Exhibit
10.3


 


Execution
Version


 


AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT


 


AMENDMENT NO. 1 (this “Amendment”), dated as of May 3,
2010, to the Stock Purchase Agreement, dated as of March 31, 2010 (the “Agreement”),
by and between General Growth Properties, Inc., a Delaware corporation (“GGP”), and The Fairholme
Fund, a series of Fairholme Funds, Inc., a Maryland corporation (“The
Fairholme Fund”) and Fairholme Focused Income Fund, a series of Fairholme
Funds, Inc., a Maryland corporation, (each, together with its permitted
nominees and assigns, a “Purchaser”). 
All capitalized terms used in this Amendment which are not herein
defined shall have the same meanings ascribed to them in the Agreement (as
defined herein).


 


WHEREAS, Section 13.8 of the Agreement provides for
the amendment of the Agreement in accordance with the terms set forth therein.


 


WHEREAS, on May 3, 2010, the Company entered into an
amendment to the Pershing Agreement in the form attached hereto as Exhibit A
with the Pershing Purchasers;


 


WHEREAS,
on May 3, 2010, the Company entered into an amendment to the Brookfield Agreement in
the form attached hereto as Exhibit B with the Brookfield Investor;


 


WHEREAS, the parties hereto desire to amend the Agreement
as set forth in this Amendment.


 


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


 


1.     Amendment of Exhibit A.  Exhibit A to the Agreement is hereby
amended and restated in its entirety to read as set forth in Exhibit C to
this Amendment.


 


2.     Amendment of Exhibit B.  Exhibit B to the Agreement is hereby
amended and restated in its entirety to read as set forth in Exhibit D to
this Amendment.


 


3.     Amendment of Exhibit G.  Exhibit G to the Agreement is hereby amended
and restated in its entirety to read as set forth in Exhibit E to this
Amendment.


 


4.     Amendment of Schedule I.  Schedule I to the Agreement is hereby amended
and restated in its entirety to read as set forth in Exhibit F to this
Amendment.


 


5.     Amendment to Section 1.4.  Section 1.4 of the Agreement is hereby
amended and restated in its entirety to read as follows:


 

















 


“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 each Purchaser to reduce the Total Purchase Amount
by all or any portion of the number of such Permitted Replacement Shares as the
Company may determine in its discretion; provided, that the Total
Purchase Amount shall not be less than 190,000,000.  No election by the Company under this Section 1.4(a) shall
be effective unless received by each Purchaser on or prior to the date of
notice of the time fixed for the hearing to approve the Confirmation Order
under Bankruptcy Rule 2002.  Any
election by the Company under this Section 1.4(a) shall be
binding and irrevocable.


 


(b) 
If the Plan as confirmed provides for the commencement on or about the
Effective Date of a broadly distributed public offering of Permitted
Replacement Shares on terms and conditions and with one or more underwriters
and a plan of distribution, the Company may elect by written notice to each
Purchaser on or prior to the date of notice of the time fixed for the hearing
to approve the Confirmation Order under Bankruptcy Rule 2002 to specify a
number of Shares to be purchased by the Purchasers 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 (i) its GGP
Pro Rata Share of the Total Purchase Amount minus (ii) the Reserved Shares
shall not be less than its GGP Pro Rata Share of 190,000,000.  If the Company elects to designate any
Reserved Shares, the Company shall pay to each Purchaser in cash on the
Effective Date an amount equal to $0.25 per Reserved Share.  Upon payment of such amount, the Company
shall thereafter have the right to elect by written notice to each Purchaser (a
“Repurchase Notice”) on or prior to the 25th day after the Effective
Date (or, if not a Business Day, the next Business Day) to repurchase from each
Purchaser a number of Shares equal to such Purchaser’s GGP Pro Rata Share of
the greater of (x) the aggregate amount of Permitted Replacement Capital
Shares sold by the Company in such public offering and (y) the Reserved
Shares.  The purchase price for any
repurchased Shares shall be $10.00 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 each Purchaser and not later than
the date that is 30 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.”


