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  Exhibit 10.7    
    

February 4, 2014

Brookfield
Property Partners L.P.

Brookfield Place

181 Bay Street, Suite 300

Toronto Ontario M5J 2T3 

Attention:
John Stinebaugh 

 
 

Commitment Letter    
    

Ladies
and Gentlemen: 

	1.
	TD Securities,
Canadian Imperial Bank of Commerce, Citigroup Global Markets Inc.,(1) Deutsche Bank Securities Inc., HSBC
Bank Canada and RBC Capital Markets,(2) (collectively, the "Co-Lead Arrangers", and each, a "Co-Lead
Arranger"), each acting alone or through or with affiliates selected by it, is pleased to advise Brookfield Property Partners L.P.
("BPY") together with certain other subsidiaries of BPY (collectively, the "Borrower Group") of
arrangements under which (i) each Co-Lead Arranger is exclusively authorized by the Borrower Group to act as Co-Lead Arranger and Joint Bookrunner in connection with the Credit Facilities
described herein, (ii) The Toronto-Dominion Bank will act as the sole Administrative Agent (the "Agent") for the Credit Facilities
described herein, (iii) Canadian Imperial Bank of Commerce, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Bank Canada and RBC Capital Markets will act as the
Syndication Agents, and (iv) each of the six undersigned affiliates of the Co-Lead Arrangers (the "Banks") severally but not jointly
commits to provide the Credit Facilities described herein and to be made available to the Borrower Group upon the terms and subject to the conditions set forth or referred to in this commitment letter
(the "Commitment Letter") and the Summary of Terms and Conditions attached hereto as Exhibit A (the "Term
Sheet"). Capitalized terms used herein without express definition shall have the same meaning as are assigned to them in the Term Sheet. All amounts referred to herein and in
the Term Sheet unless otherwise specified are in US Dollars. 

In
consideration of the foregoing commitments of the Banks and the Co-Lead Arrangers' agreement to perform the services described herein, BPY hereby covenants to perform and agrees with the provisions
of this Commitment Letter as set forth below.  

	2.
	The
Co-Lead Arrangers have been informed that the BPY, Brookfield Property Split Corp. and/or Brookfield Office Properties Exchange LP (collectively,
the "Offerors") intend to make an offer (the "Offer") to acquire any or all of the issued and
outstanding common shares of Brookfield Office Properties Inc. ("BPO") for a combination of cash and units of BPY (or Brookfield Office
Properties Exchange LP) pursuant to a take-over bid and compulsory acquisition or similar squeeze-out transaction on the terms set forth in more detail in an offering circular, the most current
draft of which has been provided to the Co-Lead Arrangers and filed with the SEC on February 4, 2014 (the "Offering Circular").

	3.
	The
Offer, any Compulsory Acquisition (as defined in the Offering Circular), any Subsequent Acquisition Transaction (as defined in the Offering
Circular), the refinancing of existing indebtedness of the Borrower Group, the payment of fees, commissions and expenses relating to the foregoing transactions and the other transactions contemplated
hereby and related working capital requirements of the Borrower Group will be financed by a $1,500,000,000 non-revolving Acquisition Facility and a $1,000,000,000 Revolving Facility (together, the
"Credit Facilities") as described more fully in the Term Sheet. 

  

   

 

 	(1)
	For
the purposes of this Commitment Letter, Citigroup Global Markets Inc. is acting on behalf of itself, Citicorp North America, Inc. or such
of our other lending affiliates as such entities may deem appropriate.

	(2)
	RBC
Capital Markets is a brand name for the capital markets business of Royal Bank of Canada and its affiliates.

Page 1

 
	4.
	Each
of the Banks is pleased to commit to provide an equal portion of the total amount of the Credit Facilities; for clarity, each Bank's aggregate
commitment will be $416,666,666.67 (allocated $250,000,000.00 to the Acquisition Facility and $166,666,666.67 to the Revolving Facility). Without the prior written approval of all of the Co-Lead
Arrangers, no other agents, co-agents or arrangers will be appointed, no other titles will be awarded (including as between the Co-Lead Arrangers and/or the Banks themselves), and such appointment or
title shall not entail any role with respect to the matters referred to in this paragraph. In addition, no compensation (other than that expressly contemplated by the Term Sheet and the Fees
Arrangement as defined below) will be paid in connection with the Credit Facilities, and you agree that no Lender as defined below, without the consent of the Co-Lead Arrangers, will receive
compensation outside the terms contained in this Commitment Letter, the Term Sheet or in the Fees Arrangement in order to obtain its commitment to participate in the Credit Facilities.

	5.
	The
Co-Lead Arrangers intend to syndicate a portion of the Credit Facilities to a group of bank lenders (together with the Co-Lead Arrangers, the
"Lenders") identified by the Co-Lead Arrangers in consultation with BPY. BPY agrees to actively assist the Co-Lead Arrangers in completing a Successful
Syndication (as defined in the Fees Arrangement). Such assistance shall include: (a) BPY using commercially reasonable efforts to ensure that the syndication efforts benefit materially
from the Borrower Group's existing lending and investment banking relationships; (b) direct contact between senior management and advisors of the Borrower Group and the proposed Lenders;
(c) assistance in the preparation of a Confidential Information Memorandum and other marketing materials to be used in connection with the syndication; and (d) the hosting, with the
Co-Lead Arrangers, of one or more meetings of prospective Lenders; in each case, if required. The Co-Lead Arrangers intend to commence syndication efforts to a group of institutions promptly upon the
execution of this Commitment Letter, but in no event later than January 31. If general syndication has not commenced by this date due to the Borrower's failure to perform its obligations under
either of paragraphs 5 or 7, the Co-Lead Arrangers shall have the option of rescinding their commitment hereunder.

	6.
	The
Co-Lead Arrangers will manage all aspects of the syndication upon consultation with BPY, including decisions as to selection of institutions to be
approached and when they will be approached, when their commitments will be accepted, which Lenders will participate, the allocations of the commitments among the Lenders and the amount and
distribution of fees among the Lenders. In acting as the Co-Lead Arrangers, the Co-Lead Arrangers will have no responsibility other than to arrange syndication as set forth herein and shall in no
event be subject to fiduciary or other implied duties.

	7.
	To
assist the Co-Lead Arrangers in their syndication efforts, BPY agrees promptly to prepare and provide to the Co-Lead Arrangers all information with
respect to the Borrower Group, BPO and the Offer that they reasonably request in connection with the arrangement and syndication of the Credit Facilities, including all financial information and
projections (the "Projections"). BPY hereby represents, warrants, and covenants that (a) all information other than the Projections
(the "Information") that has been or will be made available to the Co-Lead Arrangers by the Borrower Group or any of their affiliates, advisors
or representatives in connection with the Credit Facilities is or will be, when furnished, true, accurate, and complete in all material respects and does not or will not, when furnished, contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which
such statements are made; and (b) the Projections that have been or will be made available to the Co-Lead Arrangers by the Borrower Group or any of their affiliates, advisors or representatives
have been or will be prepared in good faith based upon assumptions believed by them to be reasonable. BPY agrees to supplement the Information and Projections from time to time during the syndication
period so that the representations and warranties in this paragraph remain true and correct. The Borrower understands that in arranging and syndicating the Credit Facilities the Co-Lead Arrangers will
use and rely on the Information and Projections without independent verification thereof.

	8.
	As
consideration for the commitments hereunder and Co-Lead Arrangers' agreement to perform the services described herein, BPY agrees to pay to the Banks the
non-refundable fees at the times and in the amounts specified pursuant to the Fees Arrangement, and fulfill the other obligations set forth in 

Page 2

 

the
Fees Arrangement. "Fees Arrangement" is defined as the fee letter dated the date hereof between the Banks and BPY and any separate agency fee letter between the Agent and BPY. 

	9.
	The
Banks' commitments hereunder and the Co-Lead Arrangers' agreement to perform the services described herein are subject to (a) the conditions set
out and or referred to in the Term Sheet; (b) the payment of all fees contemplated by the Fees Arrangement; (c) the Banks not becoming aware after the date hereof of any information or
other matter (including any matter relating to financial models and underlying assumptions related to the Projections) affecting the Borrower Group or BPO that is inconsistent in a material and
adverse manner with any Information disclosed to the Banks prior to the date hereof; and (d) the Co-Lead Arrangers' satisfaction that prior to and during the syndication of the Credit
Facilities there shall be no competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of BPY or any member of the Borrower Group without the prior consent
of all of the Co-Lead Arrangers (failing which the commitments hereunder may be terminated).

