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ARTICLE I PURCHASE OF NEW COMMON STOCK; CLOSING | ||||
Section 1.1 Purchase of New Common Stock | 3 | |||
Section 1.2 Closing | 4 | |||
Section 1.3 Company Rights Offering Election | 5 | |||
Section 1.4 Company Election to Replace Certain Shares; Company Election to Reserve and Repurchase Certain Shares | 5 | |||
Section 1.5 Pro Rata Reductions with Fairholme Agreement | 11 | |||
ARTICLE II GGO SHARE DISTRIBUTION AND PURCHASE OF GGO COMMON STOCK | ||||
Section 2.1 GGO Share Distribution | 11 | |||
Section 2.2 Purchase of GGO Common Stock | 12 | |||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY | ||||
Section 3.1 Organization and Qualification | 13 | |||
Section 3.2 Corporate Power and Authority | 14 | |||
Section 3.3 Execution and Delivery; Enforceability | 14 | |||
Section 3.4 Authorized Capital Stock | 15 | |||
Section 3.5 Issuance | 16 | |||
Section 3.6 No Conflict | 17 | |||
Section 3.7 Consents and Approvals | 18 | |||
Section 3.8 Company Reports | 19 | |||
Section 3.9 No Undisclosed Liabilities | 20 | |||
Section 3.10 No Material Adverse Effect | 20 | |||
Section 3.11 No Violation or Default: Licenses and Permits | 20 | |||
Section 3.12 Legal Proceedings | 21 | |||
Section 3.13 Investment Company Act | 21 | |||
Section 3.14 Compliance With Environmental Laws | 21 | |||
Section 3.15 Company Benefit Plans | 22 | |||
Section 3.16 Labor and Employment Matters | 23 | |||
Section 3.17 Insurance | 24 | |||
Section 3.18 No Unlawful Payments | 24 |
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(continued)
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Section 3.19 No Broker’s Fees | 24 | |||
Section 3.20 Real and Personal Property | 24 | |||
Section 3.21 Tax Matters | 29 | |||
Section 3.22 Material Contracts | 31 | |||
Section 3.23 Certain Restrictions on Charter and Bylaws Provisions; State Takeover Laws | 32 | |||
Section 3.24 No Other Representations or Warranties | 32 | |||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER | ||||
Section 4.1 Organization | 33 | |||
Section 4.2 Power and Authority | 33 | |||
Section 4.3 Execution and Delivery | 33 | |||
Section 4.4 No Conflict | 33 | |||
Section 4.5 Consents and Approvals | 34 | |||
Section 4.6 Compliance with Laws | 34 | |||
Section 4.7 Legal Proceedings | 34 | |||
Section 4.8 No Broker’s Fees | 34 | |||
Section 4.9 Sophistication | 34 | |||
Section 4.10 Purchaser Intent | 34 | |||
Section 4.11 Reliance on Exemptions | 34 | |||
Section 4.12 REIT Representations | 35 | |||
Section 4.13 Financial Capability | 35 | |||
Section 4.14 No Other Representations or Warranties | 35 | |||
Section 4.15 Acknowledgement | 35 | |||
ARTICLE V COVENANTS OF THE COMPANY AND PURCHASER | ||||
Section 5.1 Bankruptcy Court Motions and Orders | 35 | |||
Section 5.2 Warrants, New Warrants and GGO Warrants | 36 | |||
Section 5.3 [Intentionally Omitted.] | 37 | |||
Section 5.4 Listing | 37 | |||
Section 5.5 Use of Proceeds | 37 | |||
Section 5.6 Access to Information | 37 |
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(continued)
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Section 5.7 Competing Transactions | 38 | |||
Section 5.8 Reservation for Issuance | 38 | |||
Section 5.9 Subscription Rights | 38 | |||
Section 5.10 Company Board of Directors | 43 | |||
Section 5.11 Notification of Certain Matters | 45 | |||
Section 5.12 Further Assurances | 46 | |||
Section 5.13 [Intentionally Omitted.] | 46 | |||
Section 5.14 Rights Agreement; Reorganized Company Organizational Documents | 47 | |||
Section 5.15 Stockholder Approval | 48 | |||
Section 5.16 Closing Date Net Debt | 49 | |||
ARTICLE VI ADDITIONAL COVENANTS OF PURCHASER | ||||
Section 6.1 Information | 52 | |||
Section 6.2 Purchaser Efforts | 52 | |||
Section 6.3 Plan Support | 52 | |||
Section 6.4 Transfer Restrictions | 53 | |||
Section 6.5 [Intentionally Omitted.] | 54 | |||
Section 6.6 REIT Representations and Covenants | 54 | |||
Section 6.7 Non-Control Agreement | 55 | |||
Section 6.8 [Intentionally Omitted.] | 55 | |||
Section 6.9 Additional Backstops | 55 | |||
ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF PURCHASER | ||||
Section 7.1 Conditions to the Obligations of Purchaser | 58 | |||
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE COMPANY | ||||
Section 8.1 Conditions to the Obligations of the Company | 69 | |||
ARTICLE IX [INTENTIONALLY OMITTED] | ||||
ARTICLE X SURVIVAL OF REPRESENTATIONS AND WARRANTIES | ||||
Section 10.1 Survival of Representations and Warranties | 71 | |||
ARTICLE XI TERMINATION | ||||
Section 11.1 Termination | 72 |
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(continued)
Page | ||||
Section 11.2 Effects of Termination | 76 | |||
ARTICLE XII DEFINITIONS | ||||
Section 12.1 Defined Terms | 76 | |||
ARTICLE XIII MISCELLANEOUS | ||||
Section 13.1 Notices | 93 | |||
Section 13.2 Assignment; Third Party Beneficiaries | 94 | |||
Section 13.3 Prior Negotiations; Entire Agreement | 96 | |||
Section 13.4 Governing Law; Venue | 96 | |||
Section 13.5 Company Disclosure Letter | 96 | |||
Section 13.6 Counterparts | 96 | |||
Section 13.7 Expenses | 96 | |||
Section 13.8 Waivers and Amendments | 96 | |||
Section 13.9 Construction | 97 | |||
Section 13.10 Adjustment of Share Numbers and Prices | 98 | |||
Section 13.11 Certain Remedies | 98 | |||
Section 13.12 Bankruptcy Matters | 99 |
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Exhibit A: | Plan Summary Term Sheet | |
Exhibit B: | Post-Bankruptcy GGP Corporate Structure | |
Exhibit C-1: | Brookfield Agreement | |
Exhibit C-2: | Fairholme Agreement | |
Exhibit D: | REIT Representation Letter | |
Exhibit E: | GGO Assets | |
Exhibit F: | Form of Approval Order | |
Exhibit G: | Form of Warrant Agreement | |
Exhibit H: | [Intentionally Omitted] | |
Exhibit I: | [Intentionally Omitted] | |
Exhibit J: | Form of REIT Opinion | |
Exhibit K: | [Intentionally Omitted] | |
Exhibit L: | [Intentionally Omitted] | |
Exhibit M: | Form of Non-Control Agreement | |
Exhibit N: | Certain REIT Investors |
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Defined Term | Page | |||
2006 Bank Loan | 76 | |||
Additional Financing | 63 | |||
Additional Sales Period | 77 | |||
Adequate Reserves | 30 | |||
Affiliate | 77 | |||
Agreement | 1 | |||
Anticipated Debt Paydowns | 63 | |||
Approval Motion | 36 | |||
Approval Order | 36 | |||
Asset Sales | 64 | |||
Backstop Investors | 55 | |||
Backstop Shares | 7 | |||
Bankruptcy Cases | 1 | |||
Bankruptcy Code | 1 | |||
Bankruptcy Court | 1 | |||
Blackstone | 94 | |||
Blackstone Assigned Securities | 94 | |||
Blackstone Assigned Shares | 94 | |||
Blackstone Assigned Warrants | 94 | |||
Blackstone Purchase Price | 95 | |||
Brazilian Entities | 77 | |||
Bridge Note Amount | 9 | |||
Bridge Note Interest Rate | 9 | |||
Bridge Note Maturity Date | 9 | |||
Bridge Notes | 9 | |||
Bridge Securities | 57 | |||
Brookfield Agreement | 2 | |||
Brookfield Consortium Member | 77 | |||
Brookfield Investor | 2 | |||
Business Day | 77 | |||
Capital Raising Activities | 77 | |||
Cash Equivalents | 77 | |||
Change of Control | 78 | |||
Chapter 11 | 1 | |||
Claims | 78 | |||
Clawback Percentage | 6 | |||
Clawback Shares | 6 | |||
Closing | 4 | |||
Closing Date | 5 | |||
Closing Date Net Debt | 78 |
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Defined Term | Page | |||
Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts | 79 | |||
Closing Restraint | 75 | |||
CMPC | 12 | |||
CNDAS Dispute Notice | 50 | |||
CNDAS Disputed Items | 50 | |||
Code | 22 | |||
Common Stock | 1 | |||
Company | 2 | |||
Company Benefit Plan | 79 | |||
Company Board | 80 | |||
Company Disclosure Letter | 13 | |||
Company Ground Lease Property | 27 | |||
Company Mortgage Loan | 28 | |||
Company Option Plans | 15 | |||
Company Properties | 24 | |||
Company Property | 24 | |||
Company Property Lease | 27 | |||
Company Rights Offering | 5 | |||
Company SEC Reports | 19 | |||
Competing Transaction | 80 | |||
Conclusive Net Debt Adjustment Statement | 80 | |||
Confirmation Order | 60 | |||
Confirmed Debtors | 89 | |||
Contract | 80 | |||
control | 88 | |||
Corporate Level Debt | 80 | |||
Dealer Manager | 55 | |||
Debt | 80 | |||
Debtors | 1 | |||
Designation Conditions | 4 | |||
DIP Loan | 81 | |||
Disclosure Statement | 81 | |||
Disclosure Statement Order | 60 | |||
Dispute Notice | 49 | |||
Disputed Items | 49 | |||
Effective Date | 4 | |||
Encumbrances | 25 | |||
Environmental Laws | 21 | |||
Equity Exchange | 2 | |||
Equity Securities | 15 | |||
ERISA | 81 | |||
ERISA Affiliate | 23 | |||
Excess Equity Capital Proceeds | 8 | |||
Excess Surplus Amount | 81 |
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Defined Term | Page | |||
Exchangeable Notes | 81 | |||
Excluded Claims | 81 | |||
Excluded Non-US Plans | 23 | |||
Fairholme Agreement | 3 | |||
Fairholme Purchasers | 3 | |||
Foreign Plan | 23 | |||
Fully Diluted Basis | 83 | |||
Fully Diluted GGO Economic Interest | 83 | |||
GAAP | 84 | |||
GGO | 2 | |||
GGO Agreement | 43 | |||
GGO Board | 43 | |||
GGO Common Share Amount | 84 | |||
GGO Common Stock | 11 | |||
GGO Non-Control Agreement | 84 | |||
GGO Note Amount | 84 | |||
GGO Per Share Purchase Price | 13 | |||
GGO Pro Rata Share | 84 | |||
GGO Promissory Note | 84 | |||
GGO Purchase Price | 13 | |||
GGO Representative | 11 | |||
GGO Setup Costs | 85 | |||
GGO Share Distribution | 12 | |||
GGO Shares | 13 | |||
GGO Warrants | 37 | |||
GGP Backstop Rights Offering | 55 | |||
GGP Backstop Rights Offering Amount | 55 | |||
GGP Pro Rata Share | 85 | |||
Governmental Entity | 85 | |||
Hazardous Materials | 22 | |||
Hughes Agreement | 85 | |||
Hughes Amount | 84 | |||
Hughes Heirs Obligations | 85 | |||
Identified Assets | 11 | |||
Indebtedness | 85 | |||
Indemnity Cap | 51 | |||
Initial Investors | 3 | |||
Investment Agreements | 3 | |||
Joint Venture | 86 | |||
Knowledge | 86 | |||
Law | 86 | |||
Liquidity Equity Issuances | 86 | |||
Liquidity Target | 62 | |||
Material Adverse Effect | 86 | |||
Material Contract | 87 |
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Defined Term | Page | |||
Material Lease | 27 | |||
Measurement Date | 15 | |||
Most Recent Statement | 24 | |||
MPC Assets | 88 | |||
MPC Taxes | 88 | |||
Net Debt Excess Amount | 88 | |||
Net Debt Surplus Amount | 88 | |||
New Common Stock | 1 | |||
New Debt | 63 | |||
New DIP Agreement | 60 | |||
New Warrant Vesting Date | 37 | |||
New Warrants | 36 | |||
Non-Control Agreement | 88 | |||
Non-Controlling Properties | 88 | |||
NYSE | 37 | |||
Offering Premium | 88 | |||
Operating Partnership | 89 | |||
Original Agreement | 1 | |||
PBGC | 23 | |||
Per Share Purchase Price | 3 | |||
Permitted Claims | 89 | |||
Permitted Claims Amount | 89 | |||
Permitted Replacement Shares | 89 | |||
Permitted Title Exceptions | 25 | |||
Person | 90 | |||
Petition Date | 1 | |||
Plan | 1 | |||
Plan Debtors | 89 | |||
Plan Summary Term Sheet | 1 | |||
PMA Claims | 89 | |||
Preliminary Closing Date Net Debt Review Deadline | 90 | |||
Preliminary Closing Date Net Debt Review Period | 90 | |||
Preliminary Closing Date Net Debt Schedule | 49 | |||
Proportionally Consolidated Debt | 90 | |||
Proportionally Consolidated Unrestricted Cash | 90 | |||
Proposed Approval Order | 36 | |||
Proposed Securities | 39 | |||
PSCM | 1 | |||
Purchase Price | 3 | |||
Purchaser | 1 | |||
Purchaser Board Designee | 43 | |||
Purchaser GGO Board Designees | 43 | |||
Purchaser Group | 91 | |||
Put Notice | 7 | |||
Put Option | 7 |
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Defined Term | Page | |||
Put Shares | 6 | |||
Put Termination Notice | 8 | |||
Refinance Cap | 66 | |||
Reinstated Amounts | 63 | |||
Reinstatement Adjustment Amount | 91 | |||
Reinstatement Amount | 91 | |||
REIT | 30 | |||
REIT Subsidiary | 30 | |||
Reorganized Company | 1 | |||
Reorganized Company Organizational Documents | 47 | |||
Repurchase Notice | 6 | |||
Repurchase Shares | 6 | |||
Reserve | 89 | |||
Reserve Surplus Amount | 91 | |||
Reserved Shares | 6 | |||
Resolution Period | 49 | |||
Rights Agreement | 91 | |||
Rights Offering Election | 5 | |||
Rouse Bonds | 91 | |||
Rule 144 | 53 | |||
Sales Cap | 65 | |||
SEC | 19 | |||
Securities Act | 19 | |||
Settlement Date | 7 | |||
Share Cap Number | 64 | |||
Share Equivalent | 91 | |||
Shares | 3 | |||
Significant Subsidiaries | 92 | |||
Specified Debt | 92 | |||
Subscription Right | 39 | |||
Subsidiary | 92 | |||
Synthetic Lease Obligation | 86 | |||
Target Net Debt | 92 | |||
Tax Protection Agreements | 92 | |||
Tax Return | 30 | |||
Taxes | 30 | |||
Termination Date | 92 | |||
Total Purchase Amount | 4 | |||
Transactions | 92 | |||
Transfer | 54 | |||
TRUPS | 92 | |||
Unrestricted Cash | 93 | |||
Unrestricted Date | 52 | |||
Unsecured Indebtedness | 93 | |||
UPREIT Units | 93 |
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Defined Term | Page | |||
Warrant Agreement | 36 | |||
Warrants | 36 |
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(i) | The Company shall not be obligated to sell, and no Purchaser shall be obligated to purchase, any Put Shares at Closing. Instead, the Company shall have the option (the |
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“Put Option”) to sell to the Purchasers on the first Business Day at least 180 days after the Effective Date (the “Settlement Date”) a number of Shares up to the Deficiency Amount (the “Backstop Shares”). |
(ii) | The Company may exercise its Put Option by irrevocable written notice (a “Put Notice”) delivered to each Purchaser on the third Business Day prior to the Settlement Date (it being agreed that the Company may at its election for convenience deliver the Put Notice prior to such date, but it shall be revocable until, and become effective only as of, the third Business Day prior to the Settlement Date), and the Put Option shall expire if the Put Notice is not so delivered. The Put Notice and this Agreement together shall constitute the binding agreement of the Company to sell to each Purchaser, and of each Purchaser to purchase from the Company, on the Settlement Date a number of Shares equal to such Purchaser’s pro rata share of the Backstop Shares for a purchase price per share equal to the Per Share Purchase Price (payable in cash in immediately available funds). Closing of the sale and purchase of the Backstop Shares shall occur at 9:30 a.m., New York time, on the Settlement Date at the offices of Weil, Gotshal & Manges LLP located at 767 Fifth Avenue, New York, NY 10153, or such other date, time or location as agreed by the parties. Backstop Shares shall constitute “Shares” for all purposes of this Agreement, including without limitation, the representations and warranties of the Company set forth inArticle III. All conditions precedent to the obligation of the Company to issue and sell, and of each Purchaser to purchase, Backstop Shares shall be deemed satisfied on the Settlement Date,provided that (A) the obligations of the Company and each Purchaser on the Settlement Date shall be subject to the satisfaction (or waiver by each of them) of the condition precedent that no judgment, injunction, decree or other legal restraint shall prohibit settlement and (B) the obligation of each Purchaser on the Settlement Date shall be subject to the additional condition precedent that the representations and warranties of the Company inSection 3.5(a) as they relate to the Backstop Shares shall be true and correct at and as of the Settlement Date as if made at and as of the Settlement Date. Each Purchaser’s obligation with respect to its pro rata share of the Backstop Shares will be independent of the payment or nonpayment |
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of any amount by the Company with respect to any Bridge Note (as described below). |
(iii) | For purposes of the Company’s Put Option, the “Deficiency Amount” shall be the sum, if positive, of: |
(iv) | PSCM, in its sole discretion, may designate that some or all of the Backstop Shares be issued in the name of, and delivered (together with the payment obligations therewith) |
8
to, the other members of the Purchaser Group. Each Purchaser (other than Pershing Square International, Ltd. and Pershing Square International V, Ltd.) will be bound jointly and severally with respect to the obligations of all the Purchasers with respect to the Put Option. |
(v) | In addition, if it has designated any Put Shares, the Company shall issue to the Purchasers, and the Purchasers shall purchase from the Company, on the Effective Date one or more unsecured notes with terms consistent with thisSection 1.4 and in form to be mutually agreed prior to the designation of Put Shares (the “Bridge Notes”) in an amount equal to the product of (A) the Put Shares multiplied by (B) the Per Share Purchase Price (the “Bridge Note Amount”). The Bridge Notes shall (1) have a final maturity date and be unconditionally payable on the first Business Day at least 181 days after the Effective Date (the “Bridge Note Maturity Date”), (2) bear interest at a rate of 6.00% per annum (the “Bridge Note Interest Rate”), with interest accruing and compounding quarterly, but payable only upon prepayment or payment of principal, (3) be unsecured general obligations of the Company without guarantee by any subsidiary, (4) have a successorship covenant customary for short term indebtedness of public companies, but no financial, operational restriction or similar covenants or any business representations or warranties and (5) have events of default limited to non-payment and customary bankruptcy matters, but for the avoidance of doubt, no cross-default, cross-acceleration or similar clauses. In return for the Bridge Notes, each Purchaser shall deliver to the Company on the Effective Date cash proceeds in the amount of such Purchaser’s pro rata share of the Bridge Note Amount. If the Company has not repaid Purchasers the full amount outstanding under the Bridge Notes on or before the Bridge Note Maturity Date, interest will accrue on the unpaid amount of the Bridge Notes, including due but unpaid interest, at a default rate equal to the Bridge Note Interest Rate plus 2.00%. The Bridge Notes may be prepaid at any time without premium or penalty. The Bridge Note shall be freely transferable by holders; provided that any transfer shall require the consent of the Company, not to be unreasonably withheld, at any time that no event of default thereunder is continuing (and it being agreed that the Company shall not be obligated to register any Bridge Note under securities laws). |
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(vi) | The Company and each Purchaser agree to work together in good faith with the aim to negotiate and agree on mutually acceptable definitive form of the Bridge Notes as promptly as practicable. |
(vii) | In the event that the Company pays or declares any dividend or distribution on New Common Shares with a record date after the Effective Date and prior to the Settlement Date, (A) the Per Share Purchase Price shall be decreased by the value of such dividend or distribution (with (1) dividends or distributions payable in New Common Shares valued at the Per Share Purchase Price (before giving effect to such adjustment), (2) dividends or distributions payable in cash valued at the amount of cash, and (3) dividends or distributions of other property valued at “Fair Market Value” as defined in the form of Warrant Agreement) and (B) the number of Shares subject to the Put Option shall be increased by multiplying such number by a fraction the numerator of which is the Per Share Purchase Price before giving effect to such adjustment and the denominator of which is the Per Share Purchase Price after giving effect to such adjustment. |
(viii) | At Closing, the Purchasers shall collaterally assign and post the Bridge Notes (or an amount of cash and freely marketable securities with a fair market value equal to the principal amount of the Bridge Notes) as collateral for performance of the Purchasers’ obligations under the Put Option pursuant to customary collateral arrangements reasonably acceptable to the parties. The amount of collateral to be posted shall be measured by the principal amount of the Bridge Note outstanding from time to time and there shall be no requirement to post additional collateral if the Bridge Note is voluntarily paid by the Company prior to its maturity. |
(ix) | For the purposes of thisSection 1.4(c), the “pro rata share” of each Purchaser means the percentage designated by PSCM by written notice to the Company on or prior to the Effective Date; provided that the sum of such pro rata shares shall be 100%. |
(x) | The Bridge Note Amount shall not be included in the calculation of Closing Date Net Debt or Closing Date Net Debt W/O Reinstatement Adjustment pursuant toSection 5.16. |
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(i) | As of the date listed thereunder,Section 3.20(g) of the Company Disclosure Letter sets forth a true, correct and complete list in all material respects of (i) all loans (other than the DIP Loan) and other indebtedness secured by a mortgage, deed of trust, deed to secure debt or indemnity deed of trust in such Company Property (each, a “Company Mortgage Loan”), (ii) the outstanding principal balance of each such Company Mortgage Loan, (iii) the rate of interest applicable to such Company Mortgage Loan and (iv) the maturity date of such Company Mortgage Loan; |
