Exhibit 10.1

 

AMENDED AND RESTATED

 

WARRANT AGREEMENT

 

 BETWEEN

 

 GENERAL GROWTH PROPERTIES, INC.

 

AND

 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

 

as WARRANT AGENT

 

Effective as of October 28, 2013

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

DEFINITIONS

2

 

 

 

2.

ORIGINAL ISSUE OF WARRANTS

9

 

 

 

 

2.1.

Form of Warrant Certificates

9

 

 

 

 

 

2.2.

Execution and Delivery of Warrant Certificates; Vesting

9

 

 

 

3.

EXERCISE PRICE; EXERCISE OF WARRANTS AND EXPIRATION OF WARRANTS

10

 

 

 

 

3.1.

Exercise Price

10

 

 

 

 

 

3.2.

Exercise of Warrants

10

 

 

 

 

 

3.3.

Expiration of Warrants

11

 

 

 

 

 

3.4.

Method of Exercise; Settlement of Warrant

11

 

 

 

 

 

3.5.

Transferability of Warrants and Common Stock

13

 

 

 

 

 

3.6.

Compliance with Law

13

 

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4.

REGISTRATION RIGHTS

15

 

 

 

 

 

4.1.

Rule 144 Reporting

15

 

 

 

 

 

4.2.

Obtaining Exchange Listing

15

 

 

 

 

 

4.3.

The Warrant Agent

15

 

 

 

 

5.

ADJUSTMENTS AND OTHER RIGHTS

15

 

 

 

 

 

5.1.

Stock Dividend; Subdivision or Combination of Common Stock

15

 

 

 

 

 

5.2.

Other Dividends and Distributions

16

 

 

 

 

 

5.3.

Rights Offerings

17

 

 

 

 

 

5.4.

Issuer Tender or Exchange Offers

17

 

 

 

 

 

5.5.

Reorganization, Reclassification, Consolidation, Merger or Sale

18

 

 

 

 

 

5.6.

Other Adjustments

19

 

 

 

 

 

5.7.

Notice of Adjustment

19

 

 

 

 

6.

CHANGE OF CONTROL

20

 

 

 

 

 

6.1.

Redemption in Connection with a Change of Control Event

20

 

 

 

 

 

6.2.

Public Stock Merger

20

 

 

 

 

 

6.3.

Mixed Consideration Merger

21

 

 

 

 

 

6.4.

The Warrant Agent

21

 

 

 

 

7.

WARRANT TRANSFER BOOKS

21

 

 

 

8.

WARRANT HOLDERS

22

 

 

 

 

 

8.1.

No Voting Rights

22

 

 

 

 

 

8.2.

Right of Action

23

 

 

 

 

9.

WARRANT AGENT

23

 

 

 

 

9.1.

Nature of Duties and Responsibilities Assumed

23

 

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9.2.

Compensation and Reimbursement

25

 

 

 

 

 

9.3.

Warrant Agent May Hold Company Securities

25

 

 

 

 

 

9.4.

Resignation and Removal; Appointment of Successor

25

 

 

 

 

 

9.5.

Damages

26

 

 

 

 

 

9.6.

Force Majeure

27

 

 

 

 

 

9.7.

Survival

27

 

 

 

 

10.

REPRESENTATIONS AND WARRANTIES

27

 

 

 

 

 

10.1.

Representations and Warranties of the Company

27

 

 

 

 

11.

COVENANTS

27

 

 

 

 

 

11.1.

Reservation of Common Stock for Issuance on Exercise of Warrants

27

 

 

 

 

 

11.2.

Notice of Distributions

27

 

 

 

 

12.

MISCELLANEOUS

27

 

 

 

 

 

12.1.

Money and Other Property Deposited with the Warrant Agent

27

 

 

 

 

 

12.2.

Payment of Taxes

28

 

 

 

 

 

12.3.

Surrender of Certificates

28

 

 

 

 

 

12.4.

Mutilated, Destroyed, Lost and Stolen Warrant Certificates

28

 

 

 

 

 

12.5.

Removal of Legends

29

 

 

 

 

 

12.6.

Notices

29

 

 

 

 

 

12.7.

Applicable Law; Jurisdiction

30

 

 

 

 

 

12.8.

Persons Benefiting

30

 

 

 

 

 

12.9.

Counterparts

31

 

 

 

 

 

12.10.

Amendments

31

 

 

 

 

 

12.11.

Headings

31

 

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12.12.

Entire Agreement

31

 

 

 

 

 

12.13.

Specific Performance

31

 

iv

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List of Exhibits

 

EXHIBIT A-1 — Form of Series A-1 Warrant Certificate

 

EXHIBIT A-2 — Form of Series A-2 Warrant Certificate

 

EXHIBIT B — Form of Assignment

 

EXHIBIT C — Option Pricing Assumptions / Methodology

 

SCHEDULE A — Allocations of Warrants to Initial Investors

 

SCHEDULE B — Warrant Agent Compensation

 

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AMENDED AND RESTATED WARRANT AGREEMENT

 

AMENDED AND RESTATED WARRANT AGREEMENT, effective as of October 28, 2013
(together with the Warrants, this “Agreement”), by and between General Growth
Properties, Inc., a Delaware corporation (the “Company”), and American Stock
Transfer & Trust Company, LLC, a Delaware limited liability company (together
with its successors and assigns, the “Warrant Agent”).

 

On November 9, 2010, the Company and Mellon Investor Services LLC, a New Jersey
limited liability company (“Mellon”), entered into the Warrant Agreement, as
amended on March 28, 2013, which the Company and Warrant Agent, as successor to
Mellon, now desire to amend and restate with this Agreement.  References to “the
date hereof” shall mean November 9, 2010.

 

WITNESSETH:

 

WHEREAS, the Company is issuing and delivering warrant certificates (the
“Warrant Certificates”) evidencing Warrants to purchase up to an aggregate of
120,000,000 shares of its Common Stock, subject to adjustment, including
(a) Series A-1 Warrants to purchase 57,500,000 shares of its Common Stock,
subject to adjustment, in connection with that certain Amended and Restated
Cornerstone Investment Agreement, effective as of March 31, 2010, by and between
Brookfield Retail Holdings (formerly known as REP Investments LLC) and the
Company (as amended from time to time, the “Investment Agreement”),
(b) Series A-2 Warrants to purchase 41,071,429 shares of its Common Stock,
subject to adjustment, in connection with that certain Amended and Restated
Stock Purchase Agreement, effective as of March 31, 2010, by and between each of
The Fairholme Fund and The Fairholme Focused Income Fund (each a “Fairholme
Purchaser”, and collectively, the “Fairholme Purchasers”) and the Company (as
amended from time to time, the “Fairholme Stock Purchase Agreement”),
(c) Series A-2 Warrants to purchase 16,428,571 shares of its Common Stock in
connection with that certain Amended and Restated Stock Purchase Agreement,
effective as of March 31, 2010, by and between each of Pershing Square, L.P.,
Pershing Square II, L.P., Pershing Square International, Ltd. and Pershing
Square International V, Ltd. (each, a “Pershing Square Purchaser”, collectively,
the “Pershing Square Purchasers”) and the Company (as amended from time to time,
the “Pershing Square Stock Purchase Agreement” and, together with the Fairholme
Stock Purchase Agreement, the “Stock Purchase Agreements”) and (d) Series A-1
Warrants to purchase 5,000,000 shares of its Common Stock in connection with the
Blackstone Purchase Agreements (as defined herein) and those certain
designations, dated as of the date hereof, by and among the Company and each of
Brookfield Retail Holdings LLC (formerly known as REP Investments LLC), the
Fairholme Purchasers and the Pershing Square Purchasers (the “Blackstone
Designations”) pursuant to each of which each Purchaser (as defined herein) has
agreed to make an equity investment in the Company upon the terms and subject to
the conditions specified therein; and

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing so to act, in connection with the issuance,
transfer, exchange, replacement and exercise of the Warrant Certificates and
other matters as provided herein;

 

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NOW, THEREFORE, in consideration of the foregoing and for the purpose of
defining the terms and provisions of the Warrants and the respective rights and
obligations thereunder of the Company and the record holders of the Warrants,
the Company and the Warrant Agent each hereby agree as follows:

 

1.                                      DEFINITIONS.

 

As used in this Agreement, the following terms shall have the following
meanings:

 

Affiliate:  of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person.  For the
purposes of this definition, (i) “control” means the possession, directly or
indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise and
(ii) none of the Initial Investors or their Affiliates shall be deemed to
“control” the Company or any of the Company’s controlled Affiliates prior to
such Initial Investor or Affiliate, as applicable, acquiring or becoming part of
the acquiring group for purposes of clauses (i) or (ii) or combining with the
Company for purposes of clause (iii) of the definition of Change of Control
Event.

 

Announcement Date:  the meaning set forth in Section 5.4.

 

Blackstone B Warrant:  means a Warrant (whether held by a Blackstone Investor or
by any transferee or any other Person) that was initially issued to a Blackstone
Investor pursuant to the Brookfield Purchase Agreement (and the corresponding
Blackstone Designation) or its designees in accordance with the last sentence of
Section 2.2(a).

 

Blackstone Designations:  the meaning set forth in the recitals hereto.

 

Blackstone F/P Warrant:  means a Warrant (whether held by a Blackstone Investor
or by any transferee or any other Person) that was initially issued to a
Blackstone Investor pursuant to either the Fairholme Purchase Agreement or the
Pershing Purchase Agreement (and the corresponding Blackstone Designations) or
its designees in accordance with the last sentence of Section 2.2(a).

 

Blackstone Investors:  means all members, collectively, of the Blackstone
Purchaser Group.

 

Blackstone Purchase Agreements:  means, collectively, the Brookfield Purchase
Agreement, the Fairholme Purchase Agreement and the Pershing Purchase Agreement.

 

Blackstone Purchaser:  means Blackstone Real Estate Partners VI L.P.

 

Blackstone Purchaser Group:  means the Blackstone Purchaser, Blackstone Real
Estate Partners (AIV) VI L.P., Blackstone Real Estate Partners VI.F L.P.,
Blackstone Real Estate Partners VI.TE.1 L.P., Blackstone Real Estate Partners
VI.TE.2 L.P., Blackstone Real Estate Holdings VI L.P. and Blackstone GGP
Principal Transaction Partners L.P. and their respective investment managers and
their respective “controlled Affiliates”.  For such purpose, one or more

 

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investment funds under common investment management shall constitute “controlled
Affiliates” of their investment manager.

 

Board:  the board of directors of the Company.

 

Brookfield Consortium Member:  as defined in the Investment Agreement.

 

Brookfield Investors:  means, collectively, the Brookfield Consortium Members.

 

Brookfield Purchase Agreement:  means that certain Purchase Agreement, dated as
of August 2, 2010, by and between REP Investments LLC and the Blackstone
Purchaser.

 

Brookfield Purchaser:  the Purchaser defined in the Investment Agreement.

 

Brookfield Warrant:  means a Warrant (whether held by Brookfield Purchaser or a
Brookfield Consortium Member or by any transferee or any other Person) that was
initially issued to Brookfield Retail Holdings LLC (formerly known as REP
Investments LLC), a Delaware limited liability company, pursuant to the
Investment Agreement or its designees in accordance with the last sentence of
Section 2.2(a).

 

Business Day:  any day that is not a Saturday, Sunday, or a day on which banks
in the states of New York or New Jersey are required or permitted to be closed.

 

Cash Consideration Ratio:  means, in connection with a Mixed Consideration
Merger, a fraction, (i) the numerator of which shall be the aggregate Fair
Market Value of cash and all other property (other than Public Stock) that
holders of Common Stock will receive for each such share of Common Stock in
connection with such Mixed Consideration Merger, and (ii) the denominator of
which shall be the Fair Market Value of all of the consideration holders of
Common Stock will receive for each such share of Common Stock in connection with
such Mixed Consideration Merger; provided, that, if the holders of Common Stock
have the opportunity to elect the consideration to be received in such Mixed
Consideration Merger, the Cash Consideration Ratio shall be determined by
reference to the weighted average of the types and amounts of consideration
received in such transaction in respect of shares of Common Stock held by
holders who are not affiliated with the Company or any entity acquiring the
Company.

 

Certificate of Incorporation:  the Company’s certificate of incorporation (or
equivalent organizational document), as amended from time to time.

 

Change of Control Event:  an event or series of events, by which (i) any Person
or group of Persons shall have acquired beneficial ownership (within the meaning
of Rule 13d-3(a) promulgated by the SEC under the Exchange Act), directly or
indirectly, of fifty percent (50%) or more (by voting power) of the outstanding
shares of Voting Securities, (ii) all or substantially all of the consolidated
assets of the Company are sold, leased (other than leases to tenants in the
ordinary course of business), exchanged or transferred to any Person or group of
Persons, (iii) the Company is consolidated, merged, amalgamated, reorganized or
otherwise enters into a similar transaction in which it is combined with another
Person (in each case, other than pursuant to the Plan), unless shares of Common
Stock held by holders who are not affiliated with the Company or any entity
acquiring the Company remain unchanged or are exchanged for,

 

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converted into or constitute solely (except to the extent of applicable
appraisal rights or cash received in lieu of fractional shares) the right to
receive as consideration Public Stock and the Persons who beneficially own the
outstanding Voting Securities of the Company immediately before consummation of
the transaction beneficially own a majority (by voting power) of the outstanding
Voting Securities of the combined or surviving entity or new parent immediately
thereafter, (iv) the Company engages in a reclassification or similar
transaction pursuant to which shares of Common Stock are converted into the
right to receive anything other than Public Stock, or (v) the holders of capital
stock of the Company have approved any plan or proposal for the liquidation or
dissolution of the Company; provided that with respect to an election by any
Holder pursuant to Section 6.1, no event or series of events shall constitute a
Change of Control Event if (x) such event or series of events is not approved by
a majority of the disinterested directors of the Company and (y) such Holder or
any of its Affiliates is the acquiror or part of the acquiring group for
purposes of clause (i) or (ii) above or is combined with the Company for
purposes of clause (iii) above.  For purposes of this definition, a “group”
means a group of Persons within the meaning of Rule 13d-5 under the Exchange
Act.

 

Change of Control Exchange: means the exchange of Warrants for shares of Common
Stock to a Holder (x) upon the election of such Holder in accordance with
Section 6.1, (y) pursuant to Section 6.2(b) or (z) upon the election of the
Company in accordance with Section 6.3(a)(i) or automatically pursuant to
Section 6.3(b).