 


6.     Amendments to Section 2.1(a).  Section 2.1(a) of the Agreement is
hereby amended and restated in its entirety to read as follows:


 


“On
or prior to the Effective Date, the Company shall incorporate GGO with issued
and outstanding capital stock consisting of at least the GGO Common Share
Amount of shares of common stock (the “GGO Common Stock”), designate an
employee of the Company familiar with the Identified Assets and reasonably
acceptable to the other Initial Investors to serve as a representative of GGO
(the “GGO Representative”) and shall contribute to GGO (directly or 


 


2

















 


indirectly)
the assets (and/or equity interests related thereto) set forth in Exhibit E
hereto and have GGO assume directly or indirectly the associated liabilities
(the “Identified Assets”); provided, however, that to the
extent the Company is prohibited by Law from contributing one or more of the
Identified Assets to GGO or the contribution thereof would breach or give rise
to a default under any Contract, agreement or instrument that would, in the
good faith judgment of the Company in consultation with the GGO Representative,
impair in any material respect the value of the relevant Identified Asset or
give rise to additional liability (other than liability that would not, in the
aggregate, be material) on the part of GGO or the Company or a Subsidiary of
the Company, the Company shall (i) to the extent not prohibited by Law or
would not give rise to such a default, take such action or cause to be taken
such other actions in order to place GGO, insofar as reasonably possible, in
the same economic position as if such Identified Asset had been transferred as
contemplated hereby and so that, insofar as reasonably possible, substantially
all the benefits and burdens (including all obligations thereunder but
excluding any obligations that arise out of the transfer of the Identified
Asset to the extent included in Permitted Claims) relating to such Identified
Asset, including possession, use, risk of loss, potential for gain and control
of such Identified Asset, are to inure from and after the Closing to GGO (provided
that as soon as a consent for the contribution of an Identified Asset is
obtained or the contractual impediment is removed or no longer applies, the
applicable Identified Asset shall be promptly contributed to GGO), or (ii) to
the extent the actions contemplated by clause (i) are not possible without
resulting in a material and adverse effect on the Company and its Subsidiaries
(as reasonably determined by the Company in consultation with the GGO
Representative), contribute other assets, with the separate consent of each
Purchaser (which such Purchaser shall not unreasonably withhold, condition or
delay), having an economically equivalent value and related financial impact on
the Company (in each case, as reasonably agreed by each Purchaser and the
Company in consultation with the GGO Representative) to the Identified Asset
not so contributed.”


 


7.     Amendment to Section 2.1(e).  The first sentence of Section 2.1(e) of
the Agreement is hereby amended and restated in its entirety to read as
follows:


 


“With
respect to the Columbia Master Planned Community (the “CMPC”), it is the
intention of the parties that office and mall assets currently producing any
material amount of income at the CMPC (including any associated right of access
to parking spaces) will be retained by the Company and the remaining non-income
producing assets at the CMPC will be transferred to GGO (including rights to
develop and/or redevelop (as appropriate) the  remainder of the CMPC).”


 


8.     Amendments to Section 5.2.  Section 5.2 of the Agreement is hereby amended
and restated in its entirety to read as follows:


 


3

















 


“Warrants,
New Warrants and GGO Warrants. 
Within one Business Day of the date of the entry of the Approval Order,
the Company and the warrant agent shall execute and deliver the warrant and
registration rights agreement in the form attached hereto as Exhibit G
(with only such changes thereto as may be reasonably requested by the warrant
agent and reasonably approved by each Purchaser) (the “Warrant Agreement”)
pursuant to which there will be issued to each Purchaser its GGP Pro Rata Share
of 42,857,143 warrants (the “Warrants”) each of which, when issued,
delivered and vested in accordance with the terms of the Warrant Agreement,
will entitle the holder to purchase one (1) share of Common Stock at an
initial price of $15.00 per share subject to adjustment as provided in the
Warrant Agreement.  The Warrant Agreement
shall provide that the Warrants shall vest in accordance with Section 2.2(b) and
Schedule A of the Warrant Agreement.  For
the avoidance of doubt, Warrants that have not vested may not be
exercised.  The Plan shall provide that
upon the Effective Date, the Warrants, regardless of whether or not vested,
shall be cancelled for no consideration. 
The Plan shall also provide that there shall be issued to each Purchaser
pro rata in accordance with the number of shares of New Common Stock or GGO
Common Stock, as the case may be, purchased, an aggregate of  (i) 42,857,143 fully vested warrants (the
“New Warrants”) each of which entitles the holder to purchase one (1) share
of New Common Stock at an initial purchase price of $10.50 per share subject to
adjustment as provided in the underlying warrant agreement and (ii) 20,000,000
fully vested warrants (the “GGO Warrants”) each of which entitles the
holder to purchase one (1) share of GGO Common Stock at a price of $5.00
per share subject to adjustment as provided in the underlying warrant
agreement, each in accordance with the terms set forth in a warrant and
registration rights agreement with terms substantially similar to the terms set
forth in the Warrant Agreement, except that the expiration date for each New
Warrant and GGO Warrant shall be the seventh year anniversary of the date on
which such warrants are issued.”