(ii) | Except as set forth inSection 3.20(g) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries have received a written notice of default (beyond any applicable grace or cure periods) in the (y) payment of interest, principal or other material amount due to the lender under any Company Mortgage Loan, whether as the primary obligor or as a guarantor thereof or (z) performance of any other material obligations under any Company Mortgage Loan, except (i) with respect to (y) and (z) above, as a result of the filing of the Bankruptcy Cases, or as is prohibited, stayed or otherwise suspended as a |
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result of the Company’s or any Subsidiary’s Chapter 11 filing or status as a debtor-in-possession under Chapter 11, and (ii) with respect solely to (z) above, which would not individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; and |
(iii) | For purposes ofSection 7.1(c) the representations and warranties made inSection 3.20(g)(i), disregarding all qualifications and exceptions contained therein relating to “materiality” or “Material Adverse Effect”, shall be true and correct at and as of the Closing Date as if made at and as of the Closing Date, except for (A) such inaccuracies caused by sales, purchases, transfers of assets, refinancing or other actions effected in accordance with, subject to the limitations contained in, and not otherwise prohibited by, the terms and conditions in this Agreement, including, without limitation, inArticle VII, (B) amortization payments made pursuant to any applicable Company Mortgage Loans and (C) such failures to be true and correct that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. |
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(1) | That following the Closing, GGO shall nominate as part of its slate of directors and use its reasonable best efforts to have them elected to the GGO Board (including through the solicitation of proxies for such person to the same extent as it does for any of its other nominees to the GGO Board) (subject to applicable Law and stock exchange rules (provided that the Purchaser GGO Board Designees need not be “independent” under the applicable rules of the applicable stock exchange or the SEC)) (x) so long as the Purchaser Group has at least a 17.5% Fully |
43
Diluted GGO Economic Interest, three (3) Purchaser Board Designees, and (y) otherwise, so long as the Purchaser Group beneficially owns (directly or indirectly) in the aggregate at least 10% of the shares of GGO Common Stock on a Fully Diluted Basis, two (2) Purchaser Board Designees. For the avoidance of doubt, at and following such time as the Purchaser Group beneficially owns (directly or indirectly) in the aggregate less than 10% of the shares of GGO Common Stock on a Fully Diluted Basis, PSCM shall no longer have the right to designate directors for election to the GGO Board. |
(2) | That following the Closing, and subject to applicable Law and stock exchange rules, there shall be proportional representation by Purchaser GGO Board Designees on any committee of the GGO Board, except for special committees established for potential conflict of interest situations, and except that only Purchaser GGO Board Designees who qualify under the applicable rules of the applicable stock exchange or the SEC may serve on committees where such qualification is required. If at any time the number of Purchaser GGO Board Designees serving on the GGO Board exceeds the number of Purchaser GGO Board Designees that PSCM is then otherwise entitled to designate as a result of a decrease in the percentage of shares of GGO Common Stock beneficially owned by the Purchaser Group, such Purchaser Group shall, to the extent it is within such Purchaser Group’s control, use commercially reasonable efforts to cause any such additional Purchaser GGO Board Designees to offer to resign such that the number of Purchaser GGO Board Designees serving on the GGO Board after giving effect to such resignation does not exceed the number of Purchaser GGO Board Designees that PSCM is entitled to designate for election to the GGO Board. | ||
(3) | That except with respect to the resignation of a Purchaser GGO Board Designee pursuant toSection 5.10(b)(ii)(2), (A) PSCM shall have the power to designate a Purchaser GGO Board Designee’s |
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replacement upon the death, resignation, retirement, disqualification or removal from office of such Purchaser GGO Board Designee and (B) the GGO Board shall promptly take all action reasonably required to fill any vacancy resulting therefrom with such replacement Purchaser GGO Board Designee (including nominating such person, subject to applicable Law, as GGO’s nominee to serve on the GGO Board and causing GGO to use all reasonable efforts to have such person elected as a director of GGO and solicit proxies for such person to the same extent as it does for any of GGO’s other nominees to the GGO Board). |
(4) | That (A) each Purchaser GGO Board Designee shall be entitled to the same compensation and same indemnification in connection with his or her role as a director as the members of the GGO Board, and each Purchaser GGO Board Designee shall be entitled to reimbursement for documented, reasonable out-of-pocket expenses incurred in attending meetings of the GGO Board or any committees thereof, to the same extent as other members of the GGO Board, (B) GGO shall notify each Purchaser GGO Board Designee of all regular and special meetings of the GGO Board and shall notify the Purchaser GGO Board Designee of all regular and special meetings of any committee of the GGO Board of which such Purchaser GGO Board Designee is a member, and (C) GGO shall provide each Purchaser GGO Board Designee with copies of all notices, minutes, consents and other materials provided to all other members of the GGO Board concurrently as such materials are provided to the other members (except, for the avoidance of doubt, as are provided to members of committees of which such Purchaser GGO Board Designee is not a member). | ||
(5) | Purchaser GGO Board Designee candidates shall be subject to such reasonable eligibility criteria as applied in good faith by the nominating, corporate governance or similar committee of the GGO Board to other candidates for the GGO Board. |
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(i) | Each Purchaser and the Brookfield Investor (together with the Purchaser, the “Backstop Investors”) and the Company shall appoint a mutually-acceptable and internationally-recognized investment bank to act as bookrunning dealer-manager for the GGP Backstop Rights Offering (the “Dealer Manager”) pursuant to such arrangements as they may mutually agree; | ||
(ii) | the Dealer Manager will, no later than the fifth business day in advance of the commencement of the solicitation of votes on the Plan and offering of rights in the GGP Backstop Rights Offering (which shall not be longer than 60 days), recommend in writing to the Backstop Investors and the Company the number of shares of New Common |
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Stock that may be purchased for each share of Common Stock , the subscription price of such purchase and the other terms for the rights offering that the Dealer Manager determines are reasonably likely to yield committed proceeds to the Company at the Effective Date equal to the GGP Backstop Rights Offering Amount (it being understood that the Dealer Manager will have no liability if it is later determined that its good faith determination was erroneous); |
(iii) | the Backstop Investors agree, severally but not jointly and severally, to subscribe, or cause one or more designees to subscribe, for New Common Stock on a pro rata basis to the extent rights are declined by holders of Common Stock, subject to the subscription rights among the Backstop Investors set forth in clause (iv); | ||
(iv) | the Backstop Investors will have subscription rights in any such offering allowing them to maintain their respective proportionate pro forma New Common Stock-equivalent interests on a Fully Diluted Basis with the effect that the Backstop Investors will be assured of the ability to acquire such number of shares of New Common Stock as would have been available to them pursuant toSection 5.9 had the GGP Backstop Rights Offering been made after the Closing; | ||
(v) | the Backstop Investors will receive aggregate compensation in the form of New Common Stock (whether or not the backstop commitments are utilized) with a value equal to three percent (3%) of the GGP Backstop Rights Offering Amount; and | ||
(vi) | the amount of New Common Stock to be purchased pursuant to the GGP Backstop Rights Offering will be subject to reduction to the extent that either (A) the Company Board determines in its business judgment after consultation with the Backstop Investors that it has sufficient liquidity and working capital available to it in light of circumstances at the time and the costs and benefits to the Company of consummation of the GGP Backstop Rights Offering or (B) the Backstop Investors have agreed that they will provide to the Company, in lieu of the GGP Backstop Rights Offering the Bridge Securities contemplated in clause (b) below. |
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(i) | the Company shall not have (A) declared, set aside or paid any dividends on, or made any other distributions in respect of, any of the Company’s capital stock (other than dividends required to retain REIT status or to avoid the imposition of entity level taxes, (B) split, combined or reclassified any of its capital stock or issued or authorized |
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the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, or (C) purchased, redeemed or otherwise acquired (other than as set forth onSection 7.1(r)(i) of the Company Disclosure Letter or pursuant to Company Benefit Plans) any shares of its capital stock or any rights, warrants or options to acquire any such shares; |
(ii) | the Company shall not have amended the Company’s certificate of incorporation or bylaws other than to increase the authorized shares of capital stock; | ||
(iii) | neither the Company nor any of its Subsidiaries shall have acquired or agreed to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof except (A) in the ordinary course of business, (B) for transactions with respect to joint ventures existing on the date hereof valued at less than $10,000,000 or (C) for transactions valued at less than $10,000,000 in the aggregate; | ||
(iv) | none of the Company Properties, Non-Controlling Properties or Identified Assets shall have been sold or otherwise transferred, except, (A) in the ordinary course of business, (B) to a wholly owned Subsidiary of the Company (which Subsidiary shall be subject to the same restrictions under this subsection (iv)), and (C) for sales or other transfers, the net proceeds of which shall not exceed $1,000,000,000 in the aggregate, when taken together with all such sales and other transfers of Company Properties, Non-Controlling Properties and Identified Assets (the “Sales Cap”); provided that the Sales Cap shall not apply with respect to sales or transfers of Identified Assets to the extent the same shall have been consummated in accordance with the express terms and conditions set forth in Article II hereof; | ||
(v) | [Intentionally Omitted;] | ||
(vi) | (vi) none of the Company or any of its Subsidiaries shall have issued, delivered, granted, sold or disposed of any Equity Securities (other than (A) issuances of shares of Common Stock issued pursuant to, and in accordance with, |
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Section 7.1(u), but subject toSection 7.1(q), (B) pursuant to the Equity Exchange, (C) the issuance of shares pursuant to the exercise of employee stock options issued pursuant to the Company Option Plans, (D) as set forth onSection 7.1(u) of the Company Disclosure Letter), or (E) the issuance of shares to existing holders of Common Stock and the Backstop Investors, in each case, pursuant toSection 6.9); |
(vii) | none of the Company Properties or Identified Assets shall have been mortgaged, or pledged, nor shall the owner or lessee thereof have granted a lien, mortgage, pledge, security interest, charge, claim or other Encumbrance relating to debt obligations of any kind or nature on, or otherwise encumbered, any Company Property or Identified Assets except in the ordinary course of business consistent with past practice, other than encumbrances of Company Properties or Identified Assets of Debtors in connection with (A) a restructuring of existing indebtedness for borrowed money related to any such Company Property or Identified Asset with the existing lender(s) thereof or (B) a refinancing of existing indebtedness for borrowed money related to any Company Property or Identified Asset in an amount not to exceed $300,000,000 (the “Refinance Cap”),provided that (x) the Refinance Cap shall not apply to a refinancing of the existing first lien indebtedness secured by the Fashion Show Mall, (y) in the event that a refinancing is secured by mortgages, deeds of trust, deeds to secure debt or indemnity deeds of trust encumbering multiple Company Properties and Identified Assets, the proceeds of such refinancing shall not exceed an amount equal to the Refinance Cap multiplied by the number of Company Properties and Identified Assets so encumbered, and (z) in connection with refinancing the indebtedness of a Company Property or Identified Asset owned by a Joint Venture, the Refinance Cap shall apply with respect to the aggregate share of such indebtedness which is allocable to, or guaranteed by (but without duplication), the Company and/or its Subsidiaries; | ||
(viii) | none of the Company or any of its Subsidiaries shall have undertaken any capital expenditure that is out of the ordinary course of business consistent with past practice and material to the Company and its Subsidiaries taken as a |
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whole, except as contemplated in the Company’s business plan for fiscal year 2010 adopted by the board of directors of the Company prior to the date hereof; or |
(ix) | the Company shall not have changed any of its methods, principles or practices of financial accounting in effect, other than as required by GAAP or regulatory guidelines (and except to implement purchase accounting and/or “fresh start” accounting if the Company elects to do so). |
(i) | The Company shall have entered into the Non-Control Agreement with each Purchaser. The Non-Control Agreement shall be in full force and effect and the Company shall not be in breach of any representation, warranty, covenant or agreement thereunder in any material respect. | ||
(ii) | GGO shall have entered into the GGO Non-Control Agreement with each Purchaser. The GGO Non-Control Agreement shall be in full force and effect and GGO shall not be in breach of any representation, warranty, covenant or agreement thereunder in any material respect. |
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(i) | if the Effective Date and the purchase and sale contemplated byArticle I have not occurred by the Termination Date;provided,however, that the right to terminate this Agreement under thisSection 11.1(b)(i) shall not be available to any Purchaser if any Purchaser has breached in any material respect its obligations under this Agreement in any manner that shall have proximately caused the Closing Date not to occur on or before the Termination Date; | ||
(ii) | if any Bankruptcy Cases of the Company or any Debtor which is a Significant Subsidiary shall have been dismissed or converted to cases under chapter 7 of the Bankruptcy Code or if an interim or permanent trustee or an examiner shall be appointed to oversee or operate any of the Debtors in their Bankruptcy Cases, in each case, except (x) as would not reasonably be expected to have a Material |
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Adverse Effect or (y) with respect to the Bankruptcy Cases for Phase II Mall Subsidiary, LLC, Oakwood Shopping Center Limited Partnership and Rouse Oakwood Shopping Center, LLC; |
(iii) | if, from and after the issuance of the Warrants, the Approval Order shall without the prior written consent of each Purchaser, cease to be in full force and effect resulting in the cancellation of any Warrants or a modification of any Warrants, in each case, other than pursuant to their terms, that adversely affects any Purchaser; | ||
(iv) | if, without a Purchaser’s consent, the Warrants have not been issued to such Purchaser in accordance withSection 5.2, or if after the Warrants are issued, any shares of Common Stock underlying the Warrants cease at any time to be authorized for issuance on a U.S. national securities exchange; | ||
(v) | if there has been a breach by the Company of any representation, warranty, covenant or agreement of the Company contained in this Agreement or the Company shall have taken any action which, in each case, (A) would result in a failure of a condition set forth inArticle VII and (B) cannot be cured prior to the Termination Date, after written notice to the Company of such breach and the intention to terminate this Agreement pursuant to this Section;provided,however, that the right to terminate this Agreement under this Section shall not be available to any Purchaser if any Purchaser has breached in any material respect its obligations under this Agreement; | ||
(vi) | following the issuance of the Warrants, if (a) the Company consummates a Competing Transaction, (b) on or after November 1, 2010, the Company enters into an agreement or files any pleading or document with the Bankruptcy Court, in each case, evidencing its decision to support any Competing Transaction, or (c) the Company files notice of a hearing to confirm a plan of reorganization that contemplates a Change of Control without such Change of Control being subject to either (1) the written consent of the holders a majority in number of the outstanding shares of Common Stock or (2) soliciting the approval of the holders of a majority in number of the outstanding shares of Common Stock in accordance with the Bankruptcy Code (in each case, regardless of whether such approval is |
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obtained) and providing for a period of at least 20 Business Days for acceptance or rejection by such holders in connection with such solicitation; |
(vii) | if the Company or any Subsidiary of the Company issues any shares of Common Stock or New Common Stock (or securities convertible into or exchangeable or exercisable for Common Stock or New Common Stock) at a purchase price (or in the case of securities that are convertible into or exchangeable or exercisable for, or linked to the performance of, Common Stock or New Common Stock, the conversion, exchange, exercise or comparable price) of less than $10.00 per share (net of all underwriting and other discounts, fees and any other compensation and related expenses;provided, that for purposes hereof, payments to the Purchasers or the Fairholme Purchasers in accordance withSection 1.4 of this Agreement or the Fairholme Agreement, respectively, shall not be considered a discount, fee or other compensation) of Common Stock or New Common Stock or converts any claim against any of the Debtors into New Common Stock at a conversion price less than $10.00 per share of Common Stock or New Common Stock (in each case, other than pursuant to (A) the exercise, exchange or conversion of Share Equivalents of the Company existing on the date of this Agreement in accordance with the terms thereof as of the date of this Agreement, (B) the Equity Exchange, (C) the issuance of shares upon the exercise of employee stock options issued pursuant to the Company Option Plans, (D) the issuance of shares as set forth onSection 7.1(u) of the Company Disclosure Letter, or (E) the issuance of shares to existing holders of Common Stock and the Backstop Investors, in each case, pursuant toSection 6.9; | ||
(viii) | if the Bankruptcy Court shall have entered a final and non-appealable order denying confirmation of the Plan; | ||
(ix) | if this Agreement, including the Plan Summary Term Sheet, or the Plan, is revised or modified (except as otherwise permitted pursuant to this Agreement) by the Company or an order of the Bankruptcy Court or other court of competent jurisdiction in a manner that is unacceptable to any Purchaser or a plan of reorganization with respect to the Debtors involving the Transactions that is unacceptable to any Purchaser is filed by the Debtors |
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with the Bankruptcy Court or another court of competent jurisdiction; |
(x) | if any Governmental Entity of competent jurisdiction shall have issued a final and nonappealable order permanently enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement (the “Closing Restraint”); | ||
(xi) | prior to the issuance of the Warrants, if the Company (A) makes a public announcement, enters into an agreement or files any pleading or document with the Bankruptcy Court, in each case, evidencing its decision to support any Competing Transaction, or (B) the Company or any Subsidiary of the Company enters into a definitive agreement providing for a Competing Transaction or the Company provides notice to any Purchaser of the Company’s or any of its Subsidiaries’ decision to enter into a definitive agreement providing for a Competing Transaction pursuant toSection 5.7; or |