 

Closing Sale Price:  as of any date, the last reported per share sales price of
a share of Common Stock or the applicable security on such date (or, if no last
reported sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and the average ask
prices on such date) as reported on the New York Stock Exchange, or if the
Common Stock or such other security is not listed on the New York Stock
Exchange, as reported by the principal U.S. national or regional securities
exchange or quotation system on which the Common Stock or such other security is
then listed or quoted; provided, however, that in the absence of such listing or
quotations, the Closing Sale Price shall be determined by an Independent
Financial Expert appointed for such purpose, using one or more valuation methods
that the Independent Financial Expert in its best professional judgment
determines to be most appropriate, assuming such Common Stock or securities are
fully distributed and are to be sold in an arm’s-length transaction and there
was no compulsion on the part of any party to such sale to buy or sell and
taking into account all relevant factors.

 

Code:  the U.S. Internal Revenue Code of 1986, as amended.

 

Common Stock:  the common stock, par value $0.01, of the Company.

 

Company:  the meaning set forth in the preamble to this Agreement and its
successors and assigns.

 

Conversion Value: the meaning set forth in Section 6.1(b).

 

Distribution:  the meaning set forth in Section 5.2.

 

Exchange Act:  the U.S. Securities Exchange Act of 1934, as amended.

 

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Exercise Date:  the meaning set forth in Section 3.4.

 

Exercise Price:  means (i) for each Fairholme/Pershing Warrant, $10.50 per
share, (ii) for each Brookfield Warrant, $10.75 per share, (iii) for each
Blackstone F/P Warrant, $10.50 per share and (iv) for each Blackstone B Warrant,
$10.75 per share, in each case subject to all adjustments made on or prior to
the date of exercise thereof as herein provided.

 

Expiration Date:  the meaning set forth in Section 3.3.

 

Fairholme Investors:  all members, collectively, of the Fairholme Purchaser
Group.

 

Fairholme/Pershing Warrant:  means a Warrant (whether held by a Fairholme
Investor, Pershing Investor or by any transferee or any other Person) that was
initially issued to a Fairholme Investor or Pershing Investor pursuant to one of
the Stock Purchase Agreements or any of their designees in accordance with the
last sentence of Section 2.2(a).

 

Fairholme Purchase Agreement:  means that certain Purchase Agreement, dated as
of August 2, 2010, by and between the Fairholme Purchasers and the Blackstone
Purchaser.

 

Fairholme Purchasers:  the meaning set forth in the recitals hereto.

 

Fairholme Purchaser Group:  the Purchaser Group defined in the Fairholme Stock
Purchase Agreement.

 

Fairholme Stock Purchase Agreement:  the meaning set forth in the recitals
hereto.

 

Fair Market Value:

 

(i)                                in the case of shares or securities, the
average of the daily volume weighted average prices per share of such shares or
securities for the ten consecutive trading days immediately preceding the day as
of which Fair Market Value is being determined, as reported on the New York
Stock Exchange, or if such shares or securities are not listed on the New York
Stock Exchange, as reported by the principal U.S. national or regional
securities exchange or quotation system on which such shares or securities are
then listed or quoted; provided, however, if (x) such shares or securities are
not listed or quoted on the New York Stock Exchange or any U.S. national or
regional securities exchange or quotations system or (y) a transaction impacting
such shares or securities makes it unjust or inequitable to value such shares or
securities in the manner provided above as reasonably determined in good faith
by the Board, then the Fair Market Value of such securities shall be the fair
market value per share or unit of such shares or securities as determined by an
Independent Financial Expert appointed for such purpose, using one or more
valuation methods that the Independent Financial Expert in its best professional
judgment determines to be most appropriate, assuming such shares or other
securities are fully distributed and are to be sold in an arm’s-length
transaction and there was no compulsion on the part of any party to such sale to
buy or sell and taking into account all relevant factors.

 

(ii)                             in the case of cash, the amount thereof.

 

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(iii)                          in the case of other property, the Fair Market
Value of such property shall be the fair market value thereof as determined by
an Independent Financial Expert appointed for such purpose, using one or more
valuation methods that the Independent Financial Expert in its best professional
judgment determines to be most appropriate, assuming such property is to be sold
in an arm’s-length transaction and there was no compulsion on the part of any
party to such sale to buy or sell and taking into account all relevant factors.

 

Full Physical Settlement:  the settlement method with respect to Series A-1
Warrants pursuant to which an exercising Holder shall be entitled to receive
from the Company, for each Warrant exercised, a number of shares of Common Stock
equal to the Full Physical Share Amount in exchange for payment by the Holder of
the aggregate Exercise Price applicable to such Warrant.

 

Full Physical Share Amount:  the meaning set forth in Section 3.4.

 

Holders:  from time to time, the holders of the Warrants and, unless otherwise
provided or indicated herein, the holders of the Warrant Securities, solely in
their capacity as such.

 

Independent Financial Expert:  a nationally recognized financial advisory firm
mutually agreed by the Company and the Majority Holders. If the Company and the
Majority Holders are unable to agree on an Independent Financial Expert for a
valuation contemplated herein, each of them shall choose promptly a separate
Independent Financial Expert and these two Independent Financial Experts shall
choose promptly a third Independent Financial Expert to conduct such valuation.

 

Initial Investor:  means, as applicable, (i) the Fairholme Purchasers,
(ii) Pershing Square Capital Management, L.P. and the Pershing Square
Purchasers, (iii) the Brookfield Purchaser; provided that, solely for the
purposes of this definition, in the event the Brookfield Purchaser is not in
existence, the Brookfield Purchaser shall be Brookfield Asset Management Inc. or
an Affiliate designated by Brookfield Asset Management Inc and (iv) the
Blackstone Purchaser.

 

Investment Agreement:  the meaning set forth in the recitals hereto.

 

Majority Holders:  means at any time Holders of a majority in number of the
outstanding Warrants not held by the Company or any of the Company’s Affiliates.

 

Mixed Consideration Merger:  means an event described in clause (iii) of the
definition of Change of Control Event pursuant to which all of the outstanding
shares of Common Stock held by holders who are not affiliated with the Company
or any entity acquiring the Company are exchanged for, converted into or
constitute solely (except to the extent of applicable appraisal rights or cash
received in lieu of fractional shares) the right to receive as consideration a
combination of (i) Public Stock and (ii) other securities, cash or other
property.

 

Net Share Amount:  the meaning set forth in Section 3.4.

 

Net Share Settlement:  the settlement method for Series A-1 Warrants, if elected
in accordance with Section 3.4, and for Series A-2 Warrants pursuant to which an
exercising

 

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Holder shall be entitled to receive from the Company, for each Warrant
exercised, a number of shares of Common Stock equal to the Net Share Amount
without any payment therefor.

 

Organic Change:  the meaning set forth in Section 5.5.

 

Pershing Investors:  all members, collectively, of the Pershing Purchaser Group.

 

Pershing Square Purchasers:  the meaning set forth in the recitals hereto.

 

Pershing Purchase Agreement:  means that certain Purchase Agreement, dated as of
August 2, 2010, by and between the Pershing Purchasers and the Blackstone
Purchaser.

 

Pershing Purchaser Group:  the Purchaser Group defined in the Pershing Stock
Purchase Agreement.

 

Pershing Square Stock Purchase Agreement:  the meaning set forth in the recitals
hereto.

 

Pershing Square Warrant Vesting Date:  the meaning set forth in Section 2.2(b).

 

Person:  any individual, corporation, partnership, joint venture, association,
joint stock company, limited liability company, limited liability partnership,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

 

Plan:  the plan of reorganization as contemplated by the Plan Term Sheet
attached as Exhibit A to the Investment Agreement and Stock Purchase Agreements.

 

Preliminary Change of Control Event:  with respect to the Company, the first
public announcement that describes the economic terms of a transaction that
results in a Change of Control Event.

 

Premium Per Post-Tender Share:  the meaning set forth in Section 5.4.

 

Public Stock:  means common stock listed on a recognized U.S. national
securities exchange with an aggregate market capitalization (held by
non-Affiliates of the issuer) in excess of $1 billion in Fair Market Value.

 

Purchaser Group:  (a) means with respect to Brookfield Purchaser, the Brookfield
Consortium Members, (b) with respect to Fairholme Purchasers, the Fairholme
Purchaser Group, (c) with respect to Pershing Square Purchasers, the Pershing
Purchaser Group and (d) with respect to the Blackstone Purchaser, the Blackstone
Purchaser Group.

 

Public Stock Merger:  means an event described in clause (iii) of the definition
of Change of Control Event pursuant to which all of the outstanding shares of
Common Stock held by holders who are not affiliated with the Company or any
entity acquiring the Company are exchanged for, converted into or constitute
solely (except to the extent of applicable appraisal rights or cash received in
lieu of fractional shares) the right to receive as consideration Public Stock.

 

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Purchaser:  means each of the Blackstone Purchasers, the Brookfield Purchaser,
the Fairholme Purchasers and the Pershing Square Purchasers.

 

Redemption Value: the meaning set forth in Section 6.1(b).

 

Registration Rights Agreements:  means those certain registration rights
agreements, dated as of the date hereof, between the Company, and separately,
each of (i) the Pershing Investors and Blackstone Real Estate Partners VI L.P.,
a Delaware limited partnership, Blackstone Real Estate Partners (AIV) VI L.P., a
Delaware limited partnership, Blackstone Real Estate Partners VI.F L.P., a
Delaware limited partnership, Blackstone Real Estate Partners VI.TE.1 L.P., a
Delaware limited partnership, Blackstone Real Estate Partners VI.TE.2 L.P., a
Delaware limited partnership, Blackstone Real Estate Holdings VI L.P., a
Delaware limited partnership, and Blackstone GGP Principal Transaction Partners
L.P., a Delaware limited partnership, (ii) the Fairholme Investors and
(iii) Brookfield Retail Holdings LLC (formerly known as REP Investments LLC), a
Delaware limited liability company, Brookfield Retail Holdings II LLC, a
Delaware limited liability company, Brookfield Retail Holdings III LLC, a
Delaware limited liability company, Brookfield Retail Holdings IV-A LLC, a
Delaware limited liability company, Brookfield Retail Holdings IV-D LLC, a
Delaware limited liability company, Brookfield Retail Holdings V LP, a Delaware
limited partnership, and Brookfield US Retail Holdings LLC, a Delaware limited
liability company.

 

Rule 144:  means such rule promulgated under the Securities Act (or any
successor provision), as the same shall be amended from time to time.

 

Sale:  the meaning set forth in Section 3.6(a) of this Agreement.

 

SEC:  the U.S. Securities and Exchange Commission.

 

Securities Act:  the U.S. Securities Act of 1933, as amended.

 

Securities Exchange Act:  the U.S. Securities Exchange Act of 1934, as amended.

 

Sell: the meaning set forth in Section 3.6(a) of this Agreement.

 

Series A-1 Warrants:  the Series A-1 Warrants issued by the Company from time to
time pursuant to this Agreement.

 

Series A-2 Warrants:  the Series A-2 Warrants issued by the Company from time to
time pursuant to this Agreement.

 

Settlement Date:  means, in respect of a Warrant that is exercised hereunder, a
reasonable time, not to exceed three Business Days, immediately following the
Exercise Date for such Warrant.

 

Stock Consideration Ratio:  means, in connection with a Mixed Consideration
Merger, 1 — the Cash Consideration Ratio for such Mixed Consideration Merger.

 

Stock Dividend:  the meaning set forth in Section 5.1.

 

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Stock Purchase Agreements:  the meaning set forth in the recitals to this
Agreement.

 

Supermajority Holders:  means at any time Holders of two-thirds or greater in
number of the outstanding Warrants not held by the Company or any of the
Company’s Affiliates.

 

Underlying Common Stock:  the shares of Common Stock issuable or issued upon the
exercise of the Warrants.

 

Voting Securities:  means any securities of the Company, surviving entity or
parent, as applicable, having power generally to vote in the election of
directors of the Company, surviving entity or parent, as applicable.

 

Warrant Agent:  the meaning set forth in the preamble to this Agreement.

 

Warrant Certificates:  the meaning set forth in the recitals to this Agreement.

 

Warrant Registrar:  the meaning set forth in Article 7.

 

Warrant Securities:  the meaning set forth in Section 3.6(a).

 

Warrants:  the Series A-1 Warrants and the Series A-2 Warrants.

 

2.                                      ORIGINAL ISSUE OF WARRANTS.

 

2.1                               Form of Warrant Certificates. The Warrant
Certificates shall be in registered form only and substantially in the form
attached hereto as Exhibit A-1, with respect to Series A-1 Warrants, and
Exhibit A-2, with respect to Series A-2 Warrants, with such appropriate
instructions, omissions, substitutions and other variations as are required or
permitted by this Agreement (but which do not affect the rights, duties or
responsibilities of the Warrant Agent) shall be dated the date on which
countersigned by the Warrant Agent and may have such legends and endorsements
typed, stamped, printed, lithographed or engraved thereon as required by the
Certificate of Incorporation or as may be required to comply with any law or
with any rule or regulation pursuant thereto or with any rule or regulation of
any securities exchange on which the Warrants may be listed.

 

2.2                               Execution and Delivery of Warrant
Certificates; Vesting.

 

(a)                                 Simultaneously with the execution of this
Agreement, Warrant Certificates evidencing such total number of Warrants to be
delivered to each Initial Investor as set forth on Schedule A shall be executed
by the Company and delivered to the Warrant Agent for countersignature, by
manual or facsimile signature, and the Warrant Agent shall thereupon countersign
and deliver such Warrant Certificates to each Initial Investor (or their
designee(s) in accordance with the last sentence of this Section 2.2(a)).  The
Warrant Certificates shall be executed on behalf of the Company by its President
or a Vice President, either manually or by facsimile signature printed thereon. 
Each Initial Investor, in its sole discretion, may designate that some or all of
its Warrants and Warrant Certificates be issued in the name of, and delivered
to, one or more of the members of its Purchaser Group.

