Document:

Exhibit
4.1

 

THE HOWARD HUGHES CORPORATION

FORM OF REGISTRATION RIGHTS
AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT, dated as of [•], 2010 (this “Agreement”),
by and between the purchasers listed on Schedule I hereto (the “Purchasers”)
and The Howard Hughes Corporation, a Delaware corporation (the “Company”).

 

R E C I T A L S

 

WHEREAS, Purchasers have, pursuant to the terms of that certain Amended
and Restated Cornerstone Investment Agreement, effective as of March 31,
2010, by and between General Growth Properties, Inc. (“GGP”) and
REP Investments LLC (as the same may be amended from time to time, the “Cornerstone
Investment Agreement”) agreed, among other things, to purchase [2,625,000]
shares of common stock, par value $0.01, of the Company (the “Common Stock”);
and

 

WHEREAS, in case any securities held by a Purchaser or its transferees
are at any time not freely transferable by the holder in accordance with
applicable laws, the Company and the Purchasers desire to define certain
registration rights with respect to the Common Stock, certain warrants and
certain other securities on the terms and subject to the conditions herein set
forth.

 

NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:

 

SECTION 1.  DEFINITIONS

 

As used in this Agreement, the following terms have the respective
meanings set forth below:

 

Affiliate:  shall mean
as to any Person, any other Person which, directly or indirectly, is in control
of, is controlled by, or is under common control with, the first Person.  A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies of the other
Person, whether through the ownership of voting securities, by contract, or
otherwise;

 

Agreement:  shall have
the meaning set forth in the Preamble hereto;

 

Blackstone:  shall mean
Blackstone Real Estate Partners VI L.P., a Delaware limited partnership, and [·];

 

Brookfield Consortium Member: shall have the meaning
ascribed thereto in the Cornerstone Investment Agreement;

 

Closing Date: shall have the meaning ascribed thereto in the
Cornerstone Investment Agreement;

 

 

Commission:  shall mean
the Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act;

 

Common Stock:  shall have
the meaning set forth in the Recitals hereto;

 

Company:  shall have
the meaning set forth in the Preamble hereto;

 

Cornerstone Investment Agreement:  shall have the meaning set forth in the
Recitals hereto;

 

Demand Notice: shall have the meaning set forth in Section 2(a)(i) hereof;

 

Exchange Act:  shall mean
the Securities Exchange Act of 1934, as amended (or any successor act), and the
rules and regulations promulgated thereunder;

 

Fairholme Holders: 
shall mean the “Holders” defined in that certain Registration Rights
Agreement, dated as of the date hereof, by and between the Company and The
Fairholme Fund, a series of Fairholme Funds, Inc. a Maryland corporation,
and Fairholme Focused Income Fund, a series of Fairholme Funds, Inc., a
Maryland corporation, as amended from time to time;

 

Fairholme Stock Purchase Agreement:  shall
mean that certain Amended and Restated Stock
Purchase Agreement, effective as of March 31, 2010, by and
between GGP and the Fairholme Holders, as amended from time to time;

 

Fairholme/Pershing Holders:  shall mean, collectively, the Fairholme
Holders and Pershing Holders;

 

Fairholme/Pershing Investors:  shall have the meaning ascribed thereto in
the Cornerstone Investment Agreement;

 

FINRA:  shall mean
the Financial Industry Regulatory Authority;

 

Holder:  shall mean
any holder of Registrable Securities subject to this Agreement, solely in their
capacity as such, including Permitted Assignees;

 

Indemnified Party: 
shall have the meaning set forth in Section 2(f)(iii) hereof;

 

Indemnifying Party:  shall have the meaning set forth in Section 2(f)(iii) hereof;

 

Initial Investors: 
shall mean (i) the Purchasers, (ii) any Brookfield Consortium
Members, (iii) Blackstone and (iv) any Permitted Assignees under
clauses (i) and (ii) of Section 3(e) hereof;

 

Initiating Holder(s):  shall mean any Holder or any group of
Holders, other than Blackstone, with respect to the Registrable Securities it
is designated to receive pursuant to the Investment Agreements;

 

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Investment Agreements:  shall mean, collectively, the Cornerstone
Investment Agreement, the Fairholme Stock Purchase Agreement and the Pershing
Stock Purchase Agreement;

 

Investors:  shall mean (i) any
Initial Investors and (ii) any Permitted Assignees under clause (iii) of
Section 3(e) hereof;

 

Issuer Free Writing Prospectus:  shall mean an “Issuer Free Writing
Prospectus,” as defined in Rule 433 under the Securities Act, relating to
an offer of Registrable Securities;

 

Losses:  shall have
the meaning set forth in Section 2(f)(i) hereof;

 

Other Stockholders:  shall have the meaning set forth in Section 2(a)(iii) hereof;

 

Participating Holders:  shall mean Holders participating in the
Registration relating to the Registrable Securities;

 

Permitted Assignees:  shall have the meaning set forth in Section 3(e) hereto;

 

Pershing Holders: 
shall mean the “Holders” defined in that certain Registration Rights
Agreement, dated as of the date hereof, by and between the Company, Pershing
Square Capital Management, L.P., on behalf of Pershing Square, L.P., a Delaware
limited partnership, Pershing Square II, L.P., a Delaware limited partnership,
Pershing Square International, Ltd., a Cayman Islands exempted company and
Pershing Square International V, Ltd., a Cayman Islands exempted company,
and Blackstone as amended from time to time;

 

Pershing Stock Purchase Agreement:  shall mean that certain Amended and Restated Stock Purchase Agreement, effective as of March 31, 2010, by and
between GGP and the Pershing Holders, as amended from time to time;

 

Person:  shall mean
an individual, partnership, joint-stock company, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof;

 

Prospectus:  shall mean
the prospectus (including any preliminary, final or summary prospectus)
included in any Registration Statement, all amendments and supplements to such
prospectus and all other material incorporated by reference in such prospectus;

 

Purchasers:  shall have
the meaning set forth in the Preamble hereto;

 

Qualifying Employee Stock:  shall mean (i) rights and options issued
in the ordinary course of business under employee benefits plans of the Company
or any predecessor or otherwise to executives in compensation arrangements
approved by the Board of Directors of the Company or any predecessor and any
securities issued after the date hereof upon exercise of such rights and
options and options issued to employees of the Company or any predecessor as a

 

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result
of adjustments to options in connection with the reorganization of the Company
or any predecessor and (ii) restricted stock and restricted stock units
issued after the date hereof in the ordinary course of business under employee
benefit plans and securities issued after the date hereof in settlement of any
such restricted stock units;

 

Register, Registered and Registration:  shall mean a registration effected by
preparing and (a) filing a Registration Statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of effectiveness of such Registration
Statement, or (b) filing a Prospectus and/or prospectus supplement in
respect of an appropriate effective Registration Statement;

 

Registrable Securities:  shall mean (A) any shares of Common
Stock acquired or held by an Initial Investor on or after the date hereof
(whether or not acquired pursuant to the Cornerstone Investment Agreement),
including without limitation shares of Common Stock acquired in connection with
the exercise of any Warrants and shares of Common Stock which at any time an
Initial Investor has a right or obligation to purchase under the Cornerstone
Investment Agreement, (B) (i) any securities of the Company or its
Affiliates issued as a dividend or other distribution with respect to, or in exchange
for or in conversion, exercise or replacement of, any Registrable Securities
described in (A) or (C) (the “Initial Securities”) or
securities that may become Registrable Securities by virtue of clause (B)(iii) or
(ii) any securities of the Company or its Affiliates offered wholly or
partly in consideration of the Initial Securities or securities that may become
Registrable Securities by virtue of clause (B)(iii) in any tender or
exchange offer or (iii) any securities of the Company or its Affiliates
issued as a dividend or other distribution with respect to, or in exchange for
or in conversion, exercise or replacement of or offered wholly or partly in any
tender or exchange offer in consideration of any Registrable Securities
described in (B)(i) or (B)(ii), (C) Warrants acquired or held by an
Initial Investor on or after the date hereof and (D) any Registrable
Securities described in (A), (B) or (C) above acquired or held by a Person, for which rights
and obligations have been assigned pursuant to clause (iii) of Section 3(e) and
in accordance with the terms of Section 3(e) hereof; provided,
that as to any particular Registrable Securities, such securities shall cease
to be Registrable Securities (i) when a Registration Statement with
respect to such securities has been declared effective under the Securities Act
and such securities have been disposed of pursuant to such Registration
Statement, (ii) after such securities have been sold in accordance with Rule 144
(but not Rule 144A), (iii) after such securities shall have otherwise
been transferred and new securities not subject to transfer restrictions under
any federal securities laws and not bearing any legend restricting further
transfer shall have been delivered by the Company, all applicable holding
periods shall have expired, and no other applicable and legally binding
restriction on transfer by the holder thereof shall exist, (iv) when such
securities are eligible for sale pursuant to Rule 144 under the Securities
Act without limitation thereunder on volume or manner of sale, or (v) when
such securities cease to be outstanding;

 

Registration Expenses:  shall mean (a) any and all expenses
incurred by the Company and its Subsidiaries in effecting any Registration
pursuant to this Agreement, including, without limitation, all (i) Registration
and filing fees, and all other fees and expenses payable in connection with the
listing of securities on any securities exchange or automated interdealer
quotation system, (ii) fees and expenses of compliance with any securities
or “blue sky” laws (including fees and disbursements of counsel in connection
with “blue sky”

 

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qualifications
of the securities registered), (iii) expenses in connection with the
preparation, printing, mailing and delivery of any Registration Statements,
Prospectuses, Issuer Free Writing Prospectus and other documents in
connection therewith and any amendments or supplements thereto, (iv) security
engraving and printing expenses, (v) internal expenses of the Company
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), (vi) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses
associated with the delivery by independent certified public accountants of any
comfort letters requested pursuant to the terms hereof), (vii) fees and
expenses of any special experts retained by the Company in connection with such
Registration, (viii) fees and expenses in connection with any review by
FINRA of any underwriting arrangements or other terms of the offering, and all
reasonable fees and expenses of any “qualified independent underwriter”, (ix) reasonable
fees and disbursements of underwriters customarily paid by issuers or sellers
of securities, but excluding any underwriting fees, discounts and commissions
attributable to the sale of Registrable Securities and fees and expenses of
counsel, (x) costs of printing and producing any agreements among
underwriters, underwriting agreements, any “blue sky” or legal investment
memoranda and any selling agreements and other documents in connection with the
offering, sale or delivery of the Registrable Securities, (xi) transfer
agents’ and registrars’ fees and expenses and the fees and expenses of any
other agent or trustee appointed in connection with such offering and (xii) expenses
relating to any analyst or investor presentations or any “road shows”
undertaken in connection with the Registration, marketing or selling of the
Registrable Securities and (b) reasonable and documented fees and expenses
of one counsel for all of the Participating Holders, which counsel shall be
selected by the Participating Holder holding the largest number of the
Registrable Securities to be sold in the applicable Registration.  Registration Expenses shall not include any
out-of-pocket expenses of the Participating Holders;

 

Registration Statement:  shall mean any registration statement of the
Company that covers Registrable Securities pursuant to the provisions of this
Agreement filed with, or to be filed with, the Commission under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement,
including pre- and post-effective amendments, and all exhibits, financial
information and all material incorporated by reference in such registration
statement;

 

Required Shelf Registration Statement: shall have the meaning set
forth in Section 2(c);

 

Rule 144; Rule 144A:  shall mean Rule 144 and Rule 144A,
respectively, under the Securities Act (or any successor provisions then in
force);

 

S-1 Registration Statement: shall mean a registration
statement of the Company on Form S-1 (or any comparable or successor form)
filed with the Commission registering any Registrable Securities;

 

Scheduled Black-Out Period:  shall mean the period from and including the
last day of a fiscal quarter of the Company to and including the earliest of (i) the
Business Day after the day on which the Company publicly releases its earnings
information for such quarter or

 

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annual
earnings information, as applicable, and (ii) the day on which the
executive officers and directors of the Company are no longer prohibited by
Company policies applicable with respect to such quarterly earnings period from
buying or selling equity securities of the Company;

 

security, securities:  shall have the meaning set forth in Section 2(a)(1) of
the Securities Act;

 

Securities Act: 
shall mean the Securities Act of 1933, as amended (or any successor
statute thereto), and the rules and regulations promulgated thereunder;

 

Selling Expenses: 
shall mean all underwriting discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities and all fees
and disbursements of counsel for each of the Holders, other than the fees and
expenses of one counsel for all of the Holders, which shall be paid for by the
Company in accordance with the terms set forth in clause (b) of the
definition of “Registration Expenses” set forth herein;

 

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

 

Transfer:  shall have
the meaning set forth in Section 2(j)(ii) hereof; and

 

Warrants:  shall mean
the warrants issued by the Company from time to time pursuant to that certain
Warrant Agreement, dated as of November [    ], 2010,
by and between the Company and Mellon Investor Services LLC.

 

SECTION 2.  REGISTRATION RIGHTS

 

(a)                                  Demand
Registration.