(i) | if the Effective Date and the purchase and sale contemplated byArticle I have not occurred by the Termination Date;provided,however, that the right to terminate this Agreement under thisSection 11.1(c)(i) shall not be available to the Company to the extent that it has breached in any material respect its obligations under this Agreement in any manner that shall have proximately caused the Closing Date not to occur on or before the Termination Date (it being agreed that this proviso shall not limit the Company’s ability to terminate this Agreement pursuant toSection 11.1(c)(ii) or any other clause of thisSection 11.1(c)); | ||
(ii) | prior to the entry of the Confirmation Order, upon notice to each Purchaser, for any reason or no reason, effective as of such time as shall be specified in such notice;provided,however, that prior to the entry of the Approval Order, the Company shall not have the right to terminate this Agreement under thisSection 11.1(c)(ii) during the 48 hour notice period contemplated bySection 5.7; |
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(iii) | if all conditions to the obligations of each Purchaser to consummate the transactions contemplated by this Agreement set forth inArticle VII shall have been satisfied (other than those conditions that are to be satisfied (and capable of being satisfied) by action taken at the Closing if such Purchaser had complied with its obligations under this Agreement) and the transactions contemplated by this Agreement fail to be consummated as a result of the breach by any Purchaser of its obligation to pay to the Company and GGO, as applicable, all amounts payable by such Purchaser underArticle I andArticle II of this Agreement, by wire transfer of immediately available funds in accordance with the terms of this Agreement; or | ||
(iv) | if a Closing Restraint is in effect. |
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(i) | the aggregate outstanding Proportionally Consolidated Debt plus any accrued and unpaid interest thereon plus the amount of the New Debt, | ||
(ii) | less the Reinstatement Adjustment Amount, | ||
(iii) | plus the Permitted Claims Amount, | ||
(iv) | plus the amount of Proportionally Consolidated Debt attributable to assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between the date of this Agreement and through the Closing, but excluding any deficiency, guaranty or other similar claims associated with the Special Consideration Properties (as such term is defined in the plan of reorganization for the applicable Confirmed Debtor), |
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(v) | less Proportionally Consolidated Unrestricted Cash;provided,however, that the net proceeds attributable to sales of assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, or otherwise transferred during the period between the date of this Agreement and through the Closing shall be deducted prior to subtracting Proportionally Consolidated Unrestricted Cash. |
(i) | the aggregate outstanding Proportionally Consolidated Debt plus any accrued and unpaid interest thereon plus the amount of the New Debt, | ||
(ii) | plus the amount of Proportionally Consolidated Debt attributable to assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between the date of this Agreement and through the Closing, but excluding any deficiency, guaranty or other similar claims associated with the Special Consideration Properties (as such term is defined in the plan of reorganization for the applicable Confirmed Debtor), and | ||
(iii) | less Proportionally Consolidated Unrestricted Cash;provided,however, that the net proceeds attributable to sales of assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, or otherwise transferred during the period between the date of this Agreement and through the Closing shall be deducted prior to subtracting Proportionally Consolidated Unrestricted Cash. |
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(i) | prepetition and postpetition Claims secured by cashiers’, landlords’, workers’, mechanics’, carriers’, workmen’s, repairmen’s and materialmen’s liens and other similar liens, |
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(ii) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, prepetition and postpetition Claims for all ordinary course trade payables for goods and services related to the operations of the Company and its Subsidiaries (including, without limitation, ordinary course obligations to tenants, anchors, vendors, customers, utility providers or forward contract counterparties related to utility services, employee payroll, commissions, bonuses and benefits (but excluding the Key Employee Incentive Plan approved by the Bankruptcy Court pursuant to an order entered on October 15, 2009 at docket no. 3126), insurance premiums, insurance deductibles, self insured amounts and other obligations that are accounted for, consistent with past practice prior to the Petition Date, as trade payables);provided,however, that Claims or expenses related to the administration and conduct of the Bankruptcy Cases (such as professional fees and disbursements of financial, legal and other advisers and consultants retained in connection with the administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy Cases and other expenses, fees and commissions related to the reorganization and recapitalization of the Company pursuant to the Plan, including related to the Investment Agreements, the issuance of the New Debt, Liquidity Equity Issuances and any other equity issuances contemplated by this Agreement and the Plan) shall not be Excluded Claims, | ||
(iii) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, Claims and liabilities arising from the litigation or potential litigation matters set forth in that certain Interim Litigation Report of the Company dated March 29, 2010 and the Company’s litigation audit response to Deloitte & Touche dated February 25, 2010, both have been made available to each Purchaser prior to close of business on March 29, 2010 and other Claims and liabilities arising from ordinary course litigation or potential litigation that was not included in such schedule solely because the amount of estimated or asserted liabilities or Claims did not meet the threshold amount used for the preparation of such schedule, in each case, to the extent that such Claims and liabilities have not been paid and satisfied as of the Effective Date, are continuing following the Effective Date, excluding Claims |
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against or interests in the Debtors arising under or related to the Hughes Agreement, |
(iv) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, all tenant, anchor and vendor Claims required to be cured pursuant to section 365 of the Bankruptcy Code, in connection with the assumption of an executory contract or unexpired lease under the Plan, | ||
(v) | any deficiency, guaranty or other similar Claims associated with the Special Consideration Properties (as such term is defined in the plans of reorganization for the applicable Confirmed Debtors), | ||
(vi) | MPC Taxes, | ||
(vii) | surety bond Claims relating to Claims of the type identified in clauses (i) through (vi) of this definition, | ||
(viii) | GGO Setup Costs (other than professional fees and disbursements of financial, legal and other advisers and consultants retained in connection with the administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy Cases), and | ||
(ix) | any liabilities assumed by GGO and paid on the Effective Date by GGO or to be paid after the Effective Date by GGO (for avoidance of doubt, this includes any Claims that, absent assumption of the liability by GGO, would be a Permitted Claim). |
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(i) | Contract that would be considered a material contract pursuant to Item 601(b)(10) of Regulation S-K promulgated by the SEC, had the Company been the registrant referred to in such regulation; or | ||
(ii) | Contract for capital expenditures, the future acquisition or construction of fixed assets or the future purchase of |
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materials, supplies or equipment that provides for the payment by the Company or its Subsidiaries of more than $5,000,000 and is not terminable by the Company or any of its Subsidiaries by notice of not more than sixty (60) days for a cost of less than $1,000,000. |
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(a) | If to any Purchaser (which shall constitute notice to each Purchaser), to: | ||
Pershing Square Capital Management, L.P. 888 Seventh Avenue, 42nd Floor New York, New York 10019 Attention: William A. Ackman Roy J. Katzovicz Facsimile: (212) 286-1133 | |||
with a copy (which shall not constitute notice) to: | |||
Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 |
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Attention: Andrew G. Dietderich, Esq. Alan J. Sinsheimer, Esq. Facsimile: (212) 558-3588 | |||
(b) | If to the Company, to: | ||
General Growth Properties, Inc. 110 N. Wacker Drive Chicago, Illinois 60606 Attention: Ronald L. Gern, Esq. Facsimile: (312) 960-5485 | |||
with a copy (which shall not constitute notice) to: | |||
Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attention: Marcia L. Goldstein, Esq. Frederick S. Green, Esq. Gary T. Holtzer, Esq. Malcolm E. Landau, Esq. Facsimile: (212) 310-8007 |
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PERSHING SQUARE CAPITAL MANAGEMENT, L.P. On behalf of each of the Purchasers By: PS Management GP, LLC Its: General Partner | ||||
By: | ||||
Name: | William A. Ackman | |||
Title: | Managing Member | |||
GENERAL GROWTH PROPERTIES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
A. | GGP | General Growth Properties, Inc. (“GGP”) on or before the Effective Date and GGP, as reorganized, from and after the Effective Date | ||
B. | Plan Debtors | The debtors, including GGP, whose chapter 11 cases are pending in the Bankruptcy Court under Chapter 11 Case No. 09-11977 (ALG), whose chapter 11 cases have not otherwise been confirmed and whose chapter 11 cases will be treated pursuant to the Plan (collectively, the “Plan Debtors”) | ||
C. | Confirmed Debtors | The subsidiary debtors other than the Plan Debtors whose chapter 11 plans have been confirmed as of the Effective Date (the “Confirmed Debtors”) | ||
D. | Debtors | Plan Debtors, Confirmed Debtors and to the extent applicable, any debtor whose chapter 11 case is pending under Chapter 11 Case No. 09-11977 (ALG) but that is not a Plan Debtor or a Confirmed Debtor | ||
E. | REP | REP Investments LLC (“REP”) | ||
F. | Fairholme | Fairholme Capital Management, LLC, on behalf of one or more of its managed funds or affiliates of such managed funds (“Fairholme”) | ||
G. | Pershing | Pershing Square Capital Management, L.P., on behalf of one or more of its managed funds (“Pershing” and together with REP and Fairholme, the “Purchasers”) |
1 | Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Investment Agreement to which this Term Sheet is attached. |
H. | Confirmed Plans | The chapter 11 plans of the Confirmed Debtors (the “Confirmed Plans”) | ||
I. | CIA | Amended and Restated Cornerstone Investment Agreement effective as of March 31, 2010 between REP and GGP (the “CIA”) | ||
J. | Fairholme Stock Purchase Agreement | Amended and Restated Stock Purchase Agreement effective as of March 31, 2010 between the purchasers parties thereto and GGP (the “Fairholme SPA”) | ||
K. | Pershing Stock Purchase Agreement | Amended and Restated Stock Purchase Agreement effective as of March 31, 2010 between the purchasers parties thereto and GGP (the “Pershing SPA” and together with the CIA and the Fairholme SPA, the “Investment Agreements”) |
A. | DIP Loan Claims | • | Treatment: Paid in full, in cash on the effective date (the “Effective Date”) of the Plan. | |
• | The Plan Debtors may, at their option, satisfy all or a portion of the DIP Loan Claims through a conversion to New Common Stock (a “DIP Conversion”), provided GGP engages in a “Qualified Rights Offering” in accordance with the terms of the order approving the DIP facility or on such other terms as the parties may agree. | |||
B. | Allowed Administrative Expense Claims | • | Treatment: Paid in full, in cash on the Effective Date or on such other terms as the parties may agree. | |
C. | Allowed Priority Non-Tax Claims | • | Treatment: Paid in full, in cash on the Effective Date or on such other terms as the parties may agree. | |
D. | Allowed Priority Tax Claims | • | Treatment: At the Plan Debtors’ election, (i) paid in full, in cash on the Effective Date, (ii) receive the treatment provided for in section 1129(a)(9)(c) of the Bankruptcy Code or (iii) receive treatment on such other terms as the parties may agree. | |
E. | Allowed Secured Tax Claims | • | Treatment: At the Plan Debtors’ election, (i) paid in full, in cash on the Effective Date, (ii) receive the treatment provided for in section 1129(a)(9)(d) of the Bankruptcy Code or (iii) receive treatment on such other terms as the parties may agree. | |
F. | Allowed Mechanics’ Lien Claims | • | Treatment: Paid in full, in cash on the Effective Date, as well as any amounts allowed and required to be paid pursuant to section 506(b) of the Bankruptcy Code, including postpetition interest at the Federal Judgment Rate (as defined in the Confirmed Plans) unless there is an applicable contractual rate or rate of interest under state law, in which case interest shall be paid at such rate of interest, provided the claimant satisfies certain notice requirements consistent with those terms contained in the Confirmed Plans. The mechanics’ liens securing the Mechanics’ Lien Claims shall be deemed released and shall require no further action on the part of the holders of the Mechanics’ Lien Claims. |
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G. | Allowed Other Secured Claims | • | Treatment: At the Plan Debtors’ option, on the Effective Date, holders of allowed Other Secured Claims shall either (a) be reinstated and rendered unimpaired, (b) receive cash in an amount equal to such allowed Other Secured Claim plus any interest allowed and required to be paid under section 506(b) of the Bankruptcy Code, (c) receive the collateral securing its allowed Other Secured Claim or (d) such other treatment as the holder of the Other Secured Claim and the Plan Debtors may agree. | |
H. | Rouse 8.00% Note Claims | • | Treatment: On the Effective Date, the Allowed Rouse 8.00% Note Claims shall be satisfied in full, in cash or shall receive such other treatment as is permissible pursuant to section 1129 of the Bankruptcy Code. In addition, the Plan Debtors shall pay in cash any outstanding reasonable agent or trustee fees and expenses provided for under the applicable indenture. | |
I. | Rouse 3.625% Note Claims | • | Treatment: On the Effective Date, the Allowed Rouse 3.625% Note Claims shall be satisfied in full, in cash or shall receive such other treatment as is permissible pursuant to section 1129 of the Bankruptcy Code. In addition, the Plan Debtors shall pay in cash any outstanding reasonable agent or trustee fees and expenses provided for under the applicable indenture. | |
J. | Rouse 5.375% Note Claims | • | Treatment: On the Effective Date, the Allowed Rouse 5.375% Note Claims (i) shall be cured and reinstated in accordance with section 1124 of the Bankruptcy Code, or (ii) shall receive such other treatment as is permissible under section 1129 of the Bankruptcy Code. In addition, the Plan Debtors shall pay in cash any outstanding reasonable agent or trustee fees and expenses provided for under the applicable indenture. | |
K. | Rouse 63/4% Note Claims | • | Treatment: On the Effective Date, the Allowed Rouse 63/4 % Note Claims (i) shall be cured and reinstated in accordance with section 1124 of the Bankruptcy Code, or (ii) shall receive such other treatment as is permissible under section 1129 of the Bankruptcy Code. In addition, the Plan Debtors shall pay in cash any outstanding reasonable agent or trustee fees and expenses provided for under the applicable indenture. |
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L. | Rouse 7.20% Note Claims | • | Treatment: On the Effective Date, the Allowed Rouse 7.20% Note Claims (i) shall be cured and reinstated in accordance with section 1124 of the Bankruptcy Code, or (ii) shall receive such other treatment as is permissible under section 1129 of the Bankruptcy Code. In addition, the Plan Debtors shall pay in cash any outstanding reasonable agent or trustee fees and expenses provided for under the applicable indenture. | |
M. | 2006 Bank Loan Claims | • | Treatment: On the Effective Date, the Allowed 2006 Bank Loan Claims shall be satisfied in full, in cash. In addition, the Plan Debtors shall pay in cash any outstanding reasonable agent fees and expenses provided for under the applicable loan agreement. | |
N. | 144A Exchangeable Notes Claims | • | Treatment: On the Effective Date, the Allowed 144A Exchangeable Note Claims (i) shall be cured and reinstated in accordance with section 1124 of the Bankruptcy Code or at the option of such holders, shall be satisfied in cash at par plus accrued interest at the stated non-default contract rate and shall be deemed to have waived any other claims, or (ii) shall receive such other treatment as is permissible under section 1129 of the Bankruptcy Code. In addition, the Plan Debtors shall pay in cash any outstanding reasonable agent or trustee fees and expenses provided for under the applicable indenture. For the avoidance of doubt, in the event the Plan Debtors determine to provide the treatment option pursuant to subsection (ii) above subsequent to a holder of an Allowed 144A Exchangeable Notes Claim electing to receive cash at par plus accrued interest, such election shall not be binding on such holder. | |
O. | 2006 Trust Preferred Shared and Junior Subordinated Notes (the “TRUPs Claims”) | • | Treatment: On the Effective Date, the Allowed TRUPs Claims shall be cured and reinstated in accordance with section 1124 of the Bankruptcy Code or shall receive such other treatment permissible under section 1129 of the Bankruptcy Code. In addition, the Plan Debtors shall pay in cash any outstanding reasonable trustee fees and expenses provided for under the applicable trust agreement. | |
P. | Allowed General Unsecured Claims | • | Treatment: On the Effective Date, holders of Allowed General Unsecured Claims shall (i) receive payment in full, in cash with postpetition interest at the Federal Judgment Rate, unless there is an applicable contractual rate or rate of interest under state law, in which case interest shall be paid at such rate of interest, provided the claimant satisfies certain notice requirements consistent with those terms contained in the Confirmed Plans or (ii) shall receive such other treatment permissible under section 1129 of the Bankruptcy Code. |
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Q. | Partner Note GGP/Homart II, L.L.C. Claims | • | Treatment: On the Effective Date, at the election of the Plan Debtors, the Allowed Partner Note GGP/Homart II L.L.C. Claims (i) shall be cured and reinstated in accordance with section 1124 of the Bankruptcy Code, (ii) shall be satisfied in full, in cash or (iii) shall receive such other treatment permissible under section 1129 of the Bankruptcy Code. | |
R. | Partner Note GGP Ivanhoe, Inc. Claims | • | Treatment: On the Effective Date, at the election of the Plan Debtors, the Allowed Partner Note GGP Ivanhoe, Inc. Claims (i) shall be cured and reinstated in accordance with section 1124 of the Bankruptcy Code, (ii) shall be satisfied in full, in cash or (iii) shall receive such other treatment permissible under section 1129 of the Bankruptcy Code. In the event the holders of Allowed Partner Note GGP Ivanhoe, Inc. Claims are reinstated, the guaranty currently securing the obligations under the GGP Ivanhoe, Inc. Partner Note shall be affirmed and shall continue post emergence. | |
S. | GGP TRS Retained Debt Claims | • | Treatment: On the Effective Date, the joint venture agreement between GGP LP and TRS JV Holdco, LLC shall be assumed, and the Plan Debtors shall make any cure payments required thereunder. | |
T. | Allowed Project Level Debt Guaranty Claims2 | • | Treatment: On the Effective Date, at the election of the Plan Debtors, the holders of allowed Project Level Debt Guaranty Claims shall receive a replacement guaranty or such other treatment under the Plan as contemplated by the Confirmed Plans. | |
U. | Allowed Hughes Heirs Obligations | • | Treatment: On the Effective Date, the holders of allowed Hughes Heirs Obligations shall receive property of a value (a) as agreed to by the Debtors and such holders or (b) ordered by the Bankruptcy Court, in satisfaction of the allowed amount of their claims or interests;provided that, to the extent permissible, the Hughes Heirs Obligations may be satisfied, in whole or in part, through the issuance of GGO Stock. | |
V. | Intercompany Obligations | • | Treatment: On the Effective Date, Intercompany Obligations shall be reinstated and treated in the ordinary course of business or eliminated in the ordinary course of business, including the elimination of any Intercompany Obligations owed to or from any entities to be transferred to GGO. |
