Exhibit
10.10


 


EXECUTION COPY


 


THE HOWARD HUGHES CORPORATION


 


November 9, 2010


 


Fairholme
Capital Management, LLC


4400
Biscayne Boulevard, 9th Floor


Miami,
Florida  33137


Attention:  Charles M. Fernandez


 


Ladies
and Gentlemen:


 


Reference is made to the Amended and Restated Stock Purchase Agreement
(the “Stock Purchase Agreement”), effective as of March 31, 2010,
as amended, between General Growth Properties, Inc. and The Fairholme Fund
and Fairholme Focused Income Fund (each, together with its permitted nominees
and assigns, a “Purchaser”).  Capitalized
terms used but not otherwise defined in this letter agreement (this “Agreement”)
shall have the meanings attributed to such terms in the Stock Purchase
Agreement as in effect on the date hereof.


 


Pursuant to the terms of the Stock Purchase Agreement and the Plan, The
Howard Hughes Corporation (“THHC”) and each Purchasers hereb agree as
follows:


 


1.                                       Subscription
Right.


 


(i)                                     Sale
of New Equity Securities.  If THHC or any Subsidiary of THHC at any time
or from time to time makes any public or non-public offering of any shares of
GGO Common Stock (or securities that are convertible into or exchangeable or
exercisable for, or linked to the performance of, GGO Common Stock) (other than
(1) pursuant to the granting or exercise of employee stock options or
other stock incentives pursuant to THHC’s stock incentive plans and employment
arrangements as in effect from time to time or the issuance of stock pursuant
to THHC’s employee stock purchase plan as in effect from time to time, (2) pursuant
to or in consideration for the acquisition of another Person, business or
assets by THHC or any of its Subsidiaries, whether by purchase of stock,
merger, consolidation, purchase of all or substantially all of the assets of
such Person or otherwise or (3) to strategic partners or joint venturers
in connection with a commercial relationship with THHC or its Subsidiaries or
to parties in connection with them providing THHC or its Subsidiaries with
loans, credit lines, cash price reductions or similar transactions, under arm’s-length
arrangements) (the “Proposed Securities”), each Purchaser shall have the
right to acquire from THHC (the “Subscription Right”) for the same price
(net of any underwriting discounts or sales commissions or any other discounts
or fees if not purchasing from or through an underwriter, placement agent or
broker) and on the same terms as such Proposed Securities are proposed to be
offered to others, up to the amount of such Proposed Securities in the
aggregate required to enable it to maintain its aggregate proportionate GGO
Common Stock-equivalent interest in THHC on a Fully Diluted Basis determined in
accordance with the following sentence, in each case, subject to such
limitations as


 

















 


may be imposed by applicable
Law or stock exchange rules.  The amount
of such Proposed Securities that each Purchaser shall be entitled to purchase
in the aggregate in any offering pursuant to the above shall (subject to such
limitations as may be imposed by applicable Law or stock exchange rules) be
determined by multiplying (x) the total number of such offered shares of
Proposed Securities by (y) a fraction, the numerator of which is the
number of shares of GGO Common Stock held by such Purchaser on a Fully Diluted
Basis as of the date of THHC’s notice pursuant to Section 1(ii) in
respect of the issuance of such Proposed Securities, and the denominator of
which is the number of shares of GGO Common Stock then outstanding on a Fully
Diluted Basis.  For the avoidance of
doubt, the actual amount of securities to be sold or offered to each Purchaser
pursuant to its exercise of the Subscription Right hereunder shall be
proportionally reduced if the aggregate amount of Proposed Securities sold or
offered is reduced.  Any offers and sales
pursuant to this Section 1 in the context of a registered public
offering shall be conditioned upon reasonably acceptable representations and
warranties of the applicable Purchaser regarding its status as the type of
offeree to whom a private sale can be made concurrently with a registered
public offering in compliance with applicable securities Laws.