 

(i)                                     Request for
Registration.  Subject to
the limitations and conditions of Section 2(a)(ii), if the Company shall
receive from an Initiating Holder(s) a written demand (the “Demand
Notice”) that the Company effect any Registration with respect to all or a
part of the Registrable Securities owned by such Initiating Holder(s) having
an estimated aggregate fair market value of at least $25 million, the Company
shall:

 

(1)                                  promptly give
written notice of the proposed Registration to all other Holders in accordance
with the terms of Section 2(b);

 

(2)                                  use its
reasonable best efforts to file a
Registration Statement with the Commission in accordance with the request of
the Initiating Holder(s), including without limitation the method of disposition specified therein and covering resales of the 

 

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Registrable Securities requested to be registered, as promptly as reasonably practicable but no later than (x) in the
case of a Registration Statement other than an S-1 Registration Statement,
within 30 days of receipt of the
Demand Notice or (y) in the case of an S-1 Registration Statement, within 60 days of receipt of the Demand Notice;

 

(3)                                  use reasonable best efforts to cause such Registration Statement to be declared or become
effective as promptly as practicable, but in no event later than 60 days after the date of initial filing of a Registration Statement
pursuant to Section 2(a)(i)(2); and

 

(4)                                  use reasonable best efforts to keep such Registration Statement continuously effective and
in compliance with the Securities Act and usable for resale of such Registrable
Securities for the period as requested in
writing by the Initiating Holder(s) or such longer period as may be
requested in writing by any Holder participating in such registration (which
periods shall be extended to the extent of any suspensions of sales pursuant to
Sections 2(a)(ii)(3) or (4));

 

provided, however,
that the Company shall be permitted, with the consent of the Initiating Holder(s) not
to be unreasonably withheld, to file a post-effective amendment or prospectus
supplement to any currently effective Shelf Registration Statement (including,
without limitation, any resale registration statement filed pursuant to the
terms of the Cornerstone Investment Agreement) in lieu of an additional
registration statement pursuant to Section 2(a)(i) to the extent the
Company reasonably determines that the Registrable Securities of the Initiating
Holder(s) may be sold thereunder by such Initiating Holder(s) pursuant
to their intended plan of distribution (in which case such post-effective
amendment or prospectus supplement shall not be counted against the limited
number of demand registrations).  It
shall not be unreasonable if, following the recommendation of an underwriter,
the Initiating Holder(s) do not consent to the Company filing a
post-effective amendment or prospectus supplement to a Shelf Registration
Statement in lieu of an additional registration statement requested by the
Initiating Holder(s).

 

(ii)                                  Notwithstanding
anything to the contrary contained herein, the Company shall not be obligated
to effect, or take any action to effect, any such Registration pursuant to this
Section 2(a):

 

(1)                                  In any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process or qualify to do business in effecting
such Registration, qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;

 

(2)                                  With respect to
securities that are not Registrable Securities;

 

(3)                                  If the Company
has notified the Holders that in the good faith judgment of the Company, it
would be materially detrimental to the Company or its security holders for such
registration to be effected at such time, in which event the Company shall have
the right to defer such registration for a period of not more than 60 days; provided,
that such right to delay a registration pursuant to clause (3) shall be
exercised by the Company only if the Company has generally exercised (or is
concurrently exercising) 

 

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similar black-out rights against holders of
similar securities that have registration rights, if any; or

 

(4)                                  Solely with respect to any Affiliate of the Company, during any
Scheduled Black-Out Period;

 

provided, that the
total number of days that any such suspension, deferral or delay in
registration pursuant to clauses (3) and (4) in the aggregate may be
in effect in any 180 day period shall not exceed 60 days.  The Company agrees to use its reasonable best
efforts to issue earnings releases as promptly as practicable following the end
of quarterly reporting periods and to otherwise minimize the duration of
Scheduled Black-Out Periods.

 

(iii)                               The Registration Statement
filed pursuant to the request of the Initiating Holder may, subject to the
provisions of Section 2(a)(iv) below, include shares of Common Stock
which are held by Holders and Persons who, by virtue of agreements with the
Company (other than this Agreement), are entitled to include their securities
in any such Registration (such Persons, other than Holders, “Other
Stockholders”).  In the event the
Initiating Holder(s) request a Registration pursuant to this Section 2(a) in
connection with a distribution of Registrable Securities to its partners or
members or any other Holder elects to participate in such Registration pursuant
to Section 2(b) hereof in connection with a distribution of
Registrable Securities to its partners or members, the Registration shall
provide for the resale by such partners or members, if requested by such
Holder.

 

(iv)                              Underwriting.  If the Initiating Holder(s) intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, it shall so advise the Company as a part of the request made
pursuant to Section 2(a).  If Other
Stockholders or Holders, to the extent they have any registration rights under Section 2(b),
request inclusion of their shares of Common Stock in the underwriting, the
Initiating Holder(s) shall offer to include the shares of Common Stock of
such Holders and Other Stockholders in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this Section 2.  The Holders whose Registrable Securities are
to be included in such Registration and the Company shall (together with all
Other Stockholders proposing to distribute their shares of Common Stock through
such underwriting) enter into an underwriting agreement in customary form for
secondary public offerings with the managing underwriter or underwriters
selected for such underwriting by a majority-in-interest of the Holders whose
Registrable Securities are to be included in such Registration subject to
approval by the Company not to be unreasonably withheld (which underwriters may
also include a non-bookrunning co-manager selected by the Company subject to
approval by a majority-in-interest of the Holders whose Registrable Securities
are to be included in such Registration); provided, however, that
such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of any Holder or Other Stockholder greater
than the obligations of the Holders under Section (2)(f)(ii) or Section 2(f)(iv).  Notwithstanding any other provision of this Section 2(a),
if the managing underwriter or underwriters advises the Holders in writing that
marketing factors require a limitation on the number of shares to be
underwritten, some or all of the securities of the Company held by the Other
Stockholders (other than the Fairholme Holders and the Pershing Holders) shall
be excluded from such Registration to the extent so required by such
limitation.  If, after the exclusion of
such shares held by such Other Stockholders (other than the Fairholme 

 

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Holders and the Pershing Holders), further
reductions are still required due to the marketing limitation, the number of
Registrable Securities included in the Registration by each Holder (including
the Initiating Holder(s)) and the Fairholme/Pershing Holders shall be reduced
on a pro rata basis (based on the number of Registrable Securities requested to
be included in such registration by such Holders and the Fairholme/Pershing
Holders, as applicable), by such minimum number of shares as is necessary to
comply with such request.  No Registrable
Securities or any other securities excluded from the underwriting by reason of
the underwriter’s marketing limitation shall be included in such
Registration.  If any Holder or Other
Stockholder who has requested inclusion in such Registration as provided above
disapproves of the terms of the underwriting, such Person may elect to withdraw
therefrom by providing written notice to the Company, the underwriter and the
Initiating Holder(s).  The securities so
withdrawn shall also be withdrawn from Registration.  If the underwriter has not limited the number
of Registrable Securities or other securities to be underwritten, the Company
and executive officers and directors of the Company (whether or not such Persons
have registration rights pursuant to Section 2(b) hereof) may include
its or their securities for its or their own account in such Registration if
the managing underwriter or underwriters and the Company so agree and if the
number of Registrable Securities and other securities which would otherwise
have been included in such Registration and underwriting will not thereby be
limited.

 

(v)                                 The number of demand
registrations that the Holders shall be entitled to request, and that the
Company shall be obligated to undertake, pursuant to this Section 2(a) shall
be unlimited; provided, that the Company shall not be obligated to
undertake more than three underwritten offerings pursuant to this Section 2
during the term of this Agreement;  provided,
further that in no event shall the Company be required to effect more
than one underwritten offerings in any twelve-month period pursuant to this
Section 2.

 

(vi)                              In the case of
an underwritten offering under this Section 2(a), the price, underwriting
discount and other financial terms for the Registrable Securities shall be
determined by the Initiating Holder(s).

 

(b)                                 Piggyback Registration.

 

(i)                                     If the Company shall
determine to register any of its
capital stock (including any warrants) either (x) for its own
account, (y) for the account of the Holders listed in Section 2(a) pursuant
to the terms thereof, or (z) for the account of Other Stockholders (other
than (A) a Registration relating solely to Qualifying Employee Stock, (B) a
Registration relating solely to a Rule 145 transaction under the
Securities Act or (C) a Registration on any Registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a Registration Statement),
the Company will, subject to the conditions set forth in this Section 2(b):

 

(1)                                  promptly give
to each of the Holders a written notice thereof (which shall include a list of
the jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws); and

 

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(2)                                  subject to Section 2(b)(ii) below
and any transfer restrictions any Holder may be a party to, include in such
Registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made by the
Holders.  Such written request may
specify all or a part of the Holders’ Registrable Securities and shall be
received by the Company within ten (10) days after written notice from the
Company is given under Section 2(b)(i)(1) above.  In the event any Holder requests inclusion in
a Registration pursuant to this Section 2(b) in connection with a
distribution of Registrable Securities to its partners or members, the
Registration shall provide for the resale by such partners or members, if
requested by such Holder.

 

(ii)                                  Underwriting.  If the Registration of which the Company
gives notice is for a Registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(1) above.  In such event, the right of each of the
Holders to Registration pursuant to this Section 2(b) shall be
conditioned upon such Holders’ participation in such underwriting and the
inclusion of such Holders’ Registrable Securities in the underwriting to the
extent provided herein.  The Holders
whose Registrable Securities are to be included in such Registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form for secondary public offerings with the managing underwriter or
underwriters selected for underwriting by the Company (and if the Registration
was initiated by a Holder pursuant to Section 2(a), such underwriters must
be selected by the Initiating Holder(s) and reasonably acceptable to the
Company); provided, however, that such underwriting agreement
shall not provide for indemnification or contribution obligations on the part
of any Holder or Other Stockholder greater than the obligations of the Holders
under Section 2(f)(ii) or Section 2(f)(iv).  Notwithstanding any other provision of this Section 2(b),
if any Registration in respect of which any Holder is exercising its rights
under this Section 2(b) involves an underwritten public offering
(other than a demand Registration pursuant to Section 2(a), in which case
the provisions with respect to priority of inclusion in such Registration set
forth in Section 2(a) shall apply) and the managing underwriter or
underwriters advises the Company that in its view marketing factors require a
limitation on the number of securities to be underwritten, then there shall be
included in such underwritten offering the number or dollar amount of
securities of the Company that in the opinion of the managing underwriter or
underwriters can be sold without adversely affecting such offering, and such
number of securities of the Company shall be allocated for inclusion as
follows: (1) first all securities of the Company being sold by the Company
for its own account or by any Person (other than a Holder or a Pershing Holder
or a Fairholme Holder) exercising a contractual right to demand registration; (2) second,
all Registrable Securities requested to be included by the Holders, all
Registrable Securities to be included by the Fairholme/Pershing Holders
pursuant to piggyback registration rights and securities of the Company being
sold by any Person with similar piggyback registration rights, pro rata, based
on the number of shares requested to be included in such registration by such
Holders, Fairholme/Pershing Holders and Persons; and (3) third, among any
other holders of securities of the Company requesting such registration, pro
rata, based on the number of securities requested to be included in such
registration by each such holder.  For
the avoidance of doubt, in the event any Fairholme Holder or any Pershing
Holder exercises demand registration rights, such registration is an
underwritten public offering and the 

 

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managing underwriter advises that marketing factors
require a limitation on the number of securities to be so underwritten,
Registrable Securities of any Holders exercising piggyback rights under this Section 2(b) in
connection with such offering and any securities to be included in such
offering by the Fairholme Holders and the Pershing Holders shall be included in
such offering in the same priority and allocated on a pro rata basis, as set
forth in clause (2) above.  If any
of the Holders or any officer, director or Other Stockholder disapproves of the
terms of any such underwriting, he, she or it may elect to withdraw therefrom
by providing written notice to the Company, the underwriter and the Initiating
Holder(s).  Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be
withdrawn from such Registration.

 

(c)                                  Required Shelf Registration
Statement.  From and
after the declaration of effectiveness by the Commission of the Shelf
Registration Statement contemplated by Section 5.16(b) of the
Cornerstone Investment Agreement (the “Required Shelf Registration Statement”),
the Company shall use reasonable best efforts to cause such Required Shelf
Registration Statement to be continuously effective so long as there are any
Registrable Securities outstanding.  In
connection with the Required Shelf Registration Statement, the Company will,
subject to the terms and limitations of this Section 2, as promptly as
reasonably practicable upon notice from any Holder requesting Registration in
accordance with the terms of this Section 2(c), cooperate in any shelf
take-down by amending or supplementing the Prospectus related to such
Registration as may be reasonably requested by such Holder or as otherwise
required to reflect the number of Registrable Securities to be sold thereunder.

 

(d)                                 Expenses of Registration.  All Registration Expenses incurred in
connection with any Registration, qualification or compliance pursuant to this Section 2
shall be borne by the Company, and all Selling Expenses shall be borne by the
Holders of the securities so registered pro rata on the basis of the number of
their shares so registered (or, in the case of fees and disbursements of
counsel and advisors to any Holders that do not constitute Registration
Expenses, by the Holders as incurred).

