Document:

Exhibit
10.3

 

Execution
Version

 

AMENDMENT NO. 2 TO STOCK PURCHASE AGREEMENT

 

AMENDMENT NO. 2 (this “Amendment”), dated as of May 7,
2010, to the Stock Purchase Agreement, dated as of March 31, 2010 (the “Agreement”),
by and between General Growth Properties, Inc., a Delaware corporation (“GGP”), and Pershing Square
Capital Management, L.P. (“PSCM”), on behalf of Pershing Square, L.P., a
Delaware limited partnership, Pershing Square II, L.P., a Delaware limited
partnership, Pershing Square International, Ltd. a Cayman Islands exempted
company and Pershing Square International V, Ltd., a Cayman Islands exempted
company, (each, except PSCM, together with its permitted nominees and assigns,
a “Purchaser”), as amended on May 3, 2010.  All capitalized terms used in this Amendment
which are not herein defined shall have the same meanings ascribed to them in
the Agreement (as defined herein).

 

WHEREAS, Section 13.8 of the Agreement provides for
the amendment of the Agreement in accordance with the terms set forth therein.

 

WHEREAS, as of May 7, 2010, the Company entered into
an amendment to the Fairholme Agreement in the form attached hereto as Exhibit A
with the Fairholme Purchasers;

 

WHEREAS,
as of May 7, 2010, the Company entered into an amendment to the Brookfield Agreement in
the form attached hereto as Exhibit B with the Brookfield Investor;

 

WHEREAS, the parties hereto desire to amend the Agreement
as set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the premises, and of
the covenants and agreements set forth herein, the parties agree as follows:

 

1.              Amendment to Section 13.10.  Section 13.10 of the Agreement is hereby
amended by deleting the last sentence thereof and replacing it with the
following new sentence:

 

“If
a transaction results in any adjustment to the exercise price for and number of
Shares underlying the warrants issued to the other Initial Investors pursuant
to Article 5 of the Warrant Agreement, the exercise price for and number
of shares underlying each of the New Warrants and GGO Warrants described in Section 5.2
of this Agreement shall be adjusted for that transaction in the same manner.”

 

2.              Amendment of Exhibit G.  Exhibit G to the Agreement is hereby
amended and restated in its entirety to read as set forth in Exhibit C to
this Amendment.

 

3.              No Further Amendment.  Except as expressly amended hereby, the
Agreement is in all respects ratified and confirmed and all the terms,
conditions, and provisions thereof shall remain in full force and effect. This
Amendment is limited precisely as

 

 

written and shall not be deemed to be an amendment to any other term or
condition of the Agreement or any of the documents referred to therein.

 

4.              Effect of Amendment.  This Amendment shall form a part of the
Agreement for all purposes, and each party thereto and hereto shall be bound
hereby. From and after the execution of this Amendment by the parties hereto,
any reference to the Agreement shall be deemed a reference to the Agreement as
amended hereby. This Amendment shall be deemed to be in full force and effect
from and after the execution of this Amendment by the parties hereto.

 

5.              Governing Law; Venue. THIS
AMENDMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND BOTH PARTIES WAIVE ANY OBJECTION BASED ON
FORUM NON CONVENIENS.

 

6.              Counterparts. This
Amendment may be executed in any number of counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each of the parties; and delivered to the
other party (including via facsimile or other electronic transmission), it
being understood that each party need not sign the same counterpart.

 

7.              Construction.

 

a.              Unless otherwise
specifically defined herein, each term used herein shall have the meaning
assigned to such term in the Agreement.

 

b.              Each reference to “hereof,” “herein,”
“hereunder,” “hereby” and “this Agreement” shall, from and after the date
hereof, refer to the Agreement as amended by this Amendment.  Notwithstanding the foregoing, references to
the date of the Agreement, as amended hereby, shall in all instances continue
to refer to March 31, 2010, references to “the date hereof” and “the date
of this Agreement” shall continue to refer to March 31, 2010.

 

c.               The headings in this
Amendment are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Amendment.

 

8.              Bankruptcy Matters. For the
avoidance of doubt, all obligations of the Company and its Subsidiaries in this
Amendment are subject to and conditioned upon entry of the Approval Order or
the Confirmation Order as provided for in Section 13.12 of the Agreement.

 

[Signature Page Follows]

 

2

 

IN WITNESS WHEREOF, the undersigned have caused this
Amendment to be executed and delivered by each of them or their respective officers
thereunto duly authorized, all as of the date first written above.

 

 

	
   

  	
  GENERAL
  GROWTH PROPERTIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Adam S. Metz

  
	
   

  	
   

  	
  Name:
  Adam S. Metz

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PERSHING
  SQUARE CAPITAL MANAGEMENT, L.P.

  
	
   

  	
  On
  behalf of each of the Purchasers

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PS
  Management GP, LLC

  
	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William A. Ackman

  
	
   

  	
   

  	
  Name:
  William A. Ackman

  
	
   

  	
   

  	
  Title: Managing Member

  
				

 

[SIGNATURE PAGE TO
AMENDMENT NO. 2]Exhibit
10.4

 

Execution Copy

 

 

 

 

WARRANT AND REGISTRATION RIGHTS AGREEMENT

 

 

BETWEEN

 

 

GENERAL GROWTH PROPERTIES, INC.

 

 

AND

 

MELLON INVESTOR SERVICES LLC, 

 

 

as WARRANT
AGENT

 

 

Dated as of May 10, 2010

 

 

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.    
  DEFINITIONS

  	
   

  
	
  2.    
  ORIGINAL ISSUE OF WARRANTS

  	
   

  
	
  2.1

  	
  Form of Warrant Certificates

  	
  9

  
	
  2.2

  	
  Execution and Delivery of Warrant
  Certificates; Vesting

  	
  9

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

  	
   

  
	
  3.1

  	
  Exercise Price

  	
  10

  
	
  3.2

  	
  Exercise of Warrants

  	
  10

  
	
  3.3

  	
  Expiration of Warrants

  	
  10

  
	
  3.4

  	
  Method of Exercise; Settlement of
  Warrant

  	
  10

  
	
  3.5

  	
  Transferability of Warrants and
  Common Stock

  	
  12

  
	
  3.6

  	
  Compliance with Law

  	
  12

  
	
  4.    
  REGISTRATION RIGHTS AND PROCEDURES AND LISTING.

  	
   

  
	
  4.1

  	
  Applicability; Registration

  	
  15

  
	
  4.2

  	
  Expenses of Registration

  	
  19

  
	
  4.3

  	
  Obligations of the Company

  	
  19

  
	
  4.4

  	
  Suspension of Sales

  	
  22

  
	
  4.5

  	
  Termination of Registration Rights

  	
  22

  
	
  4.6

  	
  Furnishing Information

  	
  22

  
	
  4.7

  	
  Indemnification

  	
  23

  
	
  4.8

  	
  Contribution

  	
  24

  
	
  4.9

  	
  Representations, Warranties and
  Indemnities to Survive

  	
  25

  
	
  4.10

  	
  Lock-Up Agreements

  	
  25

  
	
  4.11

  	
  Rule 144 Reporting

  	
  25

  
	
  4.12

  	
  Obtaining Exchange Listing

  	
  26

  
	
  4.13

  	
  The Warrant Agent

  	
  26

  
	
  5.    
  ADJUSTMENTS AND OTHER RIGHTS

  	
   

  
	
  5.1

  	
  Stock Dividend; Subdivision or
  Combination of Common Stock

  	
  26

  
	
  5.2

  	
  Other Dividends and Distributions

  	
  27

  
	
  5.3

  	
  Rights Offerings

  	
  27

  

 

i

 

	
  5.4

  	
  Issuer Tender or Exchange Offers

  	
  28

  
	
  5.5

  	
  Reorganization, Reclassification,
  Consolidation, Merger or Sale

  	
  28

  
	
  5.6

  	
  Other Adjustments

  	
  29

  
	
  5.7

  	
  Notice of Adjustment

  	
  29

  
	
  6.    
  CHANGE OF CONTROL

  	
   

  
	
  6.1

  	
  Redemption in Connection with a
  Change of Control Event

  	
  30

  
	
  6.2

  	
  Public Stock Merger

  	
  31

  
	