 


(ii)                                  Notice.  In the event THHC proposes to offer Proposed
Securities, it shall give each Purchaser written notice of its intention,
describing the estimated price (or range of prices), anticipated amount of
securities, timing and other terms upon which THHC proposes to offer the same
(including, in the case of a registered public offering and to the extent
possible, a copy of the prospectus included in the registration statement filed
with respect to such offering), no later than ten (10) Business Days after
the commencement of marketing with respect to such offering or after THHC takes
substantial steps to pursue any other offering. 
Each Purchaser shall have three (3) Business Days from the date of
receipt of such a notice to notify THHC in writing that it intends to exercise
its Subscription Right and as to the amount of Proposed Securities such
Purchaser desires to purchase, up to the maximum amount calculated pursuant to Section 1(i).  In connection with an underwritten public
offering, such notice shall constitute a non-binding indication of interest to
purchase Proposed Securities at such a range of prices as such Purchaser may
specify and, with respect to other offerings, such notice shall constitute a
binding commitment of such Purchaser to purchase the amount of Proposed
Securities so specified at the price and other terms set forth in THHC’s notice
to such Purchaser.  The failure of such
Purchaser to so respond within such three (3) Business Day period shall be
deemed to be a waiver of the applicable Subscription Right under this Section 1
only with respect to the offering described in the applicable notice.  In connection with an underwritten public
offering or a private placement, each Purchaser shall further enter into an
agreement (in form and substance customary for transactions of this type) to
purchase the Proposed Securities to be acquired by it contemporaneously with
the execution of any underwriting agreement or purchase agreement entered into
with THHC, the underwriters or initial purchasers of such underwritten public
offering or private placement, and the failure of such Purchaser to enter into
such an agreement at or prior to such time shall constitute a waiver of the
Subscription Right in respect of such offering.


 

















 


(iii)                               Purchase
Mechanism.  If a
Purchaser exercises its Subscription Right provided in this Section 1,
the closing of the purchase of the Proposed Securities with respect to which
such right has been exercised shall take place concurrently with the sale to
the other investors in the applicable offering, which period of time for the
closing of the purchase of the Proposed Securities with respect to which such
right has been exercised shall be extended for a maximum of one hundred eighty
(180) days in order to comply with applicable Laws (including receipt of any
applicable regulatory or stockholder approvals).  Each of THHC and each Purchaser shall use its
reasonable best efforts to secure any regulatory or stockholder approvals or
other consents, and to comply with any Law necessary in connection with the
offer, sale and purchase of, such Proposed Securities.


 


(iv)                              Failure
of Purchase.  In the
event (A) a Purchaser fails to exercise its Subscription Right provided in
this Section 1 within said three (3) Business Day period, or (B) if
so exercised, a Purchaser fails or is unable to consummate such purchase within
the one hundred eighty (180) day period specified in Section 1(iii),
without prejudice to other remedies, THHC shall thereafter be entitled during
the Additional Sale Period to sell the Proposed Securities not elected to be
purchased pursuant to this Section 1 or which such Purchaser fails
to, or is unable to, purchase, at a price and upon terms no more favorable in
any material respect to the purchasers of such securities than were specified
in THHC’s notice to such Purchaser.  In
the event THHC has not sold the Proposed Securities within the Additional Sale
Period, THHC shall not thereafter offer, issue or sell such Proposed Securities
without first offering such securities to the applicable Purchaser in the
manner provided above.


 


(v)                                 Non-Cash
Consideration.  In the case
of the offering of securities for a consideration in whole or in part other
than cash, including securities acquired in exchange therefor (other than
securities by their terms so exchangeable), the consideration other than cash
shall be deemed to be the fair value thereof as determined by the Board of Directors
of THHC (the “Board”); provided, however, that such fair
value as determined by the Board shall not exceed the aggregate market price of
the securities being offered as of the date the Board authorizes the offering
of such securities.


 


(vi)                              Cooperation.  THHC and each Purchaser shall cooperate in
good faith to facilitate the exercise of such Purchaser’s Subscription Right
hereunder, including using reasonable efforts to secure any required approvals
or consents.


 


(vii)                           General.  Notwithstanding anything herein to the
contrary, (A) if (1) a Purchaser
exercises its Subscription Right pursuant to this Section 1
and is unable to complete the purchase of the Proposed Securities concurrently
with the sales to the other investors in the applicable offering as
contemplated by Section 1(iii) due to applicable regulatory or
stockholder approvals and (2) THHC or the Board determines in good faith
that any delay in completion of an offering in respect of which such Purchaser is entitled to Subscription Rights would
materially impair the financing objective of such offering, THHC may proceed
with such offering without the participation of such
Purchaser in such offering, in which event THHC and such Purchaser shall promptly thereafter agree on a process
otherwise consistent with this Section 1 as would allow such Purchaser to 


 

