 

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(b)                                 Solely with respect to the Warrants
delivered pursuant to the Pershing Square Stock Purchase Agreement, such
Warrants (i) shall not vest or be exercisable prior to the New Warrant Vesting
Date (as defined in the Pershing Square Stock Purchase Agreement) (the “Pershing
Square Warrant Vesting Date”) and (ii) shall expire and not vest if, after the
date hereof but prior to the Pershing Square Warrant Vesting Date, all (but not
less than all) of the outstanding shares of Common Stock shall have been
acquired by any single Person or “group” (within the meaning of
Section 13(d)(3) of the Exchange Act, and the rules and regulations promulgated
thereunder) of Persons, other than the Company, any Initial Investor or any
Affiliate of the Company or any Initial Investor, in a full cash tender offer or
in a full cash merger transaction that, in each case, has been approved after
the date hereof by the Board.

 

(c)                                  From time to time, the Warrant Agent shall
countersign and deliver Warrant Certificates in required denominations to
Persons entitled thereto in connection with any transfer or exchange permitted
under this Agreement. The Warrant Agent is hereby irrevocably (but subject to
Article 9) authorized to countersign and deliver Warrant Certificates as
required by Section 2.2, Section 3.4, Article 7, and Section 12.4 or otherwise
as provided herein. The Warrant Certificates shall be executed on behalf of the
Company by its President or a Vice President, either manually or by facsimile
signature printed thereon. The Warrant Certificates shall be countersigned by
the Warrant Agent, either manually or by facsimile signature, and shall not be
valid for any purpose unless so countersigned. In case any officer of the
Company whose signature shall have been placed upon any of the Warrant
Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates may, nevertheless, be countersigned by the Warrant Agent,
either manually or by facsimile signature printed thereon, and issued and
delivered with the same force and effect as though such Person had not ceased to
be such officer of the Company.

 

(d)                                 No Warrant Certificate shall be entitled to
any benefit under this Agreement or be valid or obligatory for any purpose, and
no Warrant evidenced thereby may be exercised, unless such Warrant Certificate
has been countersigned by the manual or facsimile signature of the Warrant
Agent.  Such signature by the Warrant Agent upon any Warrant Certificate
executed by the Company shall be conclusive evidence that such Warrant
Certificate has been duly issued under the terms of this Agreement.

 

3.                                      EXERCISE PRICE; EXERCISE OF WARRANTS AND
EXPIRATION OF WARRANTS.

 

3.1                               Exercise Price.  Each Warrant Certificate
shall, when countersigned by the Warrant Agent, entitle the Holder thereof,
subject to the provisions of this Agreement, to purchase, except as provided in
Section 3.3 hereof, one share of Common Stock for each Warrant represented
thereby, subject to all adjustments made on or prior to the date of exercise
thereof, at the applicable Exercise Price.

 

3.2                               Exercise of Warrants.  The Warrants shall be
exercisable in whole or in part from time to time on any Business Day beginning
on the date hereof and ending on the Expiration Date, in the manner provided for
herein; provided, that solely with respect to the exercise any time prior to the
date that is 180 days prior to the Expiration Date of any Warrant held at the
time of exercise by a Fairholme or Pershing Investor, such Fairholme or Pershing
Investor must have

 

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delivered written notice of its intent to exercise such Warrant to the Company
90 days prior to the Exercise Date of such Warrant and no exercise of such
Warrant shall be effective until such 90-day period has lapsed.

 

3.3                               Expiration of Warrants.  Any unexercised
Warrants shall expire and the rights of the Holders of such Warrants to purchase
Underlying Common Stock shall terminate at the close of business on
November       , 2017 (the “Expiration Date”).

 

3.4                               Method of Exercise; Settlement of Warrant.  In
order to exercise a Warrant, the Holder thereof must (i) surrender the Warrant
Certificate evidencing such Warrant to the Warrant Agent, with the form on the
reverse of or attached to the Warrant Certificate properly completed and duly
executed (the date of the surrender of such Warrant Certificate, the “Exercise
Date”), and (ii) with respect to Series A-1 Warrants for which Net Share
Settlement is not elected, deliver in full the aggregate Exercise Price then in
effect for the shares of Underlying Common Stock as to which a Warrant
Certificate is submitted for exercise, not later than the Settlement Date as
more fully set forth herein.  Full Physical Settlement shall apply to each
Series A-1 Warrant unless the Holder elects for Net Share Settlement to apply
upon exercise of such Warrant.  Only Net Share Settlement shall apply (and shall
be automatically deemed to have been irrevocably elected) upon exercise of each
Series A-2 Warrant.  The election of Net Share Settlement shall be made in the
form on the reverse of or attached to the Warrant Certificate for each
Series A-1 Warrant.

 

(a)                                 If Full Physical Settlement is applicable
with respect to the exercise of a Warrant, then, for each Series A-1 Warrant
exercised hereunder (i) prior to 11:00 a.m., New York City time, on the
Settlement Date for such Warrant, the Holder shall pay the aggregate Exercise
Price (determined as of such Exercise Date) for the number of shares of Common
Stock obtainable upon exercise of such Warrant at such time by federal wire or
other immediately available funds payable to the order of the Company to the
account maintained by the Warrant Agent and notified to the Holder upon request
of the Holder, and (ii) on the Settlement Date, following receipt by the Warrant
Agent of such Exercise Price, the Company shall cause to be delivered to the
Holder the number of shares of Common Stock obtainable upon exercise of each
Series A-1 Warrant at such time (the “Full Physical Share Amount”), together
with cash in respect of any fractional shares of Common Stock as provided in
Section 3.4(f).

 

(b)                                 If Net Share Settlement is applicable with
respect to the exercise of a Warrant, then, for each Warrant exercised
hereunder, on the Settlement Date for such Warrant, the Company shall cause to
be delivered to the Holder a number of shares of Common Stock (which in no event
will be less than zero) (the “Net Share Amount”) equal to (i) the number of
shares of Common Stock issuable upon exercise of such Warrant at such time,
multiplied by (ii) the Closing Sale Price on the relevant Exercise Date, minus
the Exercise Price (determined as of such Exercise Date), divided by (iii) such
Closing Sale Price, together with cash in respect of any fractional shares of
Common Stock as provided in Section 3.4(f).  The Warrant Agent shall not take
any action under this Section unless and until the Company has provided it with
written instructions containing the Net Share Amount.  The Warrant Agent shall
have no duty or obligation to investigate or confirm whether the Company’s
determination of the number of the Net Share Amount is accurate or correct.

 

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(c)                                  Upon surrender of a Warrant Certificate to
the Warrant Agent in conformity with the foregoing provisions and, in the event
of Full Physical Settlement of a Series A-1 Warrant, receipt by the Warrant
Agent of the Exercise Price therefor, the Warrant Agent shall thereupon promptly
notify the Company, and the Company shall instruct its transfer agent to
transfer to the Holder of such Warrant Certificate appropriate evidence of
ownership of any shares of Underlying Common Stock or other securities or
property to which the Holder is entitled, registered or otherwise placed in, or
payable to the order of, such name or names as may be directed in writing by the
Holder, and shall deliver such evidence of ownership to the Person or Persons
entitled to receive the same, together with cash in respect of any fractional
shares of Common Stock as provided in Section 3.4(f), provided that if the
Holder shall direct that such securities be registered in a name other than that
of the Holder, such direction shall be tendered in conjunction with a signature
guarantee by a participant in a Medallion Signature Guarantee Program at a
guarantee level acceptable to the Company’s transfer agent, and any other
reasonable evidence of authority that may be required by the Warrant Agent. 
Upon surrender of a Warrant Certificate to the Warrant Agent in conformity with
subsection (a) above and, in the event of Full Physical Settlement of a
Series A-1 Warrant, receipt by the Warrant Agent of the Exercise Price therefor,
a Holder shall be deemed to own and have all of the rights associated with any
Underlying Common Stock or other securities or property to which such Holder is
entitled pursuant to this Agreement upon the surrender of a Warrant Certificate
in accordance with this Agreement.

 

(d)                                 The Company acknowledges that the bank
accounts maintained by the Warrant Agent in connection with its performance
under this Agreement shall be in the Warrant Agent’s name and that the Warrant
Agent may receive investment earnings in connection with the investment at the
Warrant Agent’s risk and for its benefit of funds held in those accounts from
time to time.  The Warrant Agent shall remit any payments received in connection
with the exercise of Warrants to the Company as soon as practicable and in any
event within three Business Days by federal wire or other immediately available
funds to an account selected by the Company and notified in writing to the
Warrant Agent.

 

(e)                                  If fewer than all the Warrants represented
by a Warrant Certificate are surrendered, such Warrant Certificate shall be
surrendered and a new Warrant Certificate of the same tenor and for the number
of Warrants that were not surrendered shall promptly be executed and delivered
to the Warrant Agent by the Company. The Warrant Agent shall promptly
countersign, by either manual or facsimile signature, the new Warrant
Certificate, register it in such name or names as may be directed in writing by
the Holder and deliver the new Warrant Certificate to the Person or Persons
entitled to receive the same.

 

(f)                                   The Company shall not be required to issue
any fraction of a share of Common Stock upon exercise of any Warrants; provided,
that, if more than one Warrant shall be exercised hereunder at one time by the
same Holder, the number of full shares of Common Stock which shall be issuable
upon exercise thereof shall be computed on the basis of all Warrants so
exercised, and shall include the aggregation of all fractional shares of Common
Stock issuable upon exercise of such Warrants.  If after giving effect to the
aggregation of all shares of Common Stock (and fractions thereof) issuable upon
exercise of Warrants by the same Holder at one time as set forth in the previous
sentence, any fraction of a share of Common Stock would, except for the
provisions of this Section 3.4(f), be issuable on the exercise of any Warrant or

 

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Warrants, the Company shall pay the Holder cash in lieu of such fractional share
valued at the Closing Sale Price on the Exercise Date.

 

3.5                               Transferability of Warrants and Common Stock. 
Except as any Holder may otherwise agree in writing, any Warrants, all rights
with respect thereto and any shares of Underlying Common Stock may be sold,
transferred or disposed of, in whole or in part, without any requirement of
obtaining the consent of the Company to so sell, transfer or dispose of,
provided that any such sale, transfer or disposition shall be in accordance with
the terms of this Agreement, including, without limitation, Article 7 hereof.

 

3.6                               Compliance with Law.  (a) To the extent the
Warrants or Common Stock issued upon exercise of the Warrants are “Registrable
Securities” under the Registration Rights Agreements (“Warrant Securities”), no
Series A-1 Warrant may be exercised using Full Physical Settlement (and the
Warrant Agent shall be under no obligation to process any such exercise) and no
such Warrant Securities may be sold, transferred, hypothecated, pledged or
otherwise disposed of (any such sale, transfer or other disposition, a “Sale”,
and the action of making any such sale, transfer or other disposition, to
“Sell”), except in compliance with applicable Federal and state securities and
other applicable laws and this Section 3.6.

 

(b)                                 A Holder may exercise its Warrants if it is
an “accredited investor” or a “qualified institutional buyer”, as defined in
Regulation D and Rule 144A under the Securities Act, respectively, and a Holder
may Sell its Warrant Securities to a transferee that is an “accredited investor”
or a “qualified institutional buyer”, as such terms are defined in Regulation D
and Rule 144A under the Securities Act, respectively, provided that each of the
following conditions is satisfied:

 

(i)                                     such Holder or transferee, as the case
may be, provides certification establishing to the reasonable satisfaction of
the Company that it is an “accredited investor”;

 

(ii)                                  such Holder or transferee represents to
the Company in writing that it is acquiring the applicable Warrant Securities
for its own account and that it is not acquiring such Warrant Securities with a
view to, or for offer or Sale in connection with, any distribution thereof
(within the meaning of the Securities Act) that would be in violation of the
securities laws of the United States or any applicable state thereof, but
subject, nevertheless, to the disposition of its property being at all times
within its control;

 

(iii)                               such Holder or transferee agrees to be bound
by the provisions of this Section 3.6 with respect to any exercise of the
Warrants and any Sale of the Warrant Securities; and

 

(iv)                              such Holder or transferee represents and
warrants in writing to the Company that the Holder or transferee has sufficient
knowledge and experience in investment transactions of this type to evaluate the
merits and risks of its exercise or purchases, as applicable.

 

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(c)                                  A Holder may exercise its Warrants and may
Sell its Warrant Securities in accordance with Regulation S under the Securities
Act.

 

(d)                                 A Holder may exercise its Warrants and may
Sell its Warrant Securities if:

 

(i)                                     such Holder gives written notice to the
Company of its intention to exercise or effect such Sale, which notice shall
describe the manner and circumstances of the proposed transaction in reasonable
detail;

 

(ii)                                  such notice includes a customary opinion
from internal or external counsel to the Holder to the effect that, in either
case, such proposed exercise or Sale may be effected without registration under
the Securities Act or under applicable blue sky laws; and

 

(iii)                               such Holder or transferee complies with
Sections 3.6(b)(ii), 3.6(b)(iii), and 3.6(b)(iv).

 

(e)                                  subject to Section 12.5, each certificate
representing Warrant Securities shall bear the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS. SUCH SECURITIES MAY BE OFFERED, SOLD OR TRANSFERRED ONLY IN
COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT AND OF ANY APPLICABLE STATE
SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF THE WARRANT AGREEMENT DATED AS
OF NOVEMBER       , 2010 BETWEEN GENERAL GROWTH PROPERTIES, INC. (THE
“COMPANY”), AND MELLON INVESTOR SERVICES LLC, AS WARRANT AGENT. A COPY OF SUCH
WARRANT AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.

 

(f)                                   [Intentionally omitted.]

 

(g)                                  the provisions of Section 3.6 shall not
apply to, and any Holder may exercise its Warrants or may Sell its Warrant
Securities:

 

(i)                                     in a transaction that is registered
under the Securities Act; and

 

(ii)                                  in a transaction pursuant to Rule 144 of
the Exchange Act; and

 

(iii)                               in a transaction following receipt of a
legal opinion of counsel to a Holder that the applicable Warrant Securities are
eligible for resale by the Holder without volume limitations or other
limitations under Rule 144; and

 

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(iv)                              with respect to an exercise of a Warrant, in
an exercise using Net Share Settlement.

 

(h)                                 The Warrant Agent shall not take any action
with respect to a Sale of Warrant Securities under this Section 3.6 unless and
until it has received appropriate instructions from the Company and a
certification of compliance with these provisions from the Company.

