" shall refer to a Section or Schedule of this Agreement unless otherwise specified. 7.8 Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the issuance of Shares pursuant hereto. 7.9 Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement. 7.10 No Right of Set-off. Notwithstanding any claim that the Partnership or the General Partner may have against any Contributing Partner not arising under this Agreement, each of the Partnership and the General Partner shall perform all of its obligations under this Agreement without asserting any right of setoff, counterclaim or similar justification for non-performance of its obligations under this Agreement as the result of any such claim against such Contributing Partner. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. GENERAL PARTNER: GENERAL GROWTH PROPERTIES, INC., a Delaware corporation By: /s/ Bernard Freibaum --------------------------------- Its: Executive Vice President 12 CONTRIBUTING PARTNERS: PIEDMONT MALL ASSOCIATES PPP ASSOCIATES, L.P. By: STROUSE, GREENBERG-DANVILLE By: PIEDMONT MALL ASSOCIATES ASSOCIATES, general partner general partner By: /s/ Joseph Straus, Jr. By: STROUSE, GREENBERG- --------------------------------- DANVILLE ASSOCIATES, Joseph Straus, Jr. general partner Co-Managing Partner By: /s/ Brent M. Milgrom By: /s/ Joseph Straus, Jr. --------------------------------- ------------------------------------ Brent M. Milgrom Joseph Straus, Jr. Co-Managing Partner Co-Managing Partner By: /s/ Brent M. Milgrom ------------------------------------ Brent M. Milgrom Co-Managing Partner By: GDC DANVILLE ASSOCIATES, By: GDC DANVILLE ASSOCIATES, L.P., L.P., general partner general partner By: GDC DANVILLE GENERAL By: GDC DANVILLE GENERAL CORP., CORP., general partner general partner By: /s/ Brent Milgrom By: /s/ Brent Milgrom --------------------------------- ------------------------------------ Brent Milgrom, Brent Milgrom, President President 13 MP ASSOCIATES L.P. HP ASSOCIATES, L.P. By: PIEDMONT MALL ASSOCIATES, By: PIEDMONT MALL ASSOCIATES, general partner general partner By: STROUSE, GREENBERG- By: STROUSE, GREENBERG- DANVILLE ASSOCIATES, DANVILLE ASSOCIATES, general partner general partner By: /s/ Joseph Straus, Jr. By: /s/ Joseph Straus, Jr. --------------------------------- ------------------------------------ Joseph Straus, Jr. Joseph Straus, Jr. Co-Managing Partner Co-Managing Partner By: /s/ Brent M. Milgrom By: /s/ Brent M. Milgrom --------------------------------- ------------------------------------ Brent M. Milgrom Brent M. Milgrom, Co-Managing Partner Co-Managing Partner By: GDC DANVILLE ASSOCIATES, By: GDC DANVILLE ASSOCIATES, L.P., L.P., general partner general partner By: GDC DANVILLE GENERAL By: GDC DANVILLE GENERAL CORP., CORP., general partner general partner By: /s/ Brent Milgrom By: /s/ Brent Milgrom --------------------------------- ------------------------------------ Brent Milgrom, Brent Milgrom, President President 14 SCHEDULE A REPRESENTATIONS AND WARRANTIES Exercising Contributing Partner has good and marketable title to the Units desired to be converted into Shares by it, free and clear of all Liens, it has full power and capacity to transfer such Units, any documents executed in connection with any such transfer are valid and binding and enforceable against it in accordance with their terms and such transfer does not conflict with or result in the breach by it of any agreement or instrument to which it is a party or by which it is bound or any laws, regulations, ordinances, judgments or decrees to which it is subject. EX-4.5 7 c02442exv4w5.txt REDEMPTION RIGHTS AGREEMENT Exhibit 4.5 EXHIBIT D REDEMPTION RIGHTS AGREEMENT Redemption Rights Agreement, dated December 6, 1996, among GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), General Growth Properties, Inc., a Delaware corporation (the "General Partner"), and the parties whose names are set forth under the caption "Contributing Partners" on the signature pages hereof (collectively, "Contributing Partners"). RECITALS WHEREAS, concurrently herewith, Contributing Partners are being admitted as limited partners of the Partnership, the general partner of which is the General Partner; WHEREAS, shares of common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange; and WHEREAS, the parties desire to set forth herein the terms and conditions upon which the Contributing Partners may cause the Partnership to redeem their limited partnership units in the Partnership. NOW, THEREFORE, the parties hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: "Acts" shall mean the Securities Act and the Exchange Act, collectively. "Affiliates" shall mean, with respect to any Contributing Partner, the "Affiliates" of such Contributing Partner as defined in the Contribution Agreement between the Partnership and such Contributing Partner. "Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois. "Cash Purchase Price" shall mean, with respect to any redeemed or purchased Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares) that would be payable with respect to such Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price of such Units. In the event that the Share Purchase Price includes securities other than Shares, then the value of such other securities shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate. "Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time. "Closing Price" shall have the meaning set forth in the Partnership Agreement. "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor code. "Common Stock" shall have the meaning set forth in the recitals. "Computation Date" shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. "Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a). "Contribution Agreements" shall mean the Contribution Agreements each dated the date hereof, and each between the Partnership and one of Contributing Partners, as the same have been and may hereafter be amended from time to time, pursuant to which this Agreement is being executed. "Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act. 2 "Expiration Date" shall mean the earlier of (a) April 16, 2023 (b) the date upon which all Units have been redeemed or purchased in accordance with the terms hereof. "Forbes/Cohen Units" shall mean any and all Units that are owned directly or indirectly through one or more partnerships by Sidney Forbes and/or Maurice Cohen on the date hereof. "Liens" shall have the meaning set forth in the Contribution Agreement. "Major Transaction Event" shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6(a)); (b) a merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner's assets or (d) the liquidation, dissolution or winding up of the General Partner. "Notice" shall have the meaning set forth in Section 3.2. "Other REIT" shall mean CenterMark Properties, Inc., GGP/Homart, Inc. and any other REIT in which the General Partner holds a direct or indirect equity interest and of which Contributing Partners are notified in writing. "Partnership Agreement" shall mean that certain Amended and Restated Agreement of Limited Partnership of the Partnership, dated July 27, 1993, as amended by that certain First Amendment thereto dated May 23, 1995, that certain Second Amendment dated June 13, 1995, that certain Third Amendment thereto dated May 21, 1996 and that certain Fourth Amendment thereto dated August 30, 1996, that certain Fifth Amendment dated as of October 4, 1996, that certain Sixth Amendment dated as of November 27, 1996 and as the same may be further amended through the date of this Agreement. "Person" shall mean any natural person, corporation, partnership, limited liability company, trust or other entity. "Pledge Agreement" shall mean that certain Pledge Agreement of even date herewith, between the Partnership and Contributing Partners. 3 "Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof. "Purchase Right" shall have the meaning set forth in Section 7.1. "Redemption Rights" shall have the meaning set forth in Section 2. "REIT" shall mean real estate investment trust as such term is defined under the Code. "REIT Requirements" shall have the meaning set forth in the Partnership Agreement, as the same may change from time to time. "Registration Expenses" shall mean all expenses incident to the General Partner's performance of or compliance with the registration requirements set forth in this Agreement, including without limitation (a) the fees, disbursements and expenses of the General Partner's counsel and accountants in connection with the registration of Shares issuable upon the exercise of the Redemption Rights; (b) all expenses in connection with the preparation, printing and filing of the registration statement or statements, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto; (c) the cost of printing or producing any blue sky or legal investment memoranda or other documents in connection with the offering, sale or delivery of such Shares; (d) all expenses in connection with the qualification of such Shares under state securities laws; and (e) the fees and expenses incurred in connection with the listing of such Shares on each securities exchange on which securities of the same class are then listed. Notwithstanding the foregoing, Registration Expenses shall not include (and the General Partner will pay) any costs incurred by the Partnership or the General Partner in preparing any document that is incorporated by reference in a registration statement, or any professional fee or other expenses, that would have been incurred apart from the obligation of the General Partner hereunder to file a Registration Statement. "Retailer Interest" shall have the meaning set forth in Section 7.5. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. 4 "Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Units being redeemed or purchased multiplied by (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than rights referred to in Section 6(b)) or any other securities or property, then the Share Purchase Price also shall include such rights, options, warrants or convertible or exchangeable securities that a holder of that number of Shares would have been entitled to receive. "Shares" shall mean shares of the Common Stock. "Units" shall mean the limited partnership units in the Partnership issued to Contributing Partners pursuant to the Contribution Agreement. "Unitholder" shall mean the Person who at the time in question holds one or more Units in accordance with the Partnership Agreement, as the same may be amended from time to time. 2. Grant of Redemption Rights. (a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to Contributing Partners, and Contributing Partners do hereby accept, the right, but without obligation on the part of Contributing Partners, to require the Partnership to redeem from time to time part or all of their Units for the Cash Purchase Price ("Redemption Rights"). (b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume the obligation of the Partnership with respect to and satisfy a Contributing Partner's exercise of a Redemption Right by paying to such Contributing Partner, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with respect to the Units for which such Contributing Partner exercised its Redemption Rights. If the General Partner assumes such obligations with respect to the exercise by a Contributing Partner of a Redemption Right as to certain Units and makes the 5 required payment, then the Partnership shall have no obligation to pay any amount to such Contributing Partner with respect to the exercise of a Redemption Right for such Units, and any Units purchased shall be owned by the General Partner for all purposes. (c) If the General Partner shall assume the obligations of the Partnership with respect to and satisfy a Redemption Right, the Partnership, the Contributing Partner and the General Partner each shall treat the transaction between the General Partner and Contributing Partner as a sale of Contributing Partner's Units (or a portion thereof) to the General Partner for federal income tax purposes. (d) Upon the redemption or purchase of part or all of a Contributing Partner's Units and the payment of the Purchase Price with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Units, provided, however, that Contributing Partner's rights under this Agreement with regard to any other Units will continue in full force and effect. (e) No fractional Shares shall be issued hereunder; in lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price on the relevant Computation Date. 3. Exercise of Redemption Rights. 3.1 Time for Exercise of Redemption Rights. Contributing Partners may exercise their Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof but prior to the Expiration Date; provided, however, that the Redemption Rights may not be exercised at any one time by any Contributing Partner with respect to less than 1,000 Units (or all the Units then owned by such Contributing Partner if such Contributing Partner owns less than 1,000 Units) or in the event that such exercise of Redemption Rights (and the assignment of Units or delivery of the Cash Purchase Price or Share Purchase Price with respect thereto) violates the terms of the Partnership Agreement or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Units specified therein in accordance with the terms hereof. 6 3.2 Method of Exercise. The Redemption Rights shall be exercised by written notice (the "Notice") to the Partnership in the form of Exhibit A specifying the number of Units to be redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the exercising Contributing Partner. 3.3 Closing. Subject to the provisions of Section 4.1(d), the closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights shall occur within 30 days following the giving of the Notice. A Contributing Partner that has exercised Redemption Rights shall execute such documents as the General Partner may reasonably require in connection with the closing of the redemption or purchase and sale pursuant thereto. 3.4 Payment of Cash or Issuance of Shares. At the closing of the redemption or purchase and sale of Units pursuant to an exercise of Redemption Rights, the Partnership shall deliver to Contributing Partner the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights and subject to the provisions of Section 4.1(d), the General Partner shall deliver to the Partnership, at the election of the General Partner, which may be exercised in the General Partner's sole discretion, either (a) the Cash Purchase Price by check or (b) certificates representing the Shares and any other securities constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e), or a combination thereof. 4. Matters Relating to Shares. 4.1 Registration. (a) The General Partner shall (i) prepare, file and use reasonable efforts to cause to become effective on or before the ninetieth day following the first anniversary of the date hereof a registration statement, which may be on Form S-3, under the Securities Act relating to the Shares to be issued upon exercise of the Redemption Rights assuming full satisfaction of the Redemption Rights by delivery of Shares (and, in the sole discretion of the General Partner, any other Shares) and (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the 7 provisions of the Securities Act. The General Partner may, but shall not be obligated to, issue Shares previously registered under its current registration statement on Form S-3 (Registration No. 33-90556). (b) The General Partner shall pay all Registration Expenses incurred prior to the sixth anniversary of the date hereof with respect to filing and keeping effective the registration statement through such date, and the Unitholders (other than the Unitholders that have given a notice pursuant to Section 4.1(e)) shall reimburse the General Partner for Registration Expenses (or a pro rata portion of the Registration Expenses based on the number of Shares issuable to such Unitholders upon full exercise of the Redemption Rights of such Unitholders relative to the total number of Shares issuable pursuant to such registration statement) which are incurred after the sixth anniversary of the date hereof in respect of maintaining effective (but not the initial filing and causing to become effective of) such registration statement. The reimbursement of such expenses by the Unitholders shall be paid upon demand. (c) If under the Securities Act or then current SEC policy public resale of any Shares to be delivered pursuant hereto may not be effected by Contributing Partners without the registration under the Securities Act of such Shares for resale and Contributing Partners shall have notified the Partnership of the same prior to or concurrently with the giving of a Notice by a Contributing Partner of the exercise of Redemption Rights, the General Partner may, at any time during the thirty-day period following the giving of such Notice, elect to delay the closing pursuant to such exercise of Redemption Rights until the ninetieth day following the giving of such Notice and thereafter use reasonable best efforts to register for resale the Shares constituting the Share Purchase Price in respect thereof (assuming full satisfaction of such Redemption Rights by delivery of Shares), which may be accomplished by means of a shelf registration, and such Contributing Partner and the General Partner will enter into customary agreements with respect thereto which contain provisions similar to those contained in Section 4.1(a) and (b) (except that (i) such registration statement only shall be maintained until the Shares registered thereunder have been sold or are eligible for resale under Rule 144(k) promulgated under the Securities Act and (ii) after the sixth anniversary of the date hereof, the Contributing Partners whose Shares are being registered for resale under such registration statement shall pay the Registration Expenses 8 therefor) and other customary provisions, including customary indemnification agreements. (d) If the registration statement referred to in Section 4.1(a) is not effective on the later of the ninetieth day following the first anniversary of the date hereof and the closing pursuant to any exercise of Redemption Rights where Shares are otherwise issuable or the SEC shall not be prepared to declare effective a registration statement referred to in Section 4.1(c) in respect of Shares to be issued pursuant to any exercise of Redemption Rights referred to in such subsection (assuming the full satisfaction of such Redemption Rights by delivery of the Share Purchase Price) (unless, in either case, the Contributing Partners have defaulted hereunder), the General Partner shall not have the right to deliver the Share Purchase Price for Units as to which Redemption Rights have been exercised, and the General Partner or the Partnership shall deliver the Cash Purchase Price on the date specified in Section 3.3 or 4.1(c), as the case may be (but the General Partner shall not otherwise have any liability therefor). (e) Notwithstanding anything to the contrary contained herein, (i) the General Partner shall have no obligation to keep any registration statement filed pursuant to this Section 4.1 effective after the Expiration Date and the provisions of Section 4.1(d) shall not apply if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated or any or all of the Unitholders notify the General Partner in writing that the General Partner no longer need keep such registration statement effective (in which case such obligation shall be terminated only as to the registration statement specified in such notice and the Shares that otherwise would be issuable or have been issued, as the case may be, to the Unitholder(s) that gave such notice and the provisions of Section 4.1(d) shall not apply only to the exercise of Redemption Rights by such Unitholders) and (ii) the provisions of Section 4.1(d) also shall not apply upon an exercise of Redemption Rights as to Forbes/Cohen Units in the event that the General Partner previously has filed two registration statements pursuant to Section 4.1(c) for Shares issued upon the exercise of Redemption Rights as to Forbes/Cohen Units. 4.2 Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to 9 time outstanding (assuming no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights). 4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights upon issue shall be duly and validly issued and fully paid and non-assessable. 4.5. Transfer and Other Taxes. In the event that any state or local property transfer or other tax is payable as the result of or in connection with any exercise of the Redemption Rights by a Contributing Partner, such Contributor Partner shall pay such tax, and no Shares shall be issued pursuant hereto until such Contributor Partner has paid to the General Partner or the Partnership, as the case may be, the amount of such tax or has provided evidence, in form reasonably satisfactory to the General Partner or the Partnership, as the case may be, as to the payment thereof. 6. Anti-Dilution and Adjustment Provisions. (a) The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares. The Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. (b) If at any time the General Partner grants to its stockholders any right to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that 10 Contributing Partners would have been entitled to subscribe for if, immediately prior to such grant, Contributing Partners had exercised their Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement, then the General Partner also shall grant to Contributing Partners the same subscription rights that Contributing Partners would be entitled to if Contributing Partners had exercised their Redemption Rights in full and received the Share Purchase Price in satisfaction thereof prior to such grant. (c) Upon the occurrence of a Major Transaction Event where at least one-half of the value (as determined in good faith by the General Partner) of the consideration received by the stockholders of the General Partner in connection with such Major Transaction Event is in the form of securities in a successor entity, the General Partner shall cause effective provision to be made so that, upon exercise of the Redemption Rights and payment of the Purchase Price by means of the Share Purchase Price, Unitholders shall have the right thereafter to acquire, in lieu of the Shares which would have been surrendered therefor, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event. (d) In the event of any other Major Transaction Event, each Unitholder shall be entitled to exercise the Redemption Rights in full prior to the consummation of such Major Transaction Event, and, with respect to any Shares acquired upon exercise thereof, shall be entitled to all of the rights of the other holders of Shares with respect to any distribution by the General Partner (or the other party to such Major Transaction Event) in connection with such Major Transaction Event. If not exercised within forty-five days after written notice from the General Partner of such Major Transaction Event or such shorter period between the date of such notice and the effective date of such Major Transaction Event, the Redemption Rights shall terminate at the expiration of such period, but the Redemption 11 Rights shall be revived if such Major Transaction Event is not consummated. (e) The Partnership shall give written notice of any Major Transaction Event promptly after such Major Transaction is announced to the public. (f) The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement, as amended from time to time. (g) Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner. 7. Purchase Right. 7.1 Purchase Right. In the event that the General Partner in good faith determines at any time that the continued ownership of Units by the holder of such Units would cause amounts which would otherwise be characterized as "rents from real property" (within the meaning of Section 865(d)(1) of the Code) to fail to be so characterized as the result of the ownership or deemed ownership of any Retailer Interest, the holder of such Units shall dispose of such Retailer Interest within five Business Days of written notice from the Partnership. In the absence of such a disposition, the General Partner shall have the right, but not the obligation (the "Purchase Right"), to purchase all of the Units then held by such holder upon the terms and subject to the conditions contained in this Section 7. 7.2 Method of Exercise. The Purchase Right shall be exercised by written notice to the holder of the Units to be purchased specifying that the General Partner has elected to purchase such Units pursuant to Section 7 of this Agreement. 12 7.3 Purchase Price. The purchase price for such Units shall be the Cash Purchase Price with respect to such Units. 7.4 Closing. The closing of any purchase and sale pursuant to this Section 7 shall occur at the time specified in the notice described in Section 7.2 but in no event later than 30 days after the giving of such notice. At the closing, the General Partner shall deliver to the selling Unitholder the Cash Purchase Price in immediately available funds, and the selling Unitholder shall deliver to the General Partner an instrument of transfer in form sufficient to transfer the Units to be transferred, free and clear of all Liens, and containing the representations and warranties set forth in Exhibit A. 7.5 Notice of Certain Events. Each Contributing Partner shall provide to the Partnership a written statement describing the acquisition by it or its partners or Affiliates of any equity interest in a retailer or other person or entity which is or could be a potential tenant of the Partnership or of any Other REIT (a "Retailer Interest"). 8. Miscellaneous Provisions. 8.1 Notices. All notices or other communications given pursuant to this Agreement shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service, facsimile or delivered by hand with receipt acknowledged in writing. All notices (a) shall be deemed given when received or, if mailed as described above, after 5 Business Days or, if sent by facsimile, upon receipt of confirmed answerback and (b) may be given either by a party or by such party's attorneys. For purposes of this Section 8.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 55 West Monroe Street, Suite 3100, Chicago, Illinois 60603, facsimile number (312) 551-5475, Attention: Matthew Bucksbaum and Bernard Freibaum, and, in the case of Contributing Partner, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof. 8.2 Assignment. Contributing Partners may not assign this Agreement or their rights hereunder; provided, however, that the rights of Contributing Partners hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Units, and becomes a 13 substituted partner with respect to such Units, in accordance with the Partnership Agreement, as amended from time to time, and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof. Subject to the provisions of Section 6, the General Partner may assign this Agreement without the consent of Contributing Partners, provided that no such assignment shall relieve the General Partner of its obligations under this Agreement. 8.3 Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns, except as expressly herein otherwise provided. 8.4 Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles). 8.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document. 8.6 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto. 8.7 Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to a "Section" or "Schedule" shall refer to a Section or Schedule of this Agreement unless otherwise specified. 8.8 Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the issuance of Shares pursuant hereto. 8.9 Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and 14 documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 15 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CONTRIBUTING PARTNERS: FORBES/COHEN PROPERTIES, a Michigan general partnership By: /s/ Maurice Cohen --------------------------------- Maurice Cohen, partner By: /s/ Sidney Forbes --------------------------------- Sidney Forbes, partner JACKSON PROPERTIES, a Michigan general partnership By: Forbes/Cohen Properties, a Michigan general partnership, partner By: /s/ Maurice Cohen --------------------------------- Maurice Cohen, partner By: /s/ Sidney Forbes --------------------------------- Sidney Forbes, partner By: The Frankel Group, a Michigan general partnership, a partner By: /s/ Samuel Frankel --------------------------------- Samuel Frankel, Trustee under Trust Agreement dated 7/9/91, partner By: The Cohn Group, a Michigan general partnership, a partner By: /s/ Avern Cohn --------------------------------- Avern Cohn, partner 16 LAKEVIEW SQUARE ASSOCIATES, a Michigan general partnership By: Forbes/Cohen Properties, a Michigan general partnership, a partner By: /s/ Maurice Cohen --------------------------------- Maurice Cohen, partner By: /s/ Sidney Forbes --------------------------------- Sidney Forbes, partner By: Lakeview Properties, a Michigan limited partnership, a partner By: Forbes/Cohen Properties, a Michigan general partnership, its general partner By: /s/ Maurice Cohen --------------------------------- Maurice Cohen, partner By: /s/ Sidney Forbes --------------------------------- Sidney Forbes, partner PARTNERSHIP: GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its Vice President GENERAL PARTNER: General Growth Properties, Inc. a Delaware corporation 17 By: /s/ Joel Bayer --------------------------------- Its Vice President 18 EX-4.6 8 c02442exv4w6.txt REDEMPTION RIGHTS AGREEMENT Exhibit 4.6 REDEMPTION RIGHTS AGREEMENT Redemption Rights Agreement, dated June 19th, 1997, among GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), General Growth Properties, Inc., a Delaware corporation (the "General Partner"), and CA Southlake Investors, Ltd., a Georgia limited partnership (collectively, "Contributing Partner"). RECITALS WHEREAS, concurrently herewith, Contributing Partner is being admitted as a limited partner of the Partnership, the general partner of which is the General Partner; WHEREAS, shares of common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange; and WHEREAS, the parties desire to set forth herein the term and conditions upon which the Contributing Partner may cause the Partnership to redeem its limited partnership units in the Partnership. NOW, THEREFORE, the parties hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: "Acts" shall mean the Securities Act and the Exchange Act, collectively. "Affiliates" shall mean "affiliates" as defined pursuant to the Securities Act. "Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois. "Cash Purchase Price" shall mean, with respect to any redeemed or purchased Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares) that would be payable with respect to such Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price of such Units. In the event that the Share Purchase Price includes securities other than Shares, then the value of such other securities shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate. "Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time. "Closing Price" shall have the meaning set forth in the Partnership Agreement. "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor code. "Common Stock" shall have the meaning set forth in the recitals. "Computation Date" shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. "Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a). "Contribution Agreement" shall mean that certain Sale and Contribution Agreement dated the date hereof, between the Partnership and Contributing Partner, as the same have been and may hereafter be amended from time to time, pursuant to which this Agreement is being executed. "Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act. "Expiration Date" shall mean the earlier of (a) April 16, 2023 (b) the date upon which all Units have been redeemed or purchased in accordance with the terms hereof. "Liens" shall have the meaning set forth in the Contribution Agreement. 2 "Major Transaction Event" shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6 (a)); (b) a merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner's assets or (d) the liquidation, dissolution or winding up of the General Partner. "Notice" shall have the meaning set forth in Section 3.2. "Other REIT" shall mean GGP/Homart, Inc. and any other REIT in which the General Partner holds a direct or indirect equity interest and of which Contributing Partner is notified in writing. "Partnership Agreement" shall mean that certain Amended and Restated Agreement of Limited Partnership of the Partnership, dated July 27, 1993, as amended by that certain First Amendment thereto dated May 23, 1995, that certain Second Amendment thereto dated June 13, 1995, that certain Third Amendment thereto dated May 21, 1996, that certain Fourth Amendment thereto dated August 30, 1996, that certain Fifth Amendment thereto dated as of October 4, 1996, that certain Sixth Amendment thereto dated as of November 27, 1996 and that certain Seventh Amendment thereto dated December 6, 1996 and as the same may be further amended through the date of this Agreement. "Person" shall mean any natural person, corporation, partnership, limited liability company, trust or other entity. "Pledge Agreement" shall mean that certain Pledge Agreement of even date herewith, between the Partnership and Contributing Partner. "Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof. "Purchase Right" shall have the meaning set forth in Section 7.1. "Redemption Rights" shall have the meaning set forth in Section 2. 3 "REIT" shall mean real estate investment trust as such term is defined under the Code. "REIT Requirements" shall have the meaning set forth in the Partnership Agreement, as the same may change from time to time. "Registration Expenses" shall mean all expenses incident to the General Partner's performance of or compliance with the registration requirements set forth in this Agreement, including without limitation (a) the fees, disbursements and expenses of the General Partner's counsel and accountants, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, in connection with the registration of Shares issuable upon the exercise of the Redemption Rights; (b) all expenses in connection with the preparation and printing of the registration statement or statements, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto; (c) the cost of printing or producing any blue sky or legal investment memoranda or other documents in connection with the offering, sale or delivery of such Shares; (d) all expenses in connection with the qualification of such Shares under state securities laws; (e) the fees and expenses incurred in connection with the listing of such Shares on each securities exchange on which securities of the same class are then listed and (f) all SEC, stock exchange and National Association of Securities Dealers, Inc. registration and filing fees. Notwithstanding the foregoing, Registration Expenses shall not include (and the General Partner will pay) any costs incurred by the Partnership or the General Partner in preparing any document that is incorporated by reference in a registration statement, or any professional fee or other expenses, that would have been incurred apart from the obligation of the General Partner hereunder to file a Registration Statement. "Retailer Interest" shall have the meaning set forth in Section 7.5. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. "Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Units being redeemed or purchased multiplied by 4 (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than rights referred to in Section 6 (b)) or any other securities or property, then the Share Purchase Price also shall include such rights, options, warrants or convertible or exchangeable securities that a holder of that number of Shares would have been entitled to receive. "Shares" shall mean shares of the Common Stock. "Units" shall mean the limited partnership units in the Partnership issued to Contributing Partner pursuant to the Contribution Agreement. "Unitholder" shall mean the Person who at the time in question holds one or more Units in accordance with the Partnership Agreement, as the same may be amended from time to time. 2. Grant of Redemption Rights. (a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to Contributing Partner, and Contributing Partner does hereby accept, the right, but without obligation on the part of Contributing Partner, to require the Partnership to redeem from time to time part or all of their Units for the Cash Purchase Price ("Redemption Rights"). (b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume the obligation of the Partnership with respect to and satisfy Contributing Partner's exercise of a Redemption Right by paying to Contributing Partner, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with respect to the Units for which Contributing Partner exercised its Redemption Rights. If the General Partner assumes such obligations with respect to the exercise by Contributing Partner of a Redemption Right as to certain Units and makes the required payment within the required period of time, then the Partnership shall have no obligation to pay any amount to Contributing Partner with respect to the exercise of a Redemption Right for such Units, 5 and any Units purchased shall be owned by the General Partner for all purposes. (c) If the General Partner shall assume the obligations of the Partnership with respect to and satisfy a Redemption Right, the Partnership, the Contributing Partner and the General Partner each shall treat the transaction between the General Partner and Contributing Partner as a sale of Contributing Partner's Units (or a portion thereof) to the General Partner for federal income tax purposes. (d) Upon the redemption or purchase of part or all of Contributing Partner's Units and the payment of the Purchase Price with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Units; provided, however, that Contributing Partner's rights under this Agreement with regard to any other Units will continue in full force and effect. (e) No fractional Shares shall be issued hereunder. In lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market price on the relevant Computation Date. 3. Exercise of Redemption Rights. 3.1 Time for Exercise of Redemption Rights. Contributing Partner may exercise its Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof but prior to the Expiration Date; provided, however, that the Redemption Rights may not be exercised at any one time by Contributing Partner with respect to less than 1,000 Units (or all the Units then owned by Contributing Partner if Contributing Partner owns less than 1,000 Units) or in the event that such exercise of Redemption Rights (and the assignment of Units or delivery of either the Cash Purchase Price or the Share Purchase Price with respect thereto) violates the terms of the Partnership Agreement or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Units specified therein in accordance with the terms hereof. 3.2 Method of Exercise. The Redemption Rights shall be exercised by written notice (the "Notice") to the Partnership in the form of Exhibit A specifying the number of Units to be 6 redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the Contributing Partner. 3.3 Closing. Subject to the provisions of Section 4.1(d), the closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights shall occur within 30 days following the giving of the Notice. Contributing Partner shall execute such documents as the General Partner may reasonably require in connection with the closing of the redemption or purchase and sale pursuant thereto. 3.4 Payment of Cash or Issuance of Shares. At the closing of the redemption or purchase and sale of Units pursuant to an exercise of Redemption Rights, the Partnership shall deliver to Contributing Partner the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights, the General Partner shall deliver to the Partnership, at the election of the General Partner, which may be exercised in the General Partner's sole discretion, either (a) the Cash Purchase Price by check or (b) certificates representing the Shares and any other securities constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e), or a combination thereof. 4. Matters Relating to Shares. 4.1 Registration. (a) The General Partner shall (i) prepare, file and use reasonable efforts to cause to become effective on or before the ninetieth day following the first anniversary of the date hereof a registration statement, which may be on Form S-3, under the Securities Act relating to the Shares to be issued upon exercise of the Redemption Rights assuming full satisfaction of the Redemption Rights by delivery of Shares and (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act. (b) The General Partner shall pay all Registration Expenses incurred prior to the sixth anniversary of the date hereof with respect to filing and keeping effective the registration 7 statement through such date, and the Unitholders (other than the Unitholders that have given a notice pursuant to Section 4.1(c)) shall reimburse the General Partner for Registration Expenses (or a pro rata portion of the Registration Expenses based on the number of Shares issuable to such Unitholders upon full exercise of the Redemption Rights of such Unitholders relative to the total number of Shares issuable pursuant to such registration statement) which are incurred after the sixth anniversary of the date hereof in respect of maintaining effective (but not the initial filing and causing to become effective of) such registration statement. The reimbursement of such expenses by the Unitholders shall be paid upon demand. (c) Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep any registration statement filed pursuant to this Section 4.1 effective after the Expiration Date or if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated or all of the Unitholders notify the General Partner in writing that the General Partner no longer need keep such registration statement effective. 4.2 Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to time outstanding (assuming no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights). 4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights shall be duly and validly issued and fully paid and non-assessable. 5. Transfer and Other Taxes. In the event that any state or local property transfer or other tax is payable as the result of or in connection with any exercise of the Redemption Rights by Contributing Partner, Contributor Partner shall pay such tax, and no Shares shall be issued pursuant hereto until such Contributor Partner has paid to the General Partner or the Partnership, as the case may be, the amount of such tax or has provided evidence, in form reasonably satisfactory to the General Partner or the Partnership, as the case may be, as to the payment thereof. 8 6. Anti-Dilution and Adjustment Provisions. (a) The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares. The Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. (b) If at any time the General Partner grants to its stockholders any right to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that Contributing Partner would have been entitled to subscribe for if, immediately prior to such grant, Contributing Partner had exercised its Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement, then the General Partner also shall grant to Contributing Partner the same subscription rights that Contributing Partner would be entitled to if Contributing Partner had exercised its Redemption Rights in full and received the Share Purchase Price in satisfaction thereof prior to such grant. (c) Upon the occurrence of a Major Transaction Event where at least one-half of the value (as determined in good faith by the General Partner) of the consideration received by the stockholders of the General Partner in connection with such Major Transaction Event is in the form of securities in a successor entity, the General Partner shall cause effective provision to be made so that, upon exercise of the Redemption Rights and payment of the Purchase Price at any time following such Major Transaction Event by means of the Share Purchase Price, Unitholders shall have the right to acquire, in lieu of 9 p the Shares which would have been surrendered therefor, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply anew to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event. (d) In the event of any other Major Transaction Event, each Unitholder shall be entitled to exercise the Redemption Right in full prior to the consummation of such Major Transaction Event, and, with respect to any Shares acquired upon exercise thereof, shall be entitled to all of the rights of the other holders of Shares with respect to any distribution by the General Partner (or the other party to such Major Transaction Event) in connection with such Major Transaction Event. If not exercised within forty-five days after written notice from the General Partner of such Major Transaction Event or such shorter period between the date of such notice and the effective date of such Major Transaction Event, the Redemption Rights shall terminate at the expiration of such period, but the Redemption Rights shall be revived if such Major Transaction Event is not consummated. (e) The Partnership shall give written notice of any Major Transaction Event promptly after such Major Transaction is announced to the public. (f) The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement, as amended from time to time. (g) Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such 10 adjustment is based, and such certificate, shall forthwith be filed at the offices of the General Partner. 7. Purchase Right. 7.1 Purchase Right. In the event that the General Partner in good faith determines at any time that the continued ownership of Units by the holder of such Units would cause amounts which would otherwise be characterized as "rents from real property" (within the meaning of Section 856(d)(1) of the Code) to fail to be so characterized as the result of the ownership or deemed ownership of any Retailer Interest, the holder of such Units shall dispose of such Retailer Interest within five Business Days of written notice from the Partnership. In the absence of such a disposition, the General Partner shall have the right, but not the obligation (the "Purchase Right"), to purchase all of the Units then held by such holder upon the terms and subject to the conditions contained in this Section 7. 7.2 Method of Exercise. The Purchase Right shall be exercised by written notice to the holder of the Units to be purchased specifying that the General Partner has elected to purchase such Units pursuant to Section 7 of this Agreement. 7.3 Purchase Price. The purchase price for such Units shall be the Cash Purchase Price with respect to such Units. 7.4 Closing. The closing of any purchase and sale pursuant to this Section 7 shall occur at the time specified in the notice described in Section 7.2 but in no event later than 30 days after the giving of such notice. At the closing, the General Partner shall deliver to the selling Unitholder the Cash Purchase Price in immediately available funds, and the selling Unitholder shall deliver to the General Partner an instrument of transfer in form sufficient to transfer the Units to be transferred, free and clear of all Liens, and containing the representations and warranties set forth in Exhibit A. 7.5 Notice of Certain Events. Contributing Partner promptly shall provide to the Partnership a written statement describing the acquisition by it or its partners or Affiliates of any equity interest in a retailer or other person or entity which is or could be a potential tenant of the Partnership or of any Other REIT (a "Retailer Interest"), and Contributing Partner represents and warrants that neither Contributing Partner nor 11 any of its partners or Affiliates currently owns any such Retailer Interest. 8. Miscellaneous Provisions. 8.1 Notices. All notices or other communications given pursuant to this Agreement shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service, facsimile or delivered by hand with receipt acknowledged in writing. All notices (a) shall be deemed given when received or, if mailed as described above, after 5 Business Days or, if sent by facsimile, upon receipt of confirmed answerback and (b) may be given either by a party or by such party's attorneys. For purposes of this Section 8.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 55 West Monroe Street, Suite 3100, Chicago, Illinois 60603, facsimile number (312) 551- 5475, Attention: Matthew Bucksbaum and Bernard Freibaum, and, in the case of Contributing Partner, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof. 8.2 Assignment. The rights of Contributing Partner hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Units, and becomes a substituted partner with respect to such Units, in accordance with the Partnership Agreement, as amended from time to time, and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof (but the rights of Contributing Partner hereunder are not otherwise assignable). Subject to the provisions of Section 6, the General Partner may assign this Agreement without the consent of Contributing Partner, provided that no such assignment shall relieve the General Partner of its obligations under this Agreement. 8.3 Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. 8.4 Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles). 12 8.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document. 8.6 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto. 8.7 Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to a "Section" or "Exhibit" shall refer to a Section or Exhibit of this Agreement unless otherwise specified. 8.8 Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the issuance of Shares pursuant hereto. 8.9 Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 13 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CONTRIBUTING PARTNER: CA SOUTHLAKE INVESTORS, LTD., a Georgia limited partnership By: /s/ Daniel B. Rather --------------------------------- Its General Partner PARTNERSHIP: GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its Vice President GENERAL PARTNER: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its Vice President EXHIBIT A Notice of Redemption The undersigned hereby irrevocably (i) exercises its Redemption Rights as to _________________ units of limited partnership interest (the "Units") in GGP Limited Partnership (the "Partnership") in accordance with the terms of that certain Redemption Rights Agreement, dated __________________, 1997 (the "Agreement"), among the Partnership, General Growth Properties, Inc. (the "General Partner"), and the other parties thereto, (ii) transfers and surrenders such Units and all right, title and interest of the undersigned therein to the party, which shall be either the Partnership or the General Partner, that shall purchase or redeem such Units pursuant to the Agreement, and (iii) directs that the Cash Purchase Price or Share Purchase Price payable upon exercise of the Redemption Right be delivered to the address specified below and, if the Share Purchase Price is to be delivered, the Shares shall be registered or placed in the name(s) and at the address(es) specified below. The undersigned hereby represents, warrants, certifies and agrees (i) that the undersigned has unencumbered title to the Units, free and clear of all Liens, (ii) that the undersigned has the full right, power and authority to transfer and surrender the Units as provided herein and such transfer and surrender has been authorized by all necessary action, and (iii) that the undersigned has obtained the consent or approval of all persons or entities, if any, having the right to consent to or approve such transfer and surrender. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. Dated: ------------------------------ Name: ---------------------------------- ---------------------------------------- (Signature of Limited Partner) ---------------------------------------- (Street Address) ---------------------------------------- City (State (Zip Code) Signature Guaranteed by ---------------------------------------- If Shares are to be issued, issue to: Please insert social security or identifying number: EX-4.7 9 c02442exv4w7.txt REDEMPTION RIGHTS AGREEMENT Exhibit 4.7 REDEMPTION RIGHTS AGREEMENT Redemption Rights Agreement, dated October 23, 1997, among GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), General Growth Properties, Inc., a Delaware corporation (the "General Partner"), and Peter D. Leibowits (collectively, "Contributing Partner"). RECITALS WHEREAS, concurrently herewith, Contributing Partner is being admitted as a limited partner of the Partnership, the general partner of which is the General Partner; WHEREAS, shares of common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange; and WHEREAS, the parties desire to set forth herein the terms and conditions upon which the Contributing Partner may cause the Partnership to redeem his limited partnership units in the Partnership. NOW, THEREFORE, the parties hereby agree as follows: I. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: "Acts" shall mean the Securities Act and the Exchange Act, collectively. "Affiliates" shall mean "affiliates" as defined pursuant to the Securities Act and the regulations promulgated thereunder. "Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois. "Cash Purchase Price" shall mean, with respect to any redeemed or purchased Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares) that would be payable with respect to such Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price of such Units. In the event that the Share Purchase Price includes securities other than Shares, then the value of such other securities shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate. "Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time. "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor code. "Common Stock" shall have the meaning set forth in the recitals. "Computation Date" shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. "Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a). "Contribution Agreement" shall mean that certain Contribution Agreement dated September 25, 1997, among the Partnership, the General Partner and Contributing Partner, as the same has been and may hereafter be amended from time to time, pursuant to which this Agreement is being executed. "Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act. "Expiration Date" shall mean the earlier of (a) April 16, 2023 and (b) the date upon which all Units have been redeemed or purchased in accordance with the terms hereof. "Liens" shall have the meaning set forth in the Contribution Agreement. "Major Transaction Event" shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6(a)); (b) a 2 merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner's assets or (d) the liquidation, dissolution or winding up of the General Partner. "Notice" shall have the meaning set forth in Section 3.2. "Partnership Agreement" shall mean that certain Amended and Restated Agreement of Limited Partnership of the Partnership, dated July 27, 1993, as amended by that certain First Amendment thereto dated May 23, 1995, that certain Second Amendment thereto dated June 13, 1995, that certain Third Amendment thereto dated May 21, 1996, that certain Fourth Amendment thereto dated August 30, 1996, that certain Fifth Amendment thereto dated as of October 4, 1996, that certain Sixth Amendment thereto dated as of November 27, 1996, that certain Seventh Amendment thereto dated December 6, 1996, that certain Eighth Amendment thereto dated June 19, 1997, that certain Ninth Amendment thereto dated as of August 8, 1997, that certain Tenth Amendment thereto dated as of September 8, 1997, that certain Eleventh Amendment thereto dated as of September 11, 1997 and that certain Twelfth Amendment thereto dated October 15, 1997 and as the same may be further amended. "Person" shall mean any natural person, corporation, partnership, association, limited liability company, trust or other entity. "Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof. "Purchase Right" shall have the meaning set forth in Section 7.1. "Redemption Rights" shall have the meaning set forth in Section 2. "REIT" shall mean real estate investment trust as such term is defined under the Code. "REIT Requirements" shall have the meaning set forth in the Partnership Agreement, as the same may change from time to time. 3 "Registration Expenses" shall mean all expenses incident to the General Partner's performance of or compliance with the registration requirements set forth in this Agreement, including without limitation (a) the fees, disbursements and expenses of the General Partner's counsel and accountants in connection with the registration of Shares issuable upon the exercise of the Redemption Rights; (b) all expenses in connection with the preparation and printing of the registration statement or statements, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto; (c) the cost of printing or producing any blue sky or legal investment memoranda or other documents in connection with the offering, sale or delivery of such Shares; (d) all expenses in connection with the qualification of such Shares under state securities laws; (e) the fees and expenses incurred in connection with the listing of such Shares on each securities exchange on which securities of the same class are then listed and (f) all SEC, stock exchange and National Association of Securities Dealers, Inc. registration and filing fees. Notwithstanding the foregoing, Registration Expenses shall not include (and the General Partner will pay) any costs incurred by the Partnership or the General Partner in preparing any document that is incorporated by reference in a registration statement, or any professional fee or other expenses, that would have been incurred apart from the obligation of the General Partner hereunder to file a Registration Statement. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. "Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Units being redeemed or purchased multiplied by (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than rights referred to in Section 6(b)) or any other securities or property, then the Share Purchase Price also shall include such rights, options, warrants or convertible or exchangeable securities that a holder of that number of Shares would have been entitled to receive. "Shares" shall mean shares of the Common Stock. 4 "Units" shall mean the limited partnership units in the Partnership issued to Contributing Partner pursuant to the Contribution Agreement. "Unitholder" shall mean the Person who at the time in question holds one or more Units in accordance with the Partnership Agreement, as the same may be amended from time to time. 2. Grant of Redemption Rights. (a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to Contributing Partner, and Contributing Partner does hereby accept, the right, but without obligation on the part of Contributing Partner, to require the Partnership to redeem from time to time part or all of the Units of Contributing Partner for the Cash Purchase Price ("Redemption Rights"). (b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume the obligation of the Partnership with respect to and satisfy Contributing Partner's exercise of a Redemption Right by paying to Contributing Partner, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with respect to the Units for which Contributing Partner exercised its Redemption Rights. If the General Partner assumes such obligations with respect to the exercise by Contributing Partner of a Redemption Right as to certain Units and makes the required payment within the required period of time, then the Partnership shall have no obligation to pay any amount to Contributing Partner with respect to the exercise of a Redemption Right for such Units, and any Units purchased shall be owned by the General Partner for all purposes. (c) If the General Partner shall assume the obligations of the Partnership with respect to and satisfy a Redemption Right, the Partnership, the Contributing Partner and the General Partner each shall treat the transaction between the General Partner and Contributing Partner as a sale of Contributing Partner's Units (or a portion thereof) to the General Partner for federal income tax purposes. (d) Upon the redemption or purchase of part or all of Contributing Partner's Units and the payment of the Purchase 5 Price with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Units; provided, however, that Contributing Partner's rights under this Agreement with regard to any other Units will continue in full force and effect. (e) No fractional Shares shall be issued hereunder. In lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price on the relevant Computation Date. 3. Exercise of Redemption Rights. 3.1 Time for Exercise of Redemption Rights. Contributing Partner may exercise his Redemption Rights in whole or in part and at any time and from time to time on or after the second anniversary of the date hereof but prior to the Expiration Date; provided, however, that the Redemption Rights may not be exercised at any one time by Contributing Partner with respect to less than 1,000 Units (or all the Units then owned by Contributing Partner if Contributing Partner owns less than 1,000 Units) or in the event that such exercise of Redemption Rights (or the assignment of Units or delivery of either the Cash Purchase Price or the Share Purchase Price with respect thereto) violates the terms of the Partnership Agreement or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Units specified therein in accordance with the terms hereof. 3.2 Method of Exercise. The Redemption Rights shall be exercised by written notice (the "Notice") to the Partnership in the form of Exhibit A specifying the number of Units to be redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the Contributing Partner. 3.3 Closing. The closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights shall occur within 30 days following the giving of the Notice. Contributing Partner shall execute such documents as the General Partner may reasonably require in connection with the closing of such redemption or purchase and sale. 3.4 Payment of Cash or Issuance of Shares. At the closing of the redemption or purchase and sale of Units pursuant to an 6 exercise of Redemption Rights, the Partnership shall deliver to Contributing Partner the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights, the General Partner shall deliver to the Partnership, at the election of the General Partner, which may be exercised in the General Partner's sole discretion, either (a) the Cash Purchase Price in immediately available funds or (b) certificates representing the Shares and any other securities constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e), or a combination thereof. 4. Matters Relating to Shares. 4.1 Registration. (a) The General Partner shall (i) prepare, file and use reasonable efforts to cause to become effective on or before the ninetieth day following the second anniversary of the date hereof a registration statement, which may be on Form S-3, under the Securities Act relating to the Shares to be issued upon exercise of the Redemption Rights assuming full satisfaction of the Redemption Rights by delivery of Shares and (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act. (b) The General Partner shall pay all Registration Expenses incurred prior to the seventh anniversary of the date hereof with respect to filing and keeping effective the registration statement through such date, and the Unitholders shall reimburse the General Partner for Registration Expenses (or a pro rata portion of the Registration Expenses based on the number of Shares issuable to such Unitholders upon full exercise of the Redemption Rights of such Unitholders relative to the total number of Shares issuable pursuant to such registration statement) which are incurred after the seventh anniversary of the date hereof in respect of maintaining effective (but not the initial filing and causing to become effective of) such registration statement; provided, however, that Contributing Partner shall not be required to reimburse any costs (i) of preparing any documents filed with the SEC that are incorporated by reference in the Registration Statement or (ii) that become necessary because the General Partner is unable to use Form S-3 7 (or any equivalent short form that relies on incorporation by reference) for the reason that the General Partner has failed to comply on a timely basis with any requirement of the Acts or Form S-3. The reimbursement of such expenses by the Unitholders shall be paid upon demand. (c) If under the Securities Act or then current SEC policy the above-described registration of the Shares constituting the Share Purchase Price (assuming full satisfaction of the Redemption Rights by delivery of Shares) is not permitted for any reason or the public resale of such Shares may not be effected by Contributing Partner without the further registration under the Securities Act of such Shares for resale, the General Partner shall use reasonable efforts to register such Shares for resale, which may be accomplished by means of a shelf registration (and the General Partner shall not be required to register such Shares pursuant to Section 4.1(a)), and Contributing Partner and the General Partner shall enter into customary agreements with respect thereto which contain provisions similar to those contained in Section 4.1(a) and (b) (except that (i) such registration statement only shall be maintained until the Shares registered thereunder have been sold or are eligible for resale under Rule 144(k) promulgated under the Securities Act (without regard to the period that Units were held prior to the exchange of such Units for Shares pursuant to the Redemption Rights) and (ii) after the seventh anniversary of the date hereof, Contributing Partner shall pay the Registration Expenses therefor or a pro rata portion thereof based on the number of Shares of Contributing Partner which remain available for sale pursuant to such registration statement relative to the total number of Shares that remain available for sale pursuant to such registration statement) and other customary provisions, including without limitation customary indemnification provisions. (d) If a registration statement referred to in Section 4.1(a) or (c) is not effective on the later of the ninetieth day following the second anniversary of the date hereof and the closing pursuant to any exercise of Redemption Rights where Shares are otherwise issuable (unless, in either case, Contributing Partner has defaulted hereunder), the General Partner shall not have the right to deliver the Share Purchase Price in respect of such exercise of Redemption Rights, and the General Partner or the Partnership shall deliver the Cash Purchase Price on the date specified in Section 3.3 (but the General Partner shall not otherwise have any liability therefor); provided, however, that the General Partner may 8 deliver Shares if it previously filed a registration statement under Section 4.1(c) and such registration statement has not yet been declared effective solely by reason of the fact that the Shares are not yet outstanding. In the event that Shares are delivered to Contributing Partner pursuant to an exercise of Redemption Rights and the proviso contained in the immediately preceding sentence and the registration statement referred to in such sentence shall not have been declared effective on or before the tenth business day following delivery of such Shares, the General Partner shall, upon written notice from Contributing Partner to the General Partner, repurchase such Shares, and Contributing Partner shall sell such Shares to the General Partner, for a purchase price equal to the Cash Purchase Price relating to such exercise of Redemption Rights. Each of Contributing Partner and the General Partner shall execute such documents as may be reasonably requested by the other to effectuate such repurchase and sale. (e) Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep any registration statement filed pursuant to this Section 4.1 effective after the Expiration Date or if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated or all of the Unitholders notify the General Partner in writing that the General Partner no longer need keep such registration statement effective. 4.2 Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to time outstanding (assuming no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights). 4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights shall be duly and validly issued and fully paid and non-assessable. 5. Transfer and Other Taxes. In the event that any state or local property transfer or other tax is payable as the result of or in connection with any exercise of the Redemption Rights by Contributing Partner, Contributor Partner shall pay such tax, and no Shares shall be issued pursuant hereto until such 9 Contributor Partner has paid to the General Partner or the Partnership, as the case may be, the amount of such tax or has provided evidence, in form reasonably satisfactory to the General Partner or the Partnership, as the case may be, as to the payment thereof. 6. Anti-Dilution and Adjustment Provisions. (a) The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares. The Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. (b) If at any time the General Partner grants to its stockholders any right to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that Contributing Partner would have been entitled to subscribe for if, immediately prior to such grant, Contributing Partner had exercised his Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement, then the General Partner also shall grant to Contributing Partner the same subscription rights that Contributing Partner would be entitled to if Contributing Partner had exercised his Redemption Rights in full and received the Share Purchase Price in satisfaction thereof prior to such grant. (c) Upon the occurrence of a Major Transaction Event where at least one-half of the value (as determined in good faith by the General Partner) of the consideration received by the stockholders of the General Partner in connection with such 10 Major Transaction Event is in the form of securities in a successor entity, the General Partner shall cause effective provision to be made so that, upon exercise of the Redemption Rights and payment of the Purchase Price at any time following such Major Transaction Event by means of the Share Purchase Price, Unitholders shall have the right to acquire, in lieu of the Shares which otherwise would have been issued to Contributing Partner, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply anew to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event. (d) In the event of any other Major Transaction Event, each Unitholder shall be entitled to exercise the Redemption Rights in full prior to the consummation of such Major Transaction Event, and, with respect to any Shares acquired upon exercise thereof, shall be entitled to all of the rights of the other holders of Shares with respect to any distribution by the General Partner (or the other party to such Major Transaction Event) in connection with such Major Transaction Event. If not exercised within forty-five days after written notice from the General Partner of such Major Transaction Event or such shorter period between the date of such notice and the effective date of such Major Transaction Event, the Redemption Rights shall terminate at the expiration of such period, but the Redemption Rights shall be revived if such Major Transaction Event is not consummated. (e) The Partnership shall give written notice of any Major Transaction Event promptly after such Major Transaction is announced to the public. (f) The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement, as amended from time to time. 11 (g) Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with this Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner and mailed to the holders of the Redemption Rights within thirty days of any such adjustment. 7. Miscellaneous Provisions. 7.1 NoticesNotices. All notices or other communications given pursuant to this Agreement, including without limitation any Notice, shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service, facsimile or delivered by hand with receipt acknowledged in writing and otherwise as set forth in this Section 8.1. All notices (a) shall be deemed given when received or, if mailed as described above, after 5 Business Days or, if sent by facsimile, upon receipt of confirmed answerback and (b) may be given either by a party or by such party's attorneys. For purposes of this Section 8.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 55 West Monroe Street, Suite 3100, Chicago, Illinois 60603, facsimile number (312) 551-5475, Attention: Matthew Bucksbaum and Bernard Freibaum (with a copy to Neal, Gerber & Eisenberg, Two North LaSalle Street, Suite 2200, Chicago, Illinois 60602, Attn: Marshall E. Eisenberg), and, in the case of Contributing Partner, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof. 7.2 Assignment. The rights of Contributing Partner hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Units, and becomes a substituted partner with respect to such Units, in accordance with the Partnership Agreement, as amended from time to time, and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof (but the rights of Contributing Partner hereunder are not otherwise assignable). Subject to the provisions of Section 6, the General Partner may assign this Agreement without the consent of Contributing Partner, provided that no such 12 assignment shall relieve the General Partner of its obligations under this Agreement. 7.3 Binding Effect. Except as otherwise set forth herein, this Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. 7.4 Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles). 7.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document. 7.6 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto. 7.7 Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to a "Section" or "Exhibit" shall refer to a Section or Exhibit of this Agreement unless otherwise specified. 7.8 Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the issuance of Shares pursuant hereto. 7.9 Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement. 7.10 No Right of Set-off. Each of the Partnership and the General Partner shall perform all of its obligations under this Agreement without asserting any right of setoff, counterclaim or similar justification for non-performance of its obligations under this Agreement on account of any claim that the 13 Partnership or the General Partner may have against Contributing Partner that does not arise under this Agreement. 14 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CONTRIBUTING PARTNER: /s/ Peter D. Leibowits - ------------------------------------ Peter D. Leibowits PARTNERSHIP: GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer -------------------------------- Its Vice President -------------------------------- GENERAL PARTNER: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer -------------------------------- Its Vice President -------------------------------- EXHIBIT A Notice of Redemption The undersigned hereby irrevocably (i) exercises its Redemption Rights as to ___________ units of limited partnership interest (the "Units") in GGP Limited Partnership (the "Partnership") in accordance with the terms of that certain Redemption Rights Agreement, dated _______________, 1997 (the "Agreement"), among the Partnership, General Growth Properties, Inc. (the "General Partner"), and the other parties thereto, (ii) transfers and surrenders such Units and all right, title and interest of the undersigned therein to the party, which shall be either the Partnership or the General Partner, that shall purchase or redeem such Units pursuant to the Agreement, and (iii) directs that the Cash Purchase Price or Share Purchase Price payable upon exercise of the Redemption Right be delivered to the address specified below and, if the Share Purchase Price is to be delivered, the Shares shall be registered or placed in the name(s) and at the address(es) specified below. The undersigned hereby represents, warrants, certifies and agrees (i) that the undersigned has unencumbered title to the Units, free and clear of all Liens, (ii) that the undersigned has the full right, power and authority to transfer and surrender the Units as provided herein and such transfer and surrender has been authorized by all necessary action, and (iii) that the undersigned has obtained the consent or approval of all persons or entities, if any, having the right to consent to or approve such transfer and surrender. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. Dated: ------------------- Name: ---------------------------------- ---------------------------------------- (Signature of Limited Partner) ---------------------------------------- (Street Address) ---------------------------------------- City (State (Zip Code) Signature Guaranteed by ---------------------------------------- If Shares are to be issued, issue to: __________________________________________ Please insert social security or identifying number: ___________________________ EX-4.8 10 c02442exv4w8.txt REDEMPTION RIGHTS AGREEMENT Exhibit 4.8 REDEMPTION RIGHTS AGREEMENT Redemption Rights Agreement, dated April 2, 1998, among GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), General Growth Properties, Inc., a Delaware corporation (the "General Partner"), and Southwest Properties Venture, a Colorado general partnership ("Contributing Partner"). RECITALS WHEREAS, concurrently herewith, Contributing Partner is being admitted as a limited partner of the Partnership, the general partner of which is the General Partner; WHEREAS, shares of common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange; and WHEREAS, the parties desire to set forth herein the terms and conditions upon which the Contributing Partner may cause the Partnership to redeem its limited partnership units in the Partnership. NOW, THEREFORE, the parties hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: "Acts" shall mean the Securities Act and the Exchange Act, collectively. "Affiliates" shall mean "affiliates" as defined pursuant to the Securities Act and the regulations promulgated thereunder. "Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois. "Cash Purchase Price" shall mean, with respect to any redeemed or purchased Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares) that would be payable with respect to such Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price of such Units. In the event that the Share Purchase Price includes securities other than Shares, then the value of such other securities shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate. "Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time. "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor code. "Common Stock" shall have the meaning set forth in the recitals. "Computation Date" shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. "Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a). "Contribution Agreement" shall mean that certain Sale and Contribution Agreement dated January ___, 1998, among the Partnership, the General Partner and Contributing Partner, as the same has been and may hereafter be amended from time to time, pursuant to which this Agreement is being executed. "Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act. "Expiration Date" shall mean the earlier of (a) April 16, 2023 and (b) the date upon which all Units have been redeemed or purchased in accordance with the terms hereof. "Liens" shall have the meaning set forth in the Contribution Agreement. 2 "Major Transaction Event" shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6(a)); (b) a merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner's assets or (d) the liquidation, dissolution or winding up of the General Partner. "Notice" shall have the meaning set forth in Section 3.2. "Partnership Agreement" shall mean that certain Amended and Restated Agreement of Limited Partnership of the Partnership, dated July 27, 1993, as amended by that certain First Amendment thereto dated May 23, 1995, that certain Second Amendment thereto dated June 13, 1995, that certain Third Amendment thereto dated May 21, 1996, that certain Fourth Amendment thereto dated August 30, 1996, that certain Fifth Amendment thereto dated as of October 4, 1996, that certain Sixth Amendment thereto dated as of November 27, 1996, that certain Seventh Amendment thereto dated December 6, 1996, that certain Eighth Amendment thereto dated June 19, 1997, that certain Ninth Amendment thereto dated as of August 8, 1997, that certain Tenth Amendment thereto dated as of September 8, 1997, that certain Eleventh Amendment thereto dated as of September 11, 1997, that certain Twelfth Amendment thereto dated October 15, 1997, that certain Thirteenth Amendment thereto dated October 24, 1997 and that certain Fourteenth Amendment thereto dated October 29, 1997 and as the same may be further amended. "Person" shall mean any natural person, corporation, partnership, association, limited liability company, trust or other entity. "Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof. "Redemption Rights" shall have the meaning set forth in Section 2. "REIT" shall mean real estate investment trust as such term is defined under the Code. 3 "REIT Requirements" shall have the meaning set forth in the Partnership Agreement, as the same may change from time to time. "Registration Expenses" shall mean all expenses incident to the General Partner's performance of or compliance with the registration requirements set forth in this Agreement, including without limitation (a) the fees, disbursements and expenses of the General Partner's counsel and accountants in connection with the registration of Shares issuable upon the exercise of the Redemption Rights; (b) all expenses in connection with the preparation and printing of the registration statement or statements, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto; (c) the cost of printing or producing any blue sky or legal investment memoranda or other documents in connection with the offering, sale or delivery of such Shares; (d) all expenses in connection with the qualification of such Shares under state securities laws; (e) the fees and expenses incurred in connection with the listing of such Shares on each securities exchange on which securities of the same class are then listed and (f) all SEC, stock exchange and National Association of Securities Dealers, Inc. registration and filing fees. Notwithstanding the foregoing, Registration Expenses shall not include (and the General Partner will pay) any costs incurred by the Partnership or the General Partner in preparing any document that is incorporated by reference in a registration statement, or any professional fee or other expenses, that would have been incurred apart from the obligation of the General Partner hereunder to file a Registration Statement. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. "Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Units being redeemed or purchased multiplied by (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than rights referred to in Section 6(b)) or any other securities or property, then the Share Purchase Price also shall include such rights, options, 4 warrants or convertible or exchangeable securities that a holder of that number of Shares would have been entitled to receive. "Shares" shall mean shares of the Common Stock. "Units" shall mean the limited partnership units in the Partnership issued to Contributing Partner pursuant to the Contribution Agreement. "Unitholder" shall mean the Person who at the time in question holds one or more Units in accordance with the Partnership Agreement, as the same may be amended from time to time. 2. Grant of Redemption Rights. (a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to Contributing Partner, and Contributing Partner does hereby accept, the right, but without obligation on the part of Contributing Partner, to require the Partnership to redeem from time to time part or all of the Units of Contributing Partner for the Cash Purchase Price ("Redemption Rights"). (b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume the obligation of the Partnership with respect to and satisfy Contributing Partner's exercise of a Redemption Right by paying to Contributing Partner, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with respect to the Units for which Contributing Partner exercised its Redemption Rights. If the General Partner assumes such obligations with respect to the exercise by Contributing Partner of a Redemption Right as to certain Units and makes the required payment, then the Partnership shall have no obligation to pay any amount to Contributing Partner with respect to the exercise of a Redemption Right for such Units, and any Units purchased shall be owned by the General Partner for all purposes. (c) If the General Partner shall assume the obligations of the Partnership with respect to and satisfy a Redemption Right, the Partnership, the Contributing Partner and the General Partner each shall treat the transaction between the General Partner and Contributing Partner as a sale of Contributing 5 Partner's Units (or a portion thereof) to the General Partner for federal income tax purposes. (d) Upon the redemption or purchase of part or all of Contributing Partner's Units and the payment of the Purchase Price with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Units; provided, however, that Contributing Partner's rights under this Agreement with regard to any other Units will continue in full force and effect. (e) No fractional Shares shall be issued hereunder. In lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price on the relevant Computation Date. 3. Exercise of Redemption Rights. 3.1 Time for Exercise of Redemption Rights. Contributing Partner may exercise its Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof but prior to the Expiration Date; provided, however, that the Redemption Rights may not be exercised at any one time by Contributing Partner with respect to less than 1,000 Units (or all the Units then owned by Contributing Partner if Contributing Partner owns less than 1,000 Units) or in the event that such exercise of Redemption Rights (or the assignment of Units or delivery of either the Cash Purchase Price or the Share Purchase Price with respect thereto) violates the terms of the Partnership Agreement or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Units specified therein in accordance with the terms hereof. 3.2 Method of Exercise. The Redemption Rights shall be exercised by written notice (the "Notice") to the Partnership in the form of Exhibit A specifying the number of Units to be redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the Contributing Partner. 3.3 Closing. The closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights shall occur within 30 days following the giving of the Notice. Contributing Partner shall execute such documents as the General 6 Partner may reasonably require in connection with the closing of such redemption or purchase and sale. 3.4 Payment of Cash or Issuance of Shares. At the closing of the redemption or purchase and sale of Units pursuant to an exercise of Redemption Rights, the Partnership shall deliver to Contributing Partner the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights, the General Partner shall deliver to the Partnership, at the election of the General Partner, which may be exercised in the General Partner's sole discretion, either (a) the Cash Purchase Price by check or (b) certificates representing the Shares and any other securities constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e), or a combination thereof. 4. Matters Relating to Shares. 4.1 Registration. (a) The General Partner shall (i) prepare, file and use reasonable efforts to cause to become effective on or before the ninetieth day following the first anniversary of the date hereof a registration statement, which may be on Form S- 3, under the Securities Act relating to the Shares to be issued upon exercise of the Redemption Rights assuming full satisfaction of the Redemption Rights by delivery of Shares and (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act. (b) The General Partner shall pay all Registration Expenses incurred prior to the sixth anniversary of the date hereof with respect to filing and keeping effective the registration statement through such date, and the Unitholders shall reimburse the General Partner for Registration Expenses (or a pro rata portion of the Registration Expenses based on the number of Shares issuable to such Unitholders upon full exercise of the Redemption Rights of such Unitholders relative to the total number of Shares issuable pursuant to such registration statement) which are incurred after the sixth anniversary of the date hereof in respect of maintaining effective (but not the initial filing and causing to become effective of) such 7 registration statement; provided, however, that Contributing Partner shall not be required to reimburse any costs (i) of preparing any documents filed with the SEC that are incorporated by reference in the Registration Statement or (ii) that become necessary because the General Partner is unable to use Form S-3 (or any equivalent short form that relies on incorporation by reference) for the reason that the General Partner has failed to comply on a timely basis with any requirement of the Acts or Form S-3. The reimbursement of such expenses by the Unitholders shall be paid upon demand. (c) Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep any registration statement filed pursuant to this Section 4.1 effective after the Expiration Date or if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated or all of the Unitholders notify the General Partner in writing that the General Partner no longer need keep such registration statement effective. 4.2 Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to time outstanding (assuming no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights). 4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights shall be duly and validly issued and fully paid and non-assessable. 5. Transfer and Other Taxes. In the event that any state or local property transfer or other tax is payable as the result of or in connection with any exercise of the Redemption Rights by Contributing Partner, Contributor Partner shall pay such tax, and no Shares shall be issued pursuant hereto until such Contributor Partner has paid to the General Partner or the Partnership, as the case may be, the amount of such tax or has provided evidence, in form reasonably satisfactory to the General Partner or the Partnership, as the case may be, as to the payment thereof. 8 6. Anti-Dilution and Adjustment Provisions. (a) The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares. The Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. (b) If at any time the General Partner grants to its stockholders any right to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that Contributing Partner would have been entitled to subscribe for if, immediately prior to such grant, Contributing Partner had exercised its Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement, then the General Partner also shall grant to Contributing Partner the same subscription rights that Contributing Partner would be entitled to if Contributing Partner had exercised its Redemption Rights in full and received the Share Purchase Price in satisfaction thereof prior to such grant. (c) Upon the occurrence of a Major Transaction Event where at least one- half of the value (as determined in good faith by the General Partner) of the consideration received by the stockholders of the General Partner in connection with such Major Transaction Event is in the form of securities in a successor entity, the General Partner shall cause effective provision to be made so that, upon exercise of the Redemption Rights and payment of the Purchase Price at any time following such Major Transaction Event by means of the Share Purchase Price, Unitholders shall have the right to acquire, in lieu of 9 the Shares which otherwise would have been issued to Contributing Partner, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply anew to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event. (d) In the event of any other Major Transaction Event, each Unitholder shall be entitled to exercise the Redemption Rights in full prior to the consummation of such Major Transaction Event, and, with respect to any Shares acquired upon exercise thereof, shall be entitled to all of the rights of the other holders of Shares with respect to any distribution by the General Partner (or the other party to such Major Transaction Event) in connection with such Major Transaction Event. If not exercised within forty-five days after written notice from the General Partner of such Major Transaction Event or such shorter period between the date of such notice and the effective date of such Major Transaction Event, the Redemption Rights shall terminate at the expiration of such period, but the Redemption Rights shall be revived if such Major Transaction Event is not consummated. (e) The Partnership shall give written notice of any Major Transaction Event promptly after such Major Transaction is announced to the public. (f) The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement, as amended from time to time. (g) Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with this Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such 10 adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner. 7. Miscellaneous Provisions. 7.1 Notices. All notices or other communications given pursuant to this Agreement, including without limitation any Notice, shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service, facsimile or delivered by hand with receipt acknowledged in writing and otherwise as set forth in this Section 8.1. All notices (a) shall be deemed given when received or, if mailed as described above, after 5 Business Days or, if sent by facsimile, upon receipt of confirmed answerback and (b) may be given either by a party or by such party's attorneys. For purposes of this Section 8.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 55 West Monroe Street, Suite 3100, Chicago, Illinois 60603, facsimile number (312) 551-5475, Attention: Matthew Bucksbaum and Bernard Freibaum (with a copy to Neal, Gerber & Eisenberg, Two North LaSalle Street, Suite 2200, Chicago, Illinois 60602, Attn: Marshall E. Eisenberg), and, in the case of Contributing Partner, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof. 7.2 Assignment. The rights of Contributing Partner hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Units, and becomes a substituted partner with respect to such Units, in accordance with the Partnership Agreement, as amended from time to time, and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof (but the rights of Contributing Partner hereunder are not otherwise assignable). Subject to the provisions of Section 6, the General Partner may assign this Agreement without the consent of Contributing Partner, provided that no such assignment shall relieve the General Partner of its obligations under this Agreement. 7.3 Binding Effect. Except as otherwise set forth herein, this Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. 11 7.4 Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles). 7.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document. 7.6 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto. 7.7 Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to a "Section" or "Exhibit" shall refer to a Section or Exhibit of this Agreement unless otherwise specified. 7.8 Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the issuance of Shares pursuant hereto. 7.9 Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement. 12 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CONTRIBUTING PARTNER: SOUTHWEST PROPERTIES VENTURE, a Colorado joint venture By: P&P SOUTHWEST PARTNERSHIP, a Colorado general partnership, which is a joint venturer of Southwest Properties Venture By: /s/ Jordon Perlmutter --------------------------------- Jordon Perlmutter Managing General Partner By: /s/ Samuel Primack --------------------------------- Samuel Primack Managing General Partner By: WADSWORTH PARTNERSHIP, a Colorado limited partnership, which is a joint venturer of Southwest Properties Venture By: The Wadsworth Holding Partnership, a Colorado general partnership, which is the sole general partner of The Wadsworth Partnership By: Cooper Investments, a Colorado general partnership, which is a general partner of The Wadsworth Holding Partnership By: /s/ Michael Cooper --------------------------------- Michael Cooper General Partner 13 PARTNERSHIP: GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its Senior Vice President GENERAL PARTNER: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its: Senior Vice President 14 EXHIBIT A Notice of Redemption The undersigned hereby irrevocably (i) exercises its Redemption Rights as to ___________ units of limited partnership interest (the "Units") in GGP Limited Partnership (the "Partnership") in accordance with the terms of that certain Redemption Rights Agreement, dated _______________, 1998 (the "Agreement"), among the Partnership, General Growth Properties, Inc. (the "General Partner"), and the other parties thereto, (ii) transfers and surrenders such Units and all right, title and interest of the undersigned therein to the party, which shall be either the Partnership or the General Partner, that shall purchase or redeem such Units pursuant to the Agreement, and (iii) directs that the Cash Purchase Price or Share Purchase Price payable upon exercise of the Redemption Right be delivered to the address specified below and, if the Share Purchase Price is to be delivered, the Shares shall be registered or placed in the name(s) and at the address(es) specified below. The undersigned hereby represents, warrants, certifies and agrees (i) that the undersigned has unencumbered title to the Units, free and clear of all Liens, (ii) that the undersigned has the full right, power and authority to transfer and surrender the Units as provided herein and such transfer and surrender has been authorized by all necessary action, and (iii) that the undersigned has obtained the consent or approval of all persons or entities, if any, having the right to consent to or approve such transfer and surrender. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. Dated: ------------------------------ Name: --------------------------------- ---------------------------------------- (Signature of Limited Partner) ---------------------------------------- (Street Address) ---------------------------------------- City (State) (Zip Code) Signature Guaranteed by ---------------------------------------- If Shares are to be issued, issue to: __________________________________________ Please insert social security or identifying number: ___________________________ EX-4.9 11 c02442exv4w9.txt REDEMPTION RIGHTS AGREEMENT EXHIBIT 4.9 REDEMPTION RIGHTS AGREEMENT Redemption Rights Agreement, dated as of July 21, 1998 (this "Agreement"), among GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), General Growth Properties, Inc., a Delaware corporation (the "General Partner"), Nashland Associates, a Tennessee general partnership ("Nashland") and HRE Altamonte, Inc., a Delaware corporation ("HRE", and each of HRE and Nashland a "Contributing Partner"). RECITALS WHEREAS, concurrently herewith, each Contributing Partner is being admitted as a limited partner of the Partnership, the general partner of which is the General Partner; WHEREAS, shares of common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange; and WHEREAS, the parties desire to set forth herein the terms and conditions upon which each Contributing Partner may cause the Partnership to redeem its limited partnership units in the Partnership. NOW, THEREFORE, the parties hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: "Acts" shall mean the Securities Act and the Exchange Act, collectively. "Affiliates" shall mean "affiliates" as defined pursuant to the Securities Act and the regulations promulgated thereunder. "Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois. 1 "Cash Purchase Price" shall mean, with respect to any redeemed or purchased Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares) that would be payable with respect to such Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price of such Units. In the event that the Share Purchase Price includes securities other than Shares, then the value of such other securities shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate. "Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time. "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor code. "Common Stock" shall have the meaning set forth in the recitals. "Computation Date" shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. "Contribution Agreement" shall mean that certain Contribution and Exchange Agreement dated as of July 10, 1998, among the Partnership, Altamonte Springs Mall, L.P., Nashland and HRE as the same has been and may hereafter be amended from time to time, pursuant to which this Agreement is being executed. "Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a). "Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement. 2 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act. "Expiration Date" shall mean the earlier of (a) December 31, 2045 and (b) the date upon which all Units have been redeemed or purchased in accordance with the terms hereof. "Holders" shall have the meaning set forth in the preamble of Exhibit B. "Liens" shall have the meaning set forth in the Contribution Agreement. "Major Transaction Event" shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6(a)); (b) a merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner's assets or (d) the liquidation, dissolution or winding up of the General Partner. "Notice" shall have the meaning set forth in Section 3.2. "Partnership Agreement" shall mean that certain Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated April 1, 1998 and as the same has been and may be further amended. "Person" shall mean any natural person, corporation, partnership, association, limited liability company, trust or other entity. "Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof. 3 "Redemption Rights" shall have the meaning set forth in Section 2. "Registrable Securities" shall have the meaning set forth in Section 1.01 of Exhibit B. "Registration Expenses" shall mean all expenses incident to the General Partner's performance of or compliance with the registration requirements set forth in this Agreement (including in Exhibit B), including without limitation (a) the fees, disbursements and expenses of the General Partner's counsel and accountants in connection with the registration of Shares and other Registrable Securities; (b) all expenses in connection with the preparation and printing of the registration statement or statements, any preliminary or final prospectus, any other offering documents and amendments and supplements thereto; (c) the cost of printing or producing any blue sky or legal investment memoranda or other documents in connection with the offering, sale or delivery of the Shares and other Registrable Securities; (d) all expenses in connection with the qualification of the Shares and other Registrable Securities under state securities laws; (e) the fees and expenses incurred in connection with the listing of the Shares and other Registrable Securities on each securities exchange on which securities of the same class are then listed and (f) all SEC, stock exchange and National Association of Securities Dealers, Inc. registration and filing fees. Notwithstanding the foregoing, Registration Expenses shall not include (and the General Partner will pay) any costs incurred by the Partnership or the General Partner in preparing any document that is incorporated by reference in a registration statement, or any professional fee or other expenses, that would have been incurred apart from the obligation of the General Partner hereunder to file a registration statement. "Registration Rights" shall have the meaning set forth in Section 4.1. "REIT" shall mean real estate investment trust as such term is defined under the Code. "REIT Requirements" shall have the meaning set forth in the Partnership Agreement, as the same may change from time 4 to time. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. "Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Units being redeemed or purchased multiplied by (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than rights referred to in Section 6(b)) or any other securities or property, then the Share Purchase Price also shall include such rights, options, warrants or convertible or exchangeable securities that a holder of that number of Shares would have been entitled to receive. "Shares" shall mean shares of the Common Stock. "Unitholder" shall mean the Person who at the time in question holds one or more Units in accordance with the Partnership Agreement, as the same may be amended from time to time. "Units" shall mean the limited partnership units in the Partnership issued to the Contributing Partners pursuant to the Contribution Agreement. 2. Grant of Redemption Rights. (a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to each Contributing Partner, and each Contributing Partner does hereby accept, the right, but without obligation on the part of such Contributing Partner, to require the Partnership to redeem from time to time part or all of the Units of such Contributing Partner for the Cash Purchase Price ("Redemption Rights"). 5 (b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume the obligation of the Partnership with respect to and satisfy each Contributing Partner's exercise of a Redemption Right by paying to such Contributing Partner, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with respect to the Units for which such Contributing Partner exercised its Redemption Rights. If the General Partner assumes such obligations of the Partnership with respect to the exercise by a Contributing Partner of a Redemption Right as to certain Units and makes the required payment, then the Partnership shall have no obligation to pay any amount to such Contributing Partner with respect to the exercise of a Redemption Right for such Units, and any Units purchased shall be owned by the General Partner for all purposes. (c) If the General Partner shall assume the obligations of the Partnership with respect to and satisfy a Redemption Right, the Partnership, the Contributing Partner and the General Partner each shall treat the transaction between the General Partner and the Contributing Partner as a sale of the Contributing Partner's Units (or a portion thereof) to the General Partner for federal income tax purposes. (d) Upon the redemption or purchase of part or all of a Contributing Partner's Units and the payment of the Purchase Price with respect thereto, such Person shall he deemed withdrawn as a Partner in the Partnership to the extent of the Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Units; provided, however, that such Contributing Partner's rights under this Agreement with regard to any other Units will continue in full force and effect. (e) No fractional Shares shall be issued hereunder. In lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price on the relevant Computation Date. 6 3. Exercise of Redemption Rights. 3.1 Time for Exercise of Redemption Rights. Each Contributing Partner may exercise its Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof but prior to the Expiration Date; provided, however, that the Redemption Rights may not be exercised at any one time by any Contributing Partner with respect to less than 1,000 Units (or all the Units then owned by a Contributing Partner if such Contributing Partner owns less than 1,000 Units) or in the event that such exercise of Redemption Rights (or the assignment of Units or delivery of either the Cash Purchase Price or the Share Purchase Price with respect thereto) violates the terms of the Partnership Agreement or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Units specified therein in accordance with the terms hereof. 3.2 Method of Exercise. The Redemption Rights shall be exercised by written notice (the "Notice") to the Partnership in the form of Exhibit A specifying the number of Units to be redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the Contributing Partner. 3.3 Closing. The closing of the redemption or purchase and sale pursuant to an exercise of the Redemption Rights shall occur within 30 days following the giving of the Notice. Each Contributing Partner shall execute such documents as the General Partner may reasonably require in connection with the closing of such redemption or purchase and sale. 3.4 Payment of Cash or Issuance of Shares. At the closing of the redemption or purchase and sale of Units pursuant to an exercise of Redemption Rights, the Partnership shall deliver to the redeeming Contributing Partner the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights, the General Partner shall deliver to the Partnership, at the election of the General Partner, which may be exercised in the General Partner's sole discretion, either (a) the Cash Purchase Price by check or 7 (b) certificates representing the Shares and any other securities constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e), or a combination thereof. 4. Matters Relating to Shares. 4.1 Registration. (a) The General Partner shall (i) prepare, file and use its reasonable efforts to cause to become effective on or before the ninetieth day following the first anniversary of the date hereof a registration statement, which may be on Form S-3, under the Securities Act relating to the issuance to each Unitholder of the Shares to be issued upon exercise of such Unitholder's Redemption Rights assuming full satisfaction of such Redemption Rights by delivery of Shares and (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act; provided that if a Unitholder first exercises its Redemption Rights with respect to any of its Units prior to the date such registration statement becomes effective under the Securities Act and the General Partner elects pursuant to Section 2(b) to satisfy such Unitholder's exercise of its Redemption Rights by paying the Share Purchase Price, the General Partner shall not be obligated to register pursuant to this Section 4.1(a) the issuance to such Unitholder of any Shares. (b) The General Partner shall pay all Registration Expenses incurred prior to the sixth anniversary of the date hereof with respect to filing and keeping effective any registration statement required by Section 4.1(a) through such date, and the Unitholders shall reimburse the General Partner for Registration Expenses (or a pro rata portion of the Registration Expenses based on the number of Shares issuable to such Unitholders pursuant to such registration statement upon full exercise of the Redemption Rights of such Unitholders relative to the total number of Shares issuable pursuant to such registration statement) which are incurred after the sixth anniversary of the date hereof in respect of maintaining effective (but not the initial filing and causing to become effective of) such registration statement; provided, however, that Unitholders shall not be 8 required to reimburse any costs (i) of preparing any documents filed with the SEC that are incorporated by reference in such registration statement or (ii) that become necessary because the General Partner is unable to use Form S-3 (or any equivalent short form that relies on incorporation by reference) for the reason that the General Partner has failed to comply on a timely basis with any requirement of the Acts or Form S-3. The reimbursement of such expenses by the Unitholders shall be paid upon demand. (c) Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep any registration statement filed pursuant to this Section 4.1(a) effective after the Expiration Date or if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated or all of the Unitholders notify the General Partner in writing that the General Partner no longer need keep such registration statement effective. (d) The Holders (as defined in Exhibit B) shall have the registration rights (the "Registration Rights") set forth on Exhibit B. 4.2 Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares in full satisfaction of all Redemption Rights which are from time to time outstanding (assuming no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights). 4.3 Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights shall be duly and validly issued and fully paid and non-assessable. 5. Transfer and Other Taxes. In the event that any state or local property transfer or other similar tax is payable as the result of or in connection with any exercise of the Redemption Rights by a Contributing Partner, such 9 Contributing Partner shall pay such tax, and no Shares shall be issued pursuant hereto until such Contributor Partner has paid to the General Partner or the Partnership, as the case may be, the amount of such tax or has provided evidence, in form reasonably satisfactory to the General Partner or the Partnership, as the case may be, as to the payment thereof. 6. Anti-Dilution and Adjustment Provisions. (a) The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares. The Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. (b) If at any time the General Partner grants to its stockholders any right to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that a Contributing Partner would have been entitled to subscribe for if, immediately prior to such grant, such Contributing Partner had exercised its Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement, then the General Partner also shall grant to each Contributing Partner the same subscription rights that such Contributing Partner would be entitled to if such Contributing Partner had exercised its Redemption Rights in full and received the Share Purchase Price in satisfaction 10 thereof prior to such grant. (c) Upon the occurrence of a Major Transaction Event where at least one-half of the value (as determined in good faith by the General Partner) of the consideration received by the stockholders of the General Partner in connection with such Major Transaction Event is in the form of securities in a successor entity, the General Partner shall cause effective provision to be made so that, upon exercise of the Redemption Rights and payment of the Purchase Price at any time following such Major Transaction Event by means of the Share Purchase Price, Unitholders shall have the right to acquire, in lieu of the Shares which otherwise would have been issued to each Contributing Partner, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply anew to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event. (d) In the event of any other Major Transaction Event, tender offer for at least 40% of the then outstanding Shares, or merger or consolidation of the General Partner which requires the approval of the General Partner's shareholders (which is not a Major Transaction Event), each Unitholder shall be entitled to exercise the Redemption Rights in full prior to the consummation of such Major Transaction Event or other event, and, with respect to any Shares acquired upon exercise thereof, shall be entitled to all of the rights of the other holders of Shares with respect to any distribution by the General Partner (or the other party to such Major Transaction Event or other event) in connection with such Major Transaction Event or other event. If not exercised within forty-five days after written notice from the General Partner of such Major Transaction Event or such shorter period between the date of such notice and the effective date of such Major Transaction Event, the Redemption Rights shall terminate at the expiration of such period, but the Redemption Rights shall 11 be revived if such Major Transaction Event is not consummated. (e) The Partnership shall give written notice of any Major Transaction Event to each Contributing Partner promptly after such Major Transaction Event is announced to the public. (f) The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement. (g) Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with this Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner. (h) Notwithstanding anything above to the contrary, the Unitholders will be entitled to adjustments to protect against dilution and the deferral of receipt of benefits, and to receive rights, preferences and privileges in connection with a Major Transaction Event, that are not less favorable than the adjustments, rights, preferences and privileges received by any other holder of the same class of limited partnership units in the Partnership. 12 7. Miscellaneous Provisions. 7.1 Notices. All notices or other communications given pursuant to this Agreement, including without limitation any Notice, shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service, facsimile or delivered by hand with receipt acknowledged in writing and otherwise as set forth in this Section 7.1. All notices (a) shall be deemed given when received or, if mailed as described above, after 5 Business Days or, if sent by facsimile, upon receipt of confirmed answer back and (b) may be given either by a party or by such party's attorneys. For purposes of this Section 7.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 110 North Wacker Drive, Chicago, Illinois 60606, facsimile number (312) 960-5475, Attention: Matthew Bucksbaum and Bernard Freibaum (with a copy to Neal, Gerber & Eisenberg, Two North LaSalle Street, Suite 2200, Chicago, Illinois 60602, Attn: Marshall E. Eisenberg), and, in the case of the Contributing Partners, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof. 7.2 Assignment. The rights of each Contributing Partner hereunder (including the Redemption Rights and the Registration Rights) shall automatically devolve upon and inure to the benefit of any Person (i) to which Units are transferred in accordance with the Partnership Agreement, as amended from time to time, and the Contribution Agreement, and (ii) which delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof. In addition, a transferee of Registrable Securities who acquires such Registrable Securities from a Holder in a transaction other than pursuant to an effective registration statement under the Securities Act may become a Holder for purposes of Exhibit B and have Registration Rights with respect to such Registrable Securities by (i) taking and holding the record ownership of such Registrable Securities, (ii) notifying the General Partner in writing of such transfer and (iii) providing the General Partner with all information concerning such transferee that is necessary to amend or 13 supplement the applicable registration statement and/or prospectus of the General Partner, whereupon such transferee shall be conclusively deemed to have agreed to be bound by and entitled to the benefit of all the terms and provisions of this Agreement relating to Registration Rights. Subject to the provisions of Section 6, the General Partner may assign this Agreement without the consent of the Contributing Partners, provided that no such assignment shall relieve the General Partner of its obligations under this Agreement. 7.3 Amendments and Waivers. (a) Subject to Section 7.3(b), the provisions of this Agreement (including the provisions of this sentence) may not be amended, modified, supplemented or waived, nor may consent to departures therefrom be given, without the written consent of the General Partner and a majority-in-interest of the Unitholders; provided, however, that no amendment, modification, supplement or waiver of, or consent to the departure from, such provisions of this Agreement, which has the purpose or effect of reducing, impairing or adversely affecting the right of any Unitholder, shall be effective as against any such Person unless consented to in writing by such Person. Notice of any such amendment, modification, supplement, waiver or consent adopted in accordance with this Section 7.3(a) shall be provided by the General Partner to each Unitholder at least thirty (30) days prior to the effective date of such amendment, modification, supplement, waiver or consent. (b) Exhibit B of this Agreement, together with Section 4.1(d), Section 7.1, the last two sentences of Section 7.2, this Section 7.3(b) and Sections 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10 and 7.11, may not be amended, modified, supplemented or waived, nor may consent to departures therefrom be given, without the written consent of the General Partner and a majority-in-interest of the Holders (as defined in Exhibit B) (aggregating holders of Units and Shares into a single class for the purpose of such computation); provided, however, that no amendment, modification, supplement or waiver of, or consent to the departure from, Exhibit B or such other provisions of this Agreement, which has the purpose or effect of reducing, impairing or adversely affecting the right of any Holder, shall be effective as against any such Holder unless 14 consented to in writing by such Holder. Notice of any such amendment, modification, supplement, waiver or consent adopted in accordance with this Section 7.3(b) shall be provided by the General Partner to each Holder at least thirty (30) days prior to the effective date of such amendment, modification, supplement, waiver or consent. 7.4 Specific Performance. The parties hereto agree that the obligations imposed on them in this Agreement are special, unique and of an extraordinary character, and that in the event of breach by any party damages would not be an adequate remedy, and each of the other parties shall be entitled to specific performance and injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity; and the parties hereto further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. 7.5 Binding Effect. Except as otherwise set forth herein, this Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. 7.6 Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles). 7.7 Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document. 7.8 Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto. 7.9 Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to 15 a "Section" or "Exhibit" shall refer to a Section or Exhibit of this Agreement unless otherwise specified. 7.10 Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the issuance of Shares pursuant hereto. 7.11 Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement. 16 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CONTRIBUTING PARTNERS: NASHLAND ASSOCIATES, a Tennessee general partnership By: O'Connor Realty Investors II, L.P., its managing partner, By: J.W. O'Connor & Co. Incorporated, its managing general partner, By: /s/ Glenn J. Rufrano --------------------------------- Name: Glenn J. Rufrano ------------------------------- Title: President ------------------------------ HRE ALTAMONTE, INC., a Delaware corporation, By: /s/ Dale R. Gilomen --------------------------------- Name: Dale R. Gilomen ------------------------------- Title: Vice President ------------------------------ PARTNERSHIP: GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its Senior Vice President --------------------------------- GENERAL PARTNER: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its Senior Vice President --------------------------------- 17 EXHIBIT A Notice of Redemption The undersigned hereby irrevocably (i) exercises its Redemption Rights as to ______________ units of limited partnership interest (the "Units") in GGP Limited Partnership (the "Partnership") in accordance with the terms of that certain Redemption Rights Agreement, dated July 21, 1998 (the "Agreement"), among the Partnership, General Growth Properties, Inc. (the "General Partner"), and the other parties thereto, (ii) transfers and surrenders such Units and all right, title and interest of the undersigned therein to the party, which shall be either the Partnership or the General Partner, that shall purchase or redeem such Units pursuant to the Agreement, and (iii) directs that the Cash Purchase Price or Share Purchase Price payable upon exercise of the Redemption Right be delivered to the address specified below and, if the Share Purchase Price is to be delivered, the Shares shall be registered or placed in the name(s) and at the address(es) specified below. The undersigned hereby represents, warrants, certifies and agrees (i) that the undersigned has unencumbered title to the Units, free and clear of all Liens, (ii) that the undersigned has the full right, power and authority to transfer and surrender the Units as provided herein and such transfer and surrender has been authorized by all necessary action, and (iii) that the undersigned has obtained the consent or approval of all persons or entities, if any, having the right to consent to or approve such transfer and surrender. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. Dated: --------------------- Name: ---------------------------------- ---------------------------------------- (Signature of Limited Partner) ---------------------------------------- (Street Address) A-1 ---------------------------------------- (City) (State) (Zip Code) ---------------------------------------- Signature Guaranteed by If Shares are to be issued, issue to: __________________________________________ Please insert social security or identifying number: ___________________________ A-2 EXHIBIT B Registration Rights Capitalized terms used in this Exhibit B and not otherwise defined herein shall have the meanings ascribed to such terms in the Agreement. References to an "Article" or a "Section" in this Exhibit B shall refer to an Article or Section of this Exhibit B unless otherwise specified. ARTICLE I Shelf Registration Statement; Underwritten Offerings SECTION 1.01. Shelf Registration Statement. (a) Not later than 10 business days after any Holder (as hereinafter defined) delivers written notice to the General Partner requesting registration of Registrable Securities (as hereinafter defined), the General Partner shall amend an existing registration statement or file a new registration statement (the "Registration Statement") under the Securities Act with the SEC covering resales of such Registrable Securities and shall use its best efforts to cause the Registration Statement to become effective under the Securities Act as soon as practicable after filing; provided that in no event shall the General Partner be obligated to use its best efforts to cause the Registration Statement to become effective as of a date prior to the 120th day following the first anniversary of the date hereof. The Registration Statement (i) shall be available for the sale of Registrable Securities in accordance with the intended method or methods of distribution by the Selling Holders (as hereinafter defined) and (ii) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith. Notwithstanding anything in this Section 1.01 to the contrary, the General Partner shall not be obligated to register for resale Registrable Securities the resale of which is already registered pursuant to a registration statement then currently effective under the Securities Act. The term "Holder" shall mean each Contributing Partner and any other person who hereafter joins in and is made a party B-1 to this Agreement pursuant to Section 7.2 of this Agreement that then holds Units or Registrable Securities. The term "Selling Holder" shall mean a holder of Registrable Securities (or Units redeemable for Registrable Securities) the public sale of which have been registered under the Securities Act pursuant to the Registration Statement. The General Partner agrees that it shall deliver to the Selling Holders for their review and comments copies of the Registration Statement and any amendments and supplements thereto (other than post-effective amendments) prior to the filing thereof with the SEC. (b) Once the Registration Statement becomes effective, the General Partner shall keep the Registration Statement continuously effective and available for resale of the Registrable Securities until the earliest to occur of (i) the Expiration Date, (ii) the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated, (iii) all of the Holders notify the General Partner in writing that the General Partner no longer need keep the Registration Statement effective, (iv) the sale of all of the Registrable Securities by the Holders, or (v) the date on which in the opinion of counsel for the General Partner all of the Registrable Securities become eligible for sale pursuant to Rule 144(k) under the Securities Act (such opinion to be in writing and addressed to the Holders and such counsel to be reasonably acceptable to the Holders). The Holders hereby agree that Neal, Gerber & Eisenberg is acceptable counsel for the General Partner. (c) The term "Registrable Securities" shall mean (i) any Shares that have been or may be issued from time to time upon the exchange of the Units (including any additional units of limited partnership interest of the Partnership or any successor entity received in exchange for, or as a dividend or distribution on account of the Units) pursuant to the Partnership Agreement or this Agreement and other securities issued by the General Partner in exchange for the Shares and (ii) any securities issued by the Partnership or the General Partner as a dividend or distribution on account of Registrable Securities or resulting from a subdivision of outstanding Registrable Securities into a greater number of securities (by reclassification, stock split or otherwise); provided that B-2 any securities issued pursuant to a registration statement effective under the Securities Act at the time of their issuance shall not be Registrable Securities. SECTION 1.02. Underwritten Offering. (a) If any of the Registrable Securities covered by the Registration Statement are to be sold in an underwritten public offering, the Holder intending to pursue such underwritten offering shall deliver a notice to the General Partner of such intent, and within ten days after receipt of the notice of intent from such Holder for an underwritten offering, the General Partner shall give written notice (the "Offering Notice") of such notice of intent to all other Holders and such other Holders shall be entitled to include in such an underwritten offering all or part of their respective Registrable Securities by notice to the General Partner for inclusion therein within 15 days after the Offering Notice is given. All notices made pursuant to this Section 1.02(a) shall specify the aggregate number of Registrable Securities to be included. The General Partner agrees to cooperate with any such request for an underwritten offering and to take all such other reasonable actions in connection therewith as provided in Section 2.01(l). If the board of directors of the General Partner shall determine in its good faith judgment that a underwritten public offering proposed by a Holder pursuant to this Section 1.02 would have a material adverse effect on the General Partner and its stockholders, then the General Partner may elect to delay or suspend such underwritten public offering for a period of not more than 45 days; provided that the General Partner shall not delay or suspend underwritten public offerings pursuant to this Section 1.02 for an aggregate period of more than 90 days during any 12 month period. (b) In the case of any firm commitment underwritten offering, if the managing underwriter or underwriters of such offering advise the General Partner in writing that in its or their opinion the number of Registrable Securities proposed to be sold in such offering exceeds the number of Registrable Securities that can be sold in such offering without adversely affecting the market for the Shares, the General Partner will include in such offering the number of Registrable Securities that in the opinion of such managing underwriter or underwriters can be sold without adversely affecting the market for the Shares. B-3 In such event, the number of Registrable Securities to be offered for the account of each Holder requesting to include Registrable Securities in such offering (including the Holder providing the initial Notice) shall be reduced pro rata on the basis of the relative number of Registrable Securities requested by each such Holder to be included in such offering to the extent necessary to reduce the total number of Registrable Securities to be included in such offering to the number recommended by such managing underwriter or underwriters. (c) If any of the Registrable Securities covered by the Registration Statement are to be sold in an underwritten offering, the Selling Holders selling Registrable Securities pursuant to such offering shall have the right to select the investment banker or investment bankers and manager or managers that will underwrite the offering; provided, however, that such investment bankers and managers must be from a nationally recognized investment banking firm reasonably acceptable to the General Partner. ARTICLE II Registration Procedures SECTION 2.01. Registration Procedures. During the time period that the Registration Statement is required to be current, effective and available under Section 1.01 above, the General Partner shall also at its expense: (a) prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus constituting a part thereof, as amended or supplemented (the "Prospectus"), as may be necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to resales of Registrable Securities in accordance with the intended method or methods of distribution by the Holders whenever a Holder shall desire to sell or otherwise dispose of the same, or any portion thereof, but in no event beyond the period during which the Registration Statement is required to be kept in effect under Section 1.01 above; provided, however, that if the General Partner shall furnish to each Holder a certificate (a "Blackout Certificate") signed by B-4 the General Partner's chief executive officer stating that in the good faith judgment of the board of directors of the General Partner it would have a material adverse effect on the General Partner and its stockholders for the Registration Statement to be amended or supplemented to include certain material non-public information regarding the General Partner required to be included therein, then the General Partner may defer such amending or supplementing for a period of not more than 45 days and in such event each Selling Holder shall be required to discontinue disposition of the Registrable Securities during such period; but provided, further, that the General Partner shall not defer or suspend the amendment or supplementation of the Registration Statement or Prospectus pursuant to this Section 2.01(a) or Section 2.01(h) for an aggregate period of more than 90 days during any 12 month period; (b) furnish to each Selling Holder, without charge, such number of authorized copies of the Prospectus, and any amendments or supplements to the Prospectus, in conformity with the requirements of the Securities Act and the Exchange Act, and such other documents as such Selling Holder may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Selling Holder, and the General Partner hereby consents to the use of the Prospectus, such amendments or supplements and such other documents in connection with the offering and sale of the Registrable Securities; (c) register or qualify the Registrable Securities under state securities or blue sky laws of such jurisdictions as are reasonably required to effect a sale thereof and do any and all other acts and things which may be necessary or appropriate under such state securities or blue sky laws to enable the Selling Holders to consummate the public sale or other disposition in such jurisdictions of the Registrable Securities to be sold or otherwise disposed of by such Selling Holders from time to time; (d) before filing with the SEC any amendments or supplements to the Registration Statement or the Prospectus, furnish copies of all such documents proposed to be filed to the Holders holding Registrable Securities, which shall have five business days to review and comment thereon; provided, B-5 however, that all such documents shall be subject to the approval of a Holder insofar as they relate to information concerning such Holder (including, without limitation, the proposed method of distribution of the Registrable Securities); (e) notify the Selling Holders promptly (and, if requested by a Selling Holder, confirm in writing) (i) when the Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for amendments or supplements to the Registration Statement and the Prospectus or for additional information, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities or the initiation of any proceeding for such purpose, and (v) of the happening of any event during the period the Registration Statement is effective which results in the Registration Statement, the Prospectus or any document incorporated therein by reference containing an untrue statement of material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (f) use its best efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest practicable time; (g) cooperate with the Selling Holders to facilitate the timely preparation and delivery of certificates evidencing the Registrable Securities being sold, which certificates shall not bear any restrictive legends provided the Registrable Securities evidenced thereby have been sold in a manner permitted by the Prospectus; (h) upon the occurrence of any event contemplated by Section 2.01(e)(v), promptly prepare and file a supplement or post-effective amendment to the Registration Statement or the Prospectus or any document incorporated therein by reference or file any other required document so B-6 that, as thereafter delivered to purchasers of the Registrable Securities, the Prospectus will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that if the General Partner shall furnish to each Selling Holder the Blackout Certificate provided for in Section 2.01(a), the obligation to prepare and file any such supplement or post-effective amendment shall be suspended in accordance with Section 2.01(a); (i) use its reasonable efforts to cause the Registrable Securities to be listed on any securities exchange on which securities of the same class issued by the General Partner are then listed; (j) make available for inspection by the Selling Holders and any counsel, accountants or other representatives retained by such Selling Holders, such financial and other records and pertinent corporate documents of the General Partner and cause the officers, directors and employees of the General Partner to supply such records, documents or information reasonably requested by such Selling Holders, counsel, accountants or representatives in connection with the preparation of the registration statement that are reasonably required to order for such Selling Holders to establish their "due diligence" defense against liabilities under Section 12(a)(2) of the Securities Act; provided, however, that such records, documents or information are confidential and shall not be disclosed by such Selling Holders, counsel, accountants or representatives unless (i) such disclosure is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, or (ii) such records, documents or information become generally available to the public other than through a breach of the terms set forth in this Exhibit B; (k) use its best efforts to make available to its security holders, as soon as reasonably practicable, an earning statement covering at least 12 months, commencing on the first day of the fiscal quarter next succeeding each sale of the Registrable Securities pursuant to the Registration Statement, in a manner which shall satisfy the provisions of Section 11(a) of the Securities Act and B-7 Rule 158 thereunder; and (l) if requested by a Selling Holder or any underwriters engaged by such Selling Holder for purposes of distributing the Registrable Securities, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other reasonable actions in connection therewith (including those reasonably requested by the underwriters or such Selling Holder) in order to expedite or facilitate the disposition of such Registrable Securities, and in such connection, (i) make such representations and warranties to the underwriters with respect to the business of the General Partner and the registration statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and confirm the same if and when requested; (ii) obtain customary opinions of counsel to the General Partner and updates thereof (which shall be in form and substance reasonably satisfactory to such Selling Holder or to the underwriters and their counsel, as the case may be), addressed to such Selling Holder and, if applicable, each of the underwriters; (iii) obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the General Partner, addressed to such Selling Holder and, if applicable, each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with any such offerings (in each case, to the extent permitted by applicable accounting rules and guidelines); (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable to the underwriters than those set forth in Article III hereof and cross indemnification by the underwriters in form and substance as is customary in connection with such offering, in favor of the General Partner or the Selling Holders, as the case may be; (v) with respect to any underwritten offering in excess of $40 million, make the General Partner's executive officers available for a total of five business days to participate in "road show" presentations (provided that in no event shall the General Partner be required to make its executive officers available for more than one "road show" in any year B-8 with respect to offerings pursuant to this Agreement); and (vi) deliver such documents and certificates as may be reasonably requested by the managing underwriters and their counsel to evidence the continued validity of the representations and warranties made pursuant to clause (i) above of this Section 2.01(l) and to evidence compliance with any customary conditions contained in the underwriting agreement entered into by the General Partner). SECTION 2.02. Registration Expenses. The General Partner shall pay all Registration Expenses incurred prior to the sixth anniversary of the date hereof with respect to the filing and keeping effective any Registration Statement through such date, and the Selling Holders shall reimburse the General Partner for Registration Expenses (or a pro rata portion of the Registration Expenses based on the number of Shares of such Selling Holders registered for resale pursuant to such Registration Statement relative to the total number of Shares registered for resale pursuant to such registration statement) which are incurred after the sixth anniversary of the date hereof in respect of maintaining effective (but not the initial filing and causing to become effective of) such Registration Statement; provided, however, that Selling Holders shall not be required to reimburse any costs (i) of preparing any documents filed with the SEC that are incorporated by reference in such Registration Statement or (ii) that become necessary because the General Partner is unable to use Form S-3 (or any equivalent short form that relies on incorporation by reference) for the reason that the General Partner has failed to comply on a timely basis with any requirement of the Acts or Form S-3. The reimbursement of such expenses by the Selling Holders shall be paid upon demand; provided, however, that the General Partner shall not be responsible for any brokerage fees or underwriting commissions, if any, incurred by Holders in connection with the resale of Registrable Securities, the fees and expenses of any counsel retained by a Holder in connection with resales of the Registrable Securities or transfer taxes, if any, relating to the sale or disposition of Registrable Securities. SECTION 2.03. Certain Other Obligations of the General Partner. (a) The General Partner covenants that, so long as it is subject to the reporting requirements of B-9 the Exchange Act, it will file the reports required to be filed by it under the Exchange Act so as to enable any Holder to sell the Registrable Securities pursuant to Rule 144 under the Securities Act. (b) In connection with any sale, transfer or other disposition by any Holder of any Registrable Securities pursuant to Rule 144 under the Securities Act, the General Partner shall cooperate with such Holder to facilitate the timely preparation and delivery of certificates evidencing the Registrable Securities to be sold and not bearing any Securities Act legend, and enable certificates for such Registrable Securities to be for such number of shares and registered in such names as the selling Holders may reasonably request. The General Partner's obligation set forth in the previous sentence shall be subject to the delivery, if reasonably requested by the General Partner or its transfer agent, by counsel to such Holder, in form and substance reasonably satisfactory to the General Partner and its transfer agent, of an opinion that such Securities Act legend need not appear on such certificate. ARTICLE III Indemnification B-10 SECTION 3.01. Indemnification by the General Partner. (a) The General Partner hereby agrees to indemnify and hold harmless each Holder and each person or entity, if any, which controls a Holder (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act), and their respective officers, directors, shareholders, members, partners, agents and employees (each such person being sometimes hereinafter referred to as an "Indemnified Holder"), from and against any and all losses, claims, damages, costs and expenses (including reasonable attorneys' fees) to which such Holder or each such person may become subject under the Securities Act or otherwise that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus, or any amendment or supplement thereto, or by reason of any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall reimburse each Indemnified Holder for any legal or other expenses reasonably incurred by such Indemnified Holder in connection with investigating, preparing or defending against any such loss, claim or damages as such expenses are incurred; provided, however, that the indemnity provided pursuant to this Section 3.01 shall not apply to any Holder with respect to any such losses, claims, damages, costs and expenses (including reasonable attorneys' fees) that arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission made in reliance upon information furnished in writing to the General Partner by such Holder expressly for use therein. This indemnity will be in addition to any liability which the General Partner may otherwise have. In addition, upon request of a Holder, the General Partner shall enter into one or more indemnification agreements with any broker or brokers engaged by such Holder (provided that the General Partner shall not be required to enter into such agreements with more than five brokers) to sell all or any portion of the Registrable Securities, each such agreement to indemnify the broker in question against the same losses, claims, damages, costs and expenses as such Holder is indemnified against by the General Partner under this Section 3.01. SECTION 3.02 Indemnification by the Holders. Each Holder B-11 selling shares pursuant to the Registration Statement (an "Indemnifying Holder") severally agrees to indemnify and hold harmless the General Partner and the other Selling Holders, and each of their respective directors, officers, shareholders, employees and agents and each person or entity, if any, who controls the General Partner or any other Selling Holder (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as the foregoing indemnity from the General Partner to such Indemnifying Holder, but only insofar as such loss, claim, damage, cost or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement or any amendment thereto or the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the General Partner by such Selling Holder for use therein relating to the Selling Holder's status as a selling security holder. SECTION 3.03. Conduct of Indemnification Proceedings. Each indemnified party shall give reasonably prompt notice to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party (i) shall not relieve it from any liability which it may have under the indemnity agreement provided in Sections 3.01 or 3.02 above, unless and to the extent it did not otherwise learn of such action and the lack of notice by the indemnified party materially prejudices the indemnifying party or results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) shall not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided under Sections 3.01 or 3.02 above. After receipt of such notice, the indemnifying party shall be entitled to participate in and, at its option, jointly with any other indemnifying party so notified, to assume the defense of such action or proceeding at such indemnifying party's own expense with counsel chosen by such indemnifying party and approved by the indemnified party, which approval shall not be unreasonably withheld; provided, however, that, if the B-12 defendants in any such action or proceeding include both the indemnified party and the indemnifying party and the indemnified party reasonably determines, upon advice of counsel, that a conflict of interest exists or that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, then the indemnified party shall be entitled to one separate counsel, the reasonable fees and expenses of which shall be paid by the indemnifying party. If the indemnifying party does not assume the defense of any such action or proceeding, after having received the notice referred to in the first sentence of this paragraph, the indemnifying party will pay the reasonable fees and expenses of counsel (which shall be limited to a single law firm in addition to any local counsel necessary in connection with such action or proceeding) for the indemnified party. In such event, however, the indemnifying party will not be liable for any settlement effected without the written consent of such indemnifying party. If the indemnifying party assumes the defense of any such action or proceeding in accordance with this paragraph, such indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified party incurred thereafter in connection with such action or proceeding except as set forth in the proviso in the second sentence of this Section 3.03. SECTION 3.04. Contribution. (a) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Article III is for any reason held to be unenforceable although applicable in accordance with its terms, the General Partner and the Selling Holders shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the General Partner and the Selling Holders, in such proportion as is appropriate to reflect the relative fault of the General Partner on the one hand and the Selling Holders on the other (in such proportions that the Selling Holders are severally, not jointly, responsible for the balance), in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified parties shall be B-13 determined by reference to, among other things, whether the action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or the indemnified parties, and the parties' relative intent, pledge, access to information and opportunity to correct or prevent such action. (b) The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 3.04 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in Section 3.04(a). Notwithstanding the provisions of this Section 3.04, no Selling Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Selling Holder were offered to the public exceeds the amount of any damages which such Selling Holder would otherwise have been required to pay by reason of such untrue statement or omission. (c) Notwithstanding the foregoing, no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 3.04, each Person, if any, who controls a Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and directors and officers of a Holder shall have the same rights to contribution as such Holder, and each director of the General Partner, each officer of the General Partner who signed the Registration Statement and each Person, if any, who controls the General Partner within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the General Partner. B-14 EX-4.10 12 c02442exv4w10.txt REDEMPTION RIGHTS AGREEMENT Exhibit 4.10 Redemption Rights Agreement Redemption Rights Agreement, dated October 21, 1998, among (i) GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), (ii) General Growth Properties, Inc., a Delaware corporation (the "General Partner"), and (iii) the following (collectively, "Contributing Partners"): (a) MSV Properties, L.L.C., a Georgia limited liability company, (b) Shreve Capital, Inc., a Louisiana corporation, (c) CMS/Valley Forge Real Estate Opportunity Fund, L.P., a Delaware limited partnership, (d) Harry J. Butler, Jr., (e) Sealy Retail Properties, L.L.C., a Louisiana limited liability company, (f) Scott P. Sealy, (g) Mark P. Sealy, (h) Gwen Sealy, (i) Scott P. Sealy, not individually but solely as Trustee for J. Pollard Sealy Trust for Scott P. Sealy, (j) Scott P. Sealy, not individually but solely as Trustee for J. Pollard Sealy Trust for Laura Celeste Sealy Curtis, (k) Scott P. Sealy, not individually but solely as Trustee for J. Pollard Sealy Trust for Mark P. Sealy, (l) Scott P. Sealy, not individually but solely as Trustee for J. Pollard Sealy Trust for Lisa Wood Sealy Hollier and (m) Scott P. Sealy, not individually but solely as Trustee for J. Pollard Sealy Trust for Sue Sealy Geren. RECITALS WHEREAS, concurrently herewith, Contributing Partners are being admitted as limited partners of the Partnership, the general partner of which is the General Partner; WHEREAS, shares of common stock, $.10 par value per share, of the General Partner (the "Common Stock") are listed on the New York Stock Exchange; and WHEREAS, the parties desire to set forth herein the terms and conditions upon which Contributing Partners may cause the Partnership to redeem its limited partnership units in the Partnership. NOW, THEREFORE, the parties hereby agree as follows: Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: "Acts" shall mean the Securities Act and the Exchange Act, collectively. "Affiliates" shall mean "affiliates" as defined pursuant to the Securities Act and the regulations promulgated thereunder. "Business Day" shall mean any day upon which commercial banks are open for business in Chicago, Illinois. "Cash Purchase Price" shall mean, with respect to any redeemed or purchased Units, an amount of cash equal to the value of the Share Purchase Price (computed as of the Computation Date and equal to the Current Per Share Market Price on such Computation Date multiplied by the number of Shares) that would be payable with respect to such Units assuming the Share Purchase Price were paid in full satisfaction of the Purchase Price of such Units. In the event that the Share Purchase Price includes securities other than Shares, then the value of such other securities shall be determined by the General Partner acting in good faith on the basis of the closing prices of securities if listed on a nationally recognized exchange and otherwise on the basis of such quotations and other information as the General Partner considers, in its reasonable judgment, appropriate. Notwithstanding anything to the contrary contained herein, in the event that Redemption Rights are exercised in respect of any Immediately Redeemable Units on or before the one hundred eightieth (180th) day after the date hereof, the Cash Purchase Price for such Units shall be equal to the product of (a) the number of such Units multiplied by (b) the Share Price (subject to adjustment in the event of a subdivision, combination or other similar event in respect of the Units). "Certificate of Incorporation" shall mean the Certificate of Incorporation of the General Partner, as the same may be amended from time to time. "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor code. "Common Stock" shall have the meaning set forth in the recitals. "Computation Date" shall mean the date on which the applicable Notice is received by the Partnership or, if such date is not a Business Day, the first Business Day thereafter. "Conversion Factor" shall mean 100%, provided that such factor shall be adjusted in accordance with Section 6(a). "Contribution Agreement" shall mean that certain Contribution Agreement dated October 21, 1998, among the Partnership and MSV Properties, L.L.C., a Georgia limited liability company, as the same has been and may hereafter be amended from time to time, pursuant to which this Agreement is being executed. "Current Per Share Market Price" shall have the meaning set forth in the Partnership Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor statute. "Exchange Act Reporting Company" shall mean any corporation or other entity which is subject to the reporting requirements of the Exchange Act. "Expiration Date" shall mean the earlier of (a) August 1, 2038 and (b) the date upon which all Units have been redeemed or purchased in accordance with the terms hereof. "Holder" shall mean a Person (other than the General Partner) who at the time in question holds one or more of the Units in accordance with the Partnership Agreement, as the same may be amended from time to time. "Immediately Redeemable Units" shall mean the Units issued to the parties as specified and in the quantities indicated on the attached Exhibit B pursuant to the Contribution Agreement. "Liens" shall have the meaning set forth in the Contribution Agreement. "Major Transaction Event" shall mean, with respect to the General Partner, (a) a reclassification, capital reorganization or other similar change regarding or affecting outstanding Shares (other than a change addressed in Section 6(a)); (b) a merger or consolidation of the General Partner with one or more other corporations or entities, other than a merger pursuant to which the General Partner is the surviving corporation and the outstanding Shares are not affected, (c) a sale, lease or exchange of all or substantially all of the General Partner's assets or (d) the liquidation, dissolution or winding up of the General Partner. "Notice" shall have the meaning set forth in Section 3.2. "Partnership Agreement" shall mean that certain Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated April 1, 1998, as amended by that certain First Amendment thereto dated as of June 10, 1998 and that certain Second Amendment thereto dated as of June 29, 1998, and as the same may be further amended from time to time. "Person" shall mean any natural person, corporation, partnership, association, limited liability company, trust or other entity. "Purchase Price" shall mean the Cash Purchase Price or the Share Purchase Price, or a combination thereof. "Redemption Rights" shall have the meaning set forth in Section 2. "REIT" shall mean real estate investment trust as such term is defined under the Code. "REIT Requirements" shall have the meaning set forth in the Partnership Agreement, as the same may change from time to time. "Registration Expenses" shall mean all expenses incident to the General Partner's performance of or compliance with the registration requirements set forth in this Agreement, including without limitation (a) the fees, disbursements and expenses of the General Partner's counsel and accountants in connection with the registration of Shares issuable upon the exercise of the Redemption Rights; (b) all expenses in connection with the preparation and printing of the registration statement or statements, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto; (c) the cost of printing or producing any blue sky or legal investment memoranda or other documents in connection with the offering, sale or delivery of such Shares; (d) all expenses in connection with the qualification of such Shares under state securities laws; (e) the fees and expenses incurred in connection with the listing of such Shares on each securities exchange on which securities of the same class are then listed and (f) all SEC, stock exchange and National Association of Securities Dealers, Inc. registration and filing fees. Notwithstanding the foregoing, Registration Expenses shall not include (and the General Partner will pay) any costs incurred by the Partnership or the General Partner in preparing any document that is incorporated by reference in a registration statement, or any professional fee or other expenses, that would have been incurred apart from the obligation of the General Partner hereunder to file a Registration Statement. "SEC" shall mean the Securities and Exchange Commission. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor statute. "Share Price" shall have the meaning set forth in the Contribution Agreement. "Share Purchase Price" shall mean, with respect to the exercise of any Redemption Rights and subject to the provisions of Section 6(c), a number of Shares equal to the product of (a) the number of Units being redeemed or purchased multiplied by (b) the Conversion Factor; provided, however, that, in the event the General Partner, after the date of this Agreement, issues to all holders of Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to subscribe for or purchase Shares (other than rights referred to in Section 6(b)) or any other securities or property, then the Share Purchase Price also shall include such rights, options, warrants or convertible or exchangeable securities that a holder of that number of Shares would have been entitled to receive. "Shares" shall mean shares of the Common Stock. "Units" shall mean the common units of limited partnership in the Partnership issued to Contributing Partners pursuant to the Contribution Agreement. Grant of Redemption Rights. (a) Upon the terms and subject to the conditions contained herein, the Partnership does hereby grant to each Contributing Partner, and such Contributing Partner does hereby accept, the right, but without obligation on the part of such Contributing Partner, to require the Partnership to redeem from time to time part or all of the Units of such Contributing Partner for the Cash Purchase Price ("Redemption Rights"). (b) Notwithstanding the provisions of Section 2(a), the General Partner may, in its sole and absolute discretion, assume the obligation of the Partnership with respect to and satisfy any Contributing Partner's exercise of a Redemption Right by paying to such Contributing Partner, at the General Partner's election (which may be exercised in the General Partner's sole discretion), either the Cash Purchase Price or the Share Purchase Price (or a combination thereof) with respect to the Units for which such Contributing Partner exercised its Redemption Rights. If the General Partner assumes such obligations with respect to the exercise by any Contributing Partner of a Redemption Right as to certain Units and makes the required payment, then the Partnership shall have no obligation to pay any amount to such Contributing Partner with respect to the exercise of a Redemption Right for such Units, and any Units purchased shall be owned by the General Partner for all purposes. Notwithstanding anything to the contrary contained herein, the General Partner shall not have the right to deliver the Share Purchase Price in connection with the exercise of Redemption Rights in respect of any Immediately Redeemable Units. (c) If the General Partner shall assume the obligations of the Partnership with respect to the exercise by a Contributing Partner of a Redemption Right, the Partnership, such Contributing Partner and the General Partner each shall treat the transaction between the General Partner and such Contributing Partner as a sale of such Contributing Partner's Units (or a portion thereof) to the General Partner for federal income tax purposes. (d) Upon the redemption or purchase of part or all of any Contributing Partner's Units and the payment of the Purchase Price with respect thereto, such Person shall be deemed withdrawn as a Partner in the Partnership to the extent of the Units redeemed or purchased and shall have no further rights or obligations under this Agreement with respect to such redeemed or purchased Units; provided, however, that such Contributing Partner's rights under this Agreement with regard to any other Units will continue in full force and effect. (e) No fractional Shares shall be issued hereunder. In lieu of fractional Shares, the General Partner shall pay cash based on the Current Per Share Market Price on the relevant Computation Date. Exercise of Redemption Rights. Time for Exercise of Redemption Rights. Each Contributing Partner may exercise its Redemption Rights in whole or in part and at any time and from time to time on or after the first anniversary of the date hereof (but each Contributing Partner holding Immediately Redeemable Units may exercise its Redemption Rights as to such Units at any time and from time to time on or after the date hereof) but prior to the Expiration Date; provided, however, that the Redemption Rights may not be exercised at any one time by a Contributing Partner with respect to less than 1,000 Units (or all the Units then owned by such Contributing Partner if such Contributing Partner owns less than 1,000 Units) or in the event that such exercise of Redemption Rights (or the assignment of Units or delivery of either the Cash Purchase Price or the Share Purchase Price with respect thereto) violates the terms of the Partnership Agreement or applicable law. Once given, a Notice shall be irrevocable subject to the payment of the Purchase Price for the Units specified therein in accordance with the terms hereof. Method of Exercise. The Redemption Rights shall be exercised by written notice (the "Notice") to the Partnership in the form of Exhibit A specifying the number of Units to be redeemed and the name or names (with address) in which any Shares issuable upon such exercise shall be registered if different than the exercising Contributing Partner. Closing. The closing of the redemption or purchase and sale of Units pursuant to an exercise of the Redemption Rights shall occur within 30 days following the giving of the Notice. Each Contributing Partner shall execute such documents as the General Partner may reasonably require in connection with the closing of such redemption or purchase and sale. Payment of Cash or Issuance of Shares. At the closing of the redemption or purchase and sale of Units pursuant to an exercise of Redemption Rights by any Contributing Partner and subject to the last sentence of Section 2(b), the Partnership shall deliver to such Contributing Partner the Cash Purchase Price by check or, in the event that the General Partner has assumed the obligations of the Partnership with respect to such exercise of Redemption Rights, the General Partner shall deliver to such Contributing Partner, at the election of the General Partner (which may be exercised in the General Partner's sole discretion), either (a) the Cash Purchase Price by check or (b) certificates representing the Shares and any other securities constituting the Share Purchase Price, together with cash in lieu of the issuance of any fraction of a Share as provided in Section 2(e), or a combination thereof. Matters Relating to Shares. Registration. The General Partner shall (i) prepare, file and use reasonable efforts to cause to become effective on or before the ninetieth day following the first anniversary of the date hereof a shelf registration statement, which may be on Form S-3, under the Securities Act relating to the Shares to be issued upon exercise of the Redemption Rights (assuming full satisfaction of such Redemption Rights by delivery of Shares to the extent permitted hereunder) and (ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act. The General Partner shall pay all Registration Expenses incurred prior to the sixth anniversary of the date hereof with respect to filing and keeping effective the registration statement through such date, and the Holders of Units (other than Immediately Redeemable Units) shall reimburse the General Partner for Registration Expenses (or a pro rata portion of the Registration Expenses based on the number of Shares issuable to such Holders upon full exercise of the Redemption Rights by such Holders relative to the total number of Shares issuable pursuant to such registration statement) which are incurred after the sixth anniversary of the date hereof in respect of maintaining effective (but not the initial filing and causing to become effective of) such registration statement; provided, however, that no Holder shall be required to reimburse any costs (i) of preparing any documents filed with the SEC that are incorporated by reference in the Registration Statement or (ii) that become necessary because the General Partner is unable to use Form S-3 (or any equivalent short form that relies on incorporation by reference) for the reason that the General Partner has failed to comply on a timely basis with any requirement of the Acts or Form S-3. The reimbursement of such expenses by the Holders shall be paid upon demand. Notwithstanding anything to the contrary contained herein, the General Partner shall have no obligation to keep any registration statement filed pursuant to this Section 4.1 effective after the Expiration Date or if the status of the General Partner (or its successor) as an Exchange Act Reporting Company is terminated or all of the Holders of Units (other than the Immediately Redeemable Units) notify the General Partner in writing that the General Partner no longer need keep such registration statement effective. Reservation of Shares. At all times while the Redemption Rights are outstanding, the General Partner shall reserve for issuance such number of Shares as may be necessary to enable the General Partner to issue Shares to the extent permitted hereunder in full satisfaction of the Redemption Rights which are from time to time outstanding (assuming no limitations as to the ownership of such Shares under the Certificate of Incorporation which relate to compliance with the REIT Requirements and that the General Partner elected to pay the Share Purchase Price with respect to all such Redemption Rights to the extent permitted hereunder). Fully Paid and Non-Assessable. All Shares which may be issued upon exercise of the Redemption Rights shall be duly and validly issued and fully paid and non-assessable. Transfer and Other Taxes. In the event that any state or local property transfer or other tax is payable as the result of or in connection with any exercise of the Redemption Rights by any Contributing Partner, such Contributing Partner shall pay such tax, and no Shares shall be issued or other consideration paid pursuant hereto until such Contributing Partner has paid to the General Partner or the Partnership, as the case may be, the amount of such tax or has provided evidence, in form reasonably satisfactory to the General Partner or the Partnership, as the case may be, as to the payment thereof. Anti-Dilution and Adjustment Provisions. The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend on its outstanding Shares in Shares or makes a distribution to all holders of its outstanding Shares in Shares, (ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares into a smaller number of Shares (unless a similar dividend, distribution, subdivision or combination occurs with respect to the Units). In such event, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of Shares issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of Shares (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. If at any time the General Partner grants to the holders of its Common Stock any right to subscribe pro rata for additional securities of the General Partner, whether Common Stock or other classifications, or for any other securities or interests that any Contributing Partner (other than a Holder of Immediately Redeemable Units) would have been entitled to subscribe for if, immediately prior to such grant, such Contributing Partner had exercised its Redemption Rights and received the Share Purchase Price in payment thereof, in lieu of any adjustment under any other subsection of this Section 6 or other provision of this Agreement, then the General Partner also shall grant to such Contributing Partner the same subscription rights that such Contributing Partner would be entitled to if such Contributing Partner had exercised its Redemption Rights in full and received the Share Purchase Price in satisfaction thereof prior to such grant. Upon the occurrence of a Major Transaction Event where at least one-half of the value (as determined in good faith by the General Partner) of the consideration received by the holders of Common Stock in connection with such Major Transaction Event is in the form of securities in a successor entity, the General Partner shall cause effective provision to be made so that, upon exercise of the Redemption Rights by a Contributing Partner (other than a Holder of Immediately Redeemable Units) and payment of the Purchase Price at any time following such Major Transaction Event by means of the Share Purchase Price, such Holder shall have the right to acquire, in lieu of the Shares which otherwise would have been issued to such Holder, the kind and amount of shares of stock and other securities and property (and the provisions contained in Section 4.1 shall apply anew to the extent that such securities are of a class of securities of the General Partner or its successor that are registered under the Exchange Act) and interests as would be issued or payable with respect to or in exchange for the number of Shares constituting the Share Purchase Price as if such Redemption Rights had been exercised and the General Partner had satisfied the Redemption Rights by delivery of the Share Purchase Price immediately before such Major Transaction Event. In the event of any other Major Transaction Event, each Holder shall be entitled to exercise its Redemption Rights in full prior to the consummation of such Major Transaction Event, and, with respect to any Shares acquired upon exercise thereof, shall be entitled to all of the rights of the other holders of Shares with respect to any distribution by the General Partner (or the other party to such Major Transaction Event) in connection with such Major Transaction Event. If not exercised within forty-five days after written notice from the General Partner of such Major Transaction Event or such shorter period between the date of such notice and the effective date of such Major Transaction Event, the Redemption Rights shall terminate at the expiration of such period, but the Redemption Rights shall be revived if such Major Transaction Event is not consummated. The Partnership shall give written notice of any Major Transaction Event promptly after such Major Transaction is announced to the public. The provisions of this Section 6 shall apply to successive events that may occur from time to time but only shall apply to a particular event if it occurs prior to the exercise in full of the Redemption Rights or the liquidation of the Partnership. Nothing contained herein shall prevent or otherwise limit the liquidation of the Partnership pursuant to the Partnership Agreement, as amended from time to time. Whenever the Conversion Factor is adjusted as herein provided, the General Partner shall compute the adjusted Conversion Factor in accordance with this Section 6 and shall prepare a certificate signed by the chief financial officer of the General Partner setting forth the adjusted Conversion Factor and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at the offices of the General Partner. Miscellaneous Provisions. Notices. All notices or other communications given pursuant to this Agreement, including without limitation any Notice, shall be sent to the party to whom or to which such notice is being sent, by certified or registered mail, return receipt requested, commercial overnight delivery service, facsimile or delivered by hand with receipt acknowledged in writing and otherwise as set forth in this Section 7.1. All notices (a) shall be deemed given when received or, if mailed as described above, after 5 Business Days or, if sent by facsimile, upon receipt of confirmed answerback and (b) may be given either by a party or by such party's attorneys. For purposes of this Section 7.1, the addresses of the parties shall be, in the case of the Partnership and the General Partner, 110 North Wacker Drive, Chicago, Illinois 60606, facsimile number (312) 960-5463, Attention: Matthew Bucksbaum and Bernard Freibaum (with a copy to Neal, Gerber & Eisenberg, Two North LaSalle Street, Suite 2200, Chicago, Illinois 60602, Attn.: Marshall E. Eisenberg), and, in the case of each Contributing Partner, as set forth on the records of the Partnership. The address of any party may be changed by a notice in writing given in accordance with the provisions hereof. Assignment. The rights of any Contributing Partner hereunder (including the Redemption Rights) shall automatically devolve upon any Person to the extent that such Person holds Units, and becomes a substituted partner with respect to such Units, in accordance with the Partnership Agreement, as amended from time to time, and delivers to the Partnership a written instrument, in form reasonably satisfactory to the Partnership, pursuant to which such Person agrees to be bound by the terms hereof (but the rights of any Contributing Partner hereunder are not otherwise assignable). Subject to the provisions of Section 6, the General Partner may assign this Agreement without the consent of Contributing Partner, provided that no such assignment shall relieve the General Partner of its obligations under this Agreement. Binding Effect. Except as otherwise set forth herein, this Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. Governing Law. This Agreement shall be governed by the laws of the State of Delaware (without regard to its conflicts of law principles). Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one document. Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and/or agreements among them with respect thereto. Pronouns; Headings; Etc. As used herein, all pronouns shall include the masculine, feminine and neuter, and all terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to a "Section" or "Exhibit" shall refer to a Section or Exhibit of this Agreement unless otherwise specified. Survival. The representations, warranties and covenants contained herein or made pursuant hereto shall survive the execution and delivery of this Agreement and the closing of any redemption or purchase and sale pursuant to an exercise of Redemption Rights hereunder. Further Assurances. Each of the parties shall hereafter execute and deliver such other instruments and documents and do such further acts and things as may be required or useful to carry out the purposes of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. CONTRIBUTING PARTNERS: MSV PROPERTIES, L.L.C., a Georgia limited liability company By: Sealy Retail Properties, L.L.C. By: /s/ Mark P. Sealy --------------------------------- Its: Member -------------------------------- SHREVE CAPITAL, INC., a Louisiana corporation By: /s/ Edward J. Crawford --------------------------------- Its: President -------------------------------- CMS/VALLEY FORGE REAL ESTATE OPPORTUNITY FUND, L.P., a Delaware limited partnership By: /s/ CMS/VF Associates, LP --------------------------------- Its: General Partner -------------------------------- /s/ Harry J. Butler, Jr. - ------------------------------------- HARRY J. BUTLER, JR. SEALY RETAIL PROPERTIES, L.L.C., a Louisiana limited liability company /s/ Mark P. Sealy - ------------------------------------- Mark P. Sealy, member /s/ Scott P. Sealy - ------------------------------------- SCOTT P. SEALY /s/ Mark P. Sealy - ------------------------------------- MARK P. SEALY /s/ Gwen Sealy - ------------------------------------- GWEN SEALY /s/ Scott P. Sealy - ------------------------------------- SCOTT P. SEALY, not individually but solely as Trustee for (i) J. Pollard Sealy Trust for Scott P. Sealy, (ii) J. Pollard Sealy Trust for Laura Celeste Sealy Curtis, (iii) J. Pollard Sealy Trust for Mark P. Sealy, (iv) J. Pollard Sealy Trust for Lisa Wood Sealy Hollier, and (v) J. Pollard Sealy Trust for Sue Sealy Geren. PARTNERSHIP: GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its: Senior Vice President -------------------------------- GENERAL PARTNER: General Growth Properties, Inc. a Delaware corporation By: /s/ Joel Bayer --------------------------------- Its: Senior Vice President -------------------------------- Notice of Redemption The undersigned hereby irrevocably (i) exercises its Redemption Rights as to ___________ common units of limited partnership interest (the "Units") in GGP Limited Partnership (the "Partnership") in accordance with the terms of that certain Redemption Rights Agreement, dated _______________, 1998 (the "Agreement"), among the Partnership, General Growth Properties, Inc. (the "General Partner"), and the other parties thereto, (ii) transfers and surrenders such Units and all right, title and interest of the undersigned therein to the party, which shall be either the Partnership or the General Partner, that shall purchase or redeem such Units pursuant to the Agreement, and (iii) directs that the Cash Purchase Price or Share Purchase Price payable upon exercise of the Redemption Right be delivered to the address specified below and, if the Share Purchase Price is to be delivered, the Shares shall be registered or placed in the name(s) and at the address(es) specified below. The undersigned hereby represents, warrants, certifies and agrees (i) that the undersigned has good and marketable title to the Units, free and clear of all Liens, (ii) that the undersigned has the full right, power and authority to transfer and surrender the Units as provided herein and such transfer and surrender has been authorized by all necessary action, and (iii) that the undersigned has obtained the consent or approval of all persons or entities, if any, having the right to consent to or approve such transfer and surrender. Capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. Dated: ------------------------------ SEALY RETAIL PROPERTIES, L.L.C., a Louisiana limited liability company ---------------------------------------- Mark P. Sealy ---------------------------------------- (Street Address) ---------------------------------------- City (State (Zip Code) Signature Guaranteed by ---------------------------------------- If Shares are to be issued, issue to: __________________________________________ Please insert social security or identifying number: ___________________________ EX-4.16 13 c02442exv4w16.txt FORM OF REGISTRATION RIGHTS AGREEMENT Exhibit 4.16 REGISTRATION RIGHTS AGREEMENT between GENERAL GROWTH PROPERTIES, INC., MARTIN BUCKSBAUM, MATTHEW BUCKSBAUM, MB CAPITAL PARTNERS I, MB CAPITAL PARTNERS II, and GENERAL TRUST COMPANY, as trustee of trusts established for the benefit of members of the Bucksbaum family Dated: As of _________________ __, 1993 TABLE OF CONTENTS
Page ---- ARTICLE I CERTAIN DEFINITIONS 1.1 Business Day ........................................................ 1 1.2 Eligible Securities ................................................. 1 1.3 Person .............................................................. 2 1.4 Permitted Transferees ............................................... 2 1.5 Registration Expenses ............................................... 2 1.6 SEC ................................................................. 3 1.7 Securities Act ...................................................... 3 ARTICLE II EFFECTIVENESS OF REGISTRATION RIGHTS 2.1 Effectiveness of Registration Rights ................................ 3 ARTICLE III REGISTRATION REQUEST 3.1 Notices ............................................................. 4 3.2 Registration Expenses ............................................... 5 3.3 Third Person Shares ................................................. 5 ARTICLE IV INCIDENTAL REGISTRATION 4.1 Notice and Registration ............................................. 7 4.2 Registration Expenses ............................................... 9 ARTICLE V REGISTRATION PROCEDURES 5.1 Registration and Qualification ...................................... 9 5.2 Underwriting ........................................................ 11
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page ---- 5.3 Blackout Periods .................................................... 12 5.4 Qualification for Rule 144 Sales .................................... 13 ARTICLE VI PREPARATION: REASONABLE INVESTIGATION 6.1 Preparation; Reasonable Investigation ............................... 13 ARTICLE VII INDEMNIFICATION AND CONTRIBUTION 7.1 Indemnification and Contribution .................................... 14 ARTICLE VIII BENEFITS OF REGISTRATION RIGHTS 8.1 Benefits of Registration Rights ..................................... 15 ARTICLE IX MISCELLANEOUS 9.1 Captions ............................................................ 16 9.2 Severability ........................................................ 16 9.3 Governing Law ....................................................... 16 9.4 Modification and Amendment .......................................... 16 9.5 Counterparts ........................................................ 16 9.6 Entire Agreement .................................................... 16 9.7 Notices ............................................................. 16 SIGNATURES .............................................................. 18
-ii- REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT is made as of the _______ day of ___________________ 1993 (this "Agreement"), among GENERAL GROWTH PROPERTIES, INC., a Delaware corporation (the "Company"). MARTIN BUCKSBAUM, MATTHEW BUCKSBAUM, MB CAPITAL PARTNERS I, a _____________________________ partnership, MB CAPITAL PARTNERS II, a _____________________________ partnership and GENERAL TRUST COMPANY, as trustee of trusts established for the benefit of members of the Bucksbaum family (each an "Investor" and collectively the "Investors"). WITNESSETH: WHEREAS, the Investors will hold an aggregate of [____________] shares (the "Investor Shares") of common stock, par value $.10 per share, of the Company (the "Common Stock") and a [____________]% limited partnership interest (the "LP Interests") in GGP Limited Partnership, a Delaware limited partnership, which may be converted into shares of Common stock; and WHEREAS, the Company has agreed to provide Investors with certain registration rights as set forth herein; NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to and on the terms and conditions herein set forth, the parties hereto agree as follows: ARTICLE I CERTAIN DEFINITIONS. 1.1. "Business Day" means any day on which the New York Stock Exchange is open for trading. 1.2. "Eligible Securities" means all or any portion of the Investors Shares and any shares of Common Stock acquired by the Investors upon conversion of the LP Interests. As to any proposed offer or sale of Eligible Securities, such securities shall cease to be Eligible Securities with respect to such proposed offer or sale when (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement or (ii) such securities are permitted to be distributed pursuant to Rule 144(k) (or any successor provision to such Rule) under the Securities Act to be confirmed in a written opinion of counsel to the Company addressed to the Investors, or (iii) such securities shall have been otherwise transferred pursuant to an applicable exemption under the Securities Act, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and such securities shall be freely transferable to the public without registration under the Securities Act. 1.3. "person" means an individual, a partnership (general or limited), corporation, joint venture, business trust, cooperative, association or other form of business organization, whether or not regarded as a legal entity under applicable law, a trust (inter vivos or testamentary), an estate of a deceased, insane or incompetent person, a quasi-governmental entity, a government or any agency, authority, political subdivision or other instrumentality thereof, or any other entity. 1.4. "Permitted Transferees" with respect to each Investor shall mean any Affiliates of such Investor, as defined in the Agreement of Limited Partnership of GGP Limited Partnership, dated __________ ____, 1993. 1.5. "Registration Expenses" means all expenses incident to the Company's performance of or compliance with the registration requirements set forth in this Agreement including, without limitation, the following: (i) the fees, disbursements and expenses of the Company's counsel(s) (United States and foreign), accountants and experts in connection with the registration of Eligible Securities to be disposed of under the Securities Act; (ii) all expenses in connection with the preparation, printing and filing of the registration statement, any preliminary prospectus or final prospectus, any other offering document and amendments and supplements thereto and the mailing and delivering of copies thereof to the underwriters and dealers; (iii) the cost of printing or producing any agreement(s) among underwriters, underwriting agreement(s) and blue sky or legal investment memoranda, any selling agreements and any other documents in connection with the offering, sale or delivery of Eligible Securities to be disposed of; (iv) all expenses in connection with the qualification of Eligible -2- Securities to be disposed of for offering and sale under state securities laws, including the fees and disbursements of counsel for the underwriters in connection with such qualification and in connection with any blue sky and legal investment surveys; (v) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of Eligible Securities to be disposed of; and (vi) fees and expenses incurred in connection with the listing of Eligible Securities on each securities exchange on which securities of the same class are then listed; provided, however, that Registration Expenses with respect to any registration pursuant to this Agreement shall not include underwriting discounts or commissions attributable to Eligible Securities, SEC or blue sky registration fees attributable to Eligible Securities or transfer taxes applicable to Eligible Securities. 1.6. "SEC" means the Securities and Exchange Commission. 1.7. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the relevant time. ARTICLE II EFFECTIVENESS OF REGISTRATION RIGHTS 2.1 Effectiveness of Registration Rights. This Agreement shall become effective immediately, provided. however, that the exercise of any registration rights granted pursuant to Articles 3 and 4 hereof prior to the third anniversary of the date of the prospectus to be used by the Company in its initial public offering of shares of Common Stock (the "IPO") shall be subject to the Investors first having received written consent from the Company and Goldman, Sachs & Co. to the waiver of the restrictions on transfer of the Common Stock held by the Investors under the terms of the letter agreement restricting such transfers, to be entered by the Investors and the underwriters in connection with the IPO. -3- ARTICLE III REGISTRATION REQUEST 3.1 NOTICE. Upon written notice front an Investor requesting that the Company effect the registration under the Securities Act of all or part of the Eligible Securities held by such Investor, which notice shall specify the intended method or methods of disposition of such Eligible Securities, the Company will use all reasonable efforts to effect (at the earliest possible date) the registration, under the Securities Act, of such Eligible Securities for disposition in accordance with the intended method or methods of disposition stated in such request, provided that: (a) if the Company shall have previously effected a registration with respect to Eligible Securities pursuant to Article 4 hereof, the Company shall not be required to effect a registration pursuant to this Article 3 until a period of one hundred twenty (120) days shall have elapsed from the effective date of the most recent such previous registration; (b) if, upon receipt of a registration request pursuant to this Article 3, the Company is advised in writing (with a copy to the Selling Shareholders (as defined below)) by a nationally recognized independent investment banking firm selected by the Company to act as lead underwriter in connection with a public offering of securities by the Company that, in such firm's opinion, a registration at the time and on the terms requested would materially adversely affect such public offering of securities by the Company (other than an offering in connection with employee benefit and similar plans) (a "Company Offering") that had been contemplated by the Company prior to the notice by the Investors who initially requested registration, the Company shall not be required to effect a registration pursuant to this Article 3 until the earliest of (i) three months after the completion of such Company Offering, (ii) the termination of any "black out" period, if any, required by the underwriters to be applicable to the Selling Investors (as defined below) in connection with such Company Offering and agreed to in writing by the Selling Investors, (iii) promptly after abandonment of such Company Offering or (iv) four months after the date of written notice from the Investor who initially requested registration; -4- (c) if, while a registration request is pending pursuant to Article 3, the Company determines in the good faith judgment of the Board of Directors of the Company, with the advice of counsel, that the filing of a registration statement would require the disclosure of non-public material information the disclosure of which would have a material adverse effect on the Company or would otherwise adversely affect a material financing, acquisition, disposition, merger or other comparable transaction, the Company shall deliver a certificate to such effect signed by its President or any Vice President to the Selling Shareholders and the Company shall not be required to effect a registration pursuant to this Article 3 until the earlier of (i) the date upon which such material information is disclosed to the public or ceases to be material or (ii) 60 days after the Company makes such good faith determination; and (d) the Company shall not be required to effect more than one registration pursuant to this Article 3 in any calendar year. No registration of Eligible Securities under this Article 3 shall relieve the Company of its obligation (if any) to effect registrations of Eligible Securities pursuant to Article 4. 3.2. Registration Expenses. With respect to the registrations requested pursuant to this Article 3 and any registration arising from an exercise of a Blackout Termination Right (as defined below), the Company shall pay all Registration Expenses. 3.3. Third Person Shares. (a) Upon receipt of the written notice from an Investor requesting registration under Section 3.1, the Company shall give written notice to each other Investor, the other parties (the "Primary Third Parties") entitled to substantially similar registration rights under a Registration Rights Agreement entered into by the Company on the date hereof and the parties (the "Incidental Parties") entitled only to incidental registration rights pursuant to an Incidental Registration Rights Agreement entered into by the Company on the date hereof. The Company shall have the right to cause the registration of securities for sale for the account of any Person in any registration of Eligible Securities requested pursuant to this Article 3 who has delivered written notice to the Company within fifteen (15) business days (which notice shall specify the number of shares to be disposed of -5- and the intended method of disposition), provided that the Company shall not have the right to cause the registration of all of such securities if the Investor who requested such registration is advised in writing (with a copy to the Company) by a nationally recognized independent investment banking firm selected by such Investor that, in such firm's opinion, registration of all of such securities would adversely affect the offering and sale of Eligible Securities then contemplated by such Investor. The Investor or Investors and any other Persons who elect to participate in an offering pursuant to registration rights are referred to herein as the "Selling Shareholders". The Investor or Investors who initially requested registration pursuant to Section 3.1 and each other Investor who elects to participate in such offering are herein referred to as the "Selling Investors". (b) If the Company cannot, pursuant to the terms of this Section 3.3, register all of the shares requested to be registered, the Company shall register the Maximum Amount (as defined below), and such amount shall be allocated among the Persons requesting registrations follows: (i) if the Selling Investors and the Principal Third Parties each exercise registration rights on the same day, the Maximum Amount shall be allocated between such Persons pro rata according to the number of shares for which registration was initially requested by each such Person; and (ii) in all other cases in which both Selling Investors and the Principal Third Parties seek to register shares, the Maximum Amount shall be allocated pro rata according to the total number of shares of Common Stock owned by the Investors taken as a whole on the one hand and the Principal Third Party on the other hand on the day the Company first received the demand request with respect to such registration. For purposes of this Section, "Maximum Amount" shall mean the largest number of shares (if any) which, after deducting any shares for which registration is requested by any Incidental Parties, in the opinion of the nationally recognized underwriter selected by the Investors for purposes of Section 3.3(a), could be offered to the public without adversely affecting the offering and sale of Eligible Securities as then contemplated by the Selling Investors. Notwithstanding anything to the contrary contained herein, if any Incidental Party seeks to register -6- shares in a registration that was initiated by the Selling Investors under this Article 3, such Incidental Party shall not suffer any reduction in the number of shares it seeks to register pursuant to the foregoing provisions of this Section 3.3(b). (c) In the event that both Selling Investors taken as a whole on the one hand and the Principal Third Parties on the other hand exercise registration rights on the same day, the party (as between such two parties) who initially requested registration of the larger number of shares shall be entitled to select the lead underwriter for such registered offering. In all other cases, the first Person to exercise registration rights with respect to any registration demand shall be entitled to select the lead underwriter for such registered offering. ARTICLE IV INCIDENTAL REGISTRATION. 4.1. Notice and Registration. If the Company proposes to register any shares of Common Stock or other securities issued by it having terms substantially similar to Eligible Securities ("Other Securities") for public sale under the Securities Act (whether proposed to be offered for sale by the Company or by any other Person) on a form and in a manner which would permit registration of Eligible Securities for sale to the public under the Securities Act, it will give prompt written notice to Investors of its intention to do so, and upon the written request of Investors delivered to the Company within fifteen (15) Business Days after the giving of any such notice (which request shall specify the number of Eligible Securities intended to be disposed of by Investors and the intended method of disposition thereof) the Company will use all reasonable efforts to effect, in connection with the registration of the Other Securities, the registration under the Securities Act of all Eligible Securities which the Company has been so requested to register by the Selling Investors, to the extent required to permit the disposition (in accordance with the intended method or methods thereof as aforesaid) of Eligible Securities so to be registered, provided that: (a) if, at any time after giving such written notice of its intention to register any Other Securities and prior to the effective date of the -7- registration statement filed in connection with such registration, the Company shall determine for any reason not to register the Other Securities, the Company may, at its election, give written notice of such determination to Investors and thereupon the Company shall be relieved of its obligation to register such Eligible Securities in connection with the registration of such Other Securities (but not from its obligation to pay Registration Expenses to the extent incurred in connection therewith as provided in Section 4.2), without prejudice, however, to the rights (if any) of Investors immediately to request that such registration be effected as a registration under Article 3; (b) The Company will not be required to effect any registration pursuant to this Article 4 if the Company shall have been advised in writing (with a copy to the Selling Investors) by a nationally recognized independent investment banking firm selected by the Company to act as lead underwriter in connection with the public offering of securities by the Company that, in such firm's opinion, a registration at that time would materially and adversely affect the Company's own scheduled offering, provided, however, that if an offering of some but not all of the shares requested to be registered by Investor would not adversely affect the Company's offering, the aggregate number of shares requested to be included in such offering by the Selling Shareholders (other than the Incidental Persons, whose requests shall not be reduced under this proviso) shall be reduced pro rata according to the total number of shares of Common Stock owned by the Investor on the one hand and the Principal Third Parties taken as a whole on the other hand on the day the Company first delivered its notice to the Investors of its proposed offering; (c) The Company shall not be required to effect any registration of Eligible Securities under this Article 4 incidental to the registration of any of its securities in connection with mergers, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or stock options or other employee benefit plans. No registration of Eligible Securities effected under this Article 4 shall relieve the Company of its obligation (if -8- any) to effect registrations of Eligible Securities pursuant to Article 3. 4.2. Registration Expenses. The Company (as between the Company and the Selling Investors) shall be responsible for the payment of all Registration Expenses in connection with any registration pursuant to this Article 4. ARTICLE V REGISTRATION PROCEDURES. 5.1. Registration and Qualification. If and whenever the Company is required to use all reasonable efforts to effect the registration of any Eligible Securities under the Securities Act as provided in Articles 3 or 4, the Company will as promptly as is practicable: (a) prepare, file and use all reasonable efforts to cause to become effective a registration statement under the Securities Act regarding the Eligible Securities to be offered; (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Eligible Securities until the earlier of such time as all of such Eligible Securities have been disposed of in accordance with the intended methods of disposition by the Selling Investors set forth in such registration statement or the expiration of twelve months after such Registration Statement becomes effective; (c) furnish to the Selling Investors and to any underwriter of such Eligible Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus), in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents as the Selling Investors or such underwriter may reasonably request; -9- (d) use all reasonable efforts to register or qualify all Eligible Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as the Selling Investors or any underwriter of such Eligible Securities shall reasonably request, and do any and all other acts and things which may be reasonably requested by the Selling Investors or any underwriter to consummate the disposition in such jurisdictions of the Eligible Securities covered by such registration statement, except the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it is not so qualified, or to subject itself to taxation in any jurisdiction where it is not then subject to taxation, or to consent to general service of process in any jurisdiction where it is not then subject to service of process; (e) use all reasonable efforts to list the Eligible Securities on each national securities exchange on which the Common Stock is then listed, if the listing of such securities is then permitted under the rules of such exchange; (f) (i) furnish to the Selling Investors, an opinion of counsel for the Company, addressed to them, dated the date of the closing under the underwriting agreement, and (ii) use all reasonable efforts to furnish to the Selling Investors, addressed to them, a "comfort letter" signed by the independent public accountants who have certified the Company's financial statements included in such registration statement, addressed to them, each such document covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants' letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to underwriters in underwritten public offerings of securities and such other matters as the Selling Investors may reasonably request; and (g) immediately notify the Selling Investors at any time when a prospectus relating to a registration pursuant to Article 3 or 4 hereof is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included -10- in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and at the request of the Selling investors prepare and furnish to the Selling Investors as many copies of a supplement to or an amendment of such prospectus as the Selling Investors reasonably request so that, as thereafter delivered to the purchasers of such Eligible Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company may require the Selling Investors to furnish the Company such information regarding the Selling Investors and the distribution of such securities as the Company may from time to time reasonably request in writing and as shall be required by law or by the SEC in connection with any registration. 5.2. Underwriting. (a) If requested by the underwriters for any underwritten offering of Eligible Securities pursuant to a registration requested hereunder, the Company will enter into and perform its obligations under an underwriting agreement with such underwriters for such offering, such agreement to contain such representations and warranties by the Company and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnities and contribution to the effect and to the extent provided in Article 7 hereof and the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 5.l(f). The holders of Eligible Securities on whose behalf Eligible Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, the company to and for the benefit of such underwriters shall also be made to and for the benefit of such holders of Eligible Securities. Notwithstanding the foregoing, any Selling Investor may elect, in writing prior to the effective date of the registration statement filed in connection with such registration, not to register such Eligible Securities in connection with such registration. -11- (b) In the event that any registration pursuant to Article 4 hereof shall involve, in whole or in part, an underwritten offering, the Company may require Eligible Securities requested to be registered pursuant to Article 4 to be included in such underwriting on the same terms and conditions as shall be applicable to the Other Securities being sold through underwriters under such registration. In such case, the holders of Eligible Securities on whose behalf Eligible Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement. Such agreement shall contain such representations and warranties by the Selling Investors and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnities and contribution to the effect and to the extent provided in Article 7. The representations and warranties in such underwriting agreement by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such holders of Eligible Securities. 5.3 Blackout Periods. (a) At any time when a registration statement effected pursuant to Article 3 relating to Eligible Securities is effective, upon written notice from the Company to Investors that the Company determines in the good faith judgment of the Board of Directors of the Company, with the advice of counsel, that Selling Investors' sale of Eligible Securities pursuant to the registration statement would require disclosure of non-public material information the disclosure of which would have a material adverse effect on the Company (an "Information Blackout"), the Selling Investors shall suspend sales of Eligible Securities pursuant to such registration statement until the earlier of: (X) (A) the date upon which such material information is disclosed to the public or ceases to be material or (B) 60 days after the Company makes such good faith determination, and (Y) such time as the Company notifies the Selling Investors that sales pursuant to such registration statement may be resumed (the number of days from such suspension of sales by the Selling Investors until the day when such sales may be resumed hereunder is hereinafter called a "Sales Blackout Period"). -12- (b) Any delivery by the Company of notice of an Information Blackout during the 90 days immediately following effectiveness of any registration statement effected pursuant to Article 3 hereof shall give the Investors the right, by written notice to the Company within 20 Business Days after the end of such blackout period, to cancel such registration and obtain one additional registration right during such calendar year (a "Blackout Termination Right") under Section 3.1(d). (c) If there is an Information Blackout and the Investors do not exercise their cancellation right, if any, pursuant to (b) above, or, if such cancellation right is not available, the time period set forth in Section 5.l(b) shall be extended for a number of days equal to the number of days in the Sales Blackout Period. 5.4. QUALIFICATION FOR RULE 144 SALES. The Company will take all actions reasonably necessary to comply with the filing requirements described in Rule 144(c)(l) so as to enable the Investors to sell Eligible Securities without registration under the Securities Act and, upon the written request of any Investor, the Company will deliver to such Investor a written statement as to whether it has complied with such filing requirements. ARTICLE VI PREPARATION: REASONABLE INVESTIGATION. 6.1. PREPARATION: REASONABLE INVESTIGATION. In connection with the preparation and filing of each registration statement registering Eligible Securities under the Securities Act, the Company will give the Selling Investors and the underwriters, if any, and their respective counsel and accountants, drafts of such registration statement for their review and comment prior to filing and such reasonable and customary access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of the Selling Investors and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. -13- ARTICLE VII INDEMNIFICATION AND CONTRIBUTION. 7.1. INDEMNIFICATION AND CONTRIBUTION. (a) In the event of any registration of any Eligible Securities hereunder, the Company will enter into customary indemnification arrangements to indemnify and hold harmless each Investor who exercises his registration rights hereunder and, to the extent applicable, its directors and officers, its partners, its trustees and each Person who controls any of such Persons, each Person who participates as an underwriter in the offering or sale of such securities, and each Person, if any, who controls such underwriter within the meaning of the Securities Act against any losses, claims, damages, liabilities and expenses, joint or several, to which such Person may be subject under the Securities Act or otherwise insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus included therein, or any amendment or supplement thereto, or any document incorporated by reference therein, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will promptly reimburse each such Person for any legal or any other expenses reasonably incurred by such Person in connection with investigating or defending any such loss, claim, damage, liability, action or proceeding; provided that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expenses arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus or final prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Selling Investors or such underwriter expressly for use in the registration statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of Investors or any such Person and shall survive the transfer of such securities by the Investors. The Company also shall agree to provide provision for contribution as shall be reasonably -14- requested by the investors or any underwriters in circumstances where such indemnity is held unenforceable. (b) The Selling Investors, by virtue of exercising their registration rights hereunder, agree and undertake to enter into customary indemnification arrangements to severally and not jointly indemnify and hold harmless (in the same manner and to the same extent as set forth in clause (a) of this Article 7) the Company, each director of the Company, each officer of the Company who shall sign such registration statement, each Person who participates as an underwriter in the offering or sale of such securities, each Person, if any, who controls the Company or any such underwriter within the meaning of the Securities Act, with respect to any statement in or omission from such registration statement, any preliminary prospectus or final prospectus included therein, or any amendment or supplement thereto, but only to the extent that such statement or omission was made in reliance upon and in conformity with written information furnished by such Selling Investors to the Company expressly for use in the registration statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of the registered securities by the Selling Investors and the expiration of this Agreement. The Selling Investors also shall agree to provide provision for contribution as shall be reasonably requested by the Company or any underwriters in circumstance where such indemnity if held unenforceable. (c) Indemnification and contribution similar to that specified in the preceding subdivisions of this Article 7 (with appropriate modifications) shall be given by the Company and the Selling Investors with respect to any required registration or other qualification of such Eligible Securities under any federal or state law or regulation of governmental authority other than the Securities Act. ARTICLE VIII BENEFITS OF REGISTRATION RIGHTS. 8.1. BENEFITS OF REGISTRATION RIGHTS. Subject to the limitations of Sections 3.1 and 4.1, Investors and any Permitted Transferees of Eligible Securities may severally or jointly exercise the registration rights hereunder in -15- such manner and in such proportion as they shall agree among themselves. ARTICLE IX MISCELLANEOUS 9.1 CAPTIONS. The captions or headings in this Agreement are for convenience and reference only, and in no way define, describe, extend or limit the scope or intent of this Agreement. 9.2 SEVERABILITY. If any clause, provision or section of this Agreement shall be invalid or unenforceable, the invalidity or unenforceability of such clause, provision or section shall not affect the enforceability or validity of any of the remaining clauses, provisions or sections hereof to the extent permitted by applicable law. 9.3 GOVERNING LAW. This Agreement shall be construed and enforced in accordance with the internal laws of the State of Delaware, without reference to its rules as to conflicts or choice of laws. 9.4 MODIFICATION aND AMENDMENT. This Agreement may not be changed, modified, discharged or amended, except by an instrument signed by all of the parties hereto. 9.5 COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. 9.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and understanding among the parties and supersedes any prior understandings and/or written or oral agreements among them respecting the subject matter herein. 9.7. NOTICES. All notices, requests, demands, consents and other communications required or permitted to be given pursuant to this Agreement shall be in writing and delivered by hand, by overnight courier delivery service or by certified mail, return receipt requested, postage prepaid. Notices shall be deemed given when actually received, which shall be deemed to be not later than the next Business Day if sent by overnight courier or after five -16- (5) Business Days if sent by mail. Notice to Investors shall be made to the address listed on the stock transfer records of the Company. -17- IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed as of the day and year first above written. GENERAL GROWTH PROPERTIES, INC. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Martin Bucksbaum By: ------------------------------------ Matthew Bucksbaum MB CAPITAL I By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- -18- MB CAPITAL II By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- GENERAL TRUST COMPANY, as Trustee for the members of the Bucksbaum Family By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- -19- EX-4.19 14 c02442exv4w19.txt RIGHTS AGREEMENT Exhibit 4.19 ================================================================================ GENERAL GROWTH PROPERTIES, INC. and NORWEST BANK MINNESOTA, N.A. Rights Agent Rights Agreement Dated as of November 18, 1998 ================================================================================ TABLE OF CONTENTS
Page ---- Section 1. Certain Definitions........................................ 1 Section 2. Appointment of Rights Agent................................ 9 Section 3. Issue of Right Certificates................................ 9 Section 4. Form of Right Certificates................................. 12 Section 5. Countersignature and Registration.......................... 13 Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates............................................... 14 Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................................................... 15 Section 8. Cancellation of Right Certificates......................... 18 Section 9. Status and Availability of Preferred Shares, etc........... 19 Section 10. Preferred Shares Record Date............................... 20 Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights..................................................... 21 Section 12. Certificate of Adjustment.................................. 36 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.............................................. 37 Section 14. Fractional Rights and Fractional Shares.................... 40 Section 15. Rights of Action........................................... 42 Section 16. Agreement of Right Holders................................. 43 Section 17. Right Certificate Holder Not Deemed a Stockholder.......... 44 Section 18. Concerning the Rights Agent................................ 44 Section 19. Merger or Consolidation or Change of Name of Rights Agent.. 45 Section 20. Duties of Rights Agent..................................... 47
i Section 21. Change of Rights Agent..................................... 50 Section 22. Issuance of New Right Certificates......................... 52 Section 23. Redemption................................................. 52 Section 24. Exchange................................................... 54 Section 25. Notice of Certain Events................................... 56 Section 26. Notices.................................................... 58 Section 27. Supplements and Amendments................................. 59 Section 28. Successors................................................. 60 Section 29. Benefits of this Agreement................................. 60 Section 30. Severability............................................... 60 Section 31. Governing Law.............................................. 60 Section 32. Counterparts............................................... 61 Section 33. Descriptive Headings....................................... 61 Section 34. Administration............................................. 61 Section 35. Limitations on Exercise or Exchange of Rights.............. 61 Section 35. Limitations on Exercise or Exchange of Rights.............. 62 Exhibit A Form of Certificate of Designation of Series A Junior Participating Preferred Stock.............................. A-1 Exhibit B Form of Right Certificate.................................. B-1 Exhibit C Summary of Rights to Purchase Preferred Shares............. C-1

