Exhibit
10.49


 


EXECUTION COPY


 


	
   

  



 


 


WARRANT AGREEMENT


 


BETWEEN


 


GENERAL GROWTH PROPERTIES, INC.


 


AND


 


MELLON INVESTOR SERVICES LLC,


 


as WARRANT
AGENT


 


 


 


Dated as of November      , 2010


 


 


	
   

  



 

















 


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

  	
  23

  
	
   

  	
  4.6

  	
  Furnishing
  Information

  	
  23

  
	
   

  	
  4.7

  	
  Indemnification

  	
  23

  
	
   

  	
  4.8

  	
  Contribution

  	
  25

  
	
   

  	
  4.9

  	
  Representations,
  Warranties and Indemnities to Survive

  	
  25

  
	
   

  	
  4.10

  	
  Lock-Up
  Agreements

  	
  25

  
	
   

  	
  4.11

  	
  Rule 144
  Reporting

  	
  26

  
	
   

  	
  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

  	
  28

  



 


i

















 


	
   

  	
  5.4

  	
  Issuer
  Tender or Exchange Offers

  	
  28

  
	
   

  	
  5.5

  	
  Reorganization,
  Reclassification, Consolidation, Merger or Sale

  	
  29

  
	
   

  	
  5.6

  	
  Other
  Adjustments

  	
  30

  
	
   

  	
  5.7

  	
  Notice
  of Adjustment

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  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

  	
  32

  
	
   

  	
   

  	
   

  
	
  7.

  	
  WARRANT TRANSFER BOOKS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  WARRANT HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  No
  Voting Rights

  	
  33

  
	
   

  	
  8.2

  	
  Right
  of Action

  	
  33

  
	
   

  	
   

  	
   

  
	
  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

  	
  36

  
	
   

  	
  9.4

  	
  Resignation
  and Removal; Appointment of Successor

  	
  36

  
	
   

  	
  9.5

  	
  Damages

  	
  37

  
	
   

  	
  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

  	
  38

  
	
   

  	
   

  	
   

  
	
  12.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Money
  and Other Property Deposited with the Warrant Agent

  	
  38

  
	
   

  	
  12.2

  	
  Payment
  of Taxes

  	
  38

  
	
   

  	
  12.3

  	
  Surrender
  of Certificates

  	
  39

  
	
   

  	
  12.4

  	
  Mutilated,
  Destroyed, Lost and Stolen Warrant Certificates

  	
  39

  
	
   

  	
  12.5

  	
  Removal
  of Legends

  	
  39

  
	
   

  	
  12.6

  	
  Notices

  	
  40

  



 


ii

















 


	
   

  	
  12.7

  	
  Applicable
  Law; Jurisdiction

  	
  41

  
	
   

  	
  12.8

  	
  Persons
  Benefiting

  	
  42

  
	
   

  	
  12.9

  	
  Counterparts

  	
  42

  
	
   

  	
  12.10

  	
  Amendments

  	
  42

  
	
   

  	
  12.11

  	
  Headings

  	
  43

  
	
   

  	
  12.12

  	
  Entire
  Agreement

  	
  43

  
	
   

  	
  12.13

  	
  Specific
  Performance

  	
  43

  



 


iii

















 


List of
Exhibits


 


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


 


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


 


EXHIBIT B
— Form of Assignment


 


EXHIBIT C
— Option Pricing Assumptions / Methodology


 


SCHEDULE
A — Allocations of Warrants to Initial Investors


 


SCHEDULE
B — Warrant Agent Compensation


 


iv

















 


WARRANT AGREEMENT


 