 

4.                                      REGISTRATION RIGHTS.

 

4.1                               Rule 144 Reporting.  With a view to making
available to the Holders the benefits of certain rules and regulations of the
SEC which may permit the sale of the Warrant Securities to the public without
registration, the Company agrees, so long as it is subject to the periodic
reporting requirements of the Securities Act, to use its reasonable best efforts
to:

 

(a)                                 make and keep public information available,
as those terms are understood and defined in Rule 144(c)(1) or any similar or
analogous rule promulgated under the Securities Act, at all times after the
effective date of this Agreement;

 

(b)                                 file with the SEC, in a timely manner, all
reports and other documents required of the Company under the Exchange Act; and

 

(c)                                  so long as the Holders own any Warrant
Securities, furnish to such Holders forthwith upon request: a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
under the Securities Act, and of the Exchange Act; and such other reports and
documents as any Initial Investor or Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing it to sell any such
securities without registration.

 

4.2                               Obtaining Exchange Listing.  The Company will
file a listing application for listing on the exchange on which the then
outstanding Common Stock is listed with respect to the Underlying Common Stock
as soon as practicable after the date hereof.  The Company shall use reasonable
best efforts to list the Warrants, and maintain such listing, on such exchange
or, if not possible, another U.S. national securities exchange, in connection
with any proposed underwritten distribution of the Warrants that meets the
applicable listing criteria.  A copy of any opinion of counsel accompanying a
listing application by the Company with respect to the Underlying Common Stock
or Warrants shall be furnished to the Warrant Agent, together with a letter to
the effect that the Warrant Agent may rely on the statements made in such
opinion.

 

4.3                               The Warrant Agent.  The Warrant Agent shall
have no duties or obligations under the Registration Rights Agreements and shall
have no duty to monitor or enforce the Company’s compliance with this Article 4
or the Registration Rights Agreements.

 

5.                                      ADJUSTMENTS AND OTHER RIGHTS.

 

5.1                               Stock Dividend; Subdivision or Combination of
Common Stock.  If the Company at any time issues to holders of the Common Stock
a dividend payable solely in, or other distribution solely of, Common Stock (a
“Stock Dividend”), the Exercise Price in effect at the

 

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close of business on the record date for such dividend or distribution shall be
reduced immediately thereafter to the price determined by multiplying such
Exercise Price by the quotient of (x) the number of shares of Common Stock
outstanding at the close of business on such record date divided by (y) the sum
of such number of shares and the total number of shares constituting such
dividend or other distribution.  If the Company at any time subdivides or
combines (by stock split, reverse stock split, recapitalization or otherwise)
the outstanding Common Stock into a greater or smaller number of shares, the
Exercise Price in effect immediately prior to the time of effectiveness of such
subdivision or combination shall be adjusted at such time of effectiveness to
the price determined by multiplying such Exercise Price by the quotient of
(x) the number of shares of Common Stock outstanding immediately prior to such
time of effectiveness divided by (y) the number of shares of Common Stock
outstanding at the time of effectiveness of and after giving effect to such
subdivision or combination.  In any such event referred to in this Section 5.1,
the number of shares of Common Stock issuable upon exercise of each Warrant as
in effect immediately prior to the Exercise Price adjustment contemplated by the
foregoing shall be adjusted immediately thereafter to the amount determined by
multiplying such number by the quotient of (x) the Exercise Price in effect
immediately prior to such Exercise Price adjustment divided by (y) the Exercise
Price determined in accordance with such Exercise Price adjustment.

 

5.2                               Other Dividends and Distributions.  If at any
time or from time to time prior to the exercise of any Warrant the Company shall
fix a record date for the making of a dividend or other distribution (other than
(i) as contemplated by Section 5.5, (ii) a Stock Dividend covered by Section 5.1
or (iii) a distribution of rights or warrants covered by Section 5.3), to the
holders of its Common Stock (collectively, a “Distribution”) of:

 

(A)                               any evidences of its indebtedness, any shares
of its capital stock or any other securities or property of any nature
whatsoever (including cash); or

 

(B)                               any options, warrants or other rights to
subscribe for or purchase any of the following: any evidences of its
indebtedness, any shares of its capital stock or any other securities or
property of any nature whatsoever;

 

then, in each such case, the Exercise Price in effect immediately prior to the
close of business on such record date shall be reduced immediately thereafter to
the price determined by multiplying such Exercise Price by the quotient of
(x) the Fair Market Value of the Common Stock on the last trading day
immediately preceding the first date on which the Common Stock trades regular
way on the principal national securities exchange on which the Common Stock is
listed or admitted to trading without the right to receive such Distribution,
minus the amount of cash and/or the Fair Market Value of the securities,
evidences of indebtedness, assets, rights or warrants to be so distributed in
respect of one share of Common Stock divided by (y) the Fair Market Value of the
Common Stock on the last trading day immediately preceding the first date on
which the Common Stock trades regular way on the principal national securities
exchange on which the Common Stock is listed or admitted to trading without the
right to receive such Distribution; such adjustment shall be made successively
whenever such a record date is fixed. In such event, the number of shares of
Common Stock issuable upon the exercise of each Warrant as in effect immediately
prior to the close of business on such record date shall be increased
immediately thereafter to the amount determined by multiplying such number by
the

 

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quotient of (x) the Exercise Price in effect immediately prior to the adjustment
contemplated by the immediately preceding sentence divided by (y) the new
Exercise Price determined in accordance with the immediately preceding
sentence.  If the Distribution includes Common Stock as well as other items of
the sort referred to in Section 5.2(A) or (B), then instead of adjusting for the
entire Distribution under this Section 5.2 the Common Stock portion shall be
treated as a Stock Dividend that triggers an adjustment to the Exercise Price
and number of shares of Common Stock obtainable upon exercise of each Warrant
under Section 5.1 and the other items in the Distribution shall trigger a
further adjustment to such adjusted Exercise Price and number of shares under
this Section 5.2.  In the event that such Distribution is not so made, the
Exercise Price and the number of shares of Common Stock issuable upon exercise
of each Warrant then in effect shall be readjusted, effective as of the date
when the Board determines not to distribute such shares, evidences of
indebtedness, assets, rights, cash or warrants, as the case may be, to the
Exercise Price that would then be in effect and the number of Shares that would
then be issuable upon exercise of this Warrant if such record date had not been
fixed.

 

5.3                               Rights Offerings.  If at any time the Company
shall distribute rights or warrants to all or substantially all holders of its
Common Stock entitling them, for a period of not more than 45 days, to subscribe
for or purchase shares of Common Stock at a price per share less than the Fair
Market Value of the Common Stock on the last trading day preceding the date on
which the Board declares such distribution of rights or warrants, the Exercise
Price in effect immediately prior to the close of business on the record date
for such distribution shall be reduced immediately thereafter to the price
determined by multiplying such Exercise Price by the quotient of (x) the number
of shares of Common Stock outstanding at the close of business on such record
date plus the number of shares of Common Stock which the aggregate of the
offering price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at such Fair Market Value divided by
(y) the number of shares of Common Stock outstanding at the close of business on
such record date plus the number of shares of Common Stock so offered for
subscription or purchase.  In such event, the number of shares of Common Stock
issuable upon the exercise of each Warrant as in effect immediately prior to the
close of business on such record date shall be increased immediately thereafter
to the amount determined by multiplying such number by the quotient of (x) the
Exercise Price in effect immediately prior to the adjustment contemplated by the
immediately preceding sentence divided by (y) the new Exercise Price determined
in accordance with the immediately preceding sentence.  In case any rights or
warrants referred to in this Section 5.3 in respect of which an adjustment shall
have been made shall expire unexercised and any shares that would have been
underlying such rights or warrants shall not have been allocated pursuant to any
backstop commitment or any similar arrangement, the Exercise Price and the
number of shares of Common Stock issuable upon exercise of each Warrant then in
effect shall be readjusted at the time of such expiration to the Exercise Price
that would then be in effect and the number of Shares that would then be
issuable upon exercise of each Warrant if no adjustment had been made on account
of such expired rights or warrants.

 

5.4                               Issuer Tender or Exchange Offers.  If the
Company or any subsidiary of the Company shall consummate a tender or exchange
offer for all or any portion of the Common Stock for a consideration per share
with a Fair Market Value greater than the Fair Market Value of the Common Stock
on the date such tender or exchange offer is first publicly announced (the
“Announcement Date”), the Exercise Price in effect immediately prior to the
expiration date for

 

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such tender or exchange offer shall be reduced immediately thereafter to the
price determined by multiplying such Exercise Price by the quotient of (x) the
Fair Market Value of the Common Stock on the Announcement Date minus the Premium
Per Post-Tender Share divided by (y) the Fair Market Value of the Common Stock
on the Announcement Date.  In such event, the number of shares of Common Stock
issuable upon the exercise of each Warrant as in effect immediately prior to
such expiration date shall be increased immediately thereafter to the amount
determined by multiplying such number by the quotient of (x) the Exercise Price
in effect immediately prior to the adjustment contemplated by the immediately
preceding sentence divided by (y) the new Exercise Price determined in
accordance with the immediately preceding sentence.  As used in this Section 5.4
with respect to any tender or exchange offer, “Premium Per Post-Tender Share”
means the quotient of (x) the amount by which the aggregate Fair Market Value of
the consideration paid in such tender or exchange offer exceeds the aggregate
Fair Market Value on the Announcement Date of the shares of Common Stock
purchased therein divided by (y) the number of shares of Common Stock
outstanding at the close of business on the expiration date for such tender or
exchange offer (after giving pro forma effect to the purchase of shares being
purchased in the tender or exchange offer).

 

5.5                               Reorganization, Reclassification,
Consolidation, Merger or Sale.  Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of the
Company’s assets or other transaction, which in each case is effected in such a
way that the shares of Common Stock are converted into the right to receive
(either directly or upon subsequent liquidation) stock, securities, other equity
interests or assets (including cash) with respect to or in exchange for shares
of Common Stock is referred to herein as “Organic Change.”  Prior to the
consummation of any Organic Change other than an Organic Change involving a
Change of Control Exchange, the Company shall make appropriate provision to
ensure that each of the Holders shall thereafter have the right to acquire and
receive, in lieu of or in addition to (as the case may be) the Common Stock
immediately theretofore acquirable and receivable upon the exercise of such
Holder’s Warrants, with the same rights afforded generally to holders of Common
Stock in connection with such Organic Change, such stock, securities, other
equity interests or assets, in each case as may be issued or payable in
connection with the Organic Change with respect to or in exchange for the number
of shares of Common Stock immediately theretofore acquirable and receivable upon
exercise of such Holder’s Warrants, for an aggregate Exercise Price per Warrant
equal to the aggregate Exercise Price per Warrant as in effect immediately prior
to such Organic Change.  Prior to the consummation of an Organic Change
involving a Change of Control Exchange, the Company shall make appropriate
provision to ensure that each of the Holders shall thereafter have the right to
acquire and receive, in lieu of or in addition to (as the case may be) the
Common Stock receivable in connection with a Change of Control Exchange, with
the same rights afforded generally to holders of Common Stock in such Organic
Change, such cash, stock, securities, other equity interests or assets, in each
case as may be issued or payable in connection with such Organic Change with
respect to or in exchange for such number of shares of Common Stock acquirable
by such Holder in such Change of Control Exchange.  In any such case, the
Company shall make appropriate provision to insure that all of the provisions of
the Warrants shall thereafter be applicable to such stock, securities, other
equity interests or assets.  The Company shall not effect any such
consolidation, merger or sale of all or substantially all of the Company’s
assets where the Warrants will be assumed by the successor entity, unless prior
to the consummation thereof, the successor entity (if other than the Company)
resulting from consolidation or merger or the entity purchasing such assets
assumes by written

 

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instrument the obligation to deliver to each such Holder upon exercise of any
Warrant, such stock, securities, equity interests or assets (including cash) as,
in accordance with Article 5, such Holder may be entitled to acquire.  For the
avoidance of doubt, the adjustments set forth in this Section 5.5 shall be
applicable to any Warrants that remain outstanding pursuant to this Agreement in
connection with a Public Stock Merger or Mixed Consideration Merger (including
any adjustment applicable in connection with such Public Stock Merger or Mixed
Consideration Merger).

 

5.6                               Other Adjustments.  The Board shall make
appropriate adjustments to the amount of cash or number of shares of Common
Stock, as the case may be, due upon exercise of the Warrants, as may be
necessary or appropriate to effectuate the intent of this Article 5 and to avoid
unjust or inequitable results as determined in its reasonable good faith
judgment, in each case to account for any adjustment to the Exercise Price and
the number of shares purchasable on exercise of Warrants for the relevant
Warrant Certificate that becomes effective, or any event requiring an adjustment
to the Exercise Price and the number of shares purchasable on exercise of
Warrants for the relevant Warrant Certificate where the record date or effective
date (in the case of a subdivision or combination of the Common Stock) of the
event occurs, during the period beginning on, and including, the Exercise Date
and ending on, and including, the related Settlement Date.

 

5.7                               Notice of Adjustment.  Whenever the number of
shares of Common Stock issuable upon the exercise of each Warrant is adjusted,
as herein provided, the Company shall cause the Warrant Agent promptly to mail
by first class mail, postage prepaid, to each Holder notice of such adjustment
or adjustments.  Additionally, within thirty days following the end of each of
the Company’s fiscal years, the Company shall cause the Warrant Agent promptly
to mail by first class mail, postage prepaid, to each Holder a certificate of a
firm of independent public accountants selected by the Board (who may be the
regular accountants employed by the Company) setting forth a summary of all
adjustments made during such fiscal year, including the number of shares of
Common Stock issuable upon the exercise of each Warrant after each such
adjustment, setting forth a brief statement in reasonable detail of the facts
requiring each such adjustment and setting forth the computation by which each
such adjustment was made. The Warrant Agent shall be fully protected in relying
on such certificate, and on any adjustment contained therein, and shall not be
deemed to have any knowledge of such adjustment unless and until it shall have
received such certificate, and shall be under no duty or responsibility with
respect to any such certificate, except to exhibit the same from time to time,
to any Holder desiring an inspection thereof during reasonable business hours.
The Warrant Agent shall not at any time be under any duty or responsibility to
any Holders to determine whether any facts exist that may require any adjustment
of the number of shares of Common Stock or other stock or property issuable on
exercise of the Warrants, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such
adjustment or the validity or value (or the kind or amount) of any shares of
Common Stock or other stock or property which may be issuable on exercise of the
Warrants, or to investigate or confirm whether the information contained in the
above referenced certificate complies with the terms of this Agreement or any
other document. The Warrant Agent shall not be responsible for any failure of
the Company to make any cash payment or to issue, transfer or deliver any shares
of Common Stock or security instruments or other securities or properties upon
the exercise of any Warrant.

