Exhibit 10.54


 


EXECUTION
VERSION


 


STANDSTILL AGREEMENT


 


This
Standstill Agreement (this “Agreement”) is dated as of November     , 2010 (the “Effective Date”),
by and between General Growth Properties, Inc., a Delaware corporation (the “Company”),
and The Fairholme Fund, a series of Fairholme Funds, Inc., a Maryland
corporation (“Investor”).


 


WHEREAS, Investor
has entered into that certain Amended and Restated Stock Purchase Agreement,
effective as of March 31, 2010 (the “Investment Agreement”), that
contemplates, among other things, the purchase by Investor of shares of Common
Stock subject to the terms and conditions contained therein;


 


WHEREAS,
the transactions contemplated by the Investment Agreement are intended to
assist the Company in its plans to recapitalize and emerge from bankruptcy and
is not intended to constitute a change of control of the Company or otherwise
give Investor the power to control the business and affairs of the Company;


 


WHEREAS,
as a material condition to the Company’s and Investor’s obligations to
consummate the transactions contemplated by the Investment Agreement, the
Company and Investor have agreed to execute this Agreement; and


 


WHEREAS,
certain terms used in this Agreement are defined in Section 4.1.


 


NOW
THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:


 


ARTICLE I

COMPANY RELATED PRINCIPLES


 


SECTION 1.1            Board of Directors.  So long as Investor, the Investor Parties and
the Subject Persons, collectively, shall Constructively Own more than ten
percent (10%) of the outstanding shares of Common Stock, none of Investor or the Investor Parties shall take any action that is
inconsistent with its support for the following corporate governance principles:


 


(a)           A majority of the members of the Board shall be
Independent Directors, where “Independent Director” means a director who
satisfies all standards for independence promulgated by the New York Stock
Exchange (or the applicable exchange where shares of Common Stock are then
listed);


 


(b)           the Board shall have a nominating committee, a
majority of which shall be Disinterested Directors;


 


(c)           in connection with any stockholder meeting or
consent solicitation, if Investor, the Investor Parties and the Subject Persons
collectively have voting control over a number of shares of Common Stock in
excess of 10% of the number of shares of Common Stock 


 

















 


outstanding
as of the applicable record date, then Investor shall, and shall cause the
other Investor Parties to, vote all shares of Common Stock over which Investor
and the other Investor Parties have voting control in excess of such percentage
in proportion to the Votes Cast; provided, however, that the
number of shares of Common Stock which shall be voted by the Investor and the
other Investor Parties in proportion to the Votes Cast shall be increased by
the number of shares of Common Stock that may be voted by the Subject Persons
(up to the number of shares of Common Stock over which the Investor and the
Investor Parties have voting control);


 


(d)           the
Board shall consist of nine (9) members and not be increased or reduced,
unless approved by seventy-five percent (75%)  of
the Board;


 


(e)           any
Change in Control (other than a transaction contemplated by Section 2.1(b)(ii))
in which a Large Stockholder or its controlled Affiliate is the acquiror or
part of the acquiror group or is proposed to be directly or indirectly combined
with the Company must be approved by a majority of the Disinterested Directors
as if it were a Company Transaction involving such Large Stockholder and by a
majority of the voting power of the stockholders (other than such Large
Stockholder or its controlled Affiliates); and


 


(f)            any
Change in Control (other than a transaction contemplated by Section 2.2(b)(v))
in which any Large Stockholder or its controlled Affiliate receives per share
consideration in its capacity as a stockholder of the Company in excess of that
to be received by other stockholders, must be approved by a majority of the
Disinterested Directors as if it were a Company Transaction involving such
Large Stockholder and by a majority of the voting power of the stockholders
(other than such Large Stockholder or its controlled Affiliates).


 


The Company shall not waive any provisions similar to
Sections 1.1(c), (e) or (f) above for any Large Stockholder under any
other agreement unless the Company grants a similar waiver under this
Agreement.


 


SECTION 1.2            Related Party Transactions.