  6.3

  	
  Mixed Consideration Merger

  	
  31

  
	
  6.4

  	
  The Warrant Agent

  	
  31

  
	
  7.    
  WARRANT TRANSFER BOOKS

  	
   

  
	
  8.    
  WARRANT HOLDERS

  	
   

  
	
  8.1

  	
  No Voting Rights

  	
  32

  
	
  8.2

  	
  Right of Action

  	
  32

  
	
  9.    
  WARRANT AGENT

  	
   

  
	
  9.1

  	
  Nature of Duties and
  Responsibilities Assumed

  	
  33

  
	
  9.2

  	
  Compensation and Reimbursement

  	
  35

  
	
  9.3

  	
  Warrant Agent May Hold
  Company Securities

  	
  35

  
	
  9.4

  	
  Resignation and Removal; Appointment
  of Successor

  	
  35

  
	
  9.5

  	
  Damages

  	
  36

  
	
  9.6

  	
  Force Majeure

  	
  37

  
	
  9.7

  	
  Survival

  	
  37

  
	
  10.   REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  10.1

  	
  Representations
  and Warranties of the Company

  	
  37

  
	
  11.   COVENANTS

  	
   

  
	
  11.1

  	
  Reservation of Common Stock for
  Issuance on Exercise of Warrants

  	
  37

  
	
  11.2

  	
  Notice of Distributions

  	
  37

  
	
  11.3

  	
  Cancellation of Warrants

  	
  37

  
	
  12.  
  MISCELLANEOUS

  	
   

  
	
  12.1

  	
  Money and Other Property Deposited
  with the Warrant Agent

  	
  37

  
	
  12.2

  	
  Payment of Taxes

  	
  38

  
	
  12.3

  	
  Surrender of Certificates

  	
  38

  
	
  12.4

  	
  Mutilated, Destroyed, Lost and
  Stolen Warrant Certificates

  	
  38

  
	
  12.5

  	
  Removal of Legends

  	
  39

  

 

ii

 

	
  12.6

  	
  Notices

  	
  40

  
	
  12.7

  	
  Applicable Law; Jurisdiction

  	
  41

  
	
  12.8

  	
  Persons Benefiting

  	
  41

  
	
  12.9

  	
  Relationship to Investment
  Agreement and Stock Purchase Agreements

  	
  41

  
	
  12.10

  	
  Counterparts

  	
  42

  
	
  12.11

  	
  Amendments

  	
  42

  
	
  12.12

  	
  Headings

  	
  42

  
	
  12.13

  	
  Entire Agreement

  	
  42

  
	
  12.14

  	
  Specific Performance

  	
  42

  

 

iii

 

List of
Exhibits

 

EXHIBIT
A — Form of Warrant Certificate

 

EXHIBIT
B — Form of Assignment

 

EXHIBIT
C — Option Pricing Assumptions / Methodology

 

SCHEDULE
A — Allocations of Warrants to Initial Investors and Vesting

 

SCHEDULE
B — Warrant Agent Compensation

 

iv

 

WARRANT AND
REGISTRATION RIGHTS AGREEMENT

 

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

 

WITNESSETH:

 

WHEREAS, the Company
is issuing and delivering warrant certificates (the “Warrant Certificates”)
evidencing Warrants to purchase up to an aggregate of 102,857,143 shares of its
Common Stock, subject to adjustment, including (a) 60,000,000 shares of
its Common Stock, subject to adjustment, in connection with that certain
Cornerstone Investment Agreement, dated as of March 31, 2010, by and
between REP Investments LLC and the Company (as amended from time to time, the “Investment
Agreement”), (b) 42,857,143 shares of its Common Stock, subject to
adjustment, in connection with that certain Stock Purchase Agreement, dated as
of March 31, 2010, by and between each of The Fairholme Fund and The
Fairholme Focused Income Fund (each a “Fairholme Purchaser”, and
collectively, the “Fairholme Purchasers”) and the Company (as amended
from time to time, the “Fairholme Stock Purchase Agreement”) and (c) 0
shares of its Common Stock in connection with that certain Stock Purchase
Agreement, dated as of March 31, 2010, by and between each of Pershing
Square, L.P., Pershing Square II, L.P., Pershing Square International, Ltd. and
Pershing Square International V, Ltd. (each, a “Pershing Square Purchaser”,
collectively, the “Pershing Square Purchasers”, and each of the
Brookfield Purchaser (as defined herein), the Fairholme Purchasers and Pershing
Square Purchasers, a “Purchaser”) and the Company (as amended from time
to time, the “Pershing Square Stock Purchase Agreement” and, together
with the Fairholme Stock Purchase Agreement, the “Stock Purchase Agreements”) pursuant to each of which each Purchaser has agreed to make an
equity investment in the Company upon the terms and subject to the conditions
specified therein; and

 

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

 

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

 

1.                                      DEFINITIONS.

 

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

 

Affiliate:  of any particular Person means any other
Person controlling, controlled by or under common control with such particular
Person.  For the purposes of this
definition, (i) “control” means the possession, directly or indirectly, of
the power to direct the management and policies of a Person whether through the
ownership of voting securities, contract or otherwise 

 

 

and
(ii) none of the Initial Investors or their Affiliates shall be deemed to “control”
the Company or any of the Company’s controlled Affiliates prior to such Initial
Investor or Affiliate, as applicable, acquiring or becoming part of the
acquiring group for purposes of clauses (i) or (ii) or combining with
the Company for purposes of clause (iii) of the definition of Change of
Control Event.

 

Announcement
Date:  the meaning set forth in Section 5.4.

 

Board:  the board of directors of the Company.

 

Brookfield
Consortium Member:  as defined in the Investment Agreement.

 

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

 

Brookfield
Purchaser:  the
Purchaser defined in the Investment Agreement.

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

Distribution:  the meaning set forth in Section 5.2.

 

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

 

Exercise
Date:  the meaning set forth in Section 3.4.

 

Exercise
Price:  the meaning set forth in Section 3.1.

 

Expiration
Date:  the meaning set forth in Section 3.3.

 

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

 

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

 

3

 

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

 

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

 

Fair
Market Value:

 

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

 

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

 

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

 

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

 

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

 

GGO
Warrants: the meaning set forth in Section 11.3.

 

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

 

Independent
Financial Expert:  a
nationally recognized financial advisory firm mutually agreed by the Company
and the Majority Holders. If the
Company and the Majority Holders are unable
to agree on an Independent Financial Expert for a valuation contemplated
herein, each of 

 

4

 

them
shall choose promptly a separate Independent Financial Expert and these two
Independent Financial Experts shall choose promptly a third Independent
Financial Expert to conduct such valuation.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Net
Share Settlement:  the
settlement method pursuant to which an exercising Holder shall be entitled to
receive from the Company, for each Warrant exercised, a number of shares of
Common Stock equal to the Net Share Amount without any payment therefor.

 

New
Warrants:  the meaning
set forth in Section 11.3.

 

Organic
Change:  the meaning set forth in Section 5.5.

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Purchaser:  the meaning set forth in the recitals hereto.

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

Rule 144, Rule 405
and Rule 415:  mean, in each
case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Stock
Dividend:  the meaning
set forth in Section 5.1.

 

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

 

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

 

Suspension
Limit: the meaning set forth in Section 4.4.

 

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

 

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

 

8

 

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

 

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

 

Warrant Registrar:  the meaning set forth in Article 7.

 

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

 

2.                                      ORIGINAL ISSUE
OF WARRANTS.

 

2.1                                 Form of
Warrant Certificates.  The Warrant
Certificates shall be in registered form only and substantially in the form
attached hereto as Exhibit A, with
such appropriate instructions, omissions, substitutions and other variations as
are required or permitted by this Agreement (but which do not affect the
rights, duties or responsibilities of the Warrant Agent) shall be dated
the date on which countersigned by the Warrant Agent and may have such legends
and endorsements typed, stamped, printed, lithographed or engraved thereon as
provided in Section 3.6(f) and as required by the Certificate
of Incorporation or as may be required to comply with any law or with any rule or
regulation pursuant thereto or with any rule or regulation of any
securities exchange on which the Warrants may be listed.