 

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6.                                      CHANGE OF CONTROL.

 

6.1                               Redemption in Connection with a Change of
Control Event.  (a) Upon the occurrence of a Change of Control Event (other than
a Public Stock Merger or Mixed Consideration Merger), at the election of each
Holder in its sole discretion by written notice to the Company or the successor
to the Company on or prior to the Exercise Date, such Holder may exchange its
outstanding Warrants immediately prior to, and conditioned upon the consummation
of, such Change of Control Event for a number of shares of Common Stock in
accordance with this Section 6.1 “with the same equivalent value” as the
Redemption Value (as defined below) and, to the extent so exchanged, the
Warrants shall thereafter be extinguished. For purposes of this Section 6.1, the
Exercise Date shall mean (x) if the Company entered into a definitive agreement
with respect to a Change of Control Event and has provided to the Holders notice
of the date on which the Change in Control Event will become effective at least
twenty (20) Business Days prior to the effectiveness of such event, the tenth
(10th) Business Day prior to such event and (y) otherwise, the fifth (5th)
Business Day following the effectiveness of the Change of Control Event.

 

(b)                                 For purposes of determining the number of
shares of Common Stock “with the same equivalent value” as the Redemption Value,
the number of shares of Common Stock to be received for each Warrant by such
Holder shall equal the Redemption Value per Warrant divided by the Conversion
Value (as defined below) per share of Common Stock.  The “Redemption Value” for
any Warrant shall equal the fair value of the Warrant as of the date of such
Change of Control Event as determined by an Independent Financial Expert, by
employing a valuation based on a computation of the option value of each Warrant
using the calculation methods and making the assumptions set forth in Exhibit C.
The “Conversion Value” of a share of Common Stock shall equal (i) upon the
occurrence of a Change of Control Event pursuant to which each of the
outstanding shares of Common Stock held by holders who are not affiliated with
the Company or any entity acquiring the Company is exchanged for, converted into
or constitutes solely the right to receive a fixed amount of cash as
consideration, such cash price, or (ii) upon the occurrence of any other Change
of Control Event, the Fair Market Value (calculated for the one trading day
period immediately preceding the date of such Change of Control Event and not
the ten consecutive trading days immediately preceding the date of such Change
of Control Event contemplated by the definition of “Fair Market Value”) of a
share of Common Stock as of the trading day immediately preceding the date of
such Change of Control Event, Public Stock Merger or Mixed Consideration Merger,
as applicable. If a Holder of Warrants does not elect to receive the Redemption
Value for such Holder’s Warrants as provided by this Section 6.1, such Warrants
will remain outstanding as adjusted pursuant to the provisions of Article 5
hereof.

 

6.2                               Public Stock Merger.  (a)  In connection with
a Public Stock Merger, the Company may by written notice to the Holders not less
than ten (10) Business Days prior to the effective date of such Public Stock
Merger elect to have all the unexercised Warrants remain outstanding after the
Public Stock Merger, in which case the Warrants will remain outstanding as
adjusted pursuant to Section 5.5 and the other provisions of Article 5 hereof.

 

(b)                                 In the case of any Public Stock Merger with
respect to which the Company does not make a timely election as contemplated by
Section 6.2(a) above, the

 

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Warrants shall be automatically exchanged for a number of shares of Common Stock
with the “same equivalent value” as the Redemption Value immediately prior to,
and conditioned upon, the effective time of such Public Stock Merger in such a
manner that permits the Holder to exercise, with respect to such shares of
Common Stock, all of the rights of a Holder of Common Stock as of immediately
prior to the effective time of such Public Stock Merger and all rights of a
Holder of Common Stock with respect to the consideration to be received in
respect of such shares of Common Stock in such Public Stock Merger, and the
Warrants shall thereafter be terminated and extinguished. The determinations of
the Redemption Value and Conversion Value and the number of shares of Common
Stock to be issued shall all be determined in accordance with Section 6.1(b).

 

6.3                               Mixed Consideration Merger.  (a)  In
connection with a Mixed Consideration Merger, the Company may by written notice
to the Holders not less than ten (10) Business Days prior to the effective date
of such Mixed Consideration Merger elect the following treatment with respect to
each outstanding Warrant: (i) the Warrant shall be exchanged for a number of
shares of Common Stock with the “same equivalent value” as the Redemption Value
(each as determined in accordance with Section 6.1(a)) immediately prior to, and
conditioned upon, the effective time of such Mixed Consideration Merger in such
a manner that permits the Holder to exercise, with respect to such shares of
Common Stock, all of the rights of a Holder of Common Stock as of immediately
prior to the effective time of such Mixed Consideration Merger and all rights of
a Holder of Common Stock with respect to the consideration to be received in
respect of such shares of Common Stock in such Mixed Consideration Merger, and
such Warrant shall thereafter be terminated and extinguished, or (ii) the
Warrant shall remain outstanding after the Mixed Consideration Merger, as
further adjusted pursuant to Section 5.5 and the other provisions of Article 5
hereof.

 

(b)                                 In the case of any Mixed Consideration
Merger with respect to which the Company does not make a timely election as
contemplated by Section 6.3(a) above, the Warrants shall be automatically
exchanged for shares of Common Stock with the “same equivalent value” as the
Redemption Value immediately prior to, and conditioned upon, the effective time
of such Mixed Consideration Merger in such a manner that permits the Holder to
exercise, with respect to such shares of Common Stock, all of the rights of a
Holder of Common Stock as of immediately prior to the effective time of such
Mixed Consideration Merger and all rights of a Holder of Common Stock with
respect to the consideration to be received in respect of such shares of Common
Stock in such Mixed Consideration Merger, and the Warrants shall thereafter be
terminated and extinguished. The determinations of the Redemption Value and
Conversion Value and the number of shares of Common Stock to be issued shall all
be determined in accordance with Section 6.1(b).

 

6.4                               The Warrant Agent.  The Warrant Agent shall
have no duty or obligation to make any of the payments required under this
Article 6 unless and until it has been provided with available cash.

 

7.                                      WARRANT TRANSFER BOOKS.

 

The Warrant Certificates shall be issued in registered form only. The Company
shall cause to be kept at the office of the Warrant Agent designated for such
purpose a register in

 

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which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Warrant Certificates and of transfers or
exchanges of Warrant Certificates as herein provided (the “Warrant Register”).

 

At the option of the Holder, Warrant Certificates may be exchanged at such
office, and upon payment of the charges hereinafter provided.  Whenever any
Warrant Certificates are so surrendered for exchange, the Company shall execute,
and the Warrant Agent shall countersign, by manual or facsimile signature, and
deliver, the Warrant Certificates that the Holder making the exchange is
entitled to receive.

 

All Warrant Certificates issued upon any registration of transfer or exchange of
Warrant Certificates shall be the valid obligations of the Company, evidencing
the same obligations, and entitled to the same benefits under this Agreement, as
the Warrant Certificates surrendered for such registration of transfer or
exchange.

 

Every Warrant Certificate surrendered for registration of transfer or exchange
shall (if so required by the Company or the Warrant Agent) be duly endorsed, or
be accompanied by a written instrument of transfer in the form attached hereto
as Exhibit B or otherwise satisfactory to the Warrant Agent, properly completed
and duly executed by the Holder thereof or his attorney duly authorized in
writing.  Until a Warrant Certificate is transferred in the Warrant Register,
the Company and the Warrant Agent may treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
represented thereby for all purposes, notwithstanding any notice to the
contrary.  Neither the Company nor the Warrant Agent will be liable or
responsible for any registration or transfer of any Warrants that are registered
or to be registered in the name of a fiduciary or the nominee of a fiduciary.

 

No service charge shall be made to a Holder for any registration of transfer or
exchange of Warrant Certificates. The Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Warrant
Certificates.  The Warrant Agent shall have no duty under this Section or any
Section of this Agreement requiring the payment of taxes and other governmental
charges unless and until it is satisfied that all such taxes and/or governmental
charges have been paid.  The Warrant Agent shall be deemed satisfied if it
receives a certificate from the Company stating that all required taxes and
governmental charges have been paid.

 

8.                                      WARRANT HOLDERS.

 

8.1                               No Voting Rights.  Prior to the exercise of
Warrants and full payment of the Exercise Price thereof, or in the event of Net
Share Settlement, prior to the election of a Holder for Net Share Settlement in
accordance with the terms of this Agreement, no Holder of a Warrant Certificate,
in respect of such Warrants, shall be entitled to any rights of a stockholder of
the Company, including, without limitation, the right to vote, to consent, to
exercise any preemptive right (except as otherwise agreed in writing by the
Company, including the subscription rights set forth in the Investment Agreement
and the Stock Purchase Agreements), to receive any notice of meetings of
stockholders for the election of directors of the Company or any other matter or
to receive any notice of any proceedings of the Company

 

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8.2                               Right of Action.  All rights of action in
respect of this Agreement are vested in the Holders of the Warrants, and any
Holder of Warrants, without the consent of the Warrant Agent or the Holder of
any other Warrant, may, on such Holder’s own behalf and for such Holder’s own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, such
Holder’s right to exercise or exchange such Holder’s Warrants in the manner
provided in this Agreement or any other obligation of the Company under this
Agreement.

 

9.                                      WARRANT AGENT.

 

9.1                               Nature of Duties and Responsibilities
Assumed.  The Company hereby appoints the Warrant Agent to act as agent of the
Company as expressly set forth in this Agreement. The Warrant Agent hereby
accepts such appointment as agent of the Company and agrees to perform that
agency upon the express terms and conditions herein set forth (and no implied
terms), by all of which the Company and the Holders, by their acceptance
thereof, shall be bound. The Warrant Agent shall not by countersigning Warrant
Certificates or by any other act hereunder be deemed to make any representations
as to validity or authorization of the Warrants or the Warrant Certificates
(except as to its countersignature thereon) or of any securities or other
property delivered upon exercise or tender of any Warrant, or as to the accuracy
of the computation of the Exercise Price or the number or kind or amount of
stock or other securities or other property deliverable upon exercise of any
Warrant, the independence of any Independent Financial Expert or the correctness
of the representations of the Company made in such certificates that the Warrant
Agent receives. The Warrant Agent shall not have any duty to calculate or
determine any adjustments with respect to the Exercise Price and the Warrant
Agent shall have no duty or responsibility in determining the accuracy or
correctness of such calculation. The Warrant Agent shall not (a) be liable for
any recital or statement of fact contained herein or in the Warrant Certificates
or for any action taken, suffered or omitted to be taken by it in good faith on
the belief that any Warrant Certificate or any other documents or any signatures
are genuine or properly authorized, (b) be responsible for any failure on the
part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in the Warrant Certificates, or (c) be liable for
any act or omission in connection with this Agreement except for its own gross
negligence or willful misconduct (as each is determined by a final,
non-appealable judgment of a court of competent jurisdiction). The Warrant Agent
is hereby authorized to accept instructions with respect to the performance of
its duties hereunder from the President, any Vice President or the Secretary of
the Company and to apply to any such officer for instructions (which
instructions will be promptly given in writing when requested) and the Warrant
Agent shall not be liable and shall be indemnified and held harmless for any
action taken or suffered to be taken by it in accordance with the instructions
of any such officer, but in its discretion the Warrant Agent may in lieu thereof
accept other evidence of such or may require such further or additional evidence
as it may deem reasonable.

 

The Warrant Agent may execute and exercise any of the rights and powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys, agents or employees, provided reasonable care has been exercised in
the selection and in the continued employment of any such attorney, agent or
employee.  The Warrant Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect
hereof, unless first indemnified to its satisfaction, but this provision shall
not affect the power of

 

23

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the Warrant Agent to take such action as the Warrant Agent may consider proper,
whether with or without such indemnity. The Warrant Agent shall promptly notify
the Company in writing of any claim made or action, suit or proceeding
instituted against it arising out of or in connection with this Agreement.

 

The Company will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Warrant Agent in
order to enable it to carry out or perform its duties under this Agreement.  The
Warrant Agent shall be protected and shall incur no liability for or in respect
of any action taken or thing suffered by it in reliance upon any notice,
direction, consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.

 

The Warrant Agent shall act solely as agent of the Company hereunder and does
not assume any obligation or relationship of agency or trust with any of the
owners or holders of the Warrants.  The Warrant Agent shall not be liable except
for the failure to perform such duties as are specifically set forth herein, and
no implied covenants or obligations shall be read into this Agreement against
the Warrant Agent, whose duties and obligations shall be determined solely by
the express provisions hereof. Notwithstanding anything in this Agreement to the
contrary, Warrant Agent’s aggregate liability under this Agreement with respect
to, arising from, or arising in connection with this Agreement, or from all
services provided or omitted to be provided under this Agreement, whether in
contract, or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid hereunder by the Company to Warrant Agent as fees and charges, but
not including reimbursable expenses.

 

The Warrant Agent may consult with counsel satisfactory to it (which may be
counsel to the Company).

 

Whenever in the performance of its duties under this Agreement the Warrant Agent
deems it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter may be deemed to be conclusively proved and established by a certificate
signed by any authorized officer of the Company and delivered to the Warrant
Agent; and such certificate will be full authorization to the Warrant Agent for
any action taken, suffered or omitted by it under the provisions of this
Agreement in reliance upon such certificate.  The Warrant Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the authorized officers of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it will not be liable for any action taken, suffered or omitted to
be taken by it in good faith in accordance with instructions of any such
officer.

 

The Warrant Agent will not be under any duty or responsibility to insure
compliance with any applicable federal or state securities laws in connection
with the issuance, transfer or exchange of Warrant Certificates.

 

The Warrant Agent shall have no duties, responsibilities or obligations as the
Warrant Agent except those which are expressly set forth herein, and in any
modification or amendment hereof to which the Warrant Agent has consented in
writing, and no duties, responsibilities or

 

24

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obligations shall be implied or inferred.  Without limiting the foregoing,
unless otherwise expressly provided in this Agreement, the Warrant Agent shall
not be subject to, nor be required to comply with, or determine if any person or
entity has complied with, the Warrant Certificate or any other agreement between
or among the parties hereto, even though reference thereto may be made in this
Warrant Agreement, or to comply with any notice, instruction, direction, request
or other communication, paper or document other than as expressly set forth in
this Warrant Agreement.