 

(e)                                  Registration Procedures.  In the case of each Registration effected by
the Company pursuant to this Section 2, the Company will keep the
Participating Holders advised in writing as to the initiation of each
Registration and as to the completion thereof. 
At its expense, the Company will:

 

(i)                                     as promptly as practicable,
prepare and file with the Commission such pre- and post-effective amendments to
such Registration Statement, supplements to the Prospectus and such amendments
or supplements to any Issuer Free Writing Prospectus as may be
(1) reasonably requested by the Initiating Holder(s) (if any),
(2) reasonably requested by any other Participating Holder (to the extent
such request relates to information relating to such Participating Holder), or
(3) necessary to keep such Registration effective for the period of time
required by this Agreement, and comply with provisions of the applicable
securities laws with respect to the sale or other disposition of all securities
covered by such Registration Statement during such period in accordance with
the intended method or methods of disposition by the sellers thereof set forth
in such Registration Statement;

 

11

 

(ii)                                  notify the Participating
Holders and the managing underwriter or underwriters, if any, and (if
requested) confirm such advice in writing and provide copies of the relevant
documents, as promptly as practicable after notice thereof is received by the
Company (1) when the applicable Registration Statement or any amendment
thereto has been filed or becomes effective, and when the applicable Prospectus
or Issuer Free Writing Prospectus or any amendment or supplement thereto has
been filed, (2) to the extent any of the following relates to the
Participating Holders or information supplied by the Participating Holders, of
any written comments by the Commission or any request by the Commission or any
other federal or state governmental authority for amendments or supplements to
such Registration Statement, Prospectus or Issuer Free Writing Prospectus or
for additional information, (3) of the issuance by the Commission of any
stop order suspending the effectiveness of such Registration Statement or any
order by the Commission or any other regulatory authority preventing or
suspending the use of any Prospectus or any Issuer Free Writing Prospectus or
the initiation or threatening of any proceedings for such purposes,
(4) if, at any time, the representations and warranties of the Company in
any applicable underwriting agreement cease to be true and correct in all
material respects, and (5) of the receipt by the Company or its legal
counsel of any notification with respect to the suspension of the qualification
of the Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;

 

(iii)                               promptly notify the
Participating Holders and the managing underwriter or underwriters, if any,
when the Company becomes aware of the happening of any event as a result of
which the applicable Registration Statement, the Prospectus included in such
Registration Statement (as then in effect) or any Issuer Free Writing
Prospectus contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein (in the case of such Prospectus or any Issuer Free Writing
Prospectus, in light of the circumstances under which they were made) not
misleading, and when any Issuer Free Writing Prospectus includes information
that may conflict with the information contained in the Registration Statement,
or, if for any other reason it shall be necessary during such time period to
amend or supplement such Registration Statement, Prospectus or Issuer Free
Writing Prospectus in order to comply with the Securities Act and, in either
case as promptly as reasonably practicable thereafter, prepare and file with
the Commission, and furnish without charge to the Participating Holders and the
managing underwriter or underwriters, if any, an amendment or supplement to
such Registration Statement, Prospectus or Issuer Free Writing Prospectus which
shall correct such misstatement or omission or effect such compliance;

 

(iv)                              use its reasonable best
efforts to prevent, or obtain the withdrawal of, any stop order or other order
suspending the use of any Prospectus or any Issuer Free Writing Prospectus;

 

(v)                                 deliver to each
Participating Holder and each underwriter, if any, without charge, as many
copies of the applicable Prospectus (including each preliminary Prospectus),
any Issuer Free Writing Prospectus and any amendment or supplement thereto as
such Participating Holder or underwriter may reasonably request (it being
understood that the Company consents to the use of such Prospectus, any Issuer
Free Writing Prospectus and any amendment or supplement thereto by such Holder
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities thereby) and such other documents as such Participating 

 

12

 

Holder
or underwriter may reasonably request in order to facilitate the disposition of
the Registrable Securities by such Participating Holder or underwriter;

 

(vi)                              subject to the terms set
forth in Section 2(a)(ii)(1) and Section 2(c) hereof, on or
prior to the date on which the applicable Registration Statement is declared
effective, use its reasonable best efforts to register or qualify the
Registrable Securities covered by such Registration Statement under such other
securities or “blue sky” laws of such jurisdictions in the United States as any
Participating Holder reasonably (in light of such Participating Holder’s
intended plan of distribution) requests and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Participating
Holder to consummate the disposition of the Registrable Securities owned by
such Participating Holder pursuant to such Registration Statement;

 

(vii)                           make such representations and
warranties to the Participating Holders and the underwriters or agents, if any,
in form, substance and scope as are customarily made by issuers in underwritten
public offerings;

 

(viii)                        enter into such customary
agreements (including underwriting and indemnification agreements) and take
such other actions as the Initiating Holder(s) or the managing
underwriter, if any, reasonably requests in order to expedite or facilitate the
Registration and disposition of such Registrable Securities;

 

(ix)                                use its reasonable best
efforts to obtain for delivery to the managing underwriter, if any, an opinion
or opinions from counsel for the Company dated the effective date of the
Registration Statement or, in the event of an underwritten offering, the date
of the closing under the underwriting agreement, in form and substance as is
customarily given to underwriters in an underwritten secondary public offering;

 

(x)                                   in the case of an
underwritten offering, use reasonable best efforts to obtain for delivery to
the Company and the managing underwriter, if any, a “ comfort” letter from the
Company’s independent certified public accountants in form and substance as is
customarily given by independent certified public accountants in an
underwritten secondary public offering;

 

(xi)                                cooperate with each
Participating Holder and the underwriters, if any, of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with FINRA;

 

(xii)                             use its reasonable best
efforts to cause all Registrable Securities covered by the applicable
Registration Statement to be listed or quoted on a national securities exchange
or trading system and each securities exchange and trading system (if any) on
which similar securities issued by the Company are then listed;

 

(xiii)                          cooperate with the
Participating Holders and the underwriters, if any, to facilitate the timely
preparation and delivery of certificates, with requisite CUSIP numbers,
representing Registrable Securities to be sold and not bearing any restrictive
legends;

 

13

 

(xiv)                       in the case of an
underwritten offering, make reasonably available the senior executive officers
of the Company to participate in the customary “road show” presentations that
may be reasonably requested by the managing underwriter in any such underwritten
offering and otherwise to facilitate, cooperate with, and participate in each
proposed offering contemplated herein and customary selling efforts related
thereto;

 

(xv)                          use its reasonable best
efforts to procure the cooperation of the Company’s transfer agent in settling
any offering or sale of Registrable Securities, including with respect to the
transfer of physical security instruments into book-entry form in accordance
with any procedures reasonably requested by the Holders or any managing underwriter(s);

 

(xvi)                       use its reasonable best
efforts to take such actions as are under its control to become or remain a
well-known seasoned issuer (as such term in defined in Rule 405 under the
Securities Act) and not become an illegible issuer (as such term is defined in Rule 405
under the Securities Act) during the period when such Registration Statement
remains in effect; and

 

(xvii)                    make available for
inspection by a representative of Participating Holders that are selling at
least five percent (5%) of the Registrable Securities included in such
Registration (and who is named in the applicable prospectus supplement as a
Person who may be deemed to be an underwriter with respect to an offering and
sale of Registrable Securities), the managing underwriter(s), if any, and any
attorneys or accountants retained by such Holders or the managing
underwriters(s), at the offices where normally kept, during reasonable business
hours, financial and other records and pertinent corporate documents of the
Company, and cause the officers, directors and employees of the Company to
supply all information in each case reasonably requested by any such
representative, managing underwriter, attorney or accountant in connection with
such Registration Statement; provided, that if any such information is
identified by the Company as being confidential or proprietary, each Person
receiving such information shall take such actions as are reasonably necessary
to protect the confidentiality of such information and shall sign customary confidentiality
agreements reasonably requested by the Company prior to the receipt of such
information.

 

(f)                                   Indemnification.

 

(i)                                     Indemnification by the
Company.  With respect to each
Registration which has been effected pursuant to this Section 2, the Company
agrees to indemnify and hold harmless, to the fullest extent permitted by law, (1) each
of the Participating Holders and each of its officers, directors, limited or
general partners and members thereof, (2) each member, limited or general
partner of each such member, limited or general partner, (3) each of their
respective Affiliates, officers, directors, shareholders, employees, advisors,
and agents and each Person who controls (within the meaning of the Securities
Act or the Exchange Act) such Persons and each underwriter, if any, and each
person who controls (within the meaning of the Securities Act or the Exchange
Act) any underwriter, against any and all claims, losses, damages, penalties,
judgments, suits, costs, liabilities and expenses (or actions in respect
thereof) (collectively, the “Losses”) arising out of or based on (A) any
untrue statement (or alleged untrue statement) of a material fact contained in
any Registration Statement (including any Prospectus or Issuer Free Writing
Prospectus) or any other document incident to any such Registration,
qualification or compliance, (B) any omission (or alleged omission) to
state therein a material fact required to be 

 

14

 

stated therein or necessary to make the statements
therein not misleading (in the case of any Prospectus or Issuer Free Writing
Prospectus, in light of the circumstances under which they were made not
misleading), or (C) any violation by the Company of the Securities Act or
the Exchange Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such Registration, qualification
or compliance, and will reimburse each of the Persons listed above, for any
reasonable and documented legal and any other expenses reasonably incurred in
connection with investigating and defending any such Losses, provided,
that the Company will not be liable in any such case to the extent that any
such Losses arise out of or are based on any untrue statement or omission based
upon written information furnished to the Company by the Participating Holders
or underwriter and stated to be specifically for use therein.

 

(ii)                                  Indemnification by the
Participating Holders.  Each
of the Participating Holders agrees (severally and not jointly) to indemnify
and hold harmless, to the fullest extent permitted by law, the Company, each of
its directors and officers and each underwriter, if any, of the Company’s
securities covered by such a Registration Statement, each Person who controls
the Company (within the meaning of the Securities Act or the Exchange Act) or
such underwriter, each other Participating Holder and each of their respective
officers, directors, partners and members, and each Person controlling such
Participating Holder (within the meaning of the Securities Act or the Exchange
Act) against any and all Losses arising out of or based on (A) any untrue
statement (or alleged untrue statement) of a material fact contained in any
Registration Statement (including any Prospectus or Issuer Free Writing
Prospectus) or any other document incident to any such Registration,
qualification or compliance (including any notification or the like) made by
such Participating Holder in writing or (B) any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to
make the statements by such Participating Holder therein not misleading (in the
case of any Prospectus or Issuer Free Writing Prospectus, in light of the
circumstances under which they were made not misleading) and will reimburse the
Persons listed above for any reasonable and documented legal or any other
expenses reasonably incurred in connection with investigating or defending any
such Losses, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in reliance upon and in conformity with written information
furnished to the Company by such Participating Holder and stated to be specifically
for use therein; provided, however, that the obligations of each
of the Participating Holders hereunder shall be limited to an amount equal to
the net proceeds (after giving effect to any underwriters discounts and
commissions) such Participating Holder receives in such Registration.

 

(iii)                               Conduct of the
Indemnification Proceedings.  Each party entitled to indemnification under
this Section 2(f) (the “Indemnified Party”) shall give notice
to the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party’s expense
(unless the Indemnified Party shall have reasonably 

 

15

 

concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of counsel shall be at the expense of the
Indemnifying Party), and provided, further, that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2(f) unless
the Indemnifying Party is prejudiced thereby. 
It is understood and agreed that the Indemnifying Party shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate legal counsel for
all Indemnified Parties; provided, however, that where the
failure to be provided separate legal counsel could potentially result in a
conflict of interest on the part of such legal counsel for all Indemnified
Parties, separate counsel shall be appointed for Indemnified Parties to the
extent needed to alleviate such potential conflict of interest.  No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the prior written consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.  Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

 

(iv)                              If the indemnification
provided for in this Section 2(f) is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
Losses, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the
statements or omissions (or alleged statements or omissions) which resulted in
such Losses, as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party
and of the Indemnified Party shall be determined by reference to, among other
things, whether the untrue (or alleged untrue) statement of a material fact or
the omission (or alleged omission) to state a material fact relates to
information supplied by the Indemnifying Party or by the Indemnified Party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; provided, however,
that the obligations of each of the Participating Holders hereunder shall be
several and not joint and shall be limited to an amount equal to the net
proceeds (after giving effect to any underwriters discounts and commissions)
such Participating Holder receives in such Registration and, provided, further,
that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.  For purposes of this Section 2(f)(iv),
each Person, if any, who controls an underwriter or agent within the meaning of
Section 15 of the Securities Act shall have the same rights to
contribution as such underwriter or agent and each director of the Company, each
officer of the Company who signed a Registration Statement, and each Person, if
any, who controls the Company or a selling Holder within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the Company
or such selling Holder, as the case may be.

 

16

 

(v)                                 Subject to the limitations
on the Holders’ liability set forth in Section 2(f)(ii) and Section 2(f)(iv),
the remedies provided for in this Section 2(f) are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
Indemnified Party at law or equity.  The
remedies shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any Indemnified Party and survive the
transfer of such securities by such Holder.