 


9.     Amendment to Section 5.9(a)(i).  The third sentence of Section 5.9(a)(i) of
the Agreement is hereby amended to replace “Section 5.9(b)” therein with “Section 5.9(a)(ii)”.


 


10.   Amendments to Section 5.14.  Section 5.14 of the Agreement is hereby
amended by adding at the end thereof the following new paragraph (e):


 


“(e) Newco (as defined in Exhibit B) will be
formed by the Operating Partnership solely for the purpose of engaging in the
transactions contemplated by this Agreement, including Exhibit B  and Capital Raising Activities permitted
pursuant to this Agreement.  Prior to the
Closing, Newco will not engage in any business activity, nor conduct its
operations, other than as contemplated by this Agreement (which, for greater
certainty, shall include Capital Raising Activities permitted pursuant to this
Agreement).”


 


4

















 


11.   Amendments to Section 5.16(d).  Section 5.16(d) of
the Agreement is hereby amended and restated in its entirety to read as
follows:


 


“(d) 
It is the intention of the parties that any Reserve should not alter the
intended allocation of value between GGO and the Company as Claims are resolved
over time.  Accordingly, the Plan shall
provide that, if a GGO Promissory Note is required to be issued at Closing and
there is a Reserve Surplus Amount as of the end of any fiscal quarter prior to
the maturity of the GGO Promissory Note, then the principal amount of the GGO
Promissory Note shall be reduced, but not below zero, by (i) if and to the
extent that such Reserve Surplus Amount as of such date is less than or equal
to the Net Debt Surplus Amount, 80% of the Reserve Surplus Amount, and
otherwise (ii) 100% of an amount equal to the Reserve Surplus Amount;
provided, however, that because this calculation may be undertaken on a
periodic basis, for purposes of clauses (i) and (ii), no portion of the
Reserve Surplus Amount shall be utilized to reduce the amount of the GGO
Promissory Note if it has been previously utilized for such purpose.  In the event that any party requests an
equitable adjustment to this formula, the other parties shall consider the
request in good faith.”


 


12.   Amendment to Section 6.4.  Section 6.4 of the Agreement is hereby
amended by inserting at the end thereof the following:


 


“The
Plan shall provide that in addition to the covenants provided in the
Non-Control Agreement, 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, to the extent reasonably requested in connection with such
offering by UBS or any other managing underwriter selected by the Company, each
Purchaser and the other members of the Purchaser Group will covenant and agree
that it does not currently intend to, and will not, sell, transfer or dispose
of (each, a “Transfer”) any Shares for a period of time not to exceed
120 days from the date of completion of the offering without the consent of the
representatives of such underwriter; provided, however, that a Purchaser
or member of its Purchaser Group may Transfer its Shares in such amounts, and
at such times, as Fairholme, as such Purchaser’s or Purchaser Group members’
manager, determines after the Closing Date to be in such Purchaser’s or
Purchaser Group members’ best interests in light of its then current
circumstances and the laws and regulations applicable to it as a management
investment company registered under the Investment Company Act of 1940, as
amended, with a policy of qualifying as a “regulated investment company” as
defined in Subchapter M of the Internal Revenue Code of 1986, as amended.”


 


13.   Amendments to Article VI.  Article VI of the
Agreement is hereby amended by adding at the end thereof the following new
sections:


 


“SECTION 6.8.  [Intentionally
Omitted.]”


 


5

















 


“SECTION 6.9.  
Additional Backstop.