 

In the event the Warrant Agent believes any ambiguity or uncertainty exists
hereunder or in any notice, instruction, direction, request or other
communication, paper or document received by the Warrant Agent hereunder, the
Warrant Agent, may, in its sole discretion, refrain from taking any action, and
shall be fully protected and shall not be liable in any way to the Company or
any Holder or other person or entity for refraining from taking such action,
unless the Warrant Agent receives written instructions signed by the Company
which eliminates such ambiguity or uncertainty to the satisfaction of the
Warrant Agent.

 

9.2                               Compensation and Reimbursement.  The Company
agrees to pay to the Warrant Agent from time to time compensation for all
services rendered by it hereunder in accordance with Schedule B hereto and as
the Company and the Warrant Agent may agree from time to time, and to reimburse
the Warrant Agent for reasonable expenses and disbursements actually incurred in
connection with the preparation, delivery, negotiation, amendment, execution and
administration of this Agreement (including the reasonable compensation and out
of pocket expenses of its counsel), and further agrees to indemnify the Warrant
Agent for, and to hold it harmless against, any loss, liability, suit, action,
proceeding, judgment, claim, settlement, cost or expense incurred without gross
negligence, willful misconduct or bad faith on its part, (as each is determined
by a final, non-appealable judgment of a court of competent jurisdiction), for
any action taken, suffered or omitted to be taken by the Warrant Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, indirectly or directly.  The Warrant Agent shall not be obligated to
expend or risk its own funds or to take any action which it believes would
expose it to expense or liability or to a risk of incurring expense or
liability, unless it has been furnished with assurances of repayment or
indemnity satisfactory to it.

 

9.3                               Warrant Agent May Hold Company Securities. 
The Warrant Agent and any stockholder, director, officer or employee of the
Warrant Agent may buy, sell or deal in any of the Warrants or other securities
of the Company or its Affiliates or become pecuniarily interested in
transactions in which the Company or its Affiliates may be interested, or
contract with or lend money to the Company or its Affiliates or otherwise act as
fully and freely as though it were not the Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.

 

9.4                               Resignation and Removal; Appointment of
Successor.  (a)  No resignation or removal of the Warrant Agent and no
appointment of a successor warrant agent shall become effective until the
acceptance of appointment by the successor warrant agent as provided herein. The
Warrant Agent may resign its duties and be discharged from all further duties
and liability hereunder (except liability arising as a result of the Warrant
Agent’s own gross negligence,

 

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willful misconduct or bad faith) after giving written notice to the Company at
least thirty (30) days prior to the date such resignation will become effective.
The Company shall, upon written request of Holders of a majority of the
outstanding Warrants, remove the Warrant Agent upon written notice provided at
least thirty (30) days prior to the date of such removal, and the Warrant Agent
shall thereupon in like manner be discharged from all further duties and
liabilities hereunder, except as aforesaid. The Warrant Agent shall, at the
Company’s expense, cause to be mailed at the Company’s expense (by first-class
mail, postage prepaid) to each Holder of a Warrant at his last address as shown
on the register of the Company maintained by the Warrant Agent a copy of said
notice of resignation or notice of removal, as the case may be. Upon such
resignation or removal, the Person holding the greatest number of Warrants as of
the date of such event shall appoint in writing a new warrant agent reasonably
acceptable to the Company. If the Person holding the greatest number of Warrants
as of the date of such event shall fail to make such appointment within a period
of twenty (20) days after it has been notified in writing of such resignation by
the resigning Warrant Agent or after such removal, then the Company shall
appoint a new warrant agent. Any new warrant agent, whether appointed by a
Holder or by the Company, shall be a reputable bank, trust company or transfer
agent doing business under the laws of the United States or any state thereof,
in good standing and having a combined capital and surplus of not less than
$50,000,000. The combined capital and surplus of any such new warrant agent
shall be deemed to be the combined capital and surplus as set forth in the most
recent annual report of its condition published by such warrant agent prior to
its appointment, provided that such reports are published at least annually
pursuant to law or to the requirements of a Federal or state supervising or
examining authority. After acceptance in writing of such appointment by the new
warrant agent, it shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant Agent,
without any further assurance, conveyance, act or deed; but if for any reason it
shall be necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning or
removed Warrant Agent. Not later than the effective date of any such
appointment, the Company shall give notice thereof to the resigning or removed
Warrant Agent. Failure to give any notice provided for in this Section 9.4(a),
however, or any defect therein, shall not affect the legality or validity of the
resignation of the Warrant Agent or the appointment of a new warrant agent, as
the case may be.

 

(b)                                 Any Person into which the Warrant Agent or
any new warrant agent may be merged or any Person resulting from any
consolidation to which the Warrant Agent or any Person resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a party
or any Person to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent or any new
warrant agent shall be a party, shall be a successor Warrant Agent under this
Agreement without any further act, provided that such Person would be eligible
for appointment as successor to the Warrant Agent under the provisions of
Section 9.4(a).  Any such successor Warrant Agent shall promptly cause notice of
succession as Warrant Agent to be mailed (by first-class mail, postage prepaid)
to each Holder of a Warrant at such Holder’s last address as shown on the
register of the Company maintained by the Warrant Agent.

 

9.5                               Damages.  No party to this Agreement shall be
liable to any other party for any consequential, indirect, punitive, special or
incidental damages under any provision of this

 

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Agreement or for any consequential, indirect, punitive, special or incidental
damages arising out of any act or failure to act hereunder even if that party
has been advised of or has foreseen the possibility of such damages.

 

9.6                               Force Majeure.  In no event shall the Warrant
Agent be responsible or liable for any failure or delay in the performance of
its obligations under this Agreement arising out of or caused by, directly or
indirectly, forces beyond its reasonable control, including without limitation
strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and interruptions,
loss or malfunctions of utilities, communications or computer (software or
hardware) services.

 

9.7                               Survival.  The provisions of this Article 9
shall survive the termination of this Warrant Agreement and the resignation or
removal of the Warrant Agent.

 

10.                               REPRESENTATIONS AND WARRANTIES.

 

10.1                        Representations and Warranties of the Company.  The
Company hereby represents and warrants that the representations and warranties
of the Company set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5 and 3.6 of the
Investment Agreement and Stock Purchase Agreements and any other representations
and warranties made by the Company in Article III of the Investment Agreement
and Stock Purchase Agreements, in each case, to the extent relating to the
authorization and issuance of the Warrants and the shares of Common Stock
issuable upon exercise thereof, are true and accurate in all respects and not
misleading in any respect.

 

11.                               COVENANTS.

 

11.1                        Reservation of Common Stock for Issuance on Exercise
of Warrants.  The Company covenants that it will at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, solely for the purpose of issue upon exercise of Warrants as
herein provided, such number of shares of Common Stock as shall then be issuable
upon the exercise of all Warrants issuable hereunder plus such number of shares
of Common Stock as shall then be issuable upon the exercise of other outstanding
warrants, options and rights (whether or not vested), the settlement of any
forward sale, swap or other derivative contract, and the conversion of all
outstanding convertible securities or other instruments convertible into Common
Stock or rights to acquire Common Stock. The Company covenants that all shares
of Common Stock which shall be issuable shall, upon such issue, be duly and
validly issued and fully paid and non-assessable.

 

11.2                        Notice of Distributions.  At any time when the
Company declares any Distribution on its Common Stock, it shall give notice to
the Holders of all the then outstanding Warrants of any such declaration not
less than 15 days prior to the related record date for payment of the
Distribution so declared.

 

12.                               MISCELLANEOUS.

 

12.1                        Money and Other Property Deposited with the Warrant
Agent.  Any moneys, securities or other property which at any time shall be
deposited by the Company or on its behalf with the Warrant Agent pursuant to
this Agreement shall be and are hereby assigned, transferred

 

27

--------------------------------------------------------------------------------

 

and set over to the Warrant Agent in trust for the purpose for which such
moneys, securities or other property shall have been deposited; but such moneys,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law. The Warrant Agent shall
distribute any money deposited with it for payment and distribution to a Holder
to an account designated by such Holder in such amount as is appropriate. Any
money deposited with the Warrant Agent for payment and distribution to the
Holders that remains unclaimed for two years after the date the money was
deposited with the Warrant Agent shall be paid to the Company.  The Warrant
Agent shall not be under any liability for interest on any monies at any time
received by it pursuant to any of the provisions of this Agreement.

 

12.2                        Payment of Taxes.  The Company shall pay all
transfer, stamp and other similar taxes that may be imposed in respect of the
issuance or delivery of the Warrants or in respect of the issuance or delivery
by the Company of any securities upon exercise of the Warrants with respect
thereto. The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issue of any
Warrants, certificate for shares of Common Stock or other securities underlying
the Warrants or payment of cash to any Person other than the Holder of a Warrant
Certificate surrendered upon the exercise or purchase of a Warrant, and in case
of such transfer or payment, the Warrant Agent and the Company shall not be
required to issue any security or to pay any cash until such tax or charge has
been paid or it has been established to the Warrant Agent’s and the Company’s
satisfaction that no such tax or other charge is due.  The Company and each
Initial Investor agree that neither the issuance nor exercise of the Warrants is
governed by Section 83(a) of the Code or otherwise a compensatory transaction,
and the Company agrees that it will not deduct any amount as compensation in
connection with such issuance or exercise for federal income tax purpose.

 

12.3                        Surrender of Certificates.  Any Warrant Certificate
surrendered for exercise or purchase shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued by the Company. The Warrant Agent shall destroy such
cancelled Warrant Certificates.

 

12.4                        Mutilated, Destroyed, Lost and Stolen Warrant
Certificates.  If (a) any mutilated Warrant Certificate is surrendered to the
Warrant Agent or (b) the Company and the Warrant Agent receive evidence to their
satisfaction of the destruction, loss or theft of any Warrant Certificate, and
there is delivered to the Company and the Warrant Agent such appropriate
affidavit of loss, applicable processing fee and a corporate bond of indemnity
as may be required by them and satisfactory to them to save each of them
harmless, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser, the
Company shall execute and upon its written request the Warrant Agent shall
countersign and deliver, in exchange for any such mutilated Warrant Certificate
or in lieu of any such destroyed, lost or stolen Warrant Certificate, a new
Warrant Certificate of like tenor and for a like aggregate number of Warrants.

 

Upon the issuance of any new Warrant Certificate under this Section 12.4, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
(including the reasonable fees and expenses of the Warrant Agent and of counsel
to the Company) in connection therewith.

 

28

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Every new Warrant Certificate executed and delivered pursuant to this
Section 12.4 in lieu of any destroyed, lost or stolen Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates of like tenor
properly completed and duly executed and delivered hereunder.

 

The provisions of this Section 12.4 are exclusive and shall preclude (to the
extent lawful) all other rights or remedies with respect to the replacement of
mutilated, destroyed lost or stolen Warrant Certificates.

 

12.5                        Removal of Legends.  Certificates evidencing the
Warrants and shares of Common Stock issued upon exercise of the Warrants shall
not be required to contain any legend referenced in Sections 2.1 or
3.6(e) (A) while a registration statement covering the resale of the Warrants or
the shares of Common Stock is effective under the Securities Act, or
(B) following any sale of any such Warrants or shares of Common Stock pursuant
to Rule 144, or (C) following receipt of a legal opinion of counsel to Holder
that the remaining Warrants or shares of Common Stock held by Holder are
eligible for resale without volume limitations or limitations on manner of sale
under Rule 144.  In addition, the Company and the Warrant Agent will agree to
the removal of all legends with respect to Warrants or shares of Common Stock
deposited with DTC from time to time in anticipation of sale in accordance with
the volume limitations and other limitations under Rule 144, subject to the
Company’s approval of appropriate procedures, such approval not to be
unreasonably withheld, conditioned or delayed.

 

Following the time at which any such legend is no longer required (as provided
above) for certain Warrants or shares of Common Stock, the Company shall
promptly, following the delivery by Holder to the Warrant Agent of a legended
certificate representing such Warrants or shares of Common Stock, as applicable,
deliver or cause to be delivered to the Holder a certificate representing such
Warrants or shares of Common Stock that is free from such legend.  In the event
any of the legends referenced in Sections 2.1 or 3.6(e) are removed from any of
the Warrants or shares of Common Stock, and thereafter the effectiveness of a
registration statement covering such Warrants or shares of Common Stock is
suspended or the Company determines that a supplement or amendment thereto is
required by applicable securities Laws, then the Company may require that such
legends, as applicable, be placed on any such applicable Warrants or shares of
Common Stock that cannot then be sold pursuant to an effective registration
statement or under Rule 144 and Holder shall cooperate in the replacement of
such legend.  Such legend shall thereafter be removed when such Warrants or
shares of Common Stock may again be sold pursuant to an effective registration
statement or under Rule 144.

 

12.6                        Notices.  (a)  Any notice, demand or delivery
authorized by this Agreement shall be sufficiently given or made when mailed if
sent by first-class mail, postage prepaid, addressed to any Holder of a Warrant
at such Holder’s address shown on the register of the Company maintained by the
Warrant Agent and to the Company or the Warrant Agent as follows:

 

29

--------------------------------------------------------------------------------

 

If to the Company, to:

 

General Growth Properties, Inc.

110 N. Wacker Drive

Chicago, IL 60606
Attention: Marvin J. Levine

Facsimile: (312) 960-5058

 

with a copy to (which shall not constitute notice):

 

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attention: Robert W. Downes

Facsimile: (212) 558-3588

 

If to the Warrant Agent, to:

 

American Stock Transfer & Trust Company, LLC

16633 N. Dallas Parkway, Suite 600

Addison, TX 75001

Attention: Barbara J. Robbins

 

or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery.

 

(b)                                 Any notice required to be given by the
Company to the Holders pursuant to this Agreement, shall be made by mailing by
registered mail, return receipt requested, to the Holders at their respective
addresses shown on the register of the Company maintained by the Warrant Agent.
The Company hereby irrevocably authorizes the Warrant Agent, in the name and at
the expense of the Company, to mail any such notice upon receipt thereof from
the Company. Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given when mailed, whether or not the
Holder receives the notice.

