Exhibit 99.1
Execution Version
dated as of March 31, 2010
between
The Purchasers Party Hereto
and
General Growth Properties, Inc.
Execution Version
TABLE OF CONTENTS
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Page |
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ARTICLE I PURCHASE OF NEW COMMON STOCK; CLOSING |
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3 |
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SECTION 1.1 |
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Purchase of New Common Stock |
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3 |
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SECTION 1.2 |
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Closing |
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4 |
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SECTION 1.3 |
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Company Rights Offering Election |
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4 |
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SECTION 1.4 |
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Company Election to Replace Certain Shares |
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4 |
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SECTION 1.5 |
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Pro Rata Reductions with Fairholme Agreement |
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5 |
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ARTICLE II GGO SHARE DISTRIBUTION AND GGO RIGHTS OFFERING |
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5 |
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SECTION 2.1 |
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GGO Share Distribution |
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5 |
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SECTION 2.2 |
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GGO Rights Offering |
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6 |
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
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9 |
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SECTION 3.1 |
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Organization and Qualification |
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9 |
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SECTION 3.2 |
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Corporate Power and Authority |
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9 |
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SECTION 3.3 |
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Execution and Delivery; Enforceability |
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10 |
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SECTION 3.4 |
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Authorized Capital Stock |
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10 |
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SECTION 3.5 |
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Issuance |
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11 |
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SECTION 3.6 |
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No Conflict |
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12 |
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SECTION 3.7 |
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Consents and Approvals |
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13 |
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SECTION 3.8 |
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Company Reports |
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14 |
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SECTION 3.9 |
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No Undisclosed Liabilities |
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15 |
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SECTION 3.10 |
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No Material Adverse Effect |
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15 |
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SECTION 3.11 |
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No Violation or Default: Licenses and Permits |
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15 |
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SECTION 3.12 |
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Legal Proceedings |
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16 |
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SECTION 3.13 |
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Investment Company Act |
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16 |
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SECTION 3.14 |
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Compliance With Environmental Laws |
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16 |
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SECTION 3.15 |
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Company Benefit Plans |
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17 |
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SECTION 3.16 |
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Labor and Employment Matters |
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18 |
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SECTION 3.17 |
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Insurance |
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18 |
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SECTION 3.18 |
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No Unlawful Payments |
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18 |
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SECTION 3.19 |
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No Broker’s Fees |
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18 |
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SECTION 3.20 |
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Real and Personal Property |
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19 |
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SECTION 3.21 |
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Tax Matters |
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23 |
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SECTION 3.22 |
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Material Contracts |
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25 |
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SECTION 3.23 |
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Certain Restrictions on Charter and Bylaws Provisions; State Takeover Laws |
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25 |
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SECTION 3.24 |
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No Other Representations or Warranties |
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26 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER |
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26 |
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SECTION 4.1 |
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Organization |
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26 |
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SECTION 4.2 |
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Power and Authority |
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27 |
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SECTION 4.3 |
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Execution and Delivery |
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27 |
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SECTION 4.4 |
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No Conflict |
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27 |
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Page |
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SECTION 4.5 |
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Consents and Approvals |
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27 |
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SECTION 4.6 |
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Compliance with Laws |
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27 |
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SECTION 4.7 |
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Legal Proceedings |
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27 |
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SECTION 4.8 |
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No Broker’s Fees |
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27 |
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SECTION 4.9 |
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Sophistication |
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28 |
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SECTION 4.10 |
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Purchaser Intent |
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28 |
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SECTION 4.11 |
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Reliance on Exemptions |
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28 |
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SECTION 4.12 |
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REIT Representations |
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28 |
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SECTION 4.13 |
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Financial Capability |
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28 |
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SECTION 4.14 |
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No Other Representations or Warranties |
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28 |
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SECTION 4.15 |
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Acknowledgement |
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28 |
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ARTICLE V COVENANTS OF THE COMPANY AND PURCHASER |
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29 |
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SECTION 5.1 |
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Bankruptcy Court Motions and Orders |
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29 |
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SECTION 5.2 |
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Warrants, New Warrants and GGO Warrants |
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29 |
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SECTION 5.3 |
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[Intentionally Omitted] |
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30 |
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SECTION 5.4 |
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Listing |
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30 |
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SECTION 5.5 |
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Use of Proceeds |
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30 |
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SECTION 5.6 |
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Access to Information |
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30 |
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SECTION 5.7 |
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Competing Transactions |
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30 |
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SECTION 5.8 |
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Reservation for Issuance |
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31 |
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SECTION 5.9 |
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Subscription Rights |
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31 |
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SECTION 5.10 |
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Company Board of Directors |
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35 |
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SECTION 5.11 |
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Notification of Certain Matters |
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37 |
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SECTION 5.12 |
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Further Assurances |
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38 |
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SECTION 5.13 |
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Xxxxxx Heirs Obligations |
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38 |
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SECTION 5.14 |
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Rights Agreement; Reorganized Company Organizational Documents |
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38 |
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SECTION 5.15 |
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Stockholder Approval |
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39 |
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SECTION 5.16 |
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Closing Date Net Debt |
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40 |
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ARTICLE VI ADDITIONAL COVENANTS OF PURCHASER |
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41 |
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SECTION 6.1 |
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Information |
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41 |
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SECTION 6.2 |
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Purchaser Efforts |
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42 |
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SECTION 6.3 |
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Plan Support |
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42 |
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SECTION 6.4 |
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Transfer Restrictions |
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42 |
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SECTION 6.5 |
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[Intentionally omitted] |
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44 |
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SECTION 6.6 |
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REIT Representations and Covenants |
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44 |
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SECTION 6.7 |
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Non-Control Agreement |
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44 |
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ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF PURCHASER |
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44 |
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SECTION 7.1 |
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Conditions to the Obligations of Purchaser |
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44 |
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ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE COMPANY |
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53 |
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SECTION 8.1 |
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Conditions to the Obligations of the Company |
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53 |
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ARTICLE IX [INTENTIONALLY OMITTED] |
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55 |
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-ii-
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Page |
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ARTICLE X SURVIVAL OF REPRESENTATIONS AND WARRANTIES |
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55 |
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SECTION 10.1 |
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Survival of Representations and Warranties |
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55 |
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ARTICLE XI TERMINATION |
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55 |
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SECTION 11.1 |
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Termination |
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55 |
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SECTION 11.2 |
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Effects of Termination |
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58 |
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ARTICLE XII DEFINITIONS |
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59 |
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SECTION 12.1 |
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Defined Terms |
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59 |
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ARTICLE XIII MISCELLANEOUS |
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73 |
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SECTION 13.1 |
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Notices |
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73 |
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SECTION 13.2 |
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Assignment; Third Party Beneficiaries |
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74 |
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SECTION 13.3 |
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Prior Negotiations; Entire Agreement |
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74 |
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SECTION 13.4 |
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Governing Law; Venue |
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74 |
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SECTION 13.5 |
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Company Disclosure Letter |
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74 |
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SECTION 13.6 |
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Counterparts |
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75 |
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SECTION 13.7 |
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Expenses |
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75 |
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SECTION 13.8 |
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Waivers and Amendments |
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75 |
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SECTION 13.9 |
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Construction |
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75 |
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SECTION 13.10 |
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Adjustment of Share Numbers and Prices |
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76 |
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SECTION 13.11 |
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Certain Remedies |
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76 |
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SECTION 13.12 |
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Bankruptcy Matters |
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77 |
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-iii-
LIST OF EXHIBITS AND SCHEDULES
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Exhibit A:
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Plan Summary Term Sheet |
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Exhibit B:
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Post-Bankruptcy GGP Corporate Structure |
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Exhibit C-1:
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Brookfield Agreement |
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Exhibit C-2:
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Fairholme Agreement |
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Exhibit D:
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REIT Representation Letter |
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Exhibit E:
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GGO Assets |
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Exhibit F:
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Form of Approval Order |
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Exhibit G:
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Form of Warrant Agreement |
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Exhibit H:
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[Intentionally Omitted] |
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Exhibit I:
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[Intentionally Omitted] |
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Exhibit J:
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Form of REIT Opinion |
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Exhibit K:
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[Intentionally Omitted] |
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Exhibit L:
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[Intentionally Omitted] |
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Exhibit M:
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Form of Non-Control Agreement |
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Exhibit N:
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Certain REIT Investors |
-iv-
INDEX OF DEFINED TERMS
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Defined Term |
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Page |
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2006 Bank Loan |
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59 |
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Act |
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43 |
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Additional Financing |
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49 |
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Additional Sales Period |
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59 |
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Adequate Reserves |
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23 |
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Affiliate |
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59 |
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Agreement |
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1 |
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Anticipated Debt Paydowns |
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49 |
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Approval Motion |
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29 |
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Approval Order |
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29 |
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Asset Sales |
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49 |
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Backstop Commitment |
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7 |
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Backstop Consideration |
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8 |
|
Bankruptcy Cases |
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1 |
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Bankruptcy Code |
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1 |
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Bankruptcy Court |
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1 |
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Blue Sky |
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43 |
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Brazilian Entities |
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59 |
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Brookfield Agreement |
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2 |
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Brookfield Backstop Commitment |
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7 |
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Brookfield Consortium Member |
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59 |
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Brookfield Investor |
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2 |
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Business Day |
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59 |
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Capital Raising Activities |
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59 |
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Cash Equivalents |
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59 |
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Change of Control |
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60 |
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Chapter 11 |
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1 |
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Claims |
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60 |
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Closing |
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4 |
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Closing Date |
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4 |
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Closing Date Net Debt |
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60 |
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Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts |
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61 |
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Closing Restraint |
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57 |
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CMPC |
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6 |
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Code |
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17 |
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Common Stock |
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1 |
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Company |
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1 |
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Company Benefit Plan |
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61 |
|
Company Board |
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61 |
|
Company Disclosure Letter |
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9 |
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Company Ground Lease Property |
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21 |
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Company Mortgage Loan |
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22 |
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Company Option Plans |
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10 |
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-v-
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Defined Term |
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Page |
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Company Properties |
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19 |
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Company Property |
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19 |
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Company Property Lease |
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21 |
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Company Rights Offering |
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4 |
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Company SEC Reports |
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14 |
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Competing Transaction |
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62 |
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Conclusive Net Debt Adjustment Statement |
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62 |
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Confirmation Order |
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46 |
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Confirmed Debtors |
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69 |
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Contract |
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62 |
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Conversion Shares |
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62 |
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Corporate Level Debt |
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62 |
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Debt |
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62 |
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Debtors |
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1 |
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Designation Conditions |
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3 |
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DIP Loan |
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63 |
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Disclosure Statement |
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63 |
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Disclosure Statement Order |
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46 |
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Dispute Notice |
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40 |
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Disputed Items |
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40 |
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Effective Date |
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4 |
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Eligible Holder |
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6 |
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Encumbrances |
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19 |
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Environmental Laws |
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16 |
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Equity Exchange |
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1 |
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Equity Securities |
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11 |
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ERISA |
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63 |
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ERISA Affiliate |
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17 |
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Essential Assets |
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63 |
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Excess Surplus Amount |
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63 |
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Exchangeable Notes |
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63 |
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Excluded Claims |
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63 |
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Excluded Non-US Plans |
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18 |
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Expiration Time |
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7 |
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Fairholme Agreement |
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2 |
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Fairholme Backstop Commitment |
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8 |
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Fairholme Purchasers |
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2 |
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Foreign Plan |
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18 |
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Fully Diluted Basis |
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65 |
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GAAP |
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65 |
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GGO |
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2 |
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GGO Agreement |
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35 |
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GGO Backstop Limit |
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7 |
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GGO Board |
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35 |
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GGO Common Share Amount |
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65 |
|
GGO Common Stock |
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5 |
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-vi-
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Defined Term |
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Page |
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GGO Minimum Allocation Right |
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7 |
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GGO Non-Control Agreement |
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65 |
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GGO Note Amount |
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65 |
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GGO Per Share Purchase Price |
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7 |
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GGO Pro Rata Share |
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65 |
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GGO Promissory Note |
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65 |
|
GGO Purchase Price |
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65 |
|
GGO Representative |
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5 |
|
GGO Rights Offering |
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6 |
|
GGO Rights Offering Shares |
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|
6 |
|
GGO Setup Costs |
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65 |
|
GGO Share Distribution |
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6 |
|
GGO Shares |
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|
66 |
|
GGO Warrants |
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30 |
|
GGP |
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1 |
|
GGP Pro Rata Share |
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|
66 |
|
Governmental Entity |
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66 |
|
Hazardous Materials |
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16 |
|
Xxxxxx Agreement |
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66 |
|
Xxxxxx Amount |
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65 |
|
Xxxxxx Heirs Obligations |
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66 |
|
Identified Assets |
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5 |
|
Indebtedness |
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66 |
|
Indemnity Cap |
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41 |
|
Initial Investor |
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2 |
|
Investment Agreements |
|
|
2 |
|
Joint Venture |
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|
67 |
|
Knowledge |
|
|
67 |
|
Law |
|
|
67 |
|
Liquidity Equity Issuances |
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|
67 |
|
Liquidity Target |
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|
48 |
|
Material Adverse Effect |
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|
67 |
|
Material Contract |
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|
68 |
|
Material Lease |
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22 |
|
Measurement Date |
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|
10 |
|
Most Recent Statement |
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19 |
|
MPC Assets |
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|
68 |
|
MPC Tax Reserve |
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68 |
|
MPC Taxes |
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|
68 |
|
Net Debt Excess Amount |
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|
68 |
|
Net Debt Surplus Amount |
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|
69 |
|
New Common Stock |
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1 |
|
New Debt |
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48 |
|
New Warrants |
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30 |
|
Non-Control Agreement |
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|
69 |
|
Non-Controlling Properties |
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69 |
|
-vii-
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Defined Term |
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Page |
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NYSE |
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30 |
|
Offering Premium |
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|
69 |
|
Operating Partnership |
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|
69 |
|
PBGC |
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|
17 |
|
Per Share Purchase Price |
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|
3 |
|
Permitted Claims |
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|
69 |
|
Permitted Claims Amount |
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|
70 |
|
Permitted Replacement Shares |
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|
70 |
|
Permitted Title Exceptions |
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19 |
|
Person |
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70 |
|
Petition Date |
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1 |
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Plan |
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1 |
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Plan Debtors |
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69 |
|
Plan Summary Term Sheet |
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1 |
|
PMA Claims |
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69 |
|
Preliminary Closing Date Net Debt Review Deadline |
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|
70 |
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Preliminary Closing Date Net Debt Review Period |
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70 |
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Preliminary Closing Date Net Debt Schedule |
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40 |
|
Proportionally Consolidated Debt |
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70 |
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Proportionally Consolidated Unrestricted Cash |
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70 |
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Proposed Approval Order |
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29 |
|
Proposed Securities |
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31 |
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PSCM |
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1 |
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Purchase Group |
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71 |
|
Purchase Notice |
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8 |
|
Purchase Price |
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3 |
|
Purchaser |
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1 |
|
Purchaser Board Designees |
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|
35 |
|
Purchaser GGO Board Designees |
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|
35 |
|
Purchaser Group Debt Holdings |
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|
62 |
|
Record Date |
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|
7 |
|
Refinance Cap |
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|
51 |
|
Reinstated Amounts |
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|
48 |
|
Reinstatement Adjustment Amount |
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|
71 |
|
Reinstatement Amount |
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|
71 |
|
REIT |
|
|
24 |
|
REIT Subsidiary |
|
|
24 |
|
Reorganized Company |
|
|
1 |
|
Reorganized Company Organizational Documents |
|
|
38 |
|
Reserve |
|
|
70 |
|
Reserve Surplus Amount |
|
|
71 |
|
Resolution Period |
|
|
40 |
|
Right |
|
|
7 |
|
Rights Agreement |
|
|
71 |
|
Rights Offering Election |
|
|
4 |
|
Xxxxx Bonds |
|
|
71 |
|
-viii-
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Defined Term |
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Page |
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Rule 144 |
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43 |
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Sales Cap |
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50 |
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SEC |
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14 |
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Securities Act |
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14 |
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Share Cap Number |
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49 |
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Share Equivalent |
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71 |
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Shares |
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3 |
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Significant Subsidiaries |
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71 |
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Specified Debt |
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72 |
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Subscription Agent |
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7 |
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Subscription Right |
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31 |
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Subsidiary |
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72 |
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Synthetic Lease Obligation |
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66 |
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Target Net Debt |
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72 |
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Tax Protection Agreements |
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72 |
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Tax Return |
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24 |
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Taxes |
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24 |
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Termination Date |
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72 |
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Total Unsubscribed Shares |
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8 |
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Transactions |
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72 |
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TRUPS |
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72 |
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Unrestricted Cash |
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72 |
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Unrestricted Date |
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42 |
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Unsecured Indebtedness |
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72 |
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Unsubscribed Shares |
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7 |
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UPREIT Units |
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73 |
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Warrant Agreement |
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29 |
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Warrants |
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29 |
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-ix-
STOCK PURCHASE AGREEMENT, dated as of March 31, 2010 (this “
Agreement”), by and
between General Growth Properties, Inc., a Delaware corporation (“
GGP”), and
Pershing
Square Capital Management, L.P. (“
PSCM”), on behalf of Pershing Square, L.P., a Delaware
limited partnership, Pershing Square II, L.P., a Delaware limited partnership, Pershing Square
International, Ltd. a Cayman Islands exempted company and Pershing Square International V, Ltd., a
Cayman Islands exempted company, (each, except PSCM, together with its permitted nominees and
assigns, a “
Purchaser”).
RECITALS
WHEREAS, GGP is a debtor in possession in that certain bankruptcy case under chapter 11
(“
Chapter 11”) of Title 11 of the United States Code, 11 U.S.C. §§ 101 -1532 (as amended,
the “
Bankruptcy Code”) filed on April 16, 2009 (the “
Petition Date”) in the United
States Bankruptcy Court for the Southern District of
New York (the “
Bankruptcy Court”),
Case No. 09-11977 (ALG).
WHEREAS, each Purchaser desires to assist GGP in its plans to recapitalize and emerge from
bankruptcy and has agreed to sponsor the implementation of a joint chapter 11 plan of
reorganization based on the Plan Summary Term Sheet (as defined below) (together with all documents
and agreements that form part of such plan or related plan supplement or are related thereto, and
as it may be amended, modified or supplemented from time to time, in each case, to the extent it
relates to the implementation and effectuation of the Plan Summary Term Sheet and this Agreement,
the “Plan”), of GGP and its Subsidiaries and Affiliates who are debtors and
debtors-in-possession (the “Debtors”) in the chapter 11 cases pending and jointly
administered in the Bankruptcy Court (the “Bankruptcy Cases”).
WHEREAS, principal elements of the Plan (including a table setting forth the proposed
treatment of allowed claims and equity interests in the Bankruptcy Cases) are set forth on
Exhibit A hereto (the “Plan Summary Term Sheet”).
WHEREAS, the Plan shall provide, among other things, that (i) each holder of common stock, par
value $0.01 per share, of GGP (the “Common Stock”) shall receive, in exchange for each
share of Common Stock held by such holder, one share (subject to adjustment as contemplated by
Section 5.13(a) hereof) of new common stock (the “New Common Stock”) of a new
company that succeeds to GGP in the manner contemplated by Exhibit B upon consummation of
the Plan (the “Reorganized Company”) and (ii) any Equity Securities (other than Common
Stock) of the Company (as defined below) or any of its Subsidiaries (as defined below) outstanding
immediately after the Effective Date that were previously convertible into, or exercisable or
exchangeable for, Common Stock shall thereafter be convertible into, or exercisable or exchangeable
for, New Common Stock (based upon the number of shares of Common Stock underlying such Equity
Securities) (the transactions contemplated by clauses (i) and (ii) of this recital being referred
to herein as the “Equity Exchange”). For purposes of this Agreement, the “Company”
shall be deemed to refer, prior to consummation of the Plan, to GGP and, on and after consummation
of the Plan, the Reorganized Company, as the context requires.
WHEREAS, each Purchaser desires to make an investment in the Reorganized Company on the terms
and subject to the conditions described herein in the form of the purchase of shares of New Common
Stock as contemplated hereby.
WHEREAS, in addition to the Equity Exchange and the sale of the Shares (as defined below), the
Plan shall provide for the incorporation by the Company of a new subsidiary, General Growth
Opportunities, Inc. (“GGO”), the contribution of certain assets (and/or equity interests
related thereto) of the Company to GGO and the assumption by GGO of the liabilities associated with
such assets, the distribution to the shareholders of the Company (subject to adjustment as
contemplated by Section 5.13(b) hereof and prior to the issuance of the Shares and the
issuance of other shares of New Common Stock contemplated by this Agreement other than pursuant to
the Equity Exchange) on a pro rata basis and certain holders of UPREIT Units of all of the capital
stock of GGO and the consummation of the GGO Rights Offering (as described herein).
WHEREAS, the Company has requested that each Purchaser commit to purchase the Shares and the
GGO Shares at a fixed price for the term hereof.
WHEREAS, each Purchaser has agreed to enter into this Agreement and commit to purchase the
Shares and the GGO Shares only on the condition that the Company, as promptly as practicable
following the date hereof (but no later than the date provided in Section 5.2 hereof),
issue the Warrants contemplated herein and perform its other obligations hereunder.
WHEREAS, on the date hereof, the Company entered into an agreement (in the form attached
hereto as Exhibit C-1 together with any amendments thereto as have been approved by each
Purchaser, the “Brookfield Agreement”) with REP Investments LLC (the “Brookfield
Investor”) pursuant to which the Brookfield Investor has agreed to make (i) an investment of up
to $2,500,000,000 in the Reorganized Company in the form of the purchase of shares of New Common
Stock and (ii) an investment of up to $125,000,000 in GGO in the form of the purchase of shares of
GGO Common Stock pursuant to a commitment to backstop a portion of the GGO Rights Offering.
WHEREAS, on the date hereof, the Company entered into an agreement (in the form attached
hereto as Exhibit C-2 together with any amendments thereto as have been approved by each
Purchaser, the “Fairholme Agreement” and, together with this Agreement and the Brookfield
Agreement, the “Investment Agreements”) with The Xxxxxxxxx Xxxx, a series of Fairholme
Funds, Inc. and Fairholme Focused Income Fund, a series of Fairholme Funds, Inc. (the
“Fairholme Purchasers” and, together with each Purchaser and the Brookfield Investor, the
“Initial Investors”) pursuant to which the Fairholme Purchasers have agreed to make (i) an
investment of up to $2,714,285,714 in the Reorganized Company in the form of the purchase of shares
of New Common Stock and (ii) an investment of up to $62,500,000 in GGO in the form of the purchase
of shares of GGO Common Stock pursuant to a commitment to backstop a portion of the GGO Rights
Offering.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:
-2-
ARTICLE I
PURCHASE OF NEW COMMON STOCK; CLOSING
SECTION 1.1 Purchase of New Common Stock.
(a) On the terms and subject to the conditions set forth herein, at the Closing (as defined
below), each Purchaser shall purchase from the Company, and the Company shall sell to such
Purchaser, a number of shares of New Common Stock (the “Shares”) equal to (x) its GGP Pro
Rata Share of the Total Purchase Amount (as defined below) minus (y) its Conversion Shares, for a
price per share equal to $10.00 (the “Per Share Purchase Price” and, in the aggregate, the
“Purchase Price”); provided, that no Purchaser shall be obligated to purchase a
number of Shares less than its GGP Pro Rata Share of 190,000,000, as determined pursuant to
Section 1.4.
(b) The “Total Purchase Amount” will be 380,000,000, subject to reduction pursuant to
Section 1.4.
(c) All Shares shall be delivered with any and all issue, stamp, transfer or similar taxes or
duties payable in connection with such delivery duly paid by the Company to the extent required
under the Confirmation Order or applicable Law.
(d) Each Purchaser, in its sole discretion, may assign its rights to receive Shares hereunder
or designate that some or all of the Shares be issued in the name of, and delivered to, one or more
of the other members of its Purchaser Group or any third party to whom the shares could be
transferred immediately after Closing in accordance with Section 6.4, subject to (i) such
action not causing any delay in the obtaining of, or significantly increasing the risk of not
obtaining, any material authorizations, consents, orders, declarations or approvals necessary to
consummate the transactions contemplated by this Agreement or otherwise delaying the consummation
of such transactions, (ii) such Person shall be an “accredited investor” (within the meaning of
Rule 501 of Regulation D under the Securities Act) and shall have agreed in writing with and for
the benefit of the Company to be bound by the terms of this Agreement applicable to such Purchaser
set forth in Section 6.4 and the applicable Non-Control Agreement, including the delivery
of the letter certifying compliance with the representations and covenants set forth on Exhibit
D to the extent applicable to such assignee or designee and (iii) such initial Purchaser not
being relieved of any of its obligations under this Agreement ((i), (ii) and (iii) collectively,
the “Designation Conditions”). Notwithstanding anything to the contrary in this Agreement,
no Purchaser may assign its rights to receive or designate Shares to any Person (other than members
of its Purchaser Group) if such assignment or designation would cause a failure of the closing
condition in Section 7.1(u) of the Brookfield Agreement.
(e) The obligations of each Purchaser hereunder shall be determined as follows: PSCM will
deliver written notice to the Company on or before the 20th day following execution of this
Agreement wherein PSCM will designate the “GGP Pro Rata Share” and the “GGO Pro Rata Share” for
each Purchaser. If PSCM fails to make such allocations to Purchasers that are reasonably
creditworthy in light of the allocation, each Purchaser (other than Pershing Square International,
Ltd. and Pershing Square International V, Ltd.) will be bound jointly and severally
-3-
hereby, and Pershing Square International, Ltd. and Pershing Square International V, Ltd.
shall unconditionally guarantee the performance hereunder of the other Purchasers.
SECTION 1.2
Closing. Subject to the satisfaction or waiver of the conditions
(excluding conditions that, by their nature, cannot be satisfied until the Closing, but subject to
the satisfaction or waiver of those conditions as of the Closing) set forth in
Article VII
and
Article VIII, the closing of the purchase of the Shares by each Purchaser pursuant
hereto (the “
Closing”) shall occur at 9:30 a.m.,
New York time, on the effective date of
the Plan (the “
Effective Date”), at the offices of Weil, Gotshal & Xxxxxx LLP located at
000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or such other date, time or location as agreed by the
parties. The date of the Closing is referred to as the “
Closing Date”. Each of the
Company and each Purchaser hereby agrees that in no event shall the Closing occur unless all of the
Shares are sold to each applicable Purchaser (or to such other Persons as each such applicable
Purchaser may designate in accordance with and subject to the Designation Conditions so long as
such designation would not cause a failure of the closing condition in Section 7.1(u) of the
Brookfield Agreement) on the Closing Date.
SECTION 1.3 Company Rights Offering Election. The Company may at any time prior to
the date of filing of the Disclosure Statement, upon written notice to each Purchaser in accordance
with the terms hereof (the “Rights Offering Election”), irrevocably elect to convert the
obligation of such Purchaser to purchase the Shares as contemplated by Section 1.1 hereof
into an obligation of such Purchaser to participate in a rights offering by the Company pursuant to
which shareholders and/or creditors of the Company are offered rights to subscribe for shares of
New Common Stock (a “Company Rights Offering”), subject to the execution and delivery of
definitive documentation therefor and the satisfaction of the conditions described therein and
other customary conditions for a public rights offering. To the extent the Company makes a Rights
Offering Election, (i) each Purchaser shall be entitled to a minimum allocation of shares of New
Common Stock in the Company Rights Offering equal to the number of shares such Purchaser would
otherwise be required to purchase pursuant to Section 1.1 hereof had no such election been
made, (ii) the purchase price per share payable by such Purchaser shall be equal to the Per Share
Purchase Price and such Purchaser shall not be otherwise adversely affected as compared to the
transactions contemplated hereby, (iii) the Company Rights Offering shall be effected in a manner
substantially consistent with the procedures contemplated by Section 2.2 with respect to
the GGO Rights Offering; provided, that the Company Rights Offering shall be completed by
the Effective Date, and (iv) the Company and each Purchaser shall cooperate in good faith to
develop and agree upon documentation that is reasonably acceptable to both the Company and each
Purchaser governing the further terms and conditions of the Company Rights Offering.
SECTION 1.4 Company Election to Replace Certain Shares. In the event that the Company
has sold, or has binding commitments to sell on or prior to the Effective Date, Permitted
Replacement Shares, the Company may elect by written notice to each Purchaser to reduce the Total
Purchase Amount by any portion of the number of such Permitted Replacement Shares as the Company
may determine in its discretion; provided, that the Total Purchase Amount shall not be less
than 190,000,000. No election by the Company under this Section 1.4 shall be effective
unless received by each Purchaser on or prior to the tenth day prior to the hearing to approve the
Confirmation Order under Bankruptcy Rule 2002. Any election by the Company under this Section
1.4 shall be binding and irrevocable.
-4-
SECTION 1.5 Pro Rata Reductions with Fairholme Agreement. No election by the Company
pursuant to Section 1.4 shall be made unless the Company is making a similar election under
the Fairholme Agreement, such that each of the aggregate number of Shares required to be purchased
at Closing is allocated as among each Purchaser and among each of the Fairholme Purchasers under
the Fairholme Agreement in accordance with the applicable GGP Pro Rata Share.
ARTICLE II
GGO SHARE DISTRIBUTION AND GGO RIGHTS OFFERING
SECTION 2.1 GGO Share Distribution. On the terms and subject to the conditions
(including Bankruptcy Court approval) set forth herein, the Plan shall provide for the following:
(a) On or prior to the Effective Date, the Company shall incorporate GGO with issued and
outstanding capital stock consisting of at least the GGO Common Share Amount of shares of common
stock (the “GGO Common Stock”), designate an employee of the Company familiar with the
Identified Assets and reasonably acceptable to each Purchaser to serve as a representative of GGO
(the “GGO Representative”) and shall contribute to GGO (directly or indirectly) the assets
(and/or equity interests related thereto) set forth in Exhibit E hereto and have GGO assume
directly or indirectly the associated liabilities (the “Identified Assets”);
provided, however, that to the extent the Company is prohibited by Law from
contributing one or more of the Identified Assets to GGO or the contribution thereof would breach
or give rise to a default under any Contract, agreement or instrument that would, in the good faith
judgment of the Company in consultation with the GGO Representative, impair in any material respect
the value of the relevant Identified Asset or give rise to additional liability (other than
liability that would not, in the aggregate, be material) on the part of GGO or the Company or a
Subsidiary of the Company, the Company shall (i) to the extent not prohibited by Law or would give
rise to such a default, take such action or cause to be taken such other actions in order to place
GGO, insofar as reasonably possible, in the same economic position as if such Identified Asset had
been transferred as contemplated hereby and so that, insofar as reasonably possible, substantially
all the benefits and burdens (including all obligations thereunder but excluding any obligations
that arise out of the transfer of the Identified Asset to the extent included in Permitted Claims)
relating to such Identified Asset, including possession, use, risk of loss, potential for gain and
control of such Identified Asset, are to inure from and after the Closing to GGO (provided
that as soon as a consent for the contribution of an Identified Asset is obtained or the
contractual impediment is removed or no longer applies, the applicable Identified Asset shall be
promptly contributed to GGO), or (ii) to the extent the actions contemplated by clause (i) are not
possible without resulting in a material and adverse effect on the Company and its Subsidiaries (as
reasonably determined by the Company in consultation with the GGO Representative), contribute other
assets, with the consent of each Purchaser (which such Purchaser shall not unreasonably withhold,
condition or delay), having an economically equivalent value and related financial impact on the
Company (in each case, as reasonably agreed by each Purchaser and the Company in consultation with
the GGO Representative) to the Identified Asset not so contributed; provided,
however, that this subsection (ii) shall not be available to the Company in the case of any
Essential Asset.
-5-
(b) Subject to Section 5.13(b), the GGO Common Share Amount of shares of GGO Common
Stock, representing all of the outstanding capital stock of GGO (other than shares of GGO Common
Stock to be issued (x) in the GGO Rights Offering, (y) in connection with the Backstop
Consideration and the backstop consideration issuable to the other Initial Investors pursuant to
their respective Investment Agreements, and (z) upon exercise of the GGO Warrants and the warrants
issued to the other Initial Investors pursuant to their respective Investment Agreements), shall be
distributed, on or prior to the Effective Date, to the shareholders of the Company (pre-issuance of
the Shares) on a pro rata basis and certain holders of Common UPREIT Units (the “GGO Share
Distribution”).
(c) It is agreed that neither the Company nor any of its Subsidiaries shall be required to pay
or cause payment of any fees or make any financial accommodations to obtain any third-party
consent, approval, waiver or other permission for the contribution contemplated by Section
2.1(a), or to seek any such consent, approval, waiver or other permission that is inapplicable
to the Company or any of its Debtor Subsidiaries pursuant to the Bankruptcy Code.
(d) The parties currently contemplate that the GGO Share Distribution will be structured as a
“tax free spin-off” under the Code. To the extent that the Company and each Purchaser jointly
determine that it is desirable for the GGO Share Distribution to be structured as a taxable
dividend, the parties will work together to structure the transaction to allow for such outcome.
(e) With respect to the Columbia Master Planned Community (the “CMPC” ), it is the
intention of the parties that office assets currently producing any material amount of income at
the CMPC (including any associated right of access to parking spaces) will be retained by the
Company and the remaining non-income producing assets at the CMPC will be transferred to GGO
(including all rights to develop and/or redevelop (as appropriate) the remainder of the CMPC). On
or prior to the Effective Date, the Company and GGO shall enter into a mutually satisfactory
development and cooperation agreement with respect to the CMPC, which agreement shall provide,
among other things, that GGO shall grant mutually satisfactory easements, to the extent not already
granted, such that the office buildings retained by GGP (as provided above) continuously shall have
access to parking spaces appropriate for such office buildings.
SECTION 2.2 GGO Rights Offering.
(a) On the terms and subject to the conditions set forth herein, the Plan shall provide for
the following:
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(i) |
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That GGO shall offer 50,000,000 shares of GGO Common Stock (the
“GGO Rights Offering Shares”) pursuant to a rights offering (the
“GGO Rights Offering”) which shall be completed at the Company’s
election either (A) on or prior to the Effective Date or (B) promptly (but in
no event later than 90 days) following the Effective Date. Pursuant to the GGO
Rights Offering, each holder of shares of Common Stock entitled to subscribe to
the GGO Rights Offering (each, an “Eligible Holder”), as of the record
date approved by the Bankruptcy Court in connection with the |
-6-
|
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Plan (the “Record Date”), shall be offered a transferable
subscription right (each, a “Right”) to purchase up to its pro rata
share (after giving effect to the GGO Minimum Allocation Right and minimum
allocation rights granted to other investors in the Plan) of the GGO Rights
Offering Shares at a purchase price of $5.00 per share of GGO Common Stock
(the “GGO Per Share Purchase Price”). |
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(ii) |
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That each Purchaser shall be entitled to receive a minimum
allocation in connection with the GGO Rights Offering equal to its GGO Pro Rata
share of 10,000,000 shares of GGO Common Stock at the GGO Per Share Purchase
Price (the “GGO Minimum Allocation Right”). |
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(iii) |
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That if the subscription agent for the GGO Rights Offering
(the “Subscription Agent”) for any reason does not receive from a given
Eligible Holder both a timely and duly completed subscription form for the GGO
Rights Offering and timely payment of such Eligible Holder’s aggregate GGO Per
Share Purchase Price prior to the expiration time for the GGO Rights Offering
(the “Expiration Time”), such Eligible Holder shall be deemed to have
relinquished and waived its right to participate in the GGO Rights Offering. |
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(iv) |
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The Expiration Time shall occur no later than ninety (90) days
after the Effective Date. |
(b) In order to facilitate the GGO Rights Offering, pursuant to this Agreement, and subject to
the terms, conditions and limitations set forth herein, the Plan will provide that GGO will sell to
each Purchaser in the GGO Rights Offering, and each Purchaser hereby agrees to subscribe and pay
for, a number of shares of GGO Common Stock (not to exceed the GGO Backstop Limit (as such term is
defined below)) equal to the product of (y) such Purchaser’s GGO Pro Rata Share multiplied by
(z)(i) the GGO Rights Offering Shares minus (ii) the number of shares of GGO Common Stock offered
pursuant to the GGO Rights Offering and duly subscribed for and paid for on or before the
Expiration Time (the difference between (i) and (ii) after applying the GGO Backstop Limit, the
“Unsubscribed Shares” and such Purchaser’s commitment to purchase such Unsubscribed Shares
being referred to as its “Backstop Commitment”); provided, however, that
the Backstop Commitment is conditioned upon GGO having filed, and the SEC declaring effective, a
shelf registration statement on Form S-1 or S-11, as applicable, prior to the date of the
completion of the GGO Rights Offering covering resales by each Purchaser of the GGO Shares and
shares issuable upon exercise of the GGO Warrants, containing a plan of distribution reasonably
satisfactory to each Purchaser, but subject to the provisions of Section 6.4 and the
Non-Control Agreement. For purposes of this Agreement, each Purchaser’s “GGO Backstop
Limit” means the number of shares of GGO Common Stock equal to (i) such Purchaser’s GGO Pro
Rata Share of the quotient obtained by dividing (x) $125,000,000 by (y) the GGO Per Share Purchase
Price minus (ii) the number of shares of GGO Common Stock subscribed, and paid for, on or before
the Expiration Time by such Purchaser pursuant to its GGO Minimum Allocation Right. If the
Brookfield Consortium Members and/or the Fairholme Purchasers have any obligation to subscribe and
pay for shares of GGO Common Stock offered pursuant to the GGO Rights Offering (the “Brookfield
Backstop Commitment”
-7-
and/or “Fairholme Backstop Commitment”, respectively) in the Brookfield Agreement or
Fairholme Agreement, respectively, the Backstop Commitment shall be applied pro rata with the
Brookfield Backstop Commitment and Fairholme Backstop Commitment, such that the total number of
shares of GGO Common Stock not subscribed for in the GGO Rights Offering (the “Total
Unsubscribed Shares”) shall be allocated in proportion to their respective backstop commitments
(subject in the case of each Purchaser to its GGO Backstop Limit and in the case of the Brookfield
Consortium Members or Fairholme Purchasers to the applicable limits in the Brookfield Agreement or
Fairholme Agreement, respectively).
(c) The Subscription Agent shall be instructed to give each Purchaser as soon as reasonably
practicable after the Expiration Time, by electronic facsimile transmission or by electronic mail a
notice conforming to the requirements specified herein of either (i) the calculation of the number
of Unsubscribed Shares and a summary of the portion of the Total Unsubscribed Shares required to be
purchased by each Purchaser and, if applicable, each Brookfield Investor and each Fairholme
Purchaser (a “Purchase Notice”), or (ii) in the absence of any Unsubscribed Shares, the
fact that there are no Unsubscribed Shares. If at the Expiration Time the Total Unsubscribed
Shares are in excess of the aggregate Backstop Commitment of the Purchasers, the Brookfield
Backstop Commitment and the Fairholme Backstop Commitment, then each Purchaser shall also have the
right, but not the obligation, to purchase on the same terms as its Backstop Commitment such
Purchaser’s GGO Pro Rata Share of fifty percent (50%) the number of Total Unsubscribed Shares in
excess of the aggregate Backstop Commitments, the Brookfield Backstop Commitment and the Fairholme
Backstop Commitment, exercisable within 30 days after receipt of the Purchase Notice.
(d) The Plan shall provide that unless this Agreement has been previously terminated, on the
Effective Date GGO shall issue to each Purchaser (or its designees in accordance with and subject
to the Designation Conditions) a number of shares of GGO Common Stock equal to the quotient
obtained by dividing (x) its GGO Pro Rata Share of $6,250,000 by (y) the GGO Per Share Purchase
Price (the “Backstop Consideration”) as compensation for the risk and efforts of its
Backstop Commitment.
(e) In the GGO Rights Offering, each Purchaser shall purchase at the GGO Per Share Purchase
Price, and GGO shall sell, such number of Unsubscribed Shares as are listed in the final Purchase
Notice provided to such Purchaser by the Company pursuant to Section 2.2(c) hereof, without
prejudice to the rights of such Purchaser or GGO to seek later an upward or downward adjustment if
the number of Unsubscribed Shares in such Purchase Notice is miscalculated.
(f) On the terms and subject to the conditions set forth herein, the Plan shall provide that
delivery of the Unsubscribed Shares shall be made promptly by GGO to the account of each Purchaser
(or to such other accounts as the applicable Purchaser may designate in accordance with and subject
to the Designation Conditions) against payment of the aggregate GGO Per Share Purchase Price for
the Unsubscribed Shares by wire transfer of immediately available funds to the account specified by
GGO to such Purchaser at least twenty-four hours in advance.
(g) All GGO Shares shall be delivered with any and all issue, stamp, transfer or similar taxes
or duties payable in connection with such delivery duly paid by GGO to the extent required under
the Confirmation Order or applicable Law.
-8-
(h) Each Purchaser, in its sole discretion, may designate that some or all of the GGO Shares
be issued in the name of, and delivered to, the other members of its Purchaser Group in accordance
with and subject to the Designation Conditions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Purchaser, as set forth below, except (i) as set
forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (but not in
documents filed as exhibits thereto or documents incorporated by reference therein) filed with the
SEC on March 1, 2010 (other than in any “risk factor” disclosure or any other forward-looking
disclosures contained in such reports under the headings “Risk Factors” or “Cautionary Note” or any
similar sections) or (ii) as set forth in the disclosure schedule delivered by the Company to each
Purchaser on the date of this Agreement (the “Company Disclosure Letter”):
SECTION 3.1 Organization and Qualification. The Company and each of its direct and
indirect Significant Subsidiaries is duly organized and is validly existing as a corporation or
other form of entity, where applicable, in good standing under the Laws of their respective
jurisdictions of organization, with the requisite power and authority to own, operate or manage its
properties and conduct its business as currently conducted, subject, as applicable, to the
restrictions that result from any such entity’s status as a debtor-in-possession under Chapter 11,
except to the extent the failure of such Significant Subsidiary to be in good standing (to the
extent the concept of good standing is applicable in its jurisdiction of organization) would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The
Company and each of its Significant Subsidiaries has been duly qualified as a foreign corporation
or other form of entity for the transaction of business and, where applicable, is in good standing
under the Laws of each other jurisdiction in which it owns, manages, operates or leases properties
or conducts business so as to require such qualification, except to the extent the failure to be so
qualified or, where applicable, be in good standing would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.2 Corporate Power and Authority.
(a) Subject to the authorization of the Bankruptcy Court, which shall be contained in the
Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period set
forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, the Company has the
requisite power and authority to enter into, execute and deliver this Agreement and to perform its
obligations hereunder (except with respect to (i) the issuance of the Warrants and (ii) the
provisions of the Approval Order). The Company has taken all necessary corporate action required
for the due authorization, execution, delivery and performance by it of this Agreement.
(b) Subject to the entry of the Approval Order, the Company has the requisite power and
authority to (i) issue the Warrants (assuming the accuracy of the representations of each Purchaser
contained in Exhibit D) and (ii) perform its obligations pursuant to the provisions of
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the Approval Order hereof. No approval by any securityholders of the Company or any
Subsidiary of the Company is required in connection with the issuance of the Warrants or the
issuance of the shares of Common Stock upon exercise of the Warrants.
(c) The Company has received written confirmation from the NYSE that the shares of New Common
Stock or other Equity Securities issuable by the Company to each Purchaser and the other members of
the Purchaser Group in connection with each Purchaser’s exercise of its Subscription Rights
contemplated by Section 5.9(a) hereof shall not require stockholder approval and shall be
eligible for listing on the NYSE in the hands of such Purchaser or other members of the Purchaser
Group without any requirement for stockholder approval, in each case, during the five (5) year
period following the Closing Date.
SECTION 3.3 Execution and Delivery; Enforceability.
(a) This Agreement has been duly and validly executed and delivered by the Company, and
subject to the authorization of the Bankruptcy Court, which shall be contained in the Confirmation
Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period set forth in
Bankruptcy Rule 3020(e) following entry of the Confirmation Order, shall constitute the valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms,
subject to general principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in
equity) (except with respect to (i) the issuance of the Warrants and (ii) the provisions of the
Approval Order).
(b) Subject to the entry of the Approval Order, the provisions of this Agreement relating to
(i) the issuance of the Warrants and (ii) the provisions of the Approval Order shall constitute the
valid and binding obligations of the Company, enforceable against the Company in accordance with
their terms.
SECTION 3.4 Authorized Capital Stock. As of the date of this Agreement, the
authorized capital stock of the Company consists of 875,000,000 shares of Common Stock and of
5,000,000 shares of preferred stock. The issued and outstanding capital stock of the Company and
the shares of Common Stock available for grant pursuant to the Company’s 1993 Stock Incentive Plan,
1998 Stock Incentive Plan and 2003 Stock Incentive Plan (collectively, the “Company Option
Plans”) or otherwise as of March 26, 2010 (the “Measurement Date”) is set forth on
Section 3.4 of the Company Disclosure Letter. From the Measurement Date to the date of
this Agreement, other than in connection with the issuance of shares of Common Stock pursuant to
the exercise of options outstanding as of the Measurement Date, there has been no change in the
number of outstanding shares of capital stock of the Company or the number of outstanding Equity
Securities (as defined below). Except as set forth on Section 3.4 of the Company
Disclosure Letter, on the Measurement Date, there was not outstanding, and there was not reserved
for issuance, any (i) share of capital stock or other voting securities of the Company or its
Significant Subsidiaries; (ii) security of the Company or its Subsidiaries convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of the Company or its
Significant Subsidiaries; (iii) option or other right to acquire from the Company or its
Subsidiaries, or obligation of the Company or its Subsidiaries to issue, any shares of capital
stock, voting securities or security convertible into or exercisable or exchangeable for shares of
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capital stock or voting securities of the Company or its Significant Subsidiaries, as the case
may be; or (iv) equity equivalent interest in the ownership or earnings of the Company or its
Significant Subsidiaries or other similar right, in each case to which the Company or a Significant
Subsidiary is a party (the items in clauses (i) through (iv) collectively, “Equity
Securities”). Other than as set forth on Section 3.4 of the Company Disclosure Letter
or as contemplated by this Agreement, or pursuant to Contracts entered into by the Company after
the date hereof and prior to the Closing that are otherwise not inconsistent with any Purchaser’s
rights hereunder and with respect to the transactions contemplated hereby, and do not confer on any
other Person rights that are superior to those received by any Purchaser hereunder or pursuant to
the transactions contemplated hereby other than rights and terms that are customarily granted to
holders of any such Equity Securities so issued and not customarily granted in transactions such as
the transactions contemplated hereby, there is no outstanding obligation of the Company or its
Subsidiaries to repurchase, redeem or otherwise acquire any Equity Security. Other than as set
forth on Section 3.4 of the Company Disclosure Letter or as contemplated by this Agreement,
or pursuant to Contracts entered into by the Company in connection with the issuance of Equity
Securities after the date hereof and prior to the Closing that are otherwise not inconsistent with
any Purchaser’s rights hereunder and with respect to the transactions contemplated hereby, and do
not confer on any other Person rights that are superior to those received by any Purchaser
hereunder or pursuant to the transactions contemplated hereby other than rights and terms that are
customarily granted to holders of any such Equity Securities so issued and not customarily granted
in transactions such as the transactions contemplated hereby, there is no stockholder agreement,
voting trust or other agreement or understanding to which the Company is a party or by which the
Company is bound relating to the voting, purchase, transfer or registration of any shares of
capital stock of the Company or preemptive rights with respect thereto. Section 3.4 of
the Company Disclosure Letter sets forth a complete and accurate list of the outstanding Equity
Securities of the Company as of the Measurement Date, including the applicable conversion rates and
exercise prices (or, in the case of options to acquire Common Stock, the weighted average exercise
price) relating to the conversion or exercise of such Equity Securities into or for Common Stock.
SECTION 3.5 Issuance.
(a) Subject to the authorization of the Bankruptcy Court, which shall be contained in entry of
the Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period
set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, the issuance of the
Shares and the New Warrants has been duly and validly authorized. Subject to the entry of the
Approval Order and assuming the accuracy of the representations of such Purchaser contained in
Exhibit D, the issuance of the Warrants is duly and validly authorized. When the Shares
are issued and delivered in accordance with the terms of this Agreement against payment therefor,
the Shares shall be duly and validly issued, fully paid and non-assessable and free and clear of
all taxes, liens, pre-emptive rights, rights of first refusal and subscription rights, other than
rights and restrictions under this Agreement, the Non-Control Agreement and applicable state and
federal securities Laws. When the Warrants and the New Warrants are issued and delivered in
accordance with the terms of this Agreement, the Warrants and New Warrants shall be duly and
validly issued and free and clear of all taxes, liens, pre-emptive rights, rights of first refusal
and subscription rights, other than rights and restrictions under this Agreement, the terms of the
Warrants and New Warrants and under applicable state and federal
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securities Laws. When the shares of Common Stock issuable upon the exercise of the Warrants
and the shares of New Common Stock issuable upon the exercise of the New Warrants are issued and
delivered against payment therefor, the shares of Common Stock and New Common Stock, as applicable,
shall be duly and validly issued, fully paid and non-assessable and free and clear of all taxes,
liens, pre-emptive rights, rights of first refusal and subscription rights, other than rights and
restrictions under this Agreement, the Non-Control Agreement and applicable state and federal
securities Laws.
(b) Subject to the authorization of the Bankruptcy Court, which shall be contained in the
entry of the Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day
period set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, when the GGO
Shares and the GGO Warrants are issued, the GGO Shares and GGO Warrants shall be duly and validly
authorized, duly and validly issued, fully paid and non-assessable and free and clear of all taxes,
liens, pre-emptive rights, rights of first refusal and subscription rights, other than rights and
restrictions under this Agreement and under applicable state and federal securities Laws. When the
shares of GGO Common Stock issuable upon the exercise of the GGO Warrants are issued and delivered
against payment therefor, the shares of GGO Common Stock shall be duly and validly issued, fully
paid and non-assessable and free and clear of all taxes, liens, pre-emptive rights, rights of first
refusal and subscription rights, other than rights and restrictions under this Agreement and under
applicable state and federal securities Laws.
SECTION 3.6 No Conflict.
(a) Subject to (i) the receipt of the consents set forth on Section 3.6 of the Company
Disclosure Letter, (ii) such authorization as is required by the Bankruptcy Court or the Bankruptcy
Code, which shall be contained in the entry of the Confirmation Order, and the expiration, or
waiver by the Bankruptcy Court, of the 14-day period set forth in Bankruptcy Rule 3020(e) following
entry of the Confirmation Order, (iii) any provisions of the Bankruptcy Code that override,
eliminate or abrogate such consents or as may be ordered by the Bankruptcy Court and (iv) the
ability to employ the alternatives contemplated by Section 2.1 of the Agreement, the
execution and delivery (or, with respect to the Plan, the filing) by the Company of this Agreement
and the Plan, the performance by the Company of its respective obligations under this Agreement and
compliance by the Company with all of the provisions hereof and thereof and the consummation of the
transactions contemplated herein and therein, (x) shall not conflict with, or result in a breach or
violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any lien under, or give rise to any termination right under,
any Contract to which the Company or any of the Company’s Subsidiaries is a party or by which any
of their material assets are subject or encumbered, (y) shall not result in any violation or breach
of any terms, conditions or provisions of the certificate of incorporation or bylaws of the
Company, or the comparable organizational documents of the Company’s Subsidiaries, and (z) shall
not conflict with or result in any violation or breach of, or any termination or impairment of any
rights under, any statute or any license, authorization, injunction, judgment, order, decree, rule
or regulation of any court or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries or any of their respective properties or assets, except, in the case of
each of clauses (x) and (z) above, for any such conflict, breach, acceleration, lien, termination,
impairment, failure to comply, default or violation that would not, individually or in the
aggregate, be reasonably
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expected to have a Material Adverse Effect (except with respect to (i) the issuance of the Warrants and (ii) the provisions of the
Approval Order).
(b) Subject to the entry of the Approval Order, (i) the issuance of the Warrants (assuming the
accuracy of the representations of each Purchaser contained in Exhibit D) and (ii) the
performance by the Company of its respective obligations under the Approval Order and compliance by
the Company with all of the provisions thereof (x) shall not conflict with, or result in a breach
or violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any lien under, or give rise to any termination right under,
any Contract, (y) shall not result in any violation or breach of any terms, conditions or
provisions of the certificate of incorporation or bylaws of the Company, or the comparable
organizational documents of the Company’s Subsidiaries, and (z) shall not conflict with or result
in any violation or breach of, or any termination or impairment of any rights under, any statute or
any license, authorization, injunction, judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any
of their respective properties or assets, except, in the case of each of clauses (x) and (z) above,
for any such conflict, breach, acceleration, lien, termination, impairment, failure to comply,
default or violation that would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.
SECTION 3.7 Consents and Approvals.
(a) No consent, approval, authorization, order, registration or qualification of or with any
Governmental Entity having jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties is required for (i) (1) the issuance and delivery of the New Warrants, (2)
the issuance, sale and delivery of Shares, (3) the issuance and delivery of the Warrants, (4) the
issuance, sale and delivery of the GGO Shares, (5) the issuance and delivery of the GGO Warrants,
(6) the issuance of New Common Stock upon exercise of the New Warrants, (7) the issuance of GGO
Common Stock upon exercise of the GGO Warrants and (8) the issuance of Common Stock upon exercise
of the Warrants and (ii) the execution and delivery by the Company of this Agreement or the Plan
and performance of and compliance by the Company with all of the provisions hereof and thereof and
the consummation of the transactions contemplated herein and therein, except (A) such authorization
as is required by the Bankruptcy Court or the Bankruptcy Code, which shall be contained in the
entry of the relevant Court Order, and the expiration, or waiver by the Bankruptcy Court, of the
14-day period set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, as
applicable (except with respect to (i) the issuance of the Warrants and (ii) the provisions of the
Approval Order), (B) filings required under, and compliance with (other than shareholder approval
requirements in respect of the issuance of the Warrants), the applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder, the Securities Act and the rules
and regulations promulgated thereunder, and the rules of the
New York Stock Exchange, and (C) such
other consents, approvals, authorizations, orders, registrations or qualifications that, if not
obtained, made or given, would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(b) No consent, approval, authorization, order, registration or qualification of or with any
Governmental Entity having jurisdiction over the Company or any of its Subsidiaries or any
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of their respective properties is required for (1) the issuance and delivery of the Warrants
and (2) the performance of and compliance by the Company with all of the provisions of the Approval
Order except (A) the entry of the Approval Order, (B) filings required under, and compliance with
(other than shareholder approval requirements in respect of the issuance of the Warrants), the
applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder,
the Securities Act and the rules and regulations promulgated thereunder, and the rules of the
New
York Stock Exchange, and (C) such other consents, approvals, authorizations, orders, registrations
or qualifications that, if not obtained, made or given, would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.8 Company Reports.
(a) The Company has filed with or otherwise furnished to the Securities and Exchange
Commission (the “SEC”) all material forms, reports, schedules, statements and other
documents required to be filed or furnished by it under the United States Securities Act of 1933,
as amended (the “Securities Act”) or the Exchange Act since December 31, 2007 (such
documents, as supplemented or amended since the time of filing, and together with all information
incorporated by reference therein, the “Company SEC Reports”). No Subsidiary of the
Company is required to file with the SEC any such forms, reports, schedules, statements or other
documents pursuant to Section 13 or 15 of the Exchange Act. As of their respective effective dates
(in the case of Company SEC Reports that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective filing dates (in the case of all
other Company SEC Reports), except as and to the extent modified, amended, restated, corrected,
updated or superseded by any subsequent Company SEC Report filed and publicly available prior to
the date of this Agreement, the Company SEC Reports (i) complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations
of the SEC promulgated thereunder applicable to such Company SEC Reports, and (ii) did not contain
any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) The Company maintains a system of “internal controls over financial reporting” (as defined
in Rules 13a-15(f) and 15a-15(f) under the Exchange Act) that provides reasonable assurance
regarding the reliability of the Company’s financial reporting and the preparation of the Company’s
financial statements for external purposes in accordance with GAAP and that includes policies and
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company, and (iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the Company’s assets that could have a material effect on the Company’s
financial statements.
(c) The Company maintains a system of “disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that is reasonably designed to ensure that
information required to be disclosed by the Company in the reports that it files or
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submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and that information relating to the Company
is accumulated and communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure and to make the certifications of the Chief Executive
Officer and Chief Financial Officer of the Company required under the Exchange Act with respect to
such reports.
(d) Since December 31, 2008, the Company has not received any oral or written notification of
a “material weakness” in the Company’s internal controls over financial reporting. The term
“material weakness” shall have the meaning assigned to it in the Statements of Auditing Standards
112 and 115, as in effect on the date hereof.
(e) Except as and to the extent modified, amended, restated, corrected, updated or superseded
by any subsequent Company SEC Report filed and publicly available prior to the date of this
Agreement, the audited consolidated financial statements and the unaudited consolidated interim
financial statements (including any related notes) included in the Company SEC Reports fairly
present in all material respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations
and their consolidated cash flows for the periods set forth therein (subject, in the case of
financial statements for quarterly periods, to normal year-end adjustments) and were prepared in
conformity with GAAP consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto).
SECTION 3.9 No Undisclosed Liabilities. None of the Company or its Subsidiaries has
any material liabilities (whether absolute, accrued, contingent or otherwise) required to be
reflected or reserved against on a consolidated balance sheet of the Company prepared in accordance
with GAAP, except for liabilities (i) reflected or reserved against or provided for in the
Company’s consolidated balance sheet as of December 31, 2009 or disclosed in the notes thereto,
included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, (ii)
incurred in the ordinary course of business consistent with past practice since the date of such
balance sheet, (iii) for fees and expenses incurred in connection with the Bankruptcy Cases, which
have been estimated and included in the Admin/Priority Claims identified in the Plan Summary Term
Sheet; provided, however, that such amount is an estimate and actual results may be
higher or lower, (iv) incurred in the ordinary course of performing this Agreement and certain
other asset sales, transfers and other actions permitted under this Agreement and (v) other
liabilities at Closing as contemplated by the Plan Summary Term Sheet.
SECTION 3.10 No Material Adverse Effect. Since December 31, 2009, there has not
occurred any event, fact or circumstance that has had or would reasonably be expected to have,
individually, or in the aggregate, a Material Adverse Effect.
SECTION 3.11 No Violation or Default: Licenses and Permits. The Company and its
Subsidiaries (a) are in compliance with all Laws, statutes, ordinances, rules, regulations, orders,
judgments and decrees of any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their respective properties, and (b) has not received
written notice of any alleged material violation of any of the foregoing except, in the case of
each of clauses (a) and (b) above, for any such failure to comply, default or violation that would
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not, individually or in the aggregate, be reasonably expected to have a Material Adverse
Effect or as may be the result of the Company’s or any of its Subsidiaries’ Chapter 11 filing or
status as a debtor-in-possession under Chapter 11. Subject to the restrictions that result from
the Company’s or any of its Subsidiaries’ status as a debtor-in-possession under Chapter 11
(including that in certain instances the Company’s or such Subsidiary’s conduct of its business
requires Bankruptcy Court approval), each of the Company and its Subsidiaries holds all material
licenses, franchises, permits, certificates of occupancy, consents, registrations, certificates and
other governmental and regulatory permits, authorizations and approvals required for the operation
of the business as currently conducted by it and for the ownership, lease or operation of its
material assets except, in each case, where the failure to possess or make the same would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.12 Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries which, individually, if determined
adversely to the Company or any of its Subsidiaries, would reasonably be expected to have a
Material Adverse Effect.
SECTION 3.13 Investment Company Act. The Company is not, and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof, shall not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder. As of the Effective Date, GGO, after giving effect to the
offering and sale of the GGO Shares and the application of the proceeds thereof, shall not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder.
SECTION 3.14 Compliance With Environmental Laws. Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each of the Company
and its Subsidiaries are and have been in compliance with and each of the Company Properties are
and have been maintained in compliance with, any and all applicable federal, state, local and
foreign Laws relating to the protection of the environment or natural resources, human health and
safety as such relates to the environment, or the presence, handling, or release of Hazardous
Materials (collectively, “Environmental Laws”), which compliance includes obtaining,
maintaining and complying with all permits, licenses or other approvals required under
Environmental Laws to conduct operations as presently conducted, and no action is pending or, to
the Knowledge of the Company, threatened that seeks to repeal, modify, amend, revoke, limit, deny
renewal of, or otherwise appeal or challenge any such permits, licenses or other approvals, (ii)
none of the Company or its Subsidiaries have received any written notice of, and none of the
Company Properties have been the subject of any written notice received by the Company or any of
its Subsidiaries of, any actual or potential liability or violation for the presence, exposure to,
investigation, remediation, arrangement for disposal, or release of any material classified,
characterized or regulated as hazardous, toxic, pollutants, or contaminants under Environmental
Laws, including petroleum products or byproducts, radioactive materials, asbestos-containing
materials, radon, lead-containing materials, polychlorinated biphenyls, mold, and hazardous
building materials (collectively, “Hazardous Materials”), (iii) none of the
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Company and its Subsidiaries are a party to or the subject of any pending, or, to the
Knowledge of the Company, threatened, legal proceeding alleging any liability, responsibility, or
violation under any Environmental Laws with respect to their past or present facilities or their
respective operations, (iv) none of the Company and its Subsidiaries have released Hazardous
Materials on any real property in a manner that would reasonably be expected to result in an
environmental claim or liability against the Company or any of its Subsidiaries or Affiliates, (v)
none of the Company Properties is the subject of any pending, or, to the Knowledge of the Company,
threatened, legal proceeding alleging any liability, responsibility, or violation under any
Environmental Laws, and (vi) to the Knowledge of the Company, there has been no release of
Hazardous Materials on, from, under, or at any of the Company Properties that would reasonably be
expected to result in an environmental claim or liability against the Company or any of its
Subsidiaries or Affiliates.
SECTION 3.15 Company Benefit Plans.
(a) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
each Company Benefit Plan is in compliance in design and operation in all material respects with
all applicable provisions of ERISA and the U.S. Internal Revenue Code of 1986, as amended (the
“Code”) and each Company Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the Internal Revenue Service with
respect to its qualified status under Section 401(a) of the Code and its related trust’s exempt
status under Section 501(a) of the Code and the Company is not aware of any circumstances likely to
result in the loss of the qualification of any such plan under Section 401(a) of the Code.
(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
with respect to each Company Benefit Plan that is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code: (A) no Company Benefit Plan has failed to satisfy the minimum
funding standard (within the meaning of Sections 412 and 430 of the Code or Section 302 of ERISA)
applicable to such Company Benefit Plan, whether or not waived and no application for a waiver of
the minimum funding standard with respect to any Company Benefit Plan has been submitted; (B) no
reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice
requirement has not been waived has occurred (other than in connection with the Bankruptcy Cases);
(C) no liability (other than for premiums to the Pension Benefit Guaranty Corporation (the
“PBGC”)) under Title IV of ERISA has been or is expected to be incurred by the Company or
any entity that is required to be aggregated with the Company pursuant to Section 414 of the Code
(an “ERISA Affiliate”); (D) the PBGC has not instituted proceedings to terminate any such
plan or made any inquiry which would reasonably be expected to lead to termination of any such
plan, and, no condition exists that presents a risk that such proceedings will be instituted or
which would constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such plan; and (E) no Company Benefit Plan is, or is
expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4)
of the Code).
(c) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
with respect to each Company Benefit Plan maintained primarily for the benefit of current or former
employees, officers or directors employed, or otherwise engaged, outside the
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Xxxxxx Xxxxxx (each a “Foreign Plan”), excluding any Foreign Plans that are
statutorily required, government sponsored or not otherwise sponsored, maintained or controlled by
the Company or any of its Significant Subsidiaries (“Excluded Non-US Plans”): (A) (1) all
employer and employee contributions required by Law or by the terms of the Foreign Plan have been
made, and all liabilities of the Company and its Significant Subsidiaries have been satisfied, or,
in each case accrued, by the Company and its Significant Subsidiaries in accordance with generally
accepted accounting principles, and (2) the Company and its Significant Subsidiaries are in
compliance with all requirements of applicable Law and the terms of such Foreign Plan; (B) as of
the Effective Date, the fair market value of the assets of each funded Foreign Plan, or the book
reserve established for each Foreign Plan, together with any accrued contributions, is sufficient
to procure or provide for the accrued benefit obligations with respect to all current and former
participants in such Foreign Plan determined on an ongoing basis (rather than on a plan termination
basis) according to the actuarial assumptions and valuations used to account for such obligations
as of the Effective Date in accordance with applicable generally accepted accounting principles;
and (C) the Foreign Plan has been registered as required and has been maintained in good standing
with applicable regulatory authorities.
SECTION 3.16 Labor and Employment Matters. (i) Neither the Company nor any of its
Significant Subsidiaries is a party to or bound by any collective bargaining agreement or any labor
union contract, nor are any employees of the Company or any of its Significant Subsidiaries
represented by a works council or a labor organization (other than any industry-wide or statutorily
mandated agreement in non-U.S. jurisdictions); (ii) to the Knowledge of the Company, as of the date
hereof, there are no activities or proceedings by any labor union or labor organization to organize
any employees of the Company or any of its Significant Subsidiaries or to compel the Company or any
of its Significant Subsidiaries to bargain with any labor union or labor organization; and (iii),
except as would not, individually or in the aggregate, have a Material Adverse Effect, there is no
pending or, to the Knowledge of the Company, threatened material labor strike, lock-out, walkout,
work stoppage, slowdown, demonstration, leafleting, picketing, boycott, work-to-rule campaign,
sit-in, sick-out, or similar form of organized labor disruption.
SECTION 3.17 Insurance. The Company maintains for itself and its Subsidiaries
insurance policies in those amounts and covering those risks, as in its judgment, are reasonable
for the business and assets of the Company and its Subsidiaries.
SECTION 3.18 No Unlawful Payments. No action is pending or, to the Knowledge of the
Company, is threatened against the Company or any of its Subsidiaries or Affiliates, or any of
their respective directors, officers, or employees resulting from any (a) use of corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity, (b) direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (c) violations of any provision of the Foreign Corrupt Practices Act
of 1977 or any other applicable local anti-bribery or anti-corruption Laws in any relevant
jurisdictions or (d) other unlawful payment, except in any such case, as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.19 No Broker’s Fees. Other than pursuant to agreements (including
amendments thereto) by and between the Company and each of UBS Securities LLC and Xxxxxx
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Buckfire & Co., LLC, or otherwise disclosed to each Purchaser prior to the date hereof and
which fees and expenses would be included in the definition of “Permitted Claims”, none of the
Company or any of its Subsidiaries is a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against the Company or any
of its Subsidiaries for an investment banking fee, finder’s fee or like payment in respect of the
sale of the Shares contemplated by this Agreement. None of the Company or any of its Subsidiaries
is a party to any contract, agreement or understanding with any Person that would give rise to a
valid claim against any Purchaser for a brokerage commission, finder’s fee, investment banking fee
or like payment in connection with the transactions contemplated by this Agreement.
SECTION 3.20 Real and Personal Property.
(a) Section 3.20(a) of the Company Disclosure Letter sets forth a true, correct and
complete list in all material respects of each material real property asset owned or leased (as
lessee), directly or indirectly, in whole or in part, by the Company and/or any of its Subsidiaries
(other than Identified Assets) (each such property that is not a Non-Controlling Property and has a
fair market value (in the reasonable determination of the Company) in excess of $10,000,000 is
individually referred to herein as “Company Property” and collectively referred to herein
as the “Company Properties”). All Company Properties, Non-Controlling Properties and the
Identified Assets are reflected in accordance with the applicable rules and regulations of the SEC
in the Annual Report in Form 10-K as of, and for the year ended, December 31, 2009 (the “Most
Recent Statement”).
(b) Except (i) for such breach of this Section 3.20(b) as may be caused fully or
substantially by the third party member or partner in any Joint Venture, without the Knowledge or
consent of the Company or any of its Subsidiaries or (ii) as would not individually or in the
aggregate be reasonably expected to have a Material Adverse Effect, the Company or one of its
Subsidiaries owns good and valid fee simple title or valid and enforceable leasehold interests
(except with respect to the Company’s right to reject any such ground lease as part of a Bankruptcy
plan of reorganization for the remaining Debtor entities and subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at Law or in equity)), as applicable, to each of the Company Properties, in
each case, free and clear of liens, mortgages or deeds of trust, claims against title, charges that
are liens or other encumbrances on title, rights of way, restrictive covenants, declarations or
reservations of an interest in title (collectively, “Encumbrances”), except for the
following (collectively, the “Permitted Title Exceptions”): (i) Encumbrances relating to
the DIP Loan and to debt obligations reflected in the Company’s financial statements and the notes
thereto (including with respect to debt obligations which are not consolidated) or otherwise
disclosed to each Purchaser in Section 3.20(b)(i) of the Company Disclosure Letter, (ii)
Encumbrances that result from any statutory or other liens for Taxes or assessments that are not
yet due or delinquent or the validity of which is being contested in good faith by appropriate
proceedings and for which a sufficient and appropriate reserve has been set aside for the full
payment thereof, (iii) any contracts, or other occupancy agreements to third parties for the
occupation or use of portions of the Company Properties by such third parties in the ordinary
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course of the business of the Company or its Subsidiaries, (iv) Encumbrances imposed or
promulgated by Law or any Governmental Entity, including zoning, entitlement and other land use and
environmental regulations, (v) Encumbrances disclosed on existing title policies and current title
insurance commitments or surveys made available to each Purchaser, (vi) Encumbrances on the
landlord’s fee interest at any Company Property where the Company or its Subsidiary is the tenant
under any ground lease, provided that, except as disclosed to each Purchaser in Section
3.20(b)(ii) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries
have received a notice indicating the intention of the landlord under such ground lease, or of any
other Person, to (1) exercise a right to terminate such ground lease, evict the lessee or otherwise
collect the sub-rents thereunder, or (2) take any other action that would be reasonably likely to
result in a termination of such ground lease, (vii) any cashiers’, landlords’, workers’,
mechanics’, carriers’, workmen’s, repairmen’s and materialmen’s liens and other similar liens (1)
incurred in the ordinary course of business which (A) are being challenged in good faith by
appropriate proceedings and for which a sufficient and appropriate reserve has been set aside for
the full payment thereof or (B) have been otherwise fully bonded and discharged of record or for
which a sufficient and appropriate reserve has been set aside for the full payment thereof or (2)
disclosed on Section 3.20(b)(i) of the Company Disclosure Letter and (viii) any
other easements, rights-of-way, restrictions (including zoning restrictions), covenants,
encroachments, protrusions and other similar charges or encumbrances, and title limitations or
title defects, if any, that (I) are customary for office, industrial, master planned communities
and retail properties or (II) individually or in the aggregate, would not be reasonably expected to
have a Material Adverse Effect. Other than as set forth on Section 3.20(b)(ii) of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries has received a written
notice of a material default, beyond any applicable grace and cure periods, of or under any
Permitted Title Exceptions, except (w) as may have been caused fully or substantially by the third
party member or partner in any Joint Venture, without the Knowledge or consent of the Company or
any of its Subsidiaries (x) as a result of the filing of the Bankruptcy Cases, (y) where the
Permitted Title Exceptions are in and of themselves evidence of default (such as mechanics’ liens
and recorded notices of default) or (z) as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect; provided, however, that
where the Company has otherwise represented and warranted to each Purchaser hereunder (including as
set forth on the Company Disclosure Letter pursuant to such representations and warranties) with
respect to the Company’s Knowledge of, the Company’s receipt of notice of or the existence of a
default in connection with a particular category of Permitted Title Exceptions, such categories of
Permitted Title Exceptions shall not be included in the representation set forth in this sentence
(by way of illustration, but not exclusion, the representations set forth in Section
3.20(f) with respect to defaults under Material Leases shall be deemed to address the Company’s
representations and warranties with respect to the entire category of Permitted Title Exceptions
detailed in clause (iii) above).
(c) To the extent available, the Company and its Subsidiaries have made commercially
reasonable efforts to make available or will use commercially reasonable efforts to make available
upon request to each Purchaser those policies of title insurance that the Company or its
Subsidiaries have obtained in the last six months.
(d) With respect to each Company Ground Lease Property, except as set forth on Section
3.20(d) of the Company Disclosure Letter and except as may have been caused by, or
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disclosed in the filing of the Bankruptcy Cases, as of the date hereof, to the Company’s
Knowledge, neither the Company nor any of its Subsidiaries has received notice of material defaults
(including, without limitation, payment defaults, but limited to those circumstances where such
default may grant the landlord under such ground lease the right to terminate such ground lease,
evict the lessee or otherwise collect the sub-rents thereunder) at such Company Ground Lease
Property beyond any applicable grace and cure periods, except (x) as would not, individually or in
the aggregate, be reasonably expected to have a Material Adverse Effect, (y) as may be caused fully
or substantially by the third party member or partner in any Joint Venture, without the Knowledge
or consent of the Company or any of its Subsidiaries and (z) with respect to any Company Ground
Lease Property which is leased by a Subsidiary of the Company which has consummated a plan of
reorganization in the Bankruptcy Cases, all such material defaults at such Company Ground Lease
Property which existed prior to the effective date of such Person’s plan of reorganization have
been or will be cured in accordance with such plan. As used herein the term “Company Ground
Lease Property” shall mean any Company Property having a fair market value (in the reasonable
determination of the Company) in excess of $25,000,000 which is leased by a Subsidiary of the
Company as tenant pursuant to a ground lease. With respect to the defaults referenced in clause
(z) above, the Bankruptcy Court approved the Debtors’ assumption of the applicable ground leases
and the fixed cure amounts for such defaults which predated assumption; provided,
however, nothing contained herein precludes any Person from raising issues in the future
with respect to defaults that may have predated such assumption.
(e) Except as set forth on Section 3.20(e) of the Company Disclosure Letter, neither
the Company nor any of its Subsidiaries is a party to any agreement relating to the property
management (but not including any leasing, development, construction or brokerage agreements) of
any of the Company Properties by a party other than Company or any wholly owned Company
Subsidiaries, except (i) management agreements that may be terminated without cause or payment of a
termination fee upon no more than 60 days notice or (ii) as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(f) Except as set forth on Section 3.20(f) of the Company Disclosure Letter, to the
Company’s Knowledge, as of February 15, 2010, (i) each Material Lease is in full force and effect,
(ii) no tenant is in arrears in the payment of rent, additional rent or any other material charges
due under any Material Lease, and no tenant is materially in default in the performance of any
other obligations under any Material Lease, (iii) no bankruptcy or insolvency proceeding has been
commenced (and is continuing) by or against any tenant under any Material Lease, and (iv) neither
the Company nor any of its Subsidiaries has received a written notice from a current tenant under
any Material Lease exercising a right to terminate or otherwise cancel its Material Lease (y) as a
result of or in connection with the termination or cancellation of any other lease, sublease,
license or occupancy agreement for space at any Company Property (each, a “Company Property
Lease”), or (z) as a result of or in connection with any other tenant that occupies, or had
previously occupied, another Company Property Lease, allowing, or having had allowed, all or any
portion of the premises leased pursuant to such other Company Property Lease to “go dark” or
otherwise be abandoned or vacated; except, (A) in the case of each of clauses (i), (ii) (iii) and
(iv) above, as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (B) as a result of the filing of the Bankruptcy Cases or in connection
with any Bankruptcy Court approved process and (C) as may have been caused fully or substantially
by the third party member or partner in any Joint Venture, without the
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Knowledge or consent of the Company or its Subsidiaries. “Material Lease” means for
any Company Property any lease in which the Company or its Subsidiaries is the landlord, and all
amendments, modifications, supplements, renewals, exhibits, schedules, extensions and guarantees
related thereto, (1) to an “anchor tenant” occupying at least 80,000 square feet with respect to
such Company Property or (2) that is one of the five (5) largest leases, in terms of gross annual
minimum rent, with respect to a Company Property that has an annual net operating income, as
determined in accordance with GAAP (provided, however, that for purposes of such
calculation, the following were reflected as expenses: (a) ground rent payments to a third party
and (b) an assumed management fee equal to 3% of base minimum and percentage rent) with respect to
the trailing twelve (12) calendar month period, equal to at least $7,500,000.00. For purposes of
Section 7.1(c), (y) the representations and warranties made in Section 3.20(f)(i),
(iii) and (iv), disregarding all qualifications and exceptions contained therein
relating to “materiality” or “Material Adverse Effect”, shall be shall be true and correct at and
as of the Closing Date as if made at and as of the Closing Date, except for such failures to be
true and correct that, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect and (z) the representation and warranties contained in Section
3.20(f)(ii), disregarding all qualifications and exceptions contained therein relating to
“materiality” or “Material Adverse Effect”, shall be true and correct (A) at and as of the last day
of the calendar month that is two (2) calendar months prior to the calendar month in which the
Closing Date occurs as if made at and as of such date, if the Closing Date occurs on or prior to
the fifteenth (15th) day of a calendar month, or (B) at and as of the fifteenth (15th) day of the
calendar month that is one (1) calendar month prior to the calendar month in which the Closing Date
occurs as if made at and as of such date, if the Closing Date occurs on or after the sixteenth
(16th) day of a calendar month, except for such failures to be true and correct that, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
(g) With respect to each Company Property:
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(i) |
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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; |
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(ii) |
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Except as set forth in Section 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 result of the Company’s or any |
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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 |
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(iii) |
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For purposes of Section 7.1(c) the representations and
warranties made in Section 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. |
(h) To the Knowledge of the Company, (i) except as set forth on Section 3.20(h) of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries has received a written
notice exercising an option, “buy-sell” right or other similar right to purchase a Company Property
or any material portion thereof which has not previously closed, except as would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect with respect to such
Company Property and (ii) no Company Property is subject to a purchase and sale agreement or any
similar legally binding agreement to purchase such Company Property or any material portion thereof
(other than (x) with respect to condominium purchase and sale agreements and purchase and sale and
early occupancy agreements or similar agreements for the sale of condominium units at the Natick
Nouvelle, (y) with respect to builder lot purchase agreements and other similar agreements for the
sale of vacant lots of land to builders at Bridgeland and (z) as set forth in (i) above) which has
not previously closed.
(i) The Company has conducted due inquiry with respect to the representations and warranties
made in Section 3.20(d), Section 3.20(f) and Section 3.20(h).
SECTION 3.21 Tax Matters. Except as disclosed on Section 3.21(a) of the
Company Disclosure Letter:
(a) Except in cases where the failure of any of the following to be true would not result in a
Material Adverse Effect: (i) the Company and each of its Significant Subsidiaries have filed all
Tax Returns required to be filed by applicable Law prior to the date hereof; (ii) all such Tax
Returns were true, complete and correct in all respects and filed on a timely basis (taking into
account any applicable extensions); (iii) the Company and each of its Significant Subsidiaries have
paid all amounts of Taxes that are due, claimed or assessed by any taxing authority to be due for
the periods covered by such Tax Returns, other than any Taxes for which adequate reserves
(“Adequate Reserves”) have been established in accordance with GAAP or a claim has been
filed in the Bankruptcy Cases; and (iv) all adjustments of federal U.S. Tax liability of the
Company and its Significant Subsidiaries resulting from completed audits or
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examinations have been reported to appropriate state and local taxing authorities and all
resulting Taxes payable to state and local taxing authorities have been paid. “Taxes”
means any U.S. federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not. “Tax Return” means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof, including, where permitted or required,
combined or consolidated returns for any group of entities that include the Company or any of its
Significant Subsidiaries.
(b) The Company and each of its REIT Subsidiaries (x) for all taxable years commencing with
the taxable year ended December 31, 2005 through December 31, 2009, has been subject to taxation as
a real estate investment trust within the meaning of Section 856 of the Code (a “REIT”) and
has satisfied all requirements to qualify as a REIT for such years; (y) has operated since January
1, 2010 to the date hereof in a manner consistent with the requirements for qualification and
taxation as a REIT; and (z) intends to continue to operate in such a manner as to qualify as a REIT
for the current taxable year. None of the transactions contemplated by this Agreement will prevent
the Company or any of its REIT Subsidiaries from so qualifying. No Subsidiary of the Company other
than a REIT Subsidiary is a corporation for U.S. federal income tax purposes, other than a
corporation that qualifies as a “taxable REIT subsidiary” within the meaning of Section 856(l) of
the Code. For the purposes of this Agreement, “REIT Subsidiary” means each of GGP Ivanhoe,
Inc., GGP Holding, Inc., GGP Holding II, Inc., Xxxxxxxx Xxxx, Limited, GGP-Natick Trust and
GGP/Homart, Inc.
(c) Each Company Subsidiary other than its REIT Subsidiaries that is a partnership, joint
venture, or limited liability company and which has not elected to be a “taxable REIT subsidiary”
within the meaning of Section 856(l) of the Code has been since its formation treated for U.S.
federal income tax purposes as a partnership or disregarded entity, as the case may be, and not as
a corporation or an association taxable as a corporation, except where failure to do so would not
have a Material Adverse Effect.
(d) Except where the failure to be true would not have a Material Adverse Effect, the Company
and each of its Significant Subsidiaries have (i) complied in all respects with all applicable
Laws, rules, and regulations relating to the payment and withholding of Taxes (including
withholding and reporting requirements under sections 1441 through 1464, 3401 through 3406, 6041
and 6049 of the Code and similar provisions under any other Laws) and (ii) within the time and in
the manner prescribed by Law, withheld from employee wages and paid to the proper Governmental
Entities all amounts required to be withheld and paid over.
(e) Except where the failure to be true would not have a Material Adverse Effect, no audits or
other administrative proceedings or court proceedings are presently pending or to the Knowledge of
the Company threatened with regard to any Taxes or Tax Returns of the Company or any of its
Significant Subsidiaries, other than any audit or administrative proceeding relating to Taxes for
which a claim has been filed in a Debtor’s Chapter 11 case or any other audit or
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administrative or court proceeding that is not reasonably expected to result in a material Tax
liability to the Company or any of its Significant Subsidiaries.
(f) The Company has made available to each Purchaser complete and accurate copies of all
material Tax Returns requested by any Purchaser and filed by or on behalf of the Company or any of
its Significant Subsidiaries for all taxable years ending on or prior to the Effective Date and for
which the statute of limitations has not expired.
(g) There are no Tax Protection Agreements except for those the breach of which would not
reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Significant
Subsidiary has any liability for Taxes of any Person under Treasury Regulation Section 1.1502-6 (or
any similar provision of any state, local or foreign Law), or as a transferee or successor (by
contract or otherwise), other than (i) to a Subsidiary of the Company or (ii) where any such
liability would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.22 Material Contracts. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each Material Contract that
shall survive the Bankruptcy Cases is valid and binding on the Company or any of its Subsidiaries,
as applicable, and, to the Knowledge of the Company, on each other Person party thereto, and is in
full force and effect. Other than as a result of the commencement of the Bankruptcy Cases, each of
the Company and its Subsidiaries has performed, in all material respects, all obligations required
to be performed by it under each Material Contract that shall survive the Bankruptcy Cases, except,
in each case, as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Other than those caused as a result of the filing of the Bankruptcy
Cases, neither the Company nor any of its Significant Subsidiaries is in breach or default of any
Material Contract to which it is a party and which shall survive the Bankruptcy Cases, except, in
each case, as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. The Company has made available to each Purchaser true, accurate and
complete copies of the Material Contracts as of the date of this Agreement, except for those
Material Contracts available to the public on the website maintained by the SEC. To the Knowledge
of the Company, no party to any Material Contract that shall survive the Bankruptcy Cases has given
written notice of any action to terminate, cancel, rescind or procure a judicial reformation of
such Material Contract or any material provision thereof, which termination, cancellation,
rescission or reformation would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. For the avoidance of doubt, Material Contracts do not include
intercompany contracts.
SECTION 3.23 Certain Restrictions on Charter and Bylaws Provisions; State Takeover
Laws.
(a) The Company and the Company Board have taken all appropriate and necessary actions to
ensure that the ownership limitations set forth in Article IV of the Company’s certificate of
incorporation shall not apply to (i) the acquisition of beneficial ownership by any Purchaser and
any other member of the Purchaser Group of the Warrants and the shares of Common Stock issuable
upon exercise of the Warrants, (ii) any antidilution adjustments to those Warrants pursuant to the
Warrant Agreement and (iii) any Common Stock that any Purchaser or any member of the Purchaser
Group may be deemed to own by no actions of its own and the
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acquisition of beneficial ownership of up to an additional amount totaling 0.714% of the
issued and outstanding shares of Common Stock, in the aggregate, by any Purchaser or any other
member of the Purchaser Group; provided, however, that such exception to the
ownership limitations are only effective as to any Purchaser or a member of the Purchaser Group so
long as (i) the Company has received executed copies of the representation certificate contained in
Exhibit D from such Purchaser or such member of the Purchaser Group, it being understood
that a member of the Purchaser Group shall be required to provide such representations at such
times and only at such times as such member of the Purchaser Group “beneficially owns” or
“constructively owns” (as such terms are defined in the certificate of incorporation of the
Company) Common Stock or New Common Stock in excess of the relevant ownership limit set forth in
the certificate of incorporation of the Company or any stock or other equity interest owned by such
member of the Purchaser Group in a tenant of the Company would be treated as constructively owned
by the Company and (ii) the representations so provided are true, correct and complete as of the
date made and continue to be true, correct and complete.
(b) The Company Board has taken all action necessary to render inapplicable to each Purchaser
the restrictions on “business combinations” set forth in Section 203 of the Delaware General
Corporation Law and, to the knowledge of the Company, any similar “moratorium,” “control share,”
“fair price,” “takeover” or “interested stockholder” law applicable to transactions between each
Purchaser and the Company.
SECTION 3.24 No Other Representations or Warranties. Except for the representations
and warranties made by the Company in this Article III, neither the Company nor any other
Person makes any representation or warranty with respect to the Company or its Subsidiaries or
their respective business, operations, assets, liabilities, condition (financial or otherwise) or
prospects, notwithstanding the delivery or disclosure to each Purchaser or any other members of the
Purchaser Group or their respective representatives of any documentation, forecasts or other
information with respect to any one or more of the foregoing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Each Purchaser severally, and not jointly and severally, represents and warrants to the
Company with respect to itself, and not with respect to any other Purchaser, as set forth below:
SECTION 4.1 Organization. Purchaser is duly organized and is validly existing and,
where applicable, in good standing under the Laws of its jurisdiction of organization, with the
requisite limited liability company power and authority to undertake and effectuate the
transactions contemplated by this Agreement. Purchaser has been duly qualified as a foreign
corporation or other form of entity for the transaction of business and, where applicable, is in
good standing under the Laws of each other jurisdiction in which it operates so as to require such
qualification, except where the failure to be so qualified, licensed or in good standing would not,
individually or in the aggregate, have or be reasonably expected to materially delay or prevent the
consummation of the transactions contemplated by this Agreement.
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SECTION 4.2 Power and Authority. Purchaser has the requisite power and authority to
enter into, execute and deliver this Agreement and to perform its obligations hereunder and has
taken all necessary action required for the due authorization, execution, delivery and performance
by it of this Agreement.
SECTION 4.3 Execution and Delivery. This Agreement has been duly and validly executed
and delivered by Purchaser and constitutes its valid and binding obligation, enforceable against
Purchaser in accordance with its terms.
SECTION 4.4 No Conflict. The execution and delivery of this Agreement and the
performance by Purchaser of its obligations hereunder and compliance by Purchaser with all of the
provisions hereof and the consummation of the transactions contemplated herein (i) shall not
conflict with, or result in a breach or violation of, any of the terms or provisions of, or
constitute a default under, or result in the acceleration of, or the creation of any lien under, or
give rise to any termination right under, any material contract to which Purchaser is a party, (ii)
shall not result in any violation or breach of any provisions of the organizational documents of
Purchaser and (iii) shall not conflict with or result in any violation of, or any termination or
material impairment of any rights under, any statute or any license, authorization, injunction,
judgment, order, decree, rule or regulation of any court or governmental agency or body having
jurisdiction over Purchaser or Purchaser’s properties or assets, except with respect to each of
(i), (ii) and (iii), such conflicts, violations or defaults as would not be reasonably expected to
have a material adverse effect on the ability of Purchaser to consummate the transactions
contemplated hereunder.
SECTION 4.5 Consents and Approvals. No consent, approval, order, authorization,
registration or qualification of or with any Governmental Entity having jurisdiction over Purchaser
is required in connection with the execution and delivery by Purchaser of this Agreement or the
consummation of the transactions contemplated hereby, except such consents, approvals, orders,
authorizations, registration or qualification as would not reasonably be expected to materially and
adversely affect the ability of Purchaser to perform its obligations under this Agreement.
SECTION 4.6 Compliance with Laws. Since the date of its formation, Purchaser has been
in compliance with all Laws applicable to Purchaser, except, in each case, for such non-compliance
as would not reasonably be expected to materially and adversely affect the ability of Purchaser to
perform its obligations under this Agreement.
SECTION 4.7 Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the knowledge of Purchaser, threatened
against Purchaser which, individually or in the aggregate, if determined adversely to Purchaser,
would materially and adversely affect the ability of Purchaser to perform its obligations under
this Agreement.
SECTION 4.8 No Broker’s Fees. Purchaser is not party to any contract, agreement or
understanding with any Person that would give rise to a valid claim against the Company for an
investment banking fee, commission, finder’s fee or like payment in connection with the
transactions contemplated by this Agreement.
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SECTION 4.9 Sophistication. Purchaser is, as of the date hereof and shall be as of
the Effective Date, an “accredited investor” within the meaning of Rule 501(a) under the Securities
Act. Purchaser understands and is able to bear any economic risks associated with such investment
(including, without limitation, the necessity of holding such Shares and GGO Shares for an
indefinite period of time).
SECTION 4.10 Purchaser Intent. Purchaser is acquiring the Shares, the Warrants, the
GGO Shares, the New Warrants and the GGO Warrants for investment purposes only and not with a view
to or for distributing or reselling such Shares, Warrants, GGO Shares, New Warrants and GGO
Warrants or any part thereof, without prejudice, however, to Purchaser’s right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such
Shares, Warrants, GGO Shares, New Warrants and GGO Warrants pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities Laws. Purchaser understands that Purchaser must bear
the economic risk of its investment indefinitely.
SECTION 4.11 Reliance on Exemptions. Purchaser understands that the Shares and the
GGO Shares are being offered and sold to Purchaser in reliance upon specific exemptions from the
registration requirements of United States federal and state securities Laws.
SECTION 4.12 REIT Representations. The representations provided by Purchaser and, to
the extent applicable, its Affiliates, members or Affiliates of members, set forth on Exhibit
D are true, correct and complete as of the date hereof, and shall be true as of the date of the
issuance of the Warrants and as of the Closing Date, it being understood that Purchaser’s
Affiliates, members or Affiliates of members shall be required to provide such representations only
if such Person “beneficially owns” or “constructively owns” (as such terms are defined in the
certificate of incorporation of the Company) Common Stock or New Common Stock in excess of the
relevant ownership limit set forth in the certificate of incorporation of the Company or any stock
or other equity interest owned by such Person in a tenant of the Company would be treated as
constructively owned by the Company.
SECTION 4.13 Financial Capability. Such Purchaser has sufficient binding capital
commitments or available funds to satisfy its obligations under this Agreement, including without
limitation the payment of the applicable Purchase Price and the GGO Purchase Price.
SECTION 4.14 No Other Representations or Warranties. Except for the representations
and warranties made by Purchaser in this Article IV, neither Purchaser nor any other Person
on behalf of Purchaser makes any representation or warranty with respect to Purchaser or its
assets, liabilities, condition (financial or otherwise) or prospects.
SECTION 4.15 Acknowledgement. Purchaser acknowledges that (a) neither the Company nor
any Person on behalf of the Company is making any representations or warranties whatsoever, express
or implied, beyond those expressly given by the Company in Article III of this Agreement
and (b) Purchaser has not been induced by, or relied upon, any representations, warranties or
statements (written or oral), whether express or implied, made by any Person, that are not
expressly set forth in Article III of this Agreement. Without limiting the generality of
the foregoing, except with respect to the representations and warranties contained in Article
III,
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Purchaser acknowledges that no representations or warranties are made with respect to any
projections, forecasts, estimates, budgets, plans or prospect information that may have been made
available to Purchaser or any of its representatives.
ARTICLE V
COVENANTS OF THE COMPANY AND PURCHASER
SECTION 5.1 Bankruptcy Court Motions and Orders.
(a) No later than the close of business on the date that is two (2) Business Days following
the date of this Agreement, the Company shall file with the Bankruptcy Court a motion in form and
substance satisfactory to each Purchaser (the “Approval Motion”) seeking to obtain entry of
an order in the form attached hereto as Exhibit F (the “Proposed Approval Order”),
which order in the final form if approved by the Bankruptcy Court (the “Approval Order”)
shall approve, among other things, the issuance of the Warrants to each Purchaser and the warrants
contemplated by each other Investment Agreement to be issued to the applicable Initial Investor,
and the performance by the Company of its obligations under the Warrant Agreement.
(b) The Approval Motion, including any exhibits thereto and any notices or other materials in
connection therewith, and any modifications or amendments to the foregoing, must be in form and
substance reasonably satisfactory to each Purchaser.
(c) If the Approval Order shall be appealed by any Person (or a petition for certiorari or
motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or
reargument shall be filed with respect to such order), the Company shall diligently defend against
any such appeal, petition or motion and shall use its reasonable best efforts to obtain an
expedited resolution of any such appeal, petition or motion. The Company shall keep each Purchaser
reasonably informed and updated regarding the status of any such appeal, petition or motion.
(d) The Company shall provide draft copies of all motions, notices, statements, schedules,
applications, reports and other papers the Company intends to file with the Bankruptcy Court in
connection with the Approval Order to each Purchaser within a reasonable period of time prior to
the date the Company intends to file any of the foregoing, and shall consult in advance in good
faith with each Purchaser regarding the form and substance of any such proposed filing with the
Bankruptcy Court.
SECTION 5.2 Warrants, New Warrants and GGO Warrants. Within one (1) Business Day of
the date of the entry of the Approval Order, the Company and the warrant agent shall execute and
deliver the warrant agreement in the form attached hereto as Exhibit G (with only such
changes thereto as may be reasonably requested by the warrant agent and reasonably approved by each
Purchaser) (the “Warrant Agreement”) evidencing 17,142,857 warrants (the
“Warrants”) each of which entitles the holder to purchase one (1) share of Common Stock at
an initial price of $15.00 per share subject to adjustment as provided in the Warrant. The
Warrants and the Plan shall provide that upon the effectiveness of the Plan, the Warrants shall be
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exchanged for and converted into the right to receive (i) 17,142,857 warrants each of which
entitles the holder to purchase one (1) share of New Common Stock (the “New Warrants”) at
an initial purchase price of $10.00 per share subject to adjustment as provided in the underlying
warrant agreement and (ii) 20,000,000 warrants each of which entitles the holder to purchase one
(1) share of GGO Common Stock (the “GGO Warrants”) at a price of $5.00 per share subject to
adjustment as provided in the warrant agreement, each in accordance with the terms set forth in the
applicable warrant agreement. PSCM, in its sole discretion, may designate that some or all of the
New Warrants or GGO Warrants be issued in the name of, and delivered to, any member of the
Purchaser Group in accordance with and subject to the Designation Conditions.
SECTION 5.3 [Intentionally Omitted.]
SECTION 5.4
Listing. The Company shall use its reasonable best efforts to cause the
Shares and the New Warrants to be listed on the
New York Stock Exchange (the “
NYSE”). The
Plan shall provide that the Company shall use its reasonable best efforts to cause GGO to use its
reasonable best efforts to cause the GGO Shares and the GGO Warrants to be listed on a U.S.
national securities exchange.
SECTION 5.5 Use of Proceeds. The Plan shall provide that the Company and its
Subsidiaries, and GGO, shall apply the net proceeds from the sale of the Shares and the GGO Rights
Offering and the Capital Raising Activities, as applicable, as provided in the Plan Summary Term
Sheet and the Plan. The parties intend that the New Warrants, GGO Warrants, New Common Shares and
GGO Shares will be offered and sold under the Plan, to the fullest extent permitted by law, in
exchange for a claim against, an interest in, or a claim for an administrative expense in the
Bankruptcy Case, or principally in such exchange and partly for other cash or property, for
purposes of Section 1145, and the parties shall take all reasonable actions necessary consistent
with applicable law to cause such securities to be so offered and sold, including without
limitation, reflecting the foregoing in the initial filing of the Plan with the Bankruptcy Court.
SECTION 5.6 Access to Information. Subject to applicable Law and the Company’s
receipt of customary assurances of confidentiality by each Purchaser, upon reasonable notice, the
Company shall afford each Purchaser and its directors, officers, employees, investment bankers,
attorneys, accountants and other advisors or representatives, reasonable access during normal
business hours, throughout the period prior to the Effective Date, to its employees, books,
contracts and records and, during such period, the Company shall (and shall cause its Subsidiaries
to) furnish promptly to each Purchaser such information concerning its business, properties and
personnel as may reasonably be requested by such Purchaser, including copies of all monthly
financial information provided to its lenders under its existing debtor in possession financing
agreements; provided, that, notwithstanding anything to the contrary, the Company shall not
be required to share confidential information relating to any Competing Transaction except as
contemplated by Section 5.7.
SECTION 5.7 Competing Transactions. From the date of this Agreement until the earlier
to occur of the Closing and the termination of this Agreement, the Company shall provide written
notice to each Purchaser not less than 48 hours prior to the Company or any Subsidiary of the
Company (i) entering into a definitive agreement providing for a Competing Transaction
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or (ii) filing a motion with the Bankruptcy Court seeking to obtain bid procedures or bid
protections for or in connection with a Competing Transaction.
SECTION 5.8 Reservation for Issuance. The Company shall reserve that number of shares
of Common Stock sufficient for issuance upon exercise or conversion of the Warrants. In connection
with the issuance of the New Warrants, the Plan shall provide that the Company shall reserve for
issuance that number of shares of New Common Stock sufficient for issuance upon exercise of the New
Warrants. The Plan shall provide that GGO shall reserve for issuance that number of shares of GGO
Common Stock sufficient for issuance upon exercise of the GGO Warrants.
SECTION 5.9 Subscription Rights.
(a) Company Subscription Right.
(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 or (5) as set forth on Section
5.9(a) of the Company Disclosure Letter) (the “Proposed Securities”), the
members of the Purchaser Group 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 aggregate amount of such Proposed Securities that the members of the
Purchaser Group 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 aggregate number of
shares of New Common Stock held by the Purchaser Group on a Fully Diluted Basis as
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of the date of the Company’s notice pursuant to Section 5.9(b) 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 the members of the Purchaser
Group pursuant to their 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 this Section 5.9 in the context of a registered public
offering shall be conditioned upon reasonably acceptable representations and warranties of
each applicable member of the Purchaser Group designated pursuant to Section
5.9(a)(vii) 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. The applicable members of the Purchaser
Group 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 the applicable Subscription Right and as
to the amount of Proposed Securities such member of the Purchaser Group desires to purchase,
up to the maximum amount calculated pursuant to Section 5.9(a)(i). In connection
with an underwritten public offering, such notice shall constitute a non-binding indication
of interest to purchase Proposed Securities at such a range of prices as the such member of
the Purchaser Group may specify and, with respect to other offerings, such notice shall
constitute a binding commitment of the applicable member of such Purchaser Group to
purchase the amount of Proposed Securities so specified at the price and other terms set
forth in the Company’s notice to each Purchaser. The failure of such member of the
Purchaser Group to so respond within such three (3) Business Day period shall be deemed to
be a waiver of the applicable Subscription Right under this Section 5.9 only with
respect to the offering described in the applicable notice. In connection with an
underwritten public offering or a private placement, the applicable member of the Purchaser
Group shall further enter into an agreement (in form and substance customary for
transactions of this type) to purchase the Proposed Securities to be acquired
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 member of the Purchaser Group
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 member of the Purchaser Group exercises its
Subscription Right provided in this Section 5.9, the closing of the purchase of the
Proposed Securities with respect to which such right has been exercised shall take place
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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). Each of the Company and the applicable members of the Purchaser Group 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) the applicable member of the
Purchaser Group fails to exercise its Subscription Right provided in this Section
5.9 within said three Business Day period, or (B) if so exercised, such member of the
Purchaser Group fails or is unable to consummate such purchase within the 180 day period
specified in Section 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 this Section 5.9 or which the
applicable member of the Purchaser Group 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 each 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 offering such
securities to the members of the Purchaser Group 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 applicable member of the Purchaser Group
shall cooperate in good faith to facilitate the exercise of such member of the Purchaser
Group’s Subscription Right hereunder, including using reasonable efforts to secure any
required approvals or consents.