 


(a)           Without the approval of a majority of the
Disinterested Directors, Investor shall not, and shall not permit any of
the Investor Parties to, engage in any Company
Transaction.  “Company Transaction” means (i) any
transaction or series of related transactions, directly or indirectly, between
the Company or any Subsidiary of the Company, on the one hand, and any of the
Investor Parties, on the other hand, or (ii) without limiting the Company’s
obligation to comply with Sections 1.4 and 1.5 hereof, with
respect to the purchase or sale of Common Stock by any of the Investor Parties,
any waiver of any limitation or restriction with respect to such purchase or
sale in the Charter or the Transaction Documents, including any exemption from
the Ownership Limit (as defined in the Charter); provided, however,
that none of the following shall constitute a Company
Transaction:


 


(i)    transactions expressly
contemplated in the Transaction Documents;


 


(ii)   customary compensation
arrangements (whether in the form of cash or equity awards), expense
reimbursement, director insurance coverage and/or indemnification arrangements
(and related advancement of expenses) in each case for 


 


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Board designees, or any use
by such persons, for Company business purposes, of aircraft, vehicles,
property, equipment or other assets owned or customarily provided to members of
the Board by the Company or any of its Subsidiaries;


 


(iii)  any transaction or series of
transactions if the same is in the Ordinary Course of Business and does not
involve payments by the Company in excess of $5,000,000 in the aggregate for
such transaction or series of transactions; and


 


(iv)  any transaction among the
Company and/or its Subsidiaries and The Howard Hughes Corporation and/or its
Subsidiaries.


 


(b)           Following the Closing (as such term is defined in
the Investment Agreement), any decisions by the Company regarding material
amendments or modifications of the Plan (as such term is defined in the
Investment Agreement) or waivers of the Company’s material rights under the
Plan, shall require the approval of the majority of Disinterested Directors to
the extent such amendment, modification or waiver relates to any Investor Party’s
rights or obligations.


 


SECTION 1.3          No Other Voting Restrictions.  For the avoidance of doubt, except as
restricted herein or by applicable Law, Investor and the other Investor Parties and the Subject Persons may vote the Common Stock
that they Beneficially Own in their sole
and absolute discretion.


 


SECTION 1.4          Amendment of the Charter.  The Company hereby agrees that following the
Closing Date, without the consent of Investor, the Company shall not amend (or
propose to amend) the provisions of the Charter in a manner or take any other
action that would:  (a) change the
restriction on Beneficial Ownership (as such term is defined in the Charter) of
the outstanding capital stock of the Company to a level other than 9.9%; (b) change
the restriction on Constructive Ownership (as such term is defined in the
Charter) of the outstanding capital stock of the Company to a level other than
9.9%; or (c) change any waiver from the restrictions set forth in the
foregoing clauses (a) and (b) granted to Investor or any Investor
Party or Subject Person in any manner adverse to Investor or any Investor Party
or any Subject Person.  For the avoidance
of doubt, nothing in this Section 1.4 shall affect the Board’s
discretion to grant to third parties any waivers from the restrictions on
Beneficial Ownership or Constructive Ownership (as each term is defined in the
Charter) in accordance with the terms of the Charter.


 


SECTION 1.5          Waiver of Ownership Limited
in the Charter.  The Company and the Board shall take all
appropriate and necessary action to ensure that the ownership limitations set
forth in the Charter shall be waived with respect to Investor, the Investor
Parties, any Subject Person any Investor Investment Advisor and any Person (other
than a transferee under Section 2.2(b)(vi) unless such
transferee executes a Transferee Agreement) to whom Investor, any Investor
Party, any Subject Person or any Investor Investment Advisor has transferred
any of the Common Stock or Warrants in accordance with the terms of this
Agreement and the Investment Agreement, provided, insofar as the waiver
relates to Investor, an Investor Party, a Subject Person, an Investor
Investment Advisor or a transferee, as the case may
be, who Beneficially Owns or Constructively Owns (as each term is defined in
the Charter) (or would, following such transfer, Beneficially Own or
Constructively Own (as each term is defined in the Charter)) 


 


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interests in excess of the Stock Ownership Limit or
the Constructive Ownership Limit (as each term is defined in the Charter), that
the Company has been provided with a certificate containing the representations
and covenants set forth on Exhibit D to the Investment Agreement
(or, to the extent necessitated by the organizational structure of the party
providing such certificate, a certificate substantially similar to such Exhibit D)
from such Investor, Investor Party, Subject Person, Investor
Investment Advisor or transferee, or in the case of a transferee, a certificate
containing the representations and covenants set forth on Exhibit D
to the Investment Agreement (or, to the extent necessitated by the
organizational structure of the party providing such certificate, a certificate
substantially similar to Exhibit D) as modified to allow such
transferee to own stock or other equity interests in a tenant of the Company or
its Subsidiaries to the extent such ownership would not result in (i) the
Company or any of its REIT Subsidiaries other than GGP-Natick Trust or GGP
Ivanhoe, Inc. recognizing more than $1 million of “related party rent” in
any year or (ii) GGP Natick Trust or GGP Ivanhoe, Inc. recognizing
more than $100,000 of “related party rent” in any year.  The parties hereto agree that the Company
may, in the discretion of the Board, grant to third parties any other waivers
from restrictions set forth in the Charter.