ii RIGHTS AGREEMENT Agreement, dated as of November 18, 1998, between General Growth Properties, Inc., a Delaware corporation (the "Company"), and Norwest Bank Minnesota, N.A. (the "Rights Agent"). The Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a "Right") for each share of Common Stock, par value $.10 per share, of the Company (a "Common Share") outstanding on the Close of Business on December 10, 1998 (the "Record Date") and has authorized the issuance of one Right with respect to each additional Common Share that shall become outstanding between the Record Date and the earliest of the Close of Business on the Distribution Date, the Redemption Date and the Close of Business on the Final Expiration Date (as such terms are hereinafter defined), each Right representing the right to purchase one one-thousandth of a Preferred Share (as hereinafter defined), or such different amount and/or kind of securities as shall be hereinafter provided. Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated: "Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding or, in the case of (i) a Bucksbaum Holder, the greater of: (A) 15% and (B) such percentage of the then outstanding Common Shares of the Company which is in excess of the percentage such Person is permitted to Beneficially Own consistent with the terms of, and subject to the restrictions contained in, the Rights Agreement, dated as of July 27, 1993, as the same may be amended from time to time (the "Bucksbaum Rights Agreement"), among the Company and the Limited Partners referred to therein, plus 1%, and (ii) a Homart Holder, the greater of: (A) 15% and (B) such percentage of the then outstanding Common Shares of the Company which is in excess of the percentage which a Homart Holder would Beneficially Own upon the exchange of all of the shares of Class B Common Stock of GGP/Homart, Inc., a Delaware corporation, Beneficially Owned by such Homart Holder for Common Shares pursuant to the terms of, and subject to the restrictions contained in, the Stockholders Agreement, dated as of December 20, 1995, as the same may be amended from time to time (the "Homart Agreement"), by and among GGP/Homart, Inc., the Company and the other parties listed on the signature pages thereof, plus 1% (the limits on ownership described in clauses (i) and (ii) being referred to as the "Grandfathered Limits"), but shall not include (1) the Company, (2) any Subsidiary of the Company, (3) any employee benefit plan of the Company or any Subsidiary of the Company, or (4) any entity holding Common Shares for or pursuant to the terms of any such employee benefit plan. Notwithstanding the foregoing, (x) no Person shall become an "Acquiring Person" as the result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares -2- beneficially owned by such Person to 15% (or such other percentage as would otherwise result in such person becoming an Acquiring Person) or more of the Common Shares of the Company then outstanding; provided, however, that if a Person shall so become the Beneficial Owner of 15% (or such other percentage) or more of the Common Shares of the Company then outstanding by reason of an acquisition of Common Shares by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of an additional 1% of the outstanding Common Shares of the Company, then such Person shall be deemed to be an "Acquiring Person"; and (y) if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph, has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph, then such Person shall not be deemed to have become an "Acquiring Person" for any purposes of this Agreement. "Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date of this Agreement. -3- "Attribution Rules" shall mean the ownership attribution rules of Section 544 of the Internal Revenue Code of 1986, as amended (the "Code"), as modified by Section 856(h)(1)(B) of the Code. A Person shall be deemed the "Beneficial Owner" of and shall be deemed to "beneficially own" any securities: (i) which such Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly; (ii) which such Person or any of such Person's Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), written or otherwise, or upon the exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed to be the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to -4- beneficially own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or (iii) which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person's Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), written or otherwise, for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to section (B) of the immediately preceding paragraph (ii)) or disposing of any securities of the Company. Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase "then outstanding," when used with reference to a Person's Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder. -5- "Business Day" shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of Illinois are authorized or obligated by law or executive order to close. "Certificate" shall mean the Second Amended and Restated Certificate of Incorporation of the Company, as amended. "Close of Business" on any given date shall mean 5:00 P.M. Chicago, Illinois time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., Chicago, Illinois time, on the next succeeding Business Day. "Common Shares" when used with reference to the Company shall mean the shares of common stock, par value $.10 per share, of the Company. "Common Shares" when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. "common stock equivalents" shall have the meaning set forth in Section 11(a)(iii)(B)(3) hereof. "Constructive Ownership Rules" shall mean the ownership attribution rules of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. "Current Value" shall have the meaning set forth in Section 11(a)(iii)(A)(1) hereof. -6- "Distribution Date" shall have the meaning set forth in Section 3(a) hereof. "equivalent preferred shares" shall have the meaning set forth in Section 11(b) hereof. "Exchange Ratio" shall have the meaning set forth in Section 24(a) hereof. "Existing Holder Limit" shall have the meaning set forth in the Certificate. "Final Expiration Date" shall mean November 18, 2008. "Grandfathered Stockholders" shall mean (i) M.B. Capital Partners III, a South Dakota general partnership, its partners, Matthew Bucksbaum, any descendants of Martin Bucksbaum or Matthew Bucksbaum, the spouses of any of the foregoing individuals, trusts for the benefit of any of the foregoing individuals and the trustees thereof, and the respective Affiliates and Associates of the foregoing Persons (each, a "Bucksbaum Holder"); and (ii) the holders of shares of Class B Common Stock of GGP/Homart, Inc., a Delaware corporation, and their Affiliates and Associates (each, a "Homart Holder"). "Ownership Limit" shall have the meaning set forth in the Certificate. "Person" shall mean any individual, firm, corporation, partnership, limited partnership, limited liability partnership, business trust, limited liability company, unincorporated association or other entity, and shall include any successor (by merger or otherwise) of such entity. -7- "Purchase Price" shall have the meaning set forth in Section 7(b) hereof. "Preferred Shares" shall mean shares of Series A Junior Participating Preferred Stock, par value $100.00 per share, of the Company having such rights and preferences upon adoption as are set forth in the form of Certificate of Designation set forth as Exhibit A hereto. "Redemption Date" shall have the meaning set forth in Section 23 hereof. "Right Certificate" shall mean a certificate evidencing a Right in substantially the form of Exhibit B hereto. "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii) hereof. "Shares Acquisition Date" shall mean the earlier of the date of (i) the public announcement by the Company or an Acquiring Person that an Acquiring Person has become such or (ii) the public disclosure of facts by the Company or an Acquiring Person indicating that an Acquiring Person has become such. "Spread" shall have the meaning set forth in Section 11(a)(iii)(A) hereof. "Subsidiary" of any Person shall mean any Person of which a majority of the voting power of the voting equity securities or equity interests is owned, directly or indirectly, by such Person. "Substitution Period" shall have the meaning set forth in Section 11(a)(iii) hereof. -8- "Summary of Rights" shall mean the Summary of Rights to Purchase Preferred Shares in substantially the form of Exhibit C hereto. Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Shares) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable, upon ten (10) days' prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and in no event be liable for, the acts or omissions of any such co-Rights Agent. Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan) of, or of the first public announcement of the intention of any Person (other than any of the Persons referred to in the preceding parenthetical) to commence, a tender or exchange offer the -9- consummation of which would result in any Person becoming the Beneficial Owner of Common Shares aggregating 15% or more of the then outstanding Common Shares or, in the case of the Grandfathered Shareholders, becoming the Beneficial Owner of an aggregate number of then outstanding Common Shares which would exceed the applicable Grandfathered Limit (such date being herein referred to as the "Distribution Date"), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Shares registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates, and (y) the right to receive Right Certificates will be transferable only in connection with the transfer of Common Shares. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate evidencing one Right for each Common Share so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. (b) On the Record Date, or as soon as practicable thereafter, the Company will send a copy of the Summary of Rights by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at -10- the address of such holder shown on the records of the Company. With respect to certificates for Common Shares outstanding as of the Record Date, until the Close of Business on the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof together with a copy of the Summary of Rights attached thereto. Until the Close of Business on the Distribution Date (or the earlier of the Redemption Date or the Close of Business on the Final Expiration Date), the surrender for transfer of any certificate for Common Shares outstanding on the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with the Common Shares evidenced thereby. (c) Certificates for Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record Date but prior to the earliest of the Close of Business on the Distribution Date, the Redemption Date or the Close of Business on the Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: This certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between General Growth Properties, Inc. and Norwest Bank Minnesota, N.A., as Rights Agent, dated as of November 18, 1998 (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of General Growth Properties, Inc. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate -11- certificates and will no longer be evidenced by this certificate. General Growth Properties, Inc. will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances, Rights that are or were acquired or beneficially owned by Acquiring Persons (as defined in the Rights Agreement) may become null and void. With respect to such certificates containing the foregoing legend, until the Close of Business on the Distribution Date, the Rights associated with the Common Shares represented by certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares represented thereby. In the event that the Company purchases or acquires any Common Shares after the Record Date but prior to the Close of Business on the Distribution Date, any Rights associated with such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding. Section 4. Form of Right Certificates. The Right Certificates (and the forms of election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any -12- rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the other provisions of this Agreement, the Right Certificates shall entitle the holders thereof to purchase such number of one one-thousandths of a Preferred Share as shall be set forth therein at the Purchase Price, but the number of one one-thousandths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein. Section 5. Countersignature and Registration. The Right Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President, any of its Vice Presidents, or its Treasurer, either manually or by facsimile signature, shall have affixed thereto the Company's seal or a facsimile thereof, and shall be attested by the Secretary or any Assistant Secretary of the Company, either manually or by facsimile signature. The Right Certificates shall be countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned, either manually or by facsimile. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of -13- the Company by any person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer. Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office, books for registration of the transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates. Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject to the provisions of Section 14 hereof, at any time after the Close of Business on the Distribution Date, and prior to the earlier of the Redemption Date or the Close of Business on the Final Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder -14- desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient for any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The registered holder of any Right Certificate (other than a holder whose Rights have become void -15- pursuant to Section 11(a)(ii) hereof or have been exchanged pursuant to Section 24 hereof) may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at its principal office, together with payment of the Purchase Price for each one one-thousandth of a Preferred Share as to which the Rights are exercised, prior to the earliest of (i) the Close of Business on the Final Expiration Date, (ii) the time at which the right to exercise the Rights terminates pursuant to Section 23 hereof, or (iii) the time at which the right to exercise the Rights terminates pursuant to Section 24 hereof. (b) The purchase price for each one one-thousandth of a Preferred Share to be purchased upon the exercise of a Right shall initially be One Hundred Forty Eight Dollars ($148.00) (the "Purchase Price"), shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase and certificate duly executed, accompanied by payment of the Purchase Price for the number of one one-thousandths of a Preferred Share to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by cash, -16- certified check, cashier's check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares certificates for the number of one one-thousandths of a Preferred Share to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from any depositary agent for the Preferred Shares depositary receipts representing such number of one one-thousandths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional Preferred Shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt, deliver such cash to or upon the order of the registered holder of such Right Certificate. (d) In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to his -17- duly authorized assigns, subject to the provisions of Section 14 hereof. (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the certificate following the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Section 8. Cancellation of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Rights Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company. -18- Section 9. Status and Availability of Preferred Shares, etc. (a) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and non-assessable shares. (b) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company's reasonable satisfaction that no such tax is due. (c) The Company covenants and agrees that it will cause to be reserved and kept available, out of its authorized and -19- unissued Preferred Shares or any Preferred Shares held in its treasury, the number of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. (d) The Company shall use its best efforts, to the extent required by law, (i) to file, as soon as practicable following the earliest date after the first occurrence of an event described in Section 11(a)(ii) in which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a)(ii) and (iii) hereof, or as soon as is required by law following the Distribution Date, as the case may be, a registration statement under the Act on an appropriate form, with respect to the securities purchasable upon exercise of the Rights, (ii) to cause such registration statement to become effective as soon as practicable after such filing, and (iii) to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the Expiration Date. The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or "blue sky" laws of the various states in connection with the exercisability of the Rights. Section 10. Preferred Shares Record Date. Each person in whose name any certificate for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become -20- the holder of record of the Preferred Shares represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (a)(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the -21- record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. (ii) Subject to the following paragraph of this subparagraph (ii) and to Section 24 of this Agreement, in the event any Person shall become an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable and dividing that product by (y) 50% of the then current per share market price of the Company's Common Shares -22- (determined pursuant to Section 11(d) hereof) on the date such Person became an Acquiring Person. In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action that would eliminate or diminish the benefits intended to be afforded by the Rights. From and after the occurrence of such an event, any Rights that are or were acquired or beneficially owned by such Acquiring Person (or any Associate or Affiliate of such Acquiring Person) on or after the earlier of (x) the date of such event and (y) the Distribution Date shall be void and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof shall be canceled. (iii) In the event that the number of Common Shares which are authorized by the Company's certificate of incorporation -23- and not outstanding or subscribed for, or reserved or otherwise committed for issuance for purposes other than upon exercise of the Rights, are not sufficient to permit the holder of each Right to purchase the number of Common Shares to which he would be entitled upon the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of paragraph (a) of this Section 11, or should the Board of Directors so elect, the Company shall: (A) determine the excess of (1) the value of the Common Shares issuable upon the exercise of a Right (calculated as provided in the last sentence of this subparagraph (iii)) pursuant to Section 11(a)(ii) hereof (the "Current Value") over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for such Common Shares, upon payment of the applicable Purchase Price, any one or more of the following having an aggregate value determined by the Board of Directors to be equal to the Current Value: (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has determined to have the same value as shares of Common Stock (such shares of preferred stock, "common stock equivalents")), (4) debt securities of the Company, or (5) other assets; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the first occurrence of an event triggering the rights to purchase Common Shares described in -24- Section 11(a)(ii) (the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional Common Shares could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof and the last paragraph of Section 11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall make a public announcement, and shall deliver to the Rights Agent a statement, stating that the exercisability of -25- the Rights has been temporarily suspended. At such time as the suspension is no longer in effect, the Company shall make another public announcement, and deliver to the Rights Agent a statement, so stating. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the current per share market price (as determined pursuant to Section 11(d)(i) hereof) of the Common Shares on the Section 11(a)(ii) Trigger Date and the value of any common stock equivalent shall be deemed to have the same value as the Common Shares on such date. (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares ("equivalent preferred shares")) or securities convertible into Preferred Shares or equivalent preferred shares at a price per Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Shares or equivalent preferred shares) less than the then current per share market price of the Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be adjusted by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares which the -26- aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. (c) In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares -27- (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preferred Share and the denominator of which shall be such current per share market price of the Preferred Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. -28- (d) (i) For the purpose of any computation hereunder, the "current per share market price" of any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal -29- national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. (ii) For the purpose of any computation hereunder, the "current per share market price" of the Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Shares are not publicly traded, the "current per share market price" of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by 1000. If neither the Common Shares nor the Preferred Shares are -30- publicly held or so listed or traded, "current per share market price" shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. (e) No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one ten-millionth of a Preferred Share or one ten-thousandth of any other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than three years from the date of the transaction which requires such adjustment. (f) If as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, the number of such other shares so receivable upon exercise of any Right shall thereafter be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Section 11(a) through (c), inclusive, and the provisions of Sections 7, 9, 10 and -31- 13 with respect to the Preferred Shares shall apply on like terms to any such other shares. (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandths of a Preferred Share (calculated to the nearest one ten-millionth of a Preferred Share) obtained by (i) multiplying (x) the number of one one-thousandths of a share covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights in substitution for any adjustment in the number of one one-thousandths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of -32- the number of Rights shall be exercisable for the number of one one-thousandths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one hundred-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been distributed, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been distributed, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to -33- which such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. (j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths of a Preferred Share issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-thousandths of a Preferred Share which were expressed in the initial Right Certificates issued hereunder. (k) Before taking any action that would cause an adjustment reducing the Purchase Price below one one-thousandth of the then par value of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and non-assessable Preferred Shares at such adjusted Purchase Price. (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Shares and other capital stock or securities of the Company, if -34- any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment. (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any (i) combination or subdivision of the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the current market price, (iii) issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares or (v) issuance of any rights, options or warrants referred to hereinabove in Section 11(b), hereafter made by the Company to holders of its Preferred Shares shall not be taxable to such stockholders. (n) In the event that at any time after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares or (ii) effect a subdivision, combination or -35- consolidation of the Common Shares (by reclassification or otherwise other than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares, then in any such case (A) the number of one one-thousandths of a Preferred Share purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one- thousandths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected. Section 12. Certificate of Adjustment. Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof. The -36- Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained. Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. In the event that, at any time after a Person becomes an Acquiring Person, directly or indirectly, (i) the Company shall consolidate with, or merge with and into, any other Person, (ii) any Person shall consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be made so that (A) each holder of a Right (except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one- thousandths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of such -37- other Person (including the Company as successor thereto or as the surviving corporation) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable and dividing that product by (y) 50% of the then current per share market price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; (B) the issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the term "Company" shall thereafter be deemed to refer to such issuer; and (D) such issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares thereafter deliverable upon the exercise of the Rights. The Company covenants and agrees that it shall not consummate any such consolidation, merger, sale or transfer unless prior thereto the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement so providing and further providing that, as soon as practicable after the date of any such consolidation, merger, sale or transfer, the issuer will: -38- (i) prepare and file a registration statement under the Act, if necessary, with respect to the Rights and the securities purchasable upon exercise of the Rights, on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Final Expiration Date and similarly comply with applicable state securities laws; and (ii) deliver to record holders of the Rights historical financial statements for the issuer and each of its Affiliates that comply in all respects with the requirements for registration on Form 10 under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. For purposes hereof, the "earning power" of the Company and its Subsidiaries shall be determined in good faith by the Company's Board of Directors on the basis of the operating earnings of each business operated by the Company and its Subsidiaries -39- during the three fiscal years preceding the date of such determination (or, in the case of any business not operated by the Company or any Subsidiary during three full fiscal years preceding such date, during the period such business was operated by the Company or any Subsidiary). Section 14. Fractional Rights and Fractional Shares. (a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on -40- which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used. (b) The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-thousandth of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-thousandth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-thousandth of a Preferred Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided, that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In -41- lieu of fractional Preferred Shares that are not integral multiples of one one-thousandth of a Preferred Share, the Company shall pay to each registered holder of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Preferred Share as the fraction of one Preferred Share that such holder would otherwise receive upon the exercise of the aggregate number of rights exercised by such holder. For the purposes of this Section 14(b), the current market value of a Preferred Share shall be the closing price of a Preferred Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise. (c) The holder of a Right by the acceptance of the Right expressly waives any right to receive fractional Rights or fractional shares upon exercise of a Right (except as provided above). Section 15. Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares) may, without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), on his own behalf and for his own benefit, enforce, and -42- may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement. Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares; (b) after the Distribution Date, the Right Certificates are transferable only on the registry books maintained by the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer with a completed form of certification; and (c) the Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Shares certificate) is -43- registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary. Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof. Section 18. Concerning the Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and -44- other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim or liability in connection therewith. The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Right Certificate or certificate for Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons. Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any corporation into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any corporation succeeding to the -45- corporate trust business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right -46- Certificates shall have the full force provided in the Right Certificates and in this Agreement. Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations expressly set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Rights Agent. The Rights Agent shall perform those duties and obligations upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the President, a Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. -47- (c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct. (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except as to its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. (e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any adjustment required under the provisions of Sections 11 or 13 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares will, when so -48- issued, be validly authorized and issued, fully paid and nonassessable. (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the President, a Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer. (h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. -49- (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof. Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 90 days' notice in writing mailed to the Company and to each transfer agent of the Common Shares and the Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares and the Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such -50- notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of any state of the United States, in good standing, having an office in the State of Illinois or New York which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $100 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares and the Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the -51- Rights Agent or the appointment of the successor Rights Agent, as the case may be. Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. Section 23. Redemption. (a) The Board of Directors of the Company may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all the then outstanding Rights at a redemption price of $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption Price"). The redemption of the Rights by the Board of Directors may be made effective at such time, on such basis and subject to such conditions as the Board of Directors in its sole discretion may establish. (b) Immediately upon the time of the effectiveness of the redemption of the Rights pursuant to paragraph (a) of this Section 23 or such earlier time as may be determined by the Board -52- of Directors of the Company in the action ordering such redemption (although not earlier than the time of such action) (such time the "Redemption Date"), and without any further action and without any notice, the right to exercise the Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors ordering the redemption of the Rights pursuant to paragraph (a), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. If the payment of the Redemption Price is not included with such notice, each such notice shall state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, other than in connection with the purchase of Common Shares prior to the Distribution Date. -53- Section 24. Exchange. (a) The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of a majority of the Common Shares then outstanding. (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to subsection (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of -54- any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights. (c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Shares or common stock equivalents for Common Shares exchangeable for Rights, at the initial rate of one one-thousandth of a Preferred Share (or an appropriate number of common stock equivalents) for each Common Share, as appropriately adjusted to reflect adjustments in the voting rights of the Preferred Shares pursuant to the terms thereof, so that the fraction of a Preferred Share delivered in lieu of each Common Share shall have the same voting rights as one Common Share. (d) In the event that there shall not be sufficient Common Shares, Preferred Shares or common stock equivalents -55- authorized by the Company's certificate of incorporation and not outstanding or subscribed for, or reserved or otherwise committed for issuance for purposes other than upon exercise of Rights, to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional Common Shares, Preferred Shares or common stock equivalents for issuance upon exchange of the Rights. (e) The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current per share market value of a whole Common Share. For the purposes of this paragraph (e), the current per share market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. Section 25. Notice of Certain Events. (a) In case the Company shall after the Distribution Date propose (i) to pay any dividend payable in stock of any class to the holders of its Preferred Shares or to make any other distribution to the holders of its Preferred Shares (other -56- than a regular quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by -57- clause (i) or (ii) above at least 10 days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier. (b) In case any event set forth in Section 11(a)(ii) hereof shall occur, then the Company shall as soon as practicable thereafter give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof. Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: Norwest Bank Minnesota, N.A. 161 North Concord Exchange South St. Paul, Minnesota 55075 Attention: Shareowner Services Department Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the -58- Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: General Growth Properties, Inc. 110 North Wacker Drive Chicago, Illinois 60606 Attention: Corporate Secretary Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. Section 27. Supplements and Amendments. The Company may from time to time, and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any change to or delete any provision hereof or to adopt any other provisions with respect to the Rights which the Company may deem necessary or desirable; provided, however, that from and after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended or supplemented in any manner which would adversely affect the interests of the holders of Rights (other than an Acquiring Person and its Affiliates and Associates). -59- Any supplement or amendment authorized by this Section 27 will be evidenced by a writing signed by the Company and the Rights Agent. Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. Section 29. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to any person or entity other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares). Section 30. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Section 31. Governing Law. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of -60- such State applicable to contracts to be made and performed entirely within such State. Section 32. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Section 33. Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 34. Administration. The Board of Directors of the Company shall have the exclusive power and authority to administer and interpret the provisions of this Agreement and to exercise all rights and powers specifically granted to the Board of Directors or the Company or as may be necessary or advisable in the administration of this Agreement. All such actions, calculations, determinations and interpretations which are done or made by the Board of Directors in good faith shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties and shall not subject the Board of Directors to any liability to the holders of the Rights. Section 35. Limitations on Exercise or Exchange of Rights. (a) Notwithstanding any provisions of this Agreement or the Rights to the contrary, in no event may a Right be -61- (i) exercised to purchase Preferred Shares, Common Shares or other securities or (ii) exchanged for Common Shares or other securities if such exercise or exchange would result in (x) any Person's ownership, taking into account both direct ownership and ownership under the Attribution Rules, of any Preferred Shares, Common Shares or other securities in excess of the Ownership Limit or Existing Holder Limit, as applicable, or (y) the ownership, taking into account both direct ownership and ownership under the Constructive Ownership Rules, by any Person of Preferred Shares, Common Shares or other securities in excess of the Ownership Limit or Existing Holder Limit, as applicable. (b) As a condition to the exercise or exchange of a Right, the Company may require the exercising or exchanging Person (the "Exchanging Person") to certify that (i) neither the Exchanging Person nor any other Person who, under the Attribution Rules, would be treated as owning all or a portion of the shares directly owned by the Exchanging Person, would own, taking into account both direct ownership and ownership under the Attribution Rules, any Preferred Shares, Common Shares or other securities in excess of the Ownership Limit or Existing Holder Limit, as applicable, as a result of the exercise or exchange of the Right if the Company were to deliver Preferred Shares, Common Shares or other securities in respect of such exercise or exchange and (ii) neither the Exchanging Person nor any other Person who, under the Constructive Ownership Rules, would be treated as owning all or a portion of the shares directly owned by the Exchanging Person, -62- would own, taking into account both direct ownership and ownership under the Constructive Ownership Rules, any Preferred Shares, Common Shares or other securities in excess of the Ownership Limit or Existing Holder Limit, as applicable, as a result of the exercise or exchange of the Right if the Company were to deliver Preferred Shares, Common Shares or other securities in respect of such exercise or exchange. In the absence of such a certification the Company shall be entitled conclusively to deem the limitation of Section 35 hereof to apply in respect of the attempted exercise or exchange. -63- IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed and their respective corporate seals to be hereunder affixed and attested, all as of the day and year first above written. Attest: GENERAL GROWTH PROPERTIES, INC. /s/ Marshall E. Eisenberg By: /s/ Bernard Freibaum - ------------------------------------- ------------------------------------ Marshall E. Eisenberg Bernard Freibaum Secretary Executive Vice President and Chief Financial Officer Attest: NORWEST BANK MINNESOTA, N.A. /s/ Suzanne M. Swits By: /s/ Kenneth Swanson - ------------------------------------- ------------------------------------ Suzanne M. Swits Kenneth Swanson Assistant Vice President Vice President Exhibit A FORM of CERTIFICATE OF DESIGNATION of SERIES A JUNIOR PARTICIPATING PREFERRED STOCK of GENERAL GROWTH PROPERTIES, INC. ---------- (Pursuant to Section 151 of the Delaware General Corporation Law) ---------- General Growth Properties, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the "Company"), hereby certifies that the following resolution was adopted by the Board of Directors of the Company as required by Section 151 of the General Corporation Law at a meeting duly called and held on November 18, 1998: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Company (hereinafter called the "Board of Directors" or the "Board") in accordance with the provisions of the Second Amended Restated Certificate of Incorporation of the Company, as amended (the "Restated Certificate of Incorporation"), the Board of Directors hereby creates a series of Preferred Stock, par value $100.00 per share (the "Preferred Stock"), of the Company and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows: Section 1. Designation and Amount. The shares of this series shall be designated as "Series A Junior Participating Preferred Stock" (the "Series A Preferred Stock") and the number of shares constituting the Series A Preferred Stock shall be 100,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any A-1 outstanding securities issued by the Company convertible into Series A Preferred Stock. Section 2. Dividends and Distributions. (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any other stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount (if any) per share (rounded to the nearest cent), subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate per share amount of all cash dividends, and 1000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock, par value $.10 per share (the "Common Stock"), of the Company or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Company shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). (C) Dividends due pursuant to paragraph (A) of this Section shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, A-2 unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 1000 votes on all matters submitted to a vote of the stockholders of the Company. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided the Restated Certificate of Incorporation, including any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Company. (C) Except as set forth herein, or as otherwise required by law, holders of Series A Preferred Stock shall have no A-3 special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Company shall not: (i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; (ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; or (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Company ranking junior (as to dividends and upon dissolution, liquidation or winding up) to the Series A Preferred Stock. (B) The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein or in the Restated Certificate of Incorporation, including any Certificate of Designations creating a series of A-4 Preferred Stock or any similar stock, or as otherwise required by law. Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount to be distributed per share to holders of shares of Common Stock plus an amount equal to any accrued and unpaid dividends. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. Amendment. The Restated Certificate of Incorporation shall not be amended in any manner, including in a merger or consolidation, which would alter, change, or repeal the powers, preferences or special rights of the Series A Preferred A-5 Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class. Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and upon liquidation, dissolution and winding up, junior to all series of Preferred Stock. IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Company by its this ______ day of November, 1998. GENERAL GROWTH PROPERTIES, INC. By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- A-6 Exhibit B Form of Right Certificate Certificate No. R-_____ ______ Rights NOT EXERCISABLE AFTER NOVEMBER 18, 2008 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. THE EXERCISABILITY OR EXCHANGEABILITY OF RIGHTS MAY BE LIMITED AS A RESULT OF THE OWNERSHIP LIMITATIONS SET FORTH IN THE SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF GENERAL GROWTH PROPERTIES, INC., AS IT MAY BE AMENDED. Right Certificate GENERAL GROWTH PROPERTIES, INC. This certifies that _______________________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of November 18, 1998 (the "Rights Agreement"), between General Growth Properties, Inc., a Delaware corporation (the "Company"), and Norwest Bank Minnesota, N.A. (the "Rights Agent"), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., Chicago, Illinois time, on November 18, 2008, at the principal office of the Rights Agent, or at the office of its successor as Rights Agent, one one-thousandth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $100.00 per share (the "Preferred Shares"), of the Company, at a purchase price of $148.00 per one one-thousandth of a Preferred Share (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the certification and the Form of Election to Purchase duly executed. The number of Rights evidenced B-1 by this Right Certificate (and the number of one one-thousandths of a Preferred Share which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of December 10, 1998, based on the Preferred Shares as constituted at such date. As provided in the Rights Agreement, the Purchase Price and the number of one one-thousandths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. From and after the occurrence of an event described in Section 11(a)(ii) of the Rights Agreement, if the Rights evidenced by this Right Certificate are or were at any time on or after the earlier of (x) the date of such event and (y) the Distribution Date (as such term is defined in the Rights Agreement) acquired or beneficially owned by an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as such terms are defined in the Rights Agreement), such Rights shall become void, and any holder of such Rights shall thereafter have no right to exercise such Rights. This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the offices of the Rights Agent. This Right Certificate, with or without other Right Certificates, upon surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, at the Company's option, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0.01 per Right or (ii) may be exchanged in whole or in part for shares of the Company's Common Stock, par value $.10 per share, or Preferred Shares. No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of a B-2 Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Rights Agreement. This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of __________ __, _____ Attest: GENERAL GROWTH PROPERTIES, INC. By: ------------------------------------ Countersigned: NORWEST BANK MINNESOTA, N.A. By: ------------------------------------ Authorized Signature B-3 Form of Reverse Side of Right Certificate FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Right Certificate.) FOR VALUE RECEIVED _______________________________________________ hereby sells, assigns and transfers unto _______________________________________ ________________________________________________________________________________ (Please print name and address of transferee) this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ___________________, Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution. Dated: _____________ ___, _____ ---------------------------------------- Signature Signature Guaranteed: Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement). ---------------------------------------- Signature B-4 Form of Reverse Side of Right Certificate -- continued FORM OF ELECTION TO PURCHASE (To be executed if holder desires to exercise the Right Certificate.) To: GENERAL GROWTH PROPERTIES, INC. The undersigned hereby irrevocably elects to exercise ________________ Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of: Please insert social security or other identifying number ________________________________________________________________________________ (Please print name and address) ________________________________________________________________________________ If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to: Please insert social security or other identifying number ________________________________________________________________________________ (Please print name and address) ________________________________________________________________________________ Dated: _____________ ___, _____ ---------------------------------------- Signature Signature Guaranteed: Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or B-5 trust company having an office or correspondent in the United States. The undersigned hereby certifies that (i) the Rights evidenced by this Right Certificate are not Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and (ii) if Preferred Shares, Common Shares or other securities are issued in respect of this exercise, (x) neither the Person effecting this exercise (the "Exchanging Person") nor any Person who, under the Attribution Rules (as defined in the Rights Agreement), would be treated as owning all or a portion of the shares directly owned by the Exchanging Person, will own, as a result of the exercise, taking into account both direct ownership and ownership under the Attribution Rules, any Preferred Shares, Common Shares or other securities in excess of the Ownership Limit (as defined in the Rights Agreement) or the Existing Holder Limit (as defined therein), as applicable, and (y) neither the Exchanging Person nor any Person who, under the Constructive Ownership Rules (as defined in the Rights Agreement), would be treated as owning all or a portion of the shares directly owned by the Exchanging Person will own, as a result of the exercise, taking into account both direct ownership and ownership under the Constructive Ownership Rules, any Preferred Shares, Common Shares or other securities in excess of the Ownership Limit or the Existing Holder Limit, as applicable. ---------------------------------------- Signature NOTICE The signature in the foregoing Forms of Assignment and Election must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and such Assignment or Election to Purchase will not be honored. B-6 Exhibit C SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES On November 18, 1998, the Board of Directors of General Growth Properties, Inc. (the "Company") declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock, par value $.10 per share (the "Common Shares") outstanding on December 10, 1998 (the "Record Date") to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $100.00 per share (the "Preferred Shares"), of the Company, at a price of $148.00 per one one-thousandth of a Preferred Share (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement") between the Company and Norwest Bank Minnesota, N.A., as Rights Agent (the "Rights Agent"). Until the earlier to occur of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired beneficial ownership of 15% or more of the outstanding Common Shares or, in the case of the Grandfathered Stockholders referred to in the Rights Agreement, beneficial ownership of a percentage of outstanding Common Shares in excess of the applicable Grandfathered Limit referred to therein, or (ii) 10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 15% or more of such outstanding Common Shares or, in the case of the Grandfathered Stockholders, beneficial ownership of a percentage of outstanding Common Shares in excess of the applicable Grandfathered Limit (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with respect to any of the Common Share certificates outstanding as of the Record Date, by such Common Share certificate with a copy of this Summary of Rights attached thereto. The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Common Shares. Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Share certificates issued after the Record Date or upon transfer or new issuance of Common Shares will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for C-1 transfer of any certificates for Common Shares outstanding as of the Record Date, even without such notation or a copy of this Summary of Rights being attached thereto, will also constitute the transfer of the Rights associated with the Common Shares represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Common Shares as of the Close of Business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. The Rights are not exercisable until the Distribution Date. The Rights will expire on November 18, 2008 (the "Final Expiration Date"), unless the Final Expiration Date is extended or unless the Rights are earlier redeemed by the Company, in each case, as described below. The Purchase Price payable, and the number of Preferred Shares or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights or warrants to subscribe for or purchase Preferred Shares at a price, or securities convertible into Preferred Shares with a conversion price, less than the then current market price of the Preferred Shares or (iii) upon the distribution to holders of the Preferred Shares of evidences of indebtedness or assets (excluding regular periodic cash dividends paid out of earnings or retained earnings or dividends payable in Preferred Shares) or of subscription rights or warrants (other than those referred to above). The number of outstanding Rights and the number of one one-thousandths of a Preferred Share issuable upon exercise of each Right are also subject to adjustment in the event of a stock split of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or subdivisions, consolidations or combinations of the Common Shares occurring, in any such case, prior to the Distribution Date. Preferred Shares purchasable upon exercise of the Rights will not be redeemable. Each Preferred Share will be entitled to a quarterly dividend payment of 1000 times the dividend declared per Common Share. In the event of liquidation, the holders of the Preferred Shares will be entitled to an aggregate payment of 1000 times the aggregate payment made per Common Share. Each Preferred Share will have 1000 votes, voting together with the Common Shares. In the event of any merger, consolidation or other transaction in which Common Shares are exchanged, each Preferred Share will be entitled to receive 1000 times the amount received per Common Share. These rights are protected by customary antidilution provisions. C-2 Because of the nature of the Preferred Shares' dividend, liquidation and voting rights, the value of the one one-thousandth interest in a Preferred Share purchasable upon exercise of each Right should approximate the value of one Common Share. From and after the occurrence of an event described in Section 11(a)(ii) of the Rights Agreement, if the Rights evidenced by this Right Certificate are or were at any time on or after the earlier of (x) the date of such event and (y) the Distribution Date (as such term is defined in the Rights Agreement) acquired or beneficially owned by an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as such terms are defined in the Rights Agreement), such Rights shall become void, and any holder of such Rights shall thereafter have no right to exercise such Rights. In the event that, at any time after a Person becomes an Acquiring Person, the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right. In the event that any person becomes an Acquiring Person, proper provision shall be made so that each holder of a Right, other than Rights beneficially owned by the Acquiring Person and its Affiliates and Associates (which will thereafter be void), will thereafter have the right to receive upon exercise that number of Common Shares having a market value of two times the exercise price of the Right. If the Company does not have sufficient Common Shares to satisfy such obligation to issue Common Shares, or if the Board of Directors so elects, the Company shall deliver upon payment of the exercise price of a Right an amount of cash or securities equivalent in value to the Common Shares issuable upon exercise of a Right; provided that, if the Company fails to meet such obligation within 30 days following the later of (x) the first occurrence of an event triggering the right to purchase Common Shares and (y) the date on which the Company's right to redeem the Rights expires, the Company must deliver, upon exercise of a Right but without requiring payment of the exercise price then in effect, Common Shares (to the extent available) and cash equal in value to the difference between the value of the Common Shares otherwise issuable upon the exercise of a Right and the exercise price then in effect. The Board of Directors may extend the 30-day period described above for up to an additional 60 days to permit the taking of action that may be necessary to authorize sufficient additional Common Shares to permit the issuance of Common Shares upon the exercise in full of the Rights. C-3 At any time after any Person becomes an Acquiring Person and prior to the acquisition by any person or group of a majority of the outstanding Common Shares, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one Common Share per Right (subject to adjustment). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Preferred Shares will be issued (other than fractions which are integral multiples of one one-thousandth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Shares on the last trading day prior to the date of exercise. At any time prior to the time any Person becomes an Acquiring Person, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the "Redemption Price"). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. The terms of the Rights may be amended by the Board of Directors of the Company without the consent of the holders of the Rights, except that from and after such time as any person becomes an Acquiring Person no such amendment may adversely affect the interests of the holders of the Rights (other than the Acquiring Person and its Affiliates and Associates). Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. The exercisability or exchangeability of the Rights may be limited as a result of the ownership limitations set forth in the Company's Second Amended and Restated Certificate of Incorporation, as it may be amended. A copy of the Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated November 18, 1998. A copy of the Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Agreement, which is hereby incorporated herein by reference. C-4 EX-4.20 15 c02442exv4w20.txt AMENDMENT TO RIGHTS AGREEMENT EXHIBIT 4.20 FIRST AMENDMENT TO RIGHTS AGREEMENT AMENDMENT (this "Amendment"), dated as of November 10, 1999, between General Growth Properties, Inc., a Delaware corporation (the "Company"), and Norwest Bank Minnesota, N.A. (the "Rights Agent"). WITNESSETH: WHEREAS, the Company and the Rights Agent entered into the Rights Agreement, dated as of November 18, 1998 (the "Rights Agreement"); WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company may from time to time supplement or amend the Rights Agreement in accordance with the provisions of such Section; and WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders that the Rights Agreement be amended as provided herein prior to the Company entering into the Homart II Agreement (as defined below). NOW THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: Section 1. Definitions. Capitalized terms used herein without definition shall have the meanings specified in the Rights Agreement. Section 2. Amendments. 2.1 Section 1 of the Rights Agreement shall be amended as follows: (a) The definition of "Acquiring Person" shall be amended by inserting a new clause in line 22 of such definition before the phrase "plus 1%", which new clause shall read in its entirety as follows: and upon the sale of all of the Class B Units of GGP/Homart II L.L.C., a Delaware limited liability company, Beneficially Owned by such Homart Holder in exchange for Common Shares pursuant to the terms of, and subject to the restrictions contained in, the Operating Agreement of GGP/Homart II L.L.C., as the same may be amended from time to time (the "Homart II Agreement"), to be entered into by and among GGP/Homart II L.L.C., GGP Limited Partnership, a Delaware limited partnership (the "Partnership"), and the other parties to be listed on the signature pages thereof," (b) The definition of "Acquiring Person" shall be further amended by inserting a new sentence in line 28 before the word "Notwithstanding", which sentence shall read in its entirety as follows: For purposes of this Agreement, a Homart Holder will at all times be deemed to Beneficially Own the Common Shares issuable upon: the exchange of all of the shares of Class B Common Stock of GGP/Homart, Inc. Beneficially Owned by such Homart Holder for Common Shares pursuant to the Homart Agreement and the sale of all of the Class B Units of GGP/Homart II L.L.C. Beneficially Owned by such Homart Holder in exchange for Common Shares pursuant to the Homart II Agreement. (c) The definition of "Grandfathered Stockholders" shall be amended by deleting clause (ii) thereof and inserting a new clause (ii) which shall read in its entirety as follows: "(ii) the Comptroller of the State of New York as Trustee of the Common Retirement Fund and the Affiliates and Associates of such Trustee or Fund (each, a "Homart Holder")." 2.2 Section 3 of the Rights Agreement shall be amended by adding a subparagraph (d) thereto which shall read in its entirety as follows: (d) On the Distribution Date, proper provision shall be made by the Company in order to provide holders ("Unitholders"), other than the Company, of partnership units ("Units") of the Partnership, with such number of Rights, represented by Right Certificates, as would have been issued to such Unitholders upon receipt of Common Shares if such Unitholder's Units had been redeemed immediately prior to such Distribution Date and the purchase price therefor had been paid in the form of Common Shares pursuant to the terms and conditions of Redemption Rights Agreements or similar agreements among the Unitholders (or transferor Unitholders), the Company and/or the Partnership relating, inter alia, to the redemption or exchange of Units, and such Unitholders shall thereafter have all of the rights, privileges, benefits and obligations with respect to such Rights as are 2 provided for herein with respect to holders of Common Shares. Section 3. Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State. Section 4. Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Section 5. Ratification. Except as expressly provided herein, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Rights Agreement, all of which are ratified and confirmed in all respects and shall continue in full force and effect. 3 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and their respective corporate seals to be hereunder affixed and attested, all as of the day and year first above written. Attest: GENERAL GROWTH PROPERTIES, INC. /s/ Marshall E. Eisenberg By: /s/ Bernard Freibaum - ------------------------------------- ------------------------------------ Name: Marshall E. Eisenberg Name: Bernard Freibaum Title: Secretary Title: Executive Vice President Attest: NORWEST BANK MINNESOTA, N.A. /s/ Karri L. VanDell By: /s/ Kenneth P. Swanson - ------------------------------------- ------------------------------------ Name: Karri L. VanDell Name: Kenneth P. Swanson Title: Assistant Vice President Title: Vice President 4 EX-4.22 16 c02442exv4w22.txt LETTER AGREEMENT CONCERNING RIGHTS AGREEMENT EXHIBIT 4.22 GENERAL GROWTH PROPERTIES, INC. GGP LIMITED PARTNERSHIP 110 North Wacker Drive Chicago, Illinois 60606 November 10, 1999 Comptroller of the State of New York as Trustee of the Common Retirement Fund 633 Third Avenue 31st Floor New York, New York 10017-6754 Agreement Concerning Shareholder Rights Plan Dear Sir/Madam: Reference is made to the following: 1. that certain Stockholders Agreement dated as of December 20, 1995, among GGP/Homart, Inc. ("GGP/Homart"), Comptroller of the State of New York as Trustee of the Common Retirement Fund ("NYSCRF"), GGP Limited Partnership ("GGPLP"), General Growth Properties, Inc., ("GGPI") and certain others (as the same has been and may be further amended from time to time, the "Stockholders Agreement"), pursuant to which, among other things, (a) GGP/Homart issued to NYSCRF shares of Class B Common Stock, $.01 par value, of GGP/Homart (together with any shares of Class C Common Stock of GGP/Homart received on conversion of such shares of Class B Common Stock, the "GGP/Homart Shares"), (b) NYSCRF has the right (the "Exchange Right") to exchange all or any portion of the GGP/Homart Shares for an amount determined as provided therein (the "Exchange Amount") and otherwise upon the terms and subject to the conditions contained therein and (c) GGPI has the option to pay the Exchange Amount in cash and/or by delivery of shares of its common stock, $.10 par value ("GGPI Shares"), upon the terms and subject to the conditions contained therein; 2. that certain Operating Agreement dated as of the date hereof, among GGP/Homart II L.L.C. ("GGP/Homart II"), NYSCRF and GGPLP (as the same may be amended from time to time, the "Operating Agreement"), pursuant to which, among other things, (a) GGP/Homart II issued to NYSCRF Class B units of membership interest (the "GGP/Homart Units" and, together with the GGP/Homart Shares, the "Venture Securities"), (b) NYSCRF has the right (the "Put Right" and, together with the Exchange Right, the "Rights") to require GGPLP to purchase all or a portion of the GGP/Homart Units for an amount determined as provided therein (the "Put Purchase Price") and otherwise upon the terms and subject to the conditions contained therein and (c) GGPI has the option to purchase all or a portion of the GGP/Homart Units and pay the Put Purchase Price by delivery of GGPI Shares, upon the terms and subject to the conditions contained therein (the GGPI Shares that are issued from time to time in connection with an exercise of Rights, the "GGPI Rights Shares"); 3. that certain Rights Agreement dated as of November 18, 1998, between GGPI and Norwest Bank Minnesota, N.A., as amended by that certain Amendment to Rights Agreement dated the date hereof (as the same may be further amended from time to time, the "Rights Agreement"); and 4. that certain letter agreement dated the date hereof, between NYRSCF and GGPLP, specifying certain Persons whose principal business is deemed to be the development or management of regional shopping malls (as the same may be amended from time to time, the "Deemed Competitor Letter"). Capitalized terms used herein without definition shall have the meanings set forth in the Rights Agreement. 1. Matters Relating to Transfer of GGPI Shares. (a) Within 30 days following the receipt by GGPI of written notice of a proposed sale, conveyance, exchange or other transfer ("Transfer") of all or any portion of the GGPI Rights Shares, GGPI shall amend the Rights Agreement, if necessary, to permit the proposed transferee (the "Transferee"), together with its Affiliates and Associates, to Beneficially Own up to the number of GGPI Shares described in the last sentence of this Section 1(a) without the Transferee becoming an Acquiring Person under the Rights Agreement. Any such notice shall disclose the identity of the Transferor and proposed Transferee and contain a certification by the proposed Transferee of the number of GGPI Shares then Beneficially Owned by the proposed Transferee and its Affiliates and Associates. The number of GGPI Shares that the Transferee, together with its Affiliates and Associates, may Beneficially Own for purposes of the first sentence of this Section 1(a) is equal to the sum of (i) the number of GGPI Rights Shares, if any, previously Transferred to such Transferee in accordance with this agreement, (ii) the number of GGPI Rights Shares then proposed to be Transferred to such Transferee pursuant to this agreement and (iii) 1% of the number of GGPI Shares then issued and outstanding. 2 (b) Prior to any Transfer in connection with which the Rights Agreement has been amended as provided in Section 1(a) hereof, the proposed Transferee shall sign and deliver to GGPI and GGPLP (i) a standstill agreement in the form of Exhibit A, attached hereto and by this reference made a part hereof (a "Standstill Agreement"), and dated the date of the Transfer and (ii) an instrument in form reasonably satisfactory to GGPI and GGPLP, pursuant to which the Transferee agrees to be bound by the terms of this agreement (and upon execution and delivery of such instrument by the Transferee, the Transferee shall be entitled to the benefits of a holder of GGPI Rights Shares under this agreement). If such Transferee has previously signed and delivered to GGPI and GGPLP a Standstill Agreement, it shall deliver a new Standstill Agreement at such time. (c) Neither NYSCRF nor any Transferee which is bound by the terms of this agreement may Transfer any GGPI Shares (including the GGPI Rights Shares or any portion thereof) to any Person described in Section 8.5(b) of the Operating Agreement (as supplemented by the Deemed Competitor Letter) without the written consent of GGPI (which consent may be withheld in the sole and absolute discretion of GGPI), and any Transfer of GGPI Shares in violation of such restriction shall be null and void. 2. Matters Relating to Exercise of Rights and Transfer of Venture Securities. (a) Notwithstanding anything to the contrary contained in the Operating Agreement and the Stockholders Agreement and upon an exercise of Rights by any holder of Venture Securities (other than NYSCRF), GGPI may pay the applicable Exchange Amount or the Put Purchase Price by issuing GGPI Rights Shares but only to the extent that (i) the issuance of GGPI Rights Shares to such holder would not cause such holder to become an Acquiring Person under the Rights Agreement or (ii) GGPI has amended the Rights Agreement (which it may do or decline to do in its sole and absolute discretion) to permit such holder, together with its Affiliates and Associates, to Beneficially Own up to the number of GGPI Shares described in the third sentence of this Section without such holder becoming an Acquiring Person under the Rights Agreement. Notwithstanding anything to the contrary contained in the Operating Agreement and the Stockholders Agreement, GGPLP and/or GGPI may defer the closing of a cash purchase and sale of Venture Securities pursuant to an exercise of the Rights for an additional 150 days in the case of an exercise of the Exchange Right and an additional 90 days in the case of an exercise of the Put Right. The number of GGPI Shares which any holder, together with its Affiliates and Associates, may Beneficially Own for purposes of clause (ii) above shall be equal to the sum of (A) the number of GGPI Rights Shares proposed to be issued by GGPI in connection with an exercise of Rights and (B) the lesser of: (I) the number of GGPI Shares that were Beneficially Owned by such holder, together with its 3 Affiliates and Associates, on the date of the first acquisition of Venture Securities by such holder or any of its Affiliates or Associates and (II) the number of GGPI Shares that are Beneficially Owned by the holder and its Affiliates and Associates at the time of such exercise of Rights. Upon exercise of Rights by a holder of Venture Securities, such holder shall deliver to GGPI and GGPLP a certification of the number of GGPI Shares referred to in clauses (B)(I) and (B)(II) above. (b) In the event that the holder of any Venture Securities (other than NYSCRF) exercises Rights, GGPI pays all or a portion of the applicable Put Purchase Price and/or Exchange Amount by delivering GGPI Rights Shares and the Rights Agreement is amended as provided in Section 2(a) hereof, the holder shall sign and deliver to GGPLP and GGPI a Standstill Agreement dated the date the GGPI Rights Shares are issued. If such holder has previously signed and delivered to GGPI and GGPLP a Standstill Agreement, it shall deliver a new Standstill Agreement at such time. (c) Prior to any Transfer of Venture Securities, the proposed Transferee shall sign and deliver to GGPI and GGPLP an instrument in form reasonably satisfactory to GGPI and GGPLP, pursuant to which the Transferee agrees to be bound by the terms of this agreement (and upon execution and delivery of such instrument by the Transferee, the Transferee shall be entitled to the benefits of a holder of Venture Securities under this agreement), and any Transfer of Venture Securities in violation of such restriction shall be null and void. 3. Matters Relating to Amendment of Rights Agreement. GGPI shall not (a) amend clause (ii) of the definition of "Acquiring Person" contained in the Rights Agreement (as in effect on the date hereof) so as to materially and adversely affect NYSCRF without NYSCRF's consent, (b) further amend the Rights Agreement (as in effect on the date hereof) in any manner which is inconsistent with the terms of this agreement or (c) enter into any other agreement which is inconsistent with the terms of this agreement. 4. Matters Relating to Beneficial Ownerships of GGPI Rights Shares. For purposes of the Rights Agreement and/or this agreement and notwithstanding anything to the contrary contained therein or herein, a holder of Venture Securities (other than NYSCRF and its Affiliates and Associates) shall not be deemed to Beneficially Own the GGPI Shares issuable to it upon the exchange or sale of the Venture Securities Beneficially Owned by it solely by virtue of its ownership of such Venture Securities. 5. No Other Changes; Etc. Except as expressly set forth herein, the Stockholders Agreement and Operating Agreement shall remain in full force and effect. Nothing contained herein shall be deemed a waiver of the provisions of GGPI's Certificate of Incorporation, as amended. Any references to the Stockholders 4 Agreement in the Stockholders Agreement or elsewhere (except herein unless otherwise specified) shall be deemed to mean the Stockholders Agreement, as amended hereby, and any references to the Operating Agreement in the Operating Agreement or elsewhere (except herein unless otherwise specified) shall be deemed to mean the Operating Agreement, as amended hereby. Neither NYSCRF nor any Transferees shall enter into any transaction or take any other action for the purpose of directly or indirectly avoiding the restrictions contained in this agreement. The parties agree that the restrictions herein are reasonable and the result of arm's-length negotiations. 6. Counterparts. This agreement may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one document. 7. Governing Law. The interpretation and performance of this agreement shall be governed under the laws of the State of Delaware (without regard to its conflict of laws rules). 8. Successors and Assigns. The terms of this agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 5 Please indicate your agreement with the foregoing by signing and returning the enclosed counterpart of this letter to the undersigned. Very truly yours, GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: GENERAL GROWTH PROPERTIES, INC., a Delaware corporation, its general partner By: /s/ JOEL BAYER ------------------------------------ Name: Joel Bayer Title: Senior Vice President GENERAL GROWTH PROPERTIES,INC., a Delaware corporation By: /s/ JOEL BAYER ------------------------------------ Name: Joel Bayer Title: Senior Vice President Accepted and agreed to as of the date first above written COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND By: /s/ JOHN E. HULL --------------------------------- Name: John E. Hull Title: Deputy Comptroller 6 The undersigned, GGP/Homart, Inc. and GGP/Homart II L.L.C., do hereby accept and agree to the foregoing to the extent that the foregoing constitutes an amendment to the Stockholders Agreement and the Operating Agreement, respectively. GGP/HOMART, INC., a Delaware corporation By: /s/ JOEL BAYER ------------------------------------ Name: Joel Bayer Title: Senior Vice President GGP/HOMART II L.L.C., a Delaware limited liability company By: /s/ JOEL BAYER ------------------------------------ Name: Joel Bayer Title: Senior Vice President 7 EX-10.1 17 c02442exv10w1.txt AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE OPERATING PARTNERSHIP Exhibit 10.1 SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF GGP LIMITED PARTNERSHIP SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF GGP LIMITED PARTNERSHIP THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is made and entered into this 1st day of April, 1998, by and among the undersigned parties. WITNESSETH: WHEREAS, a Delaware limited partnership known as GGP Limited Partnership (the "Partnership") exists pursuant to that certain Amended and Restated Agreement of Limited Partnership dated as of July 27, 1993, as amended by that certain First Amendment thereto dated May 23, 1995, that certain Second Amendment thereto dated July 13, 1995, that certain Third Amendment thereto dated as of May 21, 1996, that certain Fourth Amendment thereto dated as of August 30, 1996, that certain Fifth Amendment thereto dated as of October 4, 1996, that certain Sixth Amendment thereto dated as of November 27, 1996, that certain Seventh Amendment thereto dated as of December 6, 1996, that certain Eighth Amendment dated June 19, 1997, that certain Ninth Amendment dated August 8, 1997, that certain Tenth Amendment dated as of September 8, 1997, that certain Eleventh Amendment dated as of September 11, 1997, that certain Twelfth Amendment thereto dated October 15, 1997, that certain Thirteenth Amendment thereto dated October 23, 1997 and that certain Fourteenth Amendment thereto dated October 29, 1997 (collectively, the "Initial Partnership Agreement"), and the Delaware Revised Uniform Limited Partnership Act; WHEREAS, the parties hereto, being the general partner and a majority in interest of the limited partners of the Partnership desire to amend and restate the Initial Partnership Agreement as set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, do hereby amend and restate the Initial Partnership Agreement to read as follows: ARTICLE I Definitions; Etc. Definitions. Except as otherwise herein expressly provided, the following terms and phrases shall have the meanings set forth below: "Accountants" shall mean the firm or firms of independent certified public accountants selected by the General Partner on behalf of the Partnership and the Property Partnerships to audit the books and records of the Partnership and the Property Partnerships and to prepare statements and reports in connection therewith. "Acquisition Cost" shall have the meaning set forth in Section 4.1 hereof. "Acquisition Project" shall mean Shopping Center Projects other than Development Projects (other than Shopping Center Projects located on the properties listed in Exhibit B). "Act" shall mean the Revised Uniform Limited Partnership Act as enacted in the State of Delaware, and as the same may hereafter be amended from time to time. "Additional Units" shall have the meaning set forth in Section 8.3 hereof. "Additional Partner" shall have the meaning set forth in Section 8.3 hereof. "Adjusted Capital Account Deficit" shall mean, with respect to any Limited Partner, the deficit balance, if any, in such Partner's Capital Account as of the end of any relevant fiscal year and after giving effect to the following adjustments: credit to such Capital Account any amounts which such Partner is obligated or treated as obligated to restore with respect to any deficit balance in such Capital Account pursuant to Section 1.704-1(b)(2)(ii)(c) of the Regulations, or is deemed to be obligated to restore with respect to any deficit balance pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations. The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the requirements of the alternate test for economic effect contained in Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith. "Adjustment Date" shall have the meaning set forth in Section 4.3(a) hereof. "Administrative Expenses" shall mean (i) all administrative and operating costs and expenses incurred by the Partnership, (ii) all administrative, operating and other costs and expenses incurred by the Property Partnerships, which expenses are being assumed by the Partnership pursuant to Section 6.1 hereof, (iii) those administrative costs and expenses of the General Partner, including salaries paid to officers of the General Partner and accounting and legal expenses undertaken by the General Partner on behalf or for the benefit of the Partnership, and (iv) to the extent not included in clause (iii) above, REIT Expenses. "Affiliate" shall mean, with respect to any Partner (or as to any other Person the affiliates of whom are relevant for purposes of any of the provisions of this Agreement), (i) any member of the Immediate Family of such Partner; (ii) any trustee or beneficiary of a Partner; (iii) any legal representative, successor, or assignee of such Partner or any Person referred to in the preceding clauses (i) and (ii); (iv) any trustee of any trust for the benefit of such Partner or any Person referred to in the preceding clauses (i) through (iii); or (v) any Entity which directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Partner or any Person referred to in the preceding clauses (i) through (iv). "Agreement" shall mean this Second Amended and Restated Agreement of Limited Partnership, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires. "Audited Financial Statements" shall mean financial statements (balance sheet, statement of income, statement of partners' equity and statement of cash flows) prepared in accordance with generally accepted accounting principles and accompanied by an independent auditor's report containing (i) an opinion containing no material qualification and (ii) no explanatory paragraph disclosing information relating to material uncertainties (except as to litigation) or going concern issues. "Bankruptcy" shall mean, with respect to any Partner or the Partnership, (i) the commencement by such Partner or the Partnership of any proceeding seeking relief under any provision or chapter of the federal Bankruptcy Code or any other federal or state law relating to insolvency, bankruptcy or reorganization, (ii) an adjudication that such Partner or the Partnership is insolvent or bankrupt; (iii) the entry of an order for relief under the federal Bankruptcy Code with respect to such Partner or the Partnership, (iv) the filing of any such petition or the commencement of any such case or proceeding against such Partner or the Partnership, unless such petition and the case or proceeding initiated thereby are dismissed within ninety (90) days from the date of such filing, (v) the filing of an answer by such Partner or the Partnership admitting the allegations of any such petition, (vi) the appointment of a trustee, receiver of custodian for all or substantially all of the assets of such Partner or the Partnership unless such appointment is vacated or dismissed within ninety (90) days from the date of such appointment but not less than five (5) days before the proposed sale of any assets of such Partner or the Partnership, (vii) the insolvency of such Partner or the Partnership or the execution by such Partner or the Partnership of a general assignment for the benefit of creditors, (viii) the convening by such Partner or the Partnership of a meeting of its creditors, or any class thereof, for purposes of effecting a moratorium upon or extension or composition of its debts, (ix) the failure of such Partner or the Partnership to pay its debts as they mature, (x) the levy, attachment, execution or other seizure of substantially all of the assets of such Partner or the Partnership where such seizure is not discharged within thirty (30) days thereafter, or (xi) the admission by such Partner or the Partnership in writing of its inability to pay its debts as they mature or that it is generally not paying its debts as they become due. "Bucksbaum Limited Partners" shall mean M.B. Capital Partners III and its successors and assigns. "Bucksbaum Rights Agreement" shall mean that certain Rights Agreement dated as of July 27, 1993, among the General Partner and certain predecessors of the Bucksbaum Limited Partners. "Capital Account" shall mean, with respect to any Partner, the separate "book" account which the Partnership shall establish and maintain for such Partner in accordance with Section 704(b) of the Code and Section 1.704-1(b)(2)(iv) of the Regulations and such other provisions of Section 1.704-1(b) of the Regulations that must be complied with in order for the Capital Accounts to be determined in accordance with the provisions of said Regulations. In furtherance of the foregoing, the Capital Accounts shall be maintained in compliance with Section 1.704-1(b)(2)(iv) of the Regulations; and the provisions hereof shall be interpreted and applied in a manner consistent therewith. In the event that any Units are transferred in accordance with the terms of this Agreement, the Capital Account, at the time of the transfer, of the transferor attributable to the transferred Units shall carry over to the transferee. "Capital Contribution" shall mean, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property other than money contributed to the Partnership with respect to the Units held by such Partner (net of liabilities to which such property is subject). "Certificate" shall mean the Certificate of Limited Partnership establishing the Partnership, as filed with the office of the Delaware Secretary of State, as it may be amended from time to time in accordance with the terms of this Agreement and the Act. "Charter" shall mean the corporate charter of the General Partner, as filed with the office of the Delaware Secretary of State, as it may be amended from time to time. "Closing Price" on any date shall mean the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Common Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the Common Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock as such person is selected from time to time by the Board of Directors of the General Partner. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Common Stock" shall mean the shares of the common stock, par value $.10 per share, of the General Partner. "Consent of the Limited Partners" shall mean the written consent of a Majority-In-Interest of the Limited Partners (or other specified group of Limited Partners), which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by a Majority-In-Interest of the Limited Partners (or such specified group of Limited Partners), unless otherwise expressly provided herein, in their sole and absolute discretion. "Contributed Funds" shall have the meaning set forth in Section 4.3(a)(ii) hereof. "Contributed Property" shall have the meaning set forth in Section 4.1 hereof. "Contribution Agreements" shall mean all contribution and other agreements executed by the Partnership and/or the General Partner in connection with the issuance of Units. "Contribution Date" shall have the meaning set forth in Section 8.3 hereof. "Control" shall mean the ability, whether by the direct or indirect ownership of shares or other equity interests, by contract or otherwise, to elect a majority of the directors of a corporation, to select the managing partner of a partnership, or otherwise to select, or have the power to remove and then select, a majority of those persons exercising governing authority over an Entity. In the case of a limited partnership, the sole general partner, all of the general partners to the extent each has equal management control and authority, or the managing general partner or managing general partners thereof shall be deemed to have control of such partnership and, in the case of a trust, any trustee thereof or any Person having the right to select any such trustee shall be deemed to have control of such trust. "Conversion Factor" shall mean 1.0. The Conversion Factor shall be adjusted in the event that the General Partner (i) declares or pays a dividend on its outstanding shares of Common Stock in shares of Common Stock or makes a distribution to all holders of its outstanding shares of Common Stock in shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock, or (iii) combines its outstanding shares of Common Stock into a smaller number of shares. The Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the numerator of which shall be the number of shares of Common Stock issued and outstanding on the record date for such dividend, distribution, subdivision or combination (assuming for such purposes that such dividend, distribution, subdivision or combination has occurred as of such time) and the denominator of which shall be the actual number of shares of Common Stock (determined without the above assumption) issued and outstanding on the record date for such dividend, distribution, subdivision or combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event. "Current Per Share Market Price" shall mean, as of any date, the average of the Closing Price for the five consecutive Trading Days ending on such date or the average of the Closing Price for any other period of Trading Days that the General Partner deems appropriate with respect to any transaction or other event for which "Current Per Share Market Price" is determined (other than a redemption pursuant to any Rights Agreement unless otherwise provided therein). "Demand Notice" shall have the meaning set forth in Section 12.2 hereof. "Depreciation" shall mean, with respect to any asset of the Partnership for any fiscal year or other period, the depreciation, depletion or amortization, as the case may be, allowed or allowable for Federal income tax purposes in respect of such asset for such fiscal year or other period; provided, however, that if there is a difference between the Gross Asset Value and the adjusted tax basis of such asset, Depreciation shall mean "book depreciation, depletion or amortization" as determined under Section 1.704-1(b)(2)(iv)(g)(3) of the Regulations. "Development Land" shall mean any vacant land suitable for development as a shopping center (other than the land described in Exhibit B). "Development Project" shall mean any Shopping Center Project developed or constructed on Development Land. "Entity" shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time (or any corresponding provisions of succeeding laws). "Exercise Notice" shall have the meaning set forth in the Bucksbaum Rights Agreement. "Foreign Owner" shall mean a foreign person or a person that is directly or indirectly owned, in whole or in part, by a foreign person as determined in accordance with Section 897(h)(4) of the Code and the Regulations promulgated thereunder. "Funding Date" shall mean the date of consummation of any Funding Loan, offering of shares of Common Stock or other transaction pursuant to which the General Partner raises Required Funds. "Funding Loan Proceeds" shall mean the net cash proceeds received by the General Partner in connection with any Funding Loan, after deduction of all costs and expenses incurred by the General Partner in connection with such Funding Loan. "Funding Loan(s)" shall mean any borrowing or refinancing of borrowings by or on behalf of the General Partner from any lender for the purpose of advancing the Funding Loan Proceeds to the Partnership as a loan pursuant to Section 4.3(a) hereof. "GAAP" shall mean generally accepted accounting principles. "General Partner" shall mean General Growth Properties, Inc., a Delaware corporation, its duly admitted successors and assigns and any other Person who is a general partner of the Partnership at the time of reference thereto. "General Partner Loan" shall have the meaning set forth in Section 4.3(a) hereof. "Gross Asset Value" shall mean, with respect to any asset of the Partnership, such asset's adjusted basis for Federal income tax purposes, except as follows: (a) the initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be (i) in the case of any asset heretofore contributed to the partnership, the gross fair market value ascribed thereto on the books and record of the Partnership and (ii) in the case of any other asset hereafter contributed by a Partner, the gross fair market value of such asset as determined under Article IV in the case of a contribution by the General Partner or under Article VIII in the case of a contribution by a Limited Partner; (b) if the General Partner reasonably determines that an adjustment is necessary or appropriate to reflect the relative economic interests of the Partners, the Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as reasonably determined by the General Partner, as of the following times: (i) a Capital Contribution (other than a de minimis Capital Contribution) to the Partnership by a new or existing Partner as consideration for Units; (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for the redemption of Units; and (iii) the liquidation of the Partnership within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations; (c) the Gross Asset Values of Partnership assets distributed to any Partner shall be the gross fair market values of such assets (taking Section 7701(g) of the Code into account) as reasonably determined by the General Partner as of the date of distribution; and (d) the Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations (See Exhibit C); provided, however, that Gross Asset Values shall not be adjusted pursuant to this paragraph to the extent that the General Partner reasonably determines that an adjustment pursuant to paragraph (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this paragraph (d). At all times, Gross Asset Values shall be adjusted by any Depreciation taken into account with respect to the Partnership's assets for purposes of computing Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership property shall require an adjustment to the Partners' Capital Accounts; as for the manner in which such adjustments are allocated to the Capital Accounts, see paragraph (c) of the definition of Net Income and Net Loss in the case of adjustment by Depreciation, and paragraph (d) of said definition in all other cases. "Immediate Family" shall mean, with respect to any Person, such Person's spouse, parents, parents-in-law, descendants, nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law. "Incentive Option" means an option to purchase Common Stock granted under the Stock Incentive Plan. "Incentive Option Agreement" means the form of Incentive Option Agreement to be used under the Stock Incentive Plan. "Initial Partnership Agreement" shall have the meaning set forth in the preliminary recitals hereto. "Lien" shall mean any liens, security interests, mortgages, deeds of trust, charges, claims, encumbrances, pledges, options, rights of first offer or first refusal and any other rights or interests of others of any kind or nature, actual or contingent, or other similar encumbrances of any nature whatsoever. "Limited Partner Representatives" shall have the meaning set forth in Section 6.11 hereof. "Limited Partners" shall mean the Persons listed under the caption "Limited Partners" on Exhibit A hereto, their permitted successors or assigns or any Person who, at the time of reference thereto, is a limited partner of the Partnership. "Liquidating Trustee" shall mean such individual or Entity as is selected as the Liquidating Trustee hereunder by the General Partner, which individual or Entity may include an Affiliate of the General Partner, provided such Liquidating Trustee agrees in writing to be bound by the terms of this Agreement. The Liquidating Trustee shall be empowered to give and receive notices, reports and payments in connection with the dissolution, liquidation and/or winding-up of the Partnership and shall hold and exercise such other rights and powers as are necessary or required to permit all parties to deal with the Liquidating Trustee in connection with the dissolution, liquidation and/or winding-up of the Partnership. "Major Decisions" shall have the meaning set forth in Section 6.3 hereof. "Majority-In-Interest of the Limited Partners" shall mean Limited Partner(s) (or specified group of Limited Partners) who hold in the aggregate more than fifty percent (50%) of the Percentage Interests then allocable to and held by the Limited Partners (or such specified group of Limited Partners), as a class (excluding any Units held by the General Partner or any Affiliate of the General Partner other than the existing Limited Partners, their Affiliates and their successors and assigns, who shall not be excluded). " Management Agreement" shall mean a property management agreement with respect to the property management of each Property entered into (a) with respect to any Property in which the Partnership directly holds or acquires ownership of a fee or leasehold interest, between the Partnership, as owner, and the Property Manager, or such other property manager as the General Partner shall engage, as manager, and (b) with respect to all Properties other than those described in (a) above, between each Property Partnership, as owner, and the Property Manager, or such other property manager as the General Partner shall engage, as such agreement may be amended, modified or supplemented from time to time. "Minimum Gain Attributable to Partner Nonrecourse Debt" shall mean "partner nonrecourse debt minimum gain" as determined in accordance with Regulation Section 1.704-2(i)(2). "Net Financing Proceeds" shall mean the cash proceeds received by the Partnership in connection with any borrowing or refinancing of borrowing by or on behalf of the Partnership or by or on behalf of any Property Partnership (whether or not secured), after deduction of all costs and expenses incurred by the Partnership or the Property Partnership in connection with such borrowing, and after deduction of that portion of such proceeds used to repay any other indebtedness of the Partnership or Property Partnerships, or any interest or premium thereon. "Net Income or Net Loss" shall mean, for each fiscal year or other applicable period, an amount equal to the Partnership's net income or loss for such year or period as determined for federal income tax purposes by the Accountants, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a) of the Code shall be included in taxable income or loss), with the following adjustments: (a) by including as an item of gross income any tax-exempt income received by the Partnership; (b) by treating as a deductible expense any expenditure of the Partnership described in Section 705(a)(2)(B) of the Code (including amounts paid or incurred to organize the Partnership (unless an election is made pursuant to Code Section 709(b)) or to promote the sale of interests in the Partnership and by treating deductions for any losses incurred in connection with the sale or exchange of Partnership property disallowed pursuant to Section 267(a)(1) or Section 707(b) of the Code as expenditures described in Section 705(a)(2)(B) of the Code); (c) in lieu of depreciation, depletion, amortization, and other cost recovery deductions taken into account in computing total income or loss, there shall be taken into account Depreciation; (d) gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of such property rather than its adjusted tax basis; and (e) in the event of an adjustment of the Gross Asset Value of any Partnership asset which requires that the Capital Accounts of the Partnership be adjusted pursuant to Regulation Section 1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such adjustment is to be taken into account as additional Net Income or Net Loss pursuant to Exhibit C. "Net Operating Cash Flow" shall mean, with respect to any fiscal period of the Partnership, the excess, if any, of "Receipts" over "Expenditures." For purposes hereof, the term "Receipts" means the sum of all cash receipts of the Partnership from all sources for such period, including Net Sale Proceeds and Net Financing Proceeds but excluding Capital Contributions, and any amounts held as reserves as of the last day of such period which the General Partner reasonably deems to be in excess of necessary reserves as determined below. The term "Expenditures" means the sum of (a) all cash expenses or expenditures of the Partnership for such period, (b) the amount of all payments of principal and interest on account of any indebtedness of the Partnership including payments of principal and interest on account of General Partner Loans, or amounts due on such indebtedness during such period (in the case of clauses (a) and (b), excluding expenses or expenditures paid from previously established reserves or deducted in computing Net Financing Proceeds or Net Sales Proceeds), and (c) such additional cash reserves as of the last day of such period as the General Partner deems necessary for any capital or operating expenditure permitted hereunder. "Net Sale Proceeds" means the cash proceeds received by the Partnership in connection with a sale of any asset by or on behalf of the Partnership or by or on behalf of a Property Partnership after deduction of any costs or expenses incurred by the Partnership or a Property Partnership, or payable specifically out of the proceeds of such sale (including, without limitation, any repayment of any indebtedness required to be repaid as a result of such sale or which the General Partner elects to repay out of the proceeds of such sale, together with accrued interest and premium, if any, thereon and any sales commissions or other costs and expenses due and payable to any Person in connection with a sale, including to a Partner or its Affiliates). "Nonrecourse Deductions" shall have the meaning set forth in Sections 1.704-2(b)(1) and (c) of the Regulations. "Nonrecourse Liabilities" shall have the meaning set forth in Section 1.704-2(b)(3) of the Regulations. "Offered Units" shall have the meaning set forth in the Bucksbaum Rights Agreement. "Partner Nonrecourse Deductions" shall have the meaning set forth in Section 1.704-2(i)(2) of the Regulations. "Partners" shall mean the General Partner and the Limited Partners, their duly admitted successors or assigns or any Person who is a partner of the Partnership at the time of reference thereto. "Partnership" shall have the meaning set forth in the preliminary recitals hereto. "Partnership Minimum Gain" shall have the meaning set forth in Section 1.704-2(b)(2) of the Regulations. "Partnership Record Date" shall mean the record date established by the General Partner for a distribution of Net Operating Cash Flow pursuant to Section 5.2 hereof, which record date shall be the same as the record date established by the General Partner for the distribution to its stockholders of some or all of its share of such distribution. "Percentage Interest" shall mean, with respect to any Partner at any time, the percentage ownership interest of such Partner in the Partnership at such time, which percentage interest shall be equal to the quotient of the number of Units owned by such Partner at such time divided by the aggregate number of issued and outstanding Units at such time. The Percentage Interest of each Partner on the date hereof is set forth opposite its name on Exhibit A. "Person" shall mean any individual or Entity. "Precontribution Gain" shall have the meaning set forth in Exhibit C. "Prime Rate" shall mean the prime rate announced from time to time by Wells Fargo Bank, N.A. or any successor thereof. "Property" shall mean any Shopping Center Project in which the Partnership or any Property Partnership, directly or indirectly, acquires ownership of a fee or leasehold interest. "Property Manager" shall mean General Growth Management, Inc., a Delaware corporation, or its permitted successors or assigns. "Property Partnership" shall mean and include any partnership, limited liability company or other Entity in which the Partnership directly or indirectly is or becomes a partner, member or other equity participant and which has been or is formed for the purpose of directly or indirectly acquiring, developing or owning a Property or a proposed Property. "Property Partnership Interests" shall mean and include the interest of the Partnership as a partner, member or other equity participant in any Property Partnership. "Qualified Individual" shall have the meaning set forth in Section 12.2 hereof. "Regulations" shall mean the final, temporary or proposed Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "Regulatory Allocations" shall have the meaning set forth in Exhibit C. "REIT" shall mean a real estate investment trust as defined in Section 856 of the Code. "REIT Expenses" shall mean (i) costs and expenses relating to the formation and continuity of existence of the General Partner and its subsidiaries (which subsidiaries shall, for purposes of this definition, be included within the definition of General Partner), including taxes, fees and assessments associated therewith, any and all costs, expenses or fees payable to any director or trustee of the General Partner or such subsidiaries, (ii) costs and expenses relating to any offer or registration of securities by the General Partner and all statements, reports, fees and expenses incidental thereto, including underwriting discounts and selling commissions applicable to any such offer of securities, (iii) costs and expenses associated with the preparation and filing of any periodic reports by the General Partner under federal, state or local laws or regulations, including filings with the SEC, (iv) costs and expenses associated with compliance by the General Partner with laws, rules and regulations promulgated by any regulatory body, including the SEC, and (v) all other operating or administrative costs of the General Partner incurred in the ordinary course of its business on behalf of the Partnership. "REIT Requirements" shall have the meaning set forth in Section 5.2 hereof. "Requesting Party" shall have the meaning set forth in Section 12.2 hereof. "Required Funds" shall have the meaning set forth in Section 4.3 hereof. "Responding Party" shall have the meaning set forth in Section 12.2 hereof. "Restricted Period" shall have the meaning set forth in Section 9.5 hereof. "Restrictions Lapse Date" shall have the meaning set forth in Section 9.5 hereof. "Rights" shall mean "Rights", "Redemption Rights" or other similar rights as defined in the Rights Agreements. "Rights Agreements" shall mean the Bucksbaum Rights Agreement and those certain Redemption Rights Agreements entered into by the Partnership, the General Partner and certain Limited Partners or their predecessors in interest in connection with the issuance of Units to such Limited Partners or such predecessors in interest. "SEC" shall mean the United States Securities and Exchange Commission. "Section 704(c) Tax Items" shall have the meaning set forth in Exhibit C. "Shopping Center Project" shall mean any shopping center, including construction and improvement activities undertaken with respect thereto and off-site improvements, on-site improvements, structures, buildings and/or related parking and other facilities. "Stock Incentive Plan" means the General Partner's 1993 Stock Incentive Plan, as amended. "Substituted Limited Partner" shall have the meaning set forth in Section 8.2 hereof. "Tax Items" shall have the meaning set forth in Exhibit C. "Trading Day" shall mean a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business or, if the Common Stock is not listed or admitted to trading on any national securities exchange, shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "Units" shall mean, with respect to any Partner, the partnership units owned by such Partner in the Partnership. The number of Units held by each Partner on the date hereof is set forth opposite its name on Exhibit A. Exhibits, Etc. References to an "Exhibit" or to 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. Each Exhibit and Schedule attached hereto and referred to herein is hereby incorporated herein by reference. ARTICLE II Continuation Continuation. The parties hereto do hereby continue the Partnership as a limited partnership 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 in the Act except as otherwise herein expressly provided. The General Partner shall cause such notices, instruments, documents, or certificates as may be required by applicable law or which may be necessary to enable the Partnership to conduct its business and to own its properties in the Partnership name to be filed or recorded in all appropriate public offices. Name. The business of the Partnership shall continue to be conducted under the name of "GGP Limited Partnership" or such other name as the General Partner may select, and all transactions of the Partnership, to the extent permitted by applicable law, shall be carried on and completed in such name. Character of the Business. The purpose of the Partnership shall be to acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease, transfer, encumber, convey, exchange, and otherwise dispose of or deal with Properties; to acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease, transfer, encumber, convey, exchange, and otherwise dispose of or deal with real and personal property of all kinds; to exercise all of the powers of a partner, member or other equity participant in Property Partnerships; to acquire, own, deal with and dispose of Property Partnership Interests; to undertake such other activities as may be necessary, advisable, desirable or convenient to the business of the Partnership, and to engage in such other ancillary activities as shall be necessary or desirable to effectuate the foregoing purposes. The Partnership shall have all powers necessary or desirable to accomplish the purposes enumerated. In connection with and without limiting the foregoing, but subject to all of the terms, covenants, conditions and limitations contained in this Agreement and any other agreement entered into by the Partnership, the Partnership shall have full power and authority, directly or through its interest in Property Partnerships, to enter into, perform, and carry out contracts of any kind, to borrow money and to issue evidences of indebtedness, whether or not secured by mortgage, trust deed, pledge or other lien, and, directly or indirectly, to acquire and construct additional Properties necessary or useful in connection with its business. Location of the Principal Place of Business. The location of the principal place of business of the Partnership shall be at 55 West Monroe Street, Suite 3100, Chicago, Illinois 60603, or such other location as shall be selected from time to time by the General Partner in its sole discretion. Registered Agent and Registered Office. The Registered Agent of the Partnership shall be Prentice-Hall Corporation System, Inc. or such other Person as the General Partner may select in its sole discretion. The Registered Office of the Partnership shall be 32 Loockerman Square, Suite L-100, Dover, Delaware 19901 or such other location as the General Partner may select in its sole and absolute discretion. ARTICLE III Term Commencement. The Partnership heretofore commenced business as a limited partnership upon the filing of the Certificate with the Secretary of State of the State of Delaware. Dissolution. The Partnership shall continue until dissolved upon the occurrence of the earliest of the following events: The dissolution, termination, retirement or Bankruptcy of the General Partner unless the Partnership is continued as provided in Section 8.1 hereof; The election to dissolve the Partnership made in writing by the General Partner with the Consent of the Limited Partners; The sale or other disposition of all or substantially all the assets of the Partnership unless the General Partner, with the Consent of the Limited Partners, elects to continue the Partnership business for the purpose of the receipt and the collection of indebtedness or the collection of any other consideration to be received in exchange for the assets of the Partnership (which activities shall be deemed to be part of the winding up of the affairs of the Partnership); Dissolution required by operation of law; or December 31, 2050. ARTICLE IV Contributions to Capital General Partner Capital Contribution. The General Partner has heretofore contributed to the Partnership as its Capital Contribution the cash and property reflected in the Partnership's books and records as having been contributed by it. The gross fair market value of any property contributed by the General Partner to the Partnership ("Contributed Property") after the date hereof, other than money, shall be the acquisition cost of such Contributed Property (the "Acquisition Cost"). The Acquisition Cost also shall include any costs and expenses incurred by the General Partner in connection with such acquisition or contribution; provided, however, that in the event the Acquisition Cost of Contributed Property is financed by any borrowings by the General Partner, the Partnership shall assume any such obligations of the General Partner concurrently with the contribution of such property to the Partnership or, if impossible, shall obligate itself to the General Partner in an amount and on terms equal to such indebtedness, and the Acquisition Cost shall be reduced appropriately. If the General Partner contributes Contributed Property to the Partnership, the General Partner shall be deemed to have contributed to the Partnership as Contributed Funds pursuant to Section 4.3(a)(ii) hereof an amount equal to the Acquisition Cost of such Contributed Property. Limited Partner Capital Contributions. Each Limited Partner has heretofore contributed, or is deemed to have contributed, as its initial Capital Contribution to the capital of the Partnership, the property reflected in the Partnership's books and records as having been contributed by it. Additional Funds. If the General Partner determines that funds are required or desired ("Required Funds") for any proper Partnership purpose in excess of the funds anticipated to be available and the General Partner is not able or does not deem it advisable to cause the Partnership to borrow such funds, the General Partner shall either: to the extent the General Partner borrows all or any portion of the Required Funds by entering into a Funding Loan, the General Partner shall, on the Funding Date, lend (the "General Partner Loan") to the Partnership the Funding Loan Proceeds on the same terms and conditions, including interest rate, repayment schedule and costs and expenses, as shall be applicable with respect to or incurred in connection with the Funding Loan; or to the extent the General Partner issues shares of its Common Stock or other securities (other than notes issued in connection with a Funding Loan) to raise the Required Funds, the General Partner shall, on the Funding Date, contribute to the Partnership as an additional Capital Contribution the amount of the Required Funds so raised ("Contributed Funds") (hereinafter, each Funding Date on which the General Partner so contributes Contributed Funds pursuant to this subparagraph (ii) is referred to as an "Adjustment Date"). In the event the General Partner advances Required Funds to the Partnership as Contributed Funds pursuant to this subparagraph (ii), the Partnership shall assume and pay (or reflect on its books as additional Contributed Funds) the expenses (including any applicable underwriting discounts) incurred by the General Partner in connection with raising such Contributed Funds through a public offering of its securities or otherwise. Effective on each Adjustment Date, the Partnership shall issue to the General Partner the number of additional Units equal to the product of (i) the number of shares of Common Stock issued by the General Partner in connection with obtaining the Contributed Funds and (ii) the Conversion Factor. The General Partner promptly shall provide the Limited Partners with notice of the issuance of any such Units. Stock Incentive Plan. If at any time or from time to time Incentive Options granted in connection with the General Partner's Stock Incentive Plan are exercised in accordance with the terms of the Incentive Option Agreement: the General Partner shall, as soon as practicable after such exercise, contribute to the capital of the Partnership an amount equal to the exercise price paid to the General Partner by such exercising party in connection with the exercise of the Incentive Option; and the Partnership shall issue to the General Partner, with respect to any exercise of Incentive Options, the number of additional Units equal to the product of (i) the number of shares of Common Stock issued by the General Partner in connection with such exercise of Incentive Options and (ii) the Conversion Factor. No Third 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 loans 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. None of the rights or obligations of the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or assigned by the Partnership or pledged or encumbered by the Partnership to secure any debt or other obligation of the Partnership or of any of the Partners. No Interest; No Return. No Partner shall be entitled to interest on its Capital Contribution or on such Partner's Capital Account. Except as provided herein or by law, no Partner shall have any right to demand or receive the return of its Capital Contribution from the Partnership. ARTICLE V Allocations and Other Tax and Accounting Matters Allocations. The Net Income, Net Loss and/or other Partnership items shall be allocated pursuant to the provisions of Exhibit C hereto. Distributions. (a) The General Partner shall, from time to time as determined by the General Partner (but in any event not less frequently than quarterly), cause the Partnership to distribute all or a portion of Net Operating Cash Flow to the Partners who are such on the relevant Partnership Record Date in such amounts as the General Partner shall determine; provided, however, that all such distributions shall be made pro rata in accordance with the Partners' then Percentage Interests; and provided further, that notwithstanding the foregoing, the General Partner shall use its best efforts to cause the Partnership to distribute sufficient amounts to enable the General Partner to pay shareholder dividends that will (a) satisfy the requirements for qualifying as a REIT under the Code and Regulations ("REIT Requirements"), and (b) avoid any federal income or excise tax liability of the General Partner. (b) In no event may a Limited Partner receive a distribution of Net Operating Cash Flow in respect of a Unit that such Partner has exchanged for a share of Common Stock pursuant to a Rights Agreement on or prior to the relevant Partnership Record Date; rather, all such distributions shall be made to the General Partner. Upon the receipt by the General Partner of each Exercise Notice pursuant to which one or more Limited Partners exercise Rights in accordance with the provisions of the Bucksbaum Rights Agreement, the General Partner shall, unless the General Partner is required or elects only to issue Common Stock to such exercising Limited Partners, cause the Partnership to distribute to the Partners, pro rata in accordance with their Percentage Interests on the date of delivery of such Exercise Notice, all (or such lesser portion as the General Partner shall reasonably determine to be prudent under the circumstances) of Net Operating Cash Flow, which distribution shall be made prior to the closing of the purchase and sale of the Offered Units specified in such Exercise Notice. Books of Account. At all times during the continuance of the Partnership, the General Partner shall maintain or cause to be maintained full, true, complete and correct books of account in accordance with generally accepted accounting principles wherein shall be entered particulars of all monies, goods or effects belonging to or owing to or by the Partnership, or paid, received, sold or purchased in the course of the Partnership's business, and all of such other transactions, matters and things relating to the business of the Partnership as are usually entered in books of account 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. Reports. The General Partner shall cause to be submitted to the Limited Partners, promptly upon receipt of the same from the Accountants and in no event later than April 1 of each year, copies of Audited Financial Statements prepared on a consolidated basis for the Partnership, the General Partner and the Property Partnerships, together with the reports thereon, and all supplementary schedules and information, prepared by the Accountants. The Partnership shall also cause to be prepared such reports and/or information as are necessary for the General Partner to determine its qualification as a REIT and its compliance with REIT Requirements. Audits. Not less frequently than annually, the books and records of the Partnership shall be audited by the Accountants. The General Partner shall, unless determined otherwise by the General Partner with the Consent of the Limited Partners, engage the Accountants to audit the books and records of the Property Partnerships. Tax Elections and Returns. (a) All elections required or permitted to be made by the Partnership under any applicable tax law shall be made by the General Partner in its sole discretion, including without limitation an election on behalf of the Partnership pursuant to Section 754 of the Code to adjust the basis of the Partnership property in the case of transfers of Units, and the General Partner shall not be required to make any such election. (b) The General Partner shall cause the Accountants to prepare and file all state and federal tax returns on a timely basis. The General Partner shall cause the Accountants to prepare and submit to the Limited Partner Representatives on or before April 1 of each year for review all federal and state income tax returns of the Partnership and cause the Accountants for the Property Partnerships to submit to the Limited Partner Representatives on or before April 1 of each year for review all federal and state income tax returns of the Property Partnerships. If the Limited Partner Representatives determine that any modifications to the tax returns of the Partnership or any Property Partnership should be considered, the Limited Partner Representatives shall, within thirty (30) days following receipt of such tax returns from the Accountants or the General Partner, indicate to the General Partner the suggested revisions to the tax returns, which returns shall be resubmitted to the Limited Partner Representatives for their review (but not approval). The Limited Partner Representatives shall complete their review of the resubmitted returns within ten (10) days after receipt thereof from the Accountants or the General Partner. The General Partner shall consult in good faith with the Limited Partner Representatives regarding any such proposed modifications to the tax returns of the Partnership and/or the Property Partnerships. A statement of the allocation of Net Income or Net Loss of the Partnership shown on the annual income tax returns prepared by the Accountants and a statement of the allocation of Net Income or Net Loss shown on the income tax return of the Property Partnerships shall be transmitted and delivered to the Limited Partner Representatives within ten (10) days of the receipt thereof by the Partnership. The General Partner shall be responsible for preparing and filing all federal and state tax returns for the Partnership and furnishing copies thereof to the Partners, together with required Partnership schedules showing allocations of tax items and copies of the tax returns of all Property Partnerships, all within the period of time prescribed by law or by the provisions hereof. Tax Matters Partner. The General Partner is hereby designated as the Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code for the Partnership; provided, however, (i) in exercising its authority as Tax Matters Partner it shall be limited by the provisions of this Agreement affecting tax aspects of the Partnership; (ii) the General Partner shall consult in good faith with the Limited Partner Representatives regarding the filing of a Code Section 6227(b) administrative adjustment request with respect to the Partnership or a Property before filing such request, it being understood, however, that the provisions hereof shall not be construed to limit the ability of any Partner, including the General Partner, to file an administrative adjustment request on its own behalf pursuant to Section 6227(a) of the Code; (iii) the General Partner shall consult in good faith with the Limited Partner Representatives regarding the filing of a petition for judicial review of an administrative adjustment request under Section 6228 of the Code, or a petition for judicial review of a final partnership administrative judgment under Section 6226 of the Code relating to the Partnership before filing such petition; (iv) the General Partner shall give prompt notice to the Limited Partner Representatives of the receipt of any written notice that the Internal Revenue Service or any state or local taxing authority intends to examine Partnership income tax returns for any year, receipt of written notice of the beginning of an administrative proceeding at the Partnership level relating to the Partnership under Section 6223 of the Code, receipt of written notice of the final Partnership administrative adjustment relating to the Partnership pursuant to Section 6223 of the Code, and receipt of any request from the Internal Revenue Service for waiver of any applicable statute of limitations with respect to the filing of any tax return by the Partnership; and (v) the General Partner shall promptly notify the Limited Partner Representatives if the General Partner does not intend to file for judicial review with respect to the Partnership. The General Partner, in acting on behalf of the Partnership as tax matters partner of a Property Partnership, shall afford the Limited Partners the same rights with respect to Property Partnership tax matters as afforded to the Limited Partners under this Section 5.7. Withholding. Each Partner hereby authorizes the Partnership to withhold or pay on behalf of or with respect to such Partner any amount of federal, state, local or foreign taxes that the General Partner determines the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Partner pursuant to this Agreement, including without limitation any taxes required to be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code. Any amount paid on behalf of or with respect to a partner shall constitute a loan by the Partnership to such Partner, which loan shall be due within fifteen (15) days after repayment is demanded of such Partner and shall be repaid through withholding of subsequent distributions to such Partner. Nothing in this Section 5.8 shall create any obligation on the General Partner to advance funds to the Partnership or to borrow funds in order to make payments on account of any liability of the Partnership under a withholding tax act. Any amounts payable by a Limited Partner hereunder shall bear interest at the lesser of (a) the Prime Rate and (b) the maximum lawful rate of interest on such obligation, such interest to accrue from the date such amount is due (i.e., fifteen (15) days after demand) until such amount is paid in full. To the extent the payment or accrual of withholding tax results in a federal, state or local tax credit to the Partnership, such credit shall be allocated to the Partner to whose distribution the tax is attributable. ARTICLE VI Rights, Duties and Restrictions of the General Partner Expenditures by Partnership. The General Partner is hereby authorized to pay compensation for accounting, administrative, legal, technical, management and other services rendered to the Partnership. All of the aforesaid expenditures shall be made on behalf of the Partnership and the General Partner shall be entitled to reimbursement by the Partnership for any expenditures incurred by it on behalf of the Partnership which shall be made other than out of the funds of the Partnership. The Partnership shall also assume, and pay when due, all Administrative Expenses. Powers and Duties of General Partner. The General Partner shall be responsible for the management of the Partnership's business and affairs. Except as otherwise herein expressly provided, and subject to the limitations contained in Section 6.3 hereof with respect to Major Decisions, 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. Except as otherwise expressly provided herein, and subject to Section 6.3 hereof, the General Partner shall have the right, power and authority: 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 property of whatsoever kind and nature, and wheresoever situated, in furtherance of the purposes of the Partnership; To acquire, directly or indirectly, interests in 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 or lease, to sell on any terms; to convey, to 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 terms 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, convey or 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, convey or 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; to execute assignments of all or any part of the beneficial interest in such land trust; To employ, engage or contract with or dismiss from employment or engagement Persons to the extent deemed necessary by the General Partner for the operation and management of the Partnership business, including but not limited to, the engagement of the Property Manager pursuant to the Management Agreements and the employment or engagement of other contractors, subcontractors, engineers, architects, surveyors, mechanics, consultants, accountants, attorneys, insurance brokers, real estate brokers and others; To enter into contracts on behalf of the Partnership; 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; 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; 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; 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; to make deposits and withdraw the same and to negotiate or discount commercial paper, acceptances, negotiable instruments, bills of exchange and dollar drafts; 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 entitled or which are or may become due the Partnership from any Person; to commence, prosecute or enforce, or to defend, answer or oppose, 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 and to grant an extension of time for the payment or satisfaction thereof on any terms, with or without security; 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; 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; To maintain the Partnership's books and records; and To prepare and deliver, or cause to be prepared and delivered by the Partnership's Accountants, all financial and other reports with respect to the operations of the Partnership, and preparation and filing of all Federal and state tax returns and reports. Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership. Major Decisions. The General Partner shall not, without the prior Consent of the Limited Partners, on behalf of the Partnership, undertake any of the following actions (the "Major Decisions"): Amend, modify or terminate this Agreement other than to reflect the admission of additional limited partners pursuant to Section 8.3 hereof or the issuance of additional Units pursuant to Section 4.3 hereof. Make a general assignment for the benefit of creditors or appoint or acquiesce in the appointment of a custodian, receiver or trustee for all or any part of the assets of the Partnership. Take title to any personal or real property, other than in the name of the Partnership or a Property Partnership or pursuant to the provisions hereof. Institute any proceeding for Bankruptcy on behalf of the Partnership. Sell all or substantially all of the assets of the Partnership. Dissolve the Partnership. Actions with Respect to Certain Documents. Notwithstanding the provisions of Section 6.3 hereof to the contrary, whenever the consent, agreement, authorization or approval of the Partnership is required under any agreement to which the Bucksbaum Limited Partners and/or their Affiliates are parties in interest other than in their capacities as Limited Partners of the Partnership, the prior approval of a majority of the directors of the General Partner who are not Affiliates of the Bucksbaum Limited Partners shall be required. General Partner Participation. The General Partner agrees that all business activities of the General Partner, including activities pertaining to the acquisition, development and ownership of Properties, shall be conducted through the Partnership (other than the General Partner's interest of not more than one percent (1%) in Property Partnerships not owned through the Partnership). Without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, participate in or otherwise acquire any interest in any real or personal property unless the Partnership participates in, or otherwise acquires an interest in, such real or personal property at least to the extent of 99 times such proposed participation by the General Partner. The General Partner agrees that all borrowings for the purpose of making distributions to its stockholders will be incurred by the Partnership or the Property Partnerships and the proceeds of such indebtedness will be included as Net Financing Proceeds hereunder. Proscriptions. The General Partner shall not have the authority to: Do any act in contravention of this Agreement or which would make it impossible to carry on the ordinary business of the Partnership; Possess any Partnership property or assign rights in specific Partnership property for other than Partnership purposes; or Do any act in contravention of applicable law. 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 contract, lease, mortgage, deed or other instrument or document on behalf of the Partnership, and any such third Person shall be fully protected in relying upon such authority. Additional Partners. Additional Partners may be admitted to the Partnership only as provided in Section 8.3 hereof. Title Holder. To the extent allowable under applicable law, title to all or any part of the properties of the Partnership may be held in the name of the Partnership or any other individual, corporation, partnership, trust or otherwise, the beneficial interest in which shall at all times be vested in the Partnership. Any such title holder shall perform any and all of its respective functions to the extent and upon such terms and conditions as may be determined from time to time by the General Partner. Compensation of the General Partner. The General Partner shall not be entitled to any compensation for services rendered to the Partnership solely in its capacity as General Partner except with respect to reimbursement for those costs and expenses constituting Administrative Expenses. 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 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 Partnership and, provided further, that the General Partner or such other Person shall not be guilty of fraud, 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, any such indemnification to be satisfied solely out of the assets of the Partnership. Any Person entitled to indemnification under this Agreement shall be entitled to receive, upon application therefor, advances to cover the costs of defending any proceeding against such Person; provided, however, that such advances shall be repaid to the Partnership, 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. All rights of the indemnitee hereunder shall survive the dissolution of the Partnership; provided, however, that a claim for indemnification under this Agreement must be made by or on behalf of the Person seeking indemnification prior to the time the Partnership is liquidated hereunder. The indemnification rights contained in this Agreement shall be cumulative of, and in addition to, any and all rights, remedies and recourse to which the person seeking indemnification shall be entitled, whether at law or at equity. Indemnification pursuant to this Agreement shall be made solely and entirely from the assets of the Partnership and no Partner shall be liable therefor. Limited Partner Representatives. A Majority-In-Interest of the Bucksbaum Limited Partners shall appoint one or more representatives ("Limited Partner Representatives"). A Majority-In-Interest of the Bucksbaum Limited Partners shall have the right, at any time, within their sole discretion, to replace any of the Limited Partner Representatives, to appoint a temporary substitute to act for any Limited Partner Representative unable to act, or to vest in only one of the Limited Partner Representatives the sole power to exercise rights of the Limited Partner Representatives hereunder. The Limited Partner Representatives shall be appointed by the Bucksbaum Limited Partners in writing, a copy of which shall be delivered to the General Partner. Any appointments of Limited Partner Representatives made hereunder shall remain effective until rescinded in a writing delivered to the General Partner and the General Partner shall have the right and authority to rely (and shall be fully protected in so doing) on the actions taken and directions given by such Limited Partner Representatives without any further evidence of their authority or further action by the Bucksbaum Limited Partners. Operation in Accordance with REIT Requirements. The Partners acknowledge and agree that the Partnership shall be operated in a manner that will enable the General Partner to (a) satisfy the REIT Requirements and (b) avoid the imposition of any federal income or excise tax liability. The Partnership shall avoid taking any action, or permitting any Property Partnership to take any action, which would result in the General Partner ceasing to satisfy the REIT Requirements or would result in the imposition of any federal income or excise tax liability on the General Partner. The determination as to whether the Partnership has operated in the manner prescribed in this Section 6.12 shall be made without regard to any action or inaction of the General Partner with respect to distributions and the timing thereof. ARTICLE VII Dissolution, Liquidation and Winding-Up Accounting. In the event of the dissolution, liquidation and winding-up of the Partnership, a proper accounting (which shall be certified) shall be made of the Capital Account of each Partner and of the Net Profits or Net Losses of the Partnership from the date of the last previous accounting to the date of dissolution. Financial statements presenting such accounting shall include a report of a certified public accountant selected by the Liquidating Trustee. 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: Payment of creditors of the Partnership (other than Partners) in the order of priority as provided by law; Establishment of reserves as provided by the General Partner to provide for contingent liabilities, if any; Payment of debts of the Partnership to Partners, if any, in the order of priority provided by law; To the Partners in accordance with the positive balances in their Capital Accounts after giving effect to all contributions, distributions and allocations for all periods, including the period in which such distribution occurs (other than those adjustments made pursuant to this Section 7.2(d) and Section 7.3 hereof). Whenever the Liquidating Trustee reasonably determines that any reserves established pursuant to paragraph (b) above are in excess of the reasonable requirements of the Partnership, the amount determined to be excess shall be distributed to the Partners in accordance with the above provisions. Timing Requirements. In the event that the Partnership is "liquidated" within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations, any and all distributions to the Partners pursuant to Section 7.2(d) hereof shall be made no later than the later to occur of (i) the last day of the taxable year of the Partnership in which such liquidation occurs or (ii) ninety (90) days after the date of such liquidation. Sale of Partnership Assets. In the event of the liquidation of the Partnership in accordance with the terms of this Agreement, the Liquidating Trustee may, with the Consent of the Limited Partners, sell Partnership or Property Partnership property if the Liquidating Trustee has in good faith solicited bids from unrelated third parties and obtained independent appraisals before making any such sale; provided, however, all sales, leases, encumbrances or transfers of Partnership assets shall be made by the Liquidating Trustee with the prior Consent of the Limited Partners and solely on an "arm's-length" basis, at the best price and on the best terms and conditions as the Liquidating Trustee in good faith believes are reasonably available at the time and under the circumstances and on a non-recourse basis to the Limited Partners. The liquidation of the Partnership shall not be deemed finally terminated until the Partnership shall have received cash payments in full with respect to obligations such as notes, installment sale contracts or other similar receivables received by the Partnership in connection with the sale of Partnership assets and all obligations of the Partnership have been satisfied or assumed by the General Partner. The Liquidating Trustee shall continue to act to enforce all of the rights of the Partnership pursuant to any such obligations until paid in full. Distributions in Kind. In the event that it becomes necessary to make a distribution of Partnership property in kind, the General Partner may, with the Consent of the Limited Partners, transfer and convey such property to the distributees as tenants in common, subject to any liabilities attached thereto, so as to vest in them undivided interests in the whole of such property in proportion to their respective rights to share in the proceeds of the sale of such property (other than as a creditor) in accordance with the provisions of Section 7.2 hereof. Documentation of Liquidation. Upon the completion of the dissolution and liquidation of the Partnership, the Partnership shall terminate and the Liquidating Trustee shall have the authority to execute and record any and all documents or instruments required to effect the dissolution, liquidation and termination of the Partnership. Liability of the Liquidating Trustee. The Liquidating Trustee shall be indemnified and held harmless by the Partnership from and against any and all claims, demands, liabilities, costs, damages and causes of action of any nature whatsoever arising out of or incidental to the Liquidating Trustee's taking of any action authorized under or within the scope of this Agreement; provided, however, that the Liquidating Trustee shall not be entitled to indemnification, and shall not be held harmless, where the claim, demand, liability, cost, damage or cause of action at issue arose out of: (a) A matter entirely unrelated to the Liquidating Trustee's action or conduct pursuant to the provisions of this Agreement; or (b) The proven misconduct or negligence of the Liquidating Trustee. ARTICLE VIII Transfer of Units General Partner Transfer. The General Partner shall not withdraw from the Partnership and shall not sell, assign, pledge, encumber or otherwise dispose of all or any portion of its Units without the Consent of the Limited Partners. Upon any transfer of Units in accordance with the provisions of this Section 8.1, the transferee General Partner shall become vested with the powers and rights of the transferor General Partner, and shall be liable for all obligations and responsible for all duties of the 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 Units so acquired. It is a condition to any transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor General Partner under this Agreement with respect to such transferred Units and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor General Partner are assumed by a successor corporation by operation of law) shall relieve the transferor General Partner of its obligations under this Agreement without the Consent of the Limited Partners, in their reasonable discretion. In the event the General Partner withdraws from the Partnership, in violation of this Agreement or otherwise, or dissolves or terminates or upon the Bankruptcy of the General Partner, a Majority-In-Interest of the Limited Partners may elect to continue the Partnership business by selecting a substitute general partner. Transfers by Limited Partners. Each Limited Partner shall, subject to the provisions of this Section 8.2 and Section 8.4 hereof, have the right to transfer all or a portion of its Units to any Person, whether or not in connection with the exercise of the Rights. It is a condition to any transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor Limited Partner under this Agreement with respect to such transferred Units and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor Partner are assumed by a successor corporation by operation of law) shall relieve the transferor Partner of its obligations under this Agreement without the approval of the General Partner, in its reasonable discretion. Upon such transfer, the transferee shall be admitted as a substituted limited partner as such term is defined in the Act (the "Substituted Limited Partner") and shall succeed to all of the rights of the transferor Limited Partner under this Agreement in the place and stead of such transferor Limited Partner; provided, however, that notwithstanding the foregoing, any transferee of any transferred Units, to the extent such transferee is entitled to exercise Rights under the Rights Agreement, shall be subject to any and all ownership limitations contained in the Charter which may limit or restrict such transferee's ability to exercise the Rights. Any transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the obligations of the transferor hereunder. Unless admitted as a Substituted Limited Partner, no transferee, whether by a voluntary transfer, by operation of law or otherwise, shall have rights hereunder, other than to receive such portion of the distributions made by the Partnership as are allocable to the Units transferred. Issuance of Additional Units. At any time without the consent of any Partner, but subject to the provisions of Section 8.4 hereof, the General Partner may, upon its determination that the issuance of additional Units ("Additional Units") is in the best interests of the Partnership, cause the Partnership to issue Additional Units to and admit as a limited partner in the Partnership, any Person (the "Additional Partner") in exchange for the contribution by such Person of cash and/or property desirable to further the purposes of the Partnership under Section 2.3 hereof. The number of Additional Units issued to any Additional Partner shall be equal to the product of the (a) Conversion Factor multiplied by (b) the quotient of (i) the Gross Asset Value of the property contributed by the Additional Partner (net of liabilities assumed by the Partnership in connection with the contribution of such Property to the Partnership or to which such Property is subject) as of the date of contribution (the "Contribution Date") divided by (ii) Current Per Share Market Price in respect of such transaction, and the General Partner may admit an Additional Partner to the Partnership upon such other terms as it deems appropriate. The General Partner shall be authorized on behalf of each of the Partners to amend this Agreement to reflect the admission of any Additional Partner in accordance with the provisions of this Section 8.3 in the event that the General Partner deems such amendment to be desirable, and the General Partner promptly shall deliver a copy of such amendment to each Limited Partner. Notwithstanding anything contained herein to the contrary, an Additional Partner that acquires Additional Units pursuant to this Section 8.3 shall not acquire any interest in, and may not exercise or otherwise participate in, any Rights pursuant to the Rights Agreements unless they are expressly granted such rights. Restrictions on Transfer. In addition to any other restrictions on transfer herein contained, in no event may any transfer or assignment of Units by any Partner be made (i) to any Person who lacks the legal right, power or capacity to own Units; (ii) in violation of any provision of any mortgage or trust deed (or the note or bond secured thereby) constituting a Lien against a Property or any part thereof, or other instrument, document or agreement to which the Partnership or any Property Partnership is a party or otherwise bound; (iii) in violation of applicable law; (iv) of any component portion of a Unit, such as the Capital Account, or rights to Net Operating Cash Flow, separate and apart from all other components of such Unit (other than such assignments of the right to receive distributions as the General Partner shall approve in writing which approval the General Partner may withhold in its sole discretion), (v) in the event such transfer would cause the General Partner to cease to comply with the REIT Requirements, (vi) if such transfer would cause a termination of the Partnership for federal income tax purposes, (vii) if such transfer would, in the opinion of counsel to the Partnership, cause the Partnership to cease to be classified as a partnership for Federal income tax purposes, (viii) if such transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title 1 of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified person" (as defined in Section 4975(c) of the Code), or (ix) if such transfer would, in the opinion of counsel to the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101. Notwithstanding anything in this Agreement to the contrary, no Partner may sell, assign or otherwise transfer its Units or other interest in the Partnership or any portion thereof (or permit any interest in any Person that directly or through another Person owns Units or other interests in the Partnership to be transferred) to any Foreign Owner without providing written notice of the same to the General Partner, and any such written notice shall be received by the General Partner at least thirty days prior to any such sale, assignment or other transfer. Any sale, assignment or other transfer of Units or other interests in the Partnership made in violation of this Section 8.4 (including without limitation any sale, assignment or other transfer of Units made without giving the notice described in the immediately preceding sentence) shall be null and void ab initio. ARTICLE IX Rights and Obligations of the Limited Partners No Participation in Management. Except as expressly permitted hereunder, the Limited Partners 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. Bankruptcy of a Limited Partner. The Bankruptcy of any Limited Partner shall not cause a dissolution of the Partnership, but the rights of such Limited Partner to share in the Net Profits or Net Losses of the Partnership and to receive distributions of Partnership funds shall, on the happening of such event, devolve on its successors or assigns, subject to the terms and conditions of this Agreement, and the Partnership shall continue as a limited partnership. However, in no event shall such assignee(s) become a Substituted Limited Partner without the consent of the General Partner. No Withdrawal. No Limited Partner may withdraw from the Partnership without the prior written consent of the General Partner, other than as expressly provided in this Agreement. Duties and Conflicts. The General Partner recognizes that the Limited Partners and their Affiliates have or may hereafter have other business interests, activities and investments, some of which may be in conflict or competition with the business of the Partnership, and that, subject to the provisions of Sections 9.5 and 9.6 hereof, such Persons are entitled to carry on such other business interests, activities and investments. Subject to the provisions of Sections 9.5 and 9.6 hereof, the Limited Partners and their Affiliates may engage in or possess an interest in any other business or venture of any kind, independently or with others, on their own behalf or on behalf of other entities with which they are affiliated or associated, and such persons 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. Except as otherwise provided in Sections 9.5 and 9.6 hereof, neither the Partnership nor any Partner shall have any right, by virtue of this Agreement, in or to such activities, or the income or profits derived therefrom, and the pursuit of such activities, even if competitive with the business of the Partnership, shall not be deemed wrongful or improper. Acquisition Projects. Notwithstanding anything contained in Section 9.4 hereof to the contrary, the Bucksbaum Limited Partners and/or their Affiliates shall not, during the period (the "Restricted Period") commencing on the date on which the Partnership was formed and ending on the earlier of (i) April 16, 2003 and (ii) the Restrictions Lapse Date (as defined below), acquire an equity ownership interest in any Acquisition Project other than through their ownership interest in the Partnership. During the Restricted Period, the Bucksbaum Limited Partners may, in their sole discretion, notify the General Partner of any opportunities available to the Partnership to acquire any equity ownership interest in an Acquisition Project to the extent the Bucksbaum Limited Partners believe such opportunities may be appropriate for consideration by the Partnership. Notwithstanding the preceding sentence, the Bucksbaum Limited Partners and/or their Affiliates may not acquire an equity ownership interest in any Acquisition Project during the Restricted Period other than through their ownership interests in the Partnership. The "Restrictions Lapse Date" shall mean the first date on which all of the following conditions are satisfied: (i) none of Martin Bucksbaum, Matthew Bucksbaum or John Bucksbaum is an executive officer or director of the General Partner and (ii) Martin Bucksbaum, Matthew Bucksbaum, John Bucksbaum and the Bucksbaum Limited Partners are not (or would not be assuming such persons exercised all of their outstanding Rights in exchange for Common Stock), in the aggregate, the beneficial owners of 10% or more of the outstanding shares of Common Stock of the General Partner. For purposes of the previous sentence, during his lifetime, a person shall be deemed to be the beneficial owner of any shares of Common Stock beneficially owned by his Affiliates (including shares that would be owned assuming all outstanding Rights were exercised in exchange for Common Stock by such persons). Development Projects. Notwithstanding anything contained in Section 9.4 hereof to the contrary, the Bucksbaum Limited Partners and their Affiliates shall not, during the Restricted Period, acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease, transfer, encumber, convey or otherwise deal with any Development Project. During the Restricted Period, the Bucksbaum Limited Partners may notify the General Partner of any opportunities available to the Partnership to acquire an interest in any Development Project to the extent such Limited Partners believe such opportunities may be appropriate for consideration by the Partnership. Notwithstanding anything to the contrary contained in Sections 9.5 and 9.6 of this Agreement or any other provisions of this Agreement, Matthew Bucksbaum, John Bucksbaum, the Bucksbaum Limited Partners and/or their respective Affiliates may hold equity securities of any other publicly held Entity or subsidiary thereof engaged in the shopping center development, ownership and/or management business provided that they own in the aggregate less than five percent (5%) of the equity securities of such Entity and neither Matthew Bucksbaum nor John Bucksbaum serves as a director or executive officer of, or in a similar capacity for, such Entity other than at the request of the General Partner or by reason of an investment therein by the General Partner, the Partnership or any Affiliate of the General Partner or the Partnership. Acquisition/Development Projects -- Further Assurances. Each Bucksbaum Limited Partner acknowledges and agrees that the restrictions contained in Sections 9.5 and 9.6 hereof relating to Acquisition Projects and Development Projects shall continue to remain effective with respect to such Bucksbaum Limited Partner and its Affiliates for the applicable periods specified in such Sections 9.5 and 9.6 notwithstanding any transfer of the Units of such Bucksbaum Limited Partner. In connection with the transfer of all Units of any Bucksbaum Limited Partner, such Bucksbaum Limited Partner shall execute and deliver to the General Partner such instruments or documents as the General Partner may reasonably request confirming the transferor Bucksbaum Limited Partner's obligations to continue to be bound by the provisions of this Section 9.7 and Sections 9.5 and 9.6 hereof. ARTICLE X Limited Partner Representations and Warranties Each Limited Partner, severally, and not jointly and severally, represents and warrants to the Partnership and the General Partner as follows: (a) Organization; Authority. The Limited Partner (i) in the case of a Person who is a natural person, has full power and authority to execute, deliver and perform this Agreement or (ii) in the case of a Person which is a corporation, limited liability company, limited liability company, partnership or trust, is a corporation, limited liability company, partnership, corporation or trust, as the case may be, duly formed, validly existing and in good standing (to the extent applicable) under the laws of its jurisdiction of formation with the requisite authority to execute, deliver and perform this Agreement. (b) Due Authorization; Binding Agreement. The execution, delivery and performance of this Agreement by the Limited Partner has been duly and validly authorized by all necessary action of the Limited Partner in the case of a Limited Partner which is an Entity. This Agreement has been duly executed and delivered by the Limited Partner, or an authorized representative of the Limited Partner, and constitutes a legal, valid and binding obligation of the Limited Partner, enforceable against the Limited Partner in accordance with the terms hereof. (c) Consents and Approvals. No consent, waiver, approval or authorization of, or filing, registration or qualification with, or notice to, any governmental unit or any other Person is required to be made, obtained or given by the Limited Partner in connection with the execution, delivery and performance of this Agreement. (d) No Violation. None of the execution, delivery or performance of this Agreement by the Limited Partner does or will, with or without the giving of notice, lapse of time or both, (i) violate, conflict with or constitute a default under any term or condition of (A) the organizational documents of the Limited Partner or other agreement to which the Limited Partner is a party or by which it is bound or (B) any judgment, decree, order, statute, injunction, rule or regulation of a governmental unit applicable to the Limited Partner or by which it or its assets or properties are bound or (ii) result in the creation of any Lien or other encumbrance upon the assets or properties of the Limited Partner. ARTICLE XI General Partner Representations and Warranties The General Partner represents and warrants to the Partnership and the Limited Partners as follows: Organization; Authority. The General Partner is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware with full corporate power to execute, deliver and perform this Agreement. Due Authorization; Binding Agreement. The execution, delivery and performance of this Agreement by the General Partner has been duly and validly authorized by all necessary action of the General Partner. This Agreement has been duly executed and delivered by the General Partner, or an authorized representative of the General Partner, and constitutes a legal, valid and binding obligation of the General Partner, enforceable against the General Partner in accordance with the terms hereof. Consents and Approvals. No consent, waiver, approval or authorization of, or filing, registration or qualification with, or notice to, any governmental unit or any other person is required to be made, obtained or given by the General Partner in connection with the execution, delivery and performance of this Agreement other than consents, waivers, approvals or authorizations which have been obtained prior to the date hereof. ARTICLE XII Arbitration of Disputes Arbitration. Notwithstanding anything to the contrary contained in this Agreement, all claims, disputes and controversies between the parties hereto (including, without limitation, any claims, disputes and controversies between the Partnership and any one or more of the Partners and any claims, disputes and controversies between any one or more Partners) arising out of or in connection with this Agreement or the Partnership relating to the validity, construction, performance, breach, enforcement or termination thereof, or otherwise, shall be resolved by binding arbitration in New York, New York, in accordance with this Article XII and, to the extent not inconsistent herewith, the Expedited Procedures and Commercial Arbitration Rules of the American Arbitration Association. Procedures. Any arbitration called for by this Article XII shall be conducted in accordance with the following procedures: The Partnership or any Partner (the "Requesting Party") may demand arbitration pursuant to Section 12.1 hereof at any time by giving written notice of such demand (the "Demand Notice") to all other Partners and (if the Requesting Party is not the Partnership) to the Partnership which Demand Notice shall describe in reasonable detail the nature of the claim, dispute or controversy. Within fifteen (15) days after the giving of a Demand Notice, the Requesting Party, on the one hand, and each of the other Partners and/or the Partnership against whom the claim has been made or with respect to which a dispute has arisen (collectively, the "Responding Party"), on the other hand, shall select and designate in writing to the other party one reputable, disinterested individual (a "Qualified Individual") willing to act as an arbitrator of the claim, dispute or controversy in question. Each of the Requesting Party and the Responding Party shall use their best efforts to select a present or former partner of a "Big 6" accounting firm having no affiliation with any of the parties as their respective Qualified Individual. Within fifteen (15) days after the foregoing selections have been made, the arbitrators so selected shall jointly select a present or former partner of a "Big 6" accounting firm having no affiliation with any of the parties as the third Qualified Individual willing to act as an arbitrator of the claim, dispute or controversy in question. In the event that the two arbitrators initially selected are unable to agree on a third arbitrator within the second fifteen (15) day period referred to above, then, on the application of either party, the American Arbitration Association shall promptly select and appoint a present or former partner of a "Big 6" accounting firm having no affiliation with any of the parties as the Qualified Individual to act as the third arbitrator. The three arbitrators selected pursuant to this subsection (b) shall constitute the arbitration panel for the arbitration in question. The presentations of the parties hereto in the arbitration proceeding shall be commenced and completed within sixty (60) days after the selection of the arbitration panel pursuant to subsection (b) above, and the arbitration panel shall render its decision in writing within thirty (30) days after the completion of such presentations. Any decision concurred in by any two (2) of the arbitrators shall constitute the decision of the arbitration panel, and unanimity shall not be required. The arbitration panel shall have the discretion to include in its decision a direction that all or part of the attorneys' fees and costs of any party or parties and/or the costs of such arbitration be paid by any other party or parties. On the application of a party before or after the initial decision of the arbitration panel, and proof of its attorneys' fees and costs, the arbitration panel shall order the other party to make any payments directed pursuant to the preceding sentence. Binding Character. Any decision rendered by the arbitration panel pursuant to this Article XII shall be final and binding on the parties hereto, and judgment thereon may be entered by any state or federal court of competent jurisdiction. Exclusivity. Arbitration shall be the exclusive method available for resolution of claims, disputes and controversies described in Section 12.1 hereof, and the Partnership and its Partners stipulate that the provisions hereof shall be a complete defense to any suit, action, or proceeding in any court or before any administrative or arbitration tribunal with respect to any such claim, controversy or dispute. The provisions of this Article XII shall survive the dissolution of the Partnership. No Alteration of Agreement. Nothing contained herein shall be deemed to give the arbitrators any authority, power or right to alter, change, amend, modify, add to, or subtract from any of the provisions of this Partnership Agreement. ARTICLE XIII General Provisions Notices. All notices, offers or other communications required or permitted to be given pursuant to this Agreement shall be in writing and may be personally served, telecopied or sent by United States mail and shall be deemed to have been given when delivered in person, upon receipt of telecopy or three business days after deposit in United States mail, registered or certified, postage prepaid, and properly addressed, by or to the appropriate party. For purposes of this Section 13.1, the addresses of the parties hereto shall be as set forth in the books and records of the Partnership. The address of any party hereto may be changed by a notice in writing given in accordance with the provisions hereof. Successors. This Agreement and all the terms and provisions hereof shall be binding upon and shall inure to the benefit of all Partners, and their legal representatives, heirs, successors and permitted assigns, except as expressly herein otherwise provided. Effect and Interpretation. 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). Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. Partners Not Agents. Nothing contained herein shall be construed to constitute 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. Entire Understanding; Etc. This Agreement, together with any and all Contribution Agreements and Rights Agreements, constitutes the entire agreement and understanding among the Partners and supersedes any prior understandings and/or written or oral agreements among them respecting the subject matter within (including without limitation the Initial Partnership Agreement except for the consents, approvals and waivers given therein, the agreements by Partners to be bound by the provisions thereof, as the same is amended hereby, and the agreements of former Bucksbaum Limited Partners under Sections 9.3 and 9.4, which shall continue in full force and effect). Amendments. Except as otherwise provided herein, this Agreement may not be amended, and no provision may be waived, except by a written instrument signed by the General Partner (and, in the case of amendments or waivers benefiting the Bucksbaum Limited Partners, approved on behalf of the General Partner by at least a majority of its directors who are not Affiliates of the Bucksbaum Limited Partners) and a Majority-In-Interest of the Limited Partners. Notwithstanding anything to the contrary contained herein, without the written consent of a Limited Partner, this Agreement may not be amended to convert such Limited Partner's partnership interest in the Partnership to a general partnership interest (or otherwise adversely affect such Limited Partner's limited liability) or to materially adversely affect such Limited Partner's rights to distributions or allocations except in connection with the admission of Additional Partners unless such amendment affects the Bucksbaum Limited Partners in the same manner on a Unit-for-Unit basis. The immediately preceding sentence of this Section 13.7 may not be amended to modify the approval rights of a Partner without such Partner's consent. Severability. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid by a court of competent jurisdiction, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those to which it is held invalid by such court, shall not be affected thereby. Trust Provision. This Agreement, to the extent executed by the trustee of a trust, is executed by such trustee solely as trustee and not in a separate capacity. Nothing herein contained shall create any liability on, or require the performance of any covenant by, any such trustee individually, nor shall anything contained herein subject the individual personal property of any trustee to any liability. Pronouns and Headings. As used herein, all pronouns shall include the masculine, feminine and neuter, and all defined terms shall include the singular and plural thereof wherever the context and facts require such construction. The headings, titles and subtitles herein are inserted for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this Agreement to "including" shall be deemed to mean "including without limitation". 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. Issuance of Certificates Representing Units. The General Partner may, in its sole discretion, issue certificates representing all or a portion of the Units of one or more Partners and, in such event, the General Partner shall establish such rules and regulations relating to issuances and reissuances of certificates upon transfer of Units, the division of Units among multiple certificates and the loss, theft, destruction or mutilation of certificates as the General Partner reasonably deems appropriate. 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: GENERAL GROWTH PROPERTIES, INC., a Delaware corporation By: --------------------------------- Its: -------------------------------- 55 West Monroe Street Suite 3100 Chicago, Illinois 60603 LIMITED PARTNERS: M.B. CAPITAL PARTNERS III, a South Dakota general partnership By: GENERAL TRUST COMPANY, not individually but solely as Trustee of Martin Investment Trust G, a partner By: --------------------------------- Its: -------------------------------- TABLE OF CONTENTS
Page ---- ARTICLE I Definitions; Etc. 1.1 Definitions 2 1.2 Exhibits, Etc. 24 ARTICLE II Continuation 2.1 Continuation 24 2.2 Name 24 2.3 Character of the Business 25 2.4 Location of the Principal Place of Business 26 2.5 Registered Agent and Registered Office 26 ARTICLE III Term 3.1 Commencement 26 3.2 Dissolution 26 ARTICLE IV Contributions to Capital 4.1 General Partner Capital Contribution 27 4.2 Limited Partner Capital Contributions 28 4.3 Additional Funds 28 4.4 Stock Incentive Plan 29 4.5 No Third Party Beneficiary 29 4.6 No Interest; No Return 30
ARTICLE V Allocations and Other Tax and Accounting Matters 5.1 Allocations 30 5.2 Distributions. 30 5.3 Books of Account 31 5.4 Reports 32 5.5 Audits. 32 5.6 Tax Elections and Returns 33 5.7 Tax Matters Partner. 34 5.8 Withholding. 36 ARTICLE VI Rights, Duties and Restrictions of the General Partner 6.1 Expenditures by Partnership 37 6.2 Powers and Duties of General Partner 37 6.3 Major Decisions 41 6.4 Actions with Respect to Certain Documents 41 6.5 General Partner Participation 42 6.6 Proscriptions 42 6.7 Additional Partners 43 6.8 Title Holder 43 6.9 Compensation of the General Partner 43 6.10 Waiver and Indemnification 43 6.11 Limited Partner Representatives 44 6.12 Operation in Accordance with REIT Requirements 45 ARTICLE VII Dissolution, Liquidation and Winding-Up 7.1 Accounting 46 7.2 Distribution on Dissolution 46 7.3 Timing Requirements 47 7.4 Sale of Partnership Assets 47 7.5 Distributions in Kind 48 7.6 Documentation of Liquidation 48 7.7 Liability of the Liquidating Trustee 48 ARTICLE VIII Transfer of Units 8.1 General Partner Transfer 49 8.2 Transfers by Limited Partners 50 8.3 Issuance of Additional Units 51 8.4 Restrictions on Transfer 52 ARTICLE IX Rights and Obligations of the Limited Partners