(vii) Allocation Among Purchaser Group. PSCM shall have the right as
attorney-in-fact of each member of the Purchaser Group to exercise all of the rights of the
members of the Purchaser Group hereunder and designate the members of such Purchaser Group
to receive any securities to be issued and the Company may rely on any designations made by
PSCM. As a condition to the Company’s obligations with respect to the exercise of a
Subscription Right by a member of the Purchaser Group not a party to this Agreement, such
member will agree to perform each obligation applicable to it under this Section
5.9.
(viii) General. Notwithstanding anything herein to the contrary, (A) if (1) a
member of the Purchaser Group exercises its Subscription Right pursuant to this Section
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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 by Section 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 member of the Purchaser Group 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
member of the Purchaser Group in such offering, in which event the Company and such member
of the Purchaser Group shall promptly thereafter agree on a process otherwise consistent
with this Section 5.9 as would allow such member of the Purchaser Group 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 the Purchaser Group 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 in Section 5.9(a)(iii) would materially impair
the financing objective of an offering in respect of which the members of the Purchaser
Group are entitled to Subscription Rights, the Company shall be permitted by notice to each
Purchaser to reduce the notice period required under Section 5.9(a)(iii) (but not to
less than one (1) Business Day) to the minimum extent required to meet the financing
objective of such offering and the members of the Purchaser Group shall have the right to
either (x) exercise their 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 this Section 5.9 as would allow the applicable members of
the Purchaser Group 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 the
Purchaser Group 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 the applicable
members of the Purchaser Group 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 the Purchaser Group, 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 the applicable member of the Purchaser Group was
able to effectively exercise its Subscription Rights hereunder, including, without
limitation, at the option of such member, issuing to such member of the Purchaser Group
another class of securities of the Company having terms to be agreed by the Company and such
member having a value at least equal to the value per share of New Common Stock, in each
case, as shall be necessary to enable the Purchaser Group to maintain its
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aggregate proportionate New Common Stock-equivalent interest in the Company on a Fully
Diluted Basis.
(ix) Termination. This Section 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.
(b) GGO Subscription Rights. The Plan shall provide that in connection with the
consummation of the Plan, GGO shall enter into an agreement with each Purchaser with substantially
similar terms to those set forth in Section 5.9(a) above with respect to any issuance of
GGO Common Stock (or securities that are convertible into or exchangeable or exercisable for, or
otherwise linked to, GGO Common Stock) after the Effective Date.
SECTION 5.10 Company Board of Directors.
(a) Company Board of Directors. The Plan shall provide that as of the Effective Date,
the Company Board shall have nine (9) members and one (1) of such members shall be a person
designated by PSCM (the “Purchaser Board Designee”); provided, that such designee
shall be identified by name and in writing to the Company no later than 10 Business Days prior to
the voting deadline established by the Bankruptcy Court. Subject to the rights provided under the
other Investment Agreements, the remaining members of the Company Board on the Effective Date shall
be chosen by the Company in consultation with each Purchaser.
(b) GGO Board of Directors.
(i) The Plan shall provide that as of the Effective Date, the board of directors of GGO
(the “GGO Board”) shall have nine (9) members and two (2) of such members shall be
persons designated by PSCM (the “Purchaser GGO Board Designees”), to separate
classes of directors of the GGO Board (if GGO has a staggered board of directors);
provided, that such designees shall be identified by name and in writing to the
Company no later than 10 Business Days prior to the voting deadline established by the
Bankruptcy Court. Subject to the rights provided under the other Investment Agreements, the
remaining members of the GGO Board on the Effective Date shall be chosen by the Company in
consultation with each Purchaser.
(ii) Unless each Purchaser has otherwise agreed, the Plan shall provide, in connection
with the consummation of the Plan, for GGO to enter into an agreement with each Purchaser
(the “GGO Agreement”) providing as follows:
(1) That following the Closing, GGO shall nominate two (2) Purchaser GGO
Board Designees 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)) so long as the
Purchaser Group beneficially owns (directly or indirectly) in the aggregate
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at least 10% of the shares of GGO Common Stock on a Fully Diluted Basis.
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 to Section 5.10(b)(ii)(2), (A) PSCM shall have the
power to designate a Purchaser GGO Board Designee’s 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
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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.
SECTION 5.11 Notification of Certain Matters.
(a) The Company shall (i) give prompt written notice to each Purchaser of any written notice
or other written communication from any Person alleging that the consent of such Person which is or
may be required in connection with the transactions contemplated by this Agreement is not likely to
be obtained prior to Closing, if the failure to obtain such consent would reasonably be expected to
be adverse and material to the Company and its Subsidiaries taken as a whole or would materially
impair the ability of the Company to consummate the transactions contemplated hereby or perform its
obligations hereunder, and (ii) facilitate adding such individuals as designated by each Purchaser
to the electronic notification system such that the designated individuals will receive electronic
notice of the entry of any Bankruptcy Court Order.
(b) To the extent permitted by applicable Law, (i) the Company shall give prompt notice to
each Purchaser of the commencement of any investigation, inquiry or review by any Governmental
Entity with respect to the Company or its Subsidiaries which would reasonably be expected to be
adverse and material to the Company and its Subsidiaries taken as a whole or would materially
impair the ability of the Company to consummate the transactions contemplated hereby or perform its
obligations hereunder, and (ii) the Company shall give prompt notice to each Purchaser, and each
Purchaser shall give written prompt notice to the Company, of any event or circumstance that would
result in any representation or warranty of the Company or such Purchaser, as applicable, being
untrue or any covenant or agreement of the Company or such Purchaser, as applicable, not being
performed or complied with such that, in each such case, the conditions set forth in Article
VII or Article VIII, as applicable, would not be satisfied if such event or
circumstance existed on the Closing Date.
(c) No information received by a party pursuant to this Section 5.11 nor any
information received or learned by a party or any of its representatives pursuant to an
investigation made under this Section 5.11 shall be deemed to (A) qualify, modify, amend or
otherwise affect any representations, warranties, conditions, covenants or other agreements of the
other party set forth in this Agreement, (B) amend or otherwise supplement the information set
forth in the Company Disclosure Letter, (C) limit or restrict the remedies available to such party
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under this Agreement, applicable Law or otherwise arising out of a breach of this Agreement, or (D)
limit or restrict the ability of such party to invoke or rely on, or effect the satisfaction of,
the conditions to the obligations of such party to consummate the transactions contemplated by this
Agreement set forth in Article VII or Article VIII, as applicable.
SECTION 5.12 Further Assurances. From and after the Closing, the Company shall (and
shall cause each of its Subsidiaries to) execute and deliver, or cause to be executed and
delivered, such further instruments or documents or take such other action and cause entities
controlled by them to take such action as may be reasonably necessary (or as reasonably requested
by any Purchaser) to carry out the transactions contemplated by this Agreement.
SECTION 5.13 Xxxxxx Heirs Obligations. (a) In the event holders of Xxxxxx Heirs
Obligations receive shares of New Common Stock on account of such Xxxxxx Heirs Obligations in the
Plan, the number of shares of New Common Stock otherwise available for distribution on the
Effective Date under the Plan in the Equity Exchange shall be reduced by the number of shares of
New Common Stock issued or issuable to such holders of Xxxxxx Heirs Obligations.
(b) In the event holders of Xxxxxx Heirs Obligations receive shares of GGO Common Stock on
account of such Xxxxxx Heirs Obligations in the Plan, the number of shares of GGO Common Stock
otherwise available for distribution on the Effective Date under the Plan in the GGO Share
Distribution shall be reduced by the number of shares of GGO Common Stock issued or issuable to
such holders of Xxxxxx Heirs Obligations.
SECTION 5.14 Rights Agreement; Reorganized Company Organizational Documents.
(a) Prior to the issuance of the Warrants, the Rights Agreement shall be amended to provide
that (i) the Rights Agreement is inapplicable to (1) the acquisition by members of the Purchaser
Group of the Warrants, the underlying securities thereof, (2) any antidilution adjustments to those
Warrants pursuant to the Warrant Agreement, (3) any shares of New Common Stock that a Purchaser or
a member of its Purchaser Group may be deemed to own by no actions of its own and (4) up to an
additional amount totaling 0.714% of the issued and outstanding shares of Common Stock in the
aggregate by the Purchaser Group, (ii) no Purchaser, or any member of the Purchaser Group, shall be
deemed to be an Acquiring Person (as defined in the Rights Agreement), (iii) neither a Shares
Acquisition Date (as defined in the Rights Agreement) nor a Distribution Date (as defined in the
Rights Agreement) shall be deemed to occur and (iv) the Rights (as defined in the Rights Agreement)
shall not separate from the Common Stock, in each case under (ii), (iii) and (iv), as a result of
the acquisition by members of the Purchaser Group of the Warrants, the underlying securities
thereof and the acquisition of beneficial ownership of up to an additional amount totaling 0.714%
of the issued and outstanding shares of Common Stock in the aggregate by the Purchaser Group.
(b) The certificate of incorporation and bylaws of the Reorganized Company (the
“Reorganized Company Organizational Documents”) shall be in form mutually agreed to by the
Company and each Purchaser, provided, that in the event that the Company and such Purchaser
are not able to agree on such form prior to the Effective Date, the Reorganized Company Organizational Documents
shall be substantially in the same form as the certificate of incorporation and bylaws of the
Company as in existence on the date of this Agreement (except
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that the number of authorized shares
of capital stock of the Reorganized Company shall be increased), provided, however,
that (i) the restriction on Beneficial Ownership (as such term is defined in the certificate of
incorporation of the Company) shall be set at 9.9% of the outstanding capital stock of the
Reorganized Company, (ii) the restriction on Constructive Ownership (as such term is defined in the
certificate of incorporation of the Company) shall be set at 9.9% of the outstanding capital stock
of the Reorganized Company, (iii) there shall not be an exemption from the restrictions set forth
in the foregoing clauses (i) and (ii) for the current Existing Holder (as such term is defined in
the existing certificate of incorporation of the Company), (iv) the Reorganized Company shall
provide a waiver from the restrictions set forth in the foregoing clauses (i) and (ii) to any
member of the Purchaser Group if such member provides the Reorganized Company with a certificate
containing the representations and covenants set forth on Exhibit D and (v) the definition
of “Person” shall be revised so that it does not include a “group” as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
(c) In the event the Reorganized Company adopts a rights plan analogous to the Rights
Agreement on or prior to the Closing, the Plan shall provide that (i) the Reorganized Company’s
Rights Agreement shall be inapplicable to this Agreement and the transactions contemplated hereby,
(ii) no Purchaser, nor any other member of its Purchaser Group, shall be deemed to be an Acquiring
Person (as defined in the Rights Agreement) whether in connection with the acquisition of Shares,
New Warrants, shares issuable upon exercise of the New Warrants or otherwise, (iii) neither a
Shares Acquisition Date (as defined in the Rights Agreement) nor a Distribution Date (as defined in
the Rights Agreement) shall be deemed to occur and (iv) the Rights (as defined in the Rights
Agreement) will not separate from the New Common Stock, in each case under (ii), (iii) and (iv), as
a result of the execution, delivery or performance of this Agreement, the consummation of the
transactions contemplated hereby including the acquisition of shares of New Common Stock by any
Purchaser or other member of the Purchaser Group after the date hereof as otherwise permitted by
this Agreement, the New Warrants or as otherwise contemplated by the Non-Control Agreement.
(d) In the event GGO adopts a rights plan analogous to the Rights Agreement on or prior to the
Closing, the Plan shall provide that (i) GGO’s Rights Agreement shall be inapplicable to this
Agreement and the transactions contemplated hereby, (ii) no Purchaser, nor any other member of its
Purchaser Group, shall be deemed to be an Acquiring Person (as defined in the Rights Agreement)
whether in connection with the acquisition of shares of GGO Common Stock or GGO Warrants or the
shares issuable upon exercise of the GGO Warrants, (iii) neither a Shares Acquisition Date (as
defined in the Rights Agreement) nor a Distribution Date (as defined in the Rights Agreement) shall
be deemed to occur and (iv) the Rights (as defined in the Rights Agreement) will not separate from
the GGO Common Stock, in each case under (ii), (iii) and (iv), as a result of the execution,
delivery or performance of this Agreement, or the consummation of the transactions contemplated
hereby including the acquisition of shares of GGO Common Stock by any Purchaser or other member of
the Purchaser Group after the date hereof as otherwise permitted by this Agreement, the GGO
Warrants or as otherwise contemplated by the GGO Non-Control Agreement.
SECTION 5.15 Stockholder Approval. For so long as any Purchaser has Subscription
Rights as contemplated by Section 5.9(a) in connection with the expiration of the five (5)
year
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period referenced in Section 3.2(c), the Company shall put up for a stockholder vote
at the immediately prior annual meeting of its stockholders, and include in its proxy statement
distributed to such stockholders in connection with such annual meeting, approval of such
Purchaser’s Subscription Rights for the maximum period permitted by the NYSE. The Plan shall
provide that GGO shall, for the benefit of each Purchaser, to the extent required by any U.S.
national securities exchange upon which shares of GGO Common Stock are listed, for so long as any
Purchaser has subscription rights as contemplated by Section 5.9(b), put up for a
stockholder vote at the annual meeting of its stockholders, and include in its proxy statement
distributed to such stockholders in connection with such annual meeting, approval of such
Purchaser’s subscription rights for the maximum period permitted by the rules of such U.S. national
securities exchange.
SECTION 5.16 Closing Date Net Debt.
(a) The Company shall deliver to each Purchaser a schedule (the “Preliminary Closing Date
Net Debt Schedule”) on or before the first Business Day that is five calendar days following
approval of the Disclosure Statement, that: (i) sets forth the Company’s good faith estimate for
each of the three components of the Closing Date Net Debt W/O Reinstatement Adjustment and
Permitted Claims Amounts along with a reasonably detailed explanation and calculation of each such
component and (ii) discloses the Company’s good faith estimate of the Closing Date Net Debt W/O
Reinstatement Adjustment and Permitted Claims Amounts and GGO Setup Costs.
(b) Each Purchaser shall review the Preliminary Closing Date Net Debt Schedule during the
Preliminary Closing Date Net Debt Review Period, during which time the Company shall allow such
Purchaser reasonable access to all non-privileged or work product documents or records or personnel
used in the preparation of the Preliminary Closing Date Net Debt Schedule. On or prior to the
Preliminary Closing Date Net Debt Review Deadline, any Purchaser may deliver to the Company a
notice (the “Dispute Notice”) listing those items on the Preliminary Closing Date Net Debt
Schedule to which such Purchaser takes exception, which Dispute Notice shall (i) specifically
identify such items, and provide a reasonably detailed explanation of the basis upon which such
Purchaser has delivered such list, (ii) set forth the amount of Closing Date Net Debt W/O
Reinstatement Adjustment and Permitted Claims Amounts that such Purchaser has calculated based on
the information contained in the Preliminary Closing Date Net Debt Schedule, and (iii) specifically
identify such Purchaser’s proposed adjustment(s). If a Purchaser timely provides the Company with
a Dispute Notice, then such Purchaser and the Company shall, within ten (10) days following receipt
of such Dispute Notice by the Company (the “Resolution Period”), attempt to resolve their
differences with respect to the items specified in the Dispute Notice (the “Disputed
Items”). If a Purchaser and the Company do not resolve all Disputed Items by the end of the
Resolution Period, then all Disputed Items remaining in dispute shall be submitted to the
Bankruptcy Court for resolution at or concurrent with the Confirmation Hearing. The Bankruptcy
Court shall consider only those Disputed Items that such Purchaser, on the one hand, and the
Company, on the other hand, were unable to resolve. All other matters shall be deemed to have been
agreed upon by such Purchaser and the Company. If a Purchaser does not timely deliver a Dispute Notice, then such Purchaser shall be deemed to have accepted and agreed to
the Preliminary Closing Date Net Debt Schedule and to have waived any right to dispute the matters
set forth therein.
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(c) On or prior to the Effective Date, the Company shall deliver to each Purchaser the
Conclusive Net Debt Adjustment Statement.
(d) It is the intention of the parties that releases from the Reserve are not intended to
alter the allocation of value between GGO and the Company. Accordingly, the Plan shall provide
that if there is a Reserve Surplus Amount as of the end of any fiscal quarter prior to the maturity
of the GGO Promissory Note, the principal amount of the GGO Promissory Note shall be reduced (not
below zero) (i) by 80% of the balance of the Reserve Surplus Amount corresponding to any Net Debt
Surplus Amount and (ii) if after application of the Reserve Surplus Amount pursuant to clause (i),
any Reserve Surplus Amount remains, by 100% of the remaining balance of the Reserve Surplus Amount.
In the event that any party requests an equitable adjustment to this formula, the other parties
shall consider the request in good faith.
(e) The Plan shall provide that, if there is an Offering Premium, the principal amount of the
GGO Promissory Note shall be reduced (but not below zero) by 80% of the aggregate Offering Premium
on the 31st day following the Closing Date.
(f) The Plan and the agreements relating to the GGO Share Distribution shall provide that from
and after the Closing, the Company shall indemnify GGO and its Subsidiaries from and against 93.75%
of any and all losses, claims, damages, liabilities and reasonable expenses to which GGO and its
Subsidiaries may become subject, in each case solely to the extent directly attributable to MPC
Taxes actually paid at or after the Effective Date; provided, that in no event shall the
Company be required to make any indemnification payment hereunder to the extent such payment would
result in aggregate payments under this Section 5.16(f) that would exceed the lower of (i)
$303,750,000 and (ii) the then effective Excess Surplus Amount (the “Indemnity Cap”). The
Plan shall provide that if GGO or its Affiliates receives any refund or realizes any reduction of
its Tax liability in respect of the MPC Assets for which it has received a payment or realized a
benefit pursuant to this Agreement, GGO shall pay an amount equal to such refund or reduction in
Tax liability (less any costs or Taxes incurred with respect to the receipt thereof) to the
Reorganized Company within ten (10) Business Days of the receipt or realization thereof.
(g) If GGO is obligated to pay MPC Taxes with respect to the tax year 2010 and the Company is
not then obligated to indemnify GGO as a consequence of the Indemnity Cap, then solely with respect
to such payments, the Company shall pay such amount of MPC Taxes and the principal amount of the
GGO Promissory Note shall be increased by the amount of such payment and if at such time no GGO
Promissory Note is outstanding, on the date of any such payment, GGO shall issue in favor of the
Company a promissory note in the aggregate principal amount of such payment on the same terms as
the GGO Promissory Note.
ARTICLE VI
ADDITIONAL COVENANTS OF PURCHASER
SECTION 6.1 Information. From and after the date of this Agreement until the earlier
to occur of the Closing Date and the termination of this Agreement, each Purchaser agrees to
provide the Debtors with such information as the Debtors reasonably request regarding such
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Purchaser for inclusion in the Disclosure Statement as necessary for the Disclosure Statement to
contain adequate information for purposes of Section 1125 of the Bankruptcy Code.
SECTION 6.2 Purchaser Efforts. Each Purchaser shall use its reasonable best efforts
to obtain all material permits, consents, orders, approvals, waivers, authorizations or other
permissions or actions required for the consummation of the transactions contemplated by this
Agreement from, and shall have given all necessary notices to, all Governmental Entities necessary
to satisfy the condition in Section 8.1(b) (provided, however, that such
Purchaser shall not be required to pay or cause payment of any fees or make any financial
accommodations to obtain any such consent, approval, waiver or other permission, except filing fees
as required), and provide to such Governmental Entities all such information as may be necessary or
reasonably requested relating to the transactions contemplated hereby.
SECTION 6.3 Plan Support. From and after the date of the Approval Order until the
earliest to occur of (i) the Effective Date, (ii) the termination of this Agreement and (iii) the
date the Company or any Subsidiary of the Company makes a public announcement, enters into an
agreement or files any pleading or document with the Bankruptcy Court, in each case, evidencing its
intention to support any Competing Transaction, or the Company or any Subsidiary of the Company
enters into a Competing Transaction (such date, the “Unrestricted Date”), each Purchaser
agrees (unless otherwise consented to by the Company) (provided that (x) the Company is not
in material breach of this Agreement and (y) the terms of the Plan are and remain consistent with
the Plan Summary Term Sheet and this Agreement, and are otherwise in form and substance
satisfactory to each Purchaser) to (and shall use reasonable best efforts to cause its Affiliates
to):
(a) Not pursue, propose, support, vote to accept or encourage the pursuit, proposal or support
of, any Chapter 11 plan, or other restructuring or reorganization for the Company, or any
Subsidiary of the Company, that is not consistent with the Plan;
(b) Not, nor encourage any other Person to, interfere with, delay, impede, appeal or take any
other negative action, directly or indirectly, in any respect regarding acceptance or
implementation of the Plan; and
(c) Not commence any proceeding, or prosecute any objection to oppose or object to the Plan or
to the Disclosure Statement and not to take any action that would delay approval or confirmation,
as applicable, of the Disclosure Statement and the Plan, in each case (i) except as intended to
ensure the consistency of the Disclosure Statement and the Plan with the terms of this Agreement
and the rights and obligations of the parties thereto and (ii) without limiting any rights any
Purchaser may have to terminate this Agreement pursuant to Section 11.1(b) (including
Section 11.1(b)(ix)) hereof.
SECTION 6.4 Transfer Restrictions. Each Purchaser covenants and agrees that the
Shares and the GGO Shares (and shares issuable upon exercise of Warrants, New Warrants and GGO
Warrants) shall be disposed of only pursuant to an effective registration statement under the
Securities Act or pursuant to an available exemption from the registration requirements of the
Securities Act, and in compliance with any applicable state securities Laws. Each Purchaser agrees
to the imprinting, so long as is required by this Section 6.4, of the following legend on
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any certificate evidencing the Shares or GGO Shares (and shares issuable upon exercise of Warrants,
New Warrants and GGO Warrants):
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE
“ACT”) OR UNDER ANY STATE SECURITIES LAWS (“BLUE SKY”) OR THE SECURITIES LAWS OF
ANY OTHER RELEVANT JURISDICTION. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE. THE SHARES MAY NOT BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, ENCUMBERED,
HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS EITHER (I) A REGISTRATION STATEMENT WITH
RESPECT TO THE SHARES IS EFFECTIVE UNDER THE ACT AND APPLICABLE BLUE SKY LAWS AND THE SECURITIES
LAWS OF ANY OTHER RELEVANT JURISDICTION ARE COMPLIED WITH OR (II) UNLESS WAIVED BY THE ISSUER, THE
ISSUER RECEIVES AN OPINION OF LEGAL COUNSEL SATISFACTORY TO THE ISSUER THAT NO VIOLATION OF THE ACT
OR OTHER APPLICABLE LAWS WILL BE INVOLVED IN SUCH TRANSACTION.
Certificates evidencing the Shares (and shares issuable upon exercise of Warrants and New
Warrants) shall not be required to contain such legend (A) while a registration statement covering
the resale of the Shares is effective under the Securities Act, or (B) following any sale of any
such Shares pursuant to Rule 144 of the Exchange Act (“Rule 144”), or (C) following receipt
of a legal opinion of counsel to the applicable Purchaser that the remaining Shares held by such
Purchaser are eligible for resale without volume limitations or other limitations under Rule 144.
In addition, the Company will agree to the removal of all legends with respect to shares of New
Common Stock deposited with DTC from time to time in anticipation of sale in accordance with the
volume limitations and other limitations under Rule 144, subject to the Company’s approval of
appropriate procedures, such approval not to be unreasonably withheld, conditioned or delayed.
Following the time at which such legend is no longer required (as provided above) for certain
Shares, the Company shall promptly, following the delivery by the applicable Purchaser to the
Company of a legended certificate representing such Shares, deliver or cause to be delivered to
such Purchaser a certificate representing such Shares that is free from such legend. In the event
the above legend is removed from any of the Shares, and thereafter the effectiveness of a
registration statement covering such Shares is suspended or the Company determines that a
supplement or amendment thereto is required by applicable securities Laws, then the Company may
require that the above legend be placed on any such Shares that cannot then be sold pursuant to an
effective registration statement or under Rule 144 and such Purchaser shall cooperate in the
replacement of such legend. Such legend shall thereafter be removed when such Shares may again be
sold pursuant to an effective registration statement or under Rule 144.
The Plan shall provide, in connection with the consummation of the Plan, for GGO to enter into
an agreement with each Purchaser with respect to GGO Shares and GGO Warrants containing the same
terms as provided (i) above in this Section 6.4 but replacing references to (A) “the
Company” with GGO, (B) “New Common Stock” with GGO Common Stock, (C) “Shares” with “GGO Shares” and
(D) “Warrants” or “New Warrants” with GGO Warrants.
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Each Purchaser further covenants and agrees not to sell, transfer or dispose of the Warrants
or the shares of Common Stock issuable upon exercise of the Warrants (other than to a member of the
Purchaser Group) prior to the Unrestricted Date or any Shares, New Shares or Warrants in violation
of the Non-Control Agreement.
For the avoidance of doubt, the Purchaser Group’s rights to designate for nomination the
Purchaser Board Designee and Purchaser GGO Board Designees pursuant to Section 5.10 and
Subscription Rights pursuant to Section 5.9 may not be Transferred to a Person that is not
a member of the Purchaser Group.
SECTION 6.5 [Intentionally omitted.]
SECTION 6.6 REIT Representations and Covenants. At such times as shall be reasonably
requested by the Company, for so long as any Purchaser (or, to the extent applicable, its
Affiliates, members or Affiliates of members) “beneficially owns” or “constructively owns” (as such
terms are defined in the certificate of incorporation of the Company) in excess of the relevant
ownership limit set forth in the certificate of incorporation of the Company of the outstanding
Common Stock or New Common Stock, such Purchaser shall (and, to the extent applicable, cause its
Affiliates, members or Affiliates of members to) use reasonable best efforts to provide the Company
with customary representations and covenants, in the form attached hereto as Exhibit D
which shall, among other things, enable the Company to waive Purchaser from the ownership limit set
forth in the certificate of incorporation of the Company and ensure that the Company can
appropriately monitor any “related party rent” issues raised by the Warrants and the purchase of
the Shares by such Purchaser, it being understood that Purchaser’s Affiliates, members or
Affiliates of members shall be required to provide such representations and covenants only if such
Person “beneficially owns” or “constructively owns” (as such terms are defined in the certificate
of incorporation of the Company) Common Stock or New Common Stock in excess of the relevant
ownership limit set forth in the certificate of incorporation of the Company or any stock or other
equity interest owned by such Person in a tenant of the Company would be treated as constructively
owned by the Company.
SECTION 6.7 Non-Control Agreement. At or prior to the Closing, each Purchaser shall
enter into (1) the Non-Control Agreement with the Company and (2) the GGO Non-Control Agreement
with GGO.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
SECTION 7.1 Conditions to the Obligations of Purchaser. The obligation of each
Purchaser to purchase the Shares (and the GGO Shares if the GGO Rights Offering shall have
occurred) pursuant to this Agreement on the Closing Date is subject to the satisfaction (or
waiver (to the extent permitted by applicable Law) by such Purchaser) of the following conditions
as of the Closing Date:
(a) No Injunction. No judgment, injunction, decree or other legal restraint shall
prohibit the consummation of the Plan or the transactions contemplated by this Agreement.
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(b) Regulatory Approvals; Consents. All permits, consents, orders, approvals,
waivers, authorizations or other permissions or actions of third parties and Governmental Entities
required for the consummation of the transactions contemplated by this Agreement and the Plan shall
have been made or received, as the case may be, and shall be in full force and effect, except for
those permits, consents, orders, approvals, waivers, authorizations or other permissions or actions
the failure of which to make or receive would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect (it being agreed that any permit, consent, order,
approval, waiver, authorization or other permission or action in respect of any Identified Asset
for which any of the alternatives in Section 2.1(a) shall have been employed shall be
deemed hereunder to have been made or received, as the case may be, and in full force and effect).
(c) Representations and Warranties and Covenants. Except for changes permitted or
contemplated by this Agreement or the Plan Summary Term Sheet, each of (i) the representations and
warranties of the Company contained in Section 3.1, Section 3.2, Section
3.3, Section 3.5, Section 3.20(a) (except for such inaccuracies in Section
3.20(a) caused by sales, purchases or transfers of assets which have been 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, this Article VII)
and Section 3.23 shall be true and correct at and as of the Closing Date as if made at and
as of the Closing Date (except for representations and warranties made as of a specific date, which
shall be true and correct only as of such specific date), (ii) the representations and warranties
of the Company contained in Section 3.4 shall be true and correct (except for de minimis
inaccuracies) at and as of the Closing Date as if made at and as of the Closing Date (except for
representations and warranties made as of a specific date, which shall be true and correct (except
for de minimis inaccuracies) only as of such specific date) and (iii) the other representations and
warranties of the Company contained in this Agreement, 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
representations and warranties made as of a specified date, which shall be true and correct only as
of the specified date), except for such failures to be true and correct that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse Effect (it being agreed
that the condition in this subclause (iii) as it relates to undisclosed liabilities of the Company
and its Subsidiaries comprised of Indebtedness shall be deemed to be satisfied if the condition in
Section 7.1(p) is satisfied. The Company shall have complied in all material respects with
all of its obligations under this Agreement, provided that with respect to its obligations under
Section 5.4, Section 5.13, Section 5.14(b) (to the extent applicable) and
Section 5.14(c) the Company shall have complied therewith in all respects. The Company
shall have provided to each Purchaser a certificate delivered by an executive officer of the
Company, acting in his or her official capacity on behalf of the Company, to the effect that the
conditions in this clause (c) and the immediately following clause (d) have been satisfied as of the Closing Date and each Purchaser shall have received
such other evidence of the conditions set forth in this Section 7.1 as it shall reasonably
request.
(d) No Material Adverse Effect. Since the date of this Agreement, there shall not
have occurred any event, fact or circumstance, that has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
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(e) Plan and Confirmation Order. The Plan, in form and substance satisfactory to each
Purchaser, shall have been confirmed by the Bankruptcy Court by order in form and substance
satisfactory to each Purchaser (the “Confirmation Order”), which Confirmation Order shall
be in full force and effect (without waiver of the 14-day period set forth in Bankruptcy Rule
3020(e)) as of the Effective Date and shall not be subject to a stay of effectiveness.
Notwithstanding anything to the contrary in the Plan Term Sheet, the Plan shall have not reinstated
any Specified Debt without giving each holder of Specified Debt the option to receive cash in an
amount equal to par plus unpaid pre-petition and post-petition interest accrued at the stated
non-default rate (or contract rate in the case of Class M).
(f) Disclosure Statement. The Disclosure Statement, in form and substance acceptable
to each Purchaser, shall have been approved by order of the Bankruptcy Court in form and substance
satisfactory to each Purchaser (the “Disclosure Statement Order”).
(g) Conditions to Confirmation. The conditions to confirmation and the conditions to
the Effective Date of the Plan, including the consummation of the transactions contemplated by
Exhibit B, shall have been satisfied or waived in accordance with the Plan and the
Reorganized Company Organizational Documents as set forth in the Plan shall be in effect.
(h) GGO. The GGO Share Distribution and the issuance by GGO of the GGO Warrants shall
have occurred in accordance with this Agreement. In connection with the implementation of the GGO
Share Distribution, (i) the Company shall have provided each Purchaser with reasonable access to
all relevant information and consulted and cooperated in good faith with each Purchaser and the GGO
Representative with respect to the contribution of the Identified Assets to GGO in accordance with
Section 2.1(a), and (ii) all actions taken by the Company and its Subsidiaries related
thereto and all documentation related to the formation and organization of GGO, the implementation
of the GGO Share Distribution, to separate the business of the Company and GGO and other
intercompany arrangements between the Company and GGO, in each case, shall be reasonably
satisfactory to each Purchaser and shall be in full force and effect.
(i) GGO Common Stock. GGO shall not have issued and outstanding on a Fully Diluted
Basis immediately following the Closing more than (i) the GGO Common Share Amount of shares of GGO
Common Stock (plus (A) a number of shares of GGO Common Stock equal to the sum of the Backstop
Consideration and the backstop consideration issuable to the Fairholme Purchasers and the
Brookfield Consortium Members pursuant to the other Investment Agreements, (B) 20,000,000 shares of
GGO Common Stock issuable upon exercise of the GGO Warrants, (C) 60,000,000 shares of GGO Common
Stock issuable upon the exercise of warrants that may be issued to the other Initial Investors
pursuant to the other Investment Agreements), plus (ii) if the GGO Rights Offering shall have occurred, 50,000,000 shares of GGO Common
Stock issued pursuant to the GGO Rights Offering in accordance with this Agreement.
(j) Valid Issuance. The Shares, Warrants, New Warrants and GGO Warrants and, if the
GGO Rights Offering shall have occurred, the GGO Shares, shall be validly issued to each Purchaser
(against payment therefor in the case of the Shares and the GGO Shares). The Company and GGO shall
have executed and delivered the warrant agreement for each of the New Warrants and the GGO
Warrants, together with such other customary documentation as
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each Purchaser may reasonably request
in connection with such issuance; each warrant agreement shall be in full force and effect and
neither the Company nor GGO shall be in breach of any representation, warranty, covenant or
agreement thereunder in any material respect.
(k) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that prohibits the issuance or sale of, pursuant to
this Agreement, the Shares, the issuance of Warrants, New Warrants, GGO Shares, GGO Warrants, the
issuance of New Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock
upon exercise of the GGO Warrants; and no injunction or order of any federal, state or foreign
court shall have been issued that prohibits the issuance or sale, pursuant to this Agreement, of
the Shares, the GGO Shares, the Warrants, New Warrants, GGO Warrants, the issuance of New Common
Stock upon exercise of the New Warrants or the issuance of GGO Common Stock upon exercise of the
GGO Warrants.
(l) Registration Rights. The Company shall have filed with the SEC and the SEC shall
have declared effective, as of Closing, to the extent permitted by applicable SEC rules, a shelf
registration statement on Form S-1 or Form S-11, as applicable, covering the resale by each
Purchaser and member of the Purchaser Group of the Shares and the New Common Stock issuable upon
exercise of the New Warrants, containing a plan of distribution reasonably satisfactory to each
Purchaser. In addition, each of the Company and GGO shall have entered into registration rights
agreements with each Purchaser with respect to all registrable securities issued to or held by
members of the Purchaser Group from time to time in a manner that permits the registered offering
of securities pursuant to such methods of sale as a Purchaser may reasonably request from time to
time. Each registration rights agreement shall provide for (i) an unlimited number of shelf
registration demands on Form S-3 to the extent that the Company or GGO, as applicable, is then
permitted to file a registration statement on Form S-3, (ii) if the Company or GGO, as applicable,
is not eligible to use Form S-3, the filing by the Company or GGO, as applicable, of a registration
statement on Form S-1 or Form S-11, as applicable, and the Company or GGO, as applicable, using its
reasonable best efforts to keep such registration statement continuously effective; (iii) piggyback
rights not less favorable than those provided in the Warrant Agreement; (iv) with respect to the
Company, at least three underwritten offerings during the term of the registration rights
agreement, but not more than one underwritten offering in any 12-month period and, with respect to
GGO, at least three underwritten offerings during the term of the registration rights agreement,
but not more than one in any 12-month period; (v) “black-out” periods not less favorable than those
provided in the Warrant Agreement; (vi) “lock-up” agreements by the Company or GGO, as applicable,
to the extent requested by the managing underwriter in any underwritten public offering requested
by a Purchaser, consistent with those provided in the Warrant Agreement (it being understood that
the registration rights agreement will include procedures reasonably acceptable to such Purchaser and the Company designed to
ensure that the total number of days that the Company or GGO, as applicable, may be subject to a
lock-up shall not, in the aggregate after taking into account any applicable lock-up periods
resulting from registration rights agreements between the Company or GGO, as applicable, and the
other Initial Investors exceed 120 days in any 365-day period; (vii) to the extent that the
Purchasers and the members of the Purchaser Group are Affiliates of the Company or GGO, as
applicable, at the time of an underwritten public offering by the Company or GGO, as applicable,
each Purchaser and the other members of the Purchaser Group will agree to a 60-day customary
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lock
up to the extent requested by the managing underwriter; and (viii) other terms and conditions
reasonably acceptable to each Purchaser. The registration rights agreement shall be in full force
and effect and neither the Company nor GGO shall be in breach of any representation, warranty,
covenant or agreement thereunder in any material respect.
(m) Listing. The Shares shall be authorized for listing on the NYSE, subject to
official notice of issuance, and the shares of New Common Stock issuable upon exercise of the New
Warrants shall be eligible for listing on the NYSE. If the GGO Rights Offering shall have
occurred, the GGO Shares shall be authorized for listing on a U.S. national securities exchange,
subject to official notice of issuance, and the shares of GGO Common Stock issuable upon exercise
of the GGO Warrants shall be eligible for listing on a U.S. national securities exchange.
(n) Liquidity. The Company shall have, upon the consummation of the Plan and after
giving effect to the use of proceeds from Capital Raising Activities permitted under this Agreement
and the issuance of the Shares, and the payment and/or reserve for all allowed and disputed claims
under the Plan, transaction fees and other amounts required to be paid in cash under the Plan as
contemplated by the Plan Summary Term Sheet, an aggregate amount of not less than $500,000,000 of
Proportionally Consolidated Unrestricted Cash (the “Liquidity Target”) plus, the net
proceeds of the Additional Financings and the aggregate principal amount of the Anticipated Debt
Paydowns (or such higher number as may be agreed to by each Purchaser and the Company).
(o) Board of Directors. Each of the persons designated by PSCM pursuant to
Section 5.10 shall have been duly appointed to each of the Company Board and the GGO Board.
(p) Debt of the Company. Immediately following the Closing after giving effect to the
Plan, the aggregate outstanding Proportionally Consolidated Debt shall not exceed $22,100,000,000
in the aggregate minus (i) the amount of Proportionally Consolidated Debt attributable to assets
sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between
the date of this Agreement through the Closing and minus (ii) the excess, if any, of $1,500,000,000
over the aggregate principal amount of new Unsecured Indebtedness incurred after the date of this
Agreement and on or prior to the Closing Date for cash (“New Debt”) and the aggregate
principal amount of any Debt under the Xxxxx Bonds or the Exchangeable Notes that is reinstated
under the Plan (such amounts reinstated, the “Reinstated Amounts”) minus (iii) the amount
of Proportionally Consolidated Debt attributable to Identified Assets contributed to GGO pursuant
to Section 2.1(a), minus (iv) the amount of Proportionally Consolidated Debt attributable
to assets other than Identified Assets contributed to GGO pursuant to Section 2.1(a) minus
(v) the principal and/or liquidation preference of the TRUPS and the UPREIT Units not reinstated,
plus (vi) in the event the Closing occurs prior to September 30, 2010, the amount of scheduled
amortization on Proportionally Consolidated Debt (other than Corporate Level Debt) from the Closing
Date to September 30, 2010 that otherwise would have been paid by September 30, 2010, minus (vii)
in the event the Closing occurs on or after September 30, 2010, the amount of actual amortization
paid on Proportionally Consolidated Debt (other than Corporate Level Debt) from September 30, 2010
to the Closing Date, plus (viii) (A) the excess of the aggregate principal amount of new Debt
incurred to refinance existing Debt in accordance with Section 7.1(r)(vii) hereof over the
principal amount of the Debt so refinanced and (B) new Debt incurred to finance unencumbered
Company Properties and Non-Controlling
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Properties after the date of this Agreement and on or prior
to the Closing (such amounts contemplated by clauses (A) and (B) collectively, the “Additional
Financing”) plus (ix) the amount of other principal paydowns, writedowns and resulting impact
on amortization (or payments in the anticipated amortization schedule with respect to Fashion Show
Mall (Fashion Show Mall LLC), The Shoppes at the Palazzo and Oakwood Shopping Center (Gretna, LA))
currently anticipated to be made by the Company in connection with refinancings, or completion of
negotiations in respect of its property level Debt which the Company determines in good faith are
not actually required to be made prior to Closing (“Anticipated Debt Paydowns”).
(q) Outstanding Common Stock. The number of issued and outstanding shares of New
Common Stock on a Fully Diluted Basis (including the Shares) shall not exceed the Share Cap Number.
The “Share Cap Number” means 1,104,683,256 plus up to 50,000,000 shares of New Common
Stock issued in Liquidity Equity Issuances, plus 17,142,857 shares of New Common Stock issuable
upon the exercise of the New Warrants and plus the shares of New Common Stock issuable upon the
exercise of those certain warrants issued to the Brookfield Consortium Members pursuant to the
Brookfield Agreement and to the Fairholme Purchasers pursuant to the Fairholme Agreement and plus
the number of shares of Common Stock issued as a result of the exercise of employee stock options
to purchase Common Stock outstanding on the date hereof; provided, that if Indebtedness
under the Xxxxx Bonds or the Exchangeable Notes is reinstated under the Plan or the Company shall
have incurred New Debt, or between the date of this Agreement and the Closing Date the Company
shall have sold for cash real property assets outside of the ordinary course of business
(“Asset Sales”), the Share Cap Number shall be reduced by the quotient (rounded up to the
nearest whole number) obtained by dividing (x) the sum of Reinstated Amounts and the net cash
proceeds to the Company from Asset Sales in excess of $150,000,000 and the issuance of New Debt by
(y) the Per Share Purchase Price.
(r) Conduct of Business. The following shall be true in all material respects as of
the Closing Date:
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 by
Article 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):
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(i) |
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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 on
Section 7.1(r)(i) of the Company Disclosure Letter or pursuant
to Company |
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Benefit Plans) any shares of its capital stock or any
rights, warrants or options to acquire any such shares; |
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(ii) |
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the Company shall not have amended the
Company’s certificate of incorporation or bylaws other than to increase
the authorized shares of capital stock; |
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(iii) |
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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; |
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(iv) |
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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; |
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(v) |
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[intentionally omitted;] |
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(vi) |
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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
to Section 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 or (D) as set forth on
Section 7.1(u) of the Company Disclosure Letter); |
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(vii) |
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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 |
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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) |
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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 |
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(ix) |
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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). |
(s) REIT Opinion. Each Purchaser shall have received an opinion of Xxxxxx & Xxxxxx
LLP, dated as of the Closing Date, substantially in the form attached hereto as Exhibit J,
that the Company (x) for all taxable years commencing with the taxable year ended December 31, 2005
through December 31, 2009, has been subject to taxation as a REIT and (y) has operated since
January 1, 2010 to the Closing Date in a manner consistent with the requirements for qualification
and taxation as a REIT.
(t) Non-Control Agreements.
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(i) |
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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. |
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(ii) |
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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. |
(u) Issuance or Sale of Common Stock. Neither the Company nor any of its Subsidiaries
shall have issued or sold any shares of Common Stock (or securities, warrants or options that are
convertible into or exchangeable or exercisable for, or linked to the performance of, Common Stock)
(other than (A) pursuant to the Equity Exchange, (B) the issuance of shares pursuant to the
exercise of employee stock options issued pursuant to the Company Option Plans or (C) as set forth
on Section 7.1(u) of the Company Disclosure Letter), unless (1) the 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, the conversion, exchange or exercise price) shall not be less
than $10.00 per share (net of all underwriting and other discounts, fees and any other
compensation), (2) following such issuance or sale, (x) no Person (other than (i) the other Initial
Investors pursuant to the other Investment Agreements and (ii) any institutional underwriter or
initial purchaser acting in an underwriter capacity in an underwritten offering) shall, after
giving effect to such issuance or sale, beneficially owns more than 10% of the Common Stock of the
Company on a Fully Diluted Basis, and (y) no five Persons (other than the Purchasers, the members
of the Pershing Purchaser Group, the members of the Fairholme Purchaser Group, the Brookfield
Consortium Members or the Brookfield Investor) shall, after giving effect to such issuance or sale,
beneficially own more than thirty percent (30%) of the Common Stock on a Fully Diluted Basis;
provided, that this clause (2) shall not be applicable to any conversion or exchange of
claims against the Debtors into New Common Stock pursuant to the Plan; provided,
further, that subclause (y) of this clause (2) shall not be applicable with respect to any
Person listed on Exhibit N and (3) each Purchaser shall have been offered the right to
purchase up to its GGP Pro Rata Share of 15% of such shares of Common Stock (or securities,
warrants or options that are convertible into or exchangeable or exercisable for Common Stock) on
terms otherwise consistent with Section 5.9 (except the provisions of such Section
5.9 with respect to issuances contemplated by this Section 7.1(u) shall apply from the date of this Agreement)
(provided, that the right described in this clause (3) shall not be applicable to the
issuance of shares or warrants contemplated by the other Investment Agreements, or any conversion
or exchange of debt or other claims into equity in connection with the Plan).
(v) Xxxxxx Heirs Obligations. The Xxxxxx Heirs Obligations shall have been determined
by order of the Bankruptcy Court entered on or prior to the Effective Date (which order may be the
Confirmation Order or another order entered by the Bankruptcy Court) and satisfied in accordance
with the terms of the Plan.
(w) GGO Promissory Note. The GGO Promissory Note, if any, shall have been issued by
GGO in favor of the Reorganized Company.
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(x) Other Conditions. With respect to each other Initial Investor, either (A) its
Investment Agreement shall be in full force and effect without amendments or modifications (other
than those that are materially no less favorable to the Company than those provided in such
Investment Agreement as in effect on the date hereof), the conditions to the consummation of the
transactions under such Investment Agreement as in effect on the date hereof to be performed on the
Closing Date shall have been satisfied or waived with the prior written consent of each Purchaser,
and such Initial Investor shall have subscribed and paid for such shares of New Common Stock that
such Initial Investor is obligated to purchase thereunder, (B) the funding to be provided by such
Initial Investor under its Investment Agreement shall have been provided by one or more other
investors or purchasers acceptable to each Purchaser on terms and conditions that such Purchaser
has agreed are materially no less favorable to the Company than the terms and conditions of the
applicable Investment Agreement as in effect on the date hereof or (C) in the case of an Initial
Investor (other than a Brookfield Consortium Member), such Initial Investor has breached its
obligation to fund at Closing when required to do so in accordance with the terms of its Investment
Agreement (it being understood that the foregoing shall not limit the Company’s right to reduce the
Total Purchase Amount under Section 1.4 hereof).
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
SECTION 8.1 Conditions to the Obligations of the Company. The obligation of the
Company to issue the Shares (and the obligation of GGO to issue the GGO Shares, if the GGO Rights
Offering shall have occurred) pursuant to this Agreement on the Closing Date are subject to the
satisfaction (or waiver by the Company) of the following conditions as of the Closing Date:
(a) No Injunction. No judgment, injunction, decree or other legal restraint shall
prohibit the consummation of the Plan or the transactions contemplated by this Agreement.
(b) Regulatory Approvals; Consents. All permits, consents, orders, approvals,
waivers, authorizations or other permissions or actions of third parties and Governmental Entities
required for the consummation of the transactions contemplated by this Agreement and the Plan shall have been made or received, as the case may be, and shall be in full force and effect,
except for those permits, consents, orders, approvals, waivers, authorizations or other permissions
or actions the failure of which to make or receive would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(c) Representations and Warranties and Covenants. Each of (i) the representations and
warranties of each Purchaser contained in Section 4.1, Section 4.2, Section
4.3, and Section 4.12 in this Agreement shall be true and correct at and as of the
Closing Date as if made at and as of the Closing Date (except for representations and warranties
made as of a specific date, which shall be true and correct only as of such specific date), and
(ii) the other representations and warranties of each Purchaser contained in this Agreement,
disregarding all qualifications and exceptions contained therein relating to “materiality”, shall
be true and correct at and as of the date of this Agreement and at and as of the Closing Date as if
made at and as of the Closing Date
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(except for representations and warranties made as of a
specified date, which shall be true and correct only as of the specified date), except for such
failures to be true and correct that, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the ability of such Purchaser to consummate the
transactions contemplated by this Agreement. Each Purchaser shall have complied in all material
respects with all of its obligations under this Agreement. Each Purchaser shall have provided to
the Company a certificate delivered by an executive officer of the managing member of such
Purchaser, acting in his or her official capacity on behalf of such Purchaser, to the effect that
the conditions in this clause (c) have been satisfied as of the Closing Date.
(d) Plan and Confirmation Order. The Plan shall have been confirmed by the Bankruptcy
Court by order, which order shall be in full force and effect and not subject to a stay of
effectiveness.
(e) Conditions to Confirmation. The conditions to confirmation and the conditions to
the Effective Date of the Plan shall have been satisfied or waived in accordance with the Plan.
(f) GGO. The GGO Share Distribution shall have occurred.
(g) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that prohibits the issuance or sale of, pursuant to
this Agreement, the Shares, the issuance of Warrants, New Warrants, GGO Shares, GGO Warrants, the
issuance of New Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock
upon exercise of the GGO Warrants; and no injunction or order of any federal, state or foreign
court shall have been issued that prohibits the issuance or sale, pursuant to this Agreement, of
the Shares, the GGO Shares, the Warrants, the New Warrants, GGO Warrants, the issuance of New
Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock upon exercise of
the GGO Warrants.
(h) Reorganization Opinion. The Company shall have received an opinion of Weil,
Gotshal & Xxxxxx LLP, dated as of the Closing Date, in form and substance reasonably satisfactory
to the Company, substantially to the effect that, on the basis of the facts, representations and
assumptions set forth in such opinion, the exchange of Common Stock for New Common Stock in the Equity Exchange should be treated as a reorganization within the
meaning of Section 368(a) of the Code. In rendering such opinion, Weil, Gotshal & Xxxxxx LLP may
require and rely upon representations and covenants made by the parties to this Agreement.
(i) IRS Ruling. The Company shall have obtained a favorable written ruling from the
United States Internal Revenue Service confirming the qualification of each of the GGO Share
Distribution and the prerequisite internal spin-offs each as a “tax free spin-off” under the Code.
(j) Funding. The applicable Purchaser shall have paid to the Company and, if the GGO
Rights Offering shall have occurred, GGO, as applicable, all amounts payable by such Purchaser
under Article I and Article II of this Agreement, by wire transfer of immediately
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available funds to such account or accounts as shall have been designated in writing by the Company
at least three (3) Business Days prior to the Closing Date.
(k) REIT Matters. The representations and covenants set forth on Exhibit D in respect
of the applicable Purchaser and, to the extent applicable, its Affiliates, members, Affiliates of
members or designees, shall be true and correct in all material respects as of the Closing Date as
if made at and as of the Closing Date, it being understood that such Purchaser’s Affiliates,
members or Affiliates of members shall be required to provide such representations and covenants
only if such Person “beneficially owns” or “constructively owns” (as such terms are defined in the
certificate of incorporation of the Company) Common Stock or New Common Stock in excess of the
relevant ownership limit set forth in the certificate of incorporation of the Company or any stock
or other equity interest owned by such Person in a tenant of the Company would be treated as
constructively owned by the Company.
(l) Non-Control Agreements. Each Purchaser shall have entered into (i) the
Non-Control Agreement with the Company and (ii) the GGO Non-Control Agreement with GGO. Each of
the Non-Control Agreement and the GGO Non-Control Agreement shall be in full force and effect and
such Purchaser shall not be in breach of any representation, warranty, covenant or agreement
thereunder in any material respect.
(m) GGO Promissory Note. The GGO Promissory Note, if any, shall have been issued by
GGO in favor of the Reorganized Company.
ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 10.1 Survival of Representations and Warranties. The representations and
warranties made in this Agreement shall survive the execution and delivery of this Agreement
but shall terminate and be of no further force and effect following the earlier of (i) the
termination of this Agreement in accordance with Article XI and (ii) the Closing.
ARTICLE XI
TERMINATION
SECTION 11.1 Termination. This Agreement and the obligations of the parties hereunder
shall terminate automatically without any action by any party if (i) the Company has not filed the
Approval Motion within two (2) Business Days following the date of this Agreement, (ii) the
Approval Order, in form and substance satisfactory to each Purchaser, approving, among other
things, the issuance of the Warrants and the warrants contemplated by each other Investment
Agreement, is not entered by the Bankruptcy Court on or prior to the date that is 43 days after the
date of this Agreement, (iii) if the Debtors withdraw the Approval
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Motion, or (iv) the conditions
to the obligations of any other Initial Investor pursuant to the other Investment Agreements to
consummate the closings as set forth therein are amended or modified in any respect prior to the
entry of the Approval Order, in each of cases (i), (ii), (iii) and (iv) unless each Purchaser and
the Company otherwise agrees in writing. In addition, this Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent of each Purchaser and the Company;
(b) by each Purchaser by written notice to the Company upon the occurrence of any of the
following events (which notice shall specify the event upon which such termination is based):
(i) if the Effective Date and the purchase and sale contemplated by Article I
have not occurred by the Termination Date; provided, however, that the right
to terminate this Agreement under this Section 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 Adverse Effect or (y) with respect to the
Bankruptcy Cases for Phase II Mall Subsidiary, LLC, Oakwood Shopping Center
Limited Partnership and Xxxxx 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 the Warrants or a modification of the Warrants that
adversely affects any Purchaser;
(iv) if, without a Purchaser’s consent, the Warrants have not been issued to such
Purchaser in accordance with Section 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 (A) would result in a failure of a condition set forth in Article 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;
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(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 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) 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 or (D) the issuance of shares as set forth on
Section 7.1(u) of the Company Disclosure Letter);
(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 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
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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 to Section 5.7; or
(c) by the Company upon the occurrence of any of the following events:
(i) if the Effective Date and the purchase and sale contemplated by Article I
have not occurred by the Termination Date; provided, however, that the right
to terminate this Agreement under this Section 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 to Section 11.1(c)(ii) or
any other clause of this Section 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 this Section
11.1(c)(ii) during the 48 hour notice period contemplated by Section 5.7;
(iii) if all conditions to the obligations of each Purchaser to consummate the
transactions contemplated by this Agreement set forth in Article 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 under Article
I and Article 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.
SECTION 11.2 Effects of Termination.
(a) In the event of the termination of this Agreement pursuant to Article XI, this
Agreement shall forthwith become void and there shall be no liability or obligation on the part of
any party hereto except the covenants and agreements made by the parties herein under Article
XIII shall survive indefinitely in accordance with their terms. Except as otherwise expressly
provided in the Warrants or paragraph (b) below, the Warrants when issued in accordance with
Section 5.2 hereof and all of the obligations of the Company under the Warrant Agreement
shall survive any termination of this Agreement.
(b) In the event of a termination of this Agreement by the Company pursuant to Section
11.1(c)(iii), the parties agree that the Warrants held by any member of the Purchaser Group at
the time of such termination (but no Warrants held by any other Person if transferred as permitted
hereunder) shall be deemed cancelled, null and void and of no further effect. The foregoing shall
be a term of the Warrants.
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ARTICLE XII
DEFINITIONS
SECTION 12.1 Defined Terms. For purposes of this Agreement, the following terms, when
used in this Agreement with initial capital letters, shall have the respective meanings set forth
in this Agreement:
(a) “
2006 Bank Loan” means that certain Second Amended and Restated Credit Agreement,
dated as of February 24, 2006, by and among the Company, the Operating Partnership and GGPLP
L.L.C., as borrowers, the lenders named therein, Banc of America Securities LLC, Eurohypo AG,
New
York Branch and Wachovia Capital Markets, LLC, as joint arrangers and joint bookrunners, Eurohypo
AG,
New York Branch, as administrative agent, Bank of America, N.A. and Wachovia Bank, National
Association, as syndication agents, and Commerzbank AG and Xxxxxx Commercial Paper, Inc., as
co-documentation agents.
(b) “Additional Sales Period” means in the case of Section 5.9(a)(iv) (A), the
120 day period following the date of the Company’s notice to Purchaser pursuant to Section
5.9(a)(ii), and in the case of Section 5.9(a)(iv) (B), the 120 day period following (x)
the expiration of the 180 day period specified in Section 5.9(a)(iii) or (y) if earlier,
the date on which it is finally determined that Purchaser is unable to consummate such purchase
contemplated by Section5.9(a)(iii) within such 180 day period specified in Section
5.9(a)(iii).
(c) “Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person. For the purposes of this
definition, “control” means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting securities, contract or
otherwise.
(d) “Brazilian Entities” means those certain Persons in which the Company indirectly
owns an interest which own real property assets or have operations located in Brazil.
(e) “Brookfield Consortium Member” means Brookfield Asset Management Inc. or any
controlled Affiliate of Brookfield Asset Management Inc. or any Person of which Brookfield Asset
Management Inc. or any Subsidiary or controlled Affiliate of Brookfield Asset Management Inc. is a
general partner, managing member or equivalent thereof or a wholly owned subsidiary of the
foregoing.
(f) “
Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) any day
on which commercial banks in
New York,
New York are required or authorized to close by Law or
executive order.
(g) “Capital Raising Activities” means the Company’s efforts to consummate equity and
debt financings for the Company, and sales of properties and other assets of the Company and its
Subsidiaries for cash.
(h) “Cash Equivalents” means as to any Person, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or instrumentality thereof
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(provided, that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than 90 days from the date of acquisition by such Person,
(b) time deposits and certificates of deposit of any commercial bank having, or which is the
principal banking subsidiary of a bank holding company organized under the Laws of the United
States, any State thereof or the District of Columbia having capital, surplus and undivided profits
aggregating in excess of $500,000,000, having maturities of not more than 90 days from the date of
acquisition by such Person, (c) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in subsection (a) above entered into with any bank
meeting the qualifications specified in subsection (b) above, (d) commercial paper issued by any
issuer rated at least A-1 by S&P or at least P-1 by Xxxxx’x or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and in each case maturing not more than one year
after the date of acquisition by such Person or (e) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in subsections (a) through
(d) above.
(i) “Change of Control” means any transaction or series of related transactions, in
which, after giving effect to such transaction or transactions, (i) any Person other than a member
of a Purchaser Group of the Pershing Purchasers or Fairholme Purchasers acquires beneficial
ownership (within the meaning of Rules 13d-3 and 13d-5 promulgated under the Exchange Act),
directly or indirectly, of more than fifty percent (50%) of either (A) the then-outstanding shares
of capital stock of the Company or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of directors of the Company or
(ii) there occurs a direct or indirect sale, lease, exchange or transfer or other disposition of
all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis
(including securities of the entity’s directly or indirectly owned Subsidiaries).
(j) “Claims” shall have the meaning set forth in section 101(5) of the Bankruptcy
Code.
(k) “Closing Date Net Debt” means, as of the Effective Date but prior to giving effect
to the Plan, the sum of, without duplication:
|
(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) |
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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 |
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|
|
|
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. |
(l) “Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts”
means, as of the Effective Date but prior to giving effect to the Plan, the sum of, without
duplication:
|
(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. |
(m) “Company Benefit Plan” means each “employee benefit plan” within the meaning of
Section 3(3) of ERISA and each other stock purchase, stock option, restricted stock, severance,
retention, employment, consulting, change-of-control, collective bargaining, bonus, incentive,
deferred compensation, employee loan, fringe benefit and other benefit plan, agreement, program,
policy, commitment or other arrangement, whether or not subject to ERISA (including any related
funding mechanism now in effect or required in the future), whether formal or informal, oral or
written, in each case sponsored or maintained by the Company or any of its Significant Subsidiaries
for the benefit of any past or present director, officer, employee, consultant or independent
contractor of the Company or any of its Significant Subsidiaries has any present or future right to
benefits.
(n) “Company Board” means the board of directors of the Company.
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(o) “Competing Transaction” means, other than the transactions contemplated by this
Agreement or the Plan Summary Term Sheet, or by the other Investment Agreements, any offer or
proposal relating to (i) a merger, consolidation, business combination, share exchange, tender
offer, reorganization, recapitalization, liquidation, dissolution or similar transaction involving
the Company or (ii) any direct or indirect purchase or other acquisition by a “person” or “group”
of “beneficial ownership” (as used for purposes of Section 13(d) of the Exchange Act) of, or a
series of transactions to purchase or acquire, assets representing 30% or more of the consolidated
assets or revenues of the Company and its Subsidiaries taken as a whole or 30% or more of the
Common Stock of the Company (or securities convertible into or exchangeable or exercisable for 30%
or more of the Common Stock of the Company) or (iii) any recapitalization of the Company or the
provision of financing to the Company, in each case, other than the recapitalization and financing
transactions contemplated by this Agreement and the Plan Summary Term Sheet (or the financing
provided by the Initial Investors) or that will be effected together with the transactions
contemplated hereby.
(p) “Conclusive Net Debt Adjustment Statement” means a statement that: (i) sets forth
each of the five components of the Closing Date Net Debt (for the avoidance of doubt, this shall
include (x) the Permitted Claims Amount, which shall include the Reserve in the amount established
by the Bankruptcy Court, (y) the Reinstatement Adjustment Amount, and (z) with respect to clauses
(i), (iv) and (v) of the definition of Closing Date Net Debt, the Closing Date Net Debt Amount W/O
Reinstatement Adjustment and Permitted Claims Amounts as determined through the process provided
for in this Agreement shall be used), and (ii) sets forth the Net Debt Excess Amount or the Net
Debt Surplus Amount, as applicable.
(q) “Contract” means any agreement, lease, license, evidence of indebtedness,
mortgage, indenture, security agreement or other contract.
(r) “Conversion Shares” means (i) with respect to the Purchaser Group, a number of
shares of New Common Stock determined by dividing (x) an amount equal to (A) the aggregate allowed
amount (inclusive of prepetition and postpetition interest fees and costs) of claims against the
Debtors held by any member of such Purchaser Group outstanding as of the Effective Date (the
“Purchaser Group Debt Holdings”) minus (B) the amount of cash paid to the holders of the
Purchaser Group Holdings in respect thereof under the Plan by (y) the Per Share Purchase Price and
(ii) with respect to each Purchaser, such part of the Conversion Shares of its Purchaser Group as
PSCM shall designate.
(s) “Corporate Level Debt” means the debt described in Sections II A, H through O, Q,
R, S, W and X of the Plan Summary Term Sheet plus accrued and unpaid interest thereon.
(t) “Debt” means all obligations of the Company, its Subsidiaries and other Persons in
which the Company, directly or indirectly, holds a minority interest (a) evidenced by (i) notes,
bonds, debentures or other similar instruments (including, for avoidance of doubt, mezzanine debt),
or (ii) trust preferred shares, trust preferred units and other preferred instruments, and/or (b)
secured by a lien, mortgage or other encumbrance; provided, however, that Debt
shall exclude (x) any form of municipal financing including, but not limited to, special
improvement district bonds or tax increment financing, (y) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such Person but which,
upon the
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insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person
(without regard to accounting treatment), and (z) intercompany notes or preferred interests between
and among the Company and its wholly owned Subsidiaries.
(u) “DIP Loan” means that certain Senior Secured Debtor in Possession Credit,
Security and Guaranty Agreement, dated as of May 15, 2009, by and among the lenders named therein,
UBS AG, Stamford Branch, as administrative agent for the lenders, the Company and the Operating
Partnership, as borrowers, and the certain subsidiaries of the Company named therein, as
guarantors.
(v) “Disclosure Statement” means the disclosure statement to accompany the Plan as
amended, modified or supplemented.
(w) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
(x) “Essential Assets” means Xxxxxxxx Xxxx, Xxxxxxxxx Master Planned Community,
Xxxxxxxxx Centre and South Street Seaport unless otherwise agreed between each Purchaser and the
Company.
(y) “Excess Surplus Amount” means the sum of (i) 100% or 80%, as applicable, of the
balance, if any, of the Reserve Surplus Amount (after giving effect to the application of the
Reserve Surplus Amount to reduce the principal amount of the GGO Promissory Note pursuant to
Section 5.16(d)) and (ii) (A) if a GGO Promissory Note is required to be issued at Closing,
80% of the aggregate Offering Premium, if any, less the amount of any reduction in the principal
amount of the GGO Promissory Note pursuant to Section 5.16(d) hereof or (B) if the GGO
Promissory Note is not required to be issued at Closing, the sum of (x) 80% of the aggregate
Offering Premium and (y) 80% of the excess of the Net Debt Surplus Amount, if any, over the Xxxxxx
Amount.
(z) “
Exchangeable Notes”
means the 3.98% Exchangeable Senior Notes Due 2027
issued pursuant to that certain Indenture, dated as of April 16, 2007, by and between the Operating
Partnership, as issuer, and The Bank of
New York Mellon Corporation, as trustee.
(aa) “Excluded Claims” means:
|
(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 |
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|
|
|
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 the Xxxxxx Heirs Obligations, |
|
(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) |
|
except with respect to Claims related to GGO or the assets or
businesses contributed thereto, 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), |
|
|
(vi) |
|
the MPC Tax Reserve, and |
|
(vii) |
|
surety bond Claims relating to Claims of the type identified
in clauses (i) through (vi) of this definition. |
(bb) [Intentionally Omitted.]
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(cc) “Fully Diluted Basis” means all outstanding shares of the Common Stock, New
Common Stock or GGO Common Stock, as applicable, assuming the exercise of all outstanding Share
Equivalents (other than (x) any options issued to an employee of the Company or its Subsidiaries
pursuant to the terms of a Company Benefit Plan or to an employee of GGO or its Subsidiaries
pursuant to the terms of an employee equity plan of GGO or (y) preferred UPREIT Units) without
regard to any restrictions or conditions with respect to the exercisability of such Share
Equivalents.
(dd) “GAAP” means generally accepted accounting principles in the United States.
(ee) “GGO Common Share Amount” means 324,683,256 plus the number of shares of
Common Stock issued on or after the Measurement Date and prior to the record date of the GGO Share
Distribution as a result of the exercise, conversion or exchange of any Share Equivalents of the
Company outstanding on the Measurement Date into Common Stock and employee stock options issued
pursuant to the Company Option Plans.
(ff) “GGO Non-Control Agreement” means an agreement with respect to GGO as attached
hereto as Exhibit M.
(gg) “GGO Note Amount “ means: (i) in the event there is a Net Debt Excess Amount, the
aggregate of the Net Debt Excess Amount set forth on the Conclusive Net Debt Adjustment Statement
and the Xxxxxx Heirs Obligations to the extent satisfied with assets (including cash, but excluding
shares of New Common Stock or Identified Assets) of the Company (such amount so satisfied, the
“Xxxxxx Amount” ); and (ii) in the event there is a Net Debt Surplus Amount, the Xxxxxx
Amount less the Net Debt Surplus Amount, provided, that in no event shall the GGO Note Amount be
less than zero.
(hh) “GGO Pro Rata Share” means, with respect to each Purchaser, the percentage
designated by PSCM by written notice to the Company pursuant to Section 1.1(e).
(ii) “GGO Promissory Note” means an unsecured promissory note payable by GGO in favor
of the Reorganized Company in the aggregate principal amount of the GGO Note Amount, as adjusted
pursuant to Section 5.17(d), Section 5.17(e) and Section 5.17(g), (i)
bearing interest at a rate equal to the lower of (x) 7.5% per annum and (y) the weighted average
effective rate of interest payable (after giving effect to the payment of any underwriting and all
other discounts, fees and any other compensation) on each series of New Debt issued in connection
with the Plan and (ii) maturing on the fifth anniversary of the Closing Date (or if such date is
not a Business Day, the next immediately following Business Day), and (iii) including prohibitions
on dividends and distributions, no financial covenants and such other customary terms and
conditions as reasonably agreed to by each Purchaser and the Company.
(jj) “GGO Purchase Price” means the product of (a) the GGO Per Share Purchase
Price multiplied by (b) the sum of (i) the number of Unsubscribed Shares and (ii) the number of
shares of GGO Common Stock subscribed on or before the Expiration Time by the applicable Purchaser
pursuant to the GGO Minimum Allocation Right.
(kk) “GGO Setup Costs” means such liabilities, costs and expenses as may be incurred
by the Company in connection with the formation and organization of GGO and the
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implementation of the GGO Share Distribution, including any and all liabilities for any sales,
use, stamp, documentary, filing, recording, transfer, gross receipts, registration, duty,
securities transactions or similar fees or Taxes or governmental charges (together with any
interest or penalty, addition to Tax or additional amount imposed) as levied by any Taxing
authority.
(ll) “GGO Shares” means the shares of GGO Common Stock purchased by the applicable
Purchaser in or in connection with the GGO Rights Offering and the shares of GGO Common Stock
received as Backstop Consideration.
(mm) “GGP Pro Rata Share” means, with respect to each Purchaser, the percentage
designated by PSCM by written notice to the Company pursuant to Section 1.1(e).
(nn) “Governmental Entity” means any (a) nation, region, state, province, county,
city, town, village, district or other jurisdiction, (b) federal, state, local, municipal, foreign
or other government, (c) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, court or tribunal, or other entity), (d) multinational
organization or body or (e) body entitled to exercise any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power of any nature or any other
self-regulatory organizations.
(oo) “Xxxxxx Agreement” means that certain Contingent Stock Agreement, effective as
of January 1, 1996, by The Xxxxx Company in favor of and for the benefit of the Holders (named in
Schedule I thereto) and the Representatives (therein defined), as amended.
(pp) “Xxxxxx Heirs Obligations” means claims or interests against the Debtors arising
under or related to the Xxxxxx Agreement.
(qq) “Indebtedness” means, with respect to a Person without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred
purchase price of property (other than trade payables and accrued expenses incurred in the ordinary
course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, trust preferred shares, trust preferred units and other
preference instruments, (d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations in respect of capital leases under GAAP
of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or
applicant under acceptance, letter of credit, surety bond or similar facilities, (g) the monetary
obligations of a Person under (x) a so-called synthetic, off-balance sheet or tax retention lease,
or (y) an agreement for the use or possession of property creating obligations that do not appear
on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person,
would be characterized as the indebtedness of such Person (without regard to accounting treatment)
(each, a “Synthetic Lease Obligation” ), (h) guaranties of such Person with respect to
obligations of the type described in clauses (a) through (g) above, (i) all obligations of other
Persons of the kind referred to in clauses (a) through (h) above secured by any lien on property
owned by such Person, whether or not such Person has assumed or become liable for the payment of
such obligation, (j) the net obligations of such
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Person in respect of hedge agreements and swaps and (k) any obligation that, in accordance
with GAAP, would be required to be reflected as debt on the consolidated balance sheet of such
Person.
(rr) “Joint Venture” means a Subsidiary of the Company which is owned partly
by another Subsidiary of the Company and partly by a third party.
(ss) “Knowledge” of the Company means the actual knowledge, as of the date of this
Agreement, of the individuals listed on Section 12.1(ss) of the Company Disclosure Letter.
(tt) “Law” means any statutes, laws (including common law), rules, ordinances,
regulations, codes, orders, judgments, decisions, injunctions, writs, decrees, applicable to the
Company or any of its Subsidiaries or any Purchaser, as applicable, or their respective properties
or assets.
(uu) “Liquidity Equity Issuances” means issuances of shares of New Common
Stock in the Plan for cash in excess of 1,104,683,256 shares of New Common Stock minus the number
of shares of New Common Stock equal to the (x) sum of the Reinstated Amounts and the net cash
proceeds to the Company from Asset Sales and the issuance of New Debt divided by (y) the Per Share
Purchase Price.
(vv) “Material Adverse Effect” means any change, event or occurrence which (x) has a
material adverse effect on the results of operations or financial condition of the Company and its
direct and indirect Subsidiaries taken as a whole, other than changes, events or occurrences (i)
generally affecting (A) the retail mall industry in the United States or in a specific geographic
area in which the Company operates, or (B) the economy, or financial or capital markets, in the
United States or elsewhere in the world, including changes in interest or exchange rates or the
availability of capital, or (ii) arising out of, resulting from or attributable to (A) changes in
Law or regulation or in generally accepted accounting principles or in accounting standards, or
changes in general legal, regulatory or political conditions, (B) the negotiation, execution,
announcement or performance of any agreement between the Company and/or its Affiliates, on the one
hand, and any Purchaser and/or its Purchaser Group (or members thereof), on the other hand, or the
consummation of the transactions contemplated hereby or operating performance or reputational
issues arising out of or associated with the Bankruptcy Cases, including the impact thereof on
relationships, contractual or otherwise, with tenants, customers, suppliers, distributors, partners
or employees, or any litigation or claims arising from allegations of breach of fiduciary duty or
violation of Law or otherwise, related to the execution or performance of this Agreement or the
transactions contemplated hereby, including, without limitation, any developments in the Bankruptcy
Cases, (C) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of
war, sabotage or terrorism threatened or underway as of the date of the this Agreement, (D)
earthquakes, hurricanes, tornadoes or other natural disasters, (E) any action taken by the Company
or its Subsidiaries as contemplated or permitted by any agreement between the Company and/or its
Affiliates, on the one hand, and any Purchaser and/or Purchaser Group (or members thereof), on the
other hand, or with each Purchaser’s consent, or any failure by the Company to take any action as a
result of any restriction contained in any agreement between the Company and/or its Affiliates, on
the one hand, and any Purchaser and/or its Purchaser Group (or any member thereof), on the other
hand, or (F) in each case in and of itself,
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any decline in the market price, or change in trading volume, of the capital stock or debt
securities of the Company or any direct or indirect subsidiary thereof, or any failure to meet
publicly announced or internal revenue or earnings projections, forecasts, estimates or guidance
for any period, whether relating to financial performance or business metrics, including, without
limitation, revenues, net operating incomes, cash flows or cash positions, it being further
understood that any event, change, development, effect or occurrence giving rise to such decline in
the trading price or trading volume of the capital stock or debt securities of the Company or such
failure to meet internal projections or forecasts as described in the preceding clause (F), as the
case may be, may be the cause of a Material Adverse Effect; so long as, in the case of clauses
(i)(A) and (i)(B), such changes or events do not have a materially disproportionate adverse effect
on the Company and its Subsidiaries, taken as a whole, as compared to other entities that own and
manage retail malls throughout the United States, or (y) materially impairs the ability of the
Company to consummate the transactions contemplated by this Agreement or perform its obligations
hereunder or under the other agreements executed in connection with the transactions contemplated
hereby.
(ww) “Material Contract” means, with respect to the Company and its
Subsidiaries, any:
|
(i) |
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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) |
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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. |
(xx) “MPC Assets” means residential and commercial lots in the “master planned
communities” owned by the Xxxxxx Xxxxxx Corporation or The Xxxxxx Corporation or related to the
Xxxxxxx Master Planned Community.
(yy) “MPC Taxes” means all liability for income Taxes in respect of sales of MPC
Assets sold prior to the date of this Agreement.
(zz) “MPC Tax Reserve” means any reserve for MPC Taxes to be established under the
Plan as determined by the Bankruptcy Court in the Confirmation Order or such other order as may be
entered by the Bankruptcy Court on or prior to the Effective Date, less any MPC Taxes paid prior to
the Effective Date.
(aaa) “Net Debt Excess Amount” means, the amount, which shall in no event be less
than $0, that is calculated by subtracting the Target Net Debt from the Closing Date Net Debt (as
reflected on the Conclusive Net Debt Adjustment Statement).
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(bbb) “Net Debt Surplus Amount ” means, the amount, which shall in no event be less
than $0, that is calculated by subtracting Closing Date Net Debt (as reflected on the Conclusive
Net Debt Adjustment Statement) from the Target Net Debt.
(ccc) “Non-Control Agreement” means the Non-Control Agreement the form of which is
attached hereto as Exhibit K.
(ddd) “Non-Controlling Properties” means the Company Properties listed on Section
12.1(ddd) of the Company Disclosure Letter. Each of the Non-Controlling Properties is owned by
a Joint Venture in which neither the Company nor any of its Subsidiaries is a controlling entity.
For purposes of this Section 12.1(ddd), the term “control” shall mean, possession, directly
or indirectly, of the power to direct the management and policies of a Person whether through the
ownership of voting securities, contract or otherwise; provided, however, that the
rights of any Person to exercise Major Decision Rights under a Joint Venture shall not constitute
or be deemed to constitute “control” for the purposes hereof. “Controlling” and “controlled” shall
have meanings correlative thereto. For purposes of this Section 12.1(ddd), the term “Major
Decision Rights” shall mean, the right to, directly or indirectly, approve, consent to, veto or
exercise a vote in connection with a Person’s voting or other decision-making authority in respect
of the collective rights, options, elections or obligations of such Person under a Joint Venture.
(eee) “Offering Premium” means, with respect to any shares of New Common Stock issued
for cash in conjunction with issuances of New Common Stock permitted by this Agreement (including
any Liquidity Equity Issuance) prior to, or on the Effective Date together with shares of New
Common Stock issued in Liquidity Equity Issuances completed within thirty (30) days of the
Effective Date, the product of (i) (A) the per share offering price of the shares of New Common
Stock issued (net of all underwriting and other discounts, fees or other compensation, and related
expenses) less (B) the Per Share Purchase Price and (ii) the number of shares of New Common Stock
sold pursuant thereto.
(fff) “Operating Partnership” means GGP Limited Partnership, a Delaware
limited partnership and a Subsidiary of the Company.
(ggg) “Permitted Claims” means, as of the Effective Date, other than Excluded Claims,
(a) all Claims against the Debtors covered by the Plan (the “Plan Debtors” ) that are
classified in those certain classes of Claims described in Sections II B through E, G and P in the
Plan Summary Term Sheet (the “PMA Claims” ), (b) all Claims or other amounts required to be
paid pursuant to the Plan to indenture trustees or similar servicing or administrative agents, with
respect to administrative fees incurred by or reimbursement obligations owed to such indenture
trustees or similar servicing or administrative agents in their capacity as such under the
Corporate Level Debt documents, (c) any claims of a similar type as the PMA Claims that are or have
been asserted against affiliates of the Plan Debtors that are or were debtors in the Bankruptcy
Cases and for which a plan of reorganization has already been consummated (the “Confirmed
Debtors” ), (d) surety bond Claims relating to the types of Claims identified in clauses (a)
through (c) of this definition, and (e) GGO Setup Costs.
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(hhh) “Permitted Claims Amount” means, as of the Effective Date, an amount equal to
the sum of (a) the aggregate amount of accrued and unpaid Permitted Claims that have been allowed
(by order of the Bankruptcy Court or pursuant to the terms of the Plan) as of the Effective Date,
plus (b) the aggregate amount of the reserve to be established under the Plan with respect to
Permitted Claims, as determined by the Bankruptcy Court in the Confirmation Order or such other
order as may be entered by the Bankruptcy Court on or prior to the Effective Date (the
“Reserve” ), to provide for distributions on account of all other accrued and unpaid
Permitted Claims that have not been allowed or disallowed (in each case by order of the Bankruptcy
Court or pursuant to the terms of the Plan) as of the Effective Date, plus (c) the aggregate amount
of the GGO Setup Costs as of the Effective Date; provided, however, that there
shall be no duplication with any amounts otherwise included in Closing Date Net Debt.
(iii) “Permitted Replacement Shares” means New Common Stock that is sold for cash
proceeds immediately payable to the Company (net of all underwriting and other discounts, fees, and
related consideration) of not less than $10.50 per share of New Common Stock; provided,
that Permitted Replacement Shares shall not include any New Common Stock sold to any of the Initial
Investors or their Affiliates.
(jjj) “Person” means an individual, a group (including a “group” under Section 13(d)
of the Exchange Act), a partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization and a Governmental
Entity or any department, agency or political subdivision thereof.
(kkk) “Preliminary Closing Date Net Debt Review Deadline” means the end of the
Preliminary Closing Date Net Debt Review Period, which date shall be the first business day that is
at least twenty (20) calendar days after delivery of the Preliminary Closing Date Net Debt
Schedule, and which shall be the deadline by which a Purchaser shall deliver to the Company a
Dispute Notice.
(lll) “Preliminary Closing Date Net Debt Review Period” means the period between the
Company’s delivery of the Preliminary Closing Date Net Debt Schedule and the Preliminary Closing
Date Net Debt Review Deadline.
(mmm) “Proportionally Consolidated Debt” means consolidated Debt of the Company less
(1) all Debt of Subsidiaries of the Company that are not wholly-owned and other Persons in which
the Company, directly or indirectly, holds a minority interest, to the extent such Debt is included
in consolidated Debt, plus (2) the Company’s share of Debt for each non-wholly owned Subsidiary of
the Company and each other Persons in which the Company, directly or indirectly, holds a minority
interest based on the company’s pro-rata economic interest in each such Subsidiary or the extent to
which the Company or its Subsidiary or Person is liable therefor, whichever is greater;
provided, however, for purposes of calculating Proportionally Consolidated Debt,
the Debt of the Brazilian Entities shall be deemed to be $110,437,781.
(nnn) “Proportionally Consolidated Unrestricted Cash” means the consolidated
Unrestricted Cash of the Company less (1) all Unrestricted Cash of Subsidiaries of the Company that
are not wholly-owned and Persons in which the Company, directly or indirectly, owns a minority
interest, to the extent such Unrestricted Cash is included in consolidated Unrestricted
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Cash of the Company, plus (2) the Company’s share of Unrestricted Cash for each non-wholly
owned Subsidiary of the Company and Persons in which the Company, directly or indirectly, owns a
minority interest based on the Company’s pro rata economic interest in each such Subsidiary or
Person; provided, however, for purposes of calculating Proportionally Consolidated Unrestricted
Cash, the Unrestricted Cash of the Brazilian Entities shall be deemed to be $82,000,000,
provided, further, that any distributions of Unrestricted Cash made from the date
of this Agreement to the Closing by Brazilian Entities to the Company or any of its Subsidiaries
shall be disregarded for purposes of calculating Proportionally Consolidated Unrestricted Cash.
(ooo) “Purchaser Group” means, with respect to each Purchaser, such Purchaser, its
investment manager and their respective “controlled Affiliates”. For such purpose, one or more
investment funds under common investment management shall constitute “controlled Affiliates” of
their investment manager.
(ppp) “Reinstatement Adjustment Amount” means the difference resulting from
subtracting the Reinstatement Amount from the aggregate amount of Corporate Level Debt.
(qqq) “Reinstatement Amount” means the amount of Corporate Level Debt to the extent
such obligations will be reinstated pursuant to the Plan, including, to the extent applicable,
based on the elections of the holders of such Corporate Level Debt prior to the election deadline
established by the Bankruptcy Court.
(rrr) “Reserve Surplus Amount” means, as of any date of determination, the excess, if
any, of the Reserves over (x) any Permitted Claims paid prior to such date from Reserves for such
Permitted Claims, plus (y) the remaining balance of the Reserve maintained by the Company as of
such date as determined by the Company Board.
(sss) “Rights Agreement” means that certain Rights Agreement, dated as of November
18, 1998, by and between the Company and BNY Mellon Shareowner Services, as successor to Norwest
Bank Minnesota, N.A., as amended on November 10, 1999, December 31, 2001 and November 18, 2008, and
from time to time.
(ttt) “Xxxxx Bonds” means (i) the 6-3/4% Senior Notes Due 2013 issued
pursuant to the Indenture, dated as of May 5, 2006, by and among The Xxxxx Company LP and TRC
Co-Issuer, Inc., as co-issuers and The Bank of New York Mellon Corporation, as trustee, and (ii)
unsecured debentures issued pursuant to the Indenture, dated as of February 24, 1995, by and
between The Xxxxx Company, as issuer, and The Bank of New York Mellon Corporation, as trustee.
(uuu) “Share Equivalent” means any stock, warrants, rights, calls, options or other
securities exchangeable or exercisable for, or convertible into, shares of Common Stock, New Common
Stock or GGO Common Stock, as applicable.
(vvv) “Significant Subsidiaries” means the operating Subsidiaries of the
Company that generated revenues in excess of $30,000,000 for the year ended December 31, 2009.
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(www) “Specified Debt” means Claims in Classes H through N inclusive, in each case as
provided on the Plan Summary Term Sheet.
(xxx) “Subsidiary” means, with respect to a Person (including the Company),
(a) a company a majority of whose capital stock with voting power, under ordinary circumstances, to
elect a majority of the directors is at the time, directly or indirectly, owned by such Person, by
a subsidiary of such Person, or by such Person and one or more subsidiaries of such Person, (b) a
partnership in which such Person or a subsidiary of such Person is, at the date of determination, a
general partner of such partnership, (c) a limited liability company of which such Person, or a
Subsidiary of such Person, is a managing member or (d) any other Person (other than a company) in
which such Person, a subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (i) at least a majority
ownership interest or (ii) the power to elect or direct the election of a majority of the directors
or other governing body of such Person.
(yyy) “Target Net Debt” means $22,970,800,000.
(zzz) “Tax Protection Agreements” means any written agreement to which the
Company, its Operating Partnership or any other Subsidiary is a party pursuant to which: (i) in
connection with the deferral of income Taxes of a holder of interests in the Operating Partnership,
the Company, the Operating Partnership or the other Subsidiaries have agreed to (A) maintain a
minimum level of Indebtedness or continue any particular Indebtedness, (B) retain or not dispose of
assets for a period of time that has not since expired, (C) make or refrain from making Tax
elections, and/or (D) only dispose of assets in a particular manner; and/or (ii) limited partners
of the Operating Partnership have guaranteed Indebtedness of the Operating Partnership.
(aaaa) “Termination Date” means December 31, 2010; provided, that if
the Confirmation Order shall have been entered on or prior to December 15, 2010 but the Company,
despite its commercially reasonable efforts, is unable to consummate the Closing on or prior to
December 31, 2010, the Company may extend the Termination Date for so long as Closing by January
31, 2011 is feasible and the Company continues to diligently pursue Closing; provided,
further, that the Termination Date shall not be extended beyond January 31, 2011.
(bbbb) “Transactions” means the purchase of the Shares and the GGO Shares and
the other transactions contemplated by this Agreement.
(cccc) “TRUPS” means certain preferred securities issued by GGP Capital Trust
I.
(dddd) “Unrestricted Cash” means all cash and Cash Equivalents of the Company and of
the Subsidiaries of the Company, but excluding any cash or Cash Equivalents that are controlled by
or subject to any lien, security interest or control agreement, other preferential arrangement in
favor of any creditor or otherwise encumbered or restricted in any way.
(eeee) “Unsecured Indebtedness” means all indebtedness of the Company for
borrowed money or obligations of the Company evidenced by notes, bonds, debentures or other similar
instruments that are not secured by a lien on any Company Property or other assets of the Company
or any Subsidiary.
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(ffff) “UPREIT Units” means preferred or common units of limited partnership
interests of the Operating Partnership.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices. All notices and other communications in connection with this
Agreement shall be in writing and shall be considered given if given in the manner, and be deemed
given at times, as follows: (x) on the date delivered, if personally delivered; (y) on the day of
transmission if sent via facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission; or (z) on the next
Business Day after being sent by recognized overnight mail service specifying next business day
delivery, in each case with delivery charges pre-paid and addressed to the following addresses:
(a) If to any Purchaser (which shall constitute notice to each Purchaser), to:
Attention: Xxxxxxx X. Xxxxxx
Xxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to the Company, to:
General Growth Properties, Inc.
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
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Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
SECTION 13.2 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement may be assigned by any party without the
prior written consent of the other party. Notwithstanding the previous sentence, this Agreement,
or a Purchaser’s rights, interests or obligations hereunder (including, without limitation, the
right to receive any securities pursuant to the Transactions), may be assigned or transferred, in
whole or in part, by such Purchaser (a) to one or more members of its Purchaser Group;
provided, that no such assignment shall release such Purchaser from its obligations
hereunder to be performed by such Purchaser on or prior to the Closing Date or (b) with the prior
written consent of the Company, not to be unreasonably withheld, conditioned or delayed, to one or
more credit-worthy financial institutions who agree in writing to perform the applicable
obligations of such Purchaser hereunder (any assignment under clause (b) to which the Company has
so consented shall release such Purchaser from its obligations hereunder to the extent of the
obligations assigned). This Agreement (including the documents and instruments referred to in this
Agreement) is not intended to and does not confer upon any person other than the parties hereto any
rights or remedies under this Agreement. Notwithstanding the foregoing, or any other provisions
herein to the contrary, no Purchaser may assign any of its rights, interests or obligations under
this Agreement to the extent such assignment would preclude the applicable securities Laws
exemptions from being available or such assignment would cause a failure of the closing condition
in Section 7.1(u) of the Brookfield Agreement.
SECTION 13.3 Prior Negotiations; Entire Agreement. This Agreement (including the
exhibits hereto and the documents and instruments referred to in this Agreement) constitutes the
entire agreement of the parties and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties with respect to the subject matter of
this Agreement.
SECTION 13.4 Governing Law; Venue. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND EACH PARTY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS.
SECTION 13.5 Company Disclosure Letter. The Company Disclosure Letter shall be
arranged to correspond to the Articles and Sections of this Agreement, and the disclosure in any
portion of the Company Disclosure Letter shall qualify the corresponding provision in Article
III and any other provision of Article III to which it is reasonably apparent on the
face of the disclosure that such disclosure relates. No disclosure in the Company Disclosure
Letter relating to any possible non-compliance, breach or violation of any Contract or Law shall be
construed as an admission that any such non-compliance, breach or violation exists or has actually
occurred.
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In the Company Disclosure Letter, (a) all capitalized terms used but not defined therein shall
have the meanings assigned to them in this Agreement and (b) the Section numbers correspond to the
Section numbers in this Agreement.
SECTION 13.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties; and delivered to the other
party (including via facsimile or other electronic transmission), it being understood that each
party need not sign the same counterpart.
SECTION 13.7 Expenses. Each party shall bear its own expenses incurred or to be
incurred in connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
SECTION 13.8 Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions of this Agreement may be
waived, only by a written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance, and subject, to the extent required, to the approval of the Bankruptcy
Court. No delay on the part of any party in exercising any right, power or privilege pursuant to
this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any party of
any right, power or privilege pursuant to this Agreement, nor shall any single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this Agreement. The
rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity.
SECTION 13.9 Construction.
(a) The headings in this Agreement are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.
(b) Unless the context otherwise requires, as used in this Agreement: (i) an accounting term
not otherwise defined in this Agreement has the meaning ascribed to it in accordance with GAAP;
(ii) “or” is not exclusive; (iii) “including” and its variants mean “including, without limitation”
and its variants; (iv) words defined in the singular have the parallel meaning in the plural and
vice versa; (v) references to “written” or “in writing” include in visual electronic form; (vi)
words of one gender shall be construed to apply to each gender; (vii) the terms “Article,”
“Section,” and “Schedule” refer to the specified Article, Section, or Schedule of or to this
Agreement; and (viii) the term “beneficially own” shall have the meaning determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof; provided, however, that a Person
will be deemed to beneficially own (and have beneficial ownership of) all securities that such
Person has the right to acquire, whether such right is exercisable immediately or with the passage
of time or the satisfaction of conditions. The terms “beneficial ownership” and “beneficial owner”
have correlative meanings.
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(c) Notwithstanding anything to the contrary, and for all purposes of this Agreement, any
public announcement or filing of factual information relating to the business, financial condition
or results of the Company or its Subsidiaries, or a factually accurate (in all material respects)
public statement or filing that describes the Company’s receipt of an offer or proposal for a
Competing Transaction and the operation of this Agreement with respect thereto, or any entry into a
confidentiality agreement, shall not be deemed to evidence the Company’s or any Subsidiary’s
intention to support any Competing Transaction.
(d) In the event of a conflict between the terms and conditions of this Agreement and the Plan
Summary Term Sheet, the terms and conditions of this Agreement shall govern.
(e) Unless otherwise agreed in writing between the Company and each Purchaser, wherever this
Agreement requires the action by, consent of or delivery to Purchaser, Purchasers, each Purchaser
or similar parties, each Purchaser hereby appoints PSCM as its attorney-in-fact to exercise all of
the rights of such Purchaser hereunder (except for the assumption of any funding or related
liabilities or obligations), and the Company may rely on any instructions or elections made by such
Person.
SECTION 13.10 Adjustment of Share Numbers and Prices. The number of Shares to be
purchased by each Purchaser at the Closing pursuant to Article I, the Per Share Purchase
Price, the GGO Per Share Purchase Price, the number of GGO Shares to be purchased by such Purchaser
pursuant to Article II and any other number or amount contained in this Agreement which is
based upon the number or price of shares of GGP or GGO shall be proportionately adjusted for any
subdivision or combination (by stock split, reverse stock split, dividend, reorganization,
recapitalization or otherwise) of the Common Stock, New Common Stock or GGO Common Stock that
occurs during the period between the date of this Agreement and the Closing. In addition, if at
any time prior to the Closing, the Company or GGO shall declare or make a dividend or other
distribution whether in cash or property (other than a dividend or distribution payable in common
stock of the Company or GGO, as applicable, the GGO Share Distribution or a distribution of rights
contemplated hereby), the Per Share Purchase Price or the GGO Per Share Purchase Price, as
applicable, shall be proportionally adjusted thereafter by the Fair Market Value (as defined in the
Warrant) per share of the dividend or distribution.
SECTION 13.11 Certain Remedies.
(a) The parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement or of any other agreement between them with respect to the Transaction
were not performed in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that, in addition to any other applicable remedies at law or equity, the parties
shall be entitled to an injunction or injunctions, without proof of damages, to prevent breaches of
this Agreement or of any other agreement between them with respect to the Transaction and to
enforce specifically the terms and provisions of this Agreement.
(b) To the fullest extent permitted by applicable law, the parties shall not assert, and
hereby waive, any claim or any such damages, whether or not accrued and whether or not known or
suspect to exist in its favor, against any other party and its respective Affiliates, members,
members’ affiliates, officers, directors, partners, trustees, employees, attorneys and agents on
any
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theory of liability, for special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty
imposed by any applicable legal requirement) arising out of, in connection with, or as a result of,
this Agreement or of any other agreement between them with respect to the Transaction or the
transactions contemplated hereby or thereby.
(c) Prior to the entry of the Confirmation Order, other than with respect to the Company’s
obligations under Section 5.1(c), each Purchaser’s right to receive the Warrants on the
terms and subject to the conditions set forth in this Agreement shall constitute the sole and
exclusive remedy of any nature whatsoever (whether for monetary damages, specific performance,
injunctive relief, or otherwise) of such Purchaser against the Company for any harm, damage or loss
of any nature relating to or as a result of any breach of this Agreement by the Company or the
failure of the Closing to occur for any reason; provided, that, following the entry of the
Approval Order, each Purchaser shall be entitled to specific performance of the Company’s
obligation to issue the Warrants as well as the Company’s obligations under Section 5.1(c)
hereof.
(d) Following the entry of the Confirmation Order, each Purchaser shall be entitled to
specific performance of the terms of this Agreement, in addition to any other applicable remedies
at law.
(e) The Company, on behalf of itself and its respective heirs, successors, and assigns, hereby
covenants and agrees never to institute or cause to be instituted or continue prosecution of any
suit or other form of action or proceeding of any kind or nature whatsoever against any member of
any Purchaser or its Purchaser Group by reason of or in connection with the Transaction;
provided, however, that nothing shall prohibit the Company from instituting an
action against any Purchaser in connection with this Agreement in accordance with the provisions of
this Section 13.11.
(f) For the avoidance of doubt, the failure of any Purchaser under this Agreement to satisfy
its obligations hereunder shall not relieve any other Purchaser from its obligations hereunder,
including the obligation to consummate the transactions hereunder if all other conditions to such
Purchaser’s obligations have been satisfied or waived.
SECTION 13.12 Bankruptcy Matters. For the avoidance of doubt, all obligations of the
Company and its Subsidiaries in this Agreement are subject to and conditioned upon (a) with respect
to the issuance of the Warrants and the other obligations contained in the Approval Order, entry of
the Approval Order, and (b) with respect to the remainder of the provisions hereof, entry of the
Confirmation Order.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and delivered by
each of them or their respective officers thereunto duly authorized, all as of the date first
written above.
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GENERAL GROWTH PROPERTIES, INC.
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By: |
/s/ Xxxxxx X. Xxxxx
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Name: |
Xxxxxx X. Xxxxx
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Title: |
President and CEO |
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EXHIBIT A — PLAN SUMMARY TERM SHEET
EXHIBIT A
General Growth Properties, Inc.
Plan Summary Term Sheet1
3/31/2010
This term sheet (the “Term Sheet”) describes the material terms of a proposed chapter 11
joint plan of reorganization (the “Plan”) of the Plan Debtors (as defined below) solely for
the purposes of the Investment Agreements (as defined below). The transactions contemplated by
this term sheet are subject to conditions to be set forth in definitive documents, including the
Investment Agreements and to the approval by the United States Bankruptcy Court for the Southern
District of New York (the “Bankruptcy Court”). This Term Sheet is not an offer or
solicitation for any chapter 11 plan and is being presented for discussion and settlement purposes
only. Acceptance of any such plan by any party (including those named herein) will not be
solicited from any person or entity until such person or entity has received the disclosures
required under or otherwise in compliance with applicable law. Accordingly, this Term Sheet does
not bind any creditor or other party to vote in favor of or support any chapter 11 plan. In the
event of any inconsistency between the terms of the Plan and this Term Sheet, or the terms of any
applicable Investment Agreement and this Term Sheet, the terms of the Plan and the Investment
Agreements, respectively, shall control for their respective purposes.
I. PARTIES/AGREEMENTS
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A. GGP
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General Growth Properties, Inc. (“GGP”)
on or before the Effective Date and
GGP, as reorganized, from and after the
Effective Date |
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B. Plan Debtors
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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”) |
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C. Confirmed Debtors
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The subsidiary debtors other than the
Plan Debtors whose chapter 11 plans
have been confirmed as of the Effective
Date (the “Confirmed Debtors”) |
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D. Debtors
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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 |
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E. REP
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REP Investments LLC (“REP”) |
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F. Fairholme
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Fairholme Capital Management, LLC, on
behalf of one or more of its managed
funds or affiliates of such managed
funds (“Fairholme”) |
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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. |
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X. Xxxxxxxx
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Xxxxxxxx Square Capital Management,
L.P., on behalf of one or more of its
managed funds (“Pershing” and together
with REP and Fairholme, the
“Purchasers”) |
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H. Confirmed Plans
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The chapter 11 plans of the Confirmed
Debtors (the “Confirmed Plans”) |
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I. CIA
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Cornerstone Investment Agreement dated
as of March 31, 2010 between REP and
GGP (the “CIA”) |
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Stock Purchase Agreement dated as of
March 31, 2010 between the purchasers
parties thereto and GGP (the “Fairholme
SPA”) |
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Stock Purchase Agreement dated 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”) |
II. TREATMENT OF CLAIMS AND INTERESTS
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A. DIP Loan Claims
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• Treatment: Paid in full,
in cash on the effective date (the
“Effective Date”) of the Plan. |
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• 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. |
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B. Allowed Administrative Expense
Claims
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• Treatment: Paid in full,
in cash on the Effective Date or on
such other terms as the parties may
agree. |
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C. Allowed Priority Non-Tax Claims
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• Treatment: Paid in full,
in cash on the Effective Date or on
such other terms as the parties may
agree. |
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D. Allowed Priority Tax Claims
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• 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. |
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E. Allowed Secured Tax Claims
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• 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. |
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F. Allowed Mechanics’ Lien Claims
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• 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
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• 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. |
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X. Xxxxx 8.00% Note Claims
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• Treatment: On the Effective
Date, the Allowed Xxxxx 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. |
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X. Xxxxx 3.625% Note Claims
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• Treatment: On the Effective
Date, the Allowed Xxxxx 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. |
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X. Xxxxx 5.375% Note Claims
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• Treatment: On the
Effective Date, the Allowed Xxxxx
5.375% 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. |
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X. Xxxxx 63/4% Note Claims
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• Treatment: On the Effective
Date, the Allowed Xxxxx 63/4 % 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. |
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X. Xxxxx 7.20% Note Claims
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• Treatment: On the Effective
Date, the Allowed Xxxxx 7.20% 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. |
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M. 2006 Bank Loan Claims
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• 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. |
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N. 144A Exchangeable Notes Claims
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• 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. |
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O. 2006 Trust Preferred Shared and
Junior Subordinated Notes (the
“TRUPs Claims”)
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• 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. |
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P. Allowed General Unsecured
Claims2
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• 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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General Unsecured 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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Q. Partner Note GGP/Homart II, L.L.C.
