Exhibit 10.1

 

EXECUTION VERSION

 

 

 

STOCK PURCHASE AGREEMENT

dated as of July 8, 2010

 

between

TEACHER RETIREMENT SYSTEM OF TEXAS

and

GENERAL GROWTH PROPERTIES, INC.

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

PURCHASE OF NEW COMMON STOCK; CLOSING

2

Section 1.1

Purchase of New Common Stock

2

Section 1.2

Closing

3

Section 1.3

Company Rights Offering Election

3

Section 1.4

Company Election to Replace Certain Shares; Company Election to Reserve and
Repurchase Certain Shares

3

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

4

Section 2.1

Organization and Qualification

4

Section 2.2

Corporate Power and Authority

5

Section 2.3

Execution and Delivery; Enforceability

5

Section 2.4

Authorized Capital Stock

5

Section 2.5

Issuance

6

Section 2.6

No Conflict

6

Section 2.7

Consents and Approvals

7

Section 2.8

Company Reports

8

Section 2.9

No Undisclosed Liabilities

9

Section 2.10

No Material Adverse Effect

10

Section 2.11

No Violation or Default: Licenses and Permits

10

Section 2.12

Legal Proceedings

10

Section 2.13

Investment Company Act

10

Section 2.14

Compliance With Environmental Laws

10

Section 2.15

Company Benefit Plans

11

Section 2.16

Labor and Employment Matters

12

Section 2.17

Insurance

12

Section 2.18

No Unlawful Payments

12

Section 2.19

No Broker’s Fees

13

Section 2.20

Real and Personal Property

13

Section 2.21

Tax Matters

17

Section 2.22

Material Contracts

19

Section 2.23

No Other Representations or Warranties

19

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

20

Section 3.1

Organization

20

Section 3.2

Power and Authority

20

Section 3.3

Execution and Delivery

20

Section 3.4

No Conflict

20

Section 3.5

Consents and Approvals

20

Section 3.6

Compliance with Laws

21

Section 3.7

Legal Proceedings

21

Section 3.8

No Broker’s Fees

21

Section 3.9

Sophistication

21

Section 3.10

Purchaser Intent

21

Section 3.11

Reliance on Exemptions

21

Section 3.12

Financial Capability

21

Section 3.13

No Other Representations or Warranties

21

Section 3.14

Acknowledgement

21

ARTICLE IV

COVENANTS OF THE COMPANY AND PURCHASER

22

Section 4.1

Bankruptcy Court Motions and Orders

22

Section 4.2

Listing

22

Section 4.3

Use of Proceeds

23

Section 4.4

Access to Information

23

Section 4.5

Notification of Certain Matters

23

Section 4.6

Further Assurances

24

Section 4.7

Plan and Disclosure Statement

24

ARTICLE V

ADDITIONAL COVENANTS OF PURCHASER

24

Section 5.1

Information

24

Section 5.2

Purchaser Efforts

24

Section 5.3

Plan Support

24

Section 5.4

Transfer Restrictions

25

ARTICLE VI

CONDITIONS TO THE OBLIGATIONS OF PURCHASER

26

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

Section 6.1

Conditions to the Obligations of Purchaser

26

ARTICLE VII

CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

29

Section 7.1

Conditions to the Obligations of the Company

29

ARTICLE VIII

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

30

Section 8.1

Survival of Representations and Warranties

30

ARTICLE IX

TERMINATION

31

Section 9.1

Termination

31

Section 9.2

Effects of Termination

33

Section 9.3

Termination Payment

33

ARTICLE X

DEFINITIONS

33

Section 10.1

Defined Terms

33

ARTICLE XI

MISCELLANEOUS

39

Section 11.1

Notices

39

Section 11.2

Assignment; Third Party Beneficiaries

40

Section 11.3

Prior Negotiations; Entire Agreement

41

Section 11.4

Governing Law; Venue

41

Section 11.5

Company Disclosure Letter

41

Section 11.6

Counterparts

41

Section 11.7

Expenses

41

Section 11.8

Waivers and Amendments

41

Section 11.9

Construction

42

Section 11.10

Adjustment of Share Numbers and Prices

42

Section 11.11

Certain Remedies

42

Section 11.12

Bankruptcy Matters

43

Section 11.13

Purchaser’s Status as an Entity of the State of Texas

43

 

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A:

Form of REIT Opinion

 

iv

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INDEX OF DEFINED TERMS

 

Defined Term

 

Page

 

 

 

Affiliate

 

34

Agreement

 

1

Approval Motion

 

22

Approval Order

 

22

Bankruptcy Cases

 

1

Bankruptcy Code

 

1

Bankruptcy Court

 

1

Brazilian Entities

 

34

Broker

 

13

Brookfield Agreement

 

1

Brookfield Investor

 

1

Business Day

 

34

Capital Raising Activities

 

34

Cash Equivalents

 

34

Chapter 11

 

1

Closing

 

3

Closing Date

 

3

Closing Restraint

 

32

Code

 

11

Common Stock

 

1

Company

 

1

Company Benefit Plan

 

34

Company Disclosure Letter

 

4

Company Ground Lease Property

 

15

Company Mortgage Loan

 

16

Company Option Plans

 

5

Company Properties

 

13

Company Property

 

13

Company Property Lease

 

15

Company Rights Offering

 

3

Company SEC Reports

 

8

Confirmation Order

 

27

Contract

 

35

Debt

 

35

Debtors

 

1

Designation Conditions

 

2

DIP Loan

 

35

Disclosure Statement

 

35

Effective Date

 

3

Encumbrances

 

13

Environmental Laws

 

10

Equity Exchange

 

1

Equity Securities

 

6

 

v

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ERISA

 

35

ERISA Affiliate

 

11

Exchange Act

 

35

Excluded Non-US Plans

 

12

Expense Reimbursement

 

33

Fairholme

 

35

Fairholme Agreement

 

35

Foreign Plan

 

12

GAAP

 

35

GGO

 

2

GGP

 

1

Governmental Entity

 

35

Hazardous Materials

 

11

Identified Assets

 

35

Initial Investors

 

35

Investment Agreements

 

36

Joint Venture

 

36

Knowledge

 

36

Law

 

36

Material Adverse Effect

 

36

Material Contract

 

37

Material Lease

 

16

Measurement Date

 

5

New Common Stock

 

1

Non-Controlling Properties

 

37

NYSE

 

22

PBGC

 

11

Per Share Purchase Price

 

2

Permitted Replacement Shares

 

37

Permitted Title Exceptions

 

14

Pershing

 

37

Pershing Agreement

 

37

Person

 

38

Plan

 

1

Plan Summary Term Sheet

 

1

Proportionally Consolidated Debt

 

38

Proportionally Consolidated Unrestricted Cash

 

38

Purchase Price

 

2

Purchaser

 

1

REIT

 

18

REIT Subsidiary

 

18

Reorganized Company

 

1

Repurchase Notice

 

4

Reserved Shares

 

4

Rights Offering Election

 

3

Rule 144

 

25

 

vi

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SEC

 

8

Securities Act

 

8

Share Equivalent

 

38

Shares

 

2

Significant Subsidiaries

 

38

Subsidiary

 

38

Tax Protection Agreements

 

39

Tax Return

 

18

Taxes

 

18

Termination Date

 

39

Termination Payment

 

33

Transactions

 

39

Unrestricted Cash

 

39

Warrant Agreement

 

39

 

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STOCK PURCHASE AGREEMENT, dated as of July 8, 2010 (this “Agreement”), by and
between General Growth Properties, Inc., a Delaware corporation (“GGP”), and
Teacher Retirement System of Texas, a public pension plan and entity of the
State of Texas (together with its permitted assigns, “Purchaser”).

 

RECITALS

 

WHEREAS, GGP is a debtor in possession in that certain bankruptcy case under
chapter 11 (“Chapter 11”) of Title 11 of the United States Code, 11 U.S.C. §§
101-1532 (as amended, the “Bankruptcy Code”) filed on April 16, 2009 in the
United States Bankruptcy Court for the Southern District of New York (the
“Bankruptcy Court”), Case No. 09-11977 (ALG).

 

WHEREAS, Purchaser desires to assist GGP in its plans to recapitalize and emerge
from bankruptcy and has agreed to participate in the implementation of a joint
chapter 11 plan of reorganization based on the Plan Summary Term Sheet (as
defined below) (together with all documents and agreements that form part of
such plan or related plan supplement or are related thereto, and as it may be
amended, modified or supplemented from time to time, in each case, to the extent
it relates to the implementation and effectuation of the Plan Summary Term Sheet
and this Agreement, the “Plan”) of GGP and its Subsidiaries and Affiliates who
are debtors and debtors-in-possession (the “Debtors”) in the chapter 11 cases
pending and jointly administered in the Bankruptcy Court (the “Bankruptcy
Cases”).

 

WHEREAS, principal elements of the Plan (including a table setting forth the
proposed treatment of allowed claims and equity interests in the Bankruptcy
Cases) are set forth on the Plan Summary Term Sheet (the “Plan Summary Term
Sheet”) that is an exhibit to that certain Cornerstone Investment Agreement,
dated as of March 31, 2010, as amended (the “Brookfield Agreement”), by and
between GGP and REP Investments LLC (the “Brookfield Investor”).

 

WHEREAS, the Plan will provide, among other things, that (i) each holder of
common stock, par value $0.01 per share, of GGP (the “Common Stock”) shall
receive, in exchange for each share of Common Stock held by such holder, one
share (subject to adjustment) of new common stock (the “New Common Stock”) of a
new company that succeeds to GGP in the manner contemplated by the Brookfield
Agreement upon consummation of the Plan (the “Reorganized Company”) and (ii) any
Equity Securities (other than Common Stock) of the Company (as defined below) or
any of its Subsidiaries (as defined below) outstanding immediately after the
Effective Date that were previously convertible into, or exercisable or
exchangeable for, Common Stock shall thereafter be convertible into, or
exercisable or exchangeable for, New Common Stock (based upon the number of
shares of Common Stock underlying such Equity Securities) (the transactions
contemplated by clauses (i) and (ii) of this recital being referred to herein as
the “Equity Exchange”).  For purposes of this Agreement, the “Company” shall be
deemed to refer, prior to consummation of the Plan, to GGP and, on and after
consummation of the Plan, to the Reorganized Company, as the context requires.

 

WHEREAS, Purchaser desires to make an investment in the Reorganized Company on
the terms and subject to the conditions described herein in the form of the
purchase of shares of New Common Stock as contemplated hereby.

 

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WHEREAS, in addition to the Equity Exchange and the sale of the Shares (as
defined below), the Plan will provide for the incorporation by the Company of a
new subsidiary, General Growth Opportunities, Inc. (“GGO”), the contribution of
certain assets (and/or equity interests related thereto) of the Company to GGO
and the assumption by GGO of the liabilities associated with such assets, and
the distribution to the shareholders of the Company of capital stock of GGO, in
each case, as contemplated by the Brookfield Agreement (subject to adjustment as
contemplated by the Brookfield Agreement).

 

WHEREAS, the Company has requested that Purchaser commit to purchase the Shares
at a fixed price.

 

NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:

 

ARTICLE I

 

PURCHASE OF NEW COMMON STOCK; CLOSING

 

SECTION 1.1  Purchase of New Common Stock.

 

(a)           On the terms and subject to the conditions set forth herein, at
the Closing (as defined below), Purchaser shall purchase from the Company, and
the Company shall sell to Purchaser, Forty-Eight Million Seven Hundred Eighty
Thousand Four Hundred Eighty-Eight (48,780,488) shares of New Common Stock (the
“Shares”) for a price per share equal to $10.25 (the “Per Share Purchase Price”)
(in the aggregate, Five Hundred Million Dollars ($500,000,000) (the “Purchase
Price”)).  On the terms and subject to the conditions set forth herein, at the
Closing Purchaser shall cause the Purchase Price to be paid by wire transfer of
immediately available U.S. Dollar funds to such account or accounts as the
Company shall have designated in writing prior to the Closing.

 

(b)           All Shares shall be delivered with any and all issue, stamp,
transfer or similar taxes or duties payable in connection with such delivery
duly paid by the Company to the extent required under the Confirmation Order or
applicable Law.

 

(c)           Purchaser, in its sole discretion, may assign its rights to
receive the Shares hereunder or designate that some or all of the Shares be
issued in the name of, and delivered to, an Affiliate of Purchaser, subject to
(i) such action not causing any delay in the obtaining of, or significantly
increasing the risk of not obtaining, any material authorizations, consents,
orders, declarations or approvals necessary to consummate the transactions
contemplated by this Agreement or otherwise delaying the consummation of such
transactions, (ii) such Person shall be an “accredited investor” (within the
meaning of Rule 501 of Regulation D under the Securities Act) and shall have
agreed in writing with and for the benefit of the Company to be bound by the
terms of this Agreement applicable to Purchaser set forth in Section 5.4,
including the delivery of the letter certifying compliance with the
representations and covenants set forth on Exhibit A to the extent applicable to
such assignee or designee and (iii) such initial Purchaser not being relieved of
any of its obligations under this Agreement ((i), (ii) and (iii) collectively,
the “Designation Conditions”).  Notwithstanding anything to the contrary in this
Agreement,

 

2

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Purchaser may not assign its rights to receive or designate Shares to any Person
if such assignment or designation would cause a failure of the closing condition
in Section 7.1(u) of the Brookfield Agreement.

 

SECTION 1.2  Closing.  Subject to the satisfaction or waiver of the conditions
(excluding conditions that, by their nature, cannot be satisfied until the
Closing, but subject to the satisfaction or waiver of those conditions as of the
Closing) set forth in ARTICLE VI and ARTICLE VII, the closing of the purchase of
the Shares by Purchaser pursuant hereto (the “Closing”) shall occur at
9:30 a.m., New York time, on the effective date of the Plan (the “Effective
Date”), at the offices of Weil, Gotshal & Manges LLP located at 767 Fifth
Avenue, New York, NY 10153, or such other date, time or location as agreed by
the parties.  The date of the Closing is referred to as the “Closing Date”.

 

SECTION 1.3  Company Rights Offering Election.  The Company may at any time
prior to the date of filing of the Disclosure Statement, upon written notice to
Purchaser in accordance with the terms hereof (the “Rights Offering Election”),
irrevocably elect to convert the obligation of Purchaser to purchase the Shares
as contemplated by Section 1.1 hereof into an obligation of Purchaser to
participate in a rights offering by the Company pursuant to which shareholders
and/or creditors of the Company are offered rights to subscribe for shares of
New Common Stock (a “Company Rights Offering”), subject to the execution and
delivery of definitive documentation therefor and the satisfaction of the
conditions described therein and other customary conditions for a public rights
offering.  To the extent the Company makes a Rights Offering Election,
(i) Purchaser shall be entitled to a minimum allocation of shares of New Common
Stock in the Company Rights Offering equal to the number of shares Purchaser
would otherwise be required to purchase pursuant to Section 1.1 hereof had no
such election been made, (ii) the purchase price per share payable by Purchaser
shall be equal to the Per Share Purchase Price and Purchaser shall not be
otherwise adversely affected as compared to the transactions contemplated
hereby, (iii) the Company Rights Offering shall be effected in a manner
substantially consistent with the procedures contemplated by the Brookfield
Agreement; provided, that the Company Rights Offering shall be completed by the
Effective Date, and (iv) if the Company elects to have a Company Rights
Offering, the Company and Purchaser shall cooperate in good faith to develop and
agree upon documentation that is reasonably acceptable to both the Company and
Purchaser governing the further terms and conditions of the Company Rights
Offering to the extent it effects the Purchaser.

