Exhibit 10.4

 

Execution Copy

 

 

 

 

WARRANT AND REGISTRATION RIGHTS AGREEMENT

 

 

BETWEEN

 

 

GENERAL GROWTH PROPERTIES, INC.

 

 

AND

 

MELLON INVESTOR SERVICES LLC,

 

 

as WARRANT AGENT

 

 

Dated as of May 10, 2010

 

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.     DEFINITIONS

 

2.     ORIGINAL ISSUE OF WARRANTS

 

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

 

3.1

Exercise Price

10

3.2

Exercise of Warrants

10

3.3

Expiration of Warrants

10

3.4

Method of Exercise; Settlement of Warrant

10

3.5

Transferability of Warrants and Common Stock

12

3.6

Compliance with Law

12

4.     REGISTRATION RIGHTS AND PROCEDURES AND LISTING.

 

4.1

Applicability; Registration

15

4.2

Expenses of Registration

19

4.3

Obligations of the Company

19

4.4

Suspension of Sales

22

4.5

Termination of Registration Rights

22

4.6

Furnishing Information

22

4.7

Indemnification

23

4.8

Contribution

24

4.9

Representations, Warranties and Indemnities to Survive

25

4.10

Lock-Up Agreements

25

4.11

Rule 144 Reporting

25

4.12

Obtaining Exchange Listing

26

4.13

The Warrant Agent

26

5.     ADJUSTMENTS AND OTHER RIGHTS

 

5.1

Stock Dividend; Subdivision or Combination of Common Stock

26

5.2

Other Dividends and Distributions

27

5.3

Rights Offerings

27

 

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5.4

Issuer Tender or Exchange Offers

28

5.5

Reorganization, Reclassification, Consolidation, Merger or Sale

28

5.6

Other Adjustments

29

5.7

Notice of Adjustment

29

6.     CHANGE OF CONTROL

 

6.1

Redemption in Connection with a Change of Control Event

30

6.2

Public Stock Merger

31

6.3

Mixed Consideration Merger

31

6.4

The Warrant Agent

31

7.     WARRANT TRANSFER BOOKS

 

8.     WARRANT HOLDERS

 

8.1

No Voting Rights

32

8.2

Right of Action

32

9.     WARRANT AGENT

 

9.1

Nature of Duties and Responsibilities Assumed

33

9.2

Compensation and Reimbursement

35

9.3

Warrant Agent May Hold Company Securities

35

9.4

Resignation and Removal; Appointment of Successor

35

9.5

Damages

36

9.6

Force Majeure

37

9.7

Survival

37

10.   REPRESENTATIONS AND WARRANTIES

 

10.1

Representations and Warranties of the Company

37

11.   COVENANTS

 

11.1

Reservation of Common Stock for Issuance on Exercise of Warrants

37

11.2

Notice of Distributions

37

11.3

Cancellation of Warrants

37

12.   MISCELLANEOUS

 

12.1

Money and Other Property Deposited with the Warrant Agent

37

12.2

Payment of Taxes

38

12.3

Surrender of Certificates

38

12.4

Mutilated, Destroyed, Lost and Stolen Warrant Certificates

38

12.5

Removal of Legends

39

 

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12.6

Notices

40

12.7

Applicable Law; Jurisdiction

41

12.8

Persons Benefiting

41

12.9

Relationship to Investment Agreement and Stock Purchase Agreements

41

12.10

Counterparts

42

12.11

Amendments

42

12.12

Headings

42

12.13

Entire Agreement

42

12.14

Specific Performance

42

 

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List of Exhibits

 

EXHIBIT A — Form of Warrant Certificate

 

EXHIBIT B — Form of Assignment

 

EXHIBIT C — Option Pricing Assumptions / Methodology

 

SCHEDULE A — Allocations of Warrants to Initial Investors and Vesting

 

SCHEDULE B — Warrant Agent Compensation

 

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WARRANT AND REGISTRATION RIGHTS AGREEMENT

 

WARRANT AND REGISTRATION RIGHTS AGREEMENT, dated as of May 10, 2010 (together
with the Warrants, this “Agreement”), by and between General Growth
Properties, Inc., a Delaware corporation (the “Company”), and Mellon Investor
Services LLC, a New Jersey limited liability company (together with its
successors and assigns, the “Warrant Agent”).

 

WITNESSETH:

 

WHEREAS, the Company is issuing and delivering warrant certificates (the
“Warrant Certificates”) evidencing Warrants to purchase up to an aggregate of
102,857,143 shares of its Common Stock, subject to adjustment, including
(a) 60,000,000 shares of its Common Stock, subject to adjustment, in connection
with that certain Cornerstone Investment Agreement, dated as of March 31, 2010,
by and between REP Investments LLC and the Company (as amended from time to
time, the “Investment Agreement”), (b) 42,857,143 shares of its Common Stock,
subject to adjustment, in connection with that certain Stock Purchase Agreement,
dated 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”) and (c) 0 shares of its Common Stock in
connection with that certain Stock Purchase Agreement, dated 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 each of the Brookfield Purchaser (as defined herein), the
Fairholme Purchasers and Pershing Square Purchasers, a “Purchaser”) 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”) pursuant to each of which each Purchaser 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;

 

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

 

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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.

 

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 Purchaser:  the Purchaser defined in the Investment Agreement.

 

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.

 

Cash Redemption Value:  the meaning set forth in Section 6.1.

 

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, 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

 

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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.

 

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.

 

Distribution:  the meaning set forth in Section 5.2.

 

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

 

Exercise Date:  the meaning set forth in Section 3.4.

 

Exercise Price:  the meaning set forth in Section 3.1.

 

Expiration Date:  the meaning set forth in Section 3.3.

 

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

 

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

 

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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.

 

(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 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(a).

 

GGO Warrants: the meaning set forth in Section 11.3.

 

Holders:  from time to time, the holders of the Warrants and, unless otherwise
provided or indicated herein, the holders of the Registrable Securities.

 

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

 

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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 (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.

 

Initiating Holder(s):  the meaning set forth in Section 4.1(b).

 

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

 

Loss:  the meaning set forth in Section 4.7(a)(i).

 

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(b).

 

Net Share Settlement:  the settlement method 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 Net Share Amount
without any payment therefor.

 

New Warrants:  the meaning set forth in Section 11.3.

 

Organic Change:  the meaning set forth in Section 5.5.

 

Other Stockholders:  means Persons (other than Holders) who, by virtue of
agreements with the Company (other than this Agreement), are entitled to include
their securities in a registration.

 

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

 

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

 

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.

 

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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.

 

Prospectus: the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any of the Registrable Securities covered by such Registration
Statement and by all other amendments and supplements to the prospectus,
including post-effective amendments and all material incorporated by reference
in such prospectus.

 

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 and (c) with respect to Pershing Square Purchasers, the Pershing
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.

 

Purchaser:  the meaning set forth in the recitals hereto.

 

Qualifying Employee Stock:  means (i) rights and options issued in the ordinary
course of business under employee benefits plans and any securities issued after
the date hereof upon exercise of such rights and options and (ii) restricted
stock and restricted stock units issued after the date hereof in the ordinary
course of business under employee benefit plans and securities issued after the
date hereof in settlement of any such restricted stock units.

 

Registrable Securities:  means all Warrants and shares of Common Stock issuable
under the Warrants to each Initial Investor (or their designee(s) in accordance
with the last sentence of Section 2.2(a)) or otherwise held by each Initial
Investor or their designee(s) as of the date hereof and at any time during the
term of this Agreement.  Registrable Securities shall continue to be Registrable
Securities (whether they continue to be held by each Initial Investor or their
designee(s) or are transferred or sold to other Persons pursuant to this
Agreement) until (i) they

 

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are sold pursuant to an effective Registration Statement under the Securities
Act, (ii) after such securities have been sold pursuant to Rule 144 (or any
similar provision then in force, but not Rule 144A), (iii) they shall have
otherwise been transferred and new securities not subject to transfer
restrictions under any federal securities laws and not bearing any legend
restricting further transfer shall have been delivered by the Company, all
applicable holding periods shall have expired, and no other applicable and
legally binding restriction on transfer by the holder thereof shall exist,
(iv) they are eligible for sale pursuant to Rule 144 under the Securities Act
without limitation thereunder on volume or manner of sale, or (v) when such
securities cease to be outstanding.

 

Registration Expenses:  mean all expenses incurred by the Company in effecting
any registration pursuant to this Agreement, including, without limitation, all
registration and filing fees, printing expenses, the reasonable fees and
disbursements of one counsel for all Holders (which counsel shall be selected by
a majority of the selling Holders), fees and reasonable disbursements of counsel
for the Company, Blue Sky fees and expenses, and expenses of the Company’s
independent accountants in connection with any regular or special reviews or
audits incident to or required by any such registration, but shall not include
Selling Expenses.

 

Registration Rights:  the rights of Holders set forth in Article 4 to have
Registrable Securities registered under the Securities Act for sale under one or
more effective Registration Statements.

 

Registration Statement:  any registration statement filed by the Company under
the Securities Act pursuant to the Registration Rights, including the related
Prospectus, any amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.

 

register, registered, and registration:  shall refer to, unless the context
dictates otherwise, a registration effected by preparing and (a) filing a
Registration Statement in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering of
effectiveness of such Registration Statement or (b) filing a Prospectus and/or
prospectus supplement in respect of an appropriate effective Registration
Statement.

 

Rule 144, Rule 405 and Rule 415:  mean, in each case, 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.

 

Scheduled Black-Out Period:  means the period from and including the last day of
a fiscal quarter of the Company to and including the earliest of (i) the
Business Day after the day on which the Company publicly releases its earnings
information for such quarter or annual earnings information, as applicable, and
(ii) the day on which the executive officers and directors of the Company are no
longer prohibited by Company policies applicable with respect to such quarterly
earnings period from buying or selling equity securities of the Company.

 

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S-1 Registration Statement:  means a registration statement of the Company on
Form S-1 (or any comparable or successor form) filed with the SEC registering
any Registrable Securities.

 

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.

 

Selling Expenses:  mean all discounts, selling commissions and stock transfer
taxes applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than the reasonable fees
and expenses of one counsel for all of the Holders which shall be paid for by
the Company as provided in the definition of Registration Expenses.

 

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.

 

Shelf Registration Statement:  means a “shelf” registration statement of the
Company that covers all the Registrable Securities (and may cover other
securities of the Company) on Form S-3 and under Rule 415 or, if the Company is
not then eligible to file on Form S-3, on Form S-1 under the Securities Act, or
any successor rule that may be adopted by the Commission, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and any document incorporated by reference therein.

 

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.

 

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.

 

Suspension Limit: the meaning set forth in Section 4.4.

 

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.

 

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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.

 

Warrants:  the warrants issued by the Company from time to time pursuant to this
Agreement.

 

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, 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 PROVIDED IN SECTION 3.6(F) AND 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.

 

(B)                                 THE WARRANTS EVIDENCED BY THE WARRANT
CERTIFICATES DELIVERED PURSUANT TO SECTION 2.2(A) SHALL VEST IN THE AMOUNTS AND
AT THE TIMES SET FORTH ON SCHEDULE A; PROVIDED, THAT ANY WARRANTS DELIVERED TO
AN INITIAL INVESTOR (OR THEIR DESIGNEE(S) IN ACCORDANCE WITH THE LAST SENTENCE
OF SECTION 2.2(A)) THAT HAVE NOT VESTED ON OR PRIOR TO THE FIRST DATE ON WHICH
(X) THE INVESTMENT AGREEMENT OR STOCK PURCHASE AGREEMENT APPLICABLE WITH RESPECT
TO SUCH INITIAL INVESTOR HAS BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS AND
(Y) THE WARRANT AGENT HAS RECEIVED WRITTEN NOTICE FROM THE COMPANY OF SUCH
TERMINATION, SHALL NO LONGER BE ELIGIBLE FOR VESTING AND SHALL BE DEEMED
CANCELLED.