Claims
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• 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. |
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R. Partner Note GGP Ivanhoe, Inc.
Claims
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• 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. |
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S. GGP TRS Retained Debt Claims
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• 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. |
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T. Allowed Project Level Debt
Guaranty Claims
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• 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. |
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U. Allowed Xxxxxx Heirs Obligations
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• Treatment: On the
Effective Date, the holders of
allowed Xxxxxx 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
Xxxxxx Heirs Obligations may be
satisfied, in whole or in part,
through the issuance of GGO Stock. |
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V. Intercompany Obligations
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• 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. |
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W. GGPLP LLC Preferred Equity
Interests
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• Treatment: On the Effective
Date, the holder of GGPLP LLC
preferred equity interests (“GGPLP
LLC Preferred Equity Interests”)
will receive (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, provided,
however, that any prepetition
redemption or conversion rights
held by such holder (subject to any
rights of GGP) shall be deemed to
have been revised to subsequently
be redeemable or convertible into
New Common Stock on conversion or
redemption terms consistent with
its prepetition agreement. |
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X. GGPLP Preferred Equity Interests
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• Treatment: On the
Effective Date, holders of GGPLP
Preferred Equity Interests will
receive (a) a distribution of Cash
based on their pro rata share of
dividends accrued and unpaid prior
to the Effective Date and (b) may
elect between (i) 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 indirect redemption or
conversion rights to receive GGP
Common Stock held by such holders
(subject to any rights of GGP)
shall be deemed to have been
revised to subsequently be
redeemable or convertible into New
Common Stock on conversion or
redemption terms consistent with
their prepetition agreements, or
(ii) being deemed to have converted
their GGPLP Preferred Equity
Interests to GGPLP common units and
then to have put such GGPLP common
units to GGPLP, effective the day
prior to the Record Date, and GGP
will assume GGPLP’s obligation
under such put and satisfy this
obligation with New Common Stock
and GGO Stock as if such holders
had exercised their rights on the
day immediately preceding the
Record Date. |
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Y. GGPLP Common UPREIT Units
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• Treatment: On the Effective
Date, GGPLP Common UPREIT Units
will receive (a) the same number of
common units in Reorganized GGPLP
as they held as of the Record Date,
provided, however, that any
prepetition redemption or
conversion rights held by such
GGPLP Common UPREIT Unit holders
(subject to any rights of GGP)
shall be deemed to have been
revised to subsequently be
convertible into New Common Stock
on conversion or redemption terms
consistent with their prepetition
agreement, plus (b) GGO Common
Stock calculated as if their GGPLP
Common UPREIT Units were converted
to GGP Common Stock on the day
before the Record Date. |
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Z. GP Common Stock
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• 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. |
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AA. Outstanding Warrants
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• Treatment: On the Effective
Date, each holder of an outstanding
Warrant (as such term is defined in
the CIA and/or the Stock Purchase
Agreement), shall receive the
treatment provided for such Warrant
in the CIA or the Stock Purchase
Agreement, as applicable. |
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BB. Outstanding Options
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• Treatment: On the Effective
Date, each holder of an outstanding
option to purchase GGP Common Stock
shall receive on account of such
option, an option to purchase New
Common Stock and an option to
purchase GGO Common Stock. |
III. CLOSING DATE DEBT AND GGO PROMISSORY NOTE
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A. Closing Date Net Debt and GGO
Promissory Note
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• 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. |
IV. OTHER PLAN TERMS
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A. Executory Contracts
and Unexpired Leases
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• 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
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• 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. |
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C. Employee/ Officer/Director
Indemnification
Obligations
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• 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. |
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D. Provisions Concerning
Plan Implementation
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• 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. |
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E. Insurance Policies,
Benefit Plans, Surety
Bonds
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• 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. |
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F. Retention of Causes of
Action
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• All causes of action shall vest with GGP or GGO, as
applicable |
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G. Conditions for
Consummation and
Confirmation
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• Usual and customary for transactions of this type |
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H. Discharge, Releases
and Exculpation
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• The Plan will contain discharge, release and
exculpation provisions in a manner consistent with those
provided in the Confirmed Plans. |
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I. Governing Law
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• To the extent the Bankruptcy Code or other federal
law does not apply, New York law shall govern. |
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EXHIBIT B — POST-BANKRUPTCY GGP CORPORATE STRUCTURE
EXHIBIT C-1 — BROOKFIELD AGREEMENT
EXHIBIT C-1
CORNERSTONE INVESTMENT AGREEMENT
dated as of March 31, 2010
between
REP Investments LLC
and
General Growth Properties, Inc.
TABLE OF CONTENTS
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ARTICLE I |
PURCHASE OF NEW COMMON STOCK; CLOSING |
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Section 1.1 |
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Purchase of New Common Stock |
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Section 1.2 |
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Closing |
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Section 1.3 |
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Company Rights Offering Election |
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ARTICLE II |
GGO SHARE DISTRIBUTION AND GGO RIGHTS OFFERING |
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Section 2.1 |
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GGO Share Distribution |
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Section 2.2 |
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GGO Rights Offering |
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ARTICLE III |
REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
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Section 3.1 |
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Organization and Qualification |
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Section 3.2 |
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Corporate Power and Authority |
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Section 3.3 |
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Execution and Delivery; Enforceability |
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Section 3.4 |
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Authorized Capital Stock |
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Section 3.5 |
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Issuance |
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Section 3.6 |
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No Conflict |
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Section 3.7 |
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Consents and Approvals |
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Section 3.8 |
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Company Reports |
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Section 3.9 |
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No Undisclosed Liabilities |
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Section 3.10 |
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No Material Adverse Effect |
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Section 3.11 |
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No Violation or Default: Licenses and Permits |
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Section 3.12 |
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Legal Proceedings |
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Section 3.13 |
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Investment Company Act |
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Section 3.14 |
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Compliance With Environmental Laws |
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Section 3.15 |
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Company Benefit Plans |
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Section 3.16 |
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Labor and Employment Matters |
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Section 3.17 |
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Insurance |
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Section 3.18 |
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No Unlawful Payments |
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Section 3.19 |
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No Broker’s Fees |
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Section 3.20 |
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Real and Personal Property |
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Section 3.21 |
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Tax Matters |
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Section 3.22 |
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Material Contracts |
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Section 3.23 |
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Certain Restrictions on Charter and Bylaws
Provisions; State Takeover Laws |
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Section 3.24 |
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No Other Representations or Warranties |
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ARTICLE IV |
REPRESENTATIONS AND WARRANTIES OF PURCHASER |
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Section 4.1 |
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Organization |
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Section 4.2 |
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Power and Authority |
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Section 4.3 |
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Execution and Delivery |
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Section 4.4 |
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No Conflict |
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Section 4.5 |
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Consents and Approvals |
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26 |
|
|
|
|
|
Section 4.6 |
|
Compliance with Laws |
|
|
26 |
|
(i)
|
|
|
|
|
|
|
|
|
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|
|
|
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|
Page |
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|
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|
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|
|
|
Section 4.7 |
|
Legal Proceedings |
|
|
26 |
|
|
|
|
|
Section 4.8 |
|
No Broker’s Fees |
|
|
26 |
|
|
|
|
|
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 |
|
No Other Representations or Warranties |
|
|
27 |
|
|
|
|
|
Section 4.14 |
|
Acknowledgement |
|
|
27 |
|
|
|
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|
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|
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|
|
|
ARTICLE V |
COVENANTS OF THE COMPANY AND PURCHASER |
|
|
28 |
|
|
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|
|
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|
|
|
|
|
|
|
Section 5.1 |
|
Bankruptcy Court Motions and Orders |
|
|
28 |
|
|
|
|
|
Section 5.2 |
|
Warrants, New Warrants and GGO Warrants |
|
|
28 |
|
|
|
|
|
Section 5.3 |
|
Assistance with Capital Raising Activities |
|
|
29 |
|
|
|
|
|
Section 5.4 |
|
Listing |
|
|
29 |
|
|
|
|
|
Section 5.5 |
|
Use of Proceeds |
|
|
29 |
|
|
|
|
|
Section 5.6 |
|
Access to Information |
|
|
30 |
|
|
|
|
|
Section 5.7 |
|
Competing Transactions |
|
|
30 |
|
|
|
|
|
Section 5.8 |
|
Reservation for Issuance |
|
|
30 |
|
|
|
|
|
Section 5.9 |
|
Subscription Rights |
|
|
30 |
|
|
|
|
|
Section 5.10 |
|
Company Board of Directors |
|
|
34 |
|
|
|
|
|
Section 5.11 |
|
Notification of Certain Matters |
|
|
38 |
|
|
|
|
|
Section 5.12 |
|
Further Assurances |
|
|
39 |
|
|
|
|
|
Section 5.13 |
|
Xxxxxx Heirs Obligations |
|
|
39 |
|
|
|
|
|
Section 5.14 |
|
Rights Agreement; Reorganized Company Organizational Documents |
|
|
39 |
|
|
|
|
|
Section 5.15 |
|
Stockholder Approval |
|
|
40 |
|
|
|
|
|
Section 5.16 |
|
Registration Statements |
|
|
41 |
|
|
|
|
|
Section 5.17 |
|
Closing Date Net Debt |
|
|
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VI |
ADDITIONAL COVENANTS OF PURCHASER |
|
|
43 |
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
Section 6.1 |
|
Information |
|
|
43 |
|
|
|
|
|
Section 6.2 |
|
Purchaser Efforts |
|
|
43 |
|
|
|
|
|
Section 6.3 |
|
Plan Support |
|
|
43 |
|
|
|
|
|
Section 6.4 |
|
Transfer Restrictions |
|
|
44 |
|
|
|
|
|
Section 6.5 |
|
Equity Commitments; Source of Funds |
|
|
46 |
|
|
|
|
|
Section 6.6 |
|
REIT Representations and Covenants |
|
|
47 |
|
|
|
|
|
Section 6.7 |
|
Non-Control Agreement |
|
|
47 |
|
|
|
|
|
Section 6.8 |
|
Purchaser Formed Entities |
|
|
47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VII |
CONDITIONS TO THE OBLIGATIONS OF PURCHASER |
|
|
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 7.1 |
|
Conditions to the Obligations of Purchaser |
|
|
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE VIII |
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 8.1 |
|
Conditions to the Obligations of the Company |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE IX |
INDEMNIFICATION |
|
|
58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 9.1 |
|
Indemnification |
|
|
58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE X |
SURVIVAL OF REPRESENTATIONS AND WARRANTIES |
|
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(ii)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 10.1 |
|
Survival of Representations and Warranties |
|
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE XI |
TERMINATION |
|
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 11.1 |
|
Termination |
|
|
59 |
|
|
|
|
|
Section 11.2 |
|
Effects of Termination |
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE XII |
DEFINITIONS |
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 12.1 |
|
Defined Terms |
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARTICLE XIII |
MISCELLANEOUS |
|
|
76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section 13.1 |
|
Notices |
|
|
76 |
|
|
|
|
|
Section 13.2 |
|
Assignment; Third Party Beneficiaries |
|
|
77 |
|
|
|
|
|
Section 13.3 |
|
Prior Negotiations; Entire Agreement |
|
|
78 |
|
|
|
|
|
Section 13.4 |
|
Governing Law; Venue |
|
|
78 |
|
|
|
|
|
Section 13.5 |
|
Company Disclosure Letter |
|
|
78 |
|
|
|
|
|
Section 13.6 |
|
Counterparts |
|
|
78 |
|
|
|
|
|
Section 13.7 |
|
Expenses |
|
|
78 |
|
|
|
|
|
Section 13.8 |
|
Waivers and Amendments |
|
|
78 |
|
|
|
|
|
Section 13.9 |
|
Construction |
|
|
79 |
|
|
|
|
|
Section 13.10 |
|
Adjustment of Share Numbers and Prices |
|
|
79 |
|
|
|
|
|
Section 13.11 |
|
Certain Remedies |
|
|
80 |
|
|
|
|
|
Section 13.12 |
|
Bankruptcy Matters |
|
|
81 |
|
(iii)
LIST OF EXHIBITS
|
|
|
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 Equity Commitment Letter |
|
|
|
Exhibit L:
|
|
Form of Escrow Agreement |
|
|
|
Exhibit M:
|
|
Form of Non-Control Agreement |
|
|
|
Exhibit N:
|
|
Certain REIT Investors |
(iv)
INDEX OF DEFINED TERMS
|
|
|
|
|
Defined Term |
|
Page |
|
|
|
|
|
|
2006 Bank Loan |
|
|
62 |
|
Acceptable LC |
|
|
62 |
|
Additional Financing |
|
|
52 |
|
Additional Sales Period |
|
|
63 |
|
Adequate Reserves |
|
|
22 |
|
Affiliate |
|
|
63 |
|
Agreement |
|
|
1 |
|
Anticipated Debt Paydowns |
|
|
52 |
|
Approval Motion |
|
|
28 |
|
Approval Order |
|
|
28 |
|
Asset Sales |
|
|
52 |
|
Backstop Commitment |
|
|
6 |
|
Backstop Consideration |
|
|
7 |
|
Bankruptcy Cases |
|
|
1 |
|
Bankruptcy Code |
|
|
1 |
|
Bankruptcy Court |
|
|
1 |
|
Brazilian Entities |
|
|
63 |
|
Brookfield Consortium Member |
|
|
63 |
|
Brookfield Equity Commitment Letter |
|
|
62 |
|
Business Day |
|
|
63 |
|
Capital Raising Activities |
|
|
29 |
|
Cash Equivalents |
|
|
63 |
|
Chapter 11 |
|
|
1 |
|
Claims |
|
|
64 |
|
Closing |
|
|
3 |
|
Closing Date |
|
|
3 |
|
Closing Date Net Debt |
|
|
64 |
|
Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts |
|
|
64 |
|
Closing Funding Certification |
|
|
80 |
|
Closing Restraint |
|
|
61 |
|
CMPC |
|
|
5 |
|
Code |
|
|
16 |
|
Commitment Amount |
|
|
47 |
|
Common Stock |
|
|
1 |
|
Company |
|
|
1 |
|
Company Benefit Plan |
|
|
65 |
|
Company Board |
|
|
65 |
|
Company Disclosure Letter |
|
|
8 |
|
Company Ground Lease Property |
|
|
20 |
|
Company Mortgage Loan |
|
|
21 |
|
Company Option Plans |
|
|
9 |
|
Company Properties |
|
|
18 |
|
Company Property |
|
|
18 |
|
(v)
|
|
|
|
|
Defined Term |
|
Page |
|
|
|
|
|
|
Company Property Lease |
|
|
20 |
|
Company Rights Offering |
|
|
4 |
|
Company SEC Reports |
|
|
13 |
|
Competing Transaction |
|
|
65 |
|
Conclusive Net Debt Adjustment Statement |
|
|
65 |
|
Confidentiality Agreement |
|
|
30 |
|
Confirmation Order |
|
|
49 |
|
Confirmed Debtors |
|
|
72 |
|
Contract |
|
|
65 |
|
Conversion Shares |
|
|
66 |
|
Corporate Level Debt |
|
|
66 |
|
Debt |
|
|
66 |
|
Debtors |
|
|
1 |
|
Designation Conditions |
|
|
3 |
|
DIP Loan |
|
|
66 |
|
Disclosure Statement |
|
|
66 |
|
Disclosure Statement Order |
|
|
49 |
|
Dispute Notice |
|
|
41 |
|
Disputed Items |
|
|
42 |
|
Effective Date |
|
|
3 |
|
Eligible Holder |
|
|
6 |
|
Encumbrances |
|
|
18 |
|
Environmental Laws |
|
|
15 |
|
Equity Exchange |
|
|
1 |
|
Equity Financing |
|
|
80 |
|
Equity Provider |
|
|
62 |
|
Equity Securities |
|
|
10 |
|
ERISA |
|
|
66 |
|
ERISA Affiliate |
|
|
16 |
|
Escrow Agreement |
|
|
62 |
|
Escrow Agreements |
|
|
62 |
|
Excess Surplus Amount |
|
|
66 |
|
Exchangeable Notes |
|
|
66 |
|
Excluded Claims |
|
|
67 |
|
Excluded Non-US Plans |
|
|
17 |
|
Expiration Time |
|
|
6 |
|
Fairholme Agreement |
|
|
2 |
|
Fairholme Investors |
|
|
2 |
|
Fairholme/Pershing Agreements |
|
|
2 |
|
Fairholme/Pershing Backstop Commitment |
|
|
7 |
|
Fairholme/Pershing Investors |
|
|
2 |
|
Foreign Plan |
|
|
17 |
|
Fully Diluted Basis |
|
|
68 |
|
Funding Document |
|
|
75 |
|
GAAP |
|
|
68 |
|
GGO |
|
|
2 |
|
(vi)
|
|
|
|
|
Defined Term |
|
Page |
|
|
|
|
|
|
GGO Agreement |
|
|
36 |
|
GGO Backstop Limit |
|
|
6 |
|
GGO Board |
|
|
36 |
|
GGO Common Share Amount |
|
|
68 |
|
GGO Common Stock |
|
|
4 |
|
GGO Minimum Allocation Right |
|
|
6 |
|
GGO Note Amount |
|
|
68 |
|
GGO Per Share Purchase Price |
|
|
6 |
|
GGO Promissory Note |
|
|
68 |
|
GGO Purchase Price |
|
|
68 |
|
GGO Representative |
|
|
4 |
|
GGO Rights Offering |
|
|
5 |
|
GGO Rights Offering Shares |
|
|
5 |
|
GGO Setup Costs |
|
|
69 |
|
GGO Share Distribution |
|
|
5 |
|
GGO Shares |
|
|
69 |
|
GGO Warrants |
|
|
28 |
|
GGP |
|
|
1 |
|
Governmental Entity |
|
|
69 |
|
Hazardous Materials |
|
|
16 |
|
Xxxxxx Agreement |
|
|
69 |
|
Xxxxxx Amount |
|
|
68 |
|
Xxxxxx Heirs Obligation |
|
|
69 |
|
Identified Assets |
|
|
4 |
|
Indebtedness |
|
|
69 |
|
Indemnified Person |
|
|
58 |
|
Indemnity Cap |
|
|
42 |
|
Joint Venture |
|
|
70 |
|
Knowledge |
|
|
70 |
|
Law |
|
|
70 |
|
Liquidity Equity Issuances |
|
|
70 |
|
Liquidity Target |
|
|
51 |
|
Material Adverse Effect |
|
|
70 |
|
Material Contract |
|
|
71 |
|
Material Lease |
|
|
21 |
|
Measurement Date |
|
|
9 |
|
Most Recent Statement |
|
|
18 |
|
MPC Assets |
|
|
71 |
|
MPC Tax Reserve |
|
|
71 |
|
MPC Taxes |
|
|
71 |
|
Net Debt Deficiency Amount |
|
|
72 |
|
Net Debt Excess Amount |
|
|
71 |
|
New Common Stock |
|
|
1 |
|
New Debt |
|
|
51 |
|
New Warrants |
|
|
28 |
|
Non-Controlling Properties |
|
|
72 |
|
(vii)
|
|
|
|
|
Defined Term |
|
Page |
|
|
|
|
|
|
NYSE |
|
|
29 |
|
Offering Premium |
|
|
72 |
|
Operating Partnership |
|
|
72 |
|
Other Sponsor |
|
|
75 |
|
PBGC |
|
|
16 |
|
Per Share Purchase Price |
|
|
3 |
|
Permitted Claims |
|
|
72 |
|
Permitted Claims Amount |
|
|
73 |
|
Permitted Title Exceptions |
|
|
18 |
|
Pershing Agreement |
|
|
2 |
|
Pershing Investors |
|
|
2 |
|
Person |
|
|
73 |
|
Petition Date |
|
|
1 |
|
Plan |
|
|
1 |
|
Plan Debtors |
|
|
72 |
|
Plan Summary Term Sheet |
|
|
1 |
|
PMA Claims |
|
|
72 |
|
Preliminary Closing Date Net Debt Review Deadline |
|
|
73 |
|
Preliminary Closing Date Net Debt Review Period |
|
|
73 |
|
Preliminary Closing Date Net Debt Schedule |
|
|
41 |
|
Proceedings |
|
|
58 |
|
Proportionally Consolidated Debt |
|
|
73 |
|
Proportionally Consolidated Unrestricted Cash |
|
|
73 |
|
Proposed Approval Order |
|
|
28 |
|
Proposed Securities |
|
|
31 |
|
Purchase Notice |
|
|
7 |
|
Purchase Price |
|
|
3 |
|
Purchaser |
|
|
1 |
|
Purchaser Board Designees |
|
|
34 |
|
Purchaser Debt Holdings |
|
|
66 |
|
Purchaser GGO Board Designees |
|
|
36 |
|
Record Date |
|
|
6 |
|
Refinance Cap |
|
|
54 |
|
Reinstated Amounts |
|
|
51 |
|
Reinstatement Adjustment Amount |
|
|
74 |
|
Reinstatement Amount |
|
|
74 |
|
REIT |
|
|
23 |
|
REIT Subsidiary |
|
|
23 |
|
Release Date |
|
|
46 |
|
Reorganized Company |
|
|
1 |
|
Reorganized Company Organizational Documents |
|
|
39 |
|
Reserve |
|
|
73 |
|
Reserve Surplus Amount |
|
|
74 |
|
Resolution Period |
|
|
42 |
|
Right |
|
|
6 |
|
Rights Agreement |
|
|
74 |
|
(viii)
|
|
|
|
|
Defined Term |
|
Page |
|
|
|
|
|
|
Rights Offering Election |
|
|
3 |
|
Xxxxx Bonds |
|
|
74 |
|
Rule 144 |
|
|
44 |
|
Sales Cap |
|
|
53 |
|
SEC |
|
|
13 |
|
Securities Act |
|
|
13 |
|
Share Cap Number |
|
|
52 |
|
Share Equivalent |
|
|
74 |
|
Shares |
|
|
3 |
|
Significant Subsidiaries |
|
|
74 |
|
Stockholder Protection Agreement |
|
|
72 |
|
Subscribing Entities |
|
|
30 |
|
Subscribing Entity |
|
|
30 |
|
Subscription Agent |
|
|
6 |
|
Subscription Right |
|
|
31 |
|
Subsidiary |
|
|
74 |
|
Synthetic Lease Obligation |
|
|
69 |
|
Target Net Debt |
|
|
75 |
|
Tax Protection Agreements |
|
|
75 |
|
Tax Return |
|
|
23 |
|
Taxes |
|
|
23 |
|
Termination Date |
|
|
75 |
|
Termination Date Extension Notice |
|
|
75 |
|
Total Unsubscribed Shares |
|
|
7 |
|
Transactions |
|
|
76 |
|
Transfer |
|
|
45 |
|
TRUPS |
|
|
76 |
|
Unrestricted Cash |
|
|
76 |
|
Unsecured Indebtedness |
|
|
76 |
|
Unsubscribed Shares |
|
|
6 |
|
UPREIT Units |
|
|
76 |
|
Warrant Agreement |
|
|
28 |
|
Warrants |
|
|
28 |
|
(ix)
CORNERSTONE INVESTMENT AGREEMENT, dated as of March 31, 2010 (this “Agreement”), by
and between General Growth Properties, Inc., a Delaware corporation (“GGP”), and REP
Investments LLC, a Delaware limited liability company (together with its permitted assigns,
“Purchaser”).
RECITALS
WHEREAS, GGP is a debtor in possession in that certain bankruptcy case under chapter 11
(“Chapter 11”) of Title 11 of the United States Code, 11 U.S.C. §§ 101 -1532 (as amended,
the “Bankruptcy Code”) filed on April 16, 2009 (the “Petition Date”) in the United
States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”),
Case No. 09-11977 (ALG).
WHEREAS, Purchaser desires to assist GGP in its plans to recapitalize and emerge from
bankruptcy and has agreed to sponsor the implementation of a joint chapter 11 plan of
reorganization based on the Plan Summary Term Sheet (as defined below) (together with all documents
and agreements that form part of such plan or related plan supplement or are related thereto, and
as it may be amended, modified or supplemented from time to time, in each case, to the extent it
relates to the implementation and effectuation of the Plan Summary Term Sheet and this Agreement,
the “Plan”), of GGP and its Subsidiaries and Affiliates who are debtors and
debtors-in-possession (the “Debtors”) in the chapter 11 cases pending and jointly
administered in the Bankruptcy Court (the “Bankruptcy Cases”).
WHEREAS, principal elements of the Plan (including a table setting forth the proposed
treatment of allowed claims and equity interests in the Bankruptcy Cases) are set forth on
Exhibit A hereto (the “Plan Summary Term Sheet”).
WHEREAS, the Plan shall provide, among other things, that (i) each holder of common stock, par
value $0.01 per share, of GGP (the “Common Stock”) shall receive, in exchange for each
share of Common Stock held by such holder, one share (subject to adjustment as contemplated by
Section 5.13(a) hereof) of new common stock (the “New Common Stock”) of a new
company that succeeds to GGP in the manner contemplated by Exhibit B upon consummation of
the Plan (the “Reorganized Company”) and (ii) any Equity Securities (other than Common
Stock) of the Company (as defined below) or any of its Subsidiaries (as defined below) outstanding
immediately after the Effective Date that were previously convertible into, or exercisable or
exchangeable for, Common Stock shall thereafter be convertible into, or exercisable or exchangeable
for, New Common Stock (based upon the number of shares of Common Stock underlying such Equity
Securities) (the transactions contemplated by clauses (i) and (ii) of this recital being referred
to herein as the “Equity Exchange”). For purposes of this Agreement, the “Company”
shall be deemed to refer, prior to consummation of the Plan, to GGP and, on and after consummation
of the Plan, the Reorganized Company, as the context requires.
WHEREAS, Purchaser desires to make an investment in the Reorganized Company on the terms and
subject to the conditions described herein in the form of the purchase of shares of New Common
Stock as contemplated hereby.
WHEREAS, in addition to the Equity Exchange and the sale of the Shares (as defined below), the
Plan shall provide for the incorporation by the Company of a new subsidiary, General Growth
Opportunities, Inc. (“GGO”), the contribution of certain assets (and/or equity interests
related thereto) of the Company to GGO and the assumption by GGO of the liabilities associated with
such assets, the distribution to the shareholders of the Company (subject to adjustment as
contemplated by Section 5.13(b) hereof and prior to the issuance of the Shares and the
issuance of other shares of New Common Stock contemplated by this Agreement other than pursuant to
the Equity Exchange) on a pro rata basis and certain holders of UPREIT Units of all of the capital
stock of GGO and the consummation of the GGO Rights Offering (as described herein).
WHEREAS, the Company has requested that Purchaser commit to purchase the Shares and the GGO
Shares at a fixed price for the term hereof.
WHEREAS, Purchaser has agreed to enter into this Agreement and commit to purchase the Shares
and the GGO Shares only on the condition that the Company, as promptly as practicable following the
date hereof (but no later than the date provided in Section 5.2 hereof), issue the Warrants
contemplated herein and perform its other obligations hereunder.
WHEREAS, on the date hereof, the Company entered into an agreement (in the form attached
hereto as Exhibit C-1 together with any amendments thereto as have been approved by
Purchaser, the “Fairholme Agreement”) with The Xxxxxxxxx Xxxx and The Fairholme Focused
Income Fund (the “Fairholme Investors”) pursuant to which the Fairholme Investors have
agreed to make (i) an investment of up to $2,713,200,000 in the Reorganized Company in the form of
the purchase of shares of New Common Stock and (ii) an investment of up to $62,500,000 in GGO in
the form of the purchase of shares of GGO Common Stock pursuant to a commitment to backstop a
portion of the GGO Rights Offering.
WHEREAS, on the date hereof, the Company entered into an agreement (in the form attached
hereto as Exhibit C-2 together with any amendments thereto as have been approved by
Purchaser, the “Pershing Agreement” and, together with the Fairholme Agreement, the
“Fairholme/Pershing Agreements”) with Pershing Square, L.P., Pershing Square II, L.P.,
Pershing Square International, Ltd. and Pershing Square International V, Ltd. (the “Pershing
Investors” and, together with the Fairholme Investors, the “Fairholme/Pershing
Investors”) pursuant to which the Pershing Investors have agreed to make (i) an investment of
up to $1,086,800,000 in the Reorganized Company in the form of the purchase of shares of New Common
Stock and (ii) an investment of up to $62,500,000 in GGO in the form of the purchase of shares of
GGO Common Stock pursuant to a commitment to backstop a portion of the GGO Rights Offering.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:
-2-
ARTICLE I
PURCHASE OF NEW COMMON STOCK; CLOSING
SECTION 1.1 Purchase of New Common Stock.
(a) On the terms and subject to the conditions set forth herein, at the Closing (as defined
below), Purchaser shall purchase from the Company, and the Company shall sell to Purchaser,
250,000,000 shares of New Common Stock minus the Conversion Shares, if any (the “Shares”),
for a price per share equal to $10.00 (the “Per Share Purchase Price” and, in the
aggregate, the “Purchase Price”).
(b) All Shares shall be delivered with any and all issue, stamp, transfer or similar taxes or
duties payable in connection with such delivery duly paid by the Company to the extent required
under the Confirmation Order or applicable Law.
(c) Purchaser, in its sole discretion, may designate that some or all of the Shares be issued
in the name of, and delivered to, one or more Brookfield Consortium Members, subject to (i) such
action not causing any delay in the obtaining of, or significantly increasing the risk of not
obtaining, any material authorizations, consents, orders, declarations or approvals necessary to
consummate the transactions contemplated by this Agreement or otherwise delaying the consummation
of such transactions, (ii) such Person shall be an “accredited investor” (within the meaning of
Rule 501 of Regulation D under the Securities Act) and shall have agreed in writing with and for
the benefit of the Company to be bound by the terms of this Agreement applicable to Purchaser set
forth in Section 6.4, including the delivery of the letter certifying compliance with the
representations and covenants set forth on Exhibit D to the extent applicable and (iii)
Purchaser not being relieved of any of its obligations under this Agreement ((i), (ii) and (iii)
collectively, the “Designation Conditions”).
SECTION 1.2 Closing. Subject to the satisfaction or waiver of the conditions
(excluding conditions that, by their nature, cannot be satisfied until the Closing, but subject to
the satisfaction or waiver of those conditions as of the Closing) set forth in Article VII
and Article VIII, the closing of the purchase of the Shares by Purchaser pursuant hereto
(the “Closing”) shall occur at 9:30 a.m., New York time, on the effective date of the Plan
(the “Effective Date”), at the offices of Weil, Gotshal & Xxxxxx LLP located at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, or such other date, time or location as agreed by the parties. The
date of the Closing is referred to as the “Closing Date”. Each of the Company and
Purchaser hereby agree that in no event shall the Closing occur unless all of the Shares are sold
to Purchaser (or to such other Brookfield Consortium Members as Purchaser may designate in
accordance with and subject to the Designation Conditions) on the Closing Date.
SECTION 1.3 Company Rights Offering Election. The Company may at any time prior to
the date of filing of the Disclosure Statement, upon written notice to Purchaser in accordance with
the terms hereof (the “Rights Offering Election”), irrevocably elect to convert the
obligation of Purchaser to purchase the Shares as contemplated by Section 1.1 hereof into
an obligation of Purchaser to participate in a rights offering by the Company pursuant to which
shareholders and/or creditors of the Company are offered rights to subscribe for shares of New
-3-
Common Stock (a “Company Rights Offering”), subject to the execution and delivery of
definitive documentation therefor and the satisfaction of the conditions described therein and
other customary conditions for a public rights offering. To the extent the Company makes a Rights
Offering Election, (i) Purchaser shall be entitled to a minimum allocation of shares of New Common
Stock in the Company Rights Offering equal to the number of shares Purchaser would otherwise be
required to purchase pursuant to Section 1.1 hereof had no such election been made, (ii)
the purchase price per share payable by Purchaser shall be equal to the Per Share Purchase Price
and Purchaser shall not be otherwise adversely affected as compared to the transactions
contemplated hereby, (iii) the Company Rights Offering shall be effected in a manner substantially
consistent with the procedures contemplated by Section 2.2 with respect to the GGO Rights
Offering, provided that the Company Rights Offering shall be completed by the Effective Date, and
(iv) the Company and Purchaser shall cooperate in good faith to develop and agree upon
documentation that is reasonably acceptable to both the Company and Purchaser governing the further
terms and conditions of the Company Rights Offering.
ARTICLE II
GGO SHARE DISTRIBUTION AND GGO RIGHTS OFFERING
SECTION 2.1 GGO Share Distribution. On the terms and subject to the conditions
(including Bankruptcy Court approval) set forth herein, the Plan shall provide for the following:
(a) On or prior to the Effective Date, the Company shall incorporate GGO with issued and
outstanding capital stock consisting of at least the GGO Common Share Amount of shares of common
stock (the “GGO Common Stock”), designate an employee of the Company familiar with the
Identified Assets and reasonably acceptable to Purchaser to serve as a representative of GGO (the
“GGO Representative”) and shall contribute to GGO (directly or indirectly) the assets
(and/or equity interests related thereto) set forth in Exhibit E hereto and have GGO assume
directly or indirectly the associated liabilities (the “Identified Assets”);
provided, however, that to the extent the Company is prohibited by Law from
contributing one or more of the Identified Assets to GGO or the contribution thereof would breach
or give rise to a default under any Contract, agreement or instrument that would, in the good faith
judgment of the Company in consultation with the GGO Representative, impair in any material respect
the value of the relevant Identified Asset or give rise to additional liability (other than
liability that would not, in the aggregate, be material) on the part of GGO or the Company or a
Subsidiary of the Company, the Company shall (i) to the extent not prohibited by Law or would give
rise to such a default, take such action or cause to be taken such other actions in order to place
GGO, insofar as reasonably possible, in the same economic position as if such Identified Asset had
been transferred as contemplated hereby and so that, insofar as reasonably possible, substantially
all the benefits and burdens (including all obligations thereunder but excluding any obligations
that arise out of the transfer of the Identified Asset to the extent included in Permitted Claims)
relating to such Identified Asset, including possession, use, risk of loss, potential for gain and
control of such Identified Asset, are to inure from and after the Closing to GGO (provided,
that as soon as a consent for the contribution of an Identified Asset is obtained or the
contractual impediment is removed or no longer applies, the applicable Identified Asset shall be
promptly contributed to GGO), or (ii) to the extent the actions contemplated by clause (i) are not
possible without resulting in a material and adverse effect on the Company and its Subsidiaries (as
-4-
reasonably determined by the Company in consultation with the GGO Representative), contribute
other assets, with the consent of Purchaser (which Purchaser shall not unreasonably withhold,
condition or delay), having an economically equivalent value and related financial impact on the
Company (in each case, as reasonably agreed by Purchaser and the Company in consultation with the
GGO Representative) to the Identified Asset not so contributed.
(b) Subject to Section 5.13(b), the GGO Common Share Amount of shares of GGO Common
Stock, representing all of the outstanding capital stock of GGO (other than shares of GGO Common
Stock to be issued (x) in the GGO Rights Offering, (y) in connection with the Backstop
Consideration and the backstop consideration issuable to the Fairholme/Pershing Investors pursuant
to the Fairholme/Pershing Agreements and (z) upon exercise of the GGO Warrants and the warrants
issued to the Fairholme/Pershing Investors pursuant to the Fairholme/Pershing Agreements, shall be
distributed, on or prior to the Effective Date, to the shareholders of the Company (pre-issuance of
the Shares) on a pro rata basis and certain holders of common UPREIT Units (the “GGO Share
Distribution”).
(c) It is agreed that neither the Company nor any of its Subsidiaries shall be required to pay
or cause payment of any fees or make any financial accommodations to obtain any third-party
consent, approval, waiver or other permission for the contribution contemplated by Section
2.1(a), or to seek any such consent, approval, waiver or other permission that is inapplicable
to the Company or any of its Debtor Subsidiaries pursuant to the Bankruptcy Code.
(d) The parties currently contemplate that the GGO Share Distribution will be structured as a
“tax free spin-off” under the Code. To the extent that the Company and Purchaser jointly determine
that it is desirable for the GGO Share Distribution to be structured as a taxable dividend, the
parties will work together to structure the transaction to allow for such outcome.
(e) With respect to the Columbia Master Planned Community (the “CMPC”), it is the
intention of the parties that office assets currently producing any material amount of income at
the CMPC (including any associated right of access to parking spaces) will be retained by the
Company and the remaining non-income producing assets at the CMPC will be transferred to GGO
(including all rights to develop and/or redevelop (as appropriate) the remainder of the CMPC). On
or prior to the Effective Date, the Company and GGO shall enter into a mutually satisfactory
development and cooperation agreement with respect to the CMPC, which agreement shall provide,
among other things, that GGO shall grant mutually satisfactory easements, to the extent not already
granted, such that the office buildings retained by GGP (as provided above) continuously shall have
access to parking spaces appropriate for such office buildings.
SECTION 2.2 GGO Rights Offering.
(a) On the terms and subject to the conditions set forth herein, the Plan shall provide for
the following:
|
(i) |
|
That GGO shall offer 50,000,000 shares of GGO Common Stock (the
“GGO Rights Offering Shares”) pursuant to a rights offering (the
“GGO Rights Offering”) which shall be completed at the Company’s
election |
-5-
|
|
|
either (A) on or prior to the Effective Date or (B) promptly (but in no
event later than 90 days) following the Effective Date. Pursuant to the GGO
Rights Offering, each holder of shares of Common Stock entitled to subscribe
to the GGO Rights Offering (each, an “Eligible Holder”), as of the
record date approved by the Bankruptcy Court in connection with the Plan
(the “Record Date”), shall be offered a transferable subscription
right (each, a “Right”) to purchase up to its pro rata share (after
giving effect to the GGO Minimum Allocation Right and minimum allocation
rights granted to other investors in the Plan) of the GGO Rights Offering
Shares at a purchase price of $5.00 per share of GGO Common Stock (the
“GGO Per Share Purchase Price”). |
|
|
(ii) |
|
That Purchaser shall be entitled to receive a minimum
allocation in connection with the GGO Rights Offering of 10,000,000 shares of
GGO Common Stock at the GGO Per Share Purchase Price (the “GGO Minimum
Allocation Right”). |
|
|
(iii) |
|
That if the subscription agent for the GGO Rights Offering
(the “Subscription Agent”) for any reason does not receive from a given
Eligible Holder both a timely and duly completed subscription form for the GGO
Rights Offering and timely payment of such Eligible Holder’s aggregate GGO Per
Share Purchase Price prior to the expiration time for the GGO Rights Offering
(the “Expiration Time”), such Eligible Holder shall be deemed to have
relinquished and waived its right to participate in the GGO Rights Offering. |
|
|
(iv) |
|
The Expiration Time shall occur no later than ninety (90) days
after the Effective Date. |
(b) In order to facilitate the GGO Rights Offering, pursuant to this Agreement, and subject to
the terms, conditions and limitations set forth herein, the Plan will provide that GGO will sell to
Purchaser in the GGO Rights Offering, and Purchaser hereby agrees to subscribe and pay for, a
number of shares of GGO Common Stock (not to exceed the GGO Backstop Limit (as such term is defined
below)) equal to (i) the GGO Rights Offering Shares minus (ii) the number of shares of GGO Common
Stock offered pursuant to the GGO Rights Offering and duly subscribed for and paid for on or before
the Expiration Time (the difference between (i) and (ii) after applying the GGO Backstop Limit, the
“Unsubscribed Shares” and Purchaser’s commitment to purchase such Unsubscribed Shares being
referred to as the “Backstop Commitment”); provided, however, that the
Backstop Commitment is conditioned upon GGO having filed, and the SEC declaring effective, a shelf
registration statement on Form S-1 or S-11, as applicable, prior to the date of completion of the
GGO Rights Offering (unless Purchaser shall consent to GGO filing such registration statement after
such date, such consent not to be unreasonably withheld) covering resales by Purchaser of the GGO
Shares and shares issuable upon exercise of the GGO Warrants, containing a plan of distribution
reasonably satisfactory to Purchaser, but subject to the provisions of Section 6.4 and the
Non-Control Agreement. For purposes of this Agreement, “GGO Backstop Limit” means the
number of shares of GGO Common Stock equal to (i) the quotient obtained by dividing (x)
$125,000,000 by (y) the GGO
-6-
Per Share Purchase Price minus (ii) the number of shares of GGO Common Stock subscribed, and
paid for, on or before the Expiration Time by Purchaser pursuant to the GGO Minimum Allocation
Right. If the Fairholme Investors and/or the Pershing Investors have any obligation to subscribe
and pay for shares of GGO Common Stock offered pursuant to the GGO Rights Offering (the
“Fairholme/Pershing Backstop Commitment”) in the Fairholme/Pershing Agreements, the
Backstop Commitment shall be applied pro rata with the Fairholme/Pershing Backstop Commitment, such
that the total number of shares of GGO Common Stock not subscribed for in the GGO Rights Offering
(the “Total Unsubscribed Shares”) shall be allocated in proportion to their respective
backstop commitments (subject in the case of Purchaser to the GGO Backstop Limit and in the case of
the Fairholme/Pershing Investors to the applicable limits in the Fairholme/Pershing Agreements).
(c) The Subscription Agent shall be instructed to give Purchaser as soon as reasonably
practicable after the Expiration Time by electronic facsimile transmission or by electronic mail a
notice conforming to the requirements specified herein of either (i) the calculation of the number
of Unsubscribed Shares and a summary of the portion of the Total Unsubscribed Shares required to be
purchased by each of Purchaser and, if applicable, the Fairholme/Pershing Investors (a
“Purchase Notice”), or (ii) in the absence of any Unsubscribed Shares, the fact that there
are no Unsubscribed Shares. If at the Expiration Time the Total Unsubscribed Shares are in excess
of the Backstop Commitment and the Fairholme/Pershing Backstop Commitment, then Purchaser shall
also have the right, but not the obligation, to purchase on the same terms as the Backstop
Commitment fifty percent (50%) of the number of Total Unsubscribed Shares in excess of each of the
Backstop Commitment and the Fairholme/Pershing Backstop Commitment, exercisable within 30 days
after receipt of the Purchase Notice.
(d) The Plan shall provide that unless this Agreement has been previously terminated, on the
Effective Date GGO shall issue to Purchaser (or its designees in accordance with and subject to the
Designation Conditions) a number of shares of GGO Common Stock equal to the quotient obtained by
dividing (x) 6,250,000 by (y) the GGO Per Share Purchase Price (the “Backstop
Consideration”) as compensation for the risk and efforts of the Backstop Commitment.
(e) In the GGO Rights Offering, Purchaser shall purchase at the GGO Per Share Purchase Price,
and GGO shall sell, such number of Unsubscribed Shares as are listed in the final Purchase Notice
provided by the Company pursuant to Section 2.2(c) hereof, without prejudice to the rights
of Purchaser or GGO to seek later an upward or downward adjustment if the number of Unsubscribed
Shares in such Purchase Notice is miscalculated.
(f) On the terms and subject to the conditions set forth herein, the Plan shall provide that
delivery of the Unsubscribed Shares shall be made promptly by GGO to the account of Purchaser (or
to such other accounts as Purchaser may designate in accordance with and subject to the Designation
Conditions) against payment of the aggregate GGO Per Share Purchase Price for the Unsubscribed
Shares by wire transfer of immediately available funds to the account specified by GGO to Purchaser
at least twenty-four hours in advance.
-7-
(g) All GGO Shares shall be delivered with any and all issue, stamp, transfer or similar taxes
or duties payable in connection with such delivery duly paid by GGO to the extent required under
the Confirmation Order or applicable Law.
(h) Purchaser, in its sole discretion, may designate that some or all of the GGO Shares be
issued in the name of, and delivered to, one or more Brookfield Consortium Members in accordance
with and subject to the Designation Conditions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser, as set forth below, except (i) as set forth
in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (but not in
documents filed as exhibits thereto or documents incorporated by reference therein) filed with the
SEC on March 1, 2010 (other than in any “risk factor” disclosure or any other forward-looking
disclosures contained in such reports under the headings “Risk Factors” or “Cautionary Note” or any
similar sections) or (ii) as set forth in the disclosure schedule delivered by the Company to
Purchaser on the date of this Agreement (the “Company Disclosure Letter”):
SECTION 3.1 Organization and Qualification. The Company and each of its direct and
indirect Significant Subsidiaries is duly organized and is validly existing as a corporation or
other form of entity, where applicable, in good standing under the Laws of their respective
jurisdictions of organization, with the requisite power and authority to own, operate or manage its
properties and conduct its business as currently conducted, subject, as applicable, to the
restrictions that result from any such entity’s status as a debtor-in-possession under Chapter 11,
except to the extent the failure of such Significant Subsidiary to be in good standing (to the
extent the concept of good standing is applicable in its jurisdiction of organization) would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The
Company and each of its Significant Subsidiaries has been duly qualified as a foreign corporation
or other form of entity for the transaction of business and, where applicable, is in good standing
under the Laws of each other jurisdiction in which it owns, manages, operates or leases properties
or conducts business so as to require such qualification, except to the extent the failure to be so
qualified or, where applicable, be in good standing would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.2 Corporate Power and Authority.
(a) Subject to the authorization of the Bankruptcy Court, which shall be contained in the
Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period set
forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, the Company has the
requisite power and authority to enter into, execute and deliver this Agreement and to perform its
obligations hereunder (except with respect to (i) the issuance of the Warrants, (ii) the provisions
of the Approval Order and (iii) Article IX hereof). The Company has taken all necessary
corporate action required for the due authorization, execution, delivery and performance by it of
this Agreement.
-8-
(b) Subject to the entry of the Approval Order, the Company has the requisite power and
authority to (i) issue the Warrants (assuming the accuracy of the representations of Purchaser
contained in Exhibit D), (ii) perform its obligations pursuant to the provisions of the
Approval Order and (iii) Article IX hereof. No approval by any securityholders of the
Company or any Subsidiary of the Company is required in connection with the issuance of the
Warrants or the issuance of the shares of Common Stock upon exercise of the Warrants.
(c) The Company has received written confirmation from the NYSE that the shares of New Common
Stock or other Equity Securities issuable by the Company to Purchaser and each Subscribing Entity
in connection with each Subscribing Entity’s exercise of its Subscription Rights contemplated by
Section 5.9(a) hereof shall not require stockholder approval and shall be eligible for
listing on the NYSE in the hands of Purchaser without any requirement for stockholder approval, in
each case, during the five (5) year period following the Closing Date.
SECTION 3.3 Execution and Delivery; Enforceability.
(a) This Agreement has been duly and validly executed and delivered by the Company, and
subject to the authorization of the Bankruptcy Court, which shall be contained in the Confirmation
Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period set forth in
Bankruptcy Rule 3020(e) following entry of the Confirmation Order, shall constitute the valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms,
subject to general principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in
equity) (except with respect to (i) the issuance of the Warrants, (ii) the provisions of the
Approval Order and (iii) Article IX hereof).
(b) Subject to the entry of the Approval Order, the provisions of this Agreement relating to
(i) the issuance of the Warrants, (ii) the provisions of the Approval Order and (iii) Article
IX hereof shall constitute the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
SECTION 3.4 Authorized Capital Stock. As of the date of this Agreement, the
authorized capital stock of the Company consists of 875,000,000 shares of Common Stock and of
5,000,000 shares of preferred stock. The issued and outstanding capital stock of the Company and
the shares of Common Stock available for grant pursuant to the Company’s 1993 Stock Incentive Plan,
1998 Stock Incentive Plan and 2003 Stock Incentive Plan (collectively, the “Company Option
Plans”) or otherwise as of March 26, 2010 (the “Measurement Date”) is set forth on
Section 3.4 of the Company Disclosure Letter. From the Measurement Date to the date of
this Agreement, other than in connection with the issuance of shares of Common Stock pursuant to
the exercise of options outstanding as of the Measurement Date, there has been no change in the
number of outstanding shares of capital stock of the Company or the number of outstanding Equity
Securities (as defined below). Except as set forth on Section 3.4 of the Company
Disclosure Letter, on the Measurement Date, there was not outstanding, and there was not reserved
for issuance, any (i) share of capital stock or other voting securities of the Company or its
Significant Subsidiaries; (ii) security of the Company or its Subsidiaries convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of the Company or its
Significant Subsidiaries; (iii) option or other right to acquire from the Company or its
-9-
Subsidiaries, or obligation of the Company or its Subsidiaries to issue, any shares of capital
stock, voting securities or security convertible into or exercisable or exchangeable for shares of
capital stock or voting securities of the Company or its Significant Subsidiaries, as the case may
be; or (iv) equity equivalent interest in the ownership or earnings of the Company or its
Significant Subsidiaries or other similar right, in each case to which the Company or a Significant
Subsidiary is a party (the items in clauses (i) through (iv) collectively, “Equity
Securities”). Other than as set forth on Section 3.4 of the Company Disclosure Letter
or as contemplated by this Agreement, or pursuant to Contracts entered into by the Company after
the date hereof and prior to the Closing that are otherwise not inconsistent with Purchaser’s
rights hereunder and with respect to the transactions contemplated hereby, and do not confer on any
other Person rights that are superior to those received by Purchaser hereunder or pursuant to the
transactions contemplated hereby other than rights and terms that are customarily granted to
holders of any such Equity Securities so issued and not customarily granted in transactions such as
the transactions contemplated hereby, there is no outstanding obligation of the Company or its
Subsidiaries to repurchase, redeem or otherwise acquire any Equity Security. Other than as set
forth on Section 3.4 of the Company Disclosure Letter or as contemplated by this Agreement,
or pursuant to Contracts entered into by the Company in connection with the issuance of Equity
Securities after the date hereof and prior to the Closing that are otherwise not inconsistent with
Purchaser’s rights hereunder and with respect to the transactions contemplated hereby, and do not
confer on any other Person rights that are superior to those received by Purchaser hereunder or
pursuant to the transactions contemplated hereby other than rights and terms that are customarily
granted to holders of any such Equity Securities so issued and not customarily granted in
transactions such as the transactions contemplated hereby, there is no stockholder agreement,
voting trust or other agreement or understanding to which the Company is a party or by which the
Company is bound relating to the voting, purchase, transfer or registration of any shares of
capital stock of the Company or preemptive rights with respect thereto. Section 3.4 of the
Company Disclosure Letter sets forth a complete and accurate list of the outstanding Equity
Securities of the Company as of the Measurement Date, including the applicable conversion rates and
exercise prices (or, in the case of options to acquire Common Stock, the weighted average exercise
price) relating to the conversion or exercise of such Equity Securities into or for Common Stock.
SECTION 3.5 Issuance.
(a) Subject to the authorization of the Bankruptcy Court, which shall be contained in entry of
the Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period
set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, the issuance of the
Shares and the New Warrants has been duly and validly authorized. Subject to the entry of the
Approval Order and assuming the accuracy of the representations of Purchaser contained in Exhibit
D, the issuance of the Warrants is duly and validly authorized. When the Shares are issued and
delivered in accordance with the terms of this Agreement against payment therefor, the Shares shall
be duly and validly issued, fully paid and non-assessable and free and clear of all taxes, liens,
pre-emptive rights, rights of first refusal and subscription rights, other than rights and
restrictions under this Agreement, the Non-Control Agreement and applicable state and federal
securities Laws. When the Warrants and the New Warrants are issued and delivered in accordance
with the terms of this Agreement, the Warrants and New Warrants shall be duly and validly issued
and free and clear of all taxes, liens, pre-emptive rights, rights of first
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refusal and subscription rights, other than rights and restrictions under this Agreement, the
terms of the Warrants and New Warrants and under applicable state and federal securities Laws.
When the shares of Common Stock issuable upon the exercise of the Warrants and the shares of New
Common Stock issuable upon the exercise of the New Warrants are issued and delivered against
payment therefor, the shares of Common Stock and New Common Stock, as applicable, shall be duly and
validly issued, fully paid and non-assessable and free and clear of all taxes, liens, pre-emptive
rights, rights of first refusal and subscription rights, other than rights and restrictions under
this Agreement, the Non-Control Agreement and applicable state and federal securities Laws.
(b) Subject to the authorization of the Bankruptcy Court, which shall be contained in the
entry of the Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day
period set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, when the GGO
Shares and the GGO Warrants are issued, the GGO Shares and GGO Warrants shall be duly and validly
authorized, duly and validly issued, fully paid and non-assessable and free and clear of all taxes,
liens, pre-emptive rights, rights of first refusal and subscription rights, other than rights and
restrictions under this Agreement and under applicable state and federal securities Laws. When the
shares of GGO Common Stock issuable upon the exercise of the GGO Warrants are issued and delivered
against payment therefor, the shares of GGO Common Stock shall be duly and validly issued, fully
paid and non-assessable and free and clear of all taxes, liens, pre-emptive rights, rights of first
refusal and subscription rights, other than rights and restrictions under this Agreement and under
applicable state and federal securities Laws.
SECTION 3.6 No Conflict.
(a) Subject to (i) the receipt of the consents set forth on Section 3.6 of the Company
Disclosure Letter, (ii) such authorization as is required by the Bankruptcy Court or the Bankruptcy
Code, which shall be contained in the entry of the Confirmation Order, and the expiration, or
waiver by the Bankruptcy Court, of the 14-day period set forth in Bankruptcy Rule 3020(e) following
entry of the Confirmation Order, (iii) any provisions of the Bankruptcy Code that override,
eliminate or abrogate such consents or as may be ordered by the Bankruptcy Court and (iv) the
ability to employ the alternatives contemplated by Section 2.1 of the Agreement, the
execution and delivery (or, with respect to the Plan, the filing) by the Company of this Agreement
and the Plan, the performance by the Company of its respective obligations under this Agreement and
compliance by the Company with all of the provisions hereof and thereof and the consummation of the
transactions contemplated herein and therein, (x) shall not conflict with, or result in a breach or
violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any lien under, or give rise to any termination right under,
any Contract to which the Company or any of the Company’s Subsidiaries is a party or by which any
of their material assets are subject or encumbered, (y) shall not result in any violation or breach
of any terms, conditions or provisions of the certificate of incorporation or bylaws of the
Company, or the comparable organizational documents of the Company’s Subsidiaries, and (z) shall
not conflict with or result in any violation or breach of, or any termination or impairment of any
rights under, any statute or any license, authorization, injunction, judgment, order, decree, rule
or regulation of any court or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries or any of their respective properties or assets, except, in the case of
each of clauses (x) and (z) above, for any such conflict,
breach, acceleration, lien, termination, impairment, failure to comply, default or violation
that would not, individually or in the aggregate, be reasonably expected to have a Material Adverse
Effect (except with respect to (i) the issuance of the Warrants and (ii) the provisions of the
Approval Order and (iii) Article IX hereof).
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(b) Subject to the entry of the Approval Order, (i) the issuance of the Warrants (assuming the
accuracy of the representations of Purchaser contained in Exhibit D), (ii) the performance
by the Company of its respective obligations under the Approval Order and compliance by the Company
with all of the provisions thereof, and (iii) the performance by the Company of respective
obligations under Article IX hereof (x) shall not conflict with, or result in a breach or
violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any lien under, or give rise to any termination right under,
any Contract, (y) shall not result in any violation or breach of any terms, conditions or
provisions of the certificate of incorporation or bylaws of the Company, or the comparable
organizational documents of the Company’s Subsidiaries, and (z) shall not conflict with or result
in any violation or breach of, or any termination or impairment of any rights under, any statute or
any license, authorization, injunction, judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any
of their respective properties or assets, except, in the case of each of clauses (x) and (z) above,
for any such conflict, breach, acceleration, lien, termination, impairment, failure to comply,
default or violation that would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.
SECTION 3.7 Consents and Approvals.
(a) No consent, approval, authorization, order, registration or qualification of or with any
Governmental Entity having jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties is required for (i) (1) the issuance and delivery of the New Warrants, (2)
the issuance, sale and delivery of Shares, (3) the issuance and delivery of the Warrants, (4) the
issuance, sale and delivery of the GGO Shares, (5) the issuance and delivery of the GGO Warrants,
(6) the issuance of New Common Stock upon exercise of the New Warrants, (7) the issuance of GGO
Common Stock upon exercise of the GGO Warrants and (8) the issuance of Common Stock upon exercise
of the Warrants and (ii) the execution and delivery by the Company of this Agreement or the Plan
and performance of and compliance by the Company with all of the provisions hereof and thereof and
the consummation of the transactions contemplated herein and therein, except (A) such authorization
as is required by the Bankruptcy Court or the Bankruptcy Code, which shall be contained in the
entry of the relevant Court Order, and the expiration, or waiver by the Bankruptcy Court, of the
14-day period set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, as
applicable (except with respect to (i) the issuance of the Warrants, (ii) the provisions of the
Approval Order and (iii) Article IX hereof), (B) filings required under, and compliance
with (other than shareholder approval requirements in respect of the issuance of the Warrants), the
applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder,
the Securities Act and the rules and regulations promulgated thereunder, and the rules of the New
York Stock Exchange, and (C) such other consents, approvals, authorizations, orders, registrations
or qualifications that, if not obtained, made or given, would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
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(b) No consent, approval, authorization, order, registration or qualification of or with any
Governmental Entity having jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties is required for (1) the issuance and delivery of the Warrants, (2) the
performance of and compliance by the Company with all of the provisions of the Approval Order, and
(3) the performance of and compliance by the Company with Article IX hereof, except (A) the
entry of the Approval Order, (B) filings required under, and compliance with (other than
shareholder approval requirements in respect of the issuance of the Warrants), the applicable
requirements of the Exchange Act and the rules and regulations promulgated thereunder, the
Securities Act and the rules and regulations promulgated thereunder, and the rules of the New York
Stock Exchange, and (C) such other consents, approvals, authorizations, orders, registrations or
qualifications that, if not obtained, made or given, would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
SECTION 3.8 Company Reports.
(a) The Company has filed with or otherwise furnished to the Securities and Exchange
Commission (the “SEC”) all material forms, reports, schedules, statements and other
documents required to be filed or furnished by it under the United States Securities Act of 1933,
as amended (the “Securities Act”) or the Exchange Act since December 31, 2007 (such
documents, as supplemented or amended since the time of filing, and together with all information
incorporated by reference therein, the “Company SEC Reports”). No Subsidiary of the
Company is required to file with the SEC any such forms, reports, schedules, statements or other
documents pursuant to Section 13 or 15 of the Exchange Act. As of their respective effective dates
(in the case of Company SEC Reports that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective filing dates (in the case of all
other Company SEC Reports), except as and to the extent modified, amended, restated, corrected,
updated or superseded by any subsequent Company SEC Report filed and publicly available prior to
the date of this Agreement, the Company SEC Reports (i) complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations
of the SEC promulgated thereunder applicable to such Company SEC Reports, and (ii) did not contain
any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) The Company maintains a system of “internal controls over financial reporting” (as defined
in Rules 13a-15(f) and 15a-15(f) under the Exchange Act) that provides reasonable assurance
regarding the reliability of the Company’s financial reporting and the preparation of the Company’s
financial statements for external purposes in accordance with GAAP and that includes policies and
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company, and (iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the Company’s assets that could have a material effect on the Company’s
financial statements.
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(c) The Company maintains a system of “disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that is reasonably designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC, and that information relating to the Company is accumulated and
communicated to the Company’s management as appropriate to allow timely decisions regarding
required disclosure and to make the certifications of the Chief Executive Officer and Chief
Financial Officer of the Company required under the Exchange Act with respect to such reports.
(d) Since December 31, 2008, the Company has not received any oral or written notification of
a “material weakness” in the Company’s internal controls over financial reporting. The term
“material weakness” shall have the meaning assigned to it in the Statements of Auditing Standards
112 and 115, as in effect on the date hereof.
(e) Except as and to the extent modified, amended, restated, corrected, updated or superseded
by any subsequent Company SEC Report filed and publicly available prior to the date of this
Agreement, the audited consolidated financial statements and the unaudited consolidated interim
financial statements (including any related notes) included in the Company SEC Reports fairly
present in all material respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations
and their consolidated cash flows for the periods set forth therein (subject, in the case of
financial statements for quarterly periods, to normal year-end adjustments) and were prepared in
conformity with GAAP consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto).
SECTION 3.9 No Undisclosed Liabilities. None of the Company or its Subsidiaries has
any material liabilities (whether absolute, accrued, contingent or otherwise) required to be
reflected or reserved against on a consolidated balance sheet of the Company prepared in accordance
with GAAP, except for liabilities (i) reflected or reserved against or provided for in the
Company’s consolidated balance sheet as of December 31, 2009 or disclosed in the notes thereto,
included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, (ii)
incurred in the ordinary course of business consistent with past practice since the date of such
balance sheet, (iii) for fees and expenses incurred in connection with the Bankruptcy Cases, which
have been estimated and included in the Admin/Priority Claims identified in the Plan Summary Term
Sheet; provided, however, that such amount is an estimate and actual results may be
higher or lower, (iv) incurred in the ordinary course of performing this Agreement and certain
other asset sales, transfers and other actions permitted under this Agreement and (v) other
liabilities at Closing as contemplated by the Plan Summary Term Sheet.
SECTION 3.10 No Material Adverse Effect. Since December 31, 2009, there has not
occurred any event, fact or circumstance that has had or would reasonably be expected to have,
individually, or in the aggregate, a Material Adverse Effect.
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SECTION 3.11 No Violation or Default: Licenses and Permits. The Company and its
Subsidiaries (a) are in compliance with all Laws, statutes, ordinances, rules, regulations, orders,
judgments and decrees of any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their respective properties, and (b) has not
received written notice of any alleged material violation of any of the foregoing except, in the
case of each of clauses (a) and (b) above, for any such failure to comply, default or violation
that would not, individually or in the aggregate, be reasonably expected to have a Material Adverse
Effect or as may be the result of the Company’s or any of its Subsidiaries’ Chapter 11 filing or
status as a debtor-in-possession under Chapter 11. Subject to the restrictions that result from
the Company’s or any of its Subsidiaries’ status as a debtor-in-possession under Chapter 11
(including that in certain instances the Company’s or such Subsidiary’s conduct of its business
requires Bankruptcy Court approval), each of the Company and its Subsidiaries holds all material
licenses, franchises, permits, certificates of occupancy, consents, registrations, certificates and
other governmental and regulatory permits, authorizations and approvals required for the operation
of the business as currently conducted by it and for the ownership, lease or operation of its
material assets except, in each case, where the failure to possess or make the same would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.12 Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries which, individually, if determined
adversely to the Company or any of its Subsidiaries, would reasonably be expected to have a
Material Adverse Effect.
SECTION 3.13 Investment Company Act. The Company is not, and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof, shall not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder. As of the Effective Date, GGO, after giving effect to the
offering and sale of the GGO Shares and the application of the proceeds thereof, shall not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder.
SECTION 3.14 Compliance With Environmental Laws. Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each of the Company
and its Subsidiaries are and have been in compliance with and each of the Company Properties are
and have been maintained in compliance with, any and all applicable federal, state, local and
foreign Laws relating to the protection of the environment or natural resources, human health and
safety as such relates to the environment, or the presence, handling, or release of Hazardous
Materials (collectively, “Environmental Laws”), which compliance includes obtaining,
maintaining and complying with all permits, licenses or other approvals required under
Environmental Laws to conduct operations as presently conducted, and no action is pending or, to
the Knowledge of the Company, threatened that seeks to repeal, modify, amend, revoke, limit, deny
renewal of, or otherwise appeal or challenge any such permits, licenses or other approvals, (ii)
none of the Company or its Subsidiaries have received any written notice of, and none of the
Company Properties have been the subject of any written notice received by the Company or any of
its Subsidiaries of, any actual or potential liability or violation for the presence, exposure to,
investigation, remediation, arrangement for disposal, or release of any material classified,
characterized or regulated as hazardous, toxic, pollutants, or contaminants
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under Environmental Laws, including petroleum products or byproducts, radioactive materials,
asbestos-containing materials, radon, lead-containing materials, polychlorinated biphenyls, mold,
and hazardous building materials (collectively, “Hazardous Materials”), (iii) none of the
Company and its Subsidiaries are a party to or the subject of any pending, or, to the Knowledge of
the Company, threatened, legal proceeding alleging any liability, responsibility, or violation
under any Environmental Laws with respect to their past or present facilities or their respective
operations, (iv) none of the Company and its Subsidiaries have released Hazardous Materials on any
real property in a manner that would reasonably be expected to result in an environmental claim or
liability against the Company or any of its Subsidiaries or Affiliates, (v) none of the Company
Properties is the subject of any pending, or, to the Knowledge of the Company, threatened, legal
proceeding alleging any liability, responsibility, or violation under any Environmental Laws, and
(vi) to the Knowledge of the Company, there has been no release of Hazardous Materials on, from,
under, or at any of the Company Properties that would reasonably be expected to result in an
environmental claim or liability against the Company or any of its Subsidiaries or Affiliates.
SECTION 3.15 Company Benefit Plans.
(a) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
each Company Benefit Plan is in compliance in design and operation in all material respects with
all applicable provisions of ERISA and the U.S. Internal Revenue Code of 1986, as amended (the
“Code”) and each Company Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the Internal Revenue Service with
respect to its qualified status under Section 401(a) of the Code and its related trust’s exempt
status under Section 501(a) of the Code and the Company is not aware of any circumstances likely to
result in the loss of the qualification of any such plan under Section 401(a) of the Code.
(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
with respect to each Company Benefit Plan that is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code: (A) no Company Benefit Plan has failed to satisfy the minimum
funding standard (within the meaning of Sections 412 and 430 of the Code or Section 302 of ERISA)
applicable to such Company Benefit Plan, whether or not waived and no application for a waiver of
the minimum funding standard with respect to any Company Benefit Plan has been submitted; (B) no
reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice
requirement has not been waived has occurred (other than in connection with the Bankruptcy Cases);
(C) no liability (other than for premiums to the Pension Benefit Guaranty Corporation (the
“PBGC”)) under Title IV of ERISA has been or is expected to be incurred by the Company or
any entity that is required to be aggregated with the Company pursuant to Section 414 of the Code
(an “ERISA Affiliate”); (D) the PBGC has not instituted proceedings to terminate any such
plan or made any inquiry which would reasonably be expected to lead to termination of any such
plan, and, no condition exists that presents a risk that such proceedings will be instituted or
which would constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such plan; and (E) no Company Benefit Plan is, or is
expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4)
of the Code).
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(c) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
with respect to each Company Benefit Plan maintained primarily for the benefit of current or former
employees, officers or directors employed, or otherwise engaged, outside the United States (each a
“Foreign Plan”), excluding any Foreign Plans that are statutorily required, government
sponsored or not otherwise sponsored, maintained or controlled by the Company or any of its
Significant Subsidiaries (“Excluded Non-US Plans”): (A) (1) all employer and employee
contributions required by Law or by the terms of the Foreign Plan have been made, and all
liabilities of the Company and its Significant Subsidiaries have been satisfied, or, in each case
accrued, by the Company and its Significant Subsidiaries in accordance with generally accepted
accounting principles, and (2) the Company and its Significant Subsidiaries are in compliance with
all requirements of applicable Law and the terms of such Foreign Plan; (B) as of the Effective
Date, the fair market value of the assets of each funded Foreign Plan, or the book reserve
established for each Foreign Plan, together with any accrued contributions, is sufficient to
procure or provide for the accrued benefit obligations with respect to all current and former
participants in such Foreign Plan determined on an ongoing basis (rather than on a plan termination
basis) according to the actuarial assumptions and valuations used to account for such obligations
as of the Effective Date in accordance with applicable generally accepted accounting principles;
and (C) the Foreign Plan has been registered as required and has been maintained in good standing
with applicable regulatory authorities.
SECTION 3.16 Labor and Employment Matters. (i) Neither the Company nor any of its
Significant Subsidiaries is a party to or bound by any collective bargaining agreement or any labor
union contract, nor are any employees of the Company or any of its Significant Subsidiaries
represented by a works council or a labor organization (other than any industry-wide or statutorily
mandated agreement in non-U.S. jurisdictions); (ii) to the Knowledge of the Company, as of the date
hereof, there are no activities or proceedings by any labor union or labor organization to organize
any employees of the Company or any of its Significant Subsidiaries or to compel the Company or any
of its Significant Subsidiaries to bargain with any labor union or labor organization; and (iii),
except as would not, individually or in the aggregate, have a Material Adverse Effect, there is no
pending or, to the Knowledge of the Company, threatened material labor strike, lock-out, walkout,
work stoppage, slowdown, demonstration, leafleting, picketing, boycott, work-to-rule campaign,
sit-in, sick-out, or similar form of organized labor disruption.
SECTION 3.17 Insurance. The Company maintains for itself and its Subsidiaries
insurance policies in those amounts and covering those risks, as in its judgment, are reasonable
for the business and assets of the Company and its Subsidiaries.
SECTION 3.18 No Unlawful Payments. No action is pending or, to the Knowledge of the
Company, is threatened against the Company or any of its Subsidiaries or Affiliates, or any of
their respective directors, officers, or employees resulting from any (a) use of corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity, (b) direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (c) violations of any provision of the Foreign Corrupt Practices Act
of 1977 or any other applicable local anti-bribery or anti-corruption Laws in any relevant
jurisdictions or (d) other unlawful payment, except in any such case, as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
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SECTION 3.19 No Broker’s Fees. Other than pursuant to agreements (including
amendments thereto) by and between the Company and each of UBS Securities LLC and Xxxxxx Buckfire &
Co., LLC, or otherwise disclosed to Purchaser prior to the date hereof and which fees and expenses
would be included in the definition of “Permitted Claims”, none of the Company or any of its
Subsidiaries is a party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any of its
Subsidiaries for an investment banking fee, finder’s fee or like payment in respect of the sale of
the Shares contemplated by this Agreement. None of the Company or any of its Subsidiaries is a
party to any contract, agreement or understanding with any Person that would give rise to a valid
claim against Purchaser for a brokerage commission, finder’s fee, investment banking fee or like
payment in connection with the transactions contemplated by this Agreement.
SECTION 3.20 Real and Personal Property.
(a) Section 3.20(a) of the Company Disclosure Letter sets forth a true, correct and
complete list in all material respects of each material real property asset owned or leased (as
lessee), directly or indirectly, in whole or in part, by the Company and/or any of its Subsidiaries
(other than Identified Assets) (each such property that is not a Non-Controlling Property and has a
fair market value (in the reasonable determination of the Company) in excess of $10,000,000 is
individually referred to herein as “Company Property” and collectively referred to herein
as the “Company Properties”). All Company Properties, Non-Controlling Properties and the
Identified Assets are reflected in accordance with the applicable rules and regulations of the SEC
in the Annual Report in Form 10-K as of, and for the year ended, December 31, 2009 (the “Most
Recent Statement”).
(b) Except (i) for such breach of this Section 3.20(b) as may be caused fully or
substantially by the third party member or partner in any Joint Venture, without the Knowledge or
consent of the Company or any of its Subsidiaries or (ii) as would not individually or in the
aggregate be reasonably expected to have a Material Adverse Effect, the Company or one of its
Subsidiaries owns good and valid fee simple title or valid and enforceable leasehold interests
(except with respect to the Company’s right to reject any such ground lease as part of a Bankruptcy
plan of reorganization for the remaining Debtor entities and subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at Law or in equity)), as applicable, to each of the Company Properties, in
each case, free and clear of liens, mortgages or deeds of trust, claims against title, charges that
are liens or other encumbrances on title, rights of way, restrictive covenants, declarations or
reservations of an interest in title (collectively, “Encumbrances”), except for the
following (collectively, the “Permitted Title Exceptions”): (i) Encumbrances relating to
the DIP Loan and to debt obligations reflected in the Company’s financial statements and the notes
thereto (including with respect to debt obligations which are not consolidated) or otherwise
disclosed to Purchaser in Section 3.20(g)(i) of the Company Disclosure Letter, (ii)
Encumbrances that result from any statutory or other liens for Taxes or assessments that are not
yet due or delinquent or the validity of which is being contested in good faith by appropriate
proceedings and for which a sufficient and appropriate reserve has been set aside for the full
payment thereof, (iii) any contracts, or other occupancy agreements to third parties for the
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occupation or use of portions of the Company Properties by such third parties in the ordinary
course of the business of the Company or its Subsidiaries, (iv) Encumbrances imposed or promulgated
by Law or any Governmental Entity, including zoning, entitlement and other land use and
environmental regulations, (v) Encumbrances disclosed on existing title policies and current title
insurance commitments or surveys made available to Purchaser, (vi) Encumbrances on the landlord’s
fee interest at any Company Property where the Company or its Subsidiary is the tenant under any
ground lease, provided that, except as disclosed to Purchaser in Section 3.20(b)(ii) of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries have received a notice
indicating the intention of the landlord under such ground lease, or of any other Person, to (1)
exercise a right to terminate such ground lease, evict the lessee or otherwise collect the
sub-rents thereunder, or (2) take any other action that would be reasonably likely to result in a
termination of such ground lease, (vii) any cashiers’, landlords’, workers’, mechanics’, carriers’,
workmen’s, repairmen’s and materialmen’s liens and other similar liens (1) incurred in the ordinary
course of business which (A) are being challenged in good faith by appropriate proceedings and for
which a sufficient and appropriate reserve has been set aside for the full payment thereof or (B)
have been otherwise fully bonded and discharged of record or for which a sufficient and appropriate
reserve has been set aside for the full payment thereof or (2) disclosed on Section
3.20(b)(i) of the Company Disclosure Letter and (viii) any other easements,
rights-of-way, restrictions (including zoning restrictions), covenants, encroachments, protrusions
and other similar charges or encumbrances, and title limitations or title defects, if any, that (I)
are customary for office, industrial, master planned communities and retail properties or (II)
individually or in the aggregate, would not be reasonably expected to have a Material Adverse
Effect. Other than as set forth on Section 3.20(b)(ii) of the Company Disclosure Letter,
neither the Company nor any of its Subsidiaries has received a written notice of a material
default, beyond any applicable grace and cure periods, of or under any Permitted Title Exceptions,
except (w) as may have been caused fully or substantially by the third party member or partner in
any Joint Venture, without the Knowledge or consent of the Company or any of its Subsidiaries (x)
as a result of the filing of the Bankruptcy Cases, (y) where the Permitted Title Exceptions are in
and of themselves evidence of default (such as mechanics’ liens and recorded notices of default) or
(z) as would not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect; provided, however, that where the Company has otherwise represented and warranted
to Purchaser hereunder (including as set forth on the Company Disclosure Letter pursuant to such
representations and warranties) with respect to the Company’s Knowledge of, the Company’s receipt
of notice of or the existence of a default in connection with a particular category of Permitted
Title Exceptions, such categories of Permitted Title Exceptions shall not be included in the
representation set forth in this sentence (by way of illustration, but not exclusion, the
representations set forth in Section 3.20(f) with respect to defaults under Material Leases
shall be deemed to address the Company’s representations and warranties with respect to the entire
category of Permitted Title Exceptions detailed in clause (iii) above).
(c) To the extent available, the Company and its Subsidiaries have made commercially
reasonable efforts to make available or will use commercially reasonable efforts to make available
upon request to Purchaser those policies of title insurance that the Company or its Subsidiaries
have obtained in the last six months.
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(d) With respect to each Company Ground Lease Property, except as set forth on Section
3.20(d) of the Company Disclosure Letter and except as may have been caused by, or
disclosed in the filing of the Bankruptcy Cases, as of the date hereof, to the Company’s
Knowledge, neither the Company nor any of its Subsidiaries has received notice of material defaults
(including, without limitation, payment defaults, but limited to those circumstances where such
default may grant the landlord under such ground lease the right to terminate such ground lease,
evict the lessee or otherwise collect the sub-rents thereunder) at such Company Ground Lease
Property beyond any applicable grace and cure periods, except (x) as would not, individually or in
the aggregate, be reasonably expected to have a Material Adverse Effect, (y) as may be caused fully
or substantially by the third party member or partner in any Joint Venture, without the Knowledge
or consent of the Company or any of its Subsidiaries and (z) with respect to any Company Ground
Lease Property which is leased by a Subsidiary of the Company which has consummated a plan of
reorganization in the Bankruptcy Cases, all such material defaults at such Company Ground Lease
Property which existed prior to the effective date of such Person’s plan of reorganization have
been or will be cured in accordance with such plan. As used herein the term “Company Ground
Lease Property” shall mean any Company Property having a fair market value (in the reasonable
determination of the Company) in excess of $25,000,000 which is leased by a Subsidiary of the
Company as tenant pursuant to a ground lease. With respect to the defaults referenced in clause
(z) above, the Bankruptcy Court approved the Debtors’ assumption of the applicable ground leases
and the fixed cure amounts for such defaults which predated assumption; provided however, nothing
contained herein precludes any Person from raising issues in the future with respect to defaults
that may have predated such assumption.
(e) Except as set forth on Section 3.20(e) of the Company Disclosure Letter, neither
the Company nor any of its Subsidiaries is a party to any agreement relating to the property
management (but not including any leasing, development, construction or brokerage agreements) of
any of the Company Properties by a party other than Company or any wholly owned Company
Subsidiaries, except (i) management agreements that may be terminated without cause or payment of a
termination fee upon no more than 60 days notice or (ii) as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(f) Except as set forth on Section 3.20(f) of the Company Disclosure Letter, to the
Company’s Knowledge, as of February 15, 2010, (i) each Material Lease is in full force and effect,
(ii) no tenant is in arrears in the payment of rent, additional rent or any other material charges
due under any Material Lease, and no tenant is materially in default in the performance of any
other obligations under any Material Lease, (iii) no bankruptcy or insolvency proceeding has been
commenced (and is continuing) by or against any tenant under any Material Lease, and (iv) neither
the Company nor any of its Subsidiaries has received a written notice from a current tenant under
any Material Lease exercising a right to terminate or otherwise cancel its Material Lease (y) as a
result of or in connection with the termination or cancellation of any other lease, sublease,
license or occupancy agreement for space at any Company Property (each, a “Company Property
Lease”), or (z) as a result of or in connection with any other tenant that occupies, or had
previously occupied, another Company Property Lease, allowing, or having had allowed, all or any
portion of the premises leased pursuant to such other Company Property Lease to “go dark” or
otherwise be abandoned or vacated; except, (A) in the case of each of clauses (i), (ii) (iii) and
(iv) above, as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (B) as a result of the filing of the Bankruptcy Cases or in connection
with any Bankruptcy Court approved process and (C) as may have been caused fully or substantially
by the third party member or partner in any Joint Venture, without the
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Knowledge or consent of the Company or its Subsidiaries. “Material Lease” means for
any Company Property any lease in which the Company or its Subsidiaries is the landlord, and all
amendments, modifications, supplements, renewals, exhibits, schedules, extensions and guarantees
related thereto, (1) to an “anchor tenant” occupying at least 80,000 square feet with respect to
such Company Property or (2) that is one of the five (5) largest leases, in terms of gross annual
minimum rent, with respect to a Company Property that has an annual net operating income, as
determined in accordance with GAAP (provided, however, that for purposes of such calculation, the
following were reflected as expenses: (a) ground rent payments to a third party and (b) an assumed
management fee equal to 3% of base minimum and percentage rent) with respect to the trailing twelve
(12) calendar month period, equal to at least $7,500,000.00. For purposes of Section
7.1(c), (y) the representations and warranties made in Section 3.20(f)(i),
(iii) and (iv), disregarding all qualifications and exceptions contained therein
relating to “materiality” or “Material Adverse Effect”, shall be shall be true and correct at and
as of the Closing Date as if made at and as of the Closing Date, except for such failures to be
true and correct that, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect and (z) the representation and warranties contained in Section
3.20(f)(ii), disregarding all qualifications and exceptions contained therein relating to
“materiality” or “Material Adverse Effect”, shall be true and correct (A) at and as of the last day
of the calendar month that is two (2) calendar months prior to the calendar month in which the
Closing Date occurs as if made at and as of such date, if the Closing Date occurs on or prior to
the fifteenth (15th) day of a calendar month, or (B) at and as of the fifteenth (15th) day of the
calendar month that is one (1) calendar month prior to the calendar month in which the Closing Date
occurs as if made at and as of such date, if the Closing Date occurs on or after the sixteenth
(16th) day of a calendar month, except for such failures to be true and correct that, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
(g) With respect to each Company Property:
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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; and |
|
|
(ii) |
|
Except as set forth in Section 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 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. |
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|
(iii) |
|
For purposes of Section 7.1(c)the representations and
warranties made in Section 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. |
(h) To the Knowledge of the Company, (i) except as set forth on Section 3.20(h) of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries has received a written
notice exercising an option, “buy-sell” right or other similar right to purchase a Company Property
or any material portion thereof which has not previously closed, except as would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect with respect to such
Company Property and (ii) no Company Property is subject to a purchase and sale agreement or any
similar legally binding agreement to purchase such Company Property or any material portion thereof
(other than (x) with respect to condominium purchase and sale agreements and purchase and sale and
early occupancy agreements or other similar agreements for the sale of condominium units at the
Natick Nouvelle, (y) with respect to builder lot purchase agreements and other similar agreements
for the sale of vacant lots of land to builders at Bridgeland and (z) as set forth in (i) above)
which has not previously closed.
(i) The Company has conducted due inquiry with respect to the representations and warranties
made in Section 3.20(d), Section 3.20(f) and Section 3.20(h).
SECTION 3.21 Tax Matters. Except as disclosed on Section 3.21(a) of the
Company Disclosure Letter:
(a) Except in cases where the failure of any of the following to be true would not result in a
Material Adverse Effect: (i) the Company and each of its Significant Subsidiaries have filed all
Tax Returns required to be filed by applicable Law prior to the date hereof; (ii) all such Tax
Returns were true, complete and correct in all respects and filed on a timely basis (taking into
account any applicable extensions); (iii) the Company and each of its Significant Subsidiaries have
paid all amounts of Taxes that are due, claimed or assessed by any taxing authority to be due for
the periods covered by such Tax Returns, other than any Taxes for which adequate reserves
(“Adequate Reserves”) have been established in accordance with GAAP or a claim has been
filed in the Bankruptcy Cases; and (iv) all adjustments of federal U.S. Tax liability of the
Company and its Significant Subsidiaries resulting from completed audits or
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examinations have been reported to appropriate state and local taxing authorities and all
resulting Taxes payable to state and local taxing authorities have been paid. “Taxes”
means any U.S. federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not. “Tax Return” means any return, declaration, report,
claim for refund, or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof, including, where permitted or required,
combined or consolidated returns for any group of entities that include the Company or any of its
Significant Subsidiaries.
(b) The Company and each of its REIT Subsidiaries (x) for all taxable years commencing with
the taxable year ended December 31, 2005 through December 31, 2009, has been subject to taxation as
a real estate investment trust within the meaning of Section 856 of the Code (a “REIT”) and
has satisfied all requirements to qualify as a REIT for such years; (y) has operated since January
1, 2010 to the date hereof in a manner consistent with the requirements for qualification and
taxation as a REIT; and (z) intends to continue to operate in such a manner as to qualify as a REIT
for the current taxable year. None of the transactions contemplated by this Agreement will prevent
the Company or any of its REIT Subsidiaries from so qualifying. No Subsidiary of the Company other
than a REIT Subsidiary is a corporation for U.S. federal income tax purposes, other than a
corporation that qualifies as a “taxable REIT subsidiary” within the meaning of Section 856(l) of
the Code. For the purposes of this Agreement, “REIT Subsidiary” means each of GGP Ivanhoe,
Inc., GGP Holding, Inc., GGP Holding II, Inc., Xxxxxxxx Xxxx, Limited, GGP -Natick Trust and
GGP/Homart, Inc.
(c) Each Company Subsidiary other than its REIT Subsidiaries that is a partnership, joint
venture, or limited liability company and which has not elected to be a “taxable REIT subsidiary”
within the meaning of Section 856(l) of the Code has been since its formation treated for U.S.
federal income tax purposes as a partnership or disregarded entity, as the case may be, and not as
a corporation or an association taxable as a corporation, except where failure to do so would not
have a Material Adverse Effect.
(d) Except where the failure to be true would not have a Material Adverse Effect, the Company
and each of its Significant Subsidiaries have (i) complied in all respects with all applicable
Laws, rules, and regulations relating to the payment and withholding of Taxes (including
withholding and reporting requirements under sections 1441 through 1464, 3401 through 3406, 6041
and 6049 of the Code and similar provisions under any other Laws) and (ii) within the time and in
the manner prescribed by Law, withheld from employee wages and paid to the proper Governmental
Entities all amounts required to be withheld and paid over.
(e) Except where the failure to be true would not have a Material Adverse Effect, no audits or
other administrative proceedings or court proceedings are presently pending or to the Knowledge of
the Company threatened with regard to any Taxes or Tax Returns of the Company or any of its
Significant Subsidiaries, other than any audit or administrative proceeding relating to Taxes for
which a claim has been filed in a Debtor’s Chapter 11 case or any other audit or
administrative or court proceeding that is not reasonably expected to result in a material Tax
liability to the Company or any of its Significant Subsidiaries.
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(f) The Company has made available to Purchaser complete and accurate copies of all material
Tax Returns requested by Purchaser and filed by or on behalf of the Company or any of its
Significant Subsidiaries for all taxable years ending on or prior to the Effective Date and for
which the statute of limitations has not expired.
(g) There are no Tax Protection Agreements except for those the breach of which would not
reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Significant
Subsidiary has any liability for Taxes of any Person under Treasury Regulation Section 1.1502-6 (or
any similar provision of any state, local or foreign Law), or as a transferee or successor (by
contract or otherwise), other than (i) to a Subsidiary of the Company or (ii) where any such
liability would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.22 Material Contracts. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each Material Contract that
shall survive the Bankruptcy Cases is valid and binding on the Company or any of its Subsidiaries,
as applicable, and, to the Knowledge of the Company, on each other Person party thereto, and is in
full force and effect. Other than as a result of the commencement of the Bankruptcy Cases, each of
the Company and its Subsidiaries has performed, in all material respects, all obligations required
to be performed by it under each Material Contract that shall survive the Bankruptcy Cases, except,
in each case, as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Other than those caused as a result of the filing of the Bankruptcy
Cases, neither the Company nor any of its Significant Subsidiaries is in breach or default of any
Material Contract to which it is a party and which shall survive the Bankruptcy Cases, except, in
each case, as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. The Company has made available to Purchaser true, accurate and complete
copies of the Material Contracts as of the date of this Agreement, except for those Material
Contracts available to the public on the website maintained by the SEC. To the Knowledge of the
Company, no party to any Material Contract that shall survive the Bankruptcy Cases has given
written notice of any action to terminate, cancel, rescind or procure a judicial reformation of
such Material Contract or any material provision thereof, which termination, cancellation,
rescission or reformation would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. For the avoidance of doubt, Material Contracts do not include
intercompany contracts.
SECTION 3.23 Certain Restrictions on Charter and Bylaws Provisions; State Takeover
Laws.
(a) The Company and the Company Board have taken all appropriate and necessary actions to
ensure that the ownership limitations set forth in Article IV of the Company’s certificate of
incorporation shall not apply to (i) the acquisition of beneficial ownership by Purchaser and any
Brookfield Consortium Member of the Warrants and the shares of Common Stock issuable upon exercise
of the Warrants, (ii) any antidilution adjustments to those Warrants pursuant to the Warrant
Agreement and (iii) any shares of Common Stock that Purchaser or any Brookfield Consortium Member
may be deemed to own by no actions of its own and (iv) the
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acquisition of beneficial ownership of up to an additional 2.5% of the issued and outstanding
shares of Common Stock by any Purchaser or any Brookfield Consortium Member; provided,
however, that such exception to the ownership limitations are only effective as to
Purchaser or any particular Brookfield Consortium Member only so long as (i) the Company has
received executed copies of the representation certificate contained in Exhibit D from
Purchaser or such Brookfield Consortium Member, it being understood that a Brookfield Consortium
Member shall be required to provide such representations at such times and only at such times as
such Brookfield Consortium Member beneficially owns Common Stock or New Common Stock in excess of
the relevant ownership limit set forth in the certificate of incorporation of the Company or any
stock or other equity interest owned by such Brookfield Consortium Member in a tenant of the
Company would be treated as constructively owned by Purchaser and (ii) the representations so
provided are true, correct and complete as of the date made and continue to be true, correct and
complete.
(b) The Company Board has taken all action necessary to render inapplicable to Purchaser the
restrictions on “business combinations” set forth in Section 203 of the Delaware General
Corporation Law and, to the knowledge of the Company, any similar “moratorium,” “control share,”
“fair price,” “takeover” or “interested stockholder” law applicable to transactions between
Purchaser and the Company.
SECTION 3.24 No Other Representations or Warranties. Except for the representations
and warranties made by the Company in this Article III, neither the Company nor any other
Person makes any representation or warranty with respect to the Company or its Subsidiaries or
their respective business, operations, assets, liabilities, condition (financial or otherwise) or
prospects, notwithstanding the delivery or disclosure to Purchaser or any of its Affiliates or
representatives of any documentation, forecasts or other information with respect to any one or
more of the foregoing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Company as set forth below:
SECTION 4.1 Organization. Purchaser is duly organized and is validly existing and,
where applicable, in good standing under the Laws of its jurisdiction of organization, with the
requisite limited liability company power and authority to undertake and effectuate the
transactions contemplated by this Agreement. Purchaser has been duly qualified as a foreign
corporation or other form of entity for the transaction of business and, where applicable, is in
good standing under the Laws of each other jurisdiction in which it operates so as to require such
qualification, except where the failure to be so qualified, licensed or in good standing would not,
individually or in the aggregate, have or be reasonably expected to materially delay or prevent the
consummation of the transactions contemplated by this Agreement.
SECTION 4.2 Power and Authority. Purchaser has the requisite power and authority to
enter into, execute and deliver this Agreement and to perform its obligations hereunder and has
taken all necessary action required for the due authorization, execution, delivery and
performance by it of this Agreement.
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SECTION 4.3 Execution and Delivery. This Agreement has been duly and validly executed
and delivered by Purchaser and constitutes its valid and binding obligation, enforceable against
Purchaser in accordance with its terms.
SECTION 4.4 No Conflict. The execution and delivery of this Agreement and the
performance by Purchaser of its obligations hereunder and compliance by Purchaser with all of the
provisions hereof and the consummation of the transactions contemplated herein (i) shall not
conflict with, or result in a breach or violation of, any of the terms or provisions of, or
constitute a default under, or result in the acceleration of, or the creation of any lien under, or
give rise to any termination right under, any material contract to which Purchaser is a party, (ii)
shall not result in any violation or breach of any provisions of the organizational documents of
Purchaser and (iii) shall not conflict with or result in any violation of, or any termination or
material impairment of any rights under, any statute or any license, authorization, injunction,
judgment, order, decree, rule or regulation of any court or governmental agency or body having
jurisdiction over Purchaser or Purchaser’s properties or assets, except with respect to each of
(i), (ii) and (iii), such conflicts, violations or defaults as would not be reasonably expected to
have a material adverse effect on the ability of Purchaser to consummate the transactions
contemplated hereunder.
SECTION 4.5 Consents and Approvals. No consent, approval, order, authorization,
registration or qualification of or with any Governmental Entity having jurisdiction over Purchaser
is required in connection with the execution and delivery by Purchaser of this Agreement or the
consummation of the transactions contemplated hereby, except such consents, approvals, orders,
authorizations, registration or qualification as would not reasonably be expected to materially and
adversely affect the ability of Purchaser to perform its obligations under this Agreement.
SECTION 4.6 Compliance with Laws. Since the date of its formation, Purchaser has been
in compliance with all Laws applicable to Purchaser, except, in each case, for such non-compliance
as would not reasonably be expected to materially and adversely affect the ability of Purchaser to
perform its obligations under this Agreement.
SECTION 4.7 Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the knowledge of Purchaser, threatened
against Purchaser which, individually or in the aggregate, if determined adversely to Purchaser,
would materially and adversely affect the ability of Purchaser to perform its obligations under
this Agreement.
SECTION 4.8 No Broker’s Fees. Purchaser is not party to any contract, agreement or
understanding with any Person that would give rise to a valid claim against the Company for an
investment banking fee, commission, finder’s fee or like payment in connection with the
transactions contemplated by this Agreement.
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SECTION 4.9 Sophistication. Purchaser is, as of the date hereof and shall be as of
the Effective Date, an “accredited investor” within the meaning of Rule 501(a) under the Securities
Act. Purchaser understands and is able to bear any economic risks associated with such investment
(including, without limitation, the necessity of holding such Shares and GGO Shares for an
indefinite period of time).
SECTION 4.10 Purchaser Intent. Purchaser is acquiring the Shares, the Warrants, the
GGO Shares, the New Warrants and the GGO Warrants for investment purposes only and not with a view
to or for distributing or reselling such Shares, Warrants, GGO Shares, New Warrants and GGO
Warrants or any part thereof, without prejudice, however, to Purchaser’s right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such
Shares, Warrants, GGO Shares, New Warrants and GGO Warrants pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities Laws. Purchaser understands that Purchaser must bear
the economic risk of its investment indefinitely.
SECTION 4.11 Reliance on Exemptions. Purchaser understands that the Shares and the
GGO Shares are being offered and sold to Purchaser in reliance upon specific exemptions from the
registration requirements of United States federal and state securities Laws.
SECTION 4.12 REIT Representations. The representations provided by Purchaser and, to
the extent applicable, its Affiliates, members or Affiliates of members, set forth on Exhibit
D are true, correct and complete as of the date hereof, and shall be true as of the date of the
issuance of the Warrants and as of the Closing Date, it being understood that Purchaser’s
Affiliates, members or Affiliates of members shall be required to provide such representations only
if such Person beneficially owns Common Stock or New Common Stock in excess of the relevant
ownership limit set forth in the certificate of incorporation of the Company or any stock or other
equity interest owned by such Person in a tenant of the Company would be treated as constructively
owned by Purchaser.
SECTION 4.13 No Other Representations or Warranties. Except for the representations
and warranties made by Purchaser in this Article IV, neither Purchaser nor any other Person
on behalf of Purchaser makes any representation or warranty with respect to Purchaser or its
assets, liabilities, condition (financial or otherwise) or prospects.
SECTION 4.14 Acknowledgement. Purchaser acknowledges that (a) neither the Company nor
any Person on behalf of the Company is making any representations or warranties whatsoever, express
or implied, beyond those expressly given by the Company in Article III of this Agreement
and (b) Purchaser has not been induced by, or relied upon, any representations, warranties or
statements (written or oral), whether express or implied, made by any Person, that are not
expressly set forth in Article III of this Agreement. Without limiting the generality of
the foregoing, except with respect to the representations and warranties contained in Article
III, Purchaser acknowledges that no representations or warranties are made with respect to any
projections, forecasts, estimates, budgets, plans or prospect information that may have been made
available to Purchaser or any of its representatives.
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ARTICLE V
COVENANTS OF THE COMPANY AND PURCHASER
SECTION 5.1 Bankruptcy Court Motions and Orders.
(a) No later than the close of business on the date that is two (2) Business Days following
the date of this Agreement, the Company shall file with the Bankruptcy Court a motion in form and
substance satisfactory to Purchaser (the “Approval Motion”) seeking to obtain entry of an
order in the form attached hereto as Exhibit F (the “Proposed Approval Order”),
which order in the final form if approved by the Bankruptcy Court (the “Approval Order”)
shall approve, among other things, the issuance of the Warrants to Purchaser and the performance by
the Company of its obligations under the Warrant Agreement.
(b) The Approval Motion, including any exhibits thereto and any notices or other materials in
connection therewith, and any modifications or amendments to the foregoing, must be in form and
substance reasonably satisfactory to Purchaser.
(c) If the Approval Order shall be appealed by any Person (or a petition for certiorari or
motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or
reargument shall be filed with respect to such order), the Company shall diligently defend against
any such appeal, petition or motion and shall use its reasonable best efforts to obtain an
expedited resolution of any such appeal, petition or motion. The Company shall keep Purchaser
reasonably informed and updated regarding the status of any such appeal, petition or motion.
(d) The Company shall provide draft copies of all motions, notices, statements, schedules,
applications, reports and other papers the Company intends to file with the Bankruptcy Court in
connection with the Approval Order to Purchaser within a reasonable period of time prior to the
date the Company intends to file any of the foregoing, and shall consult in advance in good faith
with Purchaser regarding the form and substance of any such proposed filing with the Bankruptcy
Court.
SECTION 5.2 Warrants, New Warrants and GGO Warrants. Within one Business Day of the
date of the entry of the Approval Order, the Company and the warrant agent shall execute and
deliver the warrant agreement in the form attached hereto as Exhibit G (with only such
changes thereto as may be reasonably requested by the warrant agent and reasonably approved by
Purchaser) (the “Warrant Agreement”) evidencing 60,000,000 warrants (the
“Warrants”) each of which entitles the holder to purchase one (1) share of Common Stock at
an initial price of $15.00 per share subject to adjustment as provided in the Warrant. The
Warrants and the Plan shall provide that upon the effectiveness of the Plan, the Warrants shall be
exchanged for and converted into the right to receive (i) 60,000,000 warrants each of which
entitles the holder to purchase one (1) share of New Common Stock (the “New Warrants”) at
an initial purchase price of $10.00 per share subject to adjustment as provided in the underlying
warrant agreement and (ii) 40,000,000 warrants each of which entitles the holder to purchase one
(1) share of GGO Common Stock (the “GGO Warrants”) at a price of $5.00 per share subject to
adjustment as provided in the underlying warrant agreement, each in accordance with the terms set
forth in the applicable warrant agreement. Purchaser, in its sole discretion, may designate that
some or all of
the New Warrants or GGO Warrants be issued in the name of, and delivered to, one or more
Brookfield Consortium Members in accordance with and subject to the Designation Conditions.
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SECTION 5.3 Assistance with Capital Raising Activities. Until the earliest to occur
of (i) the termination of this Agreement pursuant to its terms, (ii) the date that is sixty (60)
days following the Closing and (iii) the date the Company or any Subsidiary of the Company 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 the Company
or any Subsidiary of the Company enters into a Competing Transaction:
(a) Purchaser shall provide or shall use reasonable best efforts to cause an appropriate
Affiliate to provide, all cooperation and assistance as may be reasonably requested by the Company
in connection with the Company’s efforts to consummate equity and debt financings for the Company,
and sales of properties and other assets of the Company and its Subsidiaries for cash
(collectively, the “Capital Raising Activities”), including to: (A) participate in a
reasonable number of customary meetings (including lender meetings, if any), presentations, road
shows, due diligence and drafting sessions and sessions with rating agencies, investors or
underwriters; (B) assist with the preparation of materials for rating agency presentations, bank
information memoranda, prospectuses and similar documents necessary in connection with the Capital
Raising Activities; and (C) cooperate with the Company in connection with applications to obtain
such consents, approvals or authorizations which may be reasonably necessary or desirable in
connection with the Capital Raising Activities; provided, that Purchaser shall not be
required to provide cooperation under this paragraph that: (w) unreasonably interferes with the
business of Purchaser, its Affiliates, members or partners or the Affiliates of its members or
partners; (x) causes any closing condition set forth in Article VII to fail to be satisfied
or otherwise causes a breach of this Agreement; (y) violates applicable Law; or (z) requires
Purchaser, its Affiliates, members or partners or the Affiliates of its members or partners, to pay
any fees or incur any liabilities for which they are not reimbursed when such fees or liabilities
are incurred or adequately indemnified or require Purchaser to expend any financial resources on
behalf of the Company which they are not reimbursed or fully indemnified or guarantee or otherwise
support the extension of credit to the Company; and
(b) the Company shall consult in good faith with Purchaser regarding the appropriate balance
among Capital Raising Activities with a view toward employing the alternatives that generate the
most value for the Company with the lowest cost of capital and to avoid unnecessary dilution, and
the Company shall also consider in good faith structuring certain asset sales as sales of minority
positions in the relevant assets, thereby enabling the Company to maintain majority ownership and
management of those assets.