 


ARTICLE II


 


INVESTOR
RELATED COVENANTS


 


SECTION 2.1            Ownership Limitations.


 


(a)           Except as provided in Section 2.1(b), Investor
agrees that it (together with the other Investor Parties) shall not acquire
Economic Ownership of shares of Common Stock that would result in the Investor
Parties and the Subject Persons in the aggregate Economically Owning a
percentage of the then-outstanding Common Stock on a Fully Diluted Basis that
is greater than the Ownership Cap.  In
furtherance of the foregoing, if the Subject Persons acquire Economic Ownership
of Common Stock such that the Investor Parties and the Subject Persons in the aggregate
Economically Own a percentage of the then-outstanding Common Stock on a Fully
Diluted Basis that is greater than the Ownership Cap, Investor shall, and
shall cause the Investor Parties to, promptly dispose of Common Stock in an
orderly fashion in a manner designed so as to not materially adversely affect
the trading market for Common Stock such that, following such disposition, the
Investor Parties and the Subject Persons in the aggregate no longer
Economically Own a percentage of the then-outstanding Common Stock on a Fully
Diluted Basis that is greater than the Ownership Cap.  For the avoidance of doubt, no Person shall
be in violation of this Section 2.1 as a result of (i) any
acquisition by the Company of any Common Stock; (ii) any change in the
percentage of the Investor Parties’ or Subject Persons’ Economic Ownership of
Common Stock that results from a change in the aggregate number of shares of
Common Stock outstanding; or (iii) any change in the number of shares of
Common Stock Economically Owned by the Investor Parties or Subject Persons as a
result of any anti-dilution adjustments to any Equity Securities (as defined in
the Investment Agreement) Economically Owned by any Investor Party or any
Subject Person.


 


(b)           Notwithstanding Section 2.1(a), any of
the Investor Parties may acquire Economic Ownership of shares of Common Stock
that would result in the Investor Parties and the Subject Persons (taken as a
whole) having Economic Ownership of a percentage of the then-


 


4

















 


outstanding
Common Stock on a Fully Diluted Basis that is greater than the Ownership Cap
under any of the following circumstances:


 


(i)    acquisitions of shares
pursuant to any pro rata stock dividend or stock distribution effected by the
Company and approved by a majority of the Independent Directors; or


 


(ii)   if such acquisition is
pursuant to a tender offer or exchange offer, in each case that includes an
offer for all outstanding shares of Common Stock owned by the Target Stockholders,
or a merger, consolidation, binding share exchange or similar transaction
pursuant to an agreement with the Company, so long as in each case (A) such
offer, merger, consolidation, binding share exchange or similar transaction is
approved by a majority of the Disinterested Directors or by a special committee
comprised of Disinterested Directors (such tender offer or exchange offer, an “Approved Offer”,
and such merger, consolidation, binding share exchange or similar transaction,
an “Approved
Merger”), and (B) in any such Approved Offer, a majority of the
Target Shares are tendered into such Approved Offer and not withdrawn prior to
the final expiration of such Approved Offer, or in such Approved Merger, a
majority of the Target Shares that are voted (in person or by proxy) on the
related transaction proposal are voted in favor of such proposal.  As used in this Section 2.1(b)(ii):  “Target Shares” means the
then-outstanding shares of Common Stock not owned by the Investor Parties and
the Subject Persons; and “Target Stockholders” means the stockholders of
the Company other than the Investor Parties and the Subject Persons.


 


(c)           The limitation set forth in Section 2.1(a) may
only be waived by the Company if a majority of the Disinterested Directors
consent thereto.


 


SECTION 2.2            Transfer Restrictions.


 


(a)           Subject to Section 2.2(b), unless
approved by a majority of the Independent Directors, Investor shall not,
and shall not permit any of the Investor Parties to, sell or otherwise transfer
or agree to transfer (each of the foregoing, a “Transfer”), directly or
indirectly, any shares of Common Stock that are held directly or indirectly by
Investor or any of the other Investor Parties if, immediately after giving
effect to such Transfer, the Person that acquires such Common Stock (other than
any underwriter acting in such capacity in an underwritten public offering of
such shares) would, together with its Affiliates, to the actual knowledge (“Knowledge”)
of the transferor Beneficially Own more than ten percent (10%) of the
then-outstanding Common Stock.  A
transferor shall be deemed to have Knowledge of any transferee’s Beneficial
Ownership of Common Stock if the transferor has actual knowledge of the
identity of the transferee and such Beneficial Ownership has been, at the time
of the agreement to transfer, publicly disclosed in accordance with Section 13
of the Exchange Act.