WARRANT AGREEMENT, dated as of November       ,
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 120,000,000 shares of its Common Stock, subject
to adjustment, including (a) Series A-1 Warrants to purchase
57,500,000 shares of its Common Stock, subject to adjustment, in connection
with that certain Amended and Restated Cornerstone Investment Agreement,
effective as of March 31, 2010, by and between REP Investments LLC and the
Company (as amended from time to time, the “Investment Agreement”), (b) Series A-2
Warrants to purchase 41,071,429 shares of its Common Stock, subject to adjustment,
in connection with that certain Amended and Restated Stock Purchase Agreement,
effective as of March 31, 2010, by and between each of The Fairholme Fund
and The Fairholme Focused Income Fund (each a “Fairholme Purchaser”, and
collectively, the “Fairholme Purchasers”) and the Company (as amended
from time to time, the “Fairholme Stock Purchase Agreement”), (c) Series A-2
Warrants to purchase 16,428,571 shares of its Common Stock in connection with
that certain Amended and Restated Stock Purchase Agreement, effective as of March 31,
2010, by and between each of Pershing Square, L.P., Pershing Square II, L.P.,
Pershing Square International, Ltd. and Pershing Square International V, Ltd.
(each, a “Pershing Square Purchaser”, collectively, the “Pershing Square
Purchasers”) and the Company (as amended from time to time, the “Pershing
Square Stock Purchase Agreement” and, together with the Fairholme Stock
Purchase Agreement, the “Stock Purchase Agreements”) and (d) Series A-1 Warrants to purchase 5,000,000 shares
of its Common Stock in connection with the Blackstone Purchase Agreements (as
defined herein) and those certain designations, dated as of the date hereof, by
and among the Company, Blackstone Real Estate Partners VI L.P. (the “Blackstone
Purchaser” and each of the Blackstone Purchaser, Brookfield Purchaser (as
defined herein), the Fairholme Purchasers and Pershing Square Purchasers, a “Purchaser”)
and each of Brookfield Retail Holdings LLC (formerly known as REP Investments
LLC), the Fairholme Purchasers and the Pershing Square Purchasers (the “Blackstone
Designations” and, together with the Blackstone Purchase Agreements, the “Blackstone
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:


 


[SIGNATURE PAGE TO GGP
WARRANT AGREEMENT]


 

















 


1.                                      DEFINITIONS.


 


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


 


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


 


Announcement
Date:  the meaning set forth in Section 5.4.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Blackstone
Purchaser Group:  means the
Blackstone Purchaser, its investment manager and their respective “controlled
Affiliates”.  For such purpose, one or
more investment funds under common investment management shall constitute “controlled
Affiliates” of their investment manager.


 


Board:  the board of directors of the Company.


 


Brookfield
Consortium Member:  as defined in the Investment Agreement.


 

















 


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


 


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


 


Brookfield
Purchaser:  the
Purchaser defined in the Investment Agreement.


 


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


 


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


 


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


 


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


 


Expiration
Date:  the meaning set forth in Section 3.3.


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


Fair
Market Value:


 


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


 


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


 


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


 


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


 














 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Net
Share Settlement:  the
settlement method for Series A-1 Warrants, if elected in accordance with Section
3.4, and for Series A-2 Warrants pursuant to which an exercising Holder
shall be entitled to receive from the Company, for each Warrant exercised, a
number of shares of Common Stock equal to the Net Share Amount without any
payment therefor.


 


Organic
Change:  the meaning set forth in Section
5.5.


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Purchaser:  the meaning set forth in the recitals hereto.


 


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


 

















 


Brookfield
Retail Holdings V LP, a Delaware limited partnership, and Brookfield US Retail
Holdings LLC, a Delaware limited liability company.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Stock
Dividend:  the meaning
set forth in Section 5.1.


 


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


 


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


 


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


 


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


 


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


 


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


 


Warrant Registrar:  the meaning set forth in Article 7.


 

















 


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


 


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


 


2.             ORIGINAL
ISSUE OF WARRANTS.


 


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


 


2.2           Execution and Delivery of Warrant
Certificates; Vesting.


 


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


 


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


 


(c)           From time to time, the Warrant Agent shall countersign and deliver
Warrant Certificates in required denominations to Persons entitled thereto in
connection with any transfer or exchange permitted under this Agreement. The
Warrant Agent is hereby irrevocably (but subject to Article 9)
authorized to countersign and deliver Warrant Certificates as required by Section
2.2, Section 3.4, Article 7, and Section 12.4 or
otherwise as provided herein. The Warrant Certificates shall be executed on
behalf of the Company by its President or a Vice 


 

















 


President, either manually or by facsimile signature
printed thereon. The Warrant Certificates shall be countersigned by the Warrant
Agent, either manually or by facsimile signature, and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company whose
signature shall have been placed upon any of the Warrant Certificates shall
cease to be such officer of the Company before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent, either manually or by
facsimile signature printed thereon, and issued and delivered with the same
force and effect as though such Person had not ceased to be such officer of the
Company