SECTION 5.4 Listing. The Company shall use its reasonable best efforts to cause the
Shares and the New Warrants to be listed on the New York Stock Exchange (the “NYSE”). The
Plan shall provide that the Company shall use its reasonable best efforts to cause GGO to use its
reasonable best efforts to cause the GGO Shares and the GGO Warrants to be listed on a U.S.
national securities exchange.
SECTION 5.5 Use of Proceeds. The Plan shall provide that the Company and its
Subsidiaries, and GGO, shall apply the net proceeds from the sale of the Shares and the GGO
Rights Offering and the Capital Raising Activities, as applicable, as provided in the Plan
Summary Term Sheet and the Plan.
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SECTION 5.6 Access to Information. Subject to applicable Law and the existing
confidentiality agreement between Brookfield Asset Management Inc., an Affiliate of Purchaser, and
the Company, dated February 27, 2010 (the “Confidentiality Agreement”), upon reasonable
notice, the Company shall afford Purchaser and its directors, officers, employees, investment
bankers, attorneys, accountants and other advisors or representatives, reasonable access during
normal business hours, throughout the period prior to the Effective Date, to its employees, books,
contracts and records and, during such period, the Company shall (and shall cause its Subsidiaries
to) furnish promptly to Purchaser such information concerning its business, properties and
personnel as may reasonably be requested by Purchaser, including, copies of all monthly financial
information provided to its lenders under its existing debtor-in possession financing agreements;
provided, that, notwithstanding anything to the contrary, the Company shall not be required
to share confidential information relating to any Competing Transaction except as contemplated by
Section 5.7. Subject to the Confidentiality Agreement, the Company shall provide, and
shall cause its Subsidiaries, and shall use all reasonable efforts to cause their respective
representatives, including legal and accounting, to provide all cooperation reasonably requested by
Purchaser in connection with the assistance contemplated to be provided by Purchaser in connection
with the Capital Raising Activities contemplated by Section 5.3.
SECTION 5.7 Competing Transactions. From the date of this Agreement until the earlier
to occur of the Closing and the termination of this Agreement, the Company shall provide written
notice to Purchaser not less than 48 hours prior to the Company or any Subsidiary of the Company
(i) entering into a definitive agreement providing for a Competing Transaction or (ii) filing a
motion with the Bankruptcy Court seeking to obtain bid procedures or bid protections for or in
connection with a Competing Transaction.
SECTION 5.8 Reservation for Issuance. The Company shall reserve that number of shares
of Common Stock sufficient for issuance upon exercise or conversion of the Warrants. In connection
with the issuance of the New Warrants, the Plan shall provide that the Company shall reserve for
issuance that number of shares of New Common Stock sufficient for issuance upon exercise of the New
Warrants. The Plan shall provide that GGO shall reserve for issuance that number of shares of GGO
Common Stock sufficient for issuance upon exercise of the GGO Warrants.
SECTION 5.9 Subscription Rights.
(a) Company Subscription Right.
(i) Sale of New Equity Securities. Following the Closing Date, Purchaser shall
have the right, or shall at any time and from time to time thereafter have the right to
appoint Brookfield Consortium Members in accordance with and subject to the Designation
Conditions, to exercise the Subscription Right set forth in this Section 5.9
(Purchaser or one or more Brookfield Consortium Members, each a “Subscribing Entity”
and collectively the “Subscribing Entities”). If the Company or any Subsidiary of
the Company at any time or from time to time following the Closing Date makes any public
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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 such Persons 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 or (5) as set forth on
Section 5.9(a) of the Company Disclosure Letter) (the “Proposed
Securities”), the Subscribing Entities 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 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 the Subscribing Entities
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 Purchaser and Brookfield Consortium Members on a Fully Diluted Basis as of the date of
the Company’s notice pursuant to Section 5.9(b) 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 the Subscribing Entities 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 this Section 5.9 in the context of a registered public offering shall be
conditioned upon reasonably acceptable representations and warranties of each Subscribing
Entity 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 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
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filed with respect to such offering), no later than ten Business Days after the
commencement of marketing with respect to such offering or after the Company takes
substantial steps to pursue any other offering. The Subscribing Entity shall have three
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 the Subscribing Entity desires to purchase, up to the maximum amount calculated
pursuant to Section 5.9(a)(i). In connection with an underwritten public offering,
such notice shall constitute a non-binding indication of interest to purchase Proposed
Securities at such a range of prices as the Subscribing Entity may specify and, with respect
to other offerings, such notice shall constitute a binding commitment of the Subscribing
Entity to purchase the amount of Proposed Securities so specified at the price and other
terms set forth in the Company’s notice to such Subscribing Entity. The failure of the
Subscribing Entity to so respond within such three Business Day period shall be deemed to be
a waiver of the Subscription Right under this Section 5.9 only with respect to the
offering described in the applicable notice. In connection with an underwritten public
offering or a private placement, the Subscribing Entity shall further enter into an
agreement (in form and substance customary for transactions of this type) to purchase the
Proposed Securities to be acquired 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 to
enter into such an agreement at or prior to such time shall constitute a waiver of the
Subscription Right in respect of such offering.
(iii) Purchase Mechanism. If the Subscribing Entity exercises its Subscription
Right provided in this Section 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).
Each of the Company and the Subscribing Entity 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) the Subscribing Entity fails to
exercise its Subscription Right provided in this Section 5.9 within said three
Business Day period or, (B) if so exercised, the Subscribing Entity fails or is unable to
consummate such purchase within the 180 day period specified in Section 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 this Section 5.9 or which the Subscribing Entity 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 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 offering such securities to Purchaser in the manner provided above.
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(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 Purchaser shall cooperate in good faith to
facilitate the exercise of the Subscribing Entity’s Subscription Right hereunder, including
using reasonable efforts to secure any required approvals or consents.
(vii) General. Notwithstanding anything herein to the contrary, (A) if (1) the
Subscribing Entity exercises its Subscription Right pursuant to this Section 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 by Section
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 the Brookfield Consortium Members are entitled to Subscription Rights would
materially impair the financing objective of such offering, the Company may proceed with
such offering without the participation of Purchaser in such offering, in which event the
Company and Purchaser shall promptly thereafter agree on a process otherwise consistent with
this Section 5.9 as would allow 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 Purchaser to maintain its 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 in Section
5.9(a)(ii) would materially impair the financing objective of an offering in respect of
which the Brookfield Consortium Members are entitled to Subscription Rights, the Company
shall be permitted by notice to the Subscribing Entity to reduce the notice period required
under Section 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 the Subscribing Entity
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 this Section 5.9 as would allow
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 Purchaser to
maintain its 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
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of, New Common Stock) to 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 the Subscribing Entity, in so far 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 the Subscribing Entity was able to
effectively exercise its Subscription Rights hereunder, including, at the option of the
Subscribing Entity, issuing to the Subscribing Entity another class of securities of the
Company having terms to be agreed by the Company and 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
Purchaser to maintain its proportionate New Common Stock-equivalent interest in the Company
on a Fully Diluted Basis.
(viii) Termination. This Section 5.9 shall terminate at such time as
Purchaser together with the Brookfield Consortium Members collectively beneficially own less
than 5% of the outstanding shares of New Common Stock on a Fully Diluted Basis.
(b) GGO Subscription Rights. The Plan shall provide that in connection with the
consummation of the Plan, GGO shall enter into an agreement with Purchaser with substantially
similar terms to those set forth in Section 5.9(a) above with respect to any issuance of
GGO Common Stock (or securities that are convertible into or exchangeable or exercisable for, or
otherwise linked to, GGO Common Stock) after the Effective Date.
SECTION 5.10 Company Board of Directors.
(a) Company Board of Directors.
(i) The Plan shall provide that as of the Effective Date, the Company Board shall have
nine (9) members and three (3) of such members shall be persons designated by Purchaser (the
“Purchaser Board Designees”), one to each class of directors of the Company Board
(if the Company has a staggered board of directors); provided, that such designees
shall be identified by name and in writing to the Company no later than 10 Business Days
prior to the voting deadline established by the Bankruptcy Court. Subject to the rights
provided under the Fairholme/Pershing Agreements, the remaining members of the Company Board
on the Effective Date shall be chosen by the Company in consultation with Purchaser.
(ii) Following the Closing, the Company shall nominate as part of its slate of
directors and use its reasonable best efforts to have elected to the Company 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 Company Board) (subject to applicable Law and stock
exchange rules (provided that Purchaser Board Designees need not be “independent” under the
applicable rules of the applicable stock exchange or the SEC)) (x) so long as Purchaser and
the Brookfield Consortium Members beneficially own (directly or indirectly) in the aggregate
at least 20% of the shares of New Common Stock on a Fully Diluted Basis, three (3) Purchaser
Board Designees, (y) so long as Purchaser and the Brookfield Consortium Members beneficially
own (directly or indirectly) in the aggregate at least 15%, but less than 20%, of the shares
of New Common Stock on a
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Fully Diluted Basis, two (2) Purchaser Board Designees, and (z) so long as Purchaser
and the Brookfield Consortium Members beneficially own (directly or indirectly) in the
aggregate at least 10%, but less than 15%, of the shares of Common Stock on a Fully Diluted
Basis, one (1) Purchaser Board Designee. For the avoidance of doubt, at and following such
time as Purchaser and the Brookfield Consortium Members beneficially own (directly or
indirectly) in the aggregate less than 10% of the shares of Common Stock on a Fully Diluted
Basis, Purchaser and the Brookfield Consortium Members shall no longer have the right to
designate directors for election to the Company Board. Following the Closing, and subject
to applicable Law and stock exchange rules, there shall be proportional representation by
Purchaser Board Designees on any committee of the Company Board, except for special
committees established for potential conflict of interest situations involving any
Brookfield Consortium Member or any Affiliate thereof, and except that only Purchaser 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 Board Designees serving on the Company Board exceeds the number of Purchaser Board
Designees that Purchaser is then otherwise entitled to designate as a result of a decrease
in the percentage of shares of New Common Stock beneficially owned by Purchaser and the
Brookfield Consortium Members, Purchaser shall, to the extent it is within Purchaser’s
control, use its commercially reasonable efforts to cause any such additional Purchaser
Board Designees to offer to resign such that the number of Purchaser Board Designees serving
on the Company Board after giving effect to such resignation does not exceed the number of
Purchaser Board Designees that Purchaser is entitled to designate for election to the
Company Board.
(iii) Except with respect to the resignation of a Purchaser Board Designee pursuant to
Section 5.10(a)(ii), Purchaser shall have the power to designate a Purchaser Board
Designee’s replacement upon the death, resignation, retirement, disqualification or removal
from office of such Purchaser Board Designee. The Company Board shall promptly take all
action reasonably required to fill any vacancy resulting therefrom with such replacement
Purchaser Board Designee (including nominating such person, subject to applicable Law, as
the Company’s nominee to serve on the Company Board and causing the Company to use all
reasonable efforts to have such person elected as a director of the Company and solicit
proxies for such person to the same extent as it does for any of the Company’s other
nominees to the Company Board).
(iv) The Purchaser Board Designees 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
Company Board, and each Purchaser Board Designee shall be entitled to reimbursement for
documented, reasonable out-of-pocket expenses incurred in attending meetings of the Company
Board or any committees thereof, to the same extent as other members of the Company Board.
The Company shall notify each Purchaser Board Designee of all regular and special meetings
of the Company Board and shall notify each Purchaser Board Designee of all regular and
special meetings of any committee of the Company Board of which such Purchaser Board
Designee is a member. The Company shall provide each Purchaser Board Designee with copies
of all notices, minutes, consents and other materials provided to all other members of the
Company 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 Board Designee is not a
member).
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(v) Purchaser Board Designees candidates shall be subject to such reasonable
eligibility criteria as are applied in good faith by the nominating, corporate governance or
similar committee of the Company Board to other candidates for the Company Board. Purchaser
shall designate one of the Purchaser Board Designees to serve as the initial chairman of the
Company Board as of the Effective Date.
(b) GGO Board of Directors.
(i) The Plan shall provide that as of the Effective Date, the board of directors of GGO
(the “GGO Board”) shall have nine (9) members and two (2) of such members shall be
persons designated by Purchaser (the “Purchaser GGO Board Designees”), to separate
classes of directors of the GGO Board (if GGO has a staggered board of directors);
provided, that such designees shall be identified by name and in writing to the
Company no later than 10 Business Days prior to the voting deadline established by the
Bankruptcy Court. Subject to the rights provided under the Fairholme/Pershing Agreements,
the remaining members of the GGO Board on the Effective Date shall be chosen by the Company
in consultation with Purchaser.
(ii) The Plan shall provide, in connection with the consummation of the Plan, for GGO
to enter into an agreement with Purchaser (the “GGO Agreement”) providing as
follows:
(1) That following the Closing, GGO shall nominate as part of its slate of
directors and use its reasonable best efforts to have 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)) (A) so long as Purchaser
and the Brookfield Consortium Members have not sold any of their GGO Shares
or GGO Warrants, two (2) Purchaser GGO Board Designees (provided, that in
the event that the chief executive officer of GGO is an employee of
Purchaser or one if its Affiliates, such individual shall be one of the
Purchaser GGO Board Designees) and (B) following the sale by Purchaser or
any Brookfield Consortium Member of any GGO Shares or GGO Warrants, so long
as Purchaser and the Brookfield Consortium Members beneficially own
(directly or indirectly) in the aggregate at least 10% of the shares of GGO
Common Stock on a Fully Diluted Basis, one (1) Purchaser GGO Board
Designees. For the avoidance of doubt, at and following such time as
Purchaser and the Brookfield Consortium Members have sold GGO Shares or GGO
Warrants and at such time beneficially own (directly or indirectly) in the
aggregate less than 10% of the shares of GGO Common Stock on a Fully
Diluted Basis, Purchaser and the Brookfield Consortium Members shall no
longer have the right to designate directors for election to the GGO Board.
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(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
involving any Brookfield Consortium Member or any Affiliate thereof, 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 Purchaser is then otherwise entitled
to designate as a result of a decrease in the percentage of shares of GGO
Common Stock beneficially owned by Purchaser and the Brookfield Consortium
Members, Purchaser shall, to the extent it is within Purchaser’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
Purchaser 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 to Section 5.10(b)(ii)(2), (A) Purchaser shall
have the power to designate a Purchaser GGO Board Designee’s 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
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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.
SECTION 5.11 Notification of Certain Matters.
(a) The Company shall (i) give prompt written notice to Purchaser of any written notice or
other written communication from any Person alleging that the consent of such Person which is or
may be required in connection with the transactions contemplated by this Agreement is not likely to
be obtained prior to Closing, if the failure to obtain such consent would reasonably be expected to
be adverse and material to the Company and its Subsidiaries taken as a whole or would materially
impair the ability of the Company to consummate the transactions contemplated hereby or perform its
obligations hereunder, and (ii) facilitate adding such individuals as designated by Purchaser to
the electronic notification system such that the designated individuals will receive electronic
notice of the entry of any Bankruptcy Court Order.
(b) To the extent permitted by applicable Law, (i) the Company shall give prompt notice to
Purchaser of the commencement of any investigation, inquiry or review by any Governmental Entity
with respect to the Company or its Subsidiaries which would reasonably be expected to be adverse
and material to the Company and its Subsidiaries taken as a whole or would materially impair the
ability of the Company to consummate the transactions contemplated hereby or perform its
obligations hereunder, and (ii) the Company shall give prompt notice to Purchaser, and Purchaser
shall give written prompt notice to the Company, of any event or circumstance that would result in
any representation or warranty of the Company or Purchaser, as applicable, being untrue or any
covenant or agreement of the Company or Purchaser, as applicable, not being performed or complied
with such that, in each such case, the conditions set forth in Article VII or Article
VIII, as applicable, would not be satisfied if such event or circumstance existed on the
Closing Date.
(c) No information received by a party pursuant to this Section 5.11 nor any
information received or learned by a party or any of its representatives pursuant to an
investigation made under this Section 5.11 shall be deemed to (A) qualify, modify, amend or
otherwise affect any representations, warranties, conditions, covenants or other agreements of the
other party set forth in this Agreement, (B) amend or otherwise supplement the information set
forth in the Company Disclosure Letter, (C) limit or restrict the remedies available to such party
under this Agreement, applicable Law or otherwise arising out of a breach of this Agreement, or
(iv) limit or restrict the ability of such party to invoke or rely on, or effect the satisfaction
of, the conditions to the obligations of such party to consummate the transactions contemplated by
this Agreement set forth in Article VII or Article VIII, as applicable.
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SECTION 5.12 Further Assurances. From and after the Closing, the Company shall (and
shall cause each of its Subsidiaries to) execute and deliver, or cause to be executed and
delivered, such further instruments or documents or take such other action and cause entities
controlled by them to take such action as may be reasonably necessary (or as reasonably requested
by Purchaser) to carry out the transactions contemplated by this Agreement.
SECTION 5.13 Xxxxxx Heirs Obligations.
(a) In the event holders of Xxxxxx Heirs Obligations receive shares of New Common Stock on
account of such Xxxxxx Heirs Obligations in the Plan, the number of shares of New Common Stock
otherwise available for distribution on the Effective Date under the Plan in the Equity Exchange
shall be reduced by the number of shares of New Common Stock issued or issuable to such holders of
Xxxxxx Heirs Obligations.
(b) In the event holders of Xxxxxx Heirs Obligations receive shares of GGO Common Stock on
account of such Xxxxxx Heirs Obligations in the Plan, the number of shares of GGO Common Stock
otherwise available for distribution on the Effective Date under the Plan in the GGO Share
Distribution shall be reduced by the number of shares of GGO Common Stock issued or issuable to
such holders of Xxxxxx Heirs Obligations.
SECTION 5.14 Rights Agreement; Reorganized Company Organizational Documents.
(a) Prior to the issuance of the Warrants, the Rights Agreement shall be amended to provide
that (i) the Rights Agreement is inapplicable to (1) the acquisition by Purchaser of the Warrants
and the underlying securities thereof, (2) any antidilution adjustments to those Warrants pursuant
to the Warrant Agreement, (3) any shares of New Common Stock that Purchaser or any Brookfield
Consortium Member may be deemed to own by no actions of its own and (4) up to an additional 2.5% of
the issued and outstanding shares of Common Stock by Brookfield Consortium Members, (ii) neither
Purchaser, nor any Brookfield Consortium Member, shall be deemed to be an Acquiring Person (as
defined in the Rights Agreement), (iii) neither a Shares Acquisition Date (as defined in the Rights
Agreement) nor a Distribution Date (as defined in the Rights Agreement) shall be deemed to occur
and (iv) the Rights (as defined in the Rights Agreement) shall not separate from the Common Stock,
in each case under (ii), (iii) and (iv), as a result of the acquisition by Purchaser of the
Warrants, the underlying securities thereof and the acquisition of beneficial ownership of up to an
additional 2.5% of the issued and outstanding shares of Common Stock by Brookfield Consortium
Members.
(b) The certificate of incorporation and bylaws of the Reorganized Company (the
“Reorganized Company Organizational Documents”) shall be in form mutually agreed to by the
Company and Purchaser, provided, that in the event that the Company and Purchaser are not able to
agree on such form prior to the Effective Date, the Reorganized Company Organizational Documents
shall be substantially in the same form as the certificate of incorporation and bylaws of the
Company as in existence on the date of this Agreement (except that the number of authorized shares
of capital stock of the Reorganized Company shall be increased), provided, however, that (i) the
restriction on Beneficial Ownership (as such term is defined in the certificate of incorporation of
the Company) shall be set at 9.9% of the outstanding capital stock of the Reorganized Company, (ii)
the restriction on Constructive Ownership (as such term is
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defined in the certificate of incorporation of the Company) shall be set at 9.9% of the
outstanding capital stock of the Reorganized Company, (iii) there shall not be an exemption from
the restrictions set forth in the foregoing clauses (i) and (ii) for the current Existing Holder
(as such term is defined in the existing certificate of incorporation of the Company), (iv) the
Reorganized Company shall provide a waiver from the restrictions set forth in the foregoing clauses
(i) and (ii) to any Brookfield Consortium Member if such Brookfield Consortium Member provides the
Reorganized Company with a certificate containing the representations and covenants set forth on
Exhibit D and (v) the definition of “Person” shall be revised so that it does not include a
“group” as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.
(c) In the event the Reorganized Company adopts a rights plan analogous to the Rights
Agreement on or prior to the Closing, the Plan shall provide that (i) the Reorganized Company’s
Rights Agreement shall be inapplicable to this Agreement and the transactions contemplated hereby,
(ii) neither Purchaser, nor any Brookfield Consortium Member, shall be deemed to be an Acquiring
Person (as defined in the Rights Agreement) whether in connection with the acquisition of Shares,
New Warrants, shares issuable upon exercise of the New Warrants or otherwise, (iii) neither a
Shares Acquisition Date (as defined in the Rights Agreement) nor a Distribution Date (as defined in
the Rights Agreement) shall be deemed to occur and (iv) the Rights (as defined in the Rights
Agreement) will not separate from the New Common Stock, in each case under (ii), (iii) and (iv), as
a result of the execution, delivery or performance of this Agreement, the consummation of the
transactions contemplated hereby including the acquisition of shares of New Common Stock by
Purchaser and any Brookfield Consortium Member after the date hereof as otherwise permitted by this
Agreement, the New Warrants or as otherwise contemplated by the Non-Control Agreement.
(d) In the event GGO adopts a rights plan analogous to the Rights Agreement on or prior to the
Closing, the Plan shall provide that (i) GGO’s Rights Agreement shall be inapplicable to this
Agreement and the transactions contemplated hereby, (ii) neither Purchaser, nor any Brookfield
Consortium Member, shall be deemed to be an Acquiring Person (as defined in the Rights Agreement)
whether in connection with the acquisition of shares of GGO Common Stock or GGO Warrants or the
shares issuable upon exercise of the GGO Warrants, (iii) neither a Shares Acquisition Date (as
defined in the Rights Agreement) nor a Distribution Date (as defined in the Rights Agreement) shall
be deemed to occur and (iv) the Rights (as defined in the Rights Agreement) will not separate from
the GGO Common Stock, in each case under (ii), (iii) and (iv), as a result of the execution,
delivery or performance of this Agreement or the consummation of the transactions contemplated
hereby including the acquisition of shares of GGO Common Stock by Purchaser and any Brookfield
Consortium Member after the date hereof as otherwise permitted by this Agreement, or the GGO
Warrants.
SECTION 5.15 Stockholder Approval. For so long as Purchaser has Subscription Rights
as contemplated by Section 5.9(a), in connection with the expiration of the five (5) year
period referenced in Section 3.2(c), the Company shall put up for a stockholder vote at the
immediately prior annual meeting of its stockholders, and include in its proxy statement
distributed to such stockholders in connection with such annual meeting, approval of Purchaser’s
Subscription Rights for the maximum period permitted by the NYSE. The Plan shall provide that GGO
shall, for the benefit of Purchaser, to the extent required by any U.S. national securities
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exchange upon which shares of GGO Common Stock are listed, for so long as Purchaser has
subscription rights as contemplated by Section 5.9(b), put up for a stockholder vote at the
annual meeting of its stockholders, and include in its proxy statement distributed to such
stockholders in connection with such annual meeting, approval of Purchaser’s subscription rights
for the maximum period permitted by the rules of such U.S. national securities exchange.
SECTION 5.16 Registration Statements.
(a) Prior to or promptly following the Effective Date, the Company shall file with the SEC a
shelf registration statement on Form S-1 or Form S-11, as applicable, covering the resale by
Purchaser of the Shares and the shares of New Common Stock issuable upon exercise of the New
Warrants, containing a plan of distribution reasonably satisfactory to Purchaser, and the Company
shall use its reasonable best efforts to cause such registration statement to be declared effective
by the SEC no later than 180 days after the Effective Date. Notwithstanding the foregoing, in the
event that the Company files a registration statement covering the resale of shares of New Common
Stock for any Other Sponsor prior to such date, the Company shall include the Shares and shares of
New Common Stock issuable upon exercise of the New Warrants for resale by Purchaser in such
registration statement.
(b) The Plan shall provide that, prior to or promptly following the Effective Date, GGO shall
file with the SEC a shelf registration statement on Form S-1 or Form S-11, as applicable, covering
the resale by Purchaser of the GGO Shares and the shares of GGO Common Stock issuable upon exercise
of the GGO Warrants, containing a plan of distribution reasonably satisfactory to Purchaser, and
GGO shall use its reasonable best efforts to cause such registration statement to be declared
effective by the SEC no later than 180 days after the Effective Date. Notwithstanding the
foregoing, in the event that GGO files a registration statement covering the resale of shares of
GGO Common Stock for any Other Sponsor prior to such date, GGO shall include the GGO Shares and
shares of GGO Common Stock issuable upon exercise of the GGO Warrants for resale by Purchaser in
such registration statement.
SECTION 5.17 Closing Date Net Debt.
(a) The Company shall deliver to Purchaser a schedule (the “Preliminary Closing Date Net
Debt Schedule”) on or before the first Business Day that is five calendar days following
approval of the Disclosure Statement, that: (i) sets forth the Company’s good faith estimate for
each of the three components of the Closing Date Net Debt W/O Reinstatement Adjustment and
Permitted Claims Amounts along with a reasonably detailed explanation and calculation of each such
component and (ii) discloses the Company’s good faith estimate of the Closing Date Net Debt W/O
Reinstatement Adjustment and Permitted Claims Amounts and GGO Setup Costs.
(b) Purchaser shall review the Preliminary Closing Date Net Debt Schedule during the
Preliminary Closing Date Net Debt Review Period, during which time the Company shall allow
Purchaser reasonable access to all non-privileged or work product documents or records or personnel
used in the preparation of the Preliminary Closing Date Net Debt Schedule. On or prior to the
Preliminary Closing Date Net Debt Review Deadline, Purchaser may deliver to the Company a notice
(the “Dispute Notice”) listing those items on the Preliminary Closing Date Net Debt
Schedule to which Purchaser takes exception, which Dispute Notice shall (i) specifically
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identify such items, and provide a reasonably detailed explanation of the basis upon which
Purchaser has delivered such list, (ii) set forth the amount of Closing Date Net Debt W/O
Reinstatement Adjustment and Permitted Claims Amounts that Purchaser has calculated based on the
information contained in the Preliminary Closing Date Net Debt Schedule, and (iii) specifically
identify Purchaser’s proposed adjustment(s). If Purchaser timely provides the Company with a
Dispute Notice, then Purchaser and the Company shall, within ten (10) days following receipt of
such Dispute Notice by the Company (the “Resolution Period”), attempt to resolve their
differences with respect to the items specified in the Dispute Notice (the “Disputed
Items”). If Purchaser and the Company do not resolve all Disputed Items by the end of the
Resolution Period, then all Disputed Items remaining in dispute shall be submitted to the
Bankruptcy Court for resolution at or concurrent with the Confirmation Hearing. The Bankruptcy
Court shall consider only those Disputed Items that Purchaser, on the one hand, and the Company, on
the other hand, were unable to resolve. All other matters shall be deemed to have been agreed upon
by Purchaser and the Company. If Purchaser does not timely deliver a Dispute Notice, then
Purchaser shall be deemed to have accepted and agreed to the Preliminary Closing Date Net Debt
Schedule and to have waived any right to dispute the matters set forth therein.
(c) On or prior to the Effective Date, the Company shall deliver to Purchaser the Conclusive
Net Debt Adjustment Statement.
(d) It is the intention of the parties that releases from the Reserve are not intended to
alter the allocation of value between GGO and the Company. Accordingly, the Plan shall provide
that if there is a Reserve Surplus Amount as of the end of any fiscal quarter prior to the maturity
of the GGO Promissory Note, the principal amount of the GGO Promissory Note shall be reduced (not
below zero) (i) by 80% of the balance of the Reserve Surplus Amount corresponding to any Net Debt
Surplus Amount and (ii) if after application of the Reserve Surplus Amount pursuant to clause (i),
any Reserve Surplus Amount remains, by 100% of the remaining balance of the Reserve Surplus Amount.
In the event that any party requests an equitable adjustment to this formula, the other parties
shall consider the request in good faith.
(e) The Plan shall provide that, if there is an Offering Premium, the principal amount of the
GGO Promissory Note shall be reduced (but not below zero) by 80% of the aggregate Offering Premium
on the 31st day following the Closing Date.
(f) The Plan and the agreements relating to the GGO Share Distribution shall provide that from
and after the Closing, the Company shall indemnify GGO and its Subsidiaries from and against 93.75%
of any and all losses, claims damages, liabilities and reasonable expenses to which GGO and its
Subsidiaries may become subject, in each case solely to the extent directly attributable to MPC
Taxes actually paid at or after the Effective Date; provided that in no event shall the Company be
required to make any indemnification payment hereunder to the extent such payment would result in
aggregate payments under this Section 5.17(f) that would exceed the lower of (i)
$303,750,000 and (ii) the then effective Excess Surplus Amount (the “Indemnity Cap”). The
Plan shall provide that if GGO or its Affiliates receives any refund or realizes any reduction of
its Tax liability in respect of the MPC Assets for which it has received a payment or realized a
benefit pursuant to this Agreement, GGO shall pay an amount equal to such refund or
reduction in Tax liability (less any costs or Taxes incurred with respect to the receipt
thereof) to the Reorganized Company within ten (10) Business Days of the receipt or realization
thereof.
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(g) If GGO is obligated to pay MPC Taxes with respect to the tax year 2010 and the Company is
not then obligated to indemnify GGO as a consequence of the Indemnity Cap, then solely with respect
to such payments, the Company shall pay such amount of MPC Taxes and the principal amount of the
GGO Promissory Note shall be increased by the amount of such payment and if at such time no GGO
Promissory Note is outstanding, on the date of any such payment, GGO shall issue in favor of the
Company a promissory note in the aggregate principal amount of such payment on the same terms as
the GGO Promissory Note.
ARTICLE VI
ADDITIONAL COVENANTS OF PURCHASER
SECTION 6.1 Information. From and after the date of this Agreement until the earlier
to occur of the Closing Date and the termination of this Agreement, Purchaser agrees to provide the
Debtors with such information as the Debtors reasonably request regarding Purchaser for inclusion
in the Disclosure Statement as necessary for the Disclosure Statement to contain adequate
information for purposes of Section 1125 of the Bankruptcy Code.
SECTION 6.2 Purchaser Efforts. Purchaser shall use its reasonable best efforts to
obtain all material permits, consents, orders, approvals, waivers, authorizations or other
permissions or actions required for the consummation of the transactions contemplated by this
Agreement from, and shall have given all necessary notices to, all Governmental Entities necessary
to satisfy the condition in Section 8.1(b) (provided, however, that
Purchaser shall not be required to pay or cause payment of any fees or make any financial
accommodations to obtain any such consent, approval, waiver or other permission, except filing fees
as required), and provide to such Governmental Entities all such information as may be necessary or
reasonably requested relating to the transactions contemplated hereby.
SECTION 6.3 Plan Support. From and after the date of this Agreement until the
earliest to occur of (i) the Effective Date, (ii) the termination of this Agreement and (iii) the
date the Company or any Subsidiary of the Company makes a public announcement, enters into an
agreement or files any pleading or document with the Bankruptcy Court, in each case, evidencing its
intention to support any Competing Transaction, or the Company or any Subsidiary of the Company
enters into a Competing Transaction, Purchaser agrees (unless otherwise consented to by the
Company) (provided, that (x) the Company is not in material breach of this Agreement and
(y) the terms of the Plan are and remain consistent with the Plan Summary Term Sheet and this
Agreement, and are otherwise in form and substance satisfactory to Purchaser) to (and shall use
reasonable best efforts to cause its Affiliates to):
(a) Not pursue, propose, support, vote to accept or encourage the pursuit, proposal or support
of, any Chapter 11 plan, or other restructuring or reorganization for the Company, or any
Subsidiary of the Company, that is not consistent with the Plan;
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(b) Not, nor encourage any other Person to, interfere with, delay, impede, appeal or take any
other negative action, directly or indirectly, in any respect regarding acceptance or
implementation of the Plan; and
(c) Not commence any proceeding, or prosecute any objection to oppose or object to the Plan or
to the Disclosure Statement and not to take any action that would delay approval or confirmation,
as applicable, of the Disclosure Statement and the Plan, in each case (i) except as intended to
ensure the consistency of the Disclosure Statement and the Plan with the terms of this Agreement
and the rights and obligations of the parties thereto and (ii) without limiting any rights
Purchaser may have to terminate this Agreement pursuant to Section 11.1(b) (including
Section 11.1(b)(x)) hereof.
SECTION 6.4 Transfer Restrictions. Purchaser covenants and agrees that the Shares and
the GGO Shares (and shares issuable upon exercise of Warrants, New Warrants and GGO Warrants) shall
be disposed of only pursuant to an effective registration statement under the Securities Act or
pursuant to an available exemption from the registration requirements of the Securities Act, and in
compliance with any applicable state securities Laws. Purchaser agrees to the imprinting, so long
as is required by this Section 6.4, of the following legend on any certificate evidencing
the Shares or GGO Shares (and shares issuable upon exercise of Warrants, New Warrants and GGO
Warrants):
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE
“ACT”) OR UNDER ANY STATE SECURITIES LAWS (“BLUE SKY”) OR THE SECURITIES LAWS OF
ANY OTHER RELEVANT JURISDICTION. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE. THE SHARES MAY NOT BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, ENCUMBERED,
HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS EITHER (I) A REGISTRATION STATEMENT WITH
RESPECT TO THE SHARES IS EFFECTIVE UNDER THE ACT AND APPLICABLE BLUE SKY LAWS AND THE SECURITIES
LAWS OF ANY OTHER RELEVANT JURISDICTION ARE COMPLIED WITH OR (II) UNLESS WAIVED BY THE ISSUER, THE
ISSUER RECEIVES AN OPINION OF LEGAL COUNSEL SATISFACTORY TO THE ISSUER THAT NO VIOLATION OF THE ACT
OR OTHER APPLICABLE LAWS WILL BE INVOLVED IN SUCH TRANSACTION.
Certificates evidencing the Shares (and shares issuable upon exercise of Warrants and New
Warrants) shall not be required to contain such legend (A) while a registration statement covering
the resale of the Shares is effective under the Securities Act, or (B) following any sale of any
such Shares pursuant to Rule 144 of the Exchange Act (“Rule 144”), or (C) following receipt
of a legal opinion of counsel to Purchaser that the remaining Shares held by Purchaser are eligible
for resale without volume limitations or other limitations under Rule 144. In addition, the
Company will agree to the removal of all legends with respect to shares of New Common Stock
deposited with DTC from time to time in anticipation of sale in accordance with the volume
limitations and other limitations under Rule 144, subject to the Company’s approval of appropriate
procedures, such approval not to be unreasonably withheld, conditioned or delayed.
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Following the time at which such legend is no longer required (as provided above) for certain
Shares, the Company shall promptly, following the delivery by Purchaser to the Company of a
legended certificate representing such Shares, deliver or cause to be delivered to Purchaser a
certificate representing such Shares that is free from such legend. In the event the above legend
is removed from any of the Shares, and thereafter the effectiveness of a registration statement
covering such Shares is suspended or the Company determines that a supplement or amendment thereto
is required by applicable securities Laws, then the Company may require that the above legend be
placed on any such Shares that cannot then be sold pursuant to an effective registration statement
or under Rule 144 and Purchaser shall cooperate in the replacement of such legend. Such legend
shall thereafter be removed when such Shares may again be sold pursuant to an effective
registration statement or under Rule 144.
The Plan shall provide, in connection with the consummation of the Plan, for GGO to enter into
an agreement with Purchaser with respect to GGO Shares and GGO Warrants containing the same terms
as provided above in this Section 6.4 but replacing references to (A) “the Company” with
GGO, (B) “New Common Stock” with GGO Common Stock, (C) “Shares” with “GGO Shares” and (D)
“Warrants” or “New Warrants” with GGO Warrants.
In addition to the covenants provided in the Non-Control Agreement, Purchaser further
covenants and agrees not to sell, transfer or dispose of (each, a “Transfer”) (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.
Purchaser shall further covenant and agree in an agreement to be entered into with GGO in
connection with the Plan not to Transfer (x) GGO Shares, GGO Warrants, or shares issuable upon
exercise of the GGO 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 GGO Shares and (B) 8.25% of the
GGO Warrants or the shares issuable upon exercise of the GGO 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 GGO Shares and (B) 16.5% of
the GGO Warrants or the shares issuable upon exercise of the GGO 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 GGO Shares, GGO
Warrants, or shares issuable upon exercise of the GGO Warrants from and after the eighteen (18)
month anniversary of the Closing Date.
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Prior to the Closing, Purchaser shall not Transfer the Warrants or the shares of Common Stock
issuable upon exercise of the Warrants prior to the earlier of (i) termination of this Agreement or
(ii) the date the Company or any Subsidiary of 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 the Company or any Subsidiary of
the Company enters into a definitive agreement providing for a Competing Transaction or (B)
provides notice to Purchaser of its or any of its Subsidiaries decision to enter into, or entry
into, a definitive agreement providing for a Competing Transaction.
Notwithstanding anything herein to the contrary, Purchaser shall be permitted to Transfer any
portion or all of its Shares, GGO Shares, the Warrants, the New Warrants, the GGO Warrants and the
shares of Common Stock or New Common Stock issuable upon exercise of the Warrants, the New Warrants
and the GGO Warrants at any time under the following circumstances (provided, that none of
Purchaser’s rights and benefits under this Agreement shall inure to the benefit of any transferee
under clause (ii) or (iii) below):
(i) Transfers to any Affiliate of Purchaser, any member of Purchaser, any Brookfield
Consortium Member and any member, partner or shareholder or any Affiliate of any Brookfield
Consortium Member, in accordance with and subject to the Designation Conditions.
(ii) Transfers pursuant to a merger or tender offer or exchange offer involving the
Company in which any Person acquires more than 50% of the outstanding Common Stock on a
Fully Diluted Basis.
(iii) Any bona fide mortgage, encumbrance, pledge or hypothecation of capital stock to
a financial institution in connection with any bona fide loan.
For the avoidance of doubt, Purchaser’s rights to designate for nomination the Purchaser
Board Designees and Purchaser GGO Board Designees pursuant to Section 5.10 and
Subscription Rights pursuant to Section 5.9 may not be Transferred to a Person that
is not a Brookfield Consortium Member.
Purchaser agrees to the imprinting of a legend referencing the above transfer restrictions on
any certificate evidencing the Shares or GGO Shares (and shares issuable upon exercise of Warrants,
New Warrants and GGO Warrants). In connection with any transfer of the Shares or GGO Shares (and
shares issuable upon exercise of Warrants, New Warrants and GGO Warrants), the Company shall remove
such legends from such certificates to the extent the transferee thereof is not bound by such
transfer restrictions.
SECTION 6.5 Equity Commitments; Source of Funds.
(a) Without the prior written consent of the Company, prior to the Release Date (as defined in
the Escrow Agreements), except as contemplated by Section 6.5(b) below, Purchaser shall not
(i) enter into any amendments or waive any provision of or terminate the Brookfield Equity
Commitment Letter or the Escrow Agreements or any
Acceptable LC or (ii) instruct the Escrow Agent to distribute any of the Escrow Amount to an
Equity Provider pursuant to Section 4(a)(ii) of the Escrow Agreements.
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(b) In the event that at any time following the execution of the Escrow Agreements, one or
more Equity Providers secures and delivers to Purchaser an Acceptable LC in replacement for its
Commitment Amount (as defined in the applicable Escrow Agreement), Purchaser shall be entitled to
amend or terminate the applicable Escrow Agreement replaced by an Acceptable LC without the consent
of the Company. Without the consent of the Company, Purchaser shall not permit any amendments,
waivers or terminations of any Acceptable LC.
(c) Prior to the earlier to occur of the Closing and the termination of this Agreement,
Purchaser shall not dividend, distribute or otherwise transfer or dispose of any cash or other
assets other than to pay the Purchase Price and the GGO Purchase Price and pursuant to Article
II.
SECTION 6.6 REIT Representations and Covenants. At such times as shall be reasonably
requested by the Company, for so long as Purchaser (or, to the extent applicable, its Affiliates,
members or Affiliates of members) beneficially or constructively owns in excess of the relevant
ownership limit set forth in the certificate of incorporation of the Company of the outstanding
Common Stock or New Common Stock, Purchaser shall (and, to the extent applicable, cause its
Affiliates, members or Affiliates of members to) use reasonable best efforts to provide the Company
with customary representations and covenants, in the form attached hereto as Exhibit D which shall,
among other things, enable the Company to provide a waiver of the ownership limit set forth in the
certificate of incorporation of the Company to Purchaser and ensure that the Company can
appropriately monitor any “related party rent” issues raised by the Warrants and the purchase of
the Shares by Purchaser, it being understood that Purchaser’s Affiliates, members or Affiliates of
members shall be required to provide such representations and covenants only if such Person
beneficially owns Common Stock or New Common Stock in excess of the relevant ownership limit set
forth in the certificate of incorporation of the Company or any stock or other equity interest
owned by such Person in a tenant of the Company would be treated as constructively owned by
Purchaser.
SECTION 6.7 Non-Control Agreement. At or prior to the Closing, Purchaser shall enter
into the Non-Control Agreement with the Company.
SECTION 6.8 Purchaser Formed Entities. Purchaser Formed Entities were formed by
Purchaser solely for the purpose of engaging in the reorganization transactions contemplated by
Exhibit B hereto. None of the Purchaser Formed Entities has engaged in any other business
activities and has conducted and will conduct its operations prior to the Closing only as
contemplated by this Agreement, including Exhibit B. Prior to the Closing, Purchaser shall
cause the Purchaser Formed Entities not to (i) incur any liabilities (other than as contemplated by
this Agreement) or (ii) take any action to cause any condition to the Closing hereunder not to be
satisfied.
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ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
SECTION 7.1 Conditions to the Obligations of Purchaser. The obligation of Purchaser
to purchase the Shares (and the GGO Shares if the GGO Rights Offering shall have occurred) pursuant
to this Agreement on the Closing Date are subject to the satisfaction (or waiver (to the extent
permitted by applicable Law) by Purchaser) of the following conditions as of the Closing Date:
(a) No Injunction. No judgment, injunction, decree or other legal restraint shall
prohibit the consummation of the Plan or the transactions contemplated by this Agreement.
(b) Regulatory Approvals; Consents. All permits, consents, orders, approvals,
waivers, authorizations or other permissions or actions of third parties and Governmental Entities
required for the consummation of the transactions contemplated by this Agreement and the Plan shall
have been made or received, as the case may be, and shall be in full force and effect, except for
those permits, consents, orders, approvals, waivers, authorizations or other permissions or actions
the failure of which to make or receive would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect (it being agreed that any permit, consent, order,
approval, waiver, authorization or other permission or action in respect of any Identified Asset
for which any of the alternatives in Section 2.1(a) shall have been employed shall be
deemed hereunder to have been made or received, as the case may be, and in full force and effect).
(c) Representations and Warranties and Covenants. Except for changes permitted or
contemplated by this Agreement or the Plan Summary Term Sheet, each of (i) the representations and
warranties of the Company contained in Section 3.1, Section 3.2, Section
3.3, Section 3.5, Section 3.20(a) (except for such inaccuracies in Section
3.20(a) caused by sales, purchases or transfers of assets which have been 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, this Article VII)
and Section 3.23 shall be true and correct at and as of the Closing Date as if made at and
as of the Closing Date (except for representations and warranties made as of a specific date, which
shall be true and correct only as of such specific date), (ii) the representations and warranties
of the Company contained in Section 3.4 shall be true and correct (except for de minimis
inaccuracies) at and as of the Closing Date as if made at and as of the Closing Date (except for
representations and warranties made as of a specific date, which shall be true and correct (except
for de minimis inaccuracies) only as of such specific date) and (iii) the other representations and
warranties of the Company contained in this Agreement, 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
representations and warranties made as of a specified date, which shall be true and correct only as
of the specified date), except for such failures to be true and correct that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse Effect (it being agreed
that the condition in this subclause (iii) as it relates to undisclosed liabilities of the Company
and its Subsidiaries comprised of Indebtedness shall be deemed to be satisfied if the condition in
Section 7.1(p) is satisfied. The
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Company shall have complied in all material respects with all of its obligations under this
Agreement, provided that with respect to its obligations under Section 5.13 and Section
5.14(a), Section 5.14(b) (to the extent applicable) and Section 5.14(c) hereof,
the Company shall have complied therewith in all respects. The Company shall have provided to
Purchaser a certificate delivered by an executive officer of the Company, acting in his or her
official capacity on behalf of the Company, to the effect that the conditions in this clause (c)
and the immediately following clause (d) have been satisfied as of the Closing Date and Purchaser
shall have received such other evidence of the conditions set forth in this Section 7.1 as
it shall reasonably request.
(d) No Material Adverse Effect. Since the date of this Agreement, there shall not
have occurred any event, fact or circumstance, that has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(e) Plan and Confirmation Order. The Plan, in form and substance satisfactory to
Purchaser, shall have been confirmed by the Bankruptcy Court by order in form and substance
satisfactory to Purchaser (the “Confirmation Order”), which Confirmation Order shall be in
full force and effect (without waiver of the 14 day period set forth in Bankruptcy Rule 3020(e)) as
of the Effective Date and shall not be subject to a stay of effectiveness.
(f) Disclosure Statement. The Disclosure Statement, in form and substance acceptable
to Purchaser, shall have been approved by order of the Bankruptcy Court in form and substance
satisfactory to Purchaser (the “Disclosure Statement Order”).
(g) Conditions to Confirmation. The conditions to confirmation and the conditions to
the Effective Date of the Plan, including the consummation of the transactions contemplated by
Exhibit B, shall have been satisfied or waived in accordance with the Plan and the
Reorganized Company Organizational Documents as set forth in the Plan shall be in effect.
(h) GGO. The GGO Share Distribution and the issuance by GGO of the GGO Warrants shall
have occurred in accordance with this Agreement. In connection with the implementation of the GGO
Share Distribution, (i) the Company shall have provided Purchaser with reasonable access to all
relevant information and consulted and cooperated in good faith with Purchaser and the GGO
Representative with respect to the contribution of the Identified Assets to GGO in accordance with
Section 2.1(a), and (ii) all actions taken by the Company and its Subsidiaries related
thereto and all documentation related to the formation and organization of GGO, the implementation
of the GGO Share Distribution, to separate the business of the Company and GGO and other
intercompany arrangements between the Company and GGO, in each case, shall be reasonably
satisfactory to Purchaser and shall be in full force and effect.
(i) GGO Common Stock. GGO shall not have issued and outstanding on a Fully Diluted
Basis immediately following the Closing more than (i) the GGO Common Share Amount of shares of GGO
Common Stock (plus (A) a number of shares of GGO Common Stock equal to the sum of the Backstop
Consideration and the backstop consideration issuable to the Fairholme/Pershing Investors pursuant
to the Fairholme/Pershing Agreements, (B) 40,000,000 shares of GGO Common Stock issuable upon
exercise of the GGO Warrants, and (C) 40,000,000
shares of GGO Common Stock issuable upon the exercise of warrants that may be issued to the
Fairholme/Pershing Investors pursuant to the Fairholme/Pershing Agreements, plus (ii) if the GGO
Rights Offering shall have occurred, 50,000,000 shares of GGO Common Stock issued pursuant to the
GGO Rights Offering in accordance with this Agreement.
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(j) Valid Issuance. The Shares, Warrants, New Warrants and GGO Warrants and, if the
GGO Rights Offering shall have occurred, the GGO Shares, shall be validly issued to Purchaser
(against payment therefor in the case of the Shares and the GGO Shares). The Company and GGO shall
have executed and delivered the warrant agreement for each of the New Warrants and the GGO
Warrants, together with such other customary documentation as Purchaser may reasonably request in
connection with such issuance; each warrant agreement shall be in full force and effect and neither
the Company nor GGO shall be in breach of any representation, warranty, covenant or agreement
thereunder in any material respect.
(k) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that prohibits the issuance or sale of, pursuant to
this Agreement, the Shares, the issuance of Warrants, New Warrants, GGO Shares, GGO Warrants, the
issuance of New Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock
upon exercise of the GGO Warrants; and no injunction or order of any federal, state or foreign
court shall have been issued that prohibits the issuance or sale, pursuant to this Agreement, of
the Shares, the GGO Shares, the Warrants, New Warrants, GGO Warrants, the issuance of New Common
Stock upon exercise of the New Warrants or the issuance of GGO Common Stock upon exercise of the
GGO Warrants.
(l) Registration Rights Agreements. Each of the Company and GGO shall have entered
into a registration rights agreement with Purchaser with respect to all registrable securities
issued to or held by Purchaser or any Brookfield Consortium Member from time to time in a manner
that permits the registered offering of securities pursuant to such methods of sale as Purchaser
may reasonably request from time to time. Each registration rights agreement shall provide for (i)
an unlimited number of shelf registration demands on Form S-3 to the extent that the Company or
GGO, as applicable, is then permitted to file a registration statement on Form S-3, (ii) if the
Company or GGO, as applicable, is not eligible to use Form S-3, the filing by the Company or GGO,
as applicable, of a registration statement on Form S-1 or Form S-11, as applicable, and the Company
or GGO, as applicable, using its reasonable best efforts to keep such registration statement
continuously effective; (iii) piggyback rights not less favorable than those provided in the
Warrant Agreement; (iv) with respect to the Company, underwritten offerings during the term of the
registration rights agreement, but not more than one (1) underwritten offering in any 12-month
period during the three (3) year period following the Closing Date and not more than two (2)
underwritten offerings in any 12-month period thereafter, provided that in no event shall the
Company be required to effect more than three (3) underwritten offerings in the aggregate in any
12-month period at the request of Purchaser and the Other Sponsors and, with respect to GGO, at
least three underwritten offerings during the term of the registration rights agreement, but not
more than one in any 12-month period; (v) “black-out” periods not less favorable than those
provided in the Warrant Agreement; (vi) “lock-up” agreements by the Company or GGO, as applicable,
to the extent requested by the managing underwriter in any underwritten public offering requested
by Purchaser consistent with those
provided in the Warrant Agreement (it being understood that the registration rights agreement
will include procedures, reasonably acceptable to Purchaser and the Company, designed to
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ensure
that total number of days that the Company or GGO, as applicable, may be subject to a lock-up shall
not, in the aggregate after taking into account any applicable lock-up periods resulting from
registration rights agreements between the Company or GGO, as applicable, and the
Fairholme/Pershing Investors, exceed 120 days in any 365-day period); (vii) to the extent that
Purchaser and any Brookfield Consortium Member in the aggregate hold in excess of 20% of the New
Common Stock or GGO Common Stock, as applicable, on a fully diluted basis at the time of an
underwritten public offering by the Company or GGO, as applicable, Purchaser and such Brookfield
Consortium Member will agree to a 60-day customary lock up to the extent requested by the managing
underwriter; and (viii) other terms and conditions reasonably acceptable to Purchaser. The
registration rights agreement shall be in full force and effect and neither the Company nor GGO
shall be in breach of any representation, warranty, covenant or agreement thereunder in any
material respect.
(m) Listing. The Shares shall be authorized for listing on the NYSE, subject to
official notice of issuance, and the shares of New Common Stock issuable upon exercise of the New
Warrants shall be eligible for listing on the NYSE. If the GGO Rights Offering shall have
occurred, the GGO Shares shall be authorized for listing on a U.S. national securities exchange,
subject to official notice of issuance, and the shares of GGO Common Stock issuable upon exercise
of the GGO Warrants shall be eligible for listing on a U.S. national securities exchange.
(n) Liquidity. The Company shall have, upon the consummation of the Plan and after
giving effect to the use of proceeds from Capital Raising Activities permitted under this Agreement
and the issuance of the Shares, and the payment and/or reserve for all allowed and disputed claims
under the Plan, transaction fees and other amounts required to be paid in cash under the Plan as
contemplated by the Plan Summary Term Sheet, an aggregate amount of not less than $500,000,000 of
Proportionally Consolidated Unrestricted Cash (the “Liquidity Target”) plus, the net
proceeds of the Additional Financings and the aggregate principal amount of the Anticipated Debt
Paydowns (or such higher number as may be agreed to by Purchaser and the Company).
(o) Board of Directors. Three persons designated by Purchaser pursuant to Section
5.10(a) shall have been duly appointed to the Company Board and two persons designated by
Purchaser pursuant to Section 5.10(b) shall have been duly appointed to the GGO Board.
(p) Debt of the Company. Immediately following the Closing after giving effect to the
Plan, the aggregate outstanding Proportionally Consolidated Debt shall not exceed $22,100,000,000
in the aggregate minus (i) the amount of Proportionally Consolidated Debt attributable to assets
sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between
the date of this Agreement through the Closing and minus (ii) the excess, if any, of $1,500,000,000
over the aggregate principal amount of new Unsecured Indebtedness incurred after the date of this
Agreement and on or prior to the Closing Date for cash (“New Debt”) and the aggregate
principal amount of any Debt under the Xxxxx Bonds or the Exchangeable Notes that is reinstated
under the Plan (such amounts reinstated, the “Reinstated Amounts”) minus (iii) the amount
of Proportionally Consolidated Debt attributable to Identified Assets contributed to GGO pursuant
to Section 2.1(a), minus (iv) the amount of Proportionally Consolidated Debt
attributable to assets other than Identified Assets contributed to GGO pursuant to Section
2.1(a) minus (v) the principal and/or liquidation preference of the
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TRUPS and the UPREIT Units
not reinstated, plus (vi) in the event the Closing occurs prior to September 30, 2010, the amount
of scheduled amortization on Proportionally Consolidated Debt (other than Corporate Level Debt)
from the Closing Date to September 30, 2010 that otherwise would have been paid by September 30,
2010, minus (vii) in the event the Closing occurs on or after September 30, 2010, the amount of
actual amortization paid on Proportionally Consolidated Debt (other than Corporate Level Debt) from
September 30, 2010 to the Closing Date, plus (viii) (A) the excess of the aggregate principal
amount of new Debt incurred to refinance existing Debt in accordance with Section
7.1(r)(vii) hereof over the principal amount of the Debt so refinanced and (B) new Debt
incurred to finance unencumbered Company Properties and Non-Controlling Properties after the date
of this Agreement and on or prior to the Closing (such amounts contemplated by clauses (A) and (B)
collectively, the “Additional Financing”) plus (ix) the amount of other principal paydowns,
writedowns and resulting impact on amortization (or payments in the anticipated amortization
schedule with respect to Fashion Show Mall (Fashion Show Mall LLC), The Shoppes at the Palazzo and
Oakwood Shopping Center (Gretna, LA)) currently anticipated to be made by the Company in connection
with refinancings, or completion of negotiations in respect of its property level Debt which the
Company determines in good faith are not actually required to be made prior to Closing
(“Anticipated Debt Paydowns”).
(q) Outstanding Common Stock. The number of issued and outstanding shares of New
Common Stock on a Fully Diluted Basis (including the Shares) shall not exceed the Share Cap Number.
The “Share Cap Number” means 1,104,683,256 plus up to 50,000,000 shares of New Common
Stock issued in Liquidity Equity Issuances, plus 60,000,000 shares of New Common Stock issuable
upon the exercise of the New Warrants, plus 60,000,000 shares of New Common Stock issuable upon the
exercise of those certain warrants issued to the Fairholme/Pershing Investors pursuant to the
Fairholme/Pershing Agreements and plus the number of shares of Common Stock issued as a result of
the exercise of employee stock options to purchase Common Stock outstanding on the date hereof;
provided, that if Indebtedness under the Xxxxx Bonds or the Exchangeable Notes is
reinstated under the Plan, or the Company shall have incurred New Debt, or between the date of this
Agreement and the Closing Date the Company shall have sold for cash real property assets outside of
the ordinary course of business (“Asset Sales”), the Share Cap Number shall be reduced by
the quotient (rounded up to the nearest whole number) obtained by dividing (x) the sum of
Reinstated Amounts and the net cash proceeds to the Company from Asset Sales in excess of
$150,000,000 and the issuance of New Debt by (y) the Per Share Purchase Price.
(r) Conduct of Business. The following shall be true in all material respects as of
the Closing Date:
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 by
Article 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 Purchaser (which consent Purchaser agrees shall not
be unreasonably withheld, conditioned or delayed):
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|
(i) |
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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 on
Section 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) |
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the Company shall not have amended the
Company’s certificate of incorporation or bylaws other than to increase
the authorized shares of capital stock; |
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(iii) |
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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; |
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(iv) |
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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; |
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(v) |
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[Intentionally Omitted] |
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(vi) |
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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 to Section 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 or (D) as set forth
on Section 7.1(u) of the Company Disclosure Letter); |
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(vii) |
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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) |
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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 |
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(ix) |
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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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(s) REIT Opinion. Purchaser shall have received an opinion of Xxxxxx & Xxxxxx LLP,
dated as of the Closing Date, substantially in the form attached hereto as Exhibit J, that
the Company (x) for all taxable years commencing with the taxable year ended December 31, 2005
through December 31, 2009, has been subject to taxation as a REIT and (y) has operated since
January 1, 2010 to the Closing Date in a manner consistent with the requirements for qualification
and taxation as a REIT.
(t) Non-Control Agreement. The Company shall have entered into the Non-Control
Agreement with 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.
(u) Issuance or Sale of Common Stock. Neither the Company nor any of its Subsidiaries
shall have issued or sold any shares of Common Stock (or securities, warrants or options that are
convertible into or exchangeable or exercisable for, or linked to the performance of, Common Stock)
(other than (A) pursuant to the Equity Exchange, (B) the issuance of shares pursuant to the
exercise of employee stock options issued pursuant to the Company Option Plans or (C) as set forth
on Section 7.1(u) of the Company Disclosure Letter), unless (1) the 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, the conversion, exchange or exercise price) shall not be less
than $10.00 per share (net of all underwriting and other discounts, fees and any other
compensation), (2) following such issuance or sale, (x) no Person (other than (i) the
Fairholme/Pershing Investors pursuant to the Fairholme/Pershing Agreements and (ii) any
institutional underwriter or initial purchaser acting in an underwriter capacity in an underwritten
offering) shall, after giving effect to such issuance or sale, beneficially own more than 10% of
the Common Stock of the Company on a Fully Diluted Basis, and (y) no five Persons (other than
Purchaser, Brookfield Consortium Members, and the Fairholme/Pershing Investors) shall, after giving
effect to such issuance or sale, beneficially own more than thirty percent (30%) of the Common
Stock on a Fully Diluted Basis; provided, that this clause (2) shall not be applicable to
any conversion or exchange of claims against the Debtors into New Common Stock pursuant to the
Plan; provided, further, that subclause (y) of this clause (2) shall not be
applicable with respect to any Person listed on Exhibit N and (3) Purchaser shall have been
offered the right to purchase up to 15% of such shares of Common Stock (or securities, warrants or
options that are convertible into or exchangeable or exercisable for Common Stock) on terms
otherwise consistent with Section 5.9 (except the provisions of such Section 5.9
with respect to issuances contemplated by this Section 7.1(u) shall apply from the date of
this Agreement) (provided that the right described in this clause (3) shall not be
applicable to the issuance of shares or warrants contemplated by the Fairholme/Pershing Agreements,
or any conversion or exchange of debt or other claims into equity in connection with the Plan).
(v) Xxxxxx Heirs Obligations. The Xxxxxx Heirs Obligations shall have been determined
by order of the Bankruptcy Court entered on or prior to the Effective Date (which
order may be the Confirmation Order or another order entered by the Bankruptcy Court) and
satisfied in accordance with the terms of the Plan.
(w) GGO Promissory Note. The GGO Promissory Note, if any, shall have been issued by
GGO in favor of the Reorganized Company.
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ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
SECTION 8.1 Conditions to the Obligations of the Company. The obligation of the
Company to issue the Shares (and the obligation of GGO to issue the GGO Shares, if the GGO Rights
Offering shall have occurred) pursuant to this Agreement on the Closing Date are subject to the
satisfaction (or waiver by the Company) of the following conditions as of the Closing Date:
(a) No Injunction. No judgment, injunction, decree or other legal restraint shall
prohibit the consummation of the Plan or the transactions contemplated by this Agreement.
(b) Regulatory Approvals; Consents. All permits, consents, orders, approvals,
waivers, authorizations or other permissions or actions of third parties and Governmental Entities
required for the consummation of the transactions contemplated by this Agreement and the Plan shall
have been made or received, as the case may be, and shall be in full force and effect, except for
those permits, consents, orders, approvals, waivers, authorizations or other permissions or actions
the failure of which to make or receive would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
(c) Representations and Warranties and Covenants. Each of (i) the representations and
warranties of Purchaser contained in Section 4.1, Section 4.2, Section 4.3,
and Section 4.12 in this Agreement shall be true and correct at and as of the Closing Date
as if made at and as of the Closing Date (except for representations and warranties made as of a
specific date, which shall be true and correct only as of such specific date), and (ii) the other
representations and warranties of Purchaser contained in this Agreement, disregarding all
qualifications and exceptions contained therein relating to “materiality”, shall be true and
correct at and as of the date of this Agreement and at and as of the Closing Date as if made at and
as of the Closing Date (except for representations and warranties made as of a specified date,
which shall be true and correct only as of the specified date), except for such failures to be true
and correct that, individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the ability of Purchaser to consummate the transactions contemplated by
this Agreement. Purchaser shall have complied in all material respects with all of its obligations
under this Agreement. Purchaser shall have provided to the Company a certificate delivered by an
executive officer of the managing member of Purchaser, acting in his or her official capacity on
behalf of Purchaser, to the effect that the conditions in this clause (c) have been satisfied as of
the Closing Date.
(d) Plan and Confirmation Order. The Plan shall have been confirmed by the Bankruptcy
Court by order, which order shall be in full force and effect and not subject to a stay of
effectiveness.
(e) Conditions to Confirmation. The conditions to confirmation and the conditions to
the Effective Date of the Plan shall have been satisfied or waived in accordance with the Plan.
(f) GGO. The GGO Share Distribution shall have occurred.
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(g) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that prohibits the issuance or sale of, pursuant to
this Agreement, the Shares, the issuance of Warrants, New Warrants, GGO Shares, GGO Warrants, the
issuance of New Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock
upon exercise of the GGO Warrants; and no injunction or order of any federal, state or foreign
court shall have been issued that prohibits the issuance or sale, pursuant to this Agreement, of
the Shares, the GGO Shares, the Warrants, the New Warrants, GGO Warrants, the issuance of New
Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock upon exercise of
the GGO Warrants.
(h) Reorganization Opinion. The Company shall have received an opinion of Weil,
Gotshal & Xxxxxx LLP, dated as of the Closing Date, in form and substance reasonably satisfactory
to the Company, substantially to the effect that, on the basis of the facts, representations and
assumptions set forth in such opinion, the exchange of Common Stock for New Common Stock in the
Equity Exchange should be treated as a reorganization within the meaning of Section 368(a) of the
Code. In rendering such opinion, Weil, Gotshal & Xxxxxx LLP may require and rely upon
representations and covenants made by the parties to this Agreement.
(i) IRS Ruling. The Company shall have obtained a favorable written ruling from the
United States Internal Revenue Service confirming the qualification of the GGO Share Distribution
and the prerequisite internal spin-offs each as a “tax free spin-off” under the Code.
(j) Funding. Purchaser shall have paid to the Company and, if the GGO Rights Offering
shall have occurred, GGO, as applicable, all amounts payable by Purchaser under Article I
and Article II of this Agreement, by wire transfer of immediately available funds to such
account or accounts as shall have been designated in writing by the Company at least three (3)
Business Days prior to the Closing Date.
(k) REIT Matters. The representations and covenants set forth on Exhibit D in
respect of Purchaser and, to the extent applicable, its Affiliates, members, Affiliates of members
or designees, shall be true and correct in all material respects as of the Closing Date as if made
at and as of the Closing Date, it being understood that Purchaser’s Affiliates, members or
Affiliates of members shall be required to provide such representations and covenants only if such
Person beneficially owns Common Stock or New Common Stock in excess of the relevant ownership limit
set forth in the certificate of incorporation of the Company or any stock or other equity
interest owned by such Person in a tenant of the Company would be treated as constructively
owned by Purchaser.
(l) Non-Control Agreement. Purchaser shall have entered into the Non-Control Agreement
with the Company. The Non-Control Agreement shall be in full force and effect and Purchaser shall
not be in breach of any representation, warranty, covenant or agreement thereunder in any material
respect.
(m) GGO Promissory Note. The GGO Promissory Note, if any, shall have been issued by
GGO in favor of the Reorganized Company.
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ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnification.
(a) Subject to Section 9.1(b), the Company shall indemnify and hold harmless
Purchaser, its members and partners and their respective Affiliates, officers, directors,
employees, agents, advisors and controlling persons (each an “Indemnified Person”), from
and against any and all losses, claims, damages, liabilities and reasonable expenses to which any
such Indemnified Person may become subject, in each case, to the extent arising solely and directly
out of any claim, challenge, litigation, investigation or proceeding initiated by a third party
with respect to cooperation and assistance provided by Purchaser to the Company pursuant to
Section 5.3(a) of this Agreement (but, for the avoidance of doubt, not other transactions
relating to the Plan), and to reimburse such Indemnified Persons for any reasonable legal or other
out-of-pocket expenses as they incur in connection with investigating, responding to or defending
any of the foregoing. Notwithstanding the foregoing or anything to the contrary, the Company will
not be responsible to indemnify or reimburse any Indemnified Person for anything resulting from
willful misconduct or gross negligence of any Indemnified Person.
(b) Promptly after receipt by an Indemnified Person of notice of the commencement of any
claim, litigation, investigation or proceeding for which indemnification is provided pursuant to
this Agreement (“Proceedings”), Purchaser shall, if a claim is to be made hereunder against
the Company in respect thereof, notify the Company in writing of the commencement thereof; provided
that the omission so to notify the Company shall not relieve it from any liability that it may have
hereunder except to the extent it has been materially prejudiced by such failure. In case any such
Proceedings are brought against any Indemnified Person, the Company shall be entitled to
participate therein, and, to the extent that it may elect by written notice delivered to Purchaser,
to assume the defense thereof, with counsel reasonably satisfactory to Purchaser, provided that if
the defendants in any such Proceedings include both such Indemnified Person and the Company and
such Indemnified Person shall have reasonably concluded based on the advice of outside counsel that
there are legal defenses available to it that are different from or additional to those available
to the Company such that representation by counsel for the Company would involve a material
conflict of interest, such Indemnified Persons shall have the right to select separate counsel to
assert such legal defenses and to otherwise
participate in the defense of such Proceedings on behalf of such Indemnified Person. The
Company shall not be liable to any Indemnified Person for legal expenses incurred by such
Indemnified Person in connection with the defense of any Proceeding unless (i) such Indemnified
Person shall have employed separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being understood, however, that the
Company shall not be liable under either this (i) or the following clause (ii) for the expenses of
more than one separate counsel representing the Indemnified Persons who are parties to such
Proceedings) or (ii) the Company shall not have employed counsel reasonably satisfactory to
Purchaser to represent such Indemnified Person within a reasonable time after notice of
commencement of the Proceedings.
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(c) The Company shall not be liable for any settlement of any Proceedings effected without its
written consent (which consent shall not be unreasonably withheld). If any settlement of any
Proceeding is consummated with the written consent of the Company or if there is a final judgment
for the plaintiff in any such Proceedings, the Company agrees to indemnify and hold harmless each
Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses
by reason of such settlement or judgment in accordance with, and subject to the limitations of, the
provisions of this Article IX. The Company shall not, without the prior written consent of
an Indemnified Person (which consent shall not be unreasonably withheld), effect any settlement of
any pending or threatened Proceedings in respect of which indemnity is provided hereunder by such
Indemnified Person unless such settlement (i) includes an unconditional release of such Indemnified
Person from all liability on the claims that are (1) the subject matter of such Proceedings and (2)
subject to indemnification under this Article IX and (ii) does not include any statement as
to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
ARTICLE X
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 10.1 Survival of Representations and Warranties. The representations and
warranties made in this Agreement shall survive the execution and delivery of this Agreement but
shall terminate and be of no further force and effect following the earlier of (i) the termination
of this Agreement in accordance with Article XI and (ii) the Closing.
ARTICLE XI
TERMINATION
SECTION 11.1 Termination. This Agreement and the obligations of the parties hereunder
shall terminate automatically without any action by any party if (i) the Company has not filed the
Approval Motion within two Business Days following the date of this Agreement, (ii) the Approval
Order, in form and substance satisfactory to Purchaser, approving, among other things, the issuance
of the Warrants, is not entered by the Bankruptcy Court on or prior to the date that is 43 days
after the date of this Agreement or (iii) if the Debtors withdraw the Approval Motion, in each of
cases (i), (ii) and (iii) unless Purchaser and the Company otherwise agree in
writing. In addition, this Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent of Purchaser and the Company;
(b) by Purchaser by written notice to the Company upon the occurrence of any of the following
events (which notice shall specify the event upon which such termination is based):
(i) if the Effective Date and the purchase and sale contemplated by Article I
have not occurred by the Termination Date; provided, however, that the right
to terminate this Agreement under this Section 11.1(b)(i) shall not be available to
Purchaser if 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;
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(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 Xxxxx Oakwood Shopping Center, LLC;
(iii) if, from and after the issuance of the Warrants, the Approval Order shall,
without the prior written consent of Purchaser, cease to be in full force and effect
resulting in the cancellation of the Warrants or a modification of the Warrants that
adversely affects Purchaser;
(iv) if, without Purchaser’s consent, the Warrants have not been issued to Purchaser in
accordance with Section 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 (A) would result in a failure of a condition set forth in Article 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 Purchaser if it has breached in any material respect its
obligations under this Agreement;
(vi) if the Company consummates a Competing Transaction;
(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) 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 or (D)
the issuance of shares as set forth on Section 7.1(u) of the Company Disclosure
Letter);
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(viii) [Intentionally Omitted]
(ix) if the Bankruptcy Court shall have entered a final and non-appealable order
denying confirmation of the Plan;
(x) 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 Purchaser or a plan of reorganization with respect to the Debtors involving
the Transactions that is unacceptable to Purchaser is filed by the Debtors with the
Bankruptcy Court or another court of competent jurisdiction;
(xi) 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”); or
(xii) 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 the
Company or any Subsidiary of the Company enters into a definitive agreement providing for a
Competing Transaction or (B) the Company provides notice to Purchaser of the Company’s or
any of its Subsidiaries’ decision to enter into a definitive agreement providing for a
Competing Transaction pursuant to Section 5.7;
(c) by the Company upon the occurrence of any of the following events:
(i) if the Effective Date and the purchase and sale contemplated by Article I
have not occurred by the Termination Date; provided, however, that the right
to terminate this Agreement under this Section 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 to Section 11.1(c)(ii) or
any other clause of this Section 11.1(c));
(ii) prior to the entry of the Confirmation Order, upon notice to 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 this Section 11.1(c)(ii) during the 48
hour notice period contemplated by Section 5.7;
(iii) if all conditions to the obligations of Purchaser to consummate the transactions
contemplated by this Agreement set forth in Article 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 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 failure of Purchaser to have paid to the Company and
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GGO, as applicable, all
amounts payable by Purchaser under Article I and Article II of this
Agreement, by wire transfer of immediately available funds in accordance with the terms of
this Agreement;
(iv) if as of the twentieth (20th) day (or if this twentieth (20th) day is
not a Business Day the next Business Day following the date of this Agreement), Purchaser
has not (i) received an executed equity commitment from Brookfield Asset Management Inc.
(the “Brookfield Equity Commitment Letter”) in the form attached hereto as
Exhibit K and (ii) either (A) entered into escrow agreements with members of
Purchaser (each an “Equity Provider”) in the form attached hereto as Exhibit
L (each an “Escrow Agreement”, and together, the “Escrow Agreements”)
pursuant to which such members of Purchaser shall have deposited into an escrow account with
Deutsche Bank National Trust Company such funds that when taken together with the commitment
contemplated by the Brookfield Equity Commitment Letter shall be sufficient in the aggregate
to pay the Purchase Price and the GGO Purchase Price, or (B) such members of Purchaser shall
have established one or more Acceptable LCs (as defined in the Escrow Agreements) in lieu of
one or more of the escrow accounts contemplated by the Escrow Agreements; or
(v) if a Closing Restraint is in effect.
SECTION 11.2 Effects of Termination.
(a) In the event of the termination of this Agreement pursuant to Article XI, this
Agreement shall forthwith become void and there shall be no liability or obligation on the part of
any party hereto except after the entry of the Approval Order the covenants and agreements made by
the parties herein under Section 5.1(c), Section 5.14(a), Article IX and in
all circumstances Article XIII shall survive indefinitely in accordance with their terms.
Except as otherwise expressly provided in the Warrants or paragraph (b) below, the Warrants when
issued in accordance with Section 5.2 hereof and all obligations of the Company under the
Warrant Agreement shall survive any termination of this Agreement.
(b) In the event of a termination of this Agreement by the Company pursuant to Section
11.1(c)(iii), the Warrants shall automatically be canceled, shall no longer be outstanding or
capable of exercise and shall cease to exist. The foregoing shall be a term of the Warrants.
ARTICLE XII
DEFINITIONS
SECTION 12.1 Defined Terms. For purposes of this Agreement, the following terms, when
used in this Agreement with initial capital letters, shall have the respective meanings set forth
in this Agreement:
(a) “2006 Bank Loan” means that certain Second Amended and Restated Credit Agreement,
dated as of February 24, 2006, by and among the Company, the Operating Partnership and GGPLP
L.L.C., as borrowers, the lenders named therein, Banc of America Securities LLC, Eurohypo AG, New
York Branch and Wachovia Capital Markets, LLC, as joint arrangers and joint bookrunners, Eurohypo
AG, New York Branch, as administrative agent, Bank of America, N.A. and Wachovia Bank, National
Association, as syndication agents, and Commerzbank AG and Xxxxxx Commercial Paper, Inc., as
co-documentation agents.
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(b) “Additional Sales Period” means in the case of Section 5.9(a)(iv)(A), the
120 day period following the date of the Company’s notice to Purchaser pursuant to Section
5.9(a)(ii), and in the case of Section 5.9(a)(iv)(B), the 120 day period following (x)
the expiration of the 180 day period specified in Section 5.9(a)(iii) or (y) if earlier,
the date on which it is finally determined that Purchaser is unable to consummate such purchase
contemplated by Section 5.9(a)(iii) within such 180 day period specified in Section
5.9(a)(iii).
(c) “Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person. For the purposes of this
definition, “control” means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting securities, contract or
otherwise.
(d) “Brazilian Entities” means those certain Persons in which the Company indirectly
owns an interest which own real property assets or have operations located in Brazil.
(e) “Brookfield Consortium Member” means Brookfield Asset Management Inc. or any
controlled Affiliate of Brookfield Asset Management Inc. or any Person of which Brookfield Asset
Management Inc. or any Subsidiary or controlled Affiliate of Brookfield Asset Management Inc. is a
general partner, managing member or equivalent thereof or a wholly owned subsidiary of the
foregoing.
(f) “Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) any day
on which commercial banks in New York, New York are required or authorized to close by Law or
executive order.
(g) “Cash Equivalents” means as to any Person, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or instrumentality thereof
(provided, that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than 90 days from the date of acquisition by such Person,
(b) time deposits and certificates of deposit of any commercial bank having, or which is the
principal banking subsidiary of a bank holding company organized under the Laws of the United
States, any State thereof or the District of Columbia having capital, surplus and undivided profits
aggregating in excess of $500,000,000, having maturities of not more than 90 days from the date of
acquisition by such Person, (c) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in subsection (a) above entered into with any bank
meeting the qualifications specified in subsection (b) above, (d) commercial paper issued by any
issuer rated at least A-1 by S&P or at least P-1 by Xxxxx’x or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and in each case maturing not more than one year
after the date of acquisition by such Person or (e) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in subsections (a) through
(d) above.
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(h) “Claims” shall have the meaning set forth in section 101(5) of the Bankruptcy
Code.
(i) “Closing Date Net Debt” means, as of the Effective Date but prior to giving effect
to the Plan, the sum of, without duplication:
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(i) |
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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) |
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less the Reinstatement Adjustment Amount, |
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(iii) |
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plus the Permitted Claims Amount, |
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(iv) |
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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) |
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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. |
(j) “Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts”
means, as of the Effective Date but prior to giving effect to the Plan, the sum of, without
duplication:
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(i) |
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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) |
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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 |
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(iii) |
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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. |
(k) “Company Benefit Plan” means each “employee benefit plan” within the meaning of
Section 3(3) of ERISA and each other stock purchase, stock option, restricted stock, severance,
retention, employment, consulting, change-of-control, collective bargaining, bonus, incentive,
deferred compensation, employee loan, fringe benefit and other benefit plan, agreement, program,
policy, commitment or other arrangement, whether or not subject to ERISA (including any related
funding mechanism now in effect or required in the future), whether formal or informal, oral or
written, in each case sponsored or maintained by the Company or any of its Significant Subsidiaries
for the benefit of any past or present director,
officer, employee, consultant or independent contractor of the Company or any of its
Significant Subsidiaries has any present or future right to benefits.
(l) “Company Board” means the board of directors of the Company.
(m) “Competing Transaction” means, other than the transactions contemplated by this
Agreement or the Plan Summary Term Sheet, or by the Fairholme/Pershing Agreements, any offer or
proposal relating to (i) a merger, consolidation, business combination, share exchange, tender
offer, reorganization, recapitalization, liquidation, dissolution or similar transaction involving
the Company or (ii) any direct or indirect purchase or other acquisition by a “person” or “group”
of “beneficial ownership” (as used for purposes of Section 13(d) of the Exchange Act) of, or a
series of transactions to purchase or acquire, assets representing 30% or more of the consolidated
assets or revenues of the Company and its Subsidiaries taken as a whole or 30% or more of the
Common Stock of the Company (or securities convertible into or exchangeable or exercisable for 30%
or more of the Common Stock of the Company) or (iii) any recapitalization of the Company or the
provision of financing to the Company, in each case, other than the recapitalization and financing
transactions contemplated by this Agreement and the Plan Summary Term Sheet (or the financing
provided by the Fairholme/Pershing Investors pursuant to the Fairholme/Pershing Agreements) or that
will be effected together with the transactions contemplated hereby.
(n) “Conclusive Net Debt Adjustment Statement” means a statement that: (i) sets forth
each of the five components of the Closing Date Net Debt (for the avoidance of doubt, this shall
include (x) the Permitted Claims Amount, which shall include the Reserve in the amount established
by the Bankruptcy Court, (y) the Reinstatement Adjustment Amount, and (z) with respect to clauses
(i), (iv) and (v) of the definition of Closing Date Net Debt, the Closing Date Net Debt Amount W/O
Reinstatement Adjustment and Permitted Claims Amounts as determined through the process provided
for in this Agreement shall be used), and (ii) sets forth the Net Debt Excess Amount or the Net
Debt Surplus Amount, as applicable.
(o) “Contract” means any agreement, lease, license, evidence of indebtedness,
mortgage, indenture, security agreement or other contract.
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(p) “Conversion Shares” means a number of shares of New Common Stock determined by
dividing (x) an amount (not to exceed $500,000,000) equal to (i) the aggregate allowed amount
(inclusive of prepetition and postpetition interest fees and costs) of claims against the Debtors
held by Purchaser and its Affiliates outstanding as of the Effective Date (the “Purchaser Debt
Holdings”) minus (ii) the amount of cash paid to the holders of the Purchaser Debt Holdings in
respect thereof under the Plan by (y) the Per Share Purchase Price.
(q) “Corporate Level Debt” means the debt described in Sections II A, H through O, Q,
R, S, W and X of the Plan Summary Term Sheet plus accrued and unpaid interest thereon.
(r) “Debt” means all obligations of the Company, its Subsidiaries and other Persons in
which the Company, directly or indirectly, holds a minority interest (a) evidenced by (i) notes,
bonds, debentures or other similar instruments (including, for avoidance of doubt, mezzanine debt),
or (ii) trust preferred shares, trust preferred units and other preferred instruments, and/or (b)
secured by a lien, mortgage or other encumbrance; provided, however, that Debt
shall exclude (x) any form of municipal financing including, but not limited to, special
improvement district bonds or tax increment financing, (y) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment), and (z) intercompany notes or preferred
interests between and among the Company and its wholly owned Subsidiaries.
(s) “DIP Loan” means that certain Senior Secured Debtor in Possession Credit, Security
and Guaranty Agreement, dated as of May 15, 2009, by and among the lenders named therein, UBS AG,
Stamford Branch, as administrative agent for the lenders, the Company and the Operating
Partnership, as borrowers, and the certain subsidiaries of the Company named therein, as
guarantors.
(t) “Disclosure Statement” means the disclosure statement to accompany the Plan as
amended, modified or supplemented.
(u) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
(v) “Excess Surplus Amount” means the sum of (i) 100% or 80%, as applicable, of the
balance, if any, of the Reserve Surplus Amount (after giving effect to the application of the
Reserve Surplus Amount to reduce the principal amount of the GGO Promissory Note pursuant to
Section 5.17(d)) and (ii) (A) if a GGO Promissory Note is required to be issued at Closing,
80% of the aggregate Offering Premium, if any, less the amount of any reduction in the principal
amount of the GGO Promissory Note pursuant to Section 5.17(e) hereof or (B) if the GGO
Promissory Note is not required to be issued at Closing, the sum of (x) 80% of the aggregate
Offering Premium and (y) 80% of the excess, if any, of the Net Debt Surplus Amount over the Xxxxxx
Amount.
(w) “Exchangeable Notes” means the 3.98% Exchangeable Senior Notes Due 2027 issued
pursuant to that certain Indenture, dated as of April 16, 2007, by and between the Operating
Partnership, as issuer, and The Bank of New York Mellon Corporation, as trustee.
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(x) “Excluded Claims” means:
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(i) |
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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) |
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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 Agreement, 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, |
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(iii) |
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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 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
the Xxxxxx Heirs Obligations, |
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(iv) |
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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, |
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(v) |
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except with respect to Claims related to GGO or the assets or
businesses contributed thereto, 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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(vi) |
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the MPC Tax Reserve, and |
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(vii) |
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surety bond Claims relating to Claims of the type identified
in clauses (i) through (vi) of this definition. |
(y) “Fully Diluted Basis” means all outstanding shares of the Common Stock, New Common
Stock or GGO Common Stock, as applicable, assuming the exercise of all outstanding Share
Equivalents (other than (x) any options issued to an employee of the Company or its Subsidiaries
pursuant to the terms of a Company Benefit Plan or to an employee of GGO or its Subsidiaries
pursuant to the terms of an employee equity plan of GGO or (y) preferred UPREIT Units) without
regard to any restrictions or conditions with respect to the exercisability of such Share
Equivalents.
(z) “GAAP” means generally accepted accounting principles in the United States.
(aa) “GGO Common Share Amount” means 324,683,256 plus the number of shares of Common
Stock issued on or after the Measurement Date and prior to the record date of the GGO Share
Distribution as a result of the exercise, conversion or exchange of any Share Equivalents of the
Company outstanding on the Measurement Date into Common Stock and employee stock options issued
pursuant to the Company Option Plans.
(bb) “GGO Note Amount” means: (i) in the event there is a Net Debt Excess Amount, the
aggregate of the Net Debt Excess Amount set forth on the Conclusive Net Debt Adjustment Statement
and the Xxxxxx Heirs Obligations to the extent satisfied with assets (including cash, but excluding
shares of New Common Stock or Identified Assets) of the Company (such amount so satisfied, the
“Xxxxxx Amount”); and (ii) in the event there is a Net Debt Surplus Amount, the Xxxxxx
Amount less the Net Debt Surplus Amount, provided, that in no event shall the GGO Note Amount be
less than zero.
(cc) “GGO Promissory Note” means an unsecured promissory note payable by GGO in favor
of the Reorganized Company in the aggregate principal amount of the GGO Note Amount, as adjusted
pursuant to Section 5.17(d), Section 5.17(e) and Section 5.17(g), (i)
bearing interest at a rate equal to the lower of (x) 7.5% per annum and (y) the weighted average
effective rate of interest payable (after giving effect to the payment of any underwriting and all
other discounts, fees and any other compensation) on each series of New Debt issued in connection
with the Plan and (ii) maturing on the fifth anniversary of the Closing Date (or if such date is
not a Business Day, the next immediately following Business Day), and (iii) including prohibitions
on dividends and distributions, no financial covenants and such other customary terms and
conditions as reasonably agreed to by Purchaser and the Company.
(dd) “GGO Purchase Price” means the product of (a) the GGO Per Share Purchase Price
multiplied by (b) the sum of (i) the number of Unsubscribed Shares and (ii) the number of shares of
GGO Common Stock subscribed on or before the Expiration Time by Purchaser pursuant to the GGO
Minimum Allocation Right.
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(ee) “GGO Setup Costs” means such liabilities, costs and expenses as may be incurred
by the Company in connection with the formation and organization of GGO and the implementation of
the GGO Share Distribution, including any and all liabilities for any sales, use, stamp,
documentary, filing, recording, transfer, gross receipts, registration, duty, securities
transactions or similar fees or Taxes or governmental charges (together with any interest or
penalty, addition to Tax or additional amount imposed) as levied by any Taxing authority.
(ff) “GGO Shares” means the shares of GGO Common Stock purchased by Purchaser in or in
connection with the GGO Rights Offering and the shares of GGO Common Stock received as Backstop
Consideration.
(gg) “Governmental Entity” means any (a) nation, region, state, province, county,
city, town, village, district or other jurisdiction, (b) federal, state, local, municipal, foreign
or other government, (c) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, court or tribunal, or other entity), (d) multinational
organization or body or (e) body entitled to exercise any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power of any nature or any other
self-regulatory organizations.
(hh) “Xxxxxx Agreement” means that certain Contingent Stock Agreement, effective as of
January 1, 1996, by The Xxxxx Company in favor of and for the benefit of the Holders (named in
Schedule I thereto) and the Representatives (therein defined), as amended.
(ii) “Xxxxxx Heirs Obligations” means claims or interests against the Debtors arising
under or related to the Xxxxxx Agreement.
(jj) “Indebtedness” means, with respect to a Person without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred
purchase price of property (other than trade payables and accrued expenses incurred in the ordinary
course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, trust preferred shares, trust preferred units and other
preference instruments, (d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations in respect of capital leases under GAAP
of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or
applicant under acceptance, letter of credit, surety bond or similar facilities, (g) the monetary
obligations of a Person under (x) a so-called synthetic, off-balance sheet or tax retention lease,
or (y) an agreement for the use or possession of property creating obligations that do not appear
on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person,
would be characterized as the indebtedness of such Person (without regard to accounting treatment)
(each, a “Synthetic Lease Obligation”), (h) guaranties of such Person with respect to
obligations of the type described clauses (a) through (g) above, (i) all obligations of other
Persons of the kind referred to in clauses (a) through (h) above secured by any lien on property
owned by such Person, whether or not such Person has assumed or become liable for the payment
of such obligation, (j) the net obligations of such Person in respect of hedge agreements and swaps
and (k) any obligation that, in accordance with GAAP, would be required to be reflected as debt on
the consolidated balance sheet of such Person.
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(kk) “Joint Venture” means a Subsidiary of the Company which is owned partly by
another Subsidiary of the Company and partly by a third party.
(ll) “Knowledge” of the Company means the actual knowledge, as of the date of this
Agreement, of the individuals listed on Section 12.1(ll) of the Company Disclosure Letter.
(mm) “Law” means any statutes, laws (including common law), rules, ordinances,
regulations, codes, orders, judgments, decisions, injunctions, writs, decrees, applicable to the
Company or any of its Subsidiaries or Purchaser, as applicable, or their respective properties or
assets.
(nn) “Liquidity Equity Issuances” means issuances of shares of New Common Stock in the
Plan for cash in excess of 1,104,683,256 shares of New Common Stock minus the number of shares of
New Common Stock equal to the (x) sum of the Reinstated Amounts and the net cash proceeds to the
Company from Asset Sales and the issuance of New Debt divided by (y) the Per Share Purchase Price.
(oo) “Material Adverse Effect” means any change, event or occurrence which (x) has a
material adverse effect on the results of operations or financial condition of the Company and its
direct and indirect Subsidiaries taken as a whole, other than changes, events or occurrences (i)
generally affecting (A) the retail mall industry in the United States or in a specific geographic
area in which the Company operates, or (B) the economy, or financial or capital markets, in the
United States or elsewhere in the world, including changes in interest or exchange rates or the
availability of capital, or (ii) arising out of, resulting from or attributable to (A) changes in
Law or regulation or in generally accepted accounting principles or in accounting standards, or
changes in general legal, regulatory or political conditions, (B) the negotiation, execution,
announcement or performance of any agreement between the Company and/or its Affiliates, on the one
hand, and Purchaser and/or its Affiliates, on the other hand, or the consummation of the
transactions contemplated hereby or operating performance or reputational issues arising out of or
associated with the Bankruptcy Cases, including the impact thereof on relationships, contractual or
otherwise, with tenants, customers, suppliers, distributors, partners or employees, or any
litigation or claims arising from allegations of breach of fiduciary duty or violation of Law or
otherwise, related to the execution or performance of this Agreement or the transactions
contemplated hereby, including, without limitation, any developments in the Bankruptcy Cases, (C)
acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war,
sabotage or terrorism threatened or underway as of the date of the this Agreement, (D) earthquakes,
hurricanes, tornadoes or other natural disasters, (E) any action taken by the Company or its
Subsidiaries as contemplated or permitted by any agreement between the Company and/or its
Affiliates, on the one hand, and Purchaser and/or its Affiliates, on the other hand, or with
Purchaser’s consent, or any failure by the Company to take any action as a result of any
restriction contained in any agreement between
the Company and/or its Affiliates, on the one hand, and Purchaser and/or its Affiliates, on
the other hand, or (F) in each case in and of itself,
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any decline in the market price, or change in
trading volume, of the capital stock or debt securities of the Company or any direct or indirect
subsidiary thereof, or any failure to meet publicly announced or internal revenue or earnings
projections, forecasts, estimates or guidance for any period, whether relating to financial
performance or business metrics, including, without limitation, revenues, net operating incomes,
cash flows or cash positions, it being further understood that any event, change, development,
effect or occurrence giving rise to such decline in the trading price or trading volume of the
capital stock or debt securities of the Company or such failure to meet internal projections or
forecasts as described in the preceding clause (F), as the case may be, may be the cause of a
Material Adverse Effect; so long as, in the case of clauses (i)(A) and (i)(B), such changes or
events do not have a materially disproportionate adverse effect on the Company and its
Subsidiaries, taken as a whole, as compared to other entities that own and manage retail malls
throughout the United States, or (y) materially impairs the ability of the Company to consummate
the transactions contemplated by this Agreement or perform its obligations hereunder or under the
other agreements executed in connection with the transactions contemplated hereby.
(pp) “Material Contract” means, with respect to the Company and its Subsidiaries, any:
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(i) |
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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) |
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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. |
(qq) “MPC Assets” means residential and commercial lots in the “master planned
communities” owned by the Xxxxxx Xxxxxx Corporation or The Xxxxxx Corporation or related to the
Xxxxxxx Master Planned Community.
(rr) “MPC Taxes” means all liability for income Taxes in respect of sales of MPC
Assets sold prior to the date of this Agreement.
(ss) “MPC Tax Reserve” means any reserve for MPC Taxes to be established under the
Plan as determined by the Bankruptcy Court in the Confirmation Order or such other order as may be
entered by the Bankruptcy Court on or prior to the Effective Date, less any MPC Taxes paid prior to
the Effective Date.
(tt) “Net Debt Excess Amount” means, the amount, which shall in no event be less than
$0, that is calculated by subtracting the Target Net Debt
from the Closing Date Net Debt (as reflected on the Conclusive Net Debt Adjustment Statement).
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(uu) “Net Debt Surplus Amount” means, the amount, which shall in no event be less than
$0, that is calculated by subtracting Closing Date Net Debt (as reflected on the Conclusive Net
Debt Adjustment Statement) from the Target Net Debt.
(vv) “Non-Control Agreement” means the Non-Control Agreement the form of which is
attached hereto as Exhibit M.
(ww) “Non-Controlling Properties” means the Company Properties listed on Section
12.1(ww) of the Company Disclosure Letter. Each of the Non-Controlling Properties is owned by
a Joint Venture in which neither the Company nor any of its Subsidiaries is a controlling entity.
For purposes of this Section 12.1(ww), the term “control” shall mean, possession, directly
or indirectly, of the power to direct the management and policies of a Person whether through the
ownership of voting securities, contract or otherwise; provided, however, that the rights of any
Person to exercise Major Decision Rights under a Joint Venture shall not constitute or be deemed to
constitute “control” for the purposes hereof. “Controlling” and “controlled” shall have meanings
correlative thereto. For purposes of this Section 12.1(ww), the term “Major Decision
Rights” shall mean, the right to, directly or indirectly, approve, consent to, veto or exercise a
vote in connection with a Person’s voting or other decision-making authority in respect of the
collective rights, options, elections or obligations of such Person under a Joint Venture.
(xx) “Offering Premium” means, with respect to any shares of New Common Stock issued
for cash in conjunction with issuances of New Common Stock permitted by this Agreement (including
any Liquidity Equity Issuance) prior to, or on the Effective Date together with shares of New
Common Stock issued in Liquidity Equity Issuances completed within thirty (30) days of the
Effective Date, the product of (i) (A) the per share offering price of the shares of New Common
Stock issued (net of all underwriting and other discounts, fees or other compensation, and related
expenses) less (B) the Per Share Purchase Price and (ii) the number of shares of New Common Stock
sold pursuant thereto.
(yy) “Operating Partnership” means GGP Limited Partnership, a Delaware limited
partnership and a Subsidiary of the Company.
(zz) “Permitted Claims” means, as of the Effective Date, other than Excluded Claims,
(a) all Claims against the Debtors covered by the Plan (the “Plan Debtors”) that are
classified in those certain classes of Claims described in Sections II B through E, G and P in the
Plan Summary Term Sheet (the “PMA Claims”), (b) all Claims or other amounts required to be
paid pursuant to the Plan to indenture trustees or similar servicing or administrative agents, with
respect to administrative fees incurred by or reimbursement obligations owed to such indenture
trustees or similar servicing or administrative agents in their capacity as such under the
Corporate Level Debt documents, (c) any claims of a similar type as the PMA Claims that are or have
been asserted against affiliates of the Plan Debtors that are or were debtors in the Bankruptcy
Cases and for
which a plan of reorganization has already been consummated (the “Confirmed Debtors”),
(d) surety bond Claims relating to the types of Claims identified in clauses (a) through (c) of
this definition, and (e) GGO Setup Costs.
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(aaa) “Permitted Claims Amount” means, as of the Effective Date, an amount equal to
the sum of (a) the aggregate amount of accrued and unpaid Permitted Claims that have been allowed
(by order of the Bankruptcy Court or pursuant to the terms of the Plan) as of the Effective Date,
plus (b) the aggregate amount of the reserve to be established under the Plan with respect to
Permitted Claims, as determined by the Bankruptcy Court in the Confirmation Order or such other
order as may be entered by the Bankruptcy Court on or prior to the Effective Date (the
“Reserve”), to provide for distributions on account of all other accrued and unpaid
Permitted Claims that have not been allowed or disallowed (in each case by order of the Bankruptcy
Court or pursuant to the terms of the Plan) as of the Effective Date, plus (c) the aggregate amount
of the GGO Setup Costs as of the Effective Date; provided, however, that there
shall be no duplication with any amounts otherwise included in Closing Date Net Debt.
(bbb) “Person” means an individual, a group (including a “group” under Section 13(d)
of the Exchange Act), a partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization and a Governmental
Entity or any department, agency or political subdivision thereof.
(ccc) “Preliminary Closing Date Net Debt Review Deadline” means the end of the
Preliminary Closing Date Net Debt Review Period, which date shall be the first business day that is
at least twenty (20) calendar days after delivery of the Preliminary Closing Date Net Debt
Schedule, and which shall be the deadline by which Purchaser shall deliver to the Company a Dispute
Notice.
(ddd) “Preliminary Closing Date Net Debt Review Period” means the period between the
Company’s delivery of the Preliminary Closing Date Net Debt Schedule and the Preliminary Closing
Date Net Debt Review Deadline.
(eee) “Proportionally Consolidated Debt” means consolidated Debt of the Company less
(1) all Debt of Subsidiaries of the Company that are not wholly-owned and other Persons in which
the Company, directly or indirectly, holds a minority interest, to the extent such Debt is included
in consolidated Debt, plus (2) the Company’s share of Debt for each non-wholly owned Subsidiary of
the Company and each other Persons in which the Company, directly or indirectly, holds a minority
interest based on the company’s pro-rata economic interest in each such Subsidiary or the extent to
which the Company or its Subsidiary or Person is liable therefor, whichever is greater; provided,
however, for purposes of calculating Proportionally Consolidated Debt, the Debt of the Brazilian
Entities shall be deemed to be $110,437,781.
(fff) “Proportionally Consolidated Unrestricted Cash” means the consolidated
Unrestricted Cash of the Company less (1) all Unrestricted Cash of Subsidiaries of the Company that
are not wholly-owned and Persons
in which the Company, directly or indirectly, owns a minority interest, to the extent such
Unrestricted Cash is included in consolidated Unrestricted Cash of the Company, plus (2) the
Company’s share of Unrestricted Cash for each non-wholly owned Subsidiary of the Company and
Persons in which the Company, directly or indirectly, owns a minority interest based on the
Company’s pro-rata economic interest in each such Subsidiary or Person; provided, however, for
purposes of calculating Proportionally Consolidated Unrestricted Cash, the Unrestricted Cash of the
Brazilian Entities shall be deemed to be $82,000,000, provided, further, that any distributions of
Unrestricted Cash made from the date of this Agreement to the Closing by Brazilian Entities to the
Company or any of its Subsidiaries shall be disregarded for purposes of calculating Proportionally
Consolidated Unrestricted Cash.
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(ggg) “Reinstatement Adjustment Amount” means the difference resulting from
subtracting the Reinstatement Amount from the aggregate amount of Corporate Level Debt.
(hhh) “Reinstatement Amount” means the amount of Corporate Level Debt to the extent
such obligations will be reinstated pursuant to the Plan, including, to the extent applicable,
based on the elections of the holders of such Corporate Level Debt prior to the election deadline
established by the Bankruptcy Court.
(iii) “Reserve Surplus Amount” means, as of any date of determination, the excess, if
any, of the Reserves over (x) any Permitted Claims paid prior to such date from Reserves for such
Permitted Claims, plus (y) the remaining balance of the Reserve maintained by the Company as of
such date as determined by the Company Board.
(jjj) “Rights Agreement” means that certain Rights Agreement, dated as of November 18,
1998, by and between the Company and BNY Mellon Shareowner Services, as successor to Norwest Bank
Minnesota, N.A., as amended on November 10, 1999, December 31, 2001 and November 18, 2008, and from
time to time.
(kkk) “Xxxxx Bonds” means (i) the 6-3/4% Senior Notes Due 2013 issued pursuant to the
Indenture, dated as of May 5, 2006, by and among The Xxxxx Company LP and TRC Co-Issuer, Inc., as
co-issuers and The Bank of New York Mellon Corporation, as trustee, and (ii) unsecured debentures
issued pursuant to the Indenture, dated as of February 24, 1995, by and between The Xxxxx Company,
as issuer, and The Bank of New York Mellon Corporation, as trustee.
(lll) “Share Equivalent” means any stock, warrants, rights, calls, options or other
securities exchangeable or exercisable for, or convertible into, shares of Common Stock, New Common
Stock or GGO Common Stock, as applicable.
(mmm) “Significant Subsidiaries” means the operating Subsidiaries of the Company that
generated revenues in excess of $30,000,000 for the year ended December 31, 2009.
(nnn) “Subsidiary” means, with respect to a Person (including the Company), (a) a
company a majority of whose capital stock with voting power, under ordinary circumstances, to elect
a majority of the directors is at the time, directly or indirectly, owned by
such Person, by a subsidiary of such Person, or by such Person and one or more subsidiaries of
such Person, (b) a partnership in which such Person or a subsidiary of such Person is, at the date
of determination, a general partner of such partnership, (c) a limited liability company of which
such Person, or a Subsidiary of such Person, is a managing member or (d) any other Person (other
than a company) in which such Person, a subsidiary of such Person or such Person and one or more
subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has (i)
at least a majority ownership interest or (ii) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
-74-
(ooo) “Target Net Debt” means $22,970,800,000.
