UBS Securities LLC (together with its affiliates, UBS ) hereby submits this

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1 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Jay M. Goffman Four Times Square New York, New York (212) Attorneys for UBS Securities LLC UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re : Chapter 11 Case No. : GENERAL GROWTH : (ALG) PROPERTIES, INC., et al., : : (Jointly Administered) Debtors. : x REPLY OF UBS TO THE OBJECTION OF THE UNITED STATES TRUSTEE TO DEBTORS MOTION, PURSUANT TO 11 U.S.C. 105(A) AND 363(B), FOR AN ORDER APPROVING UBS AS UNDERWRITER AND LENDER COMMITMENT PARTY UBS Securities LLC (together with its affiliates, UBS ) hereby submits this reply (the Reply ) to the Objection of the United States Trustee to Debtors Motion, Pursuant to 11 U.S.C. 105(a) and 363(b), for an Order Approving UBS as Underwriter and Lender Commitment Party (the Objection ). 1 1 Capitalized terms not defined herein have the meanings set forth in the Debtors Motion for Entry of an Order Pursuant to Sections 105(a) and 363 of the Bankruptcy Code (A) Authorizing Debtors to (1) Exercise Certain Clawback Rights and Incur Related Clawback Fees, (2) Enter Into Commitment Letter, Side Letter and Fee Letter in Connection with Potential Exit Financing Facility, and (3) Enter Into the Equity ROFO Letter, Pre-Emergence Underwriting Agreement, and Guarantee, (B) Approving UBS as Underwriter and Lender Commitment Party and (C) Authorizing Entry Into Potential Engagement Letter Extensions [Docket No. 6012] (the Motion ).

2 The Debtors are on the verge of confirming and consummating their chapter 11 plan of reorganization ( Plan ). The Plan provides for creditors to be paid in full and for equity holders to retain billions of dollars in value. Despite this incredibly successful outcome, the United States Trustee ( UST ) is once again seeking to limit UBS s role in these chapter 11 cases, even though UBS s efforts have undeniably contributed to the Debtors success. Tellingly, no party with an economic stake in the outcome of these chapter 11 cases opposes UBS s participation as an Underwriter or Lender Commitment Party. Indeed UBS s participation as an Underwriter and Lender Commitment Party increases the likelihood that the Debtors capital raising efforts will be successful. Under the circumstances, the UST s position, which can only harm the Debtors estates by interfering with their efforts to obtain committed exit capital, is untenable. As a preliminary matter, UBS has been informed that the Debtors will not seek authority to pursue the Pre-Emergence Mandatorily Exchangeable Notes Offering at the hearing. Rather, as set forth in the Motion, the Debtors are currently pursuing the post emergence offering. Therefore, to avoid any issues with the Pre-Emergence Mandatorily Exchangeable Notes Offering, the Debtors will withdraw the request to purse the Pre-Emergence Mandatorily Exchangeable Notes Offering at this time and simply reserve the right to pursue a pre-emergence underwriting by subsequent motion. Therefore, the only issue is whether UBS Securities LLC can serve as an Underwriter for a post-emergence offering and whether UBS Securities, LLC and one of its affiliates, namely UBS Loan Finance LLC, can serve as a Lender Commitment Party for a loan with the reorganized Debtors. On March 11, 2010 and April 2, 2010, this Court entered the UBS Retention Orders authorizing the Debtors to employ and retain UBS as non-exclusive capital markets and

3 M&A advisor. The Debtors sought to retain UBS because UBS is one of a few firms able to provide a full range of investment banking services and products to the Debtors, including capital markets and M&A advice and services. UBS is a leading investment bank, in among other areas, mergers and acquisitions, bank financings and public and private securities offerings involving both debt and equity. UBS is also a leading investment bank in the real estate industry with extensive experience in providing financial, capital markets and M&A advisory services to, and in transactions involving, real estate-related companies such as the Debtors. (UBS Advisor Motion 9). It is precisely UBS s ability to provide multiple capital raise alternatives in addition to advisory services that makes UBS such a potent advisor, as demonstrated by the success of the Debtors. It was always contemplated, and disclosed, that the Debtors may seek to take advantage of UBS s strength in raising capital. Specifically, the UBS Advisor Motion and the Engagement Letter expressly provide that the Debtors may request UBS to assist in underwriting Financings, 2 and if so requested, such underwriting services would be subject to a separate 2 Under the Engagement Letter Financing shall mean a private or public issuance, sale or placement of equity, equity-linked or debt securities (including convertible or exchangeable debt securities) of the Company or its successor, including any securities convertible or exchangeable into securities of the Company or its successor, or any loan or other financing in connection with confirmation of a Plan of Reorganization, except to the extent the issuance of securities is to creditors or existing debt holders in satisfaction of current claims in connection with confirmation of a Plan of Reorganization. For purposes of this Agreement, it is understood and agreed that (a) any such Financing may be funded in more than one stage and one or more securities, (b) the closing of a first stage of any Financing shall be deemed a consummation of a Financing and UBS shall have earned the Completion Fee upon the closing date of the first stage thereof, regardless of whether the Company subsequently utilizes such Financing, and (c) any subsequent underwritten Financings will be subject to a separate engagement and separate agreement regarding fees and other customary matters.

