Document:

Exhibit
10.1

 

EXECUTION
COPY

 

AMENDMENT NO. 1 TO CORNERSTONE INVESTMENT AGREEMENT

 

AMENDMENT NO. 1 (this “Amendment”), dated as of May 3,
2010, to the Cornerstone Investment Agreement, dated as of March 31, 2010
(the “Agreement”), by and between General Growth Properties, Inc.,
a Delaware corporation (“GGP”), and REP Investments LLC, a Delaware
limited liability company (together with its permitted assigns, “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 Fairholme Agreement in the form attached hereto as Exhibit A
with the Fairholme Investors;

 

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

 

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
to the Recitals.  The ninth
and tenth recitals of the Agreement are hereby amended and restated in their
entirety to read as follows:

 

“WHEREAS, on the date hereof, the
Company entered into an agreement (in the form attached hereto as Exhibit C-1
together with any amendments thereto as have been approved by Purchaser, the “Fairholme
Agreement”) with The Fairholme Fund and The Fairholme Focused Income Fund
(the “Fairholme Investors”) pursuant to which the Fairholme Investors
have agreed to make (i) an investment of up to $2,714,285,710 in the Reorganized
Company in the form of the purchase of shares of New Common Stock and (ii) an
investment of up to $62,500,000 in GGO in the 

 

 

form of the purchase of shares of GGO Common Stock pursuant to a
commitment to backstop a portion of the GGO Rights Offering.

 

WHEREAS, on the date hereof, the Company entered into an
agreement (in the form attached hereto as Exhibit C-2 together with
any amendments thereto as have been approved by Purchaser, the “Pershing
Agreement” and, together with the Fairholme Agreement, the “Fairholme/Pershing
Agreements”) with Pershing Square, L.P., Pershing Square II, L.P., Pershing
Square International, Ltd. and Pershing Square International V, Ltd. (the “Pershing
Investors” and, together with the Fairholme Investors, the “Fairholme/Pershing
Investors”) pursuant to which the Pershing Investors have agreed to make (i) an
investment of up to $1,085,714,290 in the Reorganized Company in the form of
the purchase of shares of New Common Stock and (ii) an investment of up to
$62,500,000 in GGO in the form of the purchase of shares of GGO Common Stock
pursuant to a commitment to backstop a portion of the GGO Rights Offering.”

 

5.               Amendment
to Section 2.1(a). 
Clause (i) of Section 2.1(a) of the Agreement is hereby
amended and restated in its entirety to read as follows:

 

“(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”

 

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

 

“Subject
to Section 5.13(b), the GGO Common Share Amount of shares of GGO
Common Stock, representing all of the outstanding capital stock of GGO (other
than shares of GGO Common Stock to be issued (x) in the GGO Rights
Offering, (y) in connection with the Backstop Consideration and the
backstop consideration issuable to the Fairholme/Pershing Investors pursuant to
the Fairholme/Pershing Agreements and (z) upon exercise of the GGO
Warrants and the warrants issued to the Fairholme/Pershing Investors pursuant
to the Fairholme/Pershing Agreements), shall be distributed, on or prior to the
Effective Date, to the

 

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shareholders
of the Company (pre-issuance of the Shares) on a pro rata basis and certain
holders of common UPREIT Units (the “GGO Share Distribution”).”

 

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:

 

“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 Purchaser) (the “Warrant Agreement”)
pursuant to which there will be issued to Purchaser 60,000,000 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 Purchaser (i) 60,000,000
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) 40,000,000 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. 
Purchaser, in its sole discretion, may designate that some or all of the
New Warrants or GGO Warrants be issued in the name of, and delivered to, one or

 

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more
Brookfield Consortium Members in accordance with and subject to the Designation
Conditions.”

 

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).”

 

11.         Amendments to Section 5.17(d).  Section 5.17(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.         Amendments to Section 6.4.

 

a.               The sixth paragraph of Section 6.4
of the Agreement is hereby deleted in its entirety.