 


(a)           If the Company requests the Initial Investors, in
writing, at any time prior to fifteen (15) days before the commencement of
solicitation of acceptances of the Plan, each Initial Investor agrees that it
shall, severally but not jointly and severally, provide or cause a designee to
provide its pro rata share of a backstop for new bonds, loans or preferred
stock (as determined by the Initial Investor) in an aggregate amount equal to
$1,500,000,000 less the Reinstated Amounts, at a market rate and market
commitment fees, and otherwise on terms and conditions to be mutually agreed
among the Initial Investors and the Company. 
The new bonds, loans or preferred stock would require no mandatory
interim cash principal payments prior to the third anniversary of issuance
(unless funded from committed junior indebtedness or junior preferred stock),
and would yield proceeds to the Company on the Closing Date net of OID of at
least $1,500,000,000 less the Reinstated Amounts.  Any Initial Investor may at any time
designate in writing one or more financial institutions with a corporate
investment grade credit rating (from S&P or Moody’s) to make a substantially
similar undertaking as that provided herein and, upon the receipt of such an
undertaking by the Company in form and substance reasonably satisfactory to the
Company, such Initial Investor shall be released from its obligations under its
applicable Investment Agreement.


 


(b)           For the purposes of Section 6.9(a), the “pro
rata share” or “pro rata basis” of each Initial Investor shall be determined in
accordance with the maximum number of shares of New Common Stock each Initial
Investor has committed to purchase at Closing pursuant to its Investment
Agreement as of the date hereof, but excluding any shares of New Common Stock
the Brookfield Investor or the Pershing Purchasers have committed to purchase
pursuant to Section 6.9 of the other Investment Agreements.”


 


14.   Amendment to Section 7.1(l).  The first sentence of Section 7.1(l) of
the Agreement is hereby amended and restated in its entirety to read as
follows:


 


“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 each Purchaser and
member of the Purchaser Group of the Shares, any securities issued pursuant to Section 6.9(a) and
the New Common Stock issuable upon exercise of the New Warrants, containing a
plan of distribution reasonably satisfactory to each Purchaser.”


 


15.   Amendment to Section 7.1(n).  Section 7.1(n) of the Agreement is
hereby amended and restated in its entirety to read as follows:


 


“Liquidity.  The Company shall have, on the Effective Date
and after giving effect to the use of proceeds from Capital Raising Activities
permitted under this Agreement and the issuance of the Shares, and the payment
and/or reserve for all allowed and disputed claims under the Plan, transaction
fees and other amounts required to be paid in cash or Shares 


 


6

















 


under
the Plan as contemplated by the Plan Summary Term Sheet, an aggregate amount of
not less than $350,000,000 of Proportionally Consolidated Unrestricted Cash
(the “Liquidity Target”) plus, the net proceeds of the Additional
Financings and the aggregate principal amount of the Anticipated Debt Paydowns
(or such higher number as may be agreed to by each Purchaser and the Company).”


 


16.   Amendment to Section 7.1(p).  Section 7.1(p) of the Agreement is
hereby amended to replace “22,100,000,000” therein with “22,250,000,000”.


 


17.   Amendment to Section 7.1(q).  Section 7.1(q) of the Agreement is
hereby amended and restated in its entirety to read as follows:


 


“Outstanding Common
Stock.  The
number of issued and outstanding shares of New Common Stock on a Fully Diluted
Basis (including the Shares) shall not exceed the Share Cap Number.  The “Share Cap Number” means
1,104,683,256 plus up to 65,000,000 shares of New Common Stock issued in
Liquidity Equity Issuances, plus 42,857,143 shares of New Common Stock issuable
upon the exercise of the New Warrants, plus the shares of New Common Stock
issuable upon the exercise of those certain warrants issued to the Brookfield
Consortium Members pursuant to the Brookfield Agreement and to the Pershing
Purchasers pursuant to the Pershing Agreement, plus the number of shares of
Common Stock issued as a result of the exercise of employee stock options to
purchase Common Stock outstanding on the date hereof, plus, in the event shares
of New Common Stock are issued pursuant to Section 6.9(b) of the
other Investment Agreements, the difference between (i) the number of
shares of New Common Stock issued to existing holders of
Common Stock, the Brookfield Investor and the Pershing Purchasers, in each
case, pursuant to Section 6.9(b) of the other Investment Agreements minus (ii) 50,000,000
shares of New Common Stock; provided, that if Indebtedness under the
Rouse Bonds or the Exchangeable Notes is reinstated under the Plan, or the
Company shall have incurred New Debt, or between the date of this Agreement and
the Closing Date the Company shall have sold for cash real property assets
outside of the ordinary course of business (“Asset Sales”), the Share
Cap Number shall be reduced by the quotient (rounded up to the nearest whole
number) obtained by dividing (x) the sum of Reinstated Amounts and the net
cash proceeds to the Company from Asset Sales in excess of $150,000,000 and the
issuance of New Debt by (y) the Per Share Purchase Price.”