(ppp) “Tax Protection Agreements” means any written agreement to which the Company,
its Operating Partnership or any other Subsidiary is a party pursuant to which: (i) in connection
with the deferral of income Taxes of a holder of interests in the Operating Partnership, the
Company, the Operating Partnership or the other Subsidiaries have agreed to (A) maintain a minimum
level of Indebtedness or continue any particular Indebtedness, (B) retain or not dispose of assets
for a period of time that has not since expired, (C) make or refrain from making Tax elections,
and/or (D) only dispose of assets in a particular manner; and/or (ii) limited partners of the
Operating Partnership have guaranteed Indebtedness of the Operating Partnership.
(qqq) “Termination Date” means December 31, 2010; provided, that in the event
the Company delivers a written notice (the “Termination Date Extension Notice”) identifying
the applicable clause below pursuant to which the extension is being effected to Purchaser on or
prior to December 31, 2010, the Company may elect to extend the Termination Date if:
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(i) |
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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 |
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(ii) |
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(A) all conditions to the obligations of Purchaser to
consummate the Closing set forth in Article 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 to Article 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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(rrr) “Transactions” means the purchase of the Shares and the GGO Shares and the other
transactions contemplated by this Agreement.
(sss) “TRUPS” means certain preferred securities issued by GGP Capital Trust I.
(ttt) “Unrestricted Cash” means all cash and Cash Equivalents of the Company and of
the Subsidiaries of the Company, but excluding any cash or Cash Equivalents that are controlled by
or subject to any lien, security interest or control agreement, other preferential arrangement in
favor of any creditor or otherwise encumbered or restricted in any way.
(uuu) “Unsecured Indebtedness” means all indebtedness of the Company for borrowed
money or obligations of the Company evidenced by notes, bonds, debentures or other similar
instruments that are not secured by a lien on any Company Property or other assets of the Company
or any Subsidiary.
(vvv) “UPREIT Units” means preferred or common units of limited partnership interests
of the Operating Partnership.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices. All notices and other communications in connection with this
Agreement shall be in writing and shall be considered given if given in the manner, and be deemed
given at times, as follows: (x) on the date delivered, if personally delivered; (y) on the day of
transmission if sent via facsimile transmission to the facsimile number given below, and
telephonic confirmation of receipt is obtained promptly after completion of transmission; or
(z) on the next Business Day after being sent by recognized overnight mail service specifying next
business day delivery, in each case with delivery charges pre-paid and addressed to the following
addresses:
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(a) |
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If to Purchaser, to: |
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REP Investments LLC
c/o Brookfield Asset Management Inc.
Xxxxxxxxxx Xxxxx, Xxxxx 000
000 Xxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000 |
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with a copy (which shall not constitute notice) to: |
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Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000 |
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(b) |
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If to the Company, to: |
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General Growth Properties, Inc.
000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000 |
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with a copy (which shall not constitute notice) to: |
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Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
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Xxxxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000 |
SECTION 13.2 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement may be assigned by any party without the
prior written consent of the other party. Notwithstanding the previous sentence, this Agreement,
or Purchaser’s rights, interests or obligations hereunder, may be assigned or transferred, in whole
or in part, by Purchaser to Brookfield Consortium Members; provided, that any such assignee
assumes the obligations of Purchaser hereunder and agrees in writing to be bound by the terms of
this Agreement in the same manner as Purchaser and the Designation Conditions are otherwise
satisfied. Notwithstanding the foregoing or any other provisions herein, no such assignment shall
relieve Purchaser of its obligations hereunder if such assignee fails to perform such obligations.
Except as provided in Article IX with respect to the Indemnified Parties, this Agreement
(including the documents and instruments referred to in this Agreement) is not intended to and does
not confer upon any person other than the parties hereto any rights or remedies under this
Agreement. Notwithstanding the foregoing or any other provisions herein to the contrary, Purchaser
may not assign any of its rights, interests or obligations under this Agreement, to the extent such
assignment would affect the securities Laws exemptions applicable to this transaction.
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SECTION 13.3 Prior Negotiations; Entire Agreement. This Agreement (including the
exhibits hereto and the documents and instruments referred to in this Agreement) constitutes the
entire agreement of the parties and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties with respect to the subject matter of
this Agreement, except that the parties hereto acknowledge that the Confidentiality Agreement shall
continue in full force and effect in accordance with their terms and shall terminate no earlier
than this Agreement.
SECTION 13.4 Governing Law; Venue. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. BOTH PARTIES HEREBY IRREVOCABLY
SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND BOTH PARTIES WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS.
SECTION 13.5 Company Disclosure Letter. The Company Disclosure Letter shall be
arranged to correspond to the Articles and Sections of this Agreement, and the disclosure in any
portion of the Company Disclosure Letter shall qualify the corresponding provision in Article
III and any other provision of Article III to which it is reasonably apparent on the
face of the disclosure that such disclosure relates. No disclosure in the Company Disclosure
Letter relating to any possible non-compliance, breach or violation of any Contract or Law shall be
construed as an admission that any such non-compliance, breach or violation exists or has actually
occurred. In the Company Disclosure Letter, (a) all capitalized terms used but not defined therein
shall have the meanings assigned to them in this Agreement and (b) the Section numbers correspond
to the Section numbers in this Agreement.
SECTION 13.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties; and delivered to the other
party (including via facsimile or other electronic transmission), it being understood that
each party need not sign the same counterpart.
SECTION 13.7 Expenses. Each party shall bear its own expenses incurred or to be
incurred in connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
SECTION 13.8 Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions of this Agreement may be
waived, only by a written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance, and subject, to the extent required, to the approval of the Bankruptcy
Court. No delay on the part of any party in exercising any right, power or privilege pursuant to
this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any party of
any right, power or privilege pursuant to this Agreement, nor shall any
-78-
single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this Agreement. The
rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity.
SECTION 13.9 Construction.
(a) The headings in this Agreement are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.
(b) Unless the context otherwise requires, as used in this Agreement: (i) an accounting term
not otherwise defined in this Agreement has the meaning ascribed to it in accordance with GAAP;
(ii) “or” is not exclusive; (iii) “including” and its variants mean “including, without limitation”
and its variants; (iv) words defined in the singular have the parallel meaning in the plural and
vice versa; (v) references to “written” or “in writing” include in visual electronic form; (vi)
words of one gender shall be construed to apply to each gender; (vii) the terms “Article,”
“Section,” and “Schedule” refer to the specified Article, Section, or Schedule of or to this
Agreement; and (viii) the term “beneficially own” shall have the meaning determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof; provided, however, that a Person
will be deemed to beneficially own (and have beneficial ownership of) all securities that such
Person has the right to acquire, whether such right is exercisable immediately or with the passage
of time or the satisfaction of conditions. The terms “beneficial ownership” and “beneficial owner”
have correlative meanings.
(c) Notwithstanding anything to the contrary, and for all purposes of this Agreement, any
public announcement or filing of factual information relating to the business, financial condition
or results of the Company or its Subsidiaries, or a factually accurate (in all material respects)
public statement or filing that describes the Company’s receipt of an offer or proposal for a
Competing Transaction and the operation of this Agreement with respect thereto, or any entry into a
confidentiality agreement, shall not be deemed to evidence the Company’s or any Subsidiary’s
support, or intention to support, any Competing Transaction.
(d) In the event of a conflict between the terms and conditions of this Agreement and the Plan
Summary Term Sheet, the terms and conditions of this Agreement shall govern.
SECTION 13.10 Adjustment of Share Numbers and Prices. The number of Shares to be
purchased by Purchaser at the Closing pursuant to Article I, the Per Share Purchase Price,
the GGO Per Share Purchase Price, the number of GGO Shares to be purchased by Purchaser pursuant to
Article II and any other number or amount contained in this Agreement which is based upon
the number or price of shares of GGP or GGO shall be proportionately adjusted for any subdivision
or combination (by stock split, reverse stock split, dividend, reorganization, recapitalization or
otherwise) of the Common Stock, New Common Stock or GGO Common Stock that occurs during the period
between the date of this Agreement and the Closing. In addition, if at any time prior to the
Closing, the Company or GGO shall declare or make a dividend or other distribution whether in cash
or property (other than a dividend or distribution payable in common stock of the Company or GGO,
as applicable, the GGO Share Distribution or a distribution of rights contemplated hereby), the Per
Share Purchase Price or the GGO Per Share Purchase Price, as applicable, shall be proportionally
adjusted thereafter by the Fair Market Value (as defined in the Warrant) per share of the dividend
or distribution.
-79-
SECTION 13.11 Certain Remedies.
(a) The parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms. It is
accordingly agreed that, subject to clause (c) below, the parties shall be entitled to specific
performance of the terms of this Agreement. This right shall include the right of the Company to
(i) fully enforce, or require Purchaser to fully enforce, the terms of the Brookfield Equity
Commitment Letter against the Equity Provider party thereto to the fullest extent possible pursuant
to the Brookfield Equity Commitment Letter and applicable Law and (ii) require Purchaser to deliver
a Closing Funding Certification (as defined in the Escrow Agreements) in accordance with, and
subject to, the applicable provisions of the Escrow Agreement, including Section 4(d) thereof (or
the corollary provisions of any Acceptable LC) and upon concurrent funding pursuant to the
Brookfield Equity Commitment Letter (the financing referred to in clauses (i) and (ii) of this
Section 13.11(a) being referred to herein as the “Equity Financing”) and to cause
Purchaser to pay the Purchase Price and the GGO Purchase Price and consummate the Transactions on
the terms and subject to the provisions set forth in this Agreement. It is explicitly agreed that
the Company shall be entitled to seek specific performance of Purchaser’s obligation to cause the
Equity Financing to be funded to fund the Purchase Price and the GGO Purchase Price only in the
event that (x) all conditions in Article VII have been satisfied (other than those
conditions that are to be satisfied (and capable of being satisfied) by action taken at the Closing
if Purchaser had complied with its obligations under this Agreement and the Financing Commitments
had been complied with) at the time when the Closing would have occurred but for the failure of the
Purchase Price and the GGO Purchase Price to be funded, and (y) the Company has irrevocably
confirmed that if specific performance is granted and the Purchase Price and the GGO Purchase Price
are funded, then the Closing will occur. Each of the parties hereto hereby waives (i) any defenses
in any action for specific performance, including the defense that a remedy at law would be
adequate and (ii) any requirement under any Law to post a bond or other security as a prerequisite
to obtaining equitable relief. Further, the parties agree that the Company’s right to
demand specific performance of the purchase obligations contained herein shall be limited to
complete performance, and not subject to partial performance or the sale of less than all of the
Shares to be purchased by Purchaser hereunder and shall be further conditioned upon the concurrent
funding pursuant to, and in accordance with, the Brookfield Equity Commitment Letter.
(b) THE COMPANY HEREBY AGREES THAT, PRIOR TO THE CLOSING, SPECIFIC PERFORMANCE (AND AN
INJUNCTION OR INJUNCTIONS, WITHOUT NECESSITY OF PROVING DAMAGES OR POSTING A BOND OR OTHER
SECURITY, TO PREVENT BREACHES OF THIS AGREEMENT) SHALL BE ITS SOLE AND EXCLUSIVE REMEDY WITH
RESPECT TO BREACHES BY PURCHASER IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY AND THAT IT MAY NOT SEEK OR ACCEPT ANY OTHER FORM OF RELIEF THAT MAY BE AVAILABLE FOR BREACH
UNDER THIS AGREEMENT, THE ESCROW AGREEMENTS, THE BROOKFIELD EQUITY COMMITMENT LETTER, ANY
ACCEPTABLE LC OR OTHERWISE IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (INCLUDING MONETARY DAMAGES).
-80-
(c) Prior to the entry of the Confirmation Order, other than with respect to (i) the
indemnification obligations of the Company set forth in Article IX and (ii) the Company’s
obligations under Section 5.1(c), Purchaser’s right to receive the Warrants on the terms
and subject to the conditions set forth in this Agreement shall constitute the sole and exclusive
remedy of any nature whatsoever (whether for monetary damages, specific performance, injunctive
relief, or otherwise) of Purchaser against the Company for any harm, damage or loss of any nature
relating to or as a result of any breach of this Agreement by the Company or the failure of the
Closing to occur for any reason; provided, that, following the entry of the Approval Order,
Purchaser shall be entitled to specific performance of the Company’s obligation to issue the
Warrants as well as the Company’s obligations under Article IX and Section 5.1(c)
hereof.
(d) Following entry of the Confirmation Order, Purchaser shall be entitled to specific
performance of terms of this Agreement, in addition to any other applicable remedies at law.
(e) Following the Closing, each of the parties shall be entitled to an injunction or
injunctions (without necessity of proving damages or posting a bond or other security) to prevent
breaches of this Agreement, and to enforce specifically the terms and provisions of this Agreement,
in addition to any other applicable remedies at law or equity.
(f) The Company, on behalf of itself and its respective heirs, successors, and assigns, hereby
covenants and agrees never to institute or cause to be instituted or continue prosecution of any
suit or other form of action or proceeding of any kind or nature whatsoever against any member of
Purchaser by reason of or in connection with the Transaction, provided, however, that nothing shall
prohibit the Company from instituting an action for specific performance against Purchaser in
connection with this Agreement in accordance with the provisions of this Section 13.11 or
from instituting an action against Escrow Agent for release of the Escrow Amounts.
SECTION 13.12 Bankruptcy Matters. For the avoidance of doubt, all obligations of the
Company and its Subsidiaries in this Agreement are subject to and conditioned upon (a) with respect
to the issuance of the Warrants and the other obligations contained in the Approval Order,
including approval of the indemnification provisions of Article IX hereof, entry of the
Approval Order, and (b) with respect to the remainder of the provisions hereof, entry of the
Confirmation Order.
[Signature Page Follows]
-81-
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and delivered by
each of them or their respective officers thereunto duly authorized, all as of the date first
written above.
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GENERAL GROWTH PROPERTIES, INC.
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By: |
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Name: |
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Title: |
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REP INVESTMENTS LLC
BY: Brookfield Asset Management Private Institutional Capital Adviser (Canada) L.P., its managing member
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By: |
Brookfield Private Funds Holdings Inc., its general partner
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By: |
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Name: |
Xxx Xxxxx |
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Title: |
President |
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By: |
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Name: |
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Title: |
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EXHIBIT C-2 — FAIRHOLME AGREEMENT
EXHIBIT C-2
STOCK PURCHASE AGREEMENT
dated as of March 31, 2010
between
The Purchasers Party Hereto
and
General Growth Properties, Inc.
EXHIBIT C-2
TABLE OF CONTENTS
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Page |
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ARTICLE I PURCHASE OF NEW COMMON STOCK; CLOSING |
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3 |
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SECTION 1.1 |
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Purchase of New Common Stock |
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3 |
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SECTION 1.2 |
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Closing |
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3 |
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SECTION 1.3 |
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Company Rights Offering Election |
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4 |
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SECTION 1.4 |
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Company Election to Replace Certain Shares |
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4 |
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SECTION 1.5 |
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Pro Rata Reductions with Pershing Agreement |
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4 |
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ARTICLE II GGO SHARE DISTRIBUTION AND GGO RIGHTS OFFERING |
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5 |
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SECTION 2.1 |
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GGO Share Distribution |
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5 |
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SECTION 2.2 |
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GGO Rights Offering |
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6 |
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
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9 |
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SECTION 3.1 |
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Organization and Qualification |
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9 |
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SECTION 3.2 |
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Corporate Power and Authority |
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9 |
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SECTION 3.3 |
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Execution and Delivery; Enforceability |
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10 |
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SECTION 3.4 |
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Authorized Capital Stock |
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10 |
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SECTION 3.5 |
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Issuance |
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11 |
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SECTION 3.6 |
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No Conflict |
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12 |
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SECTION 3.7 |
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Consents and Approvals |
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13 |
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SECTION 3.8 |
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Company Reports |
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14 |
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SECTION 3.9 |
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No Undisclosed Liabilities |
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15 |
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SECTION 3.10 |
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No Material Adverse Effect |
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15 |
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SECTION 3.11 |
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No Violation or Default: Licenses and Permits |
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15 |
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SECTION 3.12 |
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Legal Proceedings |
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16 |
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SECTION 3.13 |
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Investment Company Act |
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16 |
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SECTION 3.14 |
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Compliance With Environmental Laws |
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16 |
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SECTION 3.15 |
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Company Benefit Plans |
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17 |
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SECTION 3.16 |
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Labor and Employment Matters |
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18 |
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SECTION 3.17 |
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Insurance |
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18 |
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SECTION 3.18 |
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No Unlawful Payments |
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18 |
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SECTION 3.19 |
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No Broker’s Fees |
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18 |
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SECTION 3.20 |
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Real and Personal Property |
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19 |
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SECTION 3.21 |
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Tax Matters |
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23 |
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SECTION 3.22 |
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Material Contracts |
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25 |
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SECTION 3.23 |
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Certain Restrictions on Charter and Bylaws Provisions; State Takeover Laws |
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25 |
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SECTION 3.24 |
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No Other Representations or Warranties |
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26 |
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER |
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26 |
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SECTION 4.1 |
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Organization |
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26 |
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SECTION 4.2 |
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Power and Authority |
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26 |
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SECTION 4.3 |
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Execution and Delivery |
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27 |
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SECTION 4.4 |
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No Conflict |
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27 |
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Page |
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SECTION 4.5 |
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Consents and Approvals |
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27 |
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SECTION 4.6 |
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Compliance with Laws |
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27 |
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SECTION 4.7 |
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Legal Proceedings |
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27 |
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SECTION 4.8 |
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No Broker’s Fees |
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27 |
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SECTION 4.9 |
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Sophistication |
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28 |
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SECTION 4.10 |
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Purchaser Intent |
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28 |
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SECTION 4.11 |
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Reliance on Exemptions |
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28 |
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SECTION 4.12 |
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REIT Representations |
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28 |
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SECTION 4.13 |
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Financial Capability |
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28 |
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SECTION 4.14 |
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No Other Representations or Warranties |
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28 |
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SECTION 4.15 |
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Acknowledgement |
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28 |
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ARTICLE V COVENANTS OF THE COMPANY AND PURCHASER |
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29 |
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SECTION 5.1 |
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Bankruptcy Court Motions and Orders |
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29 |
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SECTION 5.2 |
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Warrants, New Warrants and GGO Warrants |
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29 |
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SECTION 5.3 |
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[Intentionally Omitted.] |
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30 |
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SECTION 5.4 |
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Listing |
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30 |
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SECTION 5.5 |
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Use of Proceeds |
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30 |
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SECTION 5.6 |
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Access to Information |
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30 |
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SECTION 5.7 |
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Competing Transactions |
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31 |
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SECTION 5.8 |
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Reservation for Issuance |
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31 |
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SECTION 5.9 |
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Subscription Rights |
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31 |
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SECTION 5.10 |
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[Intentionally Omitted.] |
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35 |
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SECTION 5.11 |
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Notification of Certain Matters |
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35 |
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SECTION 5.12 |
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Further Assurances |
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35 |
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SECTION 5.13 |
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Xxxxxx Heirs Obligations |
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35 |
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SECTION 5.14 |
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Rights Agreement; Reorganized Company Organizational Documents |
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36 |
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SECTION 5.15 |
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Stockholder Approval |
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37 |
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SECTION 5.16 |
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Closing Date Net Debt |
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37 |
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ARTICLE VI ADDITIONAL COVENANTS OF PURCHASER |
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39 |
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SECTION 6.1 |
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Information |
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39 |
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SECTION 6.2 |
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Purchaser Efforts |
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39 |
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SECTION 6.3 |
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Plan Support |
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40 |
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SECTION 6.4 |
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Transfer Restrictions |
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40 |
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SECTION 6.5 |
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[Intentionally omitted.] |
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41 |
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SECTION 6.6 |
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REIT Representations and Covenants |
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41 |
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SECTION 6.7 |
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Non-Control Agreement |
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42 |
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ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF PURCHASER |
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42 |
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SECTION 7.1 |
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Conditions to the Obligations of Purchaser |
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42 |
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ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE COMPANY |
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51 |
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SECTION 8.1 |
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Conditions to the Obligations of the Company |
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51 |
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ARTICLE IX [INTENTIONALLY OMITTED] |
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53 |
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-ii-
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Page |
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ARTICLE X SURVIVAL OF REPRESENTATIONS AND WARRANTIES |
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53 |
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SECTION 10.1 |
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Survival of Representations and Warranties |
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53 |
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ARTICLE XI TERMINATION |
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53 |
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SECTION 11.1 |
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Termination |
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53 |
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SECTION 11.2 |
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Effects of Termination |
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56 |
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ARTICLE XII DEFINITIONS |
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56 |
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SECTION 12.1 |
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Defined Terms |
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56 |
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ARTICLE XIII MISCELLANEOUS |
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70 |
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SECTION 13.1 |
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Notices |
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70 |
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SECTION 13.2 |
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Assignment; Third Party Beneficiaries |
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71 |
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SECTION 13.3 |
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Prior Negotiations; Entire Agreement |
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72 |
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SECTION 13.4 |
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Governing Law; Venue |
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72 |
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SECTION 13.5 |
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Company Disclosure Letter |
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72 |
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SECTION 13.6 |
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Counterparts |
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72 |
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SECTION 13.7 |
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Expenses |
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73 |
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SECTION 13.8 |
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Waivers and Amendments |
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73 |
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SECTION 13.9 |
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Construction |
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73 |
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SECTION 13.10 |
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Adjustment of Share Numbers and Prices |
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74 |
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SECTION 13.11 |
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Certain Remedies |
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74 |
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SECTION 13.12 |
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Bankruptcy Matters |
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75 |
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-iii-
LIST OF EXHIBITS AND SCHEDULES
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Exhibit A:
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Plan Summary Term Sheet |
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Exhibit B:
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Post-Bankruptcy GGP Corporate Structure |
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Exhibit C-1:
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Brookfield Agreement |
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Exhibit C-2:
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Pershing Agreement |
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Exhibit D:
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REIT Representation Letter |
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Exhibit E:
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GGO Assets |
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Exhibit F:
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Form of Approval Order |
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Exhibit G:
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Form of Warrant Agreement |
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Exhibit H:
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[Intentionally Omitted] |
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Exhibit I:
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[Intentionally Omitted] |
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Exhibit J:
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Form of REIT Opinion |
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Exhibit K:
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[Intentionally Omitted] |
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Exhibit L:
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[Intentionally Omitted] |
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Exhibit M:
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Form of Non-Control Agreement |
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Exhibit N:
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Certain REIT Investors |
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Schedule I:
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GGO and GGP Pro Rata Shares |
-iv-
INDEX OF DEFINED TERMS
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Defined Term |
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Page |
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2006 Bank Loan |
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56 |
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Act |
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40 |
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Additional Financing |
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46 |
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Additional Sales Period |
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56 |
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Adequate Reserves |
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23 |
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Affiliate |
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57 |
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Agreement |
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1 |
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Anticipated Debt Paydowns |
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46 |
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Approval Motion |
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29 |
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Approval Order |
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29 |
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Asset Sales |
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47 |
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Backstop Commitment |
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7 |
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Backstop Consideration |
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8 |
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Bankruptcy Cases |
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1 |
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Bankruptcy Code |
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1 |
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Bankruptcy Court |
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1 |
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Blue Sky |
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40 |
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Brookfield Agreement |
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2 |
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Brookfield Backstop Commitment |
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7 |
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Brookfield Consortium Member |
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57 |
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Brookfield Investor |
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2 |
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Business Day |
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57 |
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Capital Raising Activities |
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57 |
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Cash Equivalents |
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57 |
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Change of Control |
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57 |
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Chapter 11 |
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1 |
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Claims |
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58 |
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Closing |
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3 |
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Closing Date |
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4 |
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Closing Date Net Debt |
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58 |
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Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts |
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58 |
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Closing Restraint |
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55 |
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Code |
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17 |
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Common Stock |
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1 |
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Company |
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1 |
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Company Benefit Plan |
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59 |
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Company Board |
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59 |
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Company Disclosure Letter |
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9 |
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Company Ground Lease Property |
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21 |
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Company Mortgage Loan |
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22 |
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Company Option Plans |
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10 |
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Company Properties |
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19 |
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Company Property |
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19 |
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-v-
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Defined Term |
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Page |
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Company Property Lease |
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21 |
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Company Rights Offering |
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4 |
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Company SEC Reports |
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14 |
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Competing Transaction |
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59 |
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Conclusive Net Debt Adjustment Statement |
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59 |
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Confirmation Order |
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43 |
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Confirmed Debtors |
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67 |
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Contract |
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60 |
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Conversion Shares |
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60 |
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Corporate Level Debt |
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60 |
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Debt |
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60 |
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Debtors |
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1 |
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Designation Conditions |
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3 |
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DIP Loan |
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60 |
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Disclosure Statement |
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60 |
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Disclosure Statement Order |
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43 |
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Dispute Notice |
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38 |
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Disputed Items |
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38 |
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Effective Date |
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3 |
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Eligible Holder |
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6 |
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Encumbrances |
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19 |
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Environmental Laws |
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16 |
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Equity Exchange |
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1 |
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Equity Securities |
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11 |
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ERISA |
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60 |
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ERISA Affiliate |
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17 |
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Essential Assets |
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60 |
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Excess Surplus Amount |
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61 |
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Exchangeable Notes |
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61 |
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Excluded Claims |
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61 |
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Excluded Non-US Plans |
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17 |
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Expiration Time |
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7 |
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Fairholme |
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62 |
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Foreign Plan |
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17 |
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Fully Diluted Basis |
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62 |
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GAAP |
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62 |
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GGO |
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2 |
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GGO Backstop Limit |
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7 |
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GGO Common Share Amount |
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62 |
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GGO Common Stock |
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5 |
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GGO Minimum Allocation Right |
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7 |
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GGO Note Amount |
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62 |
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GGO Per Share Purchase Price |
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6 |
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GGO Pro Rata Share |
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63 |
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GGO Promissory Note |
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63 |
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GGO Purchase Price |
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63 |
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-vi-
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Defined Term |
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Page |
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GGO Representative |
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5 |
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GGO Rights Offering |
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6 |
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GGO Rights Offering Shares |
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6 |
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GGO Setup Costs |
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63 |
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GGO Share Distribution |
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6 |
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GGO Shares |
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63 |
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GGO Warrants |
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30 |
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GGP |
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1 |
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GGP Pro Rata Shares |
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63 |
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Governmental Entity |
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63 |
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Hazardous Materials |
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16 |
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Xxxxxx Agreement |
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64 |
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Xxxxxx Amount |
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63 |
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Xxxxxx Heirs Obligations |
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64 |
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Identified Assets |
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5 |
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Indebtedness |
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64 |
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Indemnity Cap |
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39 |
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Initial Investors |
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2 |
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Investment Agreements |
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2 |
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Joint Venture |
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64 |
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Knowledge |
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64 |
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Law |
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64 |
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Liquidity Equity Issuances |
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64 |
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Liquidity Target |
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46 |
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Material Adverse Effect |
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65 |
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Material Contract |
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65 |
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Material Lease |
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21 |
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Measurement Date |
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10 |
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Most Recent Statement |
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19 |
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MPC Assets |
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66 |
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MPC Tax Reserve |
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66 |
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MPC Taxes |
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66 |
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Net Debt Excess Amount |
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66 |
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Net Debt Surplus Amount |
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66 |
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New Common Stock |
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1 |
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New Debt |
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46 |
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New Warrants |
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30 |
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Non-Control Agreement |
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66 |
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Non-Controlling Properties |
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66 |
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NYSE |
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30 |
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Offering Premium |
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67 |
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Operating Partnership |
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67 |
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PBGC |
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17 |
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Per Share Purchase Price |
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3 |
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Permitted Claims |
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67 |
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Permitted Claims Amount |
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67 |
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-vii-
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Defined Term |
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Page |
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Permitted Replacement Shares |
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67 |
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Permitted Title Exceptions |
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19 |
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Pershing Agreement |
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2 |
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Pershing Backstop Commitment |
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7 |
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Pershing Purchasers |
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2 |
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Person |
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67 |
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Petition Date |
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1 |
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Plan |
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1 |
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Plan Debtors |
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67 |
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Plan Summary Term Sheet |
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1 |
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PMA Claims |
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67 |
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Preliminary Closing Date Net Debt Review Deadline |
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68 |
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Preliminary Closing Date Net Debt Review Period |
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68 |
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Preliminary Closing Date Net Debt Schedule |
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38 |
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Proportionally Consolidated Debt |
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68 |
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Proportionally Consolidated Unrestricted Cash |
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68 |
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Proposed Approval Order |
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29 |
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Proposed Securities |
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31 |
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Purchase Group |
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68 |
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Purchase Notice |
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8 |
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Purchase Price |
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3 |
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Purchaser |
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1 |
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Purchaser Debt Holdings |
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60 |
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Record Date |
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6 |
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Refinance Cap |
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48 |
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Reinstated Amounts |
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46 |
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Reinstatement Adjustment Amount |
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68 |
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Reinstatement Amount |
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68 |
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REIT |
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24 |
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REIT Subsidiary |
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24 |
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Reorganized Company |
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1 |
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Reorganized Company Organizational Documents |
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36 |
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Reserve |
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67 |
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Reserve Surplus Amount |
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69 |
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Resolution Period |
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38 |
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Right |
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6 |
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Rights Agreement |
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69 |
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Rights Offering Election |
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4 |
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Xxxxx Bonds |
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69 |
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Rule 144 |
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41 |
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Sales Cap |
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48 |
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SEC |
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14 |
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Securities Act |
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14 |
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Share Cap Number |
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46 |
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Share Equivalent |
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69 |
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Shares |
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3 |
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-viii-
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Defined Term |
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Page |
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Significant Subsidiaries |
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69 |
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Specified Debt |
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69 |
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Subscription Agent |
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7 |
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Subscription Right |
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31 |
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Subsidiary |
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69 |
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Synthetic Lease Obligation |
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64 |
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Target Net Debt |
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69 |
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Tax Protection Agreements |
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69 |
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Tax Return |
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24 |
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Taxes |
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23 |
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Termination Date |
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70 |
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Total Unsubscribed Shares |
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7 |
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Transactions |
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70 |
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TRUPS |
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70 |
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Unrestricted Cash |
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70 |
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Unrestricted Date |
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40 |
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Unsecured Indebtedness |
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70 |
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UPREIT Units |
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70 |
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Warrant Agreement |
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29 |
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Warrants |
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29 |
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-ix-
STOCK PURCHASE AGREEMENT, dated as of March 31, 2010 (this “Agreement”), by and
between General Growth Properties, Inc., a Delaware corporation (“GGP”), and The Xxxxxxxxx
Xxxx, a series of Fairholme Funds, Inc., a Maryland corporation (“The Xxxxxxxxx Xxxx”) and
Fairholme Focused Income Fund, a series of Fairholme Funds, Inc., a Maryland corporation, (each,
together with its permitted nominees and assigns, a “Purchaser”).
RECITALS
WHEREAS, GGP is a debtor in possession in that certain bankruptcy case under chapter 11
(“Chapter 11”) of Title 11 of the United States Code, 11 U.S.C. §§ 101 -1532 (as amended,
the “Bankruptcy Code”) filed on April 16, 2009 (the “Petition Date”) in the United
States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”),
Case No. 09-11977 (ALG).
WHEREAS, each Purchaser, separately and not jointly, desires to assist GGP in its plans to
recapitalize and emerge from bankruptcy and has agreed to sponsor the implementation of a joint
chapter 11 plan of reorganization based on the Plan Summary Term Sheet (as defined below) (together
with all documents and agreements that form part of such plan or related plan supplement or are
related thereto, and as it may be amended, modified or supplemented from time to time, in each
case, to the extent it relates to the implementation and effectuation of the Plan Summary Term
Sheet and this Agreement, the “Plan”), of GGP and its Subsidiaries and Affiliates who are
debtors and debtors-in-possession (the “Debtors”) in the chapter 11 cases pending and
jointly administered in the Bankruptcy Court (the “Bankruptcy Cases”).
WHEREAS, principal elements of the Plan (including a table setting forth the proposed
treatment of allowed claims and equity interests in the Bankruptcy Cases) are set forth on
Exhibit A hereto (the “Plan Summary Term Sheet”).
WHEREAS, the Plan shall provide, among other things, that (i) each holder of common stock, par
value $0.01 per share, of GGP (the “Common Stock”) shall receive, in exchange for each
share of Common Stock held by such holder, one share (subject to adjustment as contemplated by
Section 5.13(a) hereof) of new common stock (the “New Common Stock”) of a new
company that succeeds to GGP in the manner contemplated by Exhibit B upon consummation of
the Plan (the “Reorganized Company”) and (ii) any Equity Securities (other than Common
Stock) of the Company (as defined below) or any of its Subsidiaries (as defined below) outstanding
immediately after the Effective Date that were previously convertible into, or exercisable or
exchangeable for, Common Stock shall thereafter be convertible into, or exercisable or exchangeable
for, New Common Stock (based upon the number of shares of Common Stock underlying such Equity
Securities) (the transactions contemplated by clauses (i) and (ii) of this recital being referred
to herein as the “Equity Exchange”). For purposes of this Agreement, the “Company”
shall be deemed to refer, prior to consummation of the Plan, to GGP and, on and after consummation
of the Plan, the Reorganized Company, as the context requires.
WHEREAS, each Purchaser, separately and not jointly, desires to make an investment in the
Reorganized Company on the terms and subject to the conditions described herein in the form of the
purchase of shares of New Common Stock as contemplated hereby.
WHEREAS, in addition to the Equity Exchange and the sale of the Shares (as defined below), the
Plan shall provide for the incorporation by the Company of a new subsidiary, General Growth
Opportunities, Inc. (“GGO”), the contribution of certain assets (and/or equity interests
related thereto) of the Company to GGO and the assumption by GGO of the liabilities associated with
such assets, the distribution to the shareholders of the Company (subject to adjustment as
contemplated by Section 5.13(b) hereof and prior to the issuance of the Shares and the
issuance of other shares of New Common Stock contemplated by this Agreement other than pursuant to
the Equity Exchange) on a pro rata basis and certain holders of UPREIT Units of all of the capital
stock of GGO and the consummation of the GGO Rights Offering (as described herein).
WHEREAS, the Company has requested that each Purchaser, separately and not jointly, commit to
purchase the Shares and the GGO Shares at a fixed price for the term hereof.
WHEREAS, each Purchaser, separately and not jointly, has agreed to enter into this Agreement
and commit to purchase the Shares and the GGO Shares only on the condition that the Company, as
promptly as practicable following the date hereof (but no later than the date provided in
Section 5.2 hereof), issue the Warrants contemplated herein and perform its other
obligations hereunder.
WHEREAS, on the date hereof, the Company entered into an agreement (in the form attached
hereto as Exhibit C-1 together with any amendments thereto as have been approved by each
Purchaser, the “Brookfield Agreement”) with REP Investments LLC (the “Brookfield
Investor”) pursuant to which the Brookfield Investor has agreed to make (i) an investment of up
to $2,500,000,000 in the Reorganized Company in the form of the purchase of shares of New Common
Stock and (ii) an investment of up to $125,000,000 in GGO in the form of the purchase of shares of
GGO Common Stock pursuant to a commitment to backstop a portion of the GGO Rights Offering.
WHEREAS, on the date hereof, the Company entered into an agreement (in the form attached
hereto as Exhibit C-2 together with any amendments thereto as have been approved by each
Purchaser, the “Pershing Agreement” and, together with this Agreement and the Brookfield
Agreement, the “Investment Agreements”) with Pershing Square, L.P., Pershing Square II,
L.P., Pershing Square International, Ltd. and Pershing Square International V, Ltd. (the
“Pershing Purchasers” and, together with each Purchaser and the Brookfield Investor, the
“Initial Investors”) pursuant to which the Pershing Purchasers have agreed to make (i) an
investment of up to $1,085,714,286 in the Reorganized Company in the form of the purchase of shares
of New Common Stock and (ii) an investment of up to $62,500,000 in GGO in the form of the purchase
of shares of GGO Common Stock pursuant to a commitment to backstop a portion of the GGO Rights
Offering.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:
-2-
ARTICLE I
PURCHASE OF NEW COMMON STOCK; CLOSING
SECTION 1.1 Purchase of New Common Stock.
(a) On the terms and subject to the conditions set forth herein, at the Closing (as defined
below), each Purchaser shall purchase from the Company, and the Company shall sell to such
Purchaser, a number of shares of New Common Stock (the “Shares”) equal to (x) its GGP Pro
Rata Share of the Total Purchase Amount (as defined below) minus (y) its Conversion Shares, for a
price per share equal to $10.00 (the “Per Share Purchase Price” and, in the aggregate, the
“Purchase Price”); provided, that no Purchaser shall be obligated to purchase a
number of Shares less than its GGP Pro Rata Share of 190,000,000, as determined pursuant to
Section 1.4.
(b) The “Total Purchase Amount” will be 380,000,000, subject to reduction pursuant to
Section 1.4.
(c) All Shares shall be delivered with any and all issue, stamp, transfer or similar taxes or
duties payable in connection with such delivery duly paid by the Company to the extent required
under the Confirmation Order or applicable Law.
(d) Each Purchaser, in its sole discretion, may assign its rights to receive Shares hereunder
or designate that some or all of the Shares be issued in the name of, and delivered to, one or more
of the other members of its Purchaser Group or any third party to whom the shares could be
transferred immediately after Closing in accordance with Section 6.4, subject to (i) such
action not causing any delay in the obtaining of, or significantly increasing the risk of not
obtaining, any material authorizations, consents, orders, declarations or approvals necessary to
consummate the transactions contemplated by this Agreement or otherwise delaying the consummation
of such transactions, (ii) such Person shall be an “accredited investor” (within the meaning of
Rule 501 of Regulation D under the Securities Act) and shall have agreed in writing with and for
the benefit of the Company to be bound by the terms of this Agreement applicable to such Purchaser
set forth in Section 6.4 and the applicable Non-Control Agreement, if any, including the
delivery of the letter certifying compliance with the representations and covenants set forth on
Exhibit D to the extent applicable to such assignee or designee and (iii) such initial
Purchaser not being relieved of any of its obligations under this Agreement ((i), (ii) and (iii)
collectively, the “Designation Conditions”). Notwithstanding anything to the contrary in
this Agreement, no Purchaser may assign its rights to receive or designate Shares to any Person
(other than members of its Purchaser Group) if such assignment or designation would cause a failure
of the closing condition in Section 7.1(u) of the Brookfield Agreement.
SECTION 1.2 Closing. Subject to the satisfaction or waiver of the conditions
(excluding conditions that, by their nature, cannot be satisfied until the Closing, but subject to
the satisfaction or waiver of those conditions as of the Closing) set forth in Article VII
and Article VIII, the closing of the purchase of the Shares by each Purchaser pursuant
hereto (the “Closing”) shall occur at 9:30 a.m., New York time, on the effective date of
the Plan (the “Effective Date”), at the offices of Weil, Gotshal & Xxxxxx LLP located at
000 Xxxxx Xxxxxx, Xxx Xxxx, XX
-3-
10153, or such other date, time or location as agreed by the parties. The date of the Closing
is referred to as the “Closing Date”. Each of the Company and each Purchaser hereby agrees
that in no event shall the Closing occur unless all of the Shares are sold to each applicable
Purchaser (or to such other Persons as each such applicable Purchaser may designate in accordance
with and subject to the Designation Conditions so long as such designation would not cause a
failure of the closing condition in Section 7.1(u) of the Brookfield Agreement) on the Closing
Date.
SECTION 1.3 Company Rights Offering Election. The Company may at any time prior to
the date of filing of the Disclosure Statement, upon written notice to each Purchaser in accordance
with the terms hereof (the “Rights Offering Election”), irrevocably elect to convert the
obligation of such Purchaser to purchase the Shares as contemplated by Section 1.1 hereof
into an obligation of such Purchaser to participate in a rights offering by the Company pursuant to
which shareholders and/or creditors of the Company are offered rights to subscribe for shares of
New Common Stock (a “Company Rights Offering”), subject to the execution and delivery of
definitive documentation therefor and the satisfaction of the conditions described therein and
other customary conditions for a public rights offering. To the extent the Company makes a Rights
Offering Election, (i) each Purchaser shall be entitled to a minimum allocation of shares of New
Common Stock in the Company Rights Offering equal to the number of shares such Purchaser would
otherwise be required to purchase pursuant to Section 1.1 hereof had no such election been
made, (ii) the purchase price per share payable by such Purchaser shall be equal to the Per Share
Purchase Price and such Purchaser shall not be otherwise adversely affected as compared to the
transactions contemplated hereby, (iii) the Company Rights Offering shall be effected in a manner
substantially consistent with the procedures contemplated by Section 2.2 with respect to
the GGO Rights Offering; provided, that the Company Rights Offering shall be completed by
the Effective Date, and (iv) the Company and each Purchaser shall cooperate in good faith to
develop and agree upon documentation that is reasonably acceptable to both the Company and each
Purchaser governing the further terms and conditions of the Company Rights Offering.
SECTION 1.4 Company Election to Replace Certain Shares. In the event that the Company
has sold, or has binding commitments to sell on or prior to the Effective Date, Permitted
Replacement Shares, the Company may elect by written notice to each Purchaser to reduce the Total
Purchase Amount by any portion of the number of such Permitted Replacement Shares as the Company
may determine in its discretion; provided, that the Total Purchase Amount shall not be less
than 190,000,000. No election by the Company under this Section 1.4 shall be effective
unless received by each Purchaser on or prior to the tenth day prior to the hearing to approve the
Confirmation Order under Bankruptcy Rule 2002. Any election by the Company under this Section
1.4 shall be binding and irrevocable.
SECTION 1.5 Pro Rata Reductions with Pershing Agreement. No election by the Company
pursuant to Section 1.4 shall be made unless the Company is making a similar election under
the Pershing Agreement, such that each of the aggregate number of Shares required to be purchased
at Closing is allocated as among each Purchaser and among each of the Pershing Purchasers under the
Pershing Agreement in accordance with the applicable GGP Pro Rata Share.
-4-
ARTICLE II
GGO SHARE DISTRIBUTION AND GGO RIGHTS OFFERING
SECTION 2.1 GGO Share Distribution. On the terms and subject to the conditions
(including Bankruptcy Court approval) set forth herein, the Plan shall provide for the following:
(a) On or prior to the Effective Date, the Company shall incorporate GGO with issued and
outstanding capital stock consisting of at least the GGO Common Share Amount of shares of common
stock (the “GGO Common Stock”), designate an employee of the Company familiar with the
Identified Assets and reasonably acceptable to the other Initial Investors to serve as a
representative of GGO (the “GGO Representative”)and shall contribute to GGO (directly or
indirectly) the assets (and/or equity interests related thereto) set forth in Exhibit E
hereto and have GGO assume directly or indirectly the associated liabilities (the “Identified
Assets”); provided, however, that to the extent the Company is prohibited by
Law from contributing one or more of the Identified Assets to GGO or the contribution thereof would
breach or give rise to a default under any Contract, agreement or instrument that would, in the
good faith judgment of the Company in consultation with the GGO Representative, impair in any
material respect the value of the relevant Identified Asset or give rise to additional liability
(other than liability that would not, in the aggregate, be material) on the part of GGO or the
Company or a Subsidiary of the Company, the Company shall (i) to the extent not prohibited by Law
or would give rise to such a default, take such action or cause to be taken such other actions in
order to place GGO, insofar as reasonably possible, in the same economic position as if such
Identified Asset had been transferred as contemplated hereby and so that, insofar as reasonably
possible, substantially all the benefits and burdens (including all obligations thereunder but
excluding any obligations that arise out of the transfer of the Identified Asset to the extent
included in Permitted Claims) relating to such Identified Asset, including possession, use, risk of
loss, potential for gain and control of such Identified Asset, are to inure from and after the
Closing to GGO (provided that as soon as a consent for the contribution of an Identified
Asset is obtained or the contractual impediment is removed or no longer applies, the applicable
Identified Asset shall be promptly contributed to GGO), or (ii) to the extent the actions
contemplated by clause (i) are not possible without resulting in a material and adverse effect on
the Company and its Subsidiaries (as reasonably determined by the Company in consultation with the
GGO Representative), contribute other assets, with the separate consent of each Purchaser (which
such Purchaser shall not unreasonably withhold, condition or delay), having an economically
equivalent value and related financial impact on the Company (in each case, as reasonably agreed by
each Purchaser and the Company in consultation with the GGO Representative) to the Identified Asset
not so contributed; provided, however, that this subsection (ii) shall not be
available to the Company in the case of any Essential Asset.
(b) Subject to Section 5.13(b), the GGO Common Share Amount of shares of GGO Common
Stock, representing all of the outstanding capital stock of GGO (other than shares of GGO Common
Stock to be issued (x) in the GGO Rights Offering, (y) in connection with the Backstop
Consideration and the backstop consideration issuable to the other Initial Investors pursuant to
their respective Investment Agreements, and (z) upon exercise of the GGO Warrants and the warrants
issued to the other Initial Investors pursuant to their respective Investment Agreements), shall be
distributed, on or prior to the Effective Date, to the shareholders of the
Company (pre-issuance of the Shares) on a pro rata basis and certain holders of Common UPREIT
Units (the “GGO Share Distribution”).
-5-
(c) It is agreed that neither the Company nor any of its Subsidiaries shall be required to pay
or cause payment of any fees or make any financial accommodations to obtain any third-party
consent, approval, waiver or other permission for the contribution contemplated by Section
2.1(a), or to seek any such consent, approval, waiver or other permission that is inapplicable
to the Company or any of its Debtor Subsidiaries pursuant to the Bankruptcy Code.
(d) The parties currently contemplate that the GGO Share Distribution will be structured as a
“tax free spin-off” under the Code. To the extent that the Company and each Purchaser jointly
determine that it is desirable for the GGO Share Distribution to be structured as a taxable
dividend, the parties will work together to structure the transaction to allow for such outcome.
(e) With respect to the Columbia Master Planned Community (the “CMPC”), it is the
intention of the parties that office assets currently producing any material amount of income at
the CMPC (including any associated right of access to parking spaces) will be retained by the
Company and the remaining non-income producing assets at the CMPC will be transferred to GGO
(including all rights to develop and/or redevelop (as appropriate) the remainder of the CMPC). On
or prior to the Effective Date, the Company and GGO shall enter into a mutually satisfactory
development and cooperation agreement with respect to the CMPC, which agreement shall provide,
among other things, that GGO shall grant mutually satisfactory easements, to the extent not already
granted, such that the office buildings retained by GGP (as provided above) continuously shall have
access to parking spaces appropriate for such office buildings.
SECTION 2.2 GGO Rights Offering.
(a) On the terms and subject to the conditions set forth herein, the Plan shall provide for
the following:
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(i) |
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That GGO shall offer 50,000,000 shares of GGO Common Stock (the
“GGO Rights Offering Shares”) pursuant to a rights offering (the
“GGO Rights Offering”) which shall be completed at the Company’s
election either (A) on or prior to the Effective Date or (B) promptly (but in
no event later than 90 days) following the Effective Date. Pursuant to the GGO
Rights Offering, each holder of shares of Common Stock entitled to subscribe to
the GGO Rights Offering (each, an “Eligible Holder”), as of the record
date approved by the Bankruptcy Court in connection with the Plan (the
“Record Date”), shall be offered a transferable subscription right
(each, a “Right”) to purchase up to its pro rata share (after giving
effect to the GGO Minimum Allocation Right and minimum allocation rights
granted to other investors in the Plan) of the GGO Rights Offering Shares at a
purchase price of $5.00 per share of GGO Common Stock (the “GGO Per Share
Purchase Price”). |
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|
(ii) |
|
That each Purchaser shall be entitled to receive a minimum
allocation in connection with the GGO Rights Offering equal to its GGO Pro Rata
share of 10,000,000 shares of GGO Common Stock at the GGO Per Share Purchase
Price (the “GGO Minimum Allocation Right”). |
|
|
(iii) |
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That if the subscription agent for the GGO Rights Offering
(the “Subscription Agent”) for any reason does not receive from a given
Eligible Holder both a timely and duly completed subscription form for the GGO
Rights Offering and timely payment of such Eligible Holder’s aggregate GGO Per
Share Purchase Price prior to the expiration time for the GGO Rights Offering
(the “Expiration Time”), such Eligible Holder shall be deemed to have
relinquished and waived its right to participate in the GGO Rights Offering. |
|
|
(iv) |
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The Expiration Time shall occur no later than ninety (90) days
after the Effective Date. |
(b) In order to facilitate the GGO Rights Offering, pursuant to this Agreement, and subject to
the terms, conditions and limitations set forth herein, the Plan will provide that GGO will sell to
each Purchaser in the GGO Rights Offering, and each Purchaser hereby agrees to subscribe and pay
for, a number of shares of GGO Common Stock (not to exceed the GGO Backstop Limit (as such term is
defined below)) equal to the product of (y) such Purchaser’s GGO Pro Rata Share multiplied by
(z)(i) the GGO Rights Offering Shares minus (ii) the number of shares of GGO Common Stock offered
pursuant to the GGO Rights Offering and duly subscribed for and paid for on or before the
Expiration Time (the difference between (i) and (ii) after applying the GGO Backstop Limit, the
“Unsubscribed Shares” and such Purchaser’s commitment to purchase such Unsubscribed Shares
being referred to as its “Backstop Commitment”); provided, however, that
the Backstop Commitment is conditioned upon GGO having filed, and the SEC declaring effective, a
shelf registration statement on Form S-1 or S-11, as applicable, prior to the date of the
completion of the GGO Rights Offering covering resales by each Purchaser of the GGO Shares and
shares issuable upon exercise of the GGO Warrants, containing a plan of distribution reasonably
satisfactory to each Purchaser, but subject to the provisions of Section 6.4 and the
applicable Non-Control Agreement, if any. For purposes of this Agreement, each Purchaser’s
“GGO Backstop Limit” means the number of shares of GGO Common Stock equal to (i) such
Purchaser’s GGO Pro Rata Share of the quotient obtained by dividing (x) $125,000,000 by (y) the GGO
Per Share Purchase Price minus (ii) the number of shares of GGO Common Stock subscribed, and paid
for, on or before the Expiration Time by such Purchaser pursuant to its GGO Minimum Allocation
Right. If the Brookfield Consortium Members and/or the Pershing Purchasers have any obligation to
subscribe and pay for shares of GGO Common Stock offered pursuant to the GGO Rights Offering (the
“Brookfield Backstop Commitment” and/or “Pershing Backstop Commitment”,
respectively ) in the Brookfield Agreement or Pershing Agreement, respectively, the Backstop
Commitment shall be applied pro rata with the Brookfield Backstop Commitment and Pershing Backstop
Commitment, such that the total number of shares of GGO Common Stock not subscribed for in the GGO
Rights Offering (the “Total Unsubscribed Shares”) shall be allocated in proportion to their
respective backstop commitments (subject in the case of each Purchaser to its GGO Backstop Limit
and in the case of the Brookfield Consortium Members or Pershing Purchasers to the applicable limits
in the Brookfield Agreement or Pershing Agreement, respectively).
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(c) The Subscription Agent shall be instructed to give each Purchaser as soon as reasonably
practicable after the Expiration Time, by electronic facsimile transmission or by electronic mail a
notice conforming to the requirements specified herein of either (i) the calculation of the number
of Unsubscribed Shares and a summary of the portion of the Total Unsubscribed Shares required to be
purchased by each Purchaser and, if applicable, each Brookfield Investor and each Pershing
Purchaser (a “Purchase Notice”), or (ii) in the absence of any Unsubscribed Shares, the
fact that there are no Unsubscribed Shares. If at the Expiration Time the Total Unsubscribed
Shares are in excess of the aggregate Backstop Commitment of each Purchaser, the Brookfield
Backstop Commitment and the Pershing Backstop Commitment, then each Purchaser shall also have the
right, but not the obligation, to purchase on the same terms as its Backstop Commitment such
Purchaser’s GGO Pro Rata Share of fifty percent (50%) the number of Total Unsubscribed Shares in
excess of the aggregate Backstop Commitments, the Brookfield Backstop Commitment and the Pershing
Backstop Commitment, exercisable within 30 days after receipt of the Purchase Notice.
(d) The Plan shall provide that unless this Agreement has been previously terminated, on the
Effective Date GGO shall issue to each Purchaser (or its designees in accordance with and subject
to the Designation Conditions) a number of shares of GGO Common Stock equal to the quotient
obtained by dividing (x) its GGO Pro Rata Share of $6,250,000 by (y) the GGO Per Share Purchase
Price (the “Backstop Consideration”) as compensation for the risk and efforts of its
Backstop Commitment.
(e) In the GGO Rights Offering, each Purchaser shall purchase at the GGO Per Share Purchase
Price, and GGO shall sell, such number of Unsubscribed Shares as are listed in the final Purchase
Notice provided to such Purchaser by the Company pursuant to Section 2.2(c) hereof, without
prejudice to the rights of such Purchaser or GGO to seek later an upward or downward adjustment if
the number of Unsubscribed Shares in such Purchase Notice is miscalculated.
(f) On the terms and subject to the conditions set forth herein, the Plan shall provide that
delivery of the Unsubscribed Shares shall be made promptly by GGO to the account of each Purchaser
(or to such other accounts as the applicable Purchaser may designate in accordance with and subject
to the Designation Conditions) against payment of the aggregate GGO Per Share Purchase Price for
the Unsubscribed Shares by wire transfer of immediately available funds to the account specified by
GGO to such Purchaser at least twenty-four hours in advance.
(g) All GGO Shares shall be delivered with any and all issue, stamp, transfer or similar taxes
or duties payable in connection with such delivery duly paid by GGO to the extent required under
the Confirmation Order or applicable Law.
(h) Each Purchaser, in its sole discretion, may designate that some or all of the GGO Shares
be issued in the name of, and delivered to, the other members of its Purchaser Group in accordance
with and subject to the Designation Conditions.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Purchaser, as set forth below, except (i) as set
forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (but not in
documents filed as exhibits thereto or documents incorporated by reference therein) filed with the
SEC on March 1, 2010 (other than in any “risk factor” disclosure or any other forward-looking
disclosures contained in such reports under the headings “Risk Factors” or “Cautionary Note” or any
similar sections) or (ii) as set forth in the disclosure schedule delivered by the Company to each
Purchaser on the date of this Agreement (the “Company Disclosure Letter”):
SECTION 3.1 Organization and Qualification. The Company and each of its direct and
indirect Significant Subsidiaries is duly organized and is validly existing as a corporation or
other form of entity, where applicable, in good standing under the Laws of their respective
jurisdictions of organization, with the requisite power and authority to own, operate or manage its
properties and conduct its business as currently conducted, subject, as applicable, to the
restrictions that result from any such entity’s status as a debtor-in-possession under Chapter 11,
except to the extent the failure of such Significant Subsidiary to be in good standing (to the
extent the concept of good standing is applicable in its jurisdiction of organization) would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The
Company and each of its Significant Subsidiaries has been duly qualified as a foreign corporation
or other form of entity for the transaction of business and, where applicable, is in good standing
under the Laws of each other jurisdiction in which it owns, manages, operates or leases properties
or conducts business so as to require such qualification, except to the extent the failure to be so
qualified or, where applicable, be in good standing would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.2 Corporate Power and Authority.
(a) Subject to the authorization of the Bankruptcy Court, which shall be contained in the
Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period set
forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, the Company has the
requisite power and authority to enter into, execute and deliver this Agreement and to perform its
obligations hereunder (except with respect to (i) the issuance of the Warrants and (ii) the
provisions of the Approval Order). The Company has taken all necessary corporate action required
for the due authorization, execution, delivery and performance by it of this Agreement.
(b) Subject to the entry of the Approval Order, the Company has the requisite power and
authority to (i) issue the Warrants (assuming the accuracy of the representations of each Purchaser
contained in Exhibit D) and (ii) perform its obligations pursuant to the provisions of the
Approval Order hereof. No approval by any securityholders of the Company or any Subsidiary of the
Company is required in connection with the issuance of the Warrants or the issuance of the shares
of Common Stock upon exercise of the Warrants.
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(c) The Company has received written confirmation from the NYSE that the shares of New Common
Stock or other Equity Securities issuable by the Company to each Purchaser and the other members of
the Purchaser Group in connection with each Purchaser’s exercise of its Subscription Rights
contemplated by Section 5.9(a) hereof shall not require stockholder approval and shall be
eligible for listing on the NYSE in the hands of such Purchaser or other members of the Purchaser
Group without any requirement for stockholder approval, in each case, during the five (5) year
period following the Closing Date.
SECTION 3.3 Execution and Delivery; Enforceability.
(a) This Agreement has been duly and validly executed and delivered by the Company, and
subject to the authorization of the Bankruptcy Court, which shall be contained in the Confirmation
Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period set forth in
Bankruptcy Rule 3020(e) following entry of the Confirmation Order, shall constitute the valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms,
subject to general principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a proceeding at Law or in
equity) (except with respect to (i) the issuance of the Warrants and (ii) the provisions of the
Approval Order).
(b) Subject to the entry of the Approval Order, the provisions of this Agreement relating to
(i) the issuance of the Warrants and (ii) the provisions of the Approval Order shall constitute the
valid and binding obligations of the Company, enforceable against the Company in accordance with
their terms.
SECTION 3.4 Authorized Capital Stock. As of the date of this Agreement, the
authorized capital stock of the Company consists of 875,000,000 shares of Common Stock and of
5,000,000 shares of preferred stock. The issued and outstanding capital stock of the Company and
the shares of Common Stock available for grant pursuant to the Company’s 1993 Stock Incentive Plan,
1998 Stock Incentive Plan and 2003 Stock Incentive Plan (collectively, the “Company Option
Plans”) or otherwise as of March 26, 2010 (the “Measurement Date”) is set forth on
Section 3.4 of the Company Disclosure Letter. From the Measurement Date to the date of
this Agreement, other than in connection with the issuance of shares of Common Stock pursuant to
the exercise of options outstanding as of the Measurement Date, there has been no change in the
number of outstanding shares of capital stock of the Company or the number of outstanding Equity
Securities (as defined below). Except as set forth on Section 3.4 of the Company
Disclosure Letter, on the Measurement Date, there was not outstanding, and there was not reserved
for issuance, any (i) share of capital stock or other voting securities of the Company or its
Significant Subsidiaries; (ii) security of the Company or its Subsidiaries convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of the Company or its
Significant Subsidiaries; (iii) option or other right to acquire from the Company or its
Subsidiaries, or obligation of the Company or its Subsidiaries to issue, any shares of capital
stock, voting securities or security convertible into or exercisable or exchangeable for shares of
capital stock or voting securities of the Company or its Significant Subsidiaries, as the case may
be; or (iv) equity equivalent interest in the ownership or earnings of the Company or its
Significant Subsidiaries or other similar right, in each case to which the Company or a Significant
Subsidiary is a party (the items in clauses (i) through (iv) collectively, “Equity
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Securities”). Other than as set forth on Section 3.4 of the Company
Disclosure Letter or as contemplated by this Agreement, or pursuant to Contracts entered into by
the Company after the date hereof and prior to the Closing that are otherwise not inconsistent with
any Purchaser’s rights hereunder and with respect to the transactions contemplated hereby, and do
not confer on any other Person rights that are superior to those received by any Purchaser
hereunder or pursuant to the transactions contemplated hereby other than rights and terms that are
customarily granted to holders of any such Equity Securities so issued and not customarily granted
in transactions such as the transactions contemplated hereby, there is no outstanding obligation of
the Company or its Subsidiaries to repurchase, redeem or otherwise acquire any Equity Security.
Other than as set forth on Section 3.4 of the Company Disclosure Letter or as contemplated
by this Agreement, or pursuant to Contracts entered into by the Company in connection with the
issuance of Equity Securities after the date hereof and prior to the Closing that are otherwise not
inconsistent with any Purchaser’s rights hereunder and with respect to the transactions
contemplated hereby, and do not confer on any other Person rights that are superior to those
received by any Purchaser hereunder or pursuant to the transactions contemplated hereby other than
rights and terms that are customarily granted to holders of any such Equity Securities so issued
and not customarily granted in transactions such as the transactions contemplated hereby, there is
no stockholder agreement, voting trust or other agreement or understanding to which the Company is
a party or by which the Company is bound relating to the voting, purchase, transfer or registration
of any shares of capital stock of the Company or preemptive rights with respect thereto.
Section 3.4 of the Company Disclosure Letter sets forth a complete and accurate list of
the outstanding Equity Securities of the Company as of the Measurement Date, including the
applicable conversion rates and exercise prices (or, in the case of options to acquire Common
Stock, the weighted average exercise price) relating to the conversion or exercise of such Equity
Securities into or for Common Stock.
SECTION 3.5 Issuance.
(a) Subject to the authorization of the Bankruptcy Court, which shall be contained in entry of
the Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day period
set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, the issuance of the
Shares and the New Warrants has been duly and validly authorized. Subject to the entry of the
Approval Order and assuming the accuracy of the representations of such Purchaser contained in
Exhibit D, the issuance of the Warrants is duly and validly authorized. When the Shares
are issued and delivered in accordance with the terms of this Agreement against payment therefor,
the Shares shall be duly and validly issued, fully paid and non-assessable and free and clear of
all taxes, liens, pre-emptive rights, rights of first refusal and subscription rights, other than
rights and restrictions under this Agreement, the applicable Non-Control Agreement, if any, and
applicable state and federal securities Laws. When the Warrants and the New Warrants are issued
and delivered in accordance with the terms of this Agreement, the Warrants and New Warrants shall
be duly and validly issued and free and clear of all taxes, liens, pre-emptive rights, rights of
first refusal and subscription rights, other than rights and restrictions under this Agreement, the
terms of the Warrants and New Warrants and under applicable state and federal securities Laws.
When the shares of Common Stock issuable upon the exercise of the Warrants and the shares of New
Common Stock issuable upon the exercise of the New Warrants are issued and delivered against
payment therefor, the shares of Common Stock and New Common Stock, as applicable, shall be duly and
validly issued, fully paid and non-assessable and free and clear of all taxes, liens, pre-emptive rights, rights of first refusal
and subscription rights, other than rights and restrictions under this Agreement, the applicable
Non-Control Agreement, if any, and applicable state and federal securities Laws.
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(b) Subject to the authorization of the Bankruptcy Court, which shall be contained in the
entry of the Confirmation Order, and the expiration or waiver by the Bankruptcy Court of the 14-day
period set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, when the GGO
Shares and the GGO Warrants are issued, the GGO Shares and GGO Warrants shall be duly and validly
authorized, duly and validly issued, fully paid and non-assessable and free and clear of all taxes,
liens, pre-emptive rights, rights of first refusal and subscription rights, other than rights and
restrictions under this Agreement and under applicable state and federal securities Laws. When the
shares of GGO Common Stock issuable upon the exercise of the GGO Warrants are issued and delivered
against payment therefor, the shares of GGO Common Stock shall be duly and validly issued, fully
paid and non-assessable and free and clear of all taxes, liens, pre-emptive rights, rights of first
refusal and subscription rights, other than rights and restrictions under this Agreement and under
applicable state and federal securities Laws.
SECTION 3.6 No Conflict.
(a) Subject to (i) the receipt of the consents set forth on Section 3.6 of the Company
Disclosure Letter, (ii) such authorization as is required by the Bankruptcy Court or the Bankruptcy
Code, which shall be contained in the entry of the Confirmation Order, and the expiration, or
waiver by the Bankruptcy Court, of the 14-day period set forth in Bankruptcy Rule 3020(e) following
entry of the Confirmation Order, (iii) any provisions of the Bankruptcy Code that override,
eliminate or abrogate such consents or as may be ordered by the Bankruptcy Court and (iv) the
ability to employ the alternatives contemplated by Section 2.1 of the Agreement, the
execution and delivery (or, with respect to the Plan, the filing) by the Company of this Agreement
and the Plan, the performance by the Company of its respective obligations under this Agreement and
compliance by the Company with all of the provisions hereof and thereof and the consummation of the
transactions contemplated herein and therein, (x) shall not conflict with, or result in a breach or
violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any lien under, or give rise to any termination right under,
any Contract to which the Company or any of the Company’s Subsidiaries is a party or by which any
of their material assets are subject or encumbered, (y) shall not result in any violation or breach
of any terms, conditions or provisions of the certificate of incorporation or bylaws of the
Company, or the comparable organizational documents of the Company’s Subsidiaries, and (z) shall
not conflict with or result in any violation or breach of, or any termination or impairment of any
rights under, any statute or any license, authorization, injunction, judgment, order, decree, rule
or regulation of any court or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries or any of their respective properties or assets, except, in the case of
each of clauses (x) and (z) above, for any such conflict, breach, acceleration, lien, termination,
impairment, failure to comply, default or violation that would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect (except with respect to (i) the
issuance of the Warrants and (ii) the provisions of the Approval Order).
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(b) Subject to the entry of the Approval Order, (i) the issuance of the Warrants (assuming the
accuracy of the representations of each Purchaser contained in Exhibit D) and (ii) the
performance by the Company of its respective obligations under the Approval Order and compliance by
the Company with all of the provisions thereof (x) shall not conflict with, or result in a breach
or violation of, any of the terms or provisions of, or constitute a default under, or result in the
acceleration of, or the creation of any lien under, or give rise to any termination right under,
any Contract, (y) shall not result in any violation or breach of any terms, conditions or
provisions of the certificate of incorporation or bylaws of the Company, or the comparable
organizational documents of the Company’s Subsidiaries, and (z) shall not conflict with or result
in any violation or breach of, or any termination or impairment of any rights under, any statute or
any license, authorization, injunction, judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its Subsidiaries or any
of their respective properties or assets, except, in the case of each of clauses (x) and (z) above,
for any such conflict, breach, acceleration, lien, termination, impairment, failure to comply,
default or violation that would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.
SECTION 3.7 Consents and Approvals.
(a) No consent, approval, authorization, order, registration or qualification of or with any
Governmental Entity having jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties is required for (i) (1) the issuance and delivery of the New Warrants, (2)
the issuance, sale and delivery of Shares, (3) the issuance and delivery of the Warrants, (4) the
issuance, sale and delivery of the GGO Shares, (5) the issuance and delivery of the GGO Warrants,
(6) the issuance of New Common Stock upon exercise of the New Warrants, (7) the issuance of GGO
Common Stock upon exercise of the GGO Warrants and (8) the issuance of Common Stock upon exercise
of the Warrants and (ii) the execution and delivery by the Company of this Agreement or the Plan
and performance of and compliance by the Company with all of the provisions hereof and thereof and
the consummation of the transactions contemplated herein and therein, except (A) such authorization
as is required by the Bankruptcy Court or the Bankruptcy Code, which shall be contained in the
entry of the relevant Court Order, and the expiration, or waiver by the Bankruptcy Court, of the
14-day period set forth in Bankruptcy Rule 3020(e) following entry of the Confirmation Order, as
applicable (except with respect to (i) the issuance of the Warrants and (ii) the provisions of the
Approval Order), (B) filings required under, and compliance with (other than shareholder approval
requirements in respect of the issuance of the Warrants), the applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder, the Securities Act and the rules
and regulations promulgated thereunder, and the rules of the New York Stock Exchange, and (C) such
other consents, approvals, authorizations, orders, registrations or qualifications that, if not
obtained, made or given, would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(b) No consent, approval, authorization, order, registration or qualification of or with any
Governmental Entity having jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties is required for (1) the issuance and delivery of the Warrants and (2) the
performance of and compliance by the Company with all of the provisions of the Approval Order
except (A) the entry of the Approval Order, (B) filings required under, and compliance
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with (other than shareholder approval requirements in respect of the issuance of the
Warrants), the applicable requirements of the Exchange Act and the rules and regulations
promulgated thereunder, the Securities Act and the rules and regulations promulgated thereunder,
and the rules of the New York Stock Exchange, and (C) such other consents, approvals,
authorizations, orders, registrations or qualifications that, if not obtained, made or given, would
not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.8 Company Reports.
(a) The Company has filed with or otherwise furnished to the Securities and Exchange
Commission (the “SEC”) all material forms, reports, schedules, statements and other
documents required to be filed or furnished by it under the United States Securities Act of 1933,
as amended (the “Securities Act”) or the Exchange Act since December 31, 2007 (such
documents, as supplemented or amended since the time of filing, and together with all information
incorporated by reference therein, the “Company SEC Reports”). No Subsidiary of the
Company is required to file with the SEC any such forms, reports, schedules, statements or other
documents pursuant to Section 13 or 15 of the Exchange Act. As of their respective effective dates
(in the case of Company SEC Reports that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective filing dates (in the case of all
other Company SEC Reports), except as and to the extent modified, amended, restated, corrected,
updated or superseded by any subsequent Company SEC Report filed and publicly available prior to
the date of this Agreement, the Company SEC Reports (i) complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations
of the SEC promulgated thereunder applicable to such Company SEC Reports, and (ii) did not contain
any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(b) The Company maintains a system of “internal controls over financial reporting” (as defined
in Rules 13a-15(f) and 15a-15(f) under the Exchange Act) that provides reasonable assurance
regarding the reliability of the Company’s financial reporting and the preparation of the Company’s
financial statements for external purposes in accordance with GAAP and that includes policies and
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company, and (iii)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the Company’s assets that could have a material effect on the Company’s
financial statements.
(c) The Company maintains a system of “disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that is reasonably designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC, and that information relating to the Company is accumulated and
communicated to the Company’s management as appropriate to
allow timely decisions regarding required disclosure and to make the certifications of the
Chief Executive Officer and Chief Financial Officer of the Company required under the Exchange Act
with respect to such reports.
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(d) Since December 31, 2008, the Company has not received any oral or written notification of
a “material weakness” in the Company’s internal controls over financial reporting. The term
“material weakness” shall have the meaning assigned to it in the Statements of Auditing Standards
112 and 115, as in effect on the date hereof.
(e) Except as and to the extent modified, amended, restated, corrected, updated or superseded
by any subsequent Company SEC Report filed and publicly available prior to the date of this
Agreement, the audited consolidated financial statements and the unaudited consolidated interim
financial statements (including any related notes) included in the Company SEC Reports fairly
present in all material respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations
and their consolidated cash flows for the periods set forth therein (subject, in the case of
financial statements for quarterly periods, to normal year-end adjustments) and were prepared in
conformity with GAAP consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto).
SECTION 3.9 No Undisclosed Liabilities. None of the Company or its Subsidiaries has
any material liabilities (whether absolute, accrued, contingent or otherwise) required to be
reflected or reserved against on a consolidated balance sheet of the Company prepared in accordance
with GAAP, except for liabilities (i) reflected or reserved against or provided for in the
Company’s consolidated balance sheet as of December 31, 2009 or disclosed in the notes thereto,
included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, (ii)
incurred in the ordinary course of business consistent with past practice since the date of such
balance sheet, (iii) for fees and expenses incurred in connection with the Bankruptcy Cases, which
have been estimated and included in the Admin/Priority Claims identified in the Plan Summary Term
Sheet; provided, however, that such amount is an estimate and actual results may be
higher or lower, (iv) incurred in the ordinary course of performing this Agreement and certain
other asset sales, transfers and other actions permitted under this Agreement and (v) other
liabilities at Closing as contemplated by the Plan Summary Term Sheet.
SECTION 3.10 No Material Adverse Effect. Since December 31, 2009, there has not
occurred any event, fact or circumstance that has had or would reasonably be expected to have,
individually, or in the aggregate, a Material Adverse Effect.
SECTION 3.11 No Violation or Default: Licenses and Permits. The Company and its
Subsidiaries (a) are in compliance with all Laws, statutes, ordinances, rules, regulations, orders,
judgments and decrees of any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their respective properties, and (b) has not received
written notice of any alleged material violation of any of the foregoing except, in the case of
each of clauses (a) and (b) above, for any such failure to comply, default or violation that would
not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect or
as may be the result of the Company’s or any of its Subsidiaries’ Chapter 11 filing or status as a
debtor-in-possession under Chapter 11. Subject to the restrictions that result from the
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Company’s or any of its Subsidiaries’ status as a debtor-in-possession under Chapter 11
(including that in certain instances the Company’s or such Subsidiary’s conduct of its business
requires Bankruptcy Court approval), each of the Company and its Subsidiaries holds all material
licenses, franchises, permits, certificates of occupancy, consents, registrations, certificates and
other governmental and regulatory permits, authorizations and approvals required for the operation
of the business as currently conducted by it and for the ownership, lease or operation of its
material assets except, in each case, where the failure to possess or make the same would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.12 Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries which, individually, if determined
adversely to the Company or any of its Subsidiaries, would reasonably be expected to have a
Material Adverse Effect.
SECTION 3.13 Investment Company Act. The Company is not, and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof, shall not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder. As of the Effective Date, GGO, after giving effect to the
offering and sale of the GGO Shares and the application of the proceeds thereof, shall not be
required to register as an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the SEC thereunder.
SECTION 3.14 Compliance With Environmental Laws. Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each of the Company
and its Subsidiaries are and have been in compliance with and each of the Company Properties are
and have been maintained in compliance with, any and all applicable federal, state, local and
foreign Laws relating to the protection of the environment or natural resources, human health and
safety as such relates to the environment, or the presence, handling, or release of Hazardous
Materials (collectively, “Environmental Laws”), which compliance includes obtaining,
maintaining and complying with all permits, licenses or other approvals required under
Environmental Laws to conduct operations as presently conducted, and no action is pending or, to
the Knowledge of the Company, threatened that seeks to repeal, modify, amend, revoke, limit, deny
renewal of, or otherwise appeal or challenge any such permits, licenses or other approvals, (ii)
none of the Company or its Subsidiaries have received any written notice of, and none of the
Company Properties have been the subject of any written notice received by the Company or any of
its Subsidiaries of, any actual or potential liability or violation for the presence, exposure to,
investigation, remediation, arrangement for disposal, or release of any material classified,
characterized or regulated as hazardous, toxic, pollutants, or contaminants under Environmental
Laws, including petroleum products or byproducts, radioactive materials, asbestos-containing
materials, radon, lead-containing materials, polychlorinated biphenyls, mold, and hazardous
building materials (collectively, “Hazardous Materials”), (iii) none of the Company and its
Subsidiaries are a party to or the subject of any pending, or, to the Knowledge of the Company,
threatened, legal proceeding alleging any liability, responsibility, or violation under any
Environmental Laws with respect to their past or present facilities or their respective
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operations, (iv) none of the Company and its Subsidiaries have released Hazardous Materials on
any real property in a manner that would reasonably be expected to result in an environmental claim
or liability against the Company or any of its Subsidiaries or Affiliates, (v) none of the Company
Properties is the subject of any pending, or, to the Knowledge of the Company, threatened, legal
proceeding alleging any liability, responsibility, or violation under any Environmental Laws, and
(vi) to the Knowledge of the Company, there has been no release of Hazardous Materials on, from,
under, or at any of the Company Properties that would reasonably be expected to result in an
environmental claim or liability against the Company or any of its Subsidiaries or Affiliates.
SECTION 3.15 Company Benefit Plans.
(a) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
each Company Benefit Plan is in compliance in design and operation in all material respects with
all applicable provisions of ERISA and the U.S. Internal Revenue Code of 1986, as amended (the
“Code”) and each Company Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the Internal Revenue Service with
respect to its qualified status under Section 401(a) of the Code and its related trust’s exempt
status under Section 501(a) of the Code and the Company is not aware of any circumstances likely to
result in the loss of the qualification of any such plan under Section 401(a) of the Code.
(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
with respect to each Company Benefit Plan that is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code: (A) no Company Benefit Plan has failed to satisfy the minimum
funding standard (within the meaning of Sections 412 and 430 of the Code or Section 302 of ERISA)
applicable to such Company Benefit Plan, whether or not waived and no application for a waiver of
the minimum funding standard with respect to any Company Benefit Plan has been submitted; (B) no
reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice
requirement has not been waived has occurred (other than in connection with the Bankruptcy Cases);
(C) no liability (other than for premiums to the Pension Benefit Guaranty Corporation (the
“PBGC”)) under Title IV of ERISA has been or is expected to be incurred by the Company or
any entity that is required to be aggregated with the Company pursuant to Section 414 of the Code
(an “ERISA Affiliate”); (D) the PBGC has not instituted proceedings to terminate any such
plan or made any inquiry which would reasonably be expected to lead to termination of any such
plan, and, no condition exists that presents a risk that such proceedings will be instituted or
which would constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such plan; and (E) no Company Benefit Plan is, or is
expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4)
of the Code).
(c) Except as would not, individually or in the aggregate, have a Material Adverse Effect,
with respect to each Company Benefit Plan maintained primarily for the benefit of current or former
employees, officers or directors employed, or otherwise engaged, outside the United States (each a
“Foreign Plan”), excluding any Foreign Plans that are statutorily required, government
sponsored or not otherwise sponsored, maintained or controlled by the Company or any of its
Significant Subsidiaries (“Excluded Non-US Plans”): (A) (1) all employer and
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employee contributions required by Law or by the terms of the Foreign Plan have been made, and
all liabilities of the Company and its Significant Subsidiaries have been satisfied, or, in each
case accrued, by the Company and its Significant Subsidiaries in accordance with generally accepted
accounting principles, and (2) the Company and its Significant Subsidiaries are in compliance with
all requirements of applicable Law and the terms of such Foreign Plan; (B) as of the Effective
Date, the fair market value of the assets of each funded Foreign Plan, or the book reserve
established for each Foreign Plan, together with any accrued contributions, is sufficient to
procure or provide for the accrued benefit obligations with respect to all current and former
participants in such Foreign Plan determined on an ongoing basis (rather than on a plan termination
basis) according to the actuarial assumptions and valuations used to account for such obligations
as of the Effective Date in accordance with applicable generally accepted accounting principles;
and (C) the Foreign Plan has been registered as required and has been maintained in good standing
with applicable regulatory authorities.
SECTION 3.16 Labor and Employment Matters. (i) Neither the Company nor any of its
Significant Subsidiaries is a party to or bound by any collective bargaining agreement or any labor
union contract, nor are any employees of the Company or any of its Significant Subsidiaries
represented by a works council or a labor organization (other than any industry-wide or statutorily
mandated agreement in non-U.S. jurisdictions); (ii) to the Knowledge of the Company, as of the date
hereof, there are no activities or proceedings by any labor union or labor organization to organize
any employees of the Company or any of its Significant Subsidiaries or to compel the Company or any
of its Significant Subsidiaries to bargain with any labor union or labor organization; and (iii),
except as would not, individually or in the aggregate, have a Material Adverse Effect, there is no
pending or, to the Knowledge of the Company, threatened material labor strike, lock-out, walkout,
work stoppage, slowdown, demonstration, leafleting, picketing, boycott, work-to-rule campaign,
sit-in, sick-out, or similar form of organized labor disruption.
SECTION 3.17 Insurance. The Company maintains for itself and its Subsidiaries
insurance policies in those amounts and covering those risks, as in its judgment, are reasonable
for the business and assets of the Company and its Subsidiaries.
SECTION 3.18 No Unlawful Payments. No action is pending or, to the Knowledge of the
Company, is threatened against the Company or any of its Subsidiaries or Affiliates, or any of
their respective directors, officers, or employees resulting from any (a) use of corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity, (b) direct or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (c) violations of any provision of the Foreign Corrupt Practices Act
of 1977 or any other applicable local anti-bribery or anti-corruption Laws in any relevant
jurisdictions or (d) other unlawful payment, except in any such case, as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.19 No Broker’s Fees. Other than pursuant to agreements (including
amendments thereto) by and between the Company and each of UBS Securities LLC and Xxxxxx Buckfire &
Co., LLC, or otherwise disclosed to each Purchaser prior to the date hereof and which fees and
expenses would be included in the definition of “Permitted Claims”, none of the Company or any of
its Subsidiaries is a party to any contract, agreement or understanding with
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any person (other than this Agreement) that would give rise to a valid claim against the
Company or any of its Subsidiaries for an investment banking fee, finder’s fee or like payment in
respect of the sale of the Shares contemplated by this Agreement. None of the Company or any of
its Subsidiaries is a party to any contract, agreement or understanding with any Person that would
give rise to a valid claim against any Purchaser for a brokerage commission, finder’s fee,
investment banking fee or like payment in connection with the transactions contemplated by this
Agreement.
SECTION 3.20 Real and Personal Property.
(a) Section 3.20(a) of the Company Disclosure Letter sets forth a true, correct and
complete list in all material respects of each material real property asset owned or leased (as
lessee), directly or indirectly, in whole or in part, by the Company and/or any of its Subsidiaries
(other than Identified Assets) (each such property that is not a Non-Controlling Property and has a
fair market value (in the reasonable determination of the Company) in excess of $10,000,000 is
individually referred to herein as “Company Property” and collectively referred to herein
as the “Company Properties”). All Company Properties, Non-Controlling Properties and the
Identified Assets are reflected in accordance with the applicable rules and regulations of the SEC
in the Annual Report in Form 10-K as of, and for the year ended, December 31, 2009 (the “Most
Recent Statement”).
(b) Except (i) for such breach of this Section 3.20(b) as may be caused fully or
substantially by the third party member or partner in any Joint Venture, without the Knowledge or
consent of the Company or any of its Subsidiaries or (ii) as would not individually or in the
aggregate be reasonably expected to have a Material Adverse Effect, the Company or one of its
Subsidiaries owns good and valid fee simple title or valid and enforceable leasehold interests
(except with respect to the Company’s right to reject any such ground lease as part of a Bankruptcy
plan of reorganization for the remaining Debtor entities and subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at Law or in equity)), as applicable, to each of the Company Properties, in
each case, free and clear of liens, mortgages or deeds of trust, claims against title, charges that
are liens or other encumbrances on title, rights of way, restrictive covenants, declarations or
reservations of an interest in title (collectively, “Encumbrances”), except for the
following (collectively, the “Permitted Title Exceptions”): (i) Encumbrances relating to
the DIP Loan and to debt obligations reflected in the Company’s financial statements and the notes
thereto (including with respect to debt obligations which are not consolidated) or otherwise
disclosed to each Purchaser in Section 3.20(g)(i) of the Company Disclosure Letter, (ii)
Encumbrances that result from any statutory or other liens for Taxes or assessments that are not
yet due or delinquent or the validity of which is being contested in good faith by appropriate
proceedings and for which a sufficient and appropriate reserve has been set aside for the full
payment thereof, (iii) any contracts, or other occupancy agreements to third parties for the
occupation or use of portions of the Company Properties by such third parties in the ordinary
course of the business of the Company or its Subsidiaries, (iv) Encumbrances imposed or promulgated
by Law or any Governmental Entity, including zoning, entitlement and other land use and
environmental regulations, (v) Encumbrances disclosed on existing title policies and
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current title insurance commitments or surveys made available to each Purchaser, (vi)
Encumbrances on the landlord’s fee interest at any Company Property where the Company or its
Subsidiary is the tenant under any ground lease, provided that, except as disclosed to each
Purchaser in Section 3.20(b)(ii) of the Company Disclosure Letter, neither the Company nor
any of its Subsidiaries have received a notice indicating the intention of the landlord under such
ground lease, or of any other Person, to (1) exercise a right to terminate such ground lease, evict
the lessee or otherwise collect the sub-rents thereunder, or (2) take any other action that would
be reasonably likely to result in a termination of such ground lease, (vii) any cashiers’,
landlords’, workers’, mechanics’, carriers’, workmen’s, repairmen’s and materialmen’s liens and
other similar liens (1) incurred in the ordinary course of business which (A) are being challenged
in good faith by appropriate proceedings and for which a sufficient and appropriate reserve has
been set aside for the full payment thereof or (B) have been otherwise fully bonded and discharged
of record or for which a sufficient and appropriate reserve has been set aside for the full payment
thereof or (2) disclosed on Section 3.20(b)(i) of the Company Disclosure Letter
and (viii) any other easements, rights-of-way, restrictions (including zoning restrictions),
covenants, encroachments, protrusions and other similar charges or encumbrances, and title
limitations or title defects, if any, that (I) are customary for office, industrial, master planned
communities and retail properties or (II) individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect. Other than as set forth on Section 3.20(b)(ii)
of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries has received a
written notice of a material default, beyond any applicable grace and cure periods, of or under any
Permitted Title Exceptions, except (w) as may have been caused fully or substantially by the third
party member or partner in any Joint Venture, without the Knowledge or consent of the Company or
any of its Subsidiaries (x) as a result of the filing of the Bankruptcy Cases, (y) where the
Permitted Title Exceptions are in and of themselves evidence of default (such as mechanics’ liens
and recorded notices of default) or (z) as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect; provided, however, that
where the Company has otherwise represented and warranted to each Purchaser hereunder (including as
set forth on the Company Disclosure Letter pursuant to such representations and warranties) with
respect to the Company’s Knowledge of, the Company’s receipt of notice of or the existence of a
default in connection with a particular category of Permitted Title Exceptions, such categories of
Permitted Title Exceptions shall not be included in the representation set forth in this sentence
(by way of illustration, but not exclusion, the representations set forth in Section
3.20(f) with respect to defaults under Material Leases shall be deemed to address the Company’s
representations and warranties with respect to the entire category of Permitted Title Exceptions
detailed in clause (iii) above).
(c) To the extent available, the Company and its Subsidiaries have made commercially
reasonable efforts to make available or will use commercially reasonable efforts to make available
upon request to each Purchaser those policies of title insurance that the Company or its
Subsidiaries have obtained in the last six months.
(d) With respect to each Company Ground Lease Property, except as set forth on Section
3.20(d) of the Company Disclosure Letter and except as may have been caused by, or disclosed in
the filing of the Bankruptcy Cases, as of the date hereof, to the Company’s Knowledge, neither the
Company nor any of its Subsidiaries has received notice of material defaults (including, without
limitation, payment defaults, but limited to those circumstances
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where such default may grant the landlord under such ground lease the right to terminate such
ground lease, evict the lessee or otherwise collect the sub-rents thereunder) at such Company
Ground Lease Property beyond any applicable grace and cure periods, except (x) as would not,
individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, (y) as
may be caused fully or substantially by the third party member or partner in any Joint Venture,
without the Knowledge or consent of the Company or any of its Subsidiaries and (z) with respect to
any Company Ground Lease Property which is leased by a Subsidiary of the Company which has
consummated a plan of reorganization in the Bankruptcy Cases, all such material defaults at such
Company Ground Lease Property which existed prior to the effective date of such Person’s plan of
reorganization have been or will be cured in accordance with such plan. As used herein the term
“Company Ground Lease Property” shall mean any Company Property having a fair market value
(in the reasonable determination of the Company) in excess of $25,000,000 which is leased by a
Subsidiary of the Company as tenant pursuant to a ground lease. With respect to the defaults
referenced in clause (z) above, the Bankruptcy Court approved the Debtors’ assumption of the
applicable ground leases and the fixed cure amounts for such defaults which predated assumption;
provided, however, nothing contained herein precludes any Person from raising
issues in the future with respect to defaults that may have predated such assumption.
(e) Except as set forth on Section 3.20(e) of the Company Disclosure Letter, neither
the Company nor any of its Subsidiaries is a party to any agreement relating to the property
management (but not including any leasing, development, construction or brokerage agreements) of
any of the Company Properties by a party other than Company or any wholly owned Company
Subsidiaries, except (i) management agreements that may be terminated without cause or payment of a
termination fee upon no more than 60 days notice or (ii) as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(f) Except as set forth on Section 3.20(f) of the Company Disclosure Letter, to the
Company’s Knowledge, as of February 15, 2010, (i) each Material Lease is in full force and effect,
(ii) no tenant is in arrears in the payment of rent, additional rent or any other material charges
due under any Material Lease, and no tenant is materially in default in the performance of any
other obligations under any Material Lease, (iii) no bankruptcy or insolvency proceeding has been
commenced (and is continuing) by or against any tenant under any Material Lease, and (iv) neither
the Company nor any of its Subsidiaries has received a written notice from a current tenant under
any Material Lease exercising a right to terminate or otherwise cancel its Material Lease (y) as a
result of or in connection with the termination or cancellation of any other lease, sublease,
license or occupancy agreement for space at any Company Property (each, a “Company Property
Lease”), or (z) as a result of or in connection with any other tenant that occupies, or had
previously occupied, another Company Property Lease, allowing, or having had allowed, all or any
portion of the premises leased pursuant to such other Company Property Lease to “go dark” or
otherwise be abandoned or vacated; except, (A) in the case of each of clauses (i), (ii) (iii) and
(iv) above, as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (B) as a result of the filing of the Bankruptcy Cases or in connection
with any Bankruptcy Court approved process and (C) as may have been caused fully or substantially
by the third party member or partner in any Joint Venture, without the Knowledge or consent of the
Company or its Subsidiaries. “Material Lease” means for any Company Property any lease in
which the Company or its Subsidiaries is the landlord, and all amendments, modifications,
supplements, renewals, exhibits, schedules, extensions and
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guarantees related thereto, (1) to an “anchor tenant” occupying at least 80,000 square feet
with respect to such Company Property or (2) that is one of the five (5) largest leases, in terms
of gross annual minimum rent, with respect to a Company Property that has an annual net operating
income, as determined in accordance with GAAP (provided, however, that for purposes
of such calculation, the following were reflected as expenses: (a) ground rent payments to a third
party and (b) an assumed management fee equal to 3% of base minimum and percentage rent) with
respect to the trailing twelve (12) calendar month period, equal to at least $7,500,000.00. For
purposes of Section 7.1(c), (y) the representations and warranties made in Section
3.20(f)(i), (iii) and (iv), disregarding all qualifications and exceptions
contained therein relating to “materiality” or “Material Adverse Effect”, shall be shall be true
and correct at and as of the Closing Date as if made at and as of the Closing Date, except for such
failures to be true and correct that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect and (z) the representation and warranties contained in
Section 3.20(f)(ii), disregarding all qualifications and exceptions contained therein
relating to “materiality” or “Material Adverse Effect”, shall be true and correct (A) at and as of
the last day of the calendar month that is two (2) calendar months prior to the calendar month in
which the Closing Date occurs as if made at and as of such date, if the Closing Date occurs on or
prior to the fifteenth (15th) day of a calendar month, or (B) at and as of the fifteenth (15th) day
of the calendar month that is one (1) calendar month prior to the calendar month in which the
Closing Date occurs as if made at and as of such date, if the Closing Date occurs on or after the
sixteenth (16th) day of a calendar month, except for such failures to be true and correct that,
individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
(g) With respect to each Company Property:
|
(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 in Section 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 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 |
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|
(iii) |
|
For purposes of Section 7.1(c) the representations and
warranties made in Section 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. |
(h) To the Knowledge of the Company, (i) except as set forth on Section 3.20(h) of the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries has received a written
notice exercising an option, “buy-sell” right or other similar right to purchase a Company Property
or any material portion thereof which has not previously closed, except as would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect with respect to such
Company Property and (ii) no Company Property is subject to a purchase and sale agreement or any
similar legally binding agreement to purchase such Company Property or any material portion thereof
(other than (x) with respect to condominium purchase and sale agreements and purchase and sale and
early occupancy agreements or similar agreements for the sale of condominium units at the Natick
Nouvelle, (y) with respect to builder lot purchase agreements and other similar agreements for the
sale of vacant lots of land to builders at Bridgeland and (z) as set forth in (i) above) which has
not previously closed.
(i) The Company has conducted due inquiry with respect to the representations and warranties
made in Section 3.20(d), Section 3.20(f) and Section 3.20(g)(h).
SECTION 3.21 Tax Matters. Except as disclosed on Section 3.21(a) of the
Company Disclosure Letter:
(a) Except in cases where the failure of any of the following to be true would not result in a
Material Adverse Effect: (i) the Company and each of its Significant Subsidiaries have filed all
Tax Returns required to be filed by applicable Law prior to the date hereof; (ii) all such Tax
Returns were true, complete and correct in all respects and filed on a timely basis (taking into
account any applicable extensions); (iii) the Company and each of its Significant Subsidiaries have
paid all amounts of Taxes that are due, claimed or assessed by any taxing authority to be due for
the periods covered by such Tax Returns, other than any Taxes for which adequate reserves
(“Adequate Reserves”) have been established in accordance with GAAP or a claim has been
filed in the Bankruptcy Cases; and (iv) all adjustments of federal U.S. Tax liability of the
Company and its Significant Subsidiaries resulting from completed audits or examinations have been
reported to appropriate state and local taxing authorities and all resulting Taxes payable to state
and local taxing authorities have been paid. “Taxes” means any U.S.
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federal, state, local, or foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes
under Section 59A of the Code), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of
any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.
“Tax Return” means any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof, including, where permitted or required, combined or consolidated returns for
any group of entities that include the Company or any of its Significant Subsidiaries.
(b) The Company and each of its REIT Subsidiaries (x) for all taxable years commencing with
the taxable year ended December 31, 2005 through December 31, 2009, has been subject to taxation as
a real estate investment trust within the meaning of Section 856 of the Code (a “REIT”) and
has satisfied all requirements to qualify as a REIT for such years; (y) has operated since January
1, 2010 to the date hereof in a manner consistent with the requirements for qualification and
taxation as a REIT; and (z) intends to continue to operate in such a manner as to qualify as a REIT
for the current taxable year. None of the transactions contemplated by this Agreement will prevent
the Company or any of its REIT Subsidiaries from so qualifying. No Subsidiary of the Company other
than a REIT Subsidiary is a corporation for U.S. federal income tax purposes, other than a
corporation that qualifies as a “taxable REIT subsidiary” within the meaning of Section 856(l) of
the Code. For the purposes of this Agreement, “REIT Subsidiary” means each of GGP Ivanhoe,
Inc., GGP Holding, Inc., GGP Holding II, Inc., Xxxxxxxx Xxxx, Limited, GGP-Natick Trust and
GGP/Homart, Inc.
(c) Each Company Subsidiary other than its REIT Subsidiaries that is a partnership, joint
venture, or limited liability company and which has not elected to be a “taxable REIT subsidiary”
within the meaning of Section 856(l) of the Code has been since its formation treated for U.S.
federal income tax purposes as a partnership or disregarded entity, as the case may be, and not as
a corporation or an association taxable as a corporation, except where failure to do so would not
have a Material Adverse Effect.
(d) Except where the failure to be true would not have a Material Adverse Effect, the Company
and each of its Significant Subsidiaries have (i) complied in all respects with all applicable
Laws, rules, and regulations relating to the payment and withholding of Taxes (including
withholding and reporting requirements under sections 1441 through 1464, 3401 through 3406, 6041
and 6049 of the Code and similar provisions under any other Laws) and (ii) within the time and in
the manner prescribed by Law, withheld from employee wages and paid to the proper Governmental
Entities all amounts required to be withheld and paid over.
(e) Except where the failure to be true would not have a Material Adverse Effect, no audits or
other administrative proceedings or court proceedings are presently pending or to the Knowledge of
the Company threatened with regard to any Taxes or Tax Returns of the Company or any of its
Significant Subsidiaries, other than any audit or administrative proceeding relating to Taxes for
which a claim has been filed in a Debtor’s Chapter 11 case or any other audit or administrative or
court proceeding that is not reasonably expected to result in a material Tax liability to the
Company or any of its Significant Subsidiaries.
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(f) The Company has made available to each Purchaser complete and accurate copies of all
material Tax Returns requested by any Purchaser and filed by or on behalf of the Company or any of
its Significant Subsidiaries for all taxable years ending on or prior to the Effective Date and for
which the statute of limitations has not expired.
(g) There are no Tax Protection Agreements except for those the breach of which would not
reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Significant
Subsidiary has any liability for Taxes of any Person under Treasury Regulation Section 1.1502-6 (or
any similar provision of any state, local or foreign Law), or as a transferee or successor (by
contract or otherwise), other than (i) to a Subsidiary of the Company or (ii) where any such
liability would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.22 Material Contracts. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each Material Contract that
shall survive the Bankruptcy Cases is valid and binding on the Company or any of its Subsidiaries,
as applicable, and, to the Knowledge of the Company, on each other Person party thereto, and is in
full force and effect. Other than as a result of the commencement of the Bankruptcy Cases, each of
the Company and its Subsidiaries has performed, in all material respects, all obligations required
to be performed by it under each Material Contract that shall survive the Bankruptcy Cases, except,
in each case, as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Other than those caused as a result of the filing of the Bankruptcy
Cases, neither the Company nor any of its Significant Subsidiaries is in breach or default of any
Material Contract to which it is a party and which shall survive the Bankruptcy Cases, except, in
each case, as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. The Company has made available to each Purchaser true, accurate and
complete copies of the Material Contracts as of the date of this Agreement, except for those
Material Contracts available to the public on the website maintained by the SEC. To the Knowledge
of the Company, no party to any Material Contract that shall survive the Bankruptcy Cases has given
written notice of any action to terminate, cancel, rescind or procure a judicial reformation of
such Material Contract or any material provision thereof, which termination, cancellation,
rescission or reformation would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. For the avoidance of doubt, Material Contracts do not include
intercompany contracts.
SECTION 3.23 Certain Restrictions on Charter and Bylaws Provisions; State Takeover
Laws.
(a) The Company and the Company Board have taken all appropriate and necessary actions to
ensure that the ownership limitations set forth in Article IV of the Company’s certificate of
incorporation shall not apply to (i) the acquisition of beneficial ownership by any Purchaser and
any other member of the Purchaser Group of the Warrants and the shares of Common Stock issuable
upon exercise of the Warrants, (ii) any antidilution adjustments to those Warrants pursuant to the
Warrant Agreement and (iii) any Common Stock that any Purchaser or any member of the Purchaser
Group may be deemed to own by no actions of its own and the acquisition of beneficial ownership of
up to an additional amount totaling 1.786% of the issued and outstanding shares of Common Stock, in
the aggregate, by any Purchaser or any other member of the Purchaser Group; provided,
however, that such exception to the ownership
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limitations are only effective as to any Purchaser or a member of the Purchaser Group so long
as (i) the Company has received executed copies of the representation certificate contained in
Exhibit D from such Purchaser or any such member of the Purchaser Group, it being
understood that a member of the Purchaser Group (not otherwise a Purchaser hereunder) shall be
required to provide such representations at such times and only at such times as such member of the
Purchaser Group “beneficially owns” or “constructively owns” (as such terms are defined in the
certificate of incorporation of the Company) Common Stock or New Common Stock in excess of the
relevant ownership limit set forth in the certificate of incorporation of the Company or any stock
or other equity interest owned by such member of the Purchaser Group in a tenant of the Company
would be treated as constructively owned by the Company and (ii) the representations so provided
are true, correct and complete as of the date made and continue to be true, correct and complete.
(b) The Company Board has taken all action necessary to render inapplicable to each Purchaser
the restrictions on “business combinations” set forth in Section 203 of the Delaware General
Corporation Law and, to the knowledge of the Company, any similar “moratorium,” “control share,”
“fair price,” “takeover” or “interested stockholder” law applicable to transactions between each
Purchaser and the Company.
SECTION 3.24 No Other Representations or Warranties. Except for the representations
and warranties made by the Company in this Article III, neither the Company nor any other
Person makes any representation or warranty with respect to the Company or its Subsidiaries or
their respective business, operations, assets, liabilities, condition (financial or otherwise) or
prospects, notwithstanding the delivery or disclosure to each Purchaser or any other members of the
Purchaser Group or their respective representatives of any documentation, forecasts or other
information with respect to any one or more of the foregoing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Each Purchaser severally, and not jointly and severally, represents and warrants to the
Company with respect to itself, and not with respect to any other Purchaser, as set forth below:
SECTION 4.1 Organization. Purchaser is duly established as a series of a corporation
that is duly organized and is validly existing and in good standing under the Laws of its
jurisdiction of organization, with the requisite corporate power and authority to undertake and
effectuate the transactions contemplated by this Agreement. Purchaser is a series of a corporation
that has been duly qualified as a foreign corporation or other form of entity for the transaction
of business and, where applicable, is in good standing under the Laws of each other jurisdiction in
which it operates so as to require such qualification, except where the failure to be so qualified,
licensed or in good standing would not, individually or in the aggregate, have or be reasonably
expected to materially delay or prevent the consummation of the transactions contemplated by this
Agreement.
