Document:

Exhibit 10.9

 

EXECUTION COPY

 

THE HOWARD HUGHES CORPORATION

 

November 9, 2010

 

Brookfield
Retail Holdings LLC

c/o
Brookfield Asset Management Inc.

Brookfield
Place, Suite 300

181
Bay Street

P.O. Box
762

Toronto,
Ontario M5J 2T3

Canada

Attention: Joseph Freedman

 

Ladies
and Gentlemen:

 

Reference is made to the Amended and Restated Cornerstone Investment
Agreement (the “Cornerstone Agreement”), effective as of March 31,
2010, as amended, between General Growth Properties, Inc. and Brookfield
Retail Holdings (formerly known as REP Investments LLC) (“Purchaser”),
an affiliate of Brookfield Asset Management Inc.  Capitalized terms used but not otherwise
defined in this letter agreement (this “Agreement”) shall have the
meanings attributed to such terms in the Cornerstone Agreement as in effect on
the date hereof.

 

Pursuant to the terms of the Cornerstone Agreement and the Plan, The
Howard Hughes Corporation (“THHC”) and Purchaser hereby agree as
follows:

 

1.                                       Subscription
Right.

 

(i)                                     Sale
of New Equity Securities.  Following the date hereof, Purchaser shall
have the right, or shall at any time and from time to time have the right to
appoint Brookfield Consortium Members in accordance with and subject to the
Designation Conditions and subject to such Brookfield Consortium Members
agreeing in writing for the benefit of THHC to be bound by the terms of Section 4
hereof, to exercise the Subscription Right (as defined below) set forth in this
Section 1 (Purchaser or one or more Brookfield Consortium Members,
each a “Subscribing Entity” and collectively the “Subscribing
Entities”).  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
such Persons providing THHC or its Subsidiaries with loans, credit lines, cash
price reductions or similar transactions, under arm’s-length arrangements) (the
“Proposed Securities”), the Subscribing Entities 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 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 the Subscribing Entities
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
Purchaser and Brookfield Consortium Members 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 the Subscribing Entities
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 each Subscribing Entity 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 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. 
The Subscribing Entity 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 the
Subscribing Entity 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 the Subscribing Entity may specify and, with respect to
other offerings, such notice shall constitute a binding commitment of the
Subscribing Entity to purchase the amount of Proposed Securities so specified
at the price and other terms set forth in THHC’s notice to such Subscribing
Entity.  The failure of the Subscribing
Entity to so

 

 

respond within such three (3) Business
Day period shall be deemed to be a waiver of the 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, the Subscribing Entity shall further enter
into an agreement (in form and substance customary for transactions of this
type) to purchase the Proposed Securities to be acquired 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 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 the
Subscribing Entity 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 the Subscribing Entity 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) the Subscribing Entity fails to exercise its Subscription Right
provided in this Section 1 within said three (3) Business Day
period, or (B) if so exercised, the Subscribing Entity 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 the Subscribing Entity 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 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 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 Purchaser shall cooperate in good
faith to facilitate the exercise of the Subscribing Entity’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) the Subscribing Entity 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 the Brookfield Consortium Members are entitled to Subscription
Rights would materially impair the financing objective of such offering, THHC
may proceed with such offering without the participation of Purchaser in such
offering, in which event THHC and Purchaser shall promptly thereafter agree on
a process otherwise consistent with this Section 1 as would allow
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 Purchaser to maintain its
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 the
Brookfield Consortium Members are entitled to Subscription Rights, THHC shall
be permitted by notice to the Subscribing Entity 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 the Subscribing Entity shall have the right to either (x) exercise
its 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 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 Purchaser to maintain its 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 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 the Subscribing
Entity, 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 the Subscribing Entity was able to effectively
exercise its Subscription Rights hereunder, including, at the option of the
Subscribing Entity, issuing to the Subscribing Entity another class of
securities of THHC having terms to be agreed by THHC and Purchaser having a
value at least equal to the value per share of GGO Common Stock, in each case,
as shall be necessary to enable 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 Purchaser together with the Brookfield Consortium Members
collectively beneficially own less than 5% of the outstanding shares of GGO
Common Stock on a Fully Diluted Basis.

 

2.                                       Board of
Directors.

 

(i)                                     As of the date
hereof, the GGO Board shall have nine (9) members and one (1) of such
members shall be a person designated by Purchaser (the “Purchaser GGO Board
Designee”).