 


18.   Amendment to Section 7.1(r)(vi).  Section 7.1(r)(vi) of the Agreement
is hereby amended and restated in its entirety to read as follows:


 


“(vi) none
of the Company or any of its Subsidiaries shall have issued, delivered,
granted, sold or disposed of any Equity Securities (other than (A) issuances
of shares of Common Stock issued pursuant to, and in accordance with, Section 7.1(u),
but subject to Section 7.1(q), (B) pursuant to the Equity
Exchange, (C) the issuance of shares pursuant to the exercise of employee
stock 


 


7

















 


options
issued pursuant to the Company Option Plans, (D) as set forth on Section 7.1(u) of
the Company Disclosure Letter), or (E) the issuance of shares to existing
holders of Common Stock, the Brookfield Investor and the Pershing Purchasers,
in each case, pursuant to Section 6.9(b) of the other Investment
Agreements);”


 


19.   Amendment to Section 7.1(u).  Section 7.1(u) of the Agreement is
hereby amended and restated in its entirety to read as follows:


 


“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 7.1(u) of
the Company Disclosure Letter or (D) the issuance of shares to existing
holders of Common Stock, the Brookfield Investor and the Pershing Purchasers,
in each case, pursuant to Section 6.9(b) of the other Investment
Agreements), unless (1) 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), (2) following such issuance or sale, (x) no
Person (other than (i) an Initial Investor and their respective Affiliates
pursuant to the Investment Agreements and (ii) any institutional
underwriter or initial purchaser acting in an underwriter capacity in an
underwritten offering) shall, after giving effect to such issuance or sale,
beneficially own more than 10% of the Common Stock of the Company on a Fully
Diluted Basis, and (y) no four Persons (other than the Purchasers, members
of the Fairholme Purchaser Group, the members of the Pershing Purchaser Group,
the Brookfield Consortium Members or the Brookfield Investor) shall, after
giving effect to such issuance or sale, beneficially own more than thirty
percent (30%) of the Common Stock on a Fully Diluted Basis; provided,
that this clause (2) shall not be applicable to any conversion or exchange
of claims against the Debtors into New Common Stock pursuant to the Plan; provided,
further, that subclause (y) of this clause (2) shall not be
applicable with respect to any Person listed on Exhibit N and (3) each
Purchaser shall have been offered the right to purchase up to its GGP Pro Rata
Share of 15% of such shares of Common Stock (or securities, warrants or options
that are convertible into or exchangeable or exercisable for Common Stock) on
terms otherwise consistent with Section 5.9 (except the provisions
of such Section 5.9 with respect to issuances contemplated by this Section 7.1(u) shall
apply from the date of this Agreement) (provided that the right
described in this clause 


 


8

















 


(3) shall
not be applicable to the issuance of shares or warrants contemplated by the
other Investment Agreements, or any conversion or exchange of debt or other
claims into equity in connection with the Plan).”


 


20.   Amendment to Section 7.1(w).  Section 7.1(w) of the Agreement is
hereby amended and restated in its entirety to read as follows:


 


“GGO
Promissory Note.  The GGO Promissory
Note, if any, shall have been issued by GGO (or one of its Subsidiaries,
provided that the GGO Promissory Note is guaranteed by GGO) in favor of the
Operating Partnership.”


 


21.   Amendment to Section 8.1(m).  Section 8.1(m) of the Agreement is
hereby amended and restated in its entirety to read as follows:


 


“GGO
Promissory Note.  The GGO Promissory
Note, if any, shall have been issued by GGO (or one of its Subsidiaries,
provided that the GGO Promissory Note is guaranteed by GGO) in favor of the
Operating Partnership.”


 


22.   Amendment to Section 11.1(b)(iii).  Section 11.1(b)(iii) of the
Agreement is hereby amended and restated in its entirety to read as follows:


 


“if, from and after the issuance of the Warrants,
the Approval Order shall without the prior written consent of each Purchaser,
cease to be in full force and effect resulting in the cancellation of any
Warrants or a modification of any Warrants, in each case, other than pursuant
to their terms, that adversely affects any Purchaser;”


 


23.   Amendment to Section 11.1(b)(v).  Section 11.1(b)(v) of the Agreement
is hereby amended by inserting “, in each case, “ before “(A)”.