 

(vi)                              The obligations
of the Company and of the Participating Holders hereunder to indemnify any
underwriter or agent who participates in an offering (or any Person, if any
controlling such underwriter or agent within the meaning of Section 15 of
the Securities Act) shall be conditioned upon the underwriting or agency
agreement with such underwriter or agent containing an agreement by such
underwriter or agent to indemnify and hold harmless the Company, each of its
directors and officers, each other Participating Holder, and each Person who
controls the Company (within the meaning of the Securities Act or the Exchange
Act) or such Participating Holder against all Losses, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such underwriter or agent expressly for use in such filings
described in this sentence.

 

(g)                                  Participating Holders.

 

(i)                                     Each of the
Participating Holders shall furnish to the Company such information regarding
such Participating Holder and its partners and members, and the distribution
proposed by such Holder as the Company may reasonably request in writing and as
shall be reasonably requested in connection with any Registration, qualification
or compliance referred to in this Section 2.

 

(ii)                                  In the event
that, either immediately prior to or subsequent to the effectiveness of any
Registration Statement, any Participating Holder shall distribute Registrable
Securities to its partners or members, such Participating Holder shall so
advise the Company and provide such information as shall be necessary to permit
an amendment to such Registration Statement to provide information with respect
to such partners or members, as selling security holders.  As soon as is reasonably practicable
following receipt of such information, the Company shall file an appropriate
amendment to such Registration Statement reflecting the information so
provided.  Any incremental expense to the
Company resulting from such amendment shall be borne by such Participating
Holder.

 

(iii)                               Each Holder
agrees that at the time that such Holder is a Participating Holder, upon
receipt of any notice from the Company of the happening of any event of the
kind described in Section 2(e)(iii), such Holder shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Holder’s receipt of
the copies of a supplemented or amended Prospectus or Issuer Free Writing
Prospectus or until such Holder is advised in writing by the Company that the
use of the Prospectus or Issuer Free Writing Prospectus, as the case may be,
may be resumed, and, if so 

 

17

 

directed by the Company, such Holder shall deliver
to the Company all copies, other than any permanent file copies then in such
Holder’s possession, of the most recent Prospectus or any Issuer Free Writing
Prospectus covering such Registrable Securities at the time of receipt of such
notice.  If the Company shall give such
notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective by the number of days during the period
from and including the date of the giving of notice pursuant to Section 2(e)(iii) to
the date when the Company shall make available to such Holder a copy of the
supplement or amended Prospectus or Issuer Free Writing Prospectus or is
advised in writing that the use of the Prospectus or Issuer Free Writing
Prospectus may be resumed.

 

(h)                                 Rule 144.  With a view to making available the benefits
of certain rules and regulations of the Commission which may permit the
sale of restricted securities to the public without Registration, the Company
agrees to use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become subject to
such reporting requirements (or, if the Company is not required to file such
reports, it will, upon the reasonable request of the Holders holding a majority
of the then outstanding Registrable Securities, make publicly available such
necessary information for so long as necessary to permit sales pursuant to Rules 144
under the Securities Act).

 

(i)                                     Termination.  The registration rights set forth in this Section 2
shall terminate and cease to be available as to any securities held by an Investor at such time as such Investor
(after owning) first ceases to own any Registrable
Securities.

 

(j)                                    Lock-Up Agreements.

 

(i)                                     The Company agrees that, if
requested by the managing underwriter in any underwritten public offering
contemplated by this Agreement, it will enter into a customary “lock-up” agreement
providing that it will not, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of any Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock
(subject to customary exceptions), other than any such sale or distribution of
Common Stock upon exercise of the Company’s Warrants, for a period of 60 days
from the effective date of the Registration Statement pertaining to such Common
Stock; provided, however, that any such lock-up agreement shall
not prohibit the Company from directly or indirectly (i) selling, offering
to sell, granting any option for the sale of, or otherwise disposing of any
Qualifying Employee Stock (or otherwise maintaining its employee benefits plans
in the ordinary course of business) or (ii) issuing Common Stock or
securities convertible into or exchangeable for Common Stock upon exercise or
conversion of any warrant (including any other Warrant), option, right or
convertible or exchangeable security issued in connection with the plan of
reorganization.  Each Holder shall
coordinate with other Holders and the Fairholme Holders and the Pershing
Holders such that the total number of days that the Company will be subject to
such restrictions (including similar restrictions pursuant to any registration
rights agreements with the Fairholme Holders and the Pershing Holders) as may
be in effect in any 365-day period shall not exceed 120 days.

 

(ii)                                  To the extent Purchasers and
any Brookfield Consortium Members in the aggregate hold in excess of 20% of the
then outstanding Common Stock on a fully diluted basis, 

 

18

 

if requested by the managing underwriter in any
underwritten public offering permitted by this Agreement, Purchasers and such
Brookfield Consortium Members will enter into a customary “lock-up” agreement
providing that it will not sell, grant any option for the sale of, or otherwise
dispose (each, “Transfer”) of any Common Stock outside of such public
offering (subject to customary exceptions) for a period of 60 days from the
effective date of the Registration Statement pertaining to such Common Stock.

 

(k)                                 Notwithstanding any
provision of this Agreement to the contrary, in order for a Registration to be
included as a Registration for purposes of this SECTION 2.  , the Registration Statement in connection
therewith shall have been continually effective in compliance with the
Securities Act and usable for resale for the full period established with respect
to such Registration (except in the case of any suspension of sales pursuant to
(A) a Scheduled Black-Out Period, or (B) Section 2(e)(iii) hereof,
in which case such period shall be extended to the extent of such suspension).

 

(l)                                     Notwithstanding any provision
of this Agreement to the contrary, if the Company is required to file a
post-effective amendment to a Registration Statement to incorporate the Company’s
quarterly and annual reports and related financial statements on Form 10-Q
and Form 10-K, the Company shall use its reasonable best efforts to
promptly file such post-effective amendment and may postpone or suspend
effectiveness of such Registration Statement for a period not to exceed thirty
(30) consecutive days to the extent the Company determines necessary to comply
with applicable securities laws; provided, that the period by which the
Company postpones or suspends the effectiveness of a shelf Registration
Statement pursuant to this Section 2(l) plus any suspension, deferral
or delay pursuant to Section 2(e)(iii) shall not exceed 60 days in
the aggregate in any twelve-month period.

 

SECTION 3.  MISCELLANEOUS

 

(a)                                 Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State without regard to conflicts
of law principles.

 

(b)                                 Section Headings.  The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to constitute
a part thereof.

 

(c)                                  Notices.

 

(i)                                     All
communications under this Agreement shall be in writing and shall be delivered
by hand or facsimile or mailed by overnight courier:

 

(1)                                 if to the
Company, to:

 

The Howard Hughes Corporation

13355 Noel Road, Suite 950

Dallas, TX 75240

Attention:       General Counsel

Facsimile:       (214) 741-3021

 

19

 

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

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention:       Malcolm E. Landau, Esq.

Matthew D. Bloch, Esq.

Facsimile: (212) 310-8007

 

(2)                                 if to the
Holders, at the address or facsimile number listed on Schedule I hereto, or at
such other address or facsimile number as may have been furnished to the
Company in writing.

 

(ii)                                  Any notice so
addressed shall be deemed to be given: if delivered by hand or facsimile, on
the date of such delivery; and if mailed by overnight courier, on the first
business day following the date of such mailing.

 

(d)                                 Reproduction of Documents.  This Agreement and all documents relating
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by the Holders by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and the Holders may destroy any original document so
reproduced.  The parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made by
the Holders in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.

 

(e)                                  Successors and Assigns.  Neither this Agreement nor any right or
obligation hereunder may be assigned in whole or in part by any party without
the prior written consent of the other parties hereto and any purported
assignment in violation of this provision shall be void; provided, however,
that the rights and obligations hereunder of any Investor may be assigned, in
whole or in part, to any Person who acquires such Registrable Securities that (i) is
a Brookfield Consortium Member, (ii) is an Affiliate of any Initial
Investor or (iii) is unable to immediately sell, without limitations
(including, but not limited to, any limitation on volume or manner of sale) or
restrictions under Rule 144, all Registrable Securities and other shares
of Common Stock held by such Person (provided, that for this clause
(iii), any such rights and obligations may be assigned solely with respect to
such Registrable Securities) (each such Person described in clauses (i), (ii) or
(iii), a “Permitted Assignee”). 
Any assignment pursuant to this Section 3(e) shall be
effective and any Person shall become a Permitted Assignee only upon receipt by
the Company of (1) a written notice from the transferring Holder stating
the name and address of the transferee and identifying the number of shares of
Registrable Securities with respect to which the rights under this Agreement
are being transferred and, if fewer than all of the rights attributable to a
Holder hereunder are to be so transferred, the nature of the rights so
transferred and (2) a written instrument by which the transferee agrees to
be bound by all of the 

 

20

 

terms and conditions applicable to a Holder of such
Registrable Securities.  Subject to the
foregoing, this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties.

 

(f)                                   Several Nature of
Commitments.  The
obligations of each Holder hereunder are several and not joint and several, and
relate only to the Registrable Securities held by such Holder from time to
time.  No Holder shall bear
responsibility to the Company for breach of this Agreement or any information
provided by any other Holder.

 

(g)                                  Additional Investors.  The parties hereto acknowledge that certain
Persons may become stockholders of the Company and the Company may wish to
grant such Persons registration rights with respect to the shares of Common
Stock issued to such Persons.  The
Company may do so in its discretion so long as such registration rights are not
inconsistent with the registration rights granted to the Holders hereunder and,
if any registrations rights granted are more favorable than those provided to
Holders of Common Stock hereunder, conforming changes reasonably acceptable to
the Purchasers are made to this Agreement to provide Holders hereunder with
substantially similar rights.

 

(h)                                 Entire Agreement; Amendment
and Waiver.  This
Agreement constitutes the entire understanding of the parties hereto relating
to the subject matter hereof and supersedes all prior understandings among such
parties.  This Agreement may be amended
with (and only with) the written consent of the Company and the Holders holding
a majority of the then outstanding Registrable Securities and any such
amendment shall apply to all Holders and all of their Registrable Securities; provided,
that, notwithstanding the foregoing, additional Holders may become party hereto
upon an assignment of rights and obligations hereunder pursuant to Section 3(e);
provided  further, however, that other than as set forth in
Section 3(e), the Company may not add additional parties hereto without
the consent of Holders holding a majority of the then outstanding Registrable
Securities.  The observance of any term
of this Agreement may be waived by the party or parties waiving any rights
hereunder; provided, that any such waiver shall apply to all Holders and
all of their Registrable Securities only if made by Holders holding a majority
of then-outstanding Registrable Securities.

 

(i)                                     Injunctive Relief.  It is hereby agreed and acknowledged that it
will be impossible to measure in money the damage that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law.  Any such Person shall, therefore, be entitled
(in addition to any other remedy to which it may be entitled in law or in
equity) to injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.

 

(j)                                    WAIVER OF JURY
TRIAL.  EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE,

 

21

 

EACH
SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY ACTIONS, SUITS, DEMAND LETTERS, JUDICIAL,
ADMINISTRATIVE OR REGULATORY PROCEEDINGS, OR HEARINGS, NOTICES OF VIOLATION OR
INVESTIGATIONS ARISING OUT OF OR RELATING TO THIS AGREEMENT.  EACH PARTY TO THIS AGREEMENT CERTIFIES AND
ACKNOWLEDGES THAT (A) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER AND (B) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY.

 

(k)                                 No Inconsistent Agreements.  The Company is not currently a party to any
agreement which is, or could be inconsistent with, the rights granted to the
Holders by this Agreement.

 

(l)                                     Severability.  In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.

 

(m)                             Counterparts.  This Agreement may be executed in two or more
counterparts (including by email or facsimile signature), each of which shall
be deemed an original and all of which together shall be considered one and the
same agreement.

 

(n)                                 Interpretation of this
Agreement.  Where any
provision in this Agreement refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

 

 

[Remainder of Page Intentionally Left Blank]

 

22

 

IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date first set forth above.

 

	
   

  	
  THE HOWARD HUGHES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  [PURCHASER]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 

Schedule I

 

REP
Investments LLC, a Delaware limited liability company

[any
other Brookfield Consortium Members who hold Common Stock]Exhibit
4.2

 

THE HOWARD HUGHES CORPORATION

FORM OF REGISTRATION RIGHTS
AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT, dated as of [·], 2010 (this “Agreement”), by and between
the purchasers listed on Schedule I hereto (the “Purchasers”) and
The Howard Hughes Corporation, a Delaware corporation (the “Company”).