 

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b.              The seventh paragraph of Section 6.4
of the Agreement is hereby amended by replacing “Transfer (x)” with “sell,
transfer or dispose of (each, a “Transfer”) (x)”.

 

c.               The ninth paragraph of Section 6.4
of the Agreement is hereby amended by inserting “(but subject to the
Non-Control Agreement)” after the word “contrary” therein.

 

13.         Amendments to Article VI.  Article VI of the
Agreement is hereby amended by adding at the end thereof the following new Section 6.9:

 

“SECTION 6.9.   Additional
Backstops.

 

(a)           The
Company may, at its option, include in the Plan an offering (the “GGP
Backstop Rights Offering”) to its then-existing holders of Common Stock of
rights to purchase New Common Stock on the Effective Date in an amount
sufficient to yield to the Company aggregate net proceeds on the Effective Date
of up to $500,000,000 or such lesser amount as the Company may determine (the “GGP
Backstop Rights Offering Amount”). 
In connection with the GGP Backstop Rights Offering:

 

(i)            Purchaser
and the Pershing Investors (together with the Purchaser, the “Backstop
Investors”) and the Company shall appoint a mutually-acceptable and
internationally-recognized investment bank to act as bookrunning dealer-manager
for the GGP Backstop Rights Offering (the “Dealer Manager”) pursuant to
such arrangements as they may mutually agree;

 

(ii)           the
Dealer Manager will, no later than the fifth business day in advance of the
commencement of the solicitation of votes on the Plan and offering of rights in
the GGP Backstop Rights Offering (which shall not be longer than 60 days),
recommend in writing to the Backstop Investors and the Company the number of
shares of New Common Stock that may be purchased for each share of Common
Stock, the subscription price of such purchase and the other terms for the
rights offering that the Dealer Manager determines are reasonably likely to
yield committed proceeds to the Company at the Effective Date equal to the GGP
Backstop Rights Offering Amount (it being understood that the Dealer Manager
will have no liability if it is later determined that its good faith
determination was erroneous);

 

(iii)          the
Backstop Investors agree, severally but not jointly and severally, to
subscribe, or cause one or more designees to subscribe, for New Common Stock on
a pro rata basis to the extent rights are declined by holders of Common Stock,
subject to the subscription rights among the Backstop Investors set forth in
clause (iv);

 

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(iv)          the
Backstop Investors will have subscription rights in any such offering allowing
them to maintain their respective proportionate pro forma New Common Stock
-equivalent interests on a Fully Diluted Basis with the effect that the
Backstop Investors will be assured of the ability to acquire such number of
shares of New Common Stock as would have been available to them pursuant to Section 5.9
had the GGP Backstop Rights Offering been made after the Closing;

 

(v)           the
Backstop Investors will receive aggregate compensation in the form of New
Common Stock (whether or not the backstop commitments are utilized) with a
value equal to three percent (3%) of the GGP Backstop Rights Offering Amount;
and

 

(vi)          the
amount of New Common Stock to be purchased pursuant to the GGP Backstop Rights
Offering will be subject to reduction to the extent that either (A) the
Company Board determines in its business judgment after consultation with the
Backstop Investors that it has sufficient liquidity and working capital
available to it in light of circumstances at the time and the costs and
benefits to the Company of consummation of the GGP Backstop Rights Offering or (B) the
Backstop Investors have agreed that they will provide to the Company, in lieu
of the GGP Backstop Rights Offering, the Bridge Securities contemplated in
clause (b) below.

 