9.1 No Participation in Management 54 9.2 Bankruptcy of a Limited Partner 54 9.3 No Withdrawal 55 9.4 Duties and Conflicts 55 9.5 Acquisition Projects 56 9.6 Development Projects 57 9.7 Acquisition/Development Projects -- Further Assurances 58 ARTICLE X Limited Partner Representations and Warranties ARTICLE XI General Partner Representations and Warranties ARTICLE XII Arbitration of Disputes 12.1 Arbitration 60 12.2 Procedures 61 12.3 Binding Character 62 12.4 Exclusivity 62 12.5 No Alteration of Agreement 62 ARTICLE XIII General Provisions 13.1 Notices 63 13.2 Successors 63 13.3 Effect and Interpretation 63 13.4 Counterparts 63 13.5 Partners Not Agents 63 13.6 Entire Understanding; Etc. 64 13.7 Amendments 64 13.8 Severability 65 13.9 Trust Provision 65 13.10 Pronouns and Headings 65 13.11 Assurances 66 13.12 Issuance of Certificates Representing Units 66 EXHIBIT A

General Partner: Number of Units Percentage Interest General Growth Properties, Inc. 35,542,256.5822 Limited Partners: M.B. Capital Partners III 15,555,864.0240 Stanley Richards Revocable Trust 149,706.3938 Joe W. Lowrance 57,620.0000 LWLDA Limited Partnership 45,223.0000 Brent M. Milgrom 57,620.0000 GDC/A&B Limited Partnership 45,223.0000 Edward S. Brown 25,000.000 Lawrence A. Brown 17,647.0000 Merrill H.J. Roth 29,024.0000 The Roth Family Limited Partnership 22,308.0000 Arthur B. Morgenstern 54,625.0000 Joseph Straus, Jr. 78,017.0000 Warren Weiner and Penny Weiner, Husband and Wife, as Tenants-by-the-Entirety 15,855.5000 Joint Revocable Trust of Marvin Rounick and Judy Rounick 15,855.5000 Arthur Bruce Associates 31,711.0000 Marvin Rounick and Judy Rounick, Husband and Wife, as Tenants-by- the-Entirety 55,670.0000 Joint Revocable Trust of Warren and Penny Weiner 18,557.0000 Irrevocable Trust of Warren Weiner dated January 24, 1978 F/B/O Robyn Weiner 18,557.0000 Irrevocable Trust of Warren Weiner dated January 24, 1978 F/B/O Kimberly Weiner 18,557.0000 Forbes/Cohen Properties 801,842.0000 Jackson Properties 346,795.0000 Lakeview Square Properties 296,363.0000 CA Southlake Investors, Ltd. 353,537.0000 Peter D. Leibowits 518,833.0000 Total Units:. 100.0000 EXHIBIT B Certain Development Projects 1. Evansville, Indiana undeveloped land 2. Des Moines, Iowa undeveloped land 3. Sioux City, Iowa undeveloped land 4. Omaha, Nebraska undeveloped land 5. Fort Worth, Texas undeveloped land 6. Bowling Green, Kentucky undeveloped land 7. Colorado Springs, Colorado (50% joint venture interest) EXHIBIT C Allocations 3. Allocation of Net Income and Net Loss. (a) Net Income. Except as otherwise provided herein, Net Income for any fiscal year or other applicable period shall be allocated in the following order and priority: (1) First, to the Partners, until the cumulative Net Income allocated pursuant to this subparagraph (a)(1) for the current and all prior periods equals the cumulative Net Loss allocated pursuant to subparagraph (b)(2) hereof for all prior periods, among the Partners in the reverse order that such Net Loss was allocated to the Permitted Partners pursuant to subparagraph (b)(2) hereof (and, in the event of a shift of a Partner's interest in the Partnership, to the Partners in a manner the most equitably reflects the successors in interest to the Permitted Partners). (2) Thereafter, the balance of the Net Income, if any, shall be allocated to the Partners in accordance with their respective Percentage Interests. (b) Net Loss. Except as otherwise provided herein, Net Loss of the Partnership for each fiscal year or other applicable period shall be allocated as follows: (1) To the Partners in accordance with their respective Percentage Interests. (2) Notwithstanding subparagraph (b)(1) hereof, to the extent any Net Loss allocated to a Partner under subparagraph (b)(1) hereof or this subparagraph (b)(2) would cause such Partner (hereinafter, a "Restricted Partner") to have an Adjusted Capital Account Deficit as of the end of the fiscal year to which such Net Loss relates, such Net Loss shall not be allocated to such Restricted Partner and instead shall be allocated to the other Partner(s) (hereinafter, the "Permitted Partners") pro rata in accordance with their relative Percentage Interests. 4. Special Allocations. Notwithstanding any provisions of paragraph 1 of this Exhibit C, the following special allocations shall be made in the following order: (a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net decrease in Partnership Minimum Gain for any Partnership fiscal year (except as a result of conversion or refinancing of Partnership indebtedness, certain capital contributions or revaluation of the Partnership property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner's share of the net decrease in Partnership Minimum Gain. The items to be so allocated shall be determined in accordance with Regulation Section 1.704-2(f). This paragraph (a) is intended to comply with the minimum gain chargeback requirement in said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this paragraph (a) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto. (b) Minimum Gain Attributable to Partner Nonrecourse Debt. If there is a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during any fiscal year (other than due to the conversion, refinancing or other change in the debt instrument causing it to become partially or wholly nonrecourse, certain capital contributions, or certain revaluations of Partnership property as further outlined in Regulation Section 1.704-2(i)(4)), each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner's share of the net decrease in the Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Regulation Section 1.704-2(i)(4) and (j)(2). This paragraph (b) is intended to comply with the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this paragraph (b) shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant hereto. (c) Qualified Income Offset. In the event a Limited Partner unexpectedly receives any adjustments, allocations or distributions described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Limited Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit as quickly as possible. This paragraph (c) is intended to constitute a "qualified income offset" under Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. (d) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or other applicable period shall be allocated to the Partners in accordance with their respective Percentage Interests. (e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any fiscal year or other applicable period shall be specially allocated to the Partner that bears the economic risk of loss for the debt (i.e., the Partner Nonrecourse Debt) in respect of which such Partner Nonrecourse Deductions are attributable (as determined under Regulation Section 1.704-2(b)(4) and (i)(1). (f) Precontribution Gain. In the event that, during any fiscal year or other applicable period, any Property Partnership allocates to the Partnership Precontribution Gain, each Partner (or its successors in interest) who heretofore contributed to the capital of the Partnership an interest in such Property Partnership shall be allocated that Precontribution Gain in accordance with its respective interest in such Precontribution Gain. For purposes hereof, "Precontribution Gain" shall mean, with respect to each Shopping Center Project owned by an existing Property Partnership, that unrealized gain attributable to the excess of (a) the fair market value of such Shopping Center Project on April 15, 1993, over (b) the adjusted tax basis of such Shopping Center Project on such date; provided, however, that the amount of any Precontribution Gain associated with a Shopping Center Project shall be adjusted to account for allocations made in accordance with the provisions of Section 3(c) of this Exhibit C and shall not, in any event, exceed that amount of gain actually allocated to the Partnership by the Property Partnership as a result of the sale or other disposition of such Shopping Center Project. (g) Curative Allocations. The Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss, and deduction among the Partners so that, to the extent possible, the cumulative net amount of allocations of Partnership items under paragraphs 1 and 2 of this Exhibit C shall be equal to the net amount that would have been allocated to each Partner if the Regulatory Allocations had not occurred. This subparagraph (g) is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith. For purposes hereof, "Regulatory Allocations" shall mean the allocations provided under this paragraph 2. 5. Tax Allocations. (a) Generally. Subject to paragraphs (b) and (c) hereof, items of income, gain, loss, deduction and credit to be allocated for income tax purposes (collectively, "Tax Items") shall be allocated among the Partners on the same basis as their respective book items. (b) Sections 1245/1250 Recapture. If any portion of gain from the sale of property is treated as gain which is ordinary income by virtue of the application of Code Sections 1245 or 1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among the Partners in the same proportion that the depreciation and amortization deductions giving rise to the Affected Gain were allocated and (B) other Tax Items of gain of the same character that would have been recognized, but for the application of Code Sections 1245 and/or 1250, shall be allocated away from those Partners who are allocated Affected Gain pursuant to Clause (A) so that, to the extent possible, the other Partners are allocated the same amount, and type, of capital gain that would have been allocated to them had Code Sections 1245 and/or 1250 not applied. For purposes hereof, in order to determine the proportionate allocations of depreciation and amortization deductions for each fiscal year or other applicable period, such deductions shall be deemed allocated on the same basis as Net Income and Net Loss for such respective period. (c) Allocations Respecting Section 704(c) and Revaluations; Curative Allocations Resulting from the Ceiling Rule. Notwithstanding paragraph (b) hereof, Tax Items with respect to Partnership property that is subject to Code Section 704(c) and/or Regulation Section 1.704-1(b)(2)(iv)(f) (collectively "Section 704(c) Tax Items") shall be allocated in accordance with said Code section and/or Regulation Section 1.704-1(b)(4)(i), as the case may be. The allocation of Tax Items shall be in accordance with the "traditional method" set forth in Treas. Reg. _1.704-3(b)(1), unless otherwise determined by the General Partner, and shall be subject to the ceiling rule stated in Regulation Section 1.704-3(b)(1). The General Partner is authorized to specially allocate Tax Items (other than the Section 704(c) Tax Items) to cure for the effect of the ceiling rule. The intent of this Section 3(c) and Section 2(f) above is that each Partner who contributed to the capital of the Partnership a partnership interest in an existing Property Partnership will bear, through reduced allocations of depreciation and increased allocations of gain or other items, the tax detriments associated with any Precontribution Gain and this Section 3(c) and Section 2(f) are to be interpreted consistently with such intent. EX-10.18 18 c02442exv10w18.txt STOCKHOLDERS AGREEMENT Exhibit 10.18 STOCKHOLDERS AGREEMENT Dated as of December 20, 1995 By and Among GGP/HOMART, INC. GGP LIMITED PARTNERSHIP THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND EQUITABLE LIFE INSURANCE COMPANY OF IOWA USG ANNUITY & LIFE COMPANY TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA and GENERAL GROWTH PROPERTIES, INC. TABLE OF CONTENTS
Page ---- RECITALS ................................................................ 1 ARTICLE I. DEFINITIONS ............................................................. 1 1.1. "Accredited Investor" ....................................... 2 1.2. "Additional Subscription Dates" ............................. 2 1.3. "Additional Subscription Payment" ........................... 2 1.4. "Affiliate" ................................................. 2 1.5. "Aggregate Subscription" .................................... 2 1.6. "Annual Business Plan" ...................................... 2 1.7. "Assistant Attorney General" ................................ 2 1.8. "Available Subscription" .................................... 3 1.9. "Benefit Plan Investor" ..................................... 3 1.10. "Board" ..................................................... 3 1.11. "Called Subscriptions" ...................................... 3 1.12. "Cash Reserves" ............................................. 3 1.13. "Cause" ..................................................... 3 1.14. "Cause Notice" .............................................. 3 1.15. "Closing" ................................................... 3 1.16. "Closing Date" .............................................. 3 1.17. "Change of Control" ......................................... 3 1.18. "Class A Directors" ......................................... 4 1.19. "Class A Group" ............................................. 4 1.20. "Class A Minimum Investment" ................................ 4 1.21. "Class A Stockholders" ...................................... 5 1.22. "Class B Directors" ......................................... 5 1.23. "Class B Group" ............................................. 5 1.24. "Class B Minimum Investment" ................................ 5 1.25. "Class B Stockholders" ...................................... 5 1.26. "Class C Stockholders" ...................................... 5 1.27. "Code" ...................................................... 5 1.28. "Company Assets" ............................................ 5 1.29. "Company FFO" ............................................... 5 1.30. "Cure Notice" ............................................... 5 1.31. "Defaulting Stockholder" .................................... 5 1.32. "Development Manager" ....................................... 5 1.33. "Dissolution Commencement Notice" ........................... 5 1.34. "Dissolution Purchase Price" ................................ 5 1.35. "Dissolution Trigger Date" .................................. 6 1.36. "Dissolution Value of the Company" .......................... 6 1.37. "Dissolution Value of a Property" ........................... 6 1.38. "Distributee" ............................................... 6 1.39. "Electing Class" ............................................ 6 1.40. "ERISA" ..................................................... 6 1.41. "Exchange Amount" ........................................... 6
-i- 1.42. "Exchange Amount Payment Notice" ............................ 6 1.43. "Exchange Election Notice" .................................. 6 1.44. "Exchange Trigger Date" ..................................... 6 1.45. "Exchanging Stockholder" .................................... 6 1.46. "Existing Lender Arrangements" .............................. 6 1.47. "Expenses" .................................................. 6 1.48. "Commitment" ................................................ 8 1.49. "FTC" ....................................................... 8 1.50. "Funded Subscription" ....................................... 9 1.51. "Funding Notice" ............................................ 9 1.52. "GCL" ....................................................... 9 1.53. "General Growth Chairman" ................................... 9 1.54. "General Growth FFO" ........................................ 9 1.55. "General Growth Officers" ................................... 9 1.56. "General Growth Share Closing Price" ........................ 9 1.57. "GG Stock" .................................................. 9 1.58. "Homart Assets" ............................................. 10 1.59. "Homart Closing Date" ....................................... 10 1.60. "Homart Stock Purchase Agreement" ........................... 10 1.61. "HSR" ....................................................... 10 1.62. "Initial Subscription" ...................................... 10 1.63. "Investment Company Act" .................................... 10 1.64. "IRS" ....................................................... 10 1.65. "Management Transfer Agreement" ............................. 10 1.66. "Material Adverse Change" ................................... 10 1.67. "Measurement Period" ........................................ 10 1.68. "Natick Mall Agreement" ..................................... 10 1.69. "Net Disposition Proceeds" .................................. 10 1.70. "Net Taxable Income" ........................................ 11 1.71. "Non-Defaulting Stockholder" ................................ 11 1.72. "Non-Funding Stockholder" ................................... 11 1.73. "Offer" ..................................................... 11 1.74. "Offer Effective Date" ...................................... 12 1.75. "Operating Cash Flow" ....................................... 12 1.76. "Organic Change" ............................................ 12 1.77. "Person" .................................................... 12 1.78. "Plan Asset Regulations ..................................... 12 1.79. "Planned Expansion or Renovation Programs" .................. 12 1.80. "Properties Currently Under Development" .................... 12 1.81. "Property Manager" .......................................... 12 1.82. "Proportionate Share" ....................................... 12 1.83. "Receipts" .................................................. 12 1.84. "Relevant Trade Area" ....................................... 13 1.85. "Reserve Amount" ............................................ 14 1.86. "Response Notice" ........................................... 14 1.87. "Rules" ..................................................... 14 1.88. "Serial Transferee" ......................................... 14 1.89. "Serial Transferor" ......................................... 14 1.90. "Significant Company Assets" ................................ 14 1.91. "Special Reserve" ........................................... 14 1.92. "Sublease" .................................................. 14

-ii- 1.93. "Subsidiaries" .............................................. 14 1.94. "Ten Day Average General Growth Share Closing Price" ........ 14 1.95. "33 Act" .................................................... 15 1.96. "Trading Day" ............................................... 15 1.97. "Transfer" .................................................. 15 1.98. "Transferee" ................................................ 15 ARTICLE II. ACQUISITION OF SHARES; CLOSING .......................................... 15 2.1. Issuance and Acquisition of Shares .......................... 15 2.2. Closing ..................................................... 16 2.3. Conditions to Stockholders' Obligations ..................... 16 2.4. Merger of Homart Newco One, Inc. into the Company; Issuance of Preferred Stock ....................................... 19 2.5. Termination ................................................. 19 ARTICLE III. GOVERNANCE; BOARD OF DIRECTORS .......................................... 20 3.1. Action by Stockholders to Effectuate this Agreement ......... 20 3.2. Classes of Common Stock; Number of Directors; Voting Rights ................................................... 20 3.3. Initial Directors ........................................... 22 3.4. Subsequent Election of Directors ............................ 22 3.5. Removal and Replacement of Directors ........................ 22 3.6. Officers; Management; Dissolution in the Event of Cause ..... 22 3.7. Chairman of the Board ....................................... 26 3.8. Committees .................................................. 26 3.9. Certificate of Incorporation; By-Laws ....................... 26 3.10. Actions by Directors ........................................ 27 3.11. Meetings of the Board ....................................... 32 3.12. Restrictions on Other Agreements ............................ 33 ARTICLE IV. OTHER CORPORATE MATTERS ................................................. 33 4.1. Fiscal Year; Designation of Auditors ........................ 33 4.2. Dividends ................................................... 33 4.3. Conduct of Business ......................................... 33 4.4. Operation in Accordance with REIT Requirements and Other Matters .................................................. 34 4.5. Sources and Uses of Funds; Organizational Expenses; Reorganization Expenses; Reserves ........................ 34 4.6. Other Activities of Stockholders ............................ 36

-iii- 4.7. Reports and Statements ...................................... 37 ARTICLE V. EXCHANGE RIGHT .......................................................... 40 5.1. The Exchange Right .......................................... 40 5.2. Payment of the Exchange Amount .............................. 43 5.3. Registered Stock; Registration Statement .................... 43 5.4. Closing of an Exchange Transaction .......................... 44 5.5. Necessary Government Filings ................................ 45 5.6. Board Representation ........................................ 47 5.7. GG Properties Organic Change ................................ 48 ARTICLE VI. TRANSFERS OF COMMON STOCK ............................................... 49 6.1. Certain Restrictions ........................................ 49 6.2. Compliance with Securities Laws ............................. 49 6.3. Transfer of Ownership Interests in Affiliates ............... 49 6.4. Transfers of Common Stock by Stockholders ................... 50 6.5. Certain Prohibited Transfers of Common Stock by Stockholders ............................................. 52 6.6. Expenses of Transfer ........................................ 53 6.7. Indemnification by Transferor ............................... 53 6.8. Acceptance of Prior Acts .................................... 54 6.9. Certain Conditions to Transfer .............................. 54 6.10. Responsibility for Subscriptions ............................ 54 ARTICLE VII. SUBSCRIPTIONS ........................................................... 55 7.1. Additional Subscriptions .................................... 55 7.2. Delay or Acceleration of Additional Subscription Payments ... 55 7.3. Certain Rights and Obligations with Respect to Additional Subscription Payments .................................... 56 7.4. Failure to Make Additional Subscription Payments ............ 56 7.5. Funding Shortfalls .......................................... 57 ARTICLE VIII. DISSOLUTION RIGHT ....................................................... 57 8.1. Special Dissolution Right ................................... 57 8.2. Other Dissolutions .......................................... 65

-iv- ARTICLE IX. LEGENDS ................................................................. 66 ARTICLE X. POST-CLOSING TERMINATION ................................................ 67 ARTICLE XI. MISCELLANEOUS ........................................................... 68 11.1. Recapitalization, Exchanges, etc. Affecting the Common Stock .................................................... 68 11.2. Injunctive Relief ........................................... 68 11.3. Successors and Assigns ...................................... 68 11.4. Amendment; Waiver ........................................... 69 11.5. Representations by Stockholders ............................. 69 11.6. Notices ..................................................... 71 11.7. Further Assurances .......................................... 71 11.8. Confidentiality ............................................. 71 11.9. Waiver of Claims Against Directors .......................... 72 11.10. APPLICABLE LAW .............................................. 72 11.11. Headings .................................................... 72 11.12. Entire Agreement ............................................ 72 11.13. Severability ................................................ 73 11.14. Counterparts ................................................ 73 11.15. Arbitration ................................................. 73 11.16. Consent to Jurisdiction ..................................... 74