 


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


 


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


 


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


 


3.2           Exercise of Warrants.  The
Warrants shall be exercisable in whole or in part from time to time on any
Business Day beginning on the date hereof and ending on the Expiration Date, in the
manner provided for herein; provided, that solely with respect to the
exercise any time prior to the date that is 180 days prior to the Expiration
Date of any Warrant held at the time of exercise by a Fairholme or Pershing
Investor, such Fairholme or Pershing Investor must have delivered written
notice of its intent to exercise such Warrant to the Company 90 days prior to
the Exercise Date of such Warrant and no exercise of such Warrant shall be
effective until such 90-day period has lapsed.


 


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


 


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


 

















 


such Warrant.  Only Net Share Settlement shall apply (and
shall be automatically deemed to have been irrevocably elected) upon exercise of
each Series A-2 Warrant.  The election of Net Share Settlement shall be
made in the form on the reverse of or attached to the Warrant Certificate for
each Series A-1 Warrant.


 


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


 


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


 


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


 

















 


with any Underlying Common Stock or other securities
or property to which such Holder is entitled pursuant to this Agreement upon
the surrender of a Warrant Certificate in accordance with this Agreement.


 


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


 


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


 


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


 


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


 


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


 

















 


such sale, transfer or
other disposition, to “Sell”), except in compliance with applicable
Federal and state securities and other applicable laws and this Section 3.6.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


(f)            [Intentionally omitted.]


 


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


 


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


 


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


 


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


 


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


 


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


 


4.             REGISTRATION
RIGHTS.


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


5.             ADJUSTMENTS
AND OTHER RIGHTS.


 


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


 














 


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


 


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


 


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


 


then,
in each such case, the Exercise Price in effect immediately prior to the close
of business on such record date  shall be
reduced immediately thereafter to the price determined by multiplying such Exercise
Price by the quotient of (x) the Fair Market Value of the Common Stock on
the last trading day immediately preceding the first date on which the Common
Stock trades regular way on the principal national securities exchange on which
the Common Stock is listed or admitted to trading without the right to receive
such Distribution, minus the amount of cash and/or the Fair Market Value of the
securities, evidences of indebtedness, assets, rights or warrants to be so
distributed in respect of one share of Common Stock divided by (y) the
Fair Market Value of the Common Stock on the last trading day immediately
preceding the first date on which the Common Stock trades regular way on the
principal national securities exchange on which the Common Stock is listed or admitted
to trading without the right to receive such Distribution; such adjustment
shall be made successively whenever such a record date is fixed. In such event,
the number of shares of Common Stock issuable upon the exercise of each Warrant
as in effect immediately prior to the close of business on such record date
shall be increased immediately thereafter to the amount determined by
multiplying such number by the quotient of (x) the Exercise Price in
effect immediately prior to the adjustment contemplated by the immediately
preceding sentence divided by (y) the new Exercise Price determined in
accordance with the immediately preceding sentence.  If the Distribution includes Common Stock as
well as other items of the sort referred to in Section 5.2(A) or
(B), then instead of adjusting for the entire Distribution under this Section 5.2
the Common Stock portion shall be treated as a Stock Dividend that triggers an
adjustment to the Exercise Price and number of shares of Common Stock
obtainable upon exercise of each Warrant under Section 5.1 and the other items in the
Distribution shall trigger a further adjustment to such adjusted Exercise Price
and number of shares under this Section 5.2.  In the event that such
Distribution is not so made, the Exercise Price and the number of shares of
Common Stock issuable upon exercise of each Warrant then in effect shall be
readjusted, effective as of the date when the Board determines not to
distribute such shares, evidences of indebtedness, assets, rights, cash or
warrants, as the case may be, to the Exercise Price that would then be in
effect and the number of Shares that would then be issuable upon exercise of
this Warrant if such record date had not been fixed.