(b)           The Company shall give each Backstop
Investor written notice of its estimate of the amount the Backstop
Investors will be required to fund pursuant to Section 6.9(a) no later than six (6) Business Days
prior to the Closing Date.  If each
Backstop Investor agrees, the Backstop Investors shall have two (2) Business
Days from the date of receipt of such notice to notify the Company in writing
that they intend to elect to purchase from the Company in lieu of all or part
of the proceeds to be provided by the GGP Backstop Rights Offering its pro rata
portion of senior subordinated unsecured notes and/or preferred stock
instruments (at the election of the Backstop Investors) on market terms except
as provided below (the “Bridge Securities”).  The Bridge Securities would have a final
maturity date, in the case of a note, and a mandatory redemption date, in the
case of preferred stock, on the 270th day after the Effective Date, would not
require any mandatory interim cash distributions except as contemplated in (i) below,
and would yield to the Company on the Closing Date cash proceeds (net of OID)
of at least the proceeds from the GGP Backstop Rights Offering that such Bridge
Securities are intended to replace.  The
Bridge Securities would be subordinated in right of payment to any New Debt,
would have market coupon and fees, would allow for any interest due prior to
maturity to be “paid in kind” (rather than paid in cash) at the election of the
Company, would be prepayable, without any prepayment penalty or prepayment
premium, on a pro rata basis at any time, and would otherwise be on market
terms (determined such that fair value of the Bridge Securities as of the
Effective Date is equal to par minus OID).

 

6

 

If the GGP Backstop Rights Offering is
completed or the Bridge Securities are issued:

 

(i)            unless
the Backstop Investors otherwise agree, the Bridge Securities shall be subject
to mandatory prepayment on a pro rata basis out of the proceeds of any equity
or debt securities offered or sold by the Company at any time the Bridge
Securities are outstanding (other than the New Common Stock sold to the
Backstop Investors, any New Common Stock sold in the GGP Backstop Rights
Offering and the New Debt); and

 

(ii)           if
the Bridge Securities are issued and not repaid on or before the date that is
thirty (30) days following the Effective Date, the Company shall conduct a
rights offering in an amount equal to the outstanding amount due with respect
to the Bridge Securities and with a pro rata backstop by each applicable
Backstop Investor on substantially the same procedure and terms provided in
clause (a) above, with such rights offering to have a subscription period
of not more than 30 days that ends no later than the 10th day prior to the
final maturity date or mandatory redemption of the Bridge Securities.

 

(c)           If
the Company requests Purchaser and the Fairholme/Pershing Investors
(collectively, 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 this Agreement, the
Fairholme Agreement or the Pershing Agreement, as applicable.

 

(d)           For the purposes of Section 6.9(a) and
Section 6.9(b), the “pro rata share” or “pro rata basis” of each
Backstop Investor shall be determined in accordance with the maximum number of
shares of New Common Stock each Backstop Investor has committed to purchase at
Closing pursuant to the Pershing Agreement or this Agreement, as applicable, as
of the date hereof, in relation to 

 

7

 

the aggregate
maximum number of shares of New Common Stock all Backstop Investors have
committed to purchase at Closing pursuant to the Pershing Agreement or this
Agreement, as applicable, as of the date hereof.  For the purposes of Section 6.9(c),
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 the
Fairholme/Pershing Agreements or this Agreement, as applicable, as of the date
hereof, but excluding any shares of New
Common Stock the Backstop Investors have committed to purchase pursuant to this
Section 6.9.”

 

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

 

“GGO Common Stock.  GGO shall not have issued and outstanding on
a Fully Diluted Basis immediately following the Closing more than (i) the
GGO Common Share Amount of shares of GGO Common Stock (plus (A) a number
of shares of GGO Common Stock equal to the sum of the Backstop Consideration
and the backstop consideration issuable to the Fairholme/Pershing Investors
pursuant to the other Fairholme/Pershing Agreements, (B) such shares of
GGO Common Stock issuable upon exercise of the GGO Warrants pursuant to Section 5.2,
(C) such shares of GGO Common Stock issuable upon the exercise of warrants
that may be issued to the Fairholme/Pershing Investors pursuant to the
Fairholme/Pershing Agreements), plus (ii) if the GGO Rights Offering shall
have occurred, 50,000,000 shares of GGO Common Stock issued pursuant to the GGO
Rights Offering in accordance with this Agreement.”

 

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 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 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”.