	10.
	This
Commitment Letter shall terminate on the earlier of: (i) 120 days from the date hereof, in the event that the execution and delivery of a
definitive credit agreement (the "Credit Agreement") in a form acceptable to the Agent, the Banks the Lenders and the Borrower Group, each acting
reasonably, has not occurred by such date; (ii) the withdrawal of the Offer; (iii) the occurrence of any other event or circumstance that makes it impossible for the Offerors to complete
the acquisition of any BPO common shares pursuant to the Offer; or (iv) a material breach by BPY of any term of this Commitment Letter. In addition to other termination rights herein, the
commitment set forth in this letter may also be terminated upon written notice (i) by the Borrower at any time upon payment of all fees payable pursuant to the Fees Arrangement, and all fees,
expenses and other amounts then payable under this Commitment Letter and (ii) by the Banks if any event occurs or information becomes available that in the Banks' reasonable judgment results or
would result in the failure to satisfy any condition set forth in or referred to in Section 9 of this Commitment Letter. Sections 11 and 12 shall survive any such termination.

	11.
	BPY
agrees to indemnify and hold harmless the Agent, the Co-Lead Arrangers, the Banks and their respective and shareholders, officers, directors, employees,
advisors, and agents (each, an "indemnified person") from and against any and all losses, claims, damages, liabilities, and expenses to which any such
indemnified person may become subject or may incur arising out of or in connection with this Commitment Letter, the Credit Facilities, the use of the proceeds thereof, or any claim, litigation,
investigation or proceeding relating to any of the foregoing, regardless of whether any indemnified person is a party thereto, and to reimburse each indemnified person upon demand for any legal or
other expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing indemnity will not, as to an indemnified person, apply to losses, claims,
damages, liabilities or related expenses to the extent they are found by a final, non-appealable judgement of a court to arise directly from the willful misconduct or gross negligence of such
indemnified person. BPY agrees not to assert any claim against any indemnified person for consequential, punitive, or exemplary damages or damages of any other kind or any other form of monetary
remedy or other relief, including equitable relief, in connection in any way with the transactions described in or contemplated by this Commitment Letter, except to the extent such claim is found by a
final, non-appealable judgement of a court to arise directly from the willful misconduct or gross negligence of such indemnified person. No indemnified person shall be liable for any damages arising
from the use by unauthorized persons of Information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such unauthorized
persons or for any special, indirect, consequential or punitive damages in connection with the Credit Facilities.

	12.
	BPY
agrees to reimburse the Agent, the Co-Lead Arrangers, the Banks and their affiliates on demand for all out-of-pocket expenses including due diligence
expenses, syndication expenses (including printing, distribution whether by electronic means such as IntraLinks, with a third party distributor, or otherwise, and bank meetings), consultant's fees and
expenses, travel expenses and reasonable fees, charges and disbursements of counsel incurred in connection with the Credit Facilities and any related documentation (including this Commitment Letter,
the Term Sheet, the Fees Arrangement and the Credit Agreement) or the administration, amendment, modification or waiver thereof. 

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	13.
	BPY
acknowledges that the Agent, the Co-Lead Arrangers, the Banks and their affiliates may be providing debt financing, equity capital or other services
(including, without limitation, financial advisory services) to other persons in respect of which the Borrower Group may have conflicting interests regarding the Credit Facilities and otherwise. No
such party will use confidential information obtained from the Borrower Group by virtue of the Credit Facilities or its other relationships with the Borrower Group in connection with the performance
by such parties of services for other persons, and no such party will furnish any such information to other persons. BPY also acknowledges that the Agent, the Co-Lead Arrangers and the Banks have no
obligation to use in connection with the Credit Facilities, or to furnish to the Borrower Group, confidential information obtained from other persons.

	14.
	This
Commitment Letter shall not be assignable by BPY without the prior written consent of all of the Banks (and any purported assignment without
such consent shall be null and void), is intended to be solely for the benefit of BPY and the other members of the Borrower Group and is not intended to confer any benefits upon, or create any rights
in favour of, any person other than the parties hereto and the indemnified persons. This Commitment Letter and any of its provisions may not be amended nor waived except by an instrument in writing
signed by all of the Banks and BPY. BPY, by executing a counterparty hereof, agrees to bind the members of the Borrower Group to all of the covenants, agreements and matters contained herein in the
same manner in which BPY is bound, as if such Borrower Group members were a party hereto. Any matters that are not covered or made clear herein, in the Fees Arrangements, the Term Sheet or the Credit
Agreement are subject to the mutual agreement of the parties. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile transmission or by e-mail in pdf format shall be effective as delivery of a
manually executed counterpart hereof. This Commitment Letter and the documents, letters and agreements included in the Fees Arrangement are the only agreements that have been entered into with respect
to the Credit Facilities and set forth the entire understanding of the parties with respect thereto.

	15.
	This
Commitment Letter shall be governed by, and construed in accordance with, the laws of the Province of Ontario, including the federal laws
of Canada.

	16.
	This
Commitment Letter is delivered to BPY on the understanding that neither this Commitment Letter (including, for greater certainty, the Term Sheet or the
Fees Arrangement) nor any of its terms or substance shall be disclosed, directly or indirectly, to any other person except (a) to the Borrower Group's affiliates, directors, officers, agents
and advisors who are directly involved in the consideration of this matter and who have been informed of the confidential nature thereof and who have agreed to hold the same in confidence;
(b) as may be compelled in a judicial or administrative proceeding or as otherwise required by law (in which case BPY agrees to inform the Agent and the Banks promptly thereof);
(c) subject to prior consultation with the Banks, the disclosure pursuant to the Offering Circular or required in connection with a Compulsory Acquisition Transaction or Subsequent Acquisition
Transaction; and (d) the disclosure to BPO and its affiliates, directors, officers, agents and advisors on a need-to-know basis in connection with the Offer and who have been informed of the
confidential nature thereof and who have agreed to hold same in confidence. BPY agrees to permit the Agent and the Banks to review and approve any reference to the Agent, the Co-Lead Arrangers, the
Banks or any description of the Credit Facilities contained in any press release or other public disclosure prior to public release. The Agent, Co-Lead Arrangers and the Banks agree that all
disclosure provided for in the Offering Circular has been approved by them.

	17.
	Upon
the execution of this Commitment Letter by the Borrower, and subject to closing of the Credit Facilities, the Agent, the Co-Lead Arrangers and the
Banks may, without the consent of the Borrower, disclose the relevant deal characteristics relating to this Commitment (including the names of the Borrower Group to the Loan Pricing Corporation
(or successors thereof), and similar recognized bank loan information services so long as all information that is so disclosed is true and accurate. Further the Agent, the Co-Lead Arrangers and
the Banks shall be permitted to use information related to the syndication and arrangement of the Credit Facilities in connection with marketing, press releases or 

Page 4

 

other
transactional announcements or updates subject to confidentiality obligations or disclosure restrictions reasonably requested by you.  

	18.
	Unless
otherwise expressly agreed in writing by the Agent and the Banks, the provisions contained herein and in the Fees Arrangement shall remain in full
force and effect notwithstanding the termination of this Commitment Letter or the commitments hereunder, but shall be superseded by the applicable provisions of the Credit Agreement upon the execution
thereof; provided that Sections 4, 5, 6, 7, 8, 16, 17 and 20, together with the Fees Arrangement, shall survive the execution and delivery of the Credit Agreement.

	19.
	Each
of the Agent and the Banks hereby notifies BPY that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56) signed into law
October 26, 2001 (the "Patriot Act"), each of the Agent and the Banks may be required to obtain and verify and record information that identifies the Borrower Group, which information
includes the name and address of each member of the Borrower Group and other information that will allow each of the Agent and the Banks to identify each member of the Borrower Group in accordance
with the Patriot Act.

	20.
	All
amounts payable hereunder (and under the Fees Arrangement) shall be paid without any deduction or withholding for or on account of tax
(a "Tax Deduction") unless a Tax Deduction is required by law, including without limitation FACTA. If a Tax Deduction is required by law to be
made, the amount of the payment due shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been
required. For the purposes hereof, "FACTA" shall refer to Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended from
time to time (or any amended or successor version that is substantively comparable) and any current or future regulations or official interpretations thereof.

	21.
	If
the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof and of the Term Sheet and the Fees Arrangement by
returning to the Agent and the Banks executed counterparts hereof and of the Fees Arrangement, not later than 12:00 noon Toronto time, on February 5, 2014. The Banks' offer expressed
herein will expire at such time in the event the Banks have not received such executed counterparts and such amount in accordance with the immediately preceding sentence. 