 

(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

 

9

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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 AN EXERCISE PRICE (THE “EXERCISE PRICE”) OF $15.00 PER SHARE,
SUBJECT TO ALL ADJUSTMENTS MADE ON OR PRIOR TO THE DATE OF EXERCISE THEREOF AS
HEREIN PROVIDED.

 

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 THE WARRANTS ISSUED TO EACH INITIAL INVESTOR (OR THEIR
DESIGNEE(S) IN ACCORDANCE WITH THE LAST SENTENCE OF SECTION 2.2(A)) SHALL NOT BE
EXERCISABLE IN WHOLE OR IN PART UNTIL 61 DAYS AFTER THE DATE ON WHICH THE
INVESTMENT AGREEMENT OR STOCK PURCHASE AGREEMENT APPLICABLE TO SUCH INITIAL
INVESTOR SHALL HAVE BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS.  FOR THE
AVOIDANCE OF DOUBT, WARRANTS THAT HAVE NOT VESTED IN ACCORDANCE WITH SCHEDULE A
MAY NOT BE EXERCISED.

 

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 MAY 10, 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) IF 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

 

10

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HEREIN.  FULL PHYSICAL SETTLEMENT SHALL APPLY TO EACH WARRANT UNLESS THE HOLDER
ELECTS FOR NET SHARE SETTLEMENT TO APPLY UPON EXERCISE OF SUCH WARRANT.  SUCH
ELECTION SHALL BE MADE IN THE FORM ON THE REVERSE OF OR ATTACHED TO THE WARRANT
CERTIFICATE FOR SUCH WARRANT.

 

(A)                                  IF FULL PHYSICAL SETTLEMENT IS APPLICABLE
WITH RESPECT TO THE EXERCISE OF A WARRANT, THEN, FOR EACH 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 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 OBTAINABLE 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.

 

(C)                                  UPON SURRENDER OF A WARRANT CERTIFICATE IN
CONFORMITY WITH THE FOREGOING PROVISIONS AND RECEIPT BY THE WARRANT AGENT OF THE
EXERCISE PRICE THEREFOR OR, IN THE EVENT OF NET SHARE SETTLEMENT, UPON THE
ELECTION BY A HOLDER FOR NET SHARE SETTLEMENT, 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 RECEIPT BY THE WARRANT AGENT OF THE EXERCISE PRICE THEREFOR OR, IN THE
EVENT OF NET SHARE SETTLEMENT, UPON THE ELECTION BY A HOLDER FOR NET SHARE
SETTLEMENT, 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

 

11

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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
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 ARE REGISTRABLE SECURITIES, NO WARRANT MAY BE EXERCISED (AND THE
WARRANT AGENT SHALL BE UNDER NO OBLIGATION TO PROCESS ANY EXERCISE), AND NO
REGISTRABLE 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.

 

12

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(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 REGISTRABLE SECURITIES TO A TRANSFEREE THAT IS AN “ACCREDITED
INVESTOR” OR A “QUALIFIED INSTITUTIONAL BUYER”, AS SUCH TERMS ARE DEFINED IN
SUCH REGULATION AND SUCH RULE, 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 UNDERLYING COMMON STOCK (IN THE
CASE OF AN EXERCISE) OR REGISTRABLE SECURITIES (IN THE CASE OF A SALE) FOR ITS
OWN ACCOUNT AND THAT IT IS NOT ACQUIRING SUCH UNDERLYING COMMON STOCK OR THE
REGISTRABLE 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 REGISTRABLE 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 THE EXERCISE OF ITS WARRANTS AND/OR PURCHASE OF THE
UNDERLYING COMMON STOCK, AS APPLICABLE.

 

(C)                                  A HOLDER MAY EXERCISE ITS WARRANTS AND MAY
SELL ITS REGISTRABLE SECURITIES IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT.

 

(D)                                 A HOLDER MAY EXERCISE ITS WARRANTS OR SELL
ITS REGISTRABLE 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 SECURITIES ISSUED PURSUANT TO THE EXERCISE OF THE WARRANTS SHALL
BEAR THE FOLLOWING LEGEND:

 

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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 AND REGISTRATION
RIGHTS AGREEMENT DATED AS OF MAY 10, 2010 BETWEEN GENERAL GROWTH PROPERTIES,
INC. (THE “COMPANY”), AND MELLON INVESTOR SERVICES LLC, AS WARRANT AGENT. A COPY
OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT IS AVAILABLE AT THE OFFICES OF
THE COMPANY.

 

(F)                                    SUBJECT TO SECTION 12.5, EACH CERTIFICATE
REPRESENTING THE WARRANTS SHALL BEAR THE FOLLOWING LEGEND:

 

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 AND REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 10, 2010 BETWEEN
GENERAL GROWTH PROPERTIES, INC.  (THE “COMPANY”) AND MELLON INVESTOR SERVICES
LLC, AS WARRANT AGENT. A COPY OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT
IS AVAILABLE AT THE OFFICES OF THE COMPANY.

 

(G)                                 THE PROVISIONS OF SECTION 3.6 SHALL NOT
APPLY TO, AND ANY HOLDER MAY EXERCISE ITS WARRANTS AND SELL ITS REGISTRABLE
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 REGISTRABLE SECURITIES
ARE ELIGIBLE FOR RESALE BY THE HOLDER WITHOUT VOLUME LIMITATIONS OR OTHER
LIMITATIONS UNDER RULE 144

 

14

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(H)                                 THE WARRANT AGENT SHALL NOT TAKE ANY ACTION
UNDER THIS SECTION UNLESS AND UNTIL IT HAS RECEIVED APPROPRIATE INSTRUCTIONS
FROM THE COMPANY AND A CERTIFICATION OF COMPLIANCE WITH APPLICABLE STATE AND
FEDERAL SECURITIES LAWS FROM THE COMPANY.

 

4.                                      REGISTRATION RIGHTS AND PROCEDURES AND
LISTING.

 

4.1                                 APPLICABILITY; REGISTRATION.

 

(A)                                  SUBJECT TO THE LIMITATIONS AND CONDITIONS
OF THIS SECTION 4.1, UPON THE REQUEST OF ANY HOLDER, THE COMPANY SHALL USE
REASONABLE BEST EFFORTS TO CAUSE A SHELF REGISTRATION STATEMENT TO BE DECLARED
OR BECOME EFFECTIVE COVERING ALL REGISTRABLE SECURITIES NO LATER THAN THE
EFFECTIVE DATE OF A PLAN OF REORGANIZATION OF THE COMPANY (INCLUDING WITHOUT
LIMITATION THE PLAN), AND USE REASONABLE BEST EFFORTS TO KEEP SUCH SHELF
REGISTRATION STATEMENT CONTINUOUSLY EFFECTIVE AND IN COMPLIANCE WITH THE
SECURITIES ACT AND USABLE FOR RESALE OF ALL REGISTRABLE SECURITIES FOR THE
PERIOD FROM THE DATE OF ITS INITIAL EFFECTIVENESS UNTIL SUCH TIME AS THERE ARE
NO REGISTRABLE SECURITIES REMAINING IN ACCORDANCE WITH SUCH PLAN OF DISTRIBUTION
AS MAY BE REASONABLY REQUESTED BY HOLDERS OF REGISTRABLE SECURITIES FROM TIME TO
TIME.  THE UNDERWRITING PROVISIONS SET FORTH IN SECTION 4.1(E) HEREOF SHALL
APPLY TO AN UNDERWRITTEN PUBLIC OFFERING REQUESTED BY A HOLDER USING SUCH SHELF
REGISTRATION STATEMENT EFFECTED PURSUANT TO THIS SECTION 4.1(A), PROVIDED, THAT
THE LIMITATIONS SET FORTH IN SECTION 4.1(E) SHALL ONLY APPLY WITH RESPECT TO
SUCH UNDERWRITTEN PUBLIC OFFERING AND NOT MORE GENERALLY TO THE SHELF
REGISTRATION STATEMENT.

 

(B)                                 SUBJECT TO THE CONDITIONS OF THIS
SECTION 4.1, IF THE COMPANY SHALL RECEIVE FROM ANY HOLDER OR GROUP OF HOLDERS
(SUCH HOLDER OR GROUP OF HOLDERS, THE “INITIATING HOLDER(S)”), A WRITTEN REQUEST
THAT THE COMPANY EFFECT A REGISTRATION WITH RESPECT TO REGISTRABLE SECURITIES
OWNED BY SUCH INITIATING HOLDER(S) HAVING AN ESTIMATED AGGREGATE FAIR MARKET
VALUE OF AT LEAST $75 MILLION, THE COMPANY SHALL:

 

(I)                                     USE ITS REASONABLE BEST EFFORTS TO FILE
A REGISTRATION STATEMENT WITH THE SEC IN ACCORDANCE WITH THE REQUEST OF THE
INITIATING HOLDER(S), INCLUDING WITHOUT LIMITATION THE METHOD OF DISPOSITION
SPECIFIED THEREIN AND COVERING RESALES OF THE REGISTRABLE SECURITIES REQUESTED
TO BE REGISTERED, AS PROMPTLY AS REASONABLY PRACTICABLE BUT NO LATER THAN (X) IN
THE CASE OF A REGISTRATION STATEMENT OTHER THAN AN S-1 REGISTRATION STATEMENT,
WITHIN 30 DAYS OF RECEIPT OF THE REQUEST OR (Y) IN THE CASE OF AN S-1
REGISTRATION STATEMENT, WITHIN 60 DAYS OF RECEIPT OF THE REQUEST;

 

(II)                                  USE REASONABLE BEST EFFORTS TO CAUSE SUCH
REGISTRATION STATEMENT TO BE DECLARED OR BECOME EFFECTIVE AS PROMPTLY AS
PRACTICABLE, BUT IN NO EVENT LATER THAN 60 DAYS AFTER THE DATE OF INITIAL FILING
OF A REGISTRATION STATEMENT PURSUANT TO SECTION 4.1(B)(I); AND

 

(III)                               USE REASONABLE BEST EFFORTS TO KEEP SUCH
REGISTRATION STATEMENT CONTINUOUSLY EFFECTIVE AND IN COMPLIANCE WITH THE
SECURITIES ACT AND USABLE FOR RESALE OF SUCH REGISTRABLE SECURITIES FOR THE
PERIOD AS REQUESTED IN WRITING BY THE INITIATING HOLDER(S) OR SUCH LONGER PERIOD
AS MAY BE REQUESTED IN WRITING BY ANY HOLDER

 

15

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PARTICIPATING IN SUCH REGISTRATION (WHICH PERIODS SHALL BE EXTENDED TO THE
EXTENT OF ANY SUSPENSIONS OF SALES PURSUANT TO SECTIONS 4.1(C) OR 4.4);

 