 

8

 

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 60,000,000 shares of New Common Stock issuable upon the
exercise of the New Warrants, plus 60,000,000 shares of New Common Stock
issuable upon the exercise of those certain warrants issued to the
Fairholme/Pershing Investors pursuant to the Fairholme/Pershing Agreements,
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),
the difference between (i) the number of shares of New Common Stock issued
to existing holders of Common Stock and the Initial Investors, in each case,
pursuant to Section 6.9(b)) 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 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
and the Initial Investors, in each case, pursuant to Section 6.9(b));”

 

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 

 

9

 

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 and the Initial Investors, in each case, pursuant to Section 6.9(b)),
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) Purchaser, Brookfield Consortium Members, the
Fairholme/Pershing Investors and their respective Affiliates 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
Purchaser, Brookfield Consortium Members, the Fairholme/Pershing Investors and
their respective Affiliates) 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) Purchaser shall have
been offered the right to purchase up to 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 (3) shall not be applicable to the issuance of shares or warrants
contemplated by the Fairholme/Pershing 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:

 

10

 

“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 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 and the Initial Investors, in each case, pursuant to Section 6.9(b));”

 

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 

 

11

 

the Fairholme/Pershing
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 Fairholme/Pershing Investors pursuant to the Fairholme/Pershing Agreements)
or that will be effected together with the transactions contemplated hereby.”

 

b.              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 5.17(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 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 5.17(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.”

 

c.               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,

 

12

 

(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
this Agreement, the Pershing/Fairholme 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 and the Company’s litigation
audit response to Deloitte & Touche dated February 25, 2010, both
have been made available to 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 

 

13

 

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).”

 

d.              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 5.17(d), Section 5.17(e) and
Section 5.17(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 Purchaser and
the Company.”

 

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

 

14

 

““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.”

 

f.                 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 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.”

 

g.              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 

 

15

 

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.”

 

h.              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 13.2.  Section 13.2 of the Agreement is hereby
amended to replace “Indemnified Parties” therein with “Indemnified Persons”.

 

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

 

“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.”

 

28.         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.

 

16

 

29.         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.

 

30.         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.

 

31.         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.

 

32.         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.

 

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.

 

33.         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]

 

17

 

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REP
  INVESTMENTS 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/
  Brett Fox

  
	
   

  	
   

  	
   

  	
  Name:
  Brett Fox

  
	
   

  	
   

  	
   

  	
  Title:
  General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Moshe Mandelbaum

  
	
   

  	
   

  	
   

  	
  Name:
  Moshe Mandelbaum

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  

 

[signature page to amendment no. 1]Exhibit
10.2

 

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 Pershing Square
Capital Management, L.P. (“PSCM”), on behalf of Pershing Square, L.P., a
Delaware limited partnership, Pershing Square II, L.P., a Delaware limited
partnership, Pershing Square International, Ltd. a Cayman Islands exempted
company and Pershing Square International V, Ltd., a Cayman Islands exempted
company, (each, except PSCM, 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 Fairholme Agreement in the form attached hereto as Exhibit A
with the Fairholme 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
to Section 1.1(e).  Section 1.1(e) of
the Agreement is hereby amended and restated in its entirety to read as
follows:

 

“The obligations of each
Purchaser hereunder shall be determined as follows: PSCM will deliver written
notice to the Company on or before the 20th day following execution of this
Agreement wherein PSCM will designate the “GGP Pro Rata Share” and the “GGO Pro
Rata Share” for each Purchaser; provided that the aggregate GGP Pro Rata
Share of the Purchasers shall equal the quotient of

 

 

1.0 divided by 3.5 and the
aggregate GGO Pro Rata Share of the Purchasers shall equal 50%.  If PSCM
fails to make such allocations to Purchasers that are reasonably creditworthy
in light of the allocation, each Purchaser (other than Pershing Square
International, Ltd. and Pershing Square International V, Ltd.) will be bound
jointly and severally hereby, and Pershing Square International Ltd. and
Pershing Square International V, Ltd. shall unconditionally guarantee the
performance hereunder of the other Purchasers.”

 

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

 

2

 

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 each Purchaser to serve as a representative of GGO
(the “GGO Representative”) and shall contribute to GGO (directly or
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 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.”