        We
are pleased to have been given the opportunity to assist you in connection with this financing. 

Page 5

Yours
truly, 

 

					
	 THE TORONTO-DOMINION BANK, as Agent	 	 
	
 By:	
 	
/s/ KEN MCKINNON

 	
 	

 
	 	 	Name: Ken McKinnon	 	 
	 	 	Title:  Vice President & Director	 	 
	
 By:	
 	
/s/ BRENDON D'MELLO

 	
 	

 
	 	 	Name: Brendon D'Mello	 	 
	 	 	Title:  Vice President	 	 
	
 THE TORONTO-DOMINION BANK	
 	

 
	
 By:	
 	
/s/ BRENDON D'MELLO

 	
 	

 
	 	 	Name: Brendon D'Mello	 	 
	 	 	Title:  Vice President	 	 
	
 By:	
 	
/s/ KEN MCKINNON

 	
 	

 
	 	 	Name: Ken McKinnon	 	 
	 	 	Title:  Vice President & Director	 	 
	
 CANADIAN IMPERIAL BANK OF COMMERCE	
 	

 
	
 By:	
 	
/s/ MEDAYAT NASOODY

 	
 	

 
	 	 	Name: Medayat Nasoody	 	 
	 	 	Title:  Director	 	 
	
 By:	
 	
/s/ JACQUELINE ORENSTEIN

 	
 	

 
	 	 	Name: Jacqueline Orenstein	 	 
	 	 	Title:  Executive Director	 	 

 

  

[Signature
Page to Commitment Letter] 

 

					
	 CITIBANK N.A.	 	 
	
 By:	
 	
/s/ DAVID BOUTON

 	
 	

 
	 	 	Name: David Bouton	 	 
	 	 	Title:  Managing Director	 	 
	
 By:	
 	
 

 	
 	

 
	 	 	Name:	 	 
	 	 	Title:  	 	 
	
 DEUTSCHE BANK AG, New York Branch	
 	

 
	
 By:	
 	
/s/ JOANNA SOLIMAN

 	
 	

 
	 	 	Name: Joanna Soliman	 	 
	 	 	Title:  Vice President	 	 
	
 By:	
 	
/s/ J.T. JOHNSON COE

 	
 	

 
	 	 	Name: J.T. Johnson Coe	 	 
	 	 	Title:  Managing Director	 	 
	
 HSBC BANK CANADA	
 	

 
	
 By:	
 	
/s/ CASEY COATES

 	
 	

 
	 	 	Name: Casey Coates	 	 
	 	 	Title:  Director, Global Banking	 	 
	
 By:	
 	
/s/ JEFFREY B. ALLSAP

 	
 	

 
	 	 	Name: Jeffrey B. Allsap	 	 
	 	 	Title:  EVP & Managing Director

             Head of Global Banking, Canada

	 	 

 

  

[Signature
Page to Commitment Letter] 

 

					
	 ROYAL BANK OF CANADA	 	 
	
 By:	
 	
/s/ JOSHUA FREEDMAN

 	
 	

 
	 	 	Name: Joshua Freedman	 	 
	 	 	Title:  Authorized Signatory	 	 
	
 By:	
 	
  

 	
 	

 
	 	 	Name:	 	 
	 	 	Title:  	 	 

 

  

[Signature
Page to Commitment Letter] 

Acknowledged
and Agreed to this              day of
                                    , 2014.
 

 

 

					
	 BROOKFIELD PROPERTY PARTNERS L.P.,

by its General Partner BROOKFIELD

PROPERTY PARTNERS LTD. 	 	 
	
 By:	
 	
/s/ JOHN STINEBAUGH

 	
 	

 
	 	 	Name: John Stinebaugh	 	 
	 	 	Title:  	 	 
	
 By:	
 	
 

 	
 	

 
	 	 	Name:	 	 
	 	 	Title:  	 	 

 

  

[Signature
Page to Commitment Letter] 

 

 
 

  EXHIBIT A
  
    SUMMARY OF TERMS AND CONDITIONS    
    

        This Summary of Terms and Conditions ("Summary") is a summary
only and not an exhaustive description of the terms and conditions that will be contained in the Credit Agreement between the Borrowers, the Guarantors, The Toronto-Dominion Bank as administrative
agent and issuing bank, the co-lead arrangers and other lenders party thereto. In the event of a conflict or inconsistency between this Summary and the Credit Agreement, the latter
shall govern.

        Capitalized terms used herein and not otherwise defined have the meanings ascribed to such terms in the Commitment Letter dated as of February 4, 2014, to
which this Summary is attached (the "Commitment Letter"). All amounts are in U.S. dollars unless otherwise noted.

 

  

			
	 Borrowers:
	 	  BPY Bermuda Holdings Limited

	 
	 	 BPY Bermuda Holdings II Limited
	 
	 	 Brookfield BPY Holdings Inc.
	 
	 	 Brookfield BPY Retail Holdings II Inc.
	 
	 	  – and –

	 
	 	  Brookfield BPY Property Holdings I LLC, Brookfield BPY Property Holdings II LLC, Brookfield BPY Retail Holdings
I LLC, Brookfield BPY Retail Holdings II LLC, Brookfield BPY Retail Holdings III LLC, Brookfield Property Split Corp, Brookfield BPY Finco ULC, Brookfield Office Properties Exchange LP and other subsidiaries of the Guarantors
as are designated as borrowers (subject to any of these persons being subsequently removed as borrowers in accordance with the Credit Agreement)

	 Guarantors:
	 	  Brookfield Property Partners L.P. ("BPY")

	 
	 	 Brookfield Property L.P. ("BPY Holding LP")
	 Co-Lead Arrangers and Joint Bookrunners:
	 	  TD Securities; Canadian Imperial Bank of Commerce; Citigroup Global Markets Inc.; Deutsche Bank Securities Inc.;
HSBC Bank Canada; and RBC Capital Markets

	 Administrative Agent:
	 	  The Toronto-Dominion Bank

	 Syndication Agents:
	 	  Canadian Imperial Bank of Commerce; Citigroup Global Markets Inc.; Deutsche Bank Securities Inc.; HSBC Bank Canada;
and RBC Capital Markets

	 Issuing Bank:
	 	  The Toronto-Dominion Bank

	 Lenders:
	 	  The Banks and other lenders to be determined

	 Closing date:
	 	  Date of signing of the Credit Agreement (defined below), anticipated to be concurrent with 1st drawdown on
Acquisition Facility.

	 Facilities:
	 	  (a)   a $1,000,000,000 two-year revolving credit facility (the "Revolving
Facility"); and

	 
	 	  (b)   a $1,500,000,000 two-year non-revolving term loan (the "Acquisition
Facility" and together with the Revolving Facility, the "Credit Facilities").

	 Purpose:
	 	  Acquisition Facility: To fund the acquisition by the Offerors of the Offer, and the acquisition or redemption of BPO common
shares pursuant to a "Compulsory Acquisition" or "Subsequent Acquisition Transaction" (each as defined in the Offering Circular).

 

 

 
 

  

			
	 
	 	  Revolving Facility: To (i) partially fund the acquisition or redemption of BPO common shares up to a limit of $365,508,000 and
(ii) for general corporate purposes including ongoing operating and working capital requirements and replacement of Borrowers' existing bilateral facilities; provided, that any advance used to fund
the acquisition or redemption of BPO common shares may only be made after the Acquisition Facility is fully drawn.

	 Maturity Date:
	 	  (a)   Revolving Facility: repayable in full on the date that is 2 years from the Closing Date (subject to a
one year extension below); and

	 
	 	  (b)   Acquisition Facility: repayable in full on the date that is 2 years from the Closing Date (subject to
a one year extension below).

	 
	 	  No earlier than 60 days and no later than 30 days prior to the date that is 2 years from the Closing Date, the
Borrowers may in their sole discretion without Lender consent, subject to (a) no Default or Event of Default existing and (b) all representations and warranties being true and correct in all material respects, extend the final Maturity Date
for one year, subject to payment of a 25 bps extension fee on the size of the Credit Facilities.

	 Amortization:
	 	  The Acquisition Facility must be reduced to $500,000,000 or less at the end of year 2 and cannot be re-borrowed. Reduction must
occur for one year extension to be possible.

	 Availability:
	 	  (a)   Revolving Facility: available on a revolving basis from and after the Closing Date until the Maturity Date
and any amount repaid or prepaid may be re-borrowed.