PROVIDED, THAT (X) THE NUMBER OF DEMAND REGISTRATIONS THAT THE BROOKFIELD
INVESTORS SHALL BE ENTITLED TO EFFECT PURSUANT TO THIS SECTION 4.1(B) SHALL BE
NO MORE THAN THREE SUCH DEMAND REGISTRATIONS IN TOTAL AND NO MORE THAN ONE SUCH
DEMAND REGISTRATION IN ANY 12-MONTH PERIOD, (Y) THE NUMBER OF DEMAND
REGISTRATIONS THAT THE FAIRHOLME FUND SHALL BE ENTITLED TO EFFECT PURSUANT TO
THIS SECTION 4.1(B) SHALL BE NO MORE THAN THREE SUCH DEMAND REGISTRATIONS IN
TOTAL AND NO MORE THAN ONE SUCH DEMAND REGISTRATION IN ANY 12-MONTH PERIOD (THE
FAIRHOLME FOCUSED INCOME FUND WILL NOT BE ENTITLED TO EXERCISE DEMAND
REGISTRATION RIGHTS UNDER THIS SECTION 4.1(B)), AND (Z) THE NUMBER OF DEMAND
REGISTRATIONS THAT THE PERSHING INVESTORS SHALL BE ENTITLED TO EFFECT PURSUANT
TO THIS SECTION 4.1(B) SHALL BE NO MORE THAN THREE SUCH DEMAND REGISTRATIONS IN
TOTAL AND NO MORE THAN ONE SUCH DEMAND REGISTRATION IN ANY 12-MONTH PERIOD;
PROVIDED, FURTHER, THAT THE COMPANY SHALL BE PERMITTED, WITH THE CONSENT OF THE
INITIATING HOLDER(S) NOT TO BE UNREASONABLY WITHHELD, TO FILE A POST-EFFECTIVE
AMENDMENT OR PROSPECTUS SUPPLEMENT TO THE SHELF REGISTRATION STATEMENT FILED
PURSUANT TO SECTION 4.1(A) IN LIEU OF AN ADDITIONAL REGISTRATION STATEMENT
PURSUANT TO SECTION 4.1(B) TO THE EXTENT THE COMPANY REASONABLY DETERMINES THAT
THE REGISTRABLE SECURITIES OF THE INITIATING HOLDER(S) MAY BE SOLD THEREUNDER BY
SUCH INITIATING HOLDER(S) PURSUANT TO THEIR INTENDED PLAN OF DISTRIBUTION (IN
WHICH CASE SUCH POST-EFFECTIVE AMENDMENT OR DEMAND REGISTRATION STATEMENT SHALL
NOT BE COUNTED AGAINST THE LIMITED NUMBER OF DEMAND REGISTRATIONS).  IT SHALL
NOT BE UNREASONABLE IF, FOLLOWING THE RECOMMENDATION OF AN UNDERWRITER, THE
INITIATING HOLDER(S) DO NOT CONSENT TO THE COMPANY FILING A POST-EFFECTIVE
AMENDMENT OR PROSPECTUS SUPPLEMENT TO THE SHELF REGISTRATION STATEMENT FILED
PURSUANT TO SECTION 4.1(A) IN LIEU OF AN ADDITIONAL REGISTRATION STATEMENT
REQUESTED BY THE INITIATING HOLDER(S).

 

(C)                                  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, THE COMPANY SHALL NOT BE REQUIRED TO EFFECT A REGISTRATION
PURSUANT TO THIS SECTION 4.1: (I) WITH RESPECT TO SECURITIES THAT ARE NOT
REGISTRABLE SECURITIES; (II) SUBJECT TO SECTION 4.1(H), DURING ANY SCHEDULED
BLACK-OUT PERIOD; OR (III) IF THE COMPANY HAS NOTIFIED THE HOLDERS THAT IN THE
GOOD FAITH JUDGMENT OF THE COMPANY, IT WOULD BE MATERIALLY DETRIMENTAL TO THE
COMPANY OR ITS SECURITY HOLDERS FOR SUCH REGISTRATION TO BE EFFECTED AT SUCH
TIME, IN WHICH EVENT THE COMPANY SHALL HAVE THE RIGHT TO DEFER SUCH REGISTRATION
FOR A PERIOD OF NOT MORE THAN 60 DAYS; PROVIDED THAT (A) SUCH RIGHT TO DELAY A
REGISTRATION PURSUANT TO CLAUSE (III) SHALL BE EXERCISED BY THE COMPANY ONLY IF
THE COMPANY HAS GENERALLY EXERCISED (OR IS CONCURRENTLY EXERCISING) SIMILAR
BLACK-OUT RIGHTS AGAINST HOLDERS OF SIMILAR SECURITIES THAT HAVE REGISTRATION
RIGHTS, IF ANY, AND (B) ANY RIGHTS TO DELAY REGISTRATION PURSUANT TO CLAUSES
(II) OR (III) SHALL BE SUBJECT TO THE SUSPENSION LIMIT DESCRIBED IN SECTION 4.4.

 

(D)                                 IF THE COMPANY SHALL DETERMINE TO REGISTER
ANY OF ITS SECURITIES EITHER (X) FOR ITS OWN ACCOUNT, (Y) FOR THE ACCOUNT OF THE
HOLDERS LISTED IN SECTION 4.1(B) PURSUANT TO THE TERMS THEREOF, OR (Z) FOR THE
ACCOUNT OF OTHER STOCKHOLDERS (OTHER THAN (A) A REGISTRATION RELATING SOLELY TO
EMPLOYEE BENEFIT PLANS, (B) A REGISTRATION RELATING SOLELY TO A RULE 145
TRANSACTION UNDER THE SECURITIES ACT OR (C) A REGISTRATION ON ANY REGISTRATION
FORM WHICH DOES NOT PERMIT SECONDARY SALES OR DOES NOT INCLUDE SUBSTANTIALLY THE
SAME INFORMATION AS WOULD BE REQUIRED TO BE INCLUDED IN A REGISTRATION
STATEMENT), THE COMPANY WILL, SUBJECT TO THE CONDITIONS SET FORTH IN THIS
SECTION 4.1(D):

 

16

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(I)                                     PROMPTLY GIVE TO EACH OF THE HOLDERS A
WRITTEN NOTICE THEREOF (WHICH SHALL INCLUDE A LIST OF THE JURISDICTIONS IN WHICH
THE COMPANY INTENDS TO ATTEMPT TO QUALIFY SUCH SECURITIES UNDER THE APPLICABLE
BLUE SKY OR OTHER STATE SECURITIES LAWS); AND

 

(II)                                  SUBJECT TO SECTION 4.1(F) BELOW AND ANY
TRANSFER RESTRICTIONS ANY HOLDER MAY BE A PARTY TO, INCLUDE IN SUCH REGISTRATION
(AND ANY RELATED QUALIFICATION UNDER BLUE SKY LAWS OR OTHER COMPLIANCE), AND IN
ANY UNDERWRITING INVOLVED THEREIN, ALL THE REGISTRABLE SECURITIES SPECIFIED IN A
WRITTEN REQUEST OR REQUESTS, MADE BY THE HOLDERS.  SUCH WRITTEN REQUEST MAY
SPECIFY ALL OR A PART OF THE HOLDERS’ REGISTRABLE SECURITIES AND SHALL BE
RECEIVED BY THE COMPANY WITHIN TEN (10) DAYS AFTER WRITTEN NOTICE FROM THE
COMPANY IS GIVEN UNDER SECTION 4.1(D)(I) ABOVE.

 

(E)                                  IF ANY INITIATING HOLDER(S) INTENDS TO
DISTRIBUTE REGISTRABLE SECURITIES PURSUANT TO SECTION 4.1(B) BY MEANS OF AN
UNDERWRITING, IT SHALL SO ADVISE THE COMPANY.  IN THE CASE OF SUCH AN
UNDERWRITTEN OFFERING, THE PRICE, UNDERWRITING DISCOUNT AND OTHER FINANCIAL
TERMS FOR THE REGISTRABLE SECURITIES SHALL BE DETERMINED BY THE INITIATING
HOLDER(S).  IF OTHER STOCKHOLDERS OR HOLDERS, TO THE EXTENT THEY HAVE ANY
REGISTRATION RIGHTS UNDER SECTION 4.1(D), REQUEST INCLUSION OF THEIR SECURITIES
OR REGISTRABLE SECURITIES, RESPECTIVELY, IN THE UNDERWRITING, THE INITIATING
HOLDER(S) SHALL OFFER TO INCLUDE SUCH SECURITIES OR REGISTRABLE SECURITIES OF
SUCH OTHER STOCKHOLDERS OR HOLDERS, RESPECTIVELY, IN THE UNDERWRITING AND MAY
CONDITION SUCH OFFER ON THEIR ACCEPTANCE OF THE FURTHER APPLICABLE PROVISIONS OF
THIS SECTION 4.1(E).  THE HOLDERS WHOSE REGISTRABLE SECURITIES ARE TO BE
INCLUDED IN SUCH REGISTRATION AND THE COMPANY SHALL (TOGETHER WITH ALL OTHER
STOCKHOLDERS PROPOSING TO DISTRIBUTE THEIR SECURITIES THROUGH SUCH UNDERWRITING)
ENTER INTO AN UNDERWRITING AGREEMENT IN CUSTOMARY FORM WITH THE MANAGING
UNDERWRITER OR UNDERWRITERS SELECTED FOR SUCH UNDERWRITING BY THE INITIATING
HOLDER(S) SUBJECT TO APPROVAL BY THE COMPANY NOT TO BE UNREASONABLY WITHHELD
(WHICH UNDERWRITERS MAY ALSO INCLUDE A NON-BOOKRUNNING CO-MANAGER SELECTED BY
THE COMPANY SUBJECT TO APPROVAL BY THE INITIATING HOLDER(S)); PROVIDED, HOWEVER,
THAT SUCH UNDERWRITING AGREEMENT SHALL NOT PROVIDE FOR INDEMNIFICATION OR
CONTRIBUTION OBLIGATIONS ON THE PART OF ANY HOLDER GREATER THAN THE OBLIGATIONS
OF THE HOLDERS UNDER SECTIONS 4.7(B) AND 4.8.  NOTWITHSTANDING ANY OTHER
PROVISION OF THIS SECTION 4.1(E), IF THE MANAGING UNDERWRITER OR UNDERWRITERS
ADVISES THE HOLDERS IN WRITING THAT MARKETING FACTORS REQUIRE A LIMITATION ON
THE NUMBER OF SECURITIES TO BE UNDERWRITTEN, SOME OR ALL OF THE SECURITIES OF
THE COMPANY HELD BY THE OTHER STOCKHOLDERS SHALL BE EXCLUDED FROM SUCH
REGISTRATION TO THE EXTENT SO REQUIRED BY SUCH LIMITATION.  IF, AFTER THE
EXCLUSION OF SUCH SECURITIES HELD BY THE OTHER STOCKHOLDERS, FURTHER REDUCTIONS
ARE STILL REQUIRED DUE TO THE MARKETING LIMITATION, THE NUMBER OF REGISTRABLE
SECURITIES INCLUDED IN THE REGISTRATION BY EACH HOLDER (INCLUDING THE INITIATING
HOLDER(S)) SHALL BE REDUCED ON A PRO RATA BASIS (BASED ON THE NUMBER OF
SECURITIES HELD BY SUCH HOLDERS), BY SUCH MINIMUM NUMBER OF SECURITIES AS IS
NECESSARY TO COMPLY WITH SUCH REQUEST.  NO REGISTRABLE SECURITIES OR ANY OTHER
SECURITIES EXCLUDED FROM THE UNDERWRITING BY REASON OF THE UNDERWRITER’S
MARKETING LIMITATION SHALL BE INCLUDED IN SUCH REGISTRATION.  IF ANY HOLDER OR
OTHER STOCKHOLDER WHO HAS REQUESTED INCLUSION IN SUCH REGISTRATION AS PROVIDED
ABOVE DISAPPROVES OF THE TERMS OF THE UNDERWRITING, SUCH PERSON MAY ELECT TO
WITHDRAW THEREFROM BY PROVIDING WRITTEN NOTICE TO THE COMPANY, THE UNDERWRITER
AND THE INITIATING HOLDER(S).  THE SECURITIES SO WITHDRAWN SHALL ALSO BE
WITHDRAWN FROM REGISTRATION.  IF THE UNDERWRITER HAS NOT LIMITED THE NUMBER OF
REGISTRABLE SECURITIES OR OTHER SECURITIES TO BE UNDERWRITTEN, THE COMPANY AND
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY (WHETHER OR NOT SUCH PERSONS
HAVE REGISTRATION RIGHTS PURSUANT TO SECTION 4.1(D) HEREOF) MAY INCLUDE ITS OR
THEIR

 

17

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SECURITIES FOR ITS OR THEIR OWN ACCOUNT IN SUCH REGISTRATION IF THE MANAGING
UNDERWRITER OR UNDERWRITERS AND THE COMPANY SO AGREE AND IF THE NUMBER OF
REGISTRABLE SECURITIES AND OTHER SECURITIES WHICH WOULD OTHERWISE HAVE BEEN
INCLUDED IN SUCH REGISTRATION AND UNDERWRITING WILL NOT THEREBY BE LIMITED.  THE
COMPANY SHALL NOT BE OBLIGATED TO UNDERTAKE MORE THAN (I) ONE UNDERWRITTEN
OFFERING REQUESTED BY ANY OF THE BROOKFIELD INVESTORS PURSUANT TO SECTIONS
4.1(B) AND 4.1(E) IN ANY 12-MONTH PERIOD, (II) ONE UNDERWRITTEN OFFERING
REQUESTED BY THE FAIRHOLME FUND PURSUANT TO SECTION 4.1(B) AND 4.1(E) IN ANY
12-MONTH PERIOD, AND (III) ONE UNDERWRITTEN OFFERING REQUESTED BY ANY OF THE
PERSHING INVESTORS PURSUANT TO SECTION 4.1(B) AND 4.1(E) IN ANY 12-MONTH
PERIOD.  THE HOLDERS SHALL REASONABLY COOPERATE IN CONNECTION WITH REQUESTS FOR
UNDERWRITTEN OFFERINGS PURSUANT TO THIS SECTION 4.1(E) TO CAUSE THE TOTAL NUMBER
OF DAYS THAT THE COMPANY SHALL BE SUBJECT TO LOCK-UPS IN CONNECTION WITH ANY
SUCH UNDERWRITTEN OFFERINGS NOT TO EXCEED 120 DAYS IN ANY 365-DAY PERIOD.