2 | Allowed Project Level Debt Guaranty Claims include Existing Credit Enhancement Claims (as such term is defined in the Confirmed Plans) with respect to the Special Consideration Properties (as such term is defined in the Confirmed Plans). |
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W. | GGPLP LLC Preferred Equity Interests | • | Treatment: On the Effective Date, the holder of GGPLP LLC preferred equity interests (“GGPLP LLC Preferred Equity Interests”) will receive (i) (a) a distribution of Cash based on its share of dividends accrued and unpaid prior to the Effective Date and (b) reinstatement of its preferred units in Reorganized GGPLP LLC, which shall be in the same number of preferred units in Reorganized GGPLP LLC as it held as of the Record Date in GGPLP LLC or (ii) if the Bankruptcy Court determines that holders of such interests are impaired, such other treatment as is required under section 1129(b) of the Bankruptcy Code, less any applicable tax withholding as required by the applicable agreements. | |
X. | GGPLP Preferred Equity Interests | • | Treatment: On the Effective Date, holders of GGPLP Preferred Equity Interests will receive (i) (a) a distribution of Cash based on their pro rata share of dividends accrued and unpaid prior to the Effective Date, (b) reinstatement of their preferred units in Reorganized GGPLP, which shall be in the same number of preferred units in Reorganized GGPLP as they held as of the Record Date in GGPLP, provided, however, that any prepetition direct or indirect redemption rights which may have, at GGP’s option, been satisfied in shares of GGP Common Stock or 8.5% Cumulative Convertible Preferred Stock, Series C, as applicable, shall, in accordance with the applicable provisions of their prepetition agreements, subsequently be satisfied, at New GGP’s option, in shares of New GGP Common Stock or New GGP Series C Preferred Stock, as applicable, on terms consistent with such prepetition agreements and (c) a pro rata amount of Spinco Common Stock as if such holder of GGP LP Preferred Equity Units had converted to GGP LP Common UPREIT Units immediately prior to the Distribution Record Date or (ii) if the Bankruptcy Court determines that holders of such interests are impaired, such other treatment as is required under section 1129(b) of the Bankruptcy Code, less any applicable tax withholding as required by the applicable agreements. | |
Y. | GGPLP Common UPREIT Units | • | Treatment: On the Effective Date, holders of GGPLP Common UPREIT Units will receive (a) a distribution of Cash equal to $.019 per unit and may elect between (a) (i) reinstatement of such units in Reorganized GGPLP, which shall be in the same number as held as of the Record Date, provided, however, that any prepetition redemption or conversion rights, as applicable, held by such GGP LP Common UPREIT Unit holders which GGP had the obligation or option, as applicable, to satisfy in shares of GGP Common Stock, shall, in accordance with the applicable provisions of their prepetition agreement, subsequently be satisfied, at New GGP’s option or obligation, in shares of New GGP Common Stock on conversion or redemption terms consistent with such prepetition agreements, plus, a pro rata amount of GGO Common Stock on account of such units or (ii) being deemed to |
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have converted or redeemed, as applicable, their GGPLP Common UPREIT Units effective the day prior to the Distribution Record Date in exchange for GGP Common Stock on terms consistent with such holder’s prepetition agreements, thereby receiving such treatment as if such holder owned GGP Common Stock on the Distribution Record Date or (b) if the Bankruptcy Court determines that holders of such interests are impaired, such other treatment as is required under section 1129(b) of the Bankruptcy Code, less any applicable tax withholding as required by the applicable agreements. | ||||
Z. | GGP Common Stock | • | Treatment: On the Effective Date, each holder of GGP Common Stock shall receive its proportionate share of (i) the New Common Stock and (ii) the GGO Share Distribution. | |
AA. | REIT Preferred Stock Interests | • | On the Effective Date, holders of REIT Preferred Stock Interests will receive (1) a distribution of Cash based on their pro rata share of dividends accrued and unpaid prior to the Effective Date (if any) and (2) reinstatement of their REIT Preferred Stock Interests in the same number as they held as of the Distribution Record Date. | |
BB. | Outstanding Warrants | • | Treatment: On the Effective Date, the outstanding Warrants (as such term is defined in the Investment Agreements) shall be cancelled and each holder of the Warrants (or certain qualifying affiliates) shall receive fully vested warrants to purchase New Common Stock and fully vested warrants to purchase GGO Common Stock, in each case, in such numbers and on such terms as provided in the applicable Investment Agreement. | |
CC. | Outstanding Options | • | Treatment: On the Effective Date, the Debtors shall assume outstanding prepetition option awards to purchase GGP Common Stock, which may entitle option holders to an option to purchase New Common Stock and an option to purchase GGO Common Stock or a contractual right to elect to cash out. |
A. | Closing Date Net Debt and GGO Promissory Note | • | The Closing Date Net Debt shall be determined in accordance with the CIA and the Plan and the GGO Promissory Note, if any, shall be issued on the Effective Date. |
A. | Executory Contracts and Unexpired Leases | • | All executory contracts (including employee benefit plans, insurance, supply contracts, etc.) and unexpired leases will be assumed unless expressly rejected under the Plan or through a separate motion. |
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B. | Provisions Concerning Resolution of Disputed, Contingent, and Unliquidated Claims and Claims Payable by Third Parties | • | The Plan will contain usual and customary provisions for resolving disputed, contingent and unliquidated claims and claims payable by third parties, including (to the extent appropriate) provisions consistent with the terms contained in the Confirmed Plans. | |
C. | Employee/ Officer/Director Indemnification Obligations | • | The Plan Debtors’ indemnification obligations for employees, officers, directors, trustees or managers shall be deemed assumed, in accordance with the provisions in the Confirmed Plans, unless otherwise expressly rejected by separate motion or under the Plan. | |
D. | Provisions Concerning Plan Implementation | • | The Plan shall provide for usual and customary means of implementation, including (to the extent appropriate) implementation provisions consistent with the terms contained in the Confirmed Plans. | |
E. | Transfer Restrictions | • | The plan shall provide that, in addition to the covenants set forth in the Non Control Agreement, REP shall not sell, transfer or dispose of (x) any Shares, New Warrants, or shares issuable upon exercise of the New Warrants during the period from and after the Closing Date to the six (6) month anniversary of the Closing Date, (y) in excess of (A) 8.25% of the Shares and (B) 8.25% of the New Warrants or shares issuable upon exercise of the New Warrants, in the aggregate, during the period from and after the six (6) month anniversary of the Closing Date to the one (1) year anniversary of the Closing Date and (z) in excess of (A) 16.5% of the Shares and (B) 16.5% of the New Warrants or the shares issuable upon exercise of the New Warrants, in the aggregate (and taken together with any Transfers effected under clause (y)), during the period from and after the six (6) month anniversary of the Closing Date to the eighteen (18) month anniversary of the Closing Date. For clarity, Purchaser shall not be restricted from Transferring any Shares, New Warrants, or shares issuable upon exercise of the New Warrants from and after the eighteen (18) month anniversary of the Closing Date. | |
F. | Insurance Policies, Benefit Plans, Surety Bonds | • | The Plan Debtors’ insurance policies, benefit plans, workers’ compensation claims, and surety bonds shall be treated in a manner consistent with that provided in the Confirmed Plans. | |
G. | Retention of Causes of Action | • | All causes of action shall vest with GGP or GGO, as applicable | |
H. | Conditions for Consummation and Confirmation | • | Usual and customary for transactions of this type |
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I. | Discharge, Releases and Exculpation | • | The Plan will contain discharge, release and exculpation provisions in a manner consistent with those provided in the Confirmed Plans. | |
J. | Governing Law | • | To the extent the Bankruptcy Code or other federal law does not apply, New York law shall govern. |
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Page | ||||
Article I PURCHASE OF NEW COMMON STOCK; CLOSING | 3 | |||
Section 1.1 Purchase of New Common Stock | 3 | |||
Section 1.2 Closing | 4 | |||
Section 1.3 Company Rights Offering Election | 4 | |||
Article II GGO SHARE DISTRIBUTION AND PURCHASE OF GGO COMMON STOCK | 4 | |||
Section 2.1 GGO Share Distribution | 4 | |||
Section 2.2 Purchase of GGO Common Stock | 6 | |||
Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 6 | |||
Section 3.1 Organization and Qualification | 6 | |||
Section 3.2 Corporate Power and Authority | 7 | |||
Section 3.3 Execution and Delivery; Enforceability | 7 | |||
Section 3.4 Authorized Capital Stock | 8 | |||
Section 3.5 Issuance | 9 | |||
Section 3.6 No Conflict | 10 | |||
Section 3.7 Consents and Approvals | 11 | |||
Section 3.8 Company Reports | 11 | |||
Section 3.9 No Undisclosed Liabilities | 13 | |||
Section 3.10 No Material Adverse Effect | 13 | |||
Section 3.11 No Violation or Default: Licenses and Permits | 13 | |||
Section 3.12 Legal Proceedings | 13 | |||
Section 3.13 Investment Company Act | 14 | |||
Section 3.14 Compliance With Environmental Laws | 14 | |||
Section 3.15 Company Benefit Plans | 14 | |||
Section 3.16 Labor and Employment Matters | 16 | |||
Section 3.17 Insurance | 16 | |||
Section 3.18 No Unlawful Payments | 16 | |||
Section 3.19 No Broker’s Fees | 16 | |||
Section 3.20 Real and Personal Property | 16 | |||
Section 3.21 Tax Matters | 21 |
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(continued)
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Section 3.22 Material Contracts | 22 | |||
Section 3.23 Certain Restrictions on Charter and Bylaws Provisions; State Takeover Laws | 23 | |||
Section 3.24 No Other Representations or Warranties | 23 | |||
Article IV REPRESENTATIONS AND WARRANTIES OF PURCHASER | 24 | |||
Section 4.1 Organization | 24 | |||
Section 4.2 Power and Authority | 24 | |||
Section 4.3 Execution and Delivery | 24 | |||
Section 4.4 No Conflict | 24 | |||
Section 4.5 Consents and Approvals | 24 | |||
Section 4.6 Compliance with Laws | 25 | |||
Section 4.7 Legal Proceedings | 25 | |||
Section 4.8 No Broker’s Fees | 25 | |||
Section 4.9 Sophistication | 25 | |||
Section 4.10 Purchaser Intent | 25 | |||
Section 4.11 Reliance on Exemptions | 25 | |||
Section 4.12 REIT Representations | 25 | |||
Section 4.13 No Other Representations or Warranties | 26 | |||
Section 4.14 Acknowledgement | 26 | |||
Article V COVENANTS OF THE COMPANY AND PURCHASER | 26 | |||
Section 5.1 Bankruptcy Court Motions and Orders | 26 | |||
Section 5.2 Warrants, New Warrants and GGO Warrants | 27 | |||
Section 5.3 Assistance with Capital Raising Activities | 27 | |||
Section 5.4 Listing | 28 | |||
Section 5.5 Use of Proceeds | 28 | |||
Section 5.6 Access to Information | 28 | |||
Section 5.7 Competing Transactions | 29 | |||
Section 5.8 Reservation for Issuance | 29 | |||
Section 5.9 Subscription Rights | 29 | |||
Section 5.10 Company Board of Directors | 33 |
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(continued)
Page | ||||
Section 5.11 Notification of Certain Matters | 36 | |||
Section 5.12 Further Assurances | 37 | |||
Section 5.13 [Intentionally Omitted.] | 37 | |||
Section 5.14 Rights Agreement; Reorganized Company Organizational Documents | 37 | |||
Section 5.15 Stockholder Approval | 39 | |||
Section 5.16 Registration Statements | 39 | |||
Section 5.17 Closing Date Net Debt | 39 | |||
Article VI ADDITIONAL COVENANTS OF PURCHASER | 42 | |||
Section 6.1 Information | 42 | |||
Section 6.2 Purchaser Efforts | 42 | |||
Section 6.3 Plan Support | 42 | |||
Section 6.4 Transfer Restrictions | 43 | |||
Section 6.5 Equity Commitments; Source of Funds | 45 | |||
Section 6.6 REIT Representations and Covenants | 45 | |||
Section 6.7 Non-Control Agreement | 46 | |||
Section 6.8 Purchaser Formed Entities | 46 | |||
Section 6.9 Additional Backstops | 46 | |||
Article VII CONDITIONS TO THE OBLIGATIONS OF PURCHASER | 49 | |||
Section 7.1 Conditions to the Obligations of Purchaser | 49 | |||
Article VIII CONDITIONS TO THE OBLIGATIONS OF THE COMPANY | 58 | |||
Section 8.1 Conditions to the Obligations of the Company | 58 | |||
Article IX INDEMNIFICATION | 60 | |||
Section 9.1 Indemnification | 60 | |||
Article X SURVIVAL OF REPRESENTATIONS AND WARRANTIES | 61 | |||
Section 10.1 Survival of Representations and Warranties | 61 | |||
Article XI TERMINATION | 61 | |||
Section 11.1 Termination | 61 | |||
Section 11.2 Effects of Termination | 64 |
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(continued)
Page | ||||
Article XII DEFINITIONS | 65 | |||
Section 12.1 Defined Terms | 65 | |||
Article XIII MISCELLANEOUS | 79 | |||
Section 13.1 Notices | 79 | |||
Section 13.2 Assignment; Third Party Beneficiaries | 80 | |||
Section 13.3 Prior Negotiations; Entire Agreement | 81 | |||
Section 13.4 Governing Law; Venue | 81 | |||
Section 13.5 Company Disclosure Letter | 82 | |||
Section 13.6 Counterparts | 82 | |||
Section 13.7 Expenses | 82 | |||
Section 13.8 Waivers and Amendments | 82 | |||
Section 13.9 Construction | 82 | |||
Section 13.10 Adjustment of Share Numbers and Prices | 83 | |||
Section 13.11 Certain Remedies | 83 | |||
Section 13.12 Bankruptcy Matters | 85 |
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Exhibit A: | Plan Summary Term Sheet | |
Exhibit B: | Post-Bankruptcy GGP Corporate Structure | |
Exhibit C-1: | Fairholme Agreement | |
Exhibit C-2: | Pershing Agreement | |
Exhibit D: | REIT Representation Letter | |
Exhibit E: | GGO Assets | |
Exhibit F: | Form of Approval Order | |
Exhibit G: | Form of Warrant Agreement | |
Exhibit H: | [Intentionally Omitted] | |
Exhibit I: | [Intentionally Omitted] | |
Exhibit J: | Form of REIT Opinion | |
Exhibit K: | Form of Amended and Restated Brookfield Equity Commitment Letter | |
Exhibit L: | Form of Escrow Agreement | |
Exhibit M: | Form of Non-Control Agreement | |
Exhibit N: | Certain REIT Investors |
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Defined Term | Page | |||
2006 Bank Loan | 65 | |||
Acceptable LC | 64 | |||
Additional Financing | 53 | |||
Additional Sales Period | 65 | |||
Adequate Reserves | 21 | |||
Affiliate | 65 | |||
Agreement | 1 | |||
Anticipated Debt Paydowns | 53 | |||
Approval Motion | 26 | |||
Approval Order | 26 | |||
Asset Sales | 54 | |||
Backstop Investors | 46 | |||
Bankruptcy Cases | 1 | |||
Bankruptcy Code | 1 | |||
Bankruptcy Court | 1 | |||
Blackstone | 80 | |||
Blackstone Assigned Securities | 80 | |||
Blackstone Assigned Shares | 80 | |||
Blackstone Assigned Warrants | 80 | |||
Blackstone Purchase Price | 80 | |||
Brazilian Entities | 65 | |||
Bridge Securities | 47 | |||
Brookfield Consortium Member | 65 | |||
Brookfield Equity Commitment Letter | 64 | |||
Business Day | 65 | |||
Capital Raising Activities | 27 | |||
Cash Equivalents | 65 | |||
Chapter 11 | 1 | |||
Claims | 66 | |||
Closing | 4 | |||
Closing Date | 4 | |||
Closing Date Net Debt | 66 | |||
Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts | 66 | |||
Closing Funding Certification | 83 | |||
Closing Restraint | 63 | |||
CMPC | 6 | |||
CNDAS Dispute Notice | 40 | |||
CNDAS Disputed Items | 40 | |||
Code | 15 | |||
Commitment Amount | 45 | |||
Common Stock | 1 | |||
Company | 1 | |||
Company Benefit Plan | 67 |
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Defined Term | Page | |||
Company Board | 67 | |||
Company Disclosure Letter | 6 | |||
Company Ground Lease Property | 18 | |||
Company Mortgage Loan | 20 | |||
Company Option Plans | 8 | |||
Company Properties | 17 | |||
Company Property | 17 | |||
Company Property Lease | 19 | |||
Company Rights Offering | 4 | |||
Company SEC Reports | 11 | |||
Competing Transaction | 67 | |||
Conclusive Net Debt Adjustment Statement | 68 | |||
Confidentiality Agreement | 28 | |||
Confirmation Order | 50 | |||
Confirmed Debtors | 75 | |||
Contract | 68 | |||
Corporate Level Debt | 68 | |||
Dealer Manager | 46 | |||
Debt | 68 | |||
Debtors | 1 | |||
Designation Conditions | 4 | |||
DIP Loan | 68 | |||
Disclosure Statement | 68 | |||
Disclosure Statement Order | 50 | |||
Dispute Notice | 40 | |||
Disputed Items | 40 | |||
Effective Date | 4 | |||
Encumbrances | 17 | |||
Environmental Laws | 14 | |||
Equity Exchange | 1 | |||
Equity Financing | 84 | |||
Equity Provider | 64 | |||
Equity Securities | 8 | |||
ERISA | 68 | |||
ERISA Affiliate | 15 | |||
Escrow Agreement | 64 | |||
Escrow Agreements | 64 | |||
Excess Surplus Amount | 68 | |||
Exchangeable Notes | 69 | |||
Excluded Claims | 69 | |||
Excluded Non-US Plans | 15 | |||
Fairholme Agreement | 2 | |||
Fairholme Investors | 2 | |||
Fairholme/Pershing Agreements | 2 | |||
Fairholme/Pershing Investors | 2 | |||
Foreign Plan | 15 |
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Defined Term | Page | |||
Fully Diluted Basis | 70 | |||
Funding Document | 78 | |||
GAAP | 70 | |||
GGO | 2 | |||
GGO Agreement | 35 | |||
GGO Board | 34 | |||
GGO Common Share Amount | 70 | |||
GGO Common Stock | 4 | |||
GGO Note Amount | 71 | |||
GGO Per Share Purchase Price | 6 | |||
GGO Promissory Note | 71 | |||
GGO Purchase Price | 6 | |||
GGO Representative | 5 | |||
GGO Setup Costs | 71 | |||
GGO Share Distribution | 5 | |||
GGO Shares | 6 | |||
GGO Warrants | 27 | |||
GGP | 1 | |||
GGP Backstop Rights Offering | 46 | |||
GGP Backstop Rights Offering Amount | 46 | |||
Governmental Entity | 71 | |||
Hazardous Materials | 14 | |||
Hughes Agreement | 72 | |||
Hughes Amount | 71 | |||
Hughes Heirs Obligations | 72 | |||
Identified Assets | 5 | |||
Indebtedness | 72 | |||
Indemnified Person | 60 | |||
Indemnity Cap | 41 | |||
Initial Investors | 48 | |||
Joint Venture | 72 | |||
Knowledge | 72 | |||
Law | 72 | |||
Liquidity Equity Issuances | 72 | |||
Liquidity Target | 52 | |||
Material Adverse Effect | 73 | |||
Material Contract | 73 | |||
Material Lease | 19 | |||
Measurement Date | 8 | |||
Most Recent Statement | 17 | |||
MPC Assets | 74 | |||
MPC Taxes | 74 | |||
Net Debt Excess Amount | 74 | |||
Net Debt Surplus Amount | 74 | |||
New Common Stock | 1 | |||
New Debt | 53 |
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Defined Term | Page | |||
New DIP Agreement | 50 | |||
New Warrants | 27 | |||
Non-Control Agreement | 74 | |||
Non-Controlling Properties | 74 | |||
NYSE | 28 | |||
Offering Premium | 74 | |||
Operating Partnership | 75 | |||
Original Agreement | 1 | |||
Other Sponsor | 78 | |||
PBGC | 15 | |||
Per Share Purchase Price | 3 | |||
Permitted Assign | 3 | |||
Permitted Claims | 75 | |||
Permitted Claims Amount | 75 | |||
Permitted Title Exceptions | 17 | |||
Pershing Agreement | 2 | |||
Pershing Investors | 2 | |||
Person | 75 | |||
Petition Date | 1 | |||
Plan | 1 | |||
Plan Debtors | 75 | |||
Plan Summary Term Sheet | 1 | |||
PMA Claims | 75 | |||
Preliminary Closing Date Net Debt Review Deadline | 75 | |||
Preliminary Closing Date Net Debt Review Period | 76 | |||
Preliminary Closing Date Net Debt Schedule | 39 | |||
Proceedings | 60 | |||
Proportionally Consolidated Debt | 76 | |||
Proportionally Consolidated Unrestricted Cash | 76 | |||
Proposed Approval Order | 26 | |||
Proposed Securities | 29 | |||
Purchase Price | 3 | |||
Purchaser | 1 | |||
Purchaser Board Designees | 33 | |||
Purchaser GGO Board Designee | 34 | |||
Refinance Cap | 56 | |||
Reinstated Amounts | 53 | |||
Reinstatement Adjustment Amount | 76 | |||
Reinstatement Amount | 76 | |||
REIT | 21 | |||
REIT Subsidiary | 22 | |||
Release Date | 45 | |||
Reorganized Company | 1 | |||
Reorganized Company Organizational Documents | 37 | |||
Reserve | 75 | |||
Reserve Surplus Amount | 76 |
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Defined Term | Page | |||
Resolution Period | 40 | |||
Rights Agreement | 77 | |||
Rights Offering Election | 4 | |||
Rouse Bonds | 77 | |||
Rule 144 | 43 | |||
Sales Cap | 55 | |||
SEC | 11 | |||
Securities Act | 11 | |||
Share Cap Number | 53 | |||
Share Equivalent | 77 | |||
Shares | 3 | |||
Significant Subsidiaries | 77 | |||
Subscribing Entities | 29 | |||
Subscribing Entity | 29 | |||
Subscription Right | 29 | |||
Subsidiary | 77 | |||
Synthetic Lease Obligation | 72 | |||
Target Net Debt | 77 | |||
Tax Protection Agreements | 77 | |||
Tax Return | 21 | |||
Taxes | 21 | |||
Termination Date | 77 | |||
Termination Date Extension Notice | 77 | |||
Transactions | 78 | |||
Transfer | 44 | |||
TRUPS | 78 | |||
Unrestricted Cash | 78 | |||
Unsecured Indebtedness | 79 | |||
UPREIT Units | 79 | |||
Warrant Agreement | 27 | |||
Warrants | 27 |