 

2.2                                 Execution and
Delivery of Warrant Certificates; Vesting.

 

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

 

(b)                                 The Warrants
evidenced by the Warrant Certificates delivered pursuant to Section 2.2(a) shall
vest in the amounts and at the times set forth on Schedule A; provided, that any Warrants
delivered to an Initial Investor (or their designee(s) in
accordance with the last sentence of Section 2.2(a)) that have not vested on or prior to the first date on which (x) the
Investment Agreement or Stock Purchase Agreement applicable with respect to
such Initial Investor has been terminated in accordance with its terms and (y) the
Warrant Agent has received written notice from the Company of such termination,
shall no longer be eligible for vesting and shall be deemed cancelled.

 

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

 

9

 

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

 

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

 

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

 

3.1                                 Exercise Price.  Each Warrant Certificate shall, when
countersigned by the Warrant Agent, entitle the Holder thereof, subject to the
provisions of this Agreement, to purchase, except as provided in Section 3.3
hereof, one share of Common Stock for each Warrant represented thereby, subject
to all adjustments made on or prior to the date of exercise thereof, at an
exercise price (the “Exercise Price”) of $15.00 per share, subject to
all adjustments made on or prior to the date of exercise thereof as herein
provided.

 

3.2                                 Exercise of
Warrants.  The
Warrants shall be exercisable in whole or in part from time to time on any
Business Day beginning on the date
hereof and ending on the Expiration Date, in the manner provided for herein;
provided, that the Warrants issued to each Initial Investor (or their designee(s) in
accordance with the last sentence of Section 2.2(a)) shall not be
exercisable in whole or in part until 61 days after the date on which the
Investment Agreement or Stock Purchase Agreement applicable to such Initial
Investor shall have been terminated in accordance with its terms.  For the avoidance of doubt, Warrants that
have not vested in accordance with Schedule A may not be exercised.

 

3.3                                 Expiration of
Warrants.  Any
unexercised Warrants shall expire and the rights of the Holders of such
Warrants to purchase Underlying Common Stock shall terminate at the close of
business on May 10, 2017 (the “Expiration Date”).

 

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

 

10

 

herein.  Full Physical Settlement shall apply to each
Warrant unless the Holder elects for Net Share Settlement to apply upon
exercise of such Warrant.  Such election
shall be made in the form on the reverse of or attached to the Warrant
Certificate for such Warrant.

 

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

 

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

 

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

 

11

 

which such Holder is
entitled pursuant to this Agreement upon the surrender of a Warrant Certificate
in accordance with this Agreement.

 

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

 

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

 

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

 

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

 

3.6                                 Compliance with
Law.  (a) To the extent the Warrants are Registrable Securities, no Warrant may be
exercised (and the Warrant Agent shall be under no obligation to process any
exercise), and no Registrable Securities may be sold, transferred,
hypothecated, pledged or otherwise disposed of (any such sale, transfer or
other disposition, a “Sale”, and the
action of making any such sale, transfer or other disposition, to “Sell”),
except in compliance with applicable Federal and state securities and other
applicable laws and this Section 3.6.

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 A Holder may
exercise its Warrants or Sell its
Registrable Securities if:

 

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

 

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

 

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

 

(e)                                  subject to Section 12.5,
each certificate representing securities issued pursuant to the exercise of the
Warrants shall bear the following legend:

 

13

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE
STATE SECURITIES LAWS. SUCH SECURITIES MAY BE OFFERED, SOLD OR TRANSFERRED
ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT AND OF ANY APPLICABLE
STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF THE WARRANT AND
REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 10, 2010 BETWEEN GENERAL
GROWTH PROPERTIES, INC. (THE “COMPANY”), AND MELLON INVESTOR SERVICES
LLC, AS WARRANT AGENT. A COPY OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT
IS AVAILABLE AT THE OFFICES OF THE COMPANY.

 

(f)                                    subject to Section 12.5,
each certificate representing the Warrants shall bear the following legend:

 

THESE WARRANTS AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THESE WARRANTS AND SUCH
SECURITIES MAY BE OFFERED, SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE
REQUIREMENTS OF SUCH ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS AND
SUBJECT TO THE PROVISIONS OF THE WARRANT AND REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 10, 2010 BETWEEN GENERAL GROWTH PROPERTIES, INC.  (THE “COMPANY”) AND MELLON INVESTOR
SERVICES LLC, AS WARRANT AGENT. A COPY OF SUCH WARRANT AND REGISTRATION RIGHTS
AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.

 

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

 

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

 

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

 

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

 

14

 

(h)                                 The Warrant
Agent shall not take any action under this Section unless and until it has
received appropriate instructions from the Company and a certification of
compliance with applicable state and federal securities laws from the Company.

 

4.                                      REGISTRATION RIGHTS AND
PROCEDURES AND LISTING.

 

4.1                                 Applicability;
Registration.

 

(a)                                  Subject to the
limitations and conditions of this Section 4.1, upon the request of
any Holder, the Company shall use reasonable best efforts to cause a Shelf
Registration Statement to be declared or become effective covering all
Registrable Securities no later than the effective date of a plan of reorganization
of the Company (including without limitation the Plan), and use reasonable best
efforts to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of all Registrable
Securities for the period from the date of its initial effectiveness until such
time as there are no Registrable Securities remaining in accordance with such
plan of distribution as may be reasonably requested by Holders of Registrable
Securities from time to time.  The
underwriting provisions set forth in Section 4.1(e) hereof
shall apply to an underwritten public offering requested by a Holder using such
Shelf Registration Statement effected pursuant to this Section 4.1(a),
provided, that the limitations set forth in Section 4.1(e) shall
only apply with respect to such underwritten public offering and not more
generally to the Shelf Registration Statement.

 

(b)                                 Subject to the
conditions of this Section 4.1, if the Company shall receive from
any Holder or group of Holders (such
Holder or group of Holders, the “Initiating Holder(s)”), a written
request that the Company effect a registration  with respect to
Registrable Securities owned by such Initiating Holder(s) having an
estimated aggregate Fair Market Value of at least $75 million, the Company
shall:

 

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

 

(ii)                                  use reasonable best efforts to cause such Registration Statement to be declared or become
effective as promptly as practicable, but in no event later than 60 days after the date of initial filing of a Registration Statement
pursuant to Section 4.1(b)(i); and

 

(iii)                               use reasonable best efforts to keep such Registration Statement continuously effective and
in compliance with the Securities Act and usable for resale of such Registrable
Securities for the period as requested in
writing by the Initiating Holder(s) or such longer period as may be
requested in writing by any Holder

 

15

 

participating in such registration (which periods
shall be extended to the extent of any suspensions of sales pursuant to Sections
4.1(c) or 4.4);

 

provided, that (x) the
number of demand registrations that the Brookfield Investors shall be entitled
to effect pursuant to this Section 4.1(b) shall be no more
than three such demand registrations in total and no more than one such demand
registration in any 12-month period, (y) the number of demand
registrations that The Fairholme Fund shall be entitled to effect pursuant to
this Section 4.1(b) shall be no more than three such demand
registrations in total and no more than one such demand registration in any
12-month period (The Fairholme Focused Income Fund will not be entitled to
exercise demand registration rights under this Section 4.1(b)), and
(z) the number of demand registrations that the Pershing Investors shall
be entitled to effect pursuant to this Section 4.1(b) shall be
no more than three such demand registrations in total and no more than one such
demand registration in any 12-month period; provided, further,
that the Company shall be permitted, with the consent of the Initiating Holder(s) not
to be unreasonably withheld, to file a post-effective amendment or prospectus
supplement to the Shelf Registration Statement filed pursuant to Section 4.1(a) in
lieu of an additional registration statement pursuant to Section 4.1(b) to
the extent the Company reasonably determines that the Registrable Securities of
the Initiating Holder(s) may be sold thereunder by such Initiating Holder(s) pursuant
to their intended plan of distribution (in which case such post-effective
amendment or demand registration statement shall not be counted against the
limited number of demand registrations). 
It shall not be unreasonable if, following the recommendation of an
underwriter, the Initiating Holder(s) do not consent to the Company filing
a post-effective amendment or prospectus supplement to the Shelf Registration
Statement filed pursuant to Section 4.1(a) in lieu of an additional
registration statement requested by the Initiating Holder(s).