 

(F)                                    IF THE REGISTRATION OF WHICH THE COMPANY
GIVES NOTICE PURSUANT TO SECTION 4.1(D) IS FOR A REGISTERED PUBLIC OFFERING
INVOLVING AN UNDERWRITING, THE COMPANY SHALL SO ADVISE EACH OF THE HOLDERS AS A
PART OF THE WRITTEN NOTICE GIVEN PURSUANT TO SECTION 4.1(D) ABOVE.  IN SUCH
EVENT, THE RIGHT OF EACH OF THE HOLDERS TO REGISTRATION PURSUANT TO
SECTION 4.1(D) SHALL BE CONDITIONED UPON SUCH HOLDERS’ PARTICIPATION IN SUCH
UNDERWRITING AND THE INCLUSION OF SUCH HOLDERS’ REGISTRABLE SECURITIES IN THE
UNDERWRITING TO THE EXTENT PROVIDED HEREIN.  THE HOLDERS WHOSE REGISTRABLE
SECURITIES ARE TO BE INCLUDED IN SUCH REGISTRATION SHALL (TOGETHER WITH THE
COMPANY AND THE OTHER STOCKHOLDERS DISTRIBUTING THEIR SECURITIES THROUGH SUCH
UNDERWRITING) ENTER INTO AN UNDERWRITING AGREEMENT IN CUSTOMARY FORM WITH THE
MANAGING UNDERWRITER OR UNDERWRITERS SELECTED FOR UNDERWRITING BY THE COMPANY
(OTHER THAN A REGISTRATION PURSUANT TO SECTION 4.1(B) AND NOTIFIED BY THE
COMPANY PURSUANT TO SECTION 4.1(D)(Y), IN WHICH CASE SECTION 4.1(E) SHALL APPLY
WITH RESPECT TO THE SELECTION OF UNDERWRITERS); PROVIDED, HOWEVER, THAT SUCH
UNDERWRITING AGREEMENT SHALL NOT PROVIDE FOR INDEMNIFICATION OR CONTRIBUTION
OBLIGATIONS ON THE PART OF ANY HOLDER GREATER THAN THE OBLIGATIONS OF THE
HOLDERS UNDER SECTIONS 4.7(B) AND 4.8.  NOTWITHSTANDING ANY OTHER PROVISION OF
SECTION 4.1(D), IF ANY REGISTRATION IN RESPECT OF WHICH ANY HOLDER IS EXERCISING
ITS RIGHTS UNDER SECTION 4.1(D) INVOLVES AN UNDERWRITTEN PUBLIC OFFERING (OTHER
THAN A REGISTRATION PURSUANT TO SECTION 4.1(B), IN WHICH CASE THE PROVISIONS
WITH RESPECT TO PRIORITY OF INCLUSION IN SUCH REGISTRATION SET FORTH IN
SECTION 4.1(E) SHALL APPLY) AND THE MANAGING UNDERWRITER OR UNDERWRITERS ADVISES
THE COMPANY THAT IN ITS VIEW MARKETING FACTORS REQUIRE A LIMITATION ON THE
NUMBER OF SECURITIES TO BE UNDERWRITTEN, THEN THERE SHALL BE INCLUDED IN SUCH
UNDERWRITTEN OFFERING THE NUMBER OR DOLLAR AMOUNT OF SECURITIES OF THE COMPANY
THAT IN THE OPINION OF THE MANAGING UNDERWRITER OR UNDERWRITERS CAN BE SOLD
WITHOUT ADVERSELY AFFECTING SUCH OFFERING, AND SUCH NUMBER OF SECURITIES OF THE
COMPANY SHALL BE ALLOCATED FOR INCLUSION AS FOLLOWS: (1) FIRST, ALL SECURITIES
OF THE COMPANY BEING SOLD BY THE COMPANY FOR ITS OWN ACCOUNT; (2) SECOND, ALL
REGISTRABLE SECURITIES REQUESTED TO BE INCLUDED BY THE HOLDERS AND, SOLELY WITH
RESPECT TO AN OFFERING OF WARRANTS FOLLOWING THE 180TH DAY AFTER THE
EFFECTIVENESS OF A PLAN OF REORGANIZATION OF THE COMPANY, SECURITIES OF THE
COMPANY BEING SOLD BY ANY PERSON (OTHER THAN A HOLDER) WITH SIMILAR PIGGYBACK
REGISTRATION RIGHTS, PRO RATA, BASED ON THE NUMBER OF SECURITIES BENEFICIALLY
OWNED BY EACH SUCH HOLDER AND PERSON; AND (3) THIRD, AMONG ANY OTHER HOLDERS OF
SECURITIES OF THE COMPANY REQUESTING SUCH REGISTRATION, PRO RATA, BASED ON THE
NUMBER OF SECURITIES BENEFICIALLY OWNED BY EACH SUCH HOLDER.  IF ANY OF THE
HOLDERS OR ANY OFFICER, DIRECTOR OR OTHER STOCKHOLDER DISAPPROVES OF THE TERMS
OF ANY SUCH UNDERWRITING, HE, SHE OR IT MAY ELECT TO WITHDRAW THEREFROM BY
PROVIDING WRITTEN NOTICE TO THE COMPANY AND THE UNDERWRITER.  ANY

 

18

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REGISTRABLE SECURITIES OR OTHER SECURITIES EXCLUDED OR WITHDRAWN FROM SUCH
UNDERWRITING SHALL BE WITHDRAWN FROM SUCH REGISTRATION.

 

(G)                                 IN THE EVENT ANY HOLDER REQUESTS OR ELECTS
TO PARTICIPATE IN A REGISTRATION PURSUANT TO THIS SECTION 4.1 IN CONNECTION WITH
A DISTRIBUTION OF REGISTRABLE SECURITIES TO ITS PARTNERS OR MEMBERS, THE
REGISTRATION SHALL PROVIDE FOR THE RESALE BY SUCH PARTNERS OR MEMBERS, IF
REQUESTED BY SUCH HOLDER.

 

(H)                                 THE COMPANY AGREES TO USE REASONABLE BEST
EFFORTS TO PROMPTLY RESPOND TO ANY REQUEST BY ANY MEMBER OF THE FAIRHOLME
PURCHASER GROUP TO SELL REGISTRABLE SECURITIES UNDER A REGISTRATION STATEMENT OR
PROSPECTUS DURING WHAT WOULD OTHERWISE BE A SCHEDULED BLACK-OUT PERIOD, PROVIDED
THAT SUCH CONSENT CAN BE GIVEN IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS. IN
ADDITION THE COMPANY AGREES TO USE ITS REASONABLE BEST EFFORTS TO ISSUE EARNINGS
RELEASES AS PROMPTLY AS PRACTICABLE FOLLOWING THE END OF QUARTERLY REPORTING
PERIODS AND TO OTHERWISE MINIMIZE THE DURATION OF SCHEDULED BLACK-OUT PERIODS.

 

4.2                                 EXPENSES OF REGISTRATION.  EXCEPT AS
SPECIFICALLY PROVIDED HEREIN, ALL REGISTRATION EXPENSES INCURRED IN CONNECTION
WITH ANY REGISTRATION, QUALIFICATION OR COMPLIANCE HEREUNDER SHALL BE BORNE BY
THE COMPANY. ALL SELLING EXPENSES INCURRED IN CONNECTION WITH ANY REGISTRATIONS
HEREUNDER SHALL BE BORNE BY THE HOLDERS OF THE SECURITIES SO REGISTERED PRO RATA
ON THE BASIS OF THE AGGREGATE OFFERING OR SALE PRICE OF THE SECURITIES SO
REGISTERED.

 

4.3                                 OBLIGATIONS OF THE COMPANY.  IN CONNECTION
WITH THE REGISTRATION OF ANY REGISTRABLE SECURITIES, THE COMPANY SHALL, AS
EXPEDITIOUSLY AS REASONABLY PRACTICABLE AND IN ACCORDANCE WITH THE REQUESTED
METHODS OF DISTRIBUTION THEREOF, SUBJECT TO THE PROVISIONS OF THIS ARTICLE 4:

 

(A)                                  PREPARE AND FILE WITH THE SEC A PROSPECTUS
SUPPLEMENT WITH RESPECT TO A PROPOSED OFFERING OF REGISTRABLE SECURITIES
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, SUBJECT TO SECTIONS 4.1(B),
4.1(C) AND 4.4, USE REASONABLE BEST EFFORTS TO KEEP SUCH REGISTRATION STATEMENT
EFFECTIVE OR SUCH PROSPECTUS SUPPLEMENT CURRENT, UNTIL THE TERMINATION OF THE
PERIOD CONTEMPLATED IN SECTION 4.5.

 

(B)                                 PREPARE AND FILE WITH THE SEC SUCH
AMENDMENTS AND SUPPLEMENTS TO THE APPLICABLE REGISTRATION STATEMENT AND THE
PROSPECTUS OR PROSPECTUS SUPPLEMENT USED IN CONNECTION WITH SUCH REGISTRATION
STATEMENT AS MAY BE NECESSARY TO COMPLY WITH THE PROVISIONS OF THE SECURITIES
ACT WITH RESPECT TO THE DISPOSITION OF ALL REGISTRABLE SECURITIES COVERED BY
SUCH REGISTRATION STATEMENT FOR THE PERIOD SET FORTH IN PARAGRAPH (A) ABOVE.

 

(C)                                  FURNISH TO THE HOLDERS AND ANY UNDERWRITERS
SUCH NUMBER OF COPIES OF THE APPLICABLE REGISTRATION STATEMENT AND EACH SUCH
AMENDMENT AND SUPPLEMENT THERETO (INCLUDING IN EACH CASE ALL EXHIBITS) AND OF A
PROSPECTUS, INCLUDING A PRELIMINARY PROSPECTUS, IN CONFORMITY WITH THE
REQUIREMENTS OF THE SECURITIES ACT, AND SUCH OTHER DOCUMENTS AS THEY MAY
REASONABLY REQUEST IN ORDER TO FACILITATE THE DISPOSITION OF REGISTRABLE
SECURITIES OWNED OR TO BE DISTRIBUTED BY THEM.

 

(D)                                 USE ITS REASONABLE BEST EFFORTS TO REGISTER
AND QUALIFY THE SECURITIES

 

19

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COVERED BY SUCH REGISTRATION STATEMENT UNDER SUCH OTHER SECURITIES OR BLUE SKY
LAWS OF SUCH JURISDICTIONS AS SHALL BE REASONABLY REQUESTED BY THE HOLDERS OR
ANY MANAGING UNDERWRITER(S), TO KEEP SUCH REGISTRATION OR QUALIFICATION IN
EFFECT FOR SO LONG AS SUCH REGISTRATION STATEMENT REMAINS IN EFFECT, AND TO TAKE
ANY OTHER ACTION WHICH MAY BE REASONABLY NECESSARY TO ENABLE SUCH SELLER TO
CONSUMMATE THE DISPOSITION IN SUCH JURISDICTIONS OF THE SECURITIES OWNED BY SUCH
HOLDER; PROVIDED THAT THE COMPANY SHALL NOT BE REQUIRED IN CONNECTION THEREWITH
OR AS A CONDITION THERETO TO QUALIFY TO DO BUSINESS OR TO FILE A GENERAL CONSENT
TO SERVICE OF PROCESS IN ANY SUCH STATES OR JURISDICTIONS.