Schedule I Aggregate, Initial and Additional Subscriptions Schedule II Planned Expansions or Renovation Programs Schedule III Properties Currently Under Development Schedule IV Properties Securing Wells Fargo Credit Facility Schedule V Loan Expansions Schedule VI List of Existing Lender Consents Schedule VII Management Policies Schedule VIII Intentionally Omitted Schedule IX Excluded Costs and Expenses Schedule X Management Fees and Reimbursements Schedule XI Intentionally Omitted Schedule XII Intentionally Omitted Schedule XIII Planned Regional Malls Schedule XIV Expenses Schedule XV Special Reserves Schedule XVI Grandfathered Malls Schedule XVII Additional Subscriptions -v- Exhibit A Definition of Company FFO Exhibit B Definition of General Growth FFO Exhibit C Significant Company Assets Exhibit D Form of Amended and Restated Certificate of Incorporation Exhibit E Form of By-laws Exhibit F Form of Natick Mall Agreement Exhibit G Form of Management Transfer Agreement Exhibit H Form of Sublease Exhibit I Form of Annual Business Plan Exhibit J Trade Area Maps Exhibit K Form of Transferee Agreement -vi- STOCKHOLDERS AGREEMENT This STOCKHOLDERS AGREEMENT (this "Agreement") is made and entered into as of December 20, 1995, by and among GGP/HOMART, INC., a Delaware corporation (the "Company"), GGP LIMITED PARTNERSHIP, a Delaware limited partnership ("GGP"), THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND ("NYSCRF"), a fund, established pursuant to NY Retirement and Social Security Law Section 422, in the custody of the Comptroller of the State of New York, EQUITABLE LIFE INSURANCE COMPANY OF IOWA, USG ANNUITY & LIFE COMPANY, TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA and GENERAL GROWTH PROPERTIES, INC., a Delaware corporation ("GG Properties"). GGP, NYSCRF, EQUITABLE LIFE INSURANCE COMPANY OF IOWA, USG ANNUITY & LIFE COMPANY AND TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA are sometimes referred to herein individually as a "Stockholder" or collectively as the "Stockholders." RECITALS A. Upon the Closing (as defined below), the Stockholders will have funded their Initial Subscriptions (as defined below) and will own all of the issued and outstanding shares of Class A Common Stock, Class B Common Stock and Class C Common Stock, each with a par value of $.01 per share, of the Company (collectively, the "Common Stock"). B. Each of the Stockholders desires to promote the interests of the Company and the mutual interests of the Stockholders by establishing herein certain terms and conditions upon which the Common Stock 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 or exchange of the shares of Common Stock and other matters contained herein. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, the Company, the Stockholders and GG Properties hereby agree as follows: ARTICLE I. DEFINITIONS As used in this Agreement, the following terms shall have the meanings ascribed to them below: 1.1. "Accredited Investor" shall mean any institutional accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) under the 33 Act or as defined under Rule 501(a)(8) under the 33 Act (if all of the equity owners of such investor are Persons defined in Rule 501(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. 1.2. "Additional Subscription Dates" shall have the meaning set forth in Section 7.1. 1.3. "Additional Subscription Payment" shall have the meaning set forth in Section 7.1. 1.4. "Affiliate" shall mean, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term "Affiliated" has a meaning correlative to the foregoing. As used herein, the term "control" shall mean either (i) having (directly or indirectly through one or more intermediaries) the exclusive power to direct the management and policies of a Person or (ii) having both (A) at least fifty percent (50%) of the economic interest in a Person and (B) at least fifty percent (50%) of the voting rights with respect to such Person with the full right to exercise such vote, and the term "controlled" has a meaning correlative to the foregoing. Notwithstanding the foregoing, General Growth Management, Inc., GGP Management, Inc., any successor of either of them and any other Person shall be deemed to be Affiliates of GGP, provided that GG Properties or GGP, directly or indirectly, is entitled to receive at least seventy-five percent (75%) of all dividends or other distributions made by such entity. 1.5. "Aggregate Subscription" shall mean, with respect to any Stockholder, the amount set forth opposite such Stockholder's name on Schedule I attached hereto representing the maximum subscription price such Stockholder may be obligated to pay to the Company for the total number of shares of Class A, Class B or Class C Common Stock set forth opposite such Stockholder's name on Schedule I attached hereto. 1.6. "Annual Business Plan" shall have the meaning set forth in Section 3.10(c). 1.7. "Assistant Attorney General" shall have the meaning set forth in Section 5.5(a). -2- 1.8. "Available Subscription" shall mean, with respect to any Stockholder as of any date, such Stockholder's Aggregate Subscription minus the sum of the Initial Subscription, the Funded Subscriptions and the Called Subscriptions (which have not yet been funded) of such Stockholder to the Company. 1.9. "Benefit Plan Investor" shall have the meaning set forth in Section 4.4(b). 1.10. "Board" shall mean the Board of Directors of the Company in office at the applicable time, as elected in accordance with the provisions of the Certificate of Incorporation and this Agreement. 1.11. "Called Subscriptions" shall mean, with respect to any Stockholder as of any date, an amount (not to exceed in the aggregate such Stockholder's Available Subscription) that is required to be paid to the Company at a date specified in a Funding Notice delivered on or prior to such date in accordance with Section 7.2. 1.12. "Cash Reserves" shall mean $_________ to be funded from the Initial Subscription plus the aggregate amount of all Reserve Amounts. 1.13. "Cause" shall have the meaning set forth in Section 3.6(d). 1.14. "Cause Notice" shall have the meaning set forth in Section 3.6(e). 1.15. "Closing" shall have the meaning set forth in Section 2.2. 1.16. "Closing Date" shall have the meaning set forth in Section 2.2. 1.17. "Change of Control" shall mean, (a) with respect to GGP, GG Properties or any successor (that would not otherwise result in a Change of Control) ceasing to be the sole general partner of GGP, or (b) with respect to GG Properties, any of the following: (i) any Person, other than the Bucksbaum Family or any Stockholder becoming the beneficial owner of (x) more than 25% of the GG Stock (assuming the Bucksbaum Family has converted all of their operating partnership units in GGP into GG Stock) and (y) more than 110% of the GG Stock beneficially owned by the Bucksbaum Family (assuming the Bucksbaum Family has converted all of their operating partnership units in GGP into GG Stock); (ii) the sale or transfer (other than by way -3- of merger or any other transaction in which GG Properties' stockholders receive interests in a successor entity) of all or substantially all of GG Properties' interests in its properties in a single transaction or a series of related transactions; (iii) the merger of GGP or GG Properties and another Person and, within eighteen (18) months after such merger, a majority of the Persons who were officers (holding a position of executive vice president or higher or having the responsibilities of any such positions) of GG Properties 90 days prior to such merger are no longer employed by GG Properties or the survivor in the merger (for reasons other than death or disability) in the same or a senior position, or with the same or more senior responsibilities, as prior to the merger; (iv) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the board of directors of GG Properties (together with any new directors whose election or nomination for election was approved by a vote of a majority of the directors (or by a nominating committee of the board of directors) then still in office, who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors of GG Properties or its successor by merger or otherwise then in office or (v) the taking of any action, including the filing of a petition, with respect to (x) an assignment for the benefit of creditors of GGP or GG Properties, (y) the bankruptcy, insolvency, reorganization, dissolution or any similar occurrence of GGP or GG Properties or (z) a liquidation or any other occurrence that might result in the termination of GGP or GG Properties (other than in connection with a merger or other transaction in which GG Properties' stockholders receive interests in a successor entity) which action, if taken by someone other than GGP or GG Properties has not been discharged within sixty (60) days. For purposes of this Section 1.16, the term "Bucksbaum Family" shall mean Matthew Bucksbaum, his spouse, children, descendants and trusts for the benefit of any of them and the spouse, children, descendants and estate of Martin Bucksbaum and any trusts for the benefit of any of them. 1.18. "Class A Directors" shall have the meaning set forth in Section 3.2(a). 1.19. "Class A Group" shall have the meaning set forth in Section 8.1(a). 1.20. "Class A Minimum Investment" shall have the meaning set forth in Section 6.4(a). -4- 1.21. "Class A Stockholders" shall mean the holders of Class A Common Stock. 1.22. "Class B Directors" shall have the meaning set forth in Section 3.2(a). 1.23. "Class B Group" shall have the meaning set forth in Section 8.1(a). 1.24. "Class B Minimum Investment" shall have the meaning set forth in Section 6.4(b). 1.25. "Class B Stockholders" shall mean the holders of Class B Common Stock. 1.26. "Class C Stockholders" shall mean the holders of Class C Common Stock. 1.27. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any corresponding provisions of succeeding law. 1.28. "Company Assets" shall mean all right, title and interest of the Company or any of its Subsidiaries in and to all or any portion of the assets of the Company and such Subsidiaries and any property (real or personal) or estate acquired in exchange therefor or in connection therewith. 1.29. "Company FFO" as defined on Exhibit A hereto. 1.30. "Cure Notice" shall have the meaning set forth in Section 3.6(e). 1.31. "Defaulting Stockholder" shall have the meaning set forth in Section 7.4. 1.32. "Development Manager" shall mean GGP, General Growth Management, Inc., a Delaware corporation, or another Affiliate of GGP designated by GGP to act as the development manager for the Company or one or more of its Subsidiaries pursuant to Section 3.6(b). 1.33. "Dissolution Commencement Notice" shall have the meaning set forth in Section 8.1(a). 1.34. "Dissolution Purchase Price" shall have the meaning set forth in Section 8.1(c). -5- 1.35. "Dissolution Trigger Date" shall mean the earlier of (i) the date on which a Change of Control has occurred and (ii) the date that is four years after the Homart Closing Date. 1.36. "Dissolution Value of the Company" shall have the meaning set forth in Section 8.1(c). 1.37. "Dissolution Value of a Property" shall have the meaning set forth in Section 8.1(f). 1.38. "Distributee" shall have the meaning set forth in Section 8.1(f). 1.39. "Electing Class" shall have the meaning set forth in Section 3.2(b). 1.40. "ERISA" shall have the meaning set forth in Section 4.4(b). 1.41. "Exchange Amount" shall have the meaning set forth in Section 5.1(b). 1.42. "Exchange Amount Payment Notice" shall have the meaning set forth in Section 5.2. 1.43. "Exchange Election Notice" shall have the meaning set forth in Section 5.1(a). 1.44. "Exchange Trigger Date" shall mean the earlier to occur of (i) the date that is, two years after the Homart Closing Date, (ii) the date on which an Organic Change occurs and (iii) the date on which all of the Stockholders Aggregate Subscriptions were required to have been fully paid to the Company pursuant to Sections 2.1, 7.1 and 7.2. 1.45. "Exchanging Stockholder" shall have the meaning set forth in Section 5.1(a) 1.46. "Existing Lender Arrangements" shall have the meaning set forth in Section 2.3(h). 1.47. "Expenses" for a given period of time shall mean a sum equal to the aggregate of expenses, charges and costs actually paid or required to be paid during such period of time in connection with the business of the Company or the properties owned by the Company or any wholly-owned Subsidiary of the Company including, without limitation: -6- (a) expenses, costs, fees and charges in connection with the ownership, operation, management or leasing of the Company's properties, including without limitation, all fees and reimbursement amounts payable pursuant to Section 3.6(b); (b) expenses, costs and charges in connection with the repair, maintenance, replacement, alteration or addition or capital improvement to any property owned by the Company or a wholly-owned Subsidiary, including any casualty or condemnation losses to the extent that such losses are not reimbursed during such period by any third party responsible therefor or through insurance maintained by the Company; (c) all payments of scheduled amortization of principal, interest, points or fees on, or hedging costs associated with, the mortgage loans or other loans to the Company or its wholly-owned Subsidiaries, including upon any refinancing thereof; (d) all sales, payroll, real estate, personal property, occupancy and other excise, income, franchise, property, privilege or similar taxes and assessments imposed upon the Company, any wholly-owned Subsidiary, or any of their properties; (e) utility costs and deposits and other costs and deposits required to obtain or lease any service or equipment relating to the Company, any property owned by the Company or a wholly-owned Subsidiary; (f) leasing commissions and expenditures required to be made in connection with any lease covering space in or at any property owned by the Company or a wholly-owned Subsidiary, including tenant improvements, tenant allowances and payments, costs incurred in connection with the Company's assuming a tenant's lease obligations with respect to other real property and costs incurred in connection with the Company's exercise of a right to "take-back" space in a property owned by the Company or a wholly- owned Subsidiary; -7- (g) the Reserve Amount; (h) the fees and expenses of investment bankers, attorneys, accountants, architects, engineers, appraisers and other professionals retained by or on behalf of the Company in accordance with the terms hereof (other than such fees and expenses that are referred to in Section 4.5(b)); (i) any liabilities for which the Special Reserve has been established unless paid from the Special Reserve; and (j) all other costs and expenses of the Company incurred in accordance with this Agreement or as determined by the Board. Notwithstanding the foregoing, there shall, however, be excluded from Expenses: (1) all non-cash items such as depreciation and amortization; (2) amounts distributed as dividends pursuant to this Agreement; (3) all payments and expenses taken into account in determining Net Disposition Proceeds; (4) any expense, cost or charge enumerated in clauses (a) through (j) above incurred in connection with any of the Properties Currently Under Development or the Planned Expansion or Renovation Programs which are included within the budgets therefor prior to completion of such properties, expansions or renovations; and (5) any expense, cost or charge enumerated in clauses (a) through (j) above (other than clause (g)) to the extent such expense, cost or charge was paid from Cash Reserves. 1.48. "Commitment" shall have the meaning set forth in Section 2.3(g). 1.49. "FTC" shall have the meaning set forth in Section 5.5(a). -8- 1.50. "Funded Subscription" shall mean, with respect to any Stockholder as of any date, such Stockholder's Initial Subscription plus all Additional Subscription Payments which have actually been paid to the Company on or before such date pursuant to Section 7.1 or 7.2(b). 1.51. "Funding Notice" shall have the meaning set forth in Section 7.2(b). 1.52. "GCL" shall mean the Delaware General Corporation Law, as amended from time to time. 1.53. "General Growth Chairman" shall have the meaning set forth in Section 3.7(a). 1.54. "General Growth FFO" as defined on Exhibit B hereto. 1.55. "General Growth Officers" shall have the meaning set forth in Section 3.6(a). 1.56. "General Growth Share Closing Price" on any date shall mean, with respect to the GG Stock, the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the GG Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the GG Stock is listed or admitted to trading or, if the GG Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotations System or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the GG Stock' is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the GG Stock as such person is selected from time to time by the Board of Directors of GG Properties. 1.57. "GG Stock" shall mean the common stock, par value $.10 per share, of GG Properties. -9- 1.58. "Homart Assets" shall mean the real estate and other assets acquired either directly, or indirectly through the investment in and purchase of the Stock, and the other assets purchased pursuant to the Homart Stock Purchase Agreement. 1.59. "Homart Closing Date" shall have the meaning assigned to the term "Closing Date" in the Stock Purchase Agreement. 1.60. "Homart Stock Purchase Agreement" shall mean, collectively, the Amended and Restated Stock Purchase Agreement, dated as of October 16, 1995 (the "Stock Purchase Agreement"), between Sears, Roebuck and Co., Homart Development Co., Homart Newco One, Inc. and the Company; the Real Estate Purchase Agreement dated as of July 31, 1995, as amended as of October 16, 1995, by and among the Company, Homart Development Co. and Sears, Roebuck and Co.; and all of the related documents entered into in connection with such agreements in each case as subsequently amended or supplemented through the date hereof. 1.61. "HSR" shall have the meaning set forth in Section 5.5(a). 1.62. "Initial Subscription" shall have the meaning set forth in Section 2.1. 1.63. "Investment Company Act" shall mean the Investment Company Act of 1940, as the same may be amended from time to time. 1.64. "IRS" shall mean the Internal Revenue Service. 1.65. "Management Transfer Agreement" shall have the meaning set forth in Section 2.3(e). 1.66. "Material Adverse Change" shall have the meaning set forth in Section 8.1(d). 1.67. "Measurement Period" shall have the meaning set forth in Section 5.1 (a). 1.68. "Natick Mall Agreement" shall have the meaning set forth in Section 2.3(d). 1.69. "Net Disposition Proceeds" shall mean proceeds from any event that would be deemed a capital transaction in accordance with generally accepted accounting principles consistently applied, including without -10- limitation, sales of real or personal property, condemnations and conveyances in lieu thereof, damage recoveries, receipts of insurance proceeds (other than rent insurance proceeds), or borrowings, net of (i) the expenses or capital expenditures of the Company and its wholly owned Subsidiaries associated with such transaction (including the portion of any insurance proceeds or condemnation award applied to the restoration of the affected property, and payment or reservation for payment for the discharge of any liability arising pursuant to such transaction), (ii) amounts required (in the Board's discretion or, if contemplated in an approved Annual Business Plan, as set forth in such Annual Business Plan) to establish reserves and to pay current or potential expenses and liabilities of the Company or its Subsidiaries, (iii) amounts used or reserved (in the Board's discretion or, if contemplated in an approved Annual Business Plan, as set forth in such Annual Business Plan) to repay indebtedness of the Company or its Subsidiaries and (iv) amounts used or reserved (in the Board's discretion or, if contemplated in an approved Annual Business Plan, as set forth in such Annual Business Plan) to fund the estimated equity requirements for the Properties Currently Under Development and for any expansions or renovations of the Company Assets; provided that Net Disposition Proceeds shall include proceeds from the sale, refinancing or other disposition of a Company Asset held by a Subsidiary that is not wholly owned by the Company only to the extent distributed to the Company by such Subsidiary. 1.70. "Net Taxable Income" for any taxable year shall mean either (a), the Company's "real estate investment trust taxable income" as defined in Section 857(b)(2) of the Code for such year, or (b) the Company's real estate investment trust taxable income (as determined by excluding net capital gain and computing the deduction for dividends paid without regard to capital gains dividends) and the excess of the Company's net capital gains over the deduction for dividends paid determined with reference to capital gains dividends only (all as defined in Section 857(b)(3) of the Code) for such year, whichever would produce a lower amount of federal income tax. 1.71. "Non-Defaulting Stockholder" shall have the meaning set forth in Section 7.4. 1.72. "Non-Funding Stockholder" shall have the meaning set forth in Section 2.5(c). 1.73. "Offer" shall have the meaning set forth in Section 8.1(c). -11- 1.74. "Offer Effective Date" shall have the meaning set forth in Section 8.1(c). 1.75. "Operating Cash Flow" for any given period of time means the excess, if any, of (i) the Receipts for such period of time minus (ii) the Expenses for such period of time. 1.76. "Organic Change" shall have the meaning set forth in Section 5.7. 1.77. "Person" shall mean an individual, corporation, partnership, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity that may be treated as a person under applicable law. 1.78. "Plan Asset Regulations" shall have the meaning set forth in Section 4.4(b). 1.79. "Planned Expansion or Renovation Programs" shall mean the expansion or renovation programs for certain of the Company's Assets as more particularly described on Schedule II hereto. 1.80. "Properties Currently Under Development" shall mean those certain Company Assets listed on Schedule III hereto. 1.81. "Property Manager" shall mean GGP, General Growth Management, Inc., a Delaware corporation, or another Affiliate of GGP designated by GGP to act as the property manager for the Company or one or more of the Subsidiaries pursuant to Section.3.6(b). 1.82. "Proportionate Share" shall mean, with respect to any Stockholder or any number of shares of Common Stock being exchanged pursuant to Section 5.1(a), a fraction, the numerator of which is the total number of shares of Common Stock owned by such Stockholder or being so exchanged, as the case may be, and the denominator of which is the total number of shares of Common Stock owned by all of the Stockholders. 1.83. "Receipts" shall mean for any given period of time, a sum equal to the aggregate of all cash amounts actually received by or unconditionally made available to the Company or the Company's wholly-owned Subsidiaries from or in respect of all sources, including without limitation: -12- (a) all cash actually received by the Company from Subsidiaries that are not wholly-owned by the Company; (b) all rents, percentage rent, rent settlements, expense reimbursements and other charges received from tenants and other occupants of the Company's properties; (c) proceeds of rent insurance and business interruption insurance; (d) all utility or other deposits returned to the Company; (e) interest, if any, earned on tenant's security deposits or escrows to the extent unconditionally retained and security deposits to the extent applied pursuant to the provisions of the applicable leases; (f) the amount of any net reduction of Cash Reserves, other than to pay Expenses; (g) any Special Reserve amounts used to pay Expenses; and (h) any income items (as defined in accordance with GAAP) received by the Company from any other source and not included in (a) through (g) above. Notwithstanding the foregoing, Receipts shall not include (1) any amounts received by the Company on account of the issuance or sale of any securities, including without limitation the Stockholders' Aggregate Subscription, (2) any tenant's security deposit and interest thereon, if any, as long as the Company has a contingent legal obligation to return that deposit or such interest thereon, (3) any amounts included in the calculation of Net Disposition Proceeds, (4) any amounts received by the Company in connection with any of the Properties Currently Under Development or the Planned Expansion or Renovation Programs prior to completion of such properties, expansions or renovations and (5) any Special Reserve amounts other than those referred to in (g) above. 1.84. "Relevant Trade Area" shall have the meaning set forth in Section 4.6(a). -13- 1.85. "Reserve Amount" shall mean for any given period of time an amount or amounts to be held from Receipts after payment of Expenses (other than the Reserve Amount) as part of the Cash Reserves and which shall be used for the payment of capital improvements for the properties of the Company and its wholly-owned Subsidiaries (such as major repairs or replacements to the roofs or parking lots) or such other items as may be determined from time to time by the Board. Special Reserve amounts shall not be treated as Reserve Amounts. 1.86. "Response Notice" shall have the meaning set forth in Section 8.1(d). 1.87. "Rules" shall have the meaning set forth in Section 5.5(a). 1.88. "Serial Transferee" shall have the meaning set forth in Section 6.4(b). 1.89. "Serial Transferor" shall have the meaning set forth in Section 6.4(b). 1.90. "Significant Company Assets" shall mean those Company Assets specified on Exhibit C, and such other Company Assets as the Board may designate as such from time to time. 1.91. "Special Reserve" shall have the meaning set forth in Section 4.5(d). 1.92. "Sublease" shall have the meaning set forth in Section 2.3(1). 1.93. "Subsidiaries" shall mean, from and after the Homart Closing Date, Homart Newco One, Inc., and any successor thereto and any other direct or indirect corporate, partnership or other subsidiary of the Company whether or not wholly owned by the Company and a "Subsidiary" shall mean any one of them. 1.94. "Ten Day Average General Growth Share Closing Price" shall mean the average of the General Growth Share Closing Prices for each of the ten Trading Days immediately preceding (i) for purposes of Article V, the date of any Exchange Election Notice delivered by a Stockholder pursuant to Section 5.1 hereof or (ii) for purposes of Section 4.7(c), the last day of the period of any report delivered to a Stockholder pursuant to such Section. -14- 1.95. "33 Act" shall mean the Securities Act of 1933, as amended from time to time. 1.96. "Trading Day" shall mean a day on which the principal national securities exchange on which the GG Stock is listed or admitted to trading is open for the transaction of business or, if the GG Stock is not listed or admitted to trading on any national securities exchange, shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. 1.97. "Transfer" shall mean to transfer, sell, assign, pledge, hypothecate, give, create a security interest in or lien on, place in trust (voting or otherwise), transfer by operation of law (other than by way of a merger or consolidation of the Company) or in any other way encumber or dispose of, directly or indirectly and whether or not voluntarily, any Common Stock. 1.98. "Transferee" shall have the meaning set forth in Section 6.1. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; (b) the words "including" and "include" and other words of similar import shall be deemed to be followed by the phrase "without limitation"; and (c) any capitalized term used in any Schedule to this Agreement but not defined in such Schedule shall have the meaning assigned to such term in this Agreement or in another Schedule to this Agreement. ARTICLE II. ACQUISITION OF SHARES; CLOSING 2.1. Issuance and Acquisition of Shares. Subject to the terms and conditions set forth herein, at the Closing, the Company shall sell to each of the Stockholders, and each of the Stockholders shall acquire from the Company, the number and class of shares of Common Stock set forth opposite such Stockholder's name on Schedule I hereto at a -15- purchase price of $25,000 per share and no other shares of capital stock of the Company shall be outstanding as of such date. The aggregate purchase price to be paid by each of the Stockholders at the Closing pursuant to this Section 2.1 is set forth opposite such Stockholder's name on such Schedule I and is referred to herein as such Stockholder's "Initial Subscription." GGP shall receive a credit against the purchase price for its Initial Subscription equal to the amount of the earnest money deposit (plus interest accrued thereon) applied to the payment of the purchase price under the Homart Stock Purchase Agreement. 2.2. Closing. The closing of the purchase and sale of the Common Stock to be issued by the Company pursuant to Section 2.1 hereof (the "Closing") shall take place on a date to be designated in writing to the Stockholders by GGP, which date shall be no earlier than three (3) business days prior to the scheduled Homart Closing Date (the "Closing Date"). The Closing shall take place at the offices of Sullivan & Cromwell, 250 Park Avenue, New York, New York, or at such other place or places as the parties hereto may agree in writing. At the Closing, the Company shall deliver to each Stockholder certificates evidencing the number and class of shares of Common Stock to be issued to such Stockholder, all registered in the name of such Stockholder, against payment to the Company by wire transfer of immediately available federal (same day) funds in the amount of the Initial Subscription set forth opposite such Stockholder's name on Schedule I hereto. The Stockholders hereby agree that the funds paid to the Company pursuant to this Section 2.1 shall be invested by the Company in an interest bearing account at Chemical Bank in New York City until the Homart Closing Date, at which time such funds shall be used in the manner contemplated by this Agreement. 2.3. Conditions to Stockholders' Obligations. The obligation of each Stockholder to acquire the shares of Common Stock to be acquired by it as set forth herein at the Closing is subject to the satisfaction on or prior to the Closing Date of the following conditions: (a) The Certificate of Incorporation and By-laws of the Company in effect on the Closing Date shall be in the form of Exhibits D and E, hereto, respectively. (b) The Homart Stock Purchase Agreement shall be in full force and effect, shall not have been amended or modified in any material respect without the prior written consent of the Class B Stockholder (which -16- consent shall not be unreasonably withheld), and no unwithdrawn notice of any breach (anticipatory or otherwise) thereunder shall have been given by any party to another party thereunder. (c) The conditions precedent to the closing of the transactions contemplated by the Homart Stock Purchase Agreement shall have been fulfilled or waived, or shall be reasonably likely to be fulfilled or waived, so that the Homart Closing Date shall be reasonably likely to occur within three (3) business days of the Closing Date, and, if any material condition precedent to the Company's obligations under the Homart Stock Purchase Agreement shall have been waived, the Class B Stockholder shall have consented in writing to such waiver, which consent shall not be unreasonably withheld. (d) GGP shall have entered into a definitive agreement with the Company with respect to the Natick Mall, substantially in the form of Exhibit F hereto (the "Natick Mall Agreement"). (e) The Property Manager shall have entered into a definitive agreement with the Company with respect to the acquisition by the Property Manager upon the Homart Closing Date of certain employees and management related assets and operations, substantially in the form of Exhibit G hereto (the "Management Transfer Agreement"). (f) The Company shall have obtained a commitment from Wells Fargo Bank for a first mortgage credit facility in an amount not less than $170 million, such credit facility to be secured by the properties listed on Schedule IV hereto and scheduled to close on the Homart Closing Date, on terms and conditions reasonably satisfactory to the Class B Stockholder (the "Wells Fargo Financing Commitment"). (g) The Company shall have obtained commitments from certain lenders listed on Schedule V hereto to expand their existing loan facilities that are secured by certain properties listed on Schedule V to amounts no less than the amounts set forth on Schedule V for such lender and corresponding property, and scheduled to close on the Homart Closing Date, on terms and conditions reasonably satisfactory to the Class B Stockholder (the "Loan Expansion Commitments", and together with the Wells Fargo Financing Commitment, the "Financing Commitment"). -17- (h) The Company shall have obtained written consents from lenders that have outstanding loans secured by certain of the properties to the transactions contemplated in the Homart Stock Purchase Agreement on terms and conditions reasonably satisfactory to the Class B Stockholder (the "Existing Lender Arrangements"), or such consents shall not be required, from the lenders under existing indebtedness encumbering the properties identified on Schedule VI. (i) The Company's representations and warranties contained herein shall have been true and correct in all material respects when made and shall be true and correct in all material respects on the Closing Date and the Company shall have complied with all of its covenants and agreements to be performed by the Company on or before the Closing Date. (j) Each Stockholder shall have funded its Initial Subscription hereunder unless either (1) GGP shall have funded any shortfall or (2) replacement funds shall have been obtained on terms and conditions reasonably acceptable to each Stockholder that is not in breach of its obligation to fund its Initial Subscription. (k) The Company shall have prepared, and NYSCRF shall have approved, an operating and capital budget for fiscal year 1996. (l) The Company and GGP Management, Inc. shall have entered into a Sublease Agreement (the "Sublease"), substantially in the form of Exhibit H hereto. (m) Each Stockholder shall have received a certificate signed on behalf of GGP by the chief executive officer of the general partner in GGP to the effect that (1) all of the conditions set forth in this Section 2.3 (other than those set forth in clauses (f), (g) and (h) have been satisfied, (2) the Homart Closing Date is reasonably likely to occur within three (3) business days of the Closing and (3) the conditions set forth in Sections 2.3 (f), (g) and (h) will be satisfied on or prior to the Homart Closing Date. (n) Each Stockholder shall have received an opinion of counsel to the Company with respect to the incorporation and good standing of the Company and the authorization and issuance of the Common Stock being delivered on the Closing Date. -18- 2.4. Merger of Homart Newco One, Inc. into the Company: Issuance of Preferred Stock. (a) The Stockholders hereby acknowledge and agree that promptly following the Homart Closing Date, the Company will cause Homart Newco One, Inc. to be merged into the Company. (b) The Stockholders also hereby acknowledge and agree that promptly after the Homart Closing Date the Company will issue up to one hundred twenty (120) shares of its preferred stock in the manner and having such terms as shall be determined by the Board. 2.5. Termination. (a) Notwithstanding anything to the contrary contained in this Agreement, this Agreement may be terminated at any time before the Closing: (i) by the mutual written consent of GGP and NYSCRF; or (ii) by GGP or NYSCRF if the Closing shall not have occurred on or before January 31, 1996. (b) In the event of termination pursuant to this Section 2.5, this Agreement shall become null and void and of no further force or effect, with no liability on the part of any party hereto, or their directors, officers, agents, representatives or stockholders, except for the liability of a party for breach of this Agreement and except as provided in clause (c) below. (c) If this Agreement shall be terminated pursuant to Section 2.5(a)(ii) because (1) the condition set forth in Section 2.3 (j) has not been satisfied due to the breach by any Stockholder (a "Non-Funding Stockholder") of its obligation to fund its Initial Subscription pursuant to Section 2.1 or (2) the conditions set forth in Sections 2.3(d), (e), (i) and (1) have not been satisfied due to the failure by GGP or its Affiliate to satisfy such conditions, then, in addition to any other remedy available at law or in equity, (A) in the case of clause (1) above, any Non-Funding Stockholder shall not, and each Non-Funding Stockholder agrees not to, and (B) in the case of clause (2) above, neither GGP nor any of its Affiliates shall, and each of GGP and its Affiliates agree not to, acquire, directly or indirectly, all or any portion of the Homart Assets for a period of eighteen (18) months following the date this Agreement is so terminated. Nothing in the foregoing shall be deemed to preclude or limit any other Stockholder, other than a Non-Funding Stockholder, in the case of clause (1), or GGP and its Affiliates, in the case of clause (2), from -19- acquiring all or any portion of the Homart Assets if this Agreement shall be terminated as described in the preceding sentence. ARTICLE III. GOVERNANCE; BOARD OF DIRECTORS 3.1. Action by Stockholders to Effectuate this Agreement. Each Stockholder agrees to take all actions necessary to carry out and effectuate the provisions of this Agreement, including to vote its shares of Common Stock (to the extent it has voting rights) in a manner consistent with this Agreement and to cause any director elected by it (if it has the right to elect directors) to take such actions as are required to be taken by this Agreement. 3.2. Classes of Common Stock: Number of Directors: Voting Rights. (a) The Stockholders hereby acknowledge and agree that, except as otherwise provided herein, (i) the Company shall have three classes of Common Stock: Class A Common Stock, Class B Common Stock and Class C Common Stock, (ii) the shares of Class A Common Stock and Class B Common Stock shall have voting rights and shall each be voted as a separate class, with each share of Common Stock entitled to one vote per share and all resolutions of the Class to be adopted by a vote of a majority of the shares of the Class voted, (iii) the shares of Class C Common Stock shall have no voting rights except as may be set forth in this Agreement and except as may be required under the GCL notwithstanding a provision to the contrary in this Agreement or the Company's Certificate of Incorporation, any such voting rights to be exercised as a separate class, with each share of Class C Common Stock entitled to one vote per share, (iv) the Board of Directors of the Company shall consist of six directors, (v) the shares of Class A Common Stock shall have the right to elect three directors to the Board (the "Class A Directors"), with such directors to be elected by a majority of the shares voted, and (vi) the shares of Class B Common Stock shall have the right to elect three directors to the Board (the "Class B Directors"), with such directors to be elected by a majority of the shares voted; provided, however, that if any holder of Class A Common Stock or Class B Common Stock shall be a Defaulting Stockholder, all of the shares of such Class, whether or not held by the Defaulting Stockholder, shall automatically become shares of Class C Common Stock. The Stockholders agree that, so long as both Class A Common Stock and Class B Common Stock is outstanding, the Class A Directors shall -20- have the right and authority to designate all of the officers and directors of the Subsidiaries, subject to the approval of the Class B Directors, which approval shall not be unreasonably withheld. (b) If at any time shares of either Class A Common Stock or Class B Common Stock (but not both) shall be outstanding, then (i) the Board of Directors shall consist of seven directors, at least a majority of which shall be comprised of Persons independent of the holder or holders of the Electing Class; (ii) the remaining class of Common Stock entitled to vote for directors (the "Electing Class") shall be entitled to elect six of the directors of the Company with such directors to be elected by a majority of the shares of the Electing Class; and (iii) the holders of Class C Common Stock shall be entitled to elect one director with such director to be elected by a majority of the outstanding shares of Class C Common Stock voting for this purpose as a Class, with each share of Class C Common Stock entitled to one vote per share. For purposes of this Agreement, (1) if the Class A Common Stock is the Electing Class, a Person shall be deemed to be independent if such Person is not an Affiliate or employee of GG Properties, GGP or any of their successors or any of their Affiliates, provided, however, that no director shall be deemed not to qualify as independent solely because such director is a director of GG Properties, (2) if the Class B Common Stock is the Electing Class, a Person shall be deemed to be independent if such Person is not an Affiliate or employee of any holder of Class B Common Stock or any of its Affiliates, (3) so long as there is an Electing Class, a director elected by the holders of Class C Common Stock shall be deemed an independent director and (4) if there is no Electing Class, a Person shall be deemed to be independent if such Person is not an Affiliate or employee of any holder of Class C Common Stock or any of its Affiliates. (c) If at any time the shares of neither Class A Common Stock nor Class B Common Stock shall be outstanding, then (i) the Board of Directors shall consist of seven directors, at least a majority of which shall be comprised of Persons independent of the holder or holders of the Class C Common Stock and (ii) the shares of Class C Common Stock shall be entitled to equal voting rights and powers and shall be voted together as a single class with respect to all matters on which stockholders may be entitled to vote (including the election of directors), with each share of Class C Common Stock entitled to one vote per share. (d) Directors on the Board shall not receive compensation unless such directors are independent directors -21- elected pursuant to clause (b) or (c) above in which case such independent directors may be paid reasonable and customary compensation as determined by the Board. Directors shall be entitled to indemnification from the Company as provided in the Company's Certificate of Incorporation and By-laws. 3.3. Initial Directors. To carry out the provisions of Section 3.2, simultaneously with, or immediately following the Closing, GGP, as the sole Class A Stockholder, and NYSCRF, as the sole Class B Stockholder, hereby elects the following designated persons as Class A Directors and Class B Directors, respectively, to serve until the first annual meeting of the Stockholders and until each such director's successor has been elected and qualified to be effective as of the Closing Date. Class A Directors Matthew Bucksbaum Robert A. Michaels John Bucksbaum Class B Directors Alan C. Sullivan Martin S. Levine Frank L. Sullivan, Jr. 3.4. Subsequent Election of Directors. (a) Except as otherwise provided herein, meetings of any class of stockholders entitled to vote for the election of directors' may be convened for the purpose of electing the directors of such class, or for the removal or replacement of such directors, or such election, removal or replacement may be accomplished by written consent of stockholders of the class in lieu of a meeting or otherwise. (b) Any Class A Director shall also be a director or an executive officer of GG Properties holding the office of executive vice president or higher. 3.5. Removal and Replacement of Directors. The Stockholders agree that, except as otherwise provided herein, no director may be removed from office except by a vote of the shares of the class of Common Stock which elected such director. The Stockholders also agree that the shares of the class of Common Stock which elected such director shall have the exclusive right, with or without cause, to vote for the removal of such director from the Board and to nominate and elect a replacement director therefor. 3.6. Officers; Management; Dissolution in the Event of Cause. (a) Subject to the last sentence of Section -22- 3.2(a), the officers of the Company and the Subsidiaries shall consist of the Persons designated by the Board, and such Persons shall serve in the offices designated by the Board until their respective successors are duly appointed by the Board. Provided both Class A Common Stock and Class B Common Stock is outstanding, the Class A Stockholders and the Class B Stockholders agree to cause the Class A Directors and Class B Directors, if any, to 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 (the "General Growth Officers"). So long as the General Growth Officers are officers of the Company, the Class A Stockholders and the Class B Stockholders agree to cause the Class A Directors and Class B Directors to designate certain persons identified by any of the General Growth Officers as vice presidents, assistant treasurers or assistant secretaries of the Company and/or its Subsidiaries. (b) The officers of the Company or of any Subsidiary shall be authorized to manage the business and affairs of the Company and its Subsidiaries subject to the direction and supervision of the Board. The General Growth Officers, so long as they shall serve as the management of the Company, shall manage the Company and each of the properties owned by the Company and its Subsidiaries in a manner substantially consistent with their management of GGP and GG Properties. Without in any way limiting the generality of the foregoing, the officers of the Company shall manage the day to day operations of the Company's properties and those of its Subsidiaries in accordance with the policies and other matters set forth on Schedule VII. All costs and expenses incurred in connection with the management of the Company and the ownership, operation, management and development of the Company's properties and those of its Subsidiaries shall be paid by the Company, or if paid by GGP or any of its Affiliates, the Company shall reimburse GGP or its Affiliate therefor; provided, however, that for so long as the General Growth Officers are the officers of the Company, the costs and expenses listed on Schedule IX hereto shall be paid by GGP or its Affiliates and shall not be charged to the Company or paid from Company assets. So long as the General Growth Officers are the officers of the Company, the Company shall pay to GGP or its Affiliates (as provided below) the fees and reimbursable amounts in the amounts and in the manner set forth on Schedule X. Unless otherwise approved by the Board, and except as may otherwise be provided in this Agreement, no -23- other fee or compensation shall be paid by the Company to GGP, GG Properties or any of their Affiliates in connection with the management of the Company, its properties and the properties of its Subsidiaries. So long as the General Growth Officers are the officers of the Company, the General Growth Officers shall be authorized to enter into one or more agreements with GGP 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) GGP and any such Affiliate shall be obligated to carry out their delegated managerial responsibilities in accordance with the policies set forth on Schedule VII to the extent applicable. Any such agreement entered into by the Company and GGP or any of its Affiliates may provide that all or any portion of the fees and reimbursable amounts set forth on Schedule X be paid to an Affiliate of GGP, rather than to GGP, and may contain customary indemnities from the Company to GGP and such Affiliate against claims, losses, liabilities, costs and expenses arising out of the operation or management of the Company's properties, other than such claims, losses, liabilities, costs and expenses caused by the gross negligence or wilful misconduct of GGP or such Affiliate. Any such agreement shall be terminable by the Company immediately following the General Growth Officers ceasing to serve as the Company's management or otherwise as required to effectuate the terms of this Agreement. Unless otherwise approved by the Board, the Company and its wholly-owned Subsidiaries shall not have any employees. (c) The Class B Directors shall have the right, in their sole discretion, to cause the Company to distribute certain of the Company's properties to the Distributee in the manner described in Section 8.1(f) in the event that Cause exists. If the Class B Directors elect to so cause the Company to distribute certain of its properties, (i) the Class B Stockholders shall be considered the Offeror and the Class A and Class C Stockholders shall be considered the Offeree for purposes of Section 8.1(f), (ii) the first distribution of properties shall occur as soon as practicable in the tax year in which the election is made and (iii) notwithstanding anything to the contrary in Section 8.1(f), the Offeror shall have the right to select the first property. -24- (d) 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 3.10(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 3.10(d), (iii) the General Growth Officers taking or causing the Company to take any action materially in contravention of an approved Annual Business Plan, (iv) a wilful and material violation by GGP or GG Properties of the provisions of Section 4.6 hereof or (v) the engaging by any General Growth Officer, GGP, GG Properties, the Property Manager, if any, or the Development Manager, if any, in wilful misconduct, including, without limitation, fraud, embezzlement or theft, which is demonstrably and materially injurious to the Company; provided that Cause shall not be deemed to exist until the procedures set forth in Section 3.6(e) have been complied with. (e) If the Class B Stockholders or Class B Directors believe that an event giving rise to Cause has occurred, the Class B Stockholders or Class B Directors 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 3.6(d). If the event giving rise to Cause is one enumerated in Section 3.6(d)(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 Stockholders and the Class B Directors that either (i) the event giving rise to Cause has been cured and specifying the actions taken with 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. Unless the Class B Stockholders or Class B Directors reasonably object in writing to the Cure Notice within ten (10) days of delivery thereof, the event giving rise to Cause shall be deemed to be cured. If GGP 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 Stockholders or Class B Directors have reasonably objected to the Cure -25- Notice, the Class B Stockholders or Class B Directors shall within ten (10) days of receipt of the Cure Notice, submit the existence of Cause to arbitration pursuant to Section 11.5 hereof. If the question of Cause 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. If the General Growth Officers neither submit the question of Cause to arbitration nor deliver a Cure Notice within the fifteen (15) 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 (15) day period. During any arbitration proceeding, 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. 3.7. Chairman of the Board. So long as the General Growth Officers are officers of the Company, and provided both Class A Common Stock and Class B Common Stock is outstanding or the holders of the Class A Common Stock are the Electing Class, the Class A Stockholders and the Class B Stockholders agree to cause the Class A Directors and Class B Directors to designate as the Chairman of the Board of Directors of the Company and the Subsidiaries the director elected by the Class A Common Stock who holds the most senior position at GG Properties (the "General Growth Chairman"). 3.8. Committees. (a) The Board shall have the power to create committees, including an executive committee and an audit committee, 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 Incorporation and By-Laws and the GCL; provided, however, that so long as the Board is comprised of both Class A Directors and Class B Directors, any committee established by the Board shall have at least one member designated by the Class A Directors and at least one member designated by the Class B Directors unless the Board determines otherwise. (b) The Class A Directors shall be exclusively entitled to designate, remove and replace the Class A committee members and the Class B Directors shall be exclusively entitled to designate, remove and replace the Class B committee members. 3.9. Certificate of Incorporation; By-Laws. Each Stockholder shall vote all Common Stock over which it may have voting power and shall take all other actions necessary and appropriate to ensure that the Company's Certificate of -26- Incorporation and By-Laws do not at any time conflict with the provisions of this Agreement and shall not vote to approve (or consent to the approval of) any amendment to the Company's Certificate of Incorporation or By-Laws which would be inconsistent with this Agreement. 3.10. Actions by Directors. (a) At such times as both Class A Common Stock and Class B Common Stock 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 Directors and two (2) Class B Directors are present. At such times as both Class A Common Stock and Class B Common Stock 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 Directors and one member designated by the Class B Directors are present, unless the Board shall determine otherwise. At all other times (i.e., when the Board is constituted pursuant to Section 3.2(b) or 3.2(c)) a quorum shall exist for the transaction of business if at least a majority of directors or committee members are present. (b) When action is to be taken by vote of the Board or any committee thereof, each member of the Board or such committee shall be accorded one vote. Except for the selection of officers of the Company and officers and directors of the Subsidiaries as described in Section 2.2(e) above, 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 directors 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 the Class A Common Stock and Class B Common Stock shall be outstanding and entitled to elect directors of the Company pursuant to this Agreement, at least one Class A Director and one Class B Director (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 March 1, 1996 and on or before September 15th of each year, commencing September 15, 1996, for each Company Asset 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 the -27- 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), such plan to be substantially in the form of the template attached hereto as Exhibit I (each, an "Annual Business Plan"). The proposed Annual Business Plan shall also itemize each transaction or matter requiring approval of the Board pursuant to Section 3.10(d) (viii) below. The General Growth Officers will also 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 45 days following submission of the proposed Annual Business Plan to the Board but in all cases shall be held prior to commencement of the fiscal year to which the Annual Business Plan relates (other than with respect to the Annual Business Plan for fiscal year 1996). Prior to such meeting, the General Growth Officers shall make available to the Class B Directors and their representatives and advisors such backup information with respect to the Annual Business Plan as the Class B Directors shall reasonably request and shall be reasonably available to consult with the Class B Directors regarding the details of the Annual Business Plan. If the Board shall consider for adoption a proposed Annual Business Plan for any Company Asset 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 such 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 operating expense 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 operating expense, and provided further, however, that if there is disagreement over any discretionary item of operating expense in such Annual Business Plan, then the Board shall adopt such Annual Business Plan including such discretionary item of operating expense in an amount equal to the amount reasonably proposed for such operating expense item by management of the Company. 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 Company's assets. Without limiting the generality of the foregoing, the Stockholders acknowledge and agree that nondiscretionary items include the minimum amount of funds needed to (i) pay -28- and perform when due all of the Company's obligations under any notes, mortgages and other instruments to which the Company is or shall be a party or by which it or its assets are bound in connection with any financing, (ii) pay when due real estate and other taxes affecting the Company Assets and insurance premiums for the Company Assets and the Company, and (iii) comply with all laws now or hereafter in force which shall be applicable to all or any part of the Company Assets 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 Stockholder or any employee, agent, officer, director, or contractor of the Company 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 or (C) invalidate or impair any of the insurance maintained by the Company. Until the Annual Business Plan for fiscal year 1996 has been prepared for and approved by the Board, the Company shall be operated in accordance with the operating and capital budgets referred to in Section 2.3(k). (d) The following matters will require approval of the Board (either as part of an approved Annual Business Plan, as part of the operating and capital budgets referred to in Section 2.3(k) or by separate Board action) unless any such matters have been specifically approved pursuant to this Agreement: (i) the purchase or other acquisition by the Company or any of its Subsidiaries of any material asset or property, but excluding purchase options where the cost of the option does not exceed $500,000; (ii) the sale, exchange or other disposition by the Company or any of its Subsidiaries of any Significant Company Asset; (iii) the development, redevelopment or expansion by the Company or any of its Subsidiaries of any material asset or property or any Significant Company Asset; (iv) the incurrence by the Company or any of its Subsidiaries of any indebtedness for borrowed money or the refinancing of any indebtedness for borrowed money (including, without limitation, any capital lease obligation) in excess of $500,000 in the aggregate in any fiscal year; -29- (v) the pledge, encumbrance or subjecting to liens or mortgages by the Company or any of its Subsidiaries of any Significant Company Asset in connection with a financing or refinancing; (vi) with respect to each "Major Expense Category" (as so denominated in the Annual Business Plan), the expenditure by the Company or any of its Subsidiaries of amounts in excess of those set forth in an approved Annual Business Plan, unless such amounts do not exceed 105% of the total expenditures set forth in such Annual Business Plan for such Major Expense Category or are required, in the reasonable judgment of the Company's management, to be expended because of an emergency involving an immediate threat to persons or property and the Company's management is hereby authorized to spend such amounts without further Board action; (vii) the sale, exchange or other disposition of all or substantially all of the assets of the Company or any of its Subsidiaries or the merger, consolidation, reorganization or other similar transaction involving the Company or any of its Subsidiaries with or into another Person, in any such case, whether in a single transaction or a series of related transactions; (viii) any material transaction (or amendment or modification to any transaction) with, involving or benefitting GGP, GG Properties or an Affiliate of GGP or GG Properties other than any current or future transaction between the Property Manager or the Development Manager, on the one hand, and a non-wholly owned Subsidiary, on the other hand, relating to the providing of property or development management services pursuant to which the Property Manager or Development Manager, as the case may be, shall be paid fees for such services equal to the fees currently being paid by such non-wholly-owned Subsidiary, provided that if the Board shall not include Class B Directors, such transaction shall be voted upon solely by the independent directors; (ix) 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, insolvency, reorganization, dissolution (other than a dissolution pursuant to Section 8.1) or any similar occurrence of the Company or any Subsidiary or (z) a liquidation -30- (other than pursuant to Section 8.1) or any other occurrence that might result in the termination of the Company or any of its Subsidiaries; (x) the issuance of any Common Stock or any other capital stock of the Company or any of its Subsidiaries 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 shares of Common Stock or any other class of capital stock of the Company or any of its Subsidiaries; provided, however, that (i) the Company shall not issue any shares of Class A Common Stock or Class B Common Stock other than shares that have been subscribed for under this Agreement without the consent of all of the shares of such class in which additional shares are proposed to be issued, (ii) any additional issuances shall first be offered to the Stockholders pursuant to the provisions of Article VII hereof, and (iii) the Stockholders (other than any Defaulting Stockholder) shall have preemptive rights to acquire any additional shares of Common Stock proposed to be issued by the Company in addition to those offered pursuant to Article VII hereof; (xi) the determination of the amount and timing of distributions of Net Disposition Proceeds; (xii) the determination of Reserve Amounts for any fiscal year; (xiii) the establishment of the Company's policy with respect to the appropriate levels of debt capitalization of the Company; (xiv) the consent to any material amendments or supplements to, or the making of material elections or grant of waivers of material conditions or the enforcement of material rights under, the Homart Stock Purchase Agreement, the Financing Commitment and the Existing Lender Arrangements; (xv) 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, the Natick Mall Agreement, the Management Transfer Agreement or the Sublease, provided, however, that in connection with any Board resolutions with respect to such matters, the Class A Directors shall not have the right to vote and the Class A Directors vote shall not be required for the approval of any such action; -31- (xvi) the engagement or retention by the Company of any property or development manager for any of the Company's properties or those of its wholly-owned Subsidiaries other than GGP, GG Properties or any of their Affiliates; (xvii) 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 or Organic Change; and (xviii) the amendment of any of the policies set forth in Schedule VII hereof or any of the fees or other matters set forth in Schedule X hereof. (e) The Stockholders hereby approve, and the Company shall be authorized to undertake, (i) the expansion or renovation of those properties described on Schedule II hereto and the expenditure of funds and/or incurrence of indebtedness in connection therewith pursuant to the expansion and renovation budgets previously delivered to and approved by the Class B Stockholder, (ii) the development of those properties described on Schedule III hereto and the expenditure of funds and/or incurrence of indebtedness in connection therewith pursuant to the development budgets previously delivered to and approved by the Class B Stockholder, (iii) the funding and use of the Reserves as described in Section 4.5(d) and (iv) delivery by the Board of Funding Notices to the Stockholders permitting the Stockholders to accelerate the funding of their Available Subscriptions as and when determined by the Board for the purposes permitted by this Agreement. 3.11. Meetings of the Board. (a) The Board shall meet not less frequently than quarterly, upon notice duly given to all directors. Regular meetings of the Board shall be held at such place as shall be determined by the Board. Any failure to so meet shall not give rise to any presumption or inference that the Stockholders shall have any liability for the obligations of the Company. (b) Notwithstanding anything to the contrary contained in the Company's By-Laws or the GCL, the Board shall meet upon the request of any director conveyed in writing to each other director, at a time no fewer than two (2) and no more than twenty-one (21) business days after such notice is given, and at a place as determined by the Board; provided, however, attendance at such meeting may be by telephone or otherwise as provided in the Company's By-Laws. -32- 3.12. Restrictions on Other Agreements. No Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust with respect to the Common Stock, nor shall any Stockholder enter into any stockholder agreement or arrangements of any kind (including agreements or arrangements with respect to the acquisition, disposition or voting of shares of Common Stock) with any Person with respect to the Common Stock, in either case, on terms inconsistent with the provisions of this Agreement (whether or not such agreements and arrangements are with other Stockholders or holders of Common Stock that are not parties to this Agreement). ARTICLE IV. OTHER CORPORATE MATTERS 4.1. Fiscal Year; Designation of Auditors. The Company's fiscal year shall be the calendar year. The Company's auditors shall be selected by the Board, provided, however, that (a) such firm shall be a "Big Six" certified public accounting firm (or any successor to any such firm) and (b) unless the Class A Directors and Class B Directors determine otherwise, such firm shall not be the auditors of GGP or GG Properties. 4.2. Dividends. Subject in all cases to any applicable provisions of the GCL, the Company shall distribute to the Stockholders at least on a quarterly basis an amount at least equal to the Company's Operating Cash Flow during the immediately preceding fiscal quarter, provided that the Company shall distribute with respect to each fiscal year not less than one hundred percent (100%) of the Company's Net Taxable Income for such fiscal year. The regular record dates of the Company for the purpose of determining Stockholders entitled to quarterly distributions shall be the same as the regular record dates of GG Properties and the payment dates of the Company for regular quarterly dividends shall be the business day immediately preceding the payment date of GG Properties for regular quarterly dividends. GG Properties shall notify the Company at least ten days prior to each of its regular record dates of the date of such record date and the related payment date. 4.3. Conduct of Business. (a) The Company shall not, directly or indirectly, acquire any assets or businesses other than the Stock (as defined in the Homart Stock Purchase Agreement) and the Homart Assets except in connection with the holding, development, redevelopment, expansion, renovation, operation and otherwise dealing with -33- the Homart Assets (including (i) the development of the Properties Currently Under Development, (ii) the development of the planned regional malls listed on Schedule XIII hereto, (iii) the development of all or a portion of the vacant land included as part of the Homart Assets and (iv) the acquisition of land or properties adjacent to the real property constituting the Homart Assets and third parties' interests in the partnerships or joint ventures constituting the Homart Assets). (b) The Company shall conduct its affairs in a manner that will not cause the Company 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. 4.4. Operation in Accordance with REIT Requirements and Other Matters. (a) The Company shall operate in a manner that will enable the Company to (i) satisfy the requirements for qualifying as a real estate investment trust under the Code and (ii) avoid any federal income or excise tax liability and shall file an election to be taxed as a real estate investment trust for its first taxable year and, from and after January 31, 1996, the Company shall at all times ensure that the Company shall have no less than 100 holders of its capital stock. (b) The Company shall at all times operate, and each Stockholder shall cause the Company to operate in a manner so that it will be treated as an "operating company" under Pension and Welfare Benefits Administration Regulation Section 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. (c) The Company shall endeavor to operate and structure its investments in a manner so as to minimize, to the extent reasonably possible and to the extent not inconsistent with the best interests of the Company, the amount of unrelated business taxable income recognized by Stockholders that are pension funds or educational institutions exempt from Federal income taxes. 4.5. Sources and Uses of Funds; Organizational Expenses; Reorganization Expenses; Reserves. (a) On the Homart Closing Date, (i) the Company will use the Initial Subscriptions to fund the purchase price under the Homart Stock Purchase Agreement, to pay the organizational expenses -34- described in Section 4.5(b), to pay to GGP the reorganization costs described in Section 4.5(c) and to partially fund the Reserves referred to in Section 4.5(d), (ii) the Company and/or its Subsidiaries shall incur the indebtedness, or refinance the existing indebtedness, to the extent contemplated in the Financing Commitment and the Existing Lender Arrangements, and (iii) the Company or its Subsidiaries shall close under the Natick Mall Agreement, the Management Transfer Agreement and the Sublease. (b) Each Stockholder hereby acknowledges and agrees that all expenses that are listed under the category of "Expenses Billed to Date" on Schedule XIV hereto and amounts listed under the category of "Estimated Expenses to be Incurred After the Closing" on Schedule XIV hereto, in each case that have been or will be incurred by or on behalf of the Company on or prior to the Homart Closing Date or in connection with the closing under the Homart Stock Purchase Agreement shall be expenses of the Company and shall be paid by the Company on or promptly following the Homart Closing Date. (c) On the Homart Closing Date, the Company shall pay to GGP from the Initial Subscriptions made to the Company or from other funds available to the Company the amount of $10,000,000.00 to reimburse GGP and its Affiliates for various restructuring and transition costs that GGP and its Affiliates have incurred and will continue to incur in connection with reorganizing and combining the organization of Homart Development Co. with GGP and its Affiliates as set forth on a schedule previously delivered to and approved by the Class B Stockholder. Any such costs incurred in excess of $10,000,000.00 will be the responsibility of GGP and its Affiliates, as applicable, and will not be the responsibility of the Company. (d) (i) The Company shall establish and fund either on the Homart Closing Date or over time from the Initial Subscriptions and Funded Subscriptions made to the Company or from other capital resources available to the Company certain reserves in the specified amounts set forth on Schedule XV hereto (the "Special Reserves") with respect to certain liabilities which are estimated to be incurred by the Company through December 31, 1999. Any costs incurred with respect to such liabilities which exceed the amounts available under the Special Reserves, except for those liabilities set forth in clause (ii) below, will be for the account of the Company. Any Special Reserves that are not expended will be retained by the Company for other Company purposes. The Board may from time to -35- time reduce the amount of the Special Reserves either by making a special dividend to the Stockholders (which special dividend shall not be deemed to be a part of any dividend made pursuant to Section 4.2) or by reallocating Available Subscriptions for other purposes. (ii) The following Special Reserve liabilities represent liabilities due from the Company to GGP with respect to GGP obligations arising as a result of the Management Transfer Agreement: liabilities incurred by GGP for hiring bonuses to Homart employees being employed by GGP following the Homart Closing Date for which the Company will indemnify GGP, and reimburse GGP, to the extent set forth in Schedule XV, such reimbursement to be made at the Homart Closing Date. 4.6. Other Activities of Stockholders. (a) Neither GGP 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, located within the trade area (as shown in red on the maps attached hereto as Exhibit J) of any of the mall shopping centers listed on Exhibit J hereto (the "Relevant Trade Area"); provided, however, that nothing herein shall prohibit or restrict GGP or GG Properties or any of their Affiliates from owning, operating, developing, improving, expanding or managing any of the mall shopping centers owned, operated, being developed or managed, directly or indirectly, by any of them on the date hereof and listed on Schedule XVI hereto and; provided further, however, that GGP, GG Properties and their Affiliates shall have until June 30, 1996 to divest its management position at the Dutch Square Mall located in Columbia, South Carolina, and the Southdale Mall located in Minneapolis, Minnesota. If, as manager of the Visalia Mall located in Visalia, California, GGP or its Affiliate engages in any active discussions with a new department store interested in locating at such mall, GGP shall disclose such fact to the Board, and the Class B Directors shall have the exclusive right to determine whether a conflict exists. If the Class B Directors so determine that a conflict exists, GGP or its Affiliate shall divest itself of its management position with respect to the Visalia Mall as soon as practicable. (b) Notwithstanding anything to the contrary in Section 4.6(a), neither GGP nor GG Properties shall be in breach of Section 4.6(a) if, in connection with the -36- acquisition of a portfolio of three or more properties or management contracts, GGP, GG Properties or any of their Affiliates acquires, 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 GGP, GG Properties or such Affiliate terminates any management position with respect to such Competing Asset as soon as possible but no later than within one year. (c) Subject to Section 4.6(a) and (b), each Stockholder may engage or invest in any other activity or venture or possess any interest therein independently or with others. None of the Stockholders, the Company or any other Person employed by, related to or in any way affiliated with any Stockholder or the Company shall have any duty or obligation to disclose or offer to the Company or any of the Stockholders, or obtain for the benefit of the Company or any of the Stockholders, any such other activity or venture or interest therein. None of the Company, the Stockholders, 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 Stockholders or any other Person employed by, related to or in any way affiliated with, any of the Stockholders 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. 4.7. Reports and Statements. (a) Not later than 45 days after the end of each fiscal quarter (other than the fourth quarter), the Company shall prepare (or cause to be prepared) and mail to each Stockholder an unaudited report (prepared in accordance with generally accepted accounting principles) setting forth as of the end of such fiscal quarter: (i) a balance sheet of the Company and of the Subsidiaries on a consolidated basis; and (ii) an income statement for such fiscal quarter of the Company and of the Subsidiaries on a consolidated basis. (b) Not later than 90 days after the end of each fiscal year, the Company shall prepare (or cause to be prepared) and shall mail to each Stockholder, a report setting forth as of the end of such fiscal year: -37- (i) a balance sheet of the Company and of the Subsidiaries on a consolidated basis (which will include appropriate footnote disclosure); (ii) an income statement for such fiscal year of the Company and of the Subsidiaries on a consolidated basis; (iii) a statement of cash flows for such fiscal year of the Company and of the Subsidiaries on a consolidated basis; and (iv) a statement of changes in stockholders' equity for such fiscal year for the Company and the Subsidiaries on a consolidated basis. The annual financial statements referred to above shall be accompanied by a report of the Company's independent certified public accountants stating that an audit of such financial statements has been made in accordance with generally accepted auditing standards, stating the opinion of the accountants in respect of the financial statements and the accounting principles and practices reflected therein and as to the consistency of the application of the accounting principles, and identifying any matters to which the accountants take exception and stating, to the extent practicable, the effect of each such exception on such financial statements. The Company shall provide to any Stockholder such supporting schedules and other data as may from time to time be reasonably requested by such Stockholder relating to the presentation of the Company's financial statements on a consolidated basis. (c) Commencing with the first anniversary of this Agreement, not later than 45 days after the end of each of the first three fiscal quarters of each fiscal year, and not later than 90 days after the end of each fiscal year, the Company shall prepare (or cause to be prepared) and mail to each holder of Class B Common Stock and Class C Common Stock a report setting forth in reasonable detail a calculation of (i) the General Growth FFO and (ii) the Company's FFO, and (iii) the Exchange Amount as if such holder had delivered an Exchange Election Notice with respect to all of its exchangeable shares of Common Stock on the day immediately following the last day of the period of such report. (d) Not later than 45 days after the end of each of the first three fiscal quarters of each fiscal year, the Company shall prepare (or cause to be prepared) and mail to each Stockholder a report setting forth in reasonable detail a calculation of the Company's Operating Cash Flow for the -38- immediately preceding quarter together with a comparison of the (i) Operating Cash Flow for the same fiscal quarter in the prior year and (ii) budgeted Operating Cash Flow for the quarter, based upon the Annual Business Plan approved by the Board covering such fiscal quarter. (e) Not later than 90 days after the end of each fiscal year, the Company shall prepare (or cause to be prepared) and mail to each Stockholder a report setting forth in reasonable detail a calculation of the Company Operating Cash Flow for the immediately preceding fiscal year together with the comparison of the (i) Operating Cash Flow for the prior fiscal year and (ii) budgeted Operating Cash Flow for the fiscal year, based upon the Annual Business Plan approved by the Board of Directors for such prior fiscal year. (f) Concurrently with each dividend distribution pursuant to Section 4.2, the Company shall deliver to each Stockholder a report setting forth in reasonable detail a calculation of the Stockholder's Proportionate Share of the Company's Operating Cash Flow for the immediately preceding quarter and the amount of the dividend being distributed with respect to such period. (g) Concurrently with each distribution of Net Disposition Proceeds, the Company shall deliver to each Stockholder a report setting forth in reasonable detail a description of the transaction or transactions giving rise to the Net Disposition Proceeds, a calculation of the Net Disposition Proceeds, a calculation of the Stockholder's Proportionate Share of such Net Disposition Proceeds and the amount of the Net Disposition Proceeds being distributed to such Stockholder. (h) The Company shall prepare and deliver to each Stockholder the reports set forth in Schedule VII. (i) The Company shall prepare and deliver to each Stockholder such other reports as NYSCRF shall reasonably require. (j) The Company shall deliver to each Class C Stockholder a copy of each Annual Business Plan that has been approved by the Board, promptly following such approval. -39- ARTICLE V. EXCHANGE RIGHT 5.1. The Exchange Right. (a) At any time after the Exchange Trigger Date, each Class B Stockholder and Class C Stockholder (an "Exchanging Stockholder") shall have the right from time to time, upon delivery to GG Properties of a written election notice (the "Exchange Election Notice"), to exchange all or a portion of its Common Stock (other than with respect to any shares of Class C Stock that have been acquired from GGP or GG Properties, unless GGP or GG Properties, as part of the transaction by which such shares were acquired, consents to the application of this Section 5.1 to such shares) for consideration from GG. Properties equal to: (i) the product of (x) the Company's FFO for the most recently completed four fiscal quarters for which the report of the Company's FFO and the General Growth FFO referred to in Section 4.7(e) has been delivered to the Stockholders prior to the date of the Exchange Election Notice (the "Measurement Period"), adjusted as set forth below and calculated on the same basis as the General Growth FFO multiplied by (y) the Proportionate Share represented by the shares of Common Stock being exchanged, multiplied by (ii) an amount equal to (1) the Ten Day Average General Growth Share Closing Price divided by (2) the General Growth FFO Per share for the Measurement Period adjusted as set forth below: (b) Calculation of the Company's FFO or the General Growth FFO shall be adjusted so as to give pro forma effect to (i) the incurrence of debt or issuance of capital stock by the Company and its Subsidiaries or by GG Properties or GGP, as the case may be, during the Measurement Period or subsequent to the end of the Measurement Period through the date of the Election Notice as if such debt or capital stock had been incurred or issued, as the case may be, and the application of the proceeds from the incurrence or issuance, as the case may be, of such debt or capital stock had occurred at the beginning of the Measurement Period, (ii) the repayment or elimination of any debt of the Company or any Subsidiary or of GG Properties or GGP, as the case may be (including a -40- pro-forma repayment or elimination of debt (assuming such debt bears interest at the Company's weighted average cost of debt) as a result of (1) any Additional Subscription Payments received from an Exchanging Stockholder in conjunction with the exercise of its exchange rights under this Article V and (2) a corresponding deemed receipt of any Additional Subscription Payments from the holders of Class A Common Stock whether or not actually funded), or the repurchase or redemption of any capital stock of the Company or any Subsidiary or of GG Properties or GGP, as the case may be, during the Measurement Period or subsequent to the end of the Measurement Period through the date of the Election Notice as if such debt had been repaid or eliminated or such capital stock had been repurchased or redeemed at the beginning of the Measurement Period, and (iii) any asset disposition and any asset acquisition by the Company or any Subsidiary or by GG Properties or GGP, as the case may be, the gross proceeds or gross purchase price of which, as the case may be, exceeds $1 million and that occurred during the Measurement Period or subsequent to the end of the Measurement Period through the date of the Election Notice as if such asset disposition or asset acquisition had occurred at the beginning of the Measurement Period; provided further that, in making such calculations, the interest expense attributable to interest or dividends on any debt of the Company or any Subsidiary or of GG Properties or GGP, as the case may be, or capital stock (other than Common Stock) of the Company or any Subsidiary or of GG Properties or GGP, as the case may be, which bears a floating rate shall be determined on a pro forma basis as if the rate in effect on the date of determination had been the applicable rate for all of the Measurement Period. The amount derived by application of clauses (a)(i) and (ii) above as adjusted by this clause (b) is referred to herein as the " Exchange Amount." (c) No Stockholder may exercise the exchange right set forth in this Section 5.1 to the extent that the transfer of such Stockholder's Common Stock in exchange for GG Stock as set forth in Section 5.2 could, based upon a written opinion of counsel satisfactory to such Stockholder, cause GG Properties or the Company to fail to qualify as a real estate investment trust under the Code. No Stockholder may deliver more than one Exchange Election Notice in any twelve month period. No stockholder may deliver an Exchange Election Notice, for shares of Common Stock that would result in an Exchange Amount less than $10,000,000 unless such Exchange Election Notice relates to such Stockholder's entire remaining shares of Common Stock. No Stockholder, other than the original signatories to this Agreement, shall have the right to exchange more than the Maximum Number of -41- Shares of Common Stock pursuant to this Article V in any twelve month period. The term "Maximum Number of Shares of Common Stock" shall mean the greater of (i) one half of the total number of Shares of Common Stock at any time owned (including shares that have previously been exchanged or disposed of) by a Stockholder and (ii) such number of shares of Common Stock as would result in an Exchange Amount of $100,000,000 or less. (d) If any accounting convention, policy or procedure covering any future expenditure, receipt, sale, purchase or other event has not been fully or adequately addressed in the definition of General Growth FFO or Company FFO as set forth on Exhibits B and A hereto, respectively, then any amendment to the definition of General Growth FFO or Company FFO, as appropriate, to provide for any such convention, policy or procedure with respect to any such event shall require the consent of GG Properties and the Board. (e) On or prior to the Closing Date, GG Properties shall cause its board of directors to adopt a resolution approving all of the transactions contemplated by this Agreement that could be deemed to be a "business combination" as defined in Section 203 of the GCL between GG Properties and any Exchanging Stockholder that becomes an "interested stockholder" as defined in Section 203 of the GCL, including, without limitation, (i) additional issuances of GG Stock to such Stockholder in the context of exchanges under this Article V and (ii) the acquisition by such Stockholder of properties from the Company in the context of Article VIII hereof. GG Properties shall also cause its board of directors to adopt a resolution authorizing any Exchanging Stockholder that becomes an "interested stockholder" as defined in Section 203 of the GCL to vote its shares of GG Stock received in an exchange transaction for all purposes. GG Properties agrees that it will not adopt or otherwise approve any "poison pill" or stockholder rights plan and would have the effect of diluting an Exchanging Stockholder's equity interest in GG Properties upon exercise of the exchange rights contained in this Article V or that would otherwise conflict with or impair such exchange rights. (f) Any Stockholder exercising exchange rights pursuant to this Article V shall, as a condition to such exercise, (1) have timely and fully funded any previously required funding of all or any portion of its Aggregate Subscription and (2) fund any unfunded portion of its Aggregate Subscription, but, with respect to clause (2), shall not receive additional shares of Common Stock -42- therefor, and there shall not be any deemed receipt by any other Stockholder of additional Shares of Common Stock in connection with such funding. (g) GG Properties shall insure that it has sufficient authorized but unissued shares of Common Stock to enable it to satisfy the exchange rights of all Stockholders hereunder, and shall, subject to obtaining necessary stockholder approval, cause its certificate of incorporation and other corporate charter documents to be amended from time to time, and shall solicit the consent of its stockholders to the extent required to effectuate any such amendment. In the event GG Properties elects to pay the Exchange Amount in GG Stock, GG Properties shall take all steps required by applicable law and regulation and required under its certificate of incorporation to enable GG Properties to issue such GG Stock to the Exchanging Stockholder on the relevant closing date. 5.2. Payment of the Exchange Amount. GG Properties shall have the option to pay the Exchange Amount in cash or in shares of GG Stock or any combination thereof. At any time within forty-five (45) days after the date of the Exchange Election Notice, GG Properties shall deliver to the relevant Stockholder a written notice (the "Exchange Amount Payment Notice") specifying whether GG Properties has elected to pay the Exchange Amount in cash, GG Stock or a specified combination thereof. If GG Properties fails to deliver the Exchange Amount Payment Notice within such forty-five (45) day period in which it affirmatively elects to pay the Exchange Amount entirely in GG Stock, GG Properties shall be deemed to have elected to pay the Exchange Amount entirely in cash. 5.3. Registered Stock; Registration Statement. To the extent required to enable a Stockholder to publicly distribute the GG Stock received by it in an exchange transaction, GG Properties shall prepare and file with the Commission promptly following the delivery of an Exchange Election Notice (to the extent not then available) a shelf registration statement under the 33 Act registering GG Stock with respect to the GG Stock of such Stockholder. GG Properties shall maintain the effectiveness of such shelf registration statement with respect to such Stockholder's GG Stock, and shall include such Stockholder as a selling Stockholder with respect to such shelf registration statement to the extent the public distribution of such Stockholder's GG Stock would otherwise be prohibited under the 33 Act. All expenses of such shelf registration of GG Stock required by this Section 5.3 shall be shared equally by GG -43- Properties and the Exchanging Stockholder. If requested by a Stockholder that is selling GG Stock pursuant to an underwritten offering, GG Properties will reasonably cooperate with such Stockholder in connection with such underwritten offering, including, upon request, entering into and performing its obligations under a customary underwriting agreement (which may include representations, warranties and indemnities customarily given by GG Properties to its underwriters) with the underwriters of such offering; provided that GG Properties shall have the right to select the lead or managing underwriter for such offering (such underwriter to be either Goldman, Sachs & Co. or one of the top three lead underwriters of REIT equity securities for the immediately preceding completed calendar year) and such Stockholder shall reimburse GG Properties for all reasonable attorneys' fees incurred by GG Properties in connection with such underwritten offering. 5.4. Closing of an Exchange Transaction. (a) The closing of an exchange transaction contemplated by this Article V shall occur (i) if GG Properties has elected to pay the Exchange Amount entirely in GG Stock, on the date set forth in the Exchange Amount Payment Notice, but in no event later than the forty-fifth (45th) day following the date on which the Exchanging Stockholder delivered the Exchange Election Notice or (ii) if GG Properties has elected to pay the Exchange Amount entirely in cash, on a date set forth in the Exchange Amount Payment Notice, which date shall in no event be later than the one hundred twentieth (120th) day following the date on which the Exchanging Stockholder delivered the Exchange Election Notice. If GG Properties has elected to pay the Exchange Amount in a combination of GG Stock and cash, (A) the closing of the delivery of GG Stock shall take place on a date set forth in the Exchange Amount Payment Notice which date shall in no event be later than the forty-fifth (45th) day following the date on which the Exchanging Stockholder delivered the Exchange Election Notice and (B) the closing of the delivery of the cash portion of the Exchange Amount shall take place on a date set forth in the Exchange Amount Payment Notice, which date shall in no event be later than the one hundred twentieth (120th) day following the date on which the Exchanging Stockholder delivered the Exchange Election Notice. At the closing or closings, which shall be held at the offices of counsel to GG Properties, (i) GG Properties shall deliver to the relevant Stockholder the cash portion of the Exchange Amount required to be paid to the Stockholder in immediately available funds and, if GG Properties has elected to pay all or a portion of the Exchange Amount with GG Stock, such certificates representing the number of shares of such GG Stock to be -44- delivered (calculated based on the Ten Day Average General Growth Share Closing Price, if the closing with respect to such GG Stock occurs within seven (7) business days of the date of the Exchange Election Notice, or (subject to Section 5.5(b)) calculated based on (x) the Ten Day Average General Growth Share Closing Price or (y) the average of the General Growth Share Closing Prices for each of the ten Trading Days immediately preceding the business day preceding the closing date, whichever would result in the issuance of the greater number of shares of GG Stock, if the closing occurs after the seventh (7th) business day following the date of the Exchange Election Notice) registered in the names of the Persons designated by such Stockholder, (ii) such Stockholder shall deliver to GG Properties the certificates representing the Common Stock being exchanged (together with all necessary fully executed stock powers), free and clear of any lien, claim or encumbrance (and such Stockholder hereby represents and warrants that such Common Stock shall immediately prior to such sale, be so free and clear), (iii) GG Properties shall deliver to GGP the certificates representing the Common Stock being exchanged (together with all necessary fully executed stock powers) and (iv) GG Properties, such Stockholder, GGP and the Company shall execute such other documents and take such other action as shall be reasonably necessary to consummate the transactions contemplated by this Article V. (b) Pending the closing of an exchange transaction contemplated by this Article V, an Exchanging Stockholder shall be entitled to all rights, including voting rights and rights to receive dividends and distributions, that such Stockholder would ordinarily have with respect to its shares. (c) Any shares of Class B Common Stock received by GGP in such an exchange transaction shall, automatically upon consummation of the exchange transaction, become shares of Class C Common Stock. 5.5. Necessary Government Filings. (a) If (i) a Stockholder delivers to GG Properties an Exchange Election Notice and (ii) as of the date of such Exchange Election Notice, the purchase by GG Properties of such Stockholder's Common Stock pursuant to Section 5.1 is subject to the premerger notification and reporting requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"), and the rules and regulations thereunder (the "Rules"), then GG Properties shall use its reasonable best efforts to (1) duly file with the United States Federal Trade Commission (the "FTC") and the Assistant Attorney General (as defined in Section 7A(b)(1)(A) of HSR), no later -45- than the fifteenth (15th) day after the date of the Exchange Election Notice, a fully completed premerger notification and report form with respect to GG Properties pursuant to Section 7A(a) of HSR and a fully completed written request for early termination of the waiting period pursuant to Section 7A(b)(2) of HSR and Rule 803.11 thereunder, (2) deliver to the Company (for execution and filing by the Company), no later than the fifteenth (15th) day after the date of the Exchange Election Notice, a fully completed premerger notification and report form with respect to the Company as required to be filed pursuant to Section 7A(a) of HSR and (3) cause the applicable waiting period under HSR to terminate on or before the thirtieth (30th) day after the date of the Exchange Election Notice. (b) If (i) a Stockholder delivers to GG Properties an Exchange Election Notice and (ii) as of the date of such Exchange Election Notice, the acquisition by such Stockholder of GG Stock in exchange for such Stockholder's Common Stock pursuant to Section 5.1 is subject to the premerger notification and reporting requirements under HSR and the Rules, then (A) GG Properties and such Stockholder shall use their respective reasonable best efforts to duly file with the FTC and the Assistant Attorney General, no later than the fifteenth (15th) day after the date of the Exchange Election Notice, a fully completed premerger notification and report form with respect to GG Properties pursuant to Section 7A(a) of HSR and (B) GG Properties shall use its reasonable best efforts to file with the FTC and the Assistant Attorney General a fully completed written request for early termination of the waiting period pursuant to Section 7(A)(b)(2) of HSR and Rule 803.11 thereunder, and cause the applicable waiting period under HSR to. terminate on or before the thirtieth (30th) day after the date of the Exchange Election Notice. Notwithstanding anything to the contrary in Section 5.4, if a Stockholder is required to make a filing under HSR pursuant to this Section 5.5(b), and as a result thereof, the closing of the delivery of GG Stock cannot occur on or prior to the seventh (7th) business day following the date of the Exchange Election Notice, then the number of shares of GG Stock to be delivered at such closing shall be calculated based upon the Ten Day Average General Growth Share Closing Price. (c) If a Stockholder has delivered an Exchange Election Notice pursuant to Section 5.1 above and GG Properties and such Stockholder have complied with the provisions of Section 5.5(a) above but, notwithstanding GG Properties' and such Stockholder's reasonable best efforts, the applicable waiting period under HSR with respect to such -46- exchange has not terminated by the closing date set forth in Section 5.4 above, then, notwithstanding anything to the contrary in this Article V, the closing date set forth in Section 5.4 above shall be extended to the fifth business day after all applicable waiting periods under HSR have been terminated. From and after the original closing date set forth in Section 5.4 above, GG Properties shall continue to use its reasonable best efforts to cause the applicable waiting period under HSR with respect to such exchange to be terminated. 5.6. Board Representation. If a Stockholder exchanges its Common Stock pursuant to this Article V, and receives as consideration for such Common Stock, GG Stock having a value of at least $100,000,000, then at the election of such Stockholder, GG Properties will exercise all authority under the GCL and under GG Properties' Certificate of Incorporation and Bylaws to (i) cause one Satisfactory Nominee (as defined below) designated by such Stockholder and to cause one independent director nominated by the board of directors of GG Properties (the "GG Board") (if such Satisfactory Nominee would not qualify as an independent director) to be promptly elected to the GG Board as a member of the class of directors whose term is the latest to expire and (ii) increase the size of the GG Board to account for such additional director or directors. At each annual meeting of stockholders of GG Properties thereafter at which directors in the same class as the Satisfactory Nominee shall be elected, such Stockholder shall be entitled to propose to the GG Board or the nominating committee thereof one Satisfactory Nominee in accordance with the procedures set forth below. The proposal by such Stockholder of any person for election to the GG Board shall be made after consultation with GG Properties, each person designated by such Stockholder for election to the GG Board shall be reasonably acceptable to the GG Board (each such person, a "Satisfactory Nominee"). GG Properties shall cause each Satisfactory Nominee designated by such Stockholder for election to the GG Board to be included in the slate of nominees recommended by the GG Board to GG Properties' stockholders for election as directors at each annual meeting of the stockholders of GG Properties at which directors in the same class as the Satisfactory Nominee shall be elected and shall use its best efforts to cause the election of each such Satisfactory Nominee, including soliciting proxies in favor of the election of such persons. In the event that any Satisfactory Nominee elected to the GG Board shall cease to serve as a director for any reason, the vacancy resulting therefrom shall be filled by the GG Board with a substitute Satisfactory Nominee according to the procedures described -47- above. Notwithstanding the foregoing, such Stockholder shall no longer have the right to propose a Satisfactory Nominee to the GG Board from and after the date such Stockholder ceases to own at least $80,000,000 worth of GG Stock based on then current market value. The parties agree that the designees of such Stockholder on the GG Board shall not participate in any action taken by the GG Board or GG Properties relating to this Agreement. 5.7. GG Properties Organic Change. Any capital reorganization or reclassification of the capital stock of GG Properties, or consolidation or merger of GG Properties with another Person, or the sale of all or substantially all of the assets of GG Properties to another Person which is effected in such a way that holders of GG Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities, cash or other property with respect to or in exchange for GG Stock is referred to herein as an "Organic Change." Prior to and as a condition of such Organic Change, GG Properties shall make lawful and adequate provision to insure that the Class B Stockholders and Class C Stockholders will thereafter have the right to acquire and receive upon exchange of their shares of Class B Common Stock or shares of Class C Common Stock pursuant to this Article V, in lieu of shares of GG Stock, such shares of stock, securities, cash or other property as such Stockholders would have been entitled to receive in connection with such Organic Change if such Stockholders had exercised their exchange rights immediately prior to the Organic Change. Prior to the consummation of any such Organic Change, GG Properties shall insure that the successor Person (if other than GG Properties) resulting from such Organic Change or the Person purchasing assets shall assume by written instrument delivered to the Class B Stockholders and Class C Stockholders the obligation to deliver to each such Stockholder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Stockholder would be entitled to receive upon exercise of its exchange rights. If a purchase, tender or exchange offer is made to and accepted by the holders of more than 50% of the outstanding shares of GG Stock, GG Properties shall, prior to the consummation of any consolidation, merger or sale with the Person having made such offer or with any Affiliate of such Person, insure that the Class B Stockholders and Class C Stockholders shall have been given a reasonable opportunity to then elect to receive upon the exercise of their exchange rights pursuant to this Article V either the stock, securities or assets then issuable with respect to the GG Stock or the stock, securities or assets, or the equivalent, issued to previous holders of GG Stock in accordance with such offer. -48- ARTICLE VI. TRANSFERS OF COMMON STOCK 6.1. Certain Restrictions. No Stockholder shall, directly or indirectly, Transfer any Common Stock to any Person (any such Person in whose favor a Transfer of Stock is made and all subsequent permitted transferees of any such Person being referred to collectively as "Transferees" and individually as a "Transferee"), unless such Transfer is made pursuant to this Article VI or Articles V or VIII hereof provided, however, that nothing in this Agreement shall restrict the Transfer of any ownership interest in any Stockholder unless such Stockholder's assets consist substantially of Common Sock, in which case the Transfer shall be deemed a Transfer of such Common Stock. Each Stockholder hereby agrees that it will not Transfer all or any portion of its Common Stock except as permitted by this Agreement, that the Company shall not reflect on its books any Transfer of Common Stock to any Person except in accordance with this Agreement, and that any Transfer of Common Stock not permitted by the provisions of this Agreement shall be null and void ab initio. 6.2. Compliance with Securities Laws. No Stockholder shall Transfer any Common Stock, and the Company shall not reflect on its books any Transfer of Common Stock, unless (a) the Transfer is pursuant to an effective registration statement under the 33 Act and under any applicable state securities or blue sky laws or (b) such Stockholder shall have furnished the Company with evidence reasonably satisfactory to the Company that no such registration is required because of the availability of an exemption from registration under the 33 Act and under applicable state securities or blue sky laws. A written opinion of counsel of recognized standing to the effect set forth in clause (b) of the preceding sentence shall satisfy the requirements of such clause. 6.3. Transfer of Ownership Interests in Affiliates. Each Stockholder hereby agrees that the Transfer by such Stockholder of any ownership interest or right of exclusive control, if applicable, in any Person that is its Affiliate if (i) such Person or an Affiliate of such Person that is controlled by such Person owns Common Stock and (ii) such Transfer would result in such Person no longer being an Affiliate of such Stockholder, shall be deemed a Transfer of the shares of Common Stock owned by such Person; provided, however that this Section 6.3 shall in no way limit the transfer of ownership interests or the right of exclusive control in GG Properties or GGP. -49- 6.4. Transfers of Common Stock by Stockholders. (a)(i) Except as otherwise provided in this Section 6.4(a), a holder of Class A Common Stock shall not Transfer all or any portion of its shares of Class A Common Stock without the prior approval of the Board. (1) Any holder of Class A Common Stock shall have the right, without the approval of the Board, to Transfer all or any portion of its shares of Class A Common Stock to one or more of its Affiliates (other than an Affiliate that owns a share of the Company's Non-Voting Preferred Stock) and any shares so transferred shall remain Class A Common Stock. (2) Any holder of Class A Common Stock shall have the right, without the approval of the Board, to Transfer all or any portion of its Common Stock to one or more Accredited Investors or to another Stockholder; provided that any shares of Class A Common Stock Transferred pursuant to this clause 6.4(a)(i)(2) shall automatically be converted into an equal number of shares of Class C Common Stock. (ii) Any shares of Class A Common Stock, the Transfers of which have required approval and been approved of by the Board, shall automatically be converted into an equal number of shares of Class C Common Stock upon their transfer. (iii) If as a result of the provisions of this Agreement, including but not limited to the provisions of this Article VI, the aggregate equity investment in the Company represented by the outstanding shares of Class A Common Stock (based, on the Aggregate Subscription therefor) becomes less than the greater of (x) $100 million and (y) twenty percent (20%) of the total equity investment of all Stockholders in the Company (based on the Aggregate Subscription therefor) (the "Class A Minimum Investment"), then all remaining shares of Class A Common Stock shall automatically be converted into an equal number of shares of Class C Common Stock. (b) (i) Except as otherwise provided in this Section 6.4(b), a holder of Class B Common Stock shall not Transfer all or any portion of its shares of Class B Common Stock without the prior approval of the Board. (1) Any holder of Class B Common Stock shall have the right, without the approval of the Board, to Transfer all or any portion of its Class B Common Stock -50- to one or more of its Affiliates and any shares so transferred shall remain Class B Common Stock. (2) Any holder of Class B Common Stock shall have the right, without the approval of the Board, to Transfer all or any portion of its Class B Common Stock to one or more Accredited Investors or to another Stockholder, provided that (subject to Section 6.4(b)(v) below) any shares of Class B Common Stock Transferred pursuant to this clause 6.4(b)(i)(2) shall automatically be converted into an equal number of shares of Class C Common Stock. (ii) Any shares of Class B Common Stock, the Transfers of which have required approval and been approved of by the Board, shall automatically be converted into an equal number of shares of Class C Common Stock upon their transfer. (iii) If as a result of the provisions of this Agreement, including but not limited to the provisions of this Article VI, the aggregate equity investment in the Company represented by the outstanding shares of Class B Common Stock (based on the Aggregate Subscription therefor) becomes less than the greater of (x) $150 million and (y) thirty percent (30%) of the total equity investment of all Stockholders in the Company (based on the Aggregate Subscription therefor) (the "Class B Minimum Investment"), then all remaining shares of Class B Common Stock shall automatically be converted into an equal number of shares of Class C Common Stock. (iv) Any holder of Class B Common Stock shall have the right, without approval of the Board, to Transfer all or any portion of its Class B Common Stock to GG Properties pursuant to the exchange rights contained in Article V hereof or to GGP pursuant to the special dissolution procedures contained in Article VIII hereof. (v) Notwithstanding anything to the contrary in Section 6.4(b)(i)(2), the following shall apply: (1) if all or a portion of the outstanding shares of Class B Common Stock are Transferred to one Person or one group of Affiliated Persons not formed for the purpose of acquiring such Common Stock, and the Class B Common Stock so Transferred represents at least the Class B Minimum Investment, then such Class B Common Stock shall remain Class B Common Stock and shall not be automatically converted into an equal number of shares of Class C Common Stock as a result of such Transfer. -51- (2) If (1) shares of Class B Common Stock are Transferred to a Person not formed for the purpose of acquiring such Common Stock (a "Serial Transferee") by a transferor (a "Serial Transferor") such that the remaining shares of Class B Common Stock owned by the Serial Transferor are automatically converted into Class C Common Stock pursuant to Section 6.4(b)(iii) and (2) the Serial Transferee by virtue of such transfer, and any previous transfers of Class B Common Stock by the Serial Transferor to the Serial Transferee, then owns Common Stock which, if it were all Class B Common Stock would be at least equal to the Class B Minimum Investment, then the Serial Transferee's Common Stock equal to the number of shares of Common Stock that would be at least equal to the Class B Minimum Investment shall automatically be converted into an equal number of shares of Class B Common Stock upon such transfer. (c) Except as otherwise provided in this Section 6.4(c), no Class C Stockholder shall Transfer all or any portion of its Class C Common Stock without the prior approval of the Board. Notwithstanding anything to the contrary in this Section 6.4(c), a Class C Stockholder shall have the right, without the approval of the Board, to Transfer all or a portion of its Class C Common Stock to (i) one or more of its Affiliates, (ii) one or more Accredited Investors or to another Stockholder, and (ii) GGP pursuant to the exchange rights contained in Article V hereof. 6.5. Certain Prohibited Transfers of Common Stock by Stockholders. (a) Notwithstanding any other provision of this Agreement to the contrary, no Transfer of all or any portion of any Stockholder's Common Stock shall be made if such Transfer would result in: (i) the Company being required to register, or seek an exemption from registration, as an investment company under the Investment Company Act; or (ii) the Company failing to qualify as a real estate investment trust under the Code. (b) Notwithstanding any other provision of this Agreement to the contrary, without the prior written approval of the Class A Directors, which approval may be given or withheld in the Class A Directors, sole discretion, no Transfer of all or any portion of any Stockholder's Class B Common Stock or Class C Common Stock shall be made to any Person whose principal business is the development or management of regional shopping malls other than any Person that is an insurance company, an investment company -52- registered under the Investment Company Act, an investment advisor registered under the Investment Advisors Act of 1940, as amended, acting in its capacity as an investment advisor, or a fiduciary under ERISA acting in such capacity. (c) The Board may in its discretion require as a condition of any Transfer permitted under this Article VI, the delivery of a written opinion of responsible counsel (who may be counsel for the Company), satisfactory in form and substance to the Board, to the effect that such Transfer would not result in any of the consequences set forth in clause (a)(i) or (a)(ii) and shall cover such other matters as the Board may reasonably require. In addition, a Person to whom a Transfer may be made pursuant to this Article VI may also be required, in the discretion of the Board, and as a condition precedent to such Transfer, to make certain representations, warranties and covenants including, but not limited to, representations as to such Person's net worth, sophistication and investment intent. The Company agrees to cooperate with any Stockholder making a Transfer by providing promptly such records and other factual information as may be reasonably requested with respect to any proposed Transfer provided that such Stockholder and any prospective transferee that receives such records and information shall agree in writing to maintain the confidentiality thereof. 6.6. Expenses of Transfer. The transferring Stockholder agrees that it will pay all expenses, including reasonable attorneys' fees, incurred by the Company in connection with any Transfer of its Common Stock. 6.7. Indemnification by Transferor. In the event that the Company or any non-transferring Stockholder becomes involved in any capacity in any action, proceeding, or investigation brought by or against any Person (including any Stockholder) in connection with any Transfer by a Stockholder of its Common Stock (other than a Transfer pursuant to Article V or Article VIII hereof), the transferring Stockholder will periodically reimburse each of the Company and any non-transferring Stockholder for its legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith. To the fullest extent permitted by law, the transferring Stockholder also will indemnify the Company and any non-transferring Stockholder against any losses, claims, damages, or liabilities to which any of them may become subject in connection with such Transfer. The reimbursement and indemnity obligations of the transferring Stockholder under this paragraph shall be in addition to any liability which the transferring Stockholder may otherwise have, shall -53- extend upon the same terms and conditions to the partners, employees, and controlling Persons of the Company and any non-transferring Stockholder, and shall be binding upon and inure to the benefit of any successors, assigns, heirs, and personal representatives of the Company, any non-transferring Stockholder, and any such Persons. The foregoing provisions shall survive any termination of this Agreement. 6.8. Acceptance of Prior Acts. Any person who becomes a Stockholder accepts, ratifies and agrees to be bound by all actions duly taken pursuant to the terms and provisions of this Agreement by the Company and the Stockholders prior to the date it became a Stockholder and, without limiting the generality of the foregoing, specifically ratifies and approves all agreements and other instruments as may have been executed and delivered on behalf of the Company prior to said date and which are in force and effect on said date. 6.9. Certain Conditions to Transfer. As a condition precedent to any Transfer under Section 6.4(a), (b) (other than Section 6.4(b)(iv)) or (c), each Transferee shall have executed and delivered to the Company and each other Stockholder, an instrument in substantially the form of Exhibit K hereto confirming that such Transferee agrees to be bound by the terms of this Agreement (including, without limitation, this Article VI and Article VII) and shall have" submitted to the Company such evidence as the Company may reasonably request to demonstrate that such Transfer is a permitted transfer under this Article VI. Any Transferee of Common Stock permitted pursuant to the terms of Section 6.4(a), (b) (other than Section 6.4(b)(iv)) or (c) shall, upon execution and delivery to the Company and each other Stockholder of an instrument in substantially the form of Exhibit K hereto, be entitled to all the benefits of this Agreement, including without limitation, the exchange rights as set forth in Article V. The certificates issued to any Transferee which represent the Common Stock so Transferred shall bear the legends provided in Article IX hereof, if required by such Article. 6.10. Responsibility for Subscriptions. Any Transferee of all or a portion of a Stockholder's shares of Common Stock shall be obligated to pay when due any Called Subscriptions or Available Subscriptions on account of such transferred shares of Common Stock. Each Stockholder agrees that, notwithstanding the Transfer of all or any portion of its Common Stock, as between it and the Company it will remain liable for the Called Subscriptions and Available -54- Subscriptions in each case relating to the Transferred shares of Common Stock. ARTICLE VII. SUBSCRIPTIONS 7.1. Additional Subscriptions. In addition to each Stockholder's Initial Subscription, subject to Section 7.2 hereof, each Stockholder shall make additional subscriptions in the amounts and on the dates (the Additional Subscription Dates") set forth opposite such Stockholder's name on Schedule XVII hereto. Any subscription payment made by a Stockholder pursuant to this Section 7.1, is sometimes referred to herein as an "Additional Subscription Payment." Upon payment by a Stockholder of its Additional Subscription Payment, the Company shall issue to such Stockholder, at a purchase price of $25,000 per share, the number of additional shares of Common Stock set forth opposite such Stockholder's name on Schedule XVII hereto. All such additional shares issued to a holder of Class A Common Stock shall be shares of Class A Common Stock, all such additional shares issued to a holder of Class B Common Stock shall be shares of Class B Common Stock and all other such additional shares shall be shares of Class C Common Stock. 7.2. Delay or Acceleration of Additional Subscription Payments. (a) On or before the tenth (10th) business day prior to any Additional Subscription Date, the Board shall have the authority to postpone one or more of the Additional Subscription Dates to such date or dates as the Board shall deem in the best interest of the Company. Upon any such decision by the Board, the Company shall promptly notify each Stockholder of such postponement and the new Additional Subscription Date. Notwithstanding anything to the contrary in Section 7.l or this Section 7.2, the Company shall not have the right to require Additional Subscription Payments pursuant to this Article VII after the fourth anniversary of the Closing Date. (b) The Board shall also have the right to accelerate Additional Subscription Payments by delivering to each Stockholder a funding notice (each, a "Funding Notice") setting forth the amount of such Additional Subscription Payment and the date on which such Additional Subscription Payment shall be made. Each Stockholder shall, within fifteen (15) days after the date of a Funding Notice, pay its Called Subscription to the Company in the amount set forth in the Funding Notice, and the Company shall issue -55- additional shares of Common Stock to such Stockholder to reflect a purchase price of $25,000 per share, provided that such amount to be paid shall not exceed such Stockholder's Available Subscription immediately prior to the issuance of such Funding Notice. Subject to Section 7.4, payments required to be made by the Stockholders pursuant to a Funding Notice shall be in proportion to the Stockholders' Proportionate Shares. The Board shall have the right to deliver a Funding Notice under this Section 7.2 only to fund (1) cash needs for the Properties Currently Under Development and for the Planned Expansion and Renovation Programs, (2) liabilities in excess of the Special Reserves therefor set forth on Schedule XV hereto to the extent not funded with the Initial Subscriptions and (3) the cost of purchasing a joint venture partner's interest in any of the properties listed in Schedule VI. 7.3. Certain Rights and Obligations with Respect to Additional Subscription Payments. Each Stockholder waives its obligation to any setoff or reduction with respect to its right to make its Additional Subscription Payments based on any claim that such Stockholder has against the Company (without prejudice to such Stockholder's right to assert such claim in a separate action). The reinvestment or establishment of a reserve by the Company of or from Operating Cash Flow or Net Disposition Proceeds shall not reduce any Stockholder's Called Subscriptions or Available Subscription. Except as expressly required by Section 7.1, 7.2 and 7.4, no Stockholder shall have any obligation to make any subscription payment to the Company or to advance any funds thereto. 7.4. Failure to Make Additional Subscription Payments. If any Stockholder shall fail to timely make an Additional Subscription Payment required pursuant to Section 7.1 or 7.2 (such Stockholder is herein referred to as a "Defaulting Stockholder"), the Company shall first give written notice to the Defaulting Stockholder offering it 10 additional days in which to make its Additional Subscription Payments and acquire additional shares of Common Stock, and if such Defaulting Stockholder shall fail within such 10 day period to make such Additional Subscription Payments, the Company shall give notice of such failure to all other Stockholders (each, a "Non-Defaulting Stockholder"), and such Non-Defaulting Stockholders shall within ten (10) days of such notice (unless the Defaulting Stockholder shall have made its Additional Subscription Payment during such period), fund their Proportionate Share (the respective percentage which the shares owned by each such Non-Defaulting Stockholder bears to the total number of shares of all Non-Defaulting Stockholders) of the Additional -56- Subscription Payment that the Defaulting Stockholder failed to pay and shall acquire their Proportionate Share of the additional shares of Common Stock which the Defaulting Stockholder failed to acquire; provided, however, no Stockholder shall be required pursuant to this Section 7.4 to make subscription payments in excess of such Stockholder's Available Subscription and provided, further, that any payments made by a Non-Defaulting Stockholder pursuant to this Section 7.4 shall be deemed to be Funded Subscriptions of such Stockholder. All shares of Common Stock owned by a Defaulting Stockholder that are not shares of Class C Common Stock shall automatically be converted into shares of Class C Common Stock upon a Stockholders' failure to make an Additional Subscription Payment pursuant to Section 7.1 or 7.2 and the expiration of the ten (10) day period referred to above. 7.5. Funding Shortfalls. If as a result of a default by a Defaulting Stockholder and after giving effect to Section 7.4 above, the Funded Subscriptions of all Stockholders is less than the Aggregate Subscriptions of such Stockholders, then the Board may give notice of such shortfall to all Non-Defaulting Stockholders, and such Non-Defaulting Stockholders shall within twenty (20) days of such notice have the right, but not the obligation, to fund their Proportionate Share of the additional required funding. Each Non-Defaulting Stockholder who elects to participate shall acquire its adjusted Proportionate Share (the respective percentage which the shares owned by each participating Non-Defaulting Stockholder bears to the total number of shares of all participating Non-Defaulting Stockholders) of the additional shares of Common Stock represented by such additional funding. All such additional shares acquired with such additional funding shall be shares of Class C Common Stock which shall be acquired at a price determined by the Board. ARTICLE VIII. DISSOLUTION RIGHT 8.1. Special Dissolution Right. (a) At any time after the Dissolution Trigger Date, the holders of all shares of Class A Common Stock (acting by majority vote), on the one hand (the "Class A Group"), and the holders of all shares of Class B Common Stock (acting by majority vote) (the "Class B Group"), on the other hand, shall each have the right to offer their Common Stock to the other Group by delivering a written notice to the Company and the other Group (by delivery to GGP in the case of the Class A Group -57- and to NYSCRF in the case of the Class B Group, provided each still owns shares of Class A Common Stock or Class B Common Stock, respectively) (the "Dissolution Commencement Notice"). The Company shall promptly, after receipt thereof, deliver a copy of any Dissolution Commencement Notice to all Stockholders other than GGP and NYSCRF. Any action by the Class A Group hereunder shall for all purposes hereunder bind and be deemed to include all other holders of shares of Class A Common Stock and all holders of shares of Class C Common Stock. Any action by the Class B Group hereunder shall for all purposes hereunder bind and be deemed to include all other holders of shares of Class B Common Stock. The Group that delivers a Dissolution Commencement Notice shall be referred to as the "Offeror" and the other party or parties shall be referred to as the "Offeree." No Group may deliver more than one Dissolution Commencement Notice in any 18-month period. (b) Upon receipt of a Dissolution Commencement Notice, the Offeror and the Offeree shall cause the Company to obtain an appraisal of the fair market value of each of the Company's properties as follows. Within ten (10) days of the Dissolution Commencement Notice, each Group shall each select an Appraiser. If either Group fails to select an Appraiser within such ten (10) day period, such Group shall forfeit its right to select an Appraiser. Within ten (10) days of the selection by each Group of its Appraiser, the selected Appraisers shall collectively select a third Appraiser. If no third Appraiser is selected within such time period, the Appraisal Institute shall select the third Appraiser upon the request of either Group's selected Appraiser. Each of the Appraisers shall be instructed to complete and submit to the Offeror and Offeree its appraised valuation in full narrative form within sixty (60) days of the selection of the third Appraiser. If an Appraiser shall not deliver its appraisal for each property within such sixty (60) day period, any appraisal subsequently submitted by such Appraiser shall be disregarded. If, after the Offer Effective Date but prior to delivery of the Response Notice, the Offeror or the Offeree believes that a Material Adverse Change has occurred with respect to any Company property since the date of the foregoing appraisal, the Offeror or the Offeree may, by notice to the Appraisers, require that the Appraisers issue a new appraisal of such property reflecting such Material Adverse Change; provided that the obtaining of a new appraisal shall not extend the date on which a Response Notice is to be delivered and; provided, further, however, that if such new appraisal is delivered after the delivery of a Response Notice, the Dissolution Value of the Company or the Dissolution Value of a Property, as the case may be, shall be adjusted to account for such -58- new appraisal. Such new appraisal shall be conducted in the manner and in accordance with the rules applicable to the original appraisals. A "Material Adverse Change" shall mean, with respect to any property, an event or occurrence that is reasonably likely to have resulted in the diminution by 10% or more of the appraised value of such property as determined prior to such event or occurrence. If there shall occur a Material Adverse Change with respect to any property after delivery of the Response Notice, no additional appraisals shall be made with respect to such property and the appraised value of such property shall remain as in effect prior to such Material Adverse Change for all purposes hereunder. The appraised value for each property shall be the average of the two closest appraisals for that property. As used herein, "Appraiser" means an independent member of the Appraisal Institute, with a national practice, having at least ten years' standing and established experience in appraising companies similar to the Company. (c) Upon receipt of the final appraised value as determined by subsection (b) above, the Offeror (by majority vote) shall have thirty (30) days to withdraw, by written notice to the Offeree, the Dissolution Commencement Notice. In the event of such withdrawal, the Offeror shall pay all costs and expenses of all Appraisers. If within such thirty (30) day period (the last day of such thirty (30) day period being the "Offer Effective Date"), the Offeror shall not have withdrawn the Dissolution Commencement Notice, the Dissolution Commencement Notice shall become effective and shall constitute an irrevocable offer (the "Offer") by the Offeror to sell to the Offeree all of its Common Stock at a purchase price (the "Dissolution Purchase Price") equal to the Offeror's Proportionate Share of the Dissolution Value of the Company. The "Dissolution Value of the Company" shall be the book value of the Company as of the end of the Company's most recent fiscal quarter, calculated in accordance with GAAP, except that in calculating such book value the aggregate appraised fair market value of the Company's properties determined in accordance with paragraph (b) above shall be used in lieu of the GAAP net book value of the Company's properties. In the event the Offer shall become effective, each Group shall bear one half of the costs and expenses of all Appraisers. (d) Upon effectiveness of the Offer as described in subsection (c) above, the Offeree shall have the right to either (i) purchase the Offeror's Common Stock for the Dissolution Purchase Price, (ii) elect to require that the Company, or all or substantially all of the Company's assets, be sold (including, without limitation, by way of merger) in which case the Board shall proceed diligently to -59- sell the Company or the Company Assets so that such sale shall be completed within no longer than a fifteen (15) month period, or (iii) elect to distribute certain of the Company's properties in the manner described in paragraph (f) below. The Offeree may exercise such right by written notice to the Offerer, delivered within six (6) months after the Offer Effective Date, of its election (each such notice, a "Response Notice"). If the Offeree shall not deliver a Response Notice within much six (6) month period, the Offeree shall be deemed to have elected the alternative set forth in clause (iii) above. (e) If the Offeree elects to purchase all of the Offeror's Common Stock pursuant to Section 8.1(d)(i) above, the closing of the purchase and sale of the Offeror's Common Stock shall take place at the offices of counsel to the. Offeror and shall occur on the date that is six (6) months after the date of the Response Notice (or, if such date is not a business day, on the next succeeding day that is a business day) unless the Offeror and Offeree shall have agreed upon a different date in writing. At such closing, (i) the Offeror shall deliver to the Offeree certificates representing the Offeror's Common Stock, free and clear of any lien, claim or encumbrance (and the Offeror hereby represents, warrants and covenants that such Common Stock shall, immediately prior to such sale, be so free and clear), (ii) the Offeree shall deliver to the Offeror the Dissolution Purchase Price in immediately available funds, and (iii) the Offeror and the Offeree shall execute such other documents and take such other action as shall be reasonably necessary to consummate the purchase and sale of the Offeror's Common Stock as contemplated by this Article VIII. Each member of the Offeree shall be obligated to purchase the Offeror's Common Stock pro rata in proportion to such member's respective percentage interest of the Offeree (the respective percentage which the shares owned by such member bears to the total number of shares of all Stockholders comprising the Offeree) and each member of a Group which is the Offeror shall be obligated to sell all of its shares in the Company. If the Offeree includes holders of Class A Common Stock, the election referred to above may be made by a majority of the holders of Class A Common Stock; provided, however, that if the holder of Class A Common Stock elects option (i) above, only the holders of Class C Common Stock who have approved such election shall be obligated to purchase the Offeror's Common Stock and the Offeree, for purposes of Section 8.1(e), shall be deemed to include only the holders of Class A Common Stock and the holders of Class C Common Stock who have approved such election. After the date of the Response Notice until the closing of the purchase by the Offeree pursuant to this -60- Section 8.1(e), the Offeror shall retain all rights with respect to its Common Stock, including without limitation the right to vote for directors or to receive dividends or other distributions paid or made with respect to such Common Stock. If the Offeree elects to purchase all of the Offeror's Common Stock pursuant to Section 8.1(d)(i) and such purchase is subject to the premerger notification and reporting requirements under HSR and the Rules, then (i) the Offeror and the Offeree shall use their respective reasonable best efforts to duly file with the FTC and the Assistant Attorney General, no later than the tenth (10th) day after the date of the Response Notice, fully completed premerger notification and report forms with respect to the Offeror and the Offeree pursuant to Section 7A(a) of HSR and (ii) the Offeror shall use its reasonable best efforts to file with the FTC and the Assistant Attorney General no later than the tenth (10th) day after the date of the Response Notice a fully completed written request for early termination of the waiting period pursuant to Section 7A(b)(2) of HSR and Rule 803.11 thereunder, and cause the applicable waiting period under HSR to terminate on or before the ninetieth (90th) day after the date of the Response Notice. The filing fees incurred in connection with the premerger notification and report forms shall be borne by the Offeror. If the Offeror and the Offeree have complied with the provisions of the immediately preceding paragraph but the applicable waiting period under HSR with respect to purchase of the Offeror's Common Stock has not terminated by the closing date set forth in this Section 8.1(e), then, notwithstanding anything to the contrary in this Section 8.1(e), the closing date shall be extended to the fifth business day after all applicable waiting periods under HSR have been terminated. From and after the original closing date set forth in this Section 8.1(e), the Offeror shall continue to use its reasonable beet efforts to cause the applicable waiting period under HSR to be terminated. If the Offeree shall default in its obligation to purchase the Offeror's Common Stock as provided in this Section 8.1(e), then the Company shall make the property distribution in the manner described in clause (f) below (but in a single distribution and with the Offeror entitled to select all of the properties until it has selected properties equal in value to its Proportionate Share of the Dissolution Value of all of the Company's properties (calculated pursuant to paragraph (f) hereof)) as soon as possible following such default, but in no event later than -61- thirty (30) days after the date scheduled for closing the purchase of the Offeror's Common Stock under Section 8.1(e), and the Offeror shall have the right without the approval of any other Stockholders to cause the Company to make such distribution of properties and to take all such actions as may be necessary to accomplish such distribution. (f) If the Offeree elects to distribute certain of the Company's properties (together with associated liabilities) pursuant to Section 8.1(d)(iii) above or a distribution is required to be made pursuant to Section 8.1(e) or 8.1(g), the Company's properties (together with associated liabilities) shall be divided among the Offeror and the Offeree by having each select properties on an alternating one-by-one basis (with the Offeree being entitled to the first selection) until either the Offeror or the Offeree has selected properties having a Dissolution Value equal to its Proportionate Share of the Dissolution Value of all of the Company's properties with any remaining properties going to the other party. The "Dissolution Value of a Property" shall be the appraised fair market value of the property, determined in accordance with subsection (b) above, less the face amount of all indebtedness encumbering or incurred with respect to the property, and the amount of any other liabilities existing with respect to such property (including any unpaid arrearages in the payment of debt service with respect to the property) calculated in accordance with GAAP and reflected on the Company's financial statements for the most recent fiscal quarter. All properties selected by the Offeror (together with associated liabilities) will be distributed to the Offeror in exchange for all of its shares of Common Stock, and the Offeror shall thereafter no longer be a Stockholder of the Company unless GGP or any of its affiliates is a member of the Offeror in which case all properties selected by the Offeree (together with associated liabilities) will be distributed to the Offeree in exchange for all of its shares of Common Stock, and the Offeree shall thereafter no longer be a Stockholder of the Company. The party to whom the properties shall be distributed shall be referred to as the "Distributee". The Offeror and the Offeree will bear in equal portions all transfer costs (including, without limitation, any transfer taxes, if any are required by law, New York State real property gains taxes, if any are required by law, title insurance premiums, costs of surveys and recording fees) and any prepayment penalties or other amounts payable to lenders, and the Company's Cash Reserves (as reflected in the Company's financial statements as of the end of the Company's most recent fiscal quarter) associated with the distribution of such properties and other corporate level assets and liabilities shall be -62- apportioned on a pro rata basis. The Distributee shall indemnify the Company and the Stockholders against any losses, claims, damage or liabilities to which any of them may become subject arising out of or relating to the properties (and associated liabilities) distributed to the Distributee. The Company and the Stockholders shall indemnify the Distributee against any losses, claims, damage or liabilities to which the Distributee may become subject arising out of or relating to the properties (and associated liabilities) retained by the Company. The properties distributed to the Distributee shall be distributed subject to customary prorations. Each of the Offeree and Offeror will cooperate with the other to facilitate the distribution of properties contemplated by this Section 8.1(f), including, without limitation, with respect to obtaining (1) tenant estoppels or delivering notices to tenants relating to the distribution, and (2) tenant, lender, ground lessor or joint venturer consents and to eliminate any cross-collateralized or cross-defaulted financings between the properties selected by the Distributee, on the one hand, and the other properties, on the other hand, including, without limitation, by agreeing to encumber properties not designated for transfer and to remove cross-collateralized encumbrances from properties designated for transfer. The distribution of properties (together with associated liabilities) will occur as early as possible in three installments of as near equivalent value as possible over three taxable years, with the first distribution to occur as early as possible in the taxable year in which the Response Notice is given and thereafter a distribution shall occur on the first business day of each of the two subsequent tax years. For example, if the Offeror delivers a Dissolution Commencement Notice on December 1, 1999 and the Offeree delivers a Response Notice electing to distribute properties pursuant to Section 8.1(d)(iii) above on May, 31, 2000, the first distribution would occur on June 1, 2000, the second distribution would occur in January, 2001, and the third distribution would occur in January, 2002. Upon the second distribution of properties, all Common Stock owned by the Distributee shall automatically be converted into Class C Common Stock and such party shall no longer have the right to elect directors to the Board unless the Company shall fail to make the third distribution as required by this Section 8.1(f) in which case such Common Stock shall automatically be converted back to its original Class of Common Stock. During the distribution period, (i) the Offeror may cause the Company to engage a property manager or managers to manage the properties selected by the Offeror rather than have such properties be managed by the Company or its managers, (ii) the Company shall encumber any of the properties selected by the Offeror in connection with a -63- financing or refinancing only at the direction of the Offeror and (iii) the Company shall operate the properties selected by the Offeror to the extent owned by the Company in a manner consistent with past business practices. During the distribution period, the risk of casualty, damage or condemnation or other adverse change with respect to any property to be distributed to the Distributee shall be borne by the Distributee and with respect to any property to be retained by the Company shall be borne by the Company, provided, however, that any insurance proceeds payable with respect thereto shall, with respect to a property to be distributed to the Distributee, be paid to the Distributee, and with respect to a property to be retained by the Company, be paid to the Company. If as a result of the selection process described above, one party shall be entitled to properties that have an aggregate Dissolution Value (based on the Dissolution Value of the Properties obtained pursuant to this paragraph (f)) in excess of such party's Proportionate Share of the Dissolution Value of all of the Company's properties (including the pro-rations and adjustments described in this paragraph (f)), then such party shall pay a cash adjustment to the other party. Such cash adjustment shall be paid in three equal installments on each date a distribution of properties is made. If at the time a distribution of properties is to be made a property (an "Impaired Property") cannot be distributed due to an inability to remove it from a cross-collateralized or cross-defaulted pool, a title issue, the inability to obtain a necessary consent or any other similar matter, then such property shall be retained by the Company and the Offeror and Offeree shall reselect the properties that remain in the Company and that were selected after the Impaired Property was selected, on an alternating one-by-one basis until either the Distributee has selected properties able to be distributed as contemplated herein having a Dissolution Value equal to its then Proportionate Share of the Dissolution Value of all of the Company's properties. (g) If pursuant to Section 8.1(d)(ii), the Offeree elects to require that the Company, or all or substantially all of the Company's assets, be sold (including by way of merger), but such sale or merger has not been completed within the fifteen (15) month period following the Response Notice, then the Company shall make the property distributions in the manner described in clause (f) above (but in a single distribution and with the Offeror entitled to select the first property) as soon as possible following the expiration of such fifteen (15) month period. -64- (h) Notwithstanding anything to the contrary in Article V, (i) if the Class B Group is the Offeror, then from and after the delivery of a Dissolution Commencement Notice by the Class B Group, the Class B Group shall not have the right to exchange their Common Stock pursuant to Article V unless the Class B Group has withdrawn such Dissolution Commencement Notice pursuant to Section 8.1(c) above and (ii) if the Class A Group is the Offeror and the Class A Group has not withdrawn its Dissolution Commencement Notice pursuant to Section 8.1(c) above, then from and after the delivery by the Class B Group of a Response Notice pursuant to Section 8.1(d) above, the Class B Group shall not have the right to exchange their Common Stock pursuant to Article V. If the Class A Group has delivered a Dissolution Commencement Notice and a holder of Class B Common Stock delivers an Exchange Election Notice prior to the delivery by the Class B Group of a Response Notice, then (1) such Exchange Election Notice shall override such Dissolution Commencement Notice with respect to the shares of Class B Common Stock that are the subject of such Exchange Election Notice, (2) the shares of Class B Common Stock that are the subject of such Exchange Election Notice shall be deemed to be shares of Class C Common Stock owned by GGP for all purposes of this Section 8.1 whether or not the closing in respect of such Exchange Election Notice has occurred prior to the delivery by the Class B Group of a Response Notice and (3) the Class B Group shall not have the right to elect in its Response Notice to purchase the Class A Group's Common Stock for the Dissolution Purchase Price pursuant to Section 8.1(d)(i) above. Nothing in this Article VIII shall affect any Class C Stockholder's right to exchange its Common Stock pursuant to Article V. 8.2. Other Dissolutions. (a) Notwithstanding anything in this Agreement to the contrary, the holders of the Class A Common Stock or the holders of the Class B Common Stock shall be entitled to elect to dissolve the Company (in which case the Board shall promptly cause the Company to be dissolved) in the event the Homart Closing Date and the closings under the Natick Mall Agreement, the Management Transfer Agreement, the financing contemplated under the Financing Commitment and the Existing Lender Arrangements shall not have been consummated and shall not have closed by January 31, 1996. (b) If at any time shares of either Class A Common Stock or Class B Common Stock (but not both) shall be outstanding, any determination to dissolve the Company and the manner in which such dissolution shall occur shall be determined by the Board and submitted to a vote of the Electing Class in accordance with the provisions of the GCL. -65- If at any time shares of neither the Class A Common Stock or Class B Common Stock shall be outstanding, any determination to dissolve the Company shall be made by the Stockholders in accordance with the Company's Certificate of Incorporation and the GCL. ARTICLE IX. LEGENDS All Stockholders agree that any certificates evidencing Common Stock subject to this Agreement shall be stamped or endorsed with a legend in substantially the following form; provided, however, in the event that shares of Common Stock are registered under the 33 Act, the Company shall promptly upon request, but in any event not later than is necessary in order to consummate any sale pursuant to any underwriting agreement or sales agency agreement relating thereto, deliver a replacement certificate not containing the first paragraph of the legend below in exchange for the legended certificate (it being understood that such legend shall be placed on such replacement certificate if the sale does not occur in accordance with the terms of the registration statement); and provided, further, the Company shall upon termination of this Agreement promptly upon request deliver a replacement certificate not containing the second paragraph of the legend below in exchange for the legended certificate: THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND ACCORDINGLY NEITHER THE SHARES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY SUCH LAWS APPLICABLE THERETO AND THE RULES AND REGULATIONS THEREUNDER. IN ADDITION, TRANSFERS, VOTING AND OTHER MATTERS IN RESPECT OF THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SHAREHOLDERS AGREEMENT DATED AS OF DECEMBER 20, 1995 AMONG THE COMPANY AND CERTAIN STOCKHOLDERS NAMED THEREIN, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY. THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE COMPANY'S MAINTENANCE OF ITS -66- STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). NO INDIVIDUAL MAY BENEFICIALLY OWN COMMON SHARES IN EXCESS OF THE THEN APPLICABLE OWNERSHIP LIMIT WITH RESPECT TO COMMON SHARES, WHICH MAY DECREASE OR INCREASE FROM TIME TO TIME, UNLESS SUCH INDIVIDUAL IS AN EXISTING HOLDER. ANY INDIVIDUAL WHO ATTEMPTS TO BENEFICIALLY OWN SHARES IN EXCESS OF THE ABOVE LIMITATION MUST IMMEDIATELY NOTIFY THE COMPANY. IN ADDITION, NO PERSON MAY CONSTRUCTIVELY OWN COMMON SHARES IN EXCESS OF THE CONSTRUCTIVE OWNERSHIP LIMIT, UNLESS SUCH PERSON IS AN EXISTING CONSTRUCTIVE HOLDER. ANY PERSON WHO ATTEMPTS TO CONSTRUCTIVELY OWN COMMON SHARES IN EXCESS OF THE CONSTRUCTIVE OWNERSHIP LIMIT MUST IMMEDIATELY NOTIFY THE COMPANY. ALL CAPITALIZED TERMS USED IN THIS LEGEND HAVE THE MEANINGS DEFINED IN THE COMPANY'S CERTIFICATE OF INCORPORATION, AS THE SAME MAY BE FURTHER AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON OWNERSHIP AND TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS. IF THE RESTRICTIONS ON OWNERSHIP AND TRANSFER ARE VIOLATED, THE COMMON SHARES REPRESENTED HEREBY WILL BE AUTOMATICALLY EXCHANGED FOR EXCESS SHARES AND WILL BE DEEMED TRANSFERRED TO A SPECIAL TRUST AS PROVIDED IN THE CERTIFICATE OF INCORPORATION. ARTICLE X. POST-CLOSING TERMINATION Following the Closing, this Agreement shall terminate upon the earlier to occur of the following: (i) such time as only one Stockholder or one Affiliated group of Stockholders owns all of the issued and outstanding Common Stock and (ii) the affirmative election of a majority of the outstanding shares of each Class of Common Stock; provided, however, that no such termination shall relieve any Person of any liability for a prior breach or default. Upon the termination of this Agreement, (i) all shares of Common Stock shall be entitled to equal rights in all respects including, without limitation, the election of directors, (ii) the provisions of the Company's certificate of incorporation and by laws shall govern, and (iii) the prohibitions on Transfers of Common Stock contained in Sections 6.2, 6.4 and 6.5(a) and (d) shall, notwithstanding such termination, continue to apply. -67- ARTICLE XI. MISCELLANEOUS 11.1. Recapitalization, Exchanges, etc. Affecting the Common Stock. The provisions of this Agreement shall apply to the full extent set forth herein with respect to (a) the Common Stock and (b) any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the Common Stock, by reason of any stock dividend, split, reverse split, combination, recapitalization, reclassification, merger, consolidation or otherwise. In the event of any change in the capitalization of the Company, as a result of any stock split, stock dividend or stock combination, the provisions of this Agreement shall be appropriately adjusted. 11.2. Injunctive Relief. Each party hereto acknowledges that it would be impossible to determine the amount of damages that would result from any breach of any of the provisions of this Agreement and that the remedy at law for any breach, or threatened breach, of any of such provisions would likely be inadequate and, accordingly, agrees that each other party shall, in addition to any other rights or remedies which it may have, be entitled to seek such equitable and injunctive relief as may be available from any court of competent jurisdiction to compel specific performance of, or restrain any party from violating, any of such provisions. In connection with any action or proceeding for injunctive relief, each party hereto hereby waives the claim or defense that a remedy at law alone is adequate and agrees, to the maximum extent permitted by law, to have each provision of this Agreement specifically enforced against it, without the necessity of posting bond or other security against it, and consents to the entry of injunctive relief against it enjoining or restraining any breach or threatened breach of such provisions of this Agreement. 11.3. Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon, shall inure solely to the benefit of and shall be enforceable by the parties hereto and their respective successors and assigns, and no such term or provision is for the benefit of, or intended to create any obligations to, any other Person, provided that (i) the Company shall not have either the right or the power to assign or delegate any right or obligation hereunder (including, without limitation by merger, consolidation or other operation of law) and any -68- purported such assignment or delegation shall be void except as expressly provided herein, and (ii) no Stockholder may assign any rights under this Agreement (including, without limitation, by merger, consolidation or other operation of law) except that, subject to the following sentence, any Stockholder may assign its rights hereunder, in whole but not in part, in connection with a Transfer of Common Stock made in strict compliance with all of the provisions of this Agreement. If any Stockholder shall acquire additional Common Stock and if any Transferee of any Stockholder shall acquire any Common Stock, in each case in any manner, whether by a permitted Transfer, operation of law or otherwise, such Common Stock shall be held subject to all of the terms of this Agreement, and by taking and holding such Common Stock such Person shall be conclusively deemed to have agreed to be bound by and to comply with all of the terms and provisions of this Agreement. 11.4. Amendment; Waiver. (a) Neither this Agreement nor any provision hereof nor any provision of the Company's Certificate of Incorporation may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Company and by the holders of a majority of the shares of each class of Common Stock. (b) No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon breach thereof shall constitute a waiver of any such breach or of any other covenant, duty, agreement or condition, any such waiver being effective only if contained in a writing executed by the waiving party. 11.5. Representations by Stockholders. (a) Each Stockholder represents and warrants, that (i) it has been duly authorized and otherwise duly qualified to purchase and hold its Common Stock and to execute and deliver this Agreement and all other instruments executed and delivered on behalf of it in connection with the acquisition of its Common Stock, (ii) the consummation of such transactions will not result in a breach or violation of, or a default under, its charter or by-laws, if such Stockholder is a corporation, or its certificate of limited partnership or its partnership agreement, if such Stockholder is a partnership, or its other organizational documents, if such Stockholder is neither a corporation or partnership, or any existing agreement by which it or any of its properties is bound and (iii) this Agreement is a binding agreement on the part of such Stockholder enforceable in accordance with its terms against such Stockholder. -69- (b) Each Stockholder, by executing this Agreement, represents and warrants that it has acquired its Common Stock for its own account, or for the account of a commingled pension trust or other institutional investor previously specified in writing to the Company with respect to whom it has full investment discretion, for investment and not with a view to resale or distribution thereof, that it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of an investment in the Common Stock, and is able to bear the economic risk of its investment and that it is fully aware that the Company is relying upon the truth and accuracy of this representation and warranty. Each Stockholder agrees that it will not transfer, sell or dispose of all or any portion of, or offer to transfer, sell or dispose of all or any portion of its Common Stock, or solicit offers to buy from or otherwise approach or negotiate in respect thereof with any person or persons whomsoever, all or any portion of its Common Stock in any manner which could violate or cause the Company to violate applicable federal or state securities laws. (c) Each of GGP and GG Properties represents and warrants to the other Stockholders (i) that they have delivered or caused to be delivered to each of the other Stockholders true, correct and complete copies of the Homart Stock Purchase Agreement (including the side letter agreements relating thereto dated July 31, 1995 and October 16, 1995), the Ownership Interest Purchase Agreement dated as of October 16, 1995 among Sears, Roebuck and Co., Homart Development Co., Homart Newco One, Inc., Homart Newco Four, Inc., Homart Newco Five, Inc., Community Centers One L.L.C., Community Centers Two L.L.C. and the Company, the Purchase and Sale Agreement dated as of October 16, 1995 by and between the Company and Developers Diversified Realty Corporation, the Natick Agreement, the Management Transfer Agreement, the Sublease and any of the agreements specifically referred to therein (for example, the Escrow Agreement and the Amended and Restated Tax Allocation Agreement) and (ii) that no other agreements relating to the purchase of the assets of Homart by the Company have been entered into by any of the Company, GGP or GG Properties. (d) NYSCRF represents and warrants to the Company and the other Stockholders that it is a "government plan" within the meaning of Section 414(d) of the Code and Section 3(32) of ERISA and that its acquisition of Common Stock is in accordance with all applicable state laws. (e) NYSCRF represents and warrants to the other Stockholders that it is exempt from the filing requirements -70- of HSR and the Rules. GGP represents and warrants to the other Stockholders that its acquisition of Class A Common Stock is exempt from the filing requirements of HSR and the Rules. (f) Each Stockholder which is a Benefit Plan Investor (other than NYSCRF) represents and warrants that its acquisition and holding of Common Stock is not a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, except to the extent such acquisition and holding of Common Stock meets the requirements of a prohibited transaction class exemption. 11.6. Notices. Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, when delivered personally or by courier, five days after being deposited in the United States mail, or when received by facsimile transmission if promptly confirmed by one of the foregoing means, as follows: if to the Company at 120 N. LaSalle, Suite 3300, Chicago, Illinois 60602, Attention: Matthew Bucksbaum, facsimile transmission no. 312-422-2323, if to GGP at 120 N. LaSalle, Suite 3300, Chicago, Illinois 60602, Attention: Matthew Bucksbaum, facsimile transmission no. 312-422-2323, if to any other Stockholder at the address or facsimile transmission number set forth opposite such Stockholder's name on Schedule I hereto and if to GG Properties at 215 Keo, Des Moines, Iowa 50309, Attention: Matthew Bucksbaum, facsimile transmission no. 515-283-0635 (or, in the case of Persons who become parties hereto subsequently, at their last addresses or facsimile transmission numbers shown on the record books of the Company). Each party hereto, by notice given to each other party hereto in accordance with this Section 12.6, may change the address or facsimile transmission number to which such notice or other communications are to be sent to such Party. 11.7. Further Assurances. Each party to this Agreement agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents, and to do all such other acts and things, as may be required by law or as, in the reasonable judgment of the Board or any Stockholder, may be necessary or advisable to carry out the intent and purpose of this Agreement. 11.8. Confidentiality. The Company and each of the Stockholders agree not to disclose or permit the disclosure (except by the Company in connection with the operation of its business) of any of the terms of this -71- Agreement or of any information relating to the Company Assets or the Company's business, which the Company and the Stockholders hereby acknowledge constitute non public, financial information, provided that such disclosure may be made (a) to any person who is a partner, officer, director or employee of such Stockholder or advisers or counsel to or accountants of such Stockholder solely for their use and on a need-to-know basis, (b) with the prior consent of GGP and a majority of the other Stockholders, (c) pursuant to a subpoena or order issued by a court, arbitrator or governmental body, agency or official, (d) as required by applicable federal or state laws (including, without limitation, securities and freedom of information laws) or (e) to any lender or prospective lender to, or investor in, such Stockholder. In the event that a Stockholder shall receive a request (or, in the case of NYSCRF, at such time a notice of such request is communicated to the representatives of NYSCRF who are responsible for the administration of its ownership of Common Stock) to disclose any of the terms of this Agreement under subpoena or order, such Stockholder shall (i) promptly notify the Board thereof, (ii) consult with the Board on the advisability of taking steps to resist or narrow such request and (iii) if disclosure is required or deemed advisable, cooperate with the Board in any attempt it may make to obtain an order or other assurance that confidential treatment will be accorded those terms of this Agreement that are disclosed. 11.9. waiver of Claims Against Directors. The Company and each Stockholder agrees to waive any claim or right of action it might have, whether individually or by or in the right of the Company, against any director on account of any action taken or failure to take action by such director in the performance of his duties to the extent permitted under the GCL. 11.10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. 11.11. Headings. The descriptive headings of the several sections in this Agreement are for convenience only and do not constitute part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. 11.12. Entire Agreement. This Agreement (including the Schedules and Exhibits hereto) constitutes the entire agreement between the parties hereto and -72- supersedes all prior agreements and understandings, oral or written, between the parties hereto with respect to the subject matter hereof including, without limitation, that certain Summary Terms of the Investment, draft dated November 3, 1995. 11.13. Severability. Any provision of this Agreement that is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or lack of authorization without invalidating the remaining provisions hereof or affecting the validity, unenforceability or legality of such provision in any other jurisdiction. 11.14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument. 11.15. Arbitration. Any claim arising out of an alleged breach of this Agreement and any claim that Cause exists pursuant to Section 3.6(c) shall be resolved by arbitration. Such arbitration shall be conducted in accordance with the following: (a) Each party shall have five (5) business days after written notice by another party of the commencement of arbitration proceedings hereunder to appoint an arbitrator who is on the approved panel of arbitrators of the American Arbitration Association. Each party shall immediately notify the other party of such appointment. The two arbitrators so appointed shall then select a third arbitrator within five (5) business days after the appointment of the second arbitrator to then constitute the Board of Arbitration. If any party shall fail to appoint an arbitrator within such five (5) business day period, or if the two arbitrators selected by the parties shall fail, within five (5) business days of their selection, to make a selection of a third arbitrator, then the American Arbitration Association shall appoint the arbitrator that was not selected by the failing party or shall appoint the third arbitrator, as the case may be, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Board of Arbitration shall then proceed under such rules. (b) Following the designation of such Board of Arbitration, the parties, together with the members of the Board of Arbitrators, shall promptly undertake appropriate -73- informal efforts to mediate and negotiate a solution to the matter covered by the original notice. (c) If a negotiated solution cannot be achieved within fourteen (14) days after the date on which the Board of Arbitration is constituted, then the Board of Arbitration shall notify the parties. The proceeding, upon such notification, will then become a compulsory arbitration to be conducted under the Commercial Arbitration Rules of the American Arbitration Association by the Board of Arbitration. These rules shall be subject to the following modifications: (i) discovery shall be permitted under the same standards provided for in the Federal Rules of Civil Procedure; (ii) the members of the Board of Arbitration shall interpret and apply the provisions of this Agreement; (iii) except as otherwise set forth in Section 3.6(e), the arbitration costs may be charged to the losing party or allocated between the parties as may be determined by the Board of Arbitration; and (iv) the proceedings will be held in Chicago, Illinois, unless the parties shall otherwise agree in writing. (d) In connection with the enforcement of the mediation and arbitration provisions of this Section 11.15, any agreement, decision or award shall be final and conclusive as to any such claim. 11.16. Consent to Jurisdiction. In connection with any suit, claim, action or proceeding relating to the rights and obligations of the parties arising out of this Agreement: GG Properties, GGP and each other Stockholder hereby consents to the in personam jurisdiction of the United States federal courts and Delaware state courts located in New Castle County, Delaware; each such Person agrees that service in the manner set forth in Section 11.6 hereof shall be valid and sufficient for all purposes; and each such Person agrees to, and irrevocably waives any objection based on forum non conveniens or venue not to, appear in any United States federal court or Delaware state court located in New Castle County, Delaware. Each Stockholder (other than GGP) hereby irrevocably appoints the -74- Company as agent for service of process with respect to any matters relating to the rights and obligations of the parties arising out of this Agreement. -75- IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above. GGP/HOMART, INC. By: /s/ Matthew Bucksbaum ------------------------------------ Name: Matthew Bucksbaum ---------------------------------- Title: CEO --------------------------------- GGP LIMITED PARTNERSHIP By: General Growth Properties, Inc., its General Partner By: /s/ Matthew Bucksbaum ------------------------------------ Name: Matthew Bucksbaum ---------------------------------- Title: CEO --------------------------------- THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND By: /s/ John E. Hull ------------------------------------ Name: John E. Hull Title: Deputy Comptroller, Investments and Cash Management EQUITABLE LIFE INSURANCE COMPANY OF IOWA By Equitable Investment Services, Inc., Agent By: /s/ Bryan L. Borchert -------------------------------------- Name: Bryan L. Borchert Title: Managing Director USG ANNUITY & LIFE COMPANY By Equitable Investment Services, Inc., Agent By: /s/ Bryan L. Borchert -------------------------------------- Name: Bryan L. Borchert Title: Managing Director TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA By: /s/ Lucy Momjian -------------------------------------- Name: Lucy Momjian ------------------------------------ Title: Associate Treasurer for Investments ----------------------------------- GENERAL GROWTH PROPERTIES, INC. By: /s/ Matthew Bucksbaum -------------------------------------- Name: Matthew Bucksbaum ------------------------------------ Title: CEO ----------------------------------- EX-10.19 19 c02442exv10w19.txt AMENDMENT TO STOCKHOLDERS AGREEMENT Exhibit 10.19 FIRST AMENDMENT TO STOCKHOLDERS AGREEMENT This FIRST AMENDMENT TO STOCKHOLDERS AGREEMENT (this "Agreement") is made and entered into as of September 10, 1996 by and among GGP/HOMART, INC., a Delaware corporation (the "Company"), GGP LIMITED PARTNERSHIP, a Delaware limited partnership ("GGP"), THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND ("NYSCRF"), a fund, established pursuant to NY Retirement and Social Security Law Section 422, in the custody of the Comptroller of the State of New York, EQUITABLE LIFE INSURANCE COMPANY OF IOWA, USG ANNUITY & LIFE COMPANY, TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA and GENERAL GROWTH PROPERTIES, INC., a Delaware corporation ("GG Properties"). GGP, NYSCRF, EQUITABLE LIFE INSURANCE COMPANY OF IOWA, USG ANNUITY & LIFE COMPANY AND TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA are sometimes referred to herein individually as a "Stockholder" or collectively as the "Stockholders." RECITALS A. The Company, the Stockholders and GG Properties entered into that certain Stockholders Agreement, dated as of December 20, 1996 (the "Original Agreement"). Capitalized terms used herein but not defined herein shall have the meanings assigned to them in the Original Agreement. B. The Company, the Stockholders and GG Properties desire to amend the Original Agreement in the manner set forth in this Amendment. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, the Company, the Stockholders and GG Properties hereby agree as follows: 1. Section 1.12 of the Original Agreement is hereby deleted in its entirety and replaced with the following: "1.12 "Cash Reserves" shall mean an amount funded from the Initial Subscription as determined by the Board plus the aggregate amount of all Reserve Amounts." 2. Schedule VII, Part 1, of the Original Agreement is hereby amended by replacing the words "[open The system known as MRI is currently deemed acceptable for such purposes]." in Section B, subheading Property level, subsidiary level and corporate accounting, with the words "Management shall commence conversion of the computerized management reporting system to the MRI accounting system no later than January 1997 and use all reasonable efforts to complete the conversion process by the end of July 1997." 3. The parties hereto agree that notwithstanding anything to the contrary in the Original Agreement, including without limitation Schedule X thereto: a) Management shall be entitled to retain the fee previously paid to Management by the Company in the amount of approximately $1,200,000 with respect to work completed at West Oaks Mall prior to December 20, 1995; and b) Commencing in the year 1996 and continuing until the end of the year 2004, the aggregate property management, asset management and development fees payable to Management each year shall be reduced by $200,000 per year for an aggregate reduction of $1,800,000 (the "Aggregate Fee Reduction"). Such fee reduction shall be applied monthly, commencing with the month of January 1996 and ending with the month of December 2004, in the amount of $16,666.67 per month; provided, however, that if the Company shall be liquidated, dissolved or merged or consolidated into another unrelated Person, or if all or substantially all of the assets of the Company shall be sold or otherwise disposed of, or if Management shall no longer be entitled to receive the fees described in Schedule X, then Management shall have no further obligation or liability to the Company with respect to any portion of the Aggregate Fee Reduction that has not been applied as of the date of such event. 4. Annex A to Schedule X of the Original Agreement is hereby amended by deleting the second page thereof (entitled "GGP/Homart Purchase Price Allocation Worksheet - Land Homart Share ($ In Thousands)") in its entirety and replacing it with Exhibit 1 attached hereto. 5. Annex B to Schedule X of the Original Agreement is hereby deleted in its entirety and replaced by Exhibit 2 attached hereto. 6. Schedule X of the Original Agreement is hereby amended by adding Exhibit 3 attached hereto as Annex C to Schedule X. -2- 7. The Original Agreement is hereby amended by adding Exhibit 4 attached hereto as Exhibit I to the Original Agreement. 8. Except as set forth in this Amendment, the Original Agreement is unmodified and in full force and effect. 9. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. 10. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth above. GGP/HOMART, INC. By: /s/ Robert A. Michaels ------------------------------------ Name: Robert A. Michaels ---------------------------------- Title: President --------------------------------- GGP LIMITED PARTNERSHIP By: General Growth Properties Inc., its General Partner By: /s/ Robert A. Michaels ------------------------------------ Name: Robert A. Michaels ---------------------------------- Title: President --------------------------------- THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND By: /s/ John E. Hull ------------------------------------ Name: John E. Hull Title: Deputy Comptroller, Investments and Cash Management -3- EQUITABLE LIFE INSURANCE COMPANY OF IOWA By Equitable Investment Services, Inc., Agent By: /s/ Bryan L. Borchert ------------------------------------ Name: Bryan L. Borchert Title: Managing Director USG ANNUITY & LIFE COMPANY By Equitable Investment Services, Inc., Agent By: /s/ Bryan L. Borchert ------------------------------------ Name: Bryan L. Borchert Title: Managing Director TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA By: /s/ Lucy Momjian ------------------------------------ Name: Lucy Momjian ---------------------------------- Title: Assoc. Treasurer GENERAL GROWTH PROPERTIES, INC. By: /s/ Robert A. Michaels ------------------------------------ Name: ---------------------------------- Title: --------------------------------- -4- EX-10.20 20 c02442exv10w20.txt OPERATING AGREEMENT EXHIBIT 10.20 OPERATING AGREEMENT OF GGP/HOMART II L.L.C. . . . OPERATING AGREEMENT OF GGP/HOMART II L.L.C. Table of Contents
Page ---- ARTICLE I DEFINED TERMS.................................................... 1 1.1 Definitions...................................................... 1 ARTICLE II FORMATION OF COMPANY............................................. 21 2.1 Formation of Company............................................. 21 2.2 Name............................................................. 21 2.3 Principal Place of Business...................................... 21 2.4 Purpose and Business of the Company.............................. 21 2.5 Classes of Units................................................. 22 2.6 Term............................................................. 22 2.7 Nature of the Company............................................ 22 2.8 Members' Names and Addresses; Classification..................... 22 2.9 Registered Office and Registered Agent........................... 22 2.10 Organization Certificates........................................ 23 2.11 Concurrent Transactions.......................................... 23 2.12 Restrictions on Other Agreements................................. 23 ARTICLE III COMPANY CAPITAL.................................................. 24 3.1 Initial Contributions of Members................................. 24 3.2 No Additional Capital Contributions.............................. 24 3.3 Withdrawal; Return of Capital; Interest.......................... 24 3.4 Priority......................................................... 24 3.5 Development Project Funding/Acquisition Financing; Etc........... 24 ARTICLE IV ALLOCATION OF COMPANY ITEMS...................................... 25 4.1 Maintenance of Capital Accounts.................................. 25 4.2 Net Income and Net Loss.......................................... 25 4.3 Special Allocations.............................................. 26 4.4 Curative Allocations............................................. 27 4.5 Tax Allocations.................................................. 27 4.6 Allocations Subsequent to Assignment............................. 28
i ARTICLE V COMPANY DISTRIBUTIONS............................................ 29 ARTICLE VI ACCOUNTING MATTERS............................................... 30 6.1 Fiscal Year; Designation of Auditors............................. 30 6.2 Books and Records................................................ 30 6.3 Reports and Statements........................................... 31 6.4 Tax Matters Member............................................... 33 6.5 Tax Elections and Returns........................................ 33 6.6 Interim Accounting............................................... 33 ARTICLE VII GOVERNANCE; BOARD OF DIRECTORS................................... 34 7.1 Action by Members to Effectuate this Agreement................... 34 7.2 Board............................................................ 34 7.3 Officers; Management; Rights in the Event of Cause............... 35 7.4 Chairman of the Board............................................ 39 7.5 Committees....................................................... 39 7.6 Certificate of Formation; By-Laws................................ 40 7.7 Actions by Board................................................. 40 7.8 Meetings of the Board............................................ 46 7.9 Conduct of Business.............................................. 46 7.10 Other Activities of Members...................................... 48 7.11 Right of Public to Rely on Authority of the Members.............. 49 7.12 Standard of Care................................................. 50 7.13 Waiver and Indemnification....................................... 50 ARTICLE VIII TRANSFERS OF COMPANY UNITS....................................... 51 8.1 Certain Restrictions............................................. 51 8.2 Compliance with Securities Laws.................................. 52 8.3 Transfer of Ownership Interests in Affiliates.................... 52 8.4 Transfers of Units by Members.................................... 52 8.5 Certain Prohibited Transfers of Units by Members................. 56 8.6 Expenses of Transfer............................................. 58 8.7 Indemnification by Transferor.................................... 58 8.8 Acceptance of Prior Acts......................................... 59 8.10 Certain Conditions to Transfer................................... 59 8.11 Dissolution of Company upon Transfer............................. 60 8.12 Effect of Initiation of Certain Procedures....................... 60 ARTICLE IX PUT OPTION....................................................... 60 9.1 Put Option....................................................... 60 9.2 Exercise......................................................... 60 9.3 Dissolution Value of the Company................................. 61 9.4 Right of Offerors to Withdraw Put Notice......................... 62 9.5 Option of Class A Members........................................ 62 9.6 Purchase of Offerors' Units...................................... 62 9.7 Sale of Company.................................................. 66 9.8 Priority......................................................... 69