 

3

 

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:

 

“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 PSCM 17,142,857 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) 17,142,857 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.  PSCM, in its sole
discretion, may designate that some or all of the New Warrants or GGO Warrants
be issued in the name of, and delivered to, any member of the Purchaser Group
in accordance with and subject to the Designation Conditions.”

 

4

 

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).”

 

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, each Purchaser and the other members of the Purchaser Group
will enter into a customary ‘lock-up’ agreement with respect to third-party
sales of New Common Stock for a period of time not to exceed 120 days to the
extent

 

5

 

reasonably
requested by the managing underwriter in connection with such offering.”

 

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.]”

 

“SECTION 6.9.   Additional
Backstops.

 

(a)           The Company may, at its option,
include in the Plan an offering (the “GGP Backstop Rights Offering”) to
its then-existing holders of Common Stock of rights to purchase New Common
Stock on the Effective Date in an amount sufficient to yield to the Company
aggregate net proceeds on the Effective Date of up to $500,000,000 or such
lesser amount as the Company may determine (the “GGP Backstop Rights
Offering Amount”).  In connection
with the GGP Backstop Rights Offering:

 

(i)            Each Purchaser and the Brookfield
Investor (together with the Purchaser, the “Backstop Investors”) and the
Company shall appoint a mutually-acceptable and internationally-recognized
investment bank to act as bookrunning dealer-manager for the GGP Backstop
Rights Offering (the “Dealer Manager”) pursuant to such arrangements as
they may mutually agree;

 

(ii)           the Dealer Manager will, no later
than the fifth business day in advance of the commencement of the solicitation
of votes on the Plan and offering of rights in the GGP Backstop Rights Offering
(which shall not be longer than 60 days), recommend in writing to the Backstop
Investors and the Company the number of shares of New Common Stock that may be
purchased for each share of Common Stock , the subscription price of such
purchase and the other terms for the rights offering that the Dealer Manager
determines are reasonably likely to yield committed proceeds to the Company at
the Effective Date equal to the GGP Backstop Rights Offering Amount (it being
understood that the Dealer Manager will have no liability if it is later
determined that its good faith determination was erroneous);

 

(iii)          the Backstop Investors agree,
severally but not jointly and severally, to subscribe, or cause one or more
designees to subscribe, for New Common Stock on a pro rata basis to the extent
rights are declined by holders of Common Stock, subject to the subscription
rights among the Backstop Investors set forth in clause (iv);

 

(iv)          the Backstop Investors will have
subscription rights in any such offering allowing them to maintain their
respective proportionate pro forma New Common Stock-equivalent interests on a
Fully Diluted Basis with the effect that the Backstop Investors will be assured
of the ability to acquire such number of

 

6

 

shares of New Common
Stock as would have been available to them pursuant to Section 5.9
had the GGP Backstop Rights Offering been made after the Closing;

 

(v)           the Backstop Investors will receive
aggregate compensation in the form of New Common Stock (whether or not the
backstop commitments are utilized) with a value equal to three percent (3%) of
the GGP Backstop Rights Offering Amount; and

 

(vi)          the amount of New Common Stock to be
purchased pursuant to the GGP Backstop Rights Offering will be subject to
reduction to the extent that either (A) the Company Board determines in
its business judgment after consultation with the Backstop Investors that it
has sufficient liquidity and working capital available to it in light of
circumstances at the time and the costs and benefits to the Company of
consummation of the GGP Backstop Rights Offering or (B) the Backstop
Investors have agreed that they will provide to the Company, in lieu of the GGP
Backstop Rights Offering the Bridge Securities contemplated in clause (b) below.