	 
	 	  (b)   Acquisition Facility: available from and after the Closing Date by way of multiple drawdowns and any
undrawn amounts shall terminate on the earlier of (i) the withdrawal of the Offer by the Offerors, (ii) the occurrence of any other event of circumstances that makes it impossible for the Offerors to complete the acquisition of any BPO
common shares pursuant to the Offer, (iii) the date on which BPY and BPY Holding LP own, directly or indirectly, 100% of the outstanding common shares of BPO; and (iv) September 30, 2014.

	 Types of Accommodations:
	 	  (a)   Revolving Facility will be available: (a) in U.S. dollars by way of base rate advances and LIBOR
advances, and (b) by way of Letters of Credit (as defined below) with a face amount in U.S. dollars.

	 
	 	  (b)   Acquisition Facility will be available in U.S. dollars by way of base rate advances and LIBOR
advances.

	 Letters of Credit:
	 	  An aggregate amount of up to $100 million of the Revolving Facility shall be available to the Borrowers for the issuance of
letters of credit (collectively, "Letters of Credit" or "LCs") by the Issuing Bank. No Letter of Credit shall have an expiration date after one year after
the date of issuance.

	 Applicable Margins/Fees: Revolving Facility and Acquisition Facility:
	 	  Outstanding advances under the Revolving Facility and the Acquisition Facility shall bear issuance fees or interest, as
applicable, at the specified rates plus an applicable margin then in effect as follows:

 

   
  

 

  

							
	 
	 	BASE RATE LOANS 	 	LIBOR LOANS/

LC FEES 	 	STANDBY FEE 
	 
	 	 1.25%	 	 2.25%	 	 0.45%

 

 2

 
 

  

			
	 
	 	  The standby fee (the "Standby Fee") will be payable quarterly in arrears on
the unused balance of both the Revolving Facility and the Acquisition Facility.

	 Letter of Credit Fees:
	 	  Payable quarterly in arrears.

	 Voluntary Prepayment/Reduction of Commitments:
	 	  The Borrower may voluntarily prepay the Credit Facilities at any time in whole or in part, without premium or penalty, in
minimum amounts of $1,000,000 on provision of one banking day's prior written notice and subject, in the case of LIBOR advances, to applicable breakage costs. Such cancellations shall constitute permanent reductions in the case of the Acquisition
Facility.

	 Mandatory Prepayments:
	 	  Subject to the paragraph below, the Borrowers shall make mandatory prepayments of the Acquisition Facility from net asset sale
proceeds or net proceeds of indebtedness incurred by BPO that in each case are received by a Restricted Entity or BPY Subsidiary ("Net Available Proceeds") in excess of $5,000,000 per transaction and
$50,000,000 in the aggregate for all transactions during the term of the Acquisition Facility ("Excess Net Available Proceeds") by an amount equal to the following percentage of such Excess Net Available
Proceeds:

	

 	
 	
 (a)   if borrowings outstanding under the Acquisition Facility 3 $1,000,000,000 = 100%;
	

 	
 	
 (b)   if borrowings outstanding under the Acquisition Facility < $1,000,000,000 but 3 $500,000,000 = 662/3%;
	

 	
 	
 (c)   if borrowings outstanding under the Acquisition Facility < $500,000,000 = 50%; and
	

 	
 	
 (d)   with respect to Excess Net Available Proceeds from any disposition of BPO shares or shares of General Growth Properties Inc. ("GGP") =
100% regardless of outstanding borrowings.
	

 	
 	
 To the extent Excess Net Available Proceeds are not required to repay the Acquisition Facility and an equivalent amount is not reinvested in the business of the Restricted Entities or BPY Subsidiaries within six
months, the Borrowers will repay the Acquisition Facility by an amount equal to such Net Available Proceeds that were not reinvested within 15 days of the expiry of such six month period.
	

 	
 	
 "BPO Holding Company" means, as at the relevant time, any BPY Subsidiary which (i) directly or indirectly owns equity securities of BPO (or the successor to
all or substantially all of the assets of BPO, if any) at such time and such equity securities represent more than 50% of the total assets of such BPY Subsidiary at such time determined on a consolidated basis in accordance with GAAP, or
(ii) directly or indirectly owns more than 2% of the issued and outstanding equity securities of BPO (or the successor to all or substantially all of the assets of BPO, if any), or (iii) is otherwise a primary holding company or member
of a group of primary holding companies for BPY's consolidated interest in BPO (or any successor to all or substantially all of the assets of BPO, if any).
	

 	
 	
 "BPY Subsidiary" means any subsidiary of BPY or BPY Holding LP.

 

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	 	 	 "First Tier Holding Companies" means BPY Bermuda Holdings Limited, BPY Bermuda Holdings II Limited, Brookfield BPY Holdings Inc. and Brookfield BPY Retail Holdings
II Inc. or any successor entity to any of them in the BPY structure.
	

 	
 	
 "GGP Holding Company" means, as at the relevant time, any BPY Subsidiary which (i) directly or indirectly owns equity securities of GGP at such time and such equity
securities represent more than 50% of the total assets of such subsidiary at such time determined on a consolidated basis in accordance with GAAP, (ii) directly or indirectly owns more than 5% of the issued and outstanding Equity Securities of
GGP or (iii) is otherwise a primary holding company or member of a group of primary holding companies for BPY's consolidated interest in GGP.
	

 	
 	
 "Obligors" means the Borrowers and the Guarantors.
	

 	
 	
 "Restricted Entities" means the Obligors, BPO Holding Companies, GGP Holding Companies and any other holding company formed in compliance with the Credit Agreement and
that sits between BPY and the First Tier Holding Companies existing at such date.
	 Documentation:
	 	  The Credit Facilities will be evidenced by the Credit Agreement.

	 Conditions Precedent to Effectiveness:
	 	  The effectiveness of the Credit Facilities will be subject to certain customary conditions, including without limitation
satisfactory arrangements for the repayment and cancellation of the Borrowers' existing bilateral revolving credit facilities.

	 Conditions Precedent to Advances under Revolving Facility:
	 	  Advances under the Revolving Facility shall be subject to the conditions set forth in Appendix 1 hereto.

	 Conditions Precedent to Advances under Acquisition Facility:
	 	  Advances under the Acquisition Facility shall be subject to the conditions set forth in Appendix 1 hereto.

	 Representations & Warranties:
	 	  Customary representations and warranties to be included covering status and power, authorization and enforcement of Credit
Agreement, governmental approvals, no conflicts, financial statements, litigation, compliance with laws, taxes, disclosure, no encumbrances, money laundering laws, office of foreign assets control, insurance and environmental matters, subject to
materiality thresholds.

	 Financial Covenants
	 	  (a)   Required consolidated net worth covenant of greater than $5 billion plus percentage of $4 billion
reflecting amount of BPO common shares acquired in Offer;

	

 	
 	
 (b)   Maximum consolidated obligations to total consolidated capitalization of 0.70:1.00; and
	

 	
 	
 (c)   Minimum combined equity in GGP and BPO of $4,000,000,000, with covenant to fall away upon BPO Privatization Date.
	

 	
 	
 "BPO Privatization Date" means the first date (if any) on which BPY and BPY Holding LP directly or indirectly own 90% or more of the outstanding common shares
of BPO.

 

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	 Other Covenants:
	 	  Customary other covenants, including: reporting; existence, conduct of business; indebtedness; notice of material adverse change, negative
pledge on Restricted Entities and equal security; taxes; pensions; notice of default; use of proceeds; limitation on distributions; OFAC compliance; insurance; and conduct of Offer.

	

 	
 	
 Indebtedness covenant to permit the Restricted Entities to incur the following:
	 
	 	  a.     (i) indebtedness owed by one Restricted Entity to another Restricted Entity or to an Obligor or
by (ii) one Obligor to another Obligor;

	 
	 	  b.     subordinated debt that is owed to an affiliate of an Obligor (subject to a prescribed form of
subordination agreement);

	 
	 	  c.     indebtedness pursuant to the Credit Facilities;

	 
	 	  d.     indebtedness secured by Permitted Liens, provided that GGP and BPO interests are not
encumbered;

	 
	 	  e.     financial instrument obligations up to a limit to be agreed; and

	 
	 	  f.      an additional $10 million unsecured debt basket.

	

 	
 	
 "Permitted Liens" to consist of:
	

 	
 	
 (a)   customary purchase money liens and liens on after-acquired property;
	

 	
 	
 (b)   liens arising by operation of law;
	

 	
 	
 (c)   any other lien arising in connection with indebtedness if, after giving effect to such lien and any other lien created pursuant to this clause (c) and then existing, the aggregate
principal amount of Indebtedness secured by all liens created pursuant to this clause (c) would not exceed $10,000,000; and
	

 	
 	
 (d)   any extension, renewal, substitution or replacement (or successive extensions, renewals, substitutions or replacements), as a whole or in part, of any of the liens referred to in
paragraphs (a) and (b).
	