 

R E C I T A L S

 

WHEREAS, Purchasers have, pursuant to the terms of that certain Amended
and Restated Stock Purchase Agreement, effective as of March 31, 2010, by and
between General Growth Properties, Inc. (“GGP”) and the Purchasers (as
the same may be amended from time to time, the “Stock Purchase Agreement”)
agreed, among other things, to purchase [1,312,500] shares of common stock, par
value $0.01, of the Company (the “Common Stock”); and

 

WHEREAS, in case any securities held by a Purchaser or its transferees
are at any time not freely transferable by the holder in accordance with
applicable laws, the Company and the Purchasers desire to define certain
registration rights with respect to the Common Stock, certain warrants and
certain other securities on the terms and subject to the conditions herein set
forth.

 

NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the parties hereby agree as follows:

 

SECTION 1.  DEFINITIONS

 

As used in this Agreement, the following terms have the respective
meanings set forth below:

 

Affiliate:  shall mean
as to any Person, any other Person which, directly or indirectly, is in control
of, is controlled by, or is under common control with, the first Person.  A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies of the other
Person, whether through the ownership of voting securities, by contract, or
otherwise;

 

Agreement:  shall have
the meaning set forth in the Preamble hereto;

 

Blackstone:  shall mean
Blackstone Real Estate Partners VI L.P., a Delaware limited partnership, and [·];

 

Brookfield Holders:  shall mean the “Holders” defined in that
certain Registration Rights Agreement, dated as of the date hereof, by and
between the Company and REP Investments LLC, a Delaware limited liability
company, as amended from time to time;

 

Brookfield/Pershing Holders:  shall mean, collectively, the Brookfield
Holders and Pershing Holders and a Brookfield/Pershing Holder shall mean any
Brookfield Holder or Pershing Holder;

 

 

Closing Date: shall have the meaning ascribed thereto in the
Stock Purchase Agreement;

 

Commission:  shall mean
the Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act;

 

Common Stock:  shall have
the meaning set forth in the Recitals hereto;

 

Company:  shall have
the meaning set forth in the Preamble hereto;

 

Cornerstone Investment Agreement:  shall
mean that certain Amended and Cornerstone Investment Agreement, effective as of March 31, 2010, by and between GGP
and REP Investments LLC, a Delaware limited liability company, as amended from
time to time;

 

Demand Notice: shall have the meaning set forth in Section
2(a)(i) hereof;

 

Exchange Act:  shall mean
the Securities Exchange Act of 1934, as amended (or any successor act), and the
rules and regulations promulgated thereunder;

 

FINRA:  shall mean
the Financial Industry Regulatory Authority;

 

Holder:  shall mean
any holder of Registrable Securities subject to this Agreement, solely in their
capacity as such, including Permitted Assignees;

 

Indemnified Party: 
shall have the meaning set forth in Section 2(f)(iii) hereof;

 

Indemnifying Party:  shall have the meaning set forth in Section 2(f)(iii)
hereof;

 

Initial Investors: 
shall mean (i) the Purchasers, (ii) any member of the Purchaser Group, (iii)
Blackstone and (iv) any Permitted Assignees under clauses (i) and (ii) of Section
3(e) hereof;

 

Initiating Holder(s):  shall mean any Holder or any group of
Holders, other than Blackstone, with respect to the Registrable Securities it
is designated to receive pursuant to the Investment Agreements;

 

Investment Agreements:  shall mean, collectively, the Cornerstone
Investment Agreement, the Pershing Stock Purchase Agreement and the Stock
Purchase Agreement;

 

Investors:  shall mean (i)
any Initial Investors and (ii) any Permitted Assignees under clause (iii) of Section
3(e) hereof;

 

Issuer Free Writing Prospectus:  shall mean an “Issuer Free Writing
Prospectus,” as defined in Rule 433 under the Securities Act, relating to an
offer of Registrable Securities;

 

Losses:  shall have
the meaning set forth in Section 2(f)(i) hereof;

 

2

 

Other Stockholders:  shall have the meaning set forth in Section 2(a)(iii)
hereof;

 

Participating Holders:  shall mean Holders participating in the
Registration relating to the Registrable Securities;

 

Permitted Assignees:  shall have the meaning set forth in Section 3(e)
hereto;

 

Pershing Holders: 
shall mean the “Holders” defined in that certain Registration Rights
Agreement, dated as of the date hereof, by and between the Company, Pershing
Square Capital Management, L.P., on behalf of Pershing Square, L.P., a Delaware
limited partnership, Pershing Square II, L.P., a Delaware limited partnership,
Pershing Square International, Ltd. a Cayman Islands exempted company, Pershing
Square International V, Ltd., a Cayman Islands exempted company, and Blackstone,
as amended from time to time;

 

Pershing Stock Purchase Agreement:  shall mean that certain Amended and Restated Stock Purchase Agreement, effective as of March 31, 2010, by and
between GGP and the Pershing Holders, as amended from time to time;

 

Person:  shall mean
an individual, partnership, joint-stock company, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof;

 

Prospectus:  shall mean
the prospectus (including any preliminary, final or summary prospectus)
included in any Registration Statement, all amendments and supplements to such
prospectus and all other material incorporated by reference in such prospectus;

 

Purchaser Group: shall have the meaning ascribed thereto in
the Stock Purchase Agreement;

 

Purchasers:  shall have
the meaning set forth in the Preamble hereto;

 

Qualifying Employee Stock:  shall mean (i) rights and options issued in
the ordinary course of business under employee benefits plans of the Company or
any predecessor or otherwise to executives in compensation arrangements
approved by the Board of Directors of the Company or any predecessor and any
securities issued after the date hereof upon exercise of such rights and
options and options issued to employees of the Company or any predecessor as a
result of adjustments to options in connection with the reorganization of the
Company or any predecessor and (ii) restricted stock and restricted stock units
issued after the date hereof in the ordinary course of business under employee
benefit plans and securities issued after the date hereof in settlement of any
such restricted stock units;

 

Register, Registered and Registration:  shall mean a registration effected by
preparing and (a) filing a Registration Statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of

 

3

 

effectiveness
of such Registration Statement, or (b) filing a Prospectus and/or prospectus
supplement in respect of an appropriate effective Registration Statement;

 

Registrable Securities:  shall mean (A) any shares of Common Stock
acquired or held by an Initial Investor on or after the date hereof (whether or
not acquired pursuant to the Stock Purchase Agreement), including without
limitation shares of Common Stock acquired in connection with the exercise of
any Warrants and shares of Common Stock which at any time an Initial Investor
has a right or obligation to purchase under the Stock Purchase Agreement, (B) (i)
any securities of the Company or its Affiliates issued as a dividend or other
distribution with respect to, or in exchange for or in conversion, exercise or
replacement of, any Registrable Securities described in (A) or (C) (the “Initial
Securities”) or securities that may become Registrable Securities by virtue
of clause (B)(iii) or (ii) any securities of the Company or its Affiliates offered
wholly or partly in consideration of the Initial Securities or securities that
may become Registrable Securities by virtue of clause (B)(iii) in any tender or
exchange offer or (iii) any securities of the Company or its Affiliates issued
as a dividend or other distribution with respect to, or in exchange for or in
conversion, exercise or replacement of or offered wholly or partly in any
tender or exchange offer in consideration of any Registrable Securities
described in (B)(i) or (B)(ii), (C) Warrants acquired or held by an Initial
Investor on or after the date hereof and (D) any Registrable Securities
described in (A), (B) or (C) above acquired or held by a Person, for which rights and
obligations  have been assigned pursuant
to clause (iii) of Section 3(e) and in accordance with the terms of Section 3(e)
hereof; provided, that as to any particular Registrable Securities, such
securities shall cease to be Registrable Securities (i) when a Registration
Statement with respect to such securities has been declared effective under the
Securities Act and such securities have been disposed of pursuant to such
Registration Statement, (ii) after such securities have been sold in accordance
with Rule 144 (but not Rule 144A), (iii) after such securities shall have otherwise
been transferred and new securities not subject to transfer restrictions under
any federal securities laws and not bearing any legend restricting further
transfer shall have been delivered by the Company, all applicable holding
periods shall have expired, and no other applicable and legally binding
restriction on transfer by the holder thereof shall exist, (iv) when such
securities are eligible for sale pursuant to Rule 144 under the Securities Act
without limitation thereunder on volume or manner of sale, or (v) when such
securities cease to be outstanding;

 

Registration Expenses:  shall mean (a) any and all expenses incurred
by the Company and its Subsidiaries in effecting any Registration pursuant to
this Agreement, including, without limitation, all (i) Registration and filing
fees, and all other fees and expenses payable in connection with the listing of
securities on any securities exchange or automated interdealer quotation
system, (ii) fees and expenses of compliance with any securities or “blue sky”
laws (including fees and disbursements of counsel in connection with “blue sky”
qualifications of the securities registered), (iii) expenses in connection with
the preparation, printing, mailing and delivery of any Registration Statements,
Prospectuses, Issuer Free Writing Prospectus and other documents in connection
therewith and any amendments or supplements thereto, (iv) security engraving
and printing expenses, (v) internal expenses of the Company (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (vi) fees and disbursements of counsel for the
Company and fees and expenses for independent certified public accountants
retained by the Company (including the expenses associated with the delivery by
independent certified public accountants of any comfort

 

4

 

letters
requested pursuant to the terms hereof), (vii) fees and expenses of any special
experts retained by the Company in connection with such Registration, (viii) fees
and expenses in connection with any review by FINRA of any underwriting
arrangements or other terms of the offering, and all reasonable fees and
expenses of any “qualified independent underwriter”, (ix) reasonable fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding any underwriting fees, discounts and commissions
attributable to the sale of Registrable Securities and fees and expenses of
counsel, (x) costs of printing and producing any agreements among underwriters,
underwriting agreements, any “blue sky” or legal investment memoranda and any
selling agreements and other documents in connection with the offering, sale or
delivery of the Registrable Securities, (xi) transfer agents’ and registrars’
fees and expenses and the fees and expenses of any other agent or trustee
appointed in connection with such offering and (xii) expenses relating to any
analyst or investor presentations or any “road shows” undertaken in connection
with the Registration, marketing or selling of the Registrable Securities and (b)
reasonable and documented fees and expenses of one counsel for all of the
Participating Holders, which counsel shall be selected by the Participating
Holder holding the largest number of the Registrable Securities to be sold in
the applicable Registration. 
Registration Expenses shall not include any out-of-pocket expenses of
the Participating Holders;

 

Registration Statement:  shall mean any registration statement of the
Company that covers Registrable Securities pursuant to the provisions of this
Agreement filed with, or to be filed with, the Commission under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement,
including pre- and post-effective amendments, and all exhibits, financial
information and all material incorporated by reference in such registration
statement;

 

Required Shelf Registration Statement: shall have the meaning set
forth in Section 2(c);

 

Rule 144; Rule 144A:  shall mean Rule 144 and Rule 144A,
respectively, under the Securities Act (or any successor provisions then in
force);

 

S-1 Registration Statement: shall mean a registration
statement of the Company on Form S-1 (or any comparable or successor form)
filed with the Commission registering any Registrable Securities;

 

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

 

security, securities:  shall have the meaning set forth in Section 2(a)(1)
of the Securities Act;

 

5

 

Securities Act: 
shall mean the Securities Act of 1933, as amended (or any successor
statute thereto), and the rules and regulations promulgated thereunder;

 

Selling Expenses: 
shall mean all underwriting discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities and all fees
and disbursements of counsel for each of the Holders, other than the fees and
expenses of one counsel for all of the Holders, which shall be paid for by the
Company in accordance with the terms set forth in clause (b) of the definition
of “Registration Expenses” set forth herein;

 

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

 

Stock Purchase Agreement:  shall have the meaning set forth in the
Recitals hereto;

 

Transfer:  shall have
the meaning set forth in Section 2(j)(ii) hereof; and

 

Warrants:  shall mean
the warrants issued by the Company from time to time pursuant to that certain
Warrant Agreement, dated as of November [     
], 2010, by and between the Company and Mellon Investor Services LLC.

 

SECTION 2.  REGISTRATION RIGHTS

 

(a)                                  Demand
Registration.

 

(i)                                     Request for
Registration.  Subject to
the limitations and conditions of Section 2(a)(ii), if the Company shall
receive from an Initiating Holder(s) a written demand (the “Demand Notice”)
that the Company effect any Registration with respect to all or a part of the
Registrable Securities owned by such Initiating Holder(s) having an estimated
aggregate fair market value of at least $25 million, the Company shall:

 

(1)                                  promptly give
written notice of the proposed Registration to all other Holders in accordance
with the terms of Section 2(b);

 

(2)                                  use its
reasonable best efforts to file a
Registration Statement with the Commission in accordance with the request of
the Initiating Holder(s), including without limitation the method of disposition specified therein and covering resales of the
Registrable Securities requested to be registered, as promptly as
reasonably practicable but no later than (x) in the case of a Registration
Statement other than an S-1 Registration Statement, within 30 days of receipt of the Demand Notice or (y) in the case of an S-1
Registration Statement, within 60 days of
receipt of the Demand Notice;

 

6

 

(3)                                  use reasonable best efforts to cause such Registration Statement to be declared or become
effective as promptly as practicable, but in no event later than 60 days after the date of initial filing of a Registration Statement
pursuant to Section 2(a)(i)(2); and

 

(4)                                  use reasonable best efforts to keep such Registration Statement continuously effective and
in compliance with the Securities Act and usable for resale of such Registrable
Securities for the period as requested in
writing by the Initiating Holder(s) or such longer period as may be requested
in writing by any Holder participating in such registration (which periods
shall be extended to the extent of any suspensions of sales pursuant to
Sections 2(a)(ii)(3) or (4));

 

provided, however,
that the Company shall be permitted, with the consent of the Initiating Holder(s)
not to be unreasonably withheld, to file a post-effective amendment or
prospectus supplement to any currently effective Shelf Registration Statement
(including, without limitation, any resale registration statement filed
pursuant to the terms of the Stock Purchase Agreement) in lieu of an additional
registration statement pursuant to Section 2(a)(i) to the extent the Company
reasonably determines that the Registrable Securities of the Initiating Holder(s)
may be sold thereunder by such Initiating Holder(s) pursuant to their intended
plan of distribution (in which case such post-effective amendment or prospectus
supplement shall not be counted against the limited number of demand
registrations).  It shall not be
unreasonable if, following the recommendation of an underwriter, the Initiating
Holder(s) do not consent to the Company filing a post-effective amendment or
prospectus supplement to a Shelf Registration Statement in lieu of an
additional registration statement requested by the Initiating Holder(s).