 


(b)           The limitations in Section 2.2(a) shall
not apply, and any Investor Party may Transfer freely:


 


(i)    to any Person (including any
Affiliate of Investor) if such Person (A) has executed and delivered to
the Company a Transferee Agreement (as defined below), 


 


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and (B) has provided
the Company with a certificate containing the representations set forth on Exhibit D
of the Investment Agreement (or, to the extent necessitated by the
organizational structure of the party providing such certificate, a certificate
substantially similar to such Exhibit D) as modified to allow such
Transferee to own stock or other equity interests in a tenant of the Company or
its Subsidiaries to the extent such ownership would not result in (i) the
Company or any of its REIT Subsidiaries other than GGP-Natick Trust or GGP
Ivanhoe, Inc. recognizing more than $1 million of “related party rent”
each year or (ii) GGP-Natick Trust or GGP Ivanhoe, Inc. recognizing
more than $100,000 of “related party rent” each year;


 


(ii)   to one or more underwriters
or initial purchasers acting in their capacity as such in a manner not intended
to circumvent the restrictions contained in 2.2(a);


 


(iii)  in a sale in the public
market, in accordance with Rule 144, including the volume and manner of
sale limitations set forth therein;


 


(iv)  in any Merger Transaction
(other than a transaction contemplated by Section 2.2(b)(v) below)
or transaction contemplated by clause (iii) of the definition of Change of
Control (A) in which (in either case) no Investor Party or Subject Person
is the acquiror or part of the acquiring group or is proposed to be combined
with the Company and (B) that has been approved by the Board and a
majority of the stockholders (it being understood that this clause (iv) does
not affect the agreement of the parties under Sections 1.1(e) and (f));


 


(v)   in connection with a tender
or exchange offer that (A) is not solicited by any Investor Party (unless
such transaction was approved in accordance with Section 2.1(b)(ii))
or Subject Person and in which all holders of Common Stock are offered the
opportunity to sell shares of Common Stock and (B) complies with
applicable securities laws, including Rule 14d-10 promulgated under the
Exchange Act; and


 


(vi)  in connection with any bona
fide mortgage, encumbrance, pledge or hypothecation of capital stock to a
financial institution in connection with any bona fide loan.


 


(c)           No Transfer under Section 2.2(b)(i) shall
be valid unless and until a Transferee Agreement has been executed by the
Transferee and delivered to the Company. 
For the purpose of this Agreement a “Transferee Agreement” executed by a
Transferee means an agreement substantially in the form of this Agreement or in
such other form as is reasonably satisfactory to the Company except that:


 


(i)    notwithstanding Section 1.1(c),
in connection with any stockholder meeting or consent solicitation relating to (A) the
election of members of the Board, such Transferee may vote the shares of Common
Stock that it Beneficially Owns in favor of one director candidate in its sole
and absolute discretion and regarding any other director candidates in such
election must vote in proportion to Votes Cast, and (B) any other 


 


6

















 


matter, such Transferee may
vote the shares of Common Stock that it Beneficially Owns in its sole and
absolute discretion;


 


(ii)   “Investor” shall be defined
to mean such Transferee; and


 


(iii)  any obligation on the part
of Investor hereunder to cause the Investor Parties to take any action or
refrain from taking any action shall only apply to the Investor Parties
controlled by the Transferee and the Transferee Agreement shall provide that
the Transferee shall use all reasonable efforts to cause Affiliates that the
Transferee does not control to take or refrain from taking the action that it
is otherwise required to cause under this Agreement.


 


ARTICLE III


 


TERMINATION


 


SECTION 3.1            Termination of Agreement.  This Agreement may be terminated as follows
(the date of such termination, the “Termination Date”)


 


(a)           if Investor and the Company mutually agree to
terminate this Agreement, but only if the Disinterested Directors have approved
such termination;


 


(b)           upon five
(5) days notice by the Investor, at any time after (i) the
Other Stockholders Constructively Own more than seventy
percent (70%) of the then-outstanding
Common Stock and (ii) the Investor Parties and the Subject Persons in the
aggregate Constructively Own less than fifteen
percent (15%) of the then-outstanding
Common Stock on a Fully Diluted Basis;


 


(c)           without any further action by the parties hereto, if
Investor and the Investor Parties and the Subject Persons in the aggregate
Constructively Own less than ten percent (10%) of the then-outstanding Common Stock on a Fully Diluted Basis;


 


(d)           without any other action by the parties hereto, upon
the consummation of a Change of Control not involving Investor, any Investor
Party or any Subject Person as a purchaser of any direct or indirect interest
in the Company or any of its assets or properties; provided that the
Investor Parties shall not have violated this Agreement in connection with any
transaction under this clause; and


 


(e)           without any other action by the parties hereto, upon
the consummation of: (i) a sale of all or substantially all of the assets
the Company and its Subsidiaries (determined on a consolidated basis), in one
transaction or series of related transactions; or (ii) the acquisition (by
purchase, merger or otherwise) by any Person or Group of Beneficial Ownership
of voting securities of the Company entitling such Person or Group to exercise ninety percent (90%) or more of the
total voting power of all outstanding securities entitled to vote generally in
elections of directors of the Company; provided that the Investor
Parties shall not have violated this Agreement in connection with any
transaction under the preceding clauses (i) and (ii).