4 engagement and separate agreement regarding fees and other customary matters. (UBS Advisor Motion 9). The Debtors have requested that UBS serve as an Underwriter and Lender Commitment Party, in part, because of UBS s current relationship with the Debtors, not in spite of it. As a result of UBS s current role with respect to the Debtors, serving as one of the Debtors Underwriters and Commitment Lender Parties will facilitate and promote the Debtors capital raise. UBS has strong knowledge of the Debtors, the potential public offering that the Debtors may conduct, and has strong equity capabilities that will help the Debtors complete their offering. The New GGP Post-Emergence Public Equity Offering, which could potentially equal or exceed $2.15 billion, is complex and requires underwriters with significant resources and expertise, as well as a vast client network of investors that can be tapped for a successful execution. UBS has been integrally and intimately involved with the Debtors ongoing preparation for the New GGP Post-Emergence Public Equity Offering. Over the last few months, among other things, UBS has: provided capital markets resources and support to determine sizing, timing and scheduling of the equity raise process; managed the diligence process; engaged underwriters counsel; assisted in drafting the business sections of the S-11 Registration Statement filed with the SEC; and assisted in drafting a Form 10 for Spinco. Therefore, UBS s role as equity underwriter complements its role as advisor, and UBS s agreement to be an underwriter should encourage the market. Additionally, Goldman

5 Sachs has been appointed Lead Left underwriter. Goldman Sachs, as Lead Left underwriter, and Deutsche Bank are the two joint global coordinators having primary responsibility to coordinate all bookrunning activities. The joint global coordinators will be the primary parties in setting initial price ranges to the market. In other words, UBS will not control pricing. Regarding the proposed debt facility, Deutsche Bank, Wells Fargo and Royal Bank of Canada are the Joint Lead Arrangers which means that these institutions drive the syndication and terms in the market. UBS will simply be a terms taker and will not dictate the terms. As an additional check, Miller Buckfire is also advising the Debtors on the proposed debt offering and will not be committing to the new facility. Furthermore, it was Miller Buckfire and the Debtors counsel, not UBS, that first proposed having a debt exit facility in the event the Debtors could not reinstate the Rouse Bonds. Further, these additional roles will not affect or diminish UBS s existing engagement or ability to receive its existing Completion Fee (as defined in the Engagement Letter). First, there is no support for the UST s allegation that UBS may use its role as financial advisor to direct the Debtors towards financing alternatives where UBS may earn the most fees. For example, UBS recommended and supported the reinstatement alternative in the Debtors Plan, which provides for reinstatement of the unmatured Rouse Bonds, which reduces the Debtors need for exit financing and results in a reduction of fees for the Commitment Loan Parties. Furthermore, UBS s serving as Underwriter and Lender Commitment Party will not impact UBS s existing Completion Fee. First, the Completion Fee is earned upon the closing of the first stage of any Financing. Therefore, UBS believes that the Completion Fee was fully earned upon the issuance of warrants pursuant to this Court s May 7, 2010 Order [Docket No.

6 5145]. Furthermore, even if the Debtors did not pursue the New GGP Post-Emergence Public Equity Offering, the Debtors have already received commitments from the Initial Plan Sponsors to purchase up to $6.3 billion of the New GGP Common Stock, which, if consummated, will also trigger the right to the Completion Fee. Finally, were UBS precluded from acting as Underwriter or Lender Commitment Party in connection with the proposed exit financing, the reorganized Debtors would nonetheless be required to pay such fees to another lender or underwriter. For the foregoing reasons, the Objection should be overruled and the Court should (i) authorize UBS to act as one of the Underwriters and Lender Commitment Parties, (ii) find that such engagement will not cause UBS to fail to be a disinterested person (as defined in section 101(14) of the Bankruptcy Code), and (iii) grant such other and further relief as is just. Dated: New York, New York October 8, 2010 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP By: /s/ Jay M. Goffman Jay M. Goffman Four Times Square New York, New York (212)