 

(c)                                  Notwithstanding
anything to the contrary contained herein, the Company shall not be required to
effect a registration pursuant to this Section 4.1: (i) with
respect to securities that are not Registrable Securities; (ii) subject to
Section 4.1(h), during any Scheduled Black-Out Period; or (iii) if
the Company has notified the Holders that in the good faith judgment of the
Company, it would be materially detrimental to the Company or its security
holders for such registration to be effected at such time, in which event the
Company shall have the right to defer such registration for a period of not
more than 60 days; provided that (A) such
right to delay a registration pursuant to clause (iii) shall be exercised
by the Company only if the Company has generally exercised (or is concurrently
exercising) similar black-out rights against holders of similar securities that
have registration rights, if any, and (B) any rights to delay registration
pursuant to clauses (ii) or (iii) shall be subject to the Suspension
Limit described in Section 4.4.

 

(d)                                 If the Company
shall determine to register any of its securities either (x) for its own
account, (y) for the account of the Holders listed in Section 4.1(b) pursuant
to the terms thereof, or (z) for the account of Other Stockholders (other
than (A) a registration relating solely to employee benefit plans, (B) a
registration relating solely to a Rule 145 transaction under the
Securities Act or (C) a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a Registration Statement),
the Company will, subject to the conditions set forth in this Section 4.1(d):

 

16

 

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

 

(ii)                                  subject to Section 4.1(f) below
and any transfer restrictions any Holder may be a party to, include in such
registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made by the
Holders.  Such written request may
specify all or a part of the Holders’ Registrable Securities and shall be received
by the Company within ten (10) days after written notice from the Company
is given under Section 4.1(d)(i) above.

 

(e)                                  If any
Initiating Holder(s) intends to distribute Registrable Securities pursuant
to Section 4.1(b) by means of an underwriting, it shall so
advise the Company.  In the case of such
an underwritten offering, the price, underwriting discount and other financial
terms for the Registrable Securities shall be determined by the Initiating
Holder(s).  If Other Stockholders or
Holders, to the extent they have any registration rights under Section 4.1(d),
request inclusion of their securities or Registrable Securities, respectively,
in the underwriting, the Initiating Holder(s) shall offer to include such
securities or Registrable Securities of such Other Stockholders or Holders,
respectively, in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 4.1(e).  The Holders whose Registrable Securities are
to be included in such registration and the Company shall (together with all
Other Stockholders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter or underwriters selected for such underwriting by the
Initiating Holder(s) subject to approval by the Company not to be
unreasonably withheld (which underwriters may also include a non-bookrunning
co-manager selected by the Company subject to approval by the Initiating
Holder(s)); provided, however, that such underwriting agreement shall not
provide for indemnification or contribution obligations on the part of any
Holder greater than the obligations of the Holders under Sections 4.7(b) and
4.8.  Notwithstanding any other
provision of this Section 4.1(e), if the managing underwriter or
underwriters advises the Holders in writing that marketing factors require a
limitation on the number of securities to be underwritten, some or all of the
securities of the Company held by the Other Stockholders shall be excluded from
such registration to the extent so required by such limitation.  If, after the exclusion of such securities
held by the Other Stockholders, further reductions are still required due to
the marketing limitation, the number of Registrable Securities included in the
registration by each Holder (including the Initiating Holder(s)) shall be
reduced on a pro rata basis (based on the number of securities held by such
Holders), by such minimum number of securities as is necessary to comply with
such request.  No Registrable Securities
or any other securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration.  If any Holder or Other Stockholder who has
requested inclusion in such registration as provided above disapproves of the
terms of the underwriting, such Person may elect to withdraw therefrom by
providing written notice to the Company, the underwriter and the Initiating
Holder(s).  The securities so withdrawn
shall also be withdrawn from registration. 
If the underwriter has not limited the number of Registrable Securities
or other securities to be underwritten, the Company and executive officers and
directors of the Company (whether or not such Persons have registration rights
pursuant to Section 4.1(d) hereof) may include its or their 

 

17

 

securities for its or their
own account in such registration if the managing underwriter or underwriters
and the Company so agree and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited. 
The Company shall not be obligated to undertake more than (i) one underwritten offering requested by any of the Brookfield
Investors pursuant to Sections 4.1(b) and 4.1(e) in any
12-month period, (ii) one underwritten offering requested by The Fairholme
Fund pursuant to Section 4.1(b) and 4.1(e) in any
12-month period, and (iii) one underwritten offering requested by any of
the Pershing Investors pursuant to Section 4.1(b) and 4.1(e) in
any 12-month period.  The Holders
shall reasonably cooperate in connection with requests for underwritten
offerings pursuant to this Section 4.1(e) to cause the total
number of days that the Company shall be subject to lock-ups in connection with
any such underwritten offerings not to exceed 120 days in any 365-day period.

 

(f)                                    If the
registration of which the Company gives notice pursuant to Section 4.1(d) is
for a registered public offering involving an underwriting, the Company shall
so advise each of the Holders as a part of the written notice given pursuant to
Section 4.1(d) above. 
In such event, the right of each of the Holders to registration pursuant
to Section 4.1(d) shall be conditioned upon such Holders’
participation in such underwriting and the inclusion of such Holders’
Registrable Securities in the underwriting to the extent provided herein.  The Holders whose Registrable Securities are
to be included in such registration shall (together with the Company and the
Other Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the managing
underwriter or underwriters selected for underwriting by the Company (other
than a registration pursuant to Section 4.1(b) and notified by
the Company pursuant to Section 4.1(d)(y), in which case Section 4.1(e) shall
apply with respect to the selection of underwriters); provided, however, that
such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of any Holder greater than the obligations
of the Holders under Sections 4.7(b) and 4.8.  Notwithstanding any other provision of Section 4.1(d),
if any registration in respect of which any Holder is exercising its rights
under Section 4.1(d) involves an underwritten public offering
(other than a registration pursuant to Section 4.1(b), in which
case the provisions with respect to priority of inclusion in such registration
set forth in Section 4.1(e) shall apply) and the managing
underwriter or underwriters advises the Company that in its view marketing
factors require a limitation on the number of securities to be underwritten,
then there shall be included in such underwritten offering the number or dollar
amount of securities of the Company that in the opinion of the managing
underwriter or underwriters can be sold without adversely affecting such
offering, and such number of securities of the Company shall be allocated for
inclusion as follows: (1) first, all securities of the Company being sold
by the Company for its own account; (2) second, all Registrable Securities
requested to be included by the Holders and, solely with respect to an offering
of Warrants following the 180th day after the effectiveness of a
plan of reorganization of the Company, securities of the Company being sold by
any Person (other than a Holder) with similar piggyback registration rights,
pro rata, based on the number of securities beneficially owned by each such
Holder and Person; and (3) third, among any other holders of securities of
the Company requesting such registration, pro rata, based on the number of
securities beneficially owned by each such holder.  If any of the Holders or any officer,
director or Other Stockholder disapproves of the terms of any such
underwriting, he, she or it may elect to withdraw therefrom by providing
written notice to the Company and the underwriter.  Any 

 

18

 

Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.

 

(g)                                 In the event
any Holder requests or elects to participate in a registration pursuant to this
Section 4.1 in connection with a distribution of Registrable
Securities to its partners or members, the registration shall provide for the
resale by such partners or members, if requested by such Holder.

 

(h)                                 The Company agrees to use reasonable best efforts to promptly respond to
any request by any member of the Fairholme Purchaser Group to sell Registrable
Securities under a Registration Statement or Prospectus during what would
otherwise be a Scheduled Black-Out Period, provided that such consent can be
given in compliance with applicable securities laws. In addition the Company
agrees to use its reasonable best efforts to issue earnings releases as
promptly as practicable following the end of quarterly reporting periods and to
otherwise minimize the duration of Scheduled Black-Out Periods.

 

4.2                                 Expenses of
Registration.  Except as
specifically provided herein, all Registration Expenses incurred in connection
with any registration, qualification or compliance hereunder shall be borne by
the Company. All Selling Expenses incurred in connection with any registrations
hereunder shall be borne by the holders of the securities so registered pro
rata on the basis of the aggregate offering or sale price of the securities so
registered.