 


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SECTION 3.2            Procedure upon Termination.  In the event of termination pursuant to Section 3.1,
this Agreement shall terminate on the Termination Date without further action
by Investor and the Company.


 


SECTION 3.3            Effect of Termination.  In the event that this Agreement is validly
terminated as provided in this Article III, then each of the
parties hereto shall be relieved of their duties and obligations arising under
this Agreement after the date of such termination and such termination shall be
without liability to the other party; provided, however, that Article V
shall survive any such termination and shall be enforceable hereunder; provided
further, however, that nothing in this Section 3.3 shall
relieve any party hereto of any liability for a breach of a representation,
warranty or covenant in this Agreement prior to the Termination Date.


 


ARTICLE IV


 


DEFINITIONS


 


SECTION 4.1            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:


 


(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 Agreement, “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)        “Beneficial Ownership”
by a Person of any securities means “beneficial ownership” as used for purposes
of Rule 13d-3 adopted by the SEC under the Exchange Act; provided, however,
to the extent the term “Beneficial Ownership” is used in connection with any
obligation on the part of an Investor Party to vote, or direct the vote, of
shares of Common Stock, “Beneficial Ownership” by a Person of any securities
shall be deemed to refer solely to those securities with respect to which such Person
possesses the power to vote or direct the vote. 
The term “Beneficially Own” shall have a correlative meaning.


 


(c)        “Board” means the
Board of Directors of the Company.


 


(d)        “Brookfield Standstill
Agreement” means the Standstill Agreement, dated as of the date hereof, by
and between the Company, REP Investments LLC and the other parties named
therein.


 


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


 


(f)         “Change of Control”
means any transaction involving (i) a Merger Transaction, (ii) a sale
of all or substantially all of the assets the Company and its Subsidiaries
(determined on a consolidated basis), in one transaction or series of related 


 


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transactions, or (iii) the
consolidation, merger, amalgamation, reorganization (other than pursuant to the
Plan contemplated by the Investment Agreement) of the Company or a similar
transaction in which the Company is combined with another Person, unless shares
of Common Stock held by holders who are not affiliated with the Company or any
entity acquiring the Company remain unchanged or are exchanged for, converted
into or constitute solely (except to the extent of applicable appraisal rights
or cash received in lieu of fractional shares) the right to receive as
consideration Public Stock and the Persons or Group who beneficially own the
outstanding Common Stock of the Company immediately before consummation of the
transaction beneficially own more than 50% (by voting power) of the outstanding
voting stock of the combined or surviving entity or new parent immediately
thereafter.


 


(g)        “Charter” means the
Amended and Restated Certificate of Incorporation of the Company effective as
of the date hereof.


 


(h)        “Common Stock”  means the common stock, par value $0.01 per
share, of the Company, as authorized by the Charter as of the Effective Date,
and any successor security as provided by Section 5.11.


 


(i)         “Constructive Ownership”
of securities by a Person on any date means (A) with respect to Common
Stock issuable upon exercise of a Warrant, an interest that would constitute
Beneficial Ownership of such Common Stock had the holder of such Warrant
delivered the notice contemplated by Section 3.2 of the Warrant Agreement
(if applicable) at least 90 days prior to, and had such Warrant been validly
exercised on, such date and (B) with respect to any other securities,
including Common Stock (other than Common Stock issuable upon exercise of the
Warrants), Beneficial Ownership of such securities.  The term “Constructively Own” shall
have a correlative meaning.


 


(j)         “Disinterested Director”
means (i) with respect to a Company
Transaction or potential Company
Transaction, a director who (A) is not Affiliated with, and was
not nominated by, any Investor Party or any Subject Person that is a
participant in such transaction or potential transaction and (B) who has
no personal financial interest in the transaction (other than the same
interest, if a stockholder of the Company, as the other stockholders of the
Company) and (ii) with respect to any matter other than a Company Transaction, a director who is not Affiliated with,
and was not nominated by, any Investor Party or any Subject Person.