 

SECTION 1.4  Company Election to Replace Certain Shares; Company Election to
Reserve and Repurchase Certain Shares.

 

(a)           In the event that the Company has sold, or has binding commitments
to sell on or prior to the Effective Date, Permitted Replacement Shares, the
Company may elect by written notice to reduce the number of Shares purchased by
Purchaser pursuant to Section 1.1(a) by such number as the Company may determine
in its discretion; provided, that the number of Shares purchased by Purchaser
pursuant to Section 1.1(a) shall not be less than 24,390,244.  No election by
the Company under this Section 1.4(a) shall be effective unless received by
Purchaser at least five (5) Business Days prior to Closing.  Any election by the
Company under this Section 1.4(a) shall be binding and irrevocable.

 

3

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(b)           The Company may elect by written notice to Purchaser at least five
(5) Business Days prior to Closing to specify a number of Shares to be purchased
by Purchaser at Closing as Shares to be subject to repurchase after Closing
pursuant to this Section 1.4(b) (the “Reserved Shares”); provided, that the
excess of Shares purchased by Purchaser pursuant to Section 1.1(a) (after taking
into account any reduction pursuant to Section 1.4(a)) minus the Reserved Shares
shall not be less than 24,390,244.  If the Company elects to designate any
Reserved Shares, the Company shall thereafter have the right to elect by written
notice to Purchaser (the “Repurchase Notice”) on or prior to the 45th day after
the Effective Date (or, if not a Business Day, the next Business Day) to
repurchase (with proceeds from the sale of Permitted Replacement Shares) from
Purchaser a number of Shares up to the number of Reserved Shares.  The purchase
price for any repurchased Reserved Shares shall be $10.25 per Share, payable in
cash in immediately available funds against delivery of the repurchased Reserved
Shares on a settlement date determined by the Company and Purchaser and not
later than the date that is 45 days after the Effective Date. Any Repurchase
Notice under this Section 1.4(b) shall, when taken together with this Agreement,
constitute a binding offer and acceptance and be irrevocable.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Purchaser, as set forth below, except
(i) as set forth in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2009 (but not in documents filed as exhibits thereto or documents
incorporated by reference therein) filed with the SEC on March 1, 2010, as
amended by the Forms 10-K/A filed by the Company with the SEC on March 2, 2010
and April 30, 2010 (other than in any “risk factor” disclosure or any other
forward-looking disclosures contained in such reports under the headings “Risk
Factors” or “Cautionary Note” or any similar sections), or the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (but not in
documents filed as exhibits thereto or documents incorporated by reference
therein) filed with the SEC on May 12, 2010 (other than in any “risk factor”
disclosure or any other forward-looking disclosures contained in such reports
under the headings “Risk Factors” or “Cautionary Note” or any similar sections)
or (ii) as set forth in the disclosure schedule delivered by the Company to
Purchaser on the date of this Agreement (the “Company Disclosure Letter”);
provided, however, that the representations and warranties contained in
Section 2.14, Section 2.15, Section 2.16, Section 2.17, Section 2.18,
Section 2.20, Section 2.21, and Section 2.22 are made as of March 31, 2010
(except to the extent otherwise provided therein as of a specified earlier date,
in which case, as of such specified earlier date):

 

SECTION 2.1  Organization and Qualification.  The Company and each of its direct
and indirect Significant Subsidiaries is duly organized and is validly existing
as a corporation or other form of entity, where applicable, in good standing
under the Laws of their respective jurisdictions of organization, with the
requisite power and authority to own, operate or manage its properties and
conduct its business as currently conducted, subject, as applicable, to the
restrictions that result from any such entity’s status as a debtor-in-possession
under Chapter 11, except to the extent the failure of such Significant
Subsidiary to be in good standing (to the extent the concept of good standing is
applicable in its jurisdiction of organization) would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.  The

 

4

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Company and each of its Significant Subsidiaries has been duly qualified as a
foreign corporation or other form of entity for the transaction of business and,
where applicable, is in good standing under the Laws of each other jurisdiction
in which it owns, manages, operates or leases properties or conducts business so
as to require such qualification, except to the extent the failure to be so
qualified or, where applicable, be in good standing would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

SECTION 2.2  Corporate Power and Authority.

 

(a)           Subject to the authorization of the Bankruptcy Court, which shall
be contained in the Confirmation Order, and the expiration or waiver by the
Bankruptcy Court of the 14-day period set forth in Bankruptcy
Rule 3020(e) following entry of the Confirmation Order, the Company has the
requisite power and authority to enter into, execute and deliver this Agreement
and to perform its obligations hereunder (except with respect to the provisions
of the Approval Order).  The Company has taken all necessary corporate action
required for the due authorization, execution, delivery and performance by it of
this Agreement.

 

(b)           Subject to the entry of the Approval Order, the Company has the
requisite power and authority to perform its obligations pursuant to the
provisions of the Approval Order.

 

SECTION 2.3  Execution and Delivery; Enforceability.

 

(a)           This Agreement has been duly and validly executed and delivered by
the Company, and subject to the authorization of the Bankruptcy Court, which
shall be contained in the Confirmation Order, and the expiration or waiver by
the Bankruptcy Court of the 14-day period set forth in Bankruptcy
Rule 3020(e) following entry of the Confirmation Order, shall constitute the
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at Law or in equity) (except
with respect to the provisions of the Approval Order).

 

(b)           Subject to the entry of the Approval Order, the provisions of this
Agreement relating to the provisions of the Approval Order shall constitute the
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms.

 

SECTION 2.4  Authorized Capital Stock.  As of the date of this Agreement, the
authorized capital stock of the Company consists of 875,000,000 shares of Common
Stock and of 5,000,000 shares of preferred stock.  The issued and outstanding
capital stock of the Company and the shares of Common Stock available for grant
pursuant to the Company’s 1993 Stock Incentive Plan, 1998 Stock Incentive Plan
and  2003 Stock Incentive Plan (collectively, the “Company Option Plans”) or
otherwise as of March 26, 2010 (the “Measurement Date”) is set forth on
Section 2.4 of the Company Disclosure Letter.  From the Measurement Date to the
date of this Agreement, other than in connection with the Investment Agreements
or in connection with the issuance of shares of Common Stock pursuant to the
exercise of options outstanding as of the Measurement Date, there has been no
change in the number of outstanding shares of capital stock of the Company or
the number of outstanding Equity Securities (as defined below). 

 

5

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Except as set forth on Section 2.4 of the Company Disclosure Letter, on the
Measurement Date, there was not outstanding, and there was not reserved for
issuance, any (i) share of capital stock or other voting securities of the
Company or its Significant Subsidiaries; (ii) security of the Company or its
Subsidiaries convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of the Company or its Significant
Subsidiaries; (iii) option or other right to acquire from the Company or its
Subsidiaries, or obligation of the Company or its Subsidiaries to issue, any
shares of capital stock, voting securities or security convertible into or 
exercisable or exchangeable for shares of capital stock or voting securities of
the Company or its Significant Subsidiaries, as the case may be; or (iv) equity
equivalent interest in the ownership or earnings of the Company or its
Significant Subsidiaries or other similar right, in each case to which the
Company or a Significant Subsidiary is a party (the items in clauses (i) through
(iv) collectively, “Equity Securities”).  Other than as set forth on Section 2.4
of the Company Disclosure Letter or as contemplated by this Agreement or the
Investment Agreements, or pursuant to Contracts entered into by the Company
after the date hereof and prior to the Closing that are otherwise not
inconsistent with Purchaser’s rights hereunder and with respect to the
transactions contemplated hereby, and do not confer on any other Person rights
that are superior to those received by Purchaser hereunder or pursuant to the
transactions contemplated hereby other than rights and terms that are
customarily granted to holders of any such Equity Securities so issued and not
customarily granted in transactions such as the transactions contemplated
hereby, there is no outstanding obligation of the Company or its Subsidiaries to
repurchase, redeem or otherwise acquire any Equity Security.  Section 2.4 of the
Company Disclosure Letter sets forth a complete and accurate list of the
outstanding Equity Securities of the Company as of the Measurement Date,
including the applicable conversion rates and exercise prices (or, in the case
of options to acquire Common Stock, the weighted average exercise price)
relating to the conversion or exercise of such Equity Securities into or for
Common Stock.

 

SECTION 2.5  Issuance.  Subject to the authorization of the Bankruptcy Court,
which shall be contained in entry of the Confirmation Order, and the expiration
or waiver by the Bankruptcy Court of the 14-day period set forth in Bankruptcy
Rule 3020(e) following entry of the Confirmation Order and assuming the accuracy
of the representations of Purchaser set forth on Exhibit A hereto, the issuance
of the Shares has been duly and validly authorized.  When the Shares are issued
and delivered in accordance with the terms of this Agreement against payment
therefor, the Shares shall be duly and validly issued, fully paid and
non-assessable and free and clear of all taxes, liens, pre-emptive rights,
rights of first refusal and subscription rights, other than rights and
restrictions under this Agreement and applicable state and federal securities
Laws.

 

SECTION 2.6  No Conflict.

 

(a)           Subject to (i) the receipt of the consents set forth on
Section 2.6 of the Company Disclosure Letter, (ii) such authorization as is
required by the Bankruptcy Court or the Bankruptcy Code, which shall be
contained in the entry of the Confirmation Order, and the expiration, or waiver
by the Bankruptcy Court, of the 14-day period set forth in Bankruptcy
Rule 3020(e) following entry of the Confirmation Order and (iii) any provisions
of the Bankruptcy Code that override, eliminate or abrogate such consents or as
may be ordered by the Bankruptcy Court, the execution and delivery (or, with
respect to the Plan, the filing) by the Company of this Agreement and the Plan,
the performance by the Company of its respective obligations under

 

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this Agreement and compliance by the Company with all of the provisions hereof
and thereof and the consummation of the transactions contemplated herein and
therein, (x) shall not conflict with, or result in a breach or violation of, any
of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any lien under, or give rise to any
termination right under, any Contract to which the Company or any of the
Company’s Subsidiaries is a party or by which any of their material assets are
subject or encumbered, (y) shall not result in any violation or breach of any
terms, conditions or provisions of the certificate of incorporation or bylaws of
the Company, or the comparable organizational documents of the Company’s
Subsidiaries, and (z) shall not conflict with or result in any violation or
breach of, or any termination or impairment of any rights under, any statute or
any license, authorization, injunction, judgment, order, decree, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its Subsidiaries or any of their respective properties or
assets, except, in the case of each of clauses (x) and (z) above, for any such
conflict, breach, acceleration, lien, termination, impairment, failure to
comply, default or violation that would not, individually or in the aggregate,
be reasonably expected to have a Material Adverse Effect (except with respect to
the provisions of the Approval Order).

 

(b)           Subject to the entry of the Approval Order, the performance by the
Company of its respective obligations under the Approval Order and compliance by
the Company with all of the provisions thereof (x) shall not conflict with, or
result in a breach or violation of, any of the terms or provisions of, or
constitute a default under, or result in the acceleration of, or the creation of
any lien under, or give rise to any termination right under, any Contract,
(y) shall not result in any violation or breach of any terms, conditions or
provisions of the certificate of incorporation or bylaws of the Company, or the
comparable organizational documents of the Company’s Subsidiaries, and (z) shall
not conflict with or result in any violation or breach of, or any termination or
impairment of any rights under, any statute or any license, authorization,
injunction, judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their respective properties or assets, except, in the
case of each of clauses (x) and (z) above, for any such conflict, breach,
acceleration, lien, termination, impairment, failure to comply, default or
violation that would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect.

 

SECTION 2.7  Consents and Approvals.

 

(a)           No consent, approval, authorization, order, registration or
qualification of or with any Governmental Entity having jurisdiction over the
Company or any of its Subsidiaries or any of their respective properties is
required for (i) the issuance, sale and delivery of Shares and (ii) the
execution and delivery by the Company of this Agreement or the Plan and
performance of and compliance by the Company with all of the provisions hereof
and thereof and the consummation of the transactions contemplated herein and
therein, except (A) such authorization as is required by the Bankruptcy Court or
the Bankruptcy Code, which shall be contained in the entry of the relevant Court
Order, and the expiration, or waiver by the Bankruptcy Court, of the 14-day
period set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation
Order, as applicable (except with respect to the provisions of the Approval
Order), (B) filings required under, and compliance with, the applicable
requirements of the Exchange Act and the rules and

 

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regulations promulgated thereunder, the Securities Act and the rules and
regulations promulgated thereunder, and the rules of the New York Stock
Exchange, and (C) such other consents, approvals, authorizations, orders,
registrations or qualifications that, if not obtained, made or given, would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

 

(b)           No consent, approval, authorization, order, registration or
qualification of or with any Governmental Entity having jurisdiction over the
Company or any of its Subsidiaries or any of their respective properties is
required for the performance of and compliance by the Company with all of the
provisions of the Approval Order except (A) the entry of the Approval Order,
(B) filings required under, and compliance with, the applicable requirements of
the Exchange Act and the rules and regulations promulgated thereunder, the
Securities Act and the rules and regulations promulgated thereunder, and the
rules of the New York Stock Exchange, and (C) such other consents, approvals,
authorizations, orders, registrations or qualifications that, if not obtained,
made or given, would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

 

SECTION 2.8  Company Reports.

 

(a)           The Company has filed with or otherwise furnished to the
Securities and Exchange Commission (the “SEC”) all material forms, reports,
schedules, statements and other documents required to be filed or furnished by
it under the United States Securities Act of 1933, as amended (the “Securities
Act”) or the Exchange Act since December 31, 2007 (such documents, as
supplemented or amended since the time of filing, and together with all
information incorporated by reference therein, the “Company SEC Reports”).  No
Subsidiary of the Company is required to file with the SEC any such forms,
reports, schedules, statements or other documents pursuant to Section 13 or 15
of the Exchange Act.  As of their respective effective dates (in the case of
Company SEC Reports that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective filing dates (in
the case of all other Company SEC Reports), except as and to the extent
modified, amended, restated, corrected, updated or superseded by any subsequent
Company SEC Report filed and publicly available prior to the date of this
Agreement, the Company SEC Reports (i) complied in all material respects with
the applicable requirements of the Securities Act and the Exchange Act, and the
rules and regulations of the SEC promulgated thereunder applicable to such
Company SEC Reports, and  (ii) did not contain any 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.

 

(b)           The Company maintains a system of “internal controls over
financial reporting” (as defined in Rules 13a-15(f) and 15a-15(f) under the
Exchange Act) that provides reasonable assurance regarding the reliability of
the Company’s financial reporting and the preparation of the Company’s financial
statements for external purposes in accordance with GAAP and that includes
policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company, (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and

 

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directors of the Company, and (iii) 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 Company’s
financial statements.

 

(c)           The Company maintains a system of “disclosure controls and
procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
that is reasonably designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC, and that information relating to the Company
is accumulated and communicated to the Company’s management as appropriate to
allow timely decisions regarding required disclosure and to make the
certifications of the Chief Executive Officer and Chief Financial Officer of the
Company required under the Exchange Act with respect to such reports.

 

(d)           Since December 31, 2008, the Company has not received any oral or
written notification of a “material weakness” in the Company’s internal controls
over financial reporting.  The term “material weakness” shall have the meaning
assigned to it in the Statements of Auditing Standards 112 and 115, as in effect
on the date hereof.