 

(E)                                  NOTIFY EACH HOLDER OF REGISTRABLE
SECURITIES AT ANY TIME WHEN A PROSPECTUS RELATING THERETO IS REQUIRED TO BE
DELIVERED UNDER THE SECURITIES ACT OR THE HAPPENING OF ANY EVENT AS A RESULT OF
WHICH THE APPLICABLE PROSPECTUS, AS THEN IN EFFECT, WOULD INCLUDE AN UNTRUE
STATEMENT OF A MATERIAL FACT OR OMITS TO STATE A MATERIAL FACT REQUIRED TO BE
STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING IN
LIGHT OF THE CIRCUMSTANCES THEN EXISTING.

 

(F)                                    GIVE WRITTEN NOTICE TO THE HOLDERS OF
REGISTRABLE SECURITIES COVERED BY A REGISTRATION STATEMENT:

 

(I)                                     WHEN ANY REGISTRATION STATEMENT FILED
PURSUANT TO SECTION 4.1 OR ANY AMENDMENT THERETO HAS BEEN FILED WITH THE SEC AND
WHEN SUCH REGISTRATION STATEMENT OR ANY POST-EFFECTIVE AMENDMENT THERETO HAS
BECOME EFFECTIVE;

 

(II)                                  OF ANY REQUEST BY THE SEC FOR AMENDMENTS
OR SUPPLEMENTS TO ANY REGISTRATION STATEMENT OR THE PROSPECTUS INCLUDED THEREIN
OR FOR ADDITIONAL INFORMATION;

 

(III)                               OF THE ISSUANCE BY THE SEC OF ANY STOP ORDER
SUSPENDING THE EFFECTIVENESS OF ANY REGISTRATION STATEMENT OR THE INITIATION OF
ANY PROCEEDINGS FOR THAT PURPOSE;

 

(IV)                              OF THE RECEIPT BY THE COMPANY OR ITS LEGAL
COUNSEL OF ANY NOTIFICATION WITH RESPECT TO THE SUSPENSION OF THE QUALIFICATION
OF THE REGISTRABLE SECURITIES FOR SALE IN ANY JURISDICTION OR THE INITIATION OR
THREATENING OF ANY PROCEEDING FOR SUCH PURPOSE; AND

 

(V)                                 OF THE HAPPENING OF ANY EVENT THAT REQUIRES
THE COMPANY TO MAKE CHANGES IN ANY EFFECTIVE REGISTRATION STATEMENT OR THE
PROSPECTUS IN ORDER TO MAKE THE STATEMENTS THEREIN NOT MISLEADING (WHICH NOTICE
SHALL BE ACCOMPANIED BY AN INSTRUCTION TO SUSPEND THE USE OF THE PROSPECTUS
UNTIL THE REQUISITE CHANGES HAVE BEEN MADE).

 

(G)                                 USE ITS REASONABLE BEST EFFORTS TO PREVENT
THE ISSUANCE OR OBTAIN THE WITHDRAWAL OF ANY ORDER SUSPENDING THE EFFECTIVENESS
OF ANY REGISTRATION STATEMENT REFERRED TO IN SECTION 4.3(F)(III) AT THE EARLIEST
PRACTICABLE TIME.

 

(H)                                 UPON THE OCCURRENCE OF ANY EVENT
CONTEMPLATED BY SECTION 4.3(F)(V), AS SOON AS IS REASONABLY PRACTICABLE PREPARE
A POST-EFFECTIVE AMENDMENT TO SUCH

 

20

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REGISTRATION STATEMENT OR A SUPPLEMENT TO THE RELATED PROSPECTUS OR FILE ANY
OTHER REQUIRED DOCUMENT SO THAT, AS THEREAFTER DELIVERED TO THE HOLDERS AND ANY
UNDERWRITERS, THE PROSPECTUS WILL NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL
FACT OR OMIT TO STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING. IF THE COMPANY NOTIFIES THE HOLDERS IN ACCORDANCE WITH
SECTION 4.3(F)(V) TO SUSPEND THE USE OF THE PROSPECTUS UNTIL THE REQUISITE
CHANGES TO THE PROSPECTUS HAVE BEEN MADE, THEN THE HOLDERS AND ANY UNDERWRITERS
SHALL SUSPEND USE OF SUCH PROSPECTUS AND USE THEIR COMMERCIALLY REASONABLE
EFFORTS TO RETURN TO THE COMPANY ALL COPIES OF SUCH PROSPECTUS (AT THE COMPANY’S
EXPENSE) OTHER THAN PERMANENTLY FILED COPIES THEN IN SUCH HOLDER’S OR
UNDERWRITER’S POSSESSION.

 

(I)                                     USE ITS REASONABLE BEST EFFORTS TO
PROCURE THE COOPERATION OF THE COMPANY’S TRANSFER AGENT IN SETTLING ANY OFFERING
OR SALE OF REGISTRABLE SECURITIES, INCLUDING WITH RESPECT TO THE TRANSFER OF
PHYSICAL SECURITY INSTRUMENTS INTO BOOK-ENTRY FORM IN ACCORDANCE WITH ANY
PROCEDURES REASONABLY REQUESTED BY THE HOLDERS OR ANY MANAGING UNDERWRITER(S).

 

(J)                                     USE ITS REASONABLE BEST EFFORTS TO TAKE
SUCH ACTIONS AS ARE UNDER ITS CONTROL TO BECOME OR REMAIN A WELL-KNOWN SEASONED
ISSUER (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT) (AND NOT BECOME AN
INELIGIBLE ISSUER (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT)) DURING THE
PERIOD WHEN SUCH REGISTRATION STATEMENT REMAINS IN EFFECT.

 

(K)                                  WITH RESPECT TO UNDERWRITTEN PUBLIC
OFFERINGS PERMITTED BY THIS AGREEMENT, ENTER INTO AN UNDERWRITING AGREEMENT IN
FORM, SCOPE AND SUBSTANCE AS IS CUSTOMARILY ENTERED INTO FOR SIMILAR
UNDERWRITTEN SECONDARY OFFERINGS OF EQUITY SECURITIES AND TAKE ALL SUCH OTHER
ACTIONS REASONABLY REQUESTED BY THE HOLDERS OF A MAJORITY OF THE REGISTRABLE
SECURITIES BEING SOLD IN CONNECTION THEREWITH OR BY THE MANAGING UNDERWRITER(S),
IF ANY, TO EXPEDITE OR FACILITATE THE UNDERWRITTEN DISPOSITION OF SUCH
REGISTRABLE SECURITIES, AND IN CONNECTION THEREWITH AS CUSTOMARY FOR ANY SIMILAR
UNDERWRITTEN SECONDARY OFFERING, (I) MAKE SUCH REPRESENTATIONS AND WARRANTIES TO
THE HOLDERS THAT ARE SELLING STOCKHOLDERS AND THE MANAGING UNDERWRITER(S), IF
ANY, WITH RESPECT TO THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES, AND THE
REGISTRATION STATEMENT, PROSPECTUS AND DOCUMENTS, IF ANY, INCORPORATED OR DEEMED
TO BE INCORPORATED BY REFERENCE THEREIN, IN EACH CASE, IN FORM, SUBSTANCE AND
SCOPE AS ARE CUSTOMARILY MADE BY THE ISSUER IN SIMILAR SECONDARY UNDERWRITTEN
OFFERINGS OF EQUITY SECURITIES, AND CONFIRM THE SAME IF AND WHEN REQUESTED,
(II) USE ITS REASONABLE BEST EFFORTS TO FURNISH UNDERWRITERS OPINIONS OF COUNSEL
TO THE COMPANY, ADDRESSED TO THE MANAGING UNDERWRITER(S), IF ANY, COVERING THE
MATTERS CUSTOMARILY COVERED IN THE OPINIONS REQUESTED IN SIMILAR SECONDARY
UNDERWRITTEN OFFERINGS OF EQUITY SECURITIES, (III) USE ITS REASONABLE BEST
EFFORTS TO OBTAIN “COLD COMFORT” LETTERS FROM THE INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS OF THE COMPANY (AND, IF NECESSARY, ANY OTHER INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS OF ANY BUSINESS ACQUIRED BY THE COMPANY FOR WHICH FINANCIAL
STATEMENTS AND FINANCIAL DATA ARE INCLUDED IN THE REGISTRATION STATEMENT) WHO
HAVE CERTIFIED THE FINANCIAL STATEMENTS INCLUDED IN SUCH REGISTRATION STATEMENT,
ADDRESSED TO EACH OF THE MANAGING UNDERWRITER(S), IF ANY, SUCH LETTERS TO BE IN
CUSTOMARY FORM AND COVERING MATTERS OF THE TYPE CUSTOMARILY COVERED IN “COLD
COMFORT” LETTERS IN CONNECTION WITH SIMILAR SECONDARY UNDERWRITTEN OFFERINGS OF
EQUITY SECURITIES, (IV) IF AN UNDERWRITING AGREEMENT IS ENTERED INTO, THE SAME
SHALL CONTAIN

 

21

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INDEMNIFICATION PROVISIONS AND PROCEDURES CUSTOMARY IN SIMILAR SECONDARY
UNDERWRITTEN OFFERINGS OF EQUITY SECURITIES BY SIMILAR COMPANIES, AND
(V) DELIVER SUCH DOCUMENTS AND CERTIFICATES AS MAY BE REASONABLY REQUESTED BY
THE HOLDERS OF A MAJORITY OF THE REGISTRABLE SECURITIES BEING SOLD IN CONNECTION
THEREWITH, THEIR COUNSEL AND THE MANAGING UNDERWRITER(S), IF ANY, TO EVIDENCE
THE CONTINUED VALIDITY OF THE REPRESENTATIONS AND WARRANTIES MADE PURSUANT TO
CLAUSE (I) ABOVE AND TO EVIDENCE COMPLIANCE WITH ANY CUSTOMARY CONDITIONS
CONTAINED IN THE UNDERWRITING AGREEMENT OR OTHER AGREEMENT ENTERED INTO BY THE
COMPANY.

 

(L)                                     MAKE AVAILABLE FOR INSPECTION BY A
REPRESENTATIVE OF HOLDERS THAT ARE SELLING AT LEAST FIVE PERCENT (5%) OF THE
REGISTRABLE SECURITIES ISSUED ON THE DATE HEREOF, THE MANAGING UNDERWRITER(S),
IF ANY, AND ANY ATTORNEYS OR ACCOUNTANTS RETAINED BY SUCH HOLDERS OR MANAGING
UNDERWRITER(S), AT THE OFFICES WHERE NORMALLY KEPT, DURING REASONABLE BUSINESS
HOURS, FINANCIAL AND OTHER RECORDS AND PERTINENT CORPORATE DOCUMENTS OF THE
COMPANY, AND CAUSE THE OFFICERS, DIRECTORS AND EMPLOYEES OF THE COMPANY TO
SUPPLY ALL INFORMATION IN EACH CASE REASONABLY REQUESTED BY ANY SUCH
REPRESENTATIVE, MANAGING UNDERWRITER(S), ATTORNEY OR ACCOUNTANT IN CONNECTION
WITH SUCH REGISTRATION STATEMENT; PROVIDED THAT THIS CLAUSE (L) SHALL ONLY BE
APPLICABLE TO A REPRESENTATIVE OF SUCH HOLDERS THAT ARE SELLING STOCKHOLDERS AND
ANY ATTORNEYS OR ACCOUNTANTS RETAINED BY SUCH HOLDERS IF SUCH HOLDER IS NAMED IN
THE APPLICABLE PROSPECTUS SUPPLEMENT AS A PERSON WHO MAY BE DEEMED TO BE AN
UNDERWRITER WITH RESPECT TO AN OFFERING AND SALE OF REGISTRABLE SECURITIES.