 

(b)           The Company shall give each Backstop
Investor written notice of its estimate of the amount the Backstop Investors
will be required to fund pursuant to Section 6.9(a) no later
than six (6) Business Days prior to the Closing Date.  If each Backstop Investor agrees, the
Backstop Investors shall have two (2) Business Days from the date of
receipt of such notice to notify the Company in writing that they intend to
elect to purchase from the Company in lieu of all or part of the proceeds to be
provided by the GGP Backstop Rights Offering its pro rata portion of senior
subordinated unsecured notes and/or preferred stock instruments (at the
election of the Backstop Investors) on market terms except as provided below
(the “Bridge Securities”).  The
Bridge Securities would have a final maturity date, in the case of a note, and
a mandatory redemption date, in the case of preferred stock, on the 270th day
after the Effective Date, would not require any mandatory interim cash
distributions except as contemplated in (i) below, and would yield to the
Company on the Closing Date cash proceeds (net of OID) of at least the proceeds
from the GGP Backstop Rights Offering that such Bridge Securities are intended
to replace.  The Bridge Securities would
be subordinated in right of payment to any New Debt, would have market coupon
and fees, would allow for any interest due prior to maturity to be “paid in
kind” (rather than paid in cash) at the election of the Company, would be
prepayable, without any prepayment penalty or prepayment premium, on a pro rata
basis at any time, and would otherwise be on market terms (determined such that
fair value of the Bridge Securities as of the Effective Date is equal to par
minus OID).

 

If the GGP Backstop
Rights Offering is completed or the Bridge Securities are issued:

 

(i)            unless the Backstop Investors
otherwise agree, the Bridge Securities shall be subject to mandatory prepayment
on a pro rata basis out of the

 

7

 

proceeds of any equity or
debt securities offered or sold by the Company at any time the Bridge
Securities are outstanding (other than the New Common Stock sold to the
Backstop Investors, any New Common Stock sold in the GGP Backstop Rights
Offering and the New Debt); and

 

(ii)           if the Bridge Securities are issued
and not repaid on or before the date that is thirty (30) days following the
Effective Date, the Company shall conduct a rights offering in an amount equal
to the outstanding amount due with respect to the Bridge Securities and with a
pro rata backstop by each applicable Backstop Investor on substantially the
same procedure and terms provided in clause (a) above, with such rights
offering to have a subscription period of not more than 30 days that ends no
later than the 10th day prior to the final maturity date or mandatory
redemption of the Bridge Securities.

 

(c)           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.

 

(d)           For the purposes of Section 6.9(a) and
Section 6.9(b), the “pro rata share” or “pro rata basis” of each
Backstop Investor shall be determined in accordance with the maximum number of
shares of New Common Stock each Backstop Investor has committed to purchase at
Closing pursuant to the Brookfield Agreement or this Agreement, as applicable,
as of the date hereof, in relation to the aggregate maximum number of shares of
New Common Stock all Backstop Investors have committed to purchase at Closing
pursuant to the Brookfield Agreement or this Agreement, as applicable, as of
the date hereof.  For the purposes of Section 6.9(c),
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 Backstop Investors have committed to purchase pursuant to this
Section 6.9.”

 

8

 

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
clause (c) of Section 6.9 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 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 17,142,857 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 Fairholme
Purchasers pursuant to the Fairholme 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), the difference
between (i) the number of shares of New Common Stock issued to existing
holders of

 

9

 

Common
Stock and the Backstop Investors, in each case, pursuant to Section 6.9(b) 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 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
and the Backstop Investors, in each case, pursuant to Section 6.9(b));”

 

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 and the Backstop Investors, in each case, pursuant to Section 6.9(b)),
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

 

10

 

the
Company on a Fully Diluted Basis, and (y) no four Persons (other than the
Purchasers, members of the Pershing Purchaser Group, the members of the
Fairholme 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 (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)”.

 

11

 

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 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 and the Backstop Investors, in each case, pursuant to Section 6.9(b);”

 

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

 

12

 

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 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

 

13

 

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 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

 

14

 

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) 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

 

15

 

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 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.”

 

16

 

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:

 

“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

 

17

 

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.

 

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]

 

18

 

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PERSHING
  SQUARE CAPITAL MANAGEMENT, L.P.

  
	
   

  	
  On
  behalf of each of the Purchasers

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PS
  Management GP, LLC

  
	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William A. Ackman

  
	
   

  	
   

  	
  Name:
  William A. Ackman

  
	
   

  	
   

  	
  Title: Managing Member

  

 

[signature page to amendment no. 1]

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