 

(e)           Except as and to the extent modified, amended, restated,
corrected, updated or superseded by any subsequent Company SEC Report filed and
publicly available prior to the date of this Agreement, the audited consolidated
financial statements and the unaudited consolidated interim financial statements
(including any related notes) included in the Company SEC Reports fairly present
in all material respects, the consolidated financial position of the Company and
its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations and their consolidated cash flows for the periods
set forth therein (subject, in the case of financial statements for quarterly
periods, to normal year-end adjustments) and were prepared in conformity with
GAAP consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto).

 

SECTION 2.9  No Undisclosed Liabilities.  None of the Company or its
Subsidiaries has any material liabilities (whether absolute, accrued, contingent
or otherwise) required to be reflected or reserved against on a consolidated
balance sheet of the Company prepared in accordance with GAAP, except for
liabilities (i) reflected or reserved against or provided for in the Company’s
consolidated balance sheet as of December 31, 2009 or disclosed in the notes
thereto, included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2009, (ii) incurred in the ordinary course of business consistent
with past practice since the date of such balance sheet, (iii) for fees and
expenses incurred in connection with the Bankruptcy Cases, which have been
estimated and included in the Admin/Priority Claims identified in the Plan
Summary Term Sheet; provided, however, that such amount is an estimate and
actual results may be higher or lower, (iv) incurred in the ordinary course of
performing this Agreement or the Investment Agreements and certain other asset
sales, transfers and other actions permitted under this Agreement or the
Investment Agreements and (v) other liabilities at Closing as contemplated by
the Plan Summary Term Sheet.

 

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SECTION 2.10  No Material Adverse Effect.  Since December 31, 2009, there has
not occurred any event, fact or circumstance that has had or would reasonably be
expected to have, individually, or in the aggregate, a Material Adverse Effect.

 

SECTION 2.11  No Violation or Default: Licenses and Permits.  The Company and
its Subsidiaries (a) are in compliance with all Laws, statutes, ordinances,
rules, regulations, orders, judgments and decrees of any court or governmental
agency or body having jurisdiction over the Company or any of its Subsidiaries
or any of their respective properties, and (b) has not received written notice
of any alleged material violation of any of the foregoing except, in the case
of  each of clauses (a) and (b) above, for any such failure to comply, default
or violation that would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect or as may be the result of the
Company’s or any of its Subsidiaries’ Chapter 11 filing or status as a
debtor-in-possession under Chapter 11.  Subject to the restrictions that result
from the Company’s or any of its Subsidiaries’ status as a debtor-in-possession
under Chapter 11 (including that in certain instances the Company’s or such
Subsidiary’s conduct of its business requires Bankruptcy Court approval), each
of the Company and its Subsidiaries holds all material licenses, franchises,
permits, certificates of occupancy, consents, registrations, certificates and
other governmental and regulatory permits, authorizations and approvals required
for the operation of the business as currently conducted by it and for the
ownership, lease or operation of its material assets except, in each case, where
the failure to possess or make the same would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

SECTION 2.12  Legal Proceedings.  There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the Knowledge of
the Company, threatened against the Company or any of its Subsidiaries which,
individually, if determined adversely to the Company or any of its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect.

 

SECTION 2.13  Investment Company Act.  The Company is not, and, after giving
effect to the offering and sale of the Shares and the application of the
proceeds thereof, shall not be required to register as an “investment company”
or an entity “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
SEC thereunder.

 

SECTION 2.14  Compliance With Environmental Laws.  Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) each of the Company and its Subsidiaries are and have been
in compliance with and each of the Company Properties are and have been
maintained in compliance with, any and all applicable federal, state, local and
foreign Laws relating to the protection of the environment or natural resources,
human health and safety as such relates to the environment, or the presence,
handling, or release of Hazardous Materials (collectively, “Environmental
Laws”), which compliance includes obtaining, maintaining and complying with all
permits, licenses or other approvals required under Environmental Laws to
conduct operations as presently conducted, and no action is pending or, to the
Knowledge of the Company, threatened that seeks to repeal, modify, amend,
revoke, limit, deny renewal of, or otherwise appeal or challenge any such
permits, licenses or other approvals, (ii) none of the Company or its
Subsidiaries have received any written notice of, and none of the Company
Properties have been the subject of any written notice received by the

 

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Company or any of its Subsidiaries of, any actual or potential liability or
violation for the presence, exposure to, investigation, remediation, arrangement
for disposal, or release of any material classified, characterized or regulated
as hazardous, toxic, pollutants, or contaminants under Environmental Laws,
including petroleum products or byproducts, radioactive materials,
asbestos-containing materials, radon, lead-containing materials, polychlorinated
biphenyls, mold, and hazardous building materials (collectively, “Hazardous
Materials”), (iii) none of the Company and its Subsidiaries are a party to or
the subject of any pending, or, to the Knowledge of the Company, threatened,
legal proceeding alleging any liability, responsibility, or violation under any
Environmental Laws with respect to their past or present facilities or their
respective operations, (iv) none of the Company and its Subsidiaries have
released Hazardous Materials on any real property in a manner that would
reasonably be expected to result in an environmental claim or liability against
the Company or any of its Subsidiaries or Affiliates, (v) none of the Company
Properties is the subject of any pending, or, to the Knowledge of the Company,
threatened, legal proceeding alleging any liability, responsibility, or
violation under any Environmental Laws, and (vi) to the Knowledge of the
Company, there has been no release of Hazardous Materials on, from, under, or at
any of the Company Properties that would reasonably be expected to result in an
environmental claim or liability against the Company or any of its Subsidiaries
or Affiliates.

 

SECTION 2.15  Company Benefit Plans.

 

(a)           Except as would not, individually or in the aggregate, have a
Material Adverse Effect, each Company Benefit Plan is in compliance in design
and operation in all material respects with all applicable provisions of ERISA
and the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and each
Company Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter from the Internal Revenue
Service with respect to its qualified status under Section 401(a) of the Code
and its related trust’s exempt status under Section 501(a) of the Code and the
Company is not aware of any circumstances likely to result in the loss of the
qualification of any such plan under Section 401(a) of the Code.

 

(b)           Except as would not, individually or in the aggregate, have a
Material Adverse Effect, with respect to each Company Benefit Plan that is
subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code: 
(A) no Company Benefit Plan has failed to satisfy the minimum funding standard
(within the meaning of Sections 412 and 430 of the Code or Section 302 of ERISA)
applicable to such Company Benefit Plan, whether or not waived and no
application for a waiver of the minimum funding standard with respect to any
Company Benefit Plan has been submitted; (B) no reportable event within the
meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has
not been waived has occurred (other than in connection with the Bankruptcy
Cases); (C) no liability (other than for premiums to the Pension Benefit
Guaranty Corporation (the “PBGC”)) under Title IV of ERISA has been or is
expected to be incurred by the Company or any entity that is required to be
aggregated with the Company pursuant to Section 414 of the Code (an “ERISA
Affiliate”); (D) the PBGC has not instituted proceedings to terminate any such
plan or made any inquiry which would reasonably be expected to lead to
termination of any such plan, and, no condition exists that presents a risk that
such proceedings will be instituted or which would constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any such plan; and (E) no

 

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Company Benefit Plan is, or is expected to be, in “at-risk” status (as defined
in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code).

 

(c)           Except as would not, individually or in the aggregate, have a
Material Adverse Effect, with respect to each Company Benefit Plan maintained
primarily for the benefit of current or former employees, officers or directors
employed, or otherwise engaged, outside the United States (each a “Foreign
Plan”), excluding any Foreign Plans that are statutorily required, government
sponsored or not otherwise sponsored, maintained or controlled by the Company or
any of its Significant Subsidiaries (“Excluded Non-US Plans”): (A) (1) all
employer and employee contributions required by Law or by the terms of the
Foreign Plan have been made, and all liabilities of the Company and its
Significant Subsidiaries have been satisfied, or, in each case accrued, by the
Company and its Significant Subsidiaries in accordance with generally accepted
accounting principles, and (2) the Company and its Significant Subsidiaries are
in compliance with all requirements of applicable Law and the terms of such
Foreign Plan; (B) as of the Effective Date, the fair market value of the assets
of each funded Foreign Plan, or the book reserve established for each Foreign
Plan, together with any accrued contributions, is sufficient to procure or
provide for the accrued benefit obligations with respect to all current and
former participants in such Foreign Plan determined on an ongoing basis (rather
than on a plan termination basis) according to the actuarial assumptions and
valuations used to account for such obligations as of the Effective Date in
accordance with applicable generally accepted accounting principles; and (C) the
Foreign Plan has been registered as required and has been maintained in good
standing with applicable regulatory authorities.

 

SECTION 2.16  Labor and Employment Matters.  (i) Neither the Company nor any of
its Significant Subsidiaries is a party to or bound by any collective bargaining
agreement or any labor union contract, nor are any employees of the Company or
any of its Significant Subsidiaries represented by a works council or a labor
organization (other than any industry-wide or statutorily mandated agreement in
non-U.S. jurisdictions); (ii) to the Knowledge of the Company, as of March 31,
2010, there are no activities or proceedings by any labor union or labor
organization to organize any employees of the Company or any of its Significant
Subsidiaries or to compel the Company or any of its Significant Subsidiaries to
bargain with any labor union or labor organization; and (iii), except as would
not, individually or in the aggregate, have a Material Adverse Effect, there is
no pending or, to the Knowledge of the Company, threatened material labor
strike, lock-out, walkout, work stoppage, slowdown, demonstration, leafleting,
picketing, boycott, work-to-rule campaign, sit-in, sick-out, or similar form of
organized labor disruption.

 

SECTION 2.17  Insurance.  The Company maintains for itself and its Subsidiaries
insurance policies in those amounts and covering those risks, as in its
judgment, are reasonable for the business and assets of the Company and its
Subsidiaries.

 

SECTION 2.18  No Unlawful Payments.  No action is pending or, to the Knowledge
of the Company, is threatened against the Company or any of its Subsidiaries or
Affiliates, or any of their respective directors, officers, or employees
resulting from any (a) use of corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity,
including without limitation to any Texas State official or member of the Texas
legislature, (b) direct or indirect unlawful payment to any foreign or domestic
government

 

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official or employee from corporate funds, (c) violations of any provision of
the Foreign Corrupt Practices Act of 1977 or any other applicable local
anti-bribery or anti-corruption Laws in any relevant jurisdictions or (d) other
unlawful payment, except in any such case, as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.  No
unlawful payment has been made to any Person by, or on behalf of the Company, in
connection with the Purchaser’s investigation, negotiation or entering into this
Agreement or purchase of the Shares.

 

SECTION 2.19  No Broker’s Fees.  Other than pursuant to agreements (including
amendments thereto) by and between the Company and each of UBS Securities LLC
and Miller Buckfire & Co., LLC (each, a “Broker” ), or otherwise disclosed to
Purchaser prior to the date hereof, none of the Company or any of its
Subsidiaries is a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against
the Company or any of its Subsidiaries for an investment banking fee, finder’s
fee or like payment in respect of the sale of the Shares contemplated by this
Agreement.  None of the Company or any of its Subsidiaries is a party to any
contract, agreement or understanding with any Person that would give rise to a
valid claim against Purchaser for a brokerage commission, finder’s fee,
investment banking fee or like payment in connection with the transactions
contemplated by this Agreement.  Each Broker is registered with either the SEC
or the Financial Industry Regulatory Authority.

 

SECTION 2.20  Real and Personal Property.

 

(a)           Section 2.20(a) of the Company Disclosure Letter sets forth a
true, correct and complete list in all material respects of each material real
property asset owned or leased (as lessee), directly or indirectly, in whole or
in part, by the Company and/or any of its Subsidiaries (other than Identified
Assets) (each such property that is not a Non-Controlling Property and has a
fair market value (in the reasonable determination of the Company) in excess of
$10,000,000 is individually referred to herein as “Company Property” and
collectively referred to herein as the “Company Properties”).  All Company
Properties, Non-Controlling Properties and the Identified Assets are reflected
in accordance with the applicable rules and regulations of the SEC in the Annual
Report in Form 10-K as of, and for the year ended, December 31, 2009.

 

(b)           Except (i) for such breach of this Section 2.20(b) as may be
caused fully or substantially by the third party member or partner in any Joint
Venture, without the Knowledge or consent of the Company or any of its
Subsidiaries or (ii) as would not individually or in the aggregate be reasonably
expected to have a Material Adverse Effect, the Company or one of its
Subsidiaries owns good and valid fee simple title or valid and enforceable
leasehold interests (except with respect to the Company’s right to reject any
such ground lease as part of a Bankruptcy plan of reorganization for the
remaining Debtor entities and subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at Law or
in equity)), as applicable, to each of the Company Properties, in each case,
free and clear of liens, mortgages or deeds of trust, claims against title,
charges that are liens or other encumbrances on title, rights of way,
restrictive covenants, declarations or reservations of an interest in title
(collectively, “Encumbrances”),

 

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except for the following (collectively, the “Permitted Title Exceptions”):
(i) Encumbrances relating to the DIP Loan and to debt obligations reflected in
the Company’s financial statements and the notes thereto (including with respect
to debt obligations which are not consolidated) or otherwise disclosed to
Purchaser in Section 2.20(g)(i) of the Company Disclosure Letter,
(ii) Encumbrances that result from any statutory or other liens for Taxes or
assessments that are not yet due or delinquent or the validity of which is being
contested in good faith by appropriate proceedings and for which a sufficient
and appropriate reserve has been set aside for the full payment thereof,
(iii) any contracts, or other occupancy agreements to third parties for the
occupation or use of portions of the Company Properties by such third parties in
the ordinary course of the business of the Company or its Subsidiaries,
(iv) Encumbrances imposed or promulgated by Law or any Governmental Entity,
including zoning, entitlement and other land use and environmental regulations,
(v) Encumbrances disclosed on existing title policies and current title
insurance commitments or surveys made available to Purchaser, (vi) Encumbrances
on the landlord’s fee interest at any Company Property where the Company or its
Subsidiary is the tenant under any ground lease, provided that, except as
disclosed to Purchaser in Section 2.20(b)(ii) of the Company Disclosure Letter,
neither the Company nor any of its Subsidiaries have received a notice
indicating the intention of the landlord under such ground lease, or of any
other Person, to (1) exercise a right to terminate such ground lease, evict the
lessee or otherwise collect the sub-rents thereunder, or (2) take any other
action that would be reasonably likely to result in a termination of such ground
lease, (vii) any cashiers’, landlords’, workers’, mechanics’, carriers’,
workmen’s, repairmen’s and materialmen’s liens and other similar liens
(1) incurred in the ordinary course of business which (A) are being challenged
in good faith by appropriate proceedings and for which a sufficient and
appropriate reserve has been set aside for the full payment thereof or (B) have
been otherwise fully bonded and discharged of record or for which a sufficient
and appropriate reserve has been set aside for the full payment thereof or
(2) disclosed on Section 2.20(b)(i) of the Company Disclosure Letter  and
(viii) any other easements, rights-of-way, restrictions (including zoning
restrictions), covenants, encroachments, protrusions and other similar charges
or encumbrances, and title limitations or title defects, if any, that (I) are
customary for office, industrial, master planned communities and retail
properties or (II) individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect.  Other than as set forth on
Section 2.20(b)(ii) of the Company Disclosure Letter, neither the Company nor
any of its Subsidiaries has received a written notice of a material default,
beyond any applicable grace and cure periods, of or under any Permitted Title
Exceptions, except (w) as may have been caused fully or substantially by the
third party member or partner in any Joint Venture, without the Knowledge or
consent of the Company or any of its Subsidiaries (x) as a result of the filing
of the Bankruptcy Cases, (y) where the Permitted Title Exceptions are in and of
themselves evidence of default (such as mechanics’ liens and recorded notices of
default) or (z) as would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect; provided, however, that where the
Company has otherwise represented and warranted to Purchaser hereunder
(including as set forth on the Company Disclosure Letter pursuant to such
representations and warranties) with respect to the Company’s Knowledge of, the
Company’s receipt of notice of or the existence of a default in connection with
a particular category of Permitted Title Exceptions, such categories of
Permitted Title Exceptions shall not be included in the representation set forth
in this sentence (by way of illustration, but not exclusion, the representations
set forth in Section 2.20(f) with respect to defaults under Material

 

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Leases shall be deemed to address the Company’s representations and warranties
with respect to the entire category of Permitted Title Exceptions detailed in
clause (iii) above).