 

(ii)                                  Notwithstanding
anything to the contrary contained herein, the Company shall not be obligated
to effect, or take any action to effect, any such Registration pursuant to this
Section 2(a):

 

(1)                                  In any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process or qualify to do business in effecting
such Registration, qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;

 

(2)                                  With respect to
securities that are not Registrable Securities;

 

(3)                                  If the Company
has notified the Holders that in the good faith judgment of the Company, it
would be materially detrimental to the Company or its security holders for such
registration to be effected at such time, in which event the Company shall have
the right to defer such registration for a period of not more than 60 days; provided,
that such right to delay a registration pursuant to clause (3) shall be
exercised by the Company only if the Company has generally exercised (or is
concurrently exercising) similar black-out rights against holders of similar
securities that have registration rights, if any; or

 

(4)                                  Solely with respect to any Affiliate of the Company, during any
Scheduled Black-Out Period;

 

7

 

provided, that the
total number of days that any such suspension, deferral or delay in
registration pursuant to clauses (3) and (4) in the aggregate may be in effect
in any 180 day period shall not exceed 60 days. 
The Company agrees to use its reasonable best efforts to issue earnings
releases as promptly as practicable following the end of quarterly reporting
periods and to otherwise minimize the duration of Scheduled Black-Out Periods.

 

(iii)                               The Registration Statement
filed pursuant to the request of the Initiating Holder may, subject to the
provisions of Section 2(a)(iv) below, include shares of Common Stock which are
held by Holders and Persons who, by virtue of agreements with the Company
(other than this Agreement), are entitled to include their securities in any
such Registration (such Persons, other than Holders, “Other Stockholders”).  In the event the Initiating Holder(s) request
a Registration pursuant to this Section 2(a) in connection with a distribution
of Registrable Securities to its partners or members or any other Holder elects
to participate in such Registration pursuant to Section 2(b) hereof in
connection with a distribution of Registrable Securities to its partners or
members, the Registration shall provide for the resale by such partners or
members, if requested by such Holder.

 

(iv)                              Underwriting.  If the Initiating Holder(s) intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, it shall so advise the Company as a part of the request made
pursuant to Section 2(a).  If Other
Stockholders or Holders, to the extent they have any registration rights under Section
2(b), request inclusion of their shares of Common Stock in the underwriting,
the Initiating Holder(s) shall offer to include the shares of Common Stock of
such Holders and Other Stockholders in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this Section 2.  The Holders whose Registrable Securities are
to be included in such Registration and the Company shall (together with all
Other Stockholders proposing to distribute their shares of Common Stock through
such underwriting) enter into an underwriting agreement in customary form for secondary
public offerings with the managing underwriter or underwriters selected for
such underwriting by a majority-in-interest of the Holders whose Registrable
Securities are to be included in such Registration subject to approval by the
Company not to be unreasonably withheld (which underwriters may also include a
non-bookrunning co-manager selected by the Company subject to approval by a
majority-in-interest of the Holders whose Registrable Securities are to be
included in such Registration); provided, however, that such
underwriting agreement shall not provide for indemnification or contribution
obligations on the part of any Holder or Other Stockholder greater than the
obligations of the Holders under Section (2)(f)(ii) or Section 2(f)(iv).  Notwithstanding any other provision of this Section
2(a), if the managing underwriter or underwriters advises the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, some or all of the securities of the Company held by the Other
Stockholders (other than the Brookfield/Pershing Holders) shall be excluded
from such Registration to the extent so required by such limitation.  If, after the exclusion of such shares held
by such Other Stockholders (other than the Brookfield/Pershing Holders),
further reductions are still required due to the marketing limitation, the
number of Registrable Securities included in the Registration by each Holder
(including the Initiating Holder(s)) and the Brookfield/Pershing Holders shall
be reduced on a pro rata basis (based on the number of Registrable Securities
requested to be included in such registration by such Holders and the
Brookfield/Pershing Holders, as applicable), by such minimum number of shares
as is necessary to comply with such request. 
No Registrable 

 

8

 

Securities or any other securities excluded from the
underwriting by reason of the underwriter’s marketing limitation shall be
included in such Registration.  If any
Holder or Other Stockholder who has requested inclusion in such Registration as
provided above disapproves of the terms of the underwriting, such Person may
elect to withdraw therefrom by providing written notice to the Company, the
underwriter and the Initiating Holder(s). 
The securities so withdrawn shall also be withdrawn from
Registration.  If the underwriter has not
limited the number of Registrable Securities or other securities to be
underwritten, the Company and executive officers and directors of the Company
(whether or not such Persons have registration rights pursuant to Section 2(b) hereof)
may include its or their securities for its or their own account in such
Registration if the managing underwriter or underwriters and the Company so
agree and if the number of Registrable Securities and other securities which
would otherwise have been included in such Registration and underwriting will
not thereby be limited.

 

(v)                                 The number of demand
registrations that the Holders shall be entitled to request, and that the
Company shall be obligated to undertake, pursuant to this Section 2(a) shall be
unlimited; provided, that the Company shall not be obligated to
undertake more than three underwritten offerings pursuant to this Section 2
during the term of this Agreement, provided, further that in no
event shall the Company be required to effect more than one underwritten
offering in any twelve-month period pursuant to this Section 2.

 

(vi)                              In the case of
an underwritten offering under this Section 2(a), the price, underwriting
discount and other financial terms for the Registrable Securities shall be
determined by the Initiating Holder(s).

 

(b)                                 Piggyback Registration.

 

(i)                                     If the Company shall
determine to register any of its
capital stock (including any warrants) either (x) for its own
account, (y) for the account of the Holders listed in Section 2(a) pursuant to
the terms thereof, or (z) for the account of Other Stockholders (other than (A)
a Registration relating solely to Qualifying Employee Stock, (B) a Registration
relating solely to a Rule 145 transaction under the Securities Act or (C) a
Registration on any Registration form which does not permit secondary sales or
does not include substantially the same information as would be required to be
included in a Registration Statement), the Company will, subject to the
conditions set forth in this Section 2(b):

 

(1)                                  promptly give
to each of the Holders a written notice thereof (which shall include a list of
the jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws); and

 

(2)                                  subject to Section
2(b)(ii) below and any transfer restrictions any Holder may be a party to,
include in such Registration (and any related qualification under blue sky laws
or other compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request or requests, made by the
Holders.  Such written request may
specify all or a part of the Holders’ Registrable Securities and shall be
received by the Company within ten (10) days after written notice from the
Company is given under Section 2(b)(i)(1) above.  In the event any Holder requests 

 

9

 

inclusion in a Registration pursuant to this Section
2(b) in connection with a distribution of Registrable Securities to its
partners or members, the Registration shall provide for the resale by such
partners or members, if requested by such Holder.

 

(ii)                                  Underwriting.  If the Registration of which the Company
gives notice is for a Registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(1) above. 
In such event, the right of each of the Holders to Registration pursuant
to this Section 2(b) shall be conditioned upon such Holders’ participation in
such underwriting and the inclusion of such Holders’ Registrable Securities in
the underwriting to the extent provided herein. 
The Holders whose Registrable Securities are to be included in such
Registration shall (together with the Company and the Other Stockholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form for secondary public offerings with
the managing underwriter or underwriters selected for underwriting by the
Company (and if the Registration was initiated by a Holder pursuant to Section 2(a),
such underwriters must be selected by the Initiating Holder(s) and reasonably
acceptable to the Company); provided, however, that such
underwriting agreement shall not provide for indemnification or contribution
obligations on the part of any Holder or Other Stockholder greater than the
obligations of the Holders under Section 2(f)(ii) or Section 2(f)(iv).  Notwithstanding any other provision of this Section
2(b), if any Registration in respect of which any Holder is exercising its
rights under this Section 2(b) involves an underwritten public offering (other
than a demand Registration pursuant to Section 2(a), in which case the
provisions with respect to priority of inclusion in such Registration set forth
in Section 2(a) shall apply) and the managing underwriter or underwriters
advises the Company that in its view marketing factors require a limitation on
the number of securities to be underwritten, then there shall be included in
such underwritten offering the number or dollar amount of securities of the
Company that in the opinion of the managing underwriter or underwriters can be
sold without adversely affecting such offering, and such number of securities
of the Company shall be allocated for inclusion as follows: (1) first all
securities of the Company being sold by the Company for its own account or by
any Person (other than a Holder or a Brookfield/Pershing Holder) exercising a
contractual right to demand registration; (2) second, all Registrable
Securities requested to be included by the Holders, all Registrable Securities
to be included by the Brookfield/Pershing Holders pursuant to piggyback registration rights and
securities of the Company being sold by any Person (other than a Holder or a Brookfield/Pershing
Holder) with similar piggyback registration rights, pro rata, based on the
number of shares requested to be included in such registration by such Holders,
the Brookfield/Pershing Holders and such Persons; and (3) third, among any other
holders of securities of the Company requesting such registration, pro rata,
based on the number of securities requested to be included in such registration
by each such holder.  For the avoidance
of doubt, in the event any Brookfield/Pershing Holder exercises demand
registration rights, such registration is an underwritten public offering and
the managing underwriter advises that marketing factors require a limitation on
the number of securities to be so underwritten, Registrable Securities of any
Holders exercising piggyback rights under this Section 2(b) in connection with
such offering and any securities to be included in such offering by the
Brookfield/Pershing Holders shall be included in such offering in the same
priority and allocated on a pro rata basis, as set forth in clause (2) above.  If any of the Holders or any officer,
director or Other Stockholder disapproves of the terms of any such
underwriting, he, she or it may elect to withdraw therefrom 

 

10

 

by providing written notice to the Company, the
underwriter and the Initiating Holder(s). 
Any Registrable Securities or other securities excluded or withdrawn
from such underwriting shall be withdrawn from such Registration.

 

(c)                                  Required Shelf Registration
Statement.  From and
after the declaration of effectiveness by the Commission of the Shelf
Registration Statement contemplated by Section 7.1(l) of the Stock Purchase
Agreement (the “Required Shelf Registration Statement”), the Company
shall use reasonable best efforts to cause such Required Shelf Registration
Statement to be continuously effective so long as there are any Registrable
Securities outstanding.  In connection
with the Required Shelf Registration Statement, the Company will, subject to
the terms and limitations of this Section 2, as promptly as reasonably
practicable upon notice from any Holder requesting Registration in accordance
with the terms of this Section 2(c), cooperate in any shelf take-down by
amending or supplementing the Prospectus related to such Registration as may be
reasonably requested by such Holder or as otherwise required to reflect the
number of Registrable Securities to be sold thereunder.

 

(d)                                 Expenses of Registration.  All Registration Expenses incurred in
connection with any Registration, qualification or compliance pursuant to this Section
2 shall be borne by the Company, and all Selling Expenses shall be borne by the
Holders of the securities so registered pro rata on the basis of the number of
their shares so registered (or, in the case of fees and disbursements of
counsel and advisors to any Holders that do not constitute Registration Expenses,
by the Holders as incurred).