 


24.   Amendment to Section 11.1(b)(vii).  Section 11.1(b)(vii) of the
Agreement is hereby amended and restated in its entirety to read as follows:


 


“(vii) 
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 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 


 


9

















 


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 7.1(u) of
the Company Disclosure Letter, or (E) the issuance of shares to existing
holders of Common Stock, the Brookfield Investor and the Pershing Purchasers,
in each case, pursuant to Section 6.9(b) of the other Investment
Agreements;”


 


25.   Amendment to Section 12.1.  Section 12.1 of the Agreement is hereby
amended as follows:


 


a.     The definition of “Competing
Transaction” is hereby amended and restated in its entirety to read as
follows:


 


““Competing Transaction”
means, other than the transactions contemplated by this Agreement or the Plan
Summary Term Sheet, or by the other Investment Agreements, any offer or
proposal relating to (i) a merger, consolidation, business combination,
share exchange, tender offer, reorganization, recapitalization, liquidation,
dissolution or similar transaction involving the Company or (ii) any
direct or indirect purchase or other acquisition by a “person” or “group” of “beneficial
ownership” (as used for purposes of Section 13(d) of the Exchange
Act) of, or a series of transactions to purchase or acquire, assets
representing 30% or more of the consolidated assets or revenues of the Company
and its Subsidiaries taken as a whole or 30% or more of the Common Stock of the
Company (or securities convertible into or exchangeable or exercisable for 30%
or more of the Common Stock of the Company) or (iii) any recapitalization
of the Company or the provision of financing to the Company that shall cause
any condition in Section 7.1 not to be satisfied, in each case,
other than the recapitalization and financing transactions contemplated by this
Agreement and the Plan Summary Term Sheet (or the financing provided by the
Initial Investors) or that will be effected together with the transactions
contemplated hereby.”


 


b.     The definition of “Essential
Assets” is hereby deleted in its entirety.


 


c.     The definition of “Excess
Surplus Amount” is hereby amended and restated in its entirety to read as
follows:


 


““Excess
Surplus Amount” means the sum of: (i) if, after giving effect to the
application of the Reserve Surplus Amount to reduce the principal amount of the
GGO Promissory Note pursuant to Section 5.16(d), any Reserve
Surplus Amount remains, (A) if and to the extent that such Reserve Surplus
Amount is less than or equal to the Net Debt Surplus Amount, 80% of such
remaining Reserve Surplus Amount, and otherwise (B) 100% of the remaining
Reserve Surplus Amount; and (ii) (A) if a 


 


10

















 


GGO
Promissory Note is required to be issued at Closing, 80% of the aggregate
Offering Premium, if any, less the amount of any reduction in the principal
amount of the GGO Promissory Note pursuant to Section 5.16(e) hereof,
or (B) if the GGO Promissory Note is not required to be issued at Closing,
the sum of (x) 80% of the aggregate Offering Premium and (y) 80% of
the excess, if any, of the Net Debt Surplus Amount over the Hughes Amount.”


 


d.     The definition of “Excluded
Claims” is hereby amended and restated in its entirety to read as follows:


 


““Excluded
Claims” means:


 


(i) 
prepetition and postpetition Claims secured by cashiers’, landlords’, workers’,
mechanics’, carriers’, workmen’s, repairmen’s and materialmen’s liens and other
similar liens,


 


(ii) 
except with respect to Claims related to GGO or the assets or businesses
contributed thereto, prepetition and postpetition Claims for all ordinary
course trade payables for goods and services related to the operations of the
Company and its Subsidiaries (including, without limitation, ordinary course
obligations to tenants, anchors, vendors, customers, utility providers or
forward contract counterparties related to utility services, employee payroll,
commissions, bonuses and benefits (but excluding the Key Employee Incentive
Plan approved by the Bankruptcy Court pursuant to an order entered on October 15,
2009 at docket no. 3126), insurance premiums, insurance deductibles, self
insured amounts and other obligations that are accounted for, consistent with
past practice prior to the Petition Date, as trade payables); provided, however,
that Claims or expenses related to the administration and conduct of the
Bankruptcy Cases (such as professional fees and disbursements of financial,
legal and other advisers and consultants retained in connection with the
administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy
Cases and other expenses, fees and commissions related to the reorganization
and recapitalization of the Company pursuant to the Plan, including related to
the Investment Agreements, the issuance of the New Debt, Liquidity Equity
Issuances and any other equity issuances contemplated by this Agreement and the
Plan) shall not be Excluded Claims,