 


(k)        “Economic Ownership”
by a Person of any securities includes ownership by any Person who, directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has (i) Constructive Ownership or (ii) economic interest
in such security as a result of any cash-settled total return swap transaction
or any other swap, other derivative or “synthetic” ownership arrangement (in
which case the number of securities with respect to which such Person has
Economic Ownership shall be determined by the Company in it reasonable judgment
based on such Person’s equivalent net long position); provided, however,
that for purposes of determining Economic Ownership, a Person shall be deemed
to be the Economic Owner of any securities which may be acquired by such Person
pursuant to any agreement, arrangement or understanding 


 


9

















 


or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise
(irrespective of whether the right to acquire such securities is exercisable
immediately or only after the giving of notice or the passage of time,
including the giving of notice or the passage of time in excess of sixty (60) days,
the satisfaction of any conditions, the occurrence of any event or any
combination of the foregoing), in each case, without duplication of any
securities included pursuant to sub-clauses (i) or (ii) above.  For purposes of this Agreement, a Person shall
be deemed to be the Economic Owner of any securities Economically Owned by any
Group of which such Person is or becomes a member.  The term “Economically Own” shall have
a correlative meaning.


 


(l)         “Exchange Act” means
the Securities Exchange Act of 1934, as amended, or any successor federal
statute, and the rules and regulations of the SEC promulgated thereunder,
all as the same may be amended and shall be in effect from time to time.


 


(m)       “Fair Market Value”
means, with respect to each share of Public Stock,  the average of the daily volume weighted
average prices per share of such Public Stock for the ten consecutive trading
days immediately preceding the day as of which Fair Market Value is being
determined, as reported on the New York Stock Exchange, or if such shares are
not listed on the New York Stock Exchange, as reported by the principal U.S.
national or regional securities exchange or quotation system on which such
shares are then listed or quoted; provided, however, that in the
absence of such listing or quotations, the Fair Market Value of such shares
shall be the fair market value per share as determined by an Independent
Financial Expert appointed for such purpose, using one or more valuation
methods that the Independent Financial Expert in its best professional judgment
determines to be most appropriate, assuming such shares are fully distributed
and are to be sold in an arm’s-length transaction and there was no compulsion
on the part of any party to such sale to buy or sell and taking into account
all relevant factors.


 


(n)        “Fully Diluted Basis”
means all outstanding shares of the Common Stock assuming the exercise of all
outstanding Share Equivalents, without regard to any restrictions or conditions
with respect to the exercisability of such Share Equivalents.


 


(o)        “Governmental Entity”
means any (i) nation, region, state, province, county, city, town,
village, district or other jurisdiction, (ii) federal, state, local,
municipal, foreign or other government, (iii) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
court or tribunal, or other entity), (iv) multinational organization or
body or (v) 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)        “Group” has the
meaning assigned to it in Section 13(d)(3) of the Exchange Act and Rule 13d-5
thereunder.


 


(q)        “Independent Financial
Expert” means a nationally recognized financial advisory firm approved by a
majority of the Disinterested Directors.


 


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(r)         “Investor Investment
Advisor” means any independently operated business unit of any Affiliate of
Investor that holds shares of Common Stock (i) in trust for the benefit of
persons other than any Investor Party or Subject Person, (ii) in mutual
funds, open- or closed-end investment funds or other pooled investment vehicles
sponsored, managed or advised or subadvised by such Investor Investment
Advisor, (iii) as agent and not principal, or (iv) in any other case
where such Investor Investment Advisor is disaggregated from Investor for the
purposes of Section 13(d) of the Exchange Act; provided, however,
that  (A) in each case, such shares of Common Stock were acquired
in the ordinary course of business of the Investor Investment Advisor’s
respective investment management or securities business and not with the intent
or purpose on the part of Investor or the Investor Parties or the Subject
Persons of influencing control of the Company or avoiding the provisions of
this Agreement and (B) where appropriate, “Chinese walls” or other
informational barriers and other procedures have been established.  For avoidance of doubt, for purposes of this
Agreement shares of Common Stock or other securities of the Company held by an
Investor Investment Advisor shall not be deemed to be Beneficially Owned or
Constructively Owned by Investor or the Investor Parties or the Subject
Persons.


 


(s)        “Investor Parties”
means Investor and its controlled Affiliates; provided, however,
that none of the Company, or any Subsidiary of the Company shall be deemed to
be an Investor Party.


 


(t)         “Large
Stockholder” means a Person that is the Beneficial Owner of more than ten
percent (10%) of the outstanding shares of Common Stock on a Fully Diluted
Basis.


 


(u)        “Law” means any
statutes, laws (including common law), rules, ordinances, regulations, codes,
orders, judgments, decisions, injunctions, writs, decrees, applicable to the
Company, Common Stock or Investor Parties.