 

4.4                                 SUSPENSION OF SALES.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN (BUT SUBJECT TO THE SUSPENSION LIMIT
DESCRIBED BELOW), (I) SUBJECT TO SECTION 4.1(H), DURING ANY SCHEDULED BLACK-OUT
PERIOD OR (II) UPON RECEIPT OF WRITTEN NOTICE FROM THE COMPANY THAT A
REGISTRATION STATEMENT OR PROSPECTUS CONTAINS OR MAY CONTAIN AN UNTRUE STATEMENT
OF A MATERIAL FACT OR OMITS TO STATE A MATERIAL FACT REQUIRED TO BE STATED
THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING OR THAT
CIRCUMSTANCES EXIST THAT MAKE INADVISABLE USE OF SUCH REGISTRATION STATEMENT OR
PROSPECTUS, THE HOLDER OF REGISTRABLE SECURITIES SHALL FORTHWITH DISCONTINUE THE
MARKETING OF OR DISPOSITION OF REGISTRABLE SECURITIES UNTIL TERMINATION OF SUCH
SCHEDULED BLACK-OUT PERIOD, UNTIL THE HOLDER HAS RECEIVED COPIES OF A
SUPPLEMENTED OR AMENDED PROSPECTUS, OR UNTIL SUCH HOLDER IS ADVISED IN WRITING
BY THE COMPANY THAT THE USE OF THE PROSPECTUS MAY BE RESUMED, AND, IF SO
DIRECTED BY THE COMPANY, SUCH HOLDER SHALL DELIVER TO THE COMPANY (AT THE
COMPANY’S EXPENSE) ALL COPIES, OTHER THAN PERMANENT FILE COPIES THEN IN SUCH
HOLDER’S POSSESSION, OF THE PROSPECTUS COVERING SUCH REGISTRABLE SECURITIES
CURRENT AT THE TIME OF RECEIPT OF SUCH NOTICE. THE TOTAL NUMBER OF DAYS THAT ANY
SUCH SUSPENSIONS AND ANY DEFERRALS OR DELAYS IN REGISTRATION PURSUANT TO
SECTION 4.1(C) IN THE AGGREGATE MAY BE IN EFFECT IN ANY 180 DAY PERIOD SHALL NOT
EXCEED 60 DAYS (THE “SUSPENSION LIMIT”).

 

4.5                                 TERMINATION OF REGISTRATION RIGHTS.  A
HOLDER’S REGISTRATION RIGHTS AS TO ANY SECURITIES HELD BY SUCH HOLDER (AND ITS
AFFILIATES, PARTNERS, MEMBERS AND FORMER MEMBERS) SHALL NOT BE AVAILABLE UNLESS
SUCH SECURITIES ARE REGISTRABLE SECURITIES.

 

4.6                                 FURNISHING INFORMATION.  IT SHALL BE A
CONDITION PRECEDENT TO THE OBLIGATIONS OF THE COMPANY TO TAKE ANY ACTION
PURSUANT TO SECTION 4.3 THAT THE SELLING HOLDERS AND THE UNDERWRITERS, IF ANY,
SHALL FURNISH TO THE COMPANY SUCH INFORMATION REGARDING THEMSELVES, THE

 

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REGISTRABLE SECURITIES HELD BY THEM AND THE INTENDED METHOD OF DISPOSITION OF
SUCH SECURITIES AS SHALL BE REQUIRED TO EFFECT THE REGISTERED OFFERING OF THEIR
REGISTRABLE SECURITIES.

 

4.7                                 INDEMNIFICATION.  (A)  IN CONNECTION WITH
EACH REGISTRATION PURSUANT TO ARTICLE 4, THE COMPANY AGREES TO INDEMNIFY AND
HOLD HARMLESS (1) EACH SELLING HOLDER AND EACH OF ITS OFFICERS, DIRECTORS,
LIMITED OR GENERAL PARTNERS AND MEMBERS, (2) EACH MEMBER, LIMITED OR GENERAL
PARTNER OF EACH SUCH MEMBER, LIMITED OR GENERAL PARTNER, (3) EACH OF THEIR
RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, ADVISORS
AND AGENTS, (4) EACH UNDERWRITER OR AGENT PARTICIPATING IN SUCH OFFERING, AND
(5) EACH PERSON, IF ANY, WHO CONTROLS ANY SELLING HOLDER OR ANY SUCH UNDERWRITER
OR AGENT WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT AS FOLLOWS:

 

(I)                                     AGAINST ANY AND ALL LOSS, LIABILITY,
CLAIM, DAMAGE AND EXPENSE (“LOSS”) WHATSOEVER, AS INCURRED, ARISING OUT OF AN
UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN THE
REGISTRATION STATEMENT, OR THE OMISSION OR ALLEGED OMISSION THEREFROM OF A
MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING OR ARISING OUT OF AN UNTRUE STATEMENT OF A MATERIAL FACT
INCLUDED IN ANY PRELIMINARY PROSPECTUS OR THE PROSPECTUS OR THE OMISSION OR
ALLEGED OMISSION THEREFROM OF A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING; AND

 

(II)                                  AGAINST ANY AND ALL LOSS WHATSOEVER, AS
INCURRED, TO THE EXTENT OF THE AGGREGATE AMOUNT PAID IN SETTLEMENT OF ANY
LITIGATION, OR INVESTIGATION OR PROCEEDING BY ANY GOVERNMENTAL AGENCY OR BODY,
COMMENCED OR THREATENED, OR OF ANY CLAIM WHATSOEVER BASED UPON ANY SUCH UNTRUE
STATEMENT OR OMISSION, OR ANY SUCH ALLEGED UNTRUE STATEMENT OR OMISSION;
PROVIDED, HOWEVER, THAT, WITH RESPECT TO ANY SELLING HOLDER OR ANY UNDERWRITER
OR AGENT, THIS INDEMNITY DOES NOT APPLY TO ANY LOSS TO THE EXTENT ARISING OUT OF
AN UNTRUE STATEMENT OR OMISSION OR ALLEGED UNTRUE STATEMENT OR OMISSION MADE IN
RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED TO THE
COMPANY BY SUCH SELLING HOLDER OR UNDERWRITER OR AGENT, RESPECTIVELY, EXPRESSLY
FOR USE IN THE REGISTRATION STATEMENT, OR ANY PRELIMINARY PROSPECTUS OR THE
PROSPECTUS.

 

(B)                                 EACH SELLING HOLDER AGREES SEVERALLY, AND
NOT JOINTLY, TO INDEMNIFY AND HOLD HARMLESS THE COMPANY, ITS DIRECTORS, EACH OF
ITS OFFICERS WHO SIGNED A REGISTRATION STATEMENT, EACH UNDERWRITER OR AGENT
PARTICIPATING IN SUCH OFFERING AND THE OTHER SELLING HOLDERS, AND EACH PERSON,
IF ANY, WHO CONTROLS THE COMPANY, ANY SUCH UNDERWRITER OR AGENT AND ANY OTHER
SELLING HOLDER WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT, AGAINST
ANY AND ALL LOSSES DESCRIBED IN THE INDEMNITY CONTAINED IN SECTION 4.7(A), AS
INCURRED, BUT ONLY WITH RESPECT TO UNTRUE STATEMENTS OR OMISSIONS, OR ALLEGED
UNTRUE STATEMENTS OR OMISSIONS, MADE IN THE REGISTRATION STATEMENT, OR ANY
PRELIMINARY PROSPECTUS OR THE PROSPECTUS IN RELIANCE UPON AND IN CONFORMITY WITH
WRITTEN INFORMATION FURNISHED TO THE COMPANY BY SUCH SELLING HOLDER EXPRESSLY
FOR USE IN THE REGISTRATION STATEMENT, OR ANY PRELIMINARY PROSPECTUS OR THE
PROSPECTUS.

 

(C)                                  THE OBLIGATIONS OF THE COMPANY UNDER
SECTION 4.7(A) AND OF THE SELLING HOLDERS UNDER SECTION 4.7(B) TO INDEMNIFY ANY
UNDERWRITER OR AGENT WHO PARTICIPATES IN AN OFFERING (OR ANY PERSON, IF ANY,
CONTROLLING SUCH UNDERWRITER OR AGENT WITHIN THE MEANING OF SECTION 15 OF THE
SECURITIES ACT) SHALL BE CONDITIONED UPON THE UNDERWRITING OR AGENCY

 

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AGREEMENT WITH SUCH UNDERWRITER OR AGENT CONTAINING AN AGREEMENT BY SUCH
UNDERWRITER OR AGENT TO INDEMNIFY AND HOLD HARMLESS (1) EACH SELLING HOLDER AND
EACH OF ITS OFFICERS, DIRECTORS, LIMITED OR GENERAL PARTNERS AND MEMBERS,
(2) EACH MEMBER, LIMITED OR GENERAL PARTNER OF EACH SUCH MEMBER, LIMITED OR
GENERAL PARTNER, (3) EACH OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES, ADVISORS AND AGENTS, (4) THE COMPANY, ITS DIRECTORS,
AND EACH OF ITS OFFICERS WHO SIGNED A REGISTRATION STATEMENT, AND (5) EACH
PERSON, IF ANY, WHO CONTROLS THE COMPANY OR ANY SUCH SELLING HOLDER WITHIN THE
MEANING OF SECTION 15 OF THE SECURITIES ACT, AGAINST ANY AND ALL LOSSES
DESCRIBED IN THE INDEMNITY CONTAINED IN SECTION 4.7(A), AS INCURRED, BUT ONLY
WITH RESPECT TO UNTRUE STATEMENTS OR OMISSIONS, OR ALLEGED UNTRUE STATEMENTS OR
OMISSIONS, MADE IN THE REGISTRATION STATEMENT, OR ANY PRELIMINARY PROSPECTUS OR
THE PROSPECTUS IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION
FURNISHED TO THE COMPANY BY SUCH UNDERWRITER OR AGENT EXPRESSLY FOR USE IN THE
REGISTRATION STATEMENT OR ANY PRELIMINARY PROSPECTUS OR THE PROSPECTUS.

 

(D)                                 EACH INDEMNIFIED PARTY SHALL GIVE PROMPT
NOTICE TO EACH INDEMNIFYING PARTY OF ANY ACTION COMMENCED AGAINST IT IN RESPECT
OF WHICH INDEMNITY MAY BE SOUGHT HEREUNDER, BUT FAILURE TO SO NOTIFY AN
INDEMNIFYING PARTY SHALL NOT RELIEVE THE INDEMNIFYING PARTY FROM ANY LIABILITY
IT MAY HAVE UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT THAT THE INDEMNIFYING
PARTY IS PREJUDICED THEREBY. IF IT SO ELECTS, AFTER RECEIPT OF SUCH NOTICE, AN
INDEMNIFYING PARTY, JOINTLY WITH ANY OTHER INDEMNIFYING PARTIES RECEIVING SUCH
NOTICE, MAY ASSUME THE DEFENSE OF SUCH ACTION WITH COUNSEL CHOSEN BY IT,
PROVIDED THAT THE INDEMNIFIED PARTY SHALL BE ENTITLED TO PARTICIPATE IN (BUT NOT
CONTROL) THE DEFENSE OF SUCH ACTION WITH COUNSEL CHOSEN BY IT, THE REASONABLE
FEES AND EXPENSES OF WHICH SHALL BE PAID BY THE INDEMNIFYING PARTY IF THERE
WOULD BE A CONFLICT IF ONE COUNSEL WERE TO REPRESENT BOTH THE INDEMNIFIED AND
THE INDEMNIFYING PARTY, AND BY THE INDEMNIFIED PARTY IN ALL OTHER CIRCUMSTANCES.
IN NO EVENT SHALL THE INDEMNIFYING PARTY OR PARTIES BE LIABLE FOR A SETTLEMENT
OF AN ACTION WITH RESPECT TO WHICH THEY HAVE ASSUMED THE DEFENSE IF SUCH
SETTLEMENT IS EFFECTED WITHOUT THE WRITTEN CONSENT OF THE INDEMNIFYING PARTY
(NOT TO BE UNREASONABLY WITHHELD OR DELAYED), OR FOR THE FEES AND EXPENSES OF
MORE THAN ONE COUNSEL FOR (I) THE COMPANY, ITS OFFICER, DIRECTORS AND
CONTROLLING PERSONS AS A GROUP, (II) THE SELLING HOLDERS AND THEIR CONTROLLING
PERSONS AS A GROUP AND (III) THE UNDERWRITERS OR AGENTS AND THEIR CONTROLLING
PERSONS AS A GROUP, IN EACH CASE, IN CONNECTION WITH ANY ONE ACTION OR SEPARATE
BUT SIMILAR OR RELATED ACTIONS IN THE SAME JURISDICTION ARISING OUT OF THE SAME
GENERAL ALLEGATIONS OR CIRCUMSTANCES.