 


5.3           Rights Offerings.  If at
any time the Company shall distribute rights or warrants to all or
substantially all holders of its Common Stock entitling them, for a period of
not more than 45 days, to subscribe for or purchase shares of Common Stock at a
price per share less than the Fair Market Value of the Common Stock on the last
trading day preceding the date on which 


 

















 


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


 


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


 


5.5           Reorganization, Reclassification,
Consolidation, Merger or Sale.  Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially 


 

















 


all of the Company’s
assets or other transaction, which in each case is effected in such a way that
the shares of Common Stock are converted into the right to receive (either
directly or upon subsequent liquidation) stock, securities, other equity
interests or assets (including cash) with respect to or in exchange for shares
of Common Stock is referred to herein as “Organic Change.”  Prior to the consummation of any Organic
Change, 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 


 

















 


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.


 

















 


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”).


 

















 


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


 


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


 


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


 


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


 


8.             WARRANT
HOLDERS.


 


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


 


8.2           Right of Action.  All rights
of action in respect of this Agreement are vested in the Holders of the
Warrants, and any Holder of Warrants, without the consent of the Warrant Agent
or the Holder of any other Warrant, may, on such Holder’s own behalf and for
such Holder’s own benefit, enforce, and may institute and maintain any suit,
action or proceeding 


 

















 


against the Company
suitable to enforce, or otherwise in respect of, such Holder’s right to
exercise or exchange such Holder’s Warrants in the manner provided in this
Agreement or any other obligation of the Company under this Agreement.


 


9.             WARRANT
AGENT


 


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


 


The
Warrant Agent may execute and exercise any of the rights and powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys, agents or employees, provided reasonable care has been exercised in
the selection and in the continued employment of any such attorney, agent or
employee.  The Warrant Agent shall not be
under any obligation or duty to institute, appear in or defend any action, suit
or legal proceeding in respect hereof, unless first indemnified to its
satisfaction, but this provision shall not affect the power of the Warrant
Agent to take such action as the Warrant Agent may consider proper, whether
with or without such indemnity. The Warrant Agent shall promptly notify the
Company in writing of any claim made or action, suit or proceeding instituted
against it arising out of or in connection with this Agreement.


 

















 


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


 


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


 


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


 


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


 


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


 


The
Warrant Agent shall have no duties, responsibilities or obligations as the
Warrant Agent except those which are expressly set forth herein, and in any
modification or amendment hereof to which the Warrant Agent has consented in
writing, and no duties, responsibilities or obligations shall be implied or
inferred.  Without limiting the foregoing,
unless otherwise expressly provided in this Agreement, the Warrant Agent shall
not be subject to, nor be required to comply with, or determine if any person
or entity has complied with, the Warrant Certificate or any other agreement
between or among the parties hereto, even though reference thereto may be made
in this Warrant Agreement, or to comply with any notice, instruction,
direction, request 


 

















 


or
other communication, paper or document other than as expressly set forth in
this Warrant Agreement.


 


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


 


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


 


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


 


9.4           Resignation and Removal; Appointment of
Successor.  (a)  No resignation or removal of the
Warrant Agent and no appointment of a successor warrant agent shall become
effective until the acceptance of appointment by the successor warrant agent as
provided herein. The Warrant Agent may resign its duties and be discharged from
all further duties and liability hereunder (except liability arising as a
result of the Warrant Agent’s own gross negligence, willful misconduct or bad faith)
after giving written notice to the Company at least thirty (30) days prior to
the date such resignation will become effective. The Company shall, upon
written request of Holders of a majority of the outstanding Warrants, remove
the Warrant Agent upon written notice provided at least thirty (30) days prior
to the date of such removal, and the Warrant Agent shall thereupon in like
manner be discharged from all further duties and liabilities 


 

















 


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


 


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


 


9.5           Damages.  No
party to this Agreement shall be liable to any other party for any
consequential, indirect, punitive, special or incidental damages under any provision
of this Agreement or for any consequential, indirect, punitive, special or incidental damages arising out of
any act or failure to act hereunder even if that party has been advised of or
has foreseen the possibility of such damages.