 

4.3                                 Obligations of
the Company.  In connection with the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably practicable and in accordance with the requested methods of distribution thereof, subject to
the provisions of this Article 4:

 

(a)                                  Prepare and file
with the SEC a prospectus supplement with respect to a proposed offering of
Registrable Securities pursuant to an effective Registration Statement and,
subject to Sections 4.1(b), 4.1(c) and 4.4,
use reasonable best efforts to keep
such Registration Statement effective or such prospectus supplement current,
until the termination of the period contemplated in Section 4.5.

 

(b)                                 Prepare and
file with the SEC such amendments and supplements to the applicable
Registration Statement and the Prospectus or prospectus supplement used in
connection with such Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such Registration Statement for the period
set forth in paragraph (a) above.

 

(c)                                  Furnish to the
Holders and any underwriters such number of copies of the applicable
Registration Statement and each such amendment and supplement thereto
(including in each case all exhibits) and of a Prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned or to be distributed
by them.

 

(d)                                 Use its
reasonable best efforts to register and
qualify the securities 

 

19

 

covered
by such Registration Statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders or any
managing underwriter(s), to keep such registration or qualification in effect
for so long as such Registration Statement remains in effect, and to take any
other action which may be reasonably necessary to enable such seller to
consummate the disposition in such jurisdictions of the securities owned by
such Holder; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.

 

(e)                                  Notify each
Holder of Registrable Securities at any time when a Prospectus relating thereto
is required to be delivered under the Securities Act or the happening of any
event as a result of which the applicable Prospectus, as then in effect, would
include an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.

 

(f)                                    Give written
notice to the Holders of Registrable Securities covered by a Registration
Statement:

 

(i)                                     when any
Registration Statement filed pursuant to Section 4.1 or any
amendment thereto has been filed with the SEC and when such Registration Statement
or any post-effective amendment thereto has become effective;

 

(ii)                                  of any request
by the SEC for amendments or supplements to any Registration Statement or the
Prospectus included therein or for additional information;

 

(iii)                               of the issuance
by the SEC of any stop order suspending the effectiveness of any Registration
Statement or the initiation of any proceedings for that purpose;

 

(iv)                              of the receipt
by the Company or its legal counsel of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and

 

(v)                                 of the
happening of any event that requires the Company to make changes in any
effective Registration Statement or the Prospectus in order to make the
statements therein not misleading (which notice shall be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made).

 

(g)                                 Use its
reasonable best efforts to prevent the
issuance or obtain the withdrawal of any order suspending the effectiveness of
any Registration Statement referred to in Section 4.3(f)(iii) at
the earliest practicable time.

 

(h)                                 Upon the
occurrence of any event contemplated by Section 4.3(f)(v), as soon
as is reasonably practicable prepare a post-effective amendment to such 

 

20

 

Registration
Statement or a supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to the Holders and any underwriters,
the Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. If the Company
notifies the Holders in accordance with Section 4.3(f)(v) to
suspend the use of the Prospectus until the requisite changes to the Prospectus
have been made, then the Holders and any underwriters shall suspend use of such
Prospectus and use their commercially reasonable efforts to return to the
Company all copies of such Prospectus (at the Company’s expense) other than
permanently filed copies then in such Holder’s or underwriter’s possession.

 

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

 

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

 

(k)                                  With respect to
underwritten public offerings permitted by this Agreement, enter into an
underwriting agreement in form, scope and substance as is customarily entered
into for similar underwritten secondary offerings of equity securities and take
all such other actions reasonably requested by the Holders of a majority of the
Registrable Securities being sold in connection therewith or by the managing
underwriter(s), if any, to expedite or facilitate the underwritten disposition
of such Registrable Securities, and in connection therewith as customary for
any similar underwritten secondary offering, (i) make such representations
and warranties to the Holders that are selling stockholders and the managing
underwriter(s), if any, with respect to the business of the Company and its
subsidiaries, and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case,
in form, substance and scope as are customarily made by the issuer in similar
secondary underwritten offerings of equity securities, and confirm the same if
and when requested, (ii) use its reasonable best
efforts to furnish underwriters opinions of counsel to the Company,
addressed to the managing underwriter(s), if any, covering the matters
customarily covered in the opinions requested in similar secondary underwritten
offerings of equity securities, (iii) use its reasonable best efforts to obtain “cold comfort” letters from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any business acquired by the Company for which
financial statements and financial data are included in the Registration
Statement) who have certified the financial statements included in such
Registration Statement, addressed to each of the managing underwriter(s), if
any, such letters to be in customary form and covering matters of the type
customarily covered in “cold comfort” letters in connection with similar
secondary underwritten offerings of equity securities, (iv) if an
underwriting agreement is entered into, the same shall contain 

 

21

 

indemnification
provisions and procedures customary in similar secondary underwritten offerings
of equity securities by similar companies, and (v) deliver such documents
and certificates as may be reasonably requested by the Holders of a majority of
the Registrable Securities being sold in connection therewith, their counsel
and the managing underwriter(s), if any, to evidence the continued validity of
the representations and warranties made pursuant to clause (i) above and
to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.

 

(l)                                     Make available
for inspection by a representative of Holders that are selling at least five
percent (5%) of the Registrable Securities issued on the date hereof, the
managing underwriter(s), if any, and any attorneys or accountants retained by
such Holders or managing underwriter(s), at the offices where normally kept,
during reasonable business hours, financial and other records and pertinent
corporate documents of the Company, and cause the officers, directors and
employees of the Company to supply all information in each case reasonably
requested by any such representative, managing underwriter(s), attorney or
accountant in connection with such Registration Statement; provided that this
clause (l) shall only be applicable to a representative of such Holders
that are selling stockholders and any attorneys or accountants retained by such
Holders if such Holder is named in the applicable prospectus supplement as a
Person who may be deemed to be an underwriter with respect to an offering and sale of Registrable Securities.

 

4.4                                 Suspension of
Sales.  Notwithstanding anything to
the contrary contained herein (but subject to the Suspension Limit described
below), (i) subject to Section 4.1(h), during any Scheduled
Black-Out Period or (ii) upon receipt of written notice from the Company
that a Registration Statement or Prospectus contains or may contain an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that circumstances exist that make inadvisable use of such Registration
Statement or Prospectus, the Holder of Registrable Securities shall forthwith
discontinue the marketing of or disposition of Registrable Securities until
termination of such Scheduled Black-Out Period, until the Holder has received
copies of a supplemented or amended Prospectus, or until such Holder is advised
in writing by the Company that the use of the Prospectus may be resumed, and,
if so directed by the Company, such Holder shall deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. The total number of days that
any such suspensions and any deferrals or delays in registration pursuant to Section 4.1(c) in
the aggregate may be in effect in any 180 day period shall not exceed 60 days
(the “Suspension Limit”).

 

4.5                                 Termination of
Registration Rights.  A Holder’s
Registration Rights as to any securities held by such Holder (and its
affiliates, partners, members and former members) shall not be available unless
such securities are Registrable Securities.

 

4.6                                 Furnishing
Information.  It shall be
a condition precedent to the obligations of the Company to take any action
pursuant to Section 4.3 that the selling Holders and the
underwriters, if any, shall furnish to the Company such information regarding
themselves, the 

 

22

 

Registrable Securities held
by them and the intended method of disposition of such securities as shall be
required to effect the registered offering of their Registrable Securities.

 

4.7                                 Indemnification.  (a)  In connection with each
registration pursuant to Article 4, the Company agrees to indemnify
and hold harmless (1) each selling Holder and each of its officers,
directors, limited or general partners and members, (2) each member,
limited or general partner of each such member, limited or general partner, (3) each
of their respective Affiliates, officers, directors, shareholders, employees,
advisors and agents, (4) each underwriter or agent participating in such
offering, and (5) each Person, if any, who controls any selling Holder or
any such underwriter or agent within the meaning of Section 15 of the
Securities Act as follows:

 

(i)                                     against any and
all loss, liability, claim, damage and expense (“Loss”) whatsoever, as
incurred, arising out of an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of an
untrue statement of a material fact included in any preliminary prospectus or
the Prospectus or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and

 

(ii)                                  against any and
all Loss whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided, however, that,
with respect to any selling Holder or any underwriter or agent, this indemnity
does not apply to any Loss to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by such selling
Holder or underwriter or agent, respectively, expressly for use in the
Registration Statement, or any preliminary prospectus or the Prospectus.