 

4.8                                 CONTRIBUTION.  IF THE INDEMNIFICATION
PROVIDED FOR IN THIS ARTICLE 4 IS HELD BY A COURT OF COMPETENT JURISDICTION TO
BE UNAVAILABLE TO AN INDEMNIFIED PARTY WITH RESPECT TO ANY LOSS, THEN THE
INDEMNIFYING PARTY, IN LIEU OF INDEMNIFYING SUCH INDEMNIFIED PARTY HEREUNDER,
SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNIFIED PARTY AS A
RESULT OF SUCH AGGREGATE LOSSES IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT
THE RELATIVE FAULT OF THE INDEMNIFYING PARTY ON THE ONE HAND AND OF THE
INDEMNIFIED PARTY ON THE OTHER IN CONNECTION WITH THE STATEMENTS OR OMISSIONS
(OR ALLEGED STATEMENTS OR OMISSIONS) WHICH RESULTED IN SUCH LOSSES, AS WELL AS
ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS.  THE RELATIVE FAULT OF THE
INDEMNIFYING PARTY AND OF THE INDEMNIFIED PARTY SHALL BE DETERMINED BY REFERENCE
TO, AMONG OTHER THINGS, WHETHER THE UNTRUE (OR ALLEGED UNTRUE) STATEMENT OF A
MATERIAL FACT OR THE OMISSION (OR ALLEGED OMISSION) TO STATE A MATERIAL FACT
RELATES TO INFORMATION SUPPLIED BY THE INDEMNIFYING PARTY OR BY THE INDEMNIFIED
PARTY AND THE PARTIES’ RELATIVE INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND
OPPORTUNITY TO CORRECT OR PREVENT SUCH STATEMENT OR OMISSION; PROVIDED, HOWEVER,
THAT THE

 

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OBLIGATIONS OF EACH OF THE HOLDERS HEREUNDER SHALL BE SEVERAL AND NOT JOINT AND
SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE NET PROCEEDS SUCH HOLDER RECEIVES IN
SUCH REGISTRATION AND, PROVIDED, FURTHER, THAT NO PERSON GUILTY OF FRAUDULENT
MISREPRESENTATION (WITHIN THE MEANING OF SECTION 11(F) OF THE SECURITIES ACT)
SHALL BE ENTITLED TO CONTRIBUTION FROM ANY PERSON WHO WAS NOT GUILTY OF SUCH
FRAUDULENT MISREPRESENTATION.  FOR PURPOSES OF THIS SECTION 4.8, EACH PERSON, IF
ANY, WHO CONTROLS AN UNDERWRITER OR AGENT WITHIN THE MEANING OF SECTION 15 OF
THE SECURITIES ACT SHALL HAVE THE SAME RIGHTS TO CONTRIBUTION AS SUCH
UNDERWRITER OR AGENT AND EACH DIRECTOR OF THE COMPANY, EACH OFFICER OF THE
COMPANY WHO SIGNED A REGISTRATION STATEMENT, AND EACH PERSON, IF ANY, WHO
CONTROLS THE COMPANY OR A SELLING HOLDER WITHIN THE MEANING OF SECTION 15 OF THE
SECURITIES ACT SHALL HAVE THE SAME RIGHTS TO CONTRIBUTION AS THE COMPANY OR SUCH
SELLING HOLDER, AS THE CASE MAY BE.

 

4.9                                 REPRESENTATIONS, WARRANTIES AND INDEMNITIES
TO SURVIVE.  THE INDEMNITY AND CONTRIBUTION AGREEMENTS CONTAINED IN THIS
ARTICLE 4 AND THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY REFERRED TO IN
SECTION 4.3(K) SHALL REMAIN OPERATIVE AND IN FULL FORCE AND EFFECT REGARDLESS OF
(I) ANY TERMINATION OF ANY UNDERWRITING OR AGENCY AGREEMENT, (II) ANY
INVESTIGATION MADE BY OR ON BEHALF OF THE SELLING HOLDERS, THE COMPANY OR ANY
UNDERWRITER OR AGENT OR CONTROLLING PERSON OR (III) THE CONSUMMATION OF THE SALE
OR SUCCESSIVE RESALES OF THE REGISTRABLE SECURITIES.

 

4.10                           LOCK-UP AGREEMENTS.  THE COMPANY AGREES THAT, IF
REQUESTED BY THE MANAGING UNDERWRITER IN ANY UNDERWRITTEN PUBLIC OFFERING
PERMITTED BY THIS AGREEMENT, IT WILL NOT, DIRECTLY OR INDIRECTLY, SELL, OFFER TO
SELL, GRANT ANY OPTION FOR THE SALE OF, OR OTHERWISE DISPOSE OF ANY COMMON STOCK
OR SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE OR EXERCISABLE FOR COMMON STOCK
(SUBJECT TO CUSTOMARY EXCEPTIONS), OTHER THAN ANY SUCH SALE OR DISTRIBUTION OF
COMMON STOCK UPON EXERCISE OF THE COMPANY’S WARRANTS, IN THE CASE OF AN
UNDERWRITTEN OFFERING FOR A PERIOD OF 60 DAYS FROM THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT PERTAINING TO SUCH COMMON STOCK; PROVIDED, HOWEVER, THAT
ANY SUCH LOCK-UP AGREEMENT SHALL NOT PROHIBIT THE COMPANY FROM DIRECTLY OR
INDIRECTLY (I) SELLING, OFFERING TO SELL, GRANTING ANY OPTION FOR THE SALE OF,
OR OTHERWISE DISPOSING OF ANY QUALIFYING EMPLOYEE STOCK (OR OTHERWISE
MAINTAINING ITS EMPLOYEE BENEFITS PLANS IN THE ORDINARY COURSE OF BUSINESS) OR
(II) ISSUING COMMON STOCK OR SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR
COMMON STOCK UPON EXERCISE OR CONVERSION OF ANY WARRANT (INCLUDING ANY OTHER
WARRANT), OPTION, RIGHT OR CONVERTIBLE OR EXCHANGEABLE SECURITY ISSUED IN
CONNECTION WITH THE PLAN OF REORGANIZATION.  THE TOTAL NUMBER OF DAYS THAT ANY
SUCH LOCK-UP AGREEMENT MAY BE IN EFFECT IN ANY 365-DAY PERIOD SHALL NOT EXCEED
120 DAYS.  THE LOCK-UP AGREEMENTS SET FORTH IN THIS SECTION 4.10 SHALL BE
SUBJECT TO CUSTOMARY EXCEPTIONS THAT MAY BE CONTAINED IN AN UNDERWRITING
AGREEMENT IF ANY SUCH REGISTRATION INVOLVES A SIMILAR UNDERWRITTEN OFFERING.

 

4.11                           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 REGISTRABLE 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;

 

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(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 REGISTRABLE
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.

 

4.12                           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.

 

4.13                           THE WARRANT AGENT.  THE WARRANT AGENT SHALL HAVE
NO DUTIES OR OBLIGATIONS UNDER THIS ARTICLE 4 AND SHALL HAVE NO DUTY TO MONITOR
OR ENFORCE THE COMPANY’S COMPLIANCE WITH THIS ARTICLE 4.

 

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 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.

 

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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 AS CONTEMPLATED BY SECTION 5.5), OTHER THAN A STOCK DIVIDEND COVERED
BY SECTION 5.1 OR 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 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

 

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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 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

 

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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, 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, (X) IN THE CASE OF A MIXED CONSIDERATION MERGER, THE
PUBLIC STOCK ISSUED IN SUCH MIXED CONSIDERATION MERGER AND (Y) IN THE CASE OF
ANY OTHER 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 (I) IN THE CASE
OF A MIXED CONSIDERATION MERGER, THE AGGREGATE EXERCISE PRICE PER WARRANT AS IN
EFFECT IMMEDIATELY PRIOR TO SUCH MIXED CONSIDERATION MERGER TIMES THE STOCK
CONSIDERATION RATIO AND (II) IN THE CASE OF ANY OTHER ORGANIC CHANGE, THE
AGGREGATE EXERCISE PRICE PER WARRANT AS IN EFFECT IMMEDIATELY PRIOR TO SUCH
ORGANIC CHANGE.  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 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.  THIS SECTION 5.5 SHALL NOT
APPLY TO ANY WARRANTS OR COMMON STOCK REDEEMED OR SOLD IN CONNECTION WITH ANY
ORGANIC CHANGE PURSUANT TO SECTION 6.1, SECTION 6.2(B), SECTION 6.3(A)(I) AND
SECTION 6.3(B), PROVIDED THAT, 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

 

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CAUSE THE WARRANT AGENT PROMPTLY TO MAIL BY FIRST CLASS MAIL, POSTAGE PREPAID,
TO EACH HOLDER NOTICE OF SUCH ADJUSTMENT OR ADJUSTMENTS AND SHALL PROMPTLY
DELIVER TO THE WARRANT AGENT 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 THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON
THE EXERCISE OF EACH WARRANT AFTER SUCH ADJUSTMENT, SETTING FORTH A BRIEF
STATEMENT IN REASONABLE DETAIL OF THE FACTS REQUIRING SUCH ADJUSTMENT AND
SETTING FORTH THE COMPUTATION BY WHICH 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.

 

6.                                      CHANGE OF CONTROL.

 

6.1                                 REDEMPTION IN CONNECTION WITH A CHANGE OF
CONTROL EVENT.  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, THE COMPANY SHALL PAY TO SUCH
HOLDER OF OUTSTANDING WARRANTS AS OF THE DATE OF SUCH CHANGE OF CONTROL EVENT,
AN AMOUNT IN IMMEDIATELY AVAILABLE FUNDS EQUAL TO THE CASH REDEMPTION VALUE FOR
SUCH WARRANTS, NOT LATER THAN THE DATE WHICH IS TEN (10) BUSINESS DAYS AFTER
SUCH CHANGE OF CONTROL EVENT AND THE WARRANTS SHALL THEREAFTER BE EXTINGUISHED.
FOR PURPOSES OF THIS SECTION 6.1, THE EXERCISE DATE SHALL MEAN (A) 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 (B) OTHERWISE, THE FIFTH (5TH) BUSINESS DAY FOLLOWING THE
EFFECTIVENESS OF THE CHANGE OF CONTROL EVENT.  THE “CASH REDEMPTION VALUE” FOR
ANY WARRANT WILL 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 CASH REDEMPTION VALUE OF THE WARRANTS SHALL BE DUE AND PAYABLE
WITHIN TEN (10) BUSINESS DAYS AFTER THE DATE OF THE APPLICABLE CHANGE OF CONTROL
EVENT.  IF A HOLDER OF WARRANTS DOES NOT ELECT TO RECEIVE THE CASH 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.