 


purchase, at the same price
(net of any underwriting discounts or sales commissions or any other discounts
or fees if not purchasing from or through an underwriter, placement agent or
broker) as in such offering, up to the amount of shares of GGO Common Stock (or
securities that are convertible into or exchangeable or exercisable for, or
linked to the performance of, GGO Common Stock) as shall be necessary to enable
such Purchaser to maintain its aggregate proportionate GGO Common
Stock-equivalent interest in THHC on a Fully Diluted Basis, (B) if THHC or
the Board determines in good faith that compliance with the notice provisions
in Section 1(ii) would materially impair the financing objective
of an offering in respect of which a
Purchaser is entitled to Subscription Rights, THHC shall be
permitted by notice to such Purchaser to reduce the notice period required
under Section 1(ii) (but not to less than one (1) Business
Day) to the minimum extent required to meet the financing objective of such
offering, and such Purchaser shall have the
right to either (x) exercise it Subscription Rights during the shortened
notice periods specified in such notice or (y) require THHC to promptly
thereafter agree on a process otherwise consistent with this Section 1
as would allow such Purchaser to purchase, at
the same price (net of any underwriting discounts or sales commissions or any
other discounts or fees if not purchasing from or through an underwriter, placement
agent or broker) as in such offering, up to the amount of shares of GGO Common
Stock (or securities that are convertible into or exchangeable or exercisable
for, or linked to the performance of, GGO Common Stock) as shall be necessary
to enable such Purchaser to maintain its aggregate proportionate GGO Common
Stock-equivalent interest in THHC on a Fully Diluted Basis and (C) in the
event THHC is unable to issue shares of GGO Common Stock (or securities that
are convertible into or exchangeable or exercisable for, or linked to the
performance of, GGO Common Stock) to a
Purchaser as a result of a failure to receive regulatory or stockholder approval
therefor, THHC shall take such action or cause to be taken such other action in
order to place such Purchaser, in so far as reasonably practicable (subject to
any limitations that may be imposed by applicable Law or stock exchange rules),
in the same position in all material respects as if such Purchaser was able to effectively exercise its Subscription Rights
hereunder, including, without limitation, at the option of such Purchaser,
issuing to such Purchaser another class
of securities of THHC having terms to be agreed by THHC and such member having
a value at least equal to the value per share of GGO Common Stock, in each
case, as shall be necessary to enable such Purchaser to maintain its
proportionate GGO Common Stock-equivalent interest in THHC on a Fully Diluted
Basis.


 


(viii)                        Termination.  This Section 1 shall terminate at
such time as the Purchaser Group collectively beneficially own less than 5% of
the outstanding shares of GGO Common Stock on a Fully Diluted Basis.


 


2.                                       Stockholder
Vote With Respect to Subscription Right.  THHC shall, for the benefit of each
Purchaser, to the extent required by any U.S. national securities exchange upon
which shares of GGO Common Stock are listed, for so long as any Purchaser has
subscription rights as contemplated by Section 1, put up for a
stockholder vote at the annual meeting of its stockholders, and include in its
proxy statement distributed to such stockholders in connection with such annual
meeting, approval of such Purchaser’s subscription rights for the maximum
period permitted by the rules of such U.S. national securities exchange.


 

















 


3.                                       Transfer
Restrictions.  Each
Purchaser covenants and agrees that the GGO Shares (and shares issuable upon
exercise of GGO Warrants) 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.  Each Purchaser agrees to the imprinting, so
long as is required by this Section 3, of the following legend on
any certificate evidencing the GGO Shares (and shares issuable upon exercise of
GGO Warrants):


 


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 GGO Shares (and shares issuable upon exercise of GGO Warrants)
shall not be required to contain such legend (A) while a registration
statement covering the resale of the GGO Shares is effective under the
Securities Act, or (B) following any sale of any such GGO Shares pursuant
to Rule 144 of the Exchange Act (“Rule 144”), or (C) following
receipt of a legal opinion of counsel to the applicable Purchaser that the
remaining GGO Shares held by such Purchaser are eligible for resale without
volume limitations or other limitations under Rule 144.  In addition, THHC will agree to the removal
of all legends with respect to shares of GGO 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 THHC’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 GGO Shares, THHC shall promptly, following the delivery by the
applicable Purchaser to THHC of a legended certificate representing such GGO
Shares, deliver or cause to be delivered to such Purchaser a certificate
representing such GGO Shares that is free from such legend.  In the event the above legend is removed from
any of the GGO Shares, and thereafter the effectiveness of a registration
statement covering such GGO Shares is suspended or THHC determines that a
supplement or amendment thereto is required by applicable securities Laws, then
THHC may require that the above legend be placed on any such GGO Shares that
cannot then be sold pursuant to an effective registration statement or under Rule 144
and such Purchaser shall cooperate in the replacement of such legend.  Such legend shall thereafter be removed when 


 

















 


such
GGO Shares may again be sold pursuant to an effective registration statement or
under Rule 144.