ii ARTICLE X BUY-SELL RIGHT................................................... 69 10.1 Buy-Sell Right................................................... 69 10.2 Exercise......................................................... 69 10.3 Option of Class B Members........................................ 70 10.4 Purchase Price; Payment of Purchase Price; Closing............... 70 10.5 Priority......................................................... 72 ARTICLE XI....................................................... 73 SPECIAL DISSOLUTION RIGHT........................................ 73 11.1 Special Dissolution Right........................................ 73 11.2 Exercise......................................................... 73 11.3 Dissolution Value of the Company................................. 73 11.4 Right to Withdraw Dissolution Commencement Notice................ 73 11.5 Option of Class A Members........................................ 73 11.6 Purchase of Class B Members' Units............................... 74 11.7 Distribution of Properties....................................... 76 11.8 Priority......................................................... 80 ARTICLE XII DISSOLUTION AND TERMINATION...................................... 80 12.1 Dissolution...................................................... 80 12.2 Accounting....................................................... 81 12.3 Winding-Up....................................................... 81 12.4 Liquidating Distribution......................................... 81 12.5 Distributions in Accordance with Capital Accounts................ 82 12.6 Negative Capital Accounts........................................ 82 12.7 Distributions in Kind............................................ 82 12.8 No Redemption.................................................... 82 12.9 Governance....................................................... 82 12.10 Return of Capital................................................ 83 ARTICLE XIII MATTERS RELATING TO RETAINED DEBT................................ 83 13.1 Payment of Retained Debt......................................... 83 13.2 Failure to Make Payments in Respect of Retained Debt............. 83 13.3 Indemnification.................................................. 84 13.4 Security Interest................................................ 84 13.5 Other Matters Relating to Retained Debt.......................... 86 ARTICLE XIV ADDITIONAL CAPITAL CONTRIBUTIONS................................. 87 14.1 Additional Capital Contributions................................. 87 14.2 Failure to Make Additional Capital Contributions................. 88 ARTICLE XV MISCELLANEOUS.................................................... 88 15.1 Injunctive Relief................................................ 88 15.2 Successors and Assigns........................................... 89 15.3 Amendment; Waiver................................................ 89

iii 15.4 Representations by Members....................................... 89 15.5 Notices.......................................................... 90 15.6 Further Assurances............................................... 91 15.7 Confidentiality.................................................. 91 15.8 APPLICABLE LAW................................................... 91 15.9 Headings......................................................... 91 15.10 Entire Agreement................................................. 91 15.11 Severability..................................................... 92 15.12 Counterparts..................................................... 92 15.13 Arbitration...................................................... 92 15.14 Consent to Jurisdiction.......................................... 93 15.15 Waiver of Partition.............................................. 93 15.16 Brokerage........................................................ 93 15.17 Company Name..................................................... 94 15.18 Litigation; No Dissolution....................................... 94 15.19 Ownership of Company Property.................................... 94 15.20 Time of the Essence.............................................. 95 15.21 Status Reports................................................... 95 15.22 Disposition of Documents......................................... 95 15.23 Calculation of Days.............................................. 96 15.24 Attorneys........................................................ 96