SECTION 4.2 Power and Authority. Purchaser has the requisite power and authority to
enter into, execute and deliver this Agreement and to perform its obligations hereunder and has
taken all necessary action required for the due authorization, execution, delivery and
performance by it of this Agreement.
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SECTION 4.3 Execution and Delivery. This Agreement has been duly and validly executed
and delivered by Purchaser and constitutes its valid and binding obligation, enforceable against
Purchaser in accordance with its terms.
SECTION 4.4 No Conflict. The execution and delivery of this Agreement and the
performance by Purchaser of its obligations hereunder and compliance by Purchaser with all of the
provisions hereof and the consummation of the transactions contemplated herein (i) shall not
conflict with, or result in a breach or violation of, any of the terms or provisions of, or
constitute a default under, or result in the acceleration of, or the creation of any lien under, or
give rise to any termination right under, any material contract to which Purchaser is a party, (ii)
shall not result in any violation or breach of any provisions of the organizational documents of
Purchaser and (iii) shall not conflict with or result in any violation of, or any termination or
material impairment of any rights under, any statute or any license, authorization, injunction,
judgment, order, decree, rule or regulation of any court or governmental agency or body having
jurisdiction over Purchaser or Purchaser’s properties or assets, except with respect to each of
(i), (ii) and (iii), such conflicts, violations or defaults as would not be reasonably expected to
have a material adverse effect on the ability of Purchaser to consummate the transactions
contemplated hereunder.
SECTION 4.5 Consents and Approvals. No consent, approval, order, authorization,
registration or qualification of or with any Governmental Entity having jurisdiction over Purchaser
is required in connection with the execution and delivery by Purchaser of this Agreement or the
consummation of the transactions contemplated hereby, except such consents, approvals, orders,
authorizations, registration or qualification as would not reasonably be expected to materially and
adversely affect the ability of Purchaser to perform its obligations under this Agreement.
SECTION 4.6 Compliance with Laws. Since the date of its formation, Purchaser has been
in compliance with all Laws applicable to Purchaser, except, in each case, for such non-compliance
as would not reasonably be expected to materially and adversely affect the ability of Purchaser to
perform its obligations under this Agreement.
SECTION 4.7 Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the knowledge of Purchaser, threatened
against Purchaser which, individually or in the aggregate, if determined adversely to Purchaser,
would materially and adversely affect the ability of Purchaser to perform its obligations under
this Agreement.
SECTION 4.8 No Broker’s Fees. Purchaser is not party to any contract, agreement or
understanding with any Person that would give rise to a valid claim against the Company for an
investment banking fee, commission, finder’s fee or like payment in connection with the
transactions contemplated by this Agreement.
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SECTION 4.9 Sophistication. Purchaser is, as of the date hereof and shall be as of
the Effective Date, an “accredited investor” within the meaning of Rule 501(a) under the Securities
Act. Purchaser understands and is able to bear any economic risks associated with such investment
(including, without limitation, the necessity of holding such Shares and GGO Shares for an
indefinite period of time).
SECTION 4.10 Purchaser Intent. Purchaser is acquiring the Shares, the Warrants, the
GGO Shares, the New Warrants and the GGO Warrants for investment purposes only and not with a view
to or for distributing or reselling such Shares, Warrants, GGO Shares, New Warrants and GGO
Warrants or any part thereof, without prejudice, however, to Purchaser’s right, subject to the
provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such
Shares, Warrants, GGO Shares, New Warrants and GGO Warrants pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities Laws. Purchaser understands that Purchaser must bear
the economic risk of its investment indefinitely.
SECTION 4.11 Reliance on Exemptions. Purchaser understands that the Shares and the
GGO Shares are being offered and sold to Purchaser in reliance upon specific exemptions from the
registration requirements of United States federal and state securities Laws.
SECTION 4.12 REIT Representations. The representations provided by Purchaser and, to
the extent applicable, its Affiliates, members or Affiliates of members, set forth on Exhibit
D are true, correct and complete as of the date hereof, and shall be true as of the date of the
issuance of the Warrants and as of the Closing Date, it being understood that Purchaser’s
Affiliates, members or Affiliates of members shall be required to provide such representations only
if such Person “beneficially owns” or “constructively owns” (as such terms are defined in the
certificate of incorporation of the Company) Common Stock or New Common Stock in excess of the
relevant ownership limit set forth in the certificate of incorporation of the Company or any stock
or other equity interest owned by such Person in a tenant of the Company would be treated as
constructively owned by the Company.
SECTION 4.13 Financial Capability. Such Purchaser has sufficient binding capital
commitments or available funds to satisfy its obligations under this Agreement, including without
limitation the payment of the applicable Purchase Price and the GGO Purchase Price.
SECTION 4.14 No Other Representations or Warranties. Except for the representations
and warranties made by Purchaser in this Article IV, neither Purchaser nor any other Person
on behalf of Purchaser makes any representation or warranty with respect to Purchaser or its
assets, liabilities, condition (financial or otherwise) or prospects.
SECTION 4.15 Acknowledgement. Purchaser acknowledges that (a) neither the Company nor
any Person on behalf of the Company is making any representations or warranties whatsoever, express
or implied, beyond those expressly given by the Company in Article III of this Agreement
and (b) Purchaser has not been induced by, or relied upon, any representations, warranties or
statements (written or oral), whether express or implied, made by any Person, that are not
expressly set forth in Article III of this Agreement. Without limiting the generality of
the foregoing, except with respect to the representations and warranties contained in Article
III, Purchaser acknowledges that no representations or warranties are made with respect to any
projections, forecasts, estimates, budgets, plans or prospect information that may have been made
available to Purchaser or any of its representatives.
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ARTICLE V
COVENANTS OF THE COMPANY AND PURCHASER
SECTION 5.1 Bankruptcy Court Motions and Orders.
(a) No later than the close of business on the date that is two (2) Business Days following
the date of this Agreement, the Company shall file with the Bankruptcy Court a motion in form and
substance satisfactory to each Purchaser (the “Approval Motion”) seeking to obtain entry of
an order in the form attached hereto as Exhibit F (the “Proposed Approval Order”),
which order in the final form if approved by the Bankruptcy Court (the “Approval Order”)
shall approve, among other things, the issuance of the Warrants to each Purchaser and the warrants
contemplated by each other Investment Agreement to be issued to the applicable Initial Investor,
and the performance by the Company of its obligations under the Warrant Agreement.
(b) The Approval Motion, including any exhibits thereto and any notices or other materials in
connection therewith, and any modifications or amendments to the foregoing, must be in form and
substance reasonably satisfactory to each Purchaser.
(c) If the Approval Order shall be appealed by any Person (or a petition for certiorari or
motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or
reargument shall be filed with respect to such order), the Company shall diligently defend against
any such appeal, petition or motion and shall use its reasonable best efforts to obtain an
expedited resolution of any such appeal, petition or motion. The Company shall keep each Purchaser
reasonably informed and updated regarding the status of any such appeal, petition or motion.
(d) The Company shall provide draft copies of all motions, notices, statements, schedules,
applications, reports and other papers the Company intends to file with the Bankruptcy Court in
connection with the Approval Order to each Purchaser within a reasonable period of time prior to
the date the Company intends to file any of the foregoing, and shall consult in advance in good
faith with each Purchaser regarding the form and substance of any such proposed filing with the
Bankruptcy Court.
SECTION 5.2 Warrants, New Warrants and GGO Warrants. Within one (1) Business Day of
the date of the entry of the Approval Order, the Company and the warrant agent shall execute and
deliver the warrant agreement in the form attached hereto as Exhibit G (with only such
changes thereto as may be reasonably requested by the warrant agent and reasonably approved by each
Purchaser) (the “Warrant Agreement”) evidencing 42,857,143 warrants (the
“Warrants”) each of which entitles the holder to purchase one (1) share of Common Stock at
an initial price of $15.00 per share subject to adjustment as provided in the Warrant. The
Warrants and the Plan shall provide that upon the effectiveness of the Plan, the Warrants shall be
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exchanged for and converted into the right to receive (i) 42,857,143 warrants each of which
entitles the holder to purchase one (1) share of New Common Stock (the “New Warrants”) at
an initial purchase price of $10.00 per share subject to adjustment as provided in the underlying
warrant agreement and (ii) 20,000,000 warrants each of which entitles the holder to purchase one
(1) share of GGO Common Stock (the “GGO Warrants”) at a price of $5.00 per share subject to
adjustment as provided in the warrant agreement, each in accordance with the terms set forth in the
applicable warrant agreement.
SECTION 5.3 [Intentionally Omitted.]
SECTION 5.4 Listing. The Company shall use its reasonable best efforts to cause the
Shares and the New Warrants to be listed on the New York Stock Exchange (the “NYSE”). The
Plan shall provide that the Company shall use its reasonable best efforts to cause GGO to use its
reasonable best efforts to cause the GGO Shares and the GGO Warrants to be listed on a U.S.
national securities exchange.
SECTION 5.5 Use of Proceeds. The Plan shall provide that the Company and its
Subsidiaries, and GGO, shall apply the net proceeds from the sale of the Shares and the GGO Rights
Offering and the Capital Raising Activities, as applicable, as provided in the Plan Summary Term
Sheet and the Plan. The parties intend that the New Warrants, GGO Warrants, New Common Shares and
GGO Shares will be offered and sold under the Plan, to the fullest extent permitted by law, in
exchange for a claim against, an interest in, or a claim for an administrative expense in the
Bankruptcy Case, or principally in such exchange and partly for other cash or property, for
purposes of Section 1145, and the parties shall take all reasonable actions necessary consistent
with applicable law to cause such securities to be so offered and sold, including without
limitation, reflecting the foregoing in the initial filing of the Plan with the Bankruptcy Court.
SECTION 5.6 Access to Information. Subject to applicable Law and the Company’s
receipt of customary assurances of confidentiality by each Purchaser, upon reasonable notice, the
Company shall afford each Purchaser and its directors, officers, employees, investment bankers,
attorneys, accountants and other advisors or representatives, reasonable access during normal
business hours, throughout the period prior to the Effective Date, to its employees, books,
contracts and records and, during such period, the Company shall (and shall cause its Subsidiaries
to) furnish promptly to each Purchaser such information concerning its business, properties and
personnel as may reasonably be requested by such Purchaser, including copies of all monthly
financial information provided to its lenders under its existing debtor in possession financing
agreements; provided, that, notwithstanding anything to the contrary, the Company shall not
be required to share confidential information relating to any Competing Transaction except as
contemplated by Section 5.7.
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SECTION 5.7 Competing Transactions. From the date of this Agreement until the earlier
to occur of the Closing and the termination of this Agreement, the Company shall provide written
notice to each Purchaser not less than 48 hours prior to the Company or any Subsidiary of the
Company (i) entering into a definitive agreement providing for a Competing Transaction or (ii)
filing a motion with the Bankruptcy Court seeking to obtain bid procedures or bid protections for
or in connection with a Competing Transaction.
SECTION 5.8 Reservation for Issuance. The Company shall reserve that number of shares
of Common Stock sufficient for issuance upon exercise or conversion of the Warrants. In connection
with the issuance of the New Warrants, the Plan shall provide that the Company shall reserve for
issuance that number of shares of New Common Stock sufficient for issuance upon exercise of the New
Warrants. The Plan shall provide that GGO shall reserve for issuance that number of shares of GGO
Common Stock sufficient for issuance upon exercise of the GGO Warrants.
SECTION 5.9 Subscription Rights.
(a) Company Subscription Right.
(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 or (5) as set forth on Section
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
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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 to Section
5.9(b) 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 this Section 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
to Section 5.9(a)(i). In connection with an underwritten public 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
this Section 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.
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(iii) Purchase Mechanism. If a Purchaser exercises its Subscription Right
provided in this Section 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 this Section 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 in Section 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 this Section
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 offering 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 this Section 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 by Section
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 this
Section 5.9 as would allow such Purchaser to purchase, at the same price (net of any
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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 in
Section 5.9(a)(iii) 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 under Section
5.9(a)(iii) (but not to less than one (1) Business Day) to the minimum extent required
to meet the financing objective of such offering and such 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 this Section 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 shareholder
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. This Section 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.
(b) GGO Subscription Rights. The Plan shall provide that in connection with the
consummation of the Plan, GGO shall enter into an agreement with each Purchaser with substantially
similar terms to those set forth in Section 5.9(a) above with respect to any issuance of
GGO Common Stock (or securities that are convertible into or exchangeable or exercisable for, or
otherwise linked to, GGO Common Stock) after the Effective Date.
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SECTION 5.10 [Intentionally Omitted.]
SECTION 5.11 Notification of Certain Matters.
(a) The Company shall (i) give prompt written notice to each Purchaser of any written notice
or other written communication from any Person alleging that the consent of such Person which is or
may be required in connection with the transactions contemplated by this Agreement is not likely to
be obtained prior to Closing, if the failure to obtain such consent would reasonably be expected to
be adverse and material to the Company and its Subsidiaries taken as a whole or would materially
impair the ability of the Company to consummate the transactions contemplated hereby or perform its
obligations hereunder, and (ii) facilitate adding such individuals as designated by each Purchaser
to the electronic notification system such that the designated individuals will receive electronic
notice of the entry of any Bankruptcy Court Order.
(b) To the extent permitted by applicable Law, (i) the Company shall give prompt notice to
each Purchaser of the commencement of any investigation, inquiry or review by any Governmental
Entity with respect to the Company or its Subsidiaries which would reasonably be expected to be
adverse and material to the Company and its Subsidiaries taken as a whole or would materially
impair the ability of the Company to consummate the transactions contemplated hereby or perform its
obligations hereunder, and (ii) the Company shall give prompt notice to each Purchaser, and each
Purchaser shall give written prompt notice to the Company, of any event or circumstance that would
result in any representation or warranty of the Company or such Purchaser, as applicable, being
untrue or any covenant or agreement of the Company or such Purchaser, as applicable, not being
performed or complied with such that, in each such case, the conditions set forth in Article
VII or Article VIII, as applicable, would not be satisfied if such event or
circumstance existed on the Closing Date.
(c) No information received by a party pursuant to this Section 5.11 nor any
information received or learned by a party or any of its representatives pursuant to an
investigation made under this Section 5.11 shall be deemed to (A) qualify, modify, amend or
otherwise affect any representations, warranties, conditions, covenants or other agreements of the
other party set forth in this Agreement, (B) amend or otherwise supplement the information set
forth in the Company Disclosure Letter, (C) limit or restrict the remedies available to such party
under this Agreement, applicable Law or otherwise arising out of a breach of this Agreement, or (D)
limit or restrict the ability of such party to invoke or rely on, or effect the satisfaction of,
the conditions to the obligations of such party to consummate the transactions contemplated by this
Agreement set forth in Article VII or Article VIII, as applicable.
SECTION 5.12 Further Assurances. From and after the Closing, the Company shall (and
shall cause each of its Subsidiaries to) execute and deliver, or cause to be executed and
delivered, such further instruments or documents or take such other action and cause entities
controlled by them to take such action as may be reasonably necessary (or as reasonably requested
by any Purchaser) to carry out the transactions contemplated by this Agreement.
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SECTION 5.13 Xxxxxx Heirs Obligations. (a) In the event holders of Xxxxxx Heirs
Obligations receive shares of New Common Stock on account of such Xxxxxx Heirs Obligations
in the Plan, the number of shares of New Common Stock otherwise available for distribution on
the Effective Date under the Plan in the Equity Exchange shall be reduced by the number of shares
of New Common Stock issued or issuable to such holders of Xxxxxx Heirs Obligations.
(b) In the event holders of Xxxxxx Heirs Obligations receive shares of GGO Common Stock on
account of such Xxxxxx Heirs Obligations in the Plan, the number of shares of GGO Common Stock
otherwise available for distribution on the Effective Date under the Plan in the GGO Share
Distribution shall be reduced by the number of shares of GGO Common Stock issued or issuable to
such holders of Xxxxxx Heirs Obligations.
SECTION 5.14 Rights Agreement; Reorganized Company Organizational Documents.
(a) Prior to the issuance of the Warrants, the Rights Agreement shall be amended to provide
that (i) the Rights Agreement is inapplicable to the (1) acquisition by members of the Purchaser
Group of the Warrants, the underlying securities thereof, (2) any antidilution adjustments to those
Warrants pursuant to the Warrant Agreement, (3) any shares of New Common Stock that a Purchaser or
a member of its Purchaser Group may be deemed to own by no actions of its own and (4) up to an
additional amount totaling 1.786% of the issued and outstanding shares of Common Stock in the
aggregate by the Purchaser Group, (ii) no Purchaser, or any member of the Purchaser Group, shall be
deemed to be an Acquiring Person (as defined in the Rights Agreement), (iii) neither a Shares
Acquisition Date (as defined in the Rights Agreement) nor a Distribution Date (as defined in the
Rights Agreement) shall be deemed to occur and (iv) the Rights (as defined in the Rights Agreement)
shall not separate from the Common Stock, in each case under (ii), (iii) and (iv), as a result of
the acquisition by members of the Purchaser Group of the Warrants, the underlying securities
thereof and the acquisition of beneficial ownership of up to an additional amount totaling 1.786%
of the issued and outstanding shares of Common Stock in the aggregate by the Purchaser Group.
(b) The certificate of incorporation and bylaws of the Reorganized Company (the
“Reorganized Company Organizational Documents”) shall be in form mutually agreed to by the
Company and each Purchaser, provided, that in the event that the Company and such Purchaser
are not able to agree on such form prior to the Effective Date, the Reorganized Company
Organizational Documents shall be substantially in the same form as the certificate of
incorporation and bylaws of the Company as in existence on the date of this Agreement (except that
the number of authorized shares of capital stock of the Reorganized Company shall be increased),
provided, however, that (i) the restriction on Beneficial Ownership (as such term
is defined in the certificate of incorporation of the Company) shall be set at 9.9% of the
outstanding capital stock of the Reorganized Company, (ii) the restriction on Constructive
Ownership (as such term is defined in the certificate of incorporation of the Company) shall be set
at 9.9% of the outstanding capital stock of the Reorganized Company, (iii) there shall not be an
exemption from the restrictions set forth in the foregoing clauses (i) and (ii) for the current
Existing Holder (as such term is defined in the existing certificate of incorporation of the
Company), (iv) the Reorganized Company shall provide a waiver from the restrictions set forth in
the foregoing clauses (i) and (ii) to any member of the Purchaser Group if such member provides the
Reorganized Company with a certificate containing the representations and covenants set forth on
Exhibit D and (v) the definition of “Person” shall be revised so that it does not include a
“group” as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended.
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(c) In the event the Reorganized Company adopts a rights plan analogous to the Rights
Agreement on or prior to the Closing, the Plan shall provide that (i) the Reorganized Company’s
Rights Agreement shall be inapplicable to this Agreement and the transactions contemplated hereby,
(ii) no Purchaser, nor any other member of its Purchaser Group, shall be deemed to be an Acquiring
Person (as defined in the Rights Agreement) whether in connection with the acquisition of Shares,
New Warrants, shares issuable upon exercise of the New Warrants or otherwise, (iii) neither a
Shares Acquisition Date (as defined in the Rights Agreement) nor a Distribution Date (as defined in
the Rights Agreement) shall be deemed to occur and (iv) the Rights (as defined in the Rights
Agreement) will not separate from the New Common Stock, in each case under (ii), (iii) and (iv), as
a result of the execution, delivery or performance of this Agreement, the consummation of the
transactions contemplated hereby including the acquisition of shares of New Common Stock by any
Purchaser or other member of the Purchaser Group after the date hereof as otherwise permitted by
this Agreement, the New Warrants or as otherwise contemplated by the applicable Non-Control
Agreement, if any.
(d) In the event GGO adopts a rights plan analogous to the Rights Agreement on or prior to the
Closing, the Plan shall provide that (i) GGO’s Rights Agreement shall be inapplicable to this
Agreement and the transactions contemplated hereby, (ii) no Purchaser, nor any other member of its
Purchaser Group, shall be deemed to be an Acquiring Person (as defined in the Rights Agreement)
whether in connection with the acquisition of shares of GGO Common Stock or GGO Warrants or the
shares issuable upon exercise of the GGO Warrants, (iii) neither a Shares Acquisition Date (as
defined in the Rights Agreement) nor a Distribution Date (as defined in the Rights Agreement) shall
be deemed to occur and (iv) the Rights (as defined in the Rights Agreement) will not separate from
the GGO Common Stock, in each case under (ii), (iii) and (iv), as a result of the execution,
delivery or performance of this Agreement, or the consummation of the transactions contemplated
hereby including the acquisition of shares of GGO Common Stock by any Purchaser or other member of
the Purchaser Group after the date hereof as otherwise permitted by this Agreement or the GGO
Warrants.
SECTION 5.15 Stockholder Approval. For so long as any Purchaser has Subscription
Rights as contemplated by Section 5.9(a) in connection with the expiration of the five (5)
year period referenced in Section 3.2(c), the Company shall put up for a stockholder vote
at the immediately prior annual meeting of its stockholders, and include in its proxy statement
distributed to such stockholders in connection with such annual meeting, approval of such
Purchaser’s Subscription Rights for the maximum period permitted by the NYSE. The Plan shall
provide that GGO shall, for the benefit of each Purchaser, to the extent required by any U.S.
national securities exchange upon which shares of GGO Common Stock are listed, for so long as any
Purchaser has subscription rights as contemplated by Section 5.9(b), put up for a
stockholder vote at the annual meeting of its stockholders, and include in its proxy statement
distributed to such stockholders in connection with such annual meeting, approval of such
Purchaser’s subscription rights for the maximum period permitted by the rules of such U.S. national
securities exchange.
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SECTION 5.16 Closing Date Net Debt.
(a) The Company shall deliver to each Purchaser a schedule (the “Preliminary Closing Date
Net Debt Schedule”) on or before the first Business Day that is five calendar days following
approval of the Disclosure Statement, that: (i) sets forth the Company’s good faith estimate for
each of the three components of the Closing Date Net Debt W/O Reinstatement Adjustment and
Permitted Claims Amounts along with a reasonably detailed explanation and calculation of each such
component and (ii) discloses the Company’s good faith estimate of the Closing Date Net Debt W/O
Reinstatement Adjustment and Permitted Claims Amounts and GGO Setup Costs.
(b) Each Purchaser shall review the Preliminary Closing Date Net Debt Schedule during the
Preliminary Closing Date Net Debt Review Period, during which time the Company shall allow such
Purchaser reasonable access to all non-privileged or work product documents or records or personnel
used in the preparation of the Preliminary Closing Date Net Debt Schedule. On or prior to the
Preliminary Closing Date Net Debt Review Deadline, any Purchaser may deliver to the Company a
notice (the “Dispute Notice”) listing those items on the Preliminary Closing Date Net Debt
Schedule to which Purchaser takes exception, which Dispute Notice shall (i) specifically identify
such items, and provide a reasonably detailed explanation of the basis upon which the Purchaser has
delivered such list, (ii) set forth the amount of Closing Date Net Debt W/O Reinstatement
Adjustment and Permitted Claims Amounts that such Purchaser has calculated based on the information
contained in the Preliminary Closing Date Net Debt Schedule, and (iii) specifically identify such
Purchaser’s proposed adjustment(s). If a Purchaser timely provides the Company with a Dispute
Notice, then such Purchaser and the Company shall, within ten (10) days following receipt of such
Dispute Notice by the Company (the “Resolution Period”), attempt to resolve their
differences with respect to the items specified in the Dispute Notice (the “Disputed
Items”). If a Purchaser and the Company do not resolve all Disputed Items by the end of the
Resolution Period, then all Disputed Items remaining in dispute shall be submitted to the
Bankruptcy Court for resolution at or concurrent with the Confirmation Hearing. The Bankruptcy
Court shall consider only those Disputed Items that such Purchaser, on the one hand, and the
Company, on the other hand, were unable to resolve. All other matters shall be deemed to have been
agreed upon by such Purchaser and the Company. If such Purchaser does not timely deliver a
Dispute Notice, then such Purchaser shall be deemed to have accepted and agreed to the Preliminary
Closing Date Net Debt Schedule and to have waived any right to dispute the matters set forth
therein.
(c) On or prior to the Effective Date, the Company shall deliver to each Purchaser the
Conclusive Net Debt Adjustment Statement.
(d) It is the intention of the parties that releases from the Reserve are not intended to
alter the allocation of value between GGO and the Company. Accordingly, the Plan shall provide
that if there is a Reserve Surplus Amount as of the end of any fiscal quarter prior to the maturity
of the GGO Promissory Note, the principal amount of the GGO Promissory Note shall be reduced (not
below zero) (i) by 80% of the balance of the Reserve Surplus Amount corresponding to any Net Debt
Surplus Amount and (ii) if after application of the Reserve Surplus Amount pursuant to clause (i),
any Reserve Surplus Amount remains, by 100% of the remaining balance of the Reserve Surplus Amount.
In the event that any party requests an equitable adjustment to this formula, the other parties
shall consider the request in good faith.
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(e) The Plan shall provide that, if there is an Offering Premium, the principal amount of the
GGO Promissory Note shall be reduced (but not below zero) by 80% of the aggregate Offering Premium
on the 31st day following the Closing Date.
(f) The Plan and the agreements relating to the GGO Share Distribution shall provide that from
and after the Closing, the Company shall indemnify GGO and its Subsidiaries from and against 93.75%
of any and all losses, claims, damages, liabilities and reasonable expenses to which GGO and its
Subsidiaries may become subject, in each case solely to the extent directly attributable to MPC
Taxes actually paid at or after the Effective Date; provided, that in no event shall the
Company be required to make any indemnification payment hereunder to the extent such payment would
result in aggregate payments under this Section 5.16(f) that would exceed the lower of (i)
$303,750,000 and (ii) the then effective Excess Surplus Amount (the “Indemnity Cap”). The
Plan shall provide that if GGO or its Affiliates receives any refund or realizes any reduction of
its Tax liability in respect of the MPC Assets for which it has received a payment or realized a
benefit pursuant to this Agreement, GGO shall pay an amount equal to such refund or reduction in
Tax liability (less any costs or Taxes incurred with respect to the receipt thereof) to the
Reorganized Company within ten (10) Business Days of the receipt or realization thereof.
(g) If GGO is obligated to pay MPC Taxes with respect to the tax year 2010 and the Company is
not then obligated to indemnify GGO as a consequence of the Indemnity Cap, then solely with respect
to such payments, the Company shall pay such amount of MPC Taxes and the principal amount of the
GGO Promissory Note shall be increased by the amount of such payment and if at such time no GGO
Promissory Note is outstanding, on the date of any such payment, GGO shall issue in favor of the
Company a promissory note in the aggregate principal amount of such payment on the same terms as
the GGO Promissory Note.
ARTICLE VI
ADDITIONAL COVENANTS OF PURCHASER
SECTION 6.1 Information. From and after the date of this Agreement until the earlier
to occur of the Closing Date and the termination of this Agreement, each Purchaser agrees to
provide the Debtors with such information as the Debtors reasonably request regarding such
Purchaser for inclusion in the Disclosure Statement as necessary for the Disclosure Statement to
contain adequate information for purposes of Section 1125 of the Bankruptcy Code.
SECTION 6.2 Purchaser Efforts. Each Purchaser shall use its reasonable best efforts
to obtain all material permits, consents, orders, approvals, waivers, authorizations or other
permissions or actions required for the consummation of the transactions contemplated by this
Agreement from, and shall have given all necessary notices to, all Governmental Entities necessary
to satisfy the condition in Section 8.1(b) (provided, however, that such
Purchaser shall not be required to pay or cause payment of any fees or make any financial
accommodations to obtain any such consent, approval, waiver or other permission, except filing fees
as required), and provide to such Governmental Entities all such information as may be necessary or
reasonably requested relating to the transactions contemplated hereby.
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SECTION 6.3 Plan Support. From and after the date of the Approval Order until the
earliest to occur of (i) the Effective Date, (ii) the termination of this Agreement and (iii) the
date the Company or any Subsidiary of the Company makes a public announcement, enters into an
agreement or files any pleading or document with the Bankruptcy Court, in each case, evidencing its
intention to support any Competing Transaction, or the Company or any Subsidiary of the Company
enters into a Competing Transaction (such date, the “Unrestricted Date”), each Purchaser
agrees (unless otherwise consented to by the Company) (provided that (x) the Company is not
in material breach of this Agreement and (y) the terms of the Plan are and remain consistent with
the Plan Summary Term Sheet and this Agreement, and are otherwise in form and substance
satisfactory to each Purchaser) to (and shall use reasonable best efforts to cause its Affiliates
to):
(a) Not pursue, propose, support, vote to accept or encourage the pursuit, proposal or support
of, any Chapter 11 plan, or other restructuring or reorganization for the Company, or any
Subsidiary of the Company, that is not consistent with the Plan;
(b) Not, nor encourage any other Person to, interfere with, delay, impede, appeal or take any
other negative action, directly or indirectly, in any respect regarding acceptance or
implementation of the Plan; and
(c) Not commence any proceeding, or prosecute any objection to oppose or object to the Plan or
to the Disclosure Statement and not to take any action that would delay approval or confirmation,
as applicable, of the Disclosure Statement and the Plan, in each case (i) except as intended to
ensure the consistency of the Disclosure Statement and the Plan with the terms of this Agreement
and the rights and obligations of the parties thereto and (ii) without limiting any rights any
Purchaser may have to terminate this Agreement pursuant to Section 11.1(b) (including
Section 11.1(b)(ix)) hereof.
SECTION 6.4 Transfer Restrictions. Each Purchaser covenants and agrees that the
Shares and the GGO Shares (and shares issuable upon exercise of Warrants, New Warrants and GGO
Warrants) shall be disposed of only pursuant to an effective registration statement under the
Securities Act or pursuant to an available exemption from the registration requirements of the
Securities Act, and in compliance with any applicable state securities Laws. Each Purchaser agrees
to the imprinting, so long as is required by this Section 6.4, of the following legend on
any certificate evidencing the Shares or GGO Shares (and shares issuable upon exercise of Warrants,
New Warrants and GGO Warrants):
THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE
“ACT”) OR UNDER ANY STATE SECURITIES LAWS (“BLUE SKY”) OR THE SECURITIES LAWS OF
ANY OTHER RELEVANT JURISDICTION. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE. THE SHARES MAY NOT BE SOLD, ASSIGNED, MORTGAGED, PLEDGED, ENCUMBERED,
HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS EITHER (I) A REGISTRATION STATEMENT WITH
RESPECT TO THE SHARES IS EFFECTIVE UNDER THE ACT AND APPLICABLE BLUE SKY LAWS AND THE SECURITIES
LAWS OF ANY OTHER RELEVANT JURISDICTION ARE COMPLIED WITH OR (II) UNLESS WAIVED BY THE
ISSUER, THE ISSUER RECEIVES AN OPINION OF LEGAL COUNSEL SATISFACTORY TO THE ISSUER THAT NO
VIOLATION OF THE ACT OR OTHER APPLICABLE LAWS WILL BE INVOLVED IN SUCH TRANSACTION.
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Certificates evidencing the Shares (and shares issuable upon exercise of Warrants and New
Warrants) shall not be required to contain such legend (A) while a registration statement covering
the resale of the Shares is effective under the Securities Act, or (B) following any sale of any
such Shares pursuant to Rule 144 of the Exchange Act (“Rule 144”), or (C) following receipt
of a legal opinion of counsel to the applicable Purchaser that the remaining Shares held by such
Purchaser are eligible for resale without volume limitations or other limitations under Rule 144.
In addition, the Company will agree to the removal of all legends with respect to shares of New
Common Stock deposited with DTC from time to time in anticipation of sale in accordance with the
volume limitations and other limitations under Rule 144, subject to the Company’s approval of
appropriate procedures, such approval not to be unreasonably withheld, conditioned or delayed.
Following the time at which such legend is no longer required (as provided above) for certain
Shares, the Company shall promptly, following the delivery by the applicable Purchaser to the
Company of a legended certificate representing such Shares, deliver or cause to be delivered to
such Purchaser a certificate representing such Shares that is free from such legend. In the event
the above legend is removed from any of the Shares, and thereafter the effectiveness of a
registration statement covering such Shares is suspended or the Company determines that a
supplement or amendment thereto is required by applicable securities Laws, then the Company may
require that the above legend be placed on any such Shares that cannot then be sold pursuant to an
effective registration statement or under Rule 144 and such Purchaser shall cooperate in the
replacement of such legend. Such legend shall thereafter be removed when such Shares may again be
sold pursuant to an effective registration statement or under Rule 144.
The Plan shall provide, in connection with the consummation of the Plan, for GGO to enter into
an agreement with each Purchaser with respect to GGO Shares and GGO Warrants containing the same
terms as provided (i) above in this Section 6.4 but replacing references to (A) “the
Company” with GGO, (B) “New Common Stock” with GGO Common Stock, (C) “Shares” with “GGO Shares” and
(D) “Warrants” or “New Warrants” with GGO Warrants.
The Xxxxxxxxx Xxxx further covenants and agrees not to sell, transfer or dispose of the
Warrants or the shares of Common Stock issuable upon exercise of the Warrants (other than to a
member of the Purchaser Group) prior to the Unrestricted Date or any Shares, New Shares or Warrants
in violation of the Non-Control Agreement.
For the avoidance of doubt, each Purchaser’s Subscription Rights pursuant to Section
5.9 may not be Transferred to a Person that is not a member of the Purchaser Group.
SECTION 6.5 [Intentionally omitted.]
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SECTION 6.6 REIT Representations and Covenants. At such times as shall be reasonably
requested by the Company, for so long as any Purchaser (or, to the extent applicable, its
Affiliates, members or Affiliates of members) “beneficially owns” or “constructively owns”
(as such terms are defined in the certificate of incorporation of the Company) in excess of
the relevant ownership limit set forth in the certificate of incorporation of the Company of the
outstanding Common Stock or New Common Stock, such Purchaser shall (and, to the extent applicable,
cause its Affiliates, members or Affiliates of members to) use reasonable best efforts to provide
the Company with customary representations and covenants, in the form attached hereto as
Exhibit D which shall, among other things, enable the Company to waive Purchaser from the
ownership limit set forth in the certificate of incorporation of the Company and ensure that the
Company can appropriately monitor any “related party rent” issues raised by the Warrants and the
purchase of the Shares by such Purchaser, it being understood that Purchaser’s Affiliates, members
or Affiliates of members shall be required to provide such representations and covenants only if
such Person “beneficially owns” or “constructively owns” (as such terms are defined in the
certificate of incorporation of the Company) Common Stock or New Common Stock in excess of the
relevant ownership limit set forth in the certificate of incorporation of the Company or any stock
or other equity interest owned by such Person in a tenant of the Company would be treated as
constructively owned by the Company.
SECTION 6.7 Non-Control Agreement. At or prior to the Closing, The Xxxxxxxxx Xxxx
shall enter into the Non-Control Agreement with the Company.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
SECTION 7.1 Conditions to the Obligations of Purchaser. The obligation of each
Purchaser to purchase the Shares (and the GGO Shares if the GGO Rights Offering shall have
occurred) pursuant to this Agreement on the Closing Date is subject to the satisfaction (or waiver
(to the extent permitted by applicable Law) by such Purchaser) of the following conditions as of
the Closing Date:
(a) No Injunction. No judgment, injunction, decree or other legal restraint shall
prohibit the consummation of the Plan or the transactions contemplated by this Agreement.
(b) Regulatory Approvals; Consents. All permits, consents, orders, approvals,
waivers, authorizations or other permissions or actions of third parties and Governmental Entities
required for the consummation of the transactions contemplated by this Agreement and the Plan shall
have been made or received, as the case may be, and shall be in full force and effect, except for
those permits, consents, orders, approvals, waivers, authorizations or other permissions or actions
the failure of which to make or receive would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect (it being agreed that any permit, consent, order,
approval, waiver, authorization or other permission or action in respect of any Identified Asset
for which any of the alternatives in Section 2.1(a) shall have been employed shall be
deemed hereunder to have been made or received, as the case may be, and in full force and effect).
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(c) Representations and Warranties and Covenants. Except for changes permitted or
contemplated by this Agreement or the Plan Summary Term Sheet, each of (i) the representations and
warranties of the Company contained in Section 3.1, Section 3.2, Section
3.3, Section 3.5, Section 3.20(a) (except for such inaccuracies in Section
3.20(a) caused by sales, purchases or transfers of assets which have been 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, this Article VII)
and Section 3.23 shall be true and correct at and as of the Closing Date as if made at and
as of the Closing Date (except for representations and warranties made as of a specific date, which
shall be true and correct only as of such specific date), (ii) the representations and warranties
of the Company contained in Section 3.4 shall be true and correct (except for de minimis
inaccuracies) at and as of the Closing Date as if made at and as of the Closing Date (except for
representations and warranties made as of a specific date, which shall be true and correct (except
for de minimis inaccuracies) only as of such specific date) and (iii) the other representations and
warranties of the Company contained in this Agreement, 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
representations and warranties made as of a specified date, which shall be true and correct only as
of the specified date), except for such failures to be true and correct that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse Effect (it being agreed
that the condition in this subclause (iii) as it relates to undisclosed liabilities of the Company
and its Subsidiaries comprised of Indebtedness shall be deemed to be satisfied if the condition in
Section 7.1(p) is satisfied. The Company shall have complied in all material respects with
all of its obligations under this Agreement, provided that with respect to its obligations
under Section 5.413 and Section 5.13, Section 5.14(b) (to the extent
applicable) and Section 5.14(c) hereof the Company shall have complied therewith in all
respects. The Company shall have provided to each Purchaser a certificate delivered by an
executive officer of the Company, acting in his or her official capacity on behalf of the Company,
to the effect that the conditions in this clause (c) and the immediately following clause (d) have
been satisfied as of the Closing Date and each Purchaser shall have received such other evidence of
the conditions set forth in this Section 7.1 as it shall reasonably request.
(d) No Material Adverse Effect. Since the date of this Agreement, there shall not
have occurred any event, fact or circumstance, that has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(e) Plan and Confirmation Order. The Plan, in form and substance satisfactory to each
Purchaser, shall have been confirmed by the Bankruptcy Court by order in form and substance
satisfactory to each Purchaser (the “Confirmation Order”), which Confirmation Order shall
be in full force and effect (without waiver of the 14-day period set forth in Bankruptcy Rule
3020(e)) as of the Effective Date and shall not be subject to a stay of effectiveness.
Notwithstanding anything to the contrary in the Plan Term Sheet, the Plan shall have not reinstated
any Specified Debt without giving each holder of Specified Debt the option to receive cash in an
amount equal to par plus unpaid pre-petition and post-petition interest accrued at the stated
non-default rate (or contract rate in the case of Class M).
(f) Disclosure Statement. The Disclosure Statement, in form and substance acceptable
to each Purchaser, shall have been approved by order of the Bankruptcy Court in form and substance
satisfactory to each Purchaser (the “Disclosure Statement Order”).
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(g) Conditions to Confirmation. The conditions to confirmation and the conditions to
the Effective Date of the Plan, including the consummation of the transactions contemplated by
Exhibit B, shall have been satisfied or waived in accordance with the Plan and the
Reorganized Company Organizational Documents as set forth in the Plan shall be in effect.
(h) GGO. The GGO Share Distribution and the issuance by GGO of the GGO Warrants shall
have occurred in accordance with this Agreement. In connection with the implementation of the GGO
Share Distribution, (i) the Company shall have provided each Purchaser with reasonable access to
all relevant information and consulted and cooperated in good faith with each Purchaser and the GGO
Representative with respect to the contribution of the Identified Assets to GGO in accordance with
Section 2.1(a), and (ii) all actions taken by the Company and its Subsidiaries related
thereto and all documentation related to the formation and organization of GGO, the implementation
of the GGO Share Distribution, to separate the business of the Company and GGO and other
intercompany arrangements between the Company and GGO, in each case, shall be reasonably
satisfactory to each Purchaser and shall be in full force and effect.
(i) GGO Common Stock. GGO shall not have issued and outstanding on a Fully Diluted
Basis immediately following the Closing more than (i) the GGO Common Share Amount of shares of GGO
Common Stock (plus (A) a number of shares of GGO Common Stock equal to the sum of the Backstop
Consideration and the backstop consideration issuable to the Pershing Purchasers and the Brookfield
Consortium Members pursuant to the other Investment Agreements, (B) 20,000,000 shares of GGO Common
Stock issuable upon exercise of the GGO Warrants, (C) 60,000,000 shares of GGO Common Stock
issuable upon the exercise of warrants that may be issued to the other Initial Investors pursuant
to the other Investment Agreements), plus (ii) if the GGO Rights Offering shall have occurred,
50,000,000 shares of GGO Common Stock issued pursuant to the GGO Rights Offering in accordance with
this Agreement.
(j) Valid Issuance. The Shares, Warrants, New Warrants and GGO Warrants and, if the
GGO Rights Offering shall have occurred, the GGO Shares, shall be validly issued to each Purchaser
(against payment therefor in the case of the Shares and the GGO Shares). The Company and GGO shall
have executed and delivered the warrant agreement for each of the New Warrants and the GGO
Warrants, together with such other customary documentation as each Purchaser may reasonably request
in connection with such issuance; each warrant agreement shall be in full force and effect and
neither the Company nor GGO shall be in breach of any representation, warranty, covenant or
agreement thereunder in any material respect.
(k) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that prohibits the issuance or sale of, pursuant to
this Agreement, the Shares, the issuance of Warrants, New Warrants, GGO Shares, GGO Warrants, the
issuance of New Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock
upon exercise of the GGO Warrants; and no injunction or
order of any federal, state or foreign court shall have been issued that prohibits the
issuance or sale, pursuant to this Agreement, of the Shares, the GGO Shares, the Warrants, New
Warrants, GGO Warrants, the issuance of New Common Stock upon exercise of the New Warrants or the
issuance of GGO Common Stock upon exercise of the GGO Warrants.
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(l) Registration Rights. The Company shall have filed with the SEC and the SEC shall
have declared effective, as of Closing, to the extent permitted by applicable SEC rules, a shelf
registration statement on Form S-1 or Form S-11, as applicable, covering the resale by each
Purchaser and member of the Purchaser Group of the Shares and the New Common Stock issuable upon
exercise of the New Warrants, containing a plan of distribution reasonably satisfactory to each
Purchaser. In addition, each of the Company and GGO shall have entered into registration rights
agreements with each Purchaser with respect to all registrable securities issued to or held by
members of the Purchaser Group from time to time in a manner that permits the registered offering
of securities pursuant to such methods of sale as a Purchaser may reasonably request from time to
time. Each registration rights agreement shall provide for (i) an unlimited number of shelf
registration demands on Form S-3 to the extent that the Company or GGO, as applicable, is then
permitted to file a registration statement on Form S-3, (ii) if the Company or GGO, as applicable,
is not eligible to use Form S-3, the filing by the Company or GGO, as applicable, of a registration
statement on Form S-1 or Form S-11, as applicable, and the Company or GGO, as applicable, using its
reasonable best efforts to keep such registration statement continuously effective; (iii) piggyback
rights not less favorable than those provided in the Warrant Agreement; (iv) with respect to the
Company, at least three underwritten offerings during the term of the registration rights
agreement, but not more than one underwritten offering in any 12-month period and, with respect to
GGO, at least three underwritten offerings during the term of the registration rights agreement,
but not more than one in any 12-month period; (v) “black-out” periods not less favorable than those
provided in the Warrant Agreement; (vi) “lock-up” agreements by the Company or GGO, as applicable,
to the extent requested by the managing underwriter in any underwritten public offering requested
by a Purchaser, consistent with those provided in the Warrant Agreement (it being understood that
the registration rights agreement will include procedures reasonably acceptable to such Purchaser
and the Company designed to ensure that the total number of days that the Company or GGO, as
applicable, may be subject to a lock-up shall not, in the aggregate after taking into account any
applicable lock-up periods resulting from registration rights agreements between the Company or
GGO, as applicable, and the other Initial Investors exceed 120 days in any 365-day period; (vii) to
the extent that the Purchasers and the members of the Purchaser Group are Affiliates of the Company
or GGO, as applicable, at the time of an underwritten public offering by the Company or GGO, as
applicable, each Purchaser and the other members of the Purchaser Group will agree to a 60-day
customary lock up to the extent requested by the managing underwriter; and (viii) other terms and
conditions reasonably acceptable to each Purchaser. The registration rights agreement shall be in
full force and effect and neither the Company nor GGO shall be in breach of any representation,
warranty, covenant or agreement thereunder in any material respect.
(m) Listing. The Shares shall be authorized for listing on the NYSE, subject to
official notice of issuance, and the shares of New Common Stock issuable upon exercise of the New
Warrants shall be eligible for listing on the NYSE. If the GGO Rights Offering shall have
occurred, the GGO Shares shall be authorized for listing on a U.S. national securities exchange,
subject to official notice of issuance, and the shares of GGO Common Stock issuable upon
exercise of the GGO Warrants shall be eligible for listing on a U.S. national securities exchange.
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(n) Liquidity. The Company shall have, upon the consummation of the Plan and after
giving effect to the use of proceeds from Capital Raising Activities permitted under this Agreement
and the issuance of the Shares, and the payment and/or reserve for all allowed and disputed claims
under the Plan, transaction fees and other amounts required to be paid in cash under the Plan as
contemplated by the Plan Summary Term Sheet, an aggregate amount of not less than $500,000,000 of
Proportionally Consolidated Unrestricted Cash (the “Liquidity Target”) plus, the net
proceeds of the Additional Financings and the aggregate principal amount of the Anticipated Debt
Paydowns (or such higher number as may be agreed to by each Purchaser and the Company).
(o) [Intentionally Omitted.]
(p) Debt of the Company. Immediately following the Closing after giving effect to the
Plan, the aggregate outstanding Proportionally Consolidated Debt shall not exceed $22,100,000,000
in the aggregate minus (i) the amount of Proportionally Consolidated Debt attributable to assets
sold, returned, abandoned, conveyed, transferred or otherwise divested during the period between
the date of this Agreement through the Closing and minus (ii) the excess, if any, of $1,500,000,000
over the aggregate principal amount of new Unsecured Indebtedness incurred after the date of this
Agreement and on or prior to the Closing Date for cash (“New Debt”) and the aggregate
principal amount of any Debt under the Xxxxx Bonds or the Exchangeable Notes that is reinstated
under the Plan (such amounts reinstated, the “Reinstated Amounts”) minus (iii) the amount
of Proportionally Consolidated Debt attributable to Identified Assets contributed to GGO pursuant
to Section 2.1(a), minus (iv) the amount of Proportionally Consolidated Debt attributable
to assets other than Identified Assets contributed to GGO pursuant to Section 2.1(a) minus
(v) the principal and/or liquidation preference of the TRUPS and the UPREIT Units not reinstated,
plus (vi) in the event the Closing occurs prior to September 30, 2010, the amount of scheduled
amortization on Proportionally Consolidated Debt (other than Corporate Level Debt) from the Closing
Date to September 30, 2010 that otherwise would have been paid by September 30, 2010, minus (vii)
in the event the Closing occurs on or after September 30, 2010, the amount of actual amortization
paid on Proportionally Consolidated Debt (other than Corporate Level Debt) from September 30, 2010
to the Closing Date, plus (viii) (A) the excess of the aggregate principal amount of new Debt
incurred to refinance existing Debt in accordance with Section 7.1(r)(vii) hereof over the
principal amount of the Debt so refinanced and (B) new Debt incurred to finance unencumbered
Company Properties and Non-Controlling Properties after the date of this Agreement and on or prior
to the Closing (such amounts contemplated by clauses (A) and (B) collectively, the “Additional
Financing”) plus (ix) the amount of other principal paydowns, writedowns and resulting impact
on amortization (or payments in the anticipated amortization schedule with respect to Fashion Show
Mall (Fashion Show Mall LLC), The Shoppes at the Palazzo and Oakwood Shopping Center (Gretna, LA))
currently anticipated to be made by the Company in connection with refinancings, or completion of
negotiations in respect of its property level Debt which the Company determines in good faith are
not actually required to be made prior to Closing (“Anticipated Debt Paydowns”).
(q) Outstanding Common Stock. The number of issued and outstanding shares of New
Common Stock on a Fully Diluted Basis (including the Shares) shall not exceed the Share Cap Number.
The “Share Cap Number” means 1,104,683,256 plus up to 50,000,000 shares of New Common
Stock issued in Liquidity Equity Issuances, plus 42,857,143 shares of New Common Stock issuable
upon the exercise of the New Warrants and plus the shares of New Common Stock issuable upon the
exercise of those certain warrants issued to the Brookfield Consortium Members pursuant to the
Brookfield Agreement and to the Pershing Purchasers
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pursuant to the Pershing Agreement and plus the
number of shares of Common Stock issued as a result of the exercise of employee stock options to
purchase Common Stock outstanding on the date hereof; provided, that if Indebtedness under
the Xxxxx Bonds or the Exchangeable Notes is reinstated under the Plan or the Company shall have
incurred New Debt, or between the date of this Agreement and the Closing Date the Company shall
have sold for cash real property assets outside of the ordinary course of business (“Asset
Sales”), the Share Cap Number shall be reduced by the quotient (rounded up to the nearest whole
number) obtained by dividing (x) the sum of Reinstated Amounts and the net cash proceeds to the
Company from Asset Sales in excess of $150,000,000 and the issuance of New Debt by (y) the Per
Share Purchase Price.
(r) Conduct of Business. The following shall be true in all material respects as of
the Closing Date:
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 by
Article 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):
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(i) |
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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 on
Section 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) |
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the Company shall not have amended the
Company’s certificate of incorporation or bylaws other than to increase
the authorized shares of capital stock; |
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(iii) |
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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; |
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|
(iv) |
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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; |
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(v) |
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[intentionally omitted;] |
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(vi) |
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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
to Section 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 or (D) as set forth on
Section 7.1(u) of the Company Disclosure Letter); |
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(vii) |
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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
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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) |
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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 |
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(ix) |
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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). |
(s) REIT Opinion. Each Purchaser shall have received an opinion of Xxxxxx & Xxxxxx
LLP, dated as of the Closing Date, substantially in the form attached hereto as Exhibit J,
that the Company (x) for all taxable years commencing with the taxable year ended December 31, 2005
through December 31, 2009, has been subject to taxation as a REIT and (y) has operated since
January 1, 2010 to the Closing Date in a manner consistent with the requirements for qualification
and taxation as a REIT.
(t) Non-Control Agreements. The Company shall have entered into the Non-Control
Agreement with The Xxxxxxxxx Xxxx. 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.
(u) Issuance or Sale of Common Stock. Neither the Company nor any of its Subsidiaries
shall have issued or sold any shares of Common Stock (or securities, warrants or options that are
convertible into or exchangeable or exercisable for, or linked to the performance of, Common Stock)
(other than (A) pursuant to the Equity Exchange, (B) the issuance of shares pursuant to the
exercise of employee stock options issued pursuant to the Company Option Plans or (C) as set forth
on Section 7.1(u) of the Company Disclosure Letter), unless (1) the 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, the conversion, exchange or exercise price)
shall not be less than $10.00 per share (net of all underwriting and other discounts, fees and any
other compensation), (2) following such issuance or sale, (x) no Person (other than (i) the other
Initial Investors pursuant to the other Investment Agreements and (ii) any institutional
underwriter or initial purchaser acting in an underwriter capacity in an underwritten offering)
shall, after giving
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effect to such issuance or sale would beneficially own more than 10% of the
Common Stock of the Company on a Fully Diluted Basis, and (y) no five Persons (other than the
Purchasers, the members of the Pershing Purchaser Group, the members of the Fairholme Purchaser
Group, the Brookfield Consortium Members or the Brookfield Investor) shall, after giving effect to
such issuance or sale, beneficially own more than thirty percent (30%) of the Common Stock on a
Fully Diluted Basis; provided, that this clause (2) shall not be applicable to any
conversion or exchange of claims against the Debtors into New Common Stock pursuant to the Plan;
provided, further, that subclause (y) of this clause (2) shall not be applicable
with respect to any Person listed on Exhibit N and (3) each Purchaser shall have been
offered the right to purchase up to its GGP Pro Rata Share of 15% of such shares of Common Stock
(or securities, warrants or options that are convertible into or exchangeable or exercisable for
Common Stock) on terms otherwise consistent with Section 5.9 (except the provisions of such
Section 5.9 with respect to issuances contemplated by this Section 7.1(u) shall
apply from the date of this Agreement) (provided, that the right described in this clause
(3) shall not be applicable to the issuance of shares or warrants contemplated by the other
Investment Agreements, or any conversion or exchange of debt or other claims into equity in
connection with the Plan).
(v) Xxxxxx Heirs Obligations. The Xxxxxx Heirs Obligations shall have been determined
by order of the Bankruptcy Court entered on or prior to the Effective Date (which order may be the
Confirmation Order or another order entered by the Bankruptcy Court) and satisfied in accordance
with the terms of the Plan.
(w) GGO Promissory Note. The GGO Promissory Note, if any, shall have been issued by
GGO in favor of the Reorganized Company.
(x) Other Conditions. With respect to each other Initial Investor, either (A) its
Investment Agreement shall be in full force and effect without amendments or modifications (other
than those that are materially no less favorable to the Company than those provided in such
Investment Agreement as in effect on the date hereof), the conditions to the consummation of the
transactions under such Investment Agreement as in effect on the date hereof to be performed on the
Closing Date shall have been satisfied or waived with the prior written consent of each Purchaser,
acting separately and not jointly, and such Initial Investor shall have subscribed and paid for
such shares of New Common Stock that such Initial Investor is obligated to purchase thereunder, (B)
the funding to be provided by such Initial Investor under its Investment Agreement shall have been
provided by one or more other investors or purchasers acceptable to each Purchaser on terms and
conditions that such Purchaser has agreed are materially no less favorable to the Company than the
terms and conditions of the applicable Investment Agreement as in effect on the date hereof or (C)
in the case of an Initial Investor (other than a Brookfield Consortium Member), such Initial
Investor has breached its obligation to fund at Closing when required to do so in accordance with
the terms of its Investment
Agreement (it being understood that the foregoing shall not limit the Company’s right to
reduce the Total Purchase Amount under Section 1.4 hereof).
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ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
SECTION 8.1 Conditions to the Obligations of the Company. The obligation of the
Company to issue the Shares (and the obligation of GGO to issue the GGO Shares, if the GGO Rights
Offering shall have occurred) pursuant to this Agreement on the Closing Date are subject to the
satisfaction (or waiver by the Company) of the following conditions as of the Closing Date:
(a) No Injunction. No judgment, injunction, decree or other legal restraint shall
prohibit the consummation of the Plan or the transactions contemplated by this Agreement.
(b) Regulatory Approvals; Consents. All permits, consents, orders, approvals,
waivers, authorizations or other permissions or actions of third parties and Governmental Entities
required for the consummation of the transactions contemplated by this Agreement and the Plan shall
have been made or received, as the case may be, and shall be in full force and effect, except for
those permits, consents, orders, approvals, waivers, authorizations or other permissions or actions
the failure of which to make or receive would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
(c) Representations and Warranties and Covenants. Each of (i) the representations and
warranties of each Purchaser contained in Section 4.1, Section 4.2, Section
4.3, and Section 4.12 in this Agreement shall be true and correct at and as of the
Closing Date as if made at and as of the Closing Date (except for representations and warranties
made as of a specific date, which shall be true and correct only as of such specific date), and
(ii) the other representations and warranties of each Purchaser contained in this Agreement,
disregarding all qualifications and exceptions contained therein relating to “materiality”, shall
be true and correct at and as of the date of this Agreement and at and as of the Closing Date as if
made at and as of the Closing Date (except for representations and warranties made as of a
specified date, which shall be true and correct only as of the specified date), except for such
failures to be true and correct that, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the ability of such Purchaser to consummate the
transactions contemplated by this Agreement. Each Purchaser shall have complied in all material
respects with all of its obligations under this Agreement. Each Purchaser shall have provided to
the Company a certificate delivered by an executive officer of the managing member of such
Purchaser, acting in his or her official capacity on behalf of such Purchaser, to the effect that
the conditions in this clause (c) have been satisfied as of the Closing Date.
(d) Plan and Confirmation Order. The Plan shall have been confirmed by the Bankruptcy
Court by order, which order shall be in full force and effect and not subject to a stay of
effectiveness.
(e) Conditions to Confirmation. The conditions to confirmation and the conditions to
the Effective Date of the Plan shall have been satisfied or waived in accordance with the Plan.
(f) GGO. The GGO Share Distribution shall have occurred.
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(g) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that prohibits the issuance or sale of, pursuant to
this Agreement, the Shares, the issuance of Warrants, New Warrants, GGO Shares, GGO Warrants, the
issuance of New Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock
upon exercise of the GGO Warrants; and no injunction or order of any federal, state or foreign
court shall have been issued that prohibits the issuance or sale, pursuant to this Agreement, of
the Shares, the GGO Shares, the Warrants, the New Warrants, GGO Warrants, the issuance of New
Common Stock upon exercise of the New Warrants or the issuance of GGO Common Stock upon exercise of
the GGO Warrants.
(h) Reorganization Opinion. The Company shall have received an opinion of Weil,
Gotshal & Xxxxxx LLP, dated as of the Closing Date, in form and substance reasonably satisfactory
to the Company, substantially to the effect that, on the basis of the facts, representations and
assumptions set forth in such opinion, the exchange of Common Stock for New Common Stock in the
Equity Exchange should be treated as a reorganization within the meaning of Section 368(a) of the
Code. In rendering such opinion, Weil, Gotshal & Xxxxxx LLP may require and rely upon
representations and covenants made by the parties to this Agreement.
(i) IRS Ruling. The Company shall have obtained a favorable written ruling from the
United States Internal Revenue Service confirming the qualification of each of the GGO Share
Distribution and the prerequisite internal spin-offs each as a “tax free spin-off” under the Code.
(j) Funding. The applicable Purchaser shall have paid to the Company and, if the GGO
Rights Offering shall have occurred, GGO, as applicable, all amounts payable by such Purchaser
under Article I and Article II of this Agreement, by wire transfer of immediately
available funds to such account or accounts as shall have been designated in writing by the Company
at least three (3) Business Days prior to the Closing Date.
(k) REIT Matters. The representations and covenants set forth on Exhibit D in respect
of the applicable Purchaser and, to the extent applicable, its Affiliates, members, Affiliates of
members or designees, shall be true and correct in all material respects as of the Closing Date as
if made at and as of the Closing Date, it being understood that such Purchaser’s Affiliates,
members or Affiliates of members shall be required to provide such representations and covenants
only if such Person “beneficially owns” or “constructively owns” (as such terms are defined in the
certificate of incorporation of the Company) Common Stock or New Common Stock in excess of the
relevant ownership limit set forth in the certificate of incorporation of the Company or any stock
or other equity interest owned by such Person in a tenant of the Company would be treated as
constructively owned by the Company.
(l) Non-Control Agreements. The Xxxxxxxxx Xxxx shall have entered into the
Non-Control Agreement with the Company. The Non-Control Agreement shall be in full force and
effect and The Xxxxxxxxx Xxxx shall not be in breach of any representation, warranty, covenant or
agreement thereunder in any material respect.
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(m) GGO Promissory Note. The GGO Promissory Note, if any, shall have been issued by
GGO in favor of the Reorganized Company.
ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 10.1 Survival of Representations and Warranties. The representations and
warranties made in this Agreement shall survive the execution and delivery of this Agreement but
shall terminate and be of no further force and effect following the earlier of (i) the termination
of this Agreement in accordance with Article XI and (ii) the Closing.
ARTICLE XI
TERMINATION
SECTION 11.1 Termination. This Agreement and the obligations of the parties hereunder
shall terminate automatically without any action by any party if (i) the Company has not filed the
Approval Motion within two (2) Business Days following the date of this Agreement, (ii) the
Approval Order, in form and substance satisfactory to each Purchaser, approving, among other
things, the issuance of the Warrants and the warrants contemplated by each other Investment
Agreement, is not entered by the Bankruptcy Court on or prior to the date that is 43 days after the
date of this Agreement, (iii) if the Debtors withdraw the Approval Motion, or (iv) the conditions
to the obligations of any other Initial Investor pursuant to the other Investment Agreements to
consummate the closings as set forth therein are amended or modified in any respect prior to the
entry of the Approval Order, in each of cases (i), (ii), (iii) and (iv) unless each Purchaser and
the Company otherwise agrees in writing. In addition, this Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent of each Purchaser and the Company;
(b) by each Purchaser by written notice to the Company upon the occurrence of any of the
following events (which notice shall specify the event upon which such termination is based):
(i) if the Effective Date and the purchase and sale contemplated by Article I
have not occurred by the Termination Date; provided, however, that the right
to terminate
this Agreement under this Section 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;
-53-
(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 Xxxxx 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 the Warrants or a modification of the Warrants that
adversely affects any Purchaser;
(iv) if, without a Purchaser’s consent, the Warrants have not been issued to such
Purchaser in accordance with Section 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 (A) would result in a failure of a condition set forth in Article 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 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) of Common Stock or
New Common Stock or converts any claim against any of the Debtors into New
-54-
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 or (D)
the issuance of shares as set forth on Section 7.1(u) of the Company Disclosure
Letter);
(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”); or
(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 to Section 5.7;
(c) by the Company upon the occurrence of any of the following events:
(i) if the Effective Date and the purchase and sale contemplated by Article I
have not occurred by the Termination Date; provided, however, that the right
to terminate this Agreement under this Section 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 to Section 11.1(c)(ii) or
any other clause of this Section 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 this Section
11.1(c)(ii) during the 48 hour notice period contemplated by Section 5.7;
-55-
(iii) if all conditions to the obligations of each Purchaser to consummate the
transactions contemplated by this Agreement set forth in Article 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 under Article
I and Article 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.
SECTION 11.2 Effects of Termination.
(a) In the event of the termination of this Agreement pursuant to Article XI, this
Agreement shall forthwith become void and there shall be no liability or obligation on the part of
any party hereto except the covenants and agreements made by the parties herein under Article
XIII shall survive indefinitely in accordance with their terms. Except as otherwise expressly
provided in the Warrants or paragraph (b) below, the Warrants when issued in accordance with
Section 5.2 hereof and all of the obligations of the Company under the Warrant Agreement
shall survive any termination of this Agreement.
(b) In the event of a termination of this Agreement by the Company pursuant to Section
11.1(c)(iii), the parties agree that the Warrants held by any member of the Purchaser Group at
the time of such termination (but no Warrants held by any other Person if transferred as permitted
hereunder) shall be deemed cancelled, null and void and of no further effect. The foregoing shall
be a term of the Warrants.
ARTICLE XII
DEFINITIONS
SECTION 12.1 Defined Terms. For purposes of this Agreement, the following terms, when
used in this Agreement with initial capital letters, shall have the respective meanings set forth
in this Agreement:
(a) “2006 Bank Loan” means that certain Second Amended and Restated Credit Agreement,
dated as of February 24, 2006, by and among the Company, the Operating Partnership and GGPLP
L.L.C., as borrowers, the lenders named therein, Banc of America Securities LLC, Eurohypo AG, New
York Branch and Wachovia Capital Markets, LLC, as joint arrangers and joint bookrunners, Eurohypo
AG, New York Branch, as administrative agent, Bank of America, N.A. and Wachovia Bank, National Association, as syndication agents, and
Commerzbank AG and Xxxxxx Commercial Paper, Inc., as co-documentation agents.
(b) “Additional Sales Period” means in the case of Section 5.9(a)(iv) (A), the
120 day period following the date of the Company’s notice to Purchaser pursuant to Section
5.9(a)(ii), and in the case of Section 5.9(a)(iv) (B), the 120 day period following (x) the
expiration of the 180 day period specified in Section 5.9(a)(iii) or (y) if earlier, the
date on which it is finally determined that Purchaser is unable to consummate such purchase
contemplated by Section 5.9(a)(iii) within such 180 day period specified in Section
5.9(a)(iii).
-56-
(c) “Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person. For the purposes of this
definition, “control” means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting securities, contract or
otherwise.
(d) “Brazilian Entities” means those certain Persons in which the Company indirectly
own an interest which owns real property assets or have operations located in Brazil.
(e) “Brookfield Consortium Member” means Brookfield Asset Management Inc. or any
controlled Affiliate of Brookfield Asset Management Inc. or any Person of which Brookfield Asset
Management Inc. or any Subsidiary or controlled Affiliate of Brookfield Asset Management Inc. is a
general partner, managing member or equivalent thereof or a wholly owned subsidiary of the
foregoing.
(f) “Business Day” means any day other than (a) a Saturday, (b) a Sunday, (c) any day
on which commercial banks in New York, New York are required or authorized to close by Law or
executive order.
(g) “Capital Raising Activities” means the Company’s efforts to consummate equity and
debt financings for the Company, and sales of properties and other assets of the Company and its
Subsidiaries for cash.
(h) “Cash Equivalents” means as to any Person, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or instrumentality thereof
(provided, that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than 90 days from the date of acquisition by such Person,
(b) time deposits and certificates of deposit of any commercial bank having, or which is the
principal banking subsidiary of a bank holding company organized under the Laws of the United
States, any State thereof or the District of Columbia having capital, surplus and undivided profits
aggregating in excess of $500,000,000, having maturities of not more than 90 days from the date of
acquisition by such Person, (c) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in subsection (a) above entered into with any bank
meeting the qualifications specified in subsection (b) above, (d) commercial paper issued by any
issuer rated at least A-1 by S&P or at least P-1 by Xxxxx’x or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies cease publishing
ratings of commercial paper issuers generally, and in each case maturing not more
than one year after the date of acquisition by such Person or (e) investments in money market
funds substantially all of whose assets are comprised of securities of the types described in
subsections (a) through (d) above.
(i) “Change of Control” means any transaction or series of related transactions, in
which, after giving effect to such transaction or transactions, (i) any Person other than a member
of a Purchaser Group of the Pershing Purchasers or Fairholme Purchasers acquires beneficial
-57-
ownership (within the meaning of Rules 13d-3 and 13d-5 promulgated under the Exchange Act),
directly or indirectly, of more than fifty percent (50%) of either (A) the then-outstanding shares
of capital stock of the Company or (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of directors of the Company or
(ii) there occurs a direct or indirect sale, lease, exchange or transfer or other disposition of
all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis
(including securities of the entity’s directly or indirectly owned Subsidiaries).
(j) “Claims” shall have the meaning set forth in section 101(5) of the Bankruptcy
Code.
(k) “Closing Date Net Debt” means, as of the Effective Date but prior to giving effect
to the Plan, the sum of, without duplication:
|
(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. |
(l) “Closing Date Net Debt W/O Reinstatement Adjustment and Permitted Claims Amounts”
means, as of the Effective Date but prior to giving effect to the Plan, the sum of, without
duplication:
|
(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 |
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|
(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. |
(m) “Company Benefit Plan” means each “employee benefit plan” within the meaning of
Section 3(3) of ERISA and each other stock purchase, stock option, restricted stock, severance,
retention, employment, consulting, change-of-control, collective bargaining, bonus, incentive,
deferred compensation, employee loan, fringe benefit and other benefit plan, agreement, program,
policy, commitment or other arrangement, whether or not subject to ERISA (including any related
funding mechanism now in effect or required in the future), whether formal or informal, oral or
written, in each case sponsored or maintained by the Company or any of its Significant Subsidiaries
for the benefit of any past or present director, officer, employee, consultant or independent
contractor of the Company or any of its Significant Subsidiaries has any present or future right to
benefits.
(n) “Company Board” means the board of directors of the Company.
(o) “Competing Transaction” means, other than the transactions contemplated by this
Agreement or the Plan Summary Term Sheet, or by the other Investment Agreements, any offer or
proposal relating to (i) a merger, consolidation, business combination, share exchange, tender
offer, reorganization, recapitalization, liquidation, dissolution or similar transaction involving
the Company or (ii) any direct or indirect purchase or other acquisition by a “person” or “group”
of “beneficial ownership” (as used for purposes of Section 13(d) of the Exchange Act) of, or a
series of transactions to purchase or acquire, assets representing 30% or more of the consolidated
assets or revenues of the Company and its Subsidiaries taken as a whole or 30% or more of the
Common Stock of the Company (or securities convertible into or exchangeable or exercisable for 30%
or more of the Common Stock of the Company) or (iii) any recapitalization of the Company or the
provision of financing to the Company, in each case, other than the recapitalization and financing
transactions contemplated by this Agreement and the Plan Summary Term Sheet (or the financing
provided by the Initial Investors) or that will be effected together with the transactions
contemplated hereby.
(p) “Conclusive Net Debt Adjustment Statement” means a statement that: (i) sets forth
each of the five components of the Closing Date Net Debt (for the avoidance of doubt, this shall
include (x) the Permitted Claims Amount, which shall include the Reserve in the amount established
by the Bankruptcy Court, (y) the Reinstatement Adjustment Amount, and (z) with respect to clauses
(i), (iv) and (v) of the definition of Closing Date Net Debt, the Closing Date Net Debt Amount W/O
Reinstatement Adjustment and Permitted Claims Amounts as determined through the process provided
for in this Agreement shall be used), and (ii) sets forth the Net Debt Excess Amount or the Net
Debt Surplus Amount, as applicable.
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(q) “Contract” means any agreement, lease, license, evidence of indebtedness,
mortgage, indenture, security agreement or other contract.
(r) “Conversion Shares” means (i) with respect to the Purchaser Group, a number of
shares of New Common Stock determined by dividing (x) an amount equal to (A) the aggregate allowed
amount (inclusive of prepetition and postpetition interest fees and costs) of claims against the
Debtors held by any member of such Purchaser Group outstanding as of the Effective Date (the
“Purchaser Group Debt Holdings”) minus (B) the amount of cash actually received by the
holders of the Purchaser Group Holdings in respect thereof under the Plan by (y) the Per Share
Purchase Price and (ii) with respect to each Purchaser, its GGP Pro Rata Share of the Conversion
Shares.
(s) “Corporate Level Debt” means the debt described in Sections II A, H through O, Q,
R, S, W and X of the Plan Summary Term Sheet plus accrued and unpaid interest thereon.
(t) “Debt” means all obligations of the Company, its Subsidiaries and other Persons in
which the Company, directly or indirectly, holds a minority interest (a) evidenced by (i) notes,
bonds, debentures or other similar instruments (including, for avoidance of doubt, mezzanine debt),
or (ii) trust preferred shares, trust preferred units and other preferred instruments, and/or (b)
secured by a lien, mortgage or other encumbrance; provided, however, that Debt
shall exclude (x) any form of municipal financing including, but not limited to, special
improvement district bonds or tax increment financing, (y) an agreement for the use or possession
of property creating obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment), and (z) intercompany notes or preferred
interests between and among the Company and its wholly owned Subsidiaries.
(u) “DIP Loan” means that certain Senior Secured Debtor in Possession Credit, Security
and Guaranty Agreement, dated as of May 15, 2009, by and among the lenders named therein, UBS AG,
Stamford Branch, as administrative agent for the lenders, the Company and the Operating
Partnership, as borrowers, and the certain subsidiaries of the Company named therein, as
guarantors.
(v) “Disclosure Statement” means the disclosure statement to accompany the Plan as
amended, modified or supplemented.
(w) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
(x) “Essential Assets” means Xxxxxxxx Xxxx, Xxxxxxxxx Master Planned Community,
Xxxxxxxxx Centre and South Street Seaport unless otherwise agreed between each Purchaser and the
Company.
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(y) “Excess Surplus Amount” means the sum of (i) 100% or 80%, as applicable, of the
balance, if any, of the Reserve Surplus Amount (after giving effect to the application of the
Reserve Surplus Amount to reduce the principal amount of the GGO Promissory Note pursuant to
Section 5.16(d) and (ii) (A) if a GGO Promissory Note is required to be issued at Closing,
80% of the aggregate Offering Premium, if any, less the amount of any reduction in the principal
amount of the GGO Promissory Note pursuant to Section 5.16(c) hereof or (B) if the GGO
Promissory Note is not required to be issued at Closing, the sum of (x) 80% of the aggregate
Offering Premium and (y) 80% of the excess of the Net Debt Surplus Amount, if any, over the Xxxxxx
Amount.
(z) “Exchangeable Notes” means the 3.98% Exchangeable Senior Notes Due 2027 issued
pursuant to that certain Indenture, dated as of April 16, 2007, by and between the Operating
Partnership, as issuer, and The Bank of New York Mellon Corporation, as trustee.
(aa) “Excluded Claims” means:
|
(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 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, |
-61-
|
(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 the Xxxxxx Heirs Obligations, |
|
|
(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) |
|
except with respect to Claims related to GGO or the assets or
businesses contributed thereto, 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), |
|
|
(vi) |
|
the MPC Tax Reserve, and |
|
|
(vii) |
|
surety bond Claims relating to Claims of the type identified
in clauses (i) through (vi) of this definition. |
(bb) “Fairholme” means Fairholme Capital Management, LLC.
(cc) “Fully Diluted Basis” means all outstanding shares of the Common Stock, New
Common Stock or GGO Common Stock, as applicable, assuming the exercise of all outstanding Share
Equivalents (other than (x) any options issued to an employee of the Company or its Subsidiaries
pursuant to the terms of a Company Benefit Plan or to an employee of GGO or its Subsidiaries
pursuant to the terms of an employee equity plan of GGO or (y) preferred UPREIT Units) without
regard to any restrictions or conditions with respect to the exercisability of such Share
Equivalents.
(dd) “GAAP” means generally accepted accounting principles in the United States.
(ee) “GGO Common Share Amount” means 324,683,256 plus the number of shares of Common
Stock issued on or after the Measurement Date and prior to the record date of the GGO Share
Distribution as a result of the exercise, conversion or exchange of any Share Equivalents of the
Company outstanding on the Measurement Date into Common Stock and employee stock options issued
pursuant to the Company Option Plans.
(ff) [Intentionally Omitted.]
-62-
(gg) “GGO Note Amount” means: (i) in the event there is a Net Debt Excess Amount, the
aggregate of the Net Debt Excess Amount set forth on the Conclusive Net Debt Adjustment Statement
and the Xxxxxx Heirs Obligations to the extent satisfied with assets (including cash, but excluding
shares of New Common Stock or Identified Assets) of the Company (such amount so satisfied, the
“Xxxxxx Amount”); and (ii) in the event there is a Net Debt Surplus Amount, the Xxxxxx
Amount less the Net Debt Surplus Amount, provided, that in no event shall the GGO Note Amount be
less than zero.
(hh) “GGO Promissory Note” means an unsecured promissory note payable by GGO in favor
of the Reorganized Company in the aggregate principal amount of the GGO Note Amount, as adjusted
pursuant to Section 5.17(d), Section 5.17(e) and Section 5.17(g), (i)
bearing interest at a rate equal to the lower of (x) 7.5% per annum and (y) the weighted average
effective rate of interest payable (after giving effect to the payment of any underwriting and all
other discounts, fees and any other compensation) on each series of New Debt issued in connection
with the Plan and (ii) maturing on the fifth anniversary of the Closing Date (or if such date is
not a Business Day, the next immediately following Business Day), and (iii) including prohibitions
on dividends and distributions, no financial covenants and such other customary terms and
conditions as reasonably agreed to by each Purchaser and the Company.
(ii) “GGO Pro Rata Share” means, with respect to each Purchaser, the percentage set
forth on Schedule I for such Purchaser.
(jj) “GGO Purchase Price” means the product of (a) the GGO Per Share Purchase Price
multiplied by (b) the sum of (i) the number of Unsubscribed Shares and (ii) the number of shares of
GGO Common Stock subscribed on or before the Expiration Time by the applicable Purchaser pursuant
to the GGO Minimum Allocation Right.
(kk) “GGO Setup Costs” means such liabilities, costs and expenses as may be incurred
by the Company in connection with the formation and organization of GGO and the implementation of
the GGO Share Distribution, including any and all liabilities for any sales, use, stamp,
documentary, filing, recording, transfer, gross receipts, registration, duty, securities
transactions or similar fees or Taxes or governmental charges (together with any interest or
penalty, addition to Tax or additional amount imposed) as levied by any Taxing authority.
(ll) “GGO Shares” means the shares of GGO Common Stock purchased by the applicable
Purchaser in or in connection with the GGO Rights Offering and the shares of GGO Common Stock
received as Backstop Consideration.
(mm) “GGP Pro Rata Share” means, with respect to each Purchaser, the percentage set
forth on Schedule I for such Purchaser.
(nn) “Governmental Entity” means any (a) nation, region, state, province, county,
city, town, village, district or other jurisdiction, (b) federal, state, local, municipal, foreign
or other government, (c) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, court or tribunal, or other entity), (d) multinational
organization or body or (e) body entitled to exercise any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power of any nature or any other
self-regulatory organizations.
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(oo) “Xxxxxx Agreement” means that certain Contingent Stock Agreement, effective as of
January 1, 1996, by The Xxxxx Company in favor of and for the benefit of the Holders (named in
Schedule I thereto) and the Representatives (therein defined), as amended.
(pp) “Xxxxxx Heirs Obligations” means claims or interests against the Debtors arising
under or related to the Xxxxxx Agreement.
(qq) “Indebtedness” means, with respect to a Person without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred
purchase price of property (other than trade payables and accrued expenses incurred in the ordinary
course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, trust preferred shares, trust preferred units and other
preference instruments, (d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations in respect of capital leases under GAAP
of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or
applicant under acceptance, letter of credit, surety bond or similar facilities, (g) the monetary
obligations of a Person under (x) a so-called synthetic, off-balance sheet or tax retention lease,
or (y) an agreement for the use or possession of property creating obligations that do not appear
on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person,
would be characterized as the indebtedness of such Person (without regard to accounting treatment)
(each, a “Synthetic Lease Obligation”), (h) guaranties of such Person with respect to
obligations of the type described in clauses (a) through (g) above, (i) all obligations of other
Persons of the kind referred to in clauses (a) through (h) above secured by any lien on property
owned by such Person, whether or not such Person has assumed or become liable for the payment of
such obligation, (j) the net obligations of such Person in respect of hedge agreements and swaps
and (k) any obligation that, in accordance with GAAP, would be required to be reflected as debt on
the consolidated balance sheet of such Person.
(rr) “Joint Venture” means a Subsidiary of the Company which is owned partly by
another Subsidiary of the Company and partly by a third party.
(ss) “Knowledge” of the Company means the actual knowledge, as of the date of this
Agreement, of the individuals listed on Section 12.1(ss) of the Company Disclosure Letter.
(tt) “Law” means any statutes, laws (including common law), rules, ordinances,
regulations, codes, orders, judgments, decisions, injunctions, writs, decrees, applicable to the
Company or any of its Subsidiaries or any Purchaser, as applicable, or their respective properties
or assets.
(uu) “Liquidity Equity Issuances” means issuances of shares of New Common Stock in the
Plan for cash in excess of 1,104,683,256 shares of New Common Stock minus the number
of shares of New Common Stock equal to the (x) sum of the Reinstated Amounts and the net cash
proceeds to the Company from Asset Sales and the issuance of New Debt divided by (y) the Per Share
Purchase Price.
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(vv) “Material Adverse Effect” means any change, event or occurrence which (x) has a
material adverse effect on the results of operations or financial condition of the Company and its
direct and indirect Subsidiaries taken as a whole, other than changes, events or occurrences (i)
generally affecting (A) the retail mall industry in the United States or in a specific geographic
area in which the Company operates, or (B) the economy, or financial or capital markets, in the
United States or elsewhere in the world, including changes in interest or exchange rates or the
availability of capital, or (ii) arising out of, resulting from or attributable to (A) changes in
Law or regulation or in generally accepted accounting principles or in accounting standards, or
changes in general legal, regulatory or political conditions, (B) the negotiation, execution,
announcement or performance of any agreement between the Company and/or its Affiliates, on the one
hand, and any Purchaser and/or its Purchaser Group (or members thereof), on the other hand, or the
consummation of the transactions contemplated hereby or operating performance or reputational
issues arising out of or associated with the Bankruptcy Cases, including the impact thereof on
relationships, contractual or otherwise, with tenants, customers, suppliers, distributors, partners
or employees, or any litigation or claims arising from allegations of breach of fiduciary duty or
violation of Law or otherwise, related to the execution or performance of this Agreement or the
transactions contemplated hereby, including, without limitation, any developments in the Bankruptcy
Cases, (C) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of
war, sabotage or terrorism threatened or underway as of the date of the this Agreement, (D)
earthquakes, hurricanes, tornadoes or other natural disasters, (E) any action taken by the Company
or its Subsidiaries as contemplated or permitted by any agreement between the Company and/or its
Affiliates, on the one hand, and any Purchaser and/or Purchaser Group (or members thereof), on the
other hand, or with each Purchaser’s consent, or any failure by the Company to take any action as a
result of any restriction contained in any agreement between the Company and/or its Affiliates, on
the one hand, and any Purchaser and/or its Purchaser Group (or any member thereof), on the other
hand, or (F) in each case in and of itself, any decline in the market price, or change in trading
volume, of the capital stock or debt securities of the Company or any direct or indirect subsidiary
thereof, or any failure to meet publicly announced or internal revenue or earnings projections,
forecasts, estimates or guidance for any period, whether relating to financial performance or
business metrics, including, without limitation, revenues, net operating incomes, cash flows or
cash positions, it being further understood that any event, change, development, effect or
occurrence giving rise to such decline in the trading price or trading volume of the capital stock
or debt securities of the Company or such failure to meet internal projections or forecasts as
described in the preceding clause (F), as the case may be, may be the cause of a Material Adverse
Effect; so long as, in the case of clauses (i)(A) and (i)(B), such changes or events do not have a
materially disproportionate adverse effect on the Company and its Subsidiaries, taken as a whole,
as compared to other entities that own and manage retail malls throughout the United States, or (y)
materially impairs the ability of the Company to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder or under the other agreements executed in connection
with the transactions contemplated hereby.
(ww) “Material Contract” means, with respect to the Company and its Subsidiaries, any:
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(i) |
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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) |
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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. |
(xx) “MPC Assets” means residential and commercial lots in the “master planned
communities” owned by the Xxxxxx Xxxxxx Corporation or The Xxxxxx Corporation or related to the
Xxxxxxx Master Planned Community.
(yy) “MPC Taxes” means all liability for income Taxes in respect of sales of MPC
Assets sold prior to the date of this Agreement.
(zz) “MPC Tax Reserve” means any reserve for MPC Taxes to be established under the
Plan as determined by the Bankruptcy Court in the Confirmation Order or such other order as may be
entered by the Bankruptcy Court on or prior to the Effective Date, less any MPC Taxes paid prior to
the Effective Date.
(aaa) “Net Debt Excess Amount” means, the amount, which shall in no event be less than
$0, that is calculated by subtracting the Target Net Debt from the Closing Date Net Debt (as
reflected on the Conclusive Net Debt Adjustment Statement).
(bbb) “Net Debt Surplus Amount” means, the amount, which shall in no event be less
than $0, that is calculated by subtracting Closing Date Net Debt (as reflected on the Conclusive
Net Debt Adjustment Statement) from the Target Net Debt.
(ccc) “Non-Control Agreement” means the Non-Control Agreement the form of which is
attached hereto as Exhibit K.
(ddd) “Non-Controlling Properties” means the Company Properties listed on Section
12.1(ddd) of the Company Disclosure Letter. Each of the Non-Controlling Properties is owned by
a Joint Venture in which neither the Company nor any of its Subsidiaries is a controlling entity.
For purposes of this Section 12.1(ddd), the term “control” shall mean, possession, directly
or indirectly, of the power to direct the management and policies of a Person whether through the
ownership of voting securities, contract or otherwise; provided, however, that the
rights of any Person to exercise Major Decision Rights under a Joint Venture shall not constitute
or be deemed to constitute “control” for the purposes hereof. “Controlling” and “controlled” shall
have meanings correlative thereto. For purposes of this Section 12.1(ddd), the term “Major
Decision Rights” shall mean, the right to, directly or indirectly, approve, consent to, veto or
exercise a vote in connection with a Person’s voting or other decision-making authority in
respect of the collective rights, options, elections or obligations of such Person under a
Joint Venture.
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(eee) “Offering Premium” means, with respect to any shares of New Common Stock issued
for cash in conjunction with issuances of New Common Stock permitted by this Agreement (including
any Liquidity Equity Issuance) prior to, or on the Effective Date together with shares of New
Common Stock issued in Liquidity Equity Issuances completed within thirty (30) days of the
Effective Date, the product of (i) (A) the per share offering price of the shares of New Common
Stock issued (net of all underwriting and other discounts, fees or other compensation, and related
expenses) less (B) the Per Share Purchase Price and (ii) the number of shares of New Common Stock
sold pursuant thereto.
(fff) “Operating Partnership” means GGP Limited Partnership, a Delaware limited
partnership and a Subsidiary of the Company.
(ggg) “Permitted Claims” means, as of the Effective Date, other than Excluded Claims,
(a) all Claims against the Debtors covered by the Plan (the “Plan Debtors”) that are
classified in those certain classes of Claims described in Sections II B through E, G and P in the
Plan Summary Term Sheet (the “PMA Claims”), (b) all Claims or other amounts required to be
paid pursuant to the Plan to indenture trustees or similar servicing or administrative agents, with
respect to administrative fees incurred by or reimbursement obligations owed to such indenture
trustees or similar servicing or administrative agents in their capacity as such under the
Corporate Level Debt documents, (c) any claims of a similar type as the PMA Claims that are or have
been asserted against affiliates of the Plan Debtors that are or were debtors in the Bankruptcy
Cases and for which a plan of reorganization has already been consummated (the “Confirmed
Debtors”), (d) surety bond Claims relating to the types of Claims identified in clauses (a)
through (c) of this definition, and (e) GGO Setup Costs.
(hhh) “Permitted Claims Amount” means, as of the Effective Date, an amount equal to
the sum of (a) the aggregate amount of accrued and unpaid Permitted Claims that have been allowed
(by order of the Bankruptcy Court or pursuant to the terms of the Plan) as of the Effective Date,
plus (b) the aggregate amount of the reserve to be established under the Plan with respect to
Permitted Claims, as determined by the Bankruptcy Court in the Confirmation Order or such other
order as may be entered by the Bankruptcy Court on or prior to the Effective Date (the
“Reserve”), to provide for distributions on account of all other accrued and unpaid
Permitted Claims that have not been allowed or disallowed (in each case by order of the Bankruptcy
Court or pursuant to the terms of the Plan) as of the Effective Date, plus (c) the aggregate amount
of the GGO Setup Costs as of the Effective Date; provided, however, that there
shall be no duplication with any amounts otherwise included in Closing Date Net Debt.
(iii) “Permitted Replacement Shares” means New Common Stock that is sold for cash
proceeds immediately payable to the Company (net of all underwriting and other discounts, fees, and
related consideration) of not less than $10.50 per share of New Common Stock; provided,
that Permitted Replacement Shares shall not include any New Common Stock sold to any of the Initial
Investors or their Affiliates.
(jjj) “Person” means an individual, a group (including a “group” under Section 13(d)
of the Exchange Act), a partnership, a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization and a Governmental
Entity or any department, agency or political subdivision thereof.
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(kkk) “Preliminary Closing Date Net Debt Review Deadline” means the end of the
Preliminary Closing Date Net Debt Review Period, which date shall be the first business day that is
at least twenty (20) calendar days after delivery of the Preliminary Closing Date Net Debt
Schedule, and which shall be the deadline by which a Purchaser shall deliver to the Company a
Dispute Notice.
(lll) “Preliminary Closing Date Net Debt Review Period” means the period between the
Company’s delivery of the Preliminary Closing Date Net Debt Schedule and the Preliminary Closing
Date Net Debt Review Deadline.
(mmm) “Proportionally Consolidated Debt” means consolidated Debt of the Company less
(1) all Debt of Subsidiaries of the Company that are not wholly-owned and other Persons in which
the Company, directly or indirectly, holds a minority interest, to the extent such Debt is included
in consolidated Debt, plus (2) the Company’s share of Debt for each non-wholly owned Subsidiary of
the Company and each other Persons in which the Company, directly or indirectly, holds a minority
interest based on the company’s pro-rata economic interest in each such Subsidiary or the extent to
which the Company or its Subsidiary or Person is liable therefor, whichever is greater; provided,
however, for purposes of calculating Proportionally Consolidated Debt, the Debt of the Brazilian
Entities shall be deemed to be $110,437,781.
(nnn) “Proportionally Consolidated Unrestricted Cash” means the consolidated
Unrestricted Cash of the Company less (1) all Unrestricted Cash of Subsidiaries of the Company that
are not wholly-owned and Persons in which the Company, directly or indirectly, owns a minority
interest, to the extent such Unrestricted Cash is included in consolidated Unrestricted Cash of the
Company, plus (2) the Company’s share of Unrestricted Cash for each non-wholly owned Subsidiary of
the Company and Persons in which the Company, directly or indirectly, owns a minority interest
based on the Company’s pro rata economic interest in each such Subsidiary or Person; provided,
however, for purposes of calculating Proportionally Consolidated Unrestricted Cash, the
Unrestricted Cash of the Brazilian Entities shall be deemed to be $82,000,000, provided, further,
that any distributions of Unrestricted Cash made from the date of this Agreement to the Closing by
Brazilian Entities to the Company or any of its Subsidiaries shall be disregarded for purposes of
calculating Proportionally Consolidated Unrestricted Cash.
(ooo) “Purchaser Group” means, with respect to each Purchaser, such Purchaser, its
investment manager and their respective “controlled Affiliates”. For such purpose, one or more
investment funds under common investment management shall constitute “controlled Affiliates” of
their investment manager.
(ppp) “Reinstatement Adjustment Amount” means the difference resulting from
subtracting the Reinstatement Amount from the aggregate amount of Corporate Level Debt.
(qqq) “Reinstatement Amount” means the amount of Corporate Level Debt to the extent
such obligations will be reinstated pursuant to the Plan, including, to the extent applicable,
based on the elections of the holders of such Corporate Level Debt prior to the election deadline
established by the Bankruptcy Court.
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(rrr) “Reserve Surplus Amount” means, as of any date of determination, the excess, if
any, of the Reserves over (x) any Permitted Claims paid prior to such date from Reserves for such
Permitted Claims, plus (y) the remaining balance of the Reserve maintained by the Company as of
such date as determined by the Company Board.
(sss) “Rights Agreement” means that certain Rights Agreement, dated as of November 18,
1998, by and between the Company and BNY Mellon Shareowner Services, as successor to Norwest Bank
Minnesota, N.A., as amended on November 10, 1999, December 31, 2001 and November 18, 2008, and from
time to time.
(ttt) “Xxxxx Bonds” means (i) the 6-3/4% Senior Notes Due 2013 issued pursuant to the
Indenture, dated as of May 5, 2006, by and among The Xxxxx Company LP and TRC Co-Issuer, Inc., as
co-issuers and The Bank of New York Mellon Corporation, as trustee, and (ii) unsecured debentures
issued pursuant to the Indenture, dated as of February 24, 1995, by and between The Xxxxx Company,
as issuer, and The Bank of New York Mellon Corporation, as trustee.
(uuu) “Share Equivalent” means any stock, warrants, rights, calls, options or other
securities exchangeable or exercisable for, or convertible into, shares of Common Stock, New Common
Stock or GGO Common Stock, as applicable.
(vvv) “Significant Subsidiaries” means the operating Subsidiaries of the Company that
generated revenues in excess of $30,000,000 for the year ended December 31, 2009.
(www) “Specified Debt” means Claims in Classes H through N inclusive, in each case as
provided on the Plan Summary Term Sheet.
(xxx) “Subsidiary” means, with respect to a Person (including the Company), (a) a
company a majority of whose capital stock with voting power, under ordinary circumstances, to elect
a majority of the directors is at the time, directly or indirectly, owned by such Person, by a
subsidiary of such Person, or by such Person and one or more subsidiaries of such Person, (b) a
partnership in which such Person or a subsidiary of such Person is, at the date of determination, a
general partner of such partnership, (c) a limited liability company of which such Person, or a
Subsidiary of such Person, is a managing member or (d) any other Person (other than a company) in
which such Person, a subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (i) at least a majority
ownership interest or (ii) the power to elect or direct the election of a majority of the directors
or other governing body of such Person.
(yyy) “Target Net Debt” means $22,970,800,000.
(zzz) “Tax Protection Agreements” means any written agreement to which the Company,
its Operating Partnership or any other Subsidiary is a party pursuant to which: (i) in
connection with the deferral of income Taxes of a holder of interests in the Operating
Partnership, the Company, the Operating Partnership or the other Subsidiaries have agreed to (A)
maintain a minimum level of Indebtedness or continue any particular Indebtedness, (B) retain or not
dispose of assets for a period of time that has not since expired, (C) make or refrain from making
Tax elections, and/or (D) only dispose of assets in a particular manner; and/or (ii) limited
partners of the Operating Partnership have guaranteed Indebtedness of the Operating Partnership.
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(aaaa) “Termination Date” means December 31, 2010; provided, that if the
Confirmation Order shall have been entered on or prior to December 15, 2010 but the Company,
despite its commercially reasonable efforts, is unable to consummate the Closing on or prior to
December 31, 2010, the Company may extend the Termination Date for so long as Closing by January
31, 2011 is feasible and the Company continues to diligently pursue Closing; provided,
further, that the Termination Date shall not be extended beyond January 31, 2011.
(bbbb) “Transactions” means the purchase of the Shares and the GGO Shares and the
other transactions contemplated by this Agreement.
(cccc) “TRUPS” means certain preferred securities issued by GGP Capital Trust I.
(dddd) “Unrestricted Cash” means all cash and Cash Equivalents of the Company and of
the Subsidiaries of the Company, but excluding any cash or Cash Equivalents that are controlled by
or subject to any lien, security interest or control agreement, other preferential arrangement in
favor of any creditor or otherwise encumbered or restricted in any way.
(eeee) “Unsecured Indebtedness” means all indebtedness of the Company for borrowed
money or obligations of the Company evidenced by notes, bonds, debentures or other similar
instruments that are not secured by a lien on any Company Property or other assets of the Company
or any Subsidiary.
(ffff) “UPREIT Units” means preferred or common units of limited partnership interests
of the Operating Partnership.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices. All notices and other communications in connection with this
Agreement shall be in writing and shall be considered given if given in the manner, and be deemed
given at times, as follows: (x) on the date delivered, if personally delivered; (y) on the day of
transmission if sent via facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission; or (z) on the next
Business Day after being sent by recognized overnight mail service specifying next business day
delivery, in each case with delivery charges pre-paid and addressed to the following addresses:
(a) If to a Purchaser (which shall constitute notice to such Purchaser), to:
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Fairholme Capital Management, LLC
0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000 |
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with a copy (which shall not constitute notice) to: |
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Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Xxxx X. Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000 |
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Xxxxxxxxx Traurig, LLP
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. March, Esq.
Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000 |
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Herrick, Feinstein, LLP
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Xxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000 |
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(b) |
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If to the Company, to: |
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General Growth Properties, Inc.
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000 |
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with a copy (which shall not constitute notice) to: |
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Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000 |
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SECTION 13.2 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement may be assigned by any party without the
prior written consent of the other party. Notwithstanding the previous sentence, this Agreement,
or a Purchaser’s rights, interests or obligations hereunder (including, without limitation, the
right to receive any securities pursuant to the Transactions), may be assigned or transferred, in
whole or in part, by such Purchaser (a) to one or more members of its Purchaser Group;
provided, that no such assignment shall release such Purchaser from its obligations
hereunder to be performed by such Purchaser on or prior to the Closing Date or (b) with the prior
written consent of the Company, not to be unreasonably withheld, conditioned or delayed, to one or
more credit-worthy financial institutions who agree in writing to perform the applicable
obligations of such Purchaser hereunder (any assignment under clause (b) to which the Company has
so consented shall release such Purchaser from its obligations hereunder to the extent of the
obligations assigned). This Agreement (including the documents and instruments referred to in this
Agreement) is not intended to and does not confer upon any person other than the parties hereto any
rights or remedies under this Agreement. Notwithstanding the foregoing, or any other provisions
herein to the contrary, no Purchaser may assign any of its rights, interests or obligations under
this Agreement to the extent such assignment would preclude the applicable securities Laws
exemptions from being available or such assignment would cause a failure of the closing condition
in Section 7.1(u) of the Brookfield Agreement.
SECTION 13.3 Prior Negotiations; Entire Agreement. This Agreement (including the
exhibits hereto and the documents and instruments referred to in this Agreement) constitutes the
entire agreement of the parties and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties with respect to the subject matter of
this Agreement.
SECTION 13.4 Governing Law; Venue. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF, AND VENUE IN, THE UNITED STATES BANKRUPTCY COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.
SECTION 13.5 Company Disclosure Letter. The Company Disclosure Letter shall be
arranged to correspond to the Articles and Sections of this Agreement, and the disclosure in any
portion of the Company Disclosure Letter shall qualify the corresponding provision in Article
III and any other provision of Article III to which it is reasonably apparent on the
face of the disclosure that such disclosure relates. No disclosure in the Company Disclosure
Letter relating to any possible non-compliance, breach or violation of any Contract or Law shall be
construed as an admission that any such non-compliance, breach or violation exists or has actually
occurred. In the Company Disclosure Letter, (a) all capitalized terms used but not defined therein
shall have the meanings assigned to them in this Agreement and (b) the Section numbers correspond
to the Section numbers in this Agreement.
SECTION 13.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties; and delivered to the other
party (including via facsimile or other electronic transmission), it being understood that
each party need not sign the same counterpart.
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SECTION 13.7 Expenses. Each party shall bear its own expenses incurred or to be
incurred in connection with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby.
SECTION 13.8 Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions of this Agreement may be
waived, only by a written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance, and subject, to the extent required, to the approval of the Bankruptcy
Court. No delay on the part of any party in exercising any right, power or privilege pursuant to
this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any party of
any right, power or privilege pursuant to this Agreement, nor shall any single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this Agreement. The
rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity.
SECTION 13.9 Construction.
(a) The headings in this Agreement are for reference purposes only and shall not in any way
affect the meaning or interpretation of this Agreement.
(b) Unless the context otherwise requires, as used in this Agreement: (i) an accounting term
not otherwise defined in this Agreement has the meaning ascribed to it in accordance with GAAP;
(ii) “or” is not exclusive; (iii) “including” and its variants mean “including, without limitation”
and its variants; (iv) words defined in the singular have the parallel meaning in the plural and
vice versa; (v) references to “written” or “in writing” include in visual electronic form; (vi)
words of one gender shall be construed to apply to each gender; (vii) the terms “Article,”
“Section,” and “Schedule” refer to the specified Article, Section, or Schedule of or to this
Agreement; and (viii) the term “beneficially own” shall have the meaning determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof; provided,
however, that a Person will be deemed to beneficially own (and have beneficial ownership
of) all securities that such Person has the right to acquire, whether such right is exercisable
immediately or with the passage of time or the satisfaction of conditions. The terms “beneficial
ownership” and “beneficial owner” have correlative meanings.
(c) Notwithstanding anything to the contrary, and for all purposes of this Agreement, any
public announcement or filing of factual information relating to the business, financial condition
or results of the Company or its Subsidiaries, or a factually accurate (in all material respects)
public statement or filing that describes the Company’s receipt of an offer or proposal for a
Competing Transaction and the operation of this Agreement with respect thereto, or any entry into a
confidentiality agreement, shall not be deemed to evidence the Company’s or any Subsidiary’s
intention to support any Competing Transaction.
(d) In the event of a conflict between the terms and conditions of this Agreement and the Plan
Summary Term Sheet, the terms and conditions of this Agreement shall govern.
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(e) Unless otherwise agreed in writing between the Company and each Purchaser, wherever this
Agreement requires the action by, consent of or delivery to Purchaser, Purchasers, each Purchaser
or similar parties, each Purchaser hereby appoints Fairholme as its attorney-in-fact to exercise
all of the rights of such Purchaser hereunder (except for the assumption of any funding or related
liabilities or obligations), and the Company may rely on any instructions or elections made by such
Person; provided, that any such action by, consent of or delivery to Fairholme hereunder
shall constitute the separate, and not joint, action by, consent of or delivery to each Purchaser.