 






 










 


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


 


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


 


10.                               REPRESENTATIONS AND WARRANTIES.


 


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


 


11.                               COVENANTS.


 


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


 


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


 


12.                               MISCELLANEOUS.


 


12.1         Money and Other Property Deposited with the
Warrant Agent.  Any moneys, securities or other property
which at any time shall be deposited by the Company or on its behalf with the
Warrant Agent pursuant to this Agreement shall be and are hereby assigned,
transferred and set over to the Warrant Agent in trust for the purpose for
which such moneys, securities or other property shall have been deposited; but
such moneys, securities or other property need not be segregated from other
funds, securities or other property except to the extent required by law. The
Warrant Agent shall distribute any money deposited with it for payment and
distribution to a 


 

















 


Holder to an account designated by such Holder in
such amount as is appropriate. Any money deposited with the Warrant Agent for
payment and distribution to the Holders that remains unclaimed for two years
after the date the money was deposited with the Warrant Agent shall be paid to
the Company.  The Warrant
Agent shall not be under any liability for interest on any monies at any time
received by it pursuant to any of the provisions of this Agreement.


 


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


 


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


 


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


 


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


 


Every
new Warrant Certificate executed and delivered pursuant to this Section 12.4
in lieu of any destroyed, lost or stolen Warrant Certificate shall constitute
an original contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall 


 

















 


be
at any time enforceable by anyone, and shall be entitled to the benefits of
this Agreement equally and proportionately with any and all other Warrant
Certificates of like tenor properly completed and duly executed and delivered
hereunder.


 


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


 


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


 


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


 


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


 


If
to the Company, to:


 


General
Growth Properties, Inc.


110
N. Wacker Drive


 

















 


Chicago
IL 60606

Attention: Ronald L. Gern, Esq. (General Counsel)

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:       Frederick S. Green, 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 Holders at their respective addresses shown on the register
of the Company maintained by the Warrant Agent. The Company hereby irrevocably
authorizes the Warrant Agent, in the name and at the expense of the Company, to
mail any such notice upon receipt thereof from the Company. Any notice that is
mailed in the manner herein provided shall be conclusively presumed to have
been duly given when mailed, whether or not the Holder receives the notice.


 


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


 

















 


and (ii) the
nonexclusive jurisdiction of any federal or state court located within the
County of New York, State of New York.


 


12.8         Persons Benefiting.  This
Agreement shall be binding upon and inure to the benefit of the Company and the
Warrant Agent, and their respective successors, assigns, beneficiaries,
executors and administrators, and the Holders from time to time of the
Warrants.  The Holders of the Warrants are
express third party beneficiaries of this Agreement and each such Holder of
Warrants is hereby conferred the benefits, rights and remedies under or by
reason of the provisions of this Agreement as if a signatory hereto.  Nothing in this Agreement is intended or shall be
construed to confer upon any Person, other than the Company, the Warrant Agent
and the Holders of the Warrants, any right, remedy or claim under or by reason
of this Agreement or any part hereof.


 


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


 


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


 


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


 


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


 


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


 


12.13       Specific Performance. 
The parties shall
be entitled to specific performance of the terms of this Agreement.  Each of the parties hereto hereby waives (i) any
defenses in any action for specific performance, including the defense that a
remedy at law would be adequate 


 

















 


and (ii) any requirement
under any Law to post a bond or other security as a prerequisite to obtaining
equitable relief.


 


[signature page follows]


 

















 


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:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON
  INVESTOR SERVICES LLC,

  
	
   

  	
  as
  Warrant Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


[SIGNATURE PAGE TO GGP WARRANT AGREEMENT]


 

















 


EXHIBIT A-1


 


FORM OF FACE OF WARRANT CERTIFICATE


 


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


 


WARRANTS TO PURCHASE COMMON STOCK

OF GENERAL GROWTH PROPERTIES, INC.


 


No.                                                                                                          Certificate for
                                  
Series A-1 Warrants


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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 


 


2

















 


with
this Warrant Certificate as the absolute owner hereof for any purpose and as
the Person entitled to exercise the rights represented hereby, or to the
transfer hereof on the register of the Company maintained by the Warrant Agent,
any notice to the contrary notwithstanding, but until such transfer on such
register, the Company and the Warrant Agent may treat the registered Holder
hereof as the owner for all purposes.