 


(iii) 
except with respect to Claims related to GGO or the assets or businesses
contributed thereto, Claims and liabilities arising from the litigation or
potential litigation matters set forth in that certain Interim Litigation
Report of the Company dated March 29, 2010


 


11
















 


and
the Company’s litigation audit response to Deloitte & Touche dated February 25,
2010, both have been made available to each Purchaser prior to close of
business on March 29, 2010 and other Claims and liabilities arising from
ordinary course litigation or potential litigation that was not included in
such schedule solely because the amount of estimated or asserted liabilities or
Claims did not meet the threshold amount used for the preparation of such
schedule, in each case, to the extent that such Claims and liabilities have not
been paid and satisfied as of the Effective Date, are continuing following the
Effective Date, excluding the Hughes Heirs Obligations,


 


(iv) 
except with respect to Claims related to GGO or the assets or businesses
contributed thereto, all tenant, anchor and vendor Claims required to be cured
pursuant to section 365 of the Bankruptcy Code, in connection with the
assumption of an executory contract or unexpired lease under the Plan,


 


(v) 
any deficiency, guaranty or other similar Claims associated with the Special
Consideration Properties (as such term is defined in the plans of
reorganization for the applicable Confirmed Debtors),


 


(vi) 
the MPC Tax Reserve,


 


(vii) 
surety bond Claims relating to Claims of the type identified in clauses (i) through
(vi) of this definition,


 


(viii) GGO
Setup Costs (other than professional fees and disbursements of financial, legal
and other advisers and consultants retained in connection with the
administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy
Cases), and


 


(ix) 
any liabilities assumed by GGO and paid on the Effective Date by GGO or to be
paid after the Effective Date by GGO (for avoidance of doubt, this includes any
Claims that, absent assumption of the liability by GGO, would be a Permitted
Claim).”


 


e.     The definition of “GGO
Promissory Note” is hereby amended and restated in its entirety to read as
follows:


 


““GGO Promissory Note” means an unsecured
promissory note payable by GGO (or one of its Subsidiaries, provided that the
GGO Promissory Note is guaranteed by GGO) in favor of the Operating Partnership
in the aggregate principal amount of the GGO Note Amount, as adjusted pursuant
to Section 5.16(d), Section 5.16(e) 


 


12

















 


and
Section 5.16(g), (i) bearing interest at a rate equal to the
lower of (x) 7.5% per annum and (y) the weighted average effective
rate of interest payable (after giving effect to the payment of any
underwriting and all other discounts, fees and any other compensation) on each
series of New Debt issued in connection with the Plan and (ii) maturing on
the fifth anniversary of the Closing Date (or if such date is not a Business
Day, the next immediately following Business Day), and (iii) including
prohibitions on dividends and distributions, no financial covenants and such
other customary terms and conditions as reasonably agreed to by each Purchaser
and the Company.”


 


f.      The definition of “Permitted
Claims” is hereby amended and restated in its entirety to read as follows:


 


““Permitted Claims” means, as of the
Effective Date, other than Excluded Claims, (a) all Claims against the
Debtors covered by the Plan (the “Plan Debtors”) that are classified in
those certain classes of Claims described in Sections II B through E, G and P
in the Plan Summary Term Sheet (the “PMA Claims”), (b) all Claims
or other amounts required to be paid pursuant to the Plan to indenture trustees
or similar servicing or administrative agents, with respect to administrative
fees incurred by or reimbursement obligations owed to such indenture trustees
or similar servicing or administrative agents in their capacity as such under
the Corporate Level Debt documents, (c) any claims of a similar type as
the PMA Claims that are or have been asserted against affiliates of the Plan
Debtors that are or were debtors in the Bankruptcy Cases and for which a plan
of reorganization has already been consummated (the “Confirmed Debtors”),
and (d) surety bond Claims relating to the types of Claims identified in
clauses (a) through (c) of this definition.”