 

(b)                                 Each selling
Holder agrees severally, and not jointly, to indemnify and hold harmless the
Company, its directors, each of its officers who signed a Registration
Statement, each underwriter or agent participating in such offering and the
other selling Holders, and each Person, if any, who controls the Company, any
such underwriter or agent and any other selling Holder within the meaning of Section 15
of the Securities Act, against any and all Losses described in the indemnity
contained in Section 4.7(a), as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement, or any preliminary prospectus or the Prospectus
in reliance upon and in conformity with written information furnished to the
Company by such selling Holder expressly for use in the Registration Statement,
or any preliminary prospectus or the Prospectus.

 

(c)                                  The obligations
of the Company under Section 4.7(a) and of the selling Holders
under Section 4.7(b) to indemnify any underwriter or agent who
participates in an offering (or any Person, if any, controlling such
underwriter or agent within the meaning of Section 15 of the Securities
Act) shall be conditioned upon the underwriting or agency 

 

23

 

agreement with such
underwriter or agent containing an agreement by such underwriter or agent to
indemnify and hold harmless (1) each selling Holder and each of its
officers, directors, limited or general partners and members, (2) each member,
limited or general partner of each such member, limited or general partner, (3) each
of their respective Affiliates, officers, directors, shareholders, employees,
advisors and agents, (4) the Company, its directors, and each of its
officers who signed a Registration Statement, and (5) each Person, if any,
who controls the Company or any such selling Holder within the meaning of Section 15
of the Securities Act, against any and all Losses described in the indemnity
contained in Section 4.7(a), as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement, or any preliminary prospectus or the Prospectus
in reliance upon and in conformity with written information furnished to the
Company by such underwriter or agent expressly for use in the Registration
Statement or any preliminary prospectus or the Prospectus.

 

(d)                                 Each
indemnified party shall give prompt notice to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve the
indemnifying party from any liability it may have under this Agreement, except
to the extent that the indemnifying party is prejudiced thereby. If it so
elects, after receipt of such notice, an indemnifying party, jointly with any
other indemnifying parties receiving such notice, may assume the defense of
such action with counsel chosen by it, provided that the indemnified
party shall be entitled to participate in (but not control) the defense of such
action with counsel chosen by it, the reasonable fees and expenses of which
shall be paid by the indemnifying party if there would be a conflict if one
counsel were to represent both the indemnified and the indemnifying party, and
by the indemnified party in all other circumstances. In no event shall the
indemnifying party or parties be liable for a settlement of an action with
respect to which they have assumed the defense if such settlement is effected
without the written consent of the indemnifying party (not to be unreasonably
withheld or delayed), or for the fees and expenses of more than one counsel for
(i) the Company, its officer, directors and controlling Persons as a
group, (ii) the selling Holders and their controlling Persons as a group
and (iii) the underwriters or agents and their controlling Persons as a
group, in each case, in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances.

 

4.8                                 Contribution.  If the indemnification provided for in this Article 4
is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any Loss, then the indemnifying party, in
lieu of indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such aggregate
Losses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the
other in connection with the statements or omissions (or alleged statements or
omissions) which resulted in such Losses, as well as any other relevant
equitable considerations.  The relative
fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue (or alleged
untrue) statement of a material fact or the omission (or alleged omission) to
state a material fact relates to information supplied by the indemnifying party
or by the indemnified party and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission; provided, however, that the 

 

24

 

obligations of each of the
Holders hereunder shall be several and not joint and shall be limited to an
amount equal to the net proceeds such Holder receives in such registration and,
provided, further, that no Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.  For purposes of this Section 4.8,
each Person, if any, who controls an underwriter or agent within the meaning of
Section 15 of the Securities Act shall have the same rights to
contribution as such underwriter or agent and each director of the Company,
each officer of the Company who signed a Registration Statement, and each
Person, if any, who controls the Company or a selling Holder within the meaning
of Section 15 of the Securities Act shall have the same rights to
contribution as the Company or such selling Holder, as the case may be.

 

4.9                                 Representations,
Warranties and Indemnities to Survive.  The indemnity and contribution agreements
contained in this Article 4 and the representations and warranties
of the Company referred to in Section 4.3(k) shall remain
operative and in full force and effect regardless of (i) any termination
of any underwriting or agency agreement, (ii) any investigation made by or
on behalf of the selling Holders, the Company or any underwriter or agent or
controlling Person or (iii) the consummation of the sale or successive
resales of the Registrable Securities.

 

4.10                           Lock-Up
Agreements.  The Company
agrees that, if requested by the managing underwriter in any underwritten
public offering permitted by this Agreement, it will not, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of any Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock (subject to customary exceptions), other than any
such sale or distribution of Common Stock upon exercise of the Company’s
Warrants, in the case of an underwritten offering for a period of 60 days from
the effective date of the Registration Statement pertaining to such Common
Stock; provided, however, that any such lock-up agreement shall not prohibit
the Company from directly or indirectly (i) selling, offering to sell,
granting any option for the sale of, or otherwise disposing of any Qualifying
Employee Stock (or otherwise maintaining its employee benefits plans in the
ordinary course of business) or (ii) issuing Common Stock or securities
convertible into or exchangeable for Common Stock upon exercise or conversion
of any warrant (including any other Warrant), option, right or convertible or
exchangeable security issued in connection with the plan of
reorganization.  The total number of days
that any such lock-up agreement may be in effect in any 365-day period shall
not exceed 120 days.  The lock-up
agreements set forth in this Section 4.10 shall be subject to
customary exceptions that may be contained in an underwriting agreement if any
such registration involves a similar underwritten offering.

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

5.                                      ADJUSTMENTS AND OTHER
RIGHTS.

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

28

 

all of the Company’s assets
or other transaction, which in each case is effected in such a way that the
shares of Common Stock are converted into the right to receive (either directly
or upon subsequent liquidation) stock, securities, other equity interests or
assets (including cash) with respect to or in exchange for shares of Common
Stock is referred to herein as “Organic Change.”  Prior to the consummation of any Organic
Change, the Company shall make appropriate provision to ensure that each of the
Holders shall thereafter have the right to acquire and receive, in lieu of or
in addition to (as the case may be) the Common Stock immediately theretofore
acquirable and receivable upon the exercise of such Holder’s Warrants, (x) in
the case of a Mixed Consideration Merger, the Public Stock issued in such Mixed
Consideration Merger and (y) in the case of any other Organic Change, such
stock, securities, other equity interests or assets, in each case as may be
issued or payable in connection with the Organic Change with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of such Holder’s Warrants, for an
aggregate Exercise Price per Warrant equal to (i) in the case of a Mixed
Consideration Merger, the aggregate Exercise Price per Warrant as in effect
immediately prior to such Mixed Consideration Merger times the Stock
Consideration Ratio and (ii) in the case of any other Organic Change, the
aggregate Exercise Price per Warrant as in effect immediately prior to such
Organic Change.  In any such case, the
Company shall make appropriate provision to insure that all of the provisions
of the Warrants shall thereafter be applicable to such stock, securities, other
equity interests or assets.  The Company
shall not effect any such consolidation, merger or sale of all or substantially
all of the Company’s assets where the Warrants will be assumed by the successor
entity, unless prior to the consummation thereof, the successor entity (if
other than the Company) resulting from consolidation or merger or the entity
purchasing such assets assumes by written instrument the obligation to deliver
to each such Holder upon exercise of any Warrant, such stock, securities,
equity interests or assets (including cash) as, in accordance with Article 5,
such Holder may be entitled to acquire. 
This Section 5.5 shall not apply to any Warrants or Common
Stock redeemed or sold in connection with any Organic Change pursuant to Section 6.1,
Section 6.2(b), Section 6.3(a)(i) and Section 6.3(b),
provided that, for the avoidance of doubt, the adjustments set forth in this Section 5.5
shall be applicable to any Warrants that remain outstanding pursuant to this
Agreement in connection with a Public Stock Merger or Mixed Consideration
Merger (including any adjustment applicable in connection with such Public
Stock Merger or Mixed Consideration Merger).