SECTION 13.10 Adjustment of Share Numbers and Prices. The number of Shares to be
purchased by each Purchaser at the Closing pursuant to Article I, the Per Share Purchase
Price, the GGO Per Share Purchase Price, the number of GGO Shares to be purchased by such Purchaser
pursuant to Article II and any other number or amount contained in this Agreement which is
based upon the number or price of shares of GGP or GGO shall be proportionately adjusted for any
subdivision or combination (by stock split, reverse stock split, dividend, reorganization,
recapitalization or otherwise) of the Common Stock, New Common Stock or GGO Common Stock that
occurs during the period between the date of this Agreement and the Closing. In addition, if at
any time prior to the Closing, the Company or GGO shall declare or make a dividend or other
distribution whether in cash or property (other than a dividend or distribution payable in common
stock of the Company or GGO, as applicable, the GGO Share Distribution or a distribution of rights
contemplated hereby), the Per Share Purchase Price or the GGO Per Share Purchase Price, as
applicable, shall be proportionally adjusted thereafter by the Fair Market Value (as defined in the
Warrant) per share of the dividend or distribution.
SECTION 13.11 Certain Remedies.
(a) The parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement or of any other agreement between them with respect to the Transaction
were not performed in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that, in addition to any other applicable remedies at law or equity, the parties
shall be entitled to an injunction or injunctions, without proof of damages, to prevent breaches of
this Agreement or of any other agreement between them with respect to the Transaction and to
enforce specifically the terms and provisions of this Agreement.
(b) To the fullest extent permitted by applicable law, the parties shall not assert, and
hereby waive, any claim or any such damages, whether or not accrued and whether or not known or
suspect to exist in its favor, against any other party and its respective Affiliates, members,
members’ affiliates, officers, directors, partners, trustees, employees, attorneys and agents on
any theory of liability, for special, indirect, consequential or punitive damages (as opposed to
direct or actual damages) (whether or not the claim therefor is based on contract, tort or duty
imposed by any applicable legal requirement) arising out of, in connection with, or as a result of,
this Agreement or of any other agreement between them with respect to the Transaction or the
transactions contemplated hereby or thereby.
-74-
(c) Prior to the entry of the Confirmation Order, other than with respect to the Company’s
obligations under Section 5.1(c), each Purchaser’s right to receive the Warrants on the
terms and subject to the conditions set forth in this Agreement shall constitute the sole and
exclusive remedy of any nature whatsoever (whether for monetary damages, specific performance,
injunctive relief, or otherwise) of such Purchaser against the Company for any harm, damage or loss
of any nature relating to or as a result of any breach of this Agreement by the Company or the
failure of the Closing to occur for any reason; provided, that, following the entry of the
Approval Order, each Purchaser shall be entitled to specific performance of the Company’s
obligation to issue the Warrants as well as the Company’s obligations under Section 5.1(c)
hereof.
(d) Following the entry of the Confirmation Order, each Purchaser shall be entitled to
specific performance of the terms of this Agreement, in addition to any other applicable remedies
at law
(e) The Company, on behalf of itself and its respective heirs, successors, and assigns, hereby
covenants and agrees never to institute or cause to be instituted or continue prosecution of any
suit or other form of action or proceeding of any kind or nature whatsoever against any member of
any Purchaser or its Purchaser Group by reason of or in connection with the Transaction;
provided, however, that nothing shall prohibit the Company from instituting an
action against any Purchaser in connection with this Agreement in accordance with the provisions of
this Section 13.11.
(f) For the avoidance of doubt, the failure of any Purchaser under this Agreement to satisfy
its obligations hereunder shall not relieve any other Purchaser from its obligations hereunder,
including the obligation to consummate the transactions hereunder if all other conditions to such
Purchaser’s obligations have been satisfied or waived.
SECTION 13.12 Bankruptcy Matters. For the avoidance of doubt, all obligations of the
Company and its Subsidiaries in this Agreement are subject to and conditioned upon (a) with respect
to the issuance of the Warrants and the other obligations contained in the Approval Order, entry of
the Approval Order, and (b) with respect to the remainder of the provisions hereof, entry of the
Confirmation Order.
[Signature Pages Follow]
-75-
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and delivered by
each of them or their respective officers thereunto duly authorized, all as of the date first
written above.
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FAIRHOLME FUNDS, INC.,
on behalf of its series The Xxxxxxxxx Xxxx
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By: |
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Name: |
Xxxxx X. Xxxxxxxxx, President |
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FAIRHOLME FUNDS, INC.,
on behalf of its series Fairholme Focused Income Fund
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By: |
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Name: |
Xxxxx X. Xxxxxxxxx, President |
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Signature Page of Fairholme Stock Purchase Agreement
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GENERAL GROWTH PROPERTIES,
INC.
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By: |
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Name: |
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Title: |
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Signature Page of Fairholme Stock Purchase Agreement
EXHIBIT D — REIT REPRESENTATION LETTER
EXHIBIT E
EXHIBIT E
GGO ASSETS
Pursuant to Section 2.1(a), and subject to the conditions, exceptions and qualifications
set forth therein, the Company will contribute to GGO (directly or indirectly) the assets (and/or
equity interests related thereto) listed below:
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Master Planned Communities |
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Bridgelands |
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Columbia — subject to Section 2.1(e) of the Agreement |
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Xxxxxxx |
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Fairwoods |
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Xxxxxxxxx |
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Woodlands — joint venture interest |
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000 X. Xxxxxx (leasehold interest) — joint venture interest |
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Ala Moana Tower — air rights over existing parking deck |
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Xxxxxxx Xxxxx, Xxxxx |
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Xxxxx Xxxxx Xxxxx, Xxxxx |
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Arizona 2 Office — capital lease revenue only; no transfer to GGO of underlying
properties |
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Bridges at Mint Hill, North Carolina |
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Century Plaza, Alabama |
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Circle T Ranch & Power Centre, Texas — joint venture interest |
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Condos Nouvelle at Natick — rights to income from assets sold and for which a closing
has occurred prior to Closing remain with GGP |
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Cottonwood Mall and Cottonwood Square |
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Elk Grove Promenade |
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Fashion Show — springing right to acquire Fashion Show air rights upon full
satisfaction of existing loans and guaranties at Fashion Show and Palazzo. |
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Golf course interests — TPC Xxxxxxxxx & TPC Canyons |
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Hexalon Real Estate, LLC (including its 1.420% joint venture interest in Head
Acquisition, LP, which indirectly owns interests in Oakbrook Center, Southpoint Mall and
Water Tower Place) |
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Xxxxxxx Xxxxx Center, Miami — land |
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Landmark Mall |
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Maui Ranch property |
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Xxxx Xxxx Xxxx |
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Xxxxxxxxx, Xxx Xxxxxx — land |
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Rio West, New Mexico |
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Riverwalk Market Place |
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South Street Seaport |
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Xxxxxxxxx Centre |
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Xxxxxxxxx Hospital — joint venture interest |
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Xxxxxxxx Xxxx |
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Village of Redlands, California (Redlands Mall and Redlands Promenade) |
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Volo, Illinois — land |
2
EXHIBIT F — FORM OF APPROVAL ORDER
Exhibit F
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UNITED STATES BANKRUPTCY COURT |
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SOUTHERN DISTRICT OF NEW YORK |
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x |
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In re
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: : : |
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Chapter 11 Case No. |
GENERAL GROWTH
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09-11977 (ALG) |
PROPERTIES, INC., et al.,
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Debtors.
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(Jointly Administered) |
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ORDER PURSUANT TO SECTIONS 105(a) AND 363 OF THE BANKRUPTCY
CODE (A) APPROVING BIDDING PROCEDURES, (B) AUTHORIZING THE
DEBTORS TO ENTER INTO CERTAIN AGREEMENTS, (C) APPROVING
THE ISSUANCE OF WARRANTS, AND (D) GRANTING RELATED RELIEF
Upon the motion, dated March 31, 2010 (the “
Motion”)
1 of South Street
Seaport Limited Partnership, its ultimate parent, General Growth Properties, Inc. (“
GGP”),
and their debtor affiliates, as debtors and debtors in possession (collectively, “
General
Growth”), pursuant to sections 105(a) and 363 of title 11 of the United States Code (the
“
Bankruptcy Code”), seeking entry of an order (A) approving bidding procedures (the
“
Bidding Procedures”) substantially in the form attached hereto as
Exhibit 1, (B)
authorizing General Growth to enter into certain investment agreements (each an “
Investment
Agreement” and collectively, the “
Investment Agreements”) with REP Investments LLC
(“
REP”), an affiliate of Brookfield Asset Management Inc. (“
Brookfield”), Fairholme
Capital Management, LLC (“
Fairholme”), and
Pershing Square Capital Management, L.P.
(“
Pershing” and together with REP and Fairholme, the “
Commitment Parties”), (C)
approving the issuance of the Warrants, and (D) granting related relief, all as more fully set
forth in the Motion; and the Court having reviewed the Motion; and General Growth having provided
notice of the Motion and Hearing (as
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Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed to them in the Motion. |
defined below) to (i) the Office of the United States Trustee for the Southern District of New
York (the “U.S. Trustee”), (ii) counsel to the official committee of unsecured creditors
(the “Committee”), (iii) counsel to the committee of equity holders (the “Equity
Committee”), (iv) counsel to Brookfield, (v) counsel to Fairholme, (vi) counsel to Pershing,
and (vii) parties entitled to receive notice in these chapter 11 cases pursuant to Rule 2002 of the
Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”); and the Court having held a
hearing to consider the requested relief (the “Hearing”); and the legal and factual bases
set forth in the Motion establishing just cause for the relief granted herein; and upon the record
of the Hearing, and all of the proceedings before the Court, the Court finds and determines that
the requested relief is in the best interests of General Growth, their estates, creditors, and all
parties in interest; and after due deliberation and sufficient cause appearing therefor, the Court
hereby
FINDS, DETERMINES AND CONCLUDES THAT:
A. The Court has jurisdiction over the Motion pursuant to 28 U.S.C. §§ 157 and 1334 and the
Standing Order M-61 Referring to Bankruptcy Judges for the Southern District of New York Any and
All Proceedings Under Title 11, dated July 10, 1984 (Xxxx, Acting X.X.). This matter is a core
proceeding pursuant to 28 U.S.C. § 157(b). Venue of these cases and the Motion in this district is
proper under 28 U.S.C. §§ 1408 and 1409.
B. Good and sufficient notice of the relief sought in the Motion has been given, and no other
or further notice is required. A reasonable opportunity to object or be heard regarding the relief
requested in the Motion has been afforded to all interested persons.
C. The statutory predicates for the relief granted herein are sections 105(a) and 363(b) of
the Bankruptcy Code. In addition the relief granted herein is in accordance with Bankruptcy Rules
2002 and 6004 and rules 2002-1 and 6004-1 of the Local Rules of Bankruptcy
Practice and Procedure of the United States Bankruptcy Court for the Southern District of New
York.
2
D. The Bidding Procedures substantially in the form attached hereto as Exhibit 1,
including reimbursement of expenses incurred by a bidder in accordance with the Bidding Procedures,
are fair, reasonable, and appropriate and are designed to maximize the value General Growth may
realize through a competitive process for the benefit of all stakeholders.
E. General Growth has demonstrated sound business justifications for authorization to enter
into the Investment Agreements, to the extent provided in this Order, with REP, Fairholme, and
Pershing, and for approval to execute, deliver and perform the Warrant Agreements and the Warrants
(together, with the Investment Agreements the “Reorganization Documents”). These business
justifications include without limitation:
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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, |
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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, |
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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
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iv. |
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the lengthy nature of the commitments to purchase
$6.55 billion of publicly-listed stock at a fixed price. |
F. General Growth, assisted by qualified professional advisors, has conducted a competitive
process to identify alternative sources of equity capital commitments for a plan of reorganization,
as well as explored strategic opportunities, which process will continue as described in the
Bidding Procedures. General Growth has made a reasonable determination that it is in the best
interests of General Growth to enter into the Warrant Agreements with the Commitment Parties and
grant indemnity as provided in Article IX of the REP Investment Agreement at this time.
G. The Warrants and the Warrant Agreement relating to each Commitment Party were proposed and
negotiated in good faith and at arm’s length.
H. The execution, delivery and performance of the Warrant Agreements and the issuance of the
Warrants relating to each Commitment Party are fair and reasonable and in the best interests of
General Growth, and do not conflict with any federal or state law.
I. The Warrant Agreement and the Warrants issued to each Commitment Party are bargained-for
and integral parts of the agreement between General Growth and such Commitment Party reflected in
the Reorganization Documents. If the Warrants are not approved by the Court and issued as provided
in the Warrant Agreements, each Commitment Party will have the right to terminate its obligations
under the applicable Investment Agreement.
J. The Warrant Agreement and the Warrants issued to each Commitment Party are supported by at
least reasonably equivalent value and fair consideration given by the execution and delivery of the
applicable Investment Agreement and the commitments provided thereunder. The Warrants, once
issued, will be deemed issued and sold for value fully paid on
the date of issuance and will constitute legal, valid, binding and authorized obligations of
General Growth enforceable in accordance with their terms.
4
K. Entry of this Order is in the best interests of General Growth and its estates, creditors,
and interest holders and all other parties in interest herein.
L. The findings and conclusions set forth herein constitute the Court’s findings of fact and
conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to
Bankruptcy Rule 9014. To the extent that any finding of fact shall later be determined to be a
conclusion of law, it shall be so deemed and vice versa.
ACCORDINGLY, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. The Bidding Procedures attached hereto as Exhibit 1 are APPROVED as if fully
incorporated into this Order and General Growth is authorized to act in accordance therewith;
provided, however, that the Bidding Procedures shall be without prejudice to the rights of the
Commitment Parties under the Reorganization Documents. The failure to specifically include a
reference to any particular provision of the Bidding Procedures in this Order shall not diminish or
impair the effectiveness of such provision.
2. Notwithstanding any confidentiality agreement that may be contained in any agreement,
contract, or other document to which General Growth is a party, General Growth is authorized to
disclose the contents of such agreement, contract, or document to prospective bidders to the extent
required by the Bidding Procedures and such disclosure shall not be a breach of any such contract,
agreement or document.
3. General Growth is authorized, in its sole discretion and subject to the exercise of its
business judgment, to reimburse expenses incurred by any bidder in accordance
with the Bidding Procedures up to $1 million per bidder; provided, however, that in no event
shall General Growth reimburse more than an aggregate of $10 million for such expenses.
5
4. General Growth is authorized to enter into the Reorganization Documents and to issue and
sell the Warrants to each Commitment Party in accordance with the terms of the Investment
Agreements and Warrant Agreements. General Growth is authorized to perform its obligations under
the Warrant Agreements and the Warrants.
5. The Warrant Agent is authorized to perform its obligations under the Warrant Agreement in
accordance with the terms and conditions thereof.
6. Upon issuance of the Warrants to any Commitment Party, such Commitment Party shall be fully
and irrevocably vested with all right, title and interest in the Warrants free and clear of any
adverse claim or interest. The Warrant Agreements and the Warrants shall not be recharacterized
for any purpose or avoided for any reason whatsoever and shall not constitute fraudulent
conveyances under the Bankruptcy Code or other applicable nonbankruptcy law.
7. The Warrant Agreement and Warrants issuable to each Commitment Party are authorized as a
sale of property under section 363(b) of the Bankruptcy Code. Each Commitment Party is purchasing
the Warrants in good faith for purposes of section 363(m) of the Bankruptcy Code and, accordingly,
the reversal or modification on appeal of the authorization provided herein to issue the Warrants
pursuant to the Warrant Agreement shall not affect the validity of the issuance and sale of the
Warrants to such Commitment Party or the right, title and interest of such Commitment Party and its
successors and permitted assigns in the Warrants or any securities issued upon exercise of the
Warrants.
6
8. The provisions of Sections 5.1(c), 5.7, 11.1, 13.11(c), 13.12, and Article IX of the REP
Investment Agreement and Sections 5.1(c), 5.7, 11.1, 13.11(c), and 13.12 of the Pershing Investment
Agreement and the Fairholme Investment Agreement are approved and shall be binding upon General
Growth. Each of the Warrants and the Warrant Agreements are approved. No relief from the
automatic stay or the provisions of section 362 of the Bankruptcy Code shall be required for REP,
Fairholme, and/or Pershing to take any action, or send any notice, with respect to the exercise of
a termination right under the terms of the Investment Agreements and/or the Warrant Agreements.
9. All amounts payable by General Growth under Article IX of the REP Investment Agreement
shall constitute allowed administrative expenses of General Growth under section 503(b) and section
507(a)(2) of the Bankruptcy Code.
10. The failure specifically to include any particular provision of the Warrant Agreements in
this Order shall not diminish or impair the effectiveness of such provision, it being the intent of
the Court that the Warrants or the Warrant Agreements and their exhibits, schedules, appendices and
ancillary documents be authorized and approved in their entirety.
11. General Growth is authorized to execute and deliver all instruments and documents and take
any other actions as may be necessary or appropriate to implement and effectuate the transactions
contemplated by this Order.
12. All objections to the Motion or the relief requested therein that have not been withdrawn,
waived, settled, or specifically addressed in this Order, and all reservations of rights included
in such objections, are overruled in all respects on the merits.
7
13. Notwithstanding Bankruptcy Rules 6004, 6006 or otherwise, this Order shall be effective
and enforceable immediately upon entry and its provisions shall be self-executing.
14. All time periods set forth in this Order shall be calculated in accordance with Bankruptcy
Rule 9006.
15. This Court shall retain jurisdiction over any matters related to or arising from the
implementation or interpretation of this Order. To the extent any provisions of this Order shall
be inconsistent with the Motion or any prior order or pleading in these cases with respect to the
Motion, the terms of this Order shall control.
16. The provisions of this Order are non-severable and mutually dependant.
Dated: ________________, 0000
Xxx Xxxx, Xxx Xxxx
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THE XXXXXXXXX XXXXX X. XXXXXXX |
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UNITED STATES BANKRUPTCY JUDGE |
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8
Exhibit 1
Bidding Procedures
BIDDING PROCEDURES
The following procedures (the “Bidding Procedures”) will govern the competitive
process run by General Growth Properties, Inc. (“GGP”), and its debtor and non-debtor
affiliates (collectively, “General Growth” or the “Company”) to maximize the value
of its estates by soliciting proposals for:
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a purchase of all or substantially all of the Company (an “M&A
Transaction”); |
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a purchase of a significant portion of the Company’s assets (an “Asset
Purchase”); or |
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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. |
Following completion of the competitive processes, the Company will seek approval of its
restructuring pursuant to a plan of reorganization (a “Plan”).
Preliminary Diligence
The Company may afford any prospective acquirers and/or investors the opportunity to conduct a
reasonable due diligence review in the manner determined by General Growth, in its sole discretion.
General Growth has begun to provide certain parties who have either expressed an interest in
making a proposal or who General Growth believes may have an interest in making a proposal
(collectively, the “Interested Parties”) with requests for such proposals (“RFPs”)
and confidential information memoranda (“CIMs”). In addition, General Growth has provided
Interested Parties with access to certain information,2 including these Bidding
Procedures, through a virtual data room (the “Data Room”) or otherwise. The Data Room has
been operational as of March 3, 2010.
Parties submitting proposals may seek reimbursement of expenses incurred in connection with
these Bidding Procedures up to $1 million per bidder by providing a written request for
reimbursement with a summary and detailed backup for the expenses incurred. The Company will
consider any such request and, in its sole discretion and subject to the exercise of its business
judgment, determine whether to provide reimbursement; provided, however, that in no event will
General Growth reimburse more than $10 million in the aggregate.
Each party submitting a Term Sheet (as defined below) shall be deemed to acknowledge and
represent that it has had an opportunity to conduct due diligence on General Growth in connection
with the first round prior to submitting its Term Sheet; and that it solely relied upon its own
independent review, investigation and/or inspection of any documents and/or
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Certain information may be restricted due to anti-trust
or other concerns. |
2
the assets in making
its proposal; and that it did not rely upon any written or oral statements,
representations, promises, warranties or guaranties whatsoever, whether express, implied, by
operation of law or otherwise, regarding General Growth, or the completeness of any information
provided in connection therewith; provided, that the foregoing shall not apply to REP, Fairholme,
and/or Pershing, who have executed Investment Agreements (respectively, the “REP
Agreement,” the “Fairholme Agreement,” and the “Pershing Agreement”) and
Warrant Agreements with General Growth, and the representations, warranties, and covenants set
forth in such agreements.
First Round Bidding Process
The Company will provide reasonable assistance to prospective acquirers and/or investors in
conducting their due diligence. Prospective acquirers and investors will be expected to submit a
non-binding, detailed term sheet for a transaction (“Term Sheets”) in writing on or before
April 19, 2010 at 3:00 p.m. (Eastern Time) to the following “Bid Notification Parties”:
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Xxxxx Xxxxxx
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Xxxxxxx Xxxxx |
Managing Director
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Vice Chairman |
Xxxxxx Buckfire & Co., LLC
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Global Head of Real Estate, Lodging and Leisure |
000 X. 00xx Xxxxxx, 00xx Xxxxx
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UBS Securities, LLC |
Xxx Xxxx, Xxx Xxxx 00000
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000 Xxxx Xxxxxx |
Tel:(000) 000-0000
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Xxx Xxxx, XX 00000 |
Fax:(000) 000-0000
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Tel: (000) 000-0000 |
xxxxx.xxxxxx@xxxxxxxxxxxxxx.xxx
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Fax: (000) 000-0000 |
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xxxxxxx.xxxxx@xxx.xxx. |
Each Term Sheet must contain detailed descriptions of the M&A Transaction, Asset Purchase,
Plan Sponsor Investment and Plan (collectively, as applicable, the “Transaction”) that are
the subject of such Term Sheet. Subject to the applicable confidentiality agreements or
provisions, the Company and its professionals will share the Term Sheets received during the first
round with the advisors to the official committee of equity security holders and the official
committee of unsecured creditors (collectively, the “Committees”).
The Company will review those Term Sheets timely submitted and engage in negotiations with
those prospective acquirer and/or investors that submitted Term Sheets complying with the preceding
paragraph and as it deems appropriate in the exercise of its business judgment, subject to
consultation with the Committees. The Company will select, in its business judgment and after
consultation with the Committees, those proposals qualifying for the second round on or before
April 28, 2010.
3
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Proposal Assumptions |
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Any proposal should make the following assumptions: |
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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 satisfy
their claims of principal and accrued interest (to the extent allowed by the Bankruptcy
Court) in full; |
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(ii) |
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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; |
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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 |
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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
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Proposal Requirements |
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Based on the form of transaction proposed, a Term Sheet should include the following: |
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M&A Transaction
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Plan Sponsor Investment |
(i)
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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);
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(i)
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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); |
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(ii)
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Proposed treatment for each class of unsecured indebtedness outstanding; |
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(ii)
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Proposed treatment for each class of unsecured
indebtedness outstanding; |
(iii)
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Proposed purchase price per share of existing common stock;
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(iii)
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Valuation per share of common stock implied by
the proposal; |
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(iv)
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Transaction structure (stock deal, asset purchase, etc.);
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(iv)
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Investment structure (e.g., PIPE, rights
offering, other); |
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(v)
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Form of consideration (cash, stock, etc.), and methodology for
determining any non-cash consideration;
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(v)
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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; |
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(vi)
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If providing stock consideration, indicate the following:
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(vi)
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Key terms of newly issued securities,
including but not limited to: |
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• Value ascribed to
synergies and related methodology, if applicable;
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• Economic terms (ownership implied by
investment; discount/fees related to
investment); |
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• Pro forma
financials for combined company; |
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• Governance; |
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• Pro forma capital
structure implied by proposal;
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• Registration rights; |
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(vii)
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Sources and certainty of capital, including equity or debt commitment
letters; |
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(vii)
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Use of funds and pro forma capital structure
(to the extent the proposal contemplates
providing capital above the minimum amount
requested); |
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(viii)
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Approvals required or anticipated, including regulatory approval(s);
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(viii)
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Assumption regarding maximum debt capacity at
the corporate level; |
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(ix)
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A listing of all regulatory authorities with whom contact has been
made, and a
summary of any approvals or objections obtained or raised; |
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(ix) |
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Sources and certainty of capital, including
equity or debt commitment letters; |
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(x)
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Shareholder or other required approvals; |
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(x) |
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Approvals required or anticipated, including
regulatory approval(s); |
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(xi)
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Transaction timing/process;
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(xi)
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A listing of all regulatory authorities with
whom contact has been made, and a summary of
any approvals or objections obtained or
raised; |
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(xii)
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Key contingencies and conditions precedent; and |
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(xii)
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Transaction timing and process; |
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(xiii)
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Detailed list of remaining due diligence requirements. |
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(xiii) |
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Key contingencies and conditions precedent; and |
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(xiv)
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Detailed list of remaining due diligence
requirements. |
5
Second Round Process
The Company will consider the first round bids and determine those bids that will advance to
the second round process. In evaluating the Term Sheets, the Company will take into consideration,
among other things, the TEV and EV implied by the proposed transaction, the form, value and
certainty of recovery provided to prepetition creditors and shareholders, transaction structure and
execution risk, including conditions to close, availability of financing, and approvals required.
Upon completion of this review, the Company will select a limited number of parties to complete due
diligence and provide the Company with final financing commitments in advance of filing a Plan.
The Company will (i) provide additional due diligence information to prospective acquirers
and/or investors (including REP, Brookfield, Fairholme, and Pershing), to the extent that they have
not previously received such information or new information becomes available, and (ii) negotiate
documentation of proposals selected for the second round.
Prospective acquirers and/or investors will be expected to submit solid fully financed,
binding offers with proposed final documentation (“Final Proposals”) on or before June 2,
2010 at 4:00 p.m. (Eastern Time) to the Bid Notification Parties listed above. The Company and its
professionals will share, subject to applicable confidentiality agreements or provisions, the Final
Proposals received during the second round with the advisors to the Committees.
The Company will analyze the Final Proposals received during the second round, and will engage
in discussion with prospective acquirers and/or investors regarding their respective Final
Proposal. These discussions will provide prospective acquirers and/or investors, within a
reasonable time before the Company makes a final determination, an opportunity to improve their
proposals to exceed proposals the Company is considering accepting. On or before July 2, 2010, the
Company intends to select, in its business judgment and after consultation with the Committees, the
proposed transaction(s) it intends to consummate (the “Successful Proposal”).
Plan Process
After selecting the Successful Proposal, the Company, in consultation with the entity or
entities which submitted the Successful Proposal, will prepare and file the Plan and the
accompanying disclosure statement with of the United States Bankruptcy Court for the Southern
District of New York (the “Bankruptcy Court”). The Company currently anticipates filing
the Plan on or around July 2, 2010. Based on this expected filing date, and subject to the
Bankruptcy Court’s schedule, the relevant timeline for the Plan would be:
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• |
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Hearing on the disclosure statement on or around July 30, 2010; |
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• |
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Company to commence solicitation of the Plan on or around August 6, 2010; |
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• |
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Deadline to vote and/or object to the Plan on or around September 17, 2010; |
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• |
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Hearing to confirm the Plan on or around September 30, 2010. |
6
Reservation Of Rights
The Company reserves the right, in its sole discretion and subject to the exercise of its
business judgment, to alter or terminate these capital raising processes or these Bidding
Procedures, to alter the assumptions set forth herein, and/or to terminate discussions with any and
all prospective acquirers and investors at any time and without specifying the reasons therefore.
Dated: April __, 2010
7
EXHIBIT G — FORM OF WARRANT AGREEMENT
EXHIBIT G
[FORM OF]
WARRANT AND REGISTRATION RIGHTS AGREEMENT
BETWEEN
GENERAL GROWTH PROPERTIES, INC.
AND
[______________________]
WARRANT AGENT
Dated as of [__], 2010
TABLE OF CONTENTS
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Page |
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1. |
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DEFINITIONS |
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1 |
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2. |
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ORIGINAL ISSUE OF WARRANTS |
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8 |
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2.1 |
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Form of Warrant Certificates |
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9 |
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2.2 |
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Execution and Delivery of Warrant Certificates |
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9 |
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3. |
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EXERCISE PRICE; EXERCISE OF WARRANTS AND EXPIRATION OF WARRANTS |
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9 |
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3.1 |
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Exercise Price |
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9 |
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3.2 |
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Exercise of Warrants |
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10 |
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3.3 |
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Expiration of Warrants |
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10 |
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3.4 |
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Method of Exercise; Settlement of Warrant |
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10 |
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3.5 |
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Transferability of Warrants and Common Stock |
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11 |
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3.6 |
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Compliance with Law |
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12 |
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4. |
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REGISTRATION RIGHTS AND PROCEDURES AND LISTING |
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14 |
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4.1 |
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Applicability; Registration |
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14 |
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4.2 |
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Expenses of Registration |
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18 |
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4.3 |
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Obligations of the Company |
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18 |
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4.4 |
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Suspension of Sales |
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21 |
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4.5 |
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Termination of Registration Rights |
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22 |
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4.6 |
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Furnishing Information |
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22 |
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4.7 |
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Indemnification |
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22 |
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4.8 |
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Contribution |
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24 |
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4.9 |
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Representations, Warranties and Indemnities to Survive |
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24 |
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4.10 |
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Lock-Up Agreements |
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24 |
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4.11 |
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Rule 144 Reporting |
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25 |
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4.12 |
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Obtaining Exchange Listing |
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25 |
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5. |
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ADJUSTMENTS AND OTHER RIGHTS |
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25 |
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5.1 |
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Stock Dividend; Subdivision or Combination of Common Stock |
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25 |
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5.2 |
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Other Dividends and Distributions |
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26 |
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5.3 |
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Rights Offerings |
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26 |
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5.4 |
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Issuer Tender or Exchange Offers |
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27 |
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5.5 |
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Reorganization, Reclassification, Consolidation, Merger or Sale |
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27 |
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5.6 |
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Other Adjustments |
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28 |
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5.7 |
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Notice of Adjustment |
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28 |
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6. |
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CHANGE OF CONTROL |
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29 |
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6.1 |
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Redemption in Connection with a Change of Control Event |
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29 |
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6.2 |
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Public Stock Merger |
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29 |
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6.3 |
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Mixed Consideration Merger |
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30 |
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7. |
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WARRANT TRANSFER BOOKS |
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30 |
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Page |
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8. |
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WARRANT HOLDERS |
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31 |
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8.1 |
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No Voting Rights |
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31 |
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8.2 |
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Right of Action |
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31 |
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9. |
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WARRANT AGENT |
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31 |
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9.1 |
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Nature of Duties and Responsibilities Assumed |
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31 |
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9.2 |
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Compensation and Reimbursement |
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33 |
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9.3 |
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Warrant Agent May Hold Company Securities |
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33 |
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9.4 |
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Resignation and Removal; Appointment of Successor |
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33 |
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9.5 |
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Damages |
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34 |
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10. |
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REPRESENTATIONS AND WARRANTIES |
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34 |
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10.1 |
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Representations and Warranties of the Company |
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34 |
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11. |
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COVENANTS |
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34 |
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11.1 |
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Reservation of Common Stock for Issuance on Exercise of Warrants |
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34 |
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11.2 |
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Notice of Distributions |
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35 |
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11.3 |
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Replacement of Warrants |
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35 |
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12. |
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MISCELLANEOUS |
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35 |
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12.1 |
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Money and Other Property Deposited with the Warrant Agent |
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35 |
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12.2 |
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Payment of Taxes |
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36 |
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12.3 |
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Surrender of Certificates |
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36 |
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12.4 |
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Mutilated, Destroyed, Lost and Stolen Warrant Certificates |
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36 |
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12.5 |
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Removal of Legends |
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37 |
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12.6 |
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Notices |
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37 |
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12.7 |
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Applicable Law; Jurisdiction |
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38 |
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12.8 |
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Persons Benefiting |
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38 |
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12.9 |
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Relationship to Investment Agreement and Stock Purchase Agreements |
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39 |
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12.10 |
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Counterparts |
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39 |
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12.11 |
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Amendments |
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39 |
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12.12 |
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Headings |
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39 |
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12.13 |
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Entire Agreement |
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40 |
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12.14 |
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Specific Performance |
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40 |
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ii
List of Exhibits
EXHIBIT A — Form of Warrant Certificate
EXHIBIT B — Form of Assignment
EXHIBIT C — Option Pricing Assumptions / Methodology
SCHEDULE A — Allocations of Warrants and Underlying Shares to Initial Investors
SCHEDULE B — Warrant Agent Compensation
iii
WARRANT AND REGISTRATION RIGHTS AGREEMENT
WARRANT AND REGISTRATION RIGHTS AGREEMENT, dated as of
[___], 2010 (together with the Warrants,
this “Agreement”), by and between General Growth Properties, Inc., a Delaware corporation
(the “Company”), and [____________________], a
[______________] (together with its
successors and assigns, the “Warrant Agent”).
WITNESSETH:
WHEREAS, the Company is issuing and delivering warrant certificates (the “Warrant
Certificates”) evidencing Warrants to purchase up to an aggregate of 120,000,000 shares of its
Common Stock, subject to adjustment, including (a) 60,000,000 shares of its Common Stock, subject
to adjustment, in connection with that certain Cornerstone Investment Agreement, dated as of March
31, 2010, by and between REP Investments LLC and the Company (the “Investment Agreement”),
(b) 42,857,143 shares of its Common Stock, subject to adjustment, in connection with that certain
Stock Purchase Agreement, dated as of March 31, 2010, by and between each of The Xxxxxxxxx Xxxx and
The Fairholme Focused Income Fund (each a “Fairholme Purchaser”, and collectively, the
“Fairholme Purchasers”) and the Company (the “Fairholme Stock Purchase Agreement”)
and (c) 17,142,857 shares of its Common Stock, subject to adjustment, in connection with that
certain Stock Purchase Agreement, dated as of March 31, 2010, by and between each of Pershing
Square, L.P., Pershing Square II, L.P., Pershing Square International, Ltd. and Pershing Square
International V, Ltd. (each, a “Pershing Square Purchaser”, collectively, the “Pershing
Square Purchasers”, and each of the Brookfield Purchaser (as defined herein), the Fairholme
Purchasers and Pershing Square Purchasers, a “Purchaser”) and the Company (the
“Pershing Square Stock Purchase Agreement” and, together with the Fairholme Stock Purchase
Agreement, the “Stock Purchase Agreements”) pursuant to each of which each Purchaser has
agreed to make an equity investment in the Company upon the terms and subject to the conditions
specified therein; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing so to act, in connection with the issuance, transfer, exchange,
replacement and exercise of the Warrant Certificates and other matters as provided herein;
NOW, THEREFORE, in consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations thereunder of the Company
and the record holders of the Warrants, the Company and the Warrant Agent each hereby agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following meanings:
Affiliate: of any particular Person means any other Person controlling, controlled by
or under common control with such particular Person. For the purposes of this definition, (i)
“control” means the possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities, contract or otherwise and
(ii) none of the Initial Investors or their Affiliates shall be deemed to “control” the Company or
any of the Company’s controlled Affiliates prior to such Initial Investor or Affiliate, as
applicable, acquiring or becoming part of the acquiring group for purposes of clauses (i) or
(ii) or combining with the Company for purposes of clause (iii) of the definition of Change of
Control Event.
Announcement Date: the meaning set forth in Section 5.4.
Board: the board of directors of the Company.
Brookfield Consortium Member: as defined in the Investment Agreement.
Brookfield Investors: means, collectively, the Brookfield Consortium Members.
Brookfield Purchaser: the Purchaser defined in the Investment Agreement.
Business Day: any day that is not a Saturday, Sunday, or a day on which banks in New
York, New York are required or permitted to be closed.
Cash Consideration Ratio: means, in connection with a Mixed Consideration Merger, a
fraction, (i) the numerator of which shall be the aggregate Fair Market Value of cash and all other
property (other than Public Stock) that holders of Common Stock will receive for each such share of
Common Stock in connection with such Mixed Consideration Merger, and (ii) the denominator of which
shall be the Fair Market Value of all of the consideration holders of Common Stock will receive for
each such share of Common Stock in connection with such Mixed Consideration Merger;
provided, that, if the holders of Common Stock have the opportunity to elect the
consideration to be received in such Mixed Consideration Merger, the Cash Consideration Ratio shall
be determined by reference to the weighted average of the types and amounts of consideration
received in such transaction in respect of shares of Common Stock held by holders who are not
affiliated with the Company or any entity acquiring the Company.
Cash Redemption Value: the meaning set forth in Section 6.1.
Certificate of Incorporation: the Company’s certificate of incorporation (or
equivalent organizational document), as amended from time to time.
Change of Control Event: an event or series of events, by which (i) any Person or
group of Persons shall have acquired beneficial ownership (within the meaning of Rule 13d-3(a)
promulgated by the SEC under the Exchange Act), directly or indirectly, of fifty percent (50%) or
more (by voting power) of the outstanding shares of Voting Securities, (ii) all or substantially
all of the consolidated assets of the Company are sold, leased (other than leases to tenants in the
ordinary course of business), exchanged or transferred to any Person or group of Persons, (iii) the
Company is consolidated, merged, amalgamated, reorganized or otherwise enters into a similar
transaction in which it is combined with another Person (in each case, other than pursuant to the
Plan), unless shares of Common Stock held by holders who are not affiliated with the Company or any
entity acquiring the Company remain unchanged or are exchanged for, converted into or constitute
solely (except to the extent of applicable appraisal rights or cash received in lieu of fractional
shares) the right to receive as consideration Public Stock and the Persons who beneficially own the
outstanding Voting Securities of the Company immediately before consummation of the transaction
beneficially own a majority (by voting power) of the
2
outstanding Voting Securities of the combined or surviving entity or new parent immediately
thereafter, (iv) the Company engages in a reclassification or similar transaction pursuant to which
shares of Common Stock are converted into the right to receive anything other than Public Stock, or
(v) the holders of capital stock of the Company have approved any plan or proposal for the
liquidation or dissolution of the Company; provided that with respect to an election by any
Holder pursuant to Section 6.1, no event or series of events shall constitute a Change of Control
Event if (x) such event or series of events is not approved by a majority of the disinterested
directors of the Company and (y) such Holder or any of its Affiliates is the acquiror or part of
the acquiring group for purposes of clause (i) or (ii) above or is combined with the Company for
purposes of clause (iii) above. For purposes of this definition, a “group” means a group of
Persons within the meaning of Rule 13d-5 under the Exchange Act.
Closing Sale Price: as of any date, the last reported per share sales price of a
share of Common Stock or the applicable security on such date (or, if no last reported sale price
is reported, the average of the bid and ask prices or, if more than one in either case, the average
of the average bid and the average ask prices on such date) as reported on the New York Stock
Exchange, or if the Common Stock or such other security is not listed on the New York Stock
Exchange, as reported by the principal U.S. national or regional securities exchange or quotation
system on which the Common Stock or such other security is then listed or quoted; provided,
however, that in the absence of such listing or quotations, the Closing Sale Price shall be
determined by an Independent Financial Expert appointed for such purpose, using one or more
valuation methods that the Independent Financial Expert in its best professional judgment
determines to be most appropriate, assuming such Common Stock or securities are fully distributed
and are to be sold in an arm’s-length transaction and there was no compulsion on the part of any
party to such sale to buy or sell and taking into account all relevant factors.
Code: the U.S. Internal Revenue Code of 1986, as amended.
Common Stock: the common stock, par value $0.01, of the Company.
Company: the meaning set forth in the preamble to this Agreement and its successors
and assigns.
Distribution: the meaning set forth in Section 5.2.
Exchange Act: the U.S. Securities Exchange Act of 1934, as amended.
Exercise Date: the meaning set forth in Section 3.4.
Exercise Price: the meaning set forth in Section 3.1.
Expiration Date: the meaning set forth in Section 3.3.
Fairholme Investors: all members, collectively, of the Fairholme Purchaser Group.
Fairholme Purchasers: the meaning set forth in the recitals hereto.
3
Fairholme Purchaser Group: the Purchaser Group defined in the Fairholme Stock Purchase
Agreement.
Fairholme Stock Purchase Agreement: the meaning set forth in the recitals hereto.
Fair Market Value:
(i) in the case of shares or securities, the average of the daily volume weighted average
prices per share of such shares or securities for the ten consecutive trading days immediately
preceding the day as of which Fair Market Value is being determined, as reported on the New York
Stock Exchange, or if such shares or securities are not listed on the New York Stock Exchange, as
reported by the principal U.S. national or regional securities exchange or quotation system on
which such shares or securities are then listed or quoted; provided, however, that in the absence
of such listing or quotations, the Fair Market Value of such securities shall be the fair market
value per share or unit of such shares or securities as determined by an Independent Financial
Expert appointed for such purpose, using one or more valuation methods that the Independent
Financial Expert in its best professional judgment determines to be most appropriate, assuming such
shares or other securities are fully distributed and are to be sold in an arm’s-length transaction
and there was no compulsion on the part of any party to such sale to buy or sell and taking into
account all relevant factors.
(ii) in the case of cash, the amount thereof.
(iii) in the case of other property, the Fair Market Value of such property shall be the fair
market value thereof as determined by an Independent Financial Expert appointed for such purpose,
using one or more valuation methods that the Independent Financial Expert in its best professional
judgment determines to be most appropriate, assuming such property is to be sold in an arm’s-length
transaction and there was no compulsion on the part of any party to such sale to buy or sell and
taking into account all relevant factors.
Full Physical Settlement: the settlement method pursuant to which an exercising
Holder shall be entitled to receive from the Company, for each Warrant exercised, a number of
shares of Common Stock equal to the Full Physical Share Amount in exchange for payment by the
Holder of the aggregate Exercise Price applicable to such Warrant.
Full Physical Share Amount: the meaning set forth in Section 3.4(a).
GGO Warrants: the meaning set forth in Section 11.3.
Holders: from time to time, the holders of the Warrants and, unless otherwise
provided or indicated herein, the holders of the Registrable Securities.
Independent Financial Expert: a nationally recognized financial advisory firm
mutually agreed by the Company and the Majority Holders. If the Company and the Majority Holders
are unable to agree on an Independent Financial Expert for a valuation contemplated herein, each of
them shall choose promptly a separate Independent Financial Expert and these two Independent
Financial Experts shall choose promptly a third Independent Financial Expert to conduct such
valuation.
4
Initial Investor: means the applicable Purchaser; provided that, solely for the
purposes of this definition, in the event the Brookfield Purchaser is not in existence, the
Brookfield Purchaser shall be Brookfield Asset Management Inc. or an Affiliate designated by
Brookfield Asset Management Inc.
Initiating Holder(s): the meaning set forth in Section 4.1(b).
Investment Agreement: the meaning set forth in the recitals hereto.
Loss: the meaning set forth in Section 4.7(a)(i).
Majority Holders: means at any time Holders of a majority in number of the
outstanding Warrants not held by the Company or any of the Company’s Affiliates.
Mixed Consideration Merger: means an event described in clause (iii) of the
definition of Change of Control Event pursuant to which all of the outstanding shares of Common
Stock held by holders who are not affiliated with the Company or any entity acquiring the Company
are exchanged for, converted into or constitute solely (except to the extent of applicable
appraisal rights or cash received in lieu of fractional shares) the right to receive as
consideration a combination of (i) Public Stock and (ii) other securities, cash or other property.
Net Share Amount: the meaning set forth in Section 3.4(b).
Net Share Settlement: the settlement method pursuant to which an exercising Holder
shall be entitled to receive from the Company, for each Warrant exercised, a number of shares of
Common Stock equal to the Net Share Amount without any payment therefor.
New Warrants: the meaning set forth in Section 11.3.
Organic Change: the meaning set forth in Section 5.5.
Other Stockholders: means Persons (other than Holders) who, by virtue of agreements
with the Company (other than this Agreement), are entitled to include their securities in a
registration.
Pershing Investors: all members, collectively, of the Pershing Purchaser Group.
Pershing Square Purchasers: the meaning set forth in the recitals hereto.
Pershing Purchaser Group: the Purchaser Group defined in the Pershing Stock Purchase
Agreement.
Pershing Square Stock Purchase Agreement: the meaning set forth in the recitals
hereto.
Person: any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
5
Plan: the plan of reorganization as contemplated by the Plan Term Sheet initially
attached as Exhibit A to the Investment Agreement and Stock Purchase Agreements.
Preliminary Change of Control Event: with respect to the Company, the first public
announcement that describes the economic terms of a transaction that results in a Change of Control
Event.
Premium Per Post-Tender Share: the meaning set forth in Section 5.4.
Prospectus: the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the offering of any of the
Registrable Securities covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.
Public Stock: means common stock listed on a recognized U.S. national securities
exchange with an aggregate market capitalization (held by non-Affiliates of the issuer) in excess
of $1 billion in Fair Market Value.
Purchaser Group: (a) means with respect to Brookfield Purchaser, the Brookfield
Consortium Members, (b) with respect to Fairholme Purchasers, the Fairholme Purchaser Group and (c)
with respect to Pershing Square Purchasers, the Pershing Purchaser Group.
Public Stock Merger: means an event described in clause (iii) of the definition of
Change of Control Event pursuant to which all of the outstanding shares of Common Stock held by
holders who are not affiliated with the Company or any entity acquiring the Company are exchanged
for, converted into or constitute solely (except to the extent of applicable appraisal rights or
cash received in lieu of fractional shares) the right to receive as consideration Public Stock.
Purchaser: the meaning set forth in the recitals hereto.
Qualifying Employee Stock: means (i) rights and options issued in the ordinary course
of business under employee benefits plans and any securities issued after the date hereof upon
exercise of such rights and options and (ii) restricted stock and restricted stock units issued
after the date hereof in the ordinary course of business under employee benefit plans and
securities issued after the date hereof in settlement of any such restricted stock units.
Registrable Securities: means all Warrants and shares of Common Stock issuable under
the Warrants to each Initial Investor or otherwise held by each Initial Investor as of the date
hereof and at any time during the term of this Agreement. Registrable Securities shall continue to
be Registrable Securities (whether they continue to be held by each Initial Investor or are
transferred or sold to other Persons pursuant to this Agreement) until (i) they are sold pursuant
to an effective Registration Statement under the Securities Act, (ii) after such securities have
been sold pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A), (iii)
they shall have otherwise been transferred and new securities not subject to transfer restrictions
under any federal securities laws and not bearing any legend restricting further transfer shall
have been delivered by the Company, all applicable holding periods shall have expired, and no other
applicable and legally binding restriction on transfer by the holder thereof shall exist, (iv)
they are eligible for sale pursuant to Rule 144 under the Securities Act without limitation
thereunder on volume or manner of sale, or (v) when such securities cease to be outstanding.
6
Registration Expenses: mean all expenses incurred by the Company in effecting any
registration pursuant to this Agreement, including, without limitation, all registration and filing
fees, printing expenses, the reasonable fees and disbursements of one counsel for all Holders
(which counsel shall be selected by a majority of the selling Holders), fees and reasonable
disbursements of counsel for the Company, Blue Sky fees and expenses, and expenses of the Company’s
independent accountants in connection with any regular or special reviews or audits incident to or
required by any such registration, but shall not include Selling Expenses.
Registration Rights: the rights of Holders set forth in Article 4 to have
Registrable Securities registered under the Securities Act for sale under one or more effective
Registration Statements.
Registration Statement: any registration statement filed by the Company under the
Securities Act pursuant to the Registration Rights, including the related Prospectus, any
amendments and supplements to such Registration Statement, including post-effective amendments, and
all exhibits and all material incorporated by reference in such registration statement.
register, registered, and registration: shall refer to, unless the
context dictates otherwise, a registration effected by preparing and (a) filing a Registration
Statement in compliance with the Securities Act and applicable rules and regulations thereunder,
and the declaration or ordering of effectiveness of such Registration Statement or (b) filing a
Prospectus and/or prospectus supplement in respect of an appropriate effective Registration
Statement.
Rule 144, Rule 405 and Rule 415: mean, in each case, such rule
promulgated under the Securities Act (or any successor provision), as the same shall be amended
from time to time.
Sale: the meaning set forth in Section 3.6(a) of this Agreement.
Scheduled Black-Out Period: means the period from and including the last day of a
fiscal quarter of the Company to and including the earliest of (i) the Business Day after the day
on which the Company publicly releases its earnings information for such quarter or annual earnings
information, as applicable, and (ii) the day on which the executive officers and directors of the
Company are no longer prohibited by Company policies applicable with respect to such quarterly
earnings period from buying or selling equity securities of the Company.
S-1 Registration Statement: means a registration statement of the Company on Form S-1
(or any comparable or successor form) filed with the SEC registering any Registrable Securities.
SEC: the U.S. Securities and Exchange Commission.
Securities Act: the U.S. Securities Act of 1933, as amended.
Securities Exchange Act: the U.S. Securities Exchange Act of 1934, as amended.
7
Sell: the meaning set forth in Section 3.6(a) of this Agreement.
Selling Expenses: mean all discounts, selling commissions and stock transfer taxes
applicable to the sale of Registrable Securities and all fees and disbursements of counsel for each
of the Holders other than the reasonable fees and expenses of one counsel for all of the Holders
which shall be paid for by the Company as provided in the definition of Registration Expenses.
Settlement Date: means, in respect of a Warrant that is exercised hereunder, a
reasonable time, not to exceed three Business Days, immediately following the Exercise Date for
such Warrant.
Shelf Registration Statement: means a “shelf” registration statement of the Company
that covers all the Registrable Securities (and may cover other securities of the Company) on Form
S-3 and under Rule 415 or, if the Company is not then eligible to file on Form S-3, on Form S-1
under the Securities Act, or any successor rule that may be adopted by the Commission, and all
amendments and supplements to such registration statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto and any document
incorporated by reference therein.
Stock Consideration Ratio: means, in connection with a Mixed Consideration Merger, 1
— the Cash Consideration Ratio for such Mixed Consideration Merger.
Stock Dividend: the meaning set forth in Section 5.1.
Stock Purchase Agreements: the meaning set forth in the recitals to this Agreement.
Supermajority Holders: means at any time Holders of two-thirds or greater in number
of the outstanding Warrants not held by the Company or any of the Company’s Affiliates.
Suspension Limit: the meaning set forth in Section 4.4.
Underlying Common Stock: the shares of Common Stock issuable or issued upon the
exercise of the Warrants.
Voting Securities: means any securities of the Company, surviving entity or parent,
as applicable, having power generally to vote in the election of directors of the Company,
surviving entity or parent, as applicable.
Warrant Agent: the meaning set forth in the preamble to this Agreement.
Warrant Certificates: the meaning set forth in the recitals to this Agreement.
Warrants: the warrants issued by the Company from time to time pursuant to this
Agreement.
8
2. ORIGINAL ISSUE OF WARRANTS.
2.1 Form of Warrant Certificates. The Warrant Certificates shall be in registered
form only and substantially in the form attached hereto as Exhibit A, shall be dated the
date on which countersigned by the Warrant Agent and may have such legends and endorsements typed,
stamped, printed, lithographed or engraved thereon as provided in Section 3.6(f) and as
required by the Certificate of Incorporation or as may be required to comply with any law or with
any rule or regulation pursuant thereto or with any rule or regulation of any securities exchange
on which the Warrants may be listed.
2.2 Execution and Delivery of Warrant Certificates.
(a) Simultaneously with the execution of this Agreement, Warrant Certificates evidencing such
number of Warrants as set forth on Schedule A entitling the holder to purchase an aggregate
number of shares of Common Stock as set forth on Schedule A, in each case, as with respect
to each Initial Investor (or their designee(s) in accordance with the next sentence) and subject to
adjustment, shall be executed by the Company and delivered to the Warrant Agent for
countersignature, and the Warrant Agent shall thereupon countersign and deliver such Warrant
Certificates to each Initial Investor (or their designee(s) in accordance with the next sentence).
Each Initial Investor, in its sole discretion, may designate that some or all of its Warrants and
Warrant Certificates be issued in the name of, and delivered to, one or more of the members of its
Purchaser Group.
(b) From time to time, the Warrant Agent shall countersign and deliver Warrant Certificates in
required denominations to Persons entitled thereto in connection with any transfer or exchange
permitted under this Agreement. The Warrant Agent is hereby irrevocably (but subject to Article
9) authorized to countersign and deliver Warrant Certificates as required by Section
2.2, Section 3.4, Article 7, and Section 12.4 or otherwise as provided
herein. The Warrant Certificates shall be executed on behalf of the Company by its President or
Vice President, either manually or by facsimile signature printed thereon. The Warrant Certificates
shall be manually countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company whose signature shall have been placed upon
any of the Warrant Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery thereof, such Warrant Certificates
may, nevertheless, be countersigned by the Warrant Agent and issued and delivered with the same
force and effect as though such Person had not ceased to be such officer of the Company.
3. EXERCISE PRICE; EXERCISE OF WARRANTS AND EXPIRATION OF WARRANTS.
3.1 Exercise Price. Each Warrant Certificate shall, when countersigned by the Warrant
Agent, entitle the Holder thereof, subject to the provisions of this Agreement, to purchase, except
as provided in Section 3.3 hereof, one share of Common Stock for each Warrant represented
thereby, subject to all adjustments made on or prior to the date of exercise thereof, at an
exercise price (the “Exercise Price”) of $15.00 per share, subject to all adjustments made
on or prior to the date of exercise thereof as herein provided.
9
3.2 Exercise of Warrants. The Warrants shall be exercisable in whole or in part from
time to time on any Business Day beginning on the date hereof and ending on the Expiration Date, in
the manner provided for herein.
3.3 Expiration of Warrants. Any unexercised Warrants shall expire and the rights of
the Holders of such Warrants to purchase Underlying Common Stock shall terminate at the close of
business on [__________], 20171 (the “Expiration Date”).
3.4 Method of Exercise; Settlement of Warrant. In order to exercise a Warrant, the
Holder thereof must (i) surrender the Warrant Certificate evidencing such Warrant to the Warrant
Agent, with the form on the reverse of or attached to the Warrant Certificate duly executed (the
date of the surrender of such Warrant Certificate, the “Exercise Date”), and (ii) if Net
Share Settlement is not elected, deliver in full the aggregate Exercise Price then in effect for
the shares of Underlying Common Stock as to which a Warrant Certificate is submitted for exercise,
not later than the Settlement Date as more fully set forth herein. Full Physical Settlement shall
apply to each Warrant unless the Holder elects for Net Share Settlement to apply upon exercise of
such Warrant. Such election shall be made in the form on the reverse of or attached to the Warrant
Certificate for such Warrant.
(a) If Full Physical Settlement is applicable with respect to the exercise of a Warrant, then,
for each Warrant exercised hereunder (i) prior to 11:00 a.m., New York City time, on the Settlement
Date for such Warrant, the Holder shall pay the aggregate Exercise Price (determined as of such
Exercise Date) for the number of shares of Common Stock obtainable upon exercise of such Warrant at
such time by federal wire or other immediately available funds payable to the order of the Company
to the account maintained by the Warrant Agent and notified to the Holder upon request of the
Holder, and (ii) on the Settlement Date, following receipt by the Warrant Agent of such Exercise
Price, the Company shall cause to be delivered to the Holder the number of shares of Common Stock
obtainable upon exercise of each Warrant at such time (the “Full Physical Share Amount”),
together with cash in respect of any fractional shares of Common Stock as provided in Section
3.4(f).
(b) If Net Share Settlement is applicable with respect to the exercise of a Warrant, then, for
each Warrant exercised hereunder, on the Settlement Date for such Warrant, the Company shall cause
to be delivered to the Holder a number of shares of Common Stock (which in no event will be less
than zero) (the “Net Share Amount”) equal to (i) the number of shares of Common Stock
obtainable upon exercise of such Warrant at such time, multiplied by (ii) the Closing Sale Price on
the relevant Exercise Date, minus the Exercise Price (determined as of such Exercise Date), divided
by (iii) such Closing Sale Price, together with cash in respect of any fractional shares of Common
Stock as provided in Section 3.4(f).
(c) Upon surrender of a Warrant Certificate in conformity with the foregoing provisions and
receipt by the Warrant Agent of the Exercise Price therefor or, in the event of Net Share
Settlement, upon the election by a Holder for Net Share Settlement, the Warrant Agent shall
thereupon promptly notify the Company, and the Company shall instruct its transfer agent
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Note to Draft: Insert the date that is the
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to transfer to the Holder of such Warrant Certificate appropriate evidence of ownership of any
shares of Underlying Common Stock or other securities or property to which the Holder is entitled,
registered or otherwise placed in, or payable to the order of, such name or names as may be
directed in writing by the Holder, and shall deliver such evidence of ownership to the Person or
Persons entitled to receive the same, together with cash in respect of any fractional shares of
Common Stock as provided in Section 3.4(f), provided that if the Holder shall direct that
such securities be registered in a name other than that of the Holder, such direction shall be
tendered in conjunction with a signature guarantee from an eligible guarantor institution
participating in a signature guarantee program approved by the Securities Transfer Association, and
any other reasonable evidence of authority that may be required by the Warrant Agent. Upon receipt
by the Warrant Agent of the Exercise Price therefor or, in the event of Net Share Settlement, upon
the election by a Holder for Net Share Settlement, a Holder shall be deemed to own and have all of
the rights associated with any Underlying Common Stock or other securities or property to which
such Holder is entitled pursuant to this Agreement upon the surrender of a Warrant Certificate in
accordance with this Agreement.
(d) The Company acknowledges that the bank accounts maintained by the Warrant Agent in
connection with its performance under this Agreement shall be in the Warrant Agent’s name and that
the Warrant Agent may receive investment earnings in connection with the investment at the Warrant
Agent’s risk and for its benefit of funds held in those accounts from time to time. The Warrant
Agent shall remit any payments received in connection with the exercise of Warrants to the Company
as soon as practicable and in any event within three Business Days by federal wire or other
immediately available funds to an account selected by the Company and notified to the Warrant
Agent.
(e) If fewer than all the Warrants represented by a Warrant Certificate are surrendered, such
Warrant Certificate shall be surrendered and a new Warrant Certificate of the same tenor and for
the number of Warrants that were not surrendered shall promptly be executed and delivered to the
Warrant Agent by the Company. The Warrant Agent shall promptly countersign the new Warrant
Certificate, register it in such name or names as may be directed in writing by the Holder and
deliver the new Warrant Certificate to the Person or Persons entitled to receive the same.
(f) The Company shall not be required to issue any fraction of a share of Common Stock upon
exercise of any Warrants; provided, that, if more than one Warrant shall be exercised hereunder at
one time by the same Holder, the number of full shares of Common Stock which shall be issuable upon
exercise thereof shall be computed on the basis of all Warrants so exercised, and shall include the
aggregation of all fractional shares of Common Stock issuable upon exercise of such Warrants. If
after giving effect to the aggregation of all shares of Common Stock (and fractions thereof)
issuable upon exercise of Warrants by the same Holder at one time as set forth in the previous
sentence, any fraction of a share of Common Stock would, except for the provisions of this
Section 3.4(f), be issuable on the exercise of any Warrant or Warrants, the Company shall
pay the Holder cash in lieu of such fractional share valued at the Closing Sale Price on the
Exercise Date.
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3.5 Transferability of Warrants and Common Stock. Except as any Holder may otherwise
agree in writing, any Warrants, all rights with respect thereto and any shares of
Underlying Common Stock may be sold, transferred or disposed of, in whole or in part, without
any requirement of obtaining the consent of the Company to so sell, transfer or dispose of,
provided that any such sale, transfer or disposition shall be in accordance with the terms of this
Agreement, including, without limitation, Article 7 hereof.
3.6 Compliance with Law. (a) To the extent the Warrants are Registrable Securities,
no Warrant may be exercised (and the Warrant Agent shall be under no obligation to process any
exercise), and no Registrable Securities may be sold, transferred, hypothecated, pledged or
otherwise disposed of (any such sale, transfer or other disposition, a “Sale”, and the
action of making any such sale, transfer or other disposition, to “Sell”), except in
compliance with applicable Federal and state securities and other applicable laws and this
Section 3.6.
(b) A Holder may exercise its Warrants if it is an “accredited investor” or a “qualified
institutional buyer”, as defined in Regulation D and Rule 144A under the Securities Act,
respectively, and, a Holder may Sell its Registrable Securities to a transferee that is an
“accredited investor” or a “qualified institutional buyer”, as such terms are defined in such
Regulation and such Rule, respectively, provided that each of the following conditions is
satisfied:
(i) such Holder or transferee, as the case may be, provides certification establishing
to the reasonable satisfaction of the Company that it is an “accredited investor”;
(ii) such Holder or transferee represents to the Company in writing that it is
acquiring the Underlying Common Stock (in the case of an exercise) or Registrable Securities
(in the case of a Sale) for its own account and that it is not acquiring such Underlying
Common Stock or the Registrable Securities with a view to, or for offer or Sale in
connection with, any distribution thereof (within the meaning of the Securities Act) that
would be in violation of the securities laws of the United States or any applicable state
thereof, but subject, nevertheless, to the disposition of its property being at all times
within its control;
(iii) such Holder or transferee agrees to be bound by the provisions of this
Section 3.6 with respect to any exercise of the Warrants and any Sale of the
Registrable Securities; and
(iv) such Holder or transferee represents and warrants in writing to the Company that
the Holder or transferee has sufficient knowledge and experience in investment transactions
of this type to evaluate the merits and risks of the exercise of its Warrants and/or
purchase of the Underlying Common Stock, as applicable.
(c) A Holder may exercise its Warrants and may Sell its Registrable Securities in accordance
with Regulation S under the Securities Act.
(d) A Holder may exercise its Warrants or Sell its Registrable Securities if:
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(i) such Holder gives written notice to the Company of its intention to exercise or
effect such Sale, which notice shall describe the manner and circumstances of the proposed
transaction in reasonable detail;
(ii) such notice includes a customary opinion from internal or external counsel to the
Holder to the effect that, in either case, such proposed exercise or Sale may be effected
without registration under the Securities Act or under applicable Blue Sky laws; and
(iii) such Holder or transferee complies with Sections 3.6(b)(ii),
3.6(b)(iii), and 3.6(b)(iv).
(e) subject to Section 12.5, each certificate representing securities issued pursuant
to the exercise of the Warrants shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES
MAY BE OFFERED, SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE
REQUIREMENTS OF SUCH ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS
AND SUBJECT TO THE PROVISIONS OF THE WARRANT AND REGISTRATION RIGHTS
AGREEMENT DATED AS OF [___], 2010 BETWEEN GENERAL GROWTH PROPERTIES,
INC. (THE “COMPANY”), AND [____________________], WARRANT
AGENT. A COPY OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT IS
AVAILABLE AT THE OFFICES OF THE COMPANY.
(f) subject to Section 12.5, each certificate representing the Warrants shall bear the
following legend:
THESE WARRANTS AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THESE
WARRANTS AND SUCH SECURITIES MAY BE OFFERED, SOLD OR TRANSFERRED
ONLY IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS OF
THE WARRANT AND REGISTRATION RIGHTS AGREEMENT DATED AS OF [___], 2010
BETWEEN GENERAL GROWTH PROPERTIES, INC. (THE “COMPANY”) AND
[_______________], WARRANT AGENT. A COPY OF SUCH
WARRANT AND REGISTRATION RIGHTS AGREEMENT IS AVAILABLE AT THE
OFFICES OF THE COMPANY.
13
(g) the provisions of Section 3.6 shall not apply to, and any Holder may exercise its
Warrants and Sell its Registrable Securities:
(i) in a transaction that is registered under the Securities Act; and
(ii) in a transaction pursuant to Rule 144 of the Exchange Act; and
(iii) in a transaction following receipt of a legal opinion of counsel to a Holder that
the applicable Registrable Securities are eligible for resale by the Holder without volume
limitations or other limitations under Rule 144.
4. REGISTRATION RIGHTS AND PROCEDURES AND LISTING.
4.1 Applicability; Registration.2
(a) Subject to the limitations and conditions of this Section 4.1, upon the request of
any Holder, the Company shall use reasonable best efforts to cause a Shelf Registration Statement
to be declared or become effective covering all Registrable Securities no later than the effective
date of a plan of reorganization of the Company (including without limitation the Plan), and use
reasonable best efforts to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of all Registrable Securities for the
period from the date of its initial effectiveness until such time as there are no Registrable
Securities remaining in accordance with such plan of distribution as may be reasonably requested by
Holders of Registrable Securities from time to time. The underwriting provisions set forth in
Section 4.1(e) hereof shall apply to an underwritten public offering requested by a Holder
using such Shelf Registration Statement effected pursuant to this Section 4.1(a),
provided, that the limitations set forth in Section 4.1(e) shall only apply with
respect to such underwritten public offering and not more generally to the Shelf Registration
Statement.
(b) Subject to the conditions of this Section 4.1, if the Company shall receive from
any Holder or group of Holders (such Holder or group of Holders, the “Initiating
Holder(s)”), a written request that the Company effect a registration with respect to
Registrable Securities owned by such Initiating Holder(s) having an estimated aggregate Fair Market
Value of at least $75 million, the Company shall:
(i) use its reasonable best efforts to file a Registration Statement with the SEC in
accordance with the request of the Initiating Holder(s), including without limitation the
method of disposition specified therein and covering resales of the Registrable Securities
requested to be registered, as promptly as reasonably practicable but no later than (x) in
the case of a Registration Statement other than an S-1 Registration
Statement, within 30 days of receipt of the request or (y) in the case of an S-1
Registration Statement, within 60 days of receipt of the request;
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(ii) use reasonable best efforts to cause such Registration Statement to be declared or
become effective as promptly as practicable, but in no event later than 60 days after the
date of initial filing of a Registration Statement pursuant to Section 4.1(b)(i);
and
(iii) use reasonable best efforts to keep such Registration Statement continuously
effective and in compliance with the Securities Act and usable for resale of such
Registrable Securities for the period as requested in writing by the Initiating Holder(s) or
such longer period as may be requested in writing by any Holder participating in such
registration (which periods shall be extended to the extent of any suspensions of sales
pursuant to Sections 4.1(c) or 4.4);
provided, that (x) the number of demand registrations that the Brookfield Investors shall
be entitled to effect pursuant to this Section 4.1(b) shall be no more than three such
demand registrations in total and no more than one such demand registration in any 12-month period,
(y) the number of demand registrations that The Xxxxxxxxx Xxxx shall be entitled to effect pursuant
to this Section 4.1(b) shall be no more than three such demand registrations in total and
no more than one such demand registration in any 12-month period (The Fairholme Focused Income Fund
will not be entitled to exercise demand registration rights under this Section 4.1(b)), and
(z) the number of demand registrations that the Pershing Investors shall be entitled to effect
pursuant to this Section 4.1(b) shall be no more than three such demand registrations in
total and no more than one such demand registration in any 12-month period; provided,
further, that the Company shall be permitted, with the consent of the Initiating Holder(s)
not to be unreasonably withheld, to file a post-effective amendment or prospectus supplement to the
Shelf Registration Statement filed pursuant to Section 4.1(a) in lieu of an additional
registration statement pursuant to Section 4.1(b) to the extent the Company reasonably
determines that the Registrable Securities of the Initiating Holder(s) may be sold thereunder by
such Initiating Holder(s) pursuant to their intended plan of distribution (in which case such
post-effective amendment or demand registration statement shall not be counted against the limited
number of demand registrations). It shall not be unreasonable if, following the recommendation of
an underwriter, the Initiating Holder(s) do not consent to the Company filing a post-effective
amendment or prospectus supplement to the Shelf Registration Statement filed pursuant to
Section 4.1(a) in lieu of an additional registration statement requested by the Initiating
Holder(s).
(c) Notwithstanding anything to the contrary contained herein, the Company shall not be
required to effect a registration pursuant to this Section 4.1: (i) with respect to
securities that are not Registrable Securities; (ii) subject to Section 4.1(h), during any
Scheduled Black-Out Period; or (iii) if the Company has notified the Holders that in the good faith
judgment of the Company, it would be materially detrimental to the Company or its security holders
for such registration to be effected at such time, in which event the Company shall have the right
to defer such registration for a period of not more than 60 days; provided that (A) such
right to delay a registration pursuant to clause (iii) shall be exercised by the Company only if
the Company has generally exercised (or is concurrently exercising) similar black-out rights
against holders of similar securities that have registration rights, if any, and (B) any rights to
delay registration pursuant to clauses (ii) or (iii) shall be subject to the Suspension Limit
described in Section 4.4.
15
(d) If the Company shall determine to register any of its securities either (x) for its own
account, (y) for the account of the Holders listed in Section 4.1(b) pursuant to the terms
thereof, or (z) for the account of Other Stockholders (other than (A) a registration relating
solely to employee benefit plans, (B) a registration relating solely to a Rule 145 transaction
under the Securities Act or (C) a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as would be required to be
included in a Registration Statement), the Company will, subject to the conditions set forth in
this Section 4.1(d):
(i) promptly give to each of the Holders a written notice thereof (which shall include
a list of the jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws); and
(ii) subject to Section 4.1(f) below and any transfer restrictions any Holder
may be a party to, include in such registration (and any related qualification under blue
sky laws or other compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made by the Holders. Such written
request may specify all or a part of the Holders’ Registrable Securities and shall be
received by the Company within ten (10) days after written notice from the Company is given
under Section 4.1(d)(i) above.
(e) If any Initiating Holder(s) intends to distribute Registrable Securities pursuant to
Section 4.1(b) by means of an underwriting, it shall so advise the Company. In the case of
such an underwritten offering, the price, underwriting discount and other financial terms for the
Registrable Securities shall be determined by the Initiating Holder(s). If Other Stockholders or
Holders, to the extent they have any registration rights under Section 4.1(d), request
inclusion of their securities or Registrable Securities, respectively, in the underwriting, the
Initiating Holder(s) shall offer to include such securities or Registrable Securities of such Other
Stockholders or Holders, respectively, in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 4.1(e). The Holders whose
Registrable Securities are to be included in such registration and the Company shall (together with
all Other Stockholders proposing to distribute their securities through such underwriting) enter
into an underwriting agreement in customary form with the managing underwriter or underwriters
selected for such underwriting by the Initiating Holder(s) subject to approval by the Company not
to be unreasonably withheld (which underwriters may also include a non-bookrunning co-manager
selected by the Company subject to approval by the Initiating Holder(s)); provided, however, that
such underwriting agreement shall not provide for indemnification or contribution obligations on
the part of any Holder greater than the obligations of the Holders under Sections 4.7(b)
and 4.8. Notwithstanding any other provision of this Section 4.1(e), if the
managing underwriter or underwriters advises the Holders in writing that marketing factors require
a limitation on the number of securities to be underwritten, some or all of the securities of the
Company held by the Other Stockholders shall be excluded from such registration to the extent so
required by such limitation. If, after the exclusion of such securities held by the Other
Stockholders, further reductions are still required due to the marketing
16
limitation, the number of Registrable Securities included in the registration by each Holder
(including the Initiating Holder(s)) shall be reduced on a pro rata basis (based on the number of
securities held by such Holders), by such minimum number of securities as is necessary to comply
with such request. No Registrable Securities or any other securities excluded from the
underwriting by reason of the underwriter’s marketing limitation shall be included in such
registration. If any Holder or Other Stockholder who has requested inclusion in such registration
as provided above disapproves of the terms of the underwriting, such Person may elect to withdraw
therefrom by providing written notice to the Company, the underwriter and the Initiating Holder(s).
The securities so withdrawn shall also be withdrawn from registration. If the underwriter has not
limited the number of Registrable Securities or other securities to be underwritten, the Company
and executive officers and directors of the Company (whether or not such Persons have registration
rights pursuant to Section 4.1(d) hereof) may include its or their securities for its or
their own account in such registration if the managing underwriter or underwriters and the Company
so agree and if the number of Registrable Securities and other securities which would otherwise
have been included in such registration and underwriting will not thereby be limited. The Company
shall not be obligated to undertake more than (i) one underwritten offering requested by any of the
Brookfield Investors pursuant to Sections 4.1(b) and 4.1(e) in any 12-month period,
(ii) one underwritten offering requested by The Xxxxxxxxx Xxxx pursuant to Section 4.1(b)
and 4.1(e) in any 12-month period, and (iii) one underwritten offering requested by any of
the Pershing Investors pursuant to Section 4.1(b) and 4.1(e) in any 12-month
period. The Holders shall reasonably cooperate in connection with requests for underwritten
offerings pursuant to this Section 4.1(e) to cause the total number of days that the
Company shall be subject to lock-ups in connection with any such underwritten offerings not to
exceed 120 days in any 365-day period.
(f) If the registration of which the Company gives notice pursuant to Section 4.1(d)
is for a registered public offering involving an underwriting, the Company shall so advise each of
the Holders as a part of the written notice given pursuant to Section 4.1(d) above. In
such event, the right of each of the Holders to registration pursuant to Section 4.1(d)
shall be conditioned upon such Holders’ participation in such underwriting and the inclusion of
such Holders’ Registrable Securities in the underwriting to the extent provided herein. The
Holders whose Registrable Securities are to be included in such registration shall (together with
the Company and the Other Stockholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the managing underwriter or
underwriters selected for underwriting by the Company (other than a registration pursuant to
Section 4.1(b) and notified by the Company pursuant to Section 4.1(d)(y), in which
case Section 4.1(e) shall apply with respect to the selection of underwriters); provided,
however, that such underwriting agreement shall not provide for indemnification or contribution
obligations on the part of any Holder greater than the obligations of the Holders under
Sections 4.7(b) and 4.8. Notwithstanding any other provision of Section
4.1(d), if any registration in respect of which any Holder is exercising its rights under
Section 4.1(d) involves an underwritten public offering (other than a registration pursuant
to Section 4.1(b), in which case the provisions with respect to priority of inclusion in
such registration set forth in Section 4.1(e) shall apply) and the managing underwriter or
underwriters advises the Company that in its view marketing factors require a limitation on the
number of securities to be underwritten, then there shall be included in such underwritten offering
the number or dollar amount of securities of the Company that in the opinion of the managing
underwriter or underwriters can be sold without adversely affecting
17
such offering, and such number of securities of the Company shall be allocated for inclusion
as follows: (1) first, all securities of the Company being sold by the Company for its own account;
(2) second, all Registrable Securities requested to be included by the Holders and, solely with
respect to an offering of Warrants following the 180th day after the effectiveness of a
plan of reorganization of the Company, securities of the Company being sold by any Person (other
than a Holder) with similar piggyback registration rights, pro rata, based on the number of
securities beneficially owned by each such Holder and Person; and (3) third, among any other
holders of securities of the Company requesting such registration, pro rata, based on the number of
securities beneficially owned by each such holder. If any of the Holders or any officer, director
or Other Stockholder disapproves of the terms of any such underwriting, he, she or it may elect to
withdraw therefrom by providing written notice to the Company and the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration.
(g) In the event any Holder requests or elects to participate in a registration pursuant to
this Section 4.1 in connection with a distribution of Registrable Securities to its
partners or members, the registration shall provide for the resale by such partners or members, if
requested by such Holder.
(h) The Company agrees to use reasonable best efforts to promptly respond to any request by
any member of the Fairholme Purchaser Group to sell Registrable Securities under a Registration
Statement or Prospectus during what would otherwise be a Scheduled Black-Out Period, provided that
such consent can be given in compliance with applicable securities laws. In addition the Company
agrees to use its reasonable best efforts to issue earnings releases as promptly as practicable
following the end of quarterly reporting periods and to otherwise minimize the duration of
Scheduled Black-Out Periods.
4.2 Expenses of Registration. Except as specifically provided herein, all
Registration Expenses incurred in connection with any registration, qualification or compliance
hereunder shall be borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so registered pro rata on
the basis of the aggregate offering or sale price of the securities so registered.
4.3 Obligations of the Company. In connection with the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably practicable and in
accordance with the requested methods of distribution thereof, subject to the provisions of this
Article 4:
(a) Prepare and file with the SEC a prospectus supplement with respect to a proposed
offering of Registrable Securities pursuant to an effective Registration Statement and,
subject to Sections 4.1(b), 4.1(c) and 4.4, use reasonable best
efforts to keep such Registration Statement effective or such prospectus supplement current,
until the termination of the period contemplated in Section 4.5.
(b) Prepare and file with the SEC such amendments and supplements to the applicable
Registration Statement and the Prospectus or prospectus supplement used in connection with
such Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all Registrable
Securities covered by such Registration Statement for the period set forth in paragraph (a)
above.
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(c) Furnish to the Holders and any underwriters such number of copies of the applicable
Registration Statement and each such amendment and supplement thereto (including in each
case all exhibits) and of a Prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned or to be
distributed by them.
(d) Use its reasonable best efforts to register and qualify the securities covered by
such Registration Statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders or any managing
underwriter(s), to keep such registration or qualification in effect for so long as such
Registration Statement remains in effect, and to take any other action which may be
reasonably necessary to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such Holder; provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or jurisdictions.
(e) Notify each Holder of Registrable Securities at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act or the happening of any event
as a result of which the applicable Prospectus, as then in effect, would include an untrue
statement of a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the circumstances
then existing.
(f) Give written notice to the Holders of Registrable Securities covered by a
Registration Statement:
(i) when any Registration Statement filed pursuant to Section 4.1 or any
amendment thereto has been filed with the SEC and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements to any Registration
Statement or the Prospectus included therein or for additional information;
(iii) of the issuance by the SEC of any stop order suspending the effectiveness of any
Registration Statement or the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any notification with
respect to the suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose; and
19
(v) of the happening of any event that requires the Company to make changes in any
effective Registration Statement or the Prospectus in order to make the statements therein
not misleading (which notice shall be accompanied by an instruction to suspend the use of
the Prospectus until the requisite changes have been made).
(g) Use its reasonable best efforts to prevent the issuance or obtain the withdrawal of
any order suspending the effectiveness of any Registration Statement referred to in
Section 4.3(f)(iii) at the earliest practicable time.
(h) Upon the occurrence of any event contemplated by Section 4.3(f)(v), as soon
as is reasonably practicable prepare a post-effective amendment to such Registration
Statement or a supplement to the related Prospectus or file any other required document so
that, as thereafter delivered to the Holders and any underwriters, the Prospectus will not
contain an untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with Section
4.3(f)(v) to suspend the use of the Prospectus until the requisite changes to the
Prospectus have been made, then the Holders and any underwriters shall suspend use of such
Prospectus and use their commercially reasonable efforts to return to the Company all copies
of such Prospectus (at the Company’s expense) other than permanently filed copies then in
such Holder’s or underwriter’s possession.
(i) Use its reasonable best efforts to procure the cooperation of the Company’s
transfer agent in settling any offering or sale of Registrable Securities, including with
respect to the transfer of physical security instruments into book-entry form in accordance
with any procedures reasonably requested by the Holders or any managing underwriter(s).
(j) Use its reasonable best efforts to take such actions as are under its control to
become or remain a well-known seasoned issuer (as defined in Rule 405 under the Securities
Act) (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act))
during the period when such Registration Statement remains in effect.
(k) With respect to underwritten public offerings permitted by this Agreement, enter
into an underwriting agreement in form, scope and substance as is customarily entered into
for similar underwritten secondary offerings of equity securities and take all such other
actions reasonably requested by the Holders of a majority of the Registrable Securities
being sold in connection therewith or by the managing underwriter(s), if any, to expedite or
facilitate the underwritten disposition of such Registrable Securities, and in connection
therewith as customary for any similar underwritten secondary offering, (i) make such
representations and warranties to the Holders that are selling stockholders and the managing
underwriter(s), if any, with respect to the business of the Company and its subsidiaries,
and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to
be incorporated by reference therein, in each case, in form, substance and scope as are
customarily made by the issuer in similar secondary underwritten offerings of equity
securities, and confirm
20
the same if and when requested, (ii) use its reasonable best efforts to furnish
underwriters opinions of counsel to the Company, addressed to the managing underwriter(s),
if any, covering the matters customarily covered in the opinions requested in similar
secondary underwritten offerings of equity securities, (iii) use its reasonable best efforts
to obtain “cold comfort” letters from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public accountants of any
business acquired by the Company for which financial statements and financial data are
included in the Registration Statement) who have certified the financial statements included
in such Registration Statement, addressed to each of the managing underwriter(s), if any,
such letters to be in customary form and covering matters of the type customarily covered in
“cold comfort” letters in connection with similar secondary underwritten offerings of equity
securities, (iv) if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures customary in similar secondary underwritten
offerings of equity securities by similar companies, and (v) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith, their counsel and the managing
underwriter(s), if any, to evidence the continued validity of the representations and
warranties made pursuant to clause (i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered into by the
Company.
(l) Make available for inspection by a representative of Holders that are selling at
least five percent (5%) of the Registrable Securities issued on the date hereof, the
managing underwriter(s), if any, and any attorneys or accountants retained by such Holders
or managing underwriter(s), at the offices where normally kept, during reasonable business
hours, financial and other records and pertinent corporate documents of the Company, and
cause the officers, directors and employees of the Company to supply all information in each
case reasonably requested by any such representative, managing underwriter(s), attorney or
accountant in connection with such Registration Statement; provided that this clause (l)
shall only be applicable to a representative of such Holders that are selling stockholders
and any attorneys or accountants retained by such Holders if such Holder is named in the
applicable prospectus supplement as a Person who may be deemed to be an underwriter with
respect to an offering and sale of Registrable Securities.
4.4 Suspension of Sales. Notwithstanding anything to the contrary contained herein
(but subject to the Suspension Limit described below), (i) subject to Section 4.1(h),
during any Scheduled Black-Out Period or (ii) upon receipt of written notice from the Company that
a Registration Statement or Prospectus contains or may contain an untrue statement of a material
fact or omits to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that circumstances exist that make inadvisable use of such
Registration Statement or Prospectus, the Holder of Registrable Securities shall forthwith
discontinue the marketing of or disposition of Registrable Securities until termination of such
Scheduled Black-Out Period, until the Holder has received copies of a supplemented or amended
Prospectus, or until such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and, if so directed by the Company, such Holder shall deliver to the
Company (at the Company’s expense) all copies, other than permanent file copies then in such
21
Holder’s possession, of the Prospectus covering such Registrable Securities current at the
time of receipt of such notice. The total number of days that any such suspensions and any
deferrals or delays in registration pursuant to Section 4.1(c) in the aggregate may be in
effect in any 180 day period shall not exceed 60 days (the “Suspension Limit”).
4.5 Termination of Registration Rights. A Holder’s Registration Rights as to any
securities held by such Holder (and its affiliates, partners, members and former members) shall not
be available unless such securities are Registrable Securities.
4.6 Furnishing Information. It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Section 4.3 that the selling Holders and the
underwriters, if any, shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of such securities as
shall be required to effect the registered offering of their Registrable Securities.
4.7 Indemnification. (a) In connection with each registration pursuant to
Article 4, the Company agrees to indemnify and hold harmless (1) each selling Holder and
each of its officers, directors, limited or general partners and members, (2) each member, limited
or general partner of each such member, limited or general partner, (3) each of their respective
Affiliates, officers, directors, shareholders, employees, advisors and agents, (4) each underwriter
or agent participating in such offering, and (5) each Person, if any, who controls any selling
Holder or any such underwriter or agent within the meaning of Section 15 of the Securities Act as
follows:
(i) against any and all loss, liability, claim, damage and expense (“Loss”)
whatsoever, as incurred, arising out of an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of an untrue statement of a material fact
included in any preliminary prospectus or the Prospectus or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
(ii) against any and all Loss whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or omission;
provided, however, that, with respect to any selling Holder or any
underwriter or agent, this indemnity does not apply to any Loss to the extent arising out of
an untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such selling
Holder or underwriter or agent, respectively, expressly for use in the Registration
Statement, or any preliminary prospectus or the Prospectus.
22
(b) Each selling Holder agrees severally, and not jointly, to indemnify and hold harmless the
Company, its directors, each of its officers who signed a Registration Statement, each underwriter
or agent participating in such offering and the other selling Holders,
and each Person, if any, who controls the Company, any such underwriter or agent and any other
selling Holder within the meaning of Section 15 of the Securities Act, against any and all Losses
described in the indemnity contained in Section 4.7(a), as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement, or any preliminary prospectus or the Prospectus in reliance upon and in
conformity with written information furnished to the Company by such selling Holder expressly for
use in the Registration Statement, or any preliminary prospectus or the Prospectus.
(c) The obligations of the Company under Section 4.7(a) and of the selling Holders
under Section 4.7(b) to indemnify any underwriter or agent who participates in an offering
(or any Person, if any, controlling such underwriter or agent within the meaning of Section 15 of
the Securities Act) shall be conditioned upon the underwriting or agency agreement with such
underwriter or agent containing an agreement by such underwriter or agent to indemnify and hold
harmless (1) each selling Holder and each of its officers, directors, limited or general partners
and members, (2) each member, limited or general partner of each such member, limited or general
partner, (3) each of their respective Affiliates, officers, directors, shareholders, employees,
advisors and agents, (4) the Company, its directors, and each of its officers who signed a
Registration Statement, and (5) each Person, if any, who controls the Company or any such selling
Holder within the meaning of Section 15 of the Securities Act, against any and all Losses described
in the indemnity contained in Section 4.7(a), as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the Registration
Statement, or any preliminary prospectus or the Prospectus in reliance upon and in conformity with
written information furnished to the Company by such underwriter or agent expressly for use in the
Registration Statement or any preliminary prospectus or the Prospectus.
(d) Each indemnified party shall give prompt notice to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve the indemnifying party from any liability it may
have under this Agreement, except to the extent that the indemnifying party is prejudiced thereby.
If it so elects, after receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such action with counsel
chosen by it, provided that the indemnified party shall be entitled to participate in (but
not control) the defense of such action with counsel chosen by it, the reasonable fees and expenses
of which shall be paid by the indemnifying party if there would be a conflict if one counsel were
to represent both the indemnified and the indemnifying party, and by the indemnified party in all
other circumstances. In no event shall the indemnifying party or parties be liable for a settlement
of an action with respect to which they have assumed the defense if such settlement is effected
without the written consent of the indemnifying party (not to be unreasonably withheld or delayed),
or for the fees and expenses of more than one counsel for (i) the Company, its officer, directors
and controlling Persons as a group, (ii) the selling Holders and their controlling Persons as a
group and (iii) the underwriters or agents and their controlling Persons as a group, in each case,
in connection with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
23
4.8 Contribution. If the indemnification provided for in this Article 4 is
held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to
any Loss, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a result of such
aggregate Losses in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in connection with the
statements or omissions (or alleged statements or omissions) which resulted in such Losses, as well
as any other relevant equitable considerations. The relative fault of the indemnifying party and
of the indemnified party shall be determined by reference to, among other things, whether the
untrue (or alleged untrue) statement of a material fact or the omission (or alleged omission) to
state a material fact relates to information supplied by the indemnifying party or by the
indemnified party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided, however, that the
obligations of each of the Holders hereunder shall be several and not joint and shall be limited to
an amount equal to the net proceeds such Holder receives in such registration and, provided,
further, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 4.8, each Person, if any, who
controls an underwriter or agent within the meaning of Section 15 of the Securities Act shall have
the same rights to contribution as such underwriter or agent and each director of the Company, each
officer of the Company who signed a Registration Statement, and each Person, if any, who controls
the Company or a selling Holder within the meaning of Section 15 of the Securities Act shall have
the same rights to contribution as the Company or such selling Holder, as the case may be.
4.9 Representations, Warranties and Indemnities to Survive. The indemnity and
contribution agreements contained in this Article 4 and the representations and warranties
of the Company referred to in Section 4.3(k) shall remain operative and in full force and
effect regardless of (i) any termination of any underwriting or agency agreement, (ii) any
investigation made by or on behalf of the selling Holders, the Company or any underwriter or agent
or controlling Person or (iii) the consummation of the sale or successive resales of the
Registrable Securities.
4.10 Lock-Up Agreements. The Company agrees that, if requested by the managing
underwriter in any underwritten public offering permitted by this Agreement, it will not, directly
or indirectly, sell, offer to sell, grant any option for the sale of, or otherwise dispose of any
Common Stock or securities convertible into or exchangeable or exercisable for Common Stock
(subject to customary exceptions), other than any such sale or distribution of Common Stock upon
exercise of the Company’s Warrants, in the case of an underwritten offering for a period of 60 days
from the effective date of the Registration Statement pertaining to such Common Stock; provided,
however, that any such lock-up agreement shall not prohibit the Company from directly or indirectly
(i) selling, offering to sell, granting any option for the sale of, or otherwise disposing of any
Qualifying Employee Stock (or otherwise maintaining its employee benefits plans in the ordinary
course of business) or (ii) issuing Common Stock or securities convertible into or exchangeable for
Common Stock upon exercise or conversion of any warrant (including any other Warrant), option,
right or convertible or exchangeable security issued in connection with the plan of reorganization.
The total number of days that any such lock-up agreement may
be in effect in any 365-day period shall not exceed 120 days. The lock-up agreements set
forth in this Section 4.10 shall be subject to customary exceptions that may be contained
in an underwriting agreement if any such registration involves a similar underwritten offering.
24
4.11 Rule 144 Reporting. With a view to making available to the Holders the benefits
of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities
to the public without registration, the Company agrees, so long as it is subject to the periodic
reporting requirements of the Securities Act, to use its reasonable best efforts to:
(a) make and keep public information available, as those terms are understood and
defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities
Act, at all times after the effective date of this Agreement;
(b) file with the SEC, in a timely manner, all reports and other documents required of
the Company under the Exchange Act; and
(c) so long as the Holders own any Registrable Securities, furnish to such Holders
forthwith upon request: a written statement by the Company as to its compliance with the
reporting requirements of Rule 144 under the Securities Act, and of the Exchange Act; and
such other reports and documents as any Initial Investor or Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing it to sell any such securities
without registration.
4.12 Obtaining Exchange Listing. The Company will file a listing application for
listing on the exchange on which the then outstanding Common Stock is listed with respect to the
Underlying Common Stock as soon as practicable after the date hereof. The Company shall use
reasonable best efforts to list the Warrants, and maintain such listing, on such exchange or, if
not possible, another U.S. national securities exchange, in connection with any proposed
underwritten distribution of the Warrants that meets the applicable listing criteria. A copy of
any opinion of counsel accompanying a listing application by the Company with respect to the
Underlying Common Stock or Warrants shall be furnished to the Warrant Agent, together with a letter
to the effect that the Warrant Agent may rely on the statements made in such opinion.
5. ADJUSTMENTS AND OTHER RIGHTS.
5.1 Stock Dividend; Subdivision or Combination of Common Stock. If the Company at any
time issues to holders of the Common Stock a dividend payable solely in, or other distribution
solely of, Common Stock (a “Stock Dividend”), the Exercise Price in effect immediately
prior to such Stock Dividend shall be proportionately reduced and the number of shares of Common
Stock obtainable upon exercise of each Warrant shall be proportionately increased. If the Company
at any time subdivides (by any stock split, stock dividend, recapitalization or otherwise) the
outstanding Common Stock into a greater number of shares, the Exercise Price in effect immediately
prior to such subdivision shall be proportionately reduced (but not below the par value per share
of Common Stock) and the number of shares of Common Stock obtainable upon exercise of each Warrant
shall be proportionately increased. If the Company at any time combines (by reverse stock split or
otherwise) the outstanding Common Stock into a smaller number of shares, the Exercise Price in
effect immediately prior to such
combination shall be proportionately increased and the number of shares of Common Stock
obtainable upon exercise of each Warrant shall be proportionately decreased.
25
5.2 Other Dividends and Distributions. If at any time or from time to time prior to
the exercise of any Warrant the Company shall fix a record date for the making of a dividend or
other distribution (other than as contemplated by Section 5.5), other than a Stock Dividend
covered by Section 5.1 or a distribution of rights or warrants covered by Section
5.3, to the holders of its Common Stock (collectively, a “Distribution”) of:
(A) any evidences of its indebtedness, any shares of its capital stock or any
other securities or property of any nature whatsoever (including cash); or
(B) any options, warrants or other rights to subscribe for or purchase any of
the following: any evidences of its indebtedness, any shares of its capital stock or
any other securities or property of any nature whatsoever;
then, in each such case, the Exercise Price in effect immediately prior to such record date shall
be reduced immediately thereafter to the price determined by multiplying such Exercise Price by the
quotient of (x) the Fair Market Value of the Common Stock on the last trading day immediately
preceding the first date on which the Common Stock trades regular way on the principal national
securities exchange on which the Common Stock is listed or admitted to trading without the right to
receive such Distribution, minus the amount of cash and/or the Fair Market Value of the securities,
evidences of indebtedness, assets, rights or warrants to be so distributed in respect of one share
of Common Stock divided by (y) the Fair Market Value of the Common Stock on the last trading day
immediately preceding the first date on which the Common Stock trades regular way on the principal
national securities exchange on which the Common Stock is listed or admitted to trading without the
right to receive such Distribution; such adjustment shall be made successively whenever such a
record date is fixed. In such event, the number of shares of Common Stock issuable upon the
exercise of each Warrant as in effect immediately prior to such record date shall be increased
immediately thereafter to the amount determined by multiplying such number by the quotient of (x)
the Exercise Price in effect immediately prior to the adjustment contemplated by the immediately
preceding sentence divided by (y) the new Exercise Price determined in accordance with the
immediately preceding sentence. In the event that such Distribution is not so made, the Exercise
Price and the number of shares of Common Stock issuable upon exercise of each Warrant then in
effect shall be readjusted, effective as of the date when the Board determines not to distribute
such shares, evidences of indebtedness, assets, rights, cash or warrants, as the case may be, to
the Exercise Price that would then be in effect and the number of Shares that would then be
issuable upon exercise of this Warrant if such record date had not been fixed.
5.3 Rights Offerings. If at any time the Company shall distribute rights or warrants
to all or substantially all holders of its Common Stock entitling them, for a period of not more
than 45 days, to subscribe for or purchase shares of Common Stock at a price per share less than
the Fair Market Value of the Common Stock on the last trading day preceding the date on which the
Board declares such distribution of rights or warrants, the Exercise Price in effect immediately
prior to the close of business on the record date for such distribution shall be reduced
immediately thereafter to the price determined by multiplying such Exercise Price by the
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quotient of (x) the number of shares of Common Stock outstanding at the close of business on
such record date plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription or purchase would
purchase at such Fair Market Value divided by (y) the number of shares of Common Stock outstanding
at the close of business on such record date plus the number of shares of Common Stock so offered
for subscription or purchase. In such event, the number of shares of Common Stock issuable upon
the exercise of each Warrant as in effect immediately prior to the close of business on such record
date shall be increased immediately thereafter to the amount determined by multiplying such number
by the quotient of (x) the Exercise Price in effect immediately prior to the adjustment
contemplated by the immediately preceding sentence divided by (y) the new Exercise Price determined
in accordance with the immediately preceding sentence. In case any rights or warrants referred to
in this Section 5.3 in respect of which an adjustment shall have been made shall expire
unexercised and any shares that would have been underlying such rights or warrants shall not have
been allocated pursuant to any backstop commitment or any similar arrangement, the Exercise Price
and the number of shares of Common Stock issuable upon exercise of each Warrant then in effect
shall be readjusted at the time of such expiration to the Exercise Price that would then be in
effect and the number of Shares that would then be issuable upon exercise of each Warrant if no
adjustment had been made on account of such expired rights or warrants.
5.4 Issuer Tender or Exchange Offers. If the Company or any subsidiary of the Company
shall consummate a tender or exchange offer for all or any portion of the Common Stock for a
consideration per share with a Fair Market Value greater than the Fair Market Value of the Common
Stock on the date such tender or exchange offer is first publicly announced (the “Announcement
Date”), the Exercise Price in effect immediately prior to the expiration date for such tender
or exchange offer shall be reduced immediately thereafter to the price determined by multiplying
such Exercise Price by the quotient of (x) the Fair Market Value of the Common Stock on the
Announcement Date minus the Premium Per Post-Tender Share divided by (y) the Fair Market Value of
the Common Stock on the Announcement Date. In such event, the number of shares of Common Stock
issuable upon the exercise of each Warrant as in effect immediately prior to such expiration date
shall be increased immediately thereafter to the amount determined by multiplying such number by
the quotient of (x) the Exercise Price in effect immediately prior to the adjustment contemplated
by the immediately preceding sentence divided by (y) the new Exercise Price determined in
accordance with the immediately preceding sentence. As used in this Section 5.4 with
respect to any tender or exchange offer, “Premium Per Post-Tender Share” means the quotient
of (x) the amount by which the aggregate Fair Market Value of the consideration paid in such tender
or exchange offer exceeds the aggregate Fair Market Value on the Announcement Date of the shares of
Common Stock purchased therein divided by (y) the number of shares of Common Stock outstanding at
the close of business on the expiration date for such tender or exchange offer (after giving pro
forma effect to the purchase of shares being purchased in the tender or exchange offer).
5.5 Reorganization, Reclassification, Consolidation, Merger or Sale. Any
recapitalization, reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Company’s assets or other transaction, which in each case is effected in
such a way that the shares of Common Stock are converted into the right to receive (either directly
or upon subsequent liquidation) stock, securities, other equity interests or assets (including
cash) with
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respect to or in exchange for shares of Common Stock is referred to herein as “Organic
Change.” Prior to the consummation of any Organic Change, the Company shall make appropriate
provision to ensure that each of the Holders shall thereafter have the right to acquire and
receive, in lieu of or in addition to (as the case may be) the Common Stock immediately theretofore
acquirable and receivable upon the exercise of such Holder’s Warrants, (x) in the case of a Mixed
Consideration Merger, the Public Stock issued in such Mixed Consideration Merger and (y) in the
case of any other Organic Change, such stock, securities, other equity interests or assets, in each
case as may be issued or payable in connection with the Organic Change with respect to or in
exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable
upon exercise of such Holder’s Warrants, for an aggregate Exercise Price per Warrant equal to (i)
in the case of a Mixed Consideration Merger, the aggregate Exercise Price per Warrant as in effect
immediately prior to such Mixed Consideration Merger times the Stock Consideration Ratio and (ii)
in the case of any other Organic Change, the aggregate Exercise Price per Warrant as in effect
immediately prior to such Organic Change. In any such case, the Company shall make appropriate
provision to insure that all of the provisions of the Warrants shall thereafter be applicable to
such stock, securities, other equity interests or assets. The Company shall not effect any such
consolidation, merger or sale of all or substantially all of the Company’s assets where the
Warrants will be assumed by the successor entity, unless prior to the consummation thereof, the
successor entity (if other than the Company) resulting from consolidation or merger or the entity
purchasing such assets assumes by written instrument the obligation to deliver to each such Holder
upon exercise of any Warrant, such stock, securities, equity interests or assets (including cash)
as, in accordance with Article 5, such Holder may be entitled to acquire. This Section
5.5 shall not apply to any Warrants or Common Stock redeemed or sold in connection with any
Organic Change pursuant to Section 6.1, Section 6.2(b), Section 6.3(a)(i)
and Section 6.3(b), provided that, for the avoidance of doubt, the adjustments set forth in
this Section 5.5 shall be applicable to any Warrants that remain outstanding pursuant to
this Agreement in connection with a Public Stock Merger or Mixed Consideration Merger (including
any adjustment applicable in connection with such Public Stock Merger or Mixed Consideration
Merger).
5.6 Other Adjustments. The Board shall make appropriate adjustments to the amount of
cash or number of shares of Common Stock, as the case may be, due upon exercise of the Warrants, as
may be necessary or appropriate to effectuate the intent of this Article 5 and to avoid
unjust or inequitable results as determined in its reasonable good faith judgment, in each case to
account for any adjustment to the Exercise Price and the number of shares purchasable on exercise
of Warrants for the relevant Warrant Certificate that becomes effective, or any event requiring an
adjustment to the Exercise Price and the number of shares purchasable on exercise of Warrants for
the relevant Warrant Certificate where the record date or effective date (in the case of a
subdivision or combination of the Common Stock) of the event occurs, during the period beginning
on, and including, the Exercise Date and ending on, and including, the related Settlement Date.