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(i) | the Company shall not have (A) declared, set aside or paid any dividends on, or made any other distributions in respect of, any of the Company’s capital stock (other than dividends required to retain REIT status or to avoid the imposition of entity level taxes), (B) split, combined or reclassified any of its capital stock or issued or authorized the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, or (C) purchased, redeemed or otherwise acquired (other than as set forth onSection 7.1(r)(i) of the Company Disclosure Letter or pursuant to Company Benefit Plans) any shares of its capital stock or any rights, warrants or options to acquire any such shares; |
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(ii) | the Company shall not have amended the Company’s certificate of incorporation or bylaws other than to increase the authorized shares of capital stock; | ||
(iii) | neither the Company nor any of its Subsidiaries shall have acquired or agreed to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof except (A) in the ordinary course of business, (B) for transactions with respect to joint ventures existing on the date hereof valued at less than $10,000,000 or (C) for transactions valued at less than $10,000,000 in the aggregate; | ||
(iv) | none of the Company Properties, Non-Controlling Properties or Identified Assets shall have been sold or otherwise transferred, except, (A) in the ordinary course of business, (B) to a wholly owned Subsidiary of the Company (which Subsidiary shall be subject to the same restrictions under this subsection (iv)), and (C) for sales or other transfers, the net proceeds of which shall not exceed $1,000,000,000 in the aggregate, when taken together with all such sales and other transfers of Company Properties, Non-Controlling Properties and Identified Assets (the “Sales Cap”); provided that the Sales Cap shall not apply with respect to sales or transfers of Identified Assets to the extent the same shall have been consummated in accordance with the express terms and conditions set forth inArticle II hereof; | ||
(v) | [Intentionally Omitted] | ||
(vi) | none of the Company or any of its Subsidiaries shall have issued, delivered, granted, sold or disposed of any Equity Securities (other than (A) issuances of shares of Common Stock issued pursuant to, and in accordance with,Section 7.1(u), but subject toSection 7.1(q), (B) pursuant to the Equity Exchange, (C) the issuance of shares pursuant to the exercise of employee stock options issued pursuant to the Company Option Plans, (D) as set forth onSection 7.1(u) of the Company Disclosure Letter), or (E) the issuance of shares to existing holders of Common Stock and the Backstop Investors, in each case, pursuant toSection 6.9); | ||
(vii) | none of the Company Properties or Identified Assets shall have been mortgaged, or pledged, nor shall the owner or lessee thereof have granted a lien, mortgage, pledge, security interest, charge, claim or other Encumbrance relating to debt obligations of any kind or nature on, or otherwise encumbered, any Company |
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Property or Identified Assets except in the ordinary course of business consistent with past practice, other than encumbrances of Company Properties or Identified Assets of Debtors in connection with (A) a restructuring of existing indebtedness for borrowed money related to any such Company Property or Identified Asset with the existing lender(s) thereof or (B) a refinancing of existing indebtedness for borrowed money related to any Company Property or Identified Asset in an amount not to exceed $300,000,000 (the “Refinance Cap”), provided that (x) the Refinance Cap shall not apply to a refinancing of the existing first lien indebtedness secured by the Fashion Show Mall, (y) in the event that a refinancing is secured by mortgages, deeds of trust, deeds to secure debt or indemnity deeds of trust encumbering multiple Company Properties and Identified Assets, the proceeds of such refinancing shall not exceed an amount equal to the Refinance Cap multiplied by the number of Company Properties and Identified Assets so encumbered, and (z) in connection with refinancing the indebtedness of a Company Property or Identified Asset owned by a Joint Venture, the Refinance Cap shall apply with respect to the aggregate share of such indebtedness which is allocable to, or guaranteed by (but without duplication), the Company and/or its Subsidiaries; |
(viii) | none of the Company or any of its Subsidiaries shall have undertaken any capital expenditure that is out of the ordinary course of business consistent with past practice and material to the Company and its Subsidiaries taken as a whole, except as contemplated in the Company’s business plan for fiscal year 2010 adopted by the board of directors of the Company prior to the date hereof; or | ||
(ix) | the Company shall not have changed any of its methods, principles or practices of financial accounting in effect, other than as required by GAAP or regulatory guidelines (and except to implement purchase accounting and/or “fresh start” accounting if the Company elects to do so). |
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(i) | the aggregate outstanding Proportionally Consolidated Debt plus any accrued and unpaid interest thereon plus the amount of the New Debt, | ||
(ii) | less the Reinstatement Adjustment Amount, | ||
(iii) | plus the Permitted Claims Amount, | ||
(iv) | plus the amount of Proportionally Consolidated Debt attributable to assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between the date of this Agreement and through the Closing, but excluding any deficiency, guaranty or other similar claims associated with the Special Consideration Properties (as such term is defined in the plan of reorganization for the applicable Confirmed Debtor), | ||
(v) | less Proportionally Consolidated Unrestricted Cash; provided, however, that the net proceeds attributable to sales of assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, or otherwise transferred during the period between the date of this Agreement and through the Closing shall be deducted prior to subtracting Proportionally Consolidated Unrestricted Cash. |
(i) | the aggregate outstanding Proportionally Consolidated Debt plus any accrued and unpaid interest thereon plus the amount of the New Debt, |
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(ii) | plus the amount of Proportionally Consolidated Debt attributable to assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between the date of this Agreement and through the Closing, but excluding any deficiency, guaranty or other similar claims associated with the Special Consideration Properties (as such term is defined in the plan of reorganization for the applicable Confirmed Debtor), and | ||
(iii) | less Proportionally Consolidated Unrestricted Cash; provided, however, that the net proceeds attributable to sales of assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, or otherwise transferred during the period between the date of this Agreement and through the Closing shall be deducted prior to subtracting Proportionally Consolidated Unrestricted Cash. |
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(i) | prepetition and postpetition Claims secured by cashiers’, landlords’, workers’, mechanics’, carriers’, workmen’s, repairmen’s and materialmen’s liens and other similar liens, | ||
(ii) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, prepetition and postpetition Claims for all ordinary course trade payables for goods and services related to the operations of the Company and its Subsidiaries (including, without limitation, ordinary course obligations to tenants, anchors, vendors, customers, utility providers or forward contract counterparties related to utility services, employee payroll, commissions, bonuses and benefits (but excluding the Key Employee Incentive Plan approved by the Bankruptcy Court pursuant to an order entered on October 15, 2009 at docket no. 3126), insurance premiums, insurance deductibles, self insured amounts and other obligations that are accounted for, consistent with past practice prior to the Petition Date, as trade payables); provided, however, that Claims or expenses related to the administration and conduct of the Bankruptcy Cases (such as professional fees and disbursements of financial, legal and other advisers and consultants retained in connection with the administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy Cases and other expenses, fees and commissions related to the reorganization and recapitalization of the Company pursuant to the Plan, including related to this Agreement, the Pershing/Fairholme Agreements, the issuance of the New Debt, Liquidity Equity Issuances and any other equity issuances contemplated by this Agreement and the Plan) shall not be Excluded Claims, | ||
(iii) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, Claims and liabilities arising from the litigation or potential litigation matters set forth in that certain Interim Litigation Report of the Company dated March 29, 2010 and the Company’s litigation audit response to Deloitte & Touche dated February 25, 2010, both have been made available to Purchaser prior to close of business on March 29, 2010 and other Claims and liabilities arising from ordinary course litigation or potential litigation that was not included in such schedule solely because the amount of estimated or asserted liabilities or |
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Claims did not meet the threshold amount used for the preparation of such schedule, in each case, to the extent that such Claims and liabilities have not been paid and satisfied as of the Effective Date, are continuing following the Effective Date, excluding Claims against or interests in the Debtors arising under or related to the Hughes Agreement, |
(iv) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, all tenant, anchor and vendor Claims required to be cured pursuant to section 365 of the Bankruptcy Code, in connection with the assumption of an executory contract or unexpired lease under the Plan, | ||
(v) | any deficiency, guaranty or other similar Claims associated with the Special Consideration Properties (as such term is defined in the plans of reorganization for the applicable Confirmed Debtors), | ||
(vi) | MPC Taxes, | ||
(vii) | surety bond Claims relating to Claims of the type identified in clauses (i) through (vi) of this definition, | ||
(viii) | GGO Setup Costs (other than professional fees and disbursements of financial, legal and other advisers and consultants retained in connection with the administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy Cases), and | ||
(ix) | any liabilities assumed by GGO and paid on the Effective Date by GGO or to be paid after the Effective Date by GGO (for avoidance of doubt, this includes any Claims that, absent assumption of the liability by GGO, would be a Permitted Claim). |
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(i) | Contract that would be considered a material contract pursuant to Item 601(b)(10) of Regulation S-K promulgated by the SEC, had the Company been the registrant referred to in such regulation; or |
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(ii) | Contract for capital expenditures, the future acquisition or construction of fixed assets or the future purchase of materials, supplies or equipment that provides for the payment by the Company or its Subsidiaries of more than $5,000,000 and is not terminable by the Company or any of its Subsidiaries by notice of not more than sixty (60) days for a cost of less than $1,000,000. |
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(i) | the Confirmation Order shall have been entered on or before December 15, 2010, to any date on or prior to January 31, 2011 (as specified in the Termination Date Extension Notice), provided that, during such extension, the Company shall use its reasonable best efforts to take all actions and to do all things necessary, proper and advisable to consummate the transactions contemplated hereby and to cause the conditions to Closing to be satisfied in a timely manner; or | ||
(ii) | (A) all conditions to the obligations of Purchaser to consummate the Closing set forth inArticle VII shall have been satisfied (other than those conditions that are to be satisfied (and capable of being satisfied) by action taken at the Closing if (1) Purchaser and each purchaser under the Fairholme/Pershing Agreements (each, an “Other Sponsor”) had complied with its obligations under this Agreement and the Fairholme/Pershing Agreements, as applicable, and (2) the Brookfield Equity Commitment Letter, the Escrow Agreements and any letter of credit contemplated thereby (each, a “Funding Document”) had been complied with) and (B) the transactions contemplated by this Agreement or the Fairholme/Pershing Agreements fail to be consummated as a result of a failure of any Funding Document to be complied with, the failure of Purchaser to fund the amounts it is required to fund pursuant toArticle I or the failure of the Fairholme/Pershing Investors to fund the purchase price under the Fairholme/Pershing Agreements, to any date on or prior to (X) if either Fairholme/Pershing Agreement shall not have been terminated in accordance with its terms and any Other Sponsor fails to fund, March 31, 2011 (as specified in the Termination Date Extension Notice) in order to pursue remedies against the non-compliant Other Sponsors or (Y) if Purchaser fails to fund, the earlier of the one (1) year anniversary of the date of a Termination Date Extension Notice given pursuant to this clause (Y) and December 31, 2011 (as specified in the Termination Date Extension Notice) in order to pursue remedies against Purchaser, in each case, to seek to cause the Closing to be consummated, provided that, during such extensions specified in clause (X) or (Y) of this clause (ii), the Company shall use its reasonable best efforts to take all actions and to do all things necessary, proper and advisable to consummate the transactions contemplated hereby and to cause the conditions to Closing to be satisfied in a timely manner. |
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(a) | If to Purchaser, to: | ||
REP Investments LLC c/o Brookfield Asset Management Inc. Brookfield Place, Suite 300 181 Bay Street P.O. Box 762 Toronto, Ontario M5J 2T3 Canada Attention: Joseph Freedman Facsimile: (416) 365-9642 | |||
with a copy (which shall not constitute notice) to: | |||
Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019 Attention: Marc Abrams, Esq. Gregory B. Astrachan, Esq. Paul V. Shalhoub, Esq. Facsimile: (212) 728-8111 |
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(b) | If to the Company, to: | ||
General Growth Properties, Inc. 110 N. Wacker Drive Chicago, IL 60606 Attention: Ronald L. Gern, Esq. Facsimile: (312) 960-5485 | |||
with a copy (which shall not constitute notice) to: | |||
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 |
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GENERAL GROWTH PROPERTIES, INC. | ||||||||
By: | ||||||||
Name: | ||||||||
Title: | ||||||||
REP INVESTMENTS LLC | ||||||||
BY: | Brookfield Asset Management Private Institutional Capital Adviser (Canada) L.P., its managing member | |||||||
By: | Brookfield Private Funds Holdings Inc., its general partner | |||||||
By | ||||||||
Title: | ||||||||
By | ||||||||
Title: |
Page | ||||||||
Article I PURCHASE OF NEW COMMON STOCK; CLOSING | 3 | |||||||
Section 1.1 | Purchase of New Common Stock | 3 | ||||||
Section 1.2 | Closing | 4 | ||||||
Section 1.3 | Company Rights Offering Election | 4 | ||||||
Section 1.4 | Company Election to Replace Certain Shares; Company Election to Reserve and Repurchase Certain Shares | 5 | ||||||
Section 1.5 | Pro Rata Reductions with Pershing Agreement | 6 | ||||||
Article II GGO SHARE DISTRIBUTION AND PURCHASE OF GGO COMMON STOCK | 6 | |||||||
Section 2.1 | GGO Share Distribution | 6 | ||||||
Section 2.2 | Purchase of GGO Common Stock | 7 | ||||||
Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 8 | |||||||
Section 3.1 | Organization and Qualification | 8 | ||||||
Section 3.2 | Corporate Power and Authority | 8 | ||||||
Section 3.3 | Execution and Delivery; Enforceability | 9 | ||||||
Section 3.4 | Authorized Capital Stock | 9 | ||||||
Section 3.5 | Issuance | 10 | ||||||
Section 3.6 | No Conflict | 11 | ||||||
Section 3.7 | Consents and Approvals | 12 | ||||||
Section 3.8 | Company Reports | 13 | ||||||
Section 3.9 | No Undisclosed Liabilities | 14 | ||||||
Section 3.10 | No Material Adverse Effect | 14 | ||||||
Section 3.11 | No Violation or Default: Licenses and Permits | 14 | ||||||
Section 3.12 | Legal Proceedings | 15 | ||||||
Section 3.13 | Investment Company Act | 15 | ||||||
Section 3.14 | Compliance With Environmental Laws | 15 | ||||||
Section 3.15 | Company Benefit Plans | 16 | ||||||
Section 3.16 | Labor and Employment Matters | 17 | ||||||
Section 3.17 | Insurance | 17 | ||||||
Section 3.18 | No Unlawful Payments | 17 |
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(continued)
Page | ||||||||
Section 3.19 | No Broker’s Fees | 18 | ||||||
Section 3.20 | Real and Personal Property | 18 | ||||||
Section 3.21 | Tax Matters | 22 | ||||||
Section 3.22 | Material Contracts | 24 | ||||||
Section 3.23 | Certain Restrictions on Charter and Bylaws Provisions; State Takeover Laws | 24 | ||||||
Section 3.24 | No Other Representations or Warranties | 25 | ||||||
Article IV REPRESENTATIONS AND WARRANTIES OF PURCHASER | 25 | |||||||
Section 4.1 | Organization | 25 | ||||||
Section 4.2 | Power and Authority | 26 | ||||||
Section 4.3 | Execution and Delivery | 26 | ||||||
Section 4.4 | No Conflict | 26 | ||||||
Section 4.5 | Consents and Approvals | 26 | ||||||
Section 4.6 | Compliance with Laws | 26 | ||||||
Section 4.7 | Legal Proceedings | 26 | ||||||
Section 4.8 | No Broker’s Fees | 27 | ||||||
Section 4.9 | Sophistication | 27 | ||||||
Section 4.10 | Purchaser Intent | 27 | ||||||
Section 4.11 | Reliance on Exemptions | 27 | ||||||
Section 4.12 | REIT Representations | 27 | ||||||
Section 4.13 | Financial Capability | 27 | ||||||
Section 4.14 | No Other Representations or Warranties | 27 | ||||||
Section 4.15 | Acknowledgement | 27 | ||||||
Article V COVENANTS OF THE COMPANY AND PURCHASER | 28 | |||||||
Section 5.1 | Bankruptcy Court Motions and Orders | 28 | ||||||
Section 5.2 | Warrants, New Warrants and GGO Warrants | 28 | ||||||
Section 5.3 | [Intentionally Omitted.] | 29 | ||||||
Section 5.4 | Listing | 29 | ||||||
Section 5.5 | Use of Proceeds | 29 | ||||||
Section 5.6 | Access to Information | 29 |
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(continued)
Page | ||||||||
Section 5.7 | Competing Transactions | 30 | ||||||
Section 5.8 | Reservation for Issuance | 30 | ||||||
Section 5.9 | Subscription Rights | 30 | ||||||
Section 5.10 | [Intentionally Omitted.] | 34 | ||||||
Section 5.11 | Notification of Certain Matters | 34 | ||||||
Section 5.12 | Further Assurances | 35 | ||||||
Section 5.13 | [Intentionally Omitted.] | 35 | ||||||
Section 5.14 | Rights Agreement; Reorganized Company Organizational Documents | 35 | ||||||
Section 5.15 | Stockholder Approval | 37 | ||||||
Section 5.16 | Closing Date Net Debt | 37 | ||||||
Article VI ADDITIONAL COVENANTS OF PURCHASER | 40 | |||||||
Section 6.1 | Information | 40 | ||||||
Section 6.2 | Purchaser Efforts | 40 | ||||||
Section 6.3 | Plan Support | 40 | ||||||
Section 6.4 | Transfer Restrictions | 41 | ||||||
Section 6.5 | [Intentionally Omitted.] | 42 | ||||||
Section 6.6 | REIT Representations and Covenants | 42 | ||||||
Section 6.7 | Non-Control Agreement | 43 | ||||||
Section 6.8 | [Intentionally Omitted.] | 43 | ||||||
Section 6.9 | Additional Backstop | 43 | ||||||
Article VII CONDITIONS TO THE OBLIGATIONS OF PURCHASER | 43 | |||||||
Section 7.1 | Conditions to the Obligations of Purchaser | 43 | ||||||
Article VIII CONDITIONS TO THE OBLIGATIONS OF THE COMPANY | 53 | |||||||
Section 8.1 | Conditions to the Obligations of the Company | 53 | ||||||
Article IX [INTENTIONALLY OMITTED] | 55 | |||||||
Article X SURVIVAL OF REPRESENTATIONS AND WARRANTIES | 55 | |||||||
Section 10.1 | Survival of Representations and Warranties | 55 | ||||||
Article XI TERMINATION | 55 | |||||||
Section 11.1 | Termination | 55 |
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(continued)
Page | ||||||||
Section 11.2 | Effects of Termination | 58 | ||||||
Article XII DEFINITIONS | 59 | |||||||
Section 12.1 | Defined Terms | 59 | ||||||
Article XIII MISCELLANEOUS | 73 | |||||||
Section 13.1 | Notices | 73 | ||||||
Section 13.2 | Assignment; Third Party Beneficiaries | 74 | ||||||
Section 13.3 | Prior Negotiations; Entire Agreement | 76 | ||||||
Section 13.4 | Governing Law; Venue | 76 | ||||||
Section 13.5 | Company Disclosure Letter | 76 | ||||||
Section 13.6 | Counterparts | 76 | ||||||
Section 13.7 | Expenses | 76 | ||||||
Section 13.8 | Waivers and Amendments | 77 | ||||||
Section 13.9 | Construction | 77 | ||||||
Section 13.10 | Adjustment of Share Numbers and Prices | 78 | ||||||
Section 13.11 | Certain Remedies | 78 | ||||||
Section 13.12 | Bankruptcy Matters | 79 |
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Exhibit A: | Plan Summary Term Sheet | |
Exhibit B: | Post-Bankruptcy GGP Corporate Structure | |
Exhibit C-1: | Brookfield Agreement | |
Exhibit C-2: | Pershing Agreement | |
Exhibit D: | REIT Representation Letter | |
Exhibit E: | GGO Assets | |
Exhibit F: | Form of Approval Order | |
Exhibit G: | Form of Warrant Agreement | |