 

(ii)                                  THHC shall nominate one (1) Purchaser GGO Board Designee as part of its slate of
directors and use its reasonable best efforts to have him or her elected to the
Board (including through the solicitation of proxies for such person to the
same extent as it does for any of its other nominees to the Board) (subject to
applicable Law and stock exchange rules (provided that the Purchaser GGO
Board Designee need not be “independent” under the applicable rules of the
applicable stock exchange or the SEC)) so
long as Purchaser and the Brookfield Consortium Members beneficially own (directly or indirectly) in the aggregate at least 10% of the
shares of GGO Common Stock on a Fully Diluted Basis.  For the avoidance of doubt, at and following
such time as Purchaser and the Brookfield Consortium Members beneficially own
(directly or indirectly) in the aggregate less than 10% of the shares of GGO
Common Stock on a Fully Diluted Basis, Purchaser and the Brookfield Consortium
Members shall no longer have the right to designate any director for election
to the Board.

 

(iii)                               Subject to
applicable Law and stock exchange rules, there shall be proportional
representation by the Purchaser GGO Board Designee on any committee of the
Board, except for special committees established for potential conflict of
interest situations involving any Brookfield Consortium Member or any Affiliate
thereof, and except that the Purchaser GGO Board Designee may serve on
committees where qualification under the applicable rules of the
applicable stock exchange or the SEC are required only if the Purchaser GGO
Board Designee so qualifies.  If at any
time Purchaser is no longer entitled to designate the Purchaser GGO Board
Designee as a result of a decrease in the percentage of shares of GGO Common
Stock beneficially owned by Purchaser and the Brookfield Consortium Members,
Purchaser shall, to the extent it is within Purchaser’s control, use
commercially reasonable efforts to cause any such Purchaser GGO Board Designee
to offer to resign.

 

(iv)                              Except with
respect to the resignation of the Purchaser GGO Board Designee pursuant to Section 2(iii),
(A) Purchaser shall have the power to designate the Purchaser GGO Board
Designee’s replacement upon the death, resignation, retirement,
disqualification or removal from office of such Purchaser GGO Board Designee
and (B) the Board shall promptly
take all action reasonably required to fill any vacancy resulting therefrom
with such replacement Purchaser GGO Board Designee (including nominating such
person, subject to applicable Law, as THHC’s nominee to serve on the Board and causing THHC to use all reasonable efforts to
have such person elected as a director of THHC and solicit proxies for such
person to the same extent as it does for any of THHC’s other nominees to the Board).

 

 

(v)                                 (A) The
Purchaser GGO Board Designee shall be entitled to the same compensation and
same indemnification in connection with his or her role as a director as the
members of the Board, and the
Purchaser GGO Board Designee shall be entitled to reimbursement for documented,
reasonable out-of-pocket expenses incurred in attending meetings of the Board or any committees thereof, to the same extent as
other members of the Board, (B) THHC
shall notify the Purchaser GGO Board Designee of all regular and
special meetings of the Board and shall
notify the Purchaser GGO Board Designee of all regular and special meetings of
any committee of the Board of which the
Purchaser GGO Board Designee is a member, and (C) THHC shall provide the
Purchaser GGO Board Designee with copies of all notices, minutes, consents and
other materials provided to all other members of the Board concurrently as such materials are provided to the
other members (except, for the avoidance of doubt, as are provided to members
of committees of which the Purchaser GGO Board Designee is not a member).

 

(vi)                              Purchaser GGO
Board Designee candidates shall be subject to such reasonable eligibility
criteria as applied in good faith by the nominating, corporate governance or
similar committee of the Board to other candidates for the Board.

 

3.                                       Stockholder
Vote With Respect to Subscription Right.  THHC shall, for the benefit of 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 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 Purchaser’s subscription rights for the maximum period permitted by
the rules of such U.S. national securities exchange.

 

4.                                       Transfer
Restrictions.  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. 
Purchaser agrees to the imprinting, so long as is required by this Section 4,
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 Purchaser that the remaining GGO
Shares held by 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 Purchaser to
THHC of a legended certificate representing such GGO Shares, deliver or cause
to be delivered to 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 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.