 	
 	
 Distributions covenant to limit the Restricted Entities from making (i) distributions during the continuance of a Default or Event of Default (subject to limited exceptions) and (ii) redemptions or
retractions of the existing preferred shares issued by Brookfield BPY Holdings Inc. (and any that replace them) unless made or satisfied with the issuance of equity securities or the proceeds thereof or the proceeds of subordinated
debt.
	 Events of Default:
	 	  Customary Events of Default to include:

	

 	
 	
 (a)   non-payment of principal, and non-payment of interest and other amounts after a 3 business day cure;
	

 	
 	
 (b)   breach of representation, warranty or covenant (subject to a 10 business day cure);
	

 	
 	
 (c)   insolvency of a Restricted Entity or, after the BPO Privatization Date, BPO;
	

 	
 	
 (d)   action, suit or proceeding resulting in a material adverse effect;
	

 	
 	
 (e)   seizure of assets in excess of $115,000,000;
	

 	
 	
 (f)    cross default to Restricted Entity debt of $50,000,000 or more;

 

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	 	 	 (g)   (i) prior to BPO Privatization Date, cross default to BPO and GGP debt in excess of $115,000,000 to apply only if market value of Borrower's interest in both BPO and GGP is less than $4 billion
plus a percentage of $4 billion reflecting amount of BPO common shares acquired in Offer; and (ii) after BPO Privatization Date, cross default to BPO debt alone in excess of $115,000,000 to apply regardless of market value;
	

 	
 	
 (h)   judgments in excess of $115,000,000;
	

 	
 	
 (i)    reorganization resulting in a material adverse effect;
	

 	
 	
 (j)    invalidity of Credit Agreement;
	

 	
 	
 (k)   material adverse change event of default in respect of BPY, only to apply after termination of unused Acquisition Facility commitments;
	

 	
 	
 (l)    Brookfield Asset Management Inc. and its affiliates ceasing to control the Obligors or ceasing to own at least 20% of the economic interests in BPY Holding LP (or its
successor in the structure); and
	

 	
 	
 (m)  BPY ceasing to be a publicly-traded company on a recognized stock exchange.
	 Indemnification:
	 	  Customary indemnities to be included.

	 Assignment:
	 	  Permitted, subject to the following:

	

 	
 	
 (a)   prior to an assignment by a Lender (i) the written consent of the Administrative Agent or the Issuing Bank, as applicable, must be obtained and (ii) in the absence of an event of
default, other than an assignment by a Lender to an affiliate, the Borrower's prior written consent must be obtained;
	

 	
 	
 (b)   the Administrative Agent is required to maintain documentation of assignments and a register of information on the Lenders and their respective commitments.
	

 	
 	
 The Agent shall receive in connection with each assignment, a processing and recording fee of $3,500 payable by the assignor.
	 Agency Provisions:
	 	  Consistent with other syndicated Brookfield credit facilities.

	 Required Lenders:
	 	  50.1%

	 Increased Costs

Taxes, etc.:
	 	  Customary provisions to be included

	 Expenses:
	 	  Customary indemnity for expenses of Agent and Lenders

	 Governing law:
	 	  Province of Ontario and laws of Canada applicable therein.

	 Administrative Agent and Lenders' Counsel:
	 	  Goodmans LLP

 

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  APPENDIX 1    
    
    CONDITIONS PRECEDENT    
    

 Conditions Precedent to Advances Under Revolving Facility  

        The obligation of the Lenders to extend credit by means of drawdown (including by issuance of a Letter of Credit), rollover or
conversion from one type of credit availment to another under the Revolving Facility is subject to the fulfilment of the following conditions precedent on the date such credit is extended or other
date as specified unless waived with the consent of the Lenders holding loans and unused commitments representing more than 662/3% of the total amount of loans and unused commitments at
such time (the "Supermajority Lenders"): 

	(a)
	the
Administrative Agent has received a borrowing notice;

	(b)
	with
respect to each drawdown being made under the Revolving Facility for purposes other than the funding of the acquisition or redemption of BPO shares
pursuant to the Offer, a Compulsory Acquisition or a Subsequent Acquisition Transaction, no default or Event of Default will have occurred and be continuing and no material adverse change shall have
occurred in respect of BPY;

	(c)
	with
respect to each drawdown being made under the Revolving Facility for the purpose of funding the acquisition or redemption of BPO shares pursuant to the
Offer, a Compulsory Acquisition or a Subsequent Acquisition Transaction:

	(i)
	no
default or Event of Default will have occurred and be continuing except for any default or Event of Default resulting from a breach of financial covenant
that would cease to exist upon the making of the proposed drawdown and the acquisition or redemption of the BPO common shares with the proceeds of such drawdown;

	(ii)
	the
Acquisition Facility has been fully advanced or will be fully advanced on the date of such drawdown (where all conditions precedent to such advance
have been satisfied); and

	(iii)
	with
respect solely to any drawdown under the Revolving Facility to fund a Brookfield-Initiated Compulsory Acquisition (as defined below) or
Subsequent Acquisition Transaction, (A) there shall not have existed or occurred prior to the date such transaction was initially commenced, any change (or any condition, event or
development involving a prospective change) in the business, operations, assets, capitalization, properties, condition (financial or otherwise), results of operations, rights or privileges (whether
contractual or otherwise), prospects or liabilities (whether accrued, absolute, contingent or otherwise) of BPO which, when considered either individually or in the aggregate, constitutes a "Material
Adverse Effect" (as that term is defined in the Offering Circular) with respect to BPO (a "BPO Material Adverse Effect"), and no action
shall be pending to enjoin such transaction and all necessary governmental consents shall have been obtained; and

	(d)
	with
respect to each drawdown, the representations and warranties of the Borrowers and Guarantors contained in the Credit Agreement must be true and correct
in all material respects on the date such credit is obtained as if such representations and warranties were made on such date, except for any representations and warranties which are expressly stated
to be made as of a specific date and except in respect of any default or Event of Default resulting from a breach of a financial covenant that would cease to exist upon the making of the proposed
drawdown and the acquisition or redemption of the BPO common shares with the proceeds of such drawdown. 

 Conditions Precedent to Advances Under Acquisition Facility  

        The obligation of the Lenders to extend credit hereunder by means of drawdown, rollover or conversion from one type of credit availment
to another under the Acquisition Facility is subject to the fulfilment of the following conditions precedent on the date such credit is extended or other date as specified (unless waived with the
consent of the Supermajority Lenders): 

	(a)
	the
Administrative Agent has received a borrowing notice and appropriate funding direction evidencing the use of proceeds; 

 

	(b)
	with
respect solely to the initial drawdown under the Acquisition Facility:

	(i)
	there
shall not exist or have occurred prior to the borrowing notice having been issued in respect of such drawdown any BPO Material Adverse
Effect; and

	(ii)
	all
Conditions set forth in section 4(a), (b), (d) or (e) of the Offering Circular approved by the Lenders have either been satisfied
on their current terms, or waived or amended with the consent of the Supermajority Lenders;

	(c)
	with
respect to any drawdown under the Acquisition Facility to fund the acquisition or redemption of BPO shares pursuant to the Offer, all amendments and
modifications to the Offering Circular that are adverse to the Lenders in any material respect have been approved by the Supermajority Lenders, acting reasonably;

	(d)
	with
respect solely to any drawdown under the Acquisition Facility to fund a Brookfield-Initiated Compulsory Acquisition:

	(i)
	there
shall not have existed or occurred prior to the date the Brookfield-Initiated Compulsory Acquisition was commenced any BPO Material Adverse
Effect; and

	(ii)
	at
the time the Brookfield-Initiated Compulsory Acquisition is commenced, no act, action, suit or proceeding shall have been taken and no laws shall have
been announced, proposed, enacted, promulgated, amended or applied to enjoin or prohibit the Brookfield-Initiated Compulsory Acquisition; and

	(iii)
	all
material government or regulatory consents, authorizations, waivers, permits, reviews, orders, rulings, decisions, approvals or exemptions necessary
to complete the Brookfield-Initiated Compulsory Acquisition have been obtained;

	(e)
	with
respect solely to any drawdown under the Acquisition Facility to fund a Subsequent Acquisition Transaction:

	(i)
	there
shall not have existed or occurred prior to the date the Subsequent Acquisition Transaction was commenced any BPO Material Adverse Effect;

	(ii)
	all
conditions precedent for the benefit of the Offerors set out in any agreement with BPO (including any arrangement agreement or plan of arrangement or
otherwise) for the completion of the Subsequent Acquisition Transaction have been satisfied on their terms in all material respects or waived with the consent of the Supermajority Lenders;

	(iii)
	no
act, action, suit or proceeding shall have been taken and no laws shall have been announced, proposed, enacted, promulgated, amended or applied to
enjoin or prohibit the Subsequent Acquisition Transaction; and

	(iv)
	all
material government or regulatory consents, authorizations, waivers, permits, reviews, orders, rulings, decisions, approvals or exemptions necessary to
complete the Subsequent Acquisition Transaction have been obtained.