 

12.7                        Applicable Law; Jurisdiction.  This Agreement and
each Warrant issued hereunder and all rights arising hereunder shall be governed
by the internal laws of the State of New York.  In connection with any action,
suit or proceeding arising out of or relating to this Agreement or the Warrants,
the parties hereto and each Holder irrevocably submit to (i) the exclusive
jurisdiction of the United States Bankruptcy Court for the Southern District of
New York until the chapter 11 cases of General Growth Properties, Inc. and its
Affiliates are closed, and (ii) the nonexclusive jurisdiction of any federal or
state court located within the County of New York, State of New York.

 

12.8                        Persons Benefiting.  This Agreement shall be binding
upon and inure to the benefit of the Company and the Warrant Agent, and their
respective successors, assigns, beneficiaries, executors and administrators, and
the Holders from time to time of the Warrants.  The Holders of the Warrants are
express third party beneficiaries of this Agreement and each

 

30

--------------------------------------------------------------------------------

 

such Holder of Warrants is hereby conferred the benefits, rights and remedies
under or by reason of the provisions of this Agreement as if a signatory
hereto.  Nothing in this Agreement is intended or shall be construed to confer
upon any Person, other than the Company, the Warrant Agent and the Holders of
the Warrants, any right, remedy or claim under or by reason of this Agreement or
any part hereof.

 

12.9                        Counterparts.  This Agreement may be executed in any
number of counterparts, each or which shall be deemed an original, but all of
which together constitute one and the same instrument.

 

12.10                 Amendments.  (a)  The Company and the Warrant Agent may
from time to time supplement or amend this Agreement without the approval of any
Holder in order to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and, in each case, which shall not adversely affect the
interests of any Holder.

 

(b)                                 In addition to the foregoing, with the
consent of the Supermajority Holders, the Company and the Warrant Agent may
modify this Agreement for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Warrant Agreement or
modifying in any manner the rights of the Holders hereunder; provided, however,
that no modification effecting the terms upon which the Warrants are
exercisable, redeemable or transferable, or reduction in the percentage required
for consent to modification of this Agreement, may be made without the consent
of each Holder affected thereby.

 

12.11                 Headings.  The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience and shall
not control or affect the meaning or construction of any of the provisions
hereof.

 

12.12                 Entire Agreement.  This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof. In the
event of any conflict, discrepancy, or ambiguity between the terms and
conditions contained in this Agreement and any schedules or attachments hereto,
the terms and conditions contained in this Agreement shall take precedence.

 

12.13                 Specific Performance.  The parties shall be entitled to
specific performance of the terms of this Agreement.  Each of the parties hereto
hereby waives (i) any defenses in any action for specific performance, including
the defense that a remedy at law would be adequate and (ii) any requirement
under any Law to post a bond or other security as a prerequisite to obtaining
equitable relief.

 

[signature page follows]

 

31

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.

 

 

GENERAL GROWTH PROPERTIES, INC.

 

 

 

 

By:

/s/ Marvin J. Levine

 

 

 

 

Name:

Marvin J. Levine

 

 

 

 

Title:

Executive Vice President and Chief Legal Officer

 

 

 

 

 

 

American Stock Transfer & Trust Company, LLC,

 

as Warrant Agent

 

 

 

 

By:

/s/ Barbara J. Robbins

 

 

 

 

Name:

Barbara J. Robbins

 

 

 

 

Title:

Sr. Vice President

 

[SIGNATURE PAGE TO GGP WARRANT AGREEMENT]

 

32

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EXHIBIT A-1

 

FORM OF FACE OF WARRANT CERTIFICATE

 

THESE WARRANTS AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS. THESE WARRANTS AND SUCH SECURITIES MAY BE
OFFERED, SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH
ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF
THE WARRANT AGREEMENT DATED AS OF NOVEMBER 9, 2010 BETWEEN GENERAL GROWTH
PROPERTIES, INC. (THE “COMPANY”) AND MELLON INVESTOR SERVICES LLC, WARRANT
AGENT. A COPY OF SUCH WARRANT AGREEMENT IS AVAILABLE AT THE OFFICES OF THE
COMPANY.

 

WARRANTS TO PURCHASE COMMON STOCK
OF GENERAL GROWTH PROPERTIES, INC.

 

No.

Certificate for

Series A-1
Warrants

 

This certifies that [HOLDER], or registered assigns, is the registered holder of
the number of Series A-1 Warrants set forth above. Each Series A-1 Warrant
entitles the holder thereof (a “Holder”), subject to the provisions contained
herein and in the Warrant Agreement referred to below, to purchase from GENERAL
GROWTH PROPERTIES, INC. (the “Company”) a number of shares of the Company’s
common stock, par value $0.01 (“Common Stock”), equal to [INSERT $10.75 FOR
BROOKFIELD WARRANTS AND BLACKSTONE B WARRANTS][INSERT $10.50 FOR BLACKSTONE F/P
WARRANTS] divided by the Exercise Price (as defined in the Warrant Agreement
referred to below), for a price per share of Common Stock equal to the Exercise
Price.

 

This Warrant Certificate is issued under and in accordance with the Warrant
Agreement, dated as of November 9, 2010 (the “Warrant Agreement”), between the
Company and Mellon Investor Services LLC, a New Jersey limited liability
company, as warrant agent (the “Warrant Agent”, which term includes any
successor Warrant Agent under the Warrant Agreement), and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the Holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement is hereby incorporated herein by reference and
made a part hereof. Reference is hereby made to the Warrant Agreement for a full
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Warrant Agent and the Holders of
the Warrants.

 

This Warrant Certificate shall terminate and be void as of the close of business
on November 9, 2017 (the “Expiration Date”).

 

33

--------------------------------------------------------------------------------

 

As provided in the Warrant Agreement and subject to the terms and conditions
therein set forth, the Series A-1 Warrants shall be exercisable from time to
time on any Business Day and ending on the Expiration Date.

 

The Exercise Price and the number of shares of Common Stock issuable upon the
exercise of each Series A-1 Warrant are subject to adjustment as provided in the
Warrant Agreement.

 

All shares of Common Stock issuable by the Company upon the exercise of
Series A-1 Warrants shall, upon such issue, be duly and validly issued and fully
paid and non-assessable.

 

In order to exercise a Series A-1 Warrant, the registered holder hereof must
surrender this Warrant Certificate at the corporate trust office of the Warrant
Agent, with the Exercise Subscription Form on the reverse hereof duly executed
by the Holder hereof, with signature guaranteed as therein specified, together
with any required payment in full of the Exercise Price (unless the Holder shall
have elected Net Share Settlement, as such term is defined in the Warrant
Agreement) then in effect for the shares(s) of Underlying Common Stock as to
which the Series A-1 Warrant(s) represented by this Warrant Certificate are
submitted for exercise, all subject to the terms and conditions hereof and of
the Warrant Agreement.

 

The Company shall pay all transfer, stamp and other similar taxes that may be
imposed in respect of the issuance or delivery of the Series A-1 Warrants or in
respect of the issuance or delivery by the Company of any securities upon
exercise of the Series A-1 Warrants with respect thereto. The Company shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any Series A-1 Warrants, certificate for
shares of Common Stock or other securities underlying the Series A-1 Warrants or
payment of cash in each case to any Person other than the Holder of a Warrant
Certificate surrendered upon the exercise or purchase of a Series A-1 Warrant,
and in case of such transfer or payment, the Warrant Agent and the Company shall
not be required to issue any security or to pay any cash until such tax or
charge has been paid or it has been established to the Warrant Agent’s and the
Company’s satisfaction that no such tax or other charge is due.

 

This Warrant Certificate and all rights hereunder are transferable by the
registered holder hereof, subject to the terms of the Warrant Agreement, in
whole or in part, on the register of the Company, upon surrender of this Warrant
Certificate for registration of transfer at the office of the Warrant Agent
maintained for such purpose in the City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Warrant Agent duly executed by, the Holder hereof or his
attorney duly authorized in writing, with signature guaranteed as specified in
the attached Form of Assignment. Upon any partial transfer, the Company will
issue and deliver to such holder a new Warrant Certificate or Certificates with
respect to any portion not so transferred.

 

No service charge shall be made to a Holder for any registration of transfer or
exchange of the Warrant Certificates, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

 

34

--------------------------------------------------------------------------------

 

Subject to compliance with any restrictions on transfer under applicable law and
this Warrant Agreement, each taker and holder of this Warrant Certificate by
taking or holding the same, consents and agrees that this Warrant Certificate
when duly endorsed in blank shall be deemed negotiable and that when this
Warrant Certificate shall have been so endorsed, the holder hereof may be
treated by the Company, the Warrant Agent and all other Persons dealing with
this Warrant Certificate as the absolute owner hereof for any purpose and as the
Person entitled to exercise the rights represented hereby, or to the transfer
hereof on the register of the Company maintained by the Warrant Agent, any
notice to the contrary notwithstanding, but until such transfer on such
register, the Company and the Warrant Agent may treat the registered Holder
hereof as the owner for all purposes.

 

This Warrant Certificate and the Warrant Agreement are subject to amendment as
provided in the Warrant Agreement.

 

All terms used in this Warrant Certificate that are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

 

Copies of the Warrant Agreement are on file at the office of the Company and the
Warrant Agent and may be obtained by writing to the Company or the Warrant Agent
at the following address: Mellon Investor Services LLC, 200 W. Monroe Street,
Suite 1590, Chicago, IL 60606.

 

This Warrant Certificate shall not be valid for any purpose until it shall have
been countersigned by the Warrant Agent.

 

Dated: November 9, 2010

 

 

GENERAL GROWTH PROPERTIES, INC.

 

 

 

 

 

By:

 

 

 

Name and Title:

 

 

 

 

By:

 

 

 

Name and Title:

 

Countersigned:

 

 

 

Mellon Investor Services LLC, as Warrant Agent

 

 

 

By:

 

 

 

Name:

 

 

Authorized Officer

 

 

35

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EXHIBIT A

 

FORM OF REVERSE OF SERIES A-1 WARRANT CERTIFICATE

 

EXERCISE SUBSCRIPTION FORM

 

(To be executed only upon exercise of Warrant)

 

To:

 

The undersigned irrevocably exercises
                                             of the Series A-1 Warrants for the
purchase of one share (subject to adjustment in accordance with the Warrant
Agreement) of common stock, par value $0.01, of General Growth Properties, Inc.
for each Series A-1 Warrant represented by the Warrant Certificate and herewith
(i) elects for Net Share Settlement of such Series A-1 Warrants by marking X in
the space that follows         , or (ii) makes payment of
$                               (such payment being by means permitted by the
Warrant Agreement and the within Warrant Certificate), in each case at the
Exercise Price and on the terms and conditions specified in the within Warrant
Certificate and the Warrant Agreement therein referred to, and herewith
surrenders this Warrant Certificate and all right, title and interest therein to
                                                 and directs that the shares of
Common Stock deliverable upon the exercise of such Series A-1 Warrants be
registered in the name and delivered at the address specified below.

 

Date

 

 

 

 

 

 

 

*

 

(Signature of Owner)

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

(City)

(State) (Zip Code)

 

 

 

Signature Guaranteed by:

 

 

 

 

 

--------------------------------------------------------------------------------

*                                         The signature must correspond with the
name as written upon the face of the within Warrant Certificate in every
particular, without alteration or enlargement or any change whatever, and must
be guaranteed by a participant in a Medallion Signature Guarantee Program at a
guarantee level acceptable to the Company’s transfer agent.

 

1

--------------------------------------------------------------------------------

 

Securities to be issued to:

 

Please insert social security or identifying number:

 

Name:

 

Street Address:

 

City, State and Zip Code:

 

Any unexercised Series A-1 Warrants evidenced by the within Warrant Certificate
to be issued to:

 

Please insert social security or identifying number:

 

Name:

 

Street Address:

 

City, State and Zip Code:

 

2

--------------------------------------------------------------------------------

 

EXHIBIT A-2

 

FORM OF FACE OF WARRANT CERTIFICATE

 

THESE WARRANTS AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS. THESE WARRANTS AND SUCH SECURITIES MAY BE
OFFERED, SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH
ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF
THE WARRANT AGREEMENT DATED AS OF NOVEMBER 9, 2010 BETWEEN GENERAL GROWTH
PROPERTIES, INC. (THE “COMPANY”) AND MELLON INVESTOR SERVICES LLC, WARRANT
AGENT. A COPY OF SUCH WARRANT AGREEMENT IS AVAILABLE AT THE OFFICES OF THE
COMPANY.

 

WARRANTS TO PURCHASE COMMON STOCK
OF GENERAL GROWTH PROPERTIES, INC.

 

No.

 

Certificate for

Series A-2

Warrants

 

This certifies that [HOLDER], or registered assigns, is the registered holder of
the number of Series A-2 Warrants set forth above. Each Series A-2 Warrant
entitles the holder thereof (a “Holder”), subject to the provisions contained
herein and in the Warrant Agreement referred to below, to purchase from GENERAL
GROWTH PROPERTIES, INC. (the “Company”) by means of Net Share Settlement (as
defined in the Warrant Agreement defined below) a number of shares of the
Company’s common stock, par value $0.01 (“Common Stock”), equal to $10.50
divided by the Exercise Price (as defined in the Warrant Agreement referred to
below), for a price per share of Common Stock equal to the Exercise Price.

 

This Warrant Certificate is issued under and in accordance with the Warrant
Agreement, dated as of November 9, 2010 (the “Warrant Agreement”), between the
Company and Mellon Investor Services LLC, a New Jersey limited liability
company, as warrant agent (the “Warrant Agent”, which term includes any
successor Warrant Agent under the Warrant Agreement), and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the Holder of this Warrant Certificate consents by acceptance
hereof. The Warrant Agreement is hereby incorporated herein by reference and
made a part hereof. Reference is hereby made to the Warrant Agreement for a full
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Warrant Agent and the Holders of
the Warrants.

 

This Warrant Certificate shall terminate and be void as of the close of business
on November 9, 2017 (the “Expiration Date”).

 

1

--------------------------------------------------------------------------------

 

As provided in the Warrant Agreement and subject to the terms and conditions
therein set forth, the Series A-2 Warrants shall be exercisable from time to
time on any Business Day and ending on the Expiration Date.

 

The Exercise Price and the number of shares of Common Stock issuable upon the
exercise of each Series A-2 Warrant are subject to adjustment as provided in the
Warrant Agreement.

 

All shares of Common Stock issuable by the Company upon the exercise of
Series A-2 Warrants shall, upon such issue, be duly and validly issued and fully
paid and non-assessable.