 

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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 COMPANY SHALL PAY WITHIN FIVE (5) BUSINESS DAYS AFTER
THE EFFECTIVE DATE OF SUCH PUBLIC STOCK MERGER, TO THE WARRANT AGENT ON BEHALF
OF EACH HOLDER OF OUTSTANDING WARRANTS AS OF THE EFFECTIVE DATE OF SUCH PUBLIC
STOCK MERGER, AN AMOUNT IN CASH IN IMMEDIATELY AVAILABLE FUNDS EQUAL TO THE CASH
REDEMPTION VALUE FOR SUCH WARRANTS DETERMINED IN ACCORDANCE WITH SECTION 6.1 AND
THE WARRANTS SHALL BE TERMINATED AND EXTINGUISHED.

 

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) PAY TO THE HOLDER OF SUCH WARRANT AS OF THE DATE
OF SUCH MIXED CONSIDERATION MERGER THE PRODUCT OF THE CASH CONSIDERATION RATIO
MULTIPLIED BY THE CASH REDEMPTION VALUE FOR SUCH WARRANT, WHICH AMOUNT SHALL BE
PAID IN IMMEDIATELY AVAILABLE FUNDS, NOT LATER THAN THE DATE WHICH IS TEN
(10) BUSINESS DAYS AFTER SUCH MIXED CONSIDERATION MERGER AND (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.  THE
PORTION OF THE CASH REDEMPTION VALUE OF THE WARRANTS PAYABLE PURSUANT TO CLAUSE
(I) OF THIS SECTION 6.3(A) SHALL BE DUE AND PAYABLE NOT LATER THAN THE TENTH
(10TH) BUSINESS DAY AFTER THE DATE OF THE MIXED CONSIDERATION MERGER.

 

(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 COMPANY SHALL PAY, WITHIN TEN
(10) BUSINESS DAYS AFTER THE EFFECTIVE DATE OF SUCH MIXED CONSIDERATION MERGER,
TO THE WARRANT AGENT ON BEHALF OF EACH HOLDER OF OUTSTANDING WARRANTS AS OF THE
EFFECTIVE DATE OF SUCH MIXED CONSIDERATION MERGER, AN AMOUNT IN CASH IN
IMMEDIATELY AVAILABLE FUNDS EQUAL TO THE CASH REDEMPTION VALUE FOR SUCH WARRANTS
DETERMINED IN ACCORDANCE WITH SECTION 6.1 AND THE WARRANTS SHALL BE TERMINATED
AND EXTINGUISHED.

 

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 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”).

 

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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), 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.

 

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

 

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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 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.

 

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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 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

 

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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, 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

 

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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 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.

 

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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 AGREEMENT AND ANY OTHER
REPRESENTATIONS AND WARRANTIES MADE BY THE COMPANY IN ARTICLE III OF THE
INVESTMENT AGREEMENT AND STOCK PURCHASE AGREEMENTS TO THE EXTENT RELATING TO THE
WARRANTS, 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.

 

11.3                           CANCELLATION OF WARRANTS.  UPON THE EFFECTIVENESS
OF THE PLAN AND IN ACCORDANCE WITH THE INVESTMENT AGREEMENT AND/OR STOCK
PURCHASE AGREEMENTS, AS APPLICABLE, THE WARRANTS, REGARDLESS OF WHETHER OR NOT
VESTED, SHALL BE CANCELLED FOR NO CONSIDERATION AND ALL RIGHTS UNDER THIS
AGREEMENT AND THE WARRANTS SHALL THEREUPON TERMINATE.

 

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

 

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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. THE
COMPANY AND EACH INITIAL INVESTOR AGREE THAT FOR FEDERAL INCOME TAX PURPOSES,
THE WARRANTS HAVE BEEN GRANTED AS AN OPTION PREMIUM IN EXCHANGE FOR EACH INITIAL
INVESTOR AGREEING, AT THE OPTION OF THE COMPANY, TO MAKE THE EQUITY INVESTMENT
DESCRIBED IN THE INVESTMENT AGREEMENT OR STOCK PURCHASE AGREEMENTS, AS
APPLICABLE.

 

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.

 

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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.

 

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 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, 3.6(E) AND
3.6(F) (A) WHILE A REGISTRATION STATEMENT (SOLELY FOR THE PURPOSES OF THIS AND
THE IMMEDIATELY FOLLOWING PARAGRAPH, SUCH TERM TO INCLUDE 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 OTHER LIMITATIONS 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, 3.6(e) and or 3.6(f) 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.

 

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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:

 

If to the Company, to:

 

General Growth Properties, Inc.

110 N. Wacker Drive

Chicago IL 60606

Attention: Ronald L. Gern, Esq.

Fax:  312-960-5485

 

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

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention:

Marcia L. Goldstein, Esq.

 

Frederick S. Green, Esq.

 

Gary T. Holtzer, Esq.

 

Malcolm E. Landau, Esq.

Facsimile: (212) 310-8007

 

If to the Warrant Agent, to:

 

Mellon Investor Services LLC

200 W. Monroe Street, Suite 1590

Chicago, IL 60606

Attention: Relationship Manager

Facsimile: (312) 325-7610

 

with a copy to:

 

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, NJ 07310

Attention:  General Counsel

Facsimile: 201-680-4610

 

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

 

40

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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 THE COMPANY 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
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                           RELATIONSHIP TO INVESTMENT AGREEMENT AND STOCK
PURCHASE AGREEMENTS.  THE WARRANTS ISSUED HEREUNDER HAVE BEEN FULLY PAID UPON
ISSUANCE AND SHALL REMAIN ISSUED, OUTSTANDING AND BINDING ON THE PARTIES IN
ACCORDANCE WITH THE TERMS HEREOF NOTWITHSTANDING ANY FAILURE OF THE TRANSACTIONS
CONTEMPLATED BY THE INVESTMENT AGREEMENT OR STOCK PURCHASE AGREEMENTS, AS
APPLICABLE, TO BE CONSUMMATED, ANY DEFAULT BY ANY PARTY TO THE INVESTMENT
AGREEMENT OR STOCK PURCHASE AGREEMENTS, AS APPLICABLE, OR THE INVALIDITY OR
UNENFORCEABILITY THEREOF.  NOTWITHSTANDING THE PRECEDING SENTENCE, IF A FAILURE
BY ANY PURCHASER TO PAY ALL AMOUNTS PAYABLE BY SUCH PURCHASER UNDER ARTICLE I
AND ARTICLE II OF THE INVESTMENT AGREEMENT OR A STOCK PURCHASE AGREEMENTS, AS
APPLICABLE, CAUSES THE TERMINATION OF THE INVESTMENT AGREEMENT OR A STOCK
PURCHASE AGREEMENT, AS APPLICABLE, BY THE COMPANY PURSUANT TO
SECTION 11.1(C)(III) THEREIN, EACH HOLDER THAT IS A MEMBER OF THE PURCHASER
GROUP OF SUCH PURCHASER AGREES THAT AS LIQUIDATED DAMAGES FOR SUCH FAILURE AND
WITHOUT PREJUDICE TO THE RIGHTS AND REMEDIES OF THE COMPANY UNDER THE INVESTMENT
AGREEMENT OR STOCK PURCHASE AGREEMENTS, AS APPLICABLE, ANY WARRANTS HELD BY SUCH
HOLDER SHALL BE DEEMED CANCELLED, NULL AND VOID AND OF NO FURTHER EFFECT.  FOR
THE AVOIDANCE OF DOUBT, THE IMMEDIATELY PRECEDING SENTENCE APPLIES ONLY TO A
HOLDER THAT IS A MEMBER OF A PURCHASER GROUP WHERE THE APPLICABLE PURCHASER
FAILS TO PAY ALL AMOUNTS PAYABLE BY SUCH PURCHASER UNDER ARTICLE I AND
ARTICLE II OF THE INVESTMENT AGREEMENT OR A STOCK PURCHASE AGREEMENT, AS
APPLICABLE, CAUSING THE TERMINATION OF THE INVESTMENT AGREEMENT OR A STOCK
PURCHASE AGREEMENT, AS APPLICABLE, BY THE COMPANY PURSUANT TO
SECTION 11.1(C)(III) THEREOF, AND NOT TO ANY PERMITTED TRANSFEREE OF SUCH MEMBER
OR ANY OTHER PERSON.

 

41

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12.10                     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.

 

12.11                     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.

 

12.12                     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.

 

12.13                     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.

 

12.14                     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]

 

42

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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: Adam Metz

 

 

 

Name: Adam Metz

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

MELLON INVESTOR SERVICES LLC,

 

as Warrant Agent

 

 

 

 

 

By: Thomas Blatchford

 

 

 

Name: Thomas Blatchford

 

 

 

Title: Vice President

 

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EXHIBIT A

 

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 AND REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 10, 2010 BETWEEN
GENERAL GROWTH PROPERTIES, INC. (THE “COMPANY”) AND MELLON INVESTOR SERVICES
LLC, WARRANT AGENT. A COPY OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT IS
AVAILABLE AT THE OFFICES OF THE COMPANY.

 

WARRANTS TO PURCHASE COMMON STOCK

OF GENERAL GROWTH PROPERTIES, INC.

 

No.

 

Certificate for                                    Warrants

 

This certifies that [HOLDER] , or registered assigns, is the registered holder
of the number of Warrants set forth above. Each Warrant entitles the holder
thereof (a “Holder”), subject to the provisions contained herein and in the
Warrant and Registration Rights 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 $15 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 and
Registration Rights Agreement, dated as of May 10, 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 May 10, 2017 (the “Expiration Date”).

 

As provided in the Warrant Agreement and subject to the terms and conditions
therein set forth, the 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 Warrant are subject to adjustment as provided in the Warrant
Agreement.

 

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

 

In order to exercise a 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 share(s) of Underlying Common Stock as to which the
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 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 in each case 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.

 

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 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

 

2

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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: May 10, 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

 

 

 

3

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EXHIBIT A

 

FORM OF REVERSE OF WARRANT CERTIFICATE

 

EXERCISE SUBSCRIPTION FORM

 

(To be executed only upon exercise of Warrant)

 

To:

 

 

 

The undersigned irrevocably exercises
                                             of the 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
Warrant represented by the Warrant Certificate and herewith (i) elects for Net
Share Settlement of such 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 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 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

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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)

 

Number of
Warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

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

 

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:

 

 

 

 

 

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

*              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.

 

2

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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 Cash 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 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.

 

 

Settlement Date:

The scheduled date of payment of the Cash Redemption Value.

 

 

Volatility:

For calculation of Cash Redemption Value in connection with a Change of Control
Event with respect to (A) the Warrants or the New Warrants, 20% or (B) the GGO
Warrants, the lesser of (1) 30% or (2) the volatility of General Growth
Opportunities, Inc. as determined by an Independent Financial Expert engaged to
make the calculation, who shall be instructed to assume for purposes of the
determination of volatility referred to in this clause (B)(2) that the Change of
Control Event had not occurred; provided, however, that if the Warrants, New
Warrants or GGO Warrants are adjusted as a result of a Change of Control Event,
volatility for purposes of calculating Cash 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.

 

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

 

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

 

Example of a Hypothetical Warrant:(1)

 

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

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

 

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

 

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 AND VESTING

 

 

 

 

 

Vesting Schedule
(Number of Warrants that vest on applicable date)

 

Initial Investor

 

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

 

Date of Warrant
Agreement

 

July 12, 2010

 

Each day from and
including July 13, 2010
through and including
December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

Brookfield Purchaser

 

60,000,000

 

24,000,000

 

12,000,152

 

139,534

 

 

 

 

 

 

 

 

 

 

 

Fairholme Purchasers

 

42,857,143

 

17,142,857

 

8,571,562

 

99,667

 

 

 

 

 

 

 

 

 

 

 

Pershing Square Purchasers

 

0

 

0

 

0

 

0

 

 

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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

 

$

15.00

 

 

 

 

 

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

 

 

 

 

 

 

 

Requisitioning Funds, each requisition

 

$

25.00

 

 

 

 

 

Expiration

 

$

1,000.00

 

 

 

 

 

Special Services

 

Additional

 

 

 

 

 

Out of Pocket Expenses

 

Additional

 

 

 

 

 

Including Postage, Printing, Stationery, Overtime, Transportation, Microfilming,
Imprinting, Mailing, etc.

 

 

 

 

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