	(f)
	with
respect to each drawdown:

	(i)
	no
default or Event of Default will have occurred and be continuing except for any default or Event of Default resulting from a breach of financial covenant
that would cease to exist upon the making of the proposed drawdown and the acquisition or redemption of the BPO common shares with the proceeds of such drawdown; and

	(ii)
	the
representations and warranties of the Borrowers and Guarantors contained in the Credit Agreement must be true and correct in all material respects on
the date such credit is obtained as if such representations and warranties were made on such date, except for any representations and warranties which are expressly stated to be made as of a specific
date and warranties which are expressly stated to be made as of a specific date and except in respect of any default or Event of Default resulting from a breach of financial covenant that would cease 

2

 

to
exist upon the making of the proposed drawdown and the acquisition or redemption of the BPO common shares with the proceeds of such drawdown. 

 Waiver  

        These terms are inserted for the sole benefit of the Lenders and the Supermajority Lenders may (in their sole discretion) waive
them in whole or in part with or without terms or conditions, in respect of any extension of credit, without prejudicing the Lenders' right to assert them in whole or in part in respect of any other
extension of credit. 

 Commencement of Brookfield-Initiated Compulsory Acquisition / Subsequent Acquisition Transaction  

        For the purposes of this Article 8, a Brookfield-Initiated Compulsory Acquisition shall be "commenced" upon the sending of the
notice contemplated by Section 206(3) of the Canada Business Corporations Act, and a Subsequent Acquisition Transaction shall be "commenced" upon
the earlier of the entering into of a written agreement between the offeror and BPO for completion of the Subsequent Acquisition Transaction and the mailing of a circular to BPO common shareholders
for approval of a Subsequent Acquisition Transaction. 

 Interpretation  

        For the purposes hereof, a "Subsequent Acquisition Transaction" shall include the
making of loans or investments in BPO for the purposes of redeeming and cancelling BPO common shares pursuant to a Subsequent Acquisition Transaction. A "Brookfield Initiated
Compulsory Acquisition" means a Compulsory Acquisition that is initiated by the Offerors or their Affiliates and not any other shareholder(s) of BPO. 

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QuickLinks

Exhibit 10.7

Commitment Letter

EXHIBIT A SUMMARY OF TERMS AND CONDITIONS

APPENDIX 1 CONDITIONS PRECEDENTExhibit102-RegistrationRightsAgreement

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”), is made and entered into as of February 3, 2014, by and among Kingsway Financial Services Inc., a corporation incorporated under the Business Corporations Act (Ontario) (the “Company”), and the persons identified on Schedule A hereto (collectively, the “Investors” and each individually, an “Investor”).
WHEREAS, each Investor is a party to a Subscription Agreement, dated as of December 19, 2013 (the “Subscription Agreement”) with the Company, pursuant to which the Investors are purchasing an aggregate of 262,876 units of the Company (“Units”), each unit consisting of (i) 1 share of Class A Preferred Shares, Series 1 (“Series 1 Shares”), and (ii) 6.25 Series C Warrants (“Series C Warrants”); and
WHEREAS, in connection with the consummation of the transactions contemplated by the Subscription Agreement, and pursuant to the terms of the Subscription Agreement, the parties desire to enter into this Agreement in order to grant certain registration rights to the Investors as set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants hereinafter set forth, the parties agree as follows:
1.Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” has the meaning set forth in the preamble.
“Board” means the board of directors of the Company (and any successor governing body of the Company or any successor of the Company).
“Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act and the Exchange Act at the time.
“Common Stock” means the common stock, no par value per share, of the Company and any other common equity securities issued by the Company, and any other shares of stock issued or issuable with respect thereto (whether by way of a stock dividend or stock split or in exchange for or upon conversion of such shares or otherwise in connection with a combination of shares, distribution, recapitalization, merger, consolidation or other corporate reorganization).
“Company” has the meaning set forth in the preamble and includes the Company’s successors by merger, acquisition, reorganization or otherwise.

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“Demand Registration” has the meaning set forth in Section 2(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect from time to time.
“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any arbitrator, court or tribunal of competent jurisdiction.
“Investors” has the meaning set forth in the preamble.
“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.
“Piggyback Registrable Securities” means the shares of Common Stock issuable upon conversion or exercise of Registrable Securities.
“Piggyback Registration” has the meaning set forth in Section 3(a).
“Prospectus” means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.
“Registrable Securities” means (a) the Series 1 Shares, (b) any shares of Common Stock issuable upon conversion of the Series 1 Shares, (c) the Series B Warrants issued in exchange for the Series C Warrants (the “Exchange Warrants”), (d) shares of Common Stock issuable upon the exercise of the Exchange Warrants (e) any shares of Common Stock issued or issuable with respect to any Registrable Securities by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization (it being understood that for purposes of this Agreement, a Person shall be deemed to be a holder of Registrable Securities whenever such Person has the right to then acquire or obtain from the Company any Registrable Securities, whether or not such acquisition has actually been effected).  As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a Registration Statement covering such securities has been declared effective by the Commission and such securities have been disposed of pursuant to such effective Registration Statement, (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met, (iii) such securities are otherwise transferred and such securities may be resold 

2

without subsequent registration under the Securities Act, or (iv) such securities shall have ceased to be outstanding.
“Registration” means a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement has become effective. 
“Registration Statement” means any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.
“Rule 144” means Rule 144 promulgated under the Securities Act or any successor rule thereto or any complementary rule thereto (such as Rule 144A).
“Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect from time to time.
“Selling Expenses” means all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities, underwriter expenses, and fees and disbursements of counsel for any holder of Registrable Securities, except for the reasonable fees and disbursements of counsel for the holders of Registrable Securities required to be paid by the Company pursuant to Section 6.
“Series 1 Shares” has the meaning set forth in the recitals.
“Series B Warrants” means warrants of the Company, each exercisable to purchase one share of Common Stock at an initial exercise price of $5.00.
“Series C Warrants” has the meaning set forth in the recitals.
“Subscription Agreement” has the meaning set forth in the recitals.
“Units” has the meaning set forth in the recitals.
2.    Demand Registration.
(a)    At any time after 180 days after the date issuance of the Series 1 Shares, holders of a majority of the Registrable Securities then outstanding may request a Registration of at least 50% of the outstanding Registrable Securities (a “Demand Registration”).  Each request for a Demand Registration shall specify the approximate number of Registrable Securities required to be registered. Upon receipt of such request, the Company shall promptly (but in no event later than 15 days following receipt thereof) deliver notice of such request to all other holders of Registrable Securities who shall then have 15 days from the date such notice is given to notify the Company in writing of their desire to be included in such Registration. The Company shall 