 

(c)           [Intentionally omitted.]

 

(d)           With respect to each Company Ground Lease Property, except as set
forth on Section 2.20(d) of the Company Disclosure Letter and except as may have
been caused by, or disclosed in the filing of the Bankruptcy Cases, as of
March 31, 2010, to the Company’s Knowledge, neither the Company nor any of its
Subsidiaries has received notice of material defaults (including, without
limitation, payment defaults, but limited to those circumstances where such
default may grant the landlord under such ground lease the right to terminate
such ground lease, evict the lessee or otherwise collect the sub-rents
thereunder) at such Company Ground Lease Property beyond any applicable grace
and cure periods, except (x) as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect, (y) as may be caused
fully or substantially by the third party member or partner in any Joint
Venture, without the Knowledge or consent of the Company or any of its
Subsidiaries and (z) with respect to any Company Ground Lease Property which is
leased by a Subsidiary of the Company which has consummated a plan of
reorganization in the Bankruptcy Cases, all such material defaults at such
Company Ground Lease Property which existed prior to the effective date of such
Person’s plan of reorganization have been or will be cured in accordance with
such plan.  As used herein the term “Company Ground Lease Property” shall mean
any Company Property having a fair market value (in the reasonable determination
of the Company) in excess of $25,000,000 which is leased by a Subsidiary of the
Company as tenant pursuant to a ground lease.  With respect to the defaults
referenced in clause (z) above, the Bankruptcy Court approved the Debtors’
assumption of the applicable ground leases and the fixed cure amounts for such
defaults which predated assumption; provided, however, nothing contained herein
precludes any Person from raising issues in the future with respect to defaults
that may have predated such assumption.

 

(e)           Except as set forth on Section 2.20(e) of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries is a party to any
agreement relating to the property management (but not including any leasing,
development, construction or brokerage agreements) of any of the Company
Properties by a party other than Company or any wholly owned Company
Subsidiaries, except (i) management agreements that may be terminated without
cause or payment of a termination fee upon no more than 60 days notice or
(ii) as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

(f)            Except as set forth on Section 2.20(f) of the Company Disclosure
Letter, to the Company’s Knowledge, as of February 15, 2010, (i) each Material
Lease is in full force and effect, (ii) no tenant is in arrears in the payment
of rent, additional rent or any other material charges due under any Material
Lease, and no tenant is materially in default in the performance of any other
obligations under any Material Lease, (iii) no bankruptcy or insolvency
proceeding has been commenced (and is continuing) by or against any tenant under
any Material Lease, and (iv) neither the Company nor any of its Subsidiaries has
received a written notice from a current tenant under any Material Lease
exercising a right to terminate or otherwise cancel its Material Lease (y) as a
result of or in connection with the termination or cancellation of any other
lease, sublease, license or occupancy agreement for space at any Company
Property (each, a “Company Property Lease”), or (z) as a result of or in
connection with any other tenant that

 

15

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occupies, or had previously occupied, another Company Property Lease, allowing,
or having had allowed, all or any portion of the premises leased pursuant to
such other Company Property Lease to “go dark” or otherwise be abandoned or
vacated; except, (A) in the case of each of clauses (i), (ii) (iii) and
(iv) above, as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (B) as a result of the filing of the
Bankruptcy Cases or in connection with any Bankruptcy Court approved process and
(C) as may have been caused fully or substantially by the third party member or
partner in any Joint Venture, without the Knowledge or consent of the Company or
its Subsidiaries.  “Material Lease” means for any Company Property any lease in
which the Company or its Subsidiaries is the landlord, and all amendments,
modifications, supplements, renewals, exhibits, schedules, extensions and
guarantees related thereto, (1) to an “anchor tenant” occupying at least 80,000
square feet with respect to such Company Property or (2) that is one of the five
(5) largest leases, in terms of gross annual minimum rent, with respect to a
Company Property that has an annual net operating income, as determined in
accordance with GAAP (provided, however, that for purposes of such calculation,
the following were reflected as expenses: (a) ground rent payments to a third
party and (b) an assumed management fee equal to 3% of base minimum and
percentage rent) with respect to the trailing twelve (12) calendar month period,
equal to at least $7,500,000.00.  For purposes of Section 6.1(c), (y) the
representations and warranties made in Section 2.20(f)(i), (iii) and (iv),
disregarding all qualifications and exceptions contained therein relating to
“materiality” or “Material Adverse Effect”, shall be shall be true and correct
at and as of the Closing Date as if made at and as of the Closing Date, except
for such failures to be true and correct that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect and (z) the
representation and warranties contained in Section 2.20(f)(ii), disregarding all
qualifications and exceptions contained therein relating to “materiality” or
“Material Adverse Effect”, shall be true and correct (A) at and as of the last
day of the calendar month that is two (2) calendar months prior to the calendar
month in which the Closing Date occurs as if made at and as of such date, if the
Closing Date occurs on or prior to the fifteenth (15th) day of a calendar month,
or (B) at and as of the fifteenth (15th) day of the calendar month that is one
(1) calendar month prior to the calendar month in which the Closing Date occurs
as if made at and as of such date, if the Closing Date occurs on or after the
sixteenth (16th) day of a calendar month, except for such failures to be true
and correct that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.

 

(g)           With respect to each Company Property:

 

(i)            As of the date listed thereunder, Section 2.20(g) of the Company
Disclosure Letter sets forth a true, correct and complete list in all material
respects of (i) all loans (other than the DIP Loan) and other indebtedness
secured by a mortgage, deed of trust, deed to secure debt or indemnity deed of
trust in such Company Property (each, a “Company Mortgage Loan”), (ii) the
outstanding principal balance of each such Company Mortgage Loan, (iii) the rate
of interest applicable to such Company Mortgage Loan and (iv) the maturity date
of such Company Mortgage Loan;

 

(ii)           Except as set forth in Section 2.20(g) of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries have received a written

 

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notice of default (beyond any applicable grace or cure periods) in the
(y) payment of interest, principal or other material amount due to the lender
under any Company Mortgage Loan, whether as the primary obligor or as a
guarantor thereof or (z) performance of any other material obligations under any
Company Mortgage Loan, except (i) with respect to (y) and (z) above, as a result
of the filing of the Bankruptcy Cases, or as is prohibited, stayed or otherwise
suspended as a result of the Company’s or any Subsidiary’s Chapter 11 filing or
status as a debtor-in-possession under Chapter 11, and (ii) with respect solely
to (z) above, which would not individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect; and

 

(iii)          For purposes of Section 6.1(c), the representations and
warranties made in Section 2.20(g)(i), disregarding all qualifications and
exceptions contained therein relating to “materiality” or “Material Adverse
Effect”, shall be true and correct at and as of the Closing Date as if made at
and as of the Closing Date, except for (A) such inaccuracies caused by sales,
purchases, transfers of assets, refinancing or other actions effected in
accordance with, subject to the limitations contained in, and not otherwise
prohibited by, the terms and conditions in this Agreement, including, without
limitation, in ARTICLE VI, (B) amortization payments made pursuant to any
applicable Company Mortgage Loans and (C) such failures to be true and correct
that, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.

 

(h)           To the Knowledge of the Company, (i) except as set forth on
Section 2.20(h) of the Company Disclosure Letter, neither the Company nor any of
its Subsidiaries has received a written notice exercising an option, “buy-sell”
right or other similar right to purchase a Company Property or any material
portion thereof which has not previously closed, except as would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect with respect to such Company Property and (ii) no Company
Property is subject to a purchase and sale agreement or any similar legally
binding agreement to purchase such Company Property or any material portion
thereof (other than (x) with respect to condominium purchase and sale agreements
and purchase and sale and early occupancy agreements or similar agreements for
the sale of condominium units at the Natick Nouvelle, (y) with respect to
builder lot purchase agreements and other similar agreements for the sale of
vacant lots of land to builders at Bridgeland and (z) as set forth in (i) above)
which has not previously closed.

 

(i)            The Company has conducted due inquiry with respect to the
representations and warranties made in Section 2.20(d), Section 2.20(f) and
Section 2.20(h).

 

SECTION 2.21  Tax Matters.  Except as disclosed on Section 2.21(a) of the
Company Disclosure Letter:

 

(a)           Except in cases where the failure of any of the following to be
true would not result in a Material Adverse Effect: (i) the Company and each of
its Significant Subsidiaries have filed all Tax Returns required to be filed by
applicable Law prior to March 31, 2010; (ii) all such

 

17

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Tax Returns were true, complete and correct in all respects and filed on a
timely basis (taking into account any applicable extensions); (iii) the Company
and each of its Significant Subsidiaries have paid all amounts of Taxes that are
due, claimed or assessed by any taxing authority to be due for the periods
covered by such Tax Returns, other than any Taxes for which adequate reserves
have been established in accordance with GAAP or a claim has been filed in the
Bankruptcy Cases; and (iv) all adjustments of federal U.S. Tax liability of the
Company and its Significant Subsidiaries resulting from completed audits or
examinations have been reported to appropriate state and local taxing
authorities and all resulting Taxes payable to state and local taxing
authorities have been paid.  “Taxes” means any U.S. federal, state, local, or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Section 59A of the Code), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.  “Tax Return” means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof, including,
where permitted or required, combined or consolidated returns for any group of
entities that include the Company or any of its Significant Subsidiaries.

 

(b)           The Company and each of its REIT Subsidiaries (x) for all taxable
years commencing with the taxable year ended December 31, 2005 through
December 31, 2009, has been subject to taxation as a real estate investment
trust within the meaning of Section 856 of the Code (a “REIT”) and has satisfied
all requirements to qualify as a REIT for such years; (y) has operated since
January 1, 2010 to March 31, 2010 in a manner consistent with the requirements
for qualification and taxation as a REIT; and (z) intends to continue to operate
in such a manner as to qualify as a REIT for the current taxable year.  None of
the transactions contemplated by this Agreement will prevent the Company or any
of its REIT Subsidiaries from so qualifying.  No Subsidiary of the Company other
than a REIT Subsidiary is a corporation for U.S. federal income tax purposes,
other than a corporation that qualifies as a “taxable REIT subsidiary” within
the meaning of Section 856(l) of the Code.  For the purposes of this Agreement,
“REIT Subsidiary” means each of GGP Ivanhoe, Inc., GGP Holding, Inc., GGP
Holding II, Inc., Victoria Ward, Limited, GGP-Natick Trust and GGP/Homart, Inc.

 

(c)           Each Company Subsidiary other than its REIT Subsidiaries that is a
partnership, joint venture, or limited liability company and which has not
elected to be a “taxable REIT subsidiary” within the meaning of
Section 856(l) of the Code has been since its formation treated for U.S. federal
income tax purposes as a partnership or disregarded entity, as the case may be,
and not as a corporation or an association taxable as a corporation, except
where failure to do so would not have a Material Adverse Effect.

 

(d)           Except where the failure to be true would not have a Material
Adverse Effect, the Company and each of its Significant Subsidiaries have
(i) complied in all respects with all applicable Laws, rules, and regulations
relating to the payment and withholding of Taxes (including withholding and
reporting requirements under sections 1441 through 1464, 3401 through 3406, 6041
and 6049 of the Code and similar provisions under any other Laws) and (ii) 

 

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within the time and in the manner prescribed by Law, withheld from employee
wages and paid to the proper Governmental Entities all amounts required to be
withheld and paid over.

 

(e)           Except where the failure to be true would not have a Material
Adverse Effect, no audits or other administrative proceedings or court
proceedings are presently pending or to the Knowledge of the Company threatened
with regard to any Taxes or Tax Returns of the Company or any of its Significant
Subsidiaries, other than any audit or administrative proceeding relating to
Taxes for which a claim has been filed in a Debtor’s Chapter 11 case or any
other audit or administrative or court proceeding that is not reasonably
expected to result in a material Tax liability to the Company or any of its
Significant Subsidiaries.

 

(f)            [Intentionally omitted.]

 

(g)           There are no Tax Protection Agreements except for those the breach
of which would not reasonably be expected to have a Material Adverse Effect. 
Neither the Company nor any Significant Subsidiary has any liability for Taxes
of any Person under Treasury Regulation Section 1.1502-6 (or any similar
provision of any state, local or foreign Law), or as a transferee or successor
(by contract or otherwise), other than (i) to a Subsidiary of the Company or
(ii) where any such liability would not reasonably be expected to have a
Material Adverse Effect.

 

SECTION 2.22  Material Contracts.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each
Material Contract that shall survive the Bankruptcy Cases is valid and binding
on the Company or any of its Subsidiaries, as applicable, and, to the Knowledge
of the Company, on each other Person party thereto, and is in full force and
effect.  Other than as a result of the commencement of the Bankruptcy Cases,
each of the Company and its Subsidiaries has performed, in all material
respects, all obligations required to be performed by it under each Material
Contract that shall survive the Bankruptcy Cases, except, in each case, as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Other than those caused as a result of the filing of the
Bankruptcy Cases, neither the Company nor any of its Significant Subsidiaries is
in breach or default of any Material Contract to which it is a party and which
shall survive the Bankruptcy Cases, except, in each case, as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  The Company has made available to Purchaser true, accurate and
complete copies of the Material Contracts as of March 31, 2010, except for those
Material Contracts available to the public on the website maintained by the
SEC.  To the Knowledge of the Company, no party to any Material Contract that
shall survive the Bankruptcy Cases has given written notice of any action to
terminate, cancel, rescind or procure a judicial reformation of such Material
Contract or any material provision thereof, which termination, cancellation,
rescission or reformation would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.  For the avoidance of doubt,
Material Contracts do not include intercompany contracts.

 

SECTION 2.23  No Other Representations or Warranties.  Except for the
representations and warranties made by the Company in this ARTICLE II, neither
the Company nor any other Person makes any representation or warranty with
respect to the Company or its Subsidiaries or their respective business,
operations, assets, liabilities, condition (financial or otherwise) or
prospects, notwithstanding the delivery or disclosure to Purchaser or any of its
Affiliates or their

 

19

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respective representatives of any documentation, forecasts or other information
with respect to any one or more of the foregoing.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to the Company as set forth below:

 

SECTION 3.1  Organization.  Purchaser is a public pension plan and entity of the
State of Texas, with the requisite power and authority under the Laws of the
State of Texas to undertake and effectuate the transactions contemplated by this
Agreement.