Exhibit H: | [Intentionally Omitted] | |
Exhibit I: | [Intentionally Omitted] | |
Exhibit J: | Form of REIT Opinion | |
Exhibit K: | [Intentionally Omitted] | |
Exhibit L: | [Intentionally Omitted] | |
Exhibit M: | Form of Non-Control Agreement | |
Exhibit N: | Certain REIT Investors | |
Schedule I: | GGO and GGP Pro Rata Shares |
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Defined Term | Page | |||
2006 Bank Loan | 59 | |||
Additional Financing | 48 | |||
Additional Sales Period | 59 | |||
Adequate Reserves | 22 | |||
Affiliate | 59 | |||
Agreement | 1 | |||
Anticipated Debt Paydowns | 48 | |||
Approval Motion | 28 | |||
Approval Order | 28 | |||
Asset Sales | 48 | |||
Bankruptcy Cases | 1 | |||
Bankruptcy Code | 1 | |||
Bankruptcy Court | 1 | |||
Blackstone | 75 | |||
Blackstone Assigned Securities | 75 | |||
Blackstone Assigned Shares | 75 | |||
Blackstone Assigned Warrants | 75 | |||
Blackstone Purchase Price | 75 | |||
Brazilian Entities | 59 | |||
Brookfield Agreement | 2 | |||
Brookfield Consortium Member | 59 | |||
Brookfield Investor | 2 | |||
Business Day | 60 | |||
Capital Raising Activities | 60 | |||
Cash Equivalents | 60 | |||
Change of Control | 60 | |||
Chapter 11 | 1 | |||
Claims | 60 | |||
Clawback Percentage | 5 | |||
Clawback Shares | 5 | |||
Closing | 4 | |||
Closing Date | 4 | |||
Closing Date Net Debt | 60 | |||
Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts | 61 | |||
Closing Restraint | 57 | |||
CMPC | 7 | |||
CNDAS Dispute Notice | 38 | |||
CNDAS Disputed Items | 38 | |||
Code | 16 | |||
Common Stock | 1 | |||
Company | 2 | |||
Company Benefit Plan | 61 | |||
Company Board | 62 |
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Defined Term | Page | |||
Company Disclosure Letter | 8 | |||
Company Ground Lease Property | 20 | |||
Company Mortgage Loan | 21 | |||
Company Option Plans | 9 | |||
Company Properties | 18 | |||
Company Property | 18 | |||
Company Property Lease | 20 | |||
Company Rights Offering | 4 | |||
Company SEC Reports | 13 | |||
Competing Transaction | 62 | |||
Conclusive Net Debt Adjustment Statement | 62 | |||
Confirmation Order | 45 | |||
Confirmed Debtors | 70 | |||
Contract | 62 | |||
Corporate Level Debt | 62 | |||
Debt | 62 | |||
Debtors | 1 | |||
Designation Conditions | 4 | |||
DIP Loan | 63 | |||
Disclosure Statement | 63 | |||
Disclosure Statement Order | 45 | |||
Dispute Notice | 38 | |||
Disputed Items | 38 | |||
Effective Date | 4 | |||
Encumbrances | 18 | |||
Environmental Laws | 15 | |||
Equity Exchange | 2 | |||
Equity Securities | 10 | |||
ERISA | 63 | |||
ERISA Affiliate | 16 | |||
Excess Surplus Amount | 63 | |||
Exchangeable Notes | 63 | |||
Excluded Claims | 63 | |||
Excluded Non-US Plans | 17 | |||
Fairholme | 65 | |||
Foreign Plan | 17 | |||
Fully Diluted Basis | 65 | |||
GAAP | 65 | |||
GGO | 2 | |||
GGO Common Share Amount | 65 | |||
GGO Common Stock | 6 | |||
GGO Note Amount | 65 | |||
GGO Per Share Purchase Price | 7 | |||
GGO Pro Rata Share | 66 | |||
GGO Promissory Note | 65 | |||
GGO Purchase Price | 7 |
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Defined Term | Page | |||
GGO Representative | 6 | |||
GGO Setup Costs | 66 | |||
GGO Share Distribution | 7 | |||
GGO Shares | 7 | |||
GGO Warrants | 29 | |||
GGP | 1 | |||
GGP Pro Rata Shares | 66 | |||
Governmental Entity | 66 | |||
Hazardous Materials | 16 | |||
Hughes Agreement | 66 | |||
Hughes Amount | 65 | |||
Hughes Heirs Obligations | 66 | |||
Identified Assets | 6 | |||
Indebtedness | 66 | |||
Indemnity Cap | 39 | |||
Initial Investors | 2 | |||
Investment Agreements | 2 | |||
Joint Venture | 67 | |||
Knowledge | 67 | |||
Law | 67 | |||
Liquidity Equity Issuances | 67 | |||
Liquidity Target | 47 | |||
Material Adverse Effect | 67 | |||
Material Contract | 68 | |||
Material Lease | 21 | |||
Measurement Date | 9 | |||
Most Recent Statement | 18 | |||
MPC Assets | 68 | |||
MPC Taxes | 69 | |||
Net Debt Excess Amount | 69 | |||
Net Debt Surplus Amount | 69 | |||
New Common Stock | 1 | |||
New Debt | 47 | |||
New DIP Agreement | 44 | |||
New Warrants | 29 | |||
Non-Control Agreement | 69 | |||
Non-Controlling Properties | 69 | |||
NYSE | 29 | |||
Offering Premium | 69 | |||
Operating Partnership | 69 | |||
Original Agreement | 1 | |||
PBGC | 16 | |||
Per Share Purchase Price | 3 | |||
Permitted Claims | 70 | |||
Permitted Claims Amount | 70 | |||
Permitted Replacement Shares | 70 |
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Defined Term | Page | |||
Permitted Title Exceptions | 18 | |||
Pershing Agreement | 2 | |||
Pershing Purchasers | 2 | |||
Person | 70 | |||
Petition Date | 1 | |||
Plan | 1 | |||
Plan Debtors | 70 | |||
Plan Summary Term Sheet | 1 | |||
PMA Claims | 70 | |||
Preliminary Closing Date Net Debt Review Deadline | 70 | |||
Preliminary Closing Date Net Debt Review Period | 71 | |||
Preliminary Closing Date Net Debt Schedule | 37 | |||
Proportionally Consolidated Debt | 71 | |||
Proportionally Consolidated Unrestricted Cash | 71 | |||
Proposed Approval Order | 28 | |||
Proposed Securities | 31 | |||
Purchase Price | 3 | |||
Purchaser | 1 | |||
Purchaser Group | 71 | |||
Refinance Cap | 50 | |||
Reinstated Amounts | 47 | |||
Reinstatement Adjustment Amount | 71 | |||
Reinstatement Amount | 71 | |||
REIT | 23 | |||
REIT Subsidiary | 23 | |||
Reorganized Company | 1 | |||
Reorganized Company Organizational Documents | 36 | |||
Repurchase Notice | 5 | |||
Reserve | 70 | |||
Reserve Surplus Amount | 71 | |||
Reserved Shares | 5 | |||
Resolution Period | 38 | |||
Rights Agreement | 72 | |||
Rights Offering Election | 4 | |||
Rouse Bonds | 72 | |||
Rule 144 | 41 | |||
Sales Cap | 50 | |||
SEC | 13 | |||
Securities Act | 13 | |||
Share Cap Number | 48 | |||
Share Equivalent | 72 | |||
Shares | 3 | |||
Significant Subsidiaries | 72 | |||
Specified Debt | 72 | |||
Subscription Right | 31 | |||
Subsidiary | 72 |
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Defined Term | Page | |||
Synthetic Lease Obligation | 67 | |||
Target Net Debt | 72 | |||
Tax Protection Agreements | 72 | |||
Tax Return | 23 | |||
Taxes | 23 | |||
Termination Date | 73 | |||
Transactions | 73 | |||
Transfer | 42 | |||
TRUPS | 73 | |||
Unrestricted Cash | 73 | |||
Unrestricted Date | 40 | |||
Unsecured Indebtedness | 73 | |||
UPREIT Units | 73 | |||
Warrant Agreement | 29 | |||
Warrants | 29 |
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(i) | As of the date listed thereunder,Section 3.20(g) of the Company Disclosure Letter sets forth a true, correct and complete list in all material respects of (i) all loans (other than the DIP Loan) and other indebtedness secured by a mortgage, deed of trust, deed to secure debt or indemnity deed of trust in such Company Property (each, a “Company Mortgage Loan”), (ii) the outstanding principal balance of each such Company Mortgage Loan, (iii) the rate of interest applicable to such Company Mortgage Loan and (iv) the maturity date of such Company Mortgage Loan; |
(ii) | Except as set forth inSection 3.20(g) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries have received a written notice of default (beyond any applicable grace or cure periods) in the (y) payment of interest, principal or other material amount due to the lender under any Company Mortgage Loan, whether as the primary obligor or as a guarantor thereof or (z) performance of any other material obligations under any Company Mortgage Loan, except (i) with respect to (y) and (z) |
21
above, as a result of the filing of the Bankruptcy Cases, or as is prohibited, stayed or otherwise suspended as a result of the Company’s or any Subsidiary’s Chapter 11 filing or status as a debtor-in-possession under Chapter 11, and (ii) with respect solely to (z) above, which would not individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; and |
(iii) | For purposes of Section 7.1(c) the representations and warranties made inSection 3.20(g)(i), disregarding all qualifications and exceptions contained therein relating to “materiality” or “Material Adverse Effect”, shall be true and correct at and as of the Closing Date as if made at and as of the Closing Date, except for (A) such inaccuracies caused by sales, purchases, transfers of assets, refinancing or other actions effected in accordance with, subject to the limitations contained in, and not otherwise prohibited by, the terms and conditions in this Agreement, including, without limitation, in Article VII, (B) amortization payments made pursuant to any applicable Company Mortgage Loans and (C) such failures to be true and correct that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. |
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(i) | Sale of New Equity Securities. If the Company or any Subsidiary of the Company at any time or from time to time following the Closing Date makes any public or non-public offering of any shares of New Common Stock (or securities that are convertible into or exchangeable or exercisable for, or linked to the performance of, New Common Stock) (other than (1) pursuant to the granting or exercise of employee stock options or other stock incentives pursuant to the Company’s stock incentive plans and employment arrangements as in effect from time to time or the issuance of stock pursuant to the Company’s employee stock purchase plan as in effect from time to time, (2) pursuant to or in consideration for the acquisition of another Person, business or assets by the Company or any of its Subsidiaries, whether by purchase of stock, merger, consolidation, purchase of all or substantially all of the assets of such Person or otherwise, (3) to strategic partners or joint venturers in connection with a commercial relationship with the Company or its Subsidiaries or to parties in connection with them providing the Company or its Subsidiaries with loans, credit lines, cash price reductions or similar transactions, under arm’s-length arrangements, (4) pursuant to the Equity Exchange or any conversion or exchange of debt or other claims into equity in connection with the Plan, (5) the sale of Backstop Shares (as |
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defined in the Pershing Agreement) pursuant to the Pershing Agreement or (6) as set forth onSection 5.9(a) of the Company Disclosure Letter) (the “Proposed Securities”), each Purchaser shall have the right to acquire from the Company (the “Subscription Right”) for the same price (net of any underwriting discounts or sales commissions or any other discounts or fees if not purchasing from or through an underwriter, placement agent or broker) and on the same terms as such Proposed Securities are proposed to be offered to others, up to the amount of such Proposed Securities in the aggregate required to enable it to maintain its aggregate proportionate New Common Stock-equivalent interest in the Company on a Fully Diluted Basis determined in accordance with the following sentence, in each case, subject to such limitations as may be imposed by applicable Law or stock exchange rules. The amount of such Proposed Securities that each Purchaser shall be entitled to purchase in the aggregate in any offering pursuant to the above shall (subject to such limitations as may be imposed by applicable Law or stock exchange rules) be determined by multiplying (x) the total number of such offered shares of Proposed Securities by (y) a fraction, the numerator of which is the number of shares of New Common Stock held by such Purchaser on a Fully Diluted Basis as of the date of the Company’s notice pursuant toSection 5.9(a)(ii) in respect of the issuance of such Proposed Securities, and the denominator of which is the number of shares of New Common Stock then outstanding on a Fully Diluted Basis. For the avoidance of doubt, the actual amount of securities to be sold or offered to each Purchaser pursuant to its exercise of the Subscription Right hereunder shall be proportionally reduced if the aggregate amount of Proposed Securities sold or offered is reduced. Any offers and sales pursuant to thisSection 5.9 in the context of a registered public offering shall be conditioned upon reasonably acceptable representations and warranties of the applicable Purchaser regarding its status as the type of offeree to whom a private sale can be made concurrently with a registered public offering in compliance with applicable securities Laws. | |||
(ii) | Notice. In the event the Company proposes to offer Proposed Securities, it shall give each Purchaser written notice of its intention, describing the estimated price (or range of prices), anticipated amount of securities, timing and other terms upon which the Company proposes to offer the same (including, in the case of a registered public offering and to the extent possible, a copy of the prospectus included in the registration statement filed with respect to such offering), no later than 10 Business Days after the commencement of marketing with respect to such offering or after the Company takes substantial steps to pursue any other offering. Each Purchaser shall have three (3) Business Days from the date of receipt of such a notice to notify the Company in writing that it intends to exercise its Subscription Right and as to the amount of Proposed Securities such Purchaser desires to purchase, up to the maximum amount calculated pursuant toSection 5.9(a)(i). In connection with an underwritten public |
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offering, such notice shall constitute a non-binding indication of interest to purchase Proposed Securities at such a range of prices as such Purchaser may specify and, with respect to other offerings, such notice shall constitute a binding commitment of such Purchaser to purchase the amount of Proposed Securities so specified at the price and other terms set forth in the Company’s notice to such Purchaser. The failure of such Purchaser to so respond within such three (3) Business Day period shall be deemed to be a waiver of the Subscription Right under thisSection 5.9 only with respect to the offering described in the applicable notice. In connection with an underwritten public offering or a private placement, each Purchaser shall further enter into an agreement (in form and substance customary for transactions of this type) to purchase the Proposed Securities to be acquired by it contemporaneously with the execution of any underwriting agreement or purchase agreement entered into with the Company, the underwriters or initial purchasers of such underwritten public offering or private placement, and the failure of such Purchaser to enter into such an agreement at or prior to such time shall constitute a waiver of the right to purchase the applicable portion of the Proposed Securities in respect of such offering. | |||
(iii) | Purchase Mechanism. If a Purchaser exercises its Subscription Right provided in thisSection 5.9, the closing of the purchase of the Proposed Securities with respect to which such right has been exercised shall take place concurrently with the sale to the other investors in the applicable offering, which period of time for the closing of the purchase of the Proposed Securities with respect to which such right has been exercised shall be extended for a maximum of 180 days in order to comply with applicable Laws (including receipt of any applicable regulatory or stockholder approvals). The Company and each Purchaser shall use its reasonable best efforts to secure any regulatory or stockholder approvals or other consents, and to comply with any Law necessary in connection with the offer, sale and purchase of, such Proposed Securities. | ||
(iv) | Failure of Purchase. In the event (A) a Purchaser fails to exercise its Subscription Right provided in thisSection 5.9 within said three Business Day period, or (B) if so exercised, a Purchaser fails or is unable to consummate such purchase within the 180 day period specified inSection 5.9(a)(iii), without prejudice to other remedies, the Company shall thereafter be entitled during the Additional Sale Period to sell the Proposed Securities not elected to be purchased pursuant to thisSection 5.9 or which such Purchaser fails to or is unable to purchase, at a price and upon terms no more favorable in any material respect to the purchasers of such securities than were specified in the Company’s notice to such Purchaser. In the event the Company has not sold the Proposed Securities within the Additional Sale Period, the Company shall not thereafter offer, issue or sell such Proposed Securities without first |
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• | ffering such securities to the applicable Purchaser in the manner provided above. | ||
(v) | Non-Cash Consideration. In the case of the offering of securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined by the Company Board;provided,however, that such fair value as determined by the Company Board shall not exceed the aggregate market price of the securities being offered as of the date the Company Board authorizes the offering of such securities. | ||
(vi) | Cooperation. The Company and each Purchaser shall cooperate in good faith to facilitate the exercise of such Purchaser’s Subscription Right hereunder, including using reasonable efforts to secure any required approvals or consents. | ||
(vii) | [Intentionally Omitted.] | ||
(viii) | General. Notwithstanding anything herein to the contrary, (A) if (1) a Purchaser exercises its Subscription Right pursuant to thisSection 5.9 and is unable to complete the purchase of the Proposed Securities concurrently with the sales to the other investors in the applicable offering as contemplated bySection 5.9(a)(iii) due to applicable regulatory or stockholder approvals and (2) the Company or the Company Board determines in good faith that any delay in completion of an offering in respect of which such Purchaser is entitled to Subscription Rights would materially impair the financing objective of such offering, the Company may proceed with such offering without the participation of such Purchaser in such offering, in which event the Company and such Purchaser shall promptly thereafter agree on a process otherwise consistent with thisSection 5.9 as would allow such Purchaser to purchase, at the same price (net of any underwriting discounts or sales commissions or any other discounts or fees if not purchasing from or through an underwriter, placement agent or broker) as in such offering, up to the amount of shares of New Common Stock (or securities that are convertible into or exchangeable or exercisable for, or linked to the performance of, New Common Stock) as shall be necessary to enable such Purchaser to maintain its aggregate proportionate New Common Stock-equivalent interest in the Company on a Fully Diluted Basis, (B) if the Company or the Company Board determines in good faith that compliance with the notice provisions inSection 5.9(a)(ii) would materially impair the financing objective of an offering in respect of which a Purchaser is entitled to Subscription Rights, the Company shall be permitted by notice to such Purchaser to reduce the notice period required underSection 5.9(a)(ii) (but not to less than one (1) Business Day) to the minimum extent required to meet the financing objective of such offering and such |
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Purchaser shall have the right to either (x) exercise its Subscription Rights during the shortened notice periods specified in such notice or (y) require the Company to promptly thereafter agree on a process otherwise consistent with thisSection 5.9 as would allow such Purchaser to purchase, at the same price (net of any underwriting discounts or sales commissions or any other discounts or fees if not purchasing from or through an underwriter, placement agent or broker) as in such offering, up to the amount of shares of New Common Stock (or securities that are convertible into or exchangeable or exercisable for, or linked to the performance of, New Common Stock) as shall be necessary to enable such Purchaser to maintain its aggregate proportionate New Common Stock-equivalent interest in the Company on a Fully Diluted Basis and (C) in the event the Company is unable to issue shares of New Common Stock (or securities that are convertible into or exchangeable or exercisable for, or linked to the performance of, New Common Stock) to a Purchaser as a result of a failure to receive regulatory or stockholder approval therefor, the Company shall take such action or cause to be taken such other action in order to place such Purchaser, insofar as reasonably practicable (subject to any limitations that may be imposed by applicable Law or stock exchange rules), in the same position in all material respects as if such Purchaser was able to effectively exercise its Subscription Rights hereunder, including, without limitation, at the option of such Purchaser, issuing to such Purchaser another class of securities of the Company having terms to be agreed by the Company and such Purchaser having a value at least equal to the value per share of New Common Stock, in each case, as shall be necessary to enable such Purchaser to maintain its proportionate New Common Stock-equivalent interest in the Company on a Fully Diluted Basis. | |||
(ix) | Termination. ThisSection 5.9 shall terminate at such time as the members of the Purchaser Group collectively beneficially own less than 5% of the outstanding shares of New Common Stock on a Fully Diluted Basis. |