 

(e)                                  Registration Procedures.  In the case of each Registration effected by
the Company pursuant to this Section 2, the Company will keep the Participating
Holders advised in writing as to the initiation of each Registration and as to
the completion thereof.  At its expense,
the Company will:

 

(i)                                     as promptly as practicable,
prepare and file with the Commission such pre- and post-effective amendments to
such Registration Statement, supplements to the Prospectus and such amendments
or supplements to any Issuer Free Writing Prospectus as may be (1) reasonably
requested by the Initiating Holder(s) (if any), (2) reasonably requested by any
other Participating Holder (to the extent such request relates to information
relating to such Participating Holder), or (3) necessary to keep such
Registration effective for the period of time required by this Agreement, and
comply with provisions of the applicable securities laws with respect to the
sale or other disposition of all securities covered by such Registration
Statement during such period in accordance with the intended method or methods
of disposition by the sellers thereof set forth in such Registration Statement;

 

(ii)                                  notify the Participating
Holders and the managing underwriter or underwriters, if any, and (if
requested) confirm such advice in writing and provide copies of the relevant
documents, as promptly as practicable after notice thereof is received by the
Company (1) when the applicable Registration Statement or any amendment thereto
has been filed or becomes effective, and when the applicable Prospectus or
Issuer Free Writing Prospectus or any amendment or supplement thereto has been
filed, (2) to the extent any of the following relates to the Participating
Holders or information supplied by the Participating Holders, of any written
comments by the Commission or any request by the Commission or any other
federal or state 

 

11

 

governmental
authority for amendments or supplements to such Registration Statement,
Prospectus or Issuer Free Writing Prospectus or for additional information, (3)
of the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement or any order by the Commission or
any other regulatory authority preventing or suspending the use of any
Prospectus or any Issuer Free Writing Prospectus or the initiation or
threatening of any proceedings for such purposes, (4) if, at any time, the
representations and warranties of the Company in any applicable underwriting
agreement cease to be true and correct in all material respects, and (5) of the
receipt by the Company or its legal counsel of any notification with respect to
the suspension of the qualification of the Registrable Securities for offering
or sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;

 

(iii)                               promptly notify the
Participating Holders and the managing underwriter or underwriters, if any,
when the Company becomes aware of the happening of any event as a result of
which the applicable Registration Statement, the Prospectus included in such
Registration Statement (as then in effect) or any Issuer Free Writing
Prospectus contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein (in the case of such Prospectus or any Issuer Free Writing
Prospectus, in light of the circumstances under which they were made) not misleading,
and when any Issuer Free Writing Prospectus includes information that may
conflict with the information contained in the Registration Statement, or, if
for any other reason it shall be necessary during such time period to amend or
supplement such Registration Statement, Prospectus or Issuer Free Writing
Prospectus in order to comply with the Securities Act and, in either case as
promptly as reasonably practicable thereafter, prepare and file with the
Commission, and furnish without charge to the Participating Holders and the
managing underwriter or underwriters, if any, an amendment or supplement to
such Registration Statement, Prospectus or Issuer Free Writing Prospectus which
shall correct such misstatement or omission or effect such compliance;

 

(iv)                              use its reasonable best
efforts to prevent, or obtain the withdrawal of, any stop order or other order
suspending the use of any Prospectus or any Issuer Free Writing Prospectus;

 

(v)                                 deliver to each
Participating Holder and each underwriter, if any, without charge, as many
copies of the applicable Prospectus (including each preliminary Prospectus),
any Issuer Free Writing Prospectus and any amendment or supplement thereto as
such Participating Holder or underwriter may reasonably request (it being understood
that the Company consents to the use of such Prospectus, any Issuer Free
Writing Prospectus and any amendment or supplement thereto by such Holder and
the underwriters, if any, in connection with the offering and sale of the
Registrable Securities thereby) and such other documents as such Participating
Holder or underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities by such Participating Holder or
underwriter;

 

(vi)                              subject to the terms set
forth in Section 2(a)(ii)(1) and Section 2(c) hereof, on or prior to the date
on which the applicable Registration Statement is declared effective, use its
reasonable best efforts to register or qualify the Registrable Securities
covered by such Registration Statement under such other securities or “blue sky”
laws of such jurisdictions in the United States as any Participating Holder
reasonably (in light of such Participating Holder’s intended plan of
distribution) requests and do any and all other acts and things that may be 

 

12

 

reasonably
necessary or advisable to enable such Participating Holder to consummate the
disposition of the Registrable Securities owned by such Participating Holder
pursuant to such Registration Statement;

 

(vii)                           make such representations
and warranties to the Participating Holders and the underwriters or agents, if
any, in form, substance and scope as are customarily made by issuers in
underwritten public offerings;

 

(viii)                        enter into such customary
agreements (including underwriting and indemnification agreements) and take
such other actions as the Initiating Holder(s) or the managing underwriter, if
any, reasonably requests in order to expedite or facilitate the Registration
and disposition of such Registrable Securities;

 

(ix)                                use its reasonable best
efforts to obtain for delivery to the managing underwriter, if any, an opinion
or opinions from counsel for the Company dated the effective date of the
Registration Statement or, in the event of an underwritten offering, the date
of the closing under the underwriting agreement, in form and substance as is
customarily given to underwriters in an underwritten secondary public offering;

 

(x)                                   in the case of an
underwritten offering, use reasonable best efforts to obtain for delivery to
the Company and the managing underwriter, if any, a “ comfort” letter from the
Company’s independent certified public accountants in form and substance as is
customarily given by independent certified public accountants in an
underwritten secondary public offering;

 

(xi)                                cooperate with each
Participating Holder and the underwriters, if any, of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with FINRA;

 

(xii)                             use its reasonable best
efforts to cause all Registrable Securities covered by the applicable
Registration Statement to be listed or quoted on a national securities exchange
or trading system and each securities exchange and trading system (if any) on
which similar securities issued by the Company are then listed;

 

(xiii)                          cooperate with the
Participating Holders and the underwriters, if any, to facilitate the timely
preparation and delivery of certificates, with requisite CUSIP numbers,
representing Registrable Securities to be sold and not bearing any restrictive
legends;

 

(xiv)                         in the case of an
underwritten offering, make reasonably available the senior executive officers
of the Company to participate in the customary “road show” presentations that
may be reasonably requested by the managing underwriter in any such
underwritten offering and otherwise to facilitate, cooperate with, and
participate in each proposed offering contemplated herein and customary selling
efforts related thereto;

 

(xv)                            use its reasonable best
efforts to procure the cooperation of the Company’s transfer agent in settling
any offering or sale of Registrable Securities, including with respect to the
transfer of physical security instruments into book-entry form in accordance
with any procedures reasonably requested by the Holders or any managing
underwriter(s);

 

13

 

(xvi)                       use its reasonable best
efforts to take such actions as are under its control to become or remain a
well-known seasoned issuer (as such term in defined in Rule 405 under the
Securities Act) and not become an illegible issuer (as such term is defined in Rule
405 under the Securities Act) during the period when such Registration
Statement remains in effect; and

 

(xvii)                    make available for
inspection by a representative of Participating Holders that are selling at
least five percent (5%) of the Registrable Securities included in such
Registration (and who is named in the applicable prospectus supplement as a
Person who may be deemed to be an underwriter with respect to an offering and
sale of Registrable Securities), the managing underwriter(s), if any, and any
attorneys or accountants retained by such Holders or the managing
underwriters(s), at the offices where normally kept, during reasonable business
hours, financial and other records and pertinent corporate documents of the
Company, and cause the officers, directors and employees of the Company to
supply all information in each case reasonably requested by any such
representative, managing underwriter, attorney or accountant in connection with
such Registration Statement; provided, that if any such information is
identified by the Company as being confidential or proprietary, each Person
receiving such information shall take such actions as are reasonably necessary
to protect the confidentiality of such information and shall sign customary
confidentiality agreements reasonably requested by the Company prior to the
receipt of such information.

 

(f)                                   Indemnification.

 

(i)                                     Indemnification by the
Company.  With respect to each
Registration which has been effected pursuant to this Section 2, the Company
agrees to indemnify and hold harmless, to the fullest extent permitted by law, (1)
each of the Participating Holders and each of its officers, directors, limited
or general partners and members thereof, (2) each member, limited or general
partner of each such member, limited or general partner, (3) each of their
respective Affiliates, officers, directors, shareholders, employees, advisors,
and agents and each Person who controls (within the meaning of the Securities
Act or the Exchange Act) such Persons and each underwriter, if any, and each
person who controls (within the meaning of the Securities Act or the Exchange
Act) any underwriter, against any and all claims, losses, damages, penalties,
judgments, suits, costs, liabilities and expenses (or actions in respect
thereof) (collectively, the “Losses”) arising out of or based on (A) any
untrue statement (or alleged untrue statement) of a material fact contained in
any Registration Statement (including any Prospectus or Issuer Free Writing
Prospectus) or any other document incident to any such Registration,
qualification or compliance, (B) any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any Prospectus or Issuer Free
Writing Prospectus, in light of the circumstances under which they were made
not misleading), or (C) any violation by the Company of the Securities Act or
the Exchange Act applicable to the Company and relating to action or inaction
required of the Company in connection with any such Registration, qualification
or compliance, and will reimburse each of the Persons listed above, for any
reasonable and documented legal and any other expenses reasonably incurred in
connection with investigating and defending any such Losses, provided,
that the Company will not be liable in any such case to the extent that any
such Losses arise out of or are based on any untrue statement or omission based
upon written information furnished to the Company by the Participating Holders
or underwriter and stated to be specifically for use therein.

 

14

 

(ii)                                  Indemnification by the
Participating Holders.  Each
of the Participating Holders agrees (severally and not jointly) to indemnify
and hold harmless, to the fullest extent permitted by law, the Company, each of
its directors and officers and each underwriter, if any, of the Company’s
securities covered by such a Registration Statement, each Person who controls
the Company (within the meaning of the Securities Act or the Exchange Act) or
such underwriter, each other Participating Holder and each of their respective
officers, directors, partners and members, and each Person controlling such
Participating Holder (within the meaning of the Securities Act or the Exchange
Act) against any and all Losses arising out of or based on (A) any untrue
statement (or alleged untrue statement) of a material fact contained in any
Registration Statement (including any Prospectus or Issuer Free Writing
Prospectus) or any other document incident to any such Registration,
qualification or compliance (including any notification or the like) made by
such Participating Holder in writing or (B) any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to
make the statements by such Participating Holder therein not misleading (in the
case of any Prospectus or Issuer Free Writing Prospectus, in light of the
circumstances under which they were made not misleading) and will reimburse the
Persons listed above for any reasonable and documented legal or any other
expenses reasonably incurred in connection with investigating or defending any
such Losses, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in reliance upon and in conformity with written information
furnished to the Company by such Participating Holder and stated to be
specifically for use therein; provided, however, that the
obligations of each of the Participating Holders hereunder shall be limited to
an amount equal to the net proceeds (after giving effect to any underwriters
discounts and commissions) such Participating Holder receives in such
Registration.

 

(iii)                               Conduct of the
Indemnification Proceedings.  Each party entitled to indemnification under
this Section 2(f) (the “Indemnified Party”) shall give notice to the
party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom; provided,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party’s expense
(unless the Indemnified Party shall have reasonably concluded that there may be
a conflict of interest between the Indemnifying Party and the Indemnified Party
in such action, in which case the fees and expenses of counsel shall be at the
expense of the Indemnifying Party), and provided, further, that
the failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Section 2(f) unless
the Indemnifying Party is prejudiced thereby. 
It is understood and agreed that the Indemnifying Party shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate legal counsel for
all Indemnified Parties; provided, however, that where the
failure to be provided separate legal counsel could potentially result in a
conflict of interest on the part of such legal counsel for all Indemnified
Parties, separate counsel shall be appointed for Indemnified Parties to the
extent needed to alleviate such potential conflict of interest.  No 

 

15

 

Indemnifying Party, in the defense of any such claim
or litigation shall, except with the prior written consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.  Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.

 

(iv)                              If the indemnification
provided for in this Section 2(f) is held by a court of competent jurisdiction
to be unavailable to an Indemnified Party with respect to any Losses, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions (or alleged
statements or omissions) which resulted in such Losses, as well as any other
relevant equitable considerations.  The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue (or alleged
untrue) statement of a material fact or the omission (or alleged omission) to
state a material fact relates to information supplied by the Indemnifying Party
or by the Indemnified Party and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission; provided, however, that the obligations of each of the
Participating Holders hereunder shall be several and not joint and shall be
limited to an amount equal to the net proceeds (after giving effect to any
underwriters discounts and commissions) such Participating Holder receives in
such Registration and, provided, further, that no Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. 
For purposes of this Section 2(f)(iv), each Person, if any, who controls
an underwriter or agent within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as such underwriter or agent and
each director of the Company, each officer of the Company who signed a
Registration Statement, and each Person, if any, who controls the Company or a
selling Holder within the meaning of Section 15 of the Securities Act shall
have the same rights to contribution as the Company or such selling Holder, as
the case may be.

 

(v)                                 Subject to the limitations
on the Holders’ liability set forth in Section 2(f)(ii) and Section 2(f)(iv),
the remedies provided for in this Section 2(f) are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
Indemnified Party at law or equity.  The
remedies shall remain in full force and effect regardless of any investigation
made by or on behalf of such Holder or any Indemnified Party and survive the
transfer of such securities by such Holder.

 

(vi)                              The obligations
of the Company and of the Participating Holders hereunder to indemnify any
underwriter or agent who participates in an offering (or any Person, if any
controlling such underwriter or agent within the meaning of Section 15 of the
Securities Act) shall be conditioned upon the underwriting or agency agreement
with such underwriter or agent containing an agreement by such underwriter or
agent to indemnify and hold harmless the Company, each of its directors and
officers, each other Participating Holder, and each Person 

 

16

 

who
controls the Company (within the meaning of the Securities Act or the Exchange
Act) or such Participating Holder against all Losses, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such underwriter or agent expressly for use in such filings
described in this sentence.