 

SECTION 3.2  Power and Authority.  Purchaser has the requisite power and
authority under the Laws of the State of Texas to enter into, execute and
deliver this Agreement and to perform its obligations hereunder and has taken
all necessary action required for the due authorization, execution, delivery and
performance by it of this Agreement.

 

SECTION 3.3  Execution and Delivery.  This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes its valid and binding
obligation, enforceable against Purchaser in accordance with its terms, except
as such enforceability may be limited by (i) applicable bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting the enforcement of creditors’
rights generally and subject to general principles of equity, including
principles of commercial reasonableness, good faith and  fair dealing
(regardless of whether enforcement is sought in a proceeding of law or in
equity), and (ii) Texas Law applicable to Purchaser as an entity of the State of
Texas.

 

SECTION 3.4  No Conflict.  The execution and delivery of this Agreement and the
performance by Purchaser of its obligations hereunder and compliance by
Purchaser with all of the provisions hereof and the consummation of the
transactions contemplated herein (i) shall not conflict with, or result in a
breach or violation of, any of the terms or provisions of, or constitute a
default under, or result in the acceleration of, or the creation of any lien
under, or give rise to any termination right under, any material contract to
which Purchaser is a party, (ii) shall not result in any violation or breach of
any provisions of the organizational documents of Purchaser and (iii) shall not
conflict with or result in any violation of, or any termination or material
impairment of any rights under, any statute or any license, authorization,
injunction, judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over Purchaser or Purchaser’s
properties or assets, except with respect to each of (i), (ii) and (iii), such
conflicts, violations or defaults as would not be reasonably expected to have a
material adverse effect on the ability of Purchaser to consummate the
transactions contemplated hereunder.

 

SECTION 3.5  Consents and Approvals.  No consent, approval, order,
authorization, registration or qualification of or with any Governmental Entity
having jurisdiction over Purchaser is required in connection with the execution
and delivery by Purchaser of this Agreement or the consummation of the
transactions contemplated hereby, except such consents, approvals, orders,
authorizations, registration or qualification as would not reasonably be

 

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expected to materially and adversely affect the ability of Purchaser to perform
its obligations under this Agreement or which have already been obtained.

 

SECTION 3.6  Compliance with Laws.  Since the date of its formation, Purchaser
has been in compliance with all Laws applicable to Purchaser, except, in each
case, for such non-compliance as would not reasonably be expected to materially
and adversely affect the ability of Purchaser to perform its obligations under
this Agreement.

 

SECTION 3.7  Legal Proceedings.  There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the knowledge of
Purchaser, threatened against Purchaser which, individually or in the aggregate,
if determined adversely to Purchaser, would materially and adversely affect the
ability of Purchaser to perform its obligations under this Agreement.

 

SECTION 3.8  No Broker’s Fees.  Purchaser is not party to any contract,
agreement or understanding with any Person that would give rise to a valid claim
against the Company for an investment banking fee, commission, finder’s fee or
like payment in connection with the transactions contemplated by this Agreement.

 

SECTION 3.9  Sophistication.  Purchaser is, as of the date hereof and shall be
as of the Effective Date, an “accredited investor” within the meaning of
Rule 501(a) under the Securities Act.  Purchaser understands and is able to bear
any economic risks associated with the investments contemplated by this
Agreement (including, without limitation, the necessity of holding the Shares
for an indefinite period of time).

 

SECTION 3.10  Purchaser Intent.  Purchaser is acquiring the Shares for
investment purposes only and not with a view to or for distributing or reselling
such Shares or any part thereof, without prejudice, however, to Purchaser’s
right, subject to the provisions of this Agreement, at all times to sell or
otherwise dispose of all or any part of such Shares pursuant to an effective
registration statement under the Securities Act or under an exemption from such
registration and in compliance with applicable federal and state securities
Laws.  Purchaser understands that Purchaser must bear the economic risk of its
investment indefinitely.

 

SECTION 3.11  Reliance on Exemptions.  Purchaser understands that the Shares are
being offered and sold to Purchaser in reliance upon specific exemptions from
the registration requirements of United States federal and state securities
Laws.

 

SECTION 3.12  Financial Capability.  Purchaser has sufficient available funds to
satisfy its obligations under this Agreement, including without limitation the
payment of the Purchase Price.

 

SECTION 3.13  No Other Representations or Warranties.  Except for the
representations and warranties made by Purchaser in this ARTICLE III, neither
Purchaser nor any other Person on behalf of Purchaser makes any representation
or warranty with respect to Purchaser or its assets, liabilities, condition
(financial or otherwise) or prospects.

 

SECTION 3.14  Acknowledgement.  Purchaser acknowledges that (a) neither the
Company nor any Person on behalf of the Company is making any representations or
warranties

 

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whatsoever, express or implied, beyond those expressly given by the Company in
ARTICLE II of this Agreement and (b) Purchaser has not been induced by, or
relied upon, any representations, warranties or statements (written or oral),
whether express or implied, made by any Person, that are not expressly set forth
in ARTICLE II of this Agreement.  Without limiting the generality of the
foregoing, except with respect to the representations and warranties contained
in ARTICLE II, Purchaser acknowledges that no representations or warranties are
made with respect to any projections, forecasts, estimates, budgets, plans or
prospect information that may have been made available to Purchaser or any of
its representatives.

 

ARTICLE IV

 

COVENANTS OF THE COMPANY AND PURCHASER

 

SECTION 4.1  Bankruptcy Court Motions and Orders.

 

(a)           Promptly following the date of this Agreement, the Company shall
file with the Bankruptcy Court a motion in form and substance reasonably
satisfactory to Purchaser (the “Approval Motion”) seeking to obtain entry of an
order which in final form if approved by the Bankruptcy Court (the “Approval
Order”) shall approve, among other things, the Termination Payment and Expense
Reimbursement contemplated by Section 9.3(a); provided, however, that the
Company may delay filing the Approval Motion if it determines such delay is
reasonably necessary in order to file the Approval Motion in conjunction with
any other filing with the Bankruptcy Court.

 

(b)           The Approval Motion, including any exhibits thereto and any
notices or other materials in connection therewith, and any modifications or
amendments to the foregoing, must be in form and substance reasonably
satisfactory to Purchaser.

 

(c)           If the Approval Order shall be appealed by any Person (or a
petition for certiorari or motion for reconsideration, amendment, clarification,
modification, vacation, stay, rehearing or reargument shall be filed with
respect to such order), the Company shall diligently defend against any such
appeal, petition or motion and shall use its reasonable best efforts to obtain
an expedited resolution of any such appeal, petition or motion.  The Company
shall keep Purchaser reasonably informed and updated regarding the status of any
such appeal, petition or motion.

 

(d)           The Company shall provide draft copies of all motions, notices,
statements, schedules, applications, reports and other papers the Company
intends to file with the Bankruptcy Court in connection with the Approval Order
to Purchaser within a reasonable period of time prior to the date the Company
intends to file any of the foregoing, and shall consult in advance in good faith
with Purchaser regarding the form and substance of any such proposed filing with
the Bankruptcy Court.

 

SECTION 4.2  Listing.  The Company shall use its reasonable best efforts to
cause the Shares to be listed on the New York Stock Exchange (the “NYSE”).

 

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SECTION 4.3  Use of Proceeds.  The Plan shall provide that the Company and its
Subsidiaries shall apply the net proceeds from the sale of the Shares and the
Capital Raising Activities, as applicable, as provided in the Plan Summary Term
Sheet and the Plan.

 

SECTION 4.4  Access to Information.  Subject to applicable Law and the Company’s
receipt of customary assurances of confidentiality by Purchaser, upon reasonable
notice, the Company shall afford Purchaser and its directors, officers,
employees, investment bankers, attorneys, accountants and other advisors or
representatives, reasonable access during normal business hours, throughout the
period prior to the Effective Date, to its employees, books, contracts and
records and, during such period, the Company shall (and shall cause its
Subsidiaries to) furnish promptly to Purchaser such information concerning its
business, properties and personnel as may reasonably be requested by Purchaser.

 

SECTION 4.5  Notification of Certain Matters.

 

(a)           The Company shall (i) give prompt written notice to Purchaser of
any written notice or other written communication from any Person alleging that
the consent of such Person which is or may be required in connection with the
transactions contemplated by this Agreement is not likely to be obtained prior
to Closing, if the failure to obtain such consent would reasonably be expected
to be adverse and material to the Company and its Subsidiaries taken as a whole
or would materially impair the ability of the Company to consummate the
transactions contemplated hereby or perform its obligations hereunder, and
(ii) facilitate adding such individuals as designated by Purchaser to the
electronic notification system such that the designated individuals will receive
electronic notice of the entry of any Bankruptcy Court Order.

 

(b)           To the extent permitted by applicable Law, (i) the Company shall
give prompt notice to Purchaser of the commencement of any investigation,
inquiry or review by any Governmental Entity with respect to the Company or its
Subsidiaries which would reasonably be expected to be adverse and material to
the Company and its Subsidiaries taken as a whole or would materially impair the
ability of the Company to consummate the transactions contemplated hereby or
perform its obligations hereunder, and (ii) the Company shall give prompt notice
to Purchaser, and Purchaser shall give written prompt notice to the Company, of
any event or circumstance that would result in any representation or warranty of
the Company or Purchaser, as applicable, being untrue or any covenant or
agreement of the Company or Purchaser, as applicable, not being performed or
complied with such that, in each such case, the conditions set forth in
ARTICLE VI or ARTICLE VII, as applicable, would not be satisfied if such event
or circumstance existed on the Closing Date.

 

(c)           No information received by a party pursuant to this Section 4.5
nor any information received or learned by a party or any of its representatives
pursuant to an investigation made under this Section 4.5 shall be deemed to
(A) qualify, modify, amend or otherwise affect any representations, warranties,
conditions, covenants or other agreements of the other party set forth in this
Agreement, (B) amend or otherwise supplement the information set forth in the
Company Disclosure Letter, (C) limit or restrict the remedies available to such
party  under this Agreement, applicable Law or otherwise arising out of a breach
of this Agreement, or (D) limit or restrict the ability of such party to invoke
or rely on, or effect the satisfaction of, the

 

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conditions to the obligations of such party to consummate the transactions
contemplated by this Agreement set forth in ARTICLE VI or ARTICLE VII, as
applicable.

 

SECTION 4.6  Further Assurances.  From and after the Closing, the Company shall
(and shall cause each of its Subsidiaries to) execute and deliver, or cause to
be executed and delivered, such further instruments or documents or take such
other action and cause entities controlled by them to take such action as may be
reasonably necessary (or as reasonably requested by Purchaser) to carry out the
transactions contemplated by this Agreement.

 

SECTION 4.7  Plan and Disclosure Statement.  Subject to the Company’s receipt of
customary assurances of confidentiality by Purchaser as may be reasonably
requested by the Company, the Company shall provide Purchaser with copies of the
Plan and Disclosure Statement, and any amendments or supplements thereto, prior
to filing such documents with the Bankruptcy Court.

 

ARTICLE V

 

ADDITIONAL COVENANTS OF PURCHASER

 

SECTION 5.1  Information.  From and after the date of this Agreement until the
earlier to occur of the Closing Date and the termination of this Agreement,
Purchaser agrees to provide the Debtors with such information as the Debtors
reasonably request regarding Purchaser for inclusion in the Disclosure Statement
as necessary for the Disclosure Statement to contain adequate information for
purposes of Section 1125 of the Bankruptcy Code.

 

SECTION 5.2  Purchaser Efforts.  Purchaser shall use its reasonable best efforts
to obtain all material permits, consents, orders, approvals, waivers,
authorizations or other permissions or actions required for the consummation of
the transactions contemplated by this Agreement from, and shall have given all
necessary notices to, all Governmental Entities necessary to satisfy the
condition in Section 7.1(b) (provided, however, that Purchaser shall not be
required to pay or cause payment of any fees or make any financial
accommodations to obtain any such consent, approval, waiver or other permission,
except filing fees as required), and provide to such Governmental Entities all
such information as may be necessary or reasonably requested relating to the
transactions contemplated hereby.

 

SECTION 5.3  Plan Support.  From and after the date of the Approval Order until
the earliest to occur of (i) the Effective Date and (ii) the termination of this
Agreement, Purchaser agrees (unless otherwise consented to by the Company)
(provided that (x) the Company is not in material breach of this Agreement and
(y) the terms of the Plan are and remain consistent with the Plan Summary Term
Sheet and this Agreement) to (and shall use reasonable best efforts to cause its
Affiliates to):

 

(a)           Not pursue, propose, support, vote to accept or encourage the
pursuit, proposal or support of, any Chapter 11 plan, or other restructuring or
reorganization for the Company, or any Subsidiary of the Company, that is not
consistent with the Plan;

 

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(b)           Not, nor encourage any other Person to, interfere with, delay,
impede, appeal or take any other negative action, directly or indirectly, in any
respect regarding acceptance or implementation of the Plan; and

 

(c)           Not commence any proceeding, or prosecute any objection to oppose
or object to the Plan or to the Disclosure Statement and not to take any action
that would delay approval or confirmation, as applicable, of the Disclosure
Statement and the Plan, in each case (i) except as intended to ensure the
consistency of the Disclosure Statement and the Plan with the terms of this
Agreement and the rights and obligations of the parties thereto and (ii) without
limiting any rights Purchaser may have to terminate this Agreement pursuant to
Section 9.1(c).

 

SECTION 5.4  Transfer Restrictions.  Purchaser covenants and agrees that the
Shares shall be disposed of only pursuant to an effective registration statement
under the Securities Act or pursuant to an available exemption from the
registration requirements of the Securities Act, and in compliance with any
applicable state securities Laws.  Purchaser agrees to the imprinting, so long
as is required by this Section 5.4, of the following legend on any certificate
evidencing the Shares:

 

THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED
(THE “ACT”) OR UNDER ANY STATE SECURITIES LAWS (“BLUE SKY”) OR THE SECURITIES
LAWS OF ANY OTHER RELEVANT JURISDICTION.  THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE.  THE SHARES MAY NOT BE
SOLD, ASSIGNED, MORTGAGED, PLEDGED, ENCUMBERED, HYPOTHECATED, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS EITHER (I) A REGISTRATION STATEMENT WITH RESPECT TO
THE SHARES IS EFFECTIVE UNDER THE ACT AND APPLICABLE BLUE SKY LAWS AND THE
SECURITIES LAWS OF ANY OTHER RELEVANT JURISDICTION ARE COMPLIED WITH OR
(II) UNLESS WAIVED BY THE ISSUER, THE ISSUER RECEIVES AN OPINION OF LEGAL
COUNSEL SATISFACTORY TO THE ISSUER THAT NO VIOLATION OF THE ACT OR OTHER
APPLICABLE LAWS WILL BE INVOLVED IN SUCH TRANSACTION.

 

Certificates evidencing the Shares shall not be required to contain such legend
(A) while a registration statement covering the resale of the Shares is
effective under the Securities Act, or (B) following any sale of any such Shares
pursuant to Rule 144 of the Exchange Act (“Rule 144”), or (C) following receipt
of a legal opinion of counsel to Purchaser that the remaining Shares held by
Purchaser are eligible for resale without volume limitations or other
limitations under Rule 144.  In addition, the Company will agree to the removal
of all legends with respect to shares of New Common Stock deposited with DTC
from time to time in anticipation of sale in accordance with the volume
limitations and other limitations under Rule 144, subject to the Company’s
approval of appropriate procedures, such approval not to be unreasonably
withheld, conditioned or delayed.