 


g.     The definition of “Permitted
Claims Amount” is hereby amended and restated in its entirety to read as
follows:


 


““Permitted
Claims Amount” means, as of the Effective Date, an amount equal to the sum
of, without duplication, (a) the aggregate amount of accrued and unpaid
Permitted Claims that have been allowed (by order of the Bankruptcy Court or
pursuant to the terms of the Plan) as of the Effective Date, plus (b) the
aggregate amount of the reserve to be established under the Plan with respect
to accrued and unpaid Permitted Claims that have not been allowed or disallowed
(in each case by order of the Bankruptcy Court or pursuant to the terms of the
Plan) as of the Effective Date, with such aggregate amount to be determined by
the Bankruptcy Court 


 


13

















 


in
the Confirmation Order or such other order as may be entered by the Bankruptcy
Court on or prior to the Effective Date (the “Reserve”), plus (c) the
aggregate amount of the GGO Setup Costs (other than professional fees and
disbursements of financial, legal and other advisers and consultants retained
in connection with the administration and conduct of the Company’s and its
Subsidiaries’ Bankruptcy Cases) as of the Effective Date; provided, however,
that there shall be no duplication with any amounts otherwise included in
Closing Date Net Debt.”


 


h.     The definition of “Proportionally
Consolidated Debt” is hereby amended and restated in its entirety to read
as follows:


 


““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.”


 


i.      The definition of “Reserve
Surplus Amount” is hereby amended and restated in its entirety to read as
follows:


 


““Reserve
Surplus Amount” means, as of any date of determination, (x) the
Reserve minus (y) the aggregate amount paid with respect to Permitted
Claims through such date of determination to the extent such Permitted Claims
were included in the calculation of the Reserve minus (z) any amount
included in the Reserve with respect to Permitted Claims that the Company
Board, based on the exercise of its business judgment and information available
to the Company Board as of the date of determination, considers necessary to
maintain as a reserve against Permitted Claims yet to be paid.”


 


26.   Amendment to Section 13.10.  Section 13.10
of the Agreement is hereby amended by adding at the end thereof the following
new sentence:


 


14

















 


“If a transaction results
in any adjustment to the exercise price for and number of Shares underlying the
Warrants pursuant to Article 5 of the Warrant Agreement, the exercise
price for and number of shares underlying each of the New Warrants and GGO
Warrants described in Section 5.2 of this Agreement shall be
adjusted for that transaction in the same manner.”


 


27.   No Further Amendment.  Except as expressly amended hereby, the
Agreement is in all respects ratified and confirmed and all the terms,
conditions, and provisions thereof shall remain in full force and effect. This
Amendment is limited precisely as written and shall not be deemed to be an
amendment to any other term or condition of the Agreement or any of the
documents referred to therein.


 


28.   Effect of Amendment.  This Amendment shall form a part of the
Agreement for all purposes, and each party thereto and hereto shall be bound
hereby. From and after the execution of this Amendment by the parties hereto,
any reference to the Agreement shall be deemed a reference to the Agreement as
amended hereby. This Amendment shall be deemed to be in full force and effect
from and after the execution of this Amendment by the parties hereto.


 


29.   Governing Law; Venue. THIS
AMENDMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND BOTH PARTIES WAIVE ANY OBJECTION BASED ON
FORUM NON CONVENIENS.


 


30.   Counterparts. This
Amendment 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.


 


31.   Construction.


 


a.     Unless otherwise
specifically defined herein, each term used herein shall have the meaning
assigned to such term in the Agreement.


 


b.     Each reference to “hereof,” “herein,”
“hereunder,” “hereby” and “this Agreement” shall, from and after the date
hereof, refer to the Agreement as amended by this Amendment.  Notwithstanding the foregoing, references to
the date of the Agreement, as amended hereby, shall in all instances continue
to refer to March 31, 2010, references to “the date hereof” and “the date
of this Agreement” shall continue to refer to March 31, 2010.


 


15

















 


c.     The headings in this
Amendment are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Amendment.


 


32.   Bankruptcy Matters. For the
avoidance of doubt, all obligations of the Company and its Subsidiaries in this
Amendment are subject to and conditioned upon entry of the Approval Order or
the Confirmation Order as provided for in Section 13.12 of the Agreement.


 


[Signature Page Follows]


 


16

















 


IN WITNESS WHEREOF, the undersigned have caused this
Amendment 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:
  

  	
  /s/
  Thomas H. Nolan Jr.

  
	
   

  	
   

  	
  Name:
  Thomas H. Nolan Jr.

  
	
   

  	
   

  	
  Title:
  President & COO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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
AMENDMENT NO. 1]