3

cause a Registration Statement to be filed within 60 days after the date on which the initial request is given and shall use commercially reasonable efforts to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter. The Company shall not be required to effect a Demand Registration more than once for the holders of Registrable Securities as a group; provided, that a Registration Statement shall not count as a Demand Registration requested under Section 2(a) unless and until it has become effective.
(b)    The Company shall not be obligated to effect any Demand Registration within 180 days after the effective date of a previous Piggyback Registration (as defined below) in which holders of Registrable Securities were permitted to register, and actually sold, at least 50% of the shares of Registrable Securities requested to be included therein. The Company may postpone for up to 90 days the filing or effectiveness of a Registration Statement for a Demand Registration if the Company’s Board determines in its reasonable good faith judgment that such Demand Registration would (i) materially interfere with a significant acquisition, corporate organization or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act; provided, that in such event the holders of a majority of the Registrable Securities initiating such Demand Registration shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as the one permitted Demand Registration hereunder and the Company shall pay all registration expenses in connection with such registration. The Company may delay a Demand Registration hereunder only twice in any period of twelve consecutive months.
(c)    If the holders of the Registrable Securities initially requesting a Demand Registration elect to distribute the Registrable Securities covered by their request in an underwritten offering, they shall so advise the Company as a part of their request made pursuant to Section 2(a), and the Company shall include such information in its notice to the other holders of Registrable Securities. The holders of a majority of the Registrable Securities initially requesting the Demand Registration shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such offering; provided, that such selection shall be subject to the consent of the Company, which consent shall not be unreasonably withheld or delayed.
(d)    If a Demand Registration involves an underwritten offering and the managing underwriter of the requested Demand Registration advises the Company and the holders of Registrable Securities in writing that in its opinion the number of shares of Common Stock proposed to be included in the Demand Registration, including all Registrable Securities and all other shares of Common Stock proposed to be included in such underwritten offering, exceeds the number of shares of Common Stock which can be sold in such underwritten offering and/or the number of shares of Common Stock proposed to be included in such registration would adversely affect the price per share of the Registrable Securities proposed to be sold in such underwritten offering, the Company shall include in such Demand Registration (i) first, the number of shares of Common Stock that the holders of Registrable Securities propose to sell, and (ii) second, the number of shares of Common Stock proposed to be included therein by any other 

4

Persons (including shares of Common Stock to be sold for the account of the Company and/or other holders of Common Stock) allocated among such Persons in such manner as they may agree. If the managing underwriter determines that less than all of the Registrable Securities proposed to be sold can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated pro rata among the respective holders thereof on the basis of the number of Registrable Securities owned by each such holder.
3.    Piggyback Registration.
(a)    Whenever the Company proposes offer and sell any shares of its Common Stock in a primary offering registered under the Securities Act (other than a registration effected solely to implement an employee benefit plan or a transaction to which Rule 145 of the Securities Act is applicable, or a Registration Statement on Form S-4, S-8 or any successor form thereto or another form not available for registering Piggyback Registrable Securities for sale to the public), and the form of Registration Statement to be used may be used for any registration of Piggyback Registrable Securities (a “Piggyback Registration”), the Company shall give prompt written notice (in any event no later than 20 days prior to the filing of such Registration Statement) to the holders of Registrable Securities of its intention to effect such a Registration and, subject to Section 3(b), shall include in such registration all Piggyback Registrable Securities with respect to which the Company has received written requests for inclusion from the holders thereof within 10 days after the Company’s notice has been given to each such holder.  The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion. A Piggyback Registration shall not be considered a Demand Registration for purposes of Section 2 of this Agreement.
(b)    If a Piggyback Registration is initiated and the managing underwriter advises the Company and the holders of Piggyback Registrable Securities (if any holders of Piggyback Registrable Securities have elected to include Piggyback Registrable Securities in such Piggyback Registration) in writing that in its opinion the number of shares of Common Stock proposed to be included in such registration, including all Piggyback Registrable Securities and all other shares of Common Stock proposed to be included in such underwritten offering, exceeds the number of shares of Common Stock which can be sold in such offering and/or that the number of shares of Common Stock proposed to be included in any such registration would adversely affect the price per share of the Common Stock to be sold in such offering, the Company shall include in such registration (i) first, the number of shares of Common Stock that the Company proposes to sell; (ii) second, the number of shares of Common Stock requested to be included therein by holders of Registrable Securities and any holders of securities who have registration rights pari passu with the holders of Registrable Securities, allocated pro rata among all such holders on the basis of the number of shares of Common Stock owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the number of shares of Common Stock requested to be included therein by holders of Common Stock (other than holders of Registrable Securities and holders of securities who have registration rights pari passu with the holders of Registrable Securities), allocated among such holders in such manner as they may agree.

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(c)    If any Piggyback Registration is initiated, the Company shall select the investment banking firm or firms, if any, to act as the managing underwriter or underwriters in connection with such offering.
4.    Lock-up Agreement. Each holder of Registrable Securities agrees that in connection with any public offering of the Company’s Common Stock or other equity securities, and upon the request of the managing underwriter in such offering, such holder shall not, without the prior written consent of such managing underwriter, during the period commencing on 10 days prior to the effective date of such registration and ending on the date specified by such managing underwriter (such period not to exceed 90 days), (a) offer, pledge, sell, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, hedge the beneficial ownership of or otherwise dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into, exercisable for or exchangeable for shares of Common Stock (whether such shares or any such securities are then owned by the Holder or are thereafter acquired), or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing provisions of this Section 4 shall not apply to sales of Registrable Securities to be included in such offering pursuant to Section 2(a) or Section 3(a), and shall be applicable to the holders of Registrable Securities only if all officers and directors of the Company are subject to the same restrictions. Each holder of Registrable Securities agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the managing underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. Notwithstanding anything to the contrary contained in this Section 4, each holder of Registrable Securities shall be released, pro rata, from any lock-up agreement entered into pursuant to this Section 4 in the event and to the extent that the managing underwriter or the Company permit any discretionary waiver or termination of the restrictions of any lock-up agreement pertaining to any officer or director.
5.    Registration Procedures. If and whenever the holders of Registrable Securities request that any Registrable Securities be registered pursuant to the provisions of this Agreement, the Company shall use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company shall as soon as reasonably practicable:
(a)    subject to Section 2(a) and Section 3(a), prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective;
(b)    prepare and file with the Commission such amendments, post-effective amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than 180 days, or if earlier, until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the 

6

disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such Registration Statement;
(c)    within a reasonable time before filing such Registration Statement, Prospectus or amendments or supplements thereto, furnish to one counsel selected by holders of a majority of such Registrable Securities copies of such documents proposed to be filed, which documents shall be subject to the review and comment of such counsel;
(d)    notify each selling holder of Registrable Securities, promptly after the Company receives notice thereof, of the time when such Registration Statement has been declared effective or a supplement to any Prospectus forming a part of such Registration Statement has been filed;
(e)    furnish to each selling holder of Registrable Securities such number of copies of the Prospectus included in such Registration Statement (including each preliminary Prospectus) and any supplement thereto (in each case including all exhibits and documents incorporated by reference therein) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;
(f)    use its commercially reasonable efforts to register or qualify such Registrable Securities under such other securities or “blue sky” laws of such jurisdictions as any selling holder reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such holders to consummate the disposition in such jurisdictions of the Registrable Securities owned by such holders; provided, that the Company shall not be required to qualify generally to do business, subject itself to general taxation or consent to general service of process in any jurisdiction where it would not otherwise be required to do so but for this Section 5(f);
(g)    notify each selling holder of such Registrable Securities, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading;
(h)    provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;
(i)    use its commercially reasonable efforts to cause such Registrable Securities to be listed on each securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed, on a national securities exchange selected by the holders of a majority of such Registrable Securities;
(j)    in connection with an underwritten offering, enter into such customary agreements (including underwriting and lock-up agreements in customary form) and take all 

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such other customary actions as the holders of such Registrable Securities or the managing underwriter of such offering reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, making appropriate officers of the Company available to participate in “road show” and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registrable Securities); and
(k)    furnish to each selling holder of Registrable Securities and each underwriter, if any, with (i) a legal opinion of the Company’s outside counsel, dated the effective date of such Registration Statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), in form and substance as is customarily given in opinions of the Company’s counsel to underwriters in underwritten public offerings; and (ii) a “comfort” letter signed by the Company’s independent certified public accountants in form and substance as is customarily given in accountants’ letters to underwriters in underwritten public offerings;
(l)    without limiting Section 5(f) above, use its commercially reasonable efforts to cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;
(m)    notify the holders of Registrable Securities promptly of any request by the Commission for the amending or supplementing of such Registration Statement or Prospectus or for additional information;
(n)    advise the holders of Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued;
(o)    permit any holder of Registrable Securities which holder, in its sole and exclusive judgment, might be deemed to be an underwriter or a controlling person of the Company, to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included;
(p)    otherwise use its commercially reasonable efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated hereby.
6.    Expenses. All expenses (other than Selling Expenses) incurred by the Company in complying with its obligations pursuant to this Agreement and in connection with the registration and disposition of Registrable Securities, including, without limitation, all registration and filing fees, expenses of any audits incident to or required by any such registration, fees and expenses of complying with securities and “blue sky” laws, printing expenses, fees and expenses of the 