 

Following the time at which such legend is no longer required (as provided
above) for certain Shares, the Company shall promptly, following the delivery by
Purchaser to the Company of a legended certificate representing such Shares,
deliver or cause to be delivered to Purchaser a certificate representing such
Shares that is free from such legend.  In the event the

 

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above legend is removed from any of the Shares, and thereafter the effectiveness
of a registration statement covering such Shares is suspended or the Company
determines that a supplement or amendment thereto is required by applicable
securities Laws, then the Company may require that the above legend be placed on
any such Shares that cannot then be sold pursuant to an effective registration
statement or under Rule 144 and Purchaser shall cooperate in the replacement of
such legend.  Such legend shall thereafter be removed when such Shares may again
be sold pursuant to an effective registration statement or under Rule 144.

 

The Plan shall provide that, at the time of an underwritten offering of equity
or convertible securities by the Company on or prior to the 30th day after the
Effective Date, Purchaser and its applicable Affiliates, subject to any rights
the Purchaser or its Affiliates have to participate in such offering, will enter
into a customary ‘lock-up’ agreement with respect to third party sales of New
Common Stock for a period of time not to exceed 120 days to the extent
reasonably requested by the managing underwriter in connection with such
offering; provided, however, in no event will Purchaser or its Affiliates be
required to enter into a ‘lock-up’ agreement (i) if it beneficially owns 3% or
less of the New Common Stock or (ii) for a period longer than is applicable to
any executive officer, director or Affiliate of the Company (for the avoidance
of doubt, Purchaser agrees that Fairholme is not an Affiliate of the Company).

 

ARTICLE VI

 

CONDITIONS TO THE OBLIGATIONS OF PURCHASER

 

SECTION 6.1  Conditions to the Obligations of Purchaser.  The obligation of
Purchaser to purchase the Shares pursuant to this Agreement on the Closing Date
is subject to the satisfaction (or waiver (to the extent permitted by applicable
Law) by Purchaser) of the following conditions as of the Closing Date:

 

(a)           No Injunction.  No judgment, injunction, decree or other legal
restraint shall prohibit the consummation of the Plan or the transactions
contemplated by this Agreement.

 

(b)           Regulatory Approvals; Consents.  All permits, consents, orders,
approvals, waivers, authorizations or other permissions or actions of third
parties and Governmental Entities required for the consummation of the
transactions contemplated by this Agreement and the Plan shall have been made or
received, as the case may be, and shall be in full force and effect, except for
those permits, consents, orders, approvals, waivers, authorizations or other
permissions or actions the failure of which to make or receive would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect (it being agreed that any permit, consent, order, approval,
waiver, authorization or other permission or action in respect of any Identified
Asset (as defined in the Brookfield Agreement) for which any of the alternatives
in Section 2.1(a) of the Brookfield Agreement shall have been employed shall be
deemed hereunder to have been made or received, as the case may be, and in full
force and effect).

 

(c)           Representations and Warranties and Covenants.  Except for changes
permitted or contemplated by this Agreement or the Plan Summary Term Sheet, each
of (i) the representations and warranties of the Company contained in
Section 2.1, Section 2.2, Section 2.3, Section 2.5, the last sentence of
Section 2.18 and Section 2.20(a) (except for such

 

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inaccuracies in Section 2.20(a) caused by sales, purchases or transfers of
assets which have been effected in accordance with, subject to the limitations
contained in, and not otherwise prohibited by, the terms and conditions in this
Agreement, including, without limitation, this ARTICLE VI or the Investment
Agreements, including, without limitation, ARTICLE VII thereof) shall be true
and correct at and as of the Closing Date as if made at and as of the Closing
Date (except for representations and warranties made as of a specific date,
which shall be true and correct only as of such specific date), (ii) the
representations and warranties of the Company contained in Section 2.4 shall be
true and correct (except for de minimis inaccuracies) at and as of the Closing
Date as if made at and as of the Closing Date (except for representations and
warranties made as of a specific date, which shall be true and correct (except
for de minimis inaccuracies) only as of such specific date) and (iii) the other
representations and warranties of the Company contained in this Agreement,
disregarding all qualifications and exceptions contained therein relating to
“materiality” or “Material Adverse Effect”, shall be true and correct at and as
of the Closing Date as if made at and as of the Closing Date (except for
representations and warranties made as of a specified date, which shall be true
and correct only as of the specified date), except for such failures to be true
and correct that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect (it being agreed that the condition
in this subclause (iii) as it relates to undisclosed liabilities of the Company
and its Subsidiaries comprised of indebtedness shall be deemed to be satisfied
if the condition in Section 7.1(p) of the Brookfield Agreement is satisfied). 
The Company shall have complied in all material respects with all of its
obligations under this Agreement.  The Company shall have provided to Purchaser
a certificate delivered by an executive officer of the Company, acting in his or
her official capacity on behalf of the Company, to the effect that the
conditions in this clause (c), the immediately following clause (d) and clause
(n) of this Section 6.1 have been satisfied as of the Closing Date and Purchaser
shall have received such other evidence of the conditions set forth in this
Section 6.1 as it shall reasonably request.

 

(d)           No Material Adverse Effect.  Since the date of this Agreement,
there shall not have occurred any event, fact or circumstance, that has had or
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

(e)           Plan and Confirmation Order.  The Plan shall have been confirmed
by the Bankruptcy Court by order (the “Confirmation Order”), which Confirmation
Order shall be in full force and effect (without waiver of the 14-day period set
forth in Bankruptcy Rule 3020(e)) as of the Effective Date and shall not be
subject to a stay of effectiveness.

 

(f)            Disclosure Statement.  The Disclosure Statement shall have been
approved by order of the Bankruptcy Court.

 

(g)           Conditions to Confirmation.  The conditions to confirmation and
the conditions to the Effective Date of the Plan shall have been satisfied or
waived in accordance with the Plan.

 

(h)           Valid Issuance.  The Shares shall be validly issued to Purchaser
against payment therefor.

 

(i)            No Legal Impediment to Issuance.  No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any federal, state

 

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or foreign governmental or regulatory authority that prohibits the issuance or
sale of the Shares pursuant to this Agreement, and no injunction or order of any
federal, state or foreign court shall have been issued that prohibits the
issuance or sale of the Shares pursuant to this Agreement

 

(j)            Registration Statement; Registration Rights.  The Company shall
have filed with the SEC and the SEC shall have declared effective, as of
Closing, to the extent permitted by applicable SEC rules, a shelf registration
statement on Form S-1 or Form S-11, as applicable, covering the resale by
Purchaser of the Shares, containing a plan of distribution reasonably
satisfactory to Purchaser.  In addition, the Company shall have entered into a
registration rights agreement with Purchaser with respect to all Shares held by
Purchaser and its Affiliates, which provides for (i) customary piggyback
registration rights with customary cutbacks, including cutbacks giving priority
to the Company and to any Person to whom the Company has provided demand
registration rights (including in connection with the Investment Agreements);
(ii) customary “black out” periods; (iii) to the extent that Purchaser is an
Affiliate of the Company at the time of an underwritten public offering by the
Company, Purchaser will agree to a 60-day customary lock up to the extent
requested by the managing underwriter; and (iv) other terms and conditions
customary for such rights.  The registration rights agreement shall be in full
force and effect and the Company shall not be in breach of any representation,
warranty, covenant or agreement thereunder in any material respect.

 

(k)           Listing.  The Shares shall be authorized for listing on the NYSE,
subject to official notice of issuance.

 

(l)            REIT Opinion.  Purchaser shall have received an opinion of
Arnold & Porter LLP, dated as of the Closing Date, substantially in the form
attached hereto as Exhibit A, that the Company (x) for all taxable years
commencing with the taxable year ended December 31, 2005 through December 31,
2009, has been subject to taxation as a REIT and (y) has operated since
January 1, 2010 to the Closing Date in a manner consistent with the requirements
for qualification and taxation as a REIT.

 

(m)          Issuance or Sale of Common Stock.  Neither the Company nor any of
its Subsidiaries shall have issued or sold any shares of Common Stock (or
securities, warrants or options that are convertible into or exchangeable or
exercisable for, or linked to the performance of, Common Stock) (other than
(A) pursuant to the Equity Exchange, (B) the issuance of shares pursuant to the
exercise of employee stock options issued pursuant to the Company Option Plans,
(C) as set forth on Section 6.1(m) of the Company Disclosure Letter or
(D) pursuant to the Investment Agreements as in effect as of the date hereof
(including, without limitation, Section 6.9 thereof)), unless the purchase price
(or, in the case of securities that are convertible into or exchangeable or
exercisable for, or linked to the performance of, Common Stock, the conversion,
exchange or exercise price) shall not be less than $10.00 per share (net of all
underwriting and other discounts, fees and any other compensation).

 

(n)           Other Conditions.    (i) The Brookfield Agreement shall be in full
force and effect without amendments or modifications after the date hereof
(other than those that are not materially adverse taken as a whole to the
Company), the conditions to the consummation of the transactions under the
Brookfield Agreement to be performed on the Closing Date shall have been
satisfied or waived, and the Brookfield Investor shall have subscribed and paid
for such

 

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shares of New Common Stock that the Brookfield Investor is obligated to purchase
thereunder and (ii) with respect to each Initial Investor other than the
Brookfield Investor, either (A) its Investment Agreement shall be in full force
and effect without amendments or modifications after the date hereof (other than
those that are not materially adverse taken as a whole to the Company), the
conditions to the consummation of the transactions under such Investment
Agreement to be performed on the Closing Date shall have been satisfied or
waived, and such Initial Investor shall have subscribed and paid for such shares
of New Common Stock that such Initial Investor is obligated to purchase
thereunder or (B) the funding to be provided by such Initial Investor under its
Investment Agreement shall have been provided by one or more other investors or
purchasers on terms and conditions that are materially no less favorable to the
Company than the terms and conditions of the applicable Investment Agreement;
provided, however, that in no event shall, in each case without the prior
written consent of Purchaser, (1) the aggregate outstanding Proportionally
Consolidated Debt of the Company immediately following the Closing (disregarding
any short term debt issued to Fairholme or Pershing in connection with
Section 1.4 of the Fairholme Agreement or the Pershing Agreement) exceed more
than $23,782,500,000 in the aggregate and (2) the aggregate amount of
Proportionally Consolidated Unrestricted Cash, after giving effect to all
proceeds received on the Effective Date, be less than $332,500,000; and,
provided, further, that none of the Investment Agreements shall have been
amended to reduce the per share purchase price of New Common Stock sold to any
Initial Investor, or the exercise price of warrants to purchase shares of New
Common Stock,  pursuant to the Investment Agreements as in effect as of the date
hereof.

 

ARTICLE VII

 

CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

 

SECTION 7.1  Conditions to the Obligations of the Company.  The obligation of
the Company to issue the Shares pursuant to this Agreement on the Closing Date
are subject to the satisfaction (or waiver by the Company) of the following
conditions as of the Closing Date:

 

(a)           No Injunction.  No judgment, injunction, decree or other legal
restraint shall prohibit the consummation of the Plan or the transactions
contemplated by this Agreement.

 

(b)           Regulatory Approvals; Consents.  All permits, consents, orders,
approvals, waivers, authorizations or other permissions or actions of third
parties and Governmental Entities required for the consummation of the
transactions contemplated by this Agreement and the Plan shall have been made or
received, as the case may be, and shall be in full force and effect, except for
those permits, consents, orders, approvals, waivers, authorizations or other
permissions or actions the failure of which to make or receive would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

(c)           Representations and Warranties and Covenants.  Each of (i) the
representations and warranties of Purchaser contained in Section 3.1,
Section 3.2 and Section 3.3 in this Agreement shall be true and correct at and
as of the Closing Date as if made at and as of the Closing Date (except for
representations and warranties made as of a specific date, which shall be true
and correct only as of such specific date), and (ii) the other representations
and warranties of Purchaser contained in this Agreement, disregarding all
qualifications and exceptions

 

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contained therein relating to “materiality”, shall be true and correct at and as
of the date of this Agreement and at and as of the Closing Date as if made at
and as of the Closing Date (except for representations and warranties made as of
a specified date, which shall be true and correct only as of the specified
date), except for such failures to be true and correct that, individually or in
the aggregate, would not reasonably be expected to have a material adverse
effect on the ability of Purchaser to consummate the transactions contemplated
by this Agreement.  Purchaser shall have complied in all material respects with
all of its obligations under this Agreement.  Purchaser shall have provided to
the Company a certificate delivered by an executive officer of the managing
member of Purchaser, acting in his or her official capacity on behalf of
Purchaser, to the effect that the conditions in this clause (c) have been
satisfied as of the Closing Date.

 

(d)           Plan and Confirmation Order.  The Plan shall have been confirmed
by the Bankruptcy Court by order, which order shall be in full force and effect
and not subject to a stay of effectiveness.

 

(e)           Conditions to Confirmation.  The conditions to confirmation and
the conditions to the Effective Date of the Plan shall have been satisfied or
waived in accordance with the Plan.

 

(f)            GGO.  The GGO Share Distribution (as defined in the Brookfield
Agreement) shall have occurred.

 

(g)           No Legal Impediment to Issuance.  No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any federal, state or foreign governmental or regulatory authority
that prohibits the issuance or sale of the Shares  pursuant to this Agreement;
and no injunction or order of any federal, state or foreign court shall have
been issued that prohibits the issuance or sale of the Shares pursuant to this
Agreement.

 

(h)           Funding.  Purchaser shall have paid to the Company all amounts
payable by Purchaser under ARTICLE I of this Agreement, by wire transfer of
immediately available funds to such account or accounts as shall have been
designated in writing by the Company at least three (3) Business Days prior to
the Closing Date.

 

(i)            Other Conditions.  The conditions to the consummation of the
transactions under the Brookfield Agreement to be performed on the Closing Date
shall have been satisfied or waived.

 

ARTICLE VIII

 

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

 

SECTION 8.1  Survival of Representations and Warranties.  The representations
and warranties made in this Agreement shall survive the  execution and delivery
of this Agreement but shall terminate and be of no further force and effect
following the earlier of (i) the termination of this Agreement in accordance
with ARTICLE IX and (ii) the Closing.