 

In order to exercise a Series A-2 Warrant, the registered holder hereof must
surrender this Warrant Certificate at the corporate trust office of the Warrant
Agent, with the Exercise Subscription Form on the reverse hereof duly executed
by the Holder hereof, with signature guaranteed as therein specified, all
subject to the terms and conditions hereof and of the Warrant Agreement.

 

The Company shall pay all transfer, stamp and other similar taxes that may be
imposed in respect of the issuance or delivery of the Series A-2 Warrants or in
respect of the issuance or delivery by the Company of any securities upon
exercise of the Series A-2 Warrants with respect thereto. The Company shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any Series A-2 Warrants, certificate for
shares of Common Stock or other securities underlying the Series A-2 Warrants or
payment of cash in each case to any Person other than the Holder of a Warrant
Certificate surrendered upon the exercise or purchase of a Series A-2 Warrant,
and in case of such transfer or payment, the Warrant Agent and the Company shall
not be required to issue any security or to pay any cash until such tax or
charge has been paid or it has been established to the Warrant Agent’s and the
Company’s satisfaction that no such tax or other charge is due.

 

This Warrant Certificate and all rights hereunder are transferable by the
registered holder hereof, subject to the terms of the Warrant Agreement, in
whole or in part, on the register of the Company, upon surrender of this Warrant
Certificate for registration of transfer at the office of the Warrant Agent
maintained for such purpose in the City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Warrant Agent duly executed by, the Holder hereof or his
attorney duly authorized in writing, with signature guaranteed as specified in
the attached Form of Assignment. Upon any partial transfer, the Company will
issue and deliver to such holder a new Warrant Certificate or Certificates with
respect to any portion not so transferred.

 

No service charge shall be made to a Holder for any registration of transfer or
exchange of the Warrant Certificates, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

 

Subject to compliance with any restrictions on transfer under applicable law and
this Warrant Agreement, each taker and holder of this Warrant Certificate by
taking or holding the same, consents and agrees that this Warrant Certificate
when duly endorsed in blank shall be

 

2

--------------------------------------------------------------------------------

 

deemed negotiable and that when this Warrant Certificate shall have been so
endorsed, the holder hereof may be treated by the Company, the Warrant Agent and
all other Persons dealing with this Warrant Certificate as the absolute owner
hereof for any purpose and as the Person entitled to exercise the rights
represented hereby, or to the transfer hereof on the register of the Company
maintained by the Warrant Agent, any notice to the contrary notwithstanding, but
until such transfer on such register, the Company and the Warrant Agent may
treat the registered Holder hereof as the owner for all purposes.

 

This Warrant Certificate and the Warrant Agreement are subject to amendment as
provided in the Warrant Agreement.

 

All terms used in this Warrant Certificate that are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

 

Copies of the Warrant Agreement are on file at the office of the Company and the
Warrant Agent and may be obtained by writing to the Company or the Warrant Agent
at the following address: Mellon Investor Services LLC, 200 W. Monroe Street,
Suite 1590, Chicago, IL 60606.

 

This Warrant Certificate shall not be valid for any purpose until it shall have
been countersigned by the Warrant Agent.

 

Dated: November 9, 2010

 

 

GENERAL GROWTH PROPERTIES, INC.

 

 

 

 

 

By:

 

 

 

Name and Title:

 

 

 

 

By:

 

 

 

Name and Title:

 

 

Countersigned:

 

 

 

Mellon Investor Services LLC, as Warrant Agent

 

 

 

By:

 

 

 

 

Name:

 

 

Authorized Officer

 

 

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EXHIBIT A

 

FORM OF REVERSE OF SERIES A-2 WARRANT CERTIFICATE

 

EXERCISE SUBSCRIPTION FORM

 

(To be executed only upon exercise of Warrant)

 

To:

 

The undersigned irrevocably exercises
                                             of the Series A-2 Warrants for the
purchase of one share (subject to adjustment in accordance with the Warrant
Agreement) of common stock, par value $0.01, of General Growth Properties, Inc.
for each Series A-2 Warrant represented by the Warrant Certificate by means of
Net Share Settlement of such Series A-2 Warrants, at the Exercise Price and on
the terms and conditions specified in the within Warrant Certificate and the
Warrant Agreement therein referred to, and herewith surrenders this Warrant
Certificate and all right, title and interest therein to
                                                 and directs that the shares of
Common Stock deliverable upon the exercise of such Series A-2 Warrants be
registered in the name and delivered at the address specified below.

 

Date

 

 

 

 

 

 

 

*

 

(Signature of Owner)

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

(City)

(State) (Zip Code)

 

 

 

Signature Guaranteed by:

 

 

 

 

 

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*                                         The signature must correspond with the
name as written upon the face of the within Warrant Certificate in every
particular, without alteration or enlargement or any change whatever, and must
be guaranteed by a participant in a Medallion Signature Guarantee Program at a
guarantee level acceptable to the Company’s transfer agent.

 

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Securities to be issued to:

 

Please insert social security or identifying number:

 

Name:

 

Street Address:

 

City, State and Zip Code:

 

Any unexercised Series A-2 Warrants evidenced by the within Warrant Certificate
to be issued to:

 

Please insert social security or identifying number:

 

Name:

 

Street Address:

 

City, State and Zip Code:

 

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EXHIBIT B

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned registered holder of the within Warrant
Certificate hereby sells, assigns, and transfers unto the Assignee(s) named
below (including the undersigned with respect to any Warrants constituting a
part of the Warrants evidenced by the within Warrant Certificate not being
assigned hereby) all of the right of the undersigned under the within Warrant
Certificate, with respect to the number of Warrants set forth below:

 

Names of Assignees

 

Address

 

Social Security or
other Identifying
Number of
Assignee(s)

 

Series and
Number of
Warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and does hereby irrevocably constitute and appoint                             
the undersigned’s attorney to make such transfer on the books of
                         maintained for that purpose, with full power of
substitution in the premises.

 

Date:

 

 

 

 

 

 

 

*

 

(Signature of Owner)

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

(City)

(State) (Zip Code)

 

 

 

Signature Guaranteed by:

 

 

 

 

 

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*                                         The signature must correspond with the
name as written upon the face of the within Warrant Certificate in every
particular, without alteration or enlargement or any change whatever, and must
be guaranteed by a participant in a Medallion Signature Guarantee Program at a
guarantee level acceptable to the Company’s transfer agent.

 

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EXHIBIT C

 

Option Pricing Assumptions / Methodology

 

For the purpose of this Exhibit C:

 

“Acquiror” means (A) the third party that has entered into definitive document
for a transaction, or (B) the offeror in the event of a tender or exchange
offer.

 

“Reference Date” means the date of consummation of a Change of Control Event.

 

The Redemption Value of the Warrants shall be determined using the Black-Scholes
Model as applied to third party options (i.e., options issued by a third party
that is not affiliated with the issuer of the underlying stock). For purposes of
the model, the following terms shall have the respective meanings set forth
below:

 

Underlying Security Price:

 

·

In the event of a merger or other acquisition,

 

 

 

 

 

 

 

(A)

that is an “all cash” deal, the cash per share of Common Stock to be paid to the
Company’s stockholders in the transaction;

 

 

 

 

 

 

 

 

(B)

that is an “all Public Stock” deal,

 

 

 

 

 

 

 

 

 

(1) that is a “fixed exchange ratio” transaction, a “fixed value” transaction
where as a result of a cap, floor, collar or similar mechanism the number of
Acquiror’s shares to be paid per share of Common Stock to the Company’s
stockholders in the transaction is greater or less than it would otherwise have
been or a transaction that is not otherwise described in this clause (B)(1) or
clause (B)(2) below, the product of (i) the Fair Market Value of the Acquiror’s
common stock on the day preceding the date of the Preliminary Change of Control
Event and (ii) the number of Acquiror’s shares per share of Common Stock to be
paid to the Company’s stockholders in the transaction (provided that the
Independent Financial Expert shall make appropriate adjustments to the Fair
Market Value of the Acquiror’s common stock referred to above as may be
necessary or appropriate to effectuate the intent of this Exhibit C and to avoid
unjust or inequitable results as determined in its reasonable good faith
judgment, in each case to account for any event impacting the Acquiror’s common
stock that is analogous to any of the events described in Article V of this
Agreement if the record date, ex date or effective date of that event occurs
during or after the 10

 

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trading day period over which such Fair Market Value is measured) and

 

 

 

 

 

 

 

 

 

(2) that is a “fixed value” transaction not covered by clause (B)(1) above, the
value per share of Common Stock to be paid to the Company’s stockholders in the
transaction;

 

 

 

 

 

 

 

 

(C)

that is a transaction contemplating various forms of consideration for each
share of Common Stock,

 

 

 

 

 

 

 

 

 

(1) the cash portion, if any, shall be valued as described in clause (A) above,

 

 

 

 

 

 

 

 

 

(2) the Public Stock portion shall be valued as described in clause (B) above
and

 

 

 

 

 

 

 

 

 

(3) any other forms of consideration shall be valued by the Independent
Financial Expert valuing the Warrants, using one or more valuation methods that
the Independent Financial Expert in its best professional judgment determines to
be most appropriate, assuming such consideration (if securities) is fully
distributed and is to be sold in an arm’s-length transaction and there was no
compulsion on the part of any party to such sale to buy or sell and taking into
account all relevant factors and without applying any discounts to such
consideration.

 

 

 

 

 

 

 

·

In the event of all other Change of Control Event events, the Fair Market Value
per share of the Common Stock on the last trading day preceding the date of the
Change of Control Event.

 

 

 

 

 

Exercise Price:

 

The Exercise Price as adjusted and then in effect for the Warrant.

 

 

 

 

 

Dividend Rate:

 

0 (which reflects the fact that the antidilution adjustment provisions cover all
dividends).

 

 

 

 

 

Interest Rate:

 

The annual yield as of the Reference Date (expressed on a semi-annual basis in
the manner in which U.S. treasury notes are ordinarily quoted) of the U.S.
treasury note maturing approximately at the Expiration Date as selected by the
Independent Financial Expert.

 

 

 

 

 

Put or Call:

 

Call

 

 

 

Time to Expiration:

 

The number of days from the Expiration Date (as defined in Section 3.3) to the
Reference Date divided by 365.

 

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Settlement Date:

 

The scheduled date of consummation of the Change of Control Event.

 

 

 

Volatility:

 

For calculation of Redemption Value in connection with a Change of Control Event
with respect to the Warrants, 20%; provided, however, that if the Warrants are
adjusted as a result of a Change of Control Event, volatility for purposes of
calculating Redemption Value in connection with succeeding Change of Control
Events with respect to such warrants (or their successors) shall be as
determined by an Independent Financial Expert engaged to make the calculation,
who shall be instructed to assume for purposes of the calculation that such
succeeding Change of Control Event had not occurred.

 

Such valuation of the Warrant shall not be discounted in any way.

 

For illustrative purposes only, an example Black-Scholes model calculation with
respect to a hypothetical warrant appears on the following page.

 

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Illustrative Example

 

Inputs:

 

S = Underlying Security Price

 

X = Exercise Price

 

PV(X) = Present value of the Exercise Price, discounted at a rate of R = X *
(e^-(R * T))

 

V = Volatility

 

R = continuously compounded risk free rate = 2 * [ ln (1 + Interest Rate / 2)]

 

T = Time to Expiration

 

W = warrant value per underlying share

 

Z = number of shares underlying warrants

 

Value = total warrant value

 

Formulaic inputs:

 

D1 = [ ln [ S / X] + (R + (V^2 / 2)) * T)] ÷ (V * √T)

 

D2 = [ ln [ S / X] + (R - (V^2 / 2)) * T)] ÷ (V * √T)

 

Black-Scholes Formula

 

W = [N(D1) * S] — [N(D2) * PV(X)]

 

Where “N” is the cumulative normal probability function

 

Value = W * Z

 

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(1)   Note: Amounts calculated herein may not foot due to rounding error. For
precise calculations, decimal points should not be rounded.

 

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Example of a Hypothetical Warrant:(1)

 

Inputs:

 

Interest Rate = 4.00%

 

S = $50.00

 

X = $60.00

 

PV(X) = $55.43

 

V = 25%

 

R = 3.96%

 

T = 2

 

Z = 100

 

Formulaic inputs:

 

D1           = [ ln [ S / X] + (R + (V^2 / 2)) * T)] ÷ (V * √T)

 

= (-0.1149)

 

D2           = [ ln [ S / X] + (R - (V^2 / 2)) * T)] ÷ (V * √T)

 

= (-0.4684)

 

Black-Scholes Formula

 

W            = [N(D1) * S] — [N(D2) * PV(E)]

 

= $4.99

 

Total Warrant Value

 

Value     = W * Z

 

= $499

 

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SCHEDULE A

 

ALLOCATIONS OF WARRANTS TO INITIAL INVESTORS

 

Initial Investor

 

Total Number and Series of Warrants to be
Delivered to Initial Investor (on date of Warrant
Agreement)

 

 

 

 

 

Blackstone Purchaser

 

5,000,000 Series A-1 Warrants

 

 

 

 

 

Brookfield Purchaser

 

57,500,000 Series A-1 Warrants

 

 

 

 

 

Fairholme Purchasers

 

41,071,429 Series A-2 Warrants

 

 

 

 

 

Pershing Square Purchasers

 

16,428,571 Series A-2 Warrants

 

 

SCHEDULE B

 

WARRANT AGENT COMPENSATION

 

Service Description

 

Fees

 

Warrant Agent

 

 

 

 

 

 

 

Initial Setup (one-time charge)

 

$

2,500.00

 

 

 

 

 

Annual Administration

 

$

3,500.00

 

 

 

 

 

Warrant Conversion Agent

 

 

 

 

 

 

 

Set Up and Administrative Fee

 

$

5,000.00

 

 

 

 

 

Processing Accounts, each

 

$

50.00

 

 

 

 

 

Conversions requiring additional handling (window items, deficient items,
correspondence items, legal items, items not providing a taxpayer identification
number, Transfer Requests, etc), additional each

 

$

15.00

 

 

 

 

 

Requisitioning Funds, each requisition

 

$

25.00

 

 

 

 

 

Expiration

 

$

1,000.00

 

 

 

 

 

Special Services

 

Additional

 

 

 

 

 

Out of Pocket Expenses Including Postage, Printing, Stationery, Overtime,
Transportation, Microfilming, Imprinting, Mailing, etc.

 

Additional

 

 

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