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Except as otherwise expressly provided or permitted, or contemplated, by this Agreement or the Plan Summary Term Sheet (including, without limitation, in connection with implementing the matters contemplated byArticle II hereof) or any order of the Bankruptcy Court in effect on the date of the Agreement, during the period from the date of this Agreement to the Closing, the following actions shall not have been taken without the prior written consent of each Purchaser (which consent such Purchaser agrees shall not be unreasonably withheld, conditioned or delayed): |
(i) | the Company shall not have (A) declared, set aside or paid any dividends on, or made any other distributions in respect of, any of the Company’s capital stock (other than dividends required to retain REIT status or to avoid the imposition of entity level taxes, (B) split, combined or reclassified any of its capital stock or issued or authorized the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, or (C) purchased, redeemed or otherwise acquired (other than as set forth onSection 7.1(r)(i) of the Company Disclosure Letter or pursuant to Company Benefit Plans) any shares of its capital stock or any rights, warrants or options to acquire any such shares; | ||
(ii) | the Company shall not have amended the Company’s certificate of incorporation or bylaws other than to increase the authorized shares of capital stock; | ||
(iii) | neither the Company nor any of its Subsidiaries shall have acquired or agreed to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock, or other ownership interests in, or substantial portion of assets of, or by any other manner, any business or any corporation, partnership, association, joint venture, limited liability company or other entity or division thereof except (A) in the ordinary course of business, (B) for transactions with respect to joint ventures existing on the date hereof valued at less than $10,000,000 or (C) for transactions valued at less than $10,000,000 in the aggregate; | ||
(iv) | none of the Company Properties, Non-Controlling Properties or Identified Assets shall have been sold or otherwise transferred, except, (A) in the ordinary course of business, (B) to a wholly owned Subsidiary of the Company (which Subsidiary shall be subject to the same restrictions under |
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this subsection (iv)), and (C) for sales or other transfers, the net proceeds of which shall not exceed $1,000,000,000 in the aggregate, when taken together with all such sales and other transfers of Company Properties, Non-Controlling Properties and Identified Assets (the “Sales Cap”); provided that the Sales Cap shall not apply with respect to sales or transfers of Identified Assets to the extent the same shall have been consummated in accordance with the express terms and conditions set forth inArticle II hereof; | |||
(v) | [Intentionally Omitted;] | ||
(vi) | (vi) none of the Company or any of its Subsidiaries shall have issued, delivered, granted, sold or disposed of any Equity Securities (other than (A) issuances of shares of Common Stock issued pursuant to, and in accordance with,Section 7.1(u), but subject toSection 7.1(q), (B) pursuant to the Equity Exchange, (C) the issuance of shares pursuant to the exercise of employee stock options issued pursuant to the Company Option Plans, (D) as set forth onSection 7.1(u) of the Company Disclosure Letter), or (E) the issuance of shares to existing holders of Common Stock, the Brookfield Investor and the Pershing Purchasers, in each case, pursuant to Section 6.9 of the other Investment Agreements); | ||
(vii) | none of the Company Properties or Identified Assets shall have been mortgaged, or pledged, nor shall the owner or lessee thereof have granted a lien, mortgage, pledge, security interest, charge, claim or other Encumbrance relating to debt obligations of any kind or nature on, or otherwise encumbered, any Company Property or Identified Assets except in the ordinary course of business consistent with past practice, other than encumbrances of Company Properties or Identified Assets of Debtors in connection with (A) a restructuring of existing indebtedness for borrowed money related to any such Company Property or Identified Asset with the existing lender(s) thereof or (B) a refinancing of existing indebtedness for borrowed money related to any Company Property or Identified Asset in an amount not to exceed $300,000,000 (the “Refinance Cap”),provided that (x) the Refinance Cap shall not apply to a refinancing of the existing first lien indebtedness secured by the Fashion Show Mall, (y) in the event that a refinancing is secured by mortgages, deeds of trust, deeds to secure debt or indemnity deeds of trust encumbering multiple Company Properties and Identified Assets, the proceeds of such refinancing shall not exceed an amount equal to the Refinance Cap multiplied by the number of Company Properties and Identified Assets so encumbered, and (z) in connection with refinancing the indebtedness of a Company Property or Identified Asset owned by a Joint Venture, the Refinance Cap shall apply with respect to the aggregate share of such indebtedness which is allocable to, or guaranteed by (but without duplication), the Company and/or its Subsidiaries; |
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(viii) | none of the Company or any of its Subsidiaries shall have undertaken any capital expenditure that is out of the ordinary course of business consistent with past practice and material to the Company and its Subsidiaries taken as a whole, except as contemplated in the Company’s business plan for fiscal year 2010 adopted by the board of directors of the Company prior to the date hereof; or | ||
(ix) | the Company shall not have changed any of its methods, principles or practices of financial accounting in effect, other than as required by GAAP or regulatory guidelines (and except to implement purchase accounting and/or “fresh start” accounting if the Company elects to do so). |
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(i) | if the Effective Date and the purchase and sale contemplated byArticle I have not occurred by the Termination Date;provided,however, that the right to terminate this Agreement under thisSection 11.1(b)(i) shall not be available to any Purchaser if any Purchaser has breached in any material respect its obligations under this Agreement in any manner that shall have |
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proximately caused the Closing Date not to occur on or before the Termination Date; | |||
(ii) | if any Bankruptcy Cases of the Company or any Debtor which is a Significant Subsidiary shall have been dismissed or converted to cases under chapter 7 of the Bankruptcy Code or if an interim or permanent trustee or an examiner shall be appointed to oversee or operate any of the Debtors in their Bankruptcy Cases, in each case, except (x) as would not reasonably be expected to have a Material Adverse Effect or (y) with respect to the Bankruptcy Cases for Phase II Mall Subsidiary, LLC,Oakwood Shopping Center Limited Partnership and Rouse Oakwood Shopping Center, LLC; | ||
(iii) | if, from and after the issuance of the Warrants, the Approval Order shall without the prior written consent of each Purchaser, cease to be in full force and effect resulting in the cancellation of any Warrants or a modification of any Warrants, in each case, other than pursuant to their terms, that adversely affects any Purchaser; | ||
(iv) | if, without a Purchaser’s consent, the Warrants have not been issued to such Purchaser in accordance withSection 5.2, or if after the Warrants are issued, any shares of Common Stock underlying the Warrants cease at any time to be authorized for issuance on a U.S. national securities exchange; | ||
(v) | if there has been a breach by the Company of any representation, warranty, covenant or agreement of the Company contained in this Agreement or the Company shall have taken any action which, in each case, (A) would result in a failure of a condition set forth inArticle VII and (B) cannot be cured prior to the Termination Date, after written notice to the Company of such breach and the intention to terminate this Agreement pursuant to this Section;provided,however, that the right to terminate this Agreement under this Section shall not be available to any Purchaser if any Purchaser has breached in any material respect its obligations under this Agreement; | ||
(vi) | following the issuance of the Warrants, if (a) the Company consummates a Competing Transaction, (b) on or after November 1, 2010, the Company enters into an agreement or files any pleading or document with the Bankruptcy Court, in each case, evidencing its decision to support any Competing Transaction, or (c) the Company files notice of a hearing to confirm a plan of reorganization that contemplates a Change of Control without such Change of Control being subject to either (1) the written consent of the holders a majority in number of the outstanding shares of Common Stock or (2) soliciting the approval of the holders of a majority in number of the outstanding shares of Common Stock in accordance with the Bankruptcy Code (in either case, regardless of whether such approval is obtained) and providing for a period of at least 20 Business Days for |
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acceptance or rejection by such holders in connection with such solicitation; | |||
(vii) | if the Company or any Subsidiary of the Company issues any shares of Common Stock or New Common Stock (or securities convertible into or exchangeable or exercisable for Common Stock or New Common Stock) at a purchase price (or in the case of securities that are convertible into or exchangeable or exercisable for, or linked to the performance of, Common Stock or New Common Stock, the conversion, exchange, exercise or comparable price) of less than $10.00 per share (net of all underwriting and other discounts, fees and any other compensation and related expenses;provided, that for purposes hereof, payments to the Purchasers or the Pershing Purchasers in accordance withSection 1.4 of this Agreement or the Pershing Agreement, respectively, shall not be considered a discount, fee or other compensation) of Common Stock or New Common Stock or converts any claim against any of the Debtors into New Common Stock at a conversion price less than $10.00 per share of Common Stock or New Common Stock (in each case, other than pursuant to (A) the exercise, exchange or conversion of Share Equivalents of the Company existing on the date of this Agreement in accordance with the terms thereof as of the date of this Agreement, (B) the Equity Exchange, (C) the issuance of shares upon the exercise of employee stock options issued pursuant to the Company Option Plans, (D) the issuance of shares as set forth onSection 7.1(u) of the Company Disclosure Letter, or (E) the issuance of shares to existing holders of Common Stock, the Brookfield Investor and the Pershing Purchasers, in each case, pursuant to Section 6.9 of the other Investment Agreements; | ||
(viii) | if the Bankruptcy Court shall have entered a final and non-appealable order denying confirmation of the Plan; | ||
(ix) | if this Agreement, including the Plan Summary Term Sheet, or the Plan, is revised or modified (except as otherwise permitted pursuant to this Agreement) by the Company or an order of the Bankruptcy Court or other court of competent jurisdiction in a manner that is unacceptable to any Purchaser or a plan of reorganization with respect to the Debtors involving the Transactions that is unacceptable to any Purchaser is filed by the Debtors with the Bankruptcy Court or another court of competent jurisdiction; | ||
(x) | if any Governmental Entity of competent jurisdiction shall have issued a final and nonappealable order permanently enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement (the “Closing Restraint”); | ||
(xi) | prior to the issuance of the Warrants, if the Company (A) makes a public announcement, enters into an agreement or files any pleading or document |
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with the Bankruptcy Court, in each case, evidencing its decision to support any Competing Transaction, or (B) the Company or any Subsidiary of the Company enters into a definitive agreement providing for a Competing Transaction or the Company provides notice to any Purchaser of the Company’s or any of its Subsidiaries’ decision to enter into a definitive agreement providing for a Competing Transaction pursuant toSection 5.7; or |
(i) | if the Effective Date and the purchase and sale contemplated byArticle I have not occurred by the Termination Date;provided,however, that the right to terminate this Agreement under thisSection 11.1(c)(i) shall not be available to the Company to the extent that it has breached in any material respect its obligations under this Agreement in any manner that shall have proximately caused the Closing Date not to occur on or before the Termination Date (it being agreed that this proviso shall not limit the Company’s ability to terminate this Agreement pursuant toSection 11.1(c)(ii) or any other clause of thisSection 11.1(c)); | ||
(ii) | prior to the entry of the Confirmation Order, upon notice to each Purchaser, for any reason or no reason, effective as of such time as shall be specified in such notice;provided,however, that prior to the entry of the Approval Order, the Company shall not have the right to terminate this Agreement under thisSection 11.1(c)(ii) during the 48 hour notice period contemplated bySection 5.7; | ||
(iii) | if all conditions to the obligations of each Purchaser to consummate the transactions contemplated by this Agreement set forth inArticle VII shall have been satisfied (other than those conditions that are to be satisfied (and capable of being satisfied) by action taken at the Closing if such Purchaser had complied with its obligations under this Agreement) and the transactions contemplated by this Agreement fail to be consummated as a result of the breach by any Purchaser of its obligation to pay to the Company and GGO, as applicable, all amounts payable by such Purchaser underArticle I andArticle II of this Agreement, by wire transfer of immediately available funds in accordance with the terms of this Agreement; or | ||
(iv) | if a Closing Restraint is in effect. |
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(i) | the aggregate outstanding Proportionally Consolidated Debt plus any accrued and unpaid interest thereon plus the amount of the New Debt, | ||
(ii) | less the Reinstatement Adjustment Amount, |
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(iii) | plus the Permitted Claims Amount, | ||
(iv) | plus the amount of Proportionally Consolidated Debt attributable to assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between the date of this Agreement and through the Closing, but excluding any deficiency, guaranty or other similar claims associated with the Special Consideration Properties (as such term is defined in the plan of reorganization for the applicable Confirmed Debtor), | ||
(v) | less Proportionally Consolidated Unrestricted Cash;provided,however, that the net proceeds attributable to sales of assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, or otherwise transferred during the period between the date of this Agreement and through the Closing shall be deducted prior to subtracting Proportionally Consolidated Unrestricted Cash. |
(i) | the aggregate outstanding Proportionally Consolidated Debt plus any accrued and unpaid interest thereon plus the amount of the New Debt, | ||
(ii) | plus the amount of Proportionally Consolidated Debt attributable to assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between the date of this Agreement and through the Closing, but excluding any deficiency, guaranty or other similar claims associated with the Special Consideration Properties (as such term is defined in the plan of reorganization for the applicable Confirmed Debtor), and | ||
(iii) | less Proportionally Consolidated Unrestricted Cash;provided,however, that the net proceeds attributable to sales of assets of the Company, its Subsidiaries and other Persons in which the Company, directly or indirectly, holds a minority interest sold, returned, abandoned, conveyed, or otherwise transferred during the period between the date of this Agreement and through the Closing shall be deducted prior to subtracting Proportionally Consolidated Unrestricted Cash. |
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(i) | prepetition and postpetition Claims secured by cashiers’, landlords’, workers’, mechanics’, carriers’, workmen’s, repairmen’s and materialmen’s liens and other similar liens, | ||
(ii) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, prepetition and postpetition Claims for all ordinary course trade payables for goods and services related to the operations of the Company and its Subsidiaries (including, without limitation, ordinary course obligations to tenants, anchors, vendors, customers, utility |
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providers or forward contract counterparties related to utility services, employee payroll, commissions, bonuses and benefits (but excluding the Key Employee Incentive Plan approved by the Bankruptcy Court pursuant to an order entered on October 15, 2009 at docket no. 3126), insurance premiums, insurance deductibles, self insured amounts and other obligations that are accounted for, consistent with past practice prior to the Petition Date, as trade payables);provided,however, that Claims or expenses related to the administration and conduct of the Bankruptcy Cases (such as professional fees and disbursements of financial, legal and other advisers and consultants retained in connection with the administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy Cases and other expenses, fees and commissions related to the reorganization and recapitalization of the Company pursuant to the Plan, including related to the Investment Agreements, the issuance of the New Debt, Liquidity Equity Issuances and any other equity issuances contemplated by this Agreement and the Plan) shall not be Excluded Claims, | |||
(iii) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, Claims and liabilities arising from the litigation or potential litigation matters set forth in that certain Interim Litigation Report of the Company dated March 29, 2010 and the Company’s litigation audit response to Deloitte & Touche dated February 25, 2010, both have been made available to each Purchaser prior to close of business on March 29, 2010 and other Claims and liabilities arising from ordinary course litigation or potential litigation that was not included in such schedule solely because the amount of estimated or asserted liabilities or Claims did not meet the threshold amount used for the preparation of such schedule, in each case, to the extent that such Claims and liabilities have not been paid and satisfied as of the Effective Date, are continuing following the Effective Date, excluding Claims against or interests in the Debtors arising under or related to the Hughes Agreement, | ||
(iv) | except with respect to Claims related to GGO or the assets or businesses contributed thereto, all tenant, anchor and vendor Claims required to be cured pursuant to section 365 of the Bankruptcy Code, in connection with the assumption of an executory contract or unexpired lease under the Plan, | ||
(v) | any deficiency, guaranty or other similar Claims associated with the Special Consideration Properties (as such term is defined in the plans of reorganization for the applicable Confirmed Debtors), | ||
(vi) | MPC Taxes, | ||
(vii) | surety bond Claims relating to Claims of the type identified in clauses (i) through (vi) of this definition, |
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(viii) | GGO Setup Costs (other than professional fees and disbursements of financial, legal and other advisers and consultants retained in connection with the administration and conduct of the Company’s and its Subsidiaries’ Bankruptcy Cases), and | ||
(ix) | any liabilities assumed by GGO and paid on the Effective Date by GGO or to be paid after the Effective Date by GGO (for avoidance of doubt, this includes any Claims that, absent assumption of the liability by GGO, would be a Permitted Claim). |
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(i) | Contract that would be considered a material contract pursuant to Item 601(b)(10) of Regulation S-K promulgated by the SEC, had the Company been the registrant referred to in such regulation; or | ||
(ii) | Contract for capital expenditures, the future acquisition or construction of fixed assets or the future purchase of materials, supplies or equipment that provides for the payment by the Company or its Subsidiaries of more than $5,000,000 and is not terminable by the Company or any of its Subsidiaries by notice of not more than sixty (60) days for a cost of less than $1,000,000. |
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Fairholme Capital Management, LLC
4400 Biscayne Boulevard, 9th Floor
Miami, Florida 33137
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Facsimile: (305) 358-8002
125 Broad Street
New York, New York 10004
Attention: Andrew G. Dietderich, Esq.
Alan J. Sinsheimer, Esq.