iv EXHIBIT/SCHEDULE LIST Exhibit A [INTENTIONALLY DELETED] Exhibit B [INTENTIONALLY DELETED] Exhibit C Stonebriar Development Budget Exhibit D [INTENTIONALLY DELETED] Exhibit E Relevant Trade Areas Schedule I Names of Members Schedule II Policies and Procedures Schedule III Excluded Costs and Expenses Schedule IV Management Fees and Reimbursements Schedule V Current Properties Schedule VI GGPLP Retained Debt Schedule VII NYSCRF Retained Debt 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"). WITNESSETH: 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 501(a) (1), (2), (3) or (7) under the 33 Act or as defined under Rule 501(a) (8) under the 33 Act (if all of the equity owners of such investor are Persons defined in Rule 501(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. "Adjusted Capital Account Deficit" shall mean, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of any relevant Fiscal Year, after giving effect to the following adjustments: (a) credit to such Capital Account any amounts which such Member is obligated or treated as obligated to restore with respect to any deficit balance in such Capital Account pursuant to Regulations Section 1.704-1(b)(2)(ii)(c), or is deemed to be obligated to restore with respect to any deficit balance pursuant to the penultimate sentences of Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5); and (b) debit to such Capital Account the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the requirements of the alternate test for economic effect contained in Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. "Affected Gain" shall have the meaning set forth in Section 4.5(b). "Affiliate" shall mean, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term "Affiliated" has a meaning correlative to the foregoing. As used herein, the term "control" shall mean either (i) having (directly or indirectly through one or more intermediaries) the exclusive power to direct the management and policies of a Person or (ii) having both (A) at least fifty percent (50%) of the economic interest in a Person and (B) at least fifty percent (50%) of the voting rights with respect to such Person with the full right to exercise such vote, and the term "controlled" has a meaning correlative to the foregoing. Notwithstanding the foregoing, General Growth Management, Inc., any successor thereto and any other Person shall be deemed to be Affiliates of GGPLP, provided that GG Properties or GGPLP, directly or indirectly, is entitled to receive at least seventy-five percent (75%) of all dividends or other distributions made by such Person. "Agreement" shall mean this Operating Agreement, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires. "Alderwood Mall" shall mean the property commonly known as Alderwood Mall, Seattle, Washington, as more particularly described in the Alderwood Mall Contribution Agreement. "Alderwood Mall Contribution Agreement" shall mean that certain Contribution Agreement dated concurrently herewith pursuant 2 to which NYSCRF causes the equity interests in the Alderwood Mall Owner to be conveyed to the Company. "Alderwood Mall Owner" shall mean Alderwood Mall L.L.C., a Delaware limited liability company. "Altamonte Entities" shall mean Altamonte Springs Mall L.L.C., Altamonte Springs Mall, L.P. and Altamonte Springs Mall II, L.P. "Altamonte Mall Contribution Agreement" shall mean that certain Contribution Agreement dated concurrently herewith pursuant to which GGPLP conveys and/or causes to be conveyed to the Company all of the equity interests in and to the Altamonte Entities, which Altamonte Entities own, in the aggregate, one hundred percent (100%) of the Altamonte Mall Owner which in turn owns one hundred percent (100%) of the Altamonte Mall. "Altamonte Mall" shall mean the property commonly known as Altamonte Mall, Altamonte Springs, Florida, as more particularly described in the Altamonte Mall Contribution Agreement. "Altamonte Mall Owner" shall mean Altamonte Mall Venture, a Florida general partnership. "Annual Business Plan" shall have the meaning set forth in Section 7.7(c). "Antitrust Division" shall have the meaning set forth in Section 9.6. "Appraiser" shall mean an independent member of the Appraisal Institute, who shall have a national practice, shall have at least ten years' standing and established experience in appraising properties similar to the Properties and shall not have been employed by either of the Members within the previous three (3) years of the date such Appraiser is appointed; provided, however, that neither Member shall be deemed to have employed an Appraiser merely because a lender to such Member or such Member's Affiliate hired such Appraiser even if such Member or Affiliate paid the fee for such Appraiser. "Bankruptcy Event" shall mean, with respect to a Member, the occurrence of any of the following events: (a) the making by it of an assignment for the benefit of its creditors, (b) the filing by it of a voluntary petition in bankruptcy, (c) an adjudication that it is bankrupt or insolvent unless such adjudication is stayed or dismissed within 60 days, or the entry against it of an order for relief in any bankruptcy or insolvency proceeding unless such order is stayed or dismissed within 120 days, (d) the filing by it of a petition or an answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, (e) the filing 3 by it of an answer or other pleading admitting or failing to contest the material allegations of the petition filed against it in any proceeding of the nature described in the preceding clause (d), (f) its seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of it or of all or any substantial part of its properties, or (g) 120 days after the commencement of any proceeding against it seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, if the proceeding has not been stayed or dismissed, or if within 120 days after the appointment without its consent or acquiescence of a trustee, receiver or liquidator of it or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within 120 days after the expiration of any such stay, the appointment is not vacated. "Benefit Plan Investor" shall have the meaning set forth in the Plan Asset Regulations. "Board" or "Board of Directors" shall mean the Board of Directors of the Company in office at the applicable time, as elected in accordance with the provisions hereof and the By-Laws. "Board Members" shall have the meaning set forth in Section 7.2(a). "Buy-Sell Designated Values" shall have the meaning set forth in Section 10.2. "Buy-Sell Notice" shall have the meaning set forth in Section 10.2. "Buy-Sell Purchase Price" shall have the meaning set forth in Section 10.4(a). "Buy-Sell Response Notice" shall have the meaning set forth in Section 10.3. "Buy-Sell Right" shall have the meaning set forth in Section 10.1. "Capital Account(s)" shall mean, with respect to any Member, the separate "book" account which the Company shall establish and maintain for such Member in accordance with Section 704(b) of the Code and Section 1.704-1(b)(2)(iv) of the Regulations and such other provisions of Section 1.704-1(b) of the Regulations that must be complied with in order for the Capital Accounts to be determined in accordance with the provisions of said Regulations. In furtherance of the foregoing, the Capital Accounts shall be maintained in compliance with Section 1.704-1(b)(2)(iv) of the Regulations, and the provisions hereof shall be interpreted and applied in a manner consistent therewith. 4 "Capital Contribution" shall mean, with respect to any Member, the amount of money and the Fair Market Value of any property other than money contributed to the Company (net of liabilities, other than Retained Debt, that are assumed by the Company or to which such property is subject). The Fair Market Value of the property being contributed to the Company pursuant to the Contribution Agreements is equal to the "Contribution Amounts" set forth and defined in the Contribution Agreements. "Carolina Place" shall mean the property commonly known as Carolina Place, Charlotte, North Carolina, more particularly described in the Carolina Place Contribution Agreement. "Carolina Place Contribution Agreement" shall mean that certain Contribution Agreement dated concurrently herewith pursuant to which NYSCRF causes the equity interests in the Carolina Place Owner to be conveyed to the Company. "Carolina Place Owner" shall mean Carolina Place L.L.C., a Delaware limited liability company. "Cash Reserves" shall mean the aggregate amount of all Reserve Amounts. "Cause" shall have the meaning set forth in Section 7.3(d). "Certificate of Formation" shall mean the Company's Certificate of Formation, as the same may be amended and/or restated from time to time. "Change of Control""Change of Control" shall mean, (a) with respect to GGPLP, GG Properties or any successor (that would not otherwise result in a Change of Control) ceasing to be the sole general partner of GGPLP, (b) with respect to GG Properties, any of the following: (i) any Person, other than the Bucksbaum Family or any Member or any Affiliate of any Member (including by reason of the application of Article IX), becoming the beneficial owner of (x) more than 25% of the GG Stock (assuming for such calculation that the Bucksbaum Family has converted all of their operating partnership units in GGPLP into GG Stock) and (y) more than 110% of the GG Stock beneficially owned by the Bucksbaum Family (assuming the Bucksbaum Family has converted all of their operating partnership units in GGPLP into GG Stock); (ii) the sale or transfer (other than by way of merger or any other transaction in which GG Properties' stockholders receive interests in a successor entity) of all or substantially all of GG Properties' interests in its properties in a single transaction or a series of related transactions; (iii) the merger of GGPLP or GG Properties and another Person and, within eighteen (18) months after such merger, a majority of the Persons who were officers (holding a position of executive vice president or higher or having the responsibilities of any such positions) of GG Properties 90 days prior to such merger are no longer employed 5 by GG Properties or the survivor in the merger (for reasons other than death or disability) in the same or a senior position, or with the same or more senior responsibilities, as prior to the merger; (iv) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the board of directors of GG Properties (together with any new directors whose election or nomination for election was approved by a vote of a majority of the directors (or by a nominating committee of the board of directors) then still in office, who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors of GG Properties or its successor by merger or otherwise then in office or (c) the taking of any action, including the filing of a petition, with respect to (x) an assignment for the benefit of creditors of GGPLP or GG Properties, (y) the bankruptcy, insolvency, reorganization, dissolution or any similar occurrence of GGPLP or GG Properties or (z) a liquidation or any other similar occurrence, that might result in the termination of GGPLP or GG Properties (other than in connection with a merger or other transaction in which GG Properties' stockholders receive interests in a successor entity) which action, if taken by someone other than GGPLP or GG Properties has not been discharged within sixty (60) days. For purposes of this paragraph, the term "Bucksbaum Family" shall mean Matthew Bucksbaum, his spouse, children, descendants and trusts for the benefit of any of them and the spouse, children, descendants and estate of Martin Bucksbaum and any trusts for the benefit of any of them. "Class A Board Members" shall have the meaning set forth in Section 7.2(a). "Class A Members" shall mean the holders of Class A Units. "Class A Minimum Investment" shall have the meaning set forth in Section 8.4(a)(ii). "Class A Units" shall have the meaning set forth in Section 2.5 hereof. "Class B Board Members" shall have the meaning set forth in Section 7.2(a). "Class B Members" shall mean the holders of Class B Units. "Class B Minimum Investment" shall have the meaning set forth in Section 8.4(b)(ii). "Class B Units" shall have the meaning set forth in Section 2.5 hereof. 6 "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any corresponding provisions of succeeding law. "Commission" shall mean the Securities and Exchange Commission or any successor thereto. "Company" shall have the meaning set forth in the preamble. "Company Assets" shall mean all right, title and interest of the Company and the Subsidiaries in and to all or any portion of the assets and property, whether tangible or intangible and whether real, personal or mixed, of the Company and the Subsidiaries including any direct or indirect interests therein, and any property (real or personal) or estate or direct or indirect interests therein acquired in exchange therefor or in connection therewith. "Company FFO" shall mean, with respect to any period, the funds from operations of the Company as calculated in the manner that "Company FFO" is calculated pursuant to the Stockholders Agreement. "Company Minimum Gain" shall have the meaning set forth in Sections 1.704-2(b)(2) and (d)(1) of the Regulations. "Contributed Entities" shall mean the Altamonte Entities, the Natick Entities, the Northbrook Entities, the Stonebriar Entities, the Alderwood Mall Owner and the Carolina Mall Owner. "Contribution Agreements" shall mean the Alderwood Mall Contribution Agreement, the Altamonte Mall Contribution Agreement, the Carolina Place Contribution Agreement, the Montclair Plaza Contribution Agreement, the Natick Mall Contribution Agreement, the Northbrook Court Contribution Agreement and the Stonebriar Development Project Contribution Agreement. "Contribution Default Amount" shall have the meaning set forth in Section 14.2. "Contribution Defaulting Member" shall have the meaning set forth in Section 14.2. "Contribution Default Loan" shall have the meaning set forth in Section 14.2. "Contribution Default Notice" shall have the meaning set forth in Section 14.2. "Contribution Non-Defaulting Member" shall have the meaning set forth in Section 14.2. 7 "CMBS Financing" shall mean the financing, which is anticipated to close on or before November 30, 1999, pursuant to which the Northbrook Court Owner, the Alderwood Mall Owner and Carolina Place Owner and certain subsidiaries of GGP/Homart will issue collateralized mortgage-backed securities. "Defaulting Member" shall mean a Contribution Defaulting Member or Retained Debt Defaulting Member. "Default Loan" shall mean a Contribution Default Loan or Retained Debt Default Loan. "Development Manager" shall mean, for so long as GGPLP is a Member, GGPLP, General Growth Management, Inc. or another Affiliate of GG Properties (in each case, so long as the same is an Affiliate of GGPLP or GG Properties) designated by GGPLP to act as the development manager of the Company or one or more of its Subsidiaries pursuant to Section 7.3(b). "Dissolution Commencement Notice" shall have the meaning set forth in Section 11.1. "Dissolution Commencement Notice Effective Date" shall have the meaning set forth in Section 11.4. "Dissolution Right" shall have the meaning set forth in Section 11.1. "Dissolution Value of a Property" shall have the meaning set forth in Section 11.7(b). "Dissolution Value of the Company" shall have the meaning set forth in Section 9.3. "Electing Class" shall have the meaning set forth in Section 8.4(c)(i). "Entity" shall mean a corporation, partnership, limited liability company, trust, business trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "ERISA" shall have the meaning set forth in Section 7.9(c). "Event" shall have the meaning set forth in Section 9.7. "Expenditures" for a given period of time shall mean a sum equal to the aggregate of expenses, charges, costs and other amounts actually paid or required to be paid during such period of time in connection with the business of the Company or the properties owned by the Company or any wholly-owned Subsidiary in accordance with the terms hereof, including: 8 (a) expenditures, costs, fees and charges in connection with the ownership, operation, management or leasing of the properties of the Company or any wholly-owned Subsidiary, including all fees and reimbursement amounts payable pursuant to Section 7.3; (b) expenditures, costs and charges in connection with the repair, maintenance, replacement, alteration or addition or capital improvement to any property owned by the Company or a wholly-owned Subsidiary, including any casualty or condemnation losses to the extent that such losses are not reimbursed during such period by any third party responsible therefor or through insurance maintained by the Company or any wholly-owned Subsidiary; (c) all payments of scheduled amortization of principal, interest, points or fees on, or hedging costs associated with, the mortgage loans or other loans to the Company or its wholly-owned Subsidiaries, including upon any refinancing thereof; (d) all sales, payroll, real estate, personal property, occupancy and other excise, income, franchise, property, privilege or similar taxes and assessments imposed upon the Company, any wholly-owned Subsidiary, or any of their properties; (e) utility costs and deposits and other costs and deposits required to obtain or lease any service or equipment relating to the Company, any property owned by the Company or a wholly-owned Subsidiary; (f) leasing commissions and expenditures required to be made in connection with any lease covering space in or at any property owned by the Company or a wholly-owned Subsidiary, including tenant improvements, tenant allowances and payments, costs incurred in connection with assuming a tenant's lease obligations with respect to other real property and costs incurred in connection with the exercise of a right to "take-back" space in a property owned by the Company or a wholly-owned Subsidiary; (g) the Reserve Amount; (h) the fees and expenses of investment bankers, attorneys, accountants, architects, engineers, appraisers and other professionals retained by or on behalf of the Company or its wholly-owned Subsidiaries in accordance with the terms hereof; (i) the transfer taxes, title insurance premiums, survey costs, attorneys fees, costs of environmental reports and 9 other costs and expenses to be paid by the Company pursuant to the Contribution Agreements; and (j) all other costs and expenses of the Company and the wholly-owned Subsidiaries incurred in accordance with this Agreement or as determined by the Board. Notwithstanding the foregoing, there shall be excluded from Expenditures: (1) all non-cash items such as depreciation and amortization; (2) amounts distributed to the Members pursuant to this Agreement; (3) all payments and expenses taken into account in determining Net Disposition Proceeds; (4) any expenditure, cost or charge enumerated in clauses (a) through (i) above incurred in connection with the development of the Stonebriar Development Project in accordance with the Stonebriar Development Plan to the extent of the additional Capital Contributions that are made pursuant to Article XIV; (5) all payments of principal, interest and other amounts in respect of the Retained Debt; and (6) any expenditure, cost or charge enumerated in clauses (a) through (j) above (other than clause (g)) to the extent such expenditure, cost or charge was paid from Cash Reserves. "Fair Market Value" shall mean, with respect to a particular asset or interest, the price at which informed and willing parties dealing at arm's length value and under no compulsion to sell or purchase would agree to purchase or sell such asset or interest, taking into account, among other things, the anticipated cash flow, taxable income or taxable loss attributable to the asset or interest in question. In the case of any asset other than a marketable security and unless the method of determining Fair Market Value is otherwise provided herein, the Fair Market Value shall be determined by agreement of the Members. In the case of any marketable security at any date and unless the method of determining Fair Market Value is otherwise provided herein, the Fair Market Value of such security shall equal the closing sale price of such security on the business day (on which any national securities exchange is open for the normal transaction of business) next preceding such date, as appearing in any published list of any national securities exchange or in the National Market List of the National Association of Securities Dealers, Inc., or, if there is 10 no such closing sale price of such security, the final price of such security at face value quoted on such business day by a financial institution of recognized standing which regularly deals in securities of such type. "Financing Documents" shall mean any loan agreement, security agreement, mortgage, deed of trust, indenture, bond, note, tax debenture or other instrument or agreement, in each case as amended, relating to indebtedness of the Company or any Subsidiary for borrowed money, an obligation which is represented by one or more securities issued by the Company or any Subsidiary or any tax increment financing of the Company or any Subsidiary. "FTC" shall have the meaning set forth in Section 9.6. "Funding Notice" shall have the meaning set forth in Section 14.1. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect from time to time. "General Growth Officers" shall have the meaning set forth in Section 7.3. "General Growth Share Closing Price" on any date shall mean, with respect to the GG Stock, the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the GG Stock is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the GG Stock is listed or admitted to trading or, if the GG Stock is not listed or admitted to trading on any national securities exchange, the last quoted price, or if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the GG Stock is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the GG Stock as such person is selected from time to time by the Board of Directors of GG Properties. "GG Stock" shall mean the common stock, par value $.10 per share, of GG Properties. "GGP/Homart" shall mean GGP/Homart, Inc., a Delaware corporation. 11 "GGPLP" shall mean GGP Limited Partnership, a Delaware limited partnership. "GGPLP Retained Debt" shall mean the debt described on Schedule VI. "GG Properties" shall mean General Growth Properties, Inc., a Delaware corporation or any successor thereof. "HSR" shall have the meaning set forth in Section 9.6. "Independent Board Members" shall have the meaning set forth in Section 8.4(c)(i). "Initial Properties" shall mean Alderwood Mall, Altamonte Mall, Carolina Place, Montclair Plaza, Natick Mall, Northbrook Court and the Stonebriar Development Project. "Investment Company Act" shall mean the Investment Company Act of 1940, as the same may be amended from time to time. "IRS" shall mean the Internal Revenue Service. "Key Documents" all Financing Documents, partnership agreements, limited liability company agreements or other joint venture agreements to which the Company (or its Subsidiaries) is a party or by which the Company (or its Subsidiaries) is bound, management agreements to which the Company (or its Subsidiaries) is a party or by which the Company (or its Subsidiaries) is bound, reciprocal easement agreements (including supplemental agreements) to which the Company (or its Subsidiaries) is a party or by which the Company (or its Subsidiaries) is bound, each lease for space in a Property of more than 10,000 square feet service agreements relating to the operation of the Properties, all material permits and licenses relating to the Properties and all material easements and other recorded and unrecorded material agreements relating to the Properties or to which the Company (or its Subsidiaries) is a party or by which the Company (or its Subsidiaries) is bound, in each case as amended. "Letter of Intent" shall have the meaning set forth in Section 9.7. "Lien" shall mean any mortgage, deed of trust, security interest, lien, pledge, claim or other encumbrance. "Liquidating Member" shall mean GGPLP (as long as it is a Member) or such other Person as may be selected by the Board. "Member Nonrecourse Deductions" shall have the meaning set forth in Section 1.704-2(i)(2) of the Regulations. 12 "Members" shall mean GGPLP and NYSCRF and their duly admitted successors or assigns (in each case, for so long as such Person remains a Member of the Company) and any other Person who is a member of the Company at the time of reference thereto (and, prior to such time, has been admitted as a member of the Company in accordance with the terms hereof). "Minimum Gain Attributable to Member Nonrecourse Debt" shall mean "partner nonrecourse debt minimum gain" as determined in accordance with Regulation Section 1.704-2(i)(2). "Montclair Plaza" shall mean the property commonly known as Montclair Plaza, Los Angeles, California, more particularly described in the Montclair Plaza Contribution Agreement. "Montclair Plaza Contribution Agreement" shall mean that certain Contribution Agreement dated concurrently herewith pursuant to which NYSCRF is causing Montclair Plaza Owner to convey to the Company Montclair Plaza and certain other property described therein. "Montclair Plaza Owner" shall mean Acquiport Five Corporation, a Delaware corporation. "Natick Entities" shall mean Natick Trust, General Growth Properties - Natick Limited Partnership and General Growth Properties - Natick II, Inc. "Natick Mall" shall mean the property commonly known as Natick Mall, Natick, Massachusetts, as more particularly described in the Natick Mall Contribution Agreement. "Natick Mall Contribution Agreement" shall mean that certain Contribution Agreement dated concurrently herewith pursuant to which GGPLP conveys or causes to be conveyed to the Company all of the equity interests in the Natick Entities, which Natick Entities own one hundred percent (100%) of the Natick Owner which in turn owns one hundred percent (100%) of the Natick Mall. "Natick Mall Owner" shall mean GGP-Natick Trust, a Massachusetts business trust. "Natick Trust" shall mean GGP-Natick Trust, a Massachusetts business trust. "Net Disposition Proceeds" shall mean the excess of (a) the proceeds received by the Company or any wholly-owned Subsidiary (including amounts received by the Company or any wholly-owned Subsidiary from non-wholly owned Subsidiaries) from any event that would be deemed a capital transaction in accordance with GAAP consistently applied, including sales of real or personal property or interests therein (other than the sale of personal property in 13 the ordinary course of business), condemnations and conveyances in lieu thereof, damage recoveries, receipts of insurance proceeds (other than rent insurance proceeds, the proceeds of which shall not be included in the calculation of Net Disposition Proceeds), and borrowings (other than short-term unsecured borrowings, the proceeds of which shall not be included in the calculation of Net Disposition Proceeds), over (b) the sum of (i) the expenses or capital expenditures of the Company or such wholly-owned Subsidiary associated with such transaction (including title, survey, appraisal, recording, escrow, transfer tax and other similar costs, brokerage expense and attorneys and other professional fees, the portion of any insurance proceeds or condemnation award applied to the restoration of the affected property and payment or reservation for payment for the discharge of any liability arising pursuant to such transaction), (ii) amounts required (in the Board's discretion or, if contemplated in an approved Annual Business Plan, as set forth in such Annual Business Plan) to establish reserves and to pay current or potential expenses and liabilities of the Company and the Subsidiaries, (iii) amounts used or reserved (in the Board's discretion or, if contemplated in an approved Annual Business Plan, as set forth in such Annual Business Plan) to repay indebtedness of the Company and the Subsidiaries or any other liability of the Company or any Subsidiary in connection with such event and (iv) amounts used or reserved (in the Board's discretion or, if contemplated in an approved Annual Business Plan, as set forth in such Annual Business Plan) to fund the estimated equity requirements for any expansions or renovations of the Company Assets (but the amounts described in clauses (a) and (b) shall not include the proceeds of any permitted replacement or refinancing of Retained Debt, the additional Capital Contributions made pursuant to Article XIV or any payments of principal, interest and other amounts in respect of Retained Debt). "Net Income" or "Net Loss" shall mean, for each Fiscal Year or other applicable period, an amount equal to the Company's taxable income or loss for such year or period, determined by the Company accountants in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a) of the Code shall be included in taxable income or loss), with the following adjustments: (a) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss shall be added to such taxable income or loss; (b) any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures under Section 704(b) of the Code or Section 1.704-1(b)(2)(iv)(i) of the Regulations and not 14 otherwise taken into account in computing Net Income or Net Loss shall be subtracted from such taxable income or loss; (c) gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the book value of such property (as the same may be restated or otherwise adjusted pursuant to Regulation Section 1.704-1(b)(2)(iv)) rather than its adjusted tax basis; (d) in lieu of the depreciation, depletion, amortization and other cost recovery deductions taken into account in computing taxable income or loss, there shall be taken into account depreciation as determined under Regulation Section 1.704-1(b)(2)(iv)(g)(3); and (e) in the event the book value of any Company asset is restated and/or adjusted pursuant the aforesaid Regulation Sections, the amount of such adjustment shall be taken into account as additional Net Income or Net Loss, as the case may be. "Net Sales Price" shall have the meaning set forth in Section 11.7. "Non-Defaulting Member" shall mean a Contribution Non-Defaulting Member or Retained Debt Non-Defaulting Member. "Nonrecourse Deductions" shall have the meaning set forth in Section 1.704-2(b)(1) and (c) of the Regulations. "Nonrecourse Liabilities" shall have the meaning set forth in Section 1.704-2(b)(3) of the Regulations. "Northbrook Court" shall mean the property commonly known as Northbrook Court, Northbrook, Illinois as more particularly described in the Northbrook Court Contribution Agreement. "Northbrook Court Contribution Agreement" shall mean that certain Contribution Agreement dated concurrently herewith pursuant to which GGPLP conveys or causes to be conveyed to the Company all of the equity interests in the Northbrook Entities, which Northbrook Entities own, in the aggregate, one hundred percent (100%) of the Northbrook Court Owner which in turn owns one hundred percent (100%) of Northbrook Court. "Northbrook Court Owner" shall mean Westcoast Estates, a California general partnership. "Northbrook Entities" shall mean Northbrook Court L.L.C., Northbrook Court I L.L.C. and Northbrook Court II L.L.C. 15 "NYSCRF" shall mean the Comptroller of the State of New York as Trustee of the Common Retirement Fund. "NYSCRF Malls" shall mean Alderwood Mall, Carolina Place and Montclair Plaza. "NYSCRF Retained Debt" shall mean the debt described on Schedule VII. "Offerees" shall have the meaning set forth in Section 9.1. "Offerors" shall have the meaning set forth in Section 9.1. "Operating Cash Flow" for any given period of time means the excess, if any, of (i) the Receipts for such period of time over (ii) the Expenditures for such period of time. "Other Assets" shall mean, as of any date, the book value of the cash and receivables (net of contra accounts) of the Company and its Subsidiaries calculated in accordance with GAAP consistently applied. "Permissible Transferee" shall have the meaning set forth in section 8.4(b)(iii). "Person" shall mean an individual or Entity. "Plan Asset Regulations" shall have the meaning set forth in Section 7.9(c). "Prime" shall mean the prime rate as announced from time to time by Wells Fargo Bank, N.A. "Property Manager" shall mean, for so long as GGPLP is a Member, GGPLP, General Growth Management, Inc. or another Affiliate of GG Properties (in each case, so long as the same is an Affiliate of GGPLP or GG Properties) designated by GGPLP to act as the property manager for the Company or one or more of its Subsidiaries pursuant to Section 7.3(b). "Properties" shall mean the Initial Properties and the Company's direct or indirect interest in any of the foregoing and any additional shopping center or other real estate properties or direct or indirect interests therein acquired (directly or indirectly) by the Company from time to time. "Proportionate Share" shall mean, with respect to any Member (unless otherwise provided herein) at any time, a fraction, the numerator of which is the total number of Units owned by such Member at such time and the denominator of which is the total number of Units owned by all of the Members at such time. 16 "Proposed Value" shall have the meaning set forth in Section 9.2. "Put Notice" shall have the meaning set forth in Section 9.2. "Put Notice Effective Date" shall have the meaning set forth in Section 9.4. "Put Option" shall have the meaning set forth in Section 9.1. "Put Purchase Price" shall have the meaning set forth in Section 9.6. "Put Response Notice" shall have the meaning set forth in Section 9.5. "Receipts" shall mean for any given period of time, a sum equal to the aggregate of all cash amounts actually received by or unconditionally made available to the Company or any wholly-owned Subsidiary from or in respect of all sources, including: (a) all cash actually received by the Company or any wholly-owned Subsidiary from Subsidiaries that are not wholly-owned by the Company; (b) all rents, percentage rent, rent settlements, expense reimbursements and other charges received from tenants and other occupants of the Company Assets; (c) proceeds of rent insurance and business interruption insurance; (d) all utility or other deposits returned to the Company or any wholly-owned Subsidiary (including by any non-wholly owned Subsidiary); (e) interest, if any, earned on tenant's security deposits or escrows to the extent unconditionally retained and security deposits to the extent applied pursuant to the provisions of the applicable leases; (f) the amount of any net reduction of Cash Reserves, other than to pay Expenditures; (g) any income items (as defined in accordance with GAAP) received by the Company from any other source and not included in (a) through (f) above. Notwithstanding the foregoing, Receipts shall not include (1) any amounts received by the Company and/or the Subsidiaries on account of the issuance or sale by the Company and/or the Subsidiaries of any securities, (2) any tenant's security deposit 17 and interest thereon, if any, as long as the Company or any Subsidiary has a contingent legal obligation to return that deposit or such interest thereon, (3) any amounts included in the calculation of Net Disposition Proceeds, (4) any amounts received in respect of a permitted refinancing or replacement of the Retained Debt and (5) any additional Capital Contribution made pursuant to Article XIV. "Regulations" means the proposed, temporary and final regulations promulgated by the Treasury Department pursuant to the Code, as amended from time to time. "Required Funds Amount" shall have the meaning set forth in Section 14.1. "Reserve Amount" shall mean for any given period of time an amount or amounts to be held from Receipts after payment of Expenditures (other than the Reserve Amount) as determined by the Board and which shall be used (in amounts and in a manner determined by the Board) for the payment of capital improvements for the properties of the Company and its Subsidiaries (such as major repairs or replacements to the roofs or parking lots) or such other items as may be determined from time to time by the Board. "Retained Debt" shall mean the GGPLP Retained Debt and the NYSCRF Retained Debt, collectively. "Retained Debt Default Amount" shall have the meaning set forth in Section 13.2. "Retained Debt Defaulting Member" shall have the meaning set forth in Section 13.2. "Retained Debt Default Loan" shall have the meaning set forth in Section 13.2. "Retained Debt Default Notice" shall have the meaning set forth in Section 13.2. "Retained Debt Loan Documents" shall mean the notes, mortgages and other loan documents evidencing, securing or otherwise relating to the Retained Debt. "Retained Debt Non-Defaulting Member" shall have the meaning set forth in Section 13.2. "Rules" shall have the meaning set forth in Section 9.6. "Sale Notice" shall have the meaning set forth in Section 10.2. 18 "Sale Property" shall have the meaning set forth in Section 10.1. "Second Cure Notice" shall have the meaning set forth in Section 7.3(c). "Section 704(c) Tax Items" shall have the meaning set forth in Section 4.5(c). "Serial Transferee" shall have the meaning set forth in Section 8.4(b)(iii). "Serial Transferor" shall have the meaning set forth in Section 8.4(b)(iii). "Stockholders Agreement" shall mean that certain Stockholders Agreement dated as of December 20, 1995, among GGPLP, NYSCRF, GGP/Homart and the other parties thereto, as amended. "Stonebriar Development Plan" shall have the meaning set forth in Section 7.7(e). "Stonebriar Development Project Contribution Agreement" shall mean that certain Contribution Agreement dated concurrently herewith pursuant to which GGPLP conveys or causes to be conveyed to the Company all of the equity interests in the Stonebriar Entities, which Stonebriar Entities own one hundred percent (100%) of the Stonebriar Mall Owner which in turn owns one hundred percent (100%) of the Stonebriar Development Project. "Stonebriar Development Project" shall mean the regional shopping center to be known as Stonebriar Mall and developed on the land located in Frisco, Texas and that is owned by the Stonebriar Mall Owner, as such land is more particularly described in the Stonebriar Development Project Contribution Agreement. "Stonebriar Entities" shall mean Stonebriar Mall L.L.C. and Stonebriar Mall Limited Partnership. "Stonebriar Grand Opening" shall mean the "grand opening" of the Stonebriar Development Project. "Stonebriar Mall Owner" shall mean Stonebriar Mall Limited Partnership, a Delaware limited partnership. "Subsidiaries" shall mean any direct or indirect corporate, partnership, limited liability company, trust or other subsidiary of the Company, whether or not wholly owned by the Company, and a "Subsidiary" shall mean any one of them. "Tax Items" shall have the meaning set forth in Section 4.5(a). 19 "Tax Matters Member" shall have the meaning set forth in Section 6.4. "Tax Payment" shall have the meaning set forth in Article V. "Ten Day Average General Growth Closing Price" shall mean, with respect to any purchase and sale pursuant to Article IX, the average of the General Growth Share Closing Prices for each of the ten Trading Days following the date the Put Response Notice is given. "33 Act" shall mean the Securities Act of 1933, as amended. "Trading Day" shall mean a day on which the principal national securities exchange on which the GG Stock is listed or admitted to trading is open for the transaction of business or, if the GG Stock is not listed or admitted to trading on any national securities exchange, shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "Transfer" shall mean to transfer, sell, assign, pledge, hypothecate, give, create a security interest in or lien on, place in trust (voting or otherwise), transfer by operation of law (other than by way of a merger or consolidation of the Company) or in any other way encumber or dispose of, directly or indirectly and whether or not voluntarily, any Units. "Transferee" shall have the meaning set forth in Section 8.1. "Trigger Date" shall mean the earlier of (a) the third anniversary of the date hereof, (b) the date a Change of Control occurs, (c) the date of the determination that Cause has occurred pursuant to Section 7.3(d) and (e) and (d) that date that the Class A Members no longer owns the Class A Minimum Investment. "UBTI" shall have the meaning set forth in Section 7.9. "Units" shall mean units of membership interest in the Company, including (except as otherwise expressly provided herein) the rights to allocations, distributions, management, approval and participation provided herein. "Value" shall have the meaning set forth in Section 9.3. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; 20 (b) the words "including" and "include" and other words of similar import shall be deemed to be followed by the phrase "without limitation"; and (c) any capitalized term used in any Schedule to this Agreement but not defined in such Schedule shall have the meaning assigned to such term in this Agreement or in another Schedule to this Agreement. ARTICLE II FORMATION OF COMPANY 2.1 FORMATION OF COMPANY. The Company was formed as a limited liability Company under the Act on August 6, 1999 by the filing of the Certificate of Formation with the Secretary of State of the State of Delaware on August 6, 1999. The parties hereby ratify the execution and filing thereof by the authorized person (within the meaning of the Act) identified therein. It is the intention of the Members that the provisions of this Agreement govern their relations and their respective liabilities and obligations. Accordingly, to the extent permitted by law, in the event of any conflict between any provisions contained in this Agreement and any provision in the Act, the terms and provisions of this Agreement shall control. With respect to any matter not governed by this Agreement, the provisions of the Act shall control. 2.2 NAME. The business of the Company shall be conducted under the name "GGP/HOMART II L.L.C." or such other name or names as are designated by the management of the Company from time to time. All transactions of the Company, to the extent permitted by applicable law, shall be carried on and completed in the name of the Company or such other name or names as shall be designated by the management of the Company in writing from time to time. The Members shall cause to be executed, filed and published on behalf of the Company such assumed or fictitious name certificates as may be required by law to be filed or published. 2.3 PRINCIPAL PLACE OF BUSINESS. The location of the Company's principal place of business shall be at 110 North Wacker Drive, Chicago, Illinois 60606 or such other place in the United States as is designated by the management of the Company from time to time. 2.4 PURPOSE AND BUSINESS OF THE COMPANY. The purpose of the Company shall be to acquire, hold, own, operate, sell, finance, transfer, encumber, exchange and otherwise dispose of or deal with the equity interests in the Contributed Entities and, directly or indirectly, to acquire, develop, redevelop, hold, own, sell, finance, transfer, encumber, exchange, and otherwise dispose of or deal with the Properties (including the acquisition and development 21 of land or properties adjacent to the Properties) and such other properties and assets as shall be determined by the Board. The Company shall have all powers necessary or desirable to accomplish the purposes enumerated. The Company shall not, directly or indirectly, acquire any other assets or businesses (other than in connection with the Properties, including the acquisition and development of land or properties adjacent to the Properties) except with approval of the Board. The name and funds of the Company shall be used only for Company purposes. 2.5 CLASSES OF UNITS. There shall be, initially, two classes of Units, consisting of Class A Units ("Class A Units") and Class B Units (the "Class B Units"), which shall have the rights and be subject to the limitations contained herein. 2.6 TERM. The Company shall commence business on the date hereof and shall continue its business indefinitely until its termination as hereinafter provided. 2.7 NATURE OF THE COMPANY. It is intended that the Company be a limited liability company meeting the definition of "partnership" contained in Section 7701 of the Code and the regulations issued thereunder. Except for purposes of the Code, the Members specifically intend and agree that the Company shall not be a partnership (including, a limited partnership) or any other kind of venture or Person, but a limited liability company under and pursuant to the Act. The Company's Certificate of Formation, this Agreement and the relationships created thereby and hereby and arising therefrom shall not be construed to establish a partnership as among the Members or any other Person or to constitute any Member a partner in the Company or a partner of any other Member or Person. All rights, liabilities and obligations of the Members, both as among themselves and as to Persons not parties to this Agreement, shall be as provided in the Act, except to such extent as may be otherwise expressly provided herein. 2.8 MEMBERS' NAMES AND ADDRESSES; CLASSIFICATION. The name and mailing address of each Member and the number and classification of Units owned by such Member is listed on Schedule I attached hereto. 2.9 REGISTERED OFFICE AND REGISTERED AGENT. The address of the registered office of the Company in the State of Delaware is c/o Corporation Service Company, 1013 Centre Road, Wilmington, Delaware 19805-1297. The name of its registered agent at such address is Corporation Service Company. The Company's management may at any time and from time to time change such office or agent by taking such actions as are required by the Act to change the same, including executing and filing an amendment to the Certificate of Formation. 22 2.10 ORGANIZATION CERTIFICATES. The Members shall cause to be executed, filed and/or published: (a) any and all such amendments or supplements to the Company's Certificate of Formation as from time to time may be required by the Act; and (b) all such further certificates, notices, statements or other instruments as may be required by law for the formation, qualification or operation of a limited liability company in all jurisdictions where the Company may elect to do business or otherwise necessary to carry out the purposes of this Agreement. GGPLP shall be an authorized person of the Company for purposes of any filings under the Act and shall be authorized to execute and deliver on behalf of the Company any certificates, notices, statements or other instruments required under the Act to be executed and filed by the Company. 2.11 CONCURRENT TRANSACTIONS. The Members acknowledge and agree that, concurrently with the execution and delivery hereof: (a) The Company and GGPLP are entering into the Altamonte Mall Contribution Agreement, the Northbrook Court Contribution Agreement, the Natick Mall Contribution Agreement and the Stonebriar Development Project Contribution Agreement; (b) The Company and NYSCRF (and/or Subsidiaries thereof) are entering into the Alderwood Mall Contribution Agreement, the Carolina Place Contribution Agreement and the Montclair Plaza Contribution Agreement; and (c) The Company and certain of the Contributed Entities are entering into modification agreements with respect to certain indebtedness secured by Company Assets, if required by the lenders thereunder. The Members, by execution of this Agreement, hereby authorize, approve and consent to (i) the Company entering into and consummating the transactions described in the Contribution Agreements and (ii) the Company's acquisition of the equity interests in the Contributed Entities and/or the Properties on the terms set forth in the Contribution Agreements. 2.12 RESTRICTIONS ON OTHER AGREEMENTS. No Member shall grant any proxy or enter into or agree to be bound by any voting trust with respect to the Units, nor shall any Member enter into any agreement or arrangements of any kind (including agreements or arrangements with respect to the acquisition, disposition or voting of Units) with any Person with respect to the Units, in either case on terms inconsistent with the provisions of this Agreement. 23 ARTICLE III COMPANY CAPITAL 3.1 INITIAL CONTRIBUTIONS OF MEMBERS (a) Concurrently herewith and as their Capital Contributions to the Company, the Members are conveying or causing to be conveyed to the Company and/or its Subsidiaries all of the equity interests in the Contributed Entities and/or their respective rights, title and interest in the Initial Properties in accordance with the terms of the Contribution Agreements. (b) The Members acknowledge and agree that immediately after taking into account the Capital Contributions described in Section 3.1(a), GGPLP will have a positive Capital Account balance of $462,000,000.00 and NYSCRF will have a positive Capital Account balance of $462,000,000.00. Such Capital Accounts are being computed without reduction for the Retained Debt. 3.2 NO ADDITIONAL CAPITAL CONTRIBUTIONS. Except as expressly required by Section 3.1 or Article XIII, no Member shall have any obligation to make any additional Capital Contribution to the Company or to advance any funds thereto. 3.3 WITHDRAWAL; RETURN OF CAPITAL; INTEREST. No Member shall be entitled to withdraw any part of its Capital Contribution(s) or otherwise withdraw from the Company, or shall be entitled to any distributions from the Company, except as specifically provided herein. No Member shall be entitled to interest on any Capital Contribution to the Company. 3.4 PRIORITY. Except as otherwise expressly provided herein, there shall be no priority among the Members as to the return of Capital Contributions or withdrawals from or distributions of the Company. 3.5 DEVELOPMENT PROJECT FUNDING/ACQUISITION FINANCING; ETC. It is the intention of the Members that development of the Stonebriar Development Project be funded as provided in the other sections of this Agreement, including Article XIV, and the cost of acquiring new properties be funded through such sources of financing as shall be determined by the Board. The Members agree that (a) in calculating the Net Disposition Proceeds from the CMBS Financing (which financing requires Board approval as provided herein), the proceeds from such financing shall be reduced only for the costs and expenses associated with such financing and the repayment of the existing debt on Northbrook Court (and not by any of the other items specified in the definition of "Net Disposition Proceeds") and (ii) the Net Disposition Proceeds from such financing shall be distributed to the Members concurrently with the consummation of such financing and otherwise as provided in Article V. 24 ARTICLE IV ALLOCATION OF COMPANY ITEMS 4.1 MAINTENANCE OF CAPITAL ACCOUNTS. A separate Capital Account shall be maintained for each Member. Without limiting the foregoing, the Capital Account of each Member shall be (a) credited with the Member's Capital Contribution(s) plus the amount of Net Income allocated or specially allocated to such Member pursuant to this Agreement and (ii) debited with the sum of (i) the amount of Net Loss allocated or specially allocated to such Member pursuant to the provisions of this Agreement and all money and the Fair Market Value of any property paid or distributed by the Company to such Member pursuant to the terms hereof. Any reference in this Agreement to the Capital Account of a Member shall be deemed to refer to such Capital Account as the same may be credited or debited from time to time in accordance herewith. 4.2 NET INCOME AND NET LOSS (a) Allocation of Net Income. After giving effect to the allocations set forth in Sections 4.3 and 4.4, Net Income for any Fiscal Year or other applicable period (including the period ending on the date on which there is a withdrawal of any Member or a partial withdrawal of the capital of any Member or the period ending on the date immediately preceding the date on which an additional Capital Contribution is made to the Company by a Member in accordance with the terms hereof) shall be allocated among the Members in accordance with their Proportionate Shares at such time. (b) Allocation of Net Loss. After giving effect to the allocations set forth in Sections 4.3 and 4.4, Net Loss for any Fiscal Year or other applicable period (including the period ending on the date on which there is a withdrawal of any Member or a partial withdrawal of the capital of any Member or the period ending on the date immediately preceding the date on which an additional Capital Contribution is made to the Company by a Member in accordance with the terms hereof) shall be allocated between the Members in accordance with their Proportionate Shares at such time. Notwithstanding anything to the contrary contained herein, the interest expense and/or other deductions and items of income relating to the Retained Debt of each Member shall remain at all times the expense and/or income of such Member and shall not be taken into account in calculating Net Income or Net Loss. 25 4.3 SPECIAL ALLOCATIONS. Notwithstanding any provisions of Section 4.2 to the contrary, the following special allocations shall be made in the following order: (a) Minimum Gain Chargeback (Nonrecourse Liabilities). Notwithstanding anything to the contrary contained in this Article IV, if there is a net decrease in Company Minimum Gain for any Fiscal Year (except as a result of conversion or refinancing of Company Nonrecourse Liabilities, certain capital contributions or revaluation of the Company property, all as further outlined in subsections (d)(2), (f)(2), or (f)(3) of Regulations Section 1.704-2), each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Member's share of the net decrease in the Company Minimum Gain. The items to be so allocated shall be determined in accordance with Regulations Section 1.702-2(f). This section is intended to comply with the minimum gain chargeback requirement in said section of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this section shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. (b) Minimum Gain Attributable to Member Nonrecourse Debt. After giving effect to Section 4.3(a), if there is a net decrease in Minimum Gain Attributable To Member Nonrecourse Debt (other than due to the conversion, refinancing, or other change in the debt instrument attributable to such Company Nonrecourse Liabilities causing it to become partially or wholly nonrecourse, certain capital contributions or revaluations of the Company property as further outlined in Regulations Section 1.704-2(i)(4)), each Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent years) in an amount equal to that Member's share of the net decrease in such Minimum Gain Attributable To Member Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Regulations Section 1.702-2(i). This section is intended to comply with the minimum gain chargeback requirement in said section of the Regulation and shall be interpreted consistently therewith. Allocations pursuant to this section shall be made in proportion to the respective amount required to be allocated to each Member pursuant thereto. (c) Qualified Income Offset. In the event that any Member unexpectedly receives any adjustments, allocations or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Member has an Adjusted Capital Account Deficit, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Adjusted Capital 26 Account Deficit as quickly as possible. This Section 4.3(c) is intended to constitute a "qualified income offset" under Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year or other applicable period shall be allocated to the Members in accordance with their respective Proportionate Shares. (e) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any Fiscal Year or other period shall be specially allocated to the Member that bears the economic risk of loss for the debt (i.e., the partner nonrecourse debt) in respect of which such Member Nonrecourse Deductions are attributable (as determined under Regulation Sections 1.704-2(b)(4) and (i)(1)). (f) Section 754 Basis Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Sections 732, 734 or 743 of the Code is required, to be taken into account in determining Capital Accounts in accordance with Regulations Section 1.704-1(b)(2)(iv)(m), the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations. 4.4 CURATIVE ALLOCATIONS. The allocations set forth in Sections 4.3(a), 4.3(b), 4.3(d) and 4.3(e) (the "Regulatory Allocations") are intended to comply with certain requirements of Regulations Section 1.704-1(b). Notwithstanding any provisions of Sections 4.2 and 4.3 to the contrary (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Members so that, to the extent possible, the cumulative net amount of allocations of Company items under Sections 4.2, 4.3 and 4.4 shall be equal to the net amount that would have been allocated had the Regulatory Allocations not occurred. This Section 4.4 is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith. 4.5 TAX ALLOCATIONS. (a) Generally. Subject to Sections 4.5(b) and 4.5(c), tax items of income, gain, loss, deduction and credit (collectively, "Tax Items") shall be allocated among the 27 Members on the same basis as the respective book items. Each Member shall provide to the Company information regarding the tax basis, depreciable lives and depreciation methods of or used for the assets directly and indirectly conveyed by it to the Company. (b) Sections 1245/1250 Recapture. If any portion of gain from the sale of property is treated as gain which is ordinary income by virtue of the application of Code Sections 1245 or 1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among the Members in the same proportion that the depreciation and amortization deductions giving rise to the Affected Gain were allocated and (B) other Tax Items of gain of the same character that would have been recognized, but for the application of Code Sections 1245 and/or 1250, shall be allocated away from those Members who are allocated Affected Gain pursuant to Clause (A) so that, to the extent possible, the other Members are allocated the same amount, and type, of capital gain that would have been allocated to them had Code Sections 1245 and/or 1250 not applied. For purposes hereof, in order to determine the proportionate allocations of depreciation and amortization deductions for each Fiscal Year or other applicable period, such deductions shall be deemed allocated on the same basis as Net Income and Net Loss for such respective period. (c) Allocations Respecting Section 704(c) and Revaluations. Notwithstanding Section 4.5(b), Tax Items with respect to Company property that are subject to Code Section 704(c) and/or Regulation Section 1.704-3 (collectively "Section 704(c) Tax Items") shall, to the extent so required, be allocated in accordance with said Code section and/or Regulation Section 1.704-3, as the case may be. The Members are authorized to specially allocate Tax Items consistent with the principles of Regulation Section 1.704-3. 4.6 ALLOCATIONS SUBSEQUENT TO ASSIGNMENT. To the extent permitted by the Code, Net Income or Net Loss and other items attributable to Units acquired by reason of an assignment from a Member shall be allocated or adjusted between the assignor and the assignee based upon either (a) the length of time in any fiscal period of the Company during which the assigned Units were owned by each of them, determined with reference to the effective date of the assignment, or (b) an interim closing of the Company's books (at assignor's sole expense), such manner of allocation or adjustment to be determined by the assignor, with the consent of the Board, which consent shall not be unreasonably withheld. 28 ARTICLE V COMPANY DISTRIBUTIONS Unless the Board otherwise determines, the Company shall distribute to the Members on a quarterly basis (but a monthly basis during such period when there is Retained Debt outstanding) an amount equal to the lesser of (a) the Operating Cash Flow for such quarter or month, as the case may be, and (b) eighty percent of Company FFO for such quarter or month, as the case may be, and the Company shall distribute any Net Disposition Proceeds as soon as practicable after the occurrence (but in no event later than 45 days thereafter) of the event giving rise thereto. Subject to the provisions of the third, fourth and fifth to last sentences of this Article V, any such distributions shall be paid to the Members pro rata in accordance with their Proportionate Shares. If the annual audited report of the Company shall show that there was any over-distribution or under-distribution of Operating Cash Flow to either of the Members with respect to such year, then such Member shall, within 30 days after receipt of such audited report and a written demand for the repayment of any over-distribution referenced therein, repay the over-distribution or the Company shall, within 30 days after receipt of such audited report, pay the under-distribution to the Members, as the case may be. To the extent that any taxes or withholding taxes are due on behalf of or with respect to any Member and the Company is required by law to withhold or to make such tax payments ("Tax Payments"), the Company shall withhold such amounts and make such Tax Payments as so required. Each Tax Payment made on behalf of or with respect to a Member (but not any Tax Payment made by or required to be withheld by a Subsidiary with respect to income allocable to or distributions to be made to the Company) shall be deemed a distribution of Operating Cash Flow in such amount to such Member to the extent such Tax Payment was not attributable to an event giving rise to Net Disposition Proceeds (and shall reduce distributions of Operating Cash Flow and Net Disposition Proceeds that are made concurrently or thereafter to such Member), and to the extent such Tax Payment is attributable to an event giving rise to Net Disposition Proceeds, it shall be deemed a distribution of Net Disposition Proceeds to such Member (and shall reduce distributions of Net Disposition Proceeds and Operating Cash Flow that are made concurrently or thereafter to such Member), and any such deemed distribution shall be deemed to have been paid to the Member on the earlier of the date when the corresponding Tax Payment is made by the Company or the date that the distributions, if any, giving rise to the obligation to make such Tax Payment were made. The Company is hereby directed to deduct the amount of any Default Loans that are due and payable from any distributions to be made to the Defaulting Member pursuant to this Article V and pay such amounts to the Non-Defaulting Member (and such deducted amounts shall be deemed to be distributions made to such Defaulting Member). In the event that the Company pays any principal, interest or other amount in respect of the Retained Debt of either 29 Member at the request of such Member (which the Company shall be obligated to do to the extent of such Member's share of Company distributions that are then due and payable), the Company shall deduct the amount of such principal, interest or other payment from any distributions to be made to such Member pursuant to this Article V (and such deducted amounts shall be deemed to be distributions made to such Member). Notwithstanding anything to the contrary contained herein, no distribution of Operating Cash Flow or Net Disposition Proceeds shall be made hereunder if such distribution would cause the Company to breach any covenant contained in, or be in default under, any Financing Document or other agreement binding upon the Company. The distributions made in accordance with this Article V shall not require Board approval. ARTICLE VI ACCOUNTING MATTERS 6.1 FISCAL YEAR; DESIGNATION OF AUDITORS. The Company's fiscal year shall be the calendar year. The Company's auditors shall be selected by the Board; provided, however, that (a) until the Board determines otherwise, the Company's auditors shall be Ernst & Young LLP, (b) the Company's auditors shall be a "Big Five" certified public accounting firm (or any successor to any such firm) or other reputable firm as shall be selected by the Board and (c) unless the Board determines otherwise, the Company's auditors shall not be the auditors of GGPLP or GG Properties. 6.2 BOOKS AND RECORDS. The Company shall maintain or cause to be maintained at the principal place of business of the Company full, true, complete and correct books of account of the Company. The books of account shall contain particulars of all monies, goods or effects belonging to or owing to or by the Company or paid, received, sold or purchased in the course of the Company's business, and all of such other transactions, matters and things relating to the business of the Company as are usually entered in books of accounts kept by persons engaged in a business of a like kind and character. In addition, the Company shall keep all records required to be kept pursuant to the Act. Each Member shall, at reasonable times, have free access thereto for the purpose of inspecting or copying same. Any records maintained by the Company in the regular course of its business, including its Unit ledger, books of account and minute books, if any, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Company shall so convert any records so kept upon the request of any person entitled to inspect the same. 30 6.3 REPORTS AND STATEMENTS. (a) Not later than 45 days after the end of each fiscal quarter (other than the fourth quarter), the Company shall prepare (or cause to be prepared) and mail to each Member an unaudited report (prepared in accordance with GAAP except for the absence of footnotes) setting forth as of the end of such fiscal quarter: (i) a consolidated balance sheet of the Company and the Subsidiaries; and (ii) a consolidated income statement of the Company and its Subsidiaries for such fiscal quarter. (b) Not later than 90 days after the end of each fiscal year, the Company shall prepare (or cause to be prepared) and shall mail to each Member, a report (prepared in accordance with GAAP) setting forth as of the end of such fiscal year: (i) a consolidated balance sheet of the Company and the Subsidiaries (which will include appropriate footnote disclosure) (and a consolidated balance sheet prepared on a fair market value basis provided NYSCRF has provided the fair market value of the Properties to be used in preparing such balance sheet at least 30 days prior to the date it is due and NYSCRF shall pay the cost of auditing such balance sheet (which cost, notwithstanding anything to the contrary contained herein, shall not be a Company Expenditure); (ii) an consolidated income statement of the Company and the Subsidiaries for such fiscal year; (iii) a consolidated statement of cash flows of the Company and the Subsidiaries for such fiscal year; and (iv) a statement of changes in Members' Capital Accounts for such fiscal year. The annual financial statements referred to in item (b) above shall be accompanied by a report of the Company's independent certified public accountants stating that an audit of such financial statements has been made in accordance with generally accepted auditing standards, stating the opinion of the accountants in respect of the financial statements and the accounting principles and practices reflected therein and as to the consistency of the application of the accounting principles, and identifying any matters to which the accountants take exception and stating, to the extent practicable, the effect of each such exception on such financial statements. The Company shall provide to any Member such 31 supporting schedules and other data as may from time to time be reasonably requested by such Member relating to the presentation of the Company's financial statements. (c) Not later than 45 days after the end of each of the first three fiscal quarters of each fiscal year, the Company shall prepare (or cause to be prepared) and mail to each Member a report setting forth in reasonable detail a calculation of the Company's Operating Cash Flow and Net Disposition Proceeds for the immediately preceding quarter together with a comparison of the (i) Operating Cash Flow for the same fiscal quarter in the prior year, (ii) budgeted Operating Cash Flow for the quarter, based upon the Annual Business Plan approved by the Board covering such fiscal quarter and (iii) a status report of the Company's activities during such fiscal quarter substantially in the form of the quarterly status reports delivered in connection with GGP/Homart. (d) Not later than 90 days after the end of each fiscal year, the Company shall prepare (or cause to be prepared) and mail to each Member a report setting forth in reasonable detail a calculation of the Company's Operating Cash Flow and Net Disposition Proceeds for the immediately preceding fiscal year together with a comparison of the (i) Operating Cash Flow for the prior fiscal year and (ii) budgeted Operating Cash Flow for the fiscal year, based upon the Annual Business Plan approved by the Board for such prior fiscal year. (e) Concurrently with each distribution of Operating Cash Flow pursuant to Article V, the Company shall deliver to each Member a report setting forth in reasonable detail a calculation of such Member's Proportionate Share of the Company's Operating Cash Flow for the immediately preceding quarter and the amount of the distribution for such period. (f) Concurrently with each distribution of Net Disposition Proceeds, the Company shall deliver to each Member a report setting forth in reasonable detail a description of the transaction or transactions giving rise to the Net Disposition Proceeds, a calculation of the Net Disposition Proceeds, the Member's Proportionate Share of such Net Disposition Proceeds and the amount of the Net Disposition Proceeds being distributed to such Member. (g) The Company shall prepare and deliver to each Member the reports set forth in Schedule II. (h) The Company shall prepare and deliver to each Member such other reports as any Member shall reasonably require. 32 6.4 TAX MATTERS MEMBER. GGPLP is hereby designated as the Tax Matters Member for the Company, which has the meaning of "tax matters partner" under Section 6231(a)(7) of the Code; provided, however, (i) in exercising its authority as Tax Matters Member, GGPLP shall be limited by the provisions of this Agreement affecting tax aspects of the Company; (ii) the Tax Matters Member shall consult in good faith with the Board regarding the filing of a Code Section 6227(b) administrative adjustment request with respect to the Company before filing such request, it being understood, however, that the provisions hereof shall not be construed to limit the ability of any Member, to file an administrative adjustment request on its own behalf pursuant to Section 6227(a) of the Code; (iii) the Tax Matters Member shall consult in good faith with the Board regarding the filing of a petition for judicial review of an administrative adjustment request under Section 6228 of the Code, or a petition for judicial review of a final partnership administrative judgment under Section 6226 of the Code relating to the Company before filing such petition; (iv) the Tax Matters Member shall give prompt notice to the other Members of the receipt of any written notice that the Internal Revenue Service or any state or local taxing authority intends to examine Company income tax returns for any year, receipt of written notice of the beginning of an administrative proceeding at the Company level relating to the Company under Section 6223 of the Code, receipt of written notice of the final Company administrative adjustment relating to the Company pursuant to Section 6223 of the Code, and receipt of any request from the Internal Revenue Service for waiver of any applicable statute of limitations with respect to the filing of any tax return by the Company; and (v) the Tax Matters Member shall promptly notify the other Members if the Tax Matters Member does not intend to file for judicial review with respect to the Company. 6.5 TAX ELECTIONS AND RETURNS. The Tax Matters Member GGPLP shall, from time to time, make such tax elections on behalf of the Company as it deems necessary or desirable in its discretion to carry out the business of the Company or the purposes of this Agreement, including elections under Section 754 of the Code. The Tax Matters Member shall cause the Company accountants to prepare and file federal, state and local tax returns for the Company on a timely basis, and shall furnish copies thereof to the Members with required partnership schedules showing allocations of book and tax items. 6.6 INTERIM ACCOUNTING. The Tax Matters Member may cause the books of account of the Company to be closed on an interim basis when the Board deems such closing necessary or appropriate under the circumstances, including a transfer of Units causing a termination of the Company for tax purposes. 33 ARTICLE VII GOVERNANCE; BOARD OF DIRECTORS 7.1 ACTION BY MEMBERS TO EFFECTUATE THIS AGREEMENT. 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 Agreement 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 expressly 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 Class B Board Members Marjorie Tsang Yvonne D. Nelson Frank L. Sullivan, Jr. (d) Subject to Section 7.2(e), 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 (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(a), 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; MANAGEMENT; RIGHTS 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 secretaries of the Company and/or its Subsidiaries (and remove any such Person that is designated to be removed by the General Growth Officers). Notwithstanding anything to the contrary contained herein and unless and to the extent the Board otherwise 35 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(c). (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 IV. 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 the General Growth Officers are the officers of the Company, the Company and its Subsidiaries 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 the Subsidiaries shall not commence paying GGPLP and/or its 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. 37 (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; provided 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 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 (15) 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 (15) day period. During any arbitration proceeding, 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 pertains 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 CHAIRMAN 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 Board 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 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; BY-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 BY BOARD. (a) Actions by 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 (i.e., 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 (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 this 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 45 days following submission of the proposed Annual Business Plan to the Board and no later than 75 days following submission thereof. Prior to such meeting, the General Growth Officers shall make available to the Class B Board Members and their 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 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 such 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 make 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 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; (ii) 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) the development, redevelopment or expansion by the Company or any Subsidiary of the Properties; (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 subjecting to liens or mortgages by the Company or any Subsidiary of any Property in connection with a financing or refinancing; (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 105% of the total expenditures set forth in such Annual Business Plan for such Major Expense Category (but the amount of the fees 43 identified on Schedule IV may not be increased) or (B) 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 authorized to spend such amounts without further Board action (but only such amounts as are required to alleviate such immediate threat); (vii) the merger, consolidation, reorganization 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; (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, GG 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, insolvency, reorganization, dissolution or any similar occurrence of the Company or any Subsidiary or (z) 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) the establishment of the Company's policy with respect to the appropriate levels of debt capitalization of the Company; 44 (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 (A) 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 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 MEETINGS 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 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 its Subsidiaries shall operate in a manner that will enable GG Properties and Natick Trust to (i) satisfy the requirements for qualifying as a real estate investment trust under the Code and (ii) 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. (c) 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 Section 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)(B)(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 the Code regardless of its actual status thereunder (provided that nothing 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 thereof), (ii) guarantee the obligations of others unless such guarantee does not cause the 47 obligation guaranteed to become a "recourse liability" within the meaning of Treasury Regulation Section 1.752-1(a)), or (iii) 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 514(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 512(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 MEMBERS. (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 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 as possible but no later than within one year after acquiring the same. (c) 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 RIGHT OF PUBLIC TO RELY ON AUTHORITY OF THE MEMBERS. Nothing herein contained shall impose any obligations on any Person or firm doing business with the Company to inquire as to whether or not a Member or a General Growth Officer has exceeded its authority 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 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 INDEMNIFICATION. (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 Board 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 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. (c) The indemnity obligations under this Section 7.13 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 and 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 TRANSFERS OF COMPANY 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 ab initio. 8.2 COMPLIANCE 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 effective registration statement under the 33 Act and under any applicable state securities or blue sky laws or (b) such Member shall have furnished the Company with evidence reasonably satisfactory to the Company that no such registration is required. A written opinion of counsel of recognized standing to the effect set forth in clause (b) of the preceding sentence shall satisfy the requirements of such clause. 8.3 TRANSFER OF OWNERSHIP INTERESTS IN AFFILIATES. Each Member hereby agrees that the transfer by such Member of any ownership interest or right of exclusive control, if applicable, in any Person that is its Affiliate if (i) such Person or an Affiliate of such Person that is controlled by such Person owns Units and (ii) such Transfer would result in such Person no longer being an Affiliate of such Member, shall be deemed a Transfer of Units owned by such Person; provided, however that this Section 8.3 shall in no way limit the transfer of ownership interests or the right of exclusive control in GG Properties or GGPLP. 8.4. TRANSFERS OF UNITS BY MEMBERS. (a)(i) Except as otherwise provided in this Section 8.4(a), a holder of Class A Units shall not Transfer all or any portion of its Class A Units without the prior approval of the Board. (1) Any holder of Class A Units shall have the right, without the approval of the Board (but subject to the provisions of Sections 8.2, 8.5-8.8 and 8.10 hereof), to Transfer all or any portion of its Class A Units or any direct or indirect interest therein to one or more of its Affiliates (and such Affiliate or Affiliates shall have all rights of the Transferor hereunder and shall be admitted as a Class A Member in lieu of such Class A Member with respect to the Class A Units so transferred). (2) Any holder of Class A Units shall have the right, without the approval of the Board and from and after (but in no event sooner than) the later of the third anniversary of the date hereof and the Stonebriar Grand Opening (but subject to the provisions of Sections 8.2, 8.5-8.8 and 8.10 hereof), to Transfer all or any portion of its Units to one or more Accredited Investors or to another Member; provided that any such Transferee shall not have (and, subject to Section 8.4(a)(ii), the Transferor shall retain) the right to designate Class A Board Members but otherwise shall have all rights of the Transferor hereunder and shall be admitted as a Class A Member in lieu of such Class A Member with respect to the Class A Units so transferred. 52 (ii) If at any time the aggregate Proportionate Share of GGPLP and its Affiliates is not at least twenty-six percent (26%) (the "Class A Minimum Investment"), then the Class A Members shall immediately thereafter cease to be entitled to elect Class A Board Members in accordance with the provisions of Article VII hereof, all of the Board Members (including Class A Board Members and Class B Board Members) shall be deemed to have resigned as of such time and the provisions of Section 8.4 (c) shall apply. (b) (i) Except as otherwise provided in this Section 8.4(b), a holder of Class B Units shall not Transfer all or any portion of its Class B Units without the prior approval of the Board. (1) Any holder of Class B Units shall have the right, without the approval of the Board (but subject to the provisions of Sections 8.2, 8.5-8.8 and 8.10 hereof), to Transfer all or any portion of its Class B Units or any direct or indirect interest therein to one or more of its Affiliates (and such Affiliate or Affiliates shall have all rights of the Transferor hereunder and shall be admitted as a Class B Member in lieu of such Class B Member with respect to the Class B Units so transferred). (2) Any holder of Class B Units shall have the right, without the approval of the Board and from and after (but in no event sooner than) the Trigger Date (but subject to the provisions of Sections 8.2, 8.5-8.8 and 8.10 hereof), to Transfer all or any portion of its Class B Units to one or more Accredited Investors or to another Member, provided that, subject to Section 8.4(b)(ii) and (iii), any such Transferee shall not have (and the Transferor shall retain) the right to designate Class B Board Members but otherwise shall have all rights of the Transferor hereunder and shall be admitted as a Class B Member in lieu of such Class B Member with respect to the Class B Units so transferred. (ii) If at any time the aggregate Proportionate Share of NYSCRF and its Affiliates is not at least twenty-six percent (26%) (the "Class B Minimum Investment"), then the Class B Members thereafter shall immediately cease to be entitled to elect Class B Board Members in accordance with the provisions of Article VII hereof, all of the Board Members (including Class A Board Members and Class B Board Members) shall be deemed to 53 have resigned as of such time and the provisions of Section 8.4 (c) shall apply. (iii) Notwithstanding anything to the contrary in Section 8.4(b)(ii), the following shall apply: (1) if all or a portion of the outstanding Class B Units are Transferred pursuant to Section 8.4(b)(i)(2) to one Person or one group of Affiliated Persons not formed for the purpose of acquiring such Units (a "Permissible Transferee"), and the Class B Units so Transferred represent at least the Class B Minimum Investment, then such Permissible Transferee shall continue to be entitled to designate Class B Board Members in accordance with the provisions of Article VII and the provisions of Section 7.7 hereof as to approval of Board actions by at least one Class A Board Member and one Class B Board Member shall continue to apply. (2) If (A) all or a portion of the outstanding Class B Units are Transferred pursuant to Section 8.4(b)(i)(2) to a Person not formed for the purpose of acquiring such Class B Units (a "Serial Transferee") by a transferor (a "Serial Transferor") such that the Serial Transferor no longer has the right to designate Class B Board Members pursuant to Section 8.4(b)(ii) and (2) the Serial Transferee by virtue of such transfer, and any previous Transfers of Class B Units by the Serial Transferor to the Serial Transferee, then owns Class B Units at least equal to the Class B Minimum Investment, then the Serial Transferee thereafter shall have the right to designate Class B Board Members in accordance with the provisions of Article VII and the provisions of Section 7.7 hereof as to approval of Board actions by at least one Class A Board Member and one Class B Board Member shall apply. (c) Notwithstanding anything to the contrary contained herein: (i) In the event either the Class A Members or Class B Members (but not both) shall cease to be entitled to elect Board Members in accordance with Article VII hereof as provided in Sections 8.4(a) and (b) above, then (A) the Board shall consist of seven directors, at least a majority of which shall be comprised of Persons independent of the holder or holders of the Electing Class (each, an 54 "Independent Board Member"); (B) the holder or holders of the other class of Units (the "Electing Class") shall be entitled to elect six of the Board Members with such Board Members to be elected by the holders of a majority of the Units of the Electing Class, with each Unit of the Electing Class entitled to one vote; (C) the holders of Units of the non-Electing Class shall be entitled to elect one Board Member, with such Board Member to be elected by the holders of a majority of the outstanding Units of the non-Electing Class voting for this purpose as a class, with each Unit of such non-Electing Class entitled to one vote and (D) each and every corporate action taken by vote of the Board or any committee thereof in accordance with the terms hereof shall be authorized only by the affirmative vote of the majority of Board members or committee members, as the case may be, present at a duly constituted meeting at which quorum is present and acting throughout. For purposes of this Agreement, (1) a Person shall be deemed to be an Independent Board Member if such Person is not an Affiliate or employee of any holder of Class A Units or Class B Units, as the case may be, or any of its Affiliates (and, if the Class A Members are the Electing Class, a Person shall be deemed to be an Independent Board Member if such Person is not an Affiliate, director or employee of GG Properties, GGPLP or any of their successors or any of their Affiliates, (2) so long as there is an Electing Class, a Board Member elected by the holders of Units of the non-Electing Class shall be deemed an Independent Board Member and (3) if there is no Electing Class, a Person shall be deemed to be an Independent Board Member if such Person is not an Affiliate, director or employee of any holder of Units or any of its Affiliates. (ii) in the event both the Class A Members and Class B Members shall cease to be entitled to elect Board Members in accordance with Article VII hereof as provided in Sections 8.4(a) and (b) above, (A) the Board shall consist of seven Board Members, at least a majority of which shall be comprised of Independent Board Members, (B) the Units shall be entitled to equal voting rights and powers and shall be voted together as a single class with respect to all matters on which Members may be entitled to vote (including the election of Board Members), with each Unit entitled to one vote, and (C) the approval of a majority of the Board Members 55 shall be required to approve an action of the Board or Committee to the extent the same is required hereunder. (d) The Company shall be entitled to treat the record owner of any Unit as the absolute owner thereof in all respects, and shall incur no liability to any purported Transferee of a Unit for distributions of money or other property in good faith made to the record owner of such Unit until all conditions of any Transfer are satisfied in accordance herewith and an instrument effecting such Transfer is received by the Members and is recorded on the books of the Company. 8.5 CERTAIN PROHIBITED TRANSFERS OF UNITS BY MEMBERS (a) Notwithstanding any other provision of this Agreement to the contrary, no Transfer of all or any portion of any Member's Units shall be made if such Transfer would result in: (i) the Company being required to register, [or seek an exemption from registration], as an investment company under the Investment Company Act; (ii) GG Properties failing to qualify as a real estate investment trust under the Code; (iii) an adverse effect for income tax purposes on the Company or any of the continuing Members (other than a constructive termination of the Company pursuant to Code Section 708(b)(1)(B); provided that, at the election of the non-Transferring Member, the Transfer shall be structured to avoid a termination of the Company for Federal income tax purposes, including a delayed purchase of up to 1% membership interest of the Transferring Member); (iv) the Company or its Subsidiaries being subject to materially increased regulatory burdens; (v) a material violation or default under any Key Document of the Company or any of its Subsidiaries; or (vi) a violation of any applicable statute, law, ordinance, rule or regulation of any federal, state or local governmental bodies, agencies or subdivisions having jurisdiction over the Company and its assets. (b) Notwithstanding any other provision of this Agreement to the contrary, without the prior written approval 56 of the Class A Board Members, which approval may be given or withheld in the Class A Board Members sole discretion, no Transfer of all or any portion of any Member's Units shall be made to any Person whose principal business is the development or management of regional shopping malls other than any Person that is an insurance company, a pension fund, an investment company registered under the Investment Company Act, an investment advisor registered under the Investment Advisors Act of 1940, as amended, acting in its capacity as an investment advisor, or a fiduciary under ERISA acting in such capacity. (c) Each Member may in its discretion require as a condition of any Transfer permitted under this Article VIII, the delivery of a written opinion of responsible counsel (who may be counsel for the Company), reasonably satisfactory in form and substance to such Member, to the effect that such Transfer would not result in any of the consequences set forth in the clauses of Section 8.5(a) and shall cover such other matters as such Member may reasonably require. In addition, a Person to whom a Transfer may be made pursuant to this Article VIII may also be required, in the discretion of each Member, and as a condition precedent to such Transfer, to make certain reasonable and customary representations, warranties and covenants. The Company shall cooperate with any Member making a Transfer by providing promptly such records and other factual information as may be reasonably requested with respect to any proposed Transfer provided that such Member and any prospective transferee that receives such records and information shall agree in writing to maintain the confidentiality thereof. (d) Notwithstanding anything in this Agreement to the contrary (including the other sections of this Article VIII), in no event shall any Units be Transferred to a Person who is the subject of any pending bankruptcy proceedings or to a Person who is a minor or who otherwise lacks legal capacity, and any attempt to effect a Transfer to such a Person shall be void and of no effect and shall not bind the Company. (e) Notwithstanding anything to the contrary contained in this Agreement (including the other sections of this Article VIII), any Transfer by a Member of its Units, whether direct or indirect, shall be made in full compliance with (i) all applicable statutes, laws, ordinances, rules and regulations of all federal, state and local governmental bodies, agencies and subdivisions having jurisdiction over the Company and its assets and (ii) all Key Documents, so that the operation of the Company can continue without interruption and without material violation of any applicable law or any of such instruments. In the event that any filing, application, approval or consent is required in connection with any such 57 Transfer, whether by any governmental entity or other third-party, the Member making such Transfer shall promptly make such filing or application or obtain such approval or consent, at its sole expense, and shall reimburse the other Member for any costs or expenses (including reasonable attorneys' fees and disbursements) incurred by such non-Transferring Member in connection with any filing, application, approval or consent. In the event the Member making a Transfer shall fail to comply with its obligations hereunder, the other Member, upon 10 business days prior written notice to the Transferring Member, may do so at the sole cost and expense of the Transferring Member and adjourn the closing for such periods of time as are necessary, and all reasonable amounts so incurred by such other Member, including accounting, attorneys and other professional fees, shall be payable by the Transferring Member within 10 days after demand therefor. (f) Notwithstanding anything to the contrary contained in this Agreement (including the other sections of this Article VIII), each Member and each Transferee of all or any part of any Units (i) shall at all times maintain an office or agency for the service of process in the United States of America, which shall also be its address for delivery of notices hereunder or (ii) shall be a citizen or national of the United States. (g) If any Person acquires all or any part of the Units of a Member in violation of this Article VIII or any other provision hereof, whether by operation of law, judicial proceeding or other manner not expressly permitted hereunder, such Person shall have no rights under this Agreement with respect to the Units so acquired. 8.6 EXPENSES OF TRANSFER. The transferring Member agrees that it will pay all reasonable expenses, including reasonable attorneys' fees actually incurred by the Company in connection with any Transfer of its Units. 8.7 INDEMNIFICATION BY TRANSFEROR. In the event that the Company or any non-transferring Member becomes involved in any capacity in any action, proceeding, or investigation brought by or against any Person (including any Member) in connection with any Transfer by a Member of its Units (other than a Transfer pursuant to Article IX, X or XI hereof), the transferring Member will periodically reimburse each of the Company and any non-transferring Member for its reasonable legal and other expenses (including the reasonable cost of any investigation and preparation) incurred in connection therewith. To the fullest extent permitted by law, the transferring Member also will indemnify the Company and any non-transferring Member against any losses, claims, damages, or liabilities to which any of them may become subject directly as a 58 result of such Transfer. The reimbursement and indemnity obligations of the transferring Member under this paragraph shall be in addition to any liability which the transferring Member may otherwise have, shall extend upon the same terms and conditions to the Members, stockholders, directors, officers, employees, and controlling Persons of the Company and any non-transferring Member, and shall be binding upon and inure to the benefit of any successors, assigns, heirs, and personal representatives of the Company, any non-transferring Member, and any such Persons. The foregoing provisions shall survive any termination of this Agreement or dissolution of the Company. 8.8 ACCEPTANCE OF PRIOR ACTS. Any Person who becomes a Member accepts, ratifies and agrees to be bound by all actions duly taken pursuant to the terms and provisions of this Agreement by the Company and the Members prior to the date it became a Member and, without limiting the generality of the foregoing, specifically ratifies and approves all agreements and other instruments as may have been executed and delivered on behalf of the Company prior to said date and which are in force and effect on said date. 8.9 SUBSTITUTED MEMBERS. Except as otherwise expressly provided herein (including Section 8.4), the Transferee of all or part of the Units of any Member may be substituted as a Member with respect to the Units Transferred, and shall thereupon be entitled to the rights of a Member with respect to such Units, only upon satisfaction of the following conditions and the other conditions specified in this Article VIII: (a) the Transferor grants the Transferee the right to be admitted as a Member; and (b) each of the Members consents to such substitution; provided, however, that the determination to give or withhold consent to any substitution shall be and remain wholly within the absolute discretion of the Members whose consent may be required; 8.10 CERTAIN CONDITIONS TO TRANSFER. As a condition precedent to any Transfer under this Article VIII, each Transferee shall have executed and delivered to the Company and each other Member, an instrument in form reasonably satisfactory to each Member confirming that such Transferee agrees to be bound by the terms of this Agreement (including this Article VIII) and shall have submitted to the Company such evidence as a Member may reasonably request to demonstrate that such Transfer is a permitted transfer under this Article VIII. 8.11 DISSOLUTION OF COMPANY UPON TRANSFER. In the event of a transfer of Units pursuant to this Article VIII, such transfer shall not cause a dissolution of the Company under applicable law. 59 8.12 EFFECT OF INITIATION OF CERTAIN PROCEDURES. Notwithstanding anything to the contrary contained herein, once the Class A Members or the Class B Members, as the case may be, shall have initiated the procedures set forth in any of Articles VIII, IX, X or XI, the other Members may not initiate procedures under any of Articles VIII, IX, X or XI until all of the rights under Articles VIII, IX, X or XI then being exercised shall have been fully exercised, exhausted or extinguished. ARTICLE IX PUT OPTION 9.1 PUT OPTION. The Class B Members (acting by majority vote) ("Offerors") shall have the right, but not the obligation (the "Put Option"), to require the Class A Members (the "Offerees") to, at the Class A Members' election, purchase all (but not less than all) of the Units of the Offerors or to market and sell the Company Units or the Properties (or indirect interests therein) upon the terms and subject to the conditions contained herein. Any action by the Offerors hereunder shall for all purposes hereunder bind and be deemed to include all other Offerors hereunder, and any action by the Offerees hereunder shall for all purposes hereunder bind and be deemed to include all other Offerees hereunder. 9.2 EXERCISE. The Put Option is exercisable only by delivery of written notice (the "Put Notice") to the Offerees at any time from and after (but in no event sooner than) the Trigger Date. The Put Notice shall specify that the provisions of this Article IX are being invoked and set forth the proposed Fair Market Value of each Property (the "Proposed Value") as reasonably determined by the Offerors as though no Retained Debt exists. In addition, as a condition precedent to the exercise of the Put Option and the closing of the transactions contemplated thereby, each Offeror must be an Accredited Investor and, as of the date of the Put Notice and the date of such closing, shall represent, warrant and covenant to and for the benefit of Offerees that it is an Accredited Investor, that it is acquiring any shares of GG Stock to be issued to it pursuant to this Article IX for its own account, for investment and not with a view to resale or distribution thereof (other than pursuant to the registration statement described in Section 9.6) and that it will not Transfer all or any portion of such shares in any manner which could violate or cause GG Properties to violate applicable federal or state securities laws. 9.3 DISSOLUTION VALUE OF THE COMPANY. (a) The "Dissolution Value of the Company" shall be the Value of the Properties as determined pursuant to Section 9.3(b) plus the book value of the Other Assets as of the closing date, calculated in accordance with GAAP, less the amount of the liabilities of the Company as of the closing 60 date (excluding Retained Debt, which for this purpose is not a Liability and is to be paid in accordance with Section 13.1), calculated in accordance with GAAP to the extent the same shall remain liabilities of the Company after closing (the "Liabilities"). The determination of the Accountants as to the Other Assets and the Liabilities shall be binding absent manifest error. (b) The value of a Property ("Value") shall be the Proposed Value specified in the Put Notice unless the Offerees provide written notice to the Offerors within 45 days following the delivery of the Put Notice designating a different Proposed Value. In the event that the Offerors and the Offerees after using commercially reasonable efforts to do so do not agree on the Fair Market Value of any Property (any such agreed upon Fair Market Value being the Value) within ten (10) days thereafter, the Offerees, on the one hand, and the Offerors, on the other hand, shall each designate an Appraiser. If the Offerees, on the one hand, or the Offerors, on the other hand, fail to select an Appraiser within 10 days following the end of such ten (10) day period, the party failing to designate an Appraiser shall forfeit its right to select an Appraiser, and the Appraiser designated by the other party shall alone make the determinations to be made by the Appraisers herein. Within ten (10) days thereafter, the Appraisers designated by the Offerors and the Offerees shall collectively select a third Appraiser. If no third Appraiser is selected within such time period or if neither the Offerors nor Offerees select an Appraiser in a timely manner, the Appraisal Institute shall select an Appraiser upon the request of either the Offerors or the Offerees. Within thirty (30) days of the selection of the last Appraiser to be selected in accordance with the terms hereof, the Appraisers or Appraiser, as the case may be, shall (by majority vote) select as the Value of each Property the Proposed Value which they believe is closest to the Fair Market Value of such Property (and the Appraisers may select no amount other than the Proposed Value designated by either the Offerors or the Offerees as the Value of such Property), and deliver written notice of the same to the Members. (c) Except as provided in Section 9.4, the fees and expenses of the Appraisers shall be borne (i) by the Offerors if the difference between the Offerors' Proposed Values for all Properties and the Values of the Properties as finally determined pursuant to this Article IX is greater than the difference between the Offerees' Proposed Values for all Properties and the Values of the Properties as finally determined pursuant to this Article IX, (ii) by the Offerees if the first such difference is less than the second and (iii) otherwise equally by the Offerors and the Offerees. 61 9.4 RIGHT OF OFFERORS TO WITHDRAW PUT NOTICE. Upon receipt of written notice of the determination of the Value of all Properties in accordance with Section 9.3 hereof, the Offerors (by majority vote) shall have sixty (60) days to withdraw, by written notice to the Offerees, the Put Notice in the event the aggregate Value of all Properties is less than Offerors' aggregate Proposed Values for all Properties. If within such sixty (60) day period, the Offerors shall not have withdrawn the Put Notice, the Put Notice shall become effective. The last day of such sixty (60) day period (or, where the Offerors have no right to withdraw, the date upon which the Members have received written notice of the Value of all Properties) is referred to herein as the "Put Notice Effective Date". In the event of the withdrawal of the Put Notice, the Offerors shall pay all costs and expenses of all Appraisers, the Offerors may not again deliver a Put Notice until the last day of the eighteenth full calendar month following the withdrawal of the Put Notice and the Offerors shall have no right to again withdraw a Put Notice if a Put Notice is given thereafter. 9.5 OPTION OF CLASS A MEMBERS. Upon the Put Notice Effective Date, the Offerees shall have the right to either (a) purchase all of the Offerors' Units for a purchase price and upon the other terms provided in Section 9.6 hereof or (b) elect to market and sell the Company Units or the Properties (or indirect interests therein) in accordance with Section 9.7 hereof. The Offerees may exercise such right by written notice to the Offerors, delivered within sixty (60) days after the Put Notice Effective Date, of its election (each such notice, a "Put Response Notice"). If the Class A Members shall not deliver a Put Response Notice within such sixty (60) day period, the Class A Members shall be deemed to have elected the alternative set forth in clause (b) above. 9.6 PURCHASE OF OFFERORS' UNITS. If the Offerees elect to purchase all of the Offerors' Units pursuant to Section 9.5 above, the following shall apply: (a) The purchase price for the Offerors' Units (the "Put Purchase Price") shall equal the product of the aggregate Proportionate Shares of the Offerors multiplied by the Dissolution Value of the Company. (b) The Put Purchase Price shall be paid in cash; provided, however, that GG Properties shall have the right, but not the obligation (exercisable by delivering notice to Offerors within sixty (60) days following the Put Notice Effective Date), to acquire all or part of the Offerors' Units upon the terms provided herein. If GG Properties exercises such right, any references herein to Offerees shall be deemed to include GG Properties, the Put Purchase Price in respect of such Units shall be paid by delivery, in accordance with the terms hereof, of a number of shares of GG Stock equal to the quotient of such Put Purchase Price divided by the Ten Day 62 Average General Growth Share Price. Neither Offerors nor Offerees shall buy or sell or induce any Person to buy or sell (including without limitation short sell) any shares of Common Stock during the ten Trading Days following the date the Put Response Notice is given. (c) The closing of the purchase and sale of the Offerors' Units shall take place at the offices of counsel to the Offerees and shall occur on the date that is not later than one hundred eighty (180) days following the date the Put Response Notice is given (but, in the case where GG Properties has elected to purchase the Offeror's Units, 10 business days following the date the Put Response Notice is given) unless the Members shall have agreed upon a different date in writing. At such closing, (i) the Offerors shall deliver to the Offerees reasonable and customary instruments of transfer sufficient to Transfer to the Offerees the Offerors' Units, free and clear of any Liens other than Liens created by, through or under the Offerees or Liens created in connection with Company financing (such instruments to contain surviving representations and warranties concerning due organization or formation, due authorization, execution and delivery and the absence of Liens (other than as permitted hereby) and no other representations and warranties), (ii) the Offerees shall deliver to the Offerors the Put Purchase Price in immediately available funds and/or by delivery of a certificate or certificates representing shares of GG Stock, as the case may be, equal in the aggregate to the Put Purchase Price, (iii) each of the Offerors and the Offerees shall (and shall cause their respective Affiliates to) take such other actions as shall be reasonably requested by the others to consummate the purchase and sale of the Offerors' Units as contemplated by this Article IX (including, if required, delivering notices to tenants relating to the sale and purchase, using commercially reasonable efforts (without being obligated to pay any amount or incur any obligation) to obtain tenant, lender, ground lessor or joint venturer consents and executing and delivering all amendments to fictitious name, limited liability company or similar certificates necessary to effect the withdrawal of the Offerors from the Company and, if applicable, the termination of the Company), (iv) the Offerors shall discharge of record all Liens, if any, affecting the Offerors' Units other than Liens permitted hereby (and, if the Offerors fail to do so, the Offerees may use any portion of the Put Purchase Price to pay and discharge any such Liens (other than Liens permitted hereby) and any related expenses and may adjourn the closing for such reasonable period not to exceed 30 days as may be necessary for such purpose), (v) the Offerees shall deliver to the Offerors an executed agreement indemnifying the Offerors against claims with respect to the Company arising from and after the closing and (vi) the portion of the Put Purchase Price attributable to the Other 63 Assets and/or the Liabilities may (notwithstanding anything to the contrary contained herein) be estimated at closing and adjusted between the parties within ninety (90) days thereafter based on the final determination of the Other Assets and the Liabilities. (d) The Offerors and the Offerees will bear pro rata in accordance with their Proportionate Shares all transfer costs (including any transfer, deed, stamp or other similar taxes, recording fees and, subject to the terms of Section 13.1, prepayment penalties). At the election of the Offerees, the purchase and sale will be structured to avoid a termination of the Company for Federal income tax purposes (including a delayed purchase of up to a 1% membership interest of Offerors). If the Offerees or Offerors shall default in closing the purchase and sale to the Offerors, then the non-defaulting Members may pursue their remedies at law or in equity (including an action for specific performance). If a material casualty or condemnation shall occur prior to the closing date, then the Offerees shall have the right, upon written notice, to terminate their obligations to purchase Offerors' Units. If a casualty loss shall occur which is not material and the closing shall occur, the Offerees shall be entitled to receive the entire net proceeds of any insurance paid or payable in connection therewith (other than proceeds of rent insurance with respect to the period up to the date of sale, which shall be shared by the Members as other items are shared as provided herein). For purposes of this Section 9.6(d), a material casualty or condemnation shall be one which results in damage or a loss in an amount greater than five percent (5%) of the Value of the Properties as determined in accordance with this Article IX. (e) If any purchase pursuant to this Article IX is subject to the premerger notification and reporting requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"), and the rules and regulations thereunder (the "Rules"), then the Offerors and the Offerees shall use their respective reasonable best efforts to (i) duly file with the Federal Trade Commission ("FTC") and the Antitrust Division of the Department of Justice (the "Antitrust Division"), no later than the thirtieth (30th) day after the date the Put Response Notice is given, fully completed premerger notification and report forms which include a request for early termination of the waiting period pursuant to Section 7A(b)(2) of HSR and Rule 803.11 thereunder, and (ii) respond in a timely manner to all oral or written requests from the FTC or the Antitrust Division for additional information or documentary materials. Notwithstanding the foregoing, Offerees shall not be obligated to contest any action or decision taken by the FTC or the Antitrust Division challenging the consummation of the 64 acquisition of the Offerors' Units by the Offerees or otherwise agree to the imposition of any material restriction on the business or the operations of the Offerees or any of the Offerees' Affiliates. The filing fees incurred in connection with the premerger notification and report forms shall be borne by Offerors. If the Offerors and the Offerees have complied with the provisions of the immediately preceding paragraph but the applicable waiting period under HSR with respect to the purchase of the Offerors' Units pursuant to this Article IX has not expired or been terminated by the closing date set forth in this Section 9.5, then, notwithstanding anything to the contrary in this Section 9.5, the closing date shall be extended to the fifth business day after all applicable waiting periods under HSR have expired or been terminated. From and after the original closing date set forth in this Section 9.5, the Offerors and the Offerees shall continue to use their respective reasonable best efforts to cause the applicable waiting period under HSR to be terminated. (f) To the extent required to enable Offerees to publicly distribute any GG Stock received by them pursuant to this Article IX, GG Properties shall prepare and file with the Commission promptly following the closing of the purchase and sale pursuant to which such GG Stock was issued a shelf registration statement under the 33 Act registering such GG Stock. GG Properties shall maintain the effectiveness of such shelf registration statement with respect to such GG Stock, and shall include the Offerors as selling stockholders with respect to such shelf registration statement, to the extent the public distribution of such GG Stock would otherwise be prohibited under the 33 Act. All expenses of such shelf registration of GG Stock required by this Section 9.6 (g) shall be paid by GG Properties (but the Offerors shall be responsible for all brokerage fees and underwriting commissions). Upon the happening of any event during the period such registration statement is effective which in the judgment of GG Properties makes any statement made in such registration statement or the prospectus constituting a part thereof untrue in any material respect or which requires the making of any changes in such registration statement or prospectus in order to make the statements therein not misleading (an "Event"), GG Properties promptly shall prepare and file a supplement or post-effective amendment to such registration statement or prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the shares of GG Stock, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not 65 misleading; provided, however, that the obligation to prepare and file any such supplement or post-effective amendment or other document shall be suspended if GG Properties, relying upon advice of counsel, determines that disclosure of any information required to be included therein would be adverse to its interests. Upon receipt of a notice from GG Properties of the happening of any Event, Offerees shall forthwith discontinue disposition of securities pursuant to such registration statement until Offerors' receipt of the copies of a supplemented or amended prospectus. If requested by Offerors that are selling such GG Stock with a value of $50,000,000.00 or more pursuant to an underwritten offering, GG Properties will reasonably cooperate with Offerors in connection with such underwritten offering, including, upon request, entering into and performing its obligations under a customary underwriting agreement (which may include representations, warranties and indemnities customarily given by GG Properties to its underwriters) with the underwriters of such offering; provided that GG Properties shall have the right to select the lead or managing underwriter for such offering (such underwriter to be either Goldman, Sachs & Co. or one of the top three lead underwriters of REIT equity securities for the immediately preceding completed calendar year) and Offerors shall reimburse GG Properties for all reasonable attorneys' fees incurred by GG Properties in connection with such underwritten offering. (g) After the date of the Put Response Notice until the closing of the purchase of the Offerors' Units by the Offerees pursuant to this Section 9.6, the transferring Members shall retain all rights with respect to their Units, including the right to select Board Members and to receive distributions paid or made with respect to such Units. 9.7 SALE OF COMPANY (a) In the event that the Offerees elect (or are deemed to have elected) to market and sell the Company Units or the Properties (or indirect interests therein) pursuant to Section 9.5(b) hereof, the Offerees shall use commercially reasonable best efforts for a period of 90 days after such election (or deemed election) to market the Company Units or the Properties (and/or the direct or indirect interests therein) for sale to one or more bona-fide third party purchasers in one or more arms-length transactions in accordance with the provisions of this Section 9.7; and, upon execution of a letter of intent (a "Letter of Intent") with one or more of such purchasers and subject to the provision of Section 9.7(c) and the other provisions of this Article IX, Offerors shall use commercially reasonable best efforts to sell or cause the sale of the Company Units, the Properties or the direct or indirect interests therein to such purchaser or purchasers in accordance with the terms of such Letter of Intent and the provisions of this Section 9.7. 66 (b) In the event that one or more Letters of Intent for the sale of the Company Units, the Properties and/or the direct or indirect interests therein are not fully executed and delivered within ninety (90) days following the election (or deemed election) of the Offerees pursuant to Section 9.5(b), the Offerors thereafter shall have the right for an additional ninety days to direct the marketing of the Company Units, the Properties and/or the direct or indirect interests therein to one or more bona fide third party purchasers in one or more arms-length transactions in accordance with the provisions of this Section 9.7; and, upon execution of a Letter of Intent with one or more of such purchasers and subject to the provisions of Section 9.7(c) and the other provisions of this Article IX, to sell or cause the sale of the Company Units, the Properties or the direct or indirect interests to such purchaser or purchasers in accordance with the terms of such Letter of Intent and the provisions of this Section 9.7. The rights of the purchaser or purchasers of Company Units and/or Properties (or direct or indirect interests therein) under any Letter of Intent shall be subject to the rights of the Offerees under Section 9.7(d) hereof. (c) Unless otherwise approved by the Board, the sales price (net of credits and prorations) for the Company Units or Properties (or direct or indirect interests therein) payable by a bona-fide third party purchaser pursuant to this Section 9.7 (the "Net Sales Price") shall be no less than 95% of the Dissolution Value of the Company (for purposes of this Section 9.7, the Dissolution Value of the Company shall be calculated without reduction for Retained Debt or other Liabilities to the extent that the selling Members directly or indirectly remain responsible to pay such other Liabilities following the purchase and sale other than by reduction of the purchase price) and shall be payable and paid in cash. No sale of the Units or Properties (or indirect interests therein) may be consummated unless a Letter of Intent substantially reflecting the terms of this Section 9.7, including Section 9.7(d), has been executed with respect thereto within either of the 90-day periods described above and no sale may be consummated later than six months following such 90-day period (unless the delay was due to the bad faith of Offerees). (d) In the event that the Net Sales Price for the Company Units or Properties (or direct or indirect interests therein) based on the purchase price set forth in a fully-signed Letter of Intent is less than the Dissolution Value of the Company but at least 95% of the Dissolution Value of the Company, the Offerees shall have the right, exercisable by delivery of written notice to the Offerors within 30 days 67 from the date of Offerees' receipt of such fully signed Letter of Intent, to purchase the Offerors' Units for a purchase price equal to the product of the Proportionate Share of the Offerors multiplied by the Net Sales Price and otherwise on the terms, provisions and conditions as are contained in such Letter of Intent. If the Offerees exercise such right in accordance with the foregoing provisions, the Offerees shall be bound to purchase the Units of the Offerors in accordance with such Letter of Intent (as modified in this Section 9.7) and the Offerors shall be bound to sell their Units to Offerees on such terms. In the event that the Offerees deliver written notice of rejection to the Offerors or in the event that the Offerees fail to exercise their right as to the Offerors' Units in the manner required by this Section 9.7, the Offerors shall be free to cause (and to cause the Company and its Subsidiaries to cause) the sale of the Company Units or Properties (or the direct or indirect interests therein) to the purchaser or purchasers identified in such Letter of Intent upon terms not materially more favorable to the purchaser or purchasers than the terms contained in such Letter of Intent. In the event the terms of the sale of Company Units or Properties (or direct or indirect interests therein) become materially more favorable to the purchaser or purchasers, no sale, transfer, assignment or conveyance of the Company Units or Properties (or interests therein) may be made unless the provisions of this Section 9.7(d) are again complied with. Upon the sale of the Properties, the rights of GGPLP, GG Properties and its Affiliates as to property and other management thereof (and any agreements in respect thereof) shall terminate. (e) In connection with the marketing and sale of the Company Units or the Properties (or direct or indirect interests therein) pursuant to this Section 9.7, (i) the Offerors or the Offerees, as the case may be, shall cause the Company to engage an investment banker or other broker that is reasonably satisfactory to the others and on customary terms (including the payment of customary fees and the making of customary representations, warranties and indemnities) to assist in the sale of the Company Units or Properties (or direct or indirect interests therein) (and the fees of such Person shall be borne by the Members pro rata in accordance with their Proportionate Shares), and (ii) each of Offerors and the Offerees shall (and shall cause each of its respective Affiliates to) execute and deliver such documents and take such other actions as the others shall reasonably request in order to consummate the transactions contemplated by this Section 9.7, including making or granting such representations, warranties and indemnities as are reasonable and customary in similar transactions and executing and delivering such instruments of conveyance as may be reasonably required to convey the Units or the Properties (or direct or indirect interests therein) in accordance with this Section 9.7. 68 (f) Notwithstanding anything to the contrary contained herein, if the Members cause the sale of Company Units or the Properties (or interests therein) to be sold to a bona fide third party purchaser or purchasers in accordance with the terms hereof, at the closing of such sale, such third party purchaser shall pay to the Members or the Company (or its Subsidiary, as appropriate), in immediately available funds, the entire purchase price to be paid for the same (and, if paid to the Company or any Subsidiary, such purchase price shall be distributed to the Members in accordance with the distribution provisions set forth in Article V with respect to Net Disposition Proceeds). 9.8 PRIORITY. Notwithstanding anything to the contrary contained herein, from and after the delivery of a Put Notice, the Class A Members shall not have the right to Transfer their Units pursuant to Article VIII or deliver a Buy-Sell Notice pursuant to Article X hereof and the Class B Members shall not have the right to deliver a Dissolution Commencement Notice pursuant to Article XI hereof or Transfer their Units unless the Put Notice shall have been withdrawn pursuant to the provisions of Section 9.4 hereof or the provisions of this Article IX otherwise have been carried out. ARTICLE X BUY-SELL RIGHT 10.1 BUY-SELL RIGHT. The Class A Members (acting by majority vote) shall have the right (the "Buy-Sell Right") to require the Class B Members to, at the Class B Members' sole election, sell all of their Units to the Class A Members or purchase all of the Class A Member's Units upon the terms contained herein. Any action by the Class A Members hereunder shall for all purposes hereunder bind and be deemed to include all other Class A Members hereunder, and any action by the Class B Members hereunder shall for all purposes hereunder bind and be deemed to include all other Class B Members hereunder. 10.2 EXERCISE. The Buy-Sell Right is exercisable only by delivery of written notice (the "Buy-Sell Notice") to the Class B Members at any time from and after (but in no event sooner than) the later of the third anniversary of the date hereof and the Stonebriar Grand Opening. The Buy-Sell Notice shall specify that the provisions of this Article X are being invoked and shall contain a value designated by the Class A Members for all of the Properties (the "Buy-Sell Designated Values"). 10.3 OPTION OF CLASS B MEMBERS. Upon receipt of the Buy-Sell Notice, the Class B Members (acting by majority vote) shall have 69 the right to either (a) purchase all of the Class A Members' Units or (b) sell all of the Class B Members' Units to the Class A Members, in each case upon the terms contained herein. The Class B Members may exercise such right by written notice to the Class A Members, delivered within sixty (60) days after the Buy-Sell Notice is given, of its election (each such notice, a "Buy-Sell Response Notice"). If the Class B Members shall not deliver a Buy-Sell Response Notice within such sixty (60) day period, the Class B Members shall be deemed to have elected the alternative set forth in clause (b) above. After the date of the Buy-Sell Response Notice until the closing of the purchase by the Transferee Members pursuant to this Article X, the Transferring Members shall retain all rights and obligations with respect to their Units, including the right to select Board Members and to receive distributions paid or made with respect to such Units. 10.4 PURCHASE PRICE; PAYMENT OF PURCHASE PRICE; CLOSING. (a) The purchase price for the Units of the Transferring Members (the "Buy-Sell Purchase Price") shall equal the product of the Dissolution Value of the Company (calculated using the Buy-Sell Designated Values as the Values of the Properties) multiplied by the Proportionate Share of the Transferring Members, and the Buy-Sell Purchase Price shall be paid in cash. (b) The closing of the purchase and sale of Units pursuant to the Buy-Sell Right shall take place at the offices of counsel to the Class B Members and shall occur on the date that is no sooner than thirty (30) days and no later than one hundred eighty (180) days after the Buy-Sell Response Notice (or, where no Buy-Sell Response Notice is given, the last day for giving the Buy-Sell Response Notice) unless the Members shall have agreed upon a different date in writing. At such closing, (i) the Transferring Members shall deliver to the Transferee Members reasonable and customary instruments of transfer sufficient to Transfer to the Transferee Members the Units of the Transferring Members, free and clear of any Liens other than Liens created by, through or under the Transferee Members or Liens created in connection with Company financing (such instruments to contain surviving representations and warranties concerning due organization or formation, due authorization, execution and delivery and the absence of Liens (other than as permitted hereby) and no other representations and warranties), (ii) the Transferee Members shall deliver to the Transferring Members the Buy-Sell Purchase Price in immediately available funds (iii) each of the Members shall take and shall cause their respective Affiliates to take such other actions as shall be reasonably requested by the others to consummate the purchase and sale of Units as contemplated by this Article X (including, if required, delivering notices to tenants relating to the sale and purchase, using 70 commercially reasonable efforts (without being obligated to pay any amount or incur any obligation) to obtain tenant, lender, ground lessor or joint venturer consents and executing and delivering all amendments to fictitious name, limited liability company or similar certificates necessary to effect the withdrawal of the Transferring Members from the Company and, if applicable, the termination of the Company), (iv) the Transferring Members shall discharge of record all Liens affecting the Transferee Members' Units, if any, other than Liens permitted hereby (and, if the Transferring Members fail to do so, the Transferee Members may use any portion of the Buy-Sell Purchase Price to pay and discharge any such Liens (other than Liens permitted hereby) and any related expenses and may adjourn the closing for such reasonable period not to exceed 30 days as may be necessary for such purpose), (v) the Transferee Members shall deliver to the Transferring Members an executed agreement indemnifying the Transferring Members against claims with respect to the Company arising from and after the closing and (vi) the portion of the Buy-Sell Purchase Price attributable to the Other Assets and/or the Liabilities may (notwithstanding anything to the contrary contained herein) be estimated at closing and adjusted between the parties within 90 days thereafter based on the final determination of the Other Assets and the Liabilities. (c) The Transferring Members and the Transferee Members will bear pro rata in accordance with their Proportionate Shares all transfer costs (including any transfer, deed, stamp or other similar taxes, recording fees and, subject to the terms of Article XIII, prepayment penalties). At the election of the Transferee Member, the purchase and sale will be structured to avoid a termination of the Company for Federal income tax purposes (including a delayed purchase of up to a 1% membership interest of Transferring Members). If the Transferee Members or the Transferring Members shall default in closing the purchase and sale to the Transferee Members, then the non-defaulting Members may pursue their remedies at law or in equity (including an action for specific performance). If a material casualty or condemnation shall occur prior to the closing date, then the Transferee Members shall have the right, upon written notice, to terminate their obligations to purchase Transferring Members' Units. If a casualty loss shall occur which is not material and the closing shall occur, the Transferee Members shall be entitled to receive the entire net proceeds of any insurance paid or payable in connection therewith (other than proceeds of rent insurance with respect to the period up to the date of sale, which shall be shared by the Members as other items are shared as provided herein). For purposes of this Section 10.4(c), a material casualty or condemnation shall be one which results in damage or a loss in an amount greater than five percent (5%) of the Buy-Sell Designated Values. 71 (d) If any purchase pursuant to this Article X is subject to the premerger notification and reporting requirements of HSR and the Rules, then the Members shall use their respective reasonable best efforts to (i) duly file with the FTC and the Antitrust Division, no later than the thirtieth (30th) day after the date the Buy-Sell Response Notice is given (or, where no Buy-Sell Response Notice is given, the last day for giving the Buy-Sell Response Notice), fully completed premerger notification and report forms which include a request for early termination of the waiting period pursuant to Section 7A(b)(2) of HSR and Rule 803.11 thereunder, and (ii) respond in a timely manner to all oral or written requests from the FTC or the Antitrust Division for additional information or documentary materials. Notwithstanding the foregoing, the Transferee Members shall not be obligated to contest any action or decision taken by the FTC or the Antitrust Division challenging the consummation of the acquisition of the Transferring Members' Units by the Transferee Members or otherwise agree to the imposition of any material restriction on the business or the operations of the Transferee Members or any of their Affiliates. The filing fees incurred in connection with the premerger notification and report forms shall be borne by the Class A Members. If the Members have complied with the provisions of the immediately preceding paragraph but the applicable waiting period under HSR with respect to the purchase of the Transferring Members' Units pursuant to this Article X has not expired or been terminated by the closing date set forth in this Section 10.4, then, notwithstanding anything to the contrary in this Section 10.4, the closing date shall be extended to the fifth business day after all applicable waiting periods under HSR have expired or been terminated. From and after the original closing date set forth in this Section 10.4, the Members shall continue to use their respective reasonable best efforts to cause the applicable waiting period under HSR to be terminated. 10.5 PRIORITY. Notwithstanding anything to the contrary contained herein, from and after the delivery of a Buy-Sell Notice, the Class B Members shall not have the right to Transfer their Units pursuant to Article VIII or deliver a Put Notice pursuant to Article IX hereof or a Dissolution Commencement Notice pursuant to Article XI hereof. ARTICLE XI SPECIAL DISSOLUTION RIGHT 11.1 SPECIAL DISSOLUTION RIGHT. The Class B Members (acting by majority vote) shall have the right (the "Dissolution Right") to require that, at the Class A Members' election, (a) certain Company 72 Properties be distributed to the Class B Members or (b) the Class A Members' purchase all of the Class B Members' Units upon the terms contained herein. Any action by the Class A Members hereunder shall for all purposes hereunder bind and be deemed to include all other Class A Members hereunder, and any action by the Class B Members hereunder shall for all purposes hereunder bind and be deemed to include all other Class B Members hereunder. 11.2 EXERCISE. The Dissolution Right is only exercisable by delivering a written notice (the "Dissolution Commencement Notice") to the Class A Members from and after (but in no event sooner than) the Trigger Date. The Dissolution Commencement Notice shall specify that the provisions of this Article XI are being invoked and include Proposed Values for the Company Properties. 11.3 DISSOLUTION VALUE OF THE COMPANY. Upon receipt of a Dissolution Commencement Notice, the Dissolution Value of the Company shall be determined in the manner specified in Section 9.3. 11.4 RIGHT TO WITHDRAW DISSOLUTION COMMENCEMENT NOTICE. Upon determination of the Value of the all Properties as provided above, the Class B Members (by majority vote) shall have sixty (60) days to withdraw, by written notice to the Class A Members, the Dissolution Commencement Notice in the event the aggregate Value of all Properties is less than the Class B Members' aggregate Proposed Values for all Properties. If within such sixty (60) day period the Class B Members shall not have withdrawn the Dissolution Commencement Notice, the Dissolution Commencement Notice shall become effective. The last day of such sixty (60) day period (or, where the Class B Members have no right to withdraw, the date upon which the Members have received written notice of the Value of all Properties) is referred to herein as the "Dissolution Commencement Notice Effective Date". In the event of a withdrawal of the Dissolution Commencement Notice, the Class B Members shall pay all costs and expenses of all Appraisers, the Class B Members may not again deliver a Dissolution Commencement Notice until the last day of the eighteenth full calendar month following the withdrawal of the Dissolution Commencement Notice and the Class B Members shall have no right to again withdraw a Dissolution Commencement Notice if a Dissolution Commencement Notice is given thereafter. 11.5 OPTION OF CLASS A MEMBERS. Upon the Dissolution Notice Effective Date, the Class A Members shall have the right to either (a) purchase all of Class B Members' Units or (b) elect to distribute certain of Properties, in each case in accordance with the provisions hereof. The Class A Members may exercise such right by written notice to the Class B Members, delivered within sixty (60) days after the Dissolution Notice Effective Date, of its election (each such notice, a "Dissolution Response Notice"). If the Class A Members shall not deliver a Dissolution Response Notice within such sixty (60) days period, the Class A Members shall be deemed to have elected the alternative set forth in clause (b) above. 73 11.6 PURCHASE OF CLASS B MEMBERS' UNITS. If the Class A Members elect to purchase all of the Class B Members' Units pursuant to Section 11.5 above, the following shall apply: (a) The purchase price for the Class B Members' Units (the "Dissolution Purchase Price") shall equal the product of the aggregate Proportionate Shares of the Class B Members multiplied by the Dissolution Value of the Company, and the Dissolution Purchase Price shall be paid in cash. (b) The closing of the purchase and sale of the Class B Members' Units shall take place at the offices of counsel to the Class A Members and shall occur on the date that is no later than one hundred eighty (180) days after the Dissolution Response Notice is given unless the Members shall have agreed upon a different date in writing. At such closing, (i) the Class B Members shall deliver to the Class A Members reasonable and customary instruments of transfer sufficient to Transfer to the Class A Members the Units of the Class B Members, free and clear of any Liens other than Liens created by, through or under the Class A Members or Liens created in connection with Company financing (such instruments to contain surviving representations and warranties concerning due organization or formation, due authorization, execution and delivery and the absence of Liens (other than as permitted hereby) and no other representations and warranties), (ii) the Class A Members shall deliver to the Class B Members the Dissolution Purchase Price in immediately available funds (iii) each of the Members shall take and shall cause their respective Affiliates to take such other actions as shall be reasonably requested by the others to consummate the purchase and sale of Units as contemplated by this Article XI (including, if required, delivering notices to tenants relating to the sale and purchase, using commercially reasonable efforts (without being obligated to pay any amount or incur any obligation) to obtain tenant, lender, ground lessor or joint venturer consents and executing and delivering all amendments to fictitious name, limited liability company or similar certificates necessary to effect the withdrawal of the Class B Members from the Company and, if applicable, the termination of the Company), (iv) the Class B Members shall discharge of record all Liens affecting the Class B Members' Units, if any, other than Liens permitted hereby (and, if the Class B Members fail to do so, the Class A Members may use any portion of the Dissolution Purchase Price to pay and discharge any such Liens (other than Liens permitted hereby) and any related expenses and may adjourn the closing for such reasonable period not to exceed 30 days as may be necessary for such purpose), (v) the Class A Members shall deliver to 74 the Class B Members an executed agreement indemnifying the Class B Members against claims with respect to the Company arising from and after the closing and (vi) the portion of the Dissolution Purchase Price attributable to the Other Assets and/or the Liabilities may (notwithstanding anything to the contrary contained herein) be estimated at closing and adjusted between the parties within ninety (90) days thereafter based on the final determination of the Other Assets and the Liabilities. (c) The Class A Members and the Class B Members will bear pro rata in accordance with their Proportionate Shares all transfer costs (including any transfer, deed, stamp or other similar taxes, recording fees and, subject to the terms of Article XIII, prepayment penalties). At the election of the Class A Members, the purchase and sale will be structured to avoid a termination of the Company for Federal income tax purposes (including a delayed purchase of up to a 1% membership interest of Class B Members). If the Class A Members or the Class B Members shall default in closing the purchase and sale to the Class A Members, then the non-defaulting Members may pursue their remedies at law or in equity (including an action for specific performance). If a material casualty or condemnation shall occur prior to the closing date, then the Class A Members shall have the right, upon written notice, to terminate their obligations to purchase the Class B Members' Units. If a casualty loss shall occur which is not material and the closing shall occur, the Class A Members shall be entitled to receive the entire net proceeds of any insurance paid or payable in connection therewith (other than proceeds of rent insurance relating to the period up to the date of sale, which shall be shared by the Members as other items are shared as provided herein). For purposes of this Section 11.6(c), a material casualty or condemnation shall be one which results in damage or a loss in an amount greater than five percent (5%) of the Dissolution Purchase Price. (d) If any purchase pursuant to this Article XI is subject to the premerger notification and reporting requirements of HSR and the Rules, then the Members shall use their respective reasonable best efforts to (i) duly file with the FTC and the Antitrust Division, no later than the thirtieth (30th) day after the date the Dissolution Response Notice is given, fully completed premerger notification and report forms which include a request for early termination of the waiting period pursuant to Section 7A(b)(2) of HSR and Rule 803.11 thereunder, and (ii) respond in a timely manner to all oral or written requests from the FTC or the Antitrust Division for additional information or documentary materials. Notwithstanding the foregoing, the Class A Members shall not be obligated to contest any action or decision taken by the 75 FTC or the Antitrust Division challenging the consummation of the acquisition of the Class B Members' Units by the Class A Members or otherwise agree to the imposition of any material restriction on the business or the operations of the Class A Members or any of their Affiliates. The filing fees incurred in connection with the premerger notification and report forms shall be borne by the Class B Members. If the Members have complied with the provisions of the immediately preceding paragraph but the applicable waiting period under HSR with respect to the purchase of the Class B Members' Units pursuant to this Article XI has not expired or been terminated by the closing date set forth in this Section 11.6, then, notwithstanding anything to the contrary in this Section 11.6, the closing date shall be extended to the fifth business day after all applicable waiting periods under HSR have expired or been terminated. From and after the original closing date set forth in this Section 11.6, the Members shall continue to use their respective reasonable best efforts to cause the applicable waiting period under HSR to be terminated. (e) After the date of the Dissolution Response Notice until the closing of the purchase of the Class B Members' Units by the Class A Members pursuant to this Article XI, the Class B Members shall retain all rights with respect to their Units, including the right to select Board Members and to receive distributions paid or made with respect to such Units. 11.7 DISTRIBUTION OF PROPERTIES. (a) If the Class A Members elect to distribute certain of the Company's Properties or the Company's direct or indirect interests therein (together with associated liabilities) pursuant to Section 11.5 hereof, the Company's Properties (together with associated liabilities) shall be divided among the Class A Members, on the one hand, and the Class B Members, on the other hand, by having each select Properties on an alternating one-by-one basis (with the Class B Members being entitled to the first selection) until either the Class A Members or the Class B Members have selected Properties having a Dissolution Value equal to their Proportionate Share of the Dissolution Value of all of the Company's Properties with any remaining Properties going to the other party or parties. (b) The "Dissolution Value of a Property" shall be the Value of the Property, determined in accordance with Section 9.3 above, plus the book value of the Other Assets as of the date of distribution (including Cash Reserves and other non-operating assets) that are attributable or allocable to such Property less the Liabilities as of the date of distribution (including corporate level liabilities) that are associated with or allocable to such 76 Property (excluding Retained Debt, which for this purpose is not a Liability and is to be paid in accordance with Section 13.1). The determination of the Accountants as to the Other Assets and the Liabilities (and the allocation thereof among the Properties) shall be binding. (c) All Properties selected by the Class B Members or any direct or indirect interests therein (together with associated liabilities) will be distributed to the Class B Members in exchange for all of their Units, and the Class B Members shall thereafter no longer be Members of the Company and such Properties shall no longer be owned by the Company or any Affiliate thereof for any purpose, including with respect to governance, distributions, valuation or management (and the other Properties shall continue to be owned by the Company and its Subsidiaries and the Class A Members shall continue to own their Units in the Company). Upon distribution of Properties to the Class B Members, any management agreements between GGPLP, GG Properties or any Affiliate of either of them shall terminate without further action except for the provisions thereof which expressly survive the termination thereof. During the period prior to the distribution, the risk of casualty, damage or condemnation or other adverse change with respect to any Property to be distributed to the Class B Members shall be borne by the Class B Members and with respect to any Property to be retained by the Company shall be borne by the Company, provided, however, that any insurance proceeds payable with respect thereto (other than proceeds of rent insurance relating to the period up to the date of sale, which shall be shared by the Members as other items are shared as provided herein) shall, with respect to a Property to be distributed to the Class B Members, be paid to the Class B Members, and with respect to a Property to be retained by the Company, be paid to the Company. Notwithstanding anything to the contrary contained herein, the equity interests in the Entities directly or indirectly owning the Properties that otherwise are to be distributed to the Class B Members may be distributed to the Class B Members in lieu of the distribution of such Properties to the Class B Members. (d) The closing of the distribution of the Properties to be distributed to the Class B Members (together with associated or allocable liabilities) shall take place at the offices of the counsel to the Class A Members and shall occur on a date that is no less than 30 days and no more than 180 days after the date on which such Properties to be distributed were selected unless the Members shall have agreed upon a different date in writing. At such closing, (i) the Members (or their respective Affiliates) shall cause the Company to deliver to the Class B Members (or their designees) reasonable and customary instruments of transfer sufficient to Transfer to the Class B Members (or their designees) the Properties selected by the Class B Members for distribution (or the Company's direct or indirect interests therein), any personal, intangible or tangible property related thereto and the Company's 77 (or its Subsidiaries') interest in all of the leases, contracts and other third party agreements relating to the operation and maintenance of such Properties (such instruments to contain surviving representations and warranties concerning due organization or formation and due authorization, execution and delivery and no other representations and warranties), (ii) the Class B Members shall deliver to the Class A Members reasonable and customary instruments of transfer and assumption sufficient to Transfer to the Class A Members the Class B Members' Units, free and clear of any Liens other than Liens created by, through or under the Class A Members or Liens created in connection with Company financing, and sufficient to effect the assumption by the Class B Members of all liabilities associated with or allocable to the Properties directly or indirectly distributed to them (such instruments to contain surviving representations and warranties concerning due organization or formation, due authorization, execution and delivery and the absence of Liens (other than as permitted hereby) and no other representations and warranties), (iii) the Class B Members shall discharge of record all Liens and encumbrances affecting the Class B Members' Units if any other than as permitted hereby, and (iv) each of the Members shall take and shall cause their respective Affiliates to take such other actions as shall be reasonably requested by the others to consummate the transactions as contemplated by this Article XI (including the execution and delivery of all amendments to fictitious name, limited liability company or similar certificates necessary to effect the withdrawal of the Class B Members from the Company and, if applicable, the termination of the Company). The Class A Members, on the one hand, and the Class B Members, on the other hand, will bear pro rata in accordance with their Proportionate Shares all transfer costs (including any transfer, deed, stamp or other similar taxes, recording fees, title insurance premiums, costs of surveys and, subject to the terms of Article XIII, any prepayment penalties and other amounts payable to lenders (other than prepayment penalties and other amounts payable in respect of Retained Debt). In connection with the distributions pursuant to this Article XI, the Class B Members shall have the right to receive title insurance policies and surveys reflecting such distributions and otherwise reflecting the condition of title and survey matters as of the closing date for the Properties distributed to them and the Class A Members shall have the right to receive title insurance policies and surveys reflecting such distributions and otherwise reflecting the condition of title and survey matters as of the closing date for the other Properties. (e) The Class B Members shall indemnify the Company and the Class A Members against any losses, claims, damages or liabilities arising out of or relating to the Properties (and associated liabilities) distributed to the Class B Members (other than losses, claims, damages or liabilities that were created and known by the Class A Members and not disclosed to Class B Members). The Company and the Class A Members shall indemnify the Class B Members against 78 any losses, claims, damages or liabilities (other than losses, claims, damages or liabilities that were created and known by the Class B Members and not disclosed to the Class A Members) arising out of or relating to the Properties (and associated liabilities) retained by the Company or distributed to the Class A Member. (f) Each of the Members will and shall cause its respective Affiliates to cooperate with the others to facilitate the distribution of Properties contemplated by this Section 11.7, including with respect to (i) delivering required notices to tenants relating to the distribution, (ii) using commercially reasonable efforts (without being obligated to pay any amount or incur any obligation) to obtain tenant, lender, ground lessor or joint venturer consents, if required, (iii) using commercially reasonable efforts (without being obligated to pay any amounts or incur any obligation) to eliminate any cross-collateralized or cross-defaulted financings between the properties selected by the Class B Members, on the one hand, and the other Properties, on the other hand, including by agreeing to encumber properties not designated for transfer. If the Class A Members or the Class B Members shall default in closing the distributions contemplated by this Article XI, then the non-defaulting Members may pursue their remedies at law or in equity (including an action for specific performance). (g) If as a result of the selection process described above, one party shall be entitled to Properties that have an aggregate Dissolution Value (based on the Dissolution Value of the Properties obtained pursuant to this Section 11.7) in excess of such party's Proportionate Share of the Dissolution Value of all of the Company's Properties, then such party shall pay a cash adjustment to the other party. Such cash adjustment shall be paid on the date the distribution of Properties is made. (h) If at the time a distribution of Properties is to be made and subject to the obligations of the Members hereunder to repay certain of the Retained Debt, a Property (an "Impaired Property") cannot be distributed due to an inability to remove it from a cross-collateralized or cross-defaulted pool, the inability to obtain a necessary consent or any other similar matter, then such Property shall be retained by the Company and the Members shall reselect the Properties that remain in the Company and that were selected after the Impaired Property was selected, on an alternating one-by-one basis. 11.8 PRIORITY. Notwithstanding anything to the contrary in Article VIII, X or XI, from and after the delivery of a Dissolution Commencement Notice by the Class B Members, the Class B Members shall not have the right to deliver a Put Notice pursuant to Article IX or Transfer their Units pursuant to Article VIII and the Class A Members shall not have the right to deliver a Buy-Sell Notice pursuant to Article X or Transfer their Units pursuant to 79 Article VIII unless the Class B Group has withdrawn such Dissolution Commencement Notice pursuant to Section 11.4. ARTICLE XII DISSOLUTION AND TERMINATION 12.1 DISSOLUTION. Unless otherwise expressly provided herein to the contrary, the Company shall continue in effect until dissolved and wound up upon the occurrence of any one or more of the following events: (a) the termination, dissolution, insolvency, bankruptcy or withdrawal of any Member (other than in connection with a valid transfer of Units in accordance with the terms hereof) unless the Board elects to continue the business of the Company; (b) the decision of the Board to dissolve the Company; (c) the sale of all or substantially all of the Company Assets and the receipt of all consideration therefor except that if non-monetary consideration is received upon such disposition, the Company shall not be dissolved pursuant to this clause until such consideration is converted into money or money equivalent; and (d) dissolution required by operation of law. Dissolution of the Company caused by a Member in contravention of this Agreement shall be a violation of this Agreement and the other Member shall have all rights and remedies provided under applicable law and, in addition thereto, the right to any and all damages at law or in equity resulting from such violation of this Agreement. To the extent permissible by law, whether or not the business of the Company is continued by the non-defaulting Member, such non-defaulting Member shall be permitted to withhold the defaulting Member's share of Company property the defaulting Member would otherwise be entitled to under this Article XII upon the winding-up and termination of the Company as collateral security for the obligations such defaulting Member may have to the non-defaulting Member in connection with the operation and dissolution of the Company. 12.2 ACCOUNTING. Upon the dissolution of the Company, a proper accounting shall be made of the assets and liabilities of the Company, including all Operating Cash Flow and Net Disposition Proceeds, and the Capital Account of each Member as of the date of dissolution and of the items of Net Income and Net Loss of the Company from the date of the last previous accounting to the date of dissolution. The financial statements and reports specified in Section 6.3 shall be prepared by the Liquidating Member and 80 distributed to each Member as though the date of dissolution were the last day of the then current fiscal year and shall reflect such accounting. The Liquidating Member shall also prepare a report (and deliver the same to each of the Members) setting forth in reasonable detail the manner and disposition of assets. 12.3 WINDING-UP. (a) Winding-Up. Upon the dissolution of the Company, the affairs of the Company thereafter shall be wound up and terminated as promptly as practicable in an orderly and businesslike and commercially reasonable manner, and the Members shall continue to share Net Income, Net Loss, Net Operating Cash Flow, Net Disposition Proceeds and other items of the Company during the winding-up period in accordance with the provisions of Articles IV and V hereof. Subject to the provisions of Article VII, the winding-up of the affairs of the Company and the distribution of its assets shall be conducted exclusively by the Liquidating Member in accordance with the provisions hereof. In considering the sale of any Company Assets, the Board may determine to defer the sale of all or any portion of the Company Assets if deemed necessary or appropriate to realize the Fair Market Value of any such Company Assets. (b) Termination. Upon the completion of the winding up of the Company and the distribution of all Company assets, the Company shall terminate and the Liquidating Member shall have the authority to execute and record any and all other documents required to effectuate the termination of the Company and the Members shall cooperate in the execution and delivery of any such reasonable documents required to effectuate the termination of the Company. 12.4 LIQUIDATING DISTRIBUTION. In the event of the dissolution of the Company for any reason, the Company assets shall be liquidated for distribution in the following rank and order: (a) first, to the payment and discharge of all the Company's debts and liabilities in the order of priority as provided by law; (b) second, to the establishment of any necessary reserves to provide for contingent liabilities or obligations of the Company as determined by the Board in its commercially reasonable judgment, if any; and (c) the balance, if any, to the Members pro rata in accordance with their respective positive Capital Accounts, after giving effect to all contributions, distributions and allocations for all periods, including the period during which such distributions occur. 81 12.5 DISTRIBUTIONS IN ACCORDANCE WITH CAPITAL ACCOUNTS. In the event the Company is "liquidated" within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g) (the "Liquidation Event"), distributions shall be in accordance with their respective positive Capital Accounts in compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(2), such distributions to be made on or before a date (the "Final Liquidation Date") no later than the later to occur of (i) the last day of the taxable year of the Company in which the Liquidation Event occurs and (ii) ninety days after the date of such Liquidation Event. If the Board determines that the distributions will not be timely made as provided in foregoing paragraph (a), all of the assets and liabilities of the Company shall be distributed in trust with such person as may be selected by the Board, as trustee; the purpose of the trust is to allow the Company to comply with the timing requirements contained in foregoing paragraph (a). The trustee of said trust shall distribute the former Company assets (however constituted, enhanced or otherwise) as promptly as he deems proper and in the same manner as directed in this Section 12.5 (without regard to this sentence or the preceding sentence) and otherwise as required hereunder. The trust shall be terminated as soon as possible after the trust property is distributed to the beneficiaries thereof. 12.6 NEGATIVE CAPITAL ACCOUNTS. No Member shall have an obligation to the Company or any other Member to restore to zero any negative balance in its Capital Account. 12.7 DISTRIBUTIONS IN KIND. Company Assets may not be distributed in kind without the approval of the Board. 12.8 NO REDEMPTION. The Company may not acquire, by redemption or otherwise, any Units of any Member. 12.9 GOVERNANCE. Notwithstanding a dissolution of the Company, until the termination of the business of the Company, the affairs of the Members, as such, shall be continue to be governed by this Agreement. The Liquidating Member shall be subject to the same restrictions on transactions with related parties or involving conflicts of interest as applied prior to the dissolution of the Company, including the consent requirements set forth herein for any such transaction. 12.10 RETURN OF CAPITAL. No Member shall have any right to receive the return of its Capital Contribution or to seek or obtain partition of assets of the Company, other than as provided in this Agreement. 82 ARTICLE XIII MATTERS RELATING TO RETAINED DEBT 13.1 PAYMENT OF RETAINED DEBT. (a) Each Member's Capital Account, as of the date hereof, reflects the agreed upon value of the property contributed to the Company pursuant to the Contribution Agreements without regard to the existence of any Retained Debt. For income tax reporting and for all other purposes under this Agreement, the GGPLP Retained Debt and NYSCRF Retained Debt shall be treated as the indebtedness of GGPLP and NYSCRF, respectively. (b) Each Member shall pay the principal, interest and other amounts (including prepayment penalties) in respect of the Retained Debt of such Member as and when due and payable. (c) Each Member shall prepay and otherwise discharge the Retained Debt of such Member in respect of any Property (including payment of prepayment penalties) in the event that such Property (or any direct or indirect interest therein) is Transferred (other than to another Subsidiary), and each Member shall prepay and otherwise discharge all of the Retained Debt of such Member (including payment of prepayment penalties) in the event that the Company dissolves and is liquidated and wound-up or such Member Transfers all of its Units to the other Member or Members or other Person (other than an Affiliate of the Transferring Member) pursuant to this Agreement (unless the Transferee Person assumes responsibility for the obligations hereunder relating to such Retained Debt). A payment required to be made pursuant to this subsection (c) shall be made concurrent with or prior to the Transfer of Properties or Units to which such payment relates or the dissolution, liquidation and winding-up of the Company, as the case may be. (d) Each Member may, at any time and from time to time, prepay all or a portion of its Retained Debt. 13.2 FAILURE TO MAKE PAYMENTS IN RESPECT OF RETAINED DEBT. (a) If a Member determines that another Member has failed to pay any principal, interest or other amount required pursuant to this Article XIII, such Member shall send a written notice (the "Retained Debt Default Notice") to such other Member, notifying such other Member of its failure to make such payment, the amount of such payment, the date such payment was due, and requesting that such payment be paid immediately. (b) If a Member fails to make a payment of principal, interest or other amount required under this Article XIII within 15 days after receiving the Retained Debt Default Notice, then such Member shall be in default (the Member in default is referred to as a "Retained Debt Defaulting Member" and the amount that such Defaulting Member failed to 83 contribute is referred to as the "Retained Debt Default Amount") and the Members that are not Default Members (the "Retained Debt Non-Defaulting Members") may (i) pay (and hereby are granted a power of attorney to pay) the Retained Debt Default Amount (which shall be deemed to be a loan by the Retained Debt Non-Defaulting Members to the Retained Debt Defaulting Members) and/or (ii) pursue their other rights and remedies hereunder and, subject to the terms hereof, at law or in equity. Any such loan (a "Retained Debt Default Loan") shall bear interest at the per annum rate equal to Prime plus 4% and shall be payable on demand. The foregoing power of attorney and the power of attorney granted pursuant to Section 14.2(b) are special powers of attorney coupled with an interest, are irrevocable and shall survive the dissolution of each Member and shall survive the delivery of an assignment by a Member of the whole or any portion of its Units. 13.3 INDEMNIFICATION. In addition to the obligations pursuant to Section 13.1 hereof, each Member agrees to indemnify, defend (with counsel reasonably approved by the Company) and hold harmless the Company and the Subsidiaries, the direct or indirect directors, officers, members, partners, shareholders, employees, representatives and agents of the Company and the Subsidiaries and their successors and assigns (collectively, the "Indemnitees"), from and against any claims, actions, proceedings, judgments, obligations, damages, penalties, costs, expenses, liabilities of any kind or nature or losses, including sums paid in settlement of claims and reasonable attorneys' fees, paralegals' fees and expenses, court costs (including any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), and fees of consultants and experts (collectively, the "Costs") that arise directly or indirectly from the Retained Debt of such Member (other than a Cost resulting from the breach by the Company or an Indemnitee of the provisions hereof). 13.4 SECURITY INTEREST. (a) Each Member hereby assigns and grants to the other Member a first priority lien upon, and a security interest in, all of the Units of such Member and all amounts, payments and proceeds distributable or payable to such Member by the Company, now or in the future, as collateral security for the payment and performance of such Member's obligations under this Article XIII and Article XIV. Each Member shall execute such confirmation and financing statements as the other Member shall reasonably request in order to perfect and maintain the perfection of the lien and security interest herein granted. Any transfer of the Units of a Member shall be subject to such lien and security interest. Unless either Member becomes a Defaulting Member, such Member shall remain entitled to receive distributions in accordance with Article V hereof and exercise all other rights in respect of its Units. 84 (b) If (and only if) either Member becomes a Defaulting Member and except as otherwise provided herein, all amounts, payments and proceeds which may become distributable or payable by the Company to such Defaulting Member shall be paid to the Non-Defaulting Members and shall become additional collateral hereunder. (c) This Agreement shall constitute a security agreement under the Uniform Commercial Code. If (and only if) a Member becomes a Defaulting Member, the Non-Defaulting Members may exercise any of the rights and remedies of a secured party under the Uniform Commercial Code with respect to the Units of the Defaulting Member, including the right to sell, assign and deliver such Units, or any part thereof, at public or private sale. At any such sale, the Non-Defaulting Members shall, subject to then applicable law, have the right to purchase the Units of the Defaulting Member or any part thereof, and may credit against the purchase price therefor all or any part of the amount owed to the Non-Defaulting Members by the Defaulting Member. Each Member recognizes that if it becomes a Defaulting Member, the Non-Defaulting Members may be unable to effect a public sale of all or a part of its Units because of certain prohibitions contained in the 33 Act and in applicable state securities laws and, therefore, may be compelled to resort to one or more private sales to a restricted group of offerees and purchasers who fulfill certain suitability standards and agree, among other things, to acquire the interest of the Defaulting Member for their own account, for investment and not with a view to distribution or resale. Each Member agrees that the Non-Defaulting Members shall have no obligation to delay the sale of such interest for the period of time necessary to permit the offering and sale of such interest to be registered for public sale under the 33 Act and applicable state securities laws, or to incur the expense of such registration. Each Member consents that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner. Each Member agrees that written notice sent to the Defaulting Member ten (10) business days prior to the date of public sale of such Units or ten (10) business days prior to the date after which private sale or any other disposition of the Units of the Defaulting Member will be made shall constitute reasonable notice (all other notices, demands, or advertisements of any kind being hereby expressly waived), but notice given in any other reasonable manner or at any other reasonable time shall be sufficient. (d) The security interests granted and created under this Article shall have priority over all security interests granted to secure any loans made to such Member (which security interests to a lender shall only be made in accordance with and to the extent permitted by Article VIII 85 hereof). Any lender making a loan secured by a security interest in the collateral described in subsection (a) of this Section and/or in the Units of a Member, by its acceptance thereof, acknowledges and consents to the superior priority of the security interest granted by each Member to the other Members under this Agreement, regardless of the date on which the security interest held by such lender is perfected under the Uniform Commercial Code. (e) All Members agree that, notwithstanding anything to the contrary (including but not limited to any order of recording and/or priority of Form UCC-1 financing statements), the security interests of all Non-Defaulting Members that are granted and created pursuant to this Section shall be equal in priority, and that the security interest of one Non-Defaulting Member shall never be deemed to be inferior or superior, or subordinated or paramount, to the security interest of another Non-Defaulting Member; provided, however, that the Members agree that when more than one Non-Defaulting Member is entitled to all or any part of any amounts or proceeds arising out of or derived from any security interests granted and created under this Section 13.4 each Non-Defaulting Member shall share in the amounts and proceeds arising out of or derived from such security interests in the proportion that its Units bears to the aggregate total of all Non-Defaulting Members' Units similarly entitled. The Members agree that all Non-Defaulting Members shall, upon a Member's default, consult and cooperate with one another prior to taking, and throughout the course of, any action relating to the enforcement and/or foreclosure of any security interest created pursuant to this Section but that such cooperation shall not be deemed to require that a Non-Defaulting Member agree with any other Non-Defaulting Member's proposed action. 13.5 OTHER MATTERS RELATING TO RETAINED DEBT. (a) The Company shall cause the Subsidiaries to timely comply with all of the obligations of the Subsidiaries under the Retained Debt Loan Documents (other than the obligation to pay principal, interest and other amounts thereunder). (b) Notwithstanding anything to the contrary contained herein, each Member shall have the right to direct the Company and/or the Subsidiaries to amend or modify the Retained Debt Loan Documents or take other actions in respect of the Retained Debt of such Member (in each case, upon such terms as such Member deems appropriate) without the approval of the Board or the other Members, and the Company shall comply, and cause the Subsidiaries to comply, with any such directions; provided, however, that no Member shall have the right to increase the principal amount or extend the term of, or otherwise materially increase the obligations of the Company 86 and/or the Subsidiaries in respect of, the Retained Debt of such Member without Board approval (other than to extend or replace the Retained Debt for an additional three years). (c) Notwithstanding anything to the contrary contained herein, the Company shall not, and shall cause the Subsidiaries not to, amend or modify the Retained Debt Loan Documents or take other actions in respect of the Retained Debt of any Member, including prepayment of the Retained Debt, without the prior written consent of the Board and such Member. ARTICLE XIV ADDITIONAL CAPITAL CONTRIBUTIONS 14.1 ADDITIONAL CAPITAL CONTRIBUTIONS. (a) In the event that the Company officers determine that the funds of the Company and/or the Subsidiaries are insufficient at any time or from time to time to pay the costs of the construction of the Stonebriar Development Project in accordance with the Stonebriar Development Plan (or the costs of any other project that has been approved by the Board and as to which all Members have agreed to require additional Capital Contributions), the Company officers shall deliver to the Members a funding notice (each, a "Funding Notice") specifying the amount of the funds required at such time (each, a "Required Funds Amount") and such Member's Proportionate Share thereof. Each Member shall, within fifteen (15) days after a Funding Notice is given, pay its Proportionate Share of the applicable Required Funds Amount to the Company as an additional Capital Contribution. Such additional Capital Contributions shall be made in immediately available funds. (b) Each Member waives its right to any setoff or reduction with respect to its obligation to make additional Capital Contributions based on any claim that such Member has against the Company or the other Members. (c) No additional Units shall be issued to any Member on account of any additional Capital Contribution made by such Member pursuant to this Article XIV, but the Capital Account of such Member shall be increased on account of such Capital Contribution. 14.2 FAILURE TO MAKE ADDITIONAL CAPITAL CONTRIBUTIONS. (a) If a Member determines that another Member has failed to make an additional Capital Contribution required pursuant to this Article XIV, such Member shall send a written 87 notice (the "Contribution Default Notice") to such other Member, notifying such other Member of its failure to make such additional Capital Contribution, the amount of such additional Capital Contribution, the date such additional Capital Contribution was due, and requesting that such additional Capital Contribution be paid immediately. (b) If a Member fails to pay an additional Capital Contribution required under this Article XIV within 15 days after receiving the Contribution Default Notice then such Member shall be in default (the Member in default is referred to as a "Contribution Defaulting Member" and the amount that such Contribution Defaulting Member failed to contribute is referred to as the "Contribute Default Amount") and the Members that are not Contribution Defaulting Members (the "Contribution Non-Defaulting Members") may (i) pay (and hereby are granted a power of attorney to pay) the Contribution Default Amount (which shall be deemed to be a loan by the Contribution Non-Defaulting Members to the Contribution Defaulting Members) and/or (ii) pursue their other rights and remedies hereunder and, subject to the terms hereof, at law or in equity. Any such loan (a "Contribution Default Loan") shall bear interest at the per annum rate equal to Prime plus 4% and shall be payable on demand. ARTICLE XV MISCELLANEOUS 15.1 INJUNCTIVE RELIEF. Each party hereto acknowledges that it would be impossible to determine the amount of damages that would result from any breach of any of the provisions of this Agreement and that the remedy at law for any breach, or threatened breach, of any of such provisions would likely be inadequate and, accordingly, agrees that each other party shall, in addition to any other rights or remedies which it may have hereunder, at law or in equity, be entitled to seek such equitable and injunctive relief as may be available from any court of competent jurisdiction to compel specific performance of, or restrain any party from violating, any of such provisions. In connection with any action or proceeding for injunctive relief, each party hereto hereby waives the claim or defense that a remedy at law alone is adequate and agrees, to the maximum extent permitted by law, to have each provision of this Agreement specifically enforced against it, without the necessity of posting bond or other security against it, and consents to the entry of injunctive relief against it enjoining or restraining any breach or threatened breach of such provisions of this Agreement. 15.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Article VIII, all the terms and provisions of this Agreement shall be binding upon, shall inure solely to the benefit of and shall be enforceable by the parties hereto and their respective successors and assigns, and no such term or provision is for the benefit of, 88 or intended to create any obligations to or rights in, any other Person. If any Member shall acquire additional Units and if any Transferee of any Member shall acquire any Units, in each case in any manner, whether by a permitted Transfer, operation of law or otherwise, such Units shall be held subject to all of the terms of this Agreement, and by taking and holding such Units such Person shall be conclusively deemed to have agreed to be bound by and to comply with all of the terms and provisions of this Agreement. 15.3 AMENDMENT; WAIVER (a) Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the holders of a majority of the Units of each class of Units. (b) No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon breach thereof shall constitute a waiver of any such breach or of any other covenant, duty, agreement or condition, any such waiver being effective only if contained in a writing executed by the waiving party. 15.4 REPRESENTATIONS BY MEMBERS. (a) Each Member represents and warrants that (i) it has been duly authorized to execute, deliver and perform this Agreement and all other instruments executed and delivered on behalf of it in connection with the acquisition of its Units, (ii) the consummation of such transactions will not result in a breach or violation of, or a default under, its charter or by-laws, if such Member is a corporation, or its certificate of limited partnership or its partnership agreement, if such Member is a partnership, or its other organizational documents, if such Member is neither a corporation or partnership, or any existing agreement by which it or any of its properties is bound, (iii) this Agreement is a binding agreement on the part of such Member enforceable in accordance with its terms against such Member, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, liquidation, receivership, moratorium or other similar laws relating to or affecting the enforcement of creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or law, (iv) no consent, waiver, approval or authorization of or notice to any other Person (including any governmental authority) is required to be made, obtained or given in connection with the execution and delivery of this Agreement except for those which have been heretofore obtained and (v) neither the execution nor delivery of this Agreement does or will violate, conflict with 89 or constitute a default under any term or provision of any judgment, decree, order, statute, injunction, rule or regulation of a governmental entity applicable to such Member or by which such Member or its assets are bound. (b) Each Member, by executing this Agreement, represents and warrants that it has acquired its Units for its own account, for investment and not with a view to resale or distribution thereof, that it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of an investment in the Units and is able to bear the economic risk of its investment and that it is fully aware that the Company and other Members are relying upon the truth and accuracy of this representation and warranty. Each Member agrees that it will not transfer, sell or dispose of all or any portion of, or offer to transfer, sell or dispose of all or any portion of its Units, or solicit offers from or otherwise approach or negotiate with any person or persons whomsoever regarding the purchase of all or any portion of its Units in any manner which could violate or cause the Company to violate applicable federal or state securities laws. 15.5 NOTICES. Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, when delivered personally or by courier (including nationally recognized overnight courier), five days after being deposited in the United States mail, or when received by facsimile transmission if promptly confirmed by one of the foregoing means, at the address or facsimile transmission number set forth opposite such Member's name on Schedule I hereto (or, in the case of Persons who become parties hereto subsequently, at their last addresses or facsimile transmission numbers shown on the record books of the Company). Each party hereto, by notice given to each other party hereto in accordance with this Section 15.5, may change the address or facsimile transmission number to which such notice or other communications are to be sent to such party. 15.6 FURTHER ASSURANCES. Each party to this Agreement agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents and do all such other acts and things, as may be required by law or as, in the reasonable judgment of the Company management or any Member, may be necessary or advisable to carry out the intent and purpose of this Agreement. 15.7 CONFIDENTIALITY. The Members agree not to disclose or permit the disclosure (except by the Company, any Subsidiary or either of them as may be required in connection with the operation of the business of the Company or any Subsidiary) of any of the 90 terms of this Agreement or of any information relating to the assets or business of the Company or any Subsidiary, which the Members hereby acknowledge constitute non-public information, provided that such disclosure may be made (but only as and to the extent required) (a) to any person who is a partner, officer, director or employee of such Member or advisers or counsel to or accountants of such Member solely for their use and on a need-to-know basis, (b) with the prior consent of the Board, (c) pursuant to a subpoena or order issued by a court, arbitrator or governmental body, agency or official, (d) as required by applicable federal or state laws (including securities and freedom of information laws), (e) to any lender or prospective lender to, or investor in, such Member or (f) to any prospective purchaser of Units or any Property. In the event that a Member shall receive a request (or, in the case of NYSCRF, at such time a notice of such request is delivered to the representatives of NYSCRF who are responsible for the administration of its ownership of Units) to disclose any of the terms of this Agreement under subpoena or order, such Member shall (i) promptly notify the Board thereof, (ii) consult with the Board on the advisability of taking steps to resist or narrow such request and (iii) if disclosure is required or deemed advisable, cooperate with the Board in any attempt it may make to obtain an order or other assurance that confidential treatment will be accorded those terms of this Agreement that are disclosed. 15.8 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES). 15.9 HEADINGS. The descriptive headings of the several sections in this Agreement are for convenience only and do not constitute part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. 15.10 ENTIRE AGREEMENT. This Agreement (including the Schedules and Exhibits hereto) constitutes the entire agreement between the parties hereto and supersedes all prior agreements and understandings, oral or written, between the parties hereto with respect to the subject matter hereof. 15.11 SEVERABILITY. Any provision of this Agreement that is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or lack of authorization without invalidating the remaining provisions hereof or affecting the validity, unenforceability or legality of such provision in any other jurisdiction. 91 15.12 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same document. 15.13 ARBITRATION. Any claim arising out of an alleged breach of this Agreement and any claim that Cause exists pursuant to Section 7.3(d) and (e) shall be resolved by arbitration. Such arbitration shall be conducted in accordance with the following: (a) Each party shall have five (5) business days after written notice by another party of the commencement of arbitration proceedings hereunder to appoint an arbitrator who is on the approved panel of arbitrators of the American Arbitration Association and who was not employed by such Member within the previous 5 years. Each party shall immediately notify the other party of such appointment. The two arbitrators so appointed shall then select a third arbitrator within five (5) business days after the appointment of the second arbitrator to then constitute the Board of Arbitration. If any party shall fail to appoint an arbitrator within such five (5) business day period or, if the two arbitrators selected by the parties shall fail to make a selection of a third arbitrator within five (5) business days of their selection, then the American Arbitration Association shall appoint the arbitrator that was not selected by the failing party or shall appoint the third arbitrator, as the case may be, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Board of Arbitration shall then proceed under such rules. (b) Following the designation of such Board of Arbitration, the parties, together with the members of the Board of Arbitrators, shall promptly undertake appropriate informal efforts to mediate and negotiate a solution to the matter covered by the original notice. (c) If a negotiated solution cannot be achieved within fourteen (14) days after the date on which the Board of Arbitration is constituted, then the Board of Arbitration shall notify the parties. The proceeding, upon such notification, will then become a compulsory arbitration to be conducted under the Commercial Arbitration Rules of the American Arbitration Association by the Board of Arbitration. These rules shall be subject to the following modifications: (i) discovery shall be permitted under the same standards provided for in the Federal Rules of Civil Procedure; (ii) the members of the Board of Arbitration shall interpret and apply the provisions of this Agreement; 92 (iii) the arbitration costs may be charged to the losing party or allocated between the parties as may be determined by the Board of Arbitration; and (iv) the proceedings will be held in Chicago, Illinois, unless the parties shall otherwise agree in writing. (d) In connection with the enforcement of the mediation and arbitration provisions of this Section 15.13, any agreement, decision or award shall be final and conclusive as to any such claim. 15.14 CONSENT TO JURISDICTION. In connection with any suit, claim, action or proceeding relating to the rights and obligations of the parties arising out of this Agreement: the Members hereby consent to the in personam jurisdiction of the United States federal courts and state courts located in New Castle County, Delaware; each such Person agrees that service in the manner set forth in Section 15.5 hereof shall be valid and sufficient for all purposes; and each such Person agrees to, and irrevocably waives any objection based on forum non conveniens or venue not to, appear in any United States federal court or state court located in New Castle County, Delaware. Each Member hereby irrevocably appoints the Company as agent for service of process with respect to any matters relating to the rights and obligations of the parties arising out of this Agreement. 15.15 WAIVER OF PARTITION. Each Member hereby irrevocably waives during the term of the Company any right that it may have to maintain any action for partition with respect to any Company property. 15.16 BROKERAGE (a) each Member hereby represents to the other that it has dealt with no broker or finder in connection with the execution and delivery of this Agreement, the Contribution Agreements, or any other agreements executed in connection with any of the foregoing (collectively, the "Transaction Documents") or the transactions contemplated hereby or thereby. (b) GGPLP shall indemnify, defend and hold harmless NYSCRF and the Company from and against any losses, liabilities, damages, costs and expenses (including reasonable counsel fees and disbursements) resulting from a breach of the foregoing representation by GGPLP or any claim that may be made by any broker, finder or other Person claiming to have dealt with GGPLP or any of its Affiliates in connection with this transaction, for a commission, fee or other compensation by reason of this transaction or any of the other transactions contemplated by this Agreement or the other Transaction Documents. 93 (c) NYSCRF shall indemnify, defend and hold harmless GGPLP and the Company from and against any losses, liabilities, damages, costs and expenses (including reasonable counsel fees and disbursements) resulting from a breach of the foregoing representation by NYSCRF or any claim that may be made by any broker, finder or other Person claiming to have dealt with NYSCRF or any of its Affiliates in connection with this transaction, for a commission, fee or other compensation by reason of this transaction or any of the other transactions contemplated by this Agreement or the other Transaction Documents. 15.17 COMPANY NAME. If, at any time, the Company name shall include the name of, or any trade name used by, a Member or any of its Affiliates, neither the Company nor any other Member shall acquire any right, title or interest in or to such name or trade name. 15.18 LITIGATION; NO DISSOLUTION. Subject to the provisions of 7.13 and the other provisions hereof, any Member shall be entitled to maintain, on its own behalf or on behalf of the Company, any action or proceeding against any other Member (including any action for damages, specific performance or declaratory relief) for or by reason of a default by such Member under this Agreement or any other agreement entered into pursuant to or in connection with this Agreement, notwithstanding that any or all of the parties to such proceeding may then be Members in the Company. The Company shall not dissolve by reason of the bringing of any such action or proceeding. 15.19 OWNERSHIP OF COMPANY PROPERTY. The interest of each Member in the Company shall be personal property for all purposes. All real and other property owned by the Company (or its Subsidiaries) shall be deemed owned by the Company (or its Subsidiaries) as Company (or its Subsidiaries') property. No Member, individually, shall have any direct ownership of such property and title to such property shall be held in the name of the Company (or its Affiliates). 15.20 TIME OF THE ESSENCE. Except as otherwise expressly provided in this Agreement (including Section 12.24), time shall be of the essence with respect to all time periods set forth in this Agreement. 15.21 STATUS REPORTS. Recognizing that each Member may find it necessary from time to time to establish to third parties, such as accountants, banks, mortgagees, prospective transferees of their Units, or the like, the then current status of certain matters, each Member shall, within ten (10) business days following the written request of another Member made from time to time, furnish a written statement on the status of the following: 94 (a) that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the Agreement is in full force and effect as modified and identifying the documents effecting the modifications); and (b) stating whether or not to the best knowledge of such certifying Member (i) the other Members in the Company are in default in keeping, observing or performing any of the terms contained in this Agreement and, if in default, specifying each such default (limited to those defaults of which the certifying Member has knowledge), and (ii) there has occurred an event that with the passage of time or the giving of notice, or both, would ripen into a default hereunder on the part of such other Member (limited to those events of which the certifying Member has knowledge). Such statement may be relied upon by such other Member and any other Person for whom such statement is requested and shall act as a waiver of any claim by the Member furnishing such certificate to the extent such claim is based upon facts which are contrary to those asserted in the certificate, but no such statement shall operate as a waiver as to any default or other matter as to which the Member executing it did not have actual knowledge. Such certificate shall in no event subject the Member furnishing it to any liability whatsoever, notwithstanding the negligence or inadvertent failure of such Member to disclose correct or relevant information. 15.22 DISPOSITION OF DOCUMENTS. All documents and records of the Company, including all Key Documents, financial records, vouchers, canceled checks, and bank statements shall be delivered to GGPLP upon termination of the Company if GGPLP is then a Member, and otherwise to NYSCRF. Upon request of any Member, copies of all such documents and records shall be provided to such Member at such Member's cost. The Member holding such documents and records shall retain them for a period of at least six (6) years after the termination of the Company and shall make such records available to the other Member for inspection during such period. 15.23 CALCULATION OF DAYS. The provisions of this Agreement relative to number of days shall be deemed to refer to calendar days, unless otherwise specified. When the date for performance of any obligation of any Member falls on a non-business day, such obligation need not be performed until the next following business day. For purposes of this Agreement, a "business day" shall be deemed to mean any day other than Saturday, Sunday, or a day which is in New York, NY either a legal holiday or a day upon which banking institutions are authorized by law to remain closed for the entire day. 95 15.24 ATTORNEYS. The Members hereby agree that (a) any attorney which represented any of the Members in connection with the negotiation and execution of this Agreement shall not be disqualified from representing the Company and (b) any such attorney who has represented the Company shall not be disqualified thereafter from representing a Member in a dispute with another Member. 96 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above. GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc., a Delaware corporation, general partner By: /s/ Joel Bayer ------------------------------------ Name: Joel Bayer Title: Vice President THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND By: /s/ John E. Hull ------------------------------------ Name: John E. Hull ---------------------------------- Title: Deputy Comptroller of Investments and Cash Management --------------------------------- GGP/HOMART II L.L.C., a Delaware limited liability company By: /s/ Joel Bayer ------------------------------------ Name: Joel Bayer Title: Vice President 97 EX-10.21 21 c02442exv10w21.txt AMENDMENT TO THE OPERATING AGREEMENT EXHIBIT 10.21 AMENDMENT TO OPERATING AGREEMENT Amendment to Operating Agreement, dated November 22, 2002 (the "Amendment"), among GGP Limited Partnership, a Delaware limited partnership ("GGPLP"), The Comptroller of the State of New York as Trustee of the Common Retirement Fund, a fund established pursuant to NY Retirement and Social Security Law Section 422, in the custody of the Comptroller of the State of New York ("NYSCRF" and, together with GGPLP, the "Members"), and GGP/Homart II L.L.C., a Delaware limited liability company (the "Company"). RECITALS: WHEREAS, the Members are all of the members of the Company; WHEREAS, the Company and the Members have entered into that certain Operating Agreement dated November 10, 1999, as amended (the "Existing Operating Agreement"), relating to, among other things, the management of the Company and the transfer of units of membership interest therein; WHEREAS, the Company previously made certain loans to the Members, including NYSCRF (such loans that have been made to NYSCRF, the "NYSCRF Existing Loans"); WHEREAS, Glendale I Mall Associates, LLC, a Delaware limited liability company ("Glendale LLC"), and certain subsidiaries of Glendale LLC (such subsidiaries, together with Glendale I, the "Glendale Owners") are the owners of the shopping center and office building located in Glendale, California and commonly known as Glendale Galleria (the "Glendale Property"); WHEREAS, JSG, LLC, a Delaware limited liability company ("JSG"), owns a 17.2977% membership interest in Glendale LLC (the "JSG Membership Interest"), Connecticut General Life Insurance Company, a Connecticut corporation ("Connecticut"), owns a 43.1737% membership interest in Glendale LLC (the "Connecticut Membership Interest") and New York State Teachers' Retirement System, a public pension system created and existing pursuant to Article 11 of the Education Law of the State of New York and having the powers and privileges of a corporation pursuant to Section 502 thereof ("NYSTRS" and, together with Connecticut, the "Selling Members"), owns a 39.5286% membership interest in Glendale LLC (the "NYSTRS Membership Interest" and, together with the Connecticut Membership Interest and the JSG Membership Interest, the "Membership Interests"); WHEREAS, the Glendale Owners previously obtained a mortgage loan in the original principal amount of $170,000,000 from German American Capital Corporation (the "Existing Mortgage Loan"); WHEREAS, GGPLP, JSG and the Selling Members entered into that certain Contribution and Sale Agreement dated October 18, 2002 (as the same may be amended from time to time, the "Contribution and Sale Agreement"), pursuant to which GGPLP agreed to (a) acquire the JSG Membership Interest in exchange for the issuance of Series C Preferred Units of limited partnership in GGPLP (the "Series C Preferred Units"), (b) purchase the Membership Interests of the Selling Members for the cash consideration specified therein and (c) repay the Existing Mortgage Loan in full; WHEREAS, pursuant to the Contribution and Sale Agreement, GGPLP and JSG agreed to, at the closing of the transactions contemplated thereby (the "Closing"), enter into a Pledge Agreement substantially in the form attached thereto (the "JSG Pledge Agreement") and certain documents relating to the issuance of the Series C Preferred Units as described in Section 1.2 thereof (collectively, the "Series C Preferred Units Documents"), including without limitation a Tax Matters Agreement substantially in the form attached thereto (the "Tax Matters Agreement"); WHEREAS, the parties hereto intend that the cash purchase price to be paid pursuant to the Contribution and Sale Agreement and the repayment of the Existing Mortgage Loan be funded from the proceeds of a new mortgage loan on the Glendale Property (the "New Mortgage Loan") and certain other financing (but any such financing shall require the approval of the Board of Directors of the Company as provided in the Existing Operating Agreement); WHEREAS, the parties hereto desire that (a) GGPLP contribute to the capital of the Company (i) all of the right, title and interest of GGPLP under the Contribution and Sale Agreement that relates to the acquisition of the Membership Interests of the Selling Members and (ii) following the acquisition of the JSG Membership Interest pursuant to the Contribution and Sale Agreement, all of the right, title and interest of GGPLP in and to the JSG Membership Interest and that (b) NYSCRF make an additional capital contribution to the Company in an amount equal to the aggregate base liquidation preference of the Series C Preferred Units issued by GGPLP pursuant to the Contribution and Sale Agreement (which is estimated to be approximately $42.4 million) as provided herein; and WHEREAS, the parties desire that the Company amend the Existing Operating Agreement as hereinafter set forth to reflect their understandings regarding the foregoing. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: 1. Definitions. Capitalized terms used herein without definition shall have the meanings set forth in the Existing Operating Agreement. 2 2. Additional Capital Contributions. (a) Additional Capital Contributions by GGPLP. (i) Concurrently herewith, GGPLP shall contribute to the capital of the Company all of the right, title and interest of GGPLP under the Contribution and Sale Agreement that relates to the acquisition of the Membership Interests of the Selling Members, and the Company shall assume all of the obligations of GGPLP under the Contribution and Sale Agreement that relate to the acquisition of the Membership Interests of the Selling Members (including without limitation the obligation to pay the entire earnest money deposit due thereunder), pursuant to an Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit A. The Company may further assign the right to acquire all or a portion of such Membership Interests to one or more wholly-owned Subsidiaries (including GGP-Natick Trust, which is treated as wholly-owned), and, upon any assignment to any such Subsidiary of the right to acquire all or a portion of such Membership Interests, such Subsidiary shall assume the liabilities of the Company under the Contribution and Sale Agreement that relate thereto. In addition, the parties acknowledge that Glendale LLC may make a distribution of a portion of the proceeds of the New Mortgage Loan at Closing, and GGPLP (as the holder of the JSG Membership Interest) hereby directs that its share of any such distribution be paid to the Company (and GGPLP shall be deemed to have made a capital contribution to the Company of such amount). (ii) Immediately following the Closing, GGPLP shall contribute to the capital of the Company all of the right, title and interest of GGPLP in and to the JSG Membership Interest pursuant to an Assignment of Membership Interest in substantially the form attached hereto as Exhibit B (the capital contribution described in this paragraph, the "JSG Membership Interest Contribution"). Except as provided in Sections 2(a)(iv) and 5 hereof, (A) GGPLP shall retain all of the right, title and interest of GGPLP under the Contribution and Sale Agreement that relates to the acquisition of the JSG Membership Interest and all right, title and interest of GGPLP under the Series C Preferred Units Documents and the JSG Pledge Agreement and (B) the Company is not assuming and shall not be required to assume any obligations of GGPLP under the Contribution and Sale Agreement that relate to the acquisition of the JSG Membership Interest or any obligations of GGPLP under the JSG Pledge Agreement or the Series C Preferred Units Documents. (iii) No additional Units shall be issued to GGPLP on account of the Capital Contributions referred to in this Section 2. Subject to adjustment in accordance with Section 2(a)(iv) hereof, the Capital Account of GGPLP shall be increased on account of the Capital Contributions referred to in Sections 2(a)(i) and (ii) hereof by an amount equal to the 3 aggregate base liquidation preference of the Series C Preferred Units issued by GGPLP pursuant to the Contribution and Sale Agreement. (iv) Upon receipt by GGPLP of any cash amount from JSG under the Contribution and Sale Agreement or the JSG Pledge Agreement following Closing (other than any amount arising from a Series C Preferred Units Matter, as defined below), GGPLP promptly shall pay such amount to the Company (and such payment shall not increase the Capital Account of GGPLP). Upon the surrender by JSG from time to time of any Series C Preferred Units in satisfaction of any amount owing by JSG to GGPLP pursuant to the Contribution and Sale Agreement or the JSG Pledge Agreement (other than any amount arising from a Series C Preferred Units Matter), the Capital Account of GGPLP shall be reduced by an amount equal to the aggregate base liquidation preference of such Series C Preferred Units. In the event that GGPLP is required to pay any amount pursuant to the Contribution and Sale Agreement following Closing (other than any amount arising from a Series C Preferred Units Matter), the Company promptly shall reimburse GGPLP therefor (and the Capital Account of GGPLP shall not be reduced on account thereof). For purposes hereof, a "Series C Preferred Units Matter" shall mean (A) any right or obligation under the Contribution and Sale Agreement that arises solely because the consideration for the JSG Membership Interest consists of Series C Preferred Units rather than cash and (B) any right or obligation under the Series C Preferred Units Documents. (v) GGPLP promptly shall provide to NYSCRF such documents and information as NYSCRF shall reasonably request in order to verify the amount of the aggregate base liquidation preference referred to above and any adjustments thereto. (b) Additional Capital Contribution by NYSCRF. (i) Subject to the occurrence of the Closing, NYSCRF shall contribute to the capital of the Company cash in an amount equal to the aggregate base liquidation preference of the Series C Preferred Units issued by GGPLP pursuant to the Contribution and Sale Agreement (the "NYSCRF Contribution Amount"), together with interest on the outstanding balance thereof at a rate per annum equal to 7% (compounded quarterly), on or before the earliest to occur of (A) the dissolution of the Company, (B) the sale of all or substantially all of the assets of the Company and/or its Subsidiaries and (C) the Transfer by NYSCRF of all or any part of its Units to GGPLP (or any assignee thereof), the Company or any other Person (and the payment of the unpaid NYSCRF Contribution Amount and all accrued and unpaid interest thereon shall be a condition to any such Transfer). In addition, NYSCRF shall pay accrued and unpaid interest on the NYSCRF Contribution Amount to the extent of any distributions paid to NYSCRF by the Company (other than distributions 4 that are applied to the payment of the NYSCRF Existing Loans), and, if directed by NYSCRF in writing, the Company shall withhold such distributions and apply them to the payment of the principal amount of the NYSCRF Contribution Amount and/or accrued and unpaid interest thereon. Notwithstanding the foregoing, the NYSCRF Contribution Amount shall be reduced by the amount of any reduction in the Capital Account of GGPLP pursuant to Section 2(a)(iv) hereof. (ii) Payments with respect to this Section 2(b) shall be applied first against accrued and unpaid interest, if any, and then against principal. (iii) NYSCRF may, at any time and from time to time and without premium or penalty, prepay all or a portion of the NYSCRF Contribution Amount. (iv) NYSCRF waives its right to any setoff or reduction with respect to its obligation to pay the amounts to be paid by it under this Section 2(b) based on any claim that NYSCRF has against the Company or the other Members. (v) No additional Units shall be issued to NYSCRF on account of the payment of any amount pursuant to this Section 2(b). The Capital Account of NYSCRF shall be increased by the amount of each payment (other than interest) made pursuant to this Section 2(b). (vi) To secure payment of the obligations of NYSCRF described in this Section 2(b) (collectively, the "NYSCRF Contribution Obligations"), NYSCRF hereby grants to GGPLP a security interest in the Units owned by NYSCRF on the date hereof, any Units hereafter acquired by NYSCRF, any and all rights of NYSCRF in respect of such Units, any distributions of cash or property in respect of the such Units and any and all other proceeds of any of the foregoing (such Units and other collateral, collectively, the "Collateral"). The terms of Section 13.4 of the Existing Operating Agreement shall apply to the security interest granted herein, and, in the event that NYSCRF fails to pay any amount owing in respect of the NYSCRF Contribution Obligations, NYSCRF shall be deemed to be a Defaulting Member and GGPLP (or its assignee) shall be deemed to be a Non-Defaulting Member for purposes of such section and the other provisions of the Existing Operating Agreement. (vii) Notwithstanding anything to the contrary contained herein, NYSCRF shall have no personal liability for the performance of the NYSCRF Contribution Obligations, all such personal liability being waived by the parties hereto and recourse in respect of the NYSCRF Contribution Obligations being limited to the Collateral. The foregoing limitations on personal liability shall in no way impair or constitute a waiver of the validity of the NYSCRF Contribution Obligations, or the Liens created in favor of 5 GGPLP pursuant hereto, or the right of GGPLP or its agent to foreclose and/or enforce GGPLP's rights with respect to the Collateral. Nothing herein shall be deemed to be a waiver of any right which GGPLP may have under the United States Bankruptcy Code to file a claim for the full amount of the NYSCRF Contribution Obligations or to require that all Collateral shall continue to secure all NYSCRF Contribution Obligations. The provisions set forth in this paragraph are not intended as a release or discharge of the NYSCRF Contribution Obligations, but are intended as a limitation, to the extent expressly provided in this paragraph, on GGPLP's right to sue for a deficiency or seek a personal judgment against NYSCRF with respect to the NYSCRF Contribution Obligations. 3. Confirmation Relating to Certain Definitions. The parties hereto confirm that, from and after the Closing, (a) the Glendale Property shall be a Company Asset and a Property and (b) Glendale LLC and its subsidiaries shall be Subsidiaries. 4. Amendment to Exhibit E of the Existing Operating Agreement. The trade area maps in the form attached hereto as Exhibit C are hereby added to Exhibit E of the Existing Operating Agreement. Notwithstanding anything to the contrary contained in the Existing Operating Agreement, as amended hereby, GGPLP and/or its Affiliates are permitted to provide property management, leasing and/or development services for the property or properties listed on Exhibit D, attached hereto and by this reference made a part hereof. 5. Other Matters Relating to Glendale Property. (a) The Company shall reimburse GGPLP for the costs and expenses incurred by GGPLP in connection with the transactions contemplated by the Contribution and Sale Agreement and the financing thereof, including without limitation the costs and expenses incurred in connection with the acquisition of the JSG Membership Interest and the issuance of the Series C Preferred Units. (b) Following and subject to the occurrence of the JSG Membership Interest Contribution, the Company shall (i) except as required to consummate any Exit Transaction (as defined below), perform the obligations of GGPLP contained in Section 2 of the Tax Matters Agreement to the extent that they pertain to the Company or any Subsidiary, (ii) reimburse GGPLP for any amount that is owing pursuant to Section 2 or 3 of the Tax Matters Agreement on account of any breach of such Section 2 that is caused by the Company or any Subsidiary thereof (other than a breach that directly results from the consummation of any Exit Transaction), (iii) perform the obligations of GGPLP contained in Section 4 of the Tax Matters Agreement to the extent that they pertain to the Company or any Subsidiary thereof, (iv) unless the Company or any Subsidiary ceases to own the Glendale Property as the result of any Exit Transaction or GGPLP ceases to own a direct or indirect interest in the Company, maintain (or, to the extent applicable, cause its Subsidiaries to maintain) Qualified Non-Recourse Debt (as defined in the Tax Matters 6 Agreement) to the extent that the same is required to be maintained by GGPLP pursuant to Section 5 of the Tax Matters Agreement, (v) cooperate with GGPLP in offering Guarantee Opportunities (as defined in the Tax Matters Agreement) pursuant to Sections 5 and 6 of the Tax Matters Agreement (including without limitation by means of offering Guarantee Opportunities with respect to debt of the Company and/or its Subsidiaries to the extent that the Company and/or its Subsidiaries have debt available to be guaranteed that satisfies the requirements of such Sections 5 and 6), and (vi) reimburse GGPLP for any amount that is owing pursuant to Section 5 or 6 of the Tax Matters Agreement on account of a failure by the Company or any Subsidiary thereof to comply with clause (iii), (iv) or (v) of this Section 5(b). Notwithstanding anything to the contrary contained in the Existing Operating Agreement or this Amendment, (x) the Value of a Property, the Dissolution Value of the Company and the Dissolution Value of a Property shall be determined without regard to the obligations contained in clauses (i) and (ii) of this paragraph, (y) the Class B Members shall reimburse GGPLP for an amount equal to the product of (1) the payments actually made by GGPLP pursuant to the Tax Matters Agreement as a direct result of the consummation of any Specified Exit Transaction multiplied by (2) a fraction, the numerator of which is the total number of Units owned by the Class B Members immediately prior to the consummation of such Specified Exit Transaction and the denominator of which is the total number of Units owned by all Members immediately prior to the consummation of such Specified Exit Transaction and (z) all or any part of the Class B Units to be acquired by GGPLP in any Exit Transaction may be acquired by a designee of GGPLP. As used herein, an "Exit Transaction" shall mean any transaction contemplated by Article IX, X or XI of the Existing Operating Agreement and a "Specified Exit Transaction" shall mean any Exit Transaction described in Section 9.7 of the Existing Operating Agreement, the purchase of the Units of GGPLP in an Exit Transaction described in Article X of the Existing Operating Agreement or any Exit Transaction described in Section 11.7 of the Existing Operating Agreement. (c) The Company shall indemnify, defend and hold harmless GGPLP from and against any and all losses, claims, damages, debts, liabilities, costs and expenses (including without limitation reasonable attorneys' fees), whether known or unknown, liquidated or unliquidated, fixed or contingent or direct or indirect and whether based on contract, tort, statute or other legal theory of recovery ("Claims"), which relate to or arise out of the Contribution and Sale Agreement or the transactions contemplated thereby; provided, however, that the indemnity contained in this paragraph shall not apply to a Claim to the extent that it arises out of (i) the gross negligence or intentional misconduct of GGPLP, (ii) any action or omission of GGPLP or the General Growth Officers in connection with the management of the Company (for which indemnity is provided, if at all, by Section 7.13 of the Existing Operating Agreement and Section 10 of Schedule II, Part 2, of the Existing Operating Agreement) or (iii) any Series C Preferred Units Matter. 7 (d) The pro forma for the Glendale Property operations that was previously delivered to the Members be, and it hereby is, approved as the Annual Business Plan for the Glendale Property for the remainder of 2002 (and no further approval thereof by the Board shall be required). (e) Notwithstanding anything to the contrary contained in the Existing Operating Agreement, as amended hereby, (i) the Company shall engage a leasing agent (other than GGPLP or an Affiliate thereof) selected by the General Growth Officers (and, if other than Grubb & Ellis, approved by the Class B Directors, whose approval may not be unreasonably withheld) to provide leasing services for the office building portion of the Glendale Property upon such terms as the General Growth Officers deem to be appropriate, (ii) the Company shall pay the fees and other compensation thereof (but the fees and other compensation must be consistent with the applicable Annual Business Plan or otherwise be permitted under Section 7.7(c) or Section 7.7(d)(iv) of the Existing Operating Agreement) and (iii) GGPLP and its Affiliates shall not be required to provide such services or be entitled to receive any fees pursuant to Section 2 of Schedule IV to the Existing Operating Agreement on account thereof. 6. Counterparts. This Amendment may be executed in counterparts, each of which shall constitute an original and all which together shall constitute the same agreement. 7. Captions. The article and section headings appearing in this Amendment are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof. 8. Full Force and Effect; Etc. Except as expressly set forth herein, this Amendment does not constitute a waiver or modification of any provision of the Existing Operating Agreement. Except as expressly amended hereby, the Existing Operating Agreement shall continue in full force and effect in accordance with the provisions thereof on the date hereof. As used in the Existing Operating Agreement (including without limitation the Exhibits and Schedules thereto), the terms "the Agreement," "herein," "hereof," "hereinafter," "hereto" and words of similar import, shall, unless the context otherwise requires, mean the Existing Operating Agreement, as amended by this Amendment. 8 IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment on the date first written above. GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Bernard Freibaum ------------------------------------ Bernard Freibaum, Executive Vice President THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON RETIREMENT FUND By: /s/ Bruce E. Feig ------------------------------------ Name: Bruce E. Feig Title: First Deputy Comptroller GGP/HOMART II L.L.C., a Delaware limited liability company By: /s/ Bernard Freibaum ------------------------------------ Bernard Freibaum, Executive Vice President 9 EX-10.22 22 c02442exv10w22.txt LETTER AMENDMENT TO THE OPERATING AGREEMENT EXHIBIT 10.22 GGP LIMITED PARTNERSHIP 110 North Wacker Drive Chicago, Illinois 60606 January 31, 2003 Comptroller of the State of New York as Trustee of the Common Retirement Fund 633 Third Avenue 31st Floor New York, NY 10017-6754 Ladies and Gentlemen: Reference is made to (a) that certain Operating Agreement dated as of November 10, 1999, among GGP/Homart II L.L.C., a Delaware limited liability company (the "Company"), The Comptroller of the State of New York as Trustee of the Common Retirement Fund, a fund established pursuant to NY Retirement and Social Security Law Section 422, in the custody of the Comptroller of the State of New York ("NYSCRF"), and GGP Limited Partnership, a Delaware limited partnership ("GGPLP" and, together with NYSCRF, the "Members"), as amended (the "Operating Agreement"), and (b) that certain Unanimous Written Consent of the Board of Directors relating to the acquisition of First Colony Mall in Sugar Land, Texas and certain related property (the "First Colony Property"). Capitalized terms used herein without definition shall have the meaning set forth in the Operating Agreement. 1. Matters Relating to Trade Area for First Colony Property. The trade area map for the First Colony Property in the form attached hereto as Exhibit A is hereby added to Exhibit E of the Operating Agreement. 2. Matters Relating to Annual Business Plan for First Colony Property. Notwithstanding anything to the contrary contained in the Operating Agreement, the General Growth Officers shall submit a proposed 2003 budget for the First Colony Property on or before the later of March 31, 2003 and the sixtieth day following the closing of the acquisition thereof (instead of the earlier date, if any, specified in the Operating Agreement). Until the budget for the First Colony Property is approved by the Board, the General Growth Officers shall operate the First Colony Property in accordance with the provisions of the Operating Agreement that are applicable when there is no approved Annual Business Plan for a Property. Once approved by the Board, such budget shall be deemed to be the 2003 Annual Business Plan for the First Colony Property. Comptroller of the State of New York as Trustee of the Common Retirement Fund January 31, 2003 Page 2 3. Matters Relating to Annual Business Plan for Glendale Property. Notwithstanding anything to the contrary contained in the Operating Agreement, the General Growth Officers shall submit a proposed 2003 budget for the Glendale Property on or before March 31, 2003 (instead of the earlier date, if any, specified in the Operating Agreement). Until the budget for the Glendale Property is approved by the Board, the General Growth Officers shall operate the Glendale Property in accordance with the provisions of the Operating Agreement that are applicable when there is no approved Annual Business Plan for a Property. Once approved by the Board, such budget shall be deemed to be the 2003 Annual Business Plan for the Glendale Property. Except as expressly provided herein, the Operating Agreement shall remain in full force and effect. Please indicate your agreement with the foregoing by signing and returning the enclosed counterpart of this letter to the undersigned. Very truly yours, GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Joel Bayer ------------------------------------ Name: Joel Bayer Title: Senior Vice President ACCEPTED AND AGREED TO AS OF THE DATE ABOVE WRITTEN: ALAN G. HEVESI, COMPTROLLER OF THE STATE OF NEW YORK, as trustee of the Common Retirement Fund By: /s/ Jacques Jiha --------------------------------- Name: Jacques Jiha Title: Deputy Comptroller for Pension Investment and Public Finance Comptroller of the State of New York as Trustee of the Common Retirement Fund January 31, 2003 Page 3 GGP/HOMART II L.L.C, a Delaware limited liability company By: /s/ Joel Bayer --------------------------------- Name: Joel Bayer Title: Senior Vice President EX-10.23 23 c02442exv10w23.txt AMENDMENT TO THE OPERATING AGREEMENT EXHIBIT 10.23 SECOND AMENDMENT TO OPERATING AGREEMENT OF GGP/HOMART II L.L.C. Second Amendment to Operating Agreement, dated January 31, 2003 (the "Amendment"), among GGP Limited Partnership, a Delaware limited partnership ("GGPLP"), The Comptroller of the State of New York as Trustee of the Common Retirement Fund, a fund established pursuant to NY Retirement and Social Security Law Section 422, in the custody of the Comptroller of the State of New York ("NYSCRF" and, together with GGPLP, the "Members"), and GGP/Homart II L.L.C., a Delaware limited liability company (the "Company"). RECITALS WHEREAS, the Members are all of the members of the Company; WHEREAS, the Company and the Members entered into that certain Operating Agreement dated November 10, 1999, as amended (the "Existing Operating Agreement"), relating to, among other things, the management of the Company and the transfer of units of membership interest therein; and WHEREAS, the parties hereto desire to amend the Existing Operating Agreement as set forth herein. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: 1. Definitions. Capitalized terms used herein without definition shall have the meanings set forth in the Existing Operating Agreement. 2. Amendment to Section 7.2(a). Section 7.2(a) of the Existing Operating Agreement is hereby deleted in its entirety and the following is hereby inserted in lieu thereof: "7.2. Board. (a) Except as otherwise expressly set forth herein, the Board of Directors of the Company shall consist of four (4) members, and the holders of Class A Units (by majority vote) shall have the right from time to time at their election to designate two (2) 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 two (2) members to the Board (the "Class B Board Members" and, together with the Class A Board Members, the "Board Members")." 3. Amendment to Section 7.7(a). Section 7.7(a) of the Existing Operating Agreement is hereby deleted in its entirety and the following is hereby inserted in lieu thereof: "7.7 Actions by the Board. (a) Actions by Directors. 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 one (1) Class A Board Member and one (1) Class B Board Member 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 (i.e., 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 other. 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." 4. Counterparts. This Amendment may be executed in counterparts, each of which shall constitute an original and all which together shall constitute the same agreement. 5. Captions. The article and section headings appearing in this Amendment are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof. 6. Full Force and Effect; Etc. Except as expressly set forth herein, this Amendment does not constitute a waiver or modification of any provision of the Existing Operating Agreement. Except as expressly amended hereby, the Existing Operating 2 Agreement shall continue in full force and effect in accordance with the provisions thereof on the date hereof. As used in the Existing Operating Agreement (including without limitation the Exhibits and Schedules thereto), the terms "the Agreement," "herein," "hereof," "hereinafter," "hereto" and words of similar import, shall, unless the context otherwise requires, mean the Existing Operating Agreement, as amended by this Amendment. Notwithstanding anything to the contrary contained in the Existing Operating Agreement, the matters contained herein shall not require Board approval. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 3 IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment on the date first written above. GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Robert A. Michaels ------------------------------------ Name: Robert A. Michaels Title: President COMPTROLLER OF THE STATE OF NEW YORK, as trustee of the Common Retirement Fund By: /s/ Jacques Jiha ------------------------------------ Name: Jacques Jiha Title: Deputy Comptroller for Investments and Cash Management GGP/HOMART II L.L.C., a Delaware limited liability company By: /s/ Robert A. Michaels ------------------------------------ Name: Robert A. Michaels Title: President 4 EX-10.24 24 c02442exv10w24.txt AMENDED AND RESTATED OPERATING AGREEMENT EXHIBIT 10.24 AMENDED AND RESTATED OPERATING AGREEMENT OF GGP-TRS L.L.C. Dated: August 26, 2002 TABLE OF CONTENTS
PAGE ---- ARTICLE I DEFINED TERMS.................................................. 1 1.1 Definitions................................................... 1 ARTICLE II CONTINUATION OF COMPANY....................................... 16 2.1 Continuation of Company....................................... 16 2.2 Name.......................................................... 16 2.3 Principal Place of Business................................... 16 2.4 Purpose and Business of the Company........................... 16 2.5 Term.......................................................... 17 2.6 Nature of the Company......................................... 17 2.7 Members' Names and Addresses.................................. 17 2.8 Registered Office and Registered Agent........................ 17 2.9 Organization Certificates..................................... 17 2.10 Restrictions on Other Agreements.............................. 17 ARTICLE III COMPANY CAPITAL; ETC......................................... 18 3.1 Initial Contributions of Members; Etc......................... 18 3.2 No Additional Capital Contributions........................... 18 3.3 No Withdrawal or Dissociation, Etc............................ 18 3.4 Priority...................................................... 18 ARTICLE IV ALLOCATION OF COMPANY ITEMS................................... 18 4.1 Maintenance of Capital Accounts............................... 18 4.2 Net Income and Net Loss....................................... 19 4.3 Special Allocations........................................... 19 4.4 Curative Allocations.......................................... 22 4.5 Loss Limitation............................................... 22 4.6 Tax Allocations............................................... 23 4.7 Allocations Subsequent to Assignment.......................... 23 4.8 Company Distributions......................................... 24 ARTICLE V ACCOUNTING MATTERS; ETC........................................ 24 5.1 Fiscal Year; Designation of Auditors.......................... 24 5.2 Books and Records............................................. 25
-i- TABLE OF CONTENTS (continued)
PAGE ---- 5.3 Reports and Statements........................................ 25 5.4 Tax Matters Member............................................ 26 5.5 Tax Elections and Returns..................................... 26 5.6 Interim Accounting............................................ 26 ARTICLE VI GOVERNANCE; BOARD OF DIRECTORS................................ 26 6.1 Managing Member............................................... 26 6.2 Matters Relating to the Board................................. 27 6.3 Annual Business Plans......................................... 32 6.4 Conduct of Business........................................... 33 6.5 Right of Public to Rely on Authority of the Members........... 33 6.6 Waiver and Indemnification.................................... 33 ARTICLE VII PROPERTY MANAGEMENT AND OTHER SERVICES AND COMPENSATION...... 35 7.1 Property Management and Other Services and Compensation Therefor...................................................... 35 7.2 Company Operating Costs....................................... 35 ARTICLE VIII TRANSFERS OF COMPANY UNITS.................................. 35 8.1 Transfers..................................................... 35 8.2 Transfers to Permitted Transferees............................ 35 8.3 Right of First Refusal........................................ 36 8.4 Unpermitted Transfers......................................... 37 8.5 Other Transfer Restrictions................................... 38 ARTICLE IX BUY-SELL RIGHT................................................ 39 9.1 Buy-Sell Notice............................................... 39 9.2 Right of Offeree Member to Purchase Offering Member's Units... 40 ARTICLE X MATTERS RELATING TO RETAINED DEBT.............................. 42 10.1 Nature of Retained Debt; Designation of Retained Debt; Etc.... 42 10.2 Payment of Retained Debt...................................... 43 10.3 Failure to Make Payments in Respect of Retained Debt.......... 43 10.4 Indemnification............................................... 44 10.5 Security Interest............................................. 44 10.6 Other Matters Relating to Retained Debt....................... 45 ARTICLE XI DISSOLUTION AND TERMINATION................................... 46
-ii- TABLE OF CONTENTS (continued)
PAGE ---- 11.1 Dissolution................................................... 46 11.2 Accounting.................................................... 46 11.3 Winding-Up.................................................... 46 11.4 Liquidating Distribution...................................... 47 11.5 Distributions in Accordance with Capital Accounts............. 47 11.6 Negative Capital Accounts..................................... 47 11.7 Distributions in Kind......................................... 47 11.8 No Redemption................................................. 48 11.9 Return of Capital............................................. 48 ARTICLE XII ADDITIONAL CAPITAL CONTRIBUTIONS; OTHER ACTIVITIES........... 48 12.1 Additional Capital Contributions.............................. 48 12.2 Failure to Make Additional Capital Contributions.............. 48 12.3 Other Activities.............................................. 49 ARTICLE XIII MISCELLANEOUS............................................... 49 13.1 Successors and Assigns........................................ 49 13.2 Amendment; Waiver............................................. 49 13.3 Notices....................................................... 50 13.4 Further Assurances............................................ 50 13.5 Confidentiality............................................... 50 13.6 APPLICABLE LAW................................................ 51 13.7 Headings...................................................... 51 13.8 Entire Agreement.............................................. 51 13.9 Severability.................................................. 51 13.10 Counterparts.................................................. 51 13.11 Arbitration................................................... 51 13.12 Consent to Jurisdiction....................................... 52 13.13 Waiver of Partition........................................... 53 13.14 Company Name.................................................. 53 13.15 Ownership of Company Property................................. 53 13.16 Time of the Essence........................................... 53 13.17 Status Reports................................................ 53
-iii- TABLE OF CONTENTS (continued)
PAGE ---- 13.18 Disposition of Documents...................................... 54 13.19 Calculation of Days........................................... 54 13.20 Attorneys..................................................... 54
-iv- AMENDED AND RESTATED OPERATING AGREEMENT OF GGP-TRS L.L.C. Amended and Restated Operating Agreement, dated August 26, 2002, between GGP Limited Partnership, a Delaware limited partnership ("GGPLP"), Teachers' Retirement System of the State of Illinois ("TRS" and, together with GGPLP, the "Members"), and GGP-TRS L.L.C., a Delaware limited liability company (the "Company"). WITNESSETH: A. The Company exists pursuant to that certain Operating Agreement dated as of July 25, 2002 (the "Existing Operating Agreement"), made by GGPLP, and the Delaware Limited Liability Company Act, as amended (the "Act"). B. GGPLP is the sole member of the Company. C. GGPLP, TRS and the Company have entered into that certain Formation Agreement dated August 26, 2002 (the "Formation Agreement"), pursuant to which they set forth, among other things, the terms and conditions upon which TRS would be admitted as a member of the Company and the Members would make certain capital contributions to the Company on the date hereof. D. Pursuant to the Formation Agreement and in order to effect such admission, reflect such capital contributions and set forth their other understandings regarding the Company, the parties agreed to amend and restate the Existing Operating Agreement as provided 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, hereby amend and restate the Existing Operating Agreement to read in its entirety 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 have the meaning set forth in the recitals. "Acquisition Costs" shall have the meaning set forth in Section 6.2(e). "Acquisition Financing" shall have the meaning set forth in the Formation Agreement. "Acquisition Transactions" shall mean the Acquisition Financing (and the exercise of the extension options in connection therewith) and the transactions contemplated by the Purchase Agreements and the Contribution Agreement. "Adjusted Capital Account Deficit" shall mean, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of any relevant Allocation Year, after giving effect to the following adjustments: (a) credit to such Capital Account any amounts which such Member is obligated or treated as obligated to restore with respect to any deficit balance in such Capital Account pursuant to Regulations Section 1.704-1(b)(2)(ii)(c), or is deemed to be obligated to restore with respect to any deficit balance pursuant to the penultimate sentences of Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5); and (b) debit to such Capital Account the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the requirements of the alternate test for economic effect contained in Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. "Affected Gain" shall have the meaning set forth in Section 4.6(b). "Affiliate" shall mean, with respect to any Person, an affiliate of such Person as determined under the Securities Laws; provided, however, that the Affiliate of a Member shall not include the other Member, the Company or any Subsidiary. "Agreement" shall mean this Amended and Restated Operating Agreement, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires. "Allocation Year" shall mean (a) the period commencing on the date hereof and ending on December 31, 2002, (b) any subsequent twelve (12) month period commencing on January 1 and ending on December 31 or (c) any portion of the period described in clause (a) or (b) for which the Company is required to allocate Net Income, Net Loss and other items of Company income, gain, loss or deduction pursuant to Article IV hereof. "AMG" shall have the meaning set forth in Section 5.1. "Annual Audit" shall have the meaning set forth in Section 5.3(b). "Annual Business Plan" shall have the meaning set forth in Section 6.3. "Antitrust Division" shall have the meaning set forth in Section 9.2(e). "Auditors" shall have the meaning set forth in Section 5.1. "Bankruptcy Event" shall mean, with respect to a Member or other Person, the occurrence of any of the following events: (a) the making by it of an assignment for the benefit -2- of its creditors, (b) the filing by it of a voluntary petition in bankruptcy, (c) an adjudication that it is bankrupt or insolvent unless such adjudication is stayed or dismissed within 60 days, or the entry against it of an order for relief or similar order in any bankruptcy or insolvency proceeding, (d) the filing by it of a petition or an answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, (e) the filing by it of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, (f) its seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator for it or for all or any substantial part of its properties, or (g) 120 days after the commencement of any proceeding against it seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, if the proceeding has not been stayed or dismissed. "Benefit Plan Investor" shall have the meaning set forth in the Plan Asset Regulations. "Board" or "Board of Directors" shall mean the Board of Directors of the Company in office at the applicable time, as designated in accordance with the provisions hereof. "Business" shall mean the acquisition, ownership, leasing, operation, management, redevelopment, expansion, financing and sale of, and otherwise dealing with, the Properties. "Buy-Sell Notice" shall have the meaning set forth in Section 9.1. "Buy-Sell Response Notice" shall have the meaning set forth in Section 9.2(b). "Buy-Sell Right" shall have the meaning set forth in Section 9.1. "Capital Account(s)" shall mean, with respect to any Member, the separate "book" account which the Company shall establish and maintain for such Member in accordance with Section 704(b) of the Code and Section 1.704-1(b)(2)(iv) of the Regulations and such other provisions of Section 1.704-1(b) of the Regulations that must be complied with in order for the Capital Accounts to be determined in accordance with the provisions of said Regulations. In furtherance of the foregoing, the Capital Accounts shall be maintained in compliance with Section 1.704-1(b)(2)(iv) of the Regulations, and the provisions hereof shall be interpreted and applied in a manner consistent therewith. "Capital Contribution" shall mean, with respect to any Member, the amount of money and the initial Gross Asset Value of any property other than money contributed to the Company (net of liabilities that are assumed by the Company or to which such property is subject). The initial Gross Asset Value of the Property being contributed to the Company pursuant to the Contribution Agreement is equal to the "Contribution Amount" set forth and defined in the Contribution Agreement. "Cause" shall mean (a) the failure of the Managing Member to submit an Annual Business Plan to the Board as provided in Section 6.3 and Schedule 7.1-1, (b) the failure of the Managing Member to obtain prior Board approval (as part of an approved Annual Business Plan or otherwise) for any of the matters enumerated in Section 6.2(e) to the extent required by this Agreement, (c) the engaging by the Managing Member in gross negligence which is -3- demonstrably and materially injurious to the Company or willful misconduct, including fraud, embezzlement or theft, and (d) the repeated failure by the Managing Member to perform (or cause its Affiliates to perform) the obligations to be performed by it or them hereunder in respect of the management of the Company or the services described in Article VII if such failure has a demonstrably and materially injurious effect on the Company; provided, however, that Cause shall not exist or be deemed to exist except as provided in the immediately succeeding paragraph. Notwithstanding anything to the contrary contained herein, neither a determination of Cause nor the occurrence of any other event shall (x) give rise to a right on the part of TRS or the Company (or any successor or assign of either) to remove GGPLP (or any successor or assign) as the Managing Member or terminate the right of GGPLP (or any successor or assign) to exercise the powers and rights of the Managing Member or provide services and receive fees in accordance with Section 7.1 (except as provided in the third sentence of Section 7.1) or (y) otherwise result in any such removal or termination. Nothing contained in this paragraph (except for the provisions of the immediately preceding sentence) or the immediately succeeding paragraph shall constitute a waiver of any right or remedy that TRS may have on account of the conduct of GGPLP (or any successor or assign) described in this paragraph, and TRS may, subject to the provisions of the immediately preceding sentence and the other provisions of this Agreement, pursue any rights and remedies that may be available to it at law or equity on account thereof. If TRS believes that an event giving rise to Cause has occurred, TRS shall deliver a written notice (the "Cause Notice") to the Managing Member setting forth with particularity the event giving rise to Cause and the applicable clause of the first paragraph of this definition. Except where the event giving rise to Cause constitutes willful misconduct, the Managing Member 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 Managing Member shall promptly commence such cure and proceed diligently and in good faith to complete the curing thereof as promptly as practicable). The Managing Member shall promptly, and, in any event, by the end of such fifteen (15) day period, notify (the "Cure Notice") TRS that either (a) the event giving rise to Cause has been cured and specifying the actions taken in respect thereof or (b) 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. Unless TRS reasonably objects in writing to the Cure Notice within ten (10) days of delivery thereof, the Managing Member has not promptly commenced such cure and diligently prosecuted the same to completion or the event giving rise to Cause is not cured within a reasonable time, the event giving rise to Cause shall be deemed to be cured. If the Managing Member wishes to contest the existence of Cause, the Managing Member shall within ten (10) days of receipt of the Cause Notice, or, if TRS has reasonably objected to the Cure Notice, TRS shall within ten (10) days of receipt of the Cure Notice (or, if the Managing Member has not promptly commenced such cure and diligently prosecuted the same to completion or the event giving rise to Cause has not been cured within a reasonable period, TRS may), submit the existence of Cause to arbitration pursuant to the provisions of Section 13.11. If the Managing Member neither submits the question of Cause to arbitration nor delivers a Cure Notice within the fifteen (15) 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 (15) day period (but Cause otherwise shall not exist unless and until the arbitrators have reached a final decision that Cause exists). During any arbitration proceeding, the Managing Member shall use all diligent -4- 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. "Certificate of Formation" shall mean the Company's Certificate of Formation, as the same may be amended and/or restated from time to time. "Clackamas Associates" shall mean Clackamas Associates Limited Partnership, a Delaware limited partnership. "Clackamas Property" shall mean that certain regional shopping center located in Portland, Oregon and commonly known as Clackamas Town Center. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any corresponding provisions of succeeding law. "Company" shall have the meaning set forth in the introductory paragraph hereof. "Company Assets" shall mean all right, title and interest of the Company and the Subsidiaries in and to all or any portion of the assets and property, whether tangible or intangible and whether real, personal or mixed, of the Company and the Subsidiaries, including any direct or indirect interests therein, and any property (real or personal) or estate or direct or indirect interests therein acquired in exchange therefor or in connection therewith. "Company Minimum Gain" shall have the meaning set forth in Sections 1.704-2(b)(2) and (d)(1) of the Regulations. "Contribution Agreement" shall mean that certain Contribution Agreement dated August 26, 2002, between the Company and TRS, as the same may be amended and/or supplemented from time to time. "Contribution Default Amount" shall have the meaning set forth in Section 12.2. "Contribution Defaulting Member" shall have the meaning set forth in Section 12.2. "Contribution Default Loan" shall have the meaning set forth in Section 12.2. "Contribution Default Notice" shall have the meaning set forth in Section 12.2. "Contribution Non-Defaulting Member" shall have the meaning set forth in Section 12.2. "Costs" shall have the meaning set forth in Section 10.4. "Defaulting Member" shall mean a Contribution Defaulting Member or Retained Debt Defaulting Member. "Default Loan" shall mean a Contribution Default Loan or Retained Debt Default Loan. "Deposit Amount" shall mean the earnest money held by the escrow agent pursuant to the Purchase Agreements and all interest earned thereon. -5- "Depreciation" means, for each Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Managing Member. "Determination" shall mean a determination by the Service. "Entity" shall mean a corporation, partnership, limited liability company, trust, business trust, unincorporated association, government or any agency or political subdivision thereof or any other entity. "ERISA" shall have the meaning set forth in Section 6.4(b). "Existing Operating Agreement" shall have the meaning set forth in the recitals.. "Expenditures" shall mean, with respect to any fiscal period, the sum of (a) all cash expenditures of the Company and the Subsidiaries for such period, including cash expenditures incurred in connection with the Company's and the Subsidiaries' capital expenditure activities, (b) the amount of all payments of principal and interest on account of any Indebtedness and (c) such additional cash reserves as of the last day of such period as the Managing Member reasonably deems necessary for any capital, operating or other expenditures that have been authorized by the Board or that otherwise would be permitted hereunder without Board approval. Notwithstanding the foregoing, "Expenditures" shall not include any expenditures paid from previously reserved amounts or any payments of principal, interest or other amounts in respect of the Retained Debt, but shall include the amount of the distributions pursuant to Section 3.1(b). "Extended Term Financing" shall mean the financing described on Schedule 6.2(e)(iv). "Fair Market Value" shall mean, with respect to a particular asset or interest, the price at which informed and willing parties dealing at arm's length and under no compulsion to sell or purchase would agree to purchase or sell such asset or interest, taking into account, among other things, the anticipated cash flow, taxable income or taxable loss attributable to the asset or interest in question. In the case of any Units, the Fair Market Value of such Units shall be determined without any discount or premium and shall be equal to the proportionate share of the excess of the Fair Market Value of the Company assets over Company liabilities that is represented by such Units. In the case of any asset other than a marketable security and unless the method of determining Fair Market Value is otherwise provided herein, the Fair Market Value shall be determined by agreement of the Members. In the case of any marketable security at any date and unless the method of determining Fair Market Value is otherwise provided herein, the Fair Market Value of such security shall equal the closing sale price of such security on the business day (on which any national securities exchange is open for the normal transaction of business) next preceding such date, as appearing in any published list of any -6- national securities exchange or in the National Market List of the National Association of Securities Dealers, Inc., or, if there is no such closing sale price of such security, the final price of such security at face value quoted on such business day by a financial institution of recognized standing which regularly deals in securities of such type. "Final Liquidation Date" shall have the meaning set forth in Section 11.5(a). "Fiscal Year" shall have the meaning set forth in Section 5.1. "Formation Agreement" shall have the meaning set forth in the recitals. "FTC" shall have the meaning set forth in Section 9.2(e). "Funding Notice" shall have the meaning set forth in Section 12.1(a). "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect from time to time. "GGMI" shall mean General Growth Management, Inc., a Delaware corporation. "GGPLP" shall have the meaning set forth in the introductory paragraph hereof. "GGPLP L.L.C." shall mean GGPLP L.L.C., a Delaware limited liability company. "GGPLP Directors" shall have the meaning set forth in Section 6.2(b). "GGPLP Selected Auditors" shall have the meaning set forth in Section 5.1. "GG Properties" shall mean General Growth Properties, Inc., a Delaware corporation or any successor thereof. "Gross Leasable Area" shall have the meaning set forth in Schedule 7.1-2. "Gross Asset Value" means with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross Fair Market Value of such asset, provided that the initial Gross Asset Values of the assets contributed to the Company pursuant to the Contribution Agreement shall be equal to the "Contribution Amount" set forth and defined in the Contribution Agreement; (ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross Fair Market Values (taking Code Section 7701(g) into account) as of the following times: (A) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) the distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company; and (C) the liquidation of the Company within the meaning of Regulations Section 1.704- -7- 1(b)(2)(ii)(g), provided that an adjustment described in clauses (A) and (B) of this paragraph shall be made only if the Managing Member reasonably determines that such adjustment is necessary to reflect the relative economic interests of the Members in the Company; (iii) The Gross Asset Value of any item of Company assets distributed to any Member shall be adjusted to equal the gross Fair Market Value (taking Code Section 7701(g) into account) of such asset on the date of distribution; and (iv) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (f) of the definition of "Net Income and Net Loss" or Section 4.3(g) hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Net Income and Net Loss. "Guarantee" shall mean, with respect to any Person and without duplication, any direct or indirect obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person in any manner. "HSR" shall have the meaning set forth in Section 9.2(e). "Indemnitees" shall have the meaning set forth in Section 10.4. "Indebtedness" shall mean indebtedness for borrowed money (but Indebtedness shall not include trade credit incurred in the ordinary course of business, personal property lease obligations or Guarantees). "Initial Properties" shall mean the OTR Properties and the Clackamas Property. "Investment Company Act" shall mean the Investment Company Act of 1940, as the same may be amended from time to time. "Kenwood Property" shall mean that certain regional shopping center located in Cincinnati, Ohio and commonly known as Kenwood Towne Centre. "Kenwood Purchase Agreement" shall mean that certain Agreement of Purchase and Sale dated June 26, 2002, between GGPLP and OTR, as amended by that certain Amendment to Agreements of Purchase and Sale dated as of July 26, 2002 among GGPLP, OTR and OTRLP, and that certain Second Amendment to Agreements of Purchase and Sale dated July 31, 2002, among GGPLP, OTR and OTRLP, and as the same may be further amended and/or supplemented from time to time. Pursuant to that certain Purchase Agreement Assignment, -8- GGPLP has assigned all of its right, title and interest in and to the Kenwood Purchase Agreement to the Company and the Company has assumed all obligations of GGPLP under the Kenwood Purchase Agreement. "Liquidation Event" shall have the meaning set forth in Section 11.5(a). "Lien" shall mean any mortgage, deed of trust, security interest, lien, pledge, claim or other encumbrance. "Major Center Owner" shall mean a Person that, together with its Permitted Transferees, owns interests in at least 20 regional shopping centers, a substantial portion of which are under the management of such Person or Permitted Transferees of such Person. "Major Occupant" shall have the meaning set forth in Schedule 7.1-1. "Managing Member" shall mean GGPLP and any Person to whom its Units are Transferred in accordance with Section 8.2 or 8.3 or Article IX. The Managing Member may not be removed with or without cause (except as provided in the third sentence of Section 7.1). "Material Variance" shall mean, with respect to any line item in the Annual Business Plan for any period, a variance with respect thereto equal to the greater of 5% of the budgeted amount therefor and $20,000. "Member Nonrecourse Debt" has the same meaning as the term "partner nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations. "Member Nonrecourse Deductions" shall have the same meaning as the term "partner nonrecourse deductions" in Section 1.704-2(i) of the Regulations. "Members" shall mean GGPLP and TRS and their duly admitted successors or assigns (in each case, for so long as such Person remains a Member of the Company) and any other Person who is a member of the Company at the time of reference thereto (and, prior to such time, has been admitted as a member of the Company in accordance with the terms hereof). "Minimum Gain Attributable to Member Nonrecourse Debt" shall have the same meaning as the term "partner nonrecourse debt minimum gain" as determined in accordance with Regulation Section 1.704-2(i)(2). "Net Cash Flow" shall mean, with respect to any fiscal period, the excess, if any, of Receipts for such period over Expenditures for such period. "Net Income" or "Net Loss" shall mean, for each Allocation Year, an amount equal to the Company's taxable income or loss for such Allocation Year, determined by the Company accountants in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a) of the Code shall be included in taxable income or loss), with the following adjustments: -9- (a) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss shall be added to such taxable income or loss; (b) any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures under Section 704(b) of the Code or Section 1.704-1(b)(2)(iv)(i) of the Regulations and not otherwise taken into account in computing Net Income or Net Loss shall be subtracted from such taxable income or loss; (c) gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of such property (as the same may be restated or otherwise adjusted pursuant to Regulation Section 1.704-1(b)(2)(iv)) rather than its adjusted tax basis; (d) except as provided in paragraph (g) of this definition of Net Income and Net Loss, in lieu of the depreciation, depletion, amortization and other cost recovery deductions taken into account in computing taxable income or loss, there shall be taken into account Depreciation for such Allocation Year; and (e) in the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Net Income or Net Loss; (f) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member's interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Net Income or Net Loss; and (g) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 4.3, Section 4.4, or Section 4.5 hereof shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Sections 4.3, 4.4, and 4.5 hereof shall be determined by applying rules analogous to those set forth in subparagraphs (a) through (f) above. "Non-Defaulting Member" shall mean a Contribution Non-Defaulting Member or a Retained Debt Non-Defaulting Member. -10- "Nondiscretionary Items" shall mean items that reasonably must be paid by the Company or any Subsidiary to avoid a material adverse effect on the business, operations or value of the assets of the Company or such Subsidiary or any Property (but not capital expenditures made in connection with the renovation or expansion of any Property unless required by law or contractual obligation or made in connection with the repair or restoration of any Property following the occurrence of a casualty or condemnation). Without limiting the generality of the foregoing, the Members acknowledge and agree that Nondiscretionary Items include the minimum amount of funds needed to (a) pay and perform when due all of the obligations of the Company or any Subsidiary under any notes, mortgages and other documents to which the Company or such Subsidiary is or shall be a party or by which it or its assets are bound and which have been entered into in accordance with the terms hereof, (b) pay when due real estate and other taxes affecting the Company or Subsidiary assets, utility charges and insurance premiums for the Company and Subsidiary assets and the Company and the Subsidiaries, (c) comply with all laws now or hereafter in force which shall be applicable to all or any part of the Company and Subsidiary assets and the operation and management thereof (including the making of capital expenditures required for such compliance), (d) following a casualty, condemnation or deed in lieu thereof in respect of any Property or portion thereof, restore such Property to its condition (or as near thereto as is practicable) immediately prior to such casualty, condemnation or deed in lieu thereof, (e) pay when due the fees or other amounts owing pursuant to Article VII or (f) in the case of an emergency involving an immediate threat to persons, property or the continued operations of any Property, take actions to mitigate or eliminate such threat. "Nonrecourse Deductions" shall have the meaning set forth in Section 1.704-2(b)(1) and (c) of the Regulations. "Nonrecourse Liabilities" shall have the meaning set forth in Section 1.704-2(b)(3) of the Regulations. "Offeree Members" shall have the meaning set forth in Section 9.1. "Offering Members" shall have the meaning set forth in Section 9.1. "OTR" shall mean OTR, an Ohio general partnership. "OTRLP" shall mean OTR Limited Partnership, a Delaware limited partnership. "OTR Properties" shall mean the Kenwood Property, the Silver City Property and the Tyler Property. "Permitted Transferee" shall mean, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such Person. As used herein, the term "control" shall mean having both (a) at least fifty-one percent (51%) of the economic interest in a Person and (B) at least fifty-one percent (51%) of the voting rights with respect to such Person with the full right to exercise such vote. "Person" shall mean an individual or Entity. -11- "Plan Asset Regulations" shall have the meaning set forth in Section 6.4(b). "Prime" shall mean the prime rate as announced from time to time by Wells Fargo Bank, N.A. "Properties" shall mean the Initial Properties and the Company's direct or indirect interest in any of the foregoing and any additional shopping center or other real estate properties or direct or indirect interests therein acquired (directly or indirectly) by the Company from time to time, and the term "Property" shall have a meaning correlative thereto. "Property Indebtedness" shall mean Indebtedness the repayment of which is secured by, among other things, a mortgage lien on one or more Properties, including Retained Debt. "Proportionate Share" shall mean, with respect to any Member (unless otherwise provided herein) at any time, a fraction, the numerator of which is the total number of Units owned by such Member at such time and the denominator of which is the total number of Units owned by all of the Members at such time. "Proposed Annual Business Plan" shall have the meaning set forth in Section 6.3(a). "Purchase Agreement Assignment" shall mean that certain Assignment and Assumption Agreement dated August 26, 2002, between the Company and GGPLP. "Purchase Agreements" shall mean the Kenwood Purchase Agreement, the Silver City Purchase Agreement and the Tyler Purchase Agreement, collectively. "Qualifying Firm" shall mean, at any particular time, a firm that is a nationally recognized certified public accounting firm at such time and that is not the auditors of GG Properties or GGPLP at such time. "Receipts" shall mean, with respect to any fiscal period, the sum of all cash receipts of the Company and the Subsidiaries from all sources for such period (including cash Capital Contributions) and any amounts held as reserves as of the last day of such period which are in excess of necessary reserves of the Company and the Subsidiaries for any capital, operating or other expenditures that have been authorized by the Board or that otherwise would be permitted hereunder without Board approval, as reasonably determined by the Managing Member. Notwithstanding the foregoing, "Receipts" shall not include the proceeds or other amounts received in respect of Retained Debt (including any replacement Retained Debt), which shall be paid directly to GGPLP. "Regulations" means the proposed, temporary and final regulations promulgated by the Treasury Department pursuant to the Code, as amended from time to time. "Regulatory Allocations" shall have the meaning set forth in Section 4.4. "Releasees" shall have the meaning set forth in Section 9.2(c). "Retained Debt" shall mean the Property Indebtedness or portion thereof as is designated by the Managing Member as "Retained Debt" from time to time in accordance with the terms -12- hereof, in each case only for so long as and to the extent that such Property Indebtedness or portion thereof remains outstanding and retains its characterization as Retained Debt in accordance with the terms hereof. "Retained Debt Default Amount" shall have the meaning set forth in Section 10.3(b). "Retained Debt Defaulting Member" shall have the meaning set forth in Section 10.3(b). "Retained Debt Default Loan" shall have the meaning set forth in Section 10.3(b). "Retained Debt Default Notice" shall have the meaning set forth in Section 10.3(a). "Retained Debt Loan Documents" shall mean the notes, mortgages and other loan documents evidencing, securing or otherwise relating to the Retained Debt. "Retained Debt Non-Defaulting Member" shall have the meaning set forth in Section 10.3(b). "Rules" shall have the meaning set forth in Section 9.2(e). "Sale Notice" shall have the meaning set forth in Section 8.3(a). "Section 704(c) Tax Items" shall have the meaning set forth in Section 4.6(c). "Securities Laws" shall mean the 33 Act and 34 Act, collectively. "Service" shall mean the Internal Revenue Service. "Selling Member" shall have the meaning set forth in Section 8.3(a). "Seventh Anniversary Date" shall mean the seventh anniversary of the date hereof. "Silver City Property" shall mean that certain regional shopping center located in Taunton, Massachusetts and commonly known as Silver City Galleria. "Silver City Purchase Agreement" shall mean that certain Agreement of Purchase and Sale dated June 26, 2002, between GGPLP and OTR, as amended by that certain Corrective Amendment to Agreement of Purchase and Sale dated as of June 26, 2002, between GGPLP and OTRLP, that certain Amendment to Agreements of Purchase and Sale dated as of June 26, 2002, among GGPLP, OTR and OTRLP, and that certain Second Amendment to Agreements of Purchase and Sale dated July 31, 2002, among GGPLP, OTR and OTRLP, and as the same may be further amended and/or supplemented from time to time. Pursuant to that certain Purchase Agreement Assignment, GGPLP has assigned all of its right, title and interest in and to the Silver City Purchase Agreement to the Company and the Company has assumed all obligations of GGPLP under the Silver City Purchase Agreement. "Subsidiaries" shall mean any direct or indirect corporate, partnership, limited liability company, trust or other subsidiary of the Company, whether or not wholly owned by the Company, and a "Subsidiary" shall mean any one of them. -13- "Tax Items" shall have the meaning set forth in Section 4.6(a). "Tax Matters Member" shall have the meaning set forth in Section 5.4. "Tax Payments" shall have the meaning set forth in Section 4.8. "33 Act" shall mean the Securities Act of 1933, as amended. "34 Act" shall mean the Securities Exchange Act of 1934, as amended. "Transfer" shall mean to transfer, sell, assign, pledge, hypothecate, give, create a security interest in or lien on, place in trust (voting or otherwise), transfer by operation of law (other than by way of a merger or consolidation of the Company) or in any other way encumber or dispose of, directly or indirectly and whether or not voluntarily, any Units, and the terms "Transferred", "Transferee" and "Transferor" shall have correlative meanings. "Trigger Date" shall mean the Seventh Anniversary Date; provided, however, that, in the case of the exercise by TRS of its rights under Section 8.3 or Article IX and in the event that the Trigger Date has not otherwise occurred, the Trigger Date shall be deemed to have occurred on the earlier of (a) the date of determination that Cause has occurred and (b) the date that the Managing Member is no longer a Major Center Owner or a Permitted Transferee thereof. "TRS" shall have the meaning set forth in the introductory paragraph hereof. "TRS Directors" shall have the meaning set forth in Section 6.2(b). "Tyler Property" shall mean that certain regional shopping center located in Riverside, California and commonly known as Galleria at Tyler. "Tyler Purchase Agreement" shall mean that certain Agreement of Purchase and Sale dated June 26, 2002, between GGPLP and OTR, as amended by that certain First Amendment to Agreements of Purchase and Sale dated as of July 26, 2002, among GGPLP, OTR and OTRLP, and that certain Second Amendment to Agreements of Purchase and Sale dated July 31, 2002, between GGPLP, OTR and OTRLP, and as the same may be further amended and/or supplemented from time to time. Pursuant to that certain Purchase Agreement Assignment, GGPLP has assigned all of its right, title and interest in and to the Tyler Purchase Agreement to the Company and the Company has assumed all obligations of GGPLP under the Tyler Purchase Agreement. "UBTI" shall have the meaning set forth in Section 6.4(c). "Units" shall mean units of membership interest in the Company, including (except as otherwise expressly provided herein) the rights to allocations, distributions, management, approval and participation provided herein. "Unpermitted Transfer Closing Date" shall have the meaning set forth in Section 8.4(b). "Unpermitted Transfer Purchase Price" shall have the meaning set forth in Section 8.4(a). -14- "Unpermitted Transfer" shall have the meaning set forth in Section 8.4(a). "Unpermitted Transferee" shall have the meaning set forth in Section 8.4(a). "Value" shall mean, with respect to any Units or other property involved in any Transfer of Units, the Fair Market Value of such Units or other property. The Transferor party or parties and the Transferee party or parties shall consult and negotiate with each other in good faith in an attempt to reach agreement as to the Fair Market Value of the Units or other property. In the event that the Transferor party or parties and the Transferee party or parties do not reach agreement within thirty days, each of the Transferor party or parties, on the one hand, and the Transferee party or parties, on the other hand, shall engage an appraiser to determine the Fair Market Value of the Units or other property within an additional ten days. The Company shall, and shall cause its accountants and counsel to, make readily available to each such appraiser any of its relevant books and records for purposes of such valuation. Each of the Transferor party or parties, on the one hand, and the Transferee party or parties, on the other hand, shall, within an additional ten days, provide written notice of their/its appraiser's determination of the Fair Market Value of the Units or other property (a "Proposed Value"), together with a report of its/their appraiser in respect thereof, to a third appraiser who has been designated by the other two appraisers. The third appraiser shall, within an additional fifteen days, select as the Value of such Units or other property the Proposed Value which he/she believes is closest to the Fair Market Value of such Units or other property (and the third appraiser may select no amount other than one of the Proposed Values as the Value of such Units or other property). Such determination of Value shall be final and binding. Each appraiser referred to in this paragraph must: (a) have no less than ten years of experience in valuing, in the case of a Unit, companies engaged in businesses similar to that of the Company and, in the case of other property, property similar to such other property; and (b) be independent of any parties to the Transfer. Each party or parties shall pay the cost of the appraiser designated by it/them (but, if a third appraiser is designated, the costs of the appraisers shall be paid by the party or parties whose Proposed Value is not selected as the Value of the Units or other property). "Wholly-Owned Subsidiaries" shall mean Subsidiaries that, directly and/or indirectly, are wholly-owned by the Company. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; (b) the words "including" and "include" and other words of similar import shall be deemed to be followed by the phrase "without limitation"; and (c) any capitalized term used in any Schedule to this Agreement but not defined in such Schedule shall have the meaning assigned to such term in this Agreement or in another Schedule to this Agreement. -15- ARTICLE II CONTINUATION OF COMPANY 2.1 CONTINUATION OF COMPANY. The Company was formed as a limited liability Company under the Act on July 25, 2002 by the filing of the Certificate of Formation with the Secretary of State of the State of Delaware on July 25, 2002. The parties hereby ratify the execution and filing thereof by the authorized person (within the meaning of the Act) identified therein. It is the intention of the Members that the provisions of this Agreement govern their relations and their respective liabilities and obligations. Accordingly, to the extent permitted by law, in the event of any conflict between any provisions contained in this Agreement and any provision in the Act, the terms and provisions of this Agreement shall control. With respect to any matter not governed by this Agreement, the provisions of the Act shall control. 2.2 NAME. The business of the Company shall be conducted under the name "GGP-TRS L.L.C" or such other name or names as are designated by the Managing Member from time to time. All transactions of the Company, to the extent permitted by applicable law, shall be carried on and completed in the name of the Company or such other name or names as shall be designated by the Managing Member in writing from time to time. The Members shall cause to be executed, filed and published on behalf of the Company such assumed or fictitious name certificates as may be required by law to be filed or published. 2.3 PRINCIPAL PLACE OF BUSINESS. The location of the Company's principal place of business shall be at 110 North Wacker Drive, Chicago, Illinois 60606 or such other place in the United States as is designated by the Managing Member from time to time. 2.4 PURPOSE AND BUSINESS OF THE COMPANY. The purpose of the Company shall be to, directly or indirectly, acquire, develop, redevelop, hold, own, sell, lease, finance, transfer, encumber, exchange, and otherwise dispose of or deal with the Properties (including the acquisition and development of land or properties adjacent to the Properties) and, subject to the provisions of Section 12.3, such other properties and assets as shall be determined by the Board. The Company shall have all powers necessary or desirable to accomplish the purposes enumerated. The Company shall not, directly or indirectly, acquire any other assets or businesses (other than in connection with the Properties, including the acquisition and development of land or properties adjacent to the Properties) except with approval of the Board. The name and funds of the Company shall be used only for Company purposes. 2.5 TERM. The Company shall commence business on the date hereof and shall continue its business indefinitely until its termination as hereinafter provided. 2.6 NATURE OF THE COMPANY. It is intended that the Company be a limited liability company meeting the definition of "partnership" contained in Section 7701 of the Code and the regulations issued thereunder. Except for purposes of the Code and other tax laws, the Members specifically intend and agree that the Company shall not be a partnership (including, a limited partnership) or any other kind of venture or Person, but a limited liability company under and pursuant to the Act. The Company's Certificate of Formation, this Agreement and the relationships created thereby and hereby and arising therefrom shall not be construed to establish a partnership as among the Members or any other Person or to constitute any Member a partner -16- in the Company or a partner of any other Member or Person. All rights, liabilities and obligations of the Members, both as among themselves and as to Persons not parties to this Agreement, shall be as provided in this Agreement and, to the extent not provided herein, in the Act. 2.7 MEMBERS' NAMES AND ADDRESSES. The name and mailing address of each Member and the number of Units owned by such Member are listed on Schedule I attached hereto. 2.8 REGISTERED OFFICE AND REGISTERED AGENT. The address of the registered office of the Company in the State of Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. The name of its registered agent at such address is Corporation Service Company. The Managing Member may at any time and from time to time change such office or agent by taking such actions as are required by the Act to change the same, including executing and filing an amendment to the Certificate of Formation. 2.9 ORGANIZATION CERTIFICATES. The Managing Member shall cause to be executed, filed and/or published (and, if required by law, the other Members shall execute): (a) any and all such amendments or supplements to the Company's Certificate of Formation as from time to time may be required by the Act; and (b) all such further certificates, notices, statements or other instruments as may be required by law for the formation, qualification or operation of a limited liability company in all jurisdictions where the Company may elect to do business or otherwise necessary to carry out the purposes of this Agreement. The Managing Member shall be an authorized person of the Company for purposes of any filings under the Act and shall be authorized to execute and deliver on behalf of the Company any of the other certificates, notices, statements or other instruments referred to in this Section 2.9. 2.10 RESTRICTIONS ON OTHER AGREEMENTS. No Member shall grant any proxy or enter into or agree to be bound by any voting trust with respect to the Units, nor shall any Member enter into any agreement or arrangements of any kind (including agreements or arrangements with respect to the acquisition, disposition or voting of Units) with any Person with respect to the Units, in either case on terms inconsistent with the provisions of this Agreement. ARTICLE III COMPANY CAPITAL; ETC. 3.1 INITIAL CONTRIBUTIONS OF MEMBERS; ETC. (a) As their initial Capital Contributions to the Company and concurrently herewith, (i) TRS is causing Clackamas Associates to convey to the Company or a Subsidiary all of its right, title and interest in and to the Clackamas Property in accordance with the terms of the Contribution Agreement and (ii) GGPLP and TRS are -17- contributing (or are deemed to have contributed) cash in the amounts set forth opposite their names on Schedule I. (b) Concurrently herewith, (i) the Company shall distribute to TRS cash in the amount of $1,619,025 (but the Company may set off against such distribution the amount of any payments owing to it by TRS pursuant to the Contribution Agreement but the full amount of such distribution and payments shall be deemed to have been made for all purposes hereunder, including the calculation of Receipts and Expenditures, regardless of any such set-off) and (ii) the Company shall distribute to GGPLP cash in the amount of $695,592. (c) The Members acknowledge and agree that immediately after taking into account the Capital Contributions and distributions described in Sections 3.1(a) and (b), GGPLP will have a positive Capital Account balance of $130,661,577 and TRS will have a positive Capital Account balance of $130,661,577. 3.2 NO ADDITIONAL CAPITAL CONTRIBUTIONS. Except as expressly required by Section 3.1, Article XII or Section 10.6(c), no Member shall have any obligation to make any additional Capital Contribution to the Company or to advance any funds thereto. 3.3 NO WITHDRAWAL OR DISSOCIATION, ETC. No Member shall have the power or right to withdraw or dissociate from the Company, or withdraw any part of its Capital Contribution(s), except as specifically provided herein. No Member shall be entitled to any distributions from the Company, except as specifically provided herein. No Member shall be entitled to interest on any Capital Contribution to the Company. The occurrence of any event specified in Section 18-304 of the Act as to any Member shall not result in such Member ceasing to be a member of the Company. 3.4 PRIORITY. Except as otherwise expressly provided herein, there shall be no priority among the Members as to the return of Capital Contributions or withdrawals from or distributions of the Company. ARTICLE IV ALLOCATION OF COMPANY ITEMS 4.1 MAINTENANCE OF CAPITAL ACCOUNTS. A separate Capital Account shall be maintained for each Member. Without limiting the foregoing, the Capital Account of each Member shall be (a) credited with the Member's Capital Contribution(s) plus the amount of Net Income allocated (or other items of income or gain specially allocated) to such Member pursuant to this Agreement plus the amount of any Company liabilities assumed by such Member or which are secured by any assets distributed to such Member and (b) debited with the sum of (i) the amount of Net Loss allocated (or other items of loss specially allocated) to such Member pursuant to the provisions of this Agreement, (ii) all money and the Gross Asset Value of any assets distributed by the Company to such Member pursuant to the terms hereof, and (iii) the amount of any liabilities of such Member assumed by the Company or which are secured by any assets contributed by such Member to the Company. Any reference in this Agreement to the -18- Capital Account of a Member shall be deemed to refer to such Capital Account as the same may be credited or debited from time to time in accordance herewith. 4.2 NET INCOME AND NET LOSS. (a) Allocation of Net Income. After giving effect to the allocations set forth in Sections 4.3 and 4.4, Net Income for any Allocation Year or other applicable period (including the period ending on the date on which there is a withdrawal of any Member or a partial withdrawal of the capital of any Member or the period ending on the date immediately preceding the date on which an additional Capital Contribution is made to the Company by a Member in accordance with the terms hereof) shall be allocated between the Members in accordance with their Proportionate Shares at such time. (b) Allocation of Net Loss. After giving effect to the allocations set forth in Sections 4.3, 4.4 and 4.5, Net Loss for any Allocation Year or other applicable period (including the period ending on the date on which there is a withdrawal of any Member or a partial withdrawal of the capital of any Member or the period ending on the date immediately preceding the date on which an additional Capital Contribution is made to the Company by a Member in accordance with the terms hereof) shall be allocated between the Members in accordance with their Proportionate Shares at such time. Notwithstanding anything to the contrary contained herein (but subject to the provisions of Sections 10.2(b) and 10.6(c)), the interest expense and/or other deductions and items of income relating to the Retained Debt shall remain at all times the expense and/or income of GGPLP and shall not be taken into account in calculating Net Income or Net Loss. 4.3 SPECIAL ALLOCATIONS. Notwithstanding any provisions of Section 4.2 to the contrary, the following special allocations shall be made in the following order: (a) Minimum Gain Chargeback (Nonrecourse Liabilities). Notwithstanding anything to the contrary contained in this Article IV, if there is a net decrease in Company Minimum Gain for any Allocation Year (except as a result of conversion or refinancing of Company Nonrecourse Liabilities, certain capital contributions or revaluation of the Company property, all as further outlined in subsections (d)(2), (f)(2), or (f)(3) of Regulations Section 1.704-2), each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to that Member's share of the net decrease in the Company Minimum Gain. The items to be so allocated shall be determined in accordance with Regulations Section 1.702-2(f)(6) and 1.704-2(j)(2). This section is intended to comply with the minimum gain chargeback requirement in said sections of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this section shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. (b) Minimum Gain Attributable to Member Nonrecourse Debt. After giving effect to Section 4.3(a), if there is a net decrease in Minimum Gain Attributable To Member Nonrecourse Debt during any Allocation Year (other than due to the conversion, refinancing, or other change in the debt instrument that causes it to become partially or wholly a Nonrecourse Liability, certain capital contributions or revaluations of the -19- Company property as further outlined in Regulations Section 1.704-2(i)(4)), each Member shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent years) in an amount equal to that Member's share of the net decrease in such Minimum Gain Attributable To Member Nonrecourse Debt. The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(i)(4) and (j)(2). This section is intended to comply with the minimum gain chargeback requirement in said sections of the Regulations and shall be interpreted consistently therewith. Allocations pursuant to this section shall be made in proportion to the respective amount required to be allocated to each Member pursuant thereto. (c) Qualified Income Offset. In the event that any Member unexpectedly receives any adjustments, allocations or distributions described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible, provided that an allocation pursuant to this Section 4.3(c) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 4 have been tentatively made as if this Section 4.3(c) were not in the Agreement. This Section 4.3(c) is intended to constitute a "qualified income offset" under Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. (d) Gross Income Allocation. In the event any Member has a deficit Capital Account at the end of any Allocation Year which is in excess of the amount such Member is deemed obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 4.3(d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such amount after all such allocations provided for in this Section 4 have been made as if Section 4.3(c) and this Section 4.3(d) were not in the Agreement. (e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year shall be allocated to the Members in accordance with their respective Proportionate Shares; provided, however, that to the extent Depreciation deductions constitute Nonrecourse Deductions, such Depreciation deductions shall be allocated to the Members in the same manner that Depreciation deductions are allocated to the Members pursuant to Section 4.3(h) hereof. (f) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any Allocation Year or other period shall be specially allocated to the Member that bears the economic risk of loss for the Member Nonrecourse Debt in respect of which such Member Nonrecourse Deductions are attributable (as determined under Regulation Sections 1.704-2(b)(4) and (i)(1)). (g) Section 754 Basis Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is -20- required to be taken into account in determining Capital Accounts in accordance with Regulations Section 1.704-1(b)(2)(iv)(m) as a result of a distribution to a Member in complete liquidation of such Member's interest in the Company, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations). (h) Special Allocation of Depreciation. Unless and until otherwise elected by GGPLP (where GGPLP may make such election out with respect to any one or more Properties) and subject to the following sentence, all Depreciation and similar deductions relating to Company Properties shall be specially allocated one hundred percent (100%) to GGPLP. TRS may elect to have the preceding sentence of this Section 4.3(h) cease to apply, but only at the following times: (i) immediately prior to a closing of a sale, transfer, or other disposition by TRS of all of its Company Units to an unrelated entity, but only if such sale, transfer, or other disposition will not violate the terms of this Agreement, (ii) at any time that TRS modifies its internal policies to provide that, in making decisions on all new investments, TRS will operate as though it were subject to the UBTI provisions of the Code, or (iii) as of January 1 of any year during which (A) there is a change in law (including any new interpretation of existing law) that is binding upon both TRS and the Service, as a result of which, TRS becomes subject to the UBTI provisions of the Code or (B) the Service asserts that TRS is or entities such as TRS are subject to the UBTI provisions of the Code. (i) Special Allocation of Gain. Upon the Company's sale, transfer, or other disposition of any Company Property (the "Sold Property"), any gain realized by the Company with respect to the Sold Property shall be allocated among the Members as follows: (i) first, to GGPLP in an amount equal to the excess, if any, of (A) the aggregate Depreciation or similar deductions allocated to GGPLP with respect to the Sold Property pursuant to Section 4.3(h) hereof for the current and all prior Allocation Years, over (B) the aggregate gain allocated to GGPLP with respect to the Sold Property pursuant to Section 4.3(i) for all prior Allocation Years; (ii) second, to GGPLP in an amount equal to the excess, if any, of (A) the aggregate Depreciation or similar deductions allocated to GGPLP pursuant to Section 4.3(h) hereof with respect to Properties that were previously Sold Properties (the "Previously Sold Properties") for the current and all prior Allocation Years, over (B) the aggregate gain allocated to GGPLP pursuant to Section 4.3(i) with respect to such Previously Sold Properties for all prior Allocation Years; (iii) third, to GGPLP in an amount equal to the excess, if any, of (A) the difference between (1) the aggregate Depreciation or similar deductions allocated to GGPLP with respect to its remaining Properties (i.e., Properties other than the Sold Property and the Previously Sold Properties) (the "Remaining Properties") pursuant to Section 4.3(h) hereof for the current and all prior Allocation Years and (2) the aggregate -21- Depreciation or similar deductions that would have been allocated to GGPLP with respect to the Remaining Properties pursuant to Section 4.3(h) hereof for the current and all prior Allocation Years if GGPLP had been allocated only its Proportionate Share of such Depreciation or similar deductions in each such year, over (B) the aggregate gain allocated to GGPLP with respect to the Remaining Properties pursuant to Section 4.3(i) for all prior Allocation Years; and (iv) the balance, if any, to the Members in accordance with their Proportionate Shares; provided, however, that in the Allocation Year within which the dissolution and liquidation of the Company occur pursuant to Article XI hereof, any gain realized by the Company with respect to any and all Company assets shall be allocated among the Members as follows: (i) first, to GGPLP in an amount equal to the excess, if any, of (A) the aggregate Depreciation or similar deductions allocated to GGPLP pursuant to Section 4.3(h) hereof for the current and all prior Allocation Years, over (B) the aggregate gain allocated to GGPLP pursuant to this Section 4.3(i) for all prior Allocation Years; and (ii) the balance, if any, to the Members in accordance with their Proportionate Shares. 4.4 CURATIVE ALLOCATIONS. The allocations set forth in Sections 4.3(a), 4.3(b), 4.3(c), 4.3(d), 4.3(e), 4.3(f), 4.3(g) and Section 4.5 (the "Regulatory Allocations") are intended to comply with certain requirements of Regulations Section 1.704-1(b). Notwithstanding any provisions of Sections 4.2 and 4.3 to the contrary (other than the Regulatory Allocations), the Managing Member shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member's Capital Account is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Sections 4.2, 4.3(h), and 4.3(i). This Section 4.4 is intended to minimize to the extent possible and to the extent necessary any economic distortions which may result from application of the Regulatory Allocations and shall be interpreted in a manner consistent therewith. 4.5 LOSS LIMITATION. Net Losses and deductions allocated pursuant to Section 4.2 and Section 4.3(h) hereof shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Net Losses or deductions pursuant to Section 4.2 or Section 4.3(h) hereof, the limitation set forth in this Section 4.5 shall be applied on a Member by Member basis and Net Losses or deductions not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member's Capital Accounts (as adjusted in accordance with the definition "Adjusted Capital Account Deficit") so as to allocate the maximum permissible Net Losses and deductions to each Member under Section 1.704-1(b)(2)(ii)(d) of the Regulations. -22- 4.6 TAX ALLOCATIONS. (a) Generally. Subject to Sections 4.6(b) and 4.6(c), tax items of income, gain, loss, deduction and credit (collectively, "Tax Items") shall be allocated among the Members on the same basis as the respective book items. Each Member shall provide to the Company information regarding the tax basis, depreciable lives and depreciation methods of or used for the assets directly and indirectly conveyed by it to the Company. (b) Sections 1245/1250 Recapture. If any portion of gain from the sale of property is treated as gain which is ordinary income by virtue of the application of Code Sections 1245 or 1250 ("Affected Gain"), then (A) such Affected Gain shall be allocated among the Members in the same proportion that the depreciation and amortization deductions giving rise to the Affected Gain were allocated and (B) other Tax Items of gain of the same character that would have been recognized, but for the application of Code Sections 1245 and/or 1250, shall be allocated away from those Members who are allocated Affected Gain pursuant to Clause (A) so that, to the extent possible, the other Members are allocated the same amount, and type, of capital gain that would have been allocated to them had Code Sections 1245 and/or 1250 not applied. (c) Allocations Respecting Section 704(c) and Revaluations. Notwithstanding Section 4.6 (a) and (b), Tax Items with respect to Company property that are subject to Code Section 704(c) and/or Regulation Section 1.704-3 (collectively "Section 704(c) Tax Items") shall, to the extent so required, be allocated in accordance with said Code section and/or Regulation Section 1.704-3, as the case may be. Any elections or other decisions relating to such allocations shall be made by the Tax Matters Member in any manner that reasonably reflects the purpose and intention of this Agreement, provided that, as determined in the sole discretion of the Tax Matters Member separately with respect to each asset of the Company, the Company shall elect to apply either the traditional allocation method (permitted by Treasury Regulation Section 1.704-3(b)) or the traditional allocation method with curative allocations (permitted by Treasury Regulation Section 1.704-3(c)). 4.7 ALLOCATIONS SUBSEQUENT TO ASSIGNMENT. To the extent permitted by the Code, Net Income or Net Loss and other items attributable to Units acquired by reason of an assignment from a Member shall be allocated or adjusted between the assignor and the assignee based upon either (a) the length of time in any fiscal period of the Company during which the assigned Units were owned by each of them, determined with reference to the effective date of the assignment, or (b) an interim closing of the Company's books (at assignor's sole expense), such manner of allocation or adjustment to be determined by the Tax Matters Member. 4.8 COMPANY DISTRIBUTIONS. The Company shall, with respect to each calendar month, distribute to the Members the Net Cash Flow for such month. Subject to the other provisions of this Section 4.8, and except as otherwise provided by Article XI, any such distributions shall be paid to the Members pro rata in accordance with their Proportionate Shares. To the extent that any taxes or withholding taxes are due on behalf of or with respect to any Member and the Company is required by law to withhold or to make such tax payments ("Tax Payments"), the Company shall withhold such amounts and make such Tax Payments as so required. Each Tax Payment made on behalf of or with respect to a Member (but not any Tax -23- Payment made by or required to be withheld by a Subsidiary with respect to income allocable to or distributions to be made to the Company) shall be deemed a distribution of Net Cash Flow (and shall reduce distributions of Net Cash Flow that are made concurrently or thereafter to such Member), and any such deemed distribution shall be deemed to have been paid to the Member on the earlier of the date when the corresponding Tax Payment is made by the Company or the date that the distributions, if any, giving rise to the obligation to make such Tax Payment were made. The Company is hereby directed to deduct the amount of any Default Loans that are due and payable from any distributions to be made to a Defaulting Member pursuant to this Section 4.8 and pay such amounts to the appropriate Non-Defaulting Members (and such deducted amounts shall be deemed to be distributions made to such Defaulting Member). In the event that the Company pays any principal, interest or other amount in respect of the Retained Debt at the request of GGPLP (which the Company shall be obligated to do to the extent of GGPLP's share of Company distributions that are then due and payable), the Company shall deduct the amount of such principal, interest or other payment from any distributions to be made to GGPLP pursuant to this Section 4.8 (and such deducted amounts shall be deemed to be distributions made to GGPLP). Notwithstanding anything to the contrary contained herein, no distribution of Net Cash Flow shall be made hereunder if such distribution would cause the Company to breach any covenant contained in, or be in default under, any agreement binding upon the Company. ARTICLE V ACCOUNTING MATTERS; ETC. 5.1 FISCAL YEAR; DESIGNATION OF AUDITORS. The Company's fiscal year ("Fiscal Year") shall be the calendar year. The Company's auditors (the "Auditors") shall be selected by the Board; provided, however, that until the Board determines otherwise, the Auditors shall be Altschuler, Melvoin & Glasser ("AMG"). The Managing Member may, with respect to any Fiscal Year, solicit bids from AMG and one or more other Qualifying Firms to serve as the Auditors for such fiscal year. If the GGPLP Directors desire to retain one of such other Qualified Auditors as the Auditors for such year (the "GGPLP Selected Auditors") but the TRS Directors do not desire to retain the GGPLP Selected Auditors as the Auditors for such year, then the Company shall retain AMG as the Auditors for such year but TRS shall reimburse the Company to the extent that the fees paid to AMG for serving as the Auditors for such year exceed the amount of the fees that would have been paid to the GGPLP Selected Auditors for serving as the Auditors for such year. The amount of the fees that would have been paid to the GGPLP Selected Auditors shall be determined in accordance with the fee schedule set forth in the bid submitted by the GGPLP Selected Auditors. Such reimbursement shall be made within ten days following request therefor by the Managing Member. 5.2 BOOKS AND RECORDS. The Company shall maintain or cause to be maintained at the principal place of business of the Company full, true, complete and correct books of account of the Company. The books of account shall contain particulars of all monies, goods or effects belonging to or owing to or by the Company or paid, received, sold or purchased in the course of the Company's business, and all of such other transactions, matters and things relating to the business of the Company as are usually entered in books of account kept by persons engaged in a business of a like kind and character. In addition, the Company shall keep all records required to be kept pursuant to the Act. Each Member shall, at reasonable times, have free access thereto for the purpose of inspecting or copying same. Any records maintained by the Company in the -24- regular course of its business, including its Unit ledger, books of account and minute books, if any, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Company shall so convert any records so kept upon the request of any Person entitled to inspect the same. The Company shall promptly furnish TRS with copies of all executed documents, leases, agreements and material correspondence relating to the Properties. 5.3 REPORTS AND STATEMENTS. The Company shall, at its expense, prepare and distribute, or cause to be prepared and distributed, to the Members the following reports and other items: (a) Not later than 30 days after the end of each fiscal quarter (other than the fourth quarter of each Fiscal Year), commencing with the first quarter of 2003, an unaudited report (prepared in accordance with generally accepted accounting principles consistently applied except for the absence of footnotes) setting forth a balance sheet of the Company as of the end of such fiscal quarter, an income statement of the Company for such fiscal quarter and the year-to-date, a statement of cash flows of the Company for such fiscal quarter and the year-to-date and an explanation of any Material Variances for such quarter. (b) Not later than 90 days after the end of each Fiscal Year, a report (prepared in accordance with generally accepted accounting principles consistently applied and including appropriate footnote disclosure) setting forth a balance sheet of the Company as of the end of such Fiscal Year, an income statement of the Company for such Fiscal Year, a statement of cash flows of the Company for such Fiscal Year, a statement of changes in Members' Company capital for such Fiscal Year and an explanation of any Material Variances for such Fiscal Year. The annual financial statements referred to above shall be accompanied by a report of the Auditors stating that an audit of such financial statements (the "Annual Audit") has been made in accordance with generally accepted auditing standards, stating the opinion of the Auditors in respect of the financial statements and the accounting principles and practices reflected therein and as to the consistency of the application of the accounting principles, identifying any matters as to which the Auditors take exception and stating, to the extent practicable, the effect of each such exception on such financial statements. (c) Not later than 30 days after the end of each calendar month, commencing with the first full calendar month following the date hereof, an unaudited report (prepared in accordance with generally accepted accounting principles except for the absence of footnotes) setting forth a balance sheet of the Company as of the end of such calendar month and an income statement for such calendar month and a report of leasing activity, tenant sales, tenant accounts receivable and development activity (other than tenant build-out work) for such month. Such reports shall be substantially in the forms previously delivered by GGPLP to TRS unless the Board determines otherwise. -25- 5.4 TAX MATTERS MEMBER. GGPLP is hereby designated as the "Tax Matters" Member for the Company, which has the meaning of "tax matters partner" under Section 6231(a)(7) of the Code. 5.5 TAX ELECTIONS AND RETURNS. The Tax Matters Member shall, from time to time, make such tax elections on behalf of the Company as it deems necessary or desirable in its discretion to carry out the business of the Company or the purposes of this Agreement, including elections under Section 754 of the Code. The Tax Matters Member shall cause the Company accountants to prepare and file federal, state and local tax returns for the Company on a timely basis, and shall furnish copies thereof to the Members with required partnership schedules showing allocations of book and tax items. 5.6 INTERIM ACCOUNTING. The Tax Matters Member may cause the books of account of the Company to be closed on an interim basis when the Tax Matters Member deems such closing necessary or appropriate under the circumstances, including a transfer of Units causing a termination of the Company for tax purposes. ARTICLE VI GOVERNANCE; BOARD OF DIRECTORS 6.1 MANAGING MEMBER. The Managing Member shall be responsible for the management of the business and affairs of the Company and the Subsidiaries and shall manage the Company and the Subsidiaries (or cause the Subsidiaries to be managed) in accordance with this Agreement, the Subsidiaries' respective organizational documents, the Company's contractual obligations, the Subsidiaries' contractual obligations and applicable law. Except as otherwise expressly herein provided, the Managing Member shall have, and is hereby granted, full, complete and exclusive power, authority and discretion under all circumstances to manage the business of the Company and to take all actions for and on behalf of the Company and in its name as the Managing Member shall, in its sole and absolute discretion, deem necessary, desirable or appropriate to carry out the purposes for which the Company was organized (including actions in respect the Company's ownership interests in the Subsidiaries), and the approval of no other Member or other Person shall be required in connection therewith. The Managing Member shall have the power and authority to sign for and/or bind the Company if the approval of the Board has been obtained or is not required for the taking of such action; and, except as provided in Sections 6.2(e)(xviii), 8.4(a) and 10.2(b), no other Member shall have the power or authority to sign for and/or bind the Company under any circumstance. 6.2 MATTERS RELATING TO THE BOARD. (a) Number of Directors. The total number of directors constituting the Board shall at all times equal four (4). (b) Designation of Directors. (i) The Board shall at all times consist of two (2) directors designated by GGPLP or any Transferee of GGPLP's Units pursuant to a Transfer made in accordance with this Agreement (the "GGPLP Directors") and two (2) directors -26- designated by TRS or any Transferee of TRS' Units pursuant to a Transfer made in accordance with this Agreement (the "TRS Directors"). To carry out the provisions of this Section 6.2, each Member hereby designates the Persons set forth opposite its name below as directors of the Company, to serve until each such director's successor has been designated:
Designating Member Directors - ------------------ --------- ~~GGPLP John Bucksbaum Robert A. Michaels TRS Mark Kirincich Daniel Ault~~
(ii) No director may be removed from office except by the Member that designated such director. The Member that designated a director shall have the right, with or without cause, to remove such director from the Board by providing written notice thereof to the other Member; and, in the event of a vacancy in a director position, the Member that designated the director who previously held such vacant position shall have the right to designate a replacement by providing written notice thereof to the other Member. (c) Actions by Directors. (i) Quorum. At all meetings of the Board, a quorum for the transaction of business shall consist of one director designated by each Member. In case at any meeting of the Board a quorum shall not be present, the members of the Board present may adjourn the meeting from time to time until a quorum shall be present. (ii) Regular Action. When action is to be taken by vote of the Board, each member of the Board shall be accorded one vote. Each and every action taken by vote of the Board shall be authorized by the majority affirmative vote of the directors present at a duly constituted meeting at which a quorum is present and acting throughout; provided, however, no action shall be authorized without the affirmative vote of at least one of the TRS Directors and at least one of the GGPLP Directors. (d) Meetings of the Board; Etc. (i) The Board shall meet 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. (ii) 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. -27- (iii) Meetings of the Board shall be presided over by the GGPLP Director who is the most senior ranking officer of GG Properties present at such meeting or, in the absence of any officer of GG Properties, by a chairman chosen at the meeting. The chairman shall choose a Person to act as Secretary. (iv) 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. 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. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in any written waiver of notice. (v) Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if all members of the Board consent thereto in writing, and any written consent shall be filed with the minutes of proceedings of the Board. (e) Actions Requiring Board Approval. In addition to the other actions requiring Board approval as expressly provided herein and unless otherwise approved herein, the Company shall not take, or permit any Subsidiary to take, any of the following actions without the approval of the Board (but no other actions shall require the approval of the Board): (i) Sale, exchange or other disposition of all or a portion of any Company or Subsidiary real property or equity interest in any Subsidiary, the lease of all or substantially all of any Property (other than a sale, exchange, lease or other transfer among the Company and/or its Wholly-Owned Subsidiaries or the lease of individual spaces at any Property), or the lending of money by the Company or its Subsidiaries (other than loans between the Company and any Wholly-Owned Subsidiary or among Wholly-Owned Subsidiaries and the extension of credit in the ordinary course of business, including the granting of inducements to tenants in the form of loans that are consistent with applicable Leasing Guidelines); (ii) Approval of Annual Business Plans as provided in Section 6.3; (iii) During any Fiscal Year or other period, expenditure by the Company and its Subsidiaries of amounts for such Fiscal Year or other period in respect of any Property (other than expenditures for Nondiscretionary Items or expenditures expressly authorized elsewhere in this Agreement or pursuant to another section or subsection hereof, including the schedules attached hereto, which may be made without restriction) in excess of 110% of the total expenditures set forth in the approved Annual Business Plan for such year or other period in respect of such Property; provided, however, that for the remainder of 2002 and subject to the other paragraphs of this -28- Section 6.2(e), the Company shall operate, and shall cause the Subsidiaries to operate, the Properties in a manner which is consistent with the operation by GGPLP of its properties generally, and the Company and its Subsidiaries may make such expenditures as are consistent with the operation of the Properties in such manner without the consent of the Board (but the making of capital expenditures during the remainder of 2002 shall require the approval of the Board unless they are in connection with tenant leasing or constitute Nondiscretionary Items); (iv) Incurrence by the Company and/or its Subsidiaries of Indebtedness which, together with Indebtedness previously incurred by the Company and/or the Subsidiaries, exceeds (A) $500,000 as to any Subsidiary and (B) the product of $500,000 and the number of Properties at the time of such incurrence as to the Company and the Subsidiaries taken as a whole; provided, however, that (X) the provisions of this paragraph shall not apply to the incurrence of the Acquisition Financing (or the exercise of extension options in connection therewith), or the incurrence of the Extended Term Financing and (Y) any Indebtedness referred to in the preceding clause (X) or the incurrence of which has been approved by the Board shall not be counted in determining whether the limits contained in this paragraph have been exceeded; (v) The restructuring, settlement or prepayment of any Indebtedness that required the approval of the Board pursuant to clause (iv) of this Section 6.2(e); (vi) Mortgage of or grant of security interests in Company or Subsidiary assets, including the equity interests in any Subsidiary; provided, however, that (A) the provisions of this paragraph shall not apply to the grant of a mortgage and/or security interests in connection with the Acquisition Financing or the Extended Term Financing and (B) the incurrence of a personal property lease obligation permitted under the other provisions hereof shall not be deemed to be the granting of a mortgage or security interest in Company or Subsidiary assets; (vii) Execution by the Company or any Subsidiary of a reciprocal easement agreement or individual lease agreement for leased premises in excess of 15,000 square feet and the incurrence of all related costs (or the extension or termination of, or any amendment to or modification of the material economic terms of, any such agreement); (viii) The conduct by the Company and its Subsidiaries of any business other than the Business; (ix) Approval of leases not in compliance with the leasing guidelines set forth in the applicable Annual Business Plan; (x) Decisions to maintain Company and Subsidiary cash reserves in excess of the amount of reserves that the Managing Member otherwise is permitted to maintain hereunder; (xi) Issuance of additional Units or other equity interests in the Company or any of its Subsidiaries (other than issuances of equity interests in any -29- Subsidiary to the Company or to any Wholly-Owned Subsidiary) or any call for additional Capital Contributions pursuant to Article XII; (xii) Merger, consolidation, liquidation, dissolution, recapitalization or other similar corporate organizational change in respect of the Company or any Subsidiary; provided, however, that the provisions of this paragraph shall not apply to a merger or consolidation of a Subsidiary with or into the Company and/or one or more Wholly-Owned Subsidiaries, a liquidation and/or dissolution of a Subsidiary in connection with which the Property of such Subsidiary is transferred to the Company or to any Wholly-Owned Subsidiary or the recapitalization or other similar organizational change in respect of any Subsidiary that does not adversely affect any Member or the power of the Board hereunder; (xiii) Execution of any property management agreement or other agreement for the provision of services described in Section 7.1 (other than the management and/or other agreement or agreements which may be executed pursuant to Section 7.1), the amendment, extension or termination of any property management agreement or other agreement for the provision of the services described in Section 7.1 (including the management or other agreement or agreements that may be executed pursuant to Section 7.1) or the assignment of any such management or other agreement other than to any Transferee of the Units held by GGPLP or any Affiliate of such Transferee; (xiv) Acquisition by the Company or any Subsidiary of any real property or option to acquire real property; (xv) The taking of any action that would constitute a Bankruptcy Event in respect of the Company or any Subsidiary; (xvi) Any modification to the organizational documents of any Subsidiary which would adversely affect any Member or the power of the Board hereunder; provided, however, that the provisions of this paragraph shall not apply to the modifications described in Schedule 6.2(e)(iv) hereof; (xvii) Undertaking by the Company or any Subsidiary of an obligation to expend an amount in any year for which there is not yet an Annual Business Plan in excess of the amount that could be expended therefor pursuant to Section 6.3 if there were no Annual Business Plan for such year; (xviii) Entering into any transaction by the Company or any Subsidiary with the Managing Member or an Affiliate thereof, other than a transaction that (A) does not involve the incurrence of Indebtedness, (B) is entered into upon terms that are no less favorable to the Company or such Subsidiary than the Company or such Subsidiary would obtain in a comparable arm's-length transaction and (C) is cancellable in the event that the Properties are sold or such Managing Member no longer owns Units; provided, however, that (X) the provisions of this paragraph shall not apply to the arrangements described in Article VII and elsewhere in this Agreement, including the Schedules hereto and (Y) with respect to any agreement to which this paragraph applies and -30- notwithstanding anything to the contrary contained herein, TRS shall have the right to act on behalf of the Company or the applicable Subsidiary without approval of the Board in enforcing any rights of the Company or such Subsidiary under such agreement; (xix) Incurrence or assumption of any Guarantee by the Company or any Subsidiary (other than the incurrence of any Guarantee by the Company or any Subsidiary in connection with the Acquisition Financing or the Extended Term Financing or the incurrence of any Guarantee by any Subsidiary of the obligations of another Wholly-Owned Subsidiary); (xx) Commencement of litigation against any Major Occupant or lender, litigation in which the amount in dispute is more than $100,000 and litigation in which the costs of defense or prosecution thereof are reasonably expected to exceed $25,000 and any material action taken in connection therewith, including the settlement thereof; provided, however, that the provisions of this paragraph shall not apply to litigation involving disputes over common area maintenance charges or the like or litigation which is covered by insurance (regardless of whether there is a deductible); and (xxi) Material deviation from the insurance requirements described in Schedule 6.2(xx). The Members hereby approve the Acquisition Transactions (which shall not require Board approval), and the Company shall pay (and/or cause the Subsidiaries to pay) the costs of the types described on Schedule 6.2 incurred by the Company, the Subsidiaries and/or GGPLP in connection with the consummation of the Acquisition Transactions (the "Acquisition Costs"). Notwithstanding anything to the contrary contained herein, (X) except as provided in clause (Z) of this paragraph, TRS shall not permit the TRS Directors to unreasonably withhold or delay their approval of any new Property Indebtedness proposed by the Managing Member or the grant of any mortgage or security interest or the making by the Company or any Subsidiary of a Guarantee in connection therewith, (Y) the fact that the incurrence of such new Property Indebtedness, together with the Retained Debt, would result in a loan to value ratio of no more than 65% (60% during such time as the incurrence of new Retained Debt is prohibited pursuant to Section 10.6(c)) on a Company-wide basis does not constitute a reasonable basis upon which to object to such new Property Indebtedness and (Z) the TRS Directors may object to the incurrence of new Property Indebtedness if the incurrence of such new Property Indebtedness, together with the Retained Debt, would result in a loan to value ratio of more than 65% (60% during such time as the incurrence of new Retained Debt is prohibited pursuant to Section 10.6(c)) on a Company-wide basis. The Company shall permit TRS to review the loan documents relating to any loan that is part of the Acquisition Financing or the Extended Term Financing prior to the consummation of such loan, whether the consummation thereof occurs at Closing or thereafter and shall consider, but shall not be obligated to accept, the comments of TRS and/or its counsel thereon. -31- 6.3 ANNUAL BUSINESS PLANS. (a) On or before November 15 of each year, the Managing Member shall cause to be prepared and submitted to the Board for approval a proposed annual business plan (a "Proposed Annual Business Plan") for the following year (including an annual capital budget, operating budget and leasing guidelines for each Property, which leasing guidelines shall be on a space-by-space basis and only shall be required to specify figures for minimum square foot base rentals, maximum aggregate tenant inducement costs, minimum and maximum lease terms and standards for other material economic terms (as approved by the Board, an "Annual Business Plan"). Notwithstanding the foregoing, the Managing Member shall not be obligated to deliver the Proposed Annual Business Plan for 2003 until January 1, 2003. Each Proposed Annual Business Plan also may itemize any transaction or matter requiring approval of the Board pursuant to Section 6.2(e) (other than Section 6.2(e)(ii)). (b) 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 such Proposed Annual Business Plan exclusive of the items as to which there is disagreement. If there is disagreement over any item in such Proposed Annual Business Plan or there is not yet an Annual Business Plan for such year, then the Company and the Subsidiaries may, until the disagreement over such item is resolved or there is an Annual Business Plan for such year, as the case may be, (i) expend amounts for Nondiscretionary Items and (ii) except as to items which are included in the Annual Business Plan, if any, for such year, (A) expend 110% of the amount budgeted for each item of operating expenditure in the Annual Business Plan for the previous Fiscal Year (or, in the event such previous year is 2002, 110% of the amount expended during all of 2002 therefor by the Company, the Subsidiaries and/or the prior owners of the Properties) and (B) expend such amounts in connection with leasing (including the making of capital expenditures) as is equal to the average of the amounts expended by the Company, the Subsidiaries and the prior owners of the Properties therefor during the five immediately preceding calendar years and otherwise lease the Properties in a manner consistent with the leasing of the Properties during the previous calendar year (and such amounts shall be deemed to be included in the applicable Annual Business Plan). (c) Notwithstanding anything to the contrary contained herein (including the provisions of Section 6.2), expenditures for Nondiscretionary Items shall not be limited by amounts set forth in an Annual Business Plan or by any other provisions hereof. (d) The Managing Member acknowledges that the fiscal year of TRS is July 1-June 30, and the Managing Member agrees that, in order to assist TRS in preparing its budgets and on or before March 1 of each year, the Managing Member shall deliver to TRS projections for the Company for the TRS fiscal year commencing on the following July 1. -32- 6.4 CONDUCT OF BUSINESS. (a) To the extent consistent with the other provisions of this Agreement, the Company and its Subsidiaries shall 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 shall at all times following the date hereof qualify, and each Member shall cause the Company to operate in a manner so that it will at all times hereafter qualify as an "operating company" under Pension and Welfare Benefits Administration Regulation Section 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. (c) The Company and each of its Subsidiaries shall endeavor to operate its business and structure its investments in a manner so as to minimize, to the extent reasonably practicable and to the extent not inconsistent with the best interests of the Company or the provisions of this Agreement, the amount of "unrelated business taxable income" within the meaning of Section 512 of the Code ("UBTI") to any Member who is subject to tax on UBTI pursuant to Section 511(a)(2) of the Code. 6.5 RIGHT OF PUBLIC TO RELY ON AUTHORITY OF THE MEMBERS. Nothing herein contained shall impose any obligations on any Person or firm doing business with the Company to inquire as to whether or not the Managing Member has exceeded its authority 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. 6.6 WAIVER AND INDEMNIFICATION. (a) Notwithstanding anything to the contrary contained in this Agreement (including the Schedules attached hereto), neither of the Members (including the Managing Member) nor any Person acting on its behalf pursuant hereto (including the Board members and GGMI), 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 it (or any Person acting on its behalf, including the Board members and GGMI) in connection with the management of the Company and/or the Subsidiaries or the performance of services for them or any of them and within the scope of the authority conferred upon them by this Agreement, the Board 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 (and the engagement in conduct permitted by Section 12.3 shall be deemed to have met such standards). The Company shall, and hereby does, indemnify and hold harmless the Members (including the Managing Member) and their Affiliates and any individual -33- acting on their behalf (including the Board members and GGMI) from any loss, damage, claims or liability, including reasonable attorneys' fees and expenses, incurred by them (i) by reason of any act performed or omitted to be performed by them or any Person acting on their behalf (including the Board members and GGMI) in connection with the management of, or provision of services for, the Company and/or its Subsidiaries and/or any predecessors or successors thereof or thereto and in accordance with the standard of conduct set forth above or (ii) in enforcing the provisions of this indemnity. (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 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 nonappealable judgment not to be entitled to such indemnification. (c) The indemnity obligations under this Section 6.6 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 and 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 VII PROPERTY MANAGEMENT AND OTHER SERVICES AND COMPENSATION THEREFOR; COMPANY OPERATING COSTS; ETC. 7.1 PROPERTY MANAGEMENT AND OTHER SERVICES AND COMPENSATION THEREFOR. So long as any of GGPLP, a Permitted Transferee of GGPLP or a Transferee of the Units issued to GGPLP pursuant hereto (other than TRS) owns Units, GGPLP (or such Transferee) shall provide, or cause its Affiliates to provide, to the Company and the Subsidiaries property management, leasing, development and administrative services as described on Schedule 7.1-1 and the provider of such services shall receive as compensation therefor the fees set forth on Schedule 7.1-2; provided, however, that the foregoing only shall apply to a Transferee of Units who has acquired such Units in accordance with the terms hereof. The Company may enter into one or more agreements with GGPLP (or any such Transferee) and/or its Affiliates relating to the -34- provision of such services to the Company and payment of such compensation to GGPLP (or any such Transferee) and its Affiliates and containing other customary provisions. Such agreements shall be terminable by the Company without penalty in the event that TRS and/or the Company acquires all of the Units issued to GGPLP pursuant hereto. Such agreements are subject to the terms of this Agreement, and any term or provision of this Agreement that is contrary to or inconsistent with any term or provision of any such agreement shall, notwithstanding such agreement, govern and control the matter subject thereto. 7.2 COMPANY OPERATING COSTS. Subject to the other terms of this Agreement, all costs and expenses incurred in connection with (a) the management and/or operation of the Company and/or any Subsidiary or (b) the ownership, operation, management and/or development of, or other actions taken in respect of, the properties of the Company and/or any Subsidiary shall be paid by the Company and/or the Subsidiaries or, if paid or incurred by the Managing Member or any of its Affiliates, the Company shall (or shall cause the applicable Subsidiary to) reimburse the Managing Member or its Affiliates therefor. ARTICLE VIII TRANSFERS OF COMPANY UNITS 8.1 TRANSFERS. Except as expressly provided herein, no Member may Transfer its Units without the consent of the Board. The Company shall not reflect on its books any Transfer of Units to any Person except in accordance with this Agreement, and any Transfer of Units not permitted by the provisions of this Agreement shall be null and void ab initio. There shall be no Transfer of ownership interests in any Person which directly or indirectly through another Person owns Units, if after giving effect to such Transfer, such Person shall no longer be a Permitted Transferee of GGPLP or TRS (or the ultimate owner of any Transferee thereof); provided, however, that the Transfer of ownership interests or issuance of new ownership interests in GG Properties, GGPLP, GGPLP L.L.C., TRS or any such ultimate owner shall not be prohibited or otherwise restricted hereunder. 8.2 TRANSFERS TO PERMITTED TRANSFEREES. Subject to the provisions of Section 8.5, either Member shall have the right, without the approval of the Board or the other Member and without being subject to the provisions of Section 8.3, to Transfer all, but not less than all, of its Units to a Permitted Transferee of such Member. 8.3 RIGHT OF FIRST REFUSAL. (a) If a Member (the "Selling Member") desires to sell or otherwise transfer all, but not less than all, of the Units of the Selling Member to a third party (other than an Affiliate of the Selling Member or a Person that would not meet the requirements of Section 8.5(c) or (d), as applicable, in which case the proposed Transfer would be prohibited as provided therein) for cash, the Selling Member shall give the other Member (the "Recipient Member") written notice (the "Sale Notice") of all the terms, provisions and conditions with respect to such proposed sale or other transfer, including a copy of the offer or letter of intent, if any (but no Sale Notice may be delivered before the Trigger Date). Any such proposed sale or other transfer must be pursuant to a bona fide written -35- offer from a third party (other than an Affiliate of the Selling Member or a Person that would not meet the requirements of Section 8.5(c) or (d), as applicable). (b) The Recipient Member shall have a period of 30 days from the date of its receipt of the Sale Notice to accept such offer, on the same terms, provisions and conditions stated in such written offer (except as otherwise set forth herein), which acceptance must be in writing and must be given by the Recipient Member prior to the expiration of such 30 day period. Any purported acceptance made orally shall be ineffective, and any purported acceptance which varies the terms of such offer shall be deemed to be a rejection thereof for all purposes. If the Recipient Member accepts such offer in accordance with the foregoing provisions, the Recipient Member shall be bound to purchase the Units of the Selling Member in accordance with such offer (except as otherwise provided herein) and the Selling Member shall be bound to sell its Units to the Recipient Member on such terms. (c) The closing of the purchase by the Recipient Member shall be held at the principal offices of the Company no earlier than the sixtieth day and no later than the 120th day following the giving of the acceptance pursuant to Section 8.3(b). The purchasing Member may set-off against the purchase price owing to the Transferor Member any liquidated amounts owing by the Transferor Member to the Company, any Subsidiary or the purchasing Member or its Affiliates, including any amounts that have been determined to be owing in an arbitration proceeding held in accordance with the provisions of Section 13.11, or, as the case may be, the purchase price payable to a Transferor Member shall be increased by any liquidated amounts owing to the Transferor Member from the Company, any Subsidiary or the purchasing Member or its Affiliates, including any amounts that have been determined to be owing in an arbitration proceeding held in accordance with the provisions of Section 13.11. (d) In the event that the Recipient Member delivers written notice of rejection to the Selling Member or in the event that the Recipient Member fails to accept the offer as to all of the Selling Member's Units in the manner and time required by this Section 8.3, the offer made by the Selling Member shall be deemed to have been rejected by the Recipient Member and the Selling Member shall, subject to the provisions of Section 8.3(e) and Section 8.5, be free to sell, transfer, assign or convey its Units to the third party named in the Sale Notice on the terms, provisions or conditions set forth in the Sale Notice or to such third party on terms and conditions not less favorable to the Selling Member. (e) In the event that the sale of the Units to the third party is not consummated as provided above on or before 60 days after the closing date specified in the Sale Notice, no sale, transfer, assignment or conveyance of Units may be made unless the provisions of this Section 8.3 are again complied with. -36- 8.4 UNPERMITTED TRANSFERS. (a) In the case of any Transfer of Units in connection with a foreclosure, Bankruptcy Event, forfeiture, court order or by any reason other than by a voluntary act on the part of a Member or any Transfer of Units by a Member in violation of the terms of this Agreement (other than a Transfer in connection with the foreclosure or other realization on the Units of GGPLP pursuant to the security interest granted under Section 10.5) (each, an "Unpermitted Transfer"), the Company (or its assignee as provided below) shall have the right to purchase such Units pursuant to and on and subject to the terms and conditions of this Section 8.4. Notwithstanding anything to the contrary contained herein, any action by the Company under this Section 8.4 only shall require the action of the non-Transferring Member. Upon the Unpermitted Transfer of any Units of any Member, such Member and the Person to whom such Units shall have been Transferred (the "Unpermitted Transferee") shall promptly (but in no event later than two (2) business days after such Unpermitted Transfer is effected) furnish written notice to the Company indicating that the Unpermitted Transfer has occurred, specifying the name, address and identity of the Unpermitted Transferee, and giving a detailed description of the circumstances giving rise to, and stating the legal basis for, such Unpermitted Transfer. Upon the receipt of such notice or upon discovery of the Unpermitted Transfer by the non-Transferring Member or the Company, the Value of the Units of the Unpermitted Transferee shall be determined and for thirty (30) days after such determination, the Company shall have the right (exercisable by notice given to the Unpermitted Transferee within such thirty (30) day period), which may be assigned to any other Person approved by the Board, to purchase, and upon the due exercise of such right the Unpermitted Transferee shall have the obligation to sell, all (but not less than all) of the Units acquired by the Unpermitted Transferee for a purchase price equal to the product of 70% (100% in the case of a Transfer in connection with a Bankruptcy Event) and the Value of such Units (the "Unpermitted Transfer Purchase Price"). (b) Any Unpermitted Transferee and the Company (or its assignee) shall mutually determine a closing date with respect to any exercise of the purchase right set forth in Section 8.4(a) (the "Unpermitted Transfer Closing Date") which, subject to the last sentence of Section 8.4(c), shall not be more than sixty (60) days after the expiration of the 30-day period applicable to such purchase. Such closing shall be held at 10:00 a.m., local time, at the office of the Company's counsel, or at such other time or place as the parties mutually agree. (c) On the Unpermitted Transfer Closing Date, (i) the Unpermitted Transferee shall deliver certificates, if any, representing the Units being sold, together with duly executed assignments in form sufficient to Transfer such Units to the Company (or its assignee) free and clear of any Liens other than a Lien in favor of any Company and/or Subsidiary lender (and such Unpermitted Transferee hereby represents and warrants that such Units shall, immediately prior to such sale, be so free and clear), (ii) subject to the provisions of Section 9.2(c) (which are made applicable pursuant to the last sentence of this paragraph), the Company (or its assignee) shall pay to the Unpermitted Transferee the Unpermitted Transfer Purchase Price for such Units in immediately available funds or, at the election of the Company, by delivery of a promissory note providing for payment of the Unpermitted Transfer Purchase Price in three equal annual installments, -37- without interest, commencing on the first anniversary of the Unpermitted Transfer Closing Date, and (iii) each of the Company (or its assignee) and the Unpermitted Transferee shall execute and deliver such other documents and take such other actions as the other reasonably may request in order to consummate such purchase and sale. The provisions of Sections 9.2(c) and (e) shall apply to a purchase and sale of Units pursuant to this Section 8.4. (d) In the event that, as the result of a purchase and sale pursuant to this Section 8.4, any Member owns less than two-thirds of the Units issued or Transferred to it pursuant hereto, (i) such Member shall no longer have the right to designate directors pursuant to this Agreement or to approve matters pursuant to Section 6.2(e), (ii) the directors designated by such Member shall be deemed to have resigned and (iii) if such Member is the Managing Member, such Member shall no longer have the right to be the Managing Member, to provide (or cause to be provided) the services described in Section 7.1 or to receive (or direct that its Affiliates receive) the compensation therefor, and (iv) and the other Member shall be the Managing Member and have the right to provide (or cause the provision of) such services and to receive (or direct that its Affiliates receive) the compensation therefor. 8.5 OTHER TRANSFER RESTRICTIONS. Notwithstanding anything to the contrary contained herein: (a) No Units may be sold or transferred unless they are first registered under the 33 Act and applicable state securities laws or an exemption from such registration is available. Each Transferring Member shall, not later than the effective date of such Transfer, execute and deliver or cause to be executed and delivered to each Member, at the sole cost and expense of the Transferring Member, (i) a counterpart of the instrument of Transfer; (ii) a certificate stating that such Transfer was made in accordance with this Agreement, the Certificate of Formation and all applicable laws and regulations; and (iii) unless waived in writing by the Members holding 75% or more of the Units not held by the Transferring Member, a written opinion, in form and substance reasonably satisfactory to such Members, from counsel reasonably satisfactory to such Members, to the effect that (x) either the securities proposed to be Transferred have been effectively registered under all applicable securities laws or such Transfer may be effected without the registration of such Units under any applicable securities laws and (y) the Transferee has the legal right, power and capacity to own the Units proposed to be Transferred. All reasonable costs and expenses incurred by the Company in connection with any Transfer shall be paid by the Transferring Member or the Transferee. (b) If any Member shall acquire additional Units and if any Transferee of any Member shall acquire any Units, in each case in any manner, whether by a permitted Transfer, operation of law or otherwise, such Units shall be held subject to all of the terms of this Agreement, and by taking and holding such Units such Person shall be conclusively deemed to have agreed to be bound by and to comply with all of the terms and provisions of this Agreement. At the request of the Company or any Member, a Transferee of Units shall execute and deliver to the Company and each other Member an instrument in form reasonably satisfactory to the Company pursuant to which such Transferee agrees to be bound by the terms and provisions of this Agreement. -38- (c) TRS may not Transfer all or any portion of its Units, and no direct or indirect equity interest in TRS or any Affiliate of TRS that owns Units may be Transferred, to any Person if the business of such Person or any of its Affiliates or a portion of any such business is the development, ownership or management of shopping malls (other than institutional investors which own shopping centers or interests therein but do not, directly or through Affiliates, act as property managers of shopping centers). (d) GGPLP may not Transfer all or any portion of its Units, and no direct or indirect equity interest in any Affiliate of GGPLP that owns Units may be Transferred to any Person that is not a Major Center Owner or a Permitted Transferee of a Major Center Owner, provided, however, that the Transfer of ownership interests or issuance of new ownership interests in GG Properties, GGPLP or GGPLP L.L.C. shall not be prohibited or otherwise restricted hereunder. (e) No Transfer of Units pursuant to this Agreement (other than pursuant to Section 8.3 or 8.4 or Article IX) may be made if such Transfer would result in constructive termination of the Company pursuant to Code Section 708(b)(1)(B). (f) No Transfer of Units pursuant to this Agreement shall release or be deemed to release the Transferor of such Units from its obligations under this Agreement (but a Transferor of Units pursuant to Section 8.3 or Article IX shall be released from its obligations hereunder other than those that relate to the period prior to such Transfer). ARTICLE IX BUY-SELL RIGHT 9.1 BUY-SELL NOTICE. Each Member shall have the right (the "Buy-Sell Right") to deliver a written notice (the "Buy-Sell Notice") to the other Member at any time on or after the Trigger Date. The Member that delivers a Buy-Sell Notice shall be referred to as the "Offering Member" and the other Member shall be referred to as the "Offeree Member." The Buy-Sell Notice shall contain a price per Unit designated by the Offering Member and shall state that the Offering Member is invoking the Buy-Right. 9.2 RIGHT OF OFFEREE MEMBER TO PURCHASE OFFERING MEMBER'S UNITS. (a) The Buy-Sell Notice shall constitute an irrevocable offer by the Offering Member to sell to the Offeree Member all of its Units at the purchase price per Unit specified in the Buy-Sell Notice and upon the other terms contained herein. (b) The Offeree Member may exercise such right by providing written notice of such exercise to the Offering Member, delivered no later than 60 days after the Buy-Sell Notice is given (each such notice, a "Buy-Sell Response Notice") and, in the event of such exercise, the Offeree Member shall purchase all of the Units held by the Offering Member and the Offering Member shall sell such Units to the Offeree Member at the price specified and otherwise upon the terms set forth herein. If the Offeree Member shall not deliver a Buy-Sell Response Notice within such 60-day period, the Offering Member shall purchase all of the Units of the Offeree Member for the price set forth in -39- the Buy-Sell Notice and otherwise upon the terms set forth herein. The purchase price for any purchase and sale of Units pursuant to this Article IX shall be paid in cash. (c) Unless otherwise provided in the Buy-Sell Notice, the Transferee shall use reasonable best efforts to obtain, on or before the closing of the purchase and sale pursuant to this Article IX, the release of the Transferring Member and its Affiliates (collectively, the "Releasees") from any liability (whether as maker, guarantor or otherwise) with respect to the Indebtedness of the Company and/or its Subsidiaries and, following such closing, the Transferee shall indemnify, defend and hold harmless the Transferring Member and the other Releasees from and against any claims, causes of action, losses, costs, damages and liabilities (including reasonable attorneys' fees) arising from or resulting out of the Company and/or Subsidiary Indebtedness, including Indebtedness as to which the Transferee Person was unable to obtain a release. The purchasing Person may set-off against the purchase price owing to the Transferor Member any liquidated amounts owing by the Transferor Member to the Company, any Subsidiary or the purchasing Person or its Affiliates, including any amounts that have been determined to be owing in an arbitration proceeding held in accordance with the provisions of Section 13.11, or, as the case may be, the purchase price payable to a Transferor Member shall be increased by any liquidated amounts owing to the Transferor Member from the Company, any Subsidiary or the purchasing Member or its Affiliates, including any amounts that have been determined to be owing in an arbitration proceeding held in accordance with the provisions of Section 13.11. (d) The closing of the purchase and sale of Units pursuant to this Article IX shall take place at the offices of counsel to the Offering Member and shall occur on the date that is 60 days after the date of the Buy-Sell Response Notice or, if no Buy-Sell Response Notice is given, 60 days after the last day for the giving of the Buy-Sell Response Notice (or, if such date is not a business day, on the next succeeding day that is a business day) unless the Offering Member and Offeree Member shall have agreed upon a different date in writing. At such closing, (i) the Transferring Member shall deliver to the Transferee Person the certificate or certificates, if any, representing the Units of the Transferring Member, together with duly executed assignments relating thereto in form sufficient to Transfer to the Transferee Person the Transferring Members' Units, free and clear of any Liens other than a Lien in favor of any Company and/or Subsidiary lender (and the Transferring Member hereby represents, warrants and covenants that such Units shall, immediately prior to such sale, be so free and clear), (ii) subject to the provisions of Section 9.2(c), the Transferee Person shall deliver to the Transferring Member the purchase price for such Units in immediately available funds and (iii) each of the Transferring Member and Transferee Person shall execute such other documents and take such other actions as shall be reasonably requested by the other to consummate such purchase and sale. (e) If any purchase pursuant to this Article IX is subject to the premerger notification and reporting requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"), and the rules and regulations thereunder (the "Rules"), then each of the Offering Member and Offeree Member shall use its reasonable best efforts to (i) duly file with the Federal Trade Commission ("FTC") and the Antitrust Division of the Department of Justice (the "Antitrust Division"), no later than the tenth -40- (10th) day after the date of the Buy-Sell Response Notice or, if no Buy-Sell Response Notice is given, the last day for the giving of the Buy-Sell Response Notice, fully completed premerger notification and report forms which include a request for early termination of the waiting period pursuant to Section 7A(b)(2) of HSR and Rule 803.11 thereunder, and (ii) respond in a timely manner to all oral or written requests from the FTC or the Antitrust Division for additional information or documentary materials. Notwithstanding anything to the contrary contained herein, the purchasing Member shall not be obligated to contest any action or decision taken by the FTC or the Antitrust Division challenging the consummation of the acquisition of Units by the purchasing Member or any of the purchasing Member's Affiliates or agree to the imposition of any material restriction on the business or the operations of the Company, any Subsidiary, the purchasing Member or any of the purchasing Member's Affiliates. The filing fees incurred in connection with the premerger notification and report forms shall be borne equally by the Offering Member and Offeree Member. If the Offering Member and the Offeree Member have complied with the provisions of the immediately preceding paragraph but the applicable waiting period under HSR with respect to the purchase of Units pursuant to this Article IX has not expired or been terminated by the closing date set forth in Section 9.2(d), then, notwithstanding anything to the contrary in Section 9.2(d), the closing date shall be extended to the fifth business day after all applicable waiting periods under HSR have expired or been terminated. From and after the original closing date set forth in this Section 9.2 (but subject to the second to last sentence of the first paragraph of this Section 9.2(e)), each of the Offering Member and Offeree Member shall continue to use its reasonable best efforts to cause the applicable waiting period under HSR to be terminated. ARTICLE X MATTERS RELATING TO RETAINED DEBT 10.1 NATURE OF RETAINED DEBT; DESIGNATION OF RETAINED DEBT; ETC. (a) The Managing Member shall, at the time of incurrence or assumption of any new Property Indebtedness and subject to the last sentence of this paragraph, designate such portion of the principal amount of such Property Indebtedness as "Retained Debt" to the extent necessary so that the aggregate outstanding principal amount of all Property Indebtedness (other than Retained Debt) does not exceed 60% of the Fair Market Value of the Properties at such time (but the Managing Member may not designate any portion of such principal amount as "Retained Debt" to the extent that the aggregate principal amount of all Property Indebtedness (other than then existing Retained Debt) would be less than 60% of the Fair Market Value of the Properties at such time). For purposes of this Section 10.1(a) and other provisions hereof (including Section 6.2 and Schedule 6.2(e)(iv)) relating to the calculation of loan-to-value ratios, the Fair Market Value shall be determined by the Managing Member or, if TRS requests, by independent appraisers selected by the Managing Member (but the Fair Market Value of the Initial Properties on the date hereof shall be equal to the gross purchase prices in the case of the OTR Properties and $157,000,000 in the case of the Clackamas Property). -41- The Managing Member may not otherwise designate any portion of any Property Indebtedness as Retained Debt. Notwithstanding anything to the contrary contained herein, the parties hereto agree that the initial Retained Debt is described on Schedule 10.1(a) and the Managing Member agrees that at any time that additional or substitute Property Indebtedness shall be incurred, the Retained Debt shall be adjusted so that the proportion of Retained Debt applicable to each Property shall be equal to said Property's proportion of the overall Property Indebtedness. (b) GGPLP shall be entitled to receive the proceeds of the Retained Debt (including replacement Retained Debt but excluding the initial Retained Debt relating to the Silver City Property) directly from the applicable lender(s), and such proceeds shall not be treated as having been received by the Company and distributed to GGPLP except as provided in Section 10.6(c) (but GGPLP shall cause the repayment of the principal, interest and prepayment premium allocable to any Retained Debt being replaced by any replacement Retained Debt). (c) For purposes hereof, the payments, costs and expenses that are allocable or attendant to the Retained Debt or any action taken in connection therewith shall be the payments, costs or expenses that would not have been made or incurred if such Retained Debt had not been incurred or such action had not been taken; provided, however, that (i) in the event that any Retained Debt is required to be prepaid in accordance with the terms hereof and such prepayment necessitates the prepayment of other Property Indebtedness (which prepayment of other Property Indebtedness otherwise would not have occurred), all of the prepayment penalties owing as a result thereof (but only the portion of the principal constituting Retained Debt) shall be deemed to be attendant or allocable to the prepayment of the Retained Debt (and GGPLP shall pay all of such prepayment penalties) and (ii) none of the costs and expenses owing to the lenders and/or others in connection with the initial incurrence or assumption of any Property Indebtedness (including the portion thereof that is designated as Retained Debt), including the financing fee referred to in Schedule 7.1-2 and any origination or upfront fee, shall be deemed to be attendant or allocable to the Retained Debt (and the Company shall pay all of such costs and expenses). (d) For all purposes, the Retained Debt shall be treated as the indebtedness of GGPLP (and not indebtedness of the Company). 10.2 PAYMENT OF RETAINED DEBT. (a) GGPLP shall pay the principal, interest and other amounts (including prepayment penalties) allocable to the Retained Debt as and when due and payable. (b) GGPLP shall (i) prepay and otherwise discharge the Retained Debt in respect of any Property (including payment of prepayment penalties allocable thereto) in the event that such Property (or any direct or indirect interest therein) is Transferred (other than to another Subsidiary) and (ii) prepay and otherwise discharge all of the Retained Debt (including payment of prepayment penalties allocable thereto) in the event that any unsecured Indebtedness of GGPLP has been accelerated by the lender thereof, the Company dissolves and is liquidated and wound-up or GGPLP Transfers all of its -42- Units to the other Member or Members or other Person (other than an Affiliate of GGPLP) pursuant to this Agreement. Notwithstanding anything to the contrary contained herein, in lieu of the payments described in clause (ii) of this paragraph, GGPLP may pay to the Company an amount equal to the then outstanding aggregate principal amount of the Retained Debt (which shall be treated as a Capital Contribution of such amount to the Company), in which case the Company shall be deemed to have assumed the Retained Debt (which shall be treated as a distribution of such amount to GGPLP) and the Retained Debt shall cease to be Retained Debt for purposes hereof. If the Company uses the funds referred to in the immediately preceding sentence to prepay any single Property Indebtedness (with TRS having the right, notwithstanding anything to the contrary contained herein, to select the single Property Indebtedness to be prepaid in its sole discretion and to cause the Company to prepay such Property Indebtedness), GGPLP shall pay the prepayment penalty relating thereto. A payment required to be made pursuant to this subsection (b) shall be made concurrent with or prior to the Transfer of Properties or Units to which such payment relates, within 30 days following such acceleration or concurrent with the dissolution, liquidation and winding-up of the Company, as the case may be (except that the payment of the prepayment penalty referred to in the immediately preceding sentence shall be paid within five (5) days following receipt by GGPLP of written demand therefor). (c) GGPLP may, at any time and from time to time, prepay all or a portion of its Retained Debt to the extent permitted under the Retained Debt Loan Documents (and, upon any such prepayment, GGPLP shall pay any prepayment penalties and charges attendant thereto). 10.3 FAILURE TO MAKE PAYMENTS IN RESPECT OF RETAINED DEBT. (a) If TRS determines that GGPLP has failed to pay any principal, interest or other amount required pursuant to this Article X, TRS shall send a written notice (the "Retained Debt Default Notice") to GGPLP, notifying GGPLP of its failure to make such payment, the amount of such payment, the date such payment was due, and requesting that such payment be paid immediately. (b) If GGPLP fails to make a payment of principal, interest or other amount required under this Article X within 15 days after receiving the Retained Debt Default Notice, GGPLP shall be in default (the Member in default is referred to as a "Retained Debt Defaulting Member" and the amount that such Retained Debt Defaulting Member failed to pay is referred to as the "Retained Debt Default Amount") and the Members that are not Retained Debt Default Members (the "Retained Debt Non-Defaulting Members") may (i) pay (and hereby are granted a power of attorney to pay) the Retained Debt Default Amount (which shall be deemed to be a loan by the Retained Debt Non-Defaulting Members to the Retained Debt Defaulting Members) and/or (ii) pursue their other rights and remedies hereunder and, subject to the terms hereof, at law or in equity. Any such loan (a "Retained Debt Default Loan") shall bear interest at the per annum rate equal to Prime plus 4% and shall be due and payable on demand. The foregoing power of attorney and the power of attorney granted pursuant to Section 12.2(b) are special powers of attorney coupled with an interest, are irrevocable and shall survive the -43- dissolution of the Member granting the same and shall survive the delivery of an assignment by such Member of the whole or any portion of its Units. 10.4 INDEMNIFICATION. In addition to the obligations pursuant to Section 10.2, GGPLP agrees to indemnify, defend and hold harmless the Company and the Subsidiaries, the direct or indirect directors, officers, members (including TRS), partners, shareholders, employees, representatives and agents of the Company and the Subsidiaries and their successors and assigns (collectively, the "Indemnitees"), from and against any claims, actions, proceedings, judgments, obligations, damages, penalties, costs, expenses, liabilities of any kind or nature or losses, including sums paid in settlement of claims and reasonable attorneys' fees, paralegals' fees and expenses, court costs (including any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), and fees of consultants and experts (collectively, the "Costs") that arise directly or indirectly from the failure of GGPLP to comply with its obligations under this Article X. 10.5 SECURITY INTEREST. (a) GGPLP hereby grants to the other Member a first priority lien upon, and a security interest in, all of the Units of such Member and all amounts, payments and proceeds distributable or payable to such Member by the Company, now or in the future, as collateral security for the payment and performance of such Member's obligations under this Article X (and the grant of such lien and security interest shall be deemed permitted hereunder, including under the provisions of Article VIII). GGPLP shall execute such financing statements as the other Member shall reasonably request in order to perfect and maintain the perfection of the lien and security interest herein granted and authorizes such Member to file any financing statements as such Member shall reasonably deem necessary to perfect and maintain the perfection of such lien and security interest. Unless GGPLP becomes a Retained Debt Defaulting Member, GGPLP shall remain entitled to receive distributions and other amounts in accordance with this Agreement, including Section 4.8 and Article XI, and exercise all other rights in respect of its Units. (b) If (and only if) GGPLP becomes a Retained Debt Defaulting Member and except as otherwise provided herein, all amounts, payments and proceeds which may become distributable or payable by the Company to GGPLP shall be paid to the Retained Debt Non-Defaulting Members and shall become additional collateral hereunder. (c) This Agreement shall constitute a security agreement under the Uniform Commercial Code. If (and only if) GGPLP becomes a Retained Debt Defaulting Member, the Retained Debt Non-Defaulting Member may exercise any of the rights and remedies of a secured party under the Uniform Commercial Code with respect to the Units of GGPLP, including the right to sell, assign and deliver such Units, or any part thereof, at public or private sale. 10.6 OTHER MATTERS RELATING TO RETAINED DEBT. (a) The Company shall cause the Subsidiaries to timely comply with all of the obligations of the Subsidiaries under the Retained Debt Loan Documents (other than the -44- obligation to pay the principal, interest and other amounts that GGPLP is required to pay pursuant hereto). (b) Notwithstanding anything to the contrary contained herein, the Company shall not, and shall cause the Subsidiaries not to, amend or modify the Retained Debt Loan Documents or take other actions in respect of the Retained Debt, including prepayment of the Retained Debt, without the prior written consent of GGPLP. (c) Notwithstanding anything to the contrary contained herein, if (i) a Determination has been made that Retained Debt constitutes Indebtedness of the Company rather than Indebtedness of GGPLP and (ii) TRS (or any successor or assignee with respect to all of TRS's Units) is subject to the UBTI provisions of the Code (or TRS or any such successor or assignee later becomes subject to the UBTI provisions of the Code), then, not later than the time prescribed by law (not including extensions) for the filing of the Company's federal partnership tax return (the "Return Due Date") for the taxable year within which such Determination is made (or, in the case where TRS or any such successor or assignee later becomes subject to the UBTI provisions of the Code, not later than the Return Due Date for the taxable year within which TRS or such successor or assignee becomes subject to the UBTI provisions of the Code), the following shall occur (provided that such Determination has not been revoked, overruled, or otherwise rendered inapplicable prior to the relevant Return Due Date): (i) the receipt of the proceeds of the Retained Debt by GGPLP shall be treated as a distribution to GGPLP, (ii) the Company shall assume all obligations of GGPLP with respect to such Retained Debt (which thereafter shall cease to be Retained Debt for purposes hereof), (iii) GGPLP shall pay to TRS cash in an amount equal to the product obtained by multiplying the outstanding principal balance of such Retained Debt by TRS' Proportionate Share (as a result of which transfer, for all purposes, GGPLP shall be deemed to have contributed cash to the Company in the amount of the Retained Debt and the Company shall be deemed to have distributed such cash to GGPLP and TRS in accordance with their Proportionate Shares), (iv) commencing with January 1 of the taxable year during which such Determination is made (or, in the case where TRS or any such successor or assignee later becomes subject to the UBTI provisions of the Code, commencing with January 1 of the taxable year during which TRS or such successor or assignee becomes subject to the UBTI provisions of the Code), such Retained Debt and all items of income, gain, loss, and deduction with respect thereto shall be allocated between the Members in accordance with their Proportionate Shares, and (v) unless and until the foregoing Determination is revoked, overruled, or otherwise rendered inapplicable or TRS is no longer subject to the UBTI provisions of the Code, no other Property Indebtedness of the Company shall be designated Retained Debt. ARTICLE XI DISSOLUTION AND TERMINATION 11.1 DISSOLUTION. Unless otherwise expressly provided herein to the contrary, the Company shall continue in effect until dissolved and wound up upon the occurrence of any one or more of the following events: -45- (a) the decision of the Board to dissolve the Company; (b) the sale of all or substantially all of the Company Assets and the receipt of all consideration therefor except that if non-monetary consideration is received upon such disposition, the Company shall not be dissolved pursuant to this clause until such consideration is converted into money or money equivalent; and (c) dissolution required by operation of law. Dissolution of the Company caused by a Member in contravention of this Agreement shall be a violation of this Agreement and the other Member shall have all rights and remedies provided under applicable law and, in addition thereto, the right to any and all damages at law or in equity resulting from such violation of this Agreement. To the extent permissible by law, whether or not the business of the Company is continued by the non-defaulting Member, such non-defaulting Member shall be permitted to withhold the defaulting Member's share of Company property the defaulting Member would otherwise be entitled to under this Article XI upon the winding-up and termination of the Company as collateral security for the obligations such defaulting Member may have to the non-defaulting Member in connection with the operation and dissolution of the Company. 11.2 ACCOUNTING. Upon the dissolution, winding-up and termination of the Company, a proper accounting shall be made of the assets and liabilities of the Company, including all Net Cash Flow and the Capital Account of each Member as of the date of dissolution and of the items of Net Income and Net Loss of the Company from the date of the last previous accounting to the date of dissolution. The financial statements and reports specified in Section 5.3 shall be prepared by the Managing Member and distributed to each Member as though the date of termination were the last day of the then current Fiscal Year. The Managing Member shall also prepare a report (and deliver the same to each of the Members) setting forth in reasonable detail the manner and disposition of assets. 11.3 WINDING-UP. (a) Winding-Up. Upon the dissolution of the Company, the affairs of the Company thereafter shall be wound up and terminated as promptly as practicable in an orderly and businesslike and commercially reasonable manner, and the Members shall continue to share Net Income, Net Loss, Net Cash Flow and other items of the Company during the winding-up period in accordance with the provisions of Article IV. The winding-up of the affairs of the Company shall be conducted in accordance with the provisions of Article VI. (b) Termination. Upon the completion of the winding up of the Company and the distribution of all Company assets, the Company shall terminate and the Managing Member shall have the authority to execute and record any and all other documents required to effectuate the termination of the Company and the Members shall cooperate in the execution and delivery of any such reasonable documents required to effectuate the termination of the Company. -46- 11.4 LIQUIDATING DISTRIBUTION. In the event of the dissolution of the Company for any reason, the Company assets shall be liquidated for distribution in the following rank and order: (a) first, to the payment and discharge of all the Company's debts and liabilities in the order of priority as provided by law; (b) second, to the establishment of any necessary reserves to provide for contingent liabilities or obligations of the Company as determined by the Managing Member in its commercially reasonable judgment; and (c) the balance, if any, to the Members pro rata in accordance with their respective positive Capital Accounts, after giving effect to all contributions, distributions and allocations for all periods, including the period during which such distributions occur. 11.5 DISTRIBUTIONS IN ACCORDANCE WITH CAPITAL ACCOUNTS. (a) In the event the Company is "liquidated" within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g) (the "Liquidation Event"), distributions shall be made to the Members in accordance with their respective positive Capital Accounts in compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(2), such distributions to be made on or before a date (the "Final Liquidation Date") no later than the later to occur of (i) the last day of the taxable year of the Company in which the Liquidation Event occurs and (ii) ninety days after the date of such Liquidation Event. (b) If the Board determines that the distributions will not be timely made as provided in foregoing paragraph (a), all of the assets and liabilities of the Company shall be distributed in trust with such person as may be selected by the Board, as trustee; the purpose of the trust is to allow the Company to comply with the timing requirements contained in foregoing paragraph (a). The trustee of said trust shall distribute the former Company assets (however constituted, enhanced or otherwise) as promptly as he deems proper and in the same manner as directed in this Section 11.5 (without regard to this sentence or the preceding sentence) and otherwise as required hereunder. The trust shall be terminated as soon as possible after the trust property is distributed to the beneficiaries thereof. 11.6 NEGATIVE CAPITAL ACCOUNTS. No Member shall have an obligation to the Company or any other Member to restore to zero any negative balance in its Capital Account. 11.7 DISTRIBUTIONS IN KIND. Company Assets may not be distributed in kind without the approval of the Board. 11.8 NO REDEMPTION. Except as expressly provided herein, the Company may not acquire, by redemption or otherwise, any Units of any Member. 11.9 RETURN OF CAPITAL. No Member shall have any right to receive the return of its Capital Contribution or to seek or obtain partition of assets of the Company, other than as expressly provided in this Agreement. -47- ARTICLE XII ADDITIONAL CAPITAL CONTRIBUTIONS; OTHER ACTIVITIES 12.1 ADDITIONAL CAPITAL CONTRIBUTIONS. (a) In the event that the Board determines that the Company requires additional funds for any reason, the Board shall deliver to the Members a funding notice (each, a "Funding Notice") specifying the amount of the funds required at such time (each, a "Required Funds Amount") and the Members' Proportionate Shares thereof. Each Member shall, within fifteen (15) days after a Funding Notice is given, pay its Proportionate Share of the applicable Required Funds Amount to the Company as an additional Capital Contribution. Such additional Capital Contributions shall be made in immediately available funds. (b) Each Member waives its right to any setoff or reduction with respect to its obligation to make additional Capital Contributions based on any claim that such Member has against the Company or the other Members. (c) No additional Units shall be issued to any Member on account of any additional Capital Contribution made by such Member pursuant to this Article XII, but the Capital Account of such Member shall be increased on account of such Capital Contribution. 12.2 FAILURE TO MAKE ADDITIONAL CAPITAL CONTRIBUTIONS. (a) If a Member determines that another Member has failed to make an additional Capital Contribution required pursuant to this Article XII, such Member shall send a written notice (the "Contribution Default Notice") to such other Member, notifying such other Member of its failure to make such additional Capital Contribution, the amount of such additional Capital Contribution, the date such additional Capital Contribution was due, and requesting that such additional Capital Contribution be paid immediately. (b) If a Member fails to pay an additional Capital Contribution required under this Article XII within 15 days after receiving the Contribution Default Notice then such Member shall be in default (the Member in default is referred to as a "Contribution Defaulting Member" and the amount that such Contribution Defaulting Member failed to contribute is referred to as the "Contribution Default Amount") and the Members that are not Contribution Defaulting Members (the "Contribution Non-Defaulting Members") may (i) pay (and hereby are granted a power of attorney to pay) the Contribution Default Amount (which shall be deemed to be a loan by the Contribution Non-Defaulting Members to the Contribution Defaulting Members) and/or (ii) pursue their other rights and remedies hereunder and, subject to the terms hereof, at law or in equity. Any such loan (a "Contribution Default Loan") shall bear interest at the per annum rate equal to Prime plus 4% and shall be due and payable on demand. 12.3 OTHER ACTIVITIES. Each Member and its Affiliates (including the Board members designated by it) may engage or invest in or own any other property, activity or venture (whether -48- or not competitive with the business or properties of the Company or its Subsidiaries) or possess any direct or indirect interest therein independently or with others. None of the Members, or any other Person employed by, related to or in any way affiliated with any Member or the Company (including the Board members) 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 property, activity or venture or interest therein. None of the Company, the Members, the creditors of the Company or any other Person employed by, related to or in any way affiliated with any Member or the Company shall have (a) 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 (including the Board members) by reason of any direct or indirect investment or other participation, whether active or passive, in any such other property, activity or venture or interest therein or (b) any right to any such other property, activity or venture or interest therein or the income or profits derived therefrom. The Managing Member only shall be required to devote such time to the management of the business of the Company as it deems necessary to promote the interests of the Company. ARTICLE XIII MISCELLANEOUS 13.1 SUCCESSORS AND ASSIGNS. Subject to the provisions of Article VIII, all the terms and provisions of this Agreement shall be binding upon, shall inure solely to the benefit of and shall be enforceable by, the parties hereto and their respective successors and assigns, and no such term or provision is for the benefit of, or intended to create any obligations to or rights in, any other Person. If any Member shall acquire additional Units and if any Transferee of any Member shall acquire any Units, in each case in any manner, whether by a permitted Transfer, operation of law or otherwise, such Units shall be held subject to all of the terms of this Agreement, and by taking and holding such Units such Person shall be conclusively deemed to have agreed to be bound by and to comply with all of the terms and provisions of this Agreement. 13.2 AMENDMENT; WAIVER. (a) Neither this Agreement nor any provision hereof may be changed or amended orally, but only by an instrument in writing signed by all Members. (b) No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon breach thereof shall constitute a waiver of any such breach or of any other covenant, duty, agreement or condition, any waiver being effective only if contained in a writing executed by the waiving party. 13.3 NOTICES. Except as otherwise provided in this Agreement, all notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, when delivered personally or by courier (including nationally recognized overnight courier), five days after being deposited in the United States mail, or when received by facsimile transmission, at the address or facsimile -49- transmission number set forth opposite such Member's name on Schedule I hereto (or, in the case of Persons who become parties hereto subsequently, at their last addresses or facsimile transmission numbers shown on the record books of the Company). Each party hereto, by notice given to each other party hereto in accordance with this Section 13.3, may change the address or facsimile transmission number to which such notices or other communications are to be sent to such party. 13.4 FURTHER ASSURANCES. Each party to this Agreement agrees to execute, acknowledge, deliver, file and record such further certificates, amendments, instruments and documents and do all such other acts and things, as may be required by law or as, in the reasonable judgment of Managing Member or any Member, may be necessary or advisable to carry out the intent and purpose of this Agreement. 13.5 CONFIDENTIALITY. The Members agree not to disclose or use (except by the Company, any Subsidiary or either of them as may be required in connection with the operation of the business of the Company or any Subsidiary) of any of the terms of this Agreement or of any information relating to the assets or business of the Company or any Subsidiary, which the Members hereby acknowledge constitute non-public information, provided that a Member may make such disclosure (but only as and to the extent required) (a) to any person who is a partner, officer, director or employee of such Member or advisers or counsel to or accountants of such Member solely for their use and on a need-to-know basis, (b) with the prior consent of the Board, (c) pursuant to a subpoena or order issued by a court, arbitrator or governmental body, agency or official, (d) as required by applicable federal or state laws (including securities and freedom of information laws), (e) to any lender or prospective lender to, or investor in, such Member or (f) to any prospective purchaser or purchasers of Units pursuant to and in accordance with the provisions of the third paragraph of this Section 13.5 (but such Member shall be liable for any further disclosure or use of such information by any Person referred to in this paragraph which if made or done by such Member would violate the terms hereof). In the event that a Member shall receive a request to disclose any of the terms of this Agreement or such other information under subpoena or order, such Member shall (i) promptly notify the Board thereof, (ii) consult with the Board on the advisability of taking steps to resist or narrow such request and (iii) if disclosure is required or deemed advisable, cooperate with the Board in any attempt it may make to obtain an order or other assurance that confidential treatment will be accorded the terms of this Agreement or such other information that is disclosed. Prior to and in anticipation of exercising its rights under Section 8.3 or Article IX and notwithstanding anything to the contrary contained herein, either Member may provide information concerning the Company and the Properties to one or more Persons that such Member reasonably believes would have the ability to purchase, in the case of an exercise of rights under Section 8.3, the Units of such Member and, in the case of an exercise of rights under Article IX, all of the issued and outstanding Units; provided, however, that such Member shall not (a) provide any such information to any Person unless such Person has signed a confidentiality agreement containing the restrictions set forth in the first two paragraphs of this Section 13.5 (but the execution of such confidentiality agreement shall not relieve the disclosing party from liability for the further disclosure or use of such information as provided in the parenthetical set forth at the end of the first paragraph of this Section 13.5) or (b) provide the rent -50- roll and other specific occupant information relating to a Property to any Person that owns a retail property that directly competes with any Property (it being acknowledged and understood that there currently are no such properties). 13.6 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES). 13.7 HEADINGS. The descriptive headings of the several sections in this Agreement are for convenience only and do not constitute part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. 13.8 ENTIRE AGREEMENT. This Agreement (including the Schedules and Exhibits hereto) and the other documents referred to herein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, among the parties hereto with respect to such subject matter, including the Existing Operating Agreement. 13.9 SEVERABILITY. Any provision of this Agreement that is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or lack of authorization without invalidating the remaining provisions hereof or affecting the validity, unenforceability or legality of such provision in any other jurisdiction. 13.10 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same document. 13.11 ARBITRATION. Any claim arising out of an alleged breach of this Agreement and any other dispute among the parties hereto shall be resolved by arbitration. Such arbitration shall be conducted in accordance with the following: (a) Each party shall have ten (10) business days after written notice by another party of the commencement of arbitration proceedings hereunder to appoint an arbitrator who was not employed by such Member within the previous 5 years. Each party shall immediately notify the other party of such appointment. The two arbitrators so appointed shall then select a third arbitrator within ten (10) business days after the appointment of the second arbitrator to then constitute the Board of Arbitration. If any party shall fail to appoint an arbitrator within such ten (10) business day period or, if the two arbitrators selected by the parties shall fail to make a selection of a third arbitrator within ten (10) business days of their selection, then the American Arbitration Association shall appoint the arbitrator that was not selected by the failing party or shall appoint the third arbitrator, as the case may be, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Board of Arbitration shall then proceed under such rules. (b) Following the designation of such Board of Arbitration, the parties, together with the members of the Board of Arbitrators, shall promptly undertake appropriate -51- informal efforts to mediate and negotiate a solution to the matter covered by the original notice. (c) If a negotiated solution cannot be achieved within fourteen (14) days after the date on which the Board of Arbitration is constituted, then the Board of Arbitration shall notify the parties. The proceeding, upon such notification, will then become a compulsory arbitration to be conducted under the Commercial Arbitration Rules of the American Arbitration Association by the Board of Arbitration and the Supplementary Procedures for Large, Complex Disputes. These rules shall be subject to the following modifications: (i) discovery shall be permitted under the same standards provided for in the Federal Rules of Civil Procedure; (ii) the members of the Board of Arbitration shall interpret and apply the provisions of this Agreement; (iii) the arbitration costs may be charged to the losing party or allocated between the parties as may be determined by the Board of Arbitration; and (iv) the proceedings will be held in Chicago, Illinois, unless the parties shall otherwise agree in writing. (d) In connection with the enforcement of the mediation and arbitration provisions of this Section 13.11, any agreement, decision or award shall be final and conclusive as to any such claim. The arbitrators may award any remedies that may be awarded by a court except as otherwise expressly provided herein, including as provided in the second to last sentence of the first paragraph of the definition of "Cause" and the second sentence of the definition of "Managing Member". 13.12 CONSENT TO JURISDICTION. In connection with any suit, claim, action or proceeding brought to compel arbitration or enforce an arbitration award: the Members hereby consent to the in personam jurisdiction of the United States federal courts and state courts located in New Castle County, Delaware, each such Person agrees that service in the manner set forth in Section 13.3 hereof shall be valid and sufficient for all purposes; and each such Person agrees to, and irrevocably waives any objection or defense to appearing in any United States federal court or state court located in New Castle County, Delaware. Each Member hereby irrevocably appoints the Company as agent for service of process with respect to any matters relating to the rights and obligations of the parties arising out of this Agreement. 13.13 WAIVER OF PARTITION. Each Member hereby irrevocably waives during the term of the Company any right that it may have to maintain any action for partition with respect to any Company property. 13.14 COMPANY NAME. If, at any time, the Company name shall include the name of, or any trade name used by, a Member or any of its Affiliates, neither the Company nor any other Member shall acquire any right, title or interest in or to such name or trade name. -52- 13.15 OWNERSHIP OF COMPANY PROPERTY. The interest of each Member in the Company shall be personal property for all purposes. All real and other property owned by the Company (or its Subsidiaries) shall be deemed owned by the Company (or its Subsidiaries) as Company (or its Subsidiaries') property. No Member, individually, shall have any direct ownership of such property and title to such property shall be held in the name of the Company (or its Subsidiaries). 13.16 TIME OF THE ESSENCE. Except as otherwise expressly provided in this Agreement, time shall be of the essence with respect to all time periods set forth in this Agreement. 13.17 STATUS REPORTS. Recognizing that each Member may find it necessary from time to time to establish to third parties, such as accountants, banks, mortgagees, prospective transferees of their Units, or the like or the then current status of certain matters, each Member shall, within ten (10) business days following the written request of another Member made from time to time, furnish a written statement on the status of the following: (a) that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the Agreement is in full force and effect as modified and identifying the documents effecting the modifications); and (b) stating whether or not to the actual knowledge of such certifying Member (i) the other Members in the Company are in default in keeping, observing or performing any of the terms contained in this Agreement and, if in default, specifying each such default (limited to those defaults of which the certifying Member has actual knowledge), and (ii) there has occurred an event that with the passage of time or the giving of notice, or both, would ripen into a default hereunder on the part of such other Member (limited to those events of which the certifying Member has actual knowledge). Such statement may be relied upon by such other Member and any other Person for whom such statement is requested and shall act as a waiver of any claim by the Member furnishing such certificate to the extent such claim is based upon facts which are contrary to those asserted in the certificate, but no such statement shall operate as a waiver as to any default or other matter as to which the Member executing it did not have actual knowledge. Such certificate shall in no event subject the Member furnishing it to any liability whatsoever, notwithstanding the negligence or inadvertent failure of such Member to disclose correct or relevant information. 13.18 DISPOSITION OF DOCUMENTS. All documents and records of the Company, including all financial records, vouchers, canceled checks, and bank statements shall be delivered to GGPLP upon termination of the Company if GGPLP is then a Member, and otherwise to TRS. Upon request of any Member, copies of all such documents and records shall be provided to such Member at such Member's cost. The Member holding such documents and records shall retain them for a period of at least six (6) years after the termination of the Company and shall make such records available to the other Member for inspection during such period. 13.19 CALCULATION OF DAYS. The provisions of this Agreement relative to number of days shall be deemed to refer to calendar days, unless otherwise specified. When the date for performance of any obligation of any Member falls on a non-business day, such obligation need not be performed until the next following business day. For purposes of this Agreement, a -53- "business day" shall be deemed to mean any day other than Saturday, Sunday, or a day which is in Chicago, Illinois either a legal holiday or a day upon which banking institutions are authorized by law to remain closed for the entire day. 13.20 ATTORNEYS. The Members agree that neither shall assert the fact that Neal, Gerber & Eisenberg has represented GGPLP and Piper Rudnick has represented TRS in connection with the negotiation and execution of this Agreement to be a basis to disqualify either firm from representing the Company and that any prospective representation of the Company by either law firm shall not disqualify them from representing the respective Members in any dispute with each other. -54- IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above. GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc., a Delaware corporation, general partner By: /s/ Joel Bayer ------------------------------------ Joel Bayer, Senior Vice President TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS By: Commonwealth Realty Advisors, Inc., as attorney-in-fact under power of attorney By: /s/ Mark Kirincich ------------------------------------ Mark Kirincich, President GGP-TRS L.L.C., a Delaware limited liability company By: GGP LIMITED PARTNERSHIP, a Delaware limited partnership, its managing member By: General Growth Properties, Inc., a Delaware corporation, general partner By: /s/ Joel Bayer ------------------------------------ Joel Bayer, Senior Vice President -55- EX-10.25 25 c02442exv10w25.txt AMENDMENT TO AMENDED AND RESTATED OPERATING AGREEMENT EXHIBIT 10.25 FIRST AMENDMENT TO AMENDED AND RESTATED OPERATING AGREEMENT First Amendment to Amended and Restated Operating Agreement, dated December 19, 2002 (the "Amendment"), among GGP Limited Partnership, a Delaware limited partnership ("GGPLP"), Teachers' Retirement System of the State of Illinois ("TRS" and, together with GGPLP, the "Members"), and GGP-TRS L.L.C., a Delaware limited liability company (the "Company"). RECITALS: WHEREAS, the Members are all of the members of the Company; WHEREAS, the Company and the Members have entered into that certain Amended and Restated Operating Agreement dated August 26, 2002 (the "Existing Operating Agreement"), relating to, among other things, the management of the Company and the transfer of units of membership interest therein; WHEREAS, GGPLP and The Western and Southern Life Insurance Company (the "Florence Mall Seller") have entered into that certain Purchase and Sale Agreement, dated as of November 27, 2002 (as the same may be amended from time to time, the "Florence Mall Purchase Agreement"), pursuant to which GGPLP has agreed to purchase Florence Mall in Florence, Kentucky ("Florence Mall"); WHEREAS, the Florence Mall Seller has made certain representations and warranties in the Florence Mall Purchase Agreement (collectively, the "Florence Mall Seller Representations"); WHEREAS, the Company is the sole member of Florence Mall L.L.C., a Delaware limited liability company ("Florence Mall L.L.C."); WHEREAS, pursuant to Section 6.3(d) of the Existing Operating Agreement, GGPLP agreed to provide TRS with certain projections for the Company and its properties for the TRS fiscal year commencing on July 1, 2003 (the "2003/2004 Projections") as well as projections for subsequent fiscal years; WHEREAS, the parties hereto desire that (a) GGPLP contribute to the capital of the Company all of the right, title and interest of GGPLP under the Florence Mall Purchase Agreement, (b) the Company contribute to the capital of Florence Mall L.L.C. all of such right, title and interest, (c) Florence Mall L.L.C. obtain a loan upon the terms described on Schedule A, attached hereto and by this reference made a part hereof (the "Florence Mall Loan"), the proceeds of which will be used to pay a portion of the purchase price for Florence Mall (the "Florence Mall Purchase Price"), (d) GGPLP and TRS make additional capital contributions to the Company which will be used to pay the remainder of the Florence Mall Purchase Price and the acquisition costs for Florence Mall, (e) Florence Mall L.L.C. acquire Florence Mall pursuant to the Florence Mall Purchase Agreement (the "Florence Mall Acquisition" and, together with the Florence Mall Loan, the "Florence Mall Transactions") and (f) the parties make certain other modifications to the Existing Operating Agreement; and WHEREAS, the parties desire that the Company amend the Existing Operating Agreement as hereinafter set forth to reflect their understandings regarding the foregoing. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: 1. DEFINED TERMS. Capitalized terms used but not defined herein shall have the meanings set forth in the Existing Operating Agreement, as amended hereby. 2. MATTERS RELATING TO ACQUISITION OF FLORENCE MALL. (a) Prior to the closing of the Florence Mall Acquisition, (i) GGPLP shall contribute to the capital of the Company all of GGPLP's right, title and interest under the Florence Mall Purchase Agreement, and the Company shall assume all of the obligations of GGPLP under the Florence Mall Purchase Agreement, pursuant to an Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit A and (ii) the Company shall contribute to the capital of Florence Mall L.L.C. all of such right, title and interest and Florence Mall L.L.C. shall assume all of such obligations, pursuant to an Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit B. (b) The parties hereby approve the Florence Mall Transactions, which shall be deemed to have been approved by the Board. The provisions of the last sentence of Section 6.2 of the Existing Operating Agreement shall apply to the loan documents relating to the Florence Mall Loan. (c) Concurrently with the closing of the Florence Mall Acquisition, each Member shall pay $20,500,000 to the Company as an additional capital contribution thereto; provided, however, that GGPLP shall be entitled to a credit against the amount of such payment for the $1,000,000 earnest money deposit paid by it pursuant to the Florence Mall Purchase Agreement and any interest accrued thereon, and GGPLP shall be deemed to have made a capital contribution to the Company in the amount of such credit. The additional capital contributions to be made pursuant to this paragraph shall be paid in immediately available funds. (d) No additional Units shall be issued to GGPLP or TRS on account of the additional capital contributions referred to in this Section 2. (e) The Company shall pay (and/or cause Florence Mall L.L.C. to pay) the costs of the types described in Schedule 6.2 of the Existing Operating Agreement incurred by the Company, Florence Mall L.L.C. and/or GGPLP in connection with the consummation of the Florence Mall Transactions, including without limitation the costs specified in Sections 3 and 4 of Schedule 7.1-2 of the Existing Operating Agreement (collectively, the "Florence Mall Costs"), and the payment of the Florence Mall Costs shall be deemed to have been approved by the Board. -2- (f) Notwithstanding anything to the contrary contained in the Existing Operating Agreement, the provisions of Section 6.2(e)(xvi) of the Existing Operating Agreement shall not apply to the modifications described in Schedule A. (g) Notwithstanding anything to the contrary contained in the Existing Operating Agreement, no portion of the Florence Mall Loan shall constitute Retained Debt and no adjustment in the existing Retained Debt or the existing allocation thereof shall occur on account of the incurrence of the Florence Mall Loan. (h) Notwithstanding anything to the contrary contained in the Existing Operating Agreement, the Managing Member shall submit the portions of the 2003 Proposed Annual Business Plan and the 2003/2004 Projections that pertain to Florence Mall on or before March 31, 2003 (instead of the earlier dates, if any, specified in the Existing Operating Agreement) (but nothing contained herein shall extend the due date for delivery of the remainder of the 2003 Proposed Annual Business Plan, the remainder of the 2003/2004 Projections or any other Proposed Annual Business Plan or projections). Notwithstanding anything to the contrary contained herein, until there is an Annual Business Plan that pertains to Florence Mall, the Company shall cause Florence Mall L.L.C. to operate Florence Mall in a manner which is consistent with the operation by GGPLP of its properties generally and Florence Mall L.L.C. may make such expenditures as are consistent with the operation of Florence Mall in such manner without the consent of the Board (but the making of capital expenditures during such period in respect of Florence Mall shall require the approval of the Board unless they are in connection with tenant leasing or constitute Nondiscretionary Items). (i) GGPLP represents and warrants to TRS that, as of the date hereof and except for matters set forth in written materials furnished to TRS or Commonwealth Realty Advisors, Inc. prior to the execution and delivery hereof, GGPLP has no Knowledge of inaccuracies in the Florence Mall Seller Representations (without regard to the knowledge qualifications contained therein) that individually or in the aggregate would have a material adverse effect on Florence Mall. For purposes of this paragraph, "Knowledge" means the actual knowledge (excluding any constructive or imputed knowledge) of Joel Bayer. The representation and warranty contained in this Section 2(i) shall be subject to the same limitations on survival as are contained in Section 5.3 of the Florence Mall Purchase Agreement. 3. AMENDMENT TO SCHEDULE I. Schedule I of the Existing Operating Agreement is hereby amended by deleting the reference to Piper Rudnick and its address and inserting the following in lieu thereof: "Gardner, Carton & Douglas 191 North Wacker Drive, Suite 3700 Chicago, Illinois 60606 Attn: Steven L. Loren Telephone: 312/569-1337 Facsimile: 312/569-3337" 4. NO OTHER CHANGES; ETC. Except as specifically set forth herein, the Existing Operating Agreement shall remain in full force and effect. Any references in the Existing -3- Operating Agreement to "hereunder" or "herein" or other terms of similar import shall mean the Existing Operating Agreement, as amended hereby. 5. GOVERNING LAW. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware (without regard to its conflicts of law principles). 6. COUNTERPARTS. This Amendment may be executed in counterparts, each of which shall be an original and all of which together shall constitute the same document. 7. BINDING EFFECT. This Amendment shall be binding upon, and inure to the benefit of, the parties and their respective successors and assigns. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -4- IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above. GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Joel Bayer ------------------------------------ Joel Bayer, Senior Vice President TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS By: Commonwealth Realty Advisors, Inc., as attorney-in-fact under power of attorney By: /s/ Mark Kirincich ------------------------------------ Mark Kirincich, President GGP-TRS L.L.C., a Delaware limited liability company By: GGP LIMITED PARTNERSHIP, a Delaware limited partnership, its managing member By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Joel Bayer ------------------------------------ Joel Bayer, Senior Vice President EX-10.26 26 c02442exv10w26.txt AMENDMENT TO AMENDED AND RESTATED OPERATING AGREEMENT EXHIBIT 10.26 SECOND AMENDMENT TO AMENDED AND RESTATED OPERATING AGREEMENT OF GGP-TRS L.L.C. AND FIRST AMENDMENT TO OPERATING AGREEMENT OF GGP-TRS II L.L.C. Amendment, dated November 1, 2005 (the "Amendment"), among GGP Limited Partnership, a Delaware limited partnership ("GGPLP"), Teachers' Retirement System of the State of Illinois ("TRS" and, together with GGPLP, the "Members"), GGP-TRS L.L.C., a Delaware limited liability company (the "Company"), and GGP-TRS II L.L.C., a Delaware limited liability company ("GGP-TRS II"). RECITALS: WHEREAS, the Members are all of the members of the Company; WHEREAS, the Company and the Members have entered into that certain Amended and Restated Operating Agreement dated August 26, 2002, as amended (the "Existing Operating Agreement"), relating to, among other things, the management of the Company and the transfer of units of membership interest therein; WHEREAS, the Members also are all of the members of GGP-TRS II; WHEREAS, GGP-TRS II and the Members have entered into that certain Operating Agreement dated November 29, 2004, as amended (the "Existing GGP-TRS II Operating Agreement"), relating to, among other things, the management of GGP-TRS II and the transfer of units of membership interest therein; WHEREAS, GGP-TRS II and Campbell Hawaii Investor, LLC ("Seller") have entered into that certain Disposition Agreement, dated November 29, 2004 (as the same may be amended from time to time, the "WV Purchase Agreement"), pursuant to which GGP-TRS II agreed to purchase Whalers Village in Lahaina, Maui, Hawaii ("Whalers Village"); WHEREAS, each Member has delivered a guaranty to Seller with respect to the WV Purchase Agreement (each, a "WV Guaranty"); WHEREAS, the Company is the sole member of WV Sub, LLC, a Delaware limited liability company ("WV Sub"); WHEREAS, the parties hereto desire that: (a) GGP-TRS II convey to WV Sub all of the right, title and interest of GGP-TRS II under the WV Purchase Agreement; (b) WV Sub assume all obligations of GGP-TRS II under the WV Purchase Agreement; (c) WV Sub obtain a loan (the "WV Loan") upon the terms described in that certain Loan Agreement dated the date hereof, between WV Sub, as borrower, and Archon Financial L.P. and Commerzbank AG, New York Branch, as lenders (collectively, the "WV Lender"), a portion of which will be Retained Debt (as defined in the Existing Operating Agreement) and the remainder of which (net of amounts deducted by WV Lender and other costs and expenses) will be used by WV Sub to pay a portion of the purchase price for Whalers Village (the "WV Purchase Price"); (d) GGPLP and TRS make additional capital contributions to the Company which will be used to pay the remainder of the WV Purchase Price and the acquisition costs for Whalers Village and establish a reserve for working capital; (e) WV Sub acquire Whalers Village pursuant to the WV Purchase Agreement (the "WV Acquisition" and, together with the WV Loan and the other transactions described in clauses (a)-(d) above and this clause (e), the "WV Transactions"); and (f) the parties make certain other modifications to the Existing Operating Agreement; and WHEREAS, the parties desire that the Company amend the Existing Operating Agreement as hereinafter set forth to reflect their understandings regarding the foregoing. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: 1. DEFINED TERMS. Capitalized terms used but not defined herein shall have the meanings set forth in the Existing Operating Agreement, as amended hereby. 2. MATTERS RELATING TO WV TRANSACTIONS. Notwithstanding anything to the contrary contained in the Existing Operating Agreement or the Existing GGP-TRS II Operating Agreement: (a) Prior to the closing of the WV Acquisition, the parties shall cause GGP-TRS II to assign and convey to WV Sub all of GGP-TRS II's right, title and interest under the WV Purchase Agreement, and the Company shall cause WV Sub to assume all of the obligations of GGP-TRS II under the WV Purchase Agreement, pursuant to an Assignment and Assumption Agreement substantially in the form attached hereto as Exhibit A. The Company shall indemnify, defend and hold harmless GGP-TRS II from and against any and all losses, claims, damages, debts, liabilities, costs and expenses (including without limitation reasonable attorneys' fees), whether known or unknown, liquidated or unliquidated, fixed or contingent or direct or indirect and whether based on contract, tort, statute or other legal theory of recovery, which relate to or arise out of the WV Purchase Agreement. (b) The parties hereby approve the WV Transactions, which shall be deemed to have been approved by the Board of the Company and the Board of GGP-TRS II. Joel Bayer may execute and deliver any and all closing documents relating to the WV Acquisition that are consistent with the terms and conditions of the WV Purchase Agreement. -2- (c) Concurrently with the closing of the WV Acquisition, each Member shall pay $44,834,000.00 to the Company as an additional capital contribution thereto. The additional capital contributions to be made pursuant to this Section 2(c) shall be paid in immediately available funds. No additional Units shall be issued to GGPLP or TRS on account of the additional capital contributions referred to in this Section 2(c). (d) $25,000,000 of the WV Loan shall constitute Retained Debt (the "WV Retained Debt"), regardless of whether the Managing Member would be entitled to make such designation under Section 10.1(a) of the Existing Operating Agreement. The amount of the WV Retained Debt (i.e., $25,000,000) shall be paid directly to GGPLP (or remitted by WV Sub to GGPLP) and used by GGPLP to pay a portion of its capital contribution obligation under Section 2(c) hereof. No adjustment to the Retained Debt shall be made pursuant to the last sentence of Section 10.1(a) of the Existing Operating Agreement as a result of the WV Loan. The last sentence of Section 10.1(a) of the Existing Operating Agreement shall in no event require any future adjustment to Retained Debt which would reduce the WV Retained Debt, and any such adjustment that would reduce the WV Retained Debt if this sentence did not apply shall be determined without regard to (i) the WV Retained Debt and Property Indebtedness of WV Sub and (ii) any other Retained Debt to which a similar provision applies and the Property Indebtedness related thereto (and, for clarity, any such similar provision is to be applied in the same manner as is described in this sentence). Except as specifically set forth in this Section 2, all provisions of the Existing Operating Agreement shall apply to the WV Retained Debt in the same manner as they apply to all other Retained Debt. TRS shall have the right to review the loan documents relating to the WV Loan in accordance with the last sentence of Section 6.2 of the Existing Operating Agreement. (e) In the event that either Member is required to pay any amount pursuant to its WV Guaranty, the other Member shall, upon demand by such Member, reimburse such Member for one-half of such amount. (f) The Company shall pay (and/or cause WV Sub to pay) the costs of the types shown on Exhibit B and/or Schedule 6.2 of the Existing Operating Agreement that are or were incurred by the Company, WV Sub, GGPLP and/or GGP-TRS II in connection with the WV Transactions, including without limitation the financing fee required pursuant to Section 3 of Schedule 7.1-2 of the Existing Operating Agreement and the acquisition fee required pursuant to Section 4 of such schedule (collectively, the "Costs"); and, to the extent GGPLP and/or GGP-TRS II has paid any of such costs, the Company shall reimburse (or cause WV Sub) to reimburse them therefor. The payment of the Costs shall be deemed to have been approved by the Board of the Company. Notwithstanding the foregoing, (i) the financing fee referred to above shall be $850,000 (i.e., 1% of $85,000,000 (the original principal amount of the WV Loan less the portion thereof that constitutes Retained Debt)), (ii) except as shown on Exhibit B, the Company or WV Sub shall pay the entire amount of all other costs and fees owing in connection with the WV Loan (notwithstanding that a portion of the WV Loan is Retained Debt) and (iii) such financing fee and the acquisition fee referred to above shall be paid to GGMI at closing under the WV Purchase Agreement. (g) The Managing Member shall submit the portions of the 2006 Proposed Annual Business Plan that pertain to Whalers Village to the Board of the Company for approval -3- promptly after the date of this Amendment (instead of the earlier date, if any, specified in the Existing Operating Agreement). During the portion of 2006 until there is an Annual Business Plan that pertains to Whalers Village and during the remainder of 2005, the Company shall cause WV Sub to operate Whalers Village in a manner which is consistent with the operation by GGPLP of its properties generally and WV Sub may make such expenditures as are consistent with the operation of Whalers Village in such manner without the consent of the Board of the Company (but the making of capital expenditures during such period in respect of Whalers Village shall require the approval of such Board unless they are in connection with tenant leasing or constitute Nondiscretionary Items). (h) GGPLP represents and warrants to TRS that, as of the date hereof and except for matters set forth in written materials furnished to TRS or Commonwealth Realty Advisors, Inc. prior to the execution and delivery hereof, GGPLP has no knowledge of inaccuracies in the representations made by Seller under the WV Purchase Agreement (without regard to the knowledge qualifications contained therein) that individually or in the aggregate would have a material adverse effect on Whalers Village. For purposes of this paragraph, "Knowledge" means the actual knowledge (excluding any constructive or imputed knowledge) of Joel Bayer. The representation and warranty contained in this Section 2(h) shall be subject to the same limitations on survival as are contained in Section 5.3 of the WV Purchase Agreement. (i) The indemnification provisions contained in Section 6.6 of the Existing Operating Agreement shall apply to GGPLP and its affiliates with respect to their activities as managing member of, and provider of other services to, GGP-TRS II. (j) For purposes of calculating the Annual Administrative Services Fee, the acquisition cost of the WV Property shall be determined without regard to any market value adjustment for leases that would otherwise be required by FAS 141-142. (k) The parties acknowledge that the provisions of the Existing Operating Agreement regarding Extended Term Financing (including without limitation Schedule 6.2(e)(iv)) apply to Whalers Village. The financing fee paid with respect to any refinancing of the WV Property prior to November 30, 2008 only shall apply to an amount of the gross proceeds thereof that equals the excess of (i) the initial principal amount thereof (excluding any portion thereof which constitutes Retained Debt) over (ii) the then outstanding principal amount of the financing that is being repaid with such gross proceeds (excluding any portion thereof that constitutes Retained Debt). (l) Inasmuch as Whalers Village is being acquired by a subsidiary of the Company rather than a subsidiary of GGP-TRS II, the following provisions of the Existing GGP-TRS II Operating Agreement shall no longer be applicable: (i) the provisions relating to the acquisition and operation of Whalers Village (including without limitation the provision requiring delivery of "Proposed Annual Business Plans" and the provisions regarding the provision of property management and other services), (ii) the provisions regarding contributions to the capital of GGP-TRS II, (iii) the last sentence of Section 3.1(d) regarding reimbursement by TRS for amounts paid by GGPLP under the GGPLP Guaranty, (iv) the provisions regarding delivery of reports and financial statements, (v) the provision regarding confidentiality and nonuse of information as it pertains to information about the WV Property and (vi) the -4- provisions regarding the Unit Contribution (as defined in the Existing GGP-TRS II Operating Agreement). 3. AMENDMENT TO SCHEDULE I. Schedule I of the Existing Operating Agreement is hereby amended by deleting the reference to Gardner, Carton & Douglas and its address and inserting the following in lieu thereof: "Holland & Knight LLP 131 South Dearborn Street 30th Floor Chicago, Illinois 60603 Attn: James T. Mayer Telephone: 312/715-5841 Facsimile: 312/578-6666" 4. NO OTHER CHANGES; ETC. Except as specifically set forth herein, the Existing Operating Agreement and Existing GGP-TRS II Operating Agreement shall remain in full force and effect (it being understood that the parties intend to dissolve and terminate GGP-TRS II shortly after the date hereof). Any references in either such document to "hereunder" or "herein" or other terms of similar import shall mean such document, as amended hereby. 5. GOVERNING LAW. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware (without regard to its conflicts of law principles). 6. COUNTERPARTS. This Amendment may be executed in counterparts, each of which shall be an original and all of which together shall constitute the same document. 7. BINDING EFFECT. This Amendment shall be binding upon, and inure to the benefit of, the parties and their respective successors and assigns. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -5- IN WITNESS WHEREOF, the parties have executed this Amendment on the date first written above. GGP LIMITED PARTNERSHIP, a Delaware limited partnership By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Linda J. Wight ------------------------------------ Linda J. Wight, Assistant Secretary TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS By: Commonwealth Realty Advisors, Inc., as attorney-in-fact under power of attorney By: /s/ Mark Kirincich ------------------------------------ Mark Kirincich, President GGP-TRS L.L.C., a Delaware limited liability company By: GGP LIMITED PARTNERSHIP, a Delaware limited partnership, its managing member By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Linda J. Wight ------------------------------------ Linda J. Wight, Assistant Secretary GGP-TRS II L.L.C., a Delaware limited liability company By: GGP LIMITED PARTNERSHIP, a Delaware limited partnership, its managing member By: General Growth Properties, Inc., a Delaware corporation, its general partner By: /s/ Linda J. Wight ------------------------------------ Linda J. Wight, Assistant Secretary -2- EX-10.31 27 c02442exv10w31.txt FORM OF RESTRICTED STOCK AGREEMENT EXHIBIT 10.31 GENERAL GROWTH PROPERTIES, INC. RESTRICTED STOCK AWARD AGREEMENT THIS AGREEMENT is made and entered into as of <> (the "Grant Date") by and between GENERAL GROWTH PROPERTIES, INC., a Delaware corporation (the "Company"), and <> <> (the "Employee"). WHEREAS, the Company desires to reward the Employee for her continuing efforts on behalf of the Company by awarding him restricted shares (the "Restricted Shares") of common stock, $.01 par value, of the Company (the "Common Stock"), subject to the terms and conditions set forth in the General Growth Properties, Inc. 2003 Incentive Stock Plan (the "2003 Plan") and the terms, conditions, and restrictions set forth in this Agreement. NOW, THEREFORE, for good and valuable consideration, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Award of Shares. In accordance with the terms of the 2003 Plan which are hereby incorporated herein, the Company hereby awards to the Employee, subject to the terms, conditions and restrictions set forth in this Agreement, <> shares of Common Stock ("Restricted Shares") as of the Grant Date. 2. Rights of Stockholder. Employee shall have all of the rights of a stockholder with respect to the Restricted Shares (including the right to vote the Restricted Shares and the right to receive dividends with respect to the Restricted Shares; provided, however, that dividends paid with respect to Restricted Shares which have not yet vested at the time of the dividend payments shall be held in the custody of the Company and shall be subject to the same restrictions that apply to the corresponding Restricted Shares), except for the right to transfer the Restricted Shares as provided on Section 3 and Section 5 hereof. 3. Restrictions on Transfer. Except as otherwise provided in this Agreement, Employee may not sell, transfer, assign, pledge, encumber or otherwise dispose of any portion of the Restricted Shares or the rights granted hereunder (any such disposition or encumbrance being referred to herein as a "transfer") until such portion of the Restricted Shares becomes vested in accordance with Section 4 of this Agreement. Any transfer or purported transfer by Employee of any of the Restricted Shares shall be null and void and the Company shall not recognize or give effect to such transfer on its books and records or recognize the person to whom such purported transfer has been made as the legal or beneficial holder of such shares. The Restricted Shares shall not be subject to sale, execution, pledge, attachment, encumbrance or other process and no person shall be entitled to exercise any rights of Employee as the holder of such Restricted Shares by virtue of any attempted execution, attachment or other process until the restrictions imposed herein on the transfer of the Restricted Shares shall lapse as provided in Section 4 hereof. If and when the restrictions imposed herein on the transfer of Restricted Shares shall have lapsed as provided in Section 4 hereof, such shares shall be delivered to the Employee. Until such restrictions have lapsed, any certificates representing any Restricted Shares shall be held in custody by the Company. 4. Lapse of Restrictions. (a) The interest of the Employee in the Restricted Shares shall vest as to 1/3, 1/3 and 1/3 shares of such Restricted Shares on each of <>, <>, and <>, so as to be 100% vested on <>, so long as the Employee continues to be employed by the Company, its Affiliates and Subsidiaries on each such date. (b) If the Employee's employment with the Company or any of its Affiliates or Subsidiaries is terminated for any reason which does not give rise to 100% vesting of the Restricted Shares, the balance of the Restricted Shares subject to the provisions of this Agreement which have not vested at the time of the Employee's termination of employment shall be forfeited by the Employee and ownership shall be transferred back to the Company. (c) Notwithstanding Section 4(a) hereof, in the event of a Change in Control, the restrictions on transfer imposed by Section 3 on the Restricted Shares shall lapse. 5. Transferability. Notwithstanding anything contained in this Agreement to the contrary, Restricted Shares are not transferable or assignable by the Employee until the restrictions thereon have lapsed. 6. Adjustment Provisions. If, during the term of this Agreement, there shall be any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, extraordinary distribution with respect to the Common Stock, or other change in corporate structure affecting the Common Stock, the Committee shall make or cause to be made an appropriate and equitable substitution or adjustment with respect to the Restricted Shares, including a substitution or adjustment in the aggregate number or kind of shares subject to this Agreement, notwithstanding that the Restricted Shares are subject to the restrictions on transfer imposed by Section 3 above. 7. Taxes. As a condition precedent to the receipt of any Restricted Shares hereunder, Employee agrees to pay to the Company, at such times as the Company shall determine, such amounts as the Company shall deem necessary to satisfy any withholding taxes due on income that Employee recognizes as a result of the award of the Restricted Shares hereunder. The obligations of the Company under this Agreement and the 2003 Plan shall be conditional on such payment or arrangements, and the Company, its Affiliates and Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Employee. 8. Registration. This grant is subject to the condition that if at any time the Committee shall determine, in its discretion, that the listing of the shares of Common Stock subject hereto on any securities exchange, or the registration or qualification of such shares under any federal or state law, or the consent or approval of any regulatory body, shall be necessary or desirable as a condition of, or in connection with, the grant, receipt or delivery of shares hereunder, such grant, receipt or delivery will not be effected unless and until such listing, -2- registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The Company agrees to make every reasonable effort to effect or obtain any such listing, registration, qualification, consent or approval. 9. Rights of Employee. In no event shall the granting of the Restricted Shares or the other provisions hereof or the acceptance of the Restricted Shares by Employee interfere with or limit in any way the right of the Company, an Affiliate or Subsidiary to terminate Employee's employment at any time, nor confer upon Employee any right to continue in the employ of the Company, an Affiliate or Subsidiary for any period of time or to continue their present or any other rate of compensation. 10. Construction. (a) Successors. This Agreement and all the terms and provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, heirs and successors, except as expressly herein otherwise provided. (b) Entire Agreement; Modification. This Agreement contains the entire understanding between the parties with respect to the matters referred to herein. Subject to Section 15 of the 2003 Plan, this Agreement may be amended by the Committee. (c) Capitalized Terms; Headings; Pronouns; Governing Law. Capitalized terms used and not otherwise defined herein are deemed to have the same meanings as in the 2003 Plan. The descriptive headings of the respective Sections and subsections of this Agreement are inserted for convenience of reference only and shall not be deemed to modify or construe the provisions which follow them. Any use of any masculine pronoun shall include the feminine and vice-versa and any use of a singular, the plural and vice-versa, as the context and facts may require. The construction and interpretation of this Agreement shall be governed in all respects by the laws of the State of Delaware. (d) Notices. All communications between the parties shall be in writing and shall be deemed to have been duly given as of the date and time of hand delivery or three days after mailing via certified or registered mail, return receipt requested, proper postage prepaid to the following or such other addresses of which the parties shall from time to time notify one another. (1) If to the Company: General Growth Properties, Inc. 110 North Wacker Drive Chicago, Illinois 60606 (2) If to the Employee: <> <> c/o General Growth Properties, Inc. 110 North Wacker Drive Chicago, Illinois 60606 -3- (e) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application thereof to any party or circumstance shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the minimal extent of such provision or the remaining provisions of this Agreement or the application of such provision to other parties or circumstances. (f) Counterpart Execution. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute the entire document. Dated as of the ____ day of __________, 2006. GENERAL GROWTH PROPERTIES, INC. By: ------------------------------------ John Bucksbaum Chief Executive Officer EMPLOYEE ---------------------------------------- <> <> -4- EX-21 28 c02442exv21.txt LIST OF SUBSIDIARIES Exhibit 21 FOLLOWING IS A LIST OF ACTIVE SUBSIDIARIES OF THE REGISTRANT. CERTAIN SUBSIDIARIES THAT ARE INACTIVE, HAVE INSIGNIFICANT ASSETS OR EXIST SOLELY TO PROTECT BUSINESS NAMES BUT DO NOT CONDUCT BUSINESS HAVE BEEN OMITTED. THE OMITTED SUBSIDIARIES, CONSIDERED IN THE AGGREGATE, DO NOT CONSTITUTE A SIGNIFICANT SUBSIDIARY.
ENTITY: PLACE OF FORMATION - ------- ------------------ 10 CCC BUSINESS TRUST MARYLAND 10000 WEST CHARLESTON BOULEVARD, LLC NEVADA 10450 WEST CHARLESTON BOULEVARD, LLC NEVADA 1450 CENTER CROSSING DRIVE, LLC DELAWARE 1451 CENTER CROSSING DRIVE, LLC DELAWARE 1551 HILLSHIRE DRIVE, LLC DELAWARE 1645 VILLAGE CENTER CIRCLE, LLC DELAWARE 170 RETAIL ASSOCIATES, LTD. TEXAS 20 CCC BUSINESS TRUST MARYLAND 30 CCC BUSINESS TRUST MARYLAND 500 WEST ASSOCIATES, LLC UTAH A/T ROUSE LIMITED PARTNERSHIP, THE DELAWARE ACB PARKING BUSINESS TRUST MARYLAND ALAMEDA MALL ASSOCIATES ILLINOIS ALAMEDA MALL, L.L.C. DELAWARE ALDERWOOD MALL L.L.C. DELAWARE ALDERWOOD MALL HOLDING, L.L.C. DELAWARE ALTAMONTE MALL VENTURE FLORIDA ALTAMONTE SPRINGS MALL II, L.P. DELAWARE ALTAMONTE SPRINGS MALL L.L.C. DELAWARE ALTAMONTE SPRINGS MALL, L.P. DELAWARE AMERICAN CITY COMPANY, LLC, THE MARYLAND AU MANAGEMENT COMPANY, LLC TEXAS AUGUSTA MALL PARTNERSHIP GEORGIA AUGUSTA MALL, LLC MARYLAND AUSTIN MALL LIMITED PARTNERSHIP DELAWARE AUSTIN MALL, LLC MARYLAND BAKERSFIELD MALL LLC DELAWARE BAKERSFIELD MALL, INC. DELAWARE BALTIMORE CENTER ASSOCIATES LIMITED PARTNERSHIP MARYLAND BALTIMORE CENTER GARAGE ASSOCIATES LIMITED PARTNERSHIP MARYLAND BALTIMORE CENTER, LLC DELAWARE BAY CITY MALL ASSOCIATES L.L.C. MICHIGAN BAY SHORE MALL II L.L.C. DELAWARE BAY SHORE MALL PARTNERS CALIFORNIA BAY SHORE MALL, INC. DELAWARE BAYBROOK ANCHOR ACQUISITION, LLC DELAWARE BAYBROOK ANCHOR ACQUISITION, LP DELAWARE BAYBROOK MALL, L.P. DELAWARE BAYSIDE CENTER LIMITED PARTNERSHIP MARYLAND BEACHWOOD PLACE GP SPE L.L.C. DELAWARE BEACHWOOD PLACE GP, L.L.C. DELAWARE BEACHWOOD PLACE LIMITED PARTNERSHIP OHIO