 


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


 


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


 


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


 


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


 


Dated:
November       , 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

















 


EXHIBIT A


 


FORM OF REVERSE OF SERIES A-1 WARRANT CERTIFICATE


 


EXERCISE SUBSCRIPTION FORM


 


(To be executed only upon exercise of Warrant)


 


To:                                                 


 


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


 


	
  Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  *

  
	
   

  	
   

  	
  (Signature
  of Owner)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Street
  Address)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (City)

  	
  (State) (Zip Code)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  Guaranteed by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						



 






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


 

















 


Securities
to be issued to:


 


 


Please
insert social security or identifying number:


 


 


Name:


 


 


Street
Address:


 


 


City,
State and Zip Code:


 


 


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


 


 


Please
insert social security or identifying number:


 


 


Name:


 


 


Street
Address:


 


 


City,
State and Zip Code:


 


2






 










 


EXHIBIT A-2


 


FORM OF FACE OF WARRANT CERTIFICATE


 


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


 


WARRANTS TO PURCHASE COMMON STOCK

OF GENERAL GROWTH PROPERTIES, INC.


 


	
  No.                                    

  	
   

  	
  Certificate
  for

  	
  Series A-2 Warrants

  



 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4

















 


such
transfer on such register, the Company and the Warrant Agent may treat the
registered Holder hereof as the owner for all purposes.


 


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


 


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


 


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


 


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


 


Dated:
November       , 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

  	
   

  
					



 


5

















 


EXHIBIT A


 


FORM OF REVERSE OF SERIES A-2 WARRANT CERTIFICATE


 


EXERCISE SUBSCRIPTION FORM


 


(To be executed only upon exercise of Warrant)


 


To:                                                 


 


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


 


	
  Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  *

  
	
   

  	
   

  	
  (Signature
  of Owner)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Street
  Address)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (City)

  	
  (State) (Zip Code)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  Guaranteed by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						



 






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


 


1

















 


Securities
to be issued to:


 


 


Please
insert social security or identifying number:


 


 


Name:


 


 


Street
Address:


 


 


City,
State and Zip Code:


 


 


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


 


 


Please
insert social security or identifying number:


 


 


Name:


 


 


Street
Address:


 


 


City,
State and Zip Code:


 


2

















 


EXHIBIT B


 


FORM OF ASSIGNMENT


 


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


 


	
  Names of Assignees

  	
   

  	
  Address

  	
   

  	
  Social Security or 

  other Identifying 

  Number of 

  Assignee(s)

  	
   

  	
  Series and 

  Number of 

  Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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

















 


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 the Warrants, 20%; provided, however,
  that if the Warrants are adjusted as a result of a Change of Control Event,
  volatility for purposes of calculating 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 *  ÖT)


 


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


 


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
  * ÖT)

  
	
   

  	
   

  
	
   

  	
  = (-0.1149)

  
	
   

  	
   

  
	
  D2  

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

  
	
   

  	
   

  
	
   

  	
  =
  (-0.4684)

  



 


Black-Scholes Formula


 


	
  W

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

  
	
   

  	
   

  
	
   

  	
  =
  $4.99

  
	
   

  	
   

  
	
  Total Warrant Value

  
	
   

  	
   

  
	
  Value

  	
  = W * Z

  
	
   

  	
   

  
	
   

  	
  = $499

  



 

















 


SCHEDULE A


 


ALLOCATIONS OF WARRANTS TO INITIAL INVESTORS


 


	
  Initial Investor

  	
   

  	
  Total Number and Series of Warrants to be 

  Delivered to Initial Investor (on date of Warrant 

  Agreement)

  
	
   

  	
   

  	
   

  
	
  Blackstone
  Purchaser

  	
   

  	
  5,000,000
  Series A-1 Warrants

  
	
   

  	
   

  	
   

  
	
  Brookfield
  Purchaser

  	
   

  	
  57,500,000
  Series A-1 Warrants

  
	
   

  	
   

  	
   

  
	
  Fairholme
  Purchasers

  	
   

  	
  41,071,429
  Series A-2 Warrants

  
	
   

  	
   

  	
   

  
	
  Pershing
  Square Purchasers

  	
   

  	
  16,428,571
  Series A-2 Warrants

  



 

















 


SCHEDULE B


 


WARRANT AGENT COMPENSATION


 


	
  Service Description

  	
   

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Warrant Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Initial Setup (one-time charge)

  	
   

  	
  $

  	
  2,500.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual Administration

  	
   

  	
  $

  	
  3,500.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Warrant Conversion Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Set Up and Administrative Fee

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Processing Accounts, each

  	
   

  	
  $

  	
  50.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Conversions requiring additional handling

  	
   

  	
  $

  	
  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.