 

Purchaser
shall not sell, transfer or dispose of (each, a “Transfer”) (x) GGO
Shares, GGO Warrants, or shares issuable upon exercise of the GGO Warrants
during the period from and after the Closing Date to the six (6) month
anniversary of the Closing Date, (y) in excess of (A) 8.25% of the
GGO Shares and (B) 8.25% of the GGO Warrants or the shares issuable upon
exercise of the GGO Warrants, in the aggregate, during the period from and
after the six (6) month anniversary of the Closing Date to the one (1) year
anniversary of the Closing Date and (z) in excess of (A) 16.5% of the
GGO Shares and (B) 16.5% of the GGO Warrants or the shares issuable upon
exercise of the GGO Warrants, in the aggregate (and taken together with any
Transfers effected under clause (y)), during the period from and after the six (6) month
anniversary of the Closing Date to the eighteen (18) month anniversary of the
Closing Date.  For clarity, Purchaser
shall not be restricted from Transferring any GGO Shares, GGO Warrants, or
shares issuable upon exercise of the GGO Warrants from and after the eighteen
(18) month anniversary of the Closing Date.

 

Notwithstanding
anything herein to the contrary, Purchaser shall be permitted to Transfer any
portion or all of its GGO Shares, the GGO Warrants and the shares of GGO Common
Stock issuable upon exercise of the GGO Warrants at any time under the
following circumstances (provided, that none of Purchaser’s rights and
benefits under this Agreement shall inure to the benefit of any transferee
under clause (ii) or (iii) below):

 

 

(i)                                     Transfers to
any Affiliate of Purchaser, any member of Purchaser, any Brookfield Consortium
Member and any member, partner or shareholder or any Affiliate of any
Brookfield Consortium Member, in accordance with and subject to the Designation
Conditions and subject to the transferee agreeing in writing for the benefit of
THHC to be bound by the terms of this Section 4.

 

(ii)                                  Transfers
pursuant to a merger or tender offer or exchange offer involving THHC in which
any Person acquires more than 50% of the outstanding GGO Common Stock on a
Fully Diluted Basis.

 

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

 

For
the avoidance of doubt, Purchaser’s rights to designate for nomination the
Purchaser GGO Board Designee pursuant to Section 2 and Subscription
Rights pursuant to Section 1 may not be Transferred to a Person
that is not a Brookfield Consortium Member.

 

Purchaser
agrees to the imprinting of a legend referencing the above transfer
restrictions on any certificate evidencing the GGO Shares (and shares issuable
upon exercise of GGO Warrants).  In
connection with any transfer of the GGO Shares (and shares issuable upon
exercise of GGO Warrants), THHC shall remove such legends from such
certificates to the extent the transferee thereof is not bound by such transfer
restrictions.

 

5.                                       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 Cornerstone Agreement, this Agreement and the transactions contemplated
thereby and hereby, (ii) neither Purchaser, nor any Brookfield Consortium
Member, 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 Cornerstone Agreement or this Agreement or the consummation
of the transactions contemplated thereby and hereby including the acquisition
of shares of GGO Common Stock by Purchaser and any Brookfield Consortium Member
after the date hereof as otherwise permitted by the Cornerstone Agreement and
this Agreement, or the GGO Warrants.

 

6.                                       Assignment;
Third Party Beneficiaries. 
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement may be assigned by any party without the prior written
consent of the other party. 
Notwithstanding the previous sentence, this Agreement, or Purchaser’s
rights, interests or obligations hereunder, may be assigned or transferred, in
whole or in part, by Purchaser to Brookfield Consortium Members; provided,
that any such assignee assumes the obligations of Purchaser hereunder and
agrees in writing to be bound by the terms of this Agreement in the same manner
as Purchaser and the Designation Conditions are otherwise satisfied.  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.

 

7.                                       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.

 

8.                                       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.

 

9.                                       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.

 

10.                                 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.

 

11.                                 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 BRH
LETTER AGREEMENT]

 

 

Accepted and agreed as of the date of this Agreement:

 

BROOKFIELD
RETAIL HOLDINGS LLC

 

	
  By:

  	
  Brookfield
  Asset Management Private Institutional

  	
   

  
	
   

  	
  Capital
  Adviser (Canada), L.P., its Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Brookfield
  Private Funds Holdings Inc.,

  	
   

  
	
   

  	
  its
  general partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Karen Ayre

  	
   

  
	
  Name:

  	
  Karen
  Ayre

  	
   

  
	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Moshe Mandelbaum

  	
   

  
	
  Name:

  	
  Moshe
  Mandelbaum

  	
   

  
	
  Title:

  	
  Vice
  President

  	
   

  
				

 

[SIGNATURE PAGE TO BRH
LETTER AGREEMENT]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]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]