8

Company’s counsel and accountants and reasonable fees and expenses of one counsel for the holders of Registrable Securities participating in a Demand Registration as a group (selected by the holders of a majority of the Registrable Securities initially requesting such registration), shall be paid by the Company. All Selling Expenses relating to Registrable Securities registered pursuant to this Agreement shall be borne and paid by the holders of such Registrable Securities, in proportion to the number of Registrable Securities registered for each such holder.
7.    Indemnification.
(a)    The Company shall indemnify and hold harmless, to the fullest extent permitted by law, each holder of Registrable Securities, such holder’s officers, directors, managers, members, partners, stockholders and Affiliates, each underwriter, broker or any other Person acting on behalf of such holder of Registrable Securities and each other Person, if any, who controls any of the foregoing Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against all losses, claims, actions, damages, liabilities and expenses, joint or several, to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, actions, damages, liabilities or expenses arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus, preliminary Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation or alleged violation by the Company of the Securities Act or any other similar federal or state securities laws or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance; and shall reimburse such Persons for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, action, damage or liability, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such holder expressly for use therein or by such holder’s failure to deliver a copy of the Registration Statement, Prospectus, free-writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished such holder with a sufficient number of copies of the same prior to any written confirmation of the sale of Registrable Securities.
(b)    In connection with any registration in which a holder of Registrable Securities is participating, each such holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify and hold harmless, the Company, each director of the Company, each officer of the Company who shall sign such Registration Statement, each underwriter, broker or other Person acting on behalf of the holders of Registrable Securities and each Person who controls any of the foregoing Persons within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, actions, damages, liabilities or expenses resulting from any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus, 

9

preliminary Prospectus, free writing prospectus (as defined in Rule 405 promulgated under the Securities Act) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such holder; provided, that the obligation to indemnify shall be several, not joint and several, for each holder and shall be limited to the net proceeds (after underwriting fees, commissions or discounts) actually received by such holder from the sale of Registrable Securities pursuant to such Registration Statement.
(c)    Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in this Section 7, such indemnified party shall, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. The failure of any indemnified party to notify an indemnifying party of any such action shall not (unless such failure shall have a material adverse effect on the indemnifying party) relieve the indemnifying party from any liability in respect of such action that it may have to such indemnified party hereunder. In case any such action is brought against an indemnified party, the indemnifying party shall be entitled to participate in and to assume the defense of the claims in any such action that are subject or potentially subject to indemnification hereunder, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after written notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, that if (i) any indemnified party shall have reasonably concluded that there may be one or more legal or equitable defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity provided hereunder, or (ii) such action seeks an injunction or equitable relief against any indemnified party or involves actual or alleged criminal activity, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party without such indemnified party’s prior written consent (but, without such consent, shall have the right to participate therein with counsel of its choice) and such indemnifying party shall reimburse such indemnified party and any Person controlling such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party which is reasonably related to the matters covered by the indemnity provided hereunder. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. In such instance, the conflicting indemnified parties shall have a right to retain one separate counsel, chosen by the holders of a majority of the Registrable Securities included in the registration, at the expense of the indemnifying party.
(d)    If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, 

10

liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such loss, claim, damage, liability or action 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 which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. 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. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation shall be entitled to contribution from any Person.
8.    Participation in Underwritten Registrations. No Person may participate in any registration hereunder which is underwritten unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided, that no holder of Registrable Securities included in any underwritten registration shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding such holder, such holder’s ownership of its shares of Common Stock to be sold in the offering and such holder’s intended method of distribution) or to undertake any indemnification obligations to the Company or the underwriters with respect thereto, except as otherwise provided in Section 7.
9.    Rule 144 Compliance. With a view to making available to the holders of Registrable Securities the benefits of Rule 144 under the Securities Act and any other rule or regulation of the Commission that may at any time permit a holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3 (or any successor form), the Company shall:
(a)    make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the Registration Date;
(b)    use commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and 

11

the Exchange Act, at any time after the Company has become subject to such reporting requirements; and
(c)    furnish to any holder so long as the holder owns Registrable Securities, promptly upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed or furnished by the Company as such holder may reasonably request in connection with the sale of Registrable Securities without registration.
10.    Termination. This Agreement shall terminate and be of no further force or effect when there shall no longer be any Registrable Securities outstanding; provided, that the provisions of Section 6 and Section 7 shall survive any such termination.
11.    Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11).

	
		
	If to the Company:
	Kingsway Financial Services Inc.
150 Pierce Road, 6th Floor
Itasca, IL 60143
Facsimile: (847) 952-4830
E-mail: hbaqar@kingswayfinancial.com
Attention:  Hassan Baqar

	with a copy to:
	McDermott Will & Emery LLP 
340 Madison Avenue
New York, New York 10173
Facsimile: (646) 390-1209
E-mail: jrubinstein@mwe.com
Attention: Joel L. Rubinstein, Esq.

If to any Investor, to such Investor’s address as set forth on Schedule A hereto.

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12.    Entire Agreement. This Agreement, together with the Subscription Agreement and any related exhibits and schedules thereto, constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. Notwithstanding the foregoing, in the event of any conflict between the terms and provisions of this Agreement and those of the Subscription Agreement, the terms and conditions of this Agreement shall control.
13.    Successor and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Each Investor may assign its rights hereunder to any purchaser or transferee of Registrable Securities; provided, that such purchaser or transferee shall, as a condition to the effectiveness of such assignment, be required to execute a counterpart to this Agreement agreeing to be treated as an Investor whereupon such purchaser or transferee shall have the benefits of, and shall be subject to the restrictions contained in, this Agreement as if such purchaser or transferee was originally included in the definition of an Investor herein and had originally been a party hereto.
14.    No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.
15.    Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
16.    Amendment, Modification and Waiver. Except as otherwise provided herein, the provisions of this Agreement may only be amended, modified, supplemented or waived with the prior written consent of the Company and the holders of a majority of the Registrable Securities. No waiver by any party or parties shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
17.    Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

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18.    Remedies. Each holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. The Company acknowledges that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and the Company hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.
19.    Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction). Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of New York in each case located in the city of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
20.    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 legal action arising out of or relating to this Agreement or the transactions contemplated hereby. Each party to this Agreement certifies and acknowledges that (a) no representative of any other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action, (b) such party has considered the implications of this waiver, (c) such party makes this waiver voluntarily, and (d) such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 20.
21.    Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement on the date first written above.
	
		
	 
	

KINGSWAY FINANCIAL SERVICES INC.

	 
	

By:_/s/ Larry G. Swets, Jr._________
Name: Larry G. Swets, Jr.
Title: President and Chief Executive Officer

[Signature page to Registration Rights Agreement]
FUND MANAGEMENT GROUP LLC    

By:_/s/ Gordon G. Pratt___________
Name: Gordon G. Pratt
Title: Managing Member

    
OAKMONT CAPITAL INC.    

By:_/s/ Terence M. Kavanagh ______
Name: Terence M. Kavanagh
Title: President    

STILWELL ACTIVIST INVESTMENTS, L.P.

By:_/s/ Joseph Stilwell ___________
Name: Joseph Stilwell
Title: Managing Member of the GP

STILWELL ACTIVIST FUND, L.P. 

By:_/s/ Joseph Stilwell ___________
Name: Joseph Stilwell
Title: Managing Member of the GP

GARY SCHAEVITZ 

/s/ Gary Schaevitz ___________

MICHAEL LEVENTHAL 

/s/ Michael Leventhal ________

[Signature page to Registration Rights Agreement]
KATHERINA LEVENTHAL 

/s/ Katherina Leventhal _____

ROBERT MILLER

/s/ Robert Miller ___________

GREG MANOCHERIAN

/s/ Greg Manocherian _______

JED MANOCHERIAN

/s/ Jed Manocherian _________

FRAYDUN MANOCHERIAN

/s/ Fraydun Manocherian _____

ALLISON DAWN ROSENBERG IRREVOCABLE TRUST

By:_/s/ Michael Rosenberg ________
Name: Michael Rosenberg
Title: Trustee

MICHAEL N. ROSENBERG REVOCABLE TRUST

By:_/s/ Michael Rosenberg ________
Name: Michael Rosenberg
Title: Trustee
[Signature page to Registration Rights Agreement]
MASK PARTNERS LLC

By:_/s/ Stephanie Rosen ________
Name: Stephanie Rosen
Title: Member

MELVIN FELDMAN REVOCABLE LIVING TRUST

By:_/s/ Melvin Feldman ________
Name: Melvin Feldman
Title: Trustee

PERRY WEITZ 

/s/ Perry Weitz ____________

FELICIA WEITZ

/s/ Felicia Weitz ____________

DOUG LEVINE

/s/ Doug Levine ____________

[Signature page to Registration Rights Agreement]
 

Schedule A
[List of Investors and Addresses]

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