 


For
the avoidance of doubt, each Purchaser’s Subscription Rights pursuant to Section 1
may not be sold, transferred or disposed of to a Person that is not a member of
the Purchaser Group.


 


4.                                       Rights
Agreement.  In the
event THHC adopts a rights plan analogous to the Rights Agreement (the “GGO
Rights Agreement”), (i) the GGO Rights Agreement shall be inapplicable
to the Stock Purchase Agreement, this Agreement and the transactions
contemplated thereby and hereby, (ii) no Purchaser, nor any other member
of its Purchaser Group, shall be deemed to be an Acquiring Person (as defined
in the Rights Agreement) whether in connection with the acquisition of shares
of GGO Common Stock or GGO Warrants or the shares issuable upon exercise of the
GGO Warrants, (iii) neither a Shares Acquisition Date (as defined in the
Rights Agreement) nor a Distribution Date (as defined in the Rights Agreement)
shall be deemed to occur and (iv) the Rights (as defined in the Rights
Agreement) will not separate from the GGO Common Stock, in each case under
(ii), (iii) and (iv), as a result of the execution, delivery or
performance of the Stock Purchase Agreement or this Agreement or the
consummation of the transactions contemplated thereby and hereby including the
acquisition of shares of GGO Common Stock by any Purchaser or other member of
the Purchaser Group after the date hereof as otherwise permitted by the Stock
Purchase Agreement and this Agreement, or the GGO Warrants.


 


5.                                       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 a Purchaser’s
rights, interests or obligations hereunder, may be assigned or transferred, in
whole or in part, by such Purchaser to one or more members of its Purchaser
Group.  Notwithstanding the foregoing or
any other provisions herein, no such assignment shall relieve Purchaser of its
obligations hereunder if such assignee fails to perform such obligations.


 


6.                                       Prior
Negotiations; Entire Agreement.  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.


 


7.                                       Governing Law;
Venue.  THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK.  EACH OF THE PARTIES HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF, AND VENUE IN, ANY STATE OR FEDERAL
COURT LOCATED IN NEW YORK, NEW YORK AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS.


 


8.                                       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.


 


9.                                       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.  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.


 


10.                                 Certain
Remedies.  The parties
agree that irreparable damage would occur in the event that any provisions of
this Agreement were not performed in accordance with their specific terms.  It is accordingly agreed that each of the
parties shall be entitled to an injunction or injunctions (without necessity of
proving damages or posting a bond or other security) to prevent breaches of
this Agreement, and to enforce specifically the terms and provisions of this
Agreement, in addition to any other applicable remedies at law or equity


 


[Signature Page Follows]


 

















 


Please
evidence your acceptance of, and agreement to, the terms and conditions of this
Agreement by executing and returning an executed copy of this Agreement to the
address first written above as soon as practicable.


 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  THE
  HOWARD HUGHES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Rael Diamond

  
	
   

  	
   

  	
  Name:

  	
  Rael
  Diamond

  
	
   

  	
   

  	
  Title:

  	
  Interim
  Chief Financial Officer

  



 


[SIGNATURE PAGE TO
FAIRHOLME LETTER AGREEMENT]


 

















 


Accepted and agreed as of the date of this Agreement:


 


	
  FAIRHOLME FUNDS, INC.,

  	
   

  
	
  on behalf of its series The Fairholme Fund

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Bruce R. Berkowitz

  	
   

  
	
  Name:

  	
  Bruce R. Berkowitz

  	
   

  
	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  FAIRHOLME FUNDS, INC.,

  	
   

  
	
  on behalf of its series Fairholme Focused Income
  Fund

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Bruce R. Berkowitz

  	
   

  
	
  Name:  

  	
  Bruce R. Berkowitz

  	
   

  
	
  Title:

  	
  President

  	
   

  



 


[SIGNATURE PAGE TO
FAIRHOLME LETTER AGREEMENT]