 

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ARTICLE IX

 

TERMINATION

 

SECTION 9.1  Termination.  This Agreement and the obligations of the parties
hereunder shall terminate automatically without any action by any party if
(i) the Approval Order, in form and substance reasonably satisfactory to
Purchaser, approving, among other things, the Termination Payment and Expense
Reimbursement contemplated by Section 9.3(a), is not entered by the Bankruptcy
Court on or prior August 23, 2010, or (ii) if the Debtors withdraw the Approval
Motion, in each of cases (i) and (ii) unless Purchaser and the Company otherwise
agree in writing.  In addition, this Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:

 

(a)           by mutual written consent of Purchaser and the Company;

 

(b)           by either Purchaser or the Company by written notice to the other
party upon termination of the Brookfield Agreement in accordance with its terms;

 

(c)           by Purchaser by written notice to the Company upon the occurrence
of any of the following events (which notice shall specify the event upon which
such termination is based):

 

(i)            if the Effective Date and the purchase and sale contemplated by
ARTICLE I have not occurred by the Termination Date; provided, however, that the
right to terminate this Agreement under this Section 9.1(c)(i) shall not be
available to Purchaser if Purchaser has breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
caused the Closing Date not to occur on or before the Termination Date;

 

(ii)           if any Bankruptcy Cases of the Company or any Debtor which is a
Significant Subsidiary shall have been dismissed or converted to cases under
chapter 7 of the Bankruptcy Code or if an interim or permanent trustee or an
examiner shall be appointed to oversee or operate any of the Debtors in their
Bankruptcy Cases, in each case, except (x) as would not reasonably be expected
to have a Material Adverse Effect or (y) with respect to the Bankruptcy Cases
for Phase II Mall Subsidiary, LLC, Oakwood Shopping Center Limited Partnership
and Rouse Oakwood Shopping Center, LLC;

 

(iii)          if there has been a breach by the Company of any representation,
warranty, covenant or agreement of the Company contained in this Agreement or
the Company shall have taken any action which, in each case, (A) would result in
a failure of a condition set forth in ARTICLE VI and (B) cannot be cured prior
to the Termination Date, after written notice to the Company of such breach and
the intention to terminate this Agreement pursuant to this Section; provided,
however, that the right to terminate this Agreement under this Section shall not
be available to Purchaser if Purchaser has breached in any material respect its
obligations under this Agreement;

 

(iv)          if the Company or any Subsidiary of the Company issues any shares
of Common Stock or New Common Stock (or securities convertible into or
exchangeable or exercisable for Common Stock or New Common Stock) at a purchase
price (or in the

 

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case of securities that are convertible into or exchangeable or exercisable for,
or linked to the performance of, Common Stock or New Common Stock, the
conversion, exchange, exercise or comparable price) of less than $10.00 per
share (net of all underwriting and other discounts, fees and any other
compensation and related expenses) of Common Stock or New Common Stock or
converts any claim against any of the Debtors into New Common Stock at a
conversion price less than $10.00 per share of Common Stock or New Common Stock
(in each case, other than pursuant to (A) the exercise, exchange or conversion
of Share Equivalents of the Company existing on the date of this Agreement in
accordance with the terms thereof as of the date of this Agreement, (B) the
Equity Exchange, (C) the issuance of shares upon the exercise of employee stock
options issued pursuant to the Company Option Plans, (D) the issuance of shares
as set forth on Section 6.1(m) of the Company Disclosure Letter, or (E) the
issuance of shares pursuant to the Investment Agreements (including, without
limitation, Section 6.9 thereof));

 

(v)           if the Bankruptcy Court shall have entered a final and
non-appealable order denying confirmation of the Plan;

 

(vi)          if this Agreement, the Plan Summary Term Sheet or the Plan is
revised or modified (except as otherwise permitted pursuant to this Agreement)
by the Company or an order of the Bankruptcy Court or other court of competent
jurisdiction in a manner that is materially adverse to Purchaser;

 

(vii)         if any Governmental Entity of competent jurisdiction shall have
issued a final and nonappealable order permanently enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this Agreement
(the “Closing Restraint”); or

 

(d)           by the Company upon the occurrence of any of the following events:

 

(i)            if the Effective Date and the purchase and sale contemplated by 
ARTICLE I have not occurred by the Termination Date; provided, however, that the
right to terminate this Agreement under this Section 9.1(d)(i) shall not be
available to the Company to the extent that it has breached in any material
respect its obligations under this Agreement in any manner that shall have
proximately caused the Closing Date not to occur on or before the Termination
Date (it being agreed that this proviso shall not limit the Company’s ability to
terminate this Agreement pursuant to any other clause of this Section 9.1(d));

 

(ii)           if prior to the entry of the Confirmation Order, upon notice by
the Company to Purchaser that the Company has entered into a binding commitment
after the date hereof to sell, on or prior to the Effective Date, Permitted
Replacement Shares for an aggregate purchase price of at least Five Hundred
Million Dollars ($500,000,000);

 

(iii)          if all conditions to the obligations of Purchaser to consummate
the transactions contemplated by this Agreement set forth in ARTICLE VI shall
have been satisfied (other than those conditions that are to be satisfied (and
capable of being satisfied) by action taken at the Closing if Purchaser had
complied with its obligations

 

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under this Agreement) and the transactions contemplated by this Agreement fail
to be consummated as a result of the breach by Purchaser of its obligation to
pay to the Company all amounts payable by Purchaser under ARTICLE I of this
Agreement, by wire transfer of immediately available funds in accordance with
the terms of this Agreement;

 

(iv)          if there has been a breach by Purchaser of any representation,
warranty, covenant or agreement of Purchaser contained in this Agreement or
Purchaser shall have taken any action which, in each case, (A) would result in a
failure of a condition set forth in ARTICLE VII and (B) cannot be cured prior to
the Termination Date, after written notice to Purchaser of such breach and the
intention to terminate this Agreement pursuant to this Section;

 

(v)           if the Bankruptcy Court shall have entered a final and
non-appealable order denying confirmation of the Plan; or

 

(vi)          if a Closing Restraint is in effect.

 

SECTION 9.2  Effects of Termination.  In the event of the termination of this
Agreement pursuant to ARTICLE IX, this Agreement shall forthwith become void and
there shall be no liability or obligation on the part of any party hereto except
the covenants and agreements made by the parties herein under ARTICLE XI shall
survive indefinitely in accordance with their terms; provided, however, that
termination shall not relieve the Company (subject to Section 9.3(b)) or
Purchaser from liability for any willful and material breach by such party of
its covenants under this Agreement to be performed prior to Closing.

 

SECTION 9.3  Termination Payment.

 

(a)           In the event of the termination of this Agreement pursuant to
Section 9.1(b) or Section 9.1(d)(ii), then the Company shall pay to Purchaser,
no later than the fifth (5th) Business Day following such termination, by wire
transfer of immediately available funds, an amount equal to the sum of
(i) Fifteen Million Dollars ($15,000,000) (the “Termination Payment”) and
(ii) Purchaser’s reasonable and documented out-of-pocket expenses (including
expenses of outside counsel) incurred in connection with Purchaser’s negotiation
of this Agreement, up to a maximum amount of $1,000,000 (“Expense
Reimbursement”).

 

(b)           The parties agree that the Termination Fee and Expense
Reimbursement shall be the sole and exclusive remedy of any nature available to
Purchaser with respect to this Agreement and the transactions contemplated
hereby in the event the Termination Fee and Expense Reimbursement become
payable.

 

ARTICLE X

 

DEFINITIONS

 

SECTION 10.1  Defined Terms.  For purposes of this Agreement, the following
terms, when used in this Agreement with initial capital letters, shall have the
respective meanings set forth in this Agreement:

 

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(a)           “Affiliate” of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person. 
For the purposes of this definition, “control” means the possession, directly or
indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise.

 

(b)           “Brazilian Entities” means those certain Persons in which the
Company indirectly owns an interest which own real property assets or have
operations located in Brazil.

 

(c)           “Business Day” means any day other than (a) a Saturday, (b) a
Sunday, (c) any day on which commercial banks in New York, New York are required
or authorized to close by Law or executive order.

 

(d)           “Capital Raising Activities” means the Company’s efforts to
consummate equity and debt financings for the Company, and sales of properties
and other assets of the Company and its Subsidiaries for cash.

 

(e)           “Cash Equivalents” means as to any Person, (a) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
90 days from the date of acquisition by such Person, (b) time deposits and
certificates of deposit of any commercial bank having, or which is the principal
banking subsidiary of a bank holding company organized under the Laws of the
United States, any State thereof or the District of Columbia having capital,
surplus and undivided profits aggregating in excess of $500,000,000, having
maturities of not more than 90 days from the date of acquisition by such Person,
(c) repurchase obligations with a term of not more than 90 days for underlying
securities of the types described in subsection (a) above entered into with any
bank meeting the qualifications specified in subsection (b) above,
(d) commercial paper issued by any issuer rated at least A-1 by S&P or at least
P-1 by Moody’s or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings
of commercial paper issuers generally, and in each case maturing not more than
one year after the date of acquisition by such Person or (e) investments in
money market funds substantially all of whose assets are comprised of securities
of the types described in subsections (a) through (d) above.

 

(f)            “Company Benefit Plan” means each “employee benefit plan” within
the meaning of Section 3(3) of ERISA and each other stock purchase, stock
option, restricted stock, severance, retention, employment, consulting,
change-of-control, collective bargaining, bonus, incentive, deferred
compensation, employee loan, fringe benefit and other benefit plan, agreement,
program, policy, commitment or other arrangement, whether or not subject to
ERISA (including any related funding mechanism now in effect or required in the
future), whether formal or informal, oral or written, in each case sponsored or
maintained by the Company or any of its Significant Subsidiaries for the benefit
of any past or present director, officer, employee, consultant or independent
contractor of the Company or any of its Significant Subsidiaries has any present
or future right to benefits.

 

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(g)           “Contract” means any agreement, lease, license, evidence of
indebtedness, mortgage, indenture, security agreement or other contract.

 

(h)           “DIP Loan” means that certain Senior Secured Debtor in Possession
Credit, Security and Guaranty Agreement, dated as of May 15, 2009, by and among
the lenders named therein, UBS AG, Stamford Branch, as administrative agent for
the lenders, the Company and the Operating Partnership, as borrowers, and the
certain subsidiaries of the Company named therein, as guarantors, or any
successor agreement.

 

(i)            “Disclosure Statement” means the disclosure statement to
accompany the Plan as amended, modified or supplemented.

 

(j)            “Debt” means all obligations of the Company, its Subsidiaries and
other Persons in which the Company, directly or indirectly, holds a minority
interest (a) evidenced by (i) notes, bonds, debentures or other similar
instruments (including, for avoidance of doubt, mezzanine debt), or (ii) trust
preferred shares, trust preferred units and other preferred instruments, and/or
(b) secured by a lien, mortgage or other encumbrance; provided, however, that
Debt shall exclude (x) any form of municipal financing including, but not
limited to, special improvement district bonds or tax increment financing,
(y) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment), and (z) intercompany notes or
preferred interests between and among the Company and its wholly owned
Subsidiaries.

 

(k)           “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended.

 

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

 

(m)          “Fairholme Agreement” means that certain Stock Purchase Agreement,
dated as of March 31, 2010, as amended, between GGP and The Fairholme Fund and
Fairholme Focused Income Fund (together, “Fairholme”).

 

(n)           “GAAP” means generally accepted accounting principles in the
United States.

 

(o)           “Governmental Entity” means any (a) nation, region, state,
province, county, city, town, village, district or other jurisdiction,
(b) federal, state, local, municipal, foreign or other government,
(c) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, court or tribunal, or other entity),
(d) multinational organization or body or (e) body entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature or any other self-regulatory organizations.

 

(p)           “Identified Assets”  shall have the meaning ascribed to such term
in the Brookfield Agreement.

 

(q)           “Initial Investors”  means the purchasers under the Investment
Agreements.

 

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(r)            “Investment Agreements” means the Brookfield Agreement, the
Fairholme Agreement, the Pershing Agreement and the Warrant Agreement.

 

(s)           “Joint Venture” means a Subsidiary of the Company which is owned
partly by another Subsidiary of the Company and partly by a third party.

 

(t)            “Knowledge” of the Company means the actual knowledge, as of the
date of this Agreement, of the individuals listed on Section 10.1(t) of the
Company Disclosure Letter.

 

(u)           “Law” means any statutes, laws (including common law), rules,
ordinances, regulations, codes, orders, judgments, decisions, injunctions,
writs, decrees, applicable to the Company or any of its Subsidiaries or
Purchaser, as applicable, or their respective properties or assets.

 

(v)           “Material Adverse Effect” means any change, event or occurrence
which (x) has a material adverse effect on the results of operations or
financial condition of the Company and its direct and indirect Subsidiaries
taken as a whole, other than changes, events or occurrences (i) generally
affecting (A) the retail mall industry in the United States or in a specific
geographic area in which the Company operates, or (B) the economy, or financial
or capital markets, in the United States or elsewhere in the world, including
changes in interest or exchange rates or the availability of capital, or
(ii) arising out of, resulting from or attributable to (A) changes in Law or
regulation or in generally accepted accounting principles or in accounting
standards, or changes in general legal, regulatory or political conditions,
(B) the negotiation, execution, announcement or performance of any agreement
between the Company and/or its Affiliates, on the one hand, and Purchaser and/or
its Affiliates, on the other hand, or the consummation of the transactions
contemplated hereby or operating performance or reputational issues arising out
of or associated with the Bankruptcy Cases, including the impact thereof on
relationships, contractual or otherwise, with tenants, customers, suppliers,
distributors, partners or employees, or any litigation or claims arising from
allegations of breach of fiduciary duty or violation of Law or otherwise,
related to the execution or performance of this Agreement or the transactions
contemplated hereby, including, without limitation, any developments in the
Bankruptcy Cases, (C) acts of war, sabotage or terrorism, or any escalation or
worsening of any such acts of war, sabotage or terrorism threatened or underway
as of the date of the this Agreement, (D) earthquakes, hurricanes, tornadoes or
other natural disasters, (E) any action taken by the Company or its Subsidiaries
as contemplated or permitted by any agreement between the Company and/or its
Affiliates, on the one hand, and Purchaser and/or its Affiliates, on the other
hand, or with Purchaser’s consent, or any failure by the Company to take any
action as a result of any restriction contained in any agreement between the
Company and/or its Affiliates, on the one hand, and Purchaser and/or its
Affiliates, on the other hand, or (F) in each case in and of itself, any decline
in the market price, or change in trading volume, of the capital stock or debt
securities of the Company or any direct or indirect subsidiary thereof, or any
failure to meet publicly announced or internal revenue or earnings projections,
forecasts, estimates or guidance for any period, whether relating to financial
performance or business metrics, including, without limitation, revenues, net
operating incomes, cash flows or cash positions, it being further understood
that any event, change, development, effect or occurrence giving rise to such
decline in the trading price or trading volume of the capital stock or debt
securities of the Company or such failure to meet internal projections or
forecasts as described in the preceding clause (F), as

 

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the case may be, may be the cause of a Material Adverse Effect; so long as, in
the case of clauses (i)(A) and (i)(B), such changes or events do not have a
materially disproportionate adverse effect on the Company and its Subsidiaries,
taken as a whole, as compared to other entities that own and manage retail malls
throughout the United States, or (y) materially impairs the ability of the
Company to consummate the transactions contemplated by this Agreement or perform
its obligations hereunder or under the other agreements executed in connection
with the transactions contemplated hereby.

 

(w)          “Material Contract” means, with respect to the Company and its
Subsidiaries, any:

 

(i)                                     Contract that would be considered a
material contract pursuant to Item 601(b)(10) of Regulation S-K promulgated by
the SEC, had the Company been the registrant referred to in such regulation; or

 

(ii)                                  Contract for capital expenditures, the
future acquisition or construction of fixed assets or the future purchase of
materials, supplies or equipment that provides for the payment by the Company or
its Subsidiaries of more than $5,000,000 and is not terminable by the Company or
any of its Subsidiaries by notice of not more than sixty (60) days for a cost of
less than $1,000,000.