Facsimile: (212) 558-3588
401 East Las Olas Boulevard, Suite 2000
Fort Lauderdale, Florida 33301
Attention: Bruce I. March, Esq.
Matthew M. Robbins, Esq.
Facsimile: (954) 765-1477
2 Park Avenue
New York, NY 10016
Attention: Joshua J. Angel, Esq.
John Rogers, Esq.
Facsimile: (212) 592-1500
110 N. Wacker Drive
Chicago, Illinois 60606
Attention: Ronald L. Gern, Esq.
Facsimile: (312) 960-5485
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Marcia L. Goldstein, Esq.
Frederick S. Green, Esq.
Gary T. Holtzer, Esq.
Malcolm E. Landau, Esq.
Facsimile: (212) 310-8007
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FAIRHOLME FUNDS, INC., on behalf of its series The Fairholme Fund | ||||
By: | ||||
Name: | Bruce R. Berkowitz | |||
Title: | President | |||
FAIRHOLME FUNDS, INC., on behalf of its series Fairholme Focused Income Fund | ||||
By: | ||||
Name: | Bruce R. Berkowitz | |||
Title: | President | |||
GENERAL GROWTH PROPERTIES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
• | Master Planned Communities |
• | Bridgeland | ||
• | Columbia — subject to Section 2.1(e) of the Agreement and including a right of first offer and purchase option with respect to certain office buildings in Columbia pursuant to the terms of the development agreement that will be attached to the Separation Agreement. For the avoidance of doubt, The Mall in Columbia and Gateway Overlook (including related development rights) shall not to be transferred to GGO. | ||
• | Emerson | ||
• | Fairwoods | ||
• | Summerlin | ||
• | Woodlands — joint venture interest |
• | 110 N. Wacker (leasehold interest) — joint venture interest | ||
• | Ala Moana Tower — air rights over existing parking deck | ||
• | Alameda Plaza, Idaho | ||
• | Allen Towne Plaza, Texas | ||
• | Arizona 2 Office Note — A note that will approximate the capital lease revenue from Arizona 2 Office only; there will be no transfer to GGO of underlying properties or any ownership or occupancy interest therein | ||
• | Bridges at Mint Hill, North Carolina | ||
• | Century Plaza, Alabama | ||
• | Circle T Ranch & Power Centre, Texas — joint venture interest | ||
• | Condos Nouvelle at Natick — rights to income from assets sold and for which a closing has occurred prior to Closing remain with GGP | ||
• | Cottonwood Mall and Cottonwood Square | ||
• | Elk Grove Promenade |
• | Fashion Show Air Rights — Springing right to acquire an 80% ownership interest in the air above the portions of Fashion Show Mall owned by GGP upon satisfaction of the existing loans and guaranties at Fashion Show Mall and The Shoppes at the Palazzo as described in and |
pursuant to the provisions of the Fashion Show Core Principles document that will be attached to the Separation Agreement. | |||
• | Golf course interests — TPC Summerlin & TPC Canyons | ||
• | Hexalon (but not Hexalon’s interest in General Growth Management, Inc.) | ||
• | Kendall Towne Center, Miami — land | ||
• | Landmark Mall | ||
• | Maui Ranch property | ||
• | Park West Mall | ||
• | Princeton, New Jersey — land | ||
• | Rio West, New Mexico | ||
• | Riverwalk Market Place | ||
• | South Street Seaport | ||
• | Summerlin Centre | ||
• | Summerlin Hospital — joint venture interest | ||
• | Victoria Ward | ||
• | Village of Redlands, California (Redlands Mall and Redlands Promenade) | ||
• | Volo, Illinois — land |
3
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK | ||||||||
x | ||||||||
: | ||||||||
In re | : | Chapter 11 Case No. | ||||||
: | ||||||||
GENERAL GROWTH | : | 09-11977 (ALG) | ||||||
PROPERTIES, INC., et al., | : | |||||||
: | (Jointly Administered) | |||||||
Debtors. | : | |||||||
x |
CODE (A) APPROVING BIDDING PROCEDURES, (B) AUTHORIZING THE
DEBTORS TO ENTER INTO CERTAIN AGREEMENTS, (C) APPROVINGTHE ISSUANCE OF WARRANTS, AND (D) GRANTING RELATED RELIEF
1 | Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Motion. |
2
i. | the establishment of a ‘floor’ price for the value of the equity of General Growth for the benefit of all stakeholders while preserving the ability to capture the benefit of increasing equity value in the future, | ||
ii. | long-term commitments of capital providing liquidity necessary to emerge from Chapter 11 in a manner intended to permit satisfaction of all unsecured creditors in full and provide a substantial recovery for shareholders, | ||
iii. | the preservation of flexibility to cancel some or all of the commitments under the Investment Agreements and to maximize equity value by replacing part of the committed capital with financing from more favorable sources, and |
3
iv. | the lengthy nature of the commitments to purchase $6.55 billion of publicly-listed stock at a fixed price. |
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New York, New York
THE HONORABLE ALLAN L. GROPPER UNITED STATES BANKRUPTCY JUDGE | ||||
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(i) | a purchase of all or substantially all of the Company (an “M&A Transaction”); | ||
(ii) | a purchase of a significant portion of the Company’s assets (an “Asset Purchase”); or | ||
(iii) | an investment of all or a portion of at least $1.5 billion of equity capital (a “Plan Sponsor Investment”);provided,however, that such bids are subject to a minimum investment of $100 million. |
2 | Certain information may be restricted due to anti-trust or other concerns. |
2
Ronen Bojmel | Jackson Hsieh | |
Managing Director | Vice Chairman | |
Miller Buckfire & Co., LLC | Global Head of Real Estate, Lodging and Leisure | |
153 E. 53rd Street, 22nd Floor | UBS Securities, LLC | |
New York, New York 10022 | 299 Park Avenue | |
Tel: (212) 895-1807 | New York, NY 10171 | |
Fax: (212) 895-1850 | Tel: (212) 821-4545 | |
ronen.bojmel@millerbuckfire.com | Fax: (212) 821-2545 | |
jackson.hsieh@ubs.com. |
(i) | All unsecured debt is provided consideration in the form of cash, equity and/or debt (which may include reinstatement to the extent applicable) in an amount to |
3
satisfy their claims of principal and accrued interest (to the extent allowed by the Bankruptcy Court) in full; | |||
(ii) | Pro forma for Plan distributions, the Company retains enough cash at emergence to ensure that it has a minimum of approximately $500 million in unrestricted and available liquidity; |
(iii) | The Company’s restructured property-level debt remains in place based on the restructured terms and maturities contemplated by the consummated plans of reorganization. Any property-level debtors that are pending restructuring are resolved based on terms that are substantially similar in all material respects to the treatment provided in the confirmed plans. All non-debtor property-level debt remains in place on its current terms; and |
(iv) | Unless otherwise specified in your proposal, Plan Sponsor Investments that are less than $1.5 billion may be directed by the Company into consortia with other bidders, at the Company’s option. |
4
M&A Transaction | Plan Sponsor Investment | ||||
(i) (ii) (iii) (iv) (v) (vi) • • • (vii) (viii) (ix) (x) (xi) (xii) (xiii) | Total enterprise value (“TEV”) and available equity value (“EV”) for GGP and combined company implied by proposal and any assumptions or methodologies used in analyzing TEV and EV (including any adjustments or potential decreases in net proceeds to be received by shareholders); Proposed treatment for each class of unsecured indebtedness outstanding; Proposed purchase price per share of existing common stock; Transaction structure (stock deal, asset purchase, etc.); Form of consideration (cash, stock, etc.), and methodology for determining any non-cash consideration; If providing stock consideration, indicate the following: Value ascribed to synergies and related methodology, if applicable; Pro forma financials for combined company; Pro forma capital structure implied by proposal; Sources and certainty of capital, including equity or debt commitment letters; Approvals required or anticipated, including regulatory approval(s); A listing of all regulatory authorities with whom contact has been made, and a summary of any approvals or objections obtained or raised; Shareholder or other required approvals; Transaction timing/process; Key contingencies and conditions precedent; and Detailed list of remaining due diligence requirements. | (i) (ii) (iii) (iv) (v) (vi) • • • (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) | (i) TEV and EV implied by the proposal and any assumptions or methodologies used in analyzing TEV and EV (including any adjustments or potential decreases in net proceeds to be received by shareholders); Proposed treatment for each class of unsecured indebtedness outstanding; Valuation per share of common stock implied by the proposal; Investment structure (e.g., PIPE, rights offering, other); Whether the investment is contemplated to complement the REP Agreement, the Fairholme Agreement, and/or the Pershing Agreement or replace the REP Agreement and/or the Fairholme/Pershing Agreements; Key terms of newly issued securities, including but not limited to: Economic terms (ownership implied by investment; discount/fees related to investment); Governance; Registration rights; Use of funds and pro forma capital structure (to the extent the proposal contemplates providing capital above the minimum amount requested); Assumption regarding maximum debt capacity at the corporate level; Sources and certainty of capital, including equity or debt commitment letters; Approvals required or anticipated, including regulatory approval(s); A listing of all regulatory authorities with whom contact has been made, and a summary of any approvals or objections obtained or raised; Transaction timing and process; Key contingencies and conditions precedent; and Detailed list of remaining due diligence requirements. |
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• | Hearing on the disclosure statement on or aroundJuly 30, 2010; | ||
• | Company to commence solicitation of the Plan on or aroundAugust 6, 2010; |
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• | Deadline to vote and/or object to the Plan on or aroundSeptember 17, 2010; | ||
• | Hearing to confirm the Plan on or aroundSeptember 30, 2010. |
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Page | ||||||||
1. | DEFINITIONS | |||||||
2. | ORIGINAL ISSUE OF WARRANTS | |||||||
2.1 | Form of Warrant Certificates | 9 | ||||||
2.2 | Execution and Delivery of Warrant Certificates; Vesting | 9 | ||||||
3. | EXERCISE PRICE; EXERCISE OF WARRANTS AND EXPIRATION OF WARRANTS | |||||||
3.1 | Exercise Price | 10 | ||||||
3.2 | Exercise of Warrants | 10 | ||||||
3.3 | Expiration of Warrants | 10 | ||||||
3.4 | Method of Exercise; Settlement of Warrant | 10 | ||||||
3.5 | Transferability of Warrants and Common Stock | 12 | ||||||
3.6 | Compliance with Law | 12 | ||||||
4. | REGISTRATION RIGHTS AND PROCEDURES AND LISTING | |||||||
4.1 | Applicability; Registration | 15 | ||||||
4.2 | Expenses of Registration 19 | |||||||
4.3 | Obligations of the Company | 19 | ||||||
4.4 | Suspension of Sales | 22 | ||||||
4.5 | Termination of Registration Rights | 23 | ||||||
4.6 | Furnishing Information | 23 | ||||||
4.7 | Indemnification | 23 | ||||||
4.8 | Contribution | 25 | ||||||
4.9 | Representations, Warranties and Indemnities to Survive | 25 | ||||||
4.10 | Lock-Up Agreements | 25 | ||||||
4.11 | Rule 144 Reporting | 26 | ||||||
4.12 | Obtaining Exchange Listing | 26 | ||||||
4.13 | The Warrant Agent | 26 | ||||||
5. | ADJUSTMENTS AND OTHER RIGHTS | |||||||
5.1 | Stock Dividend; Subdivision or Combination of Common Stock | 26 | ||||||
5.2 | Other Dividends and Distributions | 27 | ||||||
5.3 | Rights Offerings | 28 |
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Page | ||||||||
5.4 | Issuer Tender or Exchange Offers | 28 | ||||||
5.5 | Reorganization, Reclassification, Consolidation, Merger or Sale | 29 | ||||||
5.6 | Other Adjustments | 30 | ||||||
5.7 | Notice of Adjustment | 30 | ||||||
6. | CHANGE OF CONTROL | |||||||
6.1 | Redemption in Connection with a Change of Control Event | 31 | ||||||
6.2 | Public Stock Merger | 31 | ||||||
6.3 | Mixed Consideration Merger | 31 | ||||||
6.4 | The Warrant Agent | 32 | ||||||
7. | WARRANT TRANSFER BOOKS | |||||||
8. | WARRANT HOLDERS | |||||||
8.1 | No Voting Rights | 33 | ||||||
8.2 | Right of Action | 33 | ||||||
9. | WARRANT AGENT | |||||||
9.1 | Nature of Duties and Responsibilities Assumed | 33 | ||||||
9.2 | Compensation and Reimbursement | 35 | ||||||
9.3 | Warrant Agent May Hold Company Securities | 36 | ||||||
9.4 | Resignation and Removal; Appointment of Successor | 36 | ||||||
9.5 | Damages | 37 | ||||||
9.6 | Force Majeure | 37 | ||||||
9.7 | Survival | 37 | ||||||
10. | REPRESENTATIONS AND WARRANTIES | |||||||
10.1 | Representations and Warranties of the Company | 37 | ||||||
11. | COVENANTS | |||||||
11.1 | Reservation of Common Stock for Issuance on Exercise of Warrants | 37 | ||||||
11.2 | Notice of Distributions | 38 | ||||||
11.3 | Cancellation of Warrants | 38 | ||||||
12. | MISCELLANEOUS | |||||||
12.1 | Money and Other Property Deposited with the Warrant Agent | 38 | ||||||
12.2 | Payment of Taxes | 38 | ||||||
12.3 | Surrender of Certificates | 39 | ||||||
12.4 | Mutilated, Destroyed, Lost and Stolen Warrant Certificates | 39 | ||||||
12.5 | Removal of Legends | 39 |
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Page | ||||||||
12.6 | Notices | 40 | ||||||
12.7 | Applicable Law; Jurisdiction | 41 | ||||||
12.8 | Persons Benefiting | 42 | ||||||
12.9 | Relationship to Investment Agreement and Stock Purchase Agreements | 42 | ||||||
12.10 | Counterparts | 42 | ||||||
12.11 | Amendments | 42 | ||||||
12.12 | Headings | 43 | ||||||
12.13 | Entire Agreement | 43 | ||||||
12.14 | Specific Performance | 43 |
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1. | DEFINITIONS. |
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3
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2. | ORIGINAL ISSUE OF WARRANTS. |
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3. | EXERCISE PRICE; EXERCISE OF WARRANTS AND EXPIRATION OF WARRANTS. |
1 | Note to Draft: Insert the date that is the seventh anniversary of the date of this Agreement. |
10
11
12
13
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4. | REGISTRATION RIGHTS AND PROCEDURES AND LISTING. |
2 | Note to Draft: Lower dollar thresholds in the registration rights section to be applicable to GGO Warrants. |
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21
22
23
24
25
5. | ADJUSTMENTS AND OTHER RIGHTS. |
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6. | CHANGE OF CONTROL. |
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7. | WARRANT TRANSFER BOOKS. |
8. | WARRANT HOLDERS. |
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10. | REPRESENTATIONS AND WARRANTIES. |
11. | COVENANTS. |
37
12. | MISCELLANEOUS. |
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39
110 N. Wacker Drive
Chicago IL 60606
Attention: Ronald L. Gern, Esq.
Fax: 312-960-5485
40
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
200 W. Monroe Street, Suite 1590
Chicago, IL 60606
Attention: Relationship Manager
Facsimile: (312) 325-7610
Newport Office Center VII
480 Washington Blvd.
Jersey City, NJ 07310
Attention: General Counsel
Facsimile: 201-680-4610
41
42
43
GENERAL GROWTH PROPERTIES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
MELLON INVESTOR SERVICES LLC, as Warrant Agent | ||||
By: | ||||
Name: | ||||
Title: |
44
OF GENERAL GROWTH PROPERTIES, INC.
No. | Certificate for Warrants |
3 | Note to Draft: Insert the date that is the seventh anniversary of the date of the Agreement. |
2
By: | ||||
Name and Title: | ||||
By: | ||||
Name and Title: | ||||
By: | ||||
Name: | ||||
Authorized Officer |
3
* | ||||
(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
2
Social Security or | ||||||
other Identifying | ||||||
Number of | Number of | |||||
Names of Assignees | Address | Assignee(s) | Warrants | |||
1
* | ||||
(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
Option Pricing Assumptions / Methodology
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. |
4 | Note: Amounts calculated herein may not foot due to rounding error. For precise calculations, decimal points should not be rounded. |
D1 | = [ ln [ S / X ] + (R + (V^2 / 2)) * T)] ÷ (V *ÖT) | |
= (-0.1149) | ||
D2 | = [ ln [ S / X ] + (R — (V^2 / 2)) * T)] ÷ (V *ÖT) | |
= (-0.4684) |
W | =[N(D1) * S] – [N(D2) * PV(E)] | |
= $4.99 |
Value | =W * Z | |
=$499 |
ALLOCATIONS OF WARRANTS TO INITIAL INVESTORS AND VESTING
Vesting Schedule | ||||||||||||||||
(Number of Warrants that vest on applicable date) | ||||||||||||||||
Total Number of Warrants | Each day from and | |||||||||||||||
to be Delivered to Initial | including July 13, 2010 | |||||||||||||||
Investor (on date of | Date of Warrant | through and including | ||||||||||||||
Initial Investor | Warrant Agreement) | Agreement | July 12, 2010 | 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 |
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. |
2
3
1 | Note to Draft: To be eliminated or appropriately conformed to any comparable ownership restrictions that the Company may have in its Charter as of the Effective Date. A REIT representations letter similar in kind to Exhibit D will be required only to the extent that the Company is a REIT as of the effective date. |
4
2 | Note to Draft: A REIT representations letter similar in kind to Exhibit D will be required only to the extent that the Company is a REIT as of the Effective Date. |
5
6
7
8
9
10
11
12
[110 N. Wacker Drive
Chicago, IL 60606]
Attention:
Facsimile:
767 Fifth Avenue
New York, NY 10153
Attention: Marcia L. Goldstein, Esq.
Frederick S. Green, Esq.
Gary T. Holtzer
Malcolm E. Landau
Facsimile: (212) 310-8007
13
14
15
16
GENERAL GROWTH OPPORTUNITIES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
[INSERT NAME OF INVESTOR] | ||||
By: | ||||
Name: | ||||
Title: | ||||
1 | The purchasers under Pershing Square’s Investment Agreement will collectively sign one Non-Control Agreement and the purchasers under Fairholme’s Investment Agreement will collectively sign another Non-Control Agreement. The terms of those two agreements will be substantially similar except for the differences described in the footnotes later in this agreement. |
2 | In the Fairholme Non-Control Agreement, this will read: “in connection with any stockholder meeting or consent solicitation, if Investor and the Investor Parties have voting control over a number of shares of Common Stock in excess of 10% of the number of shares of Common Stock outstanding as of the applicable record date, then Investor shall, and shall cause the other Investor Parties to, vote all shares over which they have voting control in excess of such percentage in proportion to the Votes Cast;” |
2
3
4
5
3 | In the Fairholme Non-Control Agreement, this clause will be expanded to say that the restriction in 1.1(c) will apply only to votes for or against directors and not votes on other matters. |
6
7
8
9
10
4 | Note to Draft: 25% for the Pershing Square Non-Control Agreement and 30% for the Fairholme Non-Control Agreement. |
11
12
110 N. Wacker Drive
Chicago, IL 60606
Attention: Ronald L. Gern, Esq.
Facsimile: 312-960-5485
767 Fifth Avenue
New York, NY 10153
Attention: Marcia L. Goldstein, Esq.
Frederick S. Green, Esq.
Gary T. Holtzer
Malcolm E. Landau
Facsimile: (212) 310-8007
13
14
15
16
GENERAL GROWTH PROPERTIES, INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
[INSERT NAME OF INVESTOR] | ||||
By: | ||||
Name: | ||||
Title: | ||||