 

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

 

5.7                                 Notice of
Adjustment.  Whenever
the number of shares of Common Stock issuable upon the exercise of each Warrant
is adjusted, as herein provided, the Company shall 

 

29

 

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

 

6.                                      CHANGE OF CONTROL.

 

6.1                                 Redemption in
Connection with a Change of Control Event.  Upon the occurrence of a Change of Control
Event (other than a Public Stock Merger or Mixed Consideration Merger), at the
election of each Holder in its sole discretion by written notice to the Company
or the successor to the Company on or prior to the Exercise Date, the Company
shall pay to such Holder of outstanding Warrants as of the date of such Change
of Control Event, an amount in immediately available funds equal to the Cash
Redemption Value for such Warrants, not later than the date which is ten (10) Business
Days after such Change of Control Event and the Warrants shall thereafter be
extinguished. For purposes of this Section 6.1, the Exercise Date
shall mean (a) if the Company entered into a definitive agreement with
respect to a Change of Control Event and has provided to the Holders notice of
the date on which the Change in Control Event will become effective at least
twenty (20) Business Days prior to the effectiveness of such event, the tenth
(10th) Business Day prior to such event and (b) otherwise, the fifth (5th)
Business Day following the effectiveness of the Change of Control Event.  The “Cash Redemption Value” for any
Warrant will equal the fair value of the Warrant as of the date of such Change
of Control Event as determined by an Independent Financial Expert, by employing
a valuation based on a computation of the option value of each Warrant using the calculation methods and making the assumptions set forth in Exhibit C.  The Cash Redemption Value of the Warrants
shall be due and payable within ten (10) Business Days after the date of
the applicable Change of Control Event.  If a Holder of Warrants does not elect to
receive the Cash Redemption Value for such Holder’s Warrants as provided by
this Section 6.1, such Warrants will remain outstanding as adjusted
pursuant to the provisions of Article 5 hereof.

 

30

 

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

 

(b)                                 In the case of
any Public Stock Merger with respect to which the Company does not make a
timely election as contemplated by Section 6.2(a) above, the
Company shall pay within five (5) Business Days after the effective date of
such Public Stock Merger, to the Warrant Agent on behalf of each Holder of
outstanding Warrants as of the effective date of such Public Stock Merger, an
amount in cash in immediately available funds equal to the Cash Redemption
Value for such Warrants determined in accordance with Section 6.1
and the Warrants shall be terminated and extinguished.

 

6.3                                 Mixed
Consideration Merger.  (a) 
In connection with a Mixed Consideration Merger, the Company may by written
notice to the Holders not less than ten (10) Business Days prior to the
effective date of such Mixed Consideration Merger elect the following treatment
with respect to each outstanding Warrant: (i) pay to the Holder of such
Warrant as of the date of such Mixed Consideration Merger the product of the Cash
Consideration Ratio multiplied by the Cash Redemption Value for such Warrant,
which amount shall be paid in immediately available funds, not later than the
date which is ten (10) Business Days after such Mixed Consideration Merger
and (ii) the Warrant shall remain outstanding after the Mixed
Consideration Merger, as further adjusted pursuant to Section 5.5
and the other provisions of Article 5.  The portion of the Cash Redemption Value of
the Warrants payable pursuant to clause (i) of this Section 6.3(a) shall
be due and payable not later than the tenth (10th) Business Day after the date
of the Mixed Consideration Merger.

 

(b)                                 In the case of
any Mixed Consideration Merger with respect to which the Company does not make
a timely election as contemplated by Section 6.3(a) above, the
Company shall pay, within ten (10) Business Days after the effective date
of such Mixed Consideration Merger, to the Warrant Agent on behalf of each
Holder of outstanding Warrants as of the effective date of such Mixed Consideration
Merger, an amount in cash in immediately available funds equal to the Cash
Redemption Value for such Warrants determined in accordance with Section 6.1
and the Warrants shall be terminated and extinguished.

 

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

 

7.                                      WARRANT TRANSFER BOOKS.

 

The
Warrant Certificates shall be issued in registered form only. The Company shall
cause to be kept at the office of the Warrant Agent designated for such purpose
a register in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Warrant
Certificates and of transfers or exchanges of Warrant Certificates as herein
provided  (the “Warrant Register”).

 

31

 

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

 

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

 

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

 

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

 

8.                                      WARRANT HOLDERS.

 

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

 

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

 

32

 

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

 

9.                                      WARRANT AGENT

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

36

 

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

 

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

 

10.                               REPRESENTATIONS AND WARRANTIES.

 

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

 

11.                               COVENANTS.

 

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

 

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

 

11.3                           Cancellation of
Warrants.  Upon the
effectiveness of the Plan and in accordance with the Investment Agreement
and/or Stock Purchase Agreements, as applicable, the Warrants, regardless of
whether or not vested, shall be cancelled for no consideration and all rights
under this Agreement and the Warrants shall thereupon terminate.

 

12.                               MISCELLANEOUS.

 

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

 

37

 

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

 

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

 

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

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

If
to the Company, to:

 

General
Growth Properties, Inc.

110
N. Wacker Drive

Chicago
IL 60606

Attention:
Ronald L. Gern, Esq.

Fax:  312-960-5485

 

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

 

Weil,
Gotshal & Manges LLP

767
Fifth Avenue

New
York, NY 10153

	
  Attention:

  	
  Marcia
  L. Goldstein, Esq.

  
	
   

  	
  Frederick
  S. Green, Esq.

  
	
   

  	
  Gary T.
  Holtzer, Esq.

  
	
   

  	
  Malcolm
  E. Landau, Esq.

  
	
  Facsimile:
  (212) 310-8007

  

 

If to the Warrant Agent, to:

 

Mellon Investor Services LLC

200 W. Monroe Street, Suite 1590

Chicago, IL 60606

Attention: Relationship
Manager

Facsimile: (312) 325-7610

 

with a copy to:

 

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, NJ 07310

Attention:  General Counsel

Facsimile: 201-680-4610

 

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

 

(b)                                 Any notice
required to be given by the Company to the Holders pursuant to this Agreement,
shall be made by mailing by registered mail, return receipt requested, to the 

 

40

 

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

 

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

 

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

 

12.9                           Relationship to
Investment Agreement and Stock Purchase Agreements.  The Warrants issued hereunder
have been fully paid upon issuance and shall remain issued, outstanding and
binding on the parties in accordance with the terms hereof notwithstanding any
failure of the transactions contemplated by the Investment Agreement or Stock
Purchase Agreements, as applicable, to be
consummated, any default by any party to the Investment Agreement or Stock
Purchase Agreements, as applicable, or the
invalidity or unenforceability thereof. 
Notwithstanding the preceding sentence, if a failure by any Purchaser to
pay all amounts payable by such Purchaser under Article I and Article II
of the Investment Agreement or a Stock Purchase Agreements, as applicable, causes the termination of the Investment Agreement or
a Stock Purchase Agreement, as applicable, by the Company pursuant to Section 11.1(c)(iii) therein,
each Holder that is a member of the Purchaser Group of such Purchaser agrees
that as liquidated damages for such failure and without prejudice to the rights
and remedies of the Company under the Investment Agreement or Stock Purchase
Agreements, as applicable, any
Warrants held by such Holder shall be deemed cancelled, null and void and of no
further effect.  For the avoidance of doubt, the immediately preceding sentence applies only
to a Holder that is a member of a Purchaser Group where the applicable
Purchaser fails to pay all amounts payable by such Purchaser under Article I
and Article II of the Investment Agreement or a Stock Purchase Agreement,
as applicable, causing the termination of the Investment Agreement or a Stock
Purchase Agreement, as applicable, by the Company pursuant to Section 11.1(c)(iii) thereof,
and not to any permitted transferee of such member or any other Person.

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

[signature
page follows]

 

42

 

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

 

 

	
   

  	
  GENERAL GROWTH PROPERTIES, INC.