 

(x)            “Non-Controlling Properties” means the Company Properties listed
on Section 10.1(x) of the Company Disclosure Letter.  Each of the
Non-Controlling Properties is owned by a Joint Venture in which neither the
Company nor any of its Subsidiaries is a controlling entity.  For purposes of
this Section 10.1(x), the term “control” shall mean, possession, directly or
indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise;
provided, however, that the rights of any Person to exercise Major Decision
Rights under a Joint Venture shall not constitute or be deemed to constitute
“control” for the purposes hereof.  “Controlling” and “controlled” shall have
meanings correlative thereto.  For purposes of this Section 10.1(x), the term
“Major Decision Rights” shall mean, the right to, directly or indirectly,
approve, consent to, veto or exercise a vote in connection with a Person’s
voting or other decision-making authority in respect of the collective rights,
options, elections or obligations of such Person under a Joint Venture.

 

(y)           “Permitted Replacement Shares” means shares of New Common Stock,
or notes mandatorily convertible into or exchangeable for shares of New Common
Stock, that are sold for cash proceeds payable to the Company (net of all
underwriting and other discounts, fees, and related consideration) of not less
than $10.50 per share of New Common Stock (or in the case of notes, convertible
or exchangeable at not less than $10.50 per share of New Common Stock).

 

(z)            “Pershing Agreement”  means that certain Stock Purchase
Agreement, dated as of March 31, 2010, as amended, between GGP and Pershing
Square Capital Management, L.P. on behalf of Pershing Square, L.P., Pershing
Square II, L.P., Pershing Square International, Ltd. and Pershing Square
International V, Ltd. (together, “Pershing”).

 

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(aa)         “Person” means an individual, a group (including a “group” under
Section 13(d) of the Exchange Act), a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a Governmental Entity or any
department, agency or political subdivision thereof.

 

(bb)         “Proportionally Consolidated Debt”  means consolidated Debt of the
Company less (1) all Debt of Subsidiaries of the Company that are not
wholly-owned and other Persons in which the Company, directly or indirectly,
holds a minority interest, to the extent such Debt is included in consolidated
Debt, plus (2) the Company’s share of Debt for each non-wholly owned Subsidiary
of the Company and each other Persons in which the Company, directly or
indirectly, holds a minority interest based on the company’s pro-rata economic
interest in each such Subsidiary or Person or, to the extent to which the
Company is directly or indirectly (through one or more Subsidiaries or Persons)
liable for a percent of such Debt that is greater than such pro-rata economic
interest in such Subsidiary or Person, such larger amount; provided, however,
for purposes of calculating Proportionally Consolidated Debt, the Debt of the
Brazilian Entities shall be deemed to be $110,437,781.

 

(cc)         “Proportionally Consolidated Unrestricted Cash” means the
consolidated Unrestricted Cash of the Company less (1) all Unrestricted Cash of
Subsidiaries of the Company that are not wholly-owned and Persons in which the
Company, directly or indirectly, owns a minority interest, to the extent such
Unrestricted Cash is included in consolidated Unrestricted Cash of the Company,
plus (2) the Company’s share of Unrestricted Cash for each non-wholly owned
Subsidiary of the Company and Persons in which the Company, directly or
indirectly, owns a minority interest based on the Company’s pro rata economic
interest in each such Subsidiary or Person; provided, however, for purposes of
calculating Proportionally Consolidated Unrestricted Cash, the Unrestricted Cash
of the Brazilian Entities shall be deemed to be $82,000,000, provided, further,
that any distributions of Unrestricted Cash made from the date of this Agreement
to the Closing by Brazilian Entities to the Company or any of its Subsidiaries
shall be disregarded for purposes of calculating Proportionally Consolidated
Unrestricted Cash.

 

(dd)         “Share Equivalent” means any stock, warrants, rights, calls,
options or other securities exchangeable or exercisable for, or convertible
into, shares of Common Stock or New Common Stock, as applicable.

 

(ee)         “Significant Subsidiaries” means the operating Subsidiaries of the
Company that generated revenues in excess of $30,000,000 for the year ended
December 31, 2009.

 

(ff)           “Subsidiary” means, with respect to a Person (including the
Company), (a) a company a majority of whose capital stock with voting power,
under ordinary circumstances, to elect a majority of the directors is at the
time, directly or indirectly, owned by such Person, by a subsidiary of such
Person, or by such Person and one or more subsidiaries of such Person, (b) a
partnership in which such Person or a subsidiary of such Person is, at the date
of determination, a general partner of such partnership, (c) a limited liability
company of which such Person, or a Subsidiary of such Person, is a managing
member or (d) any other Person (other than a company) in which such Person, a
subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (i) at

 

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least a majority ownership interest or (ii) the power to elect or direct the
election of a majority of the directors or other governing body of such Person.

 

(gg)         “Tax Protection Agreements” means any written agreement to which
the Company, its Operating Partnership or any other Subsidiary is a party
pursuant to which: (i) in connection with the deferral of income Taxes of a
holder of interests in the Operating Partnership, the Company, the Operating
Partnership or the other Subsidiaries have agreed to (A) maintain a minimum
level of Indebtedness or continue any particular Indebtedness, (B) retain or not
dispose of assets for a period of time that has not since expired, (C) make or
refrain from making Tax elections, and/or (D) only dispose of assets in a
particular manner; and/or (ii) limited partners of the Operating Partnership
have guaranteed Indebtedness of the Operating Partnership.

 

(hh)         “Termination Date” means December 31, 2010; provided, that if the
Confirmation Order shall have been entered on or prior to December 15, 2010 but
the Company, despite its commercially reasonable efforts, is unable to
consummate the Closing on or prior to December 31, 2010, the Company may extend
the Termination Date for so long as Closing by January 31, 2011 is feasible and
the Company continues to diligently pursue Closing; provided, further, that the
Termination Date shall not be extended beyond January 31, 2011.

 

(ii)           “Transactions” means the purchase of the Shares and the other
transactions contemplated by this Agreement.

 

(jj)           “Unrestricted Cash” means all cash and Cash Equivalents of the
Company and of the Subsidiaries of the Company, but excluding any cash or Cash
Equivalents that are controlled by or subject to any lien, security interest or
control agreement, other preferential arrangement in favor of any creditor or
otherwise encumbered or restricted in any way.

 

(kk)         “Warrant Agreement” means that certain Warrant and Registration
Rights Agreement, dated as of May 10, 2010, between General Growth
Properties, Inc. and Mellon Investor Services LLC, as warrant agent (as the same
may be amended from time to time).

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.1  Notices.  All notices and other communications in connection with
this Agreement shall be in writing and shall be considered given if given in the
manner, and be deemed given at times, as follows: (x) on the date delivered, if
personally delivered; (y) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, and telephonic confirmation of
receipt is obtained promptly after completion of transmission; or (z) on the
next Business Day after being sent by recognized overnight mail service
specifying next business day delivery, in each case with delivery charges
pre-paid and addressed to the following addresses:

 

(a)           If to Purchaser, to:

 

Teacher Retirement System of Texas

 

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1000 Red River Street
Austin, Texas  78701-2698
Attention:        Eric L. Lang and Richard Hall
Facsimile:        (512) 370-5103

 

with a copy (which shall not constitute notice) to:

 

Fulbright & Jaworski L.L.P.

2200 Ross Avenue, Suite 2800

Dallas, Texas 75201

Attention:        D. Forrest Brumbaugh, Esq.
Facsimile:        (214) 855-8200

 

(b)           If to the Company, to:

 

General Growth Properties, Inc.
110 N. Wacker Drive
Chicago, Illinois  60606
Attention:        Ronald L. Gern, Esq.
Facsimile:        (312) 960-5485

 

with a copy (which shall not constitute notice) to:

 

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York  10153
Attention:        Marcia L. Goldstein, Esq.
                        Frederick S. Green, Esq.
                        Gary T. Holtzer, Esq.
                        Malcolm E. Landau, Esq.
Facsimile:       (212) 310-8007

 

SECTION 11.2  Assignment; Third Party Beneficiaries.  Neither this Agreement nor
any of the rights, interests or obligations under this Agreement may be assigned
by any party without the prior written consent of the other party. 
Notwithstanding the previous sentence, this Agreement, or Purchaser’s rights,
interests or obligations hereunder (including, without limitation, the right to
receive any securities pursuant to the Transactions), may be assigned or
transferred, in whole or in part, by Purchaser to one or more Affiliates of
Purchaser; provided, that no such assignment shall release Purchaser from its
obligations hereunder to be performed by Purchaser on or prior to the Closing
Date.  This Agreement (including the documents and instruments referred to in
this Agreement) is not intended to and does not confer upon any person other
than the parties hereto any rights or remedies under this Agreement. 
Notwithstanding the foregoing, or any other provisions herein to the contrary,
no Purchaser may assign any of its rights, interests or obligations under this
Agreement to the extent such assignment would preclude the applicable securities
Laws exemptions from being available or such assignment would cause a failure of
the closing condition in Section 7.1(u) of the Brookfield Agreement.

 

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SECTION 11.3  Prior Negotiations; Entire Agreement.  This Agreement (including
the exhibits hereto and the documents and instruments referred to in this
Agreement) constitutes the entire agreement of the parties and supersedes all
prior agreements, arrangements or understandings, whether written or oral,
between the parties with respect to the subject matter of this Agreement.

 

SECTION 11.4  Governing Law; Venue.  THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS.  EACH
PARTY HERETO, TO THE EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND EACH PARTY WAIVES ANY OBJECTION BASED
ON FORUM NON CONVENIENS.

 

SECTION 11.5  Company Disclosure Letter.  The Company Disclosure Letter shall be
arranged to correspond to the Articles and Sections of this Agreement, and the
disclosure in any portion of the Company Disclosure Letter shall qualify the
corresponding provision in ARTICLE II and any other provision of ARTICLE II to
which it is reasonably apparent on the face of the disclosure that such
disclosure relates.  No disclosure in the Company Disclosure Letter relating to
any possible non-compliance, breach or violation of any Contract or Law shall be
construed as an admission that any such non-compliance, breach or violation
exists or has actually occurred.  In the Company Disclosure Letter, (a) all
capitalized terms used but not defined therein shall have the meanings assigned
to them in this Agreement and (b) the Section numbers correspond to the
Section numbers in this Agreement.

 

SECTION 11.6  Counterparts.  This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the
parties; and delivered to the other party (including via facsimile or other
electronic transmission), it being understood that each party need not sign the
same counterpart.

 

SECTION 11.7  Expenses.  Each party shall bear its own expenses incurred or to
be incurred in connection with the negotiation and execution of this Agreement
and each other agreement, document and instrument contemplated by this Agreement
and the consummation of the transactions contemplated hereby and thereby.

 

SECTION 11.8  Waivers and Amendments.  This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions of this
Agreement may be waived, only by a written instrument signed by the parties or,
in the case of a waiver, by the party waiving compliance, and subject, to the
extent required, to the approval of the Bankruptcy Court.  No delay on the part
of any party in exercising any right, power or privilege pursuant to this
Agreement shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any right, power or privilege pursuant to this Agreement, nor shall
any single or partial exercise of any right, power or privilege pursuant to this
Agreement, preclude any other or further exercise thereof or the exercise of any
other right, power or privilege pursuant to this Agreement.  The rights and
remedies provided pursuant to this Agreement are cumulative and are not
exclusive of any rights or remedies which any party otherwise may have at law or
in equity.

 

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SECTION 11.9  Construction.

 

(a)           The headings in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.

 

(b)           Unless the context otherwise requires, as used in this Agreement: 
(i) an accounting term not otherwise defined in this Agreement has the meaning
ascribed to it in accordance with GAAP; (ii) “or” is not exclusive;
(iii) “including” and its variants mean “including, without limitation” and its
variants; (iv) words defined in the singular have the parallel meaning in the
plural and vice versa; (v) references to “written” or “in writing” include in
visual electronic form; (vi) words of one gender shall be construed to apply to
each gender; (vii) the terms “Article,” “Section,” and “Schedule” refer to the
specified Article, Section, or Schedule of or to this Agreement; and (viii) the
term “beneficially own” shall have the meaning determined pursuant to Rule 13d-3
under the Exchange Act as in effect on the date hereof; provided, however, that
a Person will be deemed to beneficially own (and have beneficial ownership of)
all securities that such Person has the right to acquire, whether such right is
exercisable immediately or with the passage of time or the satisfaction of
conditions. The terms “beneficial ownership” and “beneficial owner” have
correlative meanings.

 

SECTION 11.10  Adjustment of Share Numbers and Prices.  The number of Shares to
be purchased by Purchaser at the Closing pursuant to ARTICLE I, the Per Share
Purchase Price and any other number or amount contained in this Agreement which
is based upon the number or price of shares of GGP shall be proportionately
adjusted for any subdivision or combination (by stock split, reverse stock
split, dividend, reorganization, recapitalization or otherwise) of the Common
Stock or New Common Stock that occurs during the period between the date of this
Agreement and the Closing.  In addition, if at any time prior to the Closing,
the Company shall declare or make a dividend or other distribution whether in
cash or property (other than a dividend or distribution payable in common stock
of the Company, as applicable, the GGO Share Distribution (as defined in the
Brookfield Agreement) or a distribution of rights contemplated by the Investment
Agreements), the Per Share Purchase Price, shall be proportionally adjusted
thereafter by the Fair Market Value (as defined in the Warrant Agreement) per
share of the dividend or distribution.

 

SECTION 11.11  Certain Remedies.

 

(a)           The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement or of any other agreement between
them with respect to the Transaction were not performed in accordance with their
specific terms or were otherwise breached.  It is accordingly agreed that, in
addition to any other applicable remedies at law or equity, the parties shall be
entitled to an injunction or injunctions, without proof of damages, to prevent
breaches of this Agreement or of any other agreement between them with respect
to the Transaction and to enforce specifically the terms and provisions of this
Agreement.

 

(b)           To the fullest extent permitted by applicable law, the parties
shall not assert, and hereby waive, any claim or any such damages, whether or
not accrued and whether or not known or suspect to exist in its favor, against
any other party and its respective Affiliates, members, members’ affiliates,
officers, directors, partners, trustees, employees, attorneys and agents on any

 

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theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) (whether or not the claim therefor is
based on contract, tort or duty imposed by any applicable legal requirement)
arising out of, in connection with, or as a result of, this Agreement or of any
other agreement between them with respect to the Transaction or the transactions
contemplated hereby or thereby.

 

SECTION 11.12  Bankruptcy Matters.  For the avoidance of doubt, all obligations
of the Company and its Subsidiaries in this Agreement are subject to and
conditioned upon (a) with respect to obligations contained in the Approval
Order, entry of the Approval Order, and (b) with respect to the remainder of the
provisions hereof, entry of the Confirmation Order.

 

SECTION 11.13  Purchaser’s Status as an Entity of the State of Texas.  Purchaser
has advised the Company that some of Purchaser’s contractual obligations under
this Agreements may be limited by, and the Company agrees that, the Purchaser’s
obligations hereunder are made subject to Texas Law applicable to Purchaser as
an entity of the State of Texas, including, without limitation, principles of
sovereign immunity.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed
and delivered by each of them or their respective officers thereunto duly
authorized, all as of the date first written above.

 

 

TEACHER RETIREMENT SYSTEM OF TEXAS

 

 

 

 

 

By:

/s/ Richard Hall

 

Name:

Richard Hall

 

Title:

Director

 

 

 

 

GENERAL GROWTH PROPERTIES, INC.

 

 

 

 

 

By:

/s/ Adam S. Metz

 

Name

Adam S. Metz

 

Title:

Chief Executive Officer

 

[SIGNATURE PAGE OF STOCK PURCHASE AGREEMENT]

 

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