 


(v)        “Merger Transaction”
means any transaction involving the acquisition (by purchase, merger or
otherwise) by any Person or Group of Beneficial Ownership of voting securities
of the Company entitling such Person or Group to exercise a majority of the
total voting power of all outstanding securities entitled to vote generally in
elections of directors of the Company.


 


(w)        “Ordinary Course of
Business” means the ordinary and usual course of day-to-day operations of
the business of the Company consistent with past practice.


 


(x)        “Other Stockholder”
means, as of the date of the action in question, any Person not Affiliated with
Brookfield Asset Management, Inc., Fairholme Capital Management LLC,
Pershing Capital Management L.P., any transferee who is a party to a transferee
agreement under the Brookfield Standstill Agreement, the Pershing Square
Standstill Agreement or this Agreement or any of their respective Affiliates.


 


(y)         “Ownership Cap”
means the lower of (i) thirty percent
(30%) of the then-outstanding
Common Stock on a Fully Diluted Basis and (ii) the sum of five percent 


 


11

















 


(5%) and the percentage of the outstanding Common Stock on a Fully Diluted
Basis that the Investor Parties and the Subject Persons collectively Economically
Own as of the Effective Date.


 


(z)        “Pershing
Square Standstill Agreement” means the Standstill Agreement,
dated as of the date hereof, among the Company 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.


 


(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)     “Public Stock” means
common stock listed on a recognized U.S. national securities exchange with an
aggregate market capitalization (held by non-Affiliates of the issuer) in
excess of $1 billion in Fair Market Value.


 


(cc)      “Rule 144” means
Rule 144 promulgated by the SEC under the Securities Act, or any successor
rule or regulation hereafter adopted by the SEC, as the same may be
amended and shall be in effect from time to time.


 


(dd)     “SEC” means the
Securities and Exchange Commission or any other federal agency then
administering the Exchange Act, the Securities Act and other federal securities
laws.


 


(ee)      “Securities Act”
means the Securities Act of 1933, as amended, or any successor federal statute,
and the rules and regulations of the SEC promulgated thereunder, all as
the same may be amended and shall be in effect from time to time.


 


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


 


(gg)     “Subject Persons”
means, collectively, non-controlled Affiliates of the Investor, including, for
the avoidance of doubt, Fairholme Focused Income Fund and any other mutual fund
registered under the Investment Company Act of 1940, as amended, managed by
Fairholme Capital Management L.L.C. other than the Investor, but not any
Investor Investment Advisor.


 


(hh)     “Subsidiary” means,
with respect to a Person, any corporation, limited liability company,
partnership, trust or other entity of which such Person owns (either alone,
directly, or indirectly through, or together with, one or more of its
Subsidiaries) 50% or more of the equity interests the holder of which is
generally entitled to vote for the election of the board of directors or
governing body of such corporation, limited liability company, partnership,
trust or other entity.


 


12

















 


(ii)        “Transaction Documents”
means, individually or collectively, the Investment Agreement or the Warrant.


 


(jj)        “Transferee” means
any proposed transferee of securities pursuant to Sections 2.2(b)(i) or
2.2(b)(vi).


 


(kk)      “Votes
Cast” means the aggregate number of shares of Common Stock that are
properly voted for or against any action to be taken by stockholders, excluding
any shares if the holder of such shares is contractually required to vote in
proportion of the total number of votes cast pursuant to this Agreement, the Brookfield Standstill Agreement, the Pershing
Square Standstill Agreement or any transferee agreement executed hereunder or
thereunder.


 


(ll)        “Warrant Agreement”
means that certain Warrant Agreement, dated as of the date hereof, by and
between the Company and Mellon Investor Services LLC.


 


(mm)    “Warrants” means the
New Warrants (as defined in the Investment Agreement).


 


ARTICLE V


 


MISCELLANEOUS


 


SECTION 5.1            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:  (a) on the date
delivered, if personally delivered; (b) 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 (c) 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:


 


If
to Investor, to:


 


Fairholme
Capital Management, LLC


4400
Biscayne Boulevard, 9th Floor


Miami,
Florida  33137


Attention:     Charles
M. Fernandez

Facsimile:     (305) 358-8002


 


with
copies (which shall not constitute notice) to:


 


Sullivan &
Cromwell LLP


125
Broad Street


New
York, New York  10004

Attention:     Andrew G. Dietderich, Esq.


 


13

















 


                      Alan
J. Sinsheimer, Esq.

Facsimile:     (212) 558-3588


 


Greenberg
Traurig, LLP

401 East Las Olas Boulevard, Suite 2000


Fort
Lauderdale, Florida  33301

Attention:     Bruce I. March, Esq.