  
	
   

  	
   

  
	
   

  	
  By: Adam
  Metz

  
	
   

  	
   

  
	
   

  	
  Name:
  Adam Metz

  
	
   

  	
   

  
	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON INVESTOR SERVICES LLC,

  
	
   

  	
  as Warrant Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  Thomas Blatchford

  
	
   

  	
   

  
	
   

  	
  Name:
  Thomas Blatchford

  
	
   

  	
   

  
	
   

  	
  Title:
  Vice President

  

 

43

 

EXHIBIT A

 

FORM OF FACE OF WARRANT CERTIFICATE

 

THESE WARRANTS AND THE SECURITIES
ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS.
THESE WARRANTS AND SUCH SECURITIES MAY BE OFFERED, SOLD OR TRANSFERRED
ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT AND OF ANY APPLICABLE
STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF THE WARRANT AND
REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 10, 2010 BETWEEN GENERAL
GROWTH PROPERTIES, INC. (THE “COMPANY”) AND MELLON INVESTOR SERVICES
LLC, WARRANT AGENT. A COPY OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT IS
AVAILABLE AT THE OFFICES OF THE COMPANY.

 

WARRANTS
TO PURCHASE COMMON STOCK

OF
GENERAL GROWTH PROPERTIES, INC.

 

	
  No.

  	
   

  	
  Certificate for
                                    
  Warrants

  

 

This certifies that [HOLDER] , or registered
assigns, is the registered holder of the number of Warrants set forth above.
Each Warrant entitles the holder thereof (a “Holder”), subject to the
provisions contained herein and in the Warrant and Registration Rights
Agreement referred to below, to purchase from GENERAL GROWTH PROPERTIES, INC.
(the “Company”), a number of shares of the Company’s
common stock, par value $0.01 (“Common Stock”), equal to $15 divided by the Exercise Price (as defined in the Warrant
Agreement referred to below), for a price per share of Common Stock equal to
the Exercise Price.

 

This Warrant Certificate is issued under and in
accordance with the Warrant and Registration Rights Agreement, dated as of May 10,
2010 (the “Warrant Agreement”), between the Company and Mellon Investor
Services LLC, a New Jersey limited liability company, as warrant agent (the “Warrant
Agent”, which term includes any successor Warrant Agent under the Warrant
Agreement), and is subject to the terms and provisions contained in the Warrant
Agreement, to all of which terms and provisions the Holder of this Warrant
Certificate consents by acceptance hereof. The Warrant Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Warrant Agreement for a full statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Warrant Agent and the Holders of the Warrants.

 

This Warrant Certificate shall terminate and be void
as of the close of business on May 10, 2017 (the “Expiration Date”).

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

Dated: May 10, 2010

 

	
   

  	
   

  	
  GENERAL
  GROWTH PROPERTIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name and
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name and
  Title:

  
	
   

  	
   

  	
   

  
	
  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mellon
  Investor Services LLC, as Warrant Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  	
   

  

 

3

 

EXHIBIT A

 

FORM OF REVERSE OF WARRANT CERTIFICATE

 

EXERCISE SUBSCRIPTION FORM

 

(To be executed only upon exercise of Warrant)

 

	
  To:

  	
   

  	
   

  

 

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

 

	
  Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  *

  
	
   

  	
   

  	
  (Signature
  of Owner) 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Street
  Address) 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (City)

  	
  (State) (Zip Code)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranteed by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

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

 

1

 

Securities to be issued to:

 

 

Please insert social
security or identifying number:

 

 

Name:

 

 

Street Address:

 

 

City, State and Zip Code:

 

 

Any unexercised Warrants
evidenced by the within Warrant Certificate to be issued to:

 

 

Please insert social
security or identifying number:

 

 

Name:

 

 

Street Address:

 

 

City, State and Zip Code:

 

2

 

EXHIBIT B

 

FORM OF ASSIGNMENT

 

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

 

	
  Names of Assignees

  	
   

  	
  Address

  	
   

  	
  Social
  Security or

  other Identifying

  Number of

  Assignee(s)

  	
   

  	
  Number of

  Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

 

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

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  *

  
	
   

  	
  (Signature
  of Owner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Street
  Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (City)

  	
  (State) (Zip Code)

  
	
   

  	
   

  
	
   

  	
  Signature
  Guaranteed by:

  
	
   

  	
   

  
	
   

  	
   

  
						

 

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

 

2

 

EXHIBIT C

 

Option Pricing Assumptions / Methodology

 

For the purpose of this Exhibit C:

 

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

 

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

 

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

 

	
  Underlying Security Price:

  	
  ·      In
  the event of a merger or other acquisition,

   

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

   

  (B)   that
  is an “all Public Stock” deal,

   

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

  

 

 

	
   

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

   

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

   

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

   

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

   

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

   

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

   

  
	
   

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

  
	
   

  	
   

  
	
  Exercise Price:

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

  
	
   

  	
   

  
	
  Dividend Rate:

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

  
	
   

  	
   

  
	
  Interest Rate:

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

  
	
   

  	
   

  
	
  Put or Call:

  	
  Call

  

 

 

	
  Time to Expiration

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

  
	
   

  	
   

  
	
  Settlement Date:

  	
  The
  scheduled date of payment of the Cash Redemption Value.

  
	
   

  	
   

  
	
  Volatility:

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

  

 

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

 

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

 

 

Illustrative Example

 

Inputs:

 

S = Underlying Security Price

 

X = Exercise Price

 

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

 

V = Volatility

 

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

 

T = Time to Expiration

 

W = warrant value per underlying share

 

Z = number of shares underlying warrants

 

Value = total warrant value

 

Formulaic inputs:

 

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

 

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

 

Black-Scholes Formula

 

W = [N(D1) * S] – [N(D2) * PV(X)]

 

Where “N” is the cumulative normal probability
function

 

Value = W * Z

 

Example of a Hypothetical Warrant:(1)

 

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

 

 

Inputs:

 

Interest Rate = 4.00%

 

S = $50.00

 

X = $60.00

 

PV(X) = $55.43

 

V = 25%

 

R = 3.96%

 

T = 2

 

Z = 100

 

Formulaic inputs:

 

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

 

=
(-0.1149)

 

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

 

= (-0.4684)

 

Black-Scholes Formula

 

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

 

= $4.99

 

Total Warrant Value

 

Value     = W * Z

 

= $499

 

 

SCHEDULE A

 

ALLOCATIONS OF WARRANTS TO INITIAL INVESTORS AND VESTING

 

	
   

  	
   

  	
   

  	
   

  	
  Vesting
  Schedule

  (Number of Warrants that vest on applicable date)

  	
   

  
	
  Initial
  Investor

  	
   

  	
  Total Number
  of Warrants

  to be Delivered to Initial

  Investor (on date of

  Warrant Agreement)

  	
   

  	
  Date of Warrant

  Agreement

  	
   

  	
  July 12, 2010

  	
   

  	
  Each day from
  and

  including July 13, 2010

  through and including

  December 31, 2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Brookfield Purchaser

  	
   

  	
  60,000,000

  	
   

  	
  24,000,000

  	
   

  	
  12,000,152

  	
   

  	
  139,534

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fairholme Purchasers

  	
   

  	
  42,857,143

  	
   

  	
  17,142,857

  	
   

  	
  8,571,562

  	
   

  	
  99,667

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pershing Square Purchasers

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  

 

 

SCHEDULE B

 

WARRANT AGENT COMPENSATION

 

	
  Service Description

  	
   

  	
  Fees

  	
   

  
	
  Warrant Agent 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Initial
  Setup (one-time charge) 

  	
   

  	
  $

  	
  2,500.00 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Administration 

  	
   

  	
  $

  	
  3,500.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Warrant Conversion Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Set Up
  and Administrative Fee

  	
   

  	
  $

  	
  5,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Processing
  Accounts, each

  	
   

  	
  $

  	
  50.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Conversions
  requiring additional handling

  	
   

  	
  $

  	
  15.00

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Requisitioning
  Funds, each requisition

  	
   

  	
  $

  	
  25.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Expiration

  	
   

  	
  $

  	
  1,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Special
  Services

  	
   

  	
  Additional

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Out of
  Pocket Expenses 

  	
   

  	
  Additional

  	
   

  
	
   

  	
   

  	
   

  	
   

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00173-of-00352.parquet"}]]