ENTITY: PLACE OF FORMATION - ------- ------------------ BEACHWOOD PLACE LP, L.L.C. DELAWARE BEACHWOOD PLACE, LLC MARYLAND BEACHWOOD PROPERTY HOLDINGS, LLC MARYLAND BELLIS FAIR PARTNERS WASHINGTON BENSON PARK BUSINESS TRUST MARYLAND BEVERAGE OPERATIONS, INC. TEXAS BEXAR MCCRELESS L.L.C. DELAWARE BIRCHWOOD MALL PARTNERS L.L.C. MICHIGAN BIRCHWOOD MALL, INC. DELAWARE BOISE MALL, LLC DELAWARE BOISE TOWN SQUARE ANCHOR ACQUISITION, LLC DELAWARE BOISE TOWNE PLAZA L.L.C. DELAWARE BOSSIER OUTPARCEL, L.P. DELAWARE BOULEVARD ASSOCIATES NEVADA BOULEVARD MALL I LLC NEVADA BOULEVARD MALL II LLC NEVADA BOULEVARD MALL, INC. DELAWARE BRIDGELAND GP, LLC DELAWARE BRIDGEWATER COMMONS MALL DEVELOPMENT, LLC MARYLAND BRIDGEWATER COMMONS MALL II, LLC DELAWARE BRIDGEWATER COMMONS MALL, LLC MARYLAND BROOKSIDE/COLUMBIA LIMITED PARTNERSHIP MARYLAND BTS PROPERTIES L.L.C. DELAWARE BURLINGTON ASSOCIATES LIMITED PARTNERSHIP MARYLAND BURLINGTON TOWN CENTER II LLC DELAWARE BURLINGTON TOWN CENTER LLC, THE DELAWARE C.V. CENTER, INC. DELAWARE CALEDONIAN HOLDING COMPANY, INC. DELAWARE CAPITAL MALL L.L.C. DELAWARE CAPITAL MALL, INC. DELAWARE CAROLINA PLACE L.L.C. DELAWARE CAYAPAS EMPREENDIMENTOS IMOBILIARIOS LTDA BRAZIL CENTER POINTE PLAZA LLC NEVADA CENTURY PLAZA L.L.C. DELAWARE CENTURY PLAZA, INC. DELAWARE CHAMPAIGN MARKET PLACE L.L.C. DELAWARE CHAMPAIGN MARKET PLACE, INC. DELAWARE CHAPEL HILLS MALL L.L.C. DELAWARE CHATTANOOGA MALL, INC. DELAWARE CHESAPEAKE INVESTORS, LLC DELAWARE CHICO MALL L.L.C. DELAWARE CHICO MALL, L.P. DELAWARE CHRISTIANA ACQUISITION LLC DELAWARE CHRISTIANA HOLDINGS I LLC DELAWARE CHRISTIANA MALL LLC DELAWARE CLACKAMAS MALL L.L.C. DELAWARE CLOVER ACQUISITIONS LLC DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ CM THEATRE BUSINESS TRUST MARYLAND CMA ACCESS COMPANY, LLC MARYLAND CM-H BUSINESS TRUST MARYLAND CMI CORPORATE PARKING BUSINESS TRUST MARYLAND CM-N BUSINESS TRUST MARYLAND COASTLAND CENTER, INC. DELAWARE COASTLAND CENTER, L.P. DELAWARE COLLIN CREEK MALL, LP TEXAS COLLIN CREEK PLANO, LLC MARYLAND COLLIN CREEK, LLC DELAWARE COLONY SQUARE LAND L.L.C. DELAWARE COLONY SQUARE MALL L.L.C. DELAWARE COLUMBIA CROSSING, LLC MARYLAND COLUMBIA DEVELOPMENT CORPORATION, THE MARYLAND COLUMBIA GATEWAY, LLC MARYLAND COLUMBIA LAND HOLDINGS, INC. MARYLAND COLUMBIA MALL BUSINESS TRUST MARYLAND COLUMBIA MALL L.L.C. DELAWARE COLUMBIA MALL SPE, LLC MARYLAND COLUMBIA MALL, INC. MARYLAND COLUMBIA MANAGEMENT, INC. MARYLAND CORONADO CENTER HOLDING L.L.C. DELAWARE CORONADO CENTER L.L.C. DELAWARE CROCKER DOWNTOWN DEVELOPMENT ASSOCIATES FLORIDA CROCKER MIZNER PARK III, LTD. FLORIDA CROCKER MIZNER PARK IV, LTD. FLORIDA CROSSROADS MALL LAND, INC., THE DELAWARE DAYJAY ASSOCIATES OKLAHOMA DELTA INVESTMENTS LTD. NEVADA DESARROLLOS COMERCIALES DEL OESTE GSG, SRL COSTA RICA DK BURLINGTON TOWN CENTER LLC DELAWARE EAGLE RIDGE MALL, INC. DELAWARE EAGLE RIDGE MALL, L.P. DELAWARE EAST MESA LAND L.L.C. DELAWARE EAST MESA MALL L.L.C. DELAWARE EASTRIDGE SHOPPING CENTER L.L.C. DELAWARE EASTRIDGE SHOPPING CENTER, INC. DELAWARE ECHELON ACQUISITION LLC MARYLAND ECHELON MALL JOINT VENTURE NEW JERSEY ECHELON MALL LLC MARYLAND EDEN PRAIRIE ANCHOR BUILDING L.L.C. DELAWARE EDEN PRAIRIE MALL L.L.C. DELAWARE EDEN PRAIRIE MALL, INC. DELAWARE EIGHTY COLUMBIA CORPORATE CENTER, INC. MARYLAND EIGHTY COLUMBIA CORPORATE CENTER, LLC MARYLAND ELK GROVE TOWN CENTER L.L.C. DELAWARE ELK GROVE TOWN CENTER, L.P. DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ EMERSON LAND BUSINESS TRUST MARYLAND EMERSON LAND, LLC DELAWARE FAIRWOOD COMMERCIAL FRONT FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-ENDEAVOR FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-FOUR FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-GGP FRONT-FOOT BENEFIT COMPANY LLC MARYLAND FAIRWOOD-PROMISE FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-PROSPECT FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FAIRWOOD-THREE FRONT-FOOT BENEFIT COMPANY, LLC MARYLAND FALLBROOK SQUARE PARTNERS II, L.P. DELAWARE FALLBROOK SQUARE PARTNERS L.L.C. DELAWARE FALLBROOK SQUARE PARTNERS LIMITED PARTNERSHIP CALIFORNIA FALLBROOK SQUARE, INC. DELAWARE FANEUIL HALL BEVERAGE, LLC MARYLAND FANEUIL HALL MARKETPLACE, LLC DELAWARE FASHION PLACE, LLC DELAWARE FASHION SHOW DEVELOPMENT LLC NEVADA FASHION SHOW MALL LLC DELAWARE FBC & G LIMITED PARTNERSHIP MARYLAND FIFTY COLUMBIA CORPORATE CENTER, INC. MARYLAND FIFTY COLUMBIA CORPORATE CENTER, LLC MARYLAND FLORENCE MALL L.L.C. DELAWARE FORTY COLUMBIA CORPORATE CENTER, INC. MARYLAND FORTY COLUMBIA CORPORATE CENTER, LLC MARYLAND FOUR OWINGS MILL CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP MARYLAND FOUR OWINGS MILL CORPORATE CENTER LAND LIMITED PARTNERSHIP MARYLAND FOUR OWINGS MILLS CORPORATE CENTER, LLC MARYLAND FOUR STATE FACILITY CORPORATION DELAWARE FOUR STATE PROPERTIES, LLC DELAWARE FOX RIVER PLAZA NORTH L.L.C. DELAWARE FOX RIVER SHOPPING CENTER L.L.P. WISCONSIN FRANKLIN PARK MALL COMPANY, LLC MARYLAND FRANKLIN PARK MALL, LLC DELAWARE FS ENTERTAINMENT LLC NEVADA FS ENTERTAINMENT, INC. NEVADA GALLERY AT MARKET EAST LLC DELAWARE GATEWAY CROSSING L.L.C. DELAWARE GATEWAY INVESTOR, LLC MARYLAND GATEWAY RETAIL CENTER, LLC MARYLAND GEAPE III, INC. MARYLAND GEAPE III, LLC MARYLAND GEAPE LAND HOLDINGS II, INC. MARYLAND GEAPE LAND HOLDINGS, INC. MARYLAND GEAPE LAND HOLDINGS, LLC MARYLAND GENERAL GROWTH - WESTLAKE (GP), INC. DELAWARE GENERAL GROWTH - WESTLAKE, L.P. DELAWARE GENERAL GROWTH 170 (GP), LLC DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ GENERAL GROWTH 170, LP DELAWARE GENERAL GROWTH BAYBROOK MALL, INC. DELAWARE GENERAL GROWTH FINANCE SPE, INC. DELAWARE GENERAL GROWTH MANAGEMENT, INC. DELAWARE GENERAL GROWTH OAK VIEW MALL, INC. DELAWARE GENERAL GROWTH PROPERTIES, INC. DELAWARE GENERAL GROWTH PROPERTIES-NATICK II, INC. DELAWARE GENERAL GROWTH PROPERTIES-NATICK LIMITED PARTNERSHIP DELAWARE GENERAL GROWTH SUGAR LAND MALL, INC. DELAWARE GENERAL GROWTH WILLOWBROOK L.L.C. DELAWARE GENERAL GROWTH WOODLANDS ONE, INC. TEXAS GENERAL GROWTH WOODLANDS TWO, INC. DELAWARE GG DR, L.L.C. ILLINOIS GGMI MALLIBU, INC. DELAWARE GGP - BRIDGELAND, LP MARYLAND GGP 110 HOLDING L.L.C. DELAWARE GGP 110 L.L.C. DELAWARE GGP 110, INC. DELAWARE GGP ACQUISITION, L.L.C. DELAWARE GGP ALA MOANA HOLDINGS L.L.C. DELAWARE GGP ALA MOANA L.L.C. DELAWARE GGP ALA MOANA, INC. DELAWARE GGP AMERICAN HOLDINGS INC. DELAWARE GGP AMERICAN PROPERTIES INC. DELAWARE GGP BOSSIER MALL, INC. DELAWARE GGP BRASIL PARTICIPACOES LTDA. BRAZIL GGP BRAZIL I L.L.C. DELAWARE GGP BRAZIL II L.L.C. DELAWARE GGP FINANCE SUB, INC. DELAWARE GGP GENERAL I, INC. DELAWARE GGP GENERAL II, INC. DELAWARE GGP HOLDING II SERVICES, INC. DELAWARE GGP HOLDING II, INC. DELAWARE GGP HOLDING SERVICES, INC. DELAWARE GGP HOLDING, INC. DELAWARE GGP INTERNATIONAL, LLC DELAWARE GGP IVANHOE II, INC. DELAWARE GGP IVANHOE III SERVICES, INC. DELAWARE GGP IVANHOE IV SERVICES, INC. DELAWARE GGP IVANHOE IV, INC. DELAWARE GGP IVANHOE SERVICES, INC. DELAWARE GGP IVANHOE, INC. DELAWARE GGP JORDAN CREEK L.L.C. DELAWARE GGP KAPIOLANI DEVELOPMENT INC. DELAWARE GGP KAPIOLANI DEVELOPMENT, L.L.C. DELAWARE GGP KNOLLWOOD MALL, LP DELAWARE GGP LIMITED PARTNERSHIP DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ GGP MEADOWS MALL L.L.C. DELAWARE GGP MEZZANINE ONE L.L.C. DELAWARE GGP MEZZANINE THREE L.L.C. DELAWARE GGP MEZZANINE TWO L.L.C. DELAWARE GGP NATICK RESIDENCE LLC DELAWARE GGP TURKEY CONSORTIUM, LLC DELAWARE GGP TURKEY INVESTCO, LLC DELAWARE GGP TURKEY MANAGEMENT, LLC DELAWARE GGP VENTURES BRAZIL HOLDING L.L.C. DELAWARE GGP VENTURES COSTA RICA, L.L.C. DELAWARE GGP VILLAGE AT JORDAN CREEK L.L.C. DELAWARE GGP/H HOLDING, INC. DELAWARE GGP/HOMART II L.L.C. DELAWARE GGP/HOMART II SERVICES, INC. DELAWARE GGP/HOMART SERVICES, INC. DELAWARE GGP/HOMART, INC. DELAWARE GGP-ARROWHEAD, INC. DELAWARE GGP-BAY CITY ONE, INC. DELAWARE GGP-BRASS MILL, INC. DELAWARE GGP-BUCKLAND HILLS ONE, INC. DELAWARE GGP-BURLINGTON L.L.C. DELAWARE GGP-CANAL SHOPPES L.L.C. DELAWARE GGP-CAROLINA PLACE, INC. DELAWARE GGP-COLUMBIANA TRUST DELAWARE GGP-CONCORD LAND CO., INC. DELAWARE GGP-CUMBERLAND LAND L.L.C. DELAWARE GGP-DEERBROOK ONE, INC. DELAWARE GGP-DEERBROOK TWO, INC. DELAWARE GGP-DEERBROOK, L.P. DELAWARE GGP-FOOTHILLS L.L.C. DELAWARE GGP-FOOTHILLS LAND L.L.C. DELAWARE GGP-FOUR SEASONS L.L.C. DELAWARE GGP-GATEWAY MALL L.L.C. DELAWARE GGP-GATEWAY MALL, INC. DELAWARE GGP-GLENBROOK HOLDING L.L.C. DELAWARE GGP-GLENBROOK L.L.C. DELAWARE GGP-GLENDALE, INC. DELAWARE GGP-GRANDVILLE II L.L.C. DELAWARE GGP-GRANDVILLE L.L.C. DELAWARE GGP-GRANDVILLE LAND L.L.C. DELAWARE GGP-KENTUCKY, INC. KENTUCKY GGP-LA PLACE, INC. DELAWARE GGP-LA PLACE, L.P. DELAWARE GGP-LAKELAND, INC. DELAWARE GGP-LAKEVIEW SQUARE, INC. DELAWARE GGP-LANSING MALL, INC. DELAWARE GGP-LINCOLNSHIRE L.L.C. DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ GGPLP L.L.C. DELAWARE GGP-MAINE MALL HOLDING L.L.C. DELAWARE GGP-MAINE MALL L.L.C. DELAWARE GGP-MAINE MALL LAND, L.L.C. DELAWARE GGP-MALL OF LOUISIANA II, L.P. DELAWARE GGP-MALL OF LOUISIANA, INC. DELAWARE GGP-MALL OF LOUISIANA, L.P. DELAWARE GGP-MINT HILL, L.L.C. DELAWARE GGP-MORENO VALLEY, INC. DELAWARE GGP-NATICK SERVICES, INC. DELAWARE GGP-NATICK TRUST MASSACHUSETTS GGP-NATICK WEST L.L.C. DELAWARE GGP-NESHAMINY TRUST DELAWARE GGP-NEWGATE MALL, INC. DELAWARE GGP-NEWPARK L.L.C. DELAWARE GGP-NEWPARK, INC. DELAWARE GGP-NORTH POINT, INC. DELAWARE GGP-NORTHBROOK, INC. DELAWARE GGP-OTAY RANCH L.L.C. DELAWARE GGP-OTAY RANCH, L.P. DELAWARE GGP-PARAMUS PARK MALL, LLC DELAWARE GGP-PARKS AT ARLINGTON ONE, INC. DELAWARE GGP-PARKS AT ARLINGTON TWO, INC. DELAWARE GGP-PECANLAND II, L.P. DELAWARE GGP-PECANLAND, INC. DELAWARE GGP-PECANLAND, L.P. DELAWARE GGP-PEMBROKE LAKES II, INC. DELAWARE GGP-PEMBROKE LAKES, INC. DELAWARE GGP-REDLANDS MALL L.L.C. DELAWARE GGP-REDLANDS, MALL L.P. DELAWARE GGP-RIVERCHASE L.L.C. DELAWARE GGP-ROCHESTER MALL, INC. DELAWARE GGP-ROGERS RETAIL L.L.C. DELAWARE GGP-SHAVANO PARK, INC. DELAWARE GGP-SIKES SENTER L.L.C. DELAWARE GGP-SL L.L.C. DELAWARE GGP-SLH L.L.C. DELAWARE GGP-SOUTH SHORE PARTNERS, INC. DELAWARE GGP-STEEPLEGATE, INC. DELAWARE GGP-SUGAR LAND MALL, L.P. DELAWARE GGP-SUPERSTITION SPRINGS, INC. DELAWARE GGP-TOWN EAST MALL, INC. DELAWARE GGP-TRS L.L.C. DELAWARE GGP-TRS SERVICES, INC. DELAWARE GGP-TUCSON LAND L.L.C. DELAWARE GGP-TUCSON MALL L.L.C. DELAWARE GGP-TYLER MALL L.L.C. DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ GGP-UC L.L.C. DELAWARE GGP-VISTA RIDGE, INC. DELAWARE GGP-WESTWOOD MALL, INC. DELAWARE GGP-WILLOWBROOK, INC. DELAWARE GGP-WILLOWBROOK, L.P. DELAWARE GGP-WOODLANDS, L.P. DELAWARE GLENDALE ANCHOR ACQUISITION, LLC DELAWARE GLENDALE HOLDING, INC. DELAWARE GLENDALE HOLDING, L.L.C. DELAWARE GLENDALE I MALL ASSOCIATES, LLC DELAWARE GLENDALE II MALL ASSOCIATES, LLC DELAWARE GLENDALE OHRBACH'S ASSOCIATES, LLC DELAWARE GOVERNOR'S SQUARE PARTNERSHIP FLORIDA GOVERNOR'S SQUARE, LLC FLORIDA GRAND AVENUE LIMITED PARTNERSHIP MARYLAND GRAND CANAL SHOPS II, LLC DELAWARE GRAND TRAVERSE MALL HOLDING, INC. DELAWARE GRAND TRAVERSE MALL PARTNERS, LP DELAWARE GRANDVILLE MALL II, INC. DELAWARE GRANDVILLE MALL, INC. DELAWARE GREENGATE MALL, INC. PENNSYLVANIA GREENWOOD MALL L.L.C. DELAWARE GREENWOOD MALL, INC. DELAWARE GSG DE COSTA RICA, SRL BARBADOS GUILFORD INDUSTRIAL CENTER, LLC MARYLAND HAMMOND BRANCH JOINT VENTURE MARYLAND HARBOR OVERLOOK LIMITED PARTNERSHIP MARYLAND HARBOR PLACE ASSOCIATES LIMITED PARTNERSHIP MARYLAND HARBORPLACE MANAGEMENT COMPANY, LLC MARYLAND HARBORPLACE, INC. MARYLAND HARBORPLACE, LLC MARYLAND HARPER'S CHOICE BUSINESS TRUST MARYLAND HAWKEYE PROPERTIES, INC. NEVADA HCTSS L.L.C. DELAWARE HEAD ACQUISITION, LP DELAWARE HEX HOLDING, LLC DELAWARE HEXALON REAL ESTATE, INC. DELAWARE HHP GOVERNMENT SERVICES, LIMITED PARTNERSHIP NEVADA HICKORY GROVE LIMITED PARTNERSHIP MARYLAND HICKORY RIDGE VILLAGE CENTER, INC. MARYLAND HICKORY RIDGE VILLAGE CENTER, LLC MARYLAND HIGHLAND MALL JOINT VENTURE, THE NEW YORK HIGHLAND MALL LIMITED PARTNERSHIP TEXAS HMF PROPERTIES LIMITED PARTNERSHIP DELAWARE HO RETAIL PROPERTIES I LIMITED PARTNERSHIP ILLINOIS HO RETAIL PROPERTIES II LIMITED PARTNERSHIP ILLINOIS HOCKER OXMOOR PARTNERS, LLC KENTUCKY