 

(g)                                  Participating Holders.

 

(i)                                     Each of the
Participating Holders shall furnish to the Company such information regarding
such Participating Holder and its partners and members, and the distribution
proposed by such Holder as the Company may reasonably request in writing and as
shall be reasonably requested in connection with any Registration,
qualification or compliance referred to in this Section 2.

 

(ii)                                  In the event
that, either immediately prior to or subsequent to the effectiveness of any
Registration Statement, any Participating Holder shall distribute Registrable
Securities to its partners or members, such Participating Holder shall so
advise the Company and provide such information as shall be necessary to permit
an amendment to such Registration Statement to provide information with respect
to such partners or members, as selling security holders.  As soon as is reasonably practicable
following receipt of such information, the Company shall file an appropriate
amendment to such Registration Statement reflecting the information so
provided.  Any incremental expense to the
Company resulting from such amendment shall be borne by such Participating
Holder.

 

(iii)                               Each Holder
agrees that at the time that such Holder is a Participating Holder, upon
receipt of any notice from the Company of the happening of any event of the
kind described in Section 2(e)(iii), such Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Holder’s receipt of the copies
of a supplemented or amended Prospectus or Issuer Free Writing Prospectus or
until such Holder is advised in writing by the Company that the use of the
Prospectus or Issuer Free Writing Prospectus, as the case may be, may be
resumed, and, if so directed by the Company, such Holder shall deliver to the
Company all copies, other than any permanent file copies then in such Holder’s
possession, of the most recent Prospectus or any Issuer Free Writing Prospectus
covering such Registrable Securities at the time of receipt of such
notice.  If the Company shall give such
notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective by the number of days during the period
from and including the date of the giving of notice pursuant to Section 2(e)(iii)
to the date when the Company shall make available to such Holder a copy of the
supplement or amended Prospectus or Issuer Free Writing Prospectus or is
advised in writing that the use of the Prospectus or Issuer Free Writing
Prospectus may be resumed.

 

(h)                                 Rule 144.  With a view to making available the benefits
of certain rules and regulations of the Commission which may permit the sale of
restricted securities to the 

 

17

 

public without Registration, the Company agrees to
use its reasonable best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities
Act and the Exchange Act at any time after it has become subject to such
reporting requirements (or, if the Company is not required to file such
reports, it will, upon the reasonable request of the Holders holding a majority
of the then outstanding Registrable Securities, make publicly available such
necessary information for so long as necessary to permit sales pursuant to Rules
144 under the Securities Act).

 

(i)                                     Termination.  The registration rights set forth in this Section
2 shall terminate and cease to be available as to any securities held by an Investor at such time as such Investor
(after owning) first ceases to own any Registrable
Securities.

 

(j)                                    Lock-Up Agreements.

 

(i)                                     The Company agrees that, if
requested by the managing underwriter in any underwritten public offering
contemplated by this Agreement, it will enter into a customary “lock-up”
agreement providing that it will not, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of any Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock (subject to customary exceptions), other than any such sale or
distribution of Common Stock upon exercise of the Company’s Warrants, for a
period of 60 days from the effective date of the Registration Statement
pertaining to such Common Stock; provided, however, that any such
lock-up agreement shall not prohibit the Company from directly or indirectly (i)
selling, offering to sell, granting any option for the sale of, or otherwise
disposing of any Qualifying Employee Stock (or otherwise maintaining its
employee benefits plans in the ordinary course of business) or (ii) issuing
Common Stock or securities convertible into or exchangeable for Common Stock
upon exercise or conversion of any warrant (including any other Warrant),
option, right or convertible or exchangeable security issued in connection with
the plan of reorganization.  Each Holder
shall coordinate with other Holders and the Brookfield Holders and the Pershing
Holders such that the total number of days that the Company will be subject to
such restrictions (including similar restrictions pursuant to any registration
rights agreements with the Brookfield Holders and the Pershing Holders) as may
be in effect in any 365-day period shall not exceed 120 days.

 

(ii)                                  In the event that any Holder
is an Affiliate of the Company, if requested by the managing underwriter in any
underwritten public offering permitted by this Agreement, such Holder will
enter into a customary “lock-up” agreement providing that it will not sell,
grant any option for the sale of, or otherwise dispose (each, “Transfer”)
of any Common Stock outside of such public offering (subject to customary
exceptions) for a period of 60 days from the effective date of the Registration
Statement pertaining to such Common Stock; provided, however, that a
Purchaser or member of its Purchaser Group may Transfer such Common Stock in
such amounts, and at such times, as Fairholme Capital Management, LLC, such
Purchaser or such member of its Purchaser Group determines to be in such
Purchaser’s or such member of its Purchaser Group’s best interests in light of
its then current circumstances and the laws and regulations applicable to it as
a management investment company registered under the Investment Company Act of
1940, as amended, with a policy of qualifying as a “regulated investment
company” as defined in Subchapter M of the Internal Revenue Code of 1986,
as amended.

 

18

 

(k)                                 Notwithstanding any
provision of this Agreement to the contrary, in order for a Registration to be
included as a Registration for purposes of this SECTION 2.  , the Registration Statement in connection
therewith shall have been continually effective in compliance with the
Securities Act and usable for resale for the full period established with
respect to such Registration (except in the case of any suspension of sales
pursuant to (A) a Scheduled Black-Out Period, or (B) Section 2(e)(iii) hereof,
in which case such period shall be extended to the extent of such suspension).

 

(l)                                     Notwithstanding any
provision of this Agreement to the contrary, if the Company is required to file
a post-effective amendment to a Registration Statement to incorporate the
Company’s quarterly and annual reports and related financial statements on Form
10-Q and Form 10-K, the Company shall use its reasonable best efforts to
promptly file such post-effective amendment and may postpone or suspend
effectiveness of such Registration Statement for a period not to exceed thirty
(30) consecutive days to the extent the Company determines necessary to comply
with applicable securities laws; provided, that the period by which the
Company postpones or suspends the effectiveness of a shelf Registration
Statement pursuant to this Section 2(l) plus any suspension, deferral or delay
pursuant to Section 2(e)(iii) shall not exceed 60 days in the aggregate in any
twelve-month period.

 

SECTION 3.  MISCELLANEOUS

 

(a)                                 Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State without regard to
conflicts of law principles.

 

(b)                                 Section Headings.  The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.

 

(c)                                  Notices.

 

(i)                                     All
communications under this Agreement shall be in writing and shall be delivered
by hand or facsimile or mailed by overnight courier:

 

(1)                                 if to the
Company, to:

The Howard Hughes Corporation

13355 Noel Road, Suite 950

Dallas, TX 75240

Attention:  General Counsel

Fax:  (214) 741-3021

 

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

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention:  Malcolm E. Landau, Esq.

 

19

 

Matthew D. Bloch, Esq.

Facsimile: (212) 310-8007

 

(2)                                 if to the
Holders, at the address or facsimile number listed on Schedule I hereto, or at
such other address or facsimile number as may have been furnished to the
Company in writing.

 

(ii)                                  Any notice so
addressed shall be deemed to be given: if delivered by hand or facsimile, on
the date of such delivery; and if mailed by overnight courier, on the first
business day following the date of such mailing.

 

(d)                                 Reproduction of Documents.  This Agreement and all documents relating
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by the Holders by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and the Holders may destroy any original document so
reproduced.  The parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made by
the Holders in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.

 

(e)                                  Successors and Assigns.  Neither this Agreement nor any right or
obligation hereunder may be assigned in whole or in part by any party without
the prior written consent of the other parties hereto and any purported
assignment in violation of this provision shall be void; provided, however,
that the rights and obligations hereunder of any Investor may be assigned, in
whole or in part, to any Person who acquires such Registrable Securities that (i)
is a member of the Purchaser Group, (ii) is an Affiliate of any Initial
Investor or (iii) is unable to immediately sell, without limitations
(including, but not limited to, any limitation on volume or manner of sale) or
restrictions under Rule 144, all Registrable Securities and other shares of
Common Stock held by such Person (provided, that for this clause (iii),
any such rights and obligations may be assigned solely with respect to such
Registrable Securities) (each such Person described in clauses (i), (ii) or
(iii), a “Permitted Assignee”). 
Any assignment pursuant to this Section 3(e) shall be effective and any
Person shall become a Permitted Assignee only upon receipt by the Company of (1)
a written notice from the transferring Holder stating the name and address of
the transferee and identifying the number of shares of Registrable Securities
with respect to which the rights under this Agreement are being transferred
and, if fewer than all of the rights attributable to a Holder hereunder are to
be so transferred, the nature of the rights so transferred and (2) a written
instrument by which the transferee agrees to be bound by all of the terms and
conditions applicable to a Holder of such Registrable Securities.  Subject to the foregoing, this Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties.

 

(f)                                   Several Nature of
Commitments.  The
obligations of each Holder hereunder are several and not joint and several, and
relate only to the Registrable Securities held 

 

20

 

by such Holder from time to time.  No Holder shall bear responsibility to the
Company for breach of this Agreement or any information provided by any other
Holder.

 

(g)                                  Additional Investors.  The parties hereto acknowledge that certain
Persons may become stockholders of the Company and the Company may wish to
grant such Persons registration rights with respect to the shares of Common
Stock issued to such Persons.  The
Company may do so in its discretion so long as such registration rights are not
inconsistent with the registration rights granted to the Holders hereunder and,
if any registrations rights granted are more favorable than those provided to
Holders of Common Stock hereunder, conforming changes reasonably acceptable to
the Purchasers are made to this Agreement to provide Holders hereunder with
substantially similar rights.

 

(h)                                 Entire Agreement; Amendment
and Waiver.  This
Agreement constitutes the entire understanding of the parties hereto relating
to the subject matter hereof and supersedes all prior understandings among such
parties.  This Agreement may be amended
with (and only with) the written consent of the Company and the Holders holding
a majority of the then outstanding Registrable Securities and any such amendment
shall apply to all Holders and all of their Registrable Securities; provided,
that, notwithstanding the foregoing, additional Holders may become party hereto
upon an assignment of rights and obligations hereunder pursuant to Section 3(e);
provided  further, however, that other than as set forth in
Section 3(e), the Company may not add additional parties hereto without the
consent of Holders holding a majority of the then outstanding Registrable
Securities.  The observance of any term
of this Agreement may be waived by the party or parties waiving any rights
hereunder; provided, that any such waiver shall apply to all Holders and
all of their Registrable Securities only if made by Holders holding a majority
of then-outstanding Registrable Securities.

 

(i)                                     Injunctive Relief.  It is hereby agreed and acknowledged that it
will be impossible to measure in money the damage that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law.  Any such Person shall, therefore, be entitled
(in addition to any other remedy to which it may be entitled in law or in
equity) to injunctive relief, including specific performance, to enforce such
obligations, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.

 

(j)                                    WAIVER OF JURY
TRIAL.  EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY ACTIONS, SUITS, DEMAND LETTERS, JUDICIAL, ADMINISTRATIVE OR
REGULATORY PROCEEDINGS, OR HEARINGS, NOTICES OF VIOLATION OR INVESTIGATIONS
ARISING OUT OF OR RELATING TO THIS AGREEMENT. 
EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) SUCH
PARTY HAS

 

21

 

CONSIDERED
THE IMPLICATIONS OF THIS WAIVER AND (B) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY.

 

(k)                                 No Inconsistent Agreements.  The Company is not currently a party to any
agreement which is, or could be inconsistent with, the rights granted to the
Holders by this Agreement.

 

(l)                                     Severability.  In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not affect the
remaining provisions of this Agreement which shall remain in full force and
effect.

 

(m)                             Counterparts.  This Agreement may be executed in two or more
counterparts (including by email or facsimile signature), each of which shall
be deemed an original and all of which together shall be considered one and the
same agreement.

 

(n)                                 Interpretation of this
Agreement.  Where any
provision in this Agreement refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

 

[Remainder of Page Intentionally Left Blank]

 

22

 

IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date first set forth above.

 

	
   

  	
   

  	
  THE HOWARD HUGHES CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fairholme
  Funds, Inc.

  	
   

  	
   

  
	
  On
  behalf of its series The Fairholme Fund

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name: Bruce R. Berkowitz

  	
   

  	
   

  
	
  Title: President

  	
   

  	
   

  
					

 

	
  Fairholme
  Funds, Inc.

  	
   

  	
   

  
	
  On
  behalf of its series Fairholme Focused Income Fund

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name: Bruce R. Berkowitz

  	
   

  	
   

  
	
  Title: President

  	
   

  	
   

  
				

 

 

Schedule I

 

The
Fairholme Fund, a series of Fairholme Funds, Inc.

Fairholme
Focused Income Fund, a series of Fairholme Funds, Inc.

 

Notice to any Purchaser set forth above
(which shall constitute notice to each Purchaser set forth above) shall be made
to:

 

Fairholme Capital Management, LLC

4400 Biscayne Boulevard, 9th Floor

Miami, FL 33137

Attention: Charles M. Fernandez

Facsimile: (305) 358-8002

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