                      Matthew
M. Robbins, Esq.

Facsimile:     (954) 765-1477


 


Herrick,
Feinstein, LLP

2 Park Avenue


New
York, NY  10016

Attention:     Joshua J. Angel, Esq.


                     John
Rogers, Esq.

Facsimile:    (212) 592-1500


 


If
to Company, to:


 


General Growth Properties, Inc.


110 N. Wacker Drive


Chicago, IL 60606

Attention:     General Counsel

Facsimile:    (312) 960-5485


 


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


 


Weil, Gotshal & Manges LLP


767 Fifth Avenue


New York, NY 10153

Attention:    Frederick S. Green, Esq.


                    Malcolm
E. Landau, Esq.


Facsimile:   (212) 310-8007


 


SECTION 5.2            Assignment; No 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.  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.


 


SECTION 5.3            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 hereto and supersedes all prior agreements,
arrangements or understandings, whether written or oral, between the parties
hereto with respect to the subject matter of this Agreement.


 


14

















 


SECTION 5.4            Governing Law; Venue.  THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF
ACTION (WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF
OR RELATE TO THIS AGREEMENT OR THE NEGOTIATION, EXECUTION OR PERFORMANCE OF
THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF DELAWARE.  BOTH
PARTIES HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN,
DELAWARE AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.


 


SECTION 5.5            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 hereto, 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 5.6            Expenses.  Except as otherwise provided in this
Agreement, Investor and the Company shall each bear its own expenses
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 5.7            Waivers and Amendments.  Subject to Section 5.2, 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 Investor and the Company (with the approval of a majority
of the Disinterested Directors) 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.


 


SECTION 5.8            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) “or”
shall mean “and/or”; (ii) “including” and its variants mean “including,
without limitation” and its variants; (iii) words defined in the singular
have the parallel meaning in the plural and vice versa; (iv) references to
“written” or “in writing” include in visual electronic form; (v) words of
one gender shall be construed to apply to each gender; and (vi) the terms “Article”
and “Section” refer to the specified Article or Section of this
Agreement.


 


15

















 


SECTION 5.9            Severability.  If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any law or
public policy, all other terms or provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.  Upon
such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties
hereto as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.


 


SECTION 5.10          Equitable Relief.  It is hereby acknowledged that irreparable
harm would occur in the event that any of the provisions of this Agreement were
not performed fully by the parties hereto in accordance with the terms
specified herein, and that monetary damages are an inadequate remedy for breach
of this Agreement because of the difficulty of ascertaining and quantifying the
amount of damage that will be suffered by the parties hereto relying hereon in
the event that the undertakings and provisions contained in this Agreement were
breached or violated.  Accordingly, each
party hereto hereby agrees that each other party hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of the
undertakings and provisions hereof and to enforce specifically the undertakings
and provisions hereof in any court of the United States or any state having
jurisdiction over the matter; it being understood that such remedies shall be
in addition to, and not in lieu of, any other rights and remedies available at
law or in equity.


 


SECTION 5.11          Successor Securities.  The provisions of this Agreement pertaining
to shares of Common Stock shall apply to all shares of Common Stock
Beneficially Owned by any Investor Party and any voting equity securities of
the Company, regardless of class, series, designation or par value, that are
issued as a dividend on or in any other distribution in respect of, or as a
result of a reclassification (including a change in par value) in respect of,
shares of Common Stock or other shares of the Company which, as provided by
this section, are considered as shares of Common Stock for purposes of this
Agreement and shall also apply to any voting equity security issued by any company
that succeeds, by merger, consolidation, a share exchange, a reorganization of
the Company or any similar transaction, to all or substantially all the
business of the Company, or to the ownership thereof, if such security was
issued in exchange for or otherwise as consideration for or in respect of
shares of Common Stock (or other shares considered as shares of Common Stock,
as provided by this definition) in connection with such succession transaction.


 


SECTION 5.12          Voting Procedures.  If, in connection with any stockholder
meeting or consent solicitation, Investor or the Investor Parties are
required under the terms of this Agreement to vote in proportion to Votes Cast,
then the parties shall cooperate to determine appropriate procedures and
mechanics to facilitate such proportionate voting.


 


** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**


 


16

















 


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.


 


 


	
   

  	
  GENERAL GROWTH PROPERTIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


[Signature Page to
Fairholme Standstill Agreement]


 

















 


	
   

  	
  FAIRHOLME
  FUNDS, INC.

  
	
   

  	
  On
  behalf of its series The Fairholme Fund

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
  

  	
  Bruce
  R. Berkowitz

  
	
   

  	
  Title:
  

  	
  President

  



 


[Signature Page to
Fairholme Standstill Agreement]