ENTITY: PLACE OF FORMATION - ------- ------------------ HOCKER OXMOOR, LLC DELAWARE HOOVER MALL HOLDING, L.L.C. DELAWARE HOOVER MALL LIMITED, L.L.C. DELAWARE HOWARD HUGHES CANYON POINTE Q4, LLC NEVADA HOWARD HUGHES CENTERPOINT, LLC NEVADA HOWARD HUGHES CORPORATION, THE DELAWARE HOWARD HUGHES PROPERTIES I, LLC NEVADA HOWARD HUGHES PROPERTIES II, LLC NEVADA HOWARD HUGHES PROPERTIES III, LLC NEVADA HOWARD HUGHES PROPERTIES IV, LLC DELAWARE HOWARD HUGHES PROPERTIES V, LLC DELAWARE HOWARD HUGHES PROPERTIES VII, LLC NEVADA HOWARD HUGHES PROPERTIES, INC. NEVADA HOWARD HUGHES PROPERTIES, LIMITED PARTNERSHIP DELAWARE HOWARD RESEARCH AND DEVELOPMENT CORPORATION, THE MARYLAND HOWARD RESEARCH AND DEVELOPMENT HOLDINGS CORPORATION, THE MARYLAND HOWARD RETAIL INVESTMENT COMPANY, LLC MARYLAND HRD COMMERCIAL PROPERTIES, INC. MARYLAND HRD PARKING DECK BUSINESS TRUST MARYLAND HRD PARKING, INC. MARYLAND HRD PARKING, LLC MARYLAND HRD PROPERTIES, INC. MARYLAND HRD REMAINDER, INC. MARYLAND HRDHC, LLC MARYLAND HRE FLANC, INC. DELAWARE HRE KI PARTNERS, LP DELAWARE HRE KI SMBT DELAWARE HRE PENNSYLVANIA SMBT DELAWARE HRE-NS, LLC DELAWARE H-TEX, INCORPORATED TEXAS HUGHES CORPORATION, THE DELAWARE HUGHES PROPERTIES, INC. NEVADA HULEN GP LLC DELAWARE HULEN MALL JOINT VENTURE TEXAS HULEN OWNER, LP DELAWARE HUNT VALLEY TITLE HOLDING COMPANY, LLC MARYLAND JPT LIMITED NEVADA KALAMAZOO MALL L.L.C. DELAWARE KALAMAZOO MALL, INC. DELAWARE KENWOOD MALL HOLDING, LLC DELAWARE KENWOOD MALL L.L.C. DELAWARE KING'S CONTRIVANCE VILLAGE CENTER, LLC MARYLAND KNOLLWOOD MALL, INC. DELAWARE LA CANTERA HOLDING GP, LLC DELAWARE LA CANTERA HOLDING, LP DELAWARE LA CANTERA RETAIL LIMITED PARTNERSHIP TEXAS LA PLACE SHOPPING, L.P. DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ LAKE MEADE & BUFFALO PARTNERSHIP NEVADA LAKEFRONT NORTH PARKING, INC. MARYLAND LAKEFRONT NORTH PARKING, LLC MARYLAND LAKESIDE MALL PROPERTY LLC DELAWARE LAKESIDE MALL, LLC MICHIGAN LAKEVIEW SQUARE LIMITED PARTNERSHIP DELAWARE LANCASTER TRUST ILLINOIS LANDMARK MALL L.L.C. DELAWARE LANDMARK MALL, INC. DELAWARE LANSING MALL LIMITED PARTNERSHIP DELAWARE LAND TRUST NO. 89433 HAWAII LAND TRUST NO. 89434 HAWAII LOCKPORT L.L.C. NEW YORK LOT 48 BUSINESS TRUST MARYLAND LOT 49 BUSINESS TRUST MARYLAND LP ROUSE-HOUSTON, LLC MARYLAND LRVC BUSINESS TRUST MARYLAND LYNNHAVEN HOLDING L.L.C. DELAWARE LYNNHAVEN MALL L.L.C. DELAWARE MADISON LAND L.L.C. DELAWARE MAJESTIC PARTNERS-PROVO, LLC UTAH MALL ENTRANCES BUSINESS TRUST MARYLAND MALL IN COLUMBIA BUSINESS TRUST, THE MARYLAND MALL IN COLUMBIA HOLDING II, L.L.C., THE DELAWARE MALL IN COLUMBIA HOLDING, L.L.C., THE DELAWARE MALL OF THE BLUFFS PARTNERS L.L.C. IOWA MALL OF THE BLUFFS, INC. DELAWARE MALL ST. MATTHEWS COMPANY, LLC DELAWARE MALL ST. VINCENT, INC. DELAWARE MALL ST. VINCENT, L.P. DELAWARE MARKET PLACE OUTPARCEL L.L.C. DELAWARE MARKET PLACE OUTPARCEL, INC. DELAWARE MARKET STREET EAST JOINT VENTURE PENNSYLVANIA MAYFAIR PROPERTY INC. DELAWARE MERRICK PARK LLC MARYLAND MERRICK PARK PARKING LLC DELAWARE MERRIWEATHER POST BUSINESS TRUST MARYLAND MIZNER PARK HOLDINGS I, LLC DELAWARE MIZNER PARK HOLDINGS II, LLC DELAWARE MIZNER PARK HOLDINGS III, LLC DELAWARE MIZNER PARK HOLDINGS IV, LLC DELAWARE MIZNER PARK HOLDINGS V, LLC DELAWARE MIZNER PARK VENTURE, LLC DELAWARE MJ, INC. NEVADA MJF INVESTMENTS CORPORATION NEVADA MONDAWMIN BUSINESS TRUST MARYLAND MONDAWMIN, LLC MARYLAND

ENTITY: PLACE OF FORMATION - ------- ------------------ MONTCLAIR PLAZA L.L.C. DELAWARE MSM PROPERTY L.L.C. DELAWARE NESHAMINY MALL JOINT VENTURE LIMITED PARTNERSHIP ILLINOIS NEW ORLEANS RIVERWALK ASSOCIATES LOUISIANA NEW ORLEANS RIVERWALK LIMITED PARTNERSHIP MARYLAND NEW RIVER ASSOCIATES ARIZONA NEW RIVER CENTER, LLC FLORIDA NEWPARK ANCHOR ACQUISITION, LLC DELAWARE NEWPARK MALL, L.L.C. DELAWARE NORTH STAR ANCHOR ACQUISITION, LLC DELAWARE NORTH STAR ANCHOR ACQUISITION, LP DELAWARE NORTH STAR MALL II, LLC MARYLAND NORTH STAR MALL, LLC TEXAS NORTHBROOK COURT I L.L.C. DELAWARE NORTHBROOK COURT II L.L.C. DELAWARE NORTHBROOK COURT L.L.C. DELAWARE NORTHGATE MALL L.L.C. DELAWARE NORTHWEST ASSOCIATES MARYLAND NORTHWEST OHIO MALL L.L.C. DELAWARE NS MALL GP LLC DELAWARE NS MALL PROPERTY, LP DELAWARE NSMJV, LP DELAWARE O.M. INVESTMENT II LIMITED PARTNERSHIP MARYLAND O.M. INVESTMENT LIMITED PARTNERSHIP MARYLAND O.M. LAND DEVELOPMENT, LLC MARYLAND O.M. MALL COMPANY, LLC MARYLAND OAK VIEW MALL L.L.C. DELAWARE OAKBROOK FACILITIES CORPORATION MARYLAND OAKBROOK SHOPPING CENTER, LLC DELAWARE OAKBROOK URBAN VENTURE, LP ILLINOIS OAKLAND RIDGE COMMERCIAL GROUP, LLC MARYLAND OAKLAND RIDGE INDUSTRIAL DEVELOPMENT CORPORATION MARYLAND OAKLAND RIDGE INDUSTRIAL DEVELOPMENT, LLC MARYLAND OAKS MALL GAINESVILLE II, INC. DELAWARE OAKS MALL GAINESVILLE LIMITED PARTNERSHIP DELAWARE OAKWOOD HILLS MALL PARTNERS L.L.P. WISCONSIN OAKWOOD HILLS MALL, INC. DELAWARE OAKWOOD SHOPPING CENTER LIMITED PARTNERSHIP LOUISIANA OGLETHORPE MALL L.L.C. DELAWARE OKLAHOMA MALL L.L.C. DELAWARE OKLAHOMA MALL, INC. DELAWARE ONE OWINGS MILLS CORPORATE CENTER ASSOCIATES, LP MARYLAND ONE OWINGS MILLS CORPORATE CENTER, LLC MARYLAND ONE WILLOW COMPANY, LLC DELAWARE OWINGS MILLS LIMITED PARTNERSHIP MARYLAND PACIFIC REALTY, INC. NEVADA PARAMUS EQUITIES, LLC TEXAS

ENTITY: PLACE OF FORMATION - ------- ------------------ PARAMUS MALL MANAGEMENT COMPANY, LLC MARYLAND PARAMUS PARK SHOPPING CENTER LIMITED PARTNERSHIP NEW JERSEY PARAMUS PARK, LLC MARYLAND PARCEL C BUSINESS TRUST MARYLAND PARCEL D BUSINESS TRUST MARYLAND PARCIT-IIP LANCASTER VENTURE ILLINOIS PARCITY L.L.C. DELAWARE PARCITY TRUST DELAWARE PARIS PROPERTIES, INC. NEVADA PARK CITY HOLDING, INC. DELAWARE PARK MALL L.L.C. DELAWARE PARK MALL, INC. DELAWARE PARK SQUARE LIMITED PARTNERSHIP MARYLAND PARKS AT ARLINGTON, L.P. DELAWARE PARKSIDE LIMITED PARTNERSHIP MARYLAND PARKVIEW OFFICE BUILDING LIMITED PARTNERSHIP MARYLAND PAVILIONS AT BUCKLAND HILLS L.L.C. CONNECTICUT PC LANCASTER L.L.C. DELAWARE PC LANCASTER TRUST DELAWARE PDC COMMUNITY CENTERS L.L.C. DELAWARE PDC HOLDING, LLC DELAWARE PDC-EASTRIDGE MALL L.L.C. DELAWARE PDC-RED CLIFFS MALL L.L.C. DELAWARE PEACHTREE MALL L.L.C DELAWARE PEMBROKE LAKES MALL LTD. FLORIDA PERIMETER CENTER, LLC MARYLAND PERIMETER MALL FACILITIES, LLC DELAWARE PERIMETER MALL VENTURE, LLC DELAWARE PERIMETER MALL, LLC MARYLAND PIEDMONT MALL L.L.C. VIRGINIA PIERRE BOSSIER MALL, INC. DELAWARE PIERRE BOSSIER MALL, L.P. DELAWARE PINE RIDGE MALL L.L.C. DELAWARE PINES MALL PARTNERS IOWA PIONEER OFFICE LIMITED PARTNERSHIP MARYLAND PIONEER PLACE LIMITED PARTNERSHIP MARYLAND PLANOLE STORE, LP TEXAS PLYMOUTH MEETING PROPERTY LLC DELAWARE PRICE DEVELOPMENT COMPANY, LIMITED PARTNERSHIP MARYLAND PRICE FINANCING PARTNERSHIP, L.P. DELAWARE PRICE GP L.L.C. DELAWARE PRICE JAMES COMPANY LIMITED PARTNERSHIP UTAH PRICE NT L.L.C. DELAWARE PRICE SPOKANE LIMITED PARTNERSHIP DELAWARE PRICE-ASG L.L.C. DELAWARE PRICE-BOISE COMPANY, LTD. UTAH PRICE-JAMES COMPANY UTAH

ENTITY: PLACE OF FORMATION - ------- ------------------ PRINCE KUHIO PLAZA, INC. DELAWARE PRINCETON LAND EAST, LLC DELAWARE PRINCETON LAND, LLC DELAWARE PROVIDENCE PLACE HOLDING, LLC DELAWARE PROVO MALL DEVELOPMENT COMPANY, LTD. UTAH PROVO MALL L.L.C. DELAWARE RASCAP REALTY, LTD. NEW YORK RED ROCK INVESTMENT, LLC NEVADA REDLANDS LAND ACQUISITION COMPANY L.L.C. DELAWARE REDLANDS LAND ACQUISITION COMPANY, L.P. DELAWARE REDLANDS LAND HOLDING, L.L.C. DELAWARE RIDGEDALE CENTER, LLC MARYLAND RII HOLDING, LLC TEXAS RIO WEST L.L.C. DELAWARE RIVER HILL VILLAGE CENTER II, LLC MARYLAND RIVER HILLS MALL L.L.P. MINNESOTA RIVERS PARK ABC, LLC DELAWARE RIVERSPARK ASSOCIATES LIMITED PARTNERSHIP MARYLAND ROCHESTER MALL LLC DELAWARE ROGERS RETAIL L.L.C. DELAWARE ROGUE VALLEY MALL HOLDING L.L.C. DELAWARE ROGUE VALLEY MALL, L.L.C. DELAWARE ROUSE COLUMBUS SQUARE, LLC MARYLAND ROUSE COMMERCIAL PROPERTIES, LLC MARYLAND ROUSE COMPANY AT OWINGS MILLS, LLC, THE MARYLAND ROUSE COMPANY BT, LLC, THE MARYLAND ROUSE COMPANY LP, THE DELAWARE ROUSE COMPANY OF FLORIDA, LLC, THE FLORIDA ROUSE COMPANY OF GEORGIA, LLC, THE GEORGIA ROUSE COMPANY OF LOUISIANA, LLC, THE MARYLAND ROUSE COMPANY OF MASSACHUSETTS, LLC, THE MARYLAND ROUSE COMPANY OF MICHIGAN, LLC, THE MARYLAND ROUSE COMPANY OF MINNESOTA, LLC, THE MARYLAND ROUSE COMPANY OF NEW JERSEY, LLC, THE NEW JERSEY ROUSE COMPANY OF NEW YORK, LLC, THE NEW YORK ROUSE COMPANY OF OHIO, LLC, THE OHIO ROUSE COMPANY OF OREGON, LLC, THE MARYLAND ROUSE COMPANY OF PENNSYLVANIA, LLC, THE PENNSYLVANIA ROUSE COMPANY OF TEXAS, LLC, THE TEXAS ROUSE COMPANY OF WASHINGTON, LLC, THE MARYLAND ROUSE COMPANY OPERATING PARTNERSHIP LP, THE DELAWARE ROUSE COMPANY PROTECTIVE TRUST, INC., THE DELAWARE ROUSE F.S., LLC MARYLAND ROUSE FASHION SHOW MANAGEMENT, LLC MARYLAND ROUSE HOLDING COMPANY OF ARIZONA, LLC, THE MARYLAND ROUSE HOLDING COMPANY, LLC, THE MARYLAND ROUSE HOLDING LIMITED PARTNERSHIP MARYLAND

ENTITY: PLACE OF FORMATION - ------- ------------------ ROUSE INVESTING COMPANY, LLC MARYLAND ROUSE INVESTMENT LIMITED PARTNERSHIP MARYLAND ROUSE IP, LLC MARYLAND ROUSE LLC DELAWARE ROUSE OAKBROOK, LLC DELAWARE ROUSE OFFICE MANAGEMENT OF ARIZONA, LLC MARYLAND ROUSE OFFICE MANAGEMENT OF OREGON, LLC MARYLAND ROUSE OFFICE MANAGEMENT OF PENNSYLVANIA, LLC MARYLAND ROUSE OFFICE MANAGEMENT, LLC MARYLAND ROUSE OWINGS MILLS MANAGEMENT COMPANY, LLC MARYLAND ROUSE PROPERTY MANAGEMENT, INC. MARYLAND ROUSE PROVIDENCE LLC DELAWARE ROUSE RIDGEDALE HOLDING, LLC MARYLAND ROUSE RIDGEDALE, LLC DELAWARE ROUSE SI SHOPPING CENTER, LLC MARYLAND ROUSE SOUTHLAND, LLC MARYLAND ROUSE TRANSPORTATION, LLC MARYLAND ROUSE TRI-PARTY MISCELLANEOUS, LLC MARYLAND ROUSE TRI-PARTY TRS, INC. MARYLAND ROUSE WESTIN, INC. MARYLAND ROUSE WESTLAKE LIMITED PARTNERSHIP II DELAWARE ROUSE-ABBEY, LLC MARYLAND ROUSE-ARIZONA CENTER, LLC MARYLAND ROUSE-ARIZONA RETAIL CENTER LIMITED PARTNERSHIP MARYLAND ROUSE-BRIDGEWATER COMMONS, LLC MARYLAND ROUSE-BURLINGTON, LLC MARYLAND ROUSE-CORAL GABLES DEVELOPMENT, LLC MARYLAND ROUSE-EASTFIELD, LLC MARYLAND ROUSE-FAIRWOOD DEVELOPMENT CORPORATION MARYLAND ROUSE-FAIRWOOD DEVELOPMENT LIMITED PARTNERSHIP MARYLAND ROUSE-FORSYTH, LLC MARYLAND ROUSE-GOVERNOR'S SQUARE, LLC MARYLAND ROUSE-HIGHLAND, LLC DELAWARE ROUSE-MERCHANTWIRED, INC. MARYLAND ROUSE-MIAMI, LLC DELAWARE ROUSE-MIZNER PARK, LLC DELAWARE ROUSE-NEW ORLEANS, LLC MARYLAND ROUSE-OAKWOOD SHOPPING CENTER, LLC MARYLAND ROUSE-OAKWOOD TWO, LLC MARYLAND ROUSE-ORLANDO, LLC DELAWARE ROUSE-PARK MEADOWS HOLDING, LLC MARYLAND ROUSE-PARK MEADOWS, LLC MARYLAND ROUSE-PHOENIX CINEMA, LLC MARYLAND ROUSE-PHOENIX CORPORATE CENTER LIMITED PARTNERSHIP MARYLAND ROUSE-PHOENIX DEVELOPMENT COMPANY, LLC MARYLAND ROUSE-PHOENIX HOTEL CORPORATION MARYLAND ROUSE-PHOENIX HOTEL PARKING, INC. MARYLAND

ENTITY: PLACE OF FORMATION - ------- ------------------ ROUSE-PHOENIX HOTEL, LLC MARYLAND ROUSE-PHOENIX MASTER LIMITED PARTNERSHIP MARYLAND ROUSE-PHOENIX PARKING TWO, LLC MARYLAND ROUSE-PHOENIX PARKING, LLC MARYLAND ROUSE-PHOENIX THEATRE LIMITED PARTNERSHIP MARYLAND ROUSE-PHOENIX TWO CORPORATE CENTER, LLC MARYLAND ROUSE-PORTLAND, LLC MARYLAND ROUSE-RANDHURST SHOPPING CENTER, LLC MARYLAND ROUSE-RIVER HILL VILLAGE CENTER, INC. MARYLAND ROUSE-SEATTLE, LLC DELAWARE ROUSE-TOWSON TOWN CENTER, LLC MARYLAND ROUSE-TTC FUNDING, LLC MARYLAND ROUSE-URBAN ACQUISITION, LLC MARYLAND ROUSE-URBAN, LLC MARYLAND ROUSE-WEST DADE, INC. MARYLAND ROUSE-WESTLAKE LIMITED PARTNERSHIP MARYLAND ROUSE-WINCOPIN, LLC MARYLAND RREF HOLDING, LLC TEXAS RS PROPERTIES INC. DELAWARE RUNNING BROOK BUSINESS TRUST MARYLAND RV JOINT VENTURE FLORIDA SAINT LOUIS GALLERIA HOLDING L.L.C. DELAWARE SAINT LOUIS GALLERIA L.L.C. DELAWARE SAINT LOUIS LAND L.L.C. DELAWARE SALEM MALL, LLC MARYLAND SEAPORT MARKETPLACE THEATRE, LLC MARYLAND SEAPORT MARKETPLACE, LLC MARYLAND SEVENTY COLUMBIA CORPORATE CENTER LIMITED PARTNERSHIP MARYLAND SEVENTY COLUMBIA CORPORATE CENTER, INC. MARYLAND SEVENTY COLUMBIA CORPORATE CENTER, LLC MARYLAND SIKES SENTER, L.P. DELAWARE SILVER CITY GALLERIA L.L.C. DELAWARE SIXTY COLUMBIA CORPORATE CENTER, INC. MARYLAND SIXTY COLUMBIA CORPORATE CENTER, LLC MARYLAND SOONER FASHION MALL L.L.C. DELAWARE SOUTH SHORE PARTNERS, L.P. WASHINGTON SOUTH STREET SEAPORT LIMITED PARTNERSHIP MARYLAND SOUTHLAKE MALL L.L.C. DELAWARE SOUTHLAKE MALL, INC. DELAWARE SOUTHLAND CENTER HOLDING, LLC MARYLAND SOUTHLAND CENTER, LLC DELAWARE SOUTHLAND MALL, INC. DELAWARE SOUTHLAND MALL, L.P. DELAWARE SOUTHPOINT MALL, LLC DELAWARE SOUTHWEST DENVER LAND L.L.C. DELAWARE SOUTHWEST PLAZA L.L.C. DELAWARE SPOKANE MALL DEVELOPMENT COMPANY LIMITED PARTNERSHIP UTAH

ENTITY: PLACE OF FORMATION - ------- ------------------ SPOKANE MALL L.L.C. DELAWARE SPRING HILL MALL L.L.C. DELAWARE SPRING HILL MALL, INC. DELAWARE ST. CLOUD LAND L.LC. DELAWARE ST. CLOUD MALL HOLDING L.L.C. DELAWARE ST. CLOUD MALL L.L.C. DELAWARE STANSFIELD-LAUREL, INC. MARYLAND STERLING FINANCIAL, LTD. NEVADA STERRETT BUILDING BUSINESS TRUST MARYLAND STONE LAKE CORPORATION MARYLAND STONEBRIAR MALL (GP) L.L.C. DELAWARE STONEBRIAR MALL LIMITED PARTNERSHIP DELAWARE STONEBRIAR MALL, INC. DELAWARE STONESTOWN SHOPPING CENTER HOLDING L.L.C. DELAWARE STONESTOWN SHOPPING CENTER L.L.C. DELAWARE STONESTOWN SHOPPING CENTER, L.P. DELAWARE SUMMA CORPORATION DELAWARE SUMMERLIN CENTRE, LLC DELAWARE SUMMERLIN CORPORATION DELAWARE TALLAHASSEE ASSOCIATES MARYLAND TAMPA NORTHWEST, LTD. FLORIDA TERRAPIN ACQUISITION, LLC MARYLAND THC-HRE, LLC MARYLAND THREE OWINGS MILLS CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP MARYLAND THREE OWINGS MILLS CORPORATE CENTER LAND LIMITED PARTNERSHIP MARYLAND THREE OWINGS MILLS CORPORATE CENTER, LLC MARYLAND THREE RIVERS MALL L.L.C. DELAWARE THREE WILLOW COMPANY, LLC DELAWARE TOWN CENTER DEVELOPMENT COMPANY GP, LLC TEXAS TOWN CENTER DEVELOPMENT COMPANY, LP TEXAS TOWN CENTER EAST BUSINESS TRUST MARYLAND TOWN CENTER EAST PARKING LOT BUSINESS TRUST MARYLAND TOWN EAST MALL, L.P. DELAWARE TOWSON TC, LLC MARYLAND TRACY MALL PARTNERS I L.L.C. DELAWARE TRACY MALL PARTNERS II, L.P. DELAWARE TRACY MALL PARTNERS, L.P. DELAWARE TRACY MALL, INC. DELAWARE TRAILS VILLAGE CENTER CO. NEVADA TRC CENTRAL, LLC MARYLAND TRC EXTON PLYMOUTH 12 LLC DELAWARE TRC EXTON PLYMOUTH 13 LLC DELAWARE TRC EXTON PLYMOUTH 14 LLC DELAWARE TRC EXTON PLYMOUTH 15 LLC DELAWARE TRC EXTON PLYMOUTH 16 LLC DELAWARE TRC EXTON PLYMOUTH 17 LLC DELAWARE TRC EXTON PLYMOUTH 18 LLC DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ TRC EXTON PLYMOUTH 19 LLC DELAWARE TRC EXTON PLYMOUTH 20 LLC DELAWARE TRC EXTON PLYMOUTH 21 LLC DELAWARE TRC EXTON PLYMOUTH 22 LLC DELAWARE TRC EXTON PLYMOUTH 23 LLC DELAWARE TRC EXTON PLYMOUTH 24 LLC DELAWARE TRC EXTON PLYMOUTH 25 LLC DELAWARE TRC EXTON PLYMOUTH 26 LLC DELAWARE TRC EXTON PLYMOUTH 27 LLC DELAWARE TRC EXTON PLYMOUTH 28 LLC DELAWARE TRC EXTON PLYMOUTH 29 LLC DELAWARE TRC EXTON PLYMOUTH 30 LLC DELAWARE TRC EXTON PLYMOUTH 31 LLC DELAWARE TRC EXTON PLYMOUTH 32 LLC DELAWARE TRC EXTON PLYMOUTH 33 LLC DELAWARE TRC EXTON PLYMOUTH 34 LLC DELAWARE TRC EXTON PLYMOUTH 35 LLC DELAWARE TRC EXTON PLYMOUTH 36 LLC DELAWARE TRC EXTON PLYMOUTH 37 LLC DELAWARE TRC EXTON PLYMOUTH 38 LLC DELAWARE TRC EXTON PLYMOUTH 39 LLC DELAWARE TRC GALLERY AT MARKET EAST 1, LLC DELAWARE TRC GALLERY AT MARKET EAST 10, LLC DELAWARE TRC GALLERY AT MARKET EAST 11 LLC DELAWARE TRC GALLERY AT MARKET EAST 12 LLC DELAWARE TRC GALLERY AT MARKET EAST 13 LLC DELAWARE TRC GALLERY AT MARKET EAST 14 LLC DELAWARE TRC GALLERY AT MARKET EAST 15 LLC DELAWARE TRC GALLERY AT MARKET EAST 16 LLC DELAWARE TRC GALLERY AT MARKET EAST 17 LLC DELAWARE TRC GALLERY AT MARKET EAST 18 LLC DELAWARE TRC GALLERY AT MARKET EAST 19 LLC DELAWARE TRC GALLERY AT MARKET EAST 2 LLC DELAWARE TRC GALLERY AT MARKET EAST 20 LLC DELAWARE TRC GALLERY AT MARKET EAST 21 LLC DELAWARE TRC GALLERY AT MARKET EAST 22 LLC DELAWARE TRC GALLERY AT MARKET EAST 23 LLC DELAWARE TRC GALLERY AT MARKET EAST 24 LLC DELAWARE TRC GALLERY AT MARKET EAST 25 LLC DELAWARE TRC GALLERY AT MARKET EAST 26 LLC DELAWARE TRC GALLERY AT MARKET EAST 27 LLC DELAWARE TRC GALLERY AT MARKET EAST 28 LLC DELAWARE TRC GALLERY AT MARKET EAST 29 LLC DELAWARE TRC GALLERY AT MARKET EAST 3 LLC DELAWARE TRC GALLERY AT MARKET EAST 30 LLC DELAWARE TRC GALLERY AT MARKET EAST 31 LLC DELAWARE TRC GALLERY AT MARKET EAST 32 LLC DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ TRC GALLERY AT MARKET EAST 33 LLC DELAWARE TRC GALLERY AT MARKET EAST 34 LLC DELAWARE TRC GALLERY AT MARKET EAST 35 LLC DELAWARE TRC GALLERY AT MARKET EAST 36 LLC DELAWARE TRC GALLERY AT MARKET EAST 37 LLC DELAWARE TRC GALLERY AT MARKET EAST 38 LLC DELAWARE TRC GALLERY AT MARKET EAST 39 LLC DELAWARE TRC GALLERY AT MARKET EAST 4 LLC DELAWARE TRC GALLERY AT MARKET EAST 5 LLC DELAWARE TRC GALLERY AT MARKET EAST 6 LLC DELAWARE TRC GALLERY AT MARKET EAST 7 LLC DELAWARE TRC GALLERY AT MARKET EAST 8 LLC DELAWARE TRC GALLERY AT MARKET EAST 9 LLC DELAWARE TRC NJ HOLDING, LP DELAWARE TRC PARKING BUSINESS TRUST MARYLAND TRC PROPERTY HOLDINGS, INC. MARYLAND TRC WILLOW, LLC MARYLAND TRCGP, LLC MARYLAND TRIANGLE BUSINESS CENTER I LIMITED PARTNERSHIP MARYLAND TTC MEMBER, LLC MARYLAND TTC SPE, LLC MARYLAND TV INVESTMENT, LLC DELAWARE TWC COMMERCIAL PROPERTIES, LLC DELAWARE TWC COMMERCIAL PROPERTIES, LP DELAWARE TWC LAND DEVELOPMENT, LLC DELAWARE TWC LAND DEVELOPMENT, LP DELAWARE TWC OPERATING HOLDINGS, INC. DELAWARE TWC OPERATING, LLC DELAWARE TWC OPERATING, LP DELAWARE TWCPC HOLDINGS GP, LLC TEXAS TWCPC HOLDINGS, L.P. TEXAS TWLDC HOLDINGS GP, LLC TEXAS TWLDC HOLDINGS, LP TEXAS TWO FRANKLIN PARK COMPANY, LLC DELAWARE TWO OWINGS MILLS CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP MARYLAND TWO OWINGS MILLS CORPORATE CENTER, LLC MARYLAND TWO WILLOW COMPANY, LLC DELAWARE TYLER MALL LIMITED PARTNERSHIP DELAWARE TYSONS GALLERIA L.L.C. DELAWARE U.K.-AMERICAN PROPERTIES, INC. DELAWARE U.K.-LASALLE, INC. DELAWARE UC OAKBROOK GENPAR, LLC DELAWARE URBAN SHOPPING CENTERS, LP ILLINOIS VALLEY HILLS MALL L.L.C. DELAWARE VALLEY HILLS MALL, INC. DELAWARE VCK BUSINESS TRUST MARYLAND VICTORIA WARD CENTER L.L.C. DELAWARE

ENTITY: PLACE OF FORMATION - ------- ------------------ VICTORIA WARD ENTERTAINMENT CENTER L.L.C. DELAWARE VICTORIA WARD SERVICES, INC. DELAWARE VICTORIA WARD, LIMITED DELAWARE VILLAGE OF CROSS KEYS, LLC, THE MARYLAND VISALIA MALL L.L.C. DELAWARE VISALIA MALL, L.P. DELAWARE VISTA RIDGE JOINT VENTURE, L.P. DELAWARE VISTA RIDGE MALL, INC. DELAWARE WATER TOWER JOINT VENTURE ILLINOIS WATER TOWER LLC DELAWARE WECCR GENERAL PARTNERSHIP TEXAS WECCR, INC. TEXAS WEEPING WILLOW RNA, LLC DELAWARE WEST KENDALL HOLDINGS, LLC MARYLAND WEST OAKS MALL TRUST DELAWARE WESTCOAST ESTATES CALIFORNIA WESTLAKE CENTER ASSOCIATES LIMITED PARTNERSHIP WASHINGTON WESTLAKE RETAIL ASSOCIATES, LTD. TEXAS WESTROADS LAND L.L.C. DELAWARE WESTROADS MALL II, INC. DELAWARE WESTROADS MALL L.L.C. DELAWARE WESTWOOD LAND, L.L.C. DELAWARE WESTWOOD MALL LIMITED PARTNERSHIP DELAWARE WHITE MARSH GENERAL PARTNERSHIP MARYLAND WHITE MARSH LIMITED PARTNERSHIP MARYLAND WHITE MARSH MALL ASSOCIATES MARYLAND WHITE MARSH MALL, LLC MARYLAND WHITE MARSH PHASE II ASSOCIATES MARYLAND WHITELAND HOLDING LIMITED PARTNERSHIP MARYLAND WILLOW SPE, LLC DELAWARE WILLOWBROOK COMPANY, LLC, THE MARYLAND WILLOWBROOK II, LLC MARYLAND WILLOWBROOK MALL COMPANY, LLC DELAWARE WILLOWBROOK MALL, LLC DELAWARE WILLOWBROOK MANAGEMENT COMPANY, LLC MARYLAND WINCOPIN RESTAURANT BUSINESS TRUST MARYLAND WOODBRIDGE CENTER PROPERTY, LLC DELAWARE WOODBRIDGE CENTER, LLC MARYLAND WOODLANDS ANCHOR ACQUISITION, LLC DELAWARE WOODLANDS ANCHOR ACQUISITION, LP DELAWARE WOODLANDS BEVERAGE, INC. TEXAS WOODLANDS BROKERAGE, LLC, THE TEXAS WOODLANDS COMMERCIAL BROKERAGE CO., LP, THE TEXAS WOODLANDS COMMERCIAL PROPERTIES COMPANY, LP, THE TEXAS WOODLANDS CORPORATION, THE TEXAS WOODLANDS CUSTOM SALES, LP, THE TEXAS WOODLANDS HOLDING HOTEL, LP, THE TEXAS

ENTITY: PLACE OF FORMATION - ------- ------------------ WOODLANDS HOTEL GP, LLC, THE TEXAS WOODLANDS HOTEL, LP, THE TEXAS WOODLANDS LAND DEVELOPMENT CO., LP, THE TEXAS WOODLANDS MALL ASSOCIATES, THE ILLINOIS WOODLANDS OFFICE EQUITIES-95, LTD. TEXAS WOODLANDS OPERATING COMPANY, L.P., THE TEXAS WOODLANDS VTO 2000 COMMERCIAL, GP, LLC TEXAS WOODLANDS VTO 2000 COMMERCIAL, LP TEXAS WV SUB, LLC DELAWARE
EX-23.1 29 c02442exv23w1.txt CONSENT EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statement Nos. 333-11067, 333-15907, 333-17021, Amendment No. 1 to 333-23035, 333-37247, 333-37383, 333-41603, 333-58045, 333-68505, 333-76379, 333-76757, 333-82134, 333-82569, 333-84419, 333-88813, 333-88819, Amendment No. 1 to 333-91621, 333-115693, 333-115694 and Amendment No. 1 to 333-120373 on Form S-3 and Registration Statement Nos. 333-07241, 333-11237, 333-38449, 333-74461, 333-79737, 333-105882, and 333-125605 on Form S-8 of our reports dated March 31, 2006, relating to the consolidated financial statements and consolidated financial statement schedule of General Growth Properties, Inc. and subsidiaries (the "Company") and management's report on the effectiveness of internal control over financial reporting (which report expresses an adverse opinion on the effectiveness of the Company's internal control over financial reporting because of material weaknesses), appearing in this Annual Report on Form 10-K of the Company for the year ended December 31, 2005. DELOITTE & TOUCHE LLP Chicago, Illinois March 31, 2006 EX-23.2 30 c02442exv23w2.txt CONSENT EXHIBIT 23.2 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors General Growth Properties, Inc.: We consent to the incorporation by reference in the registration statements (Nos. 333-11067, 333-15907, 333-17021, 333-23035, 333-37247, 333-37383, 333-41603, 333-58045, 333-68505, 333-76379, 333-76757, 333-82134, 333-82569, 333-84419, 333-88813, 333-88819, 333-91621, 333-115693, 333-115694 and 333-120373) on Form S-3 and the registration statements (Nos. 33-79372, 333-07241, 333-11237, 333-28449, 333-74461, 333-79737, 333-105882 and 333-125605) on Form S-8 of General Growth Properties, Inc. of our report dated March 17, 2006, with respect to the consolidated balance sheets of GGP/Homart, Inc. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of income and comprehensive income, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2005, our report dated March 17, 2006, with respect to the consolidated balance sheets of GGP/Homart II L.L.C. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of income and comprehensive income, members' capital and cash flows for each of the years in the three-year period ended December 31, 2005, and our report dated March 17, 2006, with respect to the consolidated balance sheet of GGP-TRS L.L.C. and subsidiaries as of December 31, 2005, and the related consolidated statement of operations, changes in members' capital and cash flows for the year ended December 31,2005, which reports appear in the December 31, 2005 annual report on Form 10-K of General Growth Properties, Inc. KPMG LLP Chicago, Illinois March 31, 2006 EX-31.1 31 c02442exv31w1.htm CERTIFICATION exv31w1


(Mark One)
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2005
or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to


Delaware		42-1283895
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

110 N. Wacker Dr., Chicago, IL (Address of principal executive offices)		60606 (Zip Code)


82%		General Growth, as sole general partner
16		Limited partners that indirectly include family members of the original stockholders of the Company. Represented by common units of limited partnership interest (the “Common Units”)
2		Limited partners that include subsequent contributors of properties to the Operating Partnership which are also represented by Common Units.

100%


Category	% of Square Feet			Representative Tenants

Specialty (includes personal services)		22	%	Regis, Lenscrafters, Dollar Tree, Petland
Family Apparel (includes unisex)		14		Gap, Old Navy, J Crew, Express, Anchor Blue, Banana Republic, Bachrach
Women’s Apparel		14		Limited, Talbot’s, Chico’s, Lane Bryant, Ann Taylor, Coldwater Creek, Victoria’s Secret
Teen Apparel		9		PacSun, Charlotte Russe, Forever 21, d.e.m.o., Hollister & Co., Aeropostale, Abercrombie & Fitch
Shoes		8		FootLocker, Journeys, Champ’s, Finish Line, Payless Shoesource
Restaurants		7		Ruby Tuesday, Applebee’s, Bennigan’s, Cheesecake Factory, Panera Bread, PF Chang’s China Bistro
Home Entertainment and Electronics		5		RadioShack, Ritz Camera, FYE, Sam Goody, Apple Computer
Home Furnishings		4		William-Sonoma, Select Comfort, Z Gallerie, Pottery Barn, Crate & Barrel
Sporting Goods		3		Scheel’s All Sports, MC Sports, Dick’s Sporting Goods, Big 5 Sports
Gifts (includes stationery, cards, gifts and novelty)		3		Papyrus, Hallmark, Yankee Candle, Things Remembered, Spencer Gifts
Fast Food/ Food Court		3		Arby’s, Sbarro, McDonald’s, Auntie Anne’s, Chick-Fil-A, Subway, Sonic
Jewelry		3		Zales Jewelers, Kay Jewelers, Piercing Pagoda, Helzberg Diamonds
Children’s Merchandise		2		Gymboree, Club Libby Lu, Build-A-Bear, The Children’s Place, GapKids/BabyGap
Personal Care		2		L’Occitane, Sephora, Trade Secret, Bath & Body Works
Specialty Food (includes health, candy and coffee)		1		GNC, Vitamin World, Starbuck’s, Godiva Chocolatier, Harry & David

TOTAL		100	%


Consolidated	Location		Square Feet

Columbia Industrial (6 buildings)		Columbia, MD		306,000
Columbia Office (11 buildings)		Columbia, MD		1,059,000
Summerlin Commercial (28 buildings)		Summerlin, NV		1,110,000
Woodlands Office (2 buildings)		Houston, TX		267,000
Other Office Projects (6 buildings)		Various		451,000
Unconsolidated

Woodlands Office/ Industrial (5 buildings)		Houston, TX		348,000


Title of Each Class		Name of Each Exchange on Which Registered

Common Stock, $.01 par value		New York Stock Exchange
Preferred Stock Purchase Rights		New York Stock Exchange


Item No.		Page Number

Part I
1.	Business		1
1A.	Risk Factors		7
1B.	Unresolved Staff Comments		16
2.	Properties		16
3.	Legal Proceedings		28
4.	Submission of Matters to a Vote of Security Holders		29
Part II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		29
6.	Selected Financial Data		31
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		33
7A.	Quantitative and Qualitative Disclosures About Market Risk		50
8.	Financial Statements and Supplementary Data		50
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		51
9A.	Controls and Procedures		51
9B.	Other Information		55
Part III
10.	Directors and Executive Officers of the Registrant		55
11.	Executive Compensation		55
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		55
13.	Certain Relationships and Related Transactions		56
14.	Principal Accounting Fees and Services		56
Part IV
15.	Exhibits and Financial Statement Schedules		57
Signatures			58
Consolidated Financial Statements			F-1
Consolidated Financial Statement Schedule			F-55
Exhibit Index			S-1
Restated Certificate of Incorporation
Bylaws
Form of Common Stock Certificate
Rights Agreement
Redemption Rights Agreement
Redemption Rights Agreement
Redemption Rights Agreement
Redemption Rights Agreement
Redemption Rights Agreement
Redemption Rights Agreement
Redemption Rights Agreement
Form of Registration Rights Agreement
Rights Agreement
Amendment to Rights Agreement
Letter Agreement Concerning Rights Agreement
Amended and Restated Agreement of Limited Partnership of the Operating Partnership
Stockholders Agreement
Amendment to Stockholders Agreement
Operating Agreement
Amendment to the Operating Agreement
Letter Amendment to the Operating Agreement
Amendment to the Operating Agreement
Amended and Restated Operating Agreement
Amendment to Amended and Restated Operating Agreement
Amendment to Amended and Restated Operating Agreement
Form of Restricted Stock Agreement
List of Subsidiaries
Consent
Consent
Certification
Certification
Certification
Certification


•	Retail and Other. Through this segment of our business, we own, operate, manage, lease, acquire, develop, expand and finance rental properties. These properties, which are located primarily throughout the United States, include retail centers, office and industrial buildings and mixed-use and other properties. As of December 31, 2005, we had ownership interest in and/or management responsibility for a portfolio of over 200 regional shopping malls in 44 states. We also have ownership interest in certain joint ventures which own four retail properties (one under construction) in Brazil and one retail property under construction in Costa Rica.

•	Master Planned Communities. Through this segment of our business, we develop and sell land in and around Columbia, Maryland; Summerlin, Nevada; and Houston, Texas for residential, commercial and other uses primarily in master planned communities. As of December 31, 2005, these communities, including land previously sold or not saleable, total over 70,000 acres.


•	Integrating and maximizing the operations of The Rouse Company LP (“TRCLP,” successor to The Rouse Company (“TRC”)) through proactive property management and leasing and through operating cost reductions. Specific actions to increase productivity of the TRCLP properties as well as our previously existing properties have included changing the tenant mix and adding vendor carts and kiosks. As the TRC Merger was primarily funded with new acquisition debt, an additional focus has been the management and refinancing of our current debt.

•	Development activities, including ground-up development and redevelopment and expansion of existing properties. For example, we substantially completed the ground-up development of The Shops at LaCantera in San Antonio, Texas in September 2005, and the renovation of Eastridge Mall in San Jose, California in November 2005. The expansion and renovation of a property may result in increased cash flows and net income as a result of increased customer traffic, trade area penetration and improved competitive position of the property.

•	Growing our specialty leasing and alternative revenue business, which involves, among other things, the temporary leasing of carts, kiosks and available space to generate additional alternative rental revenue.


•	Columbia is located in the Baltimore, Maryland/ Washington, D.C. corridor and encompasses approximately 18,000 acres. We own approximately 873 saleable acres of land in and around Columbia, including the adjacent communities of Emerson and Stone Lake.

•	Summerlin is located immediately north and west of Las Vegas and encompasses approximately 22,500 acres. We own approximately 6,400 saleable acres of land in Summerlin. Revenues from the sale of land at Summerlin are subject to the Contingent Stock Agreement as more fully described in Note 14.

•	Bridgelands is located in the western Houston, Texas metropolitan area and encompasses approximately 10,000 acres, approximately 7,300 acres of which is developable and saleable. TRC began development activities on Bridgelands in 2004 and we began selling portions of this land in 2006.

•	We also own a 52.5% economic interest in The Woodlands, a master planned community in the Houston, Texas metropolitan area which contains approximately 27,000 acres. Assets owned by The Woodlands include approximately 6,900 saleable acres of land, three golf course complexes, a resort conference center, a hotel, interests in seven office buildings and other assets.

•	Fairwood is located in Prince George’s County, Maryland. Fairwood contains over 1,000 acres of land. We own approximately 420 saleable acres of land at Fairwood.


•	Subject to certain limitations, the funds necessary for cash acquisitions are available to us from a combination of sources, including mortgage or unsecured financing or the issuance of public or private debt or equity.

•	We have the flexibility to pay for an acquisition with a combination of cash, General Growth equity securities or common or preferred units of limited partnership interest in the Operating Partnership. This last approach may create the opportunity for a tax-advantaged transaction for the seller.

•	Our expertise allows us to evaluate proposed acquisitions of existing retail properties for their increased profit potential through expansion, remodeling, re-merchandising and more efficient management of the property.


•	Consumer demographics

•	Quality, design and location of properties

•	Total number and geographic distribution of properties

•	Diversity of retailers and anchor tenants at shopping center locations

•	Management and operational expertise

•	Rental rates


•	The size and scope of our master planned communities

•	The recreational and cultural amenities available within the communities

•	The commercial centers in the communities

•	The relationships of the developer with homebuilders

•	The proximity to major metropolitan areas


	*We invest primarily in regional mall shopping centers and other retail properties, which are subject to a number of significant risks which are beyond our control*


•	the regional and local economy, which may be negatively impacted by plant closings, industry slowdowns, adverse weather conditions, natural disasters and other factors;

•	local real estate conditions, such as an oversupply of, or a reduction in demand for, retail space or retail goods, and the availability and creditworthiness of current and prospective tenants;

•	perceptions by retailers or shoppers of the safety, convenience and attractiveness of the retail property;

•	the convenience and quality of competing retail properties and other retailing options such as the Internet;

•	changes in laws and regulations applicable to real property, including tax and zoning laws; and

•	changes in interest rate levels and the availability and cost of financing.


Item 1.	*Business*


	Other Office, Industrial and Mixed-Use buildings


	*Master Planned Communities Segment*


	*Competition*


	*We depend on leasing space to tenants on economically favorable terms and collecting rent from these tenants, who may not be able to pay*


	*Bankruptcy or store closures of tenants may decrease our revenues and available cash*


	*We may be negatively impacted by department store consolidations*


	*It may be difficult to buy and sell real estate quickly, and transfer restrictions apply to some of our properties*


	*We develop and expand properties, and this activity is subject to various risks*


•	we may abandon development or expansion activities, which may result in additional cost recognition;

•	construction costs of a project may exceed original estimates or available financing, possibly making the project unfeasible or unprofitable;

•	we may not be able to obtain financing or to refinance construction loans, which generally have full recourse to us;

•	we may not be able to obtain zoning, occupancy or other required governmental permits and authorizations;

•	occupancy rates and rents at a completed project may not meet projections and, therefore, the project may not be profitable; and

•	we may need Anchor, mortgage lender and property partner approvals, if applicable, for expansion or redevelopment activities.


	*If we are unable to manage our growth effectively, our financial condition and results of operations may be adversely affected*


	*Inflation may adversely affect our financial condition and results of operations*


•	decreasing tenant sales as a result of decreased consumer spending which could result in lower overage rents;

•	difficulty in replacing or renewing expiring leases with new leases at higher base and/or overage rents; and

•	an inability to receive reimbursement from our tenants for their share of certain operating expenses, including common area maintenance, real estate taxes and insurance.


	*As of December 31, 2005, we had material weaknesses in our internal control over financial reporting*


	*Our substantial indebtedness could adversely affect our financial health and operating flexibility*


•	limiting our ability to borrow additional amounts for working capital, capital expenditures, debt service requirements, execution of our growth strategy or other purposes;

•	limiting our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to service the debt;

•	increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates, particularly given our substantial indebtedness which bears interest at variable rates;

•	limiting our ability to capitalize on business opportunities, including the acquisition of additional properties, and to react to competitive pressures and adverse changes in government regulation;

•	limiting our ability or increasing the costs to refinance indebtedness; and

•	limiting our ability to enter into marketing and hedging transactions by reducing the number of counterparties with whom we can enter into such transactions as well as the volume of those transactions.


	The terms of the 2006 Credit Facility (obtained in February 2006 (Note 6)) and certain other debt, contain covenants and events of default that may limit our flexibility and prevent us from taking certain actions or result in the acceleration of our obligations under such debt


•	incur indebtedness;

•	create liens on assets;

•	sell assets;

•	make capital expenditures; and

•	engage in mergers and acquisitions.


	*We have a substantial amount of short-term indebtedness*


	*We share control of some of our properties with other investors and may have conflicts of interest with those investors*


	*Bankruptcy of joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties*


	Payments by our direct and indirect subsidiaries of dividends and distributions to us may be adversely affected by prior payments to these subsidiaries’ creditors and preferred security holders


	*We might fail to qualify or remain qualified as a REIT*


	*An ownership limit and certain anti-takeover defenses and applicable law may hinder any attempt to acquire us*