5.7 Notice of Adjustment. Whenever the number of shares of Common Stock issuable upon
the exercise of each Warrant is adjusted, as herein provided, the Company shall cause the Warrant
Agent promptly to mail by first class mail, postage prepaid, to each Holder notice of such
adjustment or adjustments and shall deliver to the Warrant Agent a certificate of a firm of
independent public accountants selected by the Board (who may be the regular
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accountants employed by the Company) setting forth the number of shares of Common Stock
issuable upon the exercise of each Warrant after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by which such adjustment
was made. The Warrant Agent shall be entitled to rely on such certificate and shall be under no
duty or responsibility with respect to any such certificate, except to exhibit the same from time
to time, to any Holder desiring an inspection thereof during reasonable business hours. The Warrant
Agent shall not at any time be under any duty or responsibility to any Holders to determine whether
any facts exist that may require any adjustment of the number of shares of Common Stock or other
stock or property issuable on exercise of the Warrants, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed in making such adjustment or
the validity or value (or the kind or amount) of any shares of Common Stock or other stock or
property which may be issuable on exercise of the Warrants. The Warrant Agent shall not be
responsible for any failure of the Company to make any cash payment or to issue, transfer or
deliver any shares of Common Stock or security instruments or other securities or properties upon
the exercise of any Warrant.
6. CHANGE OF CONTROL.
6.1 Redemption in Connection with a Change of Control Event. Upon the occurrence of a
Change of Control Event (other than a Public Stock Merger or Mixed Consideration Merger), at the
election of each Holder in its sole discretion by written notice to the Company or the successor to
the Company on or prior to the Exercise Date, the Company shall pay to such Holder of outstanding
Warrants as of the date of such Change of Control Event, an amount in immediately available funds
equal to the Cash Redemption Value for such Warrants, not later than the date which is ten (10)
Business Days after such Change of Control Event and the Warrants shall thereafter be extinguished.
For purposes of this Section 6.1, the Exercise Date shall mean (a) if the Company entered
into a definitive agreement with respect to a Change of Control Event and has provided to the
Holders notice of the date on which the Change in Control Event will become effective at least
twenty (20) Business Days prior to the effectiveness of such event, the tenth (10th) Business Day
prior to such event and (b) otherwise, the fifth (5th) Business Day following the effectiveness of
the Change of Control Event. The “Cash Redemption Value” for any Warrant will equal the
fair value of the Warrant as of the date of such Change of Control Event as determined by an
Independent Financial Expert, by employing a valuation based on a computation of the option value
of each Warrant using the calculation methods and making the assumptions set forth in Exhibit
C. The Cash Redemption Value of the Warrants shall be due and payable within ten (10) Business
Days after the date of the applicable Change of Control Event. If a Holder of Warrants does not
elect to receive the Cash Redemption Value for such Holder’s Warrants as provided by this
Section 6.1, such Warrants will remain outstanding as adjusted pursuant to the provisions
of Article 5 hereof.
6.2 Public Stock Merger. (a) In connection with a Public Stock Merger, the Company
may by written notice to the Holders not less than ten (10) Business Days prior to the effective
date of such Public Stock Merger elect to have all the unexercised Warrants remain outstanding
after the Public Stock Merger, in which case the Warrants will remain outstanding as adjusted
pursuant to Section 5.5 and the other provisions of Article 5 hereof.
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(a) In the case of any Public Stock Merger with respect to which the Company does not make a
timely election as contemplated by Section 6.2(a) above, the Company shall pay within five
(5) Business Days after the effective date of such Public Stock Merger, to the Warrant Agent on
behalf of each Holder of outstanding Warrants as of the effective date of such Public Stock Merger,
an amount in cash in immediately available funds equal to the Cash Redemption Value for such
Warrants determined in accordance with Section 6.1 and the Warrants shall be terminated and
extinguished.
6.3 Mixed Consideration Merger. (a) In connection with a Mixed Consideration Merger,
the Company may by written notice to the Holders not less than ten (10) Business Days prior to the
effective date of such Mixed Consideration Merger elect the following treatment with respect to
each outstanding Warrant: (i) pay to the Holder of such Warrant as of the date of such Mixed
Consideration Merger the product of the Cash Consideration Ratio multiplied by the Cash Redemption
Value for such Warrant, which amount shall be paid in immediately available funds, not later than
the date which is ten (10) Business Days after such Mixed Consideration Merger and (ii) the Warrant
shall remain outstanding after the Mixed Consideration Merger, as further adjusted pursuant to
Section 5.5 and the other provisions of Article 5. The portion of the Cash
Redemption Value of the Warrants payable pursuant to clause (i) of this Section 6.3(a)
shall be due and payable not later than the tenth (10th) Business Day after the date of the Mixed
Consideration Merger.
(a) In the case of any Mixed Consideration Merger with respect to which the Company does not
make a timely election as contemplated by Section 6.3(a) above, the Company shall pay,
within ten (10) Business Days after the effective date of such Mixed Consideration Merger, to the
Warrant Agent on behalf of each Holder of outstanding Warrants as of the effective date of such
Mixed Consideration Merger, an amount in cash in immediately available funds equal to the Cash
Redemption Value for such Warrants determined in accordance with Section 6.1 and the
Warrants shall be terminated and extinguished.
7. WARRANT TRANSFER BOOKS.
The Warrant Certificates shall be issued in registered form only. The Company shall cause to
be kept at the office of the Warrant Agent a register in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration of Warrant
Certificates and of transfers or exchanges of Warrant Certificates as herein provided.
At the option of the Holder, Warrant Certificates may be exchanged at such office, and upon
payment of the charges hereinafter provided. Whenever any Warrant Certificates are so surrendered
for exchange, the Company shall execute, and the Warrant Agent shall countersign and deliver, the
Warrant Certificates that the Holder making the exchange is entitled to receive.
All Warrant Certificates issued upon any registration of transfer or exchange of Warrant
Certificates shall be the valid obligations of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for
such registration of transfer or exchange.
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Every Warrant Certificate surrendered for registration of transfer or exchange shall (if so
required by the Company or the Warrant Agent) be duly endorsed, or be accompanied by a written
instrument of transfer in the form attached hereto as Exhibit B or otherwise satisfactory
to the Warrant Agent, duly executed by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made to a Holder for any registration of transfer or exchange of
Warrant Certificates. The Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of transfer or exchange
of Warrant Certificates.
Subject to compliance with any restrictions on transfer under applicable law and this Warrant
Agreement, any Warrant Certificate when duly endorsed in blank shall be deemed negotiable and when
a Warrant Certificate shall have been so endorsed, the Holder thereof shall be treated by the
Company, the Warrant Agent and all other Persons dealing therewith as the absolute owner thereof
for any purpose and as the Person entitled to exercise the rights represented thereby, or to the
transfer thereof on the register of the Company maintained by the Warrant Agent. No such transfer
shall be registered until the Warrant Agent has been supplied with the aforementioned instruments
of transfer and any other such documentation as the Warrant Agent may reasonably require.
8. WARRANT HOLDERS.
8.1 No Voting Rights. Prior to the exercise of Warrants and full payment of the
Exercise Price thereof, or in the event of Net Share Settlement, prior to the election of a Holder
for Net Share Settlement, in accordance with the terms of this Agreement, no Holder of a Warrant
Certificate, in respect of such Warrants, shall be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to vote, to consent, to exercise any preemptive
right (except as otherwise agreed in writing by the Company, including the subscription rights set
forth in the Investment Agreement), to receive any notice of meetings of stockholders for the
election of directors of the Company or any other matter or to receive any notice of any
proceedings of the Company.
8.2 Right of Action. All rights of action in respect of this Agreement are vested in
the Holders of the Warrants, and any Holder of Warrants, without the consent of the Warrant Agent
or the Holder of any other Warrant, may, on such Holder’s own behalf and for such Holder’s own
benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder’s right to exercise or exchange such
Holder’s Warrants in the manner provided in this Agreement or any other obligation of the Company
under this Agreement.
9. WARRANT AGENT
9.1 Nature of Duties and Responsibilities Assumed. The Company hereby appoints the
Warrant Agent to act as agent of the Company as set forth in this Agreement. The Warrant Agent
hereby accepts such appointment as agent of the Company and agrees to perform that agency upon the
terms and conditions herein set forth, by all of which the Company and the
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Holders, by their acceptance thereof, shall be bound. The Warrant Agent shall not by
countersigning Warrant Certificates or by any other act hereunder be deemed to make any
representations as to validity or authorization of the Warrants or the Warrant Certificates (except
as to its countersignature thereon) or of any securities or other property delivered upon exercise
or tender of any Warrant, or as to the accuracy of the computation of the Exercise Price or the
number or kind or amount of stock or other securities or other property deliverable upon exercise
of any Warrant, the independence of any Independent Financial Expert or the correctness of the
representations of the Company made in such certificates that the Warrant Agent receives. The
Warrant Agent shall not have any duty to calculate or determine any adjustments with respect to the
Exercise Price and the Warrant Agent shall have no duty or responsibility in determining the
accuracy or correctness of such calculation. The Warrant Agent shall not (a) be liable for any
recital or statement of fact contained herein or in the Warrant Certificates or for any action
taken, suffered or omitted by it in good faith on the belief that any Warrant Certificate or any
other documents or any signatures are genuine or properly authorized, (b) be responsible for any
failure on the part of the Company to comply with any of its covenants and obligations contained in
this Agreement or in the Warrant Certificates, or (c) be liable for any act or omission in
connection with this Agreement except for its own negligence or willful misconduct. The Warrant
Agent is hereby authorized to accept instructions with respect to the performance of its duties
hereunder from the President, any Vice President or the Secretary of the Company and to apply to
any such officer for instructions (which instructions will be promptly given in writing when
requested) and the Warrant Agent shall not be liable and shall be indemnified and held harmless for
any action taken or suffered to be taken by it in good faith in accordance with the instructions of
any such officer, but in its discretion the Warrant Agent may in lieu thereof accept other evidence
of such or may require such further or additional evidence as it may deem reasonable.
The Warrant Agent may execute and exercise any of the rights and powers hereby vested in it or
perform any duty hereunder either itself or by or through its attorneys, agents or employees,
provided reasonable care has been exercised in the selection and in the continued employment of any
such attorney, agent or employee. The Warrant Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect hereof, unless first
indemnified to its satisfaction, but this provision shall not affect the power of the Warrant Agent
to take such action as the Warrant Agent may consider proper, whether with or without such
indemnity. The Warrant Agent shall promptly notify the Company in writing of any claim made or
action, suit or proceeding instituted against it arising out of or in connection with this
Agreement.
The Company will perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further acts, instruments and assurances as may reasonably be
required by the Warrant Agent in order to enable it to carry out or perform its duties under this
Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder. The Warrant Agent shall
not be liable except for the failure to perform such duties as are specifically set forth herein,
and no implied covenants or obligations shall be read into this Agreement against the Warrant
Agent, whose duties and obligations shall be determined solely by the express provisions hereof.
Notwithstanding anything in this Agreement to the contrary, Warrant Agent’s
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aggregate liability under this Agreement with respect to, arising from, or arising in
connection with this Agreement, or from all services provided or omitted to be provided under this
Agreement, whether in contract, or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid hereunder by the Company to Warrant Agent as fees and charges, but not including
reimbursable expenses.
9.2 Compensation and Reimbursement. The Company agrees to pay to the Warrant Agent
from time to time compensation for all services rendered by it hereunder in accordance with
Schedule B hereto and as the Company and the Warrant Agent may agree from time to time, and
to reimburse the Warrant Agent for reasonable expenses and disbursements actually incurred in
connection with the execution and administration of this Agreement (including the reasonable
compensation and the expenses of its counsel), and further agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in connection with the acceptance
and administration of this Agreement, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of its powers or
duties hereunder.
9.3 Warrant Agent May Hold Company Securities. The Warrant Agent and any stockholder,
director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or its Affiliates or become pecuniarily interested in transactions
in which the Company or its Affiliates may be interested, or contract with or lend money to the
Company or its Affiliates or otherwise act as fully and freely as though it were not the Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
9.4 Resignation and Removal; Appointment of Successor. (a) No resignation or removal
of the Warrant Agent and no appointment of a successor warrant agent shall become effective until
the acceptance of appointment by the successor warrant agent as provided herein. The Warrant Agent
may resign its duties and be discharged from all further duties and liability hereunder (except
liability arising as a result of the Warrant Agent’s own negligence, willful misconduct or bad
faith) after giving written notice to the Company at least thirty (30) days prior to the date such
resignation will become effective. The Company shall, upon written request of Holders of a majority
of the outstanding Warrants, remove the Warrant Agent upon written notice provided at least thirty
(30) days prior to the date of such removal, and the Warrant Agent shall thereupon in like manner
be discharged from all further duties and liabilities hereunder, except as aforesaid. The Warrant
Agent shall, at the Company’s expense, cause to be mailed at the Company’s expense (by first-class
mail, postage prepaid) to each Holder of a Warrant at his last address as shown on the register of
the Company maintained by the Warrant Agent a copy of said notice of resignation or notice of
removal, as the case may be. Upon such resignation or removal, the Person holding the greatest
number of Warrants as of the date of such event shall appoint in writing a new warrant agent
reasonably acceptable to the Company. If the Person holding the greatest number of Warrants as of
the date of such event shall fail to make such appointment within a period of twenty (20) days
after it has been notified in writing of such resignation by the resigning Warrant Agent or after
such removal, then the Company shall appoint a new warrant agent. Any new warrant agent, whether
appointed by a Holder or by the Company, shall be a reputable bank, trust company or transfer agent
doing business under the
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laws of the United States or any state thereof, in good standing and having a combined capital
and surplus of not less than $50,000,000. The combined capital and surplus of any such new warrant
agent shall be deemed to be the combined capital and surplus as set forth in the most recent annual
report of its condition published by such warrant agent prior to its appointment, provided that
such reports are published at least annually pursuant to law or to the requirements of a Federal or
state supervising or examining authority. After acceptance in writing of such appointment by the
new warrant agent, it shall be vested with the same powers, rights, duties and responsibilities as
if it had been originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and delivered by the resigning or removed
Warrant Agent. Not later than the effective date of any such appointment, the Company shall give
notice thereof to the resigning or removed Warrant Agent. Failure to give any notice provided for
in this Section 9.4(a), however, or any defect therein, shall not affect the legality or
validity of the resignation of the Warrant Agent or the appointment of a new warrant agent, as the
case may be.
(a) Any corporation into which the Warrant Agent or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Warrant Agent or any new warrant agent
shall be a party, shall be a successor Warrant Agent under this Agreement without any further act,
provided that such corporation would be eligible for appointment as successor to the Warrant Agent
under the provisions of Section 9.4(a). Any such successor Warrant Agent shall promptly
cause notice of succession as Warrant Agent to be mailed (by first-class mail, postage prepaid) to
each Holder of a Warrant at such Holder’s last address as shown on the register of the Company
maintained by the Warrant Agent.
9.5 Damages. No party to this Agreement shall be liable to any other party for any
consequential, indirect, special or incidental damages under any provision of this Agreement or for
any consequential, indirect, penal, special or incidental damages arising out of any act or failure
to act hereunder even if that party has been advised of or has foreseen the possibility of such
damages.
10. REPRESENTATIONS AND WARRANTIES.
10.1 Representations and Warranties of the Company. The Company hereby represents and
warrants that the representations and warranties of the Company set forth in Sections 3.1, 3.2,
3.3, 3.4, 3.5 and 3.6 of the Investment Agreement and Stock Purchase Agreement and any other
representations and warranties made by the Company in Article III of the Investment Agreement and
Stock Purchase Agreements to the extent relating to the Warrants, are true and accurate in all
respects and not misleading in any respect.
11. COVENANTS.
11.1 Reservation of Common Stock for Issuance on Exercise of Warrants. The Company
covenants that it will at all times reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock, solely for the purpose of issue upon exercise of Warrants
as herein provided, such number of shares of Common Stock as shall then
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be issuable upon the exercise of all Warrants issuable hereunder plus such number of shares of
Common Stock as shall then be issuable upon the exercise of other outstanding warrants, options and
rights (whether or not vested), the settlement of any forward sale, swap or other derivative
contract, and the conversion of all outstanding convertible securities or other instruments
convertible into Common Stock or rights to acquire Common Stock. The Company covenants that all
shares of Common Stock which shall be issuable shall, upon such issue, be duly and validly issued
and fully paid and non-assessable.
11.2 Notice of Distributions. At any time when the Company declares any Distribution
on its Common Stock, it shall give notice to the Holders of all the then outstanding Warrants of
any such declaration not less than 15 days prior to the related record date for payment of the
Distribution so declared.
11.3 Replacement of Warrants. Upon the effectiveness of the Plan and in accordance
with the Investment Agreement and/or Stock Purchase Agreements, as applicable, each Warrant shall
automatically be converted into a right to receive warrants to purchase such number of shares or
New Common Stock (as defined in the Investment Agreement, as effective on the date hereof) (the
“New Warrants”) and warrants to purchase such number of shares of common stock of General
Growth Opportunities, Inc., a new wholly-owned subsidiary of the Company (the “GGO
Warrants”), as is set forth in Section 5.2 of the Investment Agreement or Stock Purchase
Agreements, as applicable. If the conversion of the Warrants described above occurs, (i) the New
Warrants and the GGO Warrants shall have substantially similar terms as are set forth herein except
that (w) the Expiration Date for each New Warrant and GGO Warrant shall be the seventh year
anniversary of the date on which those warrants are issued and (x) the initial Exercise Price for
each New Warrant and GGO Warrant, respectively, shall be as set forth in the Investment Agreement
or Stock Purchase Agreements, as applicable, and (ii) the Company and the Warrant Agent hereby
jointly agree and covenant to execute and deliver, or cause to be executed and delivered, such
further instruments or documents or take such other action (and cause entities controlled by them
to take such action) as may be reasonably necessary to effect the issuance of the New Warrants and
the GGO Warrants in accordance with the terms hereof and the terms of the Investment Agreement or
Stock Purchase Agreements, as applicable.
12. MISCELLANEOUS.
12.1 Money and Other Property Deposited with the Warrant Agent. Any moneys,
securities or other property which at any time shall be deposited by the Company or on its behalf
with the Warrant Agent pursuant to this Agreement shall be and are hereby assigned, transferred and
set over to the Warrant Agent in trust for the purpose for which such moneys, securities or other
property shall have been deposited; but such moneys, securities or other property need not be
segregated from other funds, securities or other property except to the extent required by law. The
Warrant Agent shall distribute any money deposited with it for payment and distribution to a Holder
to an account designated by such Holder in such amount as is appropriate. Any money deposited with
the Warrant Agent for payment and distribution to the Holders that remains unclaimed for two years
after the date the money was deposited with the Warrant Agent shall be paid to the Company.
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12.2 Payment of Taxes. The Company shall pay all transfer, stamp and other similar
taxes that may be imposed in respect of the issuance or delivery of the Warrants or in respect of
the issuance or delivery by the Company of any securities upon exercise of the Warrants with
respect thereto. The Company shall not be required, however, to pay any tax or other charge imposed
in connection with any transfer involved in the issue of any Warrants, certificate for shares of
Common Stock or other securities underlying the Warrants or payment of cash to any Person other
than the Holder of a Warrant Certificate surrendered upon the exercise or purchase of a Warrant,
and in case of such transfer or payment, the Warrant Agent and the Company shall not be required to
issue any security or to pay any cash until such tax or charge has been paid or it has been
established to the Warrant Agent’s and the Company’s satisfaction that no such tax or other charge
is due. The Company and each Initial Investor agree that neither the issuance nor exercise of the
Warrants is governed by Section 83(a) of the Code or otherwise a compensatory transaction, and the
Company agrees that it will not deduct any amount as compensation in connection with such issuance
or exercise for federal income tax purpose. The Company and each Initial Investor agree that for
federal income tax purposes, the Warrants have been granted as an option premium in exchange for
each Initial Investor agreeing, at the option of the Company, to make the equity investment
described in the Investment Agreement or Stock Purchase Agreements, as applicable.
12.3 Surrender of Certificates. Any Warrant Certificate surrendered for exercise or
purchase shall, if surrendered to the Company, be delivered to the Warrant Agent, and all Warrant
Certificates surrendered or so delivered to the Warrant Agent shall be promptly cancelled by the
Warrant Agent and shall not be reissued by the Company. The Warrant Agent shall destroy such
cancelled Warrant Certificates.
12.4 Mutilated, Destroyed, Lost and Stolen Warrant Certificates. If (a) any mutilated
Warrant Certificate is surrendered to the Warrant Agent or (b) the Company and the Warrant Agent
receive evidence to their satisfaction of the destruction, loss or theft of any Warrant
Certificate, and there is delivered to the Company and the Warrant Agent such appropriate affidavit
of loss, applicable processing fee and a corporate bond of indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the Warrant Agent that
such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute and
upon its written request the Warrant Agent shall countersign and deliver, in exchange for any such
mutilated Warrant Certificate or in lieu of any such destroyed, lost or stolen Warrant Certificate,
a new Warrant Certificate of like tenor and for a like aggregate number of Warrants.
Upon the issuance of any new Warrant Certificate under this Section 12.4, the Company
may require the payment of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and other expenses (including the reasonable fees and expenses of
the Warrant Agent and of counsel to the Company) in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this Section 12.4 in
lieu of any destroyed, lost or stolen Warrant Certificate shall constitute an original contractual
obligation of the Company, whether or not the destroyed, lost or stolen Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to the benefits of this Agreement
equally and proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder.
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The provisions of this Section 12.4 are exclusive and shall preclude (to the extent
lawful) all other rights or remedies with respect to the replacement of mutilated, destroyed lost
or stolen Warrant Certificates.
12.5 Removal of Legends. Certificates evidencing the Warrants and shares of Common
Stock issued upon exercise of the Warrants shall not be required to contain any legend referenced
in Sections 2.1, 3.6(e) and 3.6(f) (A) while a registration statement
(solely for the purposes of this and the immediately following paragraph, such term to include a
Registration Statement) covering the resale of the Warrants or the shares of Common Stock is
effective under the Securities Act, or (B) following any sale of any such Warrants or shares of
Common Stock pursuant to Rule 144, or (C) following receipt of a legal opinion of counsel to Holder
that the remaining Warrants or shares of Common Stock held by Holder are eligible for resale
without volume limitations or other limitations under Rule 144. In addition, the Company and the
Warrant Agent will agree to the removal of all legends with respect to Warrants or shares of Common
Stock deposited with DTC from time to time in anticipation of sale in accordance with the volume
limitations and other limitations under Rule 144, subject to the Company’s approval of appropriate
procedures, such approval not to be unreasonably withheld, conditioned or delayed.
Following the time at which any such legend is no longer required (as provided above) for certain
Warrants or shares of Common Stock, the Company shall promptly, following the delivery by Holder to
the Warrant Agent of a legended certificate representing such Warrants or shares of Common Stock,
as applicable, deliver or cause to be delivered to the Holder a certificate representing such
Warrants or shares of Common Stock that is free from such legend. In the event any of the legends
referenced in Sections 2.1, 3.6(e) and or 3.6(f) are removed from any of
the Warrants or shares of Common Stock, and thereafter the effectiveness of a registration
statement covering such Warrants or shares of Common Stock is suspended or the Company determines
that a supplement or amendment thereto is required by applicable securities Laws, then the Company
may require that such legends, as applicable, be placed on any such applicable Warrants or shares
of Common Stock that cannot then be sold pursuant to an effective registration statement or under
Rule 144 and Holder shall cooperate in the replacement of such legend. Such legend shall
thereafter be removed when such Warrants or shares of Common Stock may again be sold pursuant to an
effective registration statement or under Rule 144.
12.6 Notices. (a) Any notice, demand or delivery authorized by this Agreement shall
be sufficiently given or made when mailed if sent by first-class mail, postage prepaid, addressed
to any Holder of a Warrant at such Holder’s address shown on the register of the Company maintained
by the Warrant Agent and to the Company or the Warrant Agent as follows:
If to the Company, to:
General Growth Properties, Inc.
000 X. Xxxxxx Xxxxx
Xxxxxxx XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Fax: 000-000-0000
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with a copy to (which shall not constitute notice):
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
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Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq. |
Facsimile: (000) 000-0000
If to the Warrant Agent, to:
[•]
or such other address as shall have been furnished to the party giving or making such notice,
demand or delivery.
(b) Any notice required to be given by the Company to the Holders pursuant to this Agreement,
shall be made by mailing by registered mail, return receipt requested, to the Holders at their
respective addresses shown on the register of the Company maintained by the Warrant Agent. The
Company hereby irrevocably authorizes the Warrant Agent, in the name and at the expense of the
Company, to mail any such notice upon receipt thereof from the Company. Any notice that is mailed
in the manner herein provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.
12.7 Applicable Law; Jurisdiction. This Agreement and each Warrant issued hereunder
and all rights arising hereunder shall be governed by the internal laws of the State of New York.
In connection with any action, suit or proceeding arising out of or relating to this Agreement or
the Warrants, the parties hereto and each Holder irrevocably submit to (i) the exclusive
jurisdiction of the United States Bankruptcy Court for the Southern District of New York until the
chapter 11 cases of the Company and its Affiliates are closed, and (ii) the nonexclusive
jurisdiction of any federal or state court located within the County of New York, State of New
York.
12.8 Persons Benefiting. This Agreement shall be binding upon and inure to the
benefit of the Company and the Warrant Agent, and their respective successors, assigns,
beneficiaries, executors and administrators, and the Holders from time to time of the Warrants.
The Holders of the Warrants are express third party beneficiaries of this Agreement and each such
Holder of Warrants is hereby conferred the benefits, rights and remedies under or by reason of the
provisions of this Agreement as if a signatory hereto. Nothing in this Agreement is intended or
shall be construed to confer upon any Person, other than the Company, the Warrant
Agent and the Holders of the Warrants, any right, remedy or claim under or by reason of this
Agreement or any part hereof.
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12.9 Relationship to Investment Agreement and Stock Purchase Agreements. The Warrants
issued hereunder have been fully paid upon issuance and shall remain issued, outstanding and
binding on the parties in accordance with the terms hereof notwithstanding any failure of the
transactions contemplated by the Investment Agreement or Stock Purchase Agreements, as applicable,
to be consummated, any default by any party to the Investment Agreement or Stock Purchase
Agreements, as applicable, or the invalidity or unenforceability thereof. Notwithstanding the
preceding sentence, if a failure by any Purchaser to pay all amounts payable by such Purchaser
under Article I and Article II of the Investment Agreement or a Stock Purchase Agreements, as
applicable, causes the termination of the Investment Agreement or a Stock Purchase Agreement, as
applicable, by the Company pursuant to Section 11.1(c)(iii) therein, each Holder that is a member
of the Purchaser Group of such Purchaser agrees that as liquidated damages for such failure and
without prejudice to the rights and remedies of the Company under the Investment Agreement or Stock
Purchase Agreements, as applicable, any Warrants held by such Holder shall be deemed cancelled,
null and void and of no further effect. For the avoidance of doubt, the immediately preceding
sentence applies only to a Holder that is a member of a Purchaser Group where the applicable
Purchaser fails to pay all amounts payable by such Purchaser under Article I and Article II of the
Investment Agreement or a Stock Purchase Agreement, as applicable, causing the termination of the
Investment Agreement or a Stock Purchase Agreement, as applicable, by the Company pursuant to
Section 11.1(c)(iii) thereof, and not to any permitted transferee of such member or any other
Person.
12.10 Counterparts. This Agreement may be executed in any number of counterparts,
each or which shall be deemed an original, but all of which together constitute one and the same
instrument.
12.11 Amendments. (a) The Company and the Warrant Agent may from time to time
supplement or amend this Agreement without the approval of any Holder in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions with regard to
matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary
or desirable and, in each case, which shall not adversely affect the interests of any Holder.
(b) In addition to the foregoing, with the consent of the Supermajority Holders, the Company
and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying
in any manner the rights of the Holders hereunder; provided, however, that no modification
effecting the terms upon which the Warrants are exercisable, redeemable or transferable, or
reduction in the percentage required for consent to modification of this Agreement, may be made
without the consent of each Holder affected thereby.
12.12 Headings. The descriptive headings of the several Articles and Sections of this
Agreement are inserted for convenience and shall not control or affect the meaning or construction
of any of the provisions hereof.
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12.13 Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof. In the event of any conflict, discrepancy, or ambiguity
between the terms and conditions contained in this Agreement and any schedules or attachments
hereto, the terms and conditions contained in this Agreement shall take precedence.
12.14 Specific Performance. The parties shall be entitled to specific performance of
the terms of this Agreement. Each of the parties hereto hereby waives (i) any defenses in any
action for specific performance, including the defense that a remedy at law would be adequate and
(ii) any requirement under any Law to post a bond or other security as a prerequisite to obtaining
equitable relief.
[signature page follows]
40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of
the day and year first above written.
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GENERAL GROWTH PROPERTIES, INC.
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[Warrant Agent]
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EXHIBIT A
FORM OF FACE OF WARRANT CERTIFICATE
THESE WARRANTS AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THESE
WARRANTS AND SUCH SECURITIES MAY BE OFFERED, SOLD OR TRANSFERRED ONLY IN COMPLIANCE WITH THE
REQUIREMENTS OF SUCH ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS AND SUBJECT TO THE PROVISIONS
OF THE WARRANT AND REGISTRATION RIGHTS AGREEMENT DATED AS OF [___], 2010 BETWEEN GENERAL GROWTH
PROPERTIES, INC. (THE “COMPANY”) AND
____________________, WARRANT AGENT. A COPY OF
SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT IS AVAILABLE AT THE OFFICES OF THE COMPANY.
WARRANTS TO PURCHASE COMMON STOCK
OF GENERAL GROWTH PROPERTIES, INC.
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No.__________________
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Certificate for ______________ Warrants |
This certifies that [HOLDER] , or registered assigns, is the registered holder of the
number of Warrants set forth above. Each Warrant entitles the holder thereof (a “Holder”),
subject to the provisions contained herein and in the Warrant and Registration Rights Agreement
referred to below, to purchase from GENERAL GROWTH PROPERTIES, INC. (the “Company”), one
share of the Company’s common stock, par value $0.01 (“Common Stock”), subject to
adjustment upon the occurrence of certain events specified herein and in the Warrant and
Registration Rights Agreement, at the exercise price (the “Exercise Price”) of $15 per
share, subject to adjustment upon the occurrence of certain events specified herein and in the
Warrant Agreement.
This Warrant Certificate is issued under and in accordance with the Warrant and Registration
Rights Agreement, dated as of [___], 2010 (the “Warrant Agreement”), between the Company and
[____________________], warrant agent (the “Warrant Agent”, which term includes any
successor Warrant Agent under the Warrant Agreement), and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the Holder of this Warrant
Certificate consents by acceptance hereof. The Warrant Agreement is hereby incorporated herein by
reference and made a part hereof. Reference is hereby made to the Warrant Agreement for a full
statement of the respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Warrant Agent and the Holders of the Warrants.
This Warrant Certificate shall terminate and be void as of the close of business on
[__________],
20173 (the “Expiration Date”).
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Note to Draft: Insert the date that is the
seventh anniversary of the date on which those Warrants are issued. |
As provided in the Warrant Agreement and subject to the terms and conditions therein set
forth, the Warrants shall be exercisable from time to time on any Business Day and ending on the
Expiration Date.
The Exercise Price and the number of shares of Common Stock issuable upon the exercise of each
Warrant are subject to adjustment as provided in the Warrant Agreement.
All shares of Common Stock issuable by the Company upon the exercise of Warrants shall, upon
such issue, be duly and validly issued and fully paid and non-assessable.
In order to exercise a Warrant, the registered holder hereof must surrender this Warrant
Certificate at the corporate trust office of the Warrant Agent, with the Exercise Subscription Form
on the reverse hereof duly executed by the Holder hereof, with signature guaranteed as therein
specified, together with any required payment in full of the Exercise Price (unless the Holder
shall have elected Net Share Settlement, as such term is defined in the Warrant Agreement) then in
effect for the share(s) of Underlying Common Stock as to which the Warrant(s) represented by this
Warrant Certificate are submitted for exercise, all subject to the terms and conditions hereof and
of the Warrant Agreement.
The Company shall pay all transfer, stamp and other similar taxes that may be imposed in
respect of the issuance or delivery of the Warrants or in respect of the issuance or delivery by
the Company of any securities upon exercise of the Warrants with respect thereto. The Company shall
not be required, however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any Warrants, certificate for shares of Common Stock or other securities
underlying the Warrants or payment of cash in each case to any Person other than the Holder of a
Warrant Certificate surrendered upon the exercise or purchase of a Warrant, and in case of such
transfer or payment, the Warrant Agent and the Company shall not be required to issue any security
or to pay any cash until such tax or charge has been paid or it has been established to the Warrant
Agent’s and the Company’s satisfaction that no such tax or other charge is due.
This Warrant Certificate and all rights hereunder are transferable by the registered holder
hereof, subject to the terms of the Warrant Agreement, in whole or in part, on the register of the
Company, upon surrender of this Warrant Certificate for registration of transfer at the office of
the Warrant Agent maintained for such purpose in the City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the Warrant
Agent duly executed by, the Holder hereof or his attorney duly authorized in writing, with
signature guaranteed as specified in the attached Form of Assignment. Upon any partial transfer,
the Company will issue and deliver to such holder a new Warrant Certificate or Certificates with
respect to any portion not so transferred.
No service charge shall be made to a Holder for any registration of transfer or exchange of
the Warrant Certificates, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
Subject to compliance with any restrictions on transfer under applicable law and this Warrant
Agreement, each taker and holder of this Warrant Certificate by taking or holding the
2
same, consents and agrees that this Warrant Certificate when duly endorsed in blank shall be
deemed negotiable and that when this Warrant Certificate shall have been so endorsed, the holder
hereof may be treated by the Company, the Warrant Agent and all other Persons dealing with this
Warrant Certificate as the absolute owner hereof for any purpose and as the Person entitled to
exercise the rights represented hereby, or to the transfer hereof on the register of the Company
maintained by the Warrant Agent, any notice to the contrary notwithstanding, but until such
transfer on such register, the Company and the Warrant Agent may treat the registered Holder hereof
as the owner for all purposes.
This Warrant Certificate and the Warrant Agreement are subject to amendment as provided in the
Warrant Agreement.
All terms used in this Warrant Certificate that are defined in the Warrant Agreement shall
have the meanings assigned to them in the Warrant Agreement.
Copies of the Warrant Agreement are on file at the office of the Company and the Warrant Agent
and may be obtained by writing to the Company or the Warrant Agent at the following address:
[____________________].
This Warrant Certificate shall not be valid for any purpose until it shall have been
countersigned by the Warrant Agent.
Dated: ________, ________
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Countersigned:
___________, Warrant Agent
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EXHIBIT A
FORM OF REVERSE OF WARRANT CERTIFICATE
EXERCISE SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To: ________________________
The undersigned irrevocably exercises
____________________
of the Warrants for the purchase
of one share (subject to adjustment in accordance with the Warrant Agreement) of common stock, par
value $0.01, of General Growth Properties, Inc. for each Warrant represented by the Warrant
Certificate and herewith (i) elects for Net Share Settlement of such Warrants by marking X in the
space that follows
____, or (ii) makes payment of $
_______________
(such payment being by means
permitted by the Warrant Agreement and the within Warrant Certificate), in each case at the
Exercise Price and on the terms and conditions specified in the within Warrant Certificate and the
Warrant Agreement therein referred to, and herewith surrenders this Warrant Certificate and all
right, title and interest therein to
____________________
and directs that the shares of Common
Stock deliverable upon the exercise of such Warrants be registered in the name and delivered at the
address specified below.
Date______________
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(Signature of Owner) |
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(Street Address) |
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(City)
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Signature Guaranteed by: |
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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 financial institution satisfactory to the Warrant Agent. |
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Securities to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant Certificate to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
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EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the within Warrant Certificate hereby
sells, assigns, and transfers unto the Assignee(s) named below (including the undersigned with
respect to any Warrants constituting a part of the Warrants evidenced by the within Warrant
Certificate not being assigned hereby) all of the right of the undersigned under the within Warrant
Certificate, with respect to the number of Warrants set forth below:
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Social Security or |
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other Identifying |
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and does hereby irrevocably constitute and appoint
____________
the undersigned’s attorney to
make such transfer on the books of
__________
maintained for that purpose, with full power of
substitution in the premises.
Date: __________
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(Signature of Owner) |
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(Street Address) |
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Signature Guaranteed by: |
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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 financial institution satisfactory to the Warrant Agent. |
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EXHIBIT C
Option Pricing Assumptions / Methodology
For the purpose of this Exhibit C:
“Acquiror” means (A) the third party that has entered into definitive document for a
transaction, or (B) the offeror in the event of a tender or exchange offer.
“Reference Date” means the date of consummation of a Change of Control Event.
The Cash Redemption Value of the Warrants shall be determined using the Black-Scholes Model as
applied to third party options (i.e., options issued by a third party that is not affiliated with
the issuer of the underlying stock). For purposes of the model, the following terms shall have the
respective meanings set forth below:
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Underlying Security Price:
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(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; |
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(B) that is an “all Public Stock” deal, |
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(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 |
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day period over which such Fair Market Value is measured) and |
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(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; |
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(C) that is a transaction contemplating various forms of
consideration for each share of Common Stock, |
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(1) the cash portion, if any, shall be valued as described
in clause (A) above, |
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(2) the Public Stock portion shall be valued as described
in clause (B) above and |
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(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. |
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• 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. |
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Exercise Price:
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The Exercise Price as adjusted and then in effect for the
Warrant. |
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Dividend Rate:
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0 (which reflects the fact that the antidilution
adjustment provisions cover all dividends). |
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Interest Rate:
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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. |
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Put or Call:
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Call |
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Time to Expiration
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The number of days from the Expiration Date (as defined in
Section 3.3) to the Reference Date divided by 365. |
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Settlement Date:
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The scheduled date of payment of the Cash Redemption Value. |
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Volatility:
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For calculation of Cash Redemption Value in connection
with a Change of Control Event with respect to (A) the
Warrants or the New Warrants, 20% or (B) the GGO Warrants,
the lesser of (1) 30% or (2) the volatility of General
Growth Opportunities, Inc. as determined by an Independent
Financial Expert engaged to make the calculation, who
shall be instructed to assume for purposes of the
determination of volatility referred to in this clause
(B)(2) that the Change of Control Event had not occurred;
provided, however, that if the Warrants, New Warrants or
GGO Warrants are adjusted as a result of a Change of
Control Event, volatility for purposes of calculating Cash
Redemption Value in connection with succeeding Change of
Control Events with respect to such warrants (or their
successors) shall be as determined by an Independent
Financial Expert engaged to make the calculation, who
shall be instructed to assume for purposes of the
calculation that such succeeding Change of Control Event
had not occurred. |
Such valuation of the Warrant shall not be discounted in any way.
For illustrative purposes only, an example Black-Scholes model calculation with respect to a
hypothetical warrant appears on the following page.
Illustrative Example
Inputs:
S = Underlying Security Price
X = Exercise Price
PV(X) = Present value of the Exercise Price, discounted at a rate of R = X * (e^-(R * T))
V = Volatility
R = continuously compounded risk free rate = 2 * [ ln (1 + Interest Rate / 2) ]
T = Time to Expiration
W = warrant value per underlying share
Z = number of shares underlying warrants
Value = total warrant value
Formulaic inputs:
D1 = [ ln [ S / X ] + (R + (V^2 / 2)) * T)] ÷ (V * √T)
D2 = [ ln [ S / X ] + (R - (V^2 / 2)) * T)] ÷ (V * √T)
Black-Scholes Formula
W = [N(D1) * S] - [N(D2) * PV(X)]
Where “N” is the cumulative normal probability function
Value = W * Z
Example of a Hypothetical Warrant:4
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4 |
|
Note: Amounts calculated herein may not foot due to
rounding error. For precise calculations, decimal points should not be
rounded. |
Inputs:
Interest Rate = 4.00%
S = $50.00
X = $60.00
PV(X) = $55.43
V = 25%
R = 3.96%
T = 2
Z = 100
Formulaic inputs:
|
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D1
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|
= [ ln [ S / X ] + (R + (V^2 / 2)) * T)] ÷ (V * √T) |
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= (-0.1149) |
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D2
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= [ ln [ S / X ] + (R - (V^2 / 2)) * T)] ÷ (V * √T) |
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= (-0.4684) |
Black-Scholes Formula
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W
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= [N(D1) * S] - [N(D2) * PV(E)] |
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= $4.99 |
Total Warrant Value
SCHEDULE A
ALLOCATIONS OF WARRANTS AND
UNDERLYING SHARES TO INITIAL INVESTORS
[TO COME]
SCHEDULE B
WARRANT AGENT COMPENSATION
[TO COME]
EXHIBIT J — FORM OF REIT OPINION
EXHIBIT M — FORM OF NON-CONTROL AGREEMENT
EXHIBIT M
NON-CONTROL AGREEMENT (GGP Version)
This Non-Control Agreement (this “Agreement”) is dated as of [•] 2010 (the
“Effective Date”), by and between General Growth Properties, Inc., a Delaware corporation
(the “Company”), [insert names of Pershing Square or Fairholme purchasers]1
(collectively, “Investor”).
WHEREAS, Investor has entered into that certain Stock Purchase Agreement, dated as of [•],
2010 (the “Investment Agreement”), that contemplates, among other things, the purchase by
Investor of shares of Common Stock subject to the terms and conditions contained therein;
WHEREAS, the transactions contemplated by the Investment Agreement are intended to assist the
Company in its plans to recapitalize and emerge from bankruptcy and is not intended to constitute a
change of control of the Company or otherwise give Investor the power to control the business and
affairs of the Company;
WHEREAS, as a material condition to the Company’s and Investor’s obligations to consummate the
transactions contemplated by the Investment Agreement, the Company and Investor have agreed to
execute this Agreement; and
WHEREAS, certain terms used in this Agreement are defined in Section 4.1.
NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
COMPANY RELATED PRINCIPLES
SECTION 1.1 Board of Directors. So long as Investor and the Investor Parties,
collectively, shall Beneficially Own more than ten percent (10%) of the outstanding shares of
Common Stock, none of Investor or the Investor Parties shall take any action that is inconsistent
with its support for the following corporate governance principles:
(a) A majority of the members of the Board shall be Independent Directors, where
“Independent Director” means a director who satisfies all standards for independence
promulgated by the New York Stock Exchange (or the applicable exchange where shares of Common Stock
are then listed);
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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. |
(b) the Board shall have a nominating committee, a majority of which shall be Disinterested
Directors;
(c) in connection with any stockholder meeting or consent solicitation relating to the
election of members of the Board, if Investor and the Investor Parties, collectively, Beneficially
Own a number of shares of Common Stock greater than 10% of the shares of Common Stock outstanding
as of the applicable record date (or, if larger, the largest number of shares that any Large
Stockholder would be permitted to vote in such election, ignoring for this purpose the right of any
Large Stockholder that is a party to the Brookfield Non-Control Agreement to cast votes for
Purchaser Board Designees and the right of any Large Stockholder that is a party to a transferee
agreement in the form required by this Agreement or the Brookfield Non-Control Agreement to vote
for one director in its sole discretion), then Investor shall, and shall cause the other Investor
Parties to, vote in such election of members all shares they Beneficially Own in excess of such
number of shares in proportion to the Votes Cast;2
(d) the Board shall consist of nine (9) members and not be increased or reduced, unless
approved by seventy-five percent (75%) of the Board;
(e) any Change in Control (other than a transaction contemplated by Section 2.1(b)(ii)) in
which a Large Stockholder or its controlled Affiliate is the acquiror or part of the acquiror group
or is proposed to be directly or indirectly combined with the Company must be approved by a
majority of the Disinterested Directors as if it were an Affiliated Transaction involving such
Large Stockholder and by a majority of the voting power of the stockholders (other than such Large
Stockholder or its controlled Affiliates); and
(f) any Change in Control (other than a transaction contemplated by Section 2.2(b)(v)) in
which any Large Stockholder or its controlled Affiliate receives per share consideration in its
capacity as a stockholder of the Company in excess of that to be received by other stockholders,
must be approved by a majority of the Disinterested Directors as if it were an Affiliated
Transaction involving such Large Stockholder and by a majority of the voting power of the
stockholders (other than such Large Stockholder or its controlled Affiliates).
The Company shall not waive any provisions similar to Sections 1.1(c), (e) or (f) above for any
Large Stockholder under any other agreement unless the Company grants a similar waiver under this
Agreement.
SECTION 1.2 Related Party Transactions.
(a) Without the approval of a majority of the Disinterested Directors, Investor shall not, and
shall not permit any of the Investor Parties to, engage in any Affiliated Transaction.
“Affiliated Transaction” means (i) any transaction or series of related transactions,
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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
directly or indirectly, between the Company or any Subsidiary of the Company, on the one hand,
and any of the Investor Parties, on the other hand, or (ii) without limiting the Company’s
obligation to comply with Sections 1.4 and 1.5 hereof, with respect to the purchase
or sale of Common Stock by any of the Investor Parties, any waiver of any limitation or restriction
with respect to such purchase or sale in the Charter or the Transaction Documents, including any
exemption from the Ownership Limit (as defined in the Charter); provided, however,
that none of the following shall constitute an Affiliated Transaction:
(i) transactions expressly contemplated in the Transaction Documents;
(ii) customary compensation arrangements (whether in the form of cash or equity
awards), expense reimbursement, director insurance coverage and/or indemnification
arrangements (and related advancement of expenses) in each case for Board designees, or any
use by such persons, for Company business purposes, of aircraft, vehicles, property,
equipment or other assets owned or customarily provided to members of the Board by the
Company or any of its Subsidiaries; and
(iii) any transaction or series of transactions if the same is in the Ordinary Course
of Business and does not involve payments by the Company in excess of [$•] in the aggregate
for such transaction or series of transactions.
(b) Following the Closing (as such term is defined in the Investment Agreement), any decisions
by the Company regarding material amendments or modifications of the Plan (as such term is defined
in the Investment Agreement) or waivers of the Company’s material rights under the Plan, shall
require the approval of the majority of Disinterested Directors to the extent such amendment,
modification or waiver relates to any Investor Party’s rights or obligations.
SECTION 1.3 No Other Voting Restrictions. For the avoidance of doubt, except as
restricted herein or by applicable Law, Investor and the other Investor Parties may vote the Common
Stock that they Beneficially Own in their sole and absolute discretion.
SECTION 1.4 Amendment of the Charter. The Company hereby agrees that following the
Closing Date, without the consent of Investor, the Company shall not amend (or propose to amend)
the provisions of the Charter in a manner that would: (a) amend the restriction on Beneficial
Ownership (as such term is defined in the Charter) of the outstanding capital stock of the Company
to a level other than 9.9%; (b) amend the restriction on Constructive Ownership (as such term is
defined in the Charter) of the outstanding capital stock of the Company to a level other than 9.9%;
or (c) amend any waiver from the restrictions set forth in the foregoing clauses (a) and (b)
granted to Investor or any Investor Party in any manner adverse to Investor or any Investor Party.
SECTION 1.5 Waiver of Ownership Limited in the Charter. The Company and the Board
shall take all appropriate and necessary action to ensure that the ownership limitations set forth
in the Charter shall be waived with respect to Investor, the Investor Parties, any Investor
Investment Advisor and any Person (other than a transferee under Section 2.2(b)(vi) unless
such transferee executes a Transferee Agreement) to whom Investor, any Investor Party or any
3
Investor Investment Advisor has transferred any of the Common Stock or Warrants in accordance
with the terms of this Agreement and the Investment Agreement, provided, insofar as the
waiver relates to Investor, an Investor Party, an Investor Investment Advisor or a transferee, as
the case may be, who owns (or would, following such transfer, own) interests in excess of the
Ownership Limit (as defined in the Charter), that the Company has been provided with a certificate
containing the representations and covenants set forth on Exhibit D to the Investment
Agreement (or, to the extent necessitated by the organizational structure of the party providing
such certificate, a certificate substantially similar to such Exhibit D) from such
Investor, Investor Party, Investor Investment Advisor or transferee, or in the case of a
transferee, a certificate containing the representations and covenants set forth on Exhibit
D to the Investment Agreement (or, to the extent necessitated by the organizational structure
of the party providing such certificate, a certificate substantially similar to Exhibit D)
as modified to allow such transferee to own stock or other equity interests in a tenant of the
Company or its Subsidiaries to the extent such ownership would not result in (i) the Company or any
of its REIT Subsidiaries other than GGP-Natick Trust or GGP Ivanhoe, Inc. recognizing more than $1
million of “related party rent” in any year or (ii) GGP Natick Trust or GGP Ivanhoe, Inc.
recognizing more than $100,000 of “related party rent” in any year. The parties hereto agree that
the Company may, in the discretion of the Board, grant to third parties any other waivers from
restrictions set forth in the Charter.
ARTICLE II
INVESTOR RELATED COVENANTS
SECTION 2.1 Ownership Limitations.
(a) Except as provided in Section 2.1(b), Investor agrees that it (together with the
other Investor Parties) shall not acquire Economic Ownership of shares of Common Stock that would
result in the Investor Parties in the aggregate Economically Owning a percentage of the
then-outstanding Common Stock on a Fully Diluted Basis that is greater than the Ownership Cap. For
the avoidance of doubt, no Person shall be in violation of this Section 2.1 as a result of
(i) any acquisition by the Company of any Common Stock; (ii) any change in the percentage of the
Investor Parties’ Economic Ownership of Common Stock that results from a change in the aggregate
number of shares of Common Stock outstanding; or (iii) any change in the number of shares of Common
Stock Economically Owned by the Investor Parties as a result of any anti-dilution adjustments to
any Equity Securities (as defined in the Investment Agreement) Economically Owned by any Investor
Party.
(b) Notwithstanding Section 2.1(a), any of the Investor Parties may acquire Economic
Ownership of shares of Common Stock that would result in the Investor Parties (taken as a whole)
having Economic Ownership of a percentage of the then-outstanding Common Stock on a Fully Diluted
Basis that is greater than the Ownership Cap under any of the following circumstances:
(i) acquisitions of shares pursuant to any pro rata stock dividend or stock
distribution effected by the Company and approved by a majority of the Independent
Directors;
4
(ii) if such acquisition is pursuant to a tender offer or exchange offer, in each case
that includes an offer for all outstanding shares of Common Stock owned by the Target
Stockholders, or a merger, consolidation, binding share exchange or similar transaction
pursuant to an agreement with the Company, so long as in each case (A) such offer, merger,
consolidation, binding share exchange or similar transaction is approved by a majority of
the Disinterested Directors or by a special committee comprised of Disinterested Directors
(such tender offer or exchange offer, an “Approved Offer”, and such merger,
consolidation, binding share exchange or similar transaction, an “Approved Merger”),
and (B) in any such Approved Offer, a majority of the Target Shares are tendered into such
Approved Offer and not withdrawn prior to the final expiration of such Approved Offer, or in
such Approved Merger, a majority of the Target Shares that are voted (in person or by proxy)
on the related transaction proposal are voted in favor of such proposal. As used in this
Section 2.1(b)(ii): “Target Shares” means the then-outstanding shares of
Common Stock not owned by the Investor Parties; and “Target Stockholders” means the
stockholders of the Company other than the Investor Parties.
(c) The limitation set forth in Section 2.1(a) may only be waived by the Company if a
majority of the Disinterested Directors consent thereto.
SECTION 2.2 Transfer Restrictions.
(a) Subject to Section 2.2(b), unless approved by a majority of the Independent
Directors, Investor shall not, and shall not permit any of the Investor Parties to, sell or
otherwise transfer or agree to transfer (each of the foregoing, a “Transfer”), directly or
indirectly, any shares of Common Stock that are held directly or indirectly by Investor or any of
the other Investor Parties if, immediately after giving effect to such Transfer, the Person that
acquires such Common Stock (other than any underwriter acting in such capacity in an underwritten
public offering of such shares) would, together with its Affiliates, to the actual knowledge
(“Knowledge”) of the transferor Beneficially Own more than ten percent (10%) of the
then-outstanding Common Stock. A transferor shall be deemed to have Knowledge of any transferee’s
Beneficial Ownership of Common Stock if the transferor has actual knowledge of the identity of the
transferee and such Beneficial Ownership has been, at the time of the agreement to transfer,
publicly disclosed in accordance with Section 13 of the Exchange Act.
(b) The limitations in Section 2.2(a) shall not apply, and any Investor Party may
Transfer freely:
(i) to any Person (including any Affiliate of Investor) if such Person (A) has executed
and delivered to the Company a Transferee Agreement (as defined below), and (B) has provided
the Company with a certificate containing the representations set forth on Exhibit D
of the Investment Agreement (or, to the extent necessitated by the organizational structure
of the party providing such certificate, a certificate substantially similar to such
Exhibit D) as modified to allow such Transferee to own stock or other equity
interests in a tenant of the Company or its Subsidiaries to the extent such ownership would
not result in (i) the Company or any of its REIT Subsidiaries other than GGP-Natick Trust or
GGP Ivanhoe, Inc. recognizing more than $1 million of “related
party rent” each year or (ii) GGP-Natick Trust or GGP Ivanhoe, Inc. recognizing more
than $100,000 of “related party rent” each year;
5
(ii) to one or more underwriters or initial purchasers acting in their capacity as such
in a manner not intended to circumvent the restrictions contained in 2.2(a);
(iii) in a sale in the public market, in accordance with Rule 144, including the volume
and manner of sale limitations set forth therein;
(iv) in any Merger Transaction (other than a transaction contemplated by Section
2.2(b)(v) below) or transaction contemplated by clause (iii) of the definition of Change
of Control (A) in which (in either case) no Investor Party is the acquiror or part of the
acquiring group or is proposed to be combined with the Company and (B) that has been
approved by the Board and a majority of the stockholders (it being understood that this
clause (iv) does not affect the agreement of the parties under Sections 1.1(e) and (f));
(v) in connection with a tender or exchange offer that (A) is not solicited by any
Investor Party (unless such transaction was approved in accordance with Section
2.1(b)(ii)) and in which all holders of Common Stock are offered the opportunity to sell
shares of Common Stock and (B) complies with applicable securities laws, including Rule
14d-10 promulgated under the Exchange Act; and
(vi) in connection with any bona fide mortgage, encumbrance, pledge or hypothecation of
capital stock to a financial institution in connection with any bona fide loan.
(c) No Transfer under Section 2.2(b)(i) shall be valid unless and until a Transferee
Agreement has been executed by the Transferee and delivered to the Company. For the purpose of
this Agreement a “Transferee Agreement” executed by a Transferee means an agreement substantially
in the form of this Agreement or in such other form as is reasonably satisfactory to the Company
except that:
(i) notwithstanding Section 1.1(c), in connection with any stockholder meeting
or consent solicitation relating to the election of members of the Board, such Transferee
may vote the shares of Common Stock that it Beneficially Owns in favor of one director
candidate in its sole and absolute discretion and regarding any other director candidates in
such election must vote in proportion to Votes Cast;3
(ii) “Investor” shall be defined to mean such Transferee; and
(iii) any obligation on the part of Investor hereunder to cause the Investor Parties to
take any action or refrain from taking any action shall only apply to the Investor Parties
controlled by the Transferee and the Transferee Agreement shall provide
that the Transferee shall use all reasonable efforts to cause Affiliates that the
Transferee does not control to take or refrain from taking the action that it is otherwise
required to cause under this Agreement.
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3 |
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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
ARTICLE III
TERMINATION
SECTION 3.1 Termination of Agreement. This Agreement may be terminated as follows
(the date of such termination, the “Termination Date”)
(a) if Investor and the Company mutually agree to terminate this Agreement, but only if the
Disinterested Directors have approved such termination;
(b) upon five (5) days notice by the Investor, at any time after (i) the Other Stockholders
Beneficially Own more than seventy percent (70%) of the then-outstanding Common Stock and (ii) the
Investor Parties Beneficially Own less than fifteen percent (15%) of the then-outstanding Common
Stock on a Fully Diluted Basis;
(c) without any further action by the parties hereto, if Investor and the Investor Parties
Beneficially Own less than ten percent (10%) of the then-outstanding Common Stock on a Fully
Diluted Basis;
(d) without any other action by the parties hereto, upon the consummation of a Change of
Control not involving Investor or any Investor Party as a purchaser of any direct or indirect
interest in the Company or any of its assets or properties; provided that the Investor
Parties shall not have violated this Agreement in connection with any transaction under this
clause; and
(e) without any other action by the parties hereto, upon the consummation of: (i) a sale of
all or substantially all of the assets the Company and its Subsidiaries (determined on a
consolidated basis), in one transaction or series of related transactions; or (ii) the acquisition
(by purchase, merger or otherwise) by any Person or Group of Beneficial Ownership of voting
securities of the Company entitling such Person or Group to exercise ninety percent (90%) or more
of the total voting power of all outstanding securities entitled to vote generally in elections of
directors of the Company; provided that the Investor Parties shall not have violated this
Agreement in connection with any transaction under the preceding clauses (i) and (ii).
SECTION 3.2 Procedure upon Termination. In the event of termination pursuant to
Section 3.1, this Agreement shall terminate on the Termination Date without further action
by Investor and the Company.
SECTION 3.3 Effect of Termination. In the event that this Agreement is validly
terminated as provided in this Article III, then each of the parties hereto shall be
relieved of their duties and obligations arising under this Agreement after the date of such
termination and such termination shall be without liability to the other party; provided,
however, that Article V shall survive any such termination and shall be enforceable
hereunder; provided further, however, that nothing in this Section 3.3
shall relieve any party hereto of any liability for a
breach of a representation, warranty or covenant in this Agreement prior to the Termination
Date.
7
ARTICLE IV
DEFINITIONS
SECTION 4.1 Defined Terms. For purposes of this Agreement, the following terms, when
used in this Agreement with initial capital letters, shall have the respective meanings set forth
in this Agreement:
(a) “Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person. For the purposes of this
Agreement, “control” means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting securities,
contract or otherwise.
(b) “Beneficial Ownership” by a Person of any securities means “beneficial
ownership” as used for purposes of Rule 13d-3 adopted by the SEC under the Exchange Act;
provided, however, to the extent the term “Beneficial Ownership” is used in connection with
any obligation on the part of an Investor Party to vote, or direct the vote, of shares of
Common Stock, “Beneficial Ownership” by a Person of any securities shall be deemed to refer
solely to those securities with respect to which such Person possesses the power to vote or
direct the vote. The term “Beneficially Own” shall have a correlative meaning.
(c) “Board” means the Board of Directors of the Company.
(d) “Brookfield Non-Control Agreement” means the Non-Control Agreement, dated as
of the date hereof, among the Company and [insert names of Brookfield purchasers].
(e) “Business Day” means any day other than (i) a Saturday, (ii) a Sunday, or
(iii) any day on which commercial banks in New York, New York are required or authorized to
close by law or executive order.
(f) “Change of Control” means any transaction involving (i) a Merger
Transaction, (ii) a sale of all or substantially all of the assets the Company and its
Subsidiaries (determined on a consolidated basis), in one transaction or series of related
transactions, or (iii) the consolidation, merger, amalgamation, reorganization (other than
pursuant to the Plan contemplated by the Investment Agreement) of the Company or a similar
transaction in which the Company is combined with another Person, unless shares of Common
Stock held by holders who are not affiliated with the Company or any entity acquiring the
Company remain unchanged or are exchanged for, converted into or constitute solely (except to
the extent of applicable appraisal rights or cash received in lieu of fractional shares) the
right to receive as consideration Public Stock and the Persons or Group who beneficially own
the outstanding Common Stock of the Company immediately before consummation of the
transaction beneficially own more than 50% (by voting
power) of the outstanding voting stock of the combined or surviving entity or new parent
immediately thereafter.
8
(g) “Charter” means [the Certificate of Incorporation of the Company dated as of
xxxxxx xx, 2010][Insert Charter adopted pursuant to Section [________________] of the Investment
Agreement.]
(h) “Common Stock” means the common stock, par value $0.01 per share, of the
Company, as authorized by the Charter as of the Effective Date, and any successor security as
provided by Section 5.11.
(i) “Disinterested Director” shall mean (i) with respect to an Affiliated
Transaction or potential Affiliated Transaction, a director who (A) is not Affiliated with,
and was not nominated by, any Investor Party that is a participant in such transaction or
potential transaction and (B) who has no personal financial interest in the transaction
(other than the same interest, if a stockholder of the Company, as the other stockholders of
the Company) and (ii) with respect to any matter other than an Affiliated Transaction, a
director who is not Affiliated with, and was not nominated by, any Investor Party.
(j) “Economic Ownership” by a Person of any securities includes ownership by any
Person who, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has (i) “beneficial ownership” as defined in Rule 13d-3 adopted by
the SEC under the Exchange Act or (ii) economic interest in such security as a result of any
cash-settled total return swap transaction or any other swap, other derivative or “synthetic”
ownership arrangement (in which case the number of securities with respect to which such
Person has Economic Ownership shall be determined by the Company in it reasonable judgment
based on such Person’s equivalent net long position); provided, however, that
for purposes of determining Economic Ownership, a Person shall be deemed to be the Economic
Owner of any securities which may be acquired by such Person pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise (irrespective of whether the right to acquire such
securities is exercisable immediately or only after the passage of time, including the
passage of time in excess of sixty (60) days, the satisfaction of any conditions, the
occurrence of any event or any combination of the foregoing). For purposes of this
Agreement, a Person shall be deemed to be the Economic Owner of any securities Economically
Owned by any Group of which such Person is or becomes a member. The term “Economically
Own” shall have a correlative meaning.
(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated thereunder,
all as the same may be amended and shall be in effect from time to time.
(l) “Fair Market Value” means, with respect to each share of Public Stock, the
average of the daily volume weighted average prices per share of such Public Stock for the
ten consecutive trading days immediately preceding the day as of which Fair Market Value is
being determined, as reported on the New York Stock Exchange, or if such shares
9
are not listed on the New York Stock Exchange, as reported by the principal U.S.
national or regional securities exchange or quotation system on which such shares are then
listed or quoted; provided, however, that in the absence of such listing or
quotations, the Fair Market Value of such shares shall be the fair market value per share as
determined by an Independent Financial Expert appointed for such purpose, using one or more
valuation methods that the Independent Financial Expert in its best professional judgment
determines to be most appropriate, assuming such shares are fully distributed and are to be
sold in an arm’s-length transaction and there was no compulsion on the part of any party to
such sale to buy or sell and taking into account all relevant factors.
(m) [“Fairholme Non-Control Agreement” means the Non-Control Agreement, dated as
of the date hereof, among the Company and [insert name of Fairholme purchaser].]
(n) “Fully Diluted Basis” means all outstanding shares of the Common Stock
assuming the exercise of all outstanding Share Equivalents, without regard to any
restrictions or conditions with respect to the exercisability of such Share Equivalents.
(o) “Governmental Entity” means any (i) nation, region, state, province, county,
city, town, village, district or other jurisdiction, (ii) federal, state, local, municipal,
foreign or other government, (iii) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, court or tribunal, or other entity),
(iv) multinational organization or body or (v) body entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or power of any
nature or any other self-regulatory organizations.
(p) “Group” has the meaning assigned to it in Section 13(d)(3) of the Exchange
Act and Rule 13d-5 thereunder.
(q) “Independent Financial Expert” means a nationally recognized financial
advisory firm approved by a majority of the Disinterested Directors.
(r) “Investor Investment Advisor” means any independently operated business unit
of any Affiliate of Investor that holds shares of Common Stock (i) in trust for the benefit
of persons other than any Investor Party, (ii) in mutual funds, open- or closed-end
investment funds or other pooled investment vehicles sponsored, managed or advised or
subadvised by such Investor Investment Advisor, (iii) as agent and not principal, or (iv) in
any other case where such Investor Investment Advisor is disaggregated from Investor for the
purposes of Section 13(d) of the Exchange Act; provided, however, that (A) in
each case, such shares of Common Stock were acquired in the ordinary course of business of
the Investor Investment Advisor’s respective investment management or securities business and
not with the intent or purpose on the part of Investor or the Investor Parties of
influencing control of the Company or avoiding the provisions of this Agreement and (B) where
appropriate, “Chinese walls” or other informational barriers and other procedures have been
established. For avoidance of doubt, for purposes of this Agreement
shares of Common Stock held by an Investor Investment Advisor shall not be deemed to be
Beneficially Owned by Investor or the Investor Parties.
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(s) “Investor Parties” means Investor and its Affiliates; provided, however,
that none of the Company, any Subsidiary of the Company or any Investor Investment Advisor
shall be deemed to be an Investor Party.
(t) “Large Stockholder” means a Person that is the Beneficial Owner of more than
ten percent (10%) of the outstanding shares of Common Stock on a Fully Diluted Basis.
(u) “Law” means any statutes, laws (including common law), rules, ordinances,
regulations, codes, orders, judgments, decisions, injunctions, writs, decrees, applicable to
the Company, Common Stock or Investor Parties.
(v) “Merger Transaction” means any transaction involving the acquisition (by
purchase, merger or otherwise) by any Person or Group of Beneficial Ownership of voting
securities of the Company entitling such Person or Group to exercise a majority of the total
voting power of all outstanding securities entitled to vote generally in elections of
directors of the Company.
(w) “Ordinary Course of Business” means the ordinary and usual course of
day-to-day operations of the business of the Company consistent with past practice.
(x) “Other Stockholder” means, as of the date of the action in question, any
Person not Affiliated with Brookfield Asset Management, Inc., Fairholme Capital Management
LLC, Pershing Capital Management L.P., any transferee who is a party to a transferee
agreement under the Brookfield Non-Control Agreement, the [Fairholme][Pershing Square]
Non-Control Agreement or this Agreement or any of their respective Affiliates.
(y) “Ownership Cap” means the lower of (i) [twenty-five percent (25%)][thirty
percent (30%)]4 of the then-outstanding Common Stock on a Fully Diluted Basis and
(ii) the sum of five percent (5%) and the percentage of the outstanding Common Stock on a
Fully Diluted Basis that the Investor Parties Economically Own as of the Effective Date.
(z) [“Pershing Square Non-Control Agreement” means the Non-Control Agreement,
dated as of the date hereof, among the Company and [insert names of Pershing Square
purchasers].]
(aa) “Person” means an individual, a group (including a “group” under Section
13(d) of the Exchange Act), a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a Governmental Entity or any department, agency or political
subdivision thereof.
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Note to Draft: 25% for the Pershing Square Non-Control
Agreement and 30% for the Fairholme Non-Control Agreement. |
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(bb) “Public Stock” means common stock listed on a recognized U.S. national
securities exchange with an aggregate market capitalization (held by non-Affiliates of the
issuer) in excess of $1 billion in Fair Market Value.
(cc) “Rule 144” means Rule 144 promulgated by the SEC under the Securities Act,
or any successor rule or regulation hereafter adopted by the SEC, as the same may be amended
and shall be in effect from time to time.
(dd) “SEC” means the Securities and Exchange Commission or any other federal
agency then administering the Exchange Act, the Securities Act and other federal securities
laws.
(ee) “Securities Act” means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated thereunder,
all as the same may be amended and shall be in effect from time to time.
(ff) “Share Equivalent” means any stock, warrants, rights, calls, options or
other securities exchangeable or exercisable for, or convertible into, shares of Common
Stock.
(gg) “Subsidiary” means, with respect to a Person, any corporation, limited
liability company, partnership, trust or other entity of which such Person owns (either
alone, directly, or indirectly through, or together with, one or more of its Subsidiaries)
50% or more of the equity interests the holder of which is generally entitled to vote for the
election of the board of directors or governing body of such corporation, limited liability
company, partnership, trust or other entity.
(hh) “Transaction Documents” means, individually or collectively, the Investment
Agreement or the Warrant.
(ii) “Transferee” means any proposed transferee of securities pursuant to
Sections 2.2(b)(i) or 2.2(b)(vi).
(jj) “Votes Cast” means the aggregate number of shares of Common Stock that are
properly voted for or against any action to be taken by stockholders, excluding any shares to
the extent the holder of such shares is contractually required to vote in proportion of the
total number of votes cast pursuant to this Agreement, the Brookfield Non-Control Agreement,
the [Fairholme][Pershing Square] Non-Control Agreement or any transferee agreement executed
hereunder or thereunder.
(kk) “Warrants” means the New Warrants (as defined in the Investment Agreement).
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ARTICLE V
MISCELLANEOUS
SECTION 5.1 Notices. All notices and other communications in connection with this
Agreement shall be in writing and shall be considered given if given in the manner, and be deemed
given at times, as follows: (a) on the date delivered, if personally delivered; (b) on the day of
transmission if sent via facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission; or (c) on the next
Business Day after being sent by recognized overnight mail service specifying next business day
delivery, in each case with delivery charges pre-paid and addressed to the following addresses:
If to Investor, to:
[insert name, address and contact details of Investor]
with a copy (which shall not constitute notice) to:
[insert name, address and contact details of cc]
If to Company, to:
General Growth Properties, Inc.
000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
SECTION 5.2 Assignment; No Third Party Beneficiaries. Neither this Agreement nor any
of the rights, interests or obligations under this Agreement may be assigned by any party without
the prior written consent of the other party. This Agreement (including the documents and
instruments referred to in this Agreement) is not intended to and does not confer upon any person
other than the parties hereto any rights or remedies under this Agreement.
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SECTION 5.3 Prior Negotiations; Entire Agreement. This Agreement (including the
exhibits hereto and the documents and instruments referred to in this Agreement) constitutes the
entire agreement of the parties hereto and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties hereto with respect to the subject
matter of this Agreement.
SECTION 5.4 Governing Law; Venue. THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION
(WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS AGREEMENT OR
THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE. BOTH PARTIES HEREBY IRREVOCABLY SUBMIT
TO THE JURISDICTION OF, AND VENUE IN, DELAWARE AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS.
SECTION 5.5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties hereto, and delivered to the
other party (including via facsimile or other electronic transmission), it being understood that
each party need not sign the same counterpart.
SECTION 5.6 Expenses. Except as otherwise provided in this Agreement, Investor and
the Company shall each bear its own expenses incurred in connection with the negotiation and
execution of this Agreement and each other agreement, document and instrument contemplated by this
Agreement and the consummation of the transactions contemplated hereby and thereby.
SECTION 5.7 Waivers and Amendments. Subject to Section 5.2, this Agreement
may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions
of this Agreement may be waived, only by a written instrument signed by Investor and the Company
(with the approval of a majority of the Disinterested Directors) or, in the case of a waiver, by
the party waiving compliance, and subject, to the extent required, to the approval of the
Bankruptcy Court. No delay on the part of any party in exercising any right, power or privilege
pursuant to this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any right, power or privilege pursuant to this Agreement, nor shall any single or
partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege pursuant to this
Agreement. The rights and remedies provided pursuant to this Agreement are cumulative and are not
exclusive of any rights or remedies which any party otherwise may have at law or in equity.
SECTION 5.8 Construction.
(a) The headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
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(b) Unless the context otherwise requires, as used in this Agreement: (i) “or” shall
mean “and/or”; (ii) “including” and its variants mean “including, without limitation” and its
variants; (iii) words defined in the singular have the parallel meaning in the plural and
vice versa; (iv) references to “written” or “in writing” include in visual electronic form;
(v) words of one gender shall be construed to apply to each gender; and (vi) the terms
“Article” and “Section” refer to the specified Article or Section of this Agreement.
SECTION 5.9 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any law or public policy, all other terms or
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties hereto as closely as
possible in an acceptable manner in order that the transactions contemplated hereby are consummated
as originally contemplated to the greatest extent possible.
SECTION 5.10 Equitable Relief. It is hereby acknowledged that irreparable harm would
occur in the event that any of the provisions of this Agreement were not performed fully by the
parties hereto in accordance with the terms specified herein, and that monetary damages are an
inadequate remedy for breach of this Agreement because of the difficulty of ascertaining and
quantifying the amount of damage that will be suffered by the parties hereto relying hereon in the
event that the undertakings and provisions contained in this Agreement were breached or violated.
Accordingly, each party hereto hereby agrees that each other party hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of the undertakings and
provisions hereof and to enforce specifically the undertakings and provisions hereof in any court
of the United States or any state having jurisdiction over the matter; it being understood that
such remedies shall be in addition to, and not in lieu of, any other rights and remedies available
at law or in equity.
SECTION 5.11 Successor Securities. The provisions of this Agreement pertaining to
shares of Common Stock shall apply to all shares of Common Stock Beneficially Owned by any Investor
Party and any voting equity securities of the Company, regardless of class, series, designation or
par value, that are issued as a dividend on or in any other distribution in respect of, or as a
result of a reclassification (including a change in par value) in respect of, shares of Common
Stock or other shares of the Company which, as provided by this section, are considered as shares
of Common Stock for purposes of this Agreement and shall also apply to any voting equity security
issued by any company that succeeds, by merger, consolidation, a share exchange, a reorganization
of the Company or any similar transaction, to all or substantially all the business of the Company,
or to the ownership thereof, if such security was issued in exchange for or otherwise as
consideration for or in respect of shares of Common Stock (or other shares considered as shares of
Common Stock, as provided by this definition) in connection with such succession transaction.
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SECTION 5.12 Voting Procedures. If, in connection with any stockholder meeting or
consent solicitation, Investor or the Investor Parties are required under the terms of this
Agreement to vote in proportion to the Unaffiliated Stockholders, then the parties shall
cooperate to determine appropriate procedures and mechanics to facilitate such proportionate
voting.
** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and delivered by
each of them or their respective officers thereunto duly authorized, all as of the date first
written above.
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GENERAL GROWTH PROPERTIES, INC.
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[INSERT NAME OF INVESTOR]
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[Signature Page to Non-Control Agreement]
EXHIBIT M
NON-CONTROL AGREEMENT (GGO Version)
This Non-Control Agreement (this “Agreement”) is dated as of [•] 2010 (the
“Effective Date”), by and between General Growth Opportunities, Inc., a Delaware
corporation (the “Company”), [insert names of Pershing Square purchasers] (collectively,
“Investor”).
WHEREAS, Investor has entered into that certain Stock Purchase Agreement, dated as of [•],
2010 (the “Investment Agreement”), that contemplates, among other things, the purchase by
Investor of shares of Common Stock subject to the terms and conditions contained therein;
WHEREAS, the transactions contemplated by the Investment Agreement are intended to assist the
General Growth Properties, Inc. (“GGP”) in its plans to recapitalize and emerge from
bankruptcy and is not intended to constitute a change of control of GGP or the Company or otherwise
give Investor the power to control the business and affairs of GGP or the Company;
WHEREAS, as a material condition to GGP’s and Investor’s obligations to consummate the
transactions contemplated by the Investment Agreement, the Company and Investor have agreed to
execute this Agreement; and
WHEREAS, certain terms used in this Agreement are defined in Section 4.1.
NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
COMPANY RELATED PRINCIPLES
SECTION 1.1 Board of Directors. So long as Investor and the Investor Parties,
collectively, shall Beneficially Own more than ten percent (10%) of the outstanding shares of
Common Stock, none of Investor or the Investor Parties shall take any action that is inconsistent
with its support for the following corporate governance principles:
(a) A majority of the members of the Board shall be Independent Directors, where
“Independent Director” means a director who satisfies all standards for independence
promulgated by the New York Stock Exchange (or the applicable exchange where shares of Common Stock
are then listed);
(b) the Board shall have a nominating committee, a majority of which shall be Disinterested
Directors;
(c) except as regards voting to elect the Purchaser GGO Board Designees (as such term is
defined in the Investment Agreement), in connection with any stockholder meeting
or consent solicitation relating to the election of members of the Board, Investor shall, and
shall cause the other Investor Parties to, vote in such election of members of the Board all Common
Stock that is Beneficially Owned by the Investor Parties in proportion to the Votes Cast;
(d) the Board shall consist of nine (9) members and not be increased or reduced, unless
approved by seventy-five percent (75%) of the Board;
(e) any Change in Control (other than a transaction contemplated by Section 2.1(b)(ii)) in
which a Large Stockholder or its controlled Affiliate is the acquiror or part of the acquiror group
or is proposed to be directly or indirectly combined with the Company must be approved by a
majority of the Disinterested Directors as if it were an Affiliated Transaction involving such
Large Stockholder and by a majority of the voting power of the stockholders (other than such Large
Stockholder or its controlled Affiliates); and
(f) any Change in Control (other than a transaction contemplated by Section 2.2(b)(v)) in
which any Large Stockholder or its controlled Affiliate receives per share consideration in its
capacity as a stockholder of the Company in excess of that to be received by other stockholders,
must be approved by a majority of the Disinterested Directors as if it were an Affiliated
Transaction involving such Large Stockholder and by a majority of the voting power of the
stockholders (other than such Large Stockholder or its controlled Affiliates).
The Company shall not waive any provisions similar to Sections 1.1(c), (e) or (f) above for any
Large Stockholder under any other agreement unless the Company grants a similar waiver under this
Agreement.
SECTION 1.2 Voting.
(a) Subject to Sections 1.1(c), (e) and (f), in connection with any matter being voted on at a
stockholder meeting or in a consent solicitation that the Board has recommended that the
stockholders of the Company approve, Investor and the other Investor Parties may vote the shares of
Common Stock that they Beneficially Own against or in favor of such matter, in their sole and
absolute discretion.
(b) Subject to Sections 1.1(c), (e) and (f), in connection with any matter being voted on at a
stockholder meeting or in a consent solicitation that the Board has recommended that the
stockholders of the Company not approve, Investor and the other Investor Parties may vote
the shares of Common Stock that they Beneficially Own:
(i) against such matter; or
(ii) in favor of such matter; provided, however, that if Investor and
the other Investor Parties (taken as a whole) Beneficially Own shares of Common Stock that
represent more than the Voting Cap of the then-outstanding Common Stock, then, with respect
to the shares that account for the excess over the Voting Cap, Investor shall, and shall
cause the other Investor Parties to, vote in proportion to the Votes Cast.
SECTION 1.3 Related Party Transactions.
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(a) Without the approval of a majority of the Disinterested Directors, Investor shall not, and
shall not permit any of the Investor Parties to, engage in any Affiliated Transaction.
“Affiliated Transaction” means (i) any transaction or series of related transactions,
directly or indirectly, between the Company or any Subsidiary of the Company, on the one hand, and
any of the Investor Parties, on the other hand, or (ii) without limiting the Company’s obligation
to comply with Sections 1.5 and 1.6 hereof, with respect to the purchase or sale of
Common Stock by any of the Investor Parties, any waiver of any limitation or restriction with
respect to such purchase or sale in the Charter or the Transaction Documents, including any
exemption from the Ownership Limit (as defined in the Charter); provided, however,
that none of the following shall constitute an Affiliated Transaction:
(i) transactions expressly contemplated in the Transaction Documents;
(ii) customary compensation arrangements (whether in the form of cash or equity
awards), expense reimbursement, director insurance coverage and/or indemnification
arrangements (and related advancement of expenses) in each case for Board designees, or any
use by such persons, for Company business purposes, of aircraft, vehicles, property,
equipment or other assets owned or customarily provided to members of the Board by the
Company or any of its Subsidiaries; and
(iii) any transaction or series of transactions if the same is in the Ordinary Course
of Business and does not involve payments by the Company in excess of [$•] in the aggregate
for such transaction or series of transactions.
(b) Following the Closing (as such term is defined in the Investment Agreement), any decisions
by the Company regarding material amendments or modifications of the Plan (as such term is defined
in the Investment Agreement) or waivers of the Company’s material rights under the Plan, shall
require the approval of the majority of Disinterested Directors to the extent such amendment,
modification or waiver relates to any Investor Party’s rights or obligations.
SECTION 1.4 No Other Voting Restrictions. For the avoidance of doubt, except as
restricted herein or by applicable Law, Investor and the other Investor Parties may vote the Common
Stock that they Beneficially Own in their sole and absolute discretion.
SECTION 1.5 [Amendment of the Charter. The Company hereby agrees that following the
Closing Date, without the consent of Investor, the Company shall not amend (or propose to amend)
the provisions of the Charter in a manner that would: (a) amend the restriction on Beneficial
Ownership (as such term is defined in the Charter) of the outstanding capital stock of the Company
to a level other than 9.9%; (b) amend the restriction on Constructive Ownership (as such term is
defined in the Charter) of the outstanding capital stock of the Company to a level other than 9.9%;
or (c) amend any waiver from the restrictions set forth in the foregoing clauses (a) and (b)
granted to Investor or any Investor Party in any manner adverse to Investor or any Investor Party.
3
SECTION 1.6 Waiver of Ownership Limited in the Charter. The Company and the Board
shall take all appropriate and necessary action to ensure that the ownership limitations
set forth in the Charter shall be waived with respect to Investor, the Investor Parties, any
Investor Investment Advisor and any Person (other than a transferee under Section
2.2(b)(vi) unless such transferee executes a Transferee Agreement) to whom Investor, any
Investor Party or any Investor Investment Advisor has transferred any of the Common Stock or
Warrants in accordance with the terms of this Agreement and the Investment Agreement,
provided, insofar as the waiver relates to Investor, an Investor Party, an Investor
Investment Advisor or a transferee, as the case may be, who owns (or would, following such
transfer, own) interests in excess of the Ownership Limit (as defined in the Charter), that the
Company has been provided with a certificate containing the representations and covenants similar
in kind to those set forth on Exhibit D to the Investment Agreement from such Investor,
Investor Party, Investor Investment Advisor or transferee, or in the case of a transferee, a
certificate containing the representations and covenants set forth on Exhibit D to the
Investment Agreement as modified to allow such transferee to own stock or other equity interests in
a tenant of the Company or its Subsidiaries. The parties hereto agree that the Company may, in the
discretion of the Board, grant to third parties any other waivers from restrictions set forth in
the Charter.]1
ARTICLE II
INVESTOR RELATED COVENANTS
SECTION 2.1 Ownership Limitations.
(a) Except as provided in Section 2.1(b), Investor agrees that it (together with the
other Investor Parties) shall not acquire Economic Ownership of shares of Common Stock that would
result in the Investor Parties in the aggregate Economically Owning a percentage of the
then-outstanding Common Stock on a Fully Diluted Basis that is greater than the Ownership Cap. For
the avoidance of doubt, no Person shall be in violation of this Section 2.1 as a result of
(i) any acquisition by the Company of any Common Stock; (ii) any change in the percentage of the
Investor Parties’ Economic Ownership of Common Stock that results from a change in the aggregate
number of shares of Common Stock outstanding; or (iii) any change in the number of shares of Common
Stock Economically Owned by the Investor Parties as a result of any anti-dilution adjustments to
any Equity Securities (as defined in the Investment Agreement) Economically Owned by any Investor
Party.
(b) Notwithstanding Section 2.1(a), any of the Investor Parties may acquire Economic
Ownership of shares of Common Stock that would result in the Investor Parties (taken as a whole)
having Economic Ownership of a percentage of the then-outstanding Common Stock on a Fully Diluted
Basis that is greater than the Ownership Cap under any of the following circumstances:
(i) acquisitions of shares pursuant to any pro rata stock dividend or stock
distribution effected by the Company and approved by a majority of the Independent
Directors;
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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. |
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(ii) if such acquisition is pursuant to a tender offer or exchange offer, in each case
that includes an offer for all outstanding shares of Common Stock owned by the Target
Stockholders, or a merger, consolidation, binding share exchange or similar transaction
pursuant to an agreement with the Company, so long as in each case (A) such offer, merger,
consolidation, binding share exchange or similar transaction is approved by a majority of
the Disinterested Directors or by a special committee comprised of Disinterested Directors
(such tender offer or exchange offer, an “Approved Offer”, and such merger,
consolidation, binding share exchange or similar transaction, an “Approved Merger”),
and (B) in any such Approved Offer, a majority of the Target Shares are tendered into such
Approved Offer and not withdrawn prior to the final expiration of such Approved Offer, or in
such Approved Merger, a majority of the Target Shares that are voted (in person or by proxy)
on the related transaction proposal are voted in favor of such proposal. As used in this
Section 2.1(b)(ii): “Target Shares” means the then-outstanding shares of
Common Stock not owned by the Investor Parties; and “Target Stockholders” means the
stockholders of the Company other than the Investor Parties.
(c) The limitation set forth in Section 2.1(a) may only be waived by the Company if a
majority of the Disinterested Directors consent thereto.
SECTION 2.2 Transfer Restrictions.
(a) Subject to Section 2.2(b), unless approved by a majority of the Independent
Directors, Investor shall not, and shall not permit any of the Investor Parties to, sell or
otherwise transfer or agree to transfer (each of the foregoing, a “Transfer”), directly or
indirectly, any shares of Common Stock that are held directly or indirectly by Investor or any of
the other Investor Parties if, immediately after giving effect to such Transfer, the Person that
acquires such Common Stock (other than any underwriter acting in such capacity in an underwritten
public offering of such shares) would, together with its Affiliates, to the actual knowledge
(“Knowledge”) of the transferor Beneficially Own more than ten percent (10%) of the
then-outstanding Common Stock. A transferor shall be deemed to have Knowledge of any transferee’s
Beneficial Ownership of Common Stock if the transferor has actual knowledge of the identity of the
transferee and such Beneficial Ownership has been, at the time of the agreement to transfer,
publicly disclosed in accordance with Section 13 of the Exchange Act.
(b) The limitations in Section 2.2(a) shall not apply, and any Investor Party may
Transfer freely:
(i) to any Person (including any Affiliate of Investor) if such Person [(A)] has
executed and delivered to the Company a Transferee Agreement (as defined below), [and (B)
has provided the Company with a certificate containing the representations similar in kind
to those set forth on Exhibit D of the Investment Agreement as modified to allow
such Transferee to own stock or other equity interests in a tenant of the Company or its
Subsidiaries];2
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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. |
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(ii) to one or more underwriters or initial purchasers acting in their capacity as such
in a manner not intended to circumvent the restrictions contained in Section 2.2(a);
(iii) in a sale in the public market, in accordance with Rule 144, including the volume
and manner of sale limitations set forth therein;
(iv) in any Merger Transaction (other than a transaction contemplated by Section
2.2(b)(v) below) or transaction contemplated by clause (iii) of the definition of Change
of Control (A) in which (in either case) no Investor Party is the acquiror or part of the
acquiring group or is proposed to be combined with the Company and (B) that has been
approved by the Board and a majority of the stockholders (it being understood that this
clause (iv) does not affect the agreement of the parties under Sections 1.1(e) and (f));
(v) in connection with a tender or exchange offer that (A) is not solicited by any
Investor Party (unless such transaction was approved in accordance with Section
2.1(b)(ii)) and in which all holders of Common Stock are offered the opportunity to sell
shares of Common Stock and (B) complies with applicable securities laws, including Rule
14d-10 promulgated under the Exchange Act; and
(vi) in connection with any bona fide mortgage, encumbrance, pledge or hypothecation of
capital stock to a financial institution in connection with any bona fide loan.
(c) No Transfer under Section 2.2(b)(i) shall be valid unless and until a Transferee
Agreement has been executed by the Transferee and delivered to the Company. For the purpose of
this Agreement a “Transferee Agreement” executed by a Transferee means an agreement substantially
in the form of this Agreement or in such other form as is reasonably satisfactory to the Company
except that:
(i) notwithstanding Section 1.1(c), in connection with any stockholder meeting
or consent solicitation relating to the election of members of the Board, such Transferee
may vote the shares of Common Stock that it Beneficially Owns in favor of one director
candidate in its sole and absolute discretion and regarding any other director candidates in
such election must vote in proportion to Votes Cast;
(ii) “Investor” shall be defined to mean such Transferee;
(iii) “Ownership Cap” shall be defined to mean the lower of (x) forty percent (40%) and
(y) the sum of five percent (5%) and the percentage of the outstanding Common Stock on a
Fully Diluted Basis that the Transferee Economically Owns as of the date of (and after
giving effect to) such Transfer;
(iv) “Voting Cap” shall be defined to mean the lower of (x) thirty percent (30%) and
(y) the sum of five percent (5%) and the percentage of the outstanding Common Stock on a
Fully Diluted Basis that the Transferee Beneficially Owns as of the date of (and after
giving effect to) such Transfer; and
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(v) any obligation on the part of Investor hereunder to cause the Investor Parties to
take any action or refrain from taking any action shall only apply to the Investor Parties
controlled by the Transferee and the Transferee Agreement shall provide that the Transferee
shall use all reasonable efforts to cause Affiliates that the Transferee does not control to
take or refrain from taking the action that it is otherwise required to cause under this
Agreement.
SECTION 2.3 Purchaser GGO Board Designees.
(a) Notwithstanding anything contained herein to the contrary, the provisions in Article
I (collectively, the “Specified Provisions”) shall be suspended and shall not apply in
the event that the Purchaser GGO Board Designees that Investor is entitled to designate under the
terms of [Section 5.10(b)] of the Investment Agreement are not elected at a stockholders’ meeting
at which the stockholders voted on the election of such Purchaser GGO Board Designees (any such
period, a “Suspension Period”); provided, however, that this Section
2.3(a) shall apply only if Investor has complied with its obligations under [Section 5.10(b)]
of the Investment Agreement, including Investor’s timely designation of Purchaser GGO Board
Designees. No Suspension Period shall be deemed to occur during any reasonable period of time
during which a Purchaser GGO Board Designee is being replaced upon the death, resignation,
retirement, disqualification or removal from office of such Purchaser GGO Board Designee. Any
Suspension Period shall end upon the election of the Purchaser GGO Board Designees that Investor is
entitled to designate under the terms of [Section 5.10(b)] of the Investment Agreement. At all
times other than during a Suspension Period, the Specified Provisions shall apply in full force and
effect.
(b) Notwithstanding anything contained herein or in the Investment Agreement, no Person that
acquires Common Stock from the Investor Parties or from any other Person shall have any rights of
Investor under [Section 5.10(b)] of the Investment Agreement with respect to the designation of
members of the Board.
ARTICLE III
TERMINATION
SECTION 3.1 Termination of Agreement. This Agreement may be terminated as follows
(the date of such termination, the “Termination Date”)
(a) if Investor and the Company mutually agree to terminate this Agreement, but only if the
Disinterested Directors have approved such termination;
(b) upon five (5) days notice by the Investor, at any time after (i) the Other Stockholders
Beneficially Own more than seventy percent (70%) of the then-outstanding Common Stock and (ii) the
Investor Parties Beneficially Own less than fifteen percent (15%) of the then-outstanding Common
Stock on a Fully Diluted Basis;
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(c) without any further action by the parties hereto, if Investor and the Investor Parties
Beneficially Own less than ten percent (10%) of the then-outstanding Common Stock on a Fully
Diluted Basis;
(d) without any other action by the parties hereto, upon the consummation of a Change of
Control not involving Investor or any Investor Party as a purchaser of any direct or indirect
interest in the Company or any of its assets or properties; provided that the Investor
Parties shall not have violated this Agreement in connection with any transaction under this
clause; and
(e) without any other action by the parties hereto, upon the consummation of: (i) a sale of
all or substantially all of the assets the Company and its Subsidiaries (determined on a
consolidated basis), in one transaction or series of related transactions; or (ii) the acquisition
(by purchase, merger or otherwise) by any Person or Group of Beneficial Ownership of voting
securities of the Company entitling such Person or Group to exercise ninety percent (90%) or more
of the total voting power of all outstanding securities entitled to vote generally in elections of
directors of the Company; provided that the Investor Parties shall not have violated this
Agreement in connection with any transaction under the preceding clauses (i) and (ii).
SECTION 3.2 Procedure upon Termination. In the event of termination pursuant to
Section 3.1, this Agreement shall terminate on the Termination Date without further action
by Investor and the Company.
SECTION 3.3 Effect of Termination. In the event that this Agreement is validly
terminated as provided in this Article III, then each of the parties hereto shall be
relieved of their duties and obligations arising under this Agreement after the date of such
termination and such termination shall be without liability to the other party; provided,
however, that Article V shall survive any such termination and shall be enforceable
hereunder; provided further, however, that nothing in this Section 3.3
shall relieve any party hereto of any liability for a breach of a representation, warranty or
covenant in this Agreement prior to the Termination Date.
ARTICLE IV
DEFINITIONS
SECTION 4.1 Defined Terms. For purposes of this Agreement, the following terms, when
used in this Agreement with initial capital letters, shall have the respective meanings set forth
in this Agreement:
(a) “Affiliate” of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person. For the purposes of this
Agreement, “control” means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting securities,
contract or otherwise.
(b) “Beneficial Ownership” by a Person of any securities means “beneficial
ownership” as used for purposes of Rule 13d-3 adopted by the SEC under the Exchange
Act; provided, however, to the extent the term “Beneficial Ownership” is used in
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connection with any obligation on the part of an Investor Party to vote, or direct the vote,
of shares of Common Stock, “Beneficial Ownership” by a Person of any securities shall be
deemed to refer solely to those securities with respect to which such Person possesses the
power to vote or direct the vote. The term “Beneficially Own” shall have a
correlative meaning.
(c) “Board” means the Board of Directors of the Company.
(d) “Business Day” means any day other than (i) a Saturday, (ii) a Sunday, or
(iii) any day on which commercial banks in New York, New York are required or authorized to
close by law or executive order.
(e) “Change of Control” means any transaction involving (i) a Merger
Transaction, (ii) a sale of all or substantially all of the assets the Company and its
Subsidiaries (determined on a consolidated basis), in one transaction or series of related
transactions, or (iii) the consolidation, merger, amalgamation, reorganization (other than
pursuant to the Plan contemplated by the Investment Agreement) of the Company or a similar
transaction in which the Company is combined with another Person, unless shares of Common
Stock held by holders who are not affiliated with the Company or any entity acquiring the
Company remain unchanged or are exchanged for, converted into or constitute solely (except to
the extent of applicable appraisal rights or cash received in lieu of fractional shares) the
right to receive as consideration Public Stock and the Persons or Group who beneficially own
the outstanding Common Stock of the Company immediately before consummation of the
transaction beneficially own more than 50% (by voting power) of the outstanding voting stock
of the combined or surviving entity or new parent immediately thereafter.
(f) “Charter” means [the
Certificate of Incorporation of the Company dated as of
xxxxxx xx, 2010][Insert Charter adopted pursuant to Section [____________] of the Investment
Agreement.]
(g) “Common Stock” means the common stock, par value $0.01 per share, of the
Company, as authorized by the Charter as of the Effective Date, and any successor security as
provided by Section 5.11.
(h) “Disinterested Director” shall mean (i) with respect to an Affiliated
Transaction or potential Affiliated Transaction, a director who (A) is not Affiliated with,
and was not nominated by, any Investor Party that is a participant in such transaction or
potential transaction and (B) who has no personal financial interest in the transaction
(other than the same interest, if a stockholder of the Company, as the other stockholders of
the Company) and (ii) with respect to any matter other than an Affiliated Transaction, a
director who is not Affiliated with, and was not nominated by, any Investor Party.
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(i) “Economic Ownership” by a Person of any securities includes ownership by any
Person who, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has (i) “beneficial ownership” as defined in Rule
13d-3 adopted by the SEC under the Exchange Act or (ii) economic interest in such
security as a result of any cash-settled total return swap transaction or any other swap,
other derivative or “synthetic” ownership arrangement (in which case the number of securities
with respect to which such Person has Economic Ownership shall be determined by the Company
in it reasonable judgment based on such Person’s equivalent net long position);
provided, however, that for purposes of determining Economic Ownership, a
Person shall be deemed to be the Economic Owner of any securities which may be acquired by
such Person pursuant to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise (irrespective of
whether the right to acquire such securities is exercisable immediately or only after the
passage of time, including the passage of time in excess of sixty (60) days, the satisfaction
of any conditions, the occurrence of any event or any combination of the foregoing). For
purposes of this Agreement, a Person shall be deemed to be the Economic Owner of any
securities Economically Owned by any Group of which such Person is or becomes a member. The
term “Economically Own” shall have a correlative meaning.
(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated thereunder,
all as the same may be amended and shall be in effect from time to time.
(k) “Fair Market Value” means, with respect to each share of Public Stock, the
average of the daily volume weighted average prices per share of such Public Stock for the
ten consecutive trading days immediately preceding the day as of which Fair Market Value is
being determined, as reported on the New York Stock Exchange, or if such shares are not
listed on the New York Stock Exchange, as reported by the principal U.S. national or regional
securities exchange or quotation system on which such shares are then listed or quoted;
provided, however, that in the absence of such listing or quotations, the
Fair Market Value of such shares shall be the fair market value per share as determined by an
Independent Financial Expert appointed for such purpose, using one or more valuation methods
that the Independent Financial Expert in its best professional judgment determines to be most
appropriate, assuming such shares are fully distributed and are to be sold in an arm’s-length
transaction and there was no compulsion on the part of any party to such sale to buy or sell
and taking into account all relevant factors.
(l) “Fully Diluted Basis” means all outstanding shares of the Common Stock
assuming the exercise of all outstanding Share Equivalents, without regard to any
restrictions or conditions with respect to the exercisability of such Share Equivalents.
(m) “Governmental Entity” means any (i) nation, region, state, province, county,
city, town, village, district or other jurisdiction, (ii) federal, state, local, municipal,
foreign or other government, (iii) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, court or tribunal, or other entity),
(iv) multinational organization or body or (v) body entitled to exercise any administrative,
executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature or any other self-regulatory
organizations.
10
(n) “Group” has the meaning assigned to it in Section 13(d)(3) of the Exchange
Act and Rule 13d-5 thereunder.
(o) “Independent Financial Expert” means a nationally recognized financial
advisory firm approved by a majority of the Disinterested Directors.
(p) “Investor Investment Advisor” means any independently operated business unit
of any Affiliate of Investor that holds shares of Common Stock (i) in trust for the benefit
of persons other than any Investor Party, (ii) in mutual funds, open- or closed-end
investment funds or other pooled investment vehicles sponsored, managed or advised or
subadvised by such Investor Investment Advisor, (iii) as agent and not principal, or (iv) in
any other case where such Investor Investment Advisor is disaggregated from Investor for the
purposes of Section 13(d) of the Exchange Act; provided, however, that (A) in
each case, such shares of Common Stock were acquired in the ordinary course of business of
the Investor Investment Advisor’s respective investment management or securities business and
not with the intent or purpose on the part of Investor or the Investor Parties of
influencing control of the Company or avoiding the provisions of this Agreement and (B) where
appropriate, “Chinese walls” or other informational barriers and other procedures have been
established. For avoidance of doubt, for purposes of this Agreement shares of Common Stock
held by an Investor Investment Advisor shall not be deemed to be Beneficially Owned by
Investor or the Investor Parties.
(q) “Investor Parties” means Investor and its Affiliates; provided, however,
that none of the Company, any Subsidiary of the Company or any Investor Investment Advisor
shall be deemed to be an Investor Party.
(r) “Large Stockholder” means a Person that is the Beneficial Owner of more than
ten percent (10%) of the outstanding shares of Common Stock on a Fully Diluted Basis.
(s) “Law” means any statutes, laws (including common law), rules, ordinances,
regulations, codes, orders, judgments, decisions, injunctions, writs, decrees, applicable to
the Company, Common Stock or Investor Parties.
(t) “Merger Transaction” means any transaction involving the acquisition (by
purchase, merger or otherwise) by any Person or Group of Beneficial Ownership of voting
securities of the Company entitling such Person or Group to exercise a majority of the total
voting power of all outstanding securities entitled to vote generally in elections of
directors of the Company.
(u) “Ordinary Course of Business” means the ordinary and usual course of
day-to-day operations of the business of the Company consistent with past practice.
(v) “Other Stockholder” means, as of the date of the action in question, any
Person not Affiliated with Brookfield Asset Management, Inc., Fairholme Capital
Management LLC, Pershing Capital Management L.P., any of transferee who is a party to a
Transferee Agreement or any of their respective Affiliates.
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(w) “Ownership Cap” means forty percent (40%).
(x) “Person” means an individual, a group (including a “group” under Section
13(d) of the Exchange Act), a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization
and a Governmental Entity or any department, agency or political subdivision thereof.
(y) “Public Stock” means common stock listed on a recognized U.S. national
securities exchange with an aggregate market capitalization (held by non-Affiliates of the
issuer) in excess of $1 billion in Fair Market Value.
(z) “Rule 144” means Rule 144 promulgated by the SEC under the Securities Act,
or any successor rule or regulation hereafter adopted by the SEC, as the same may be amended
and shall be in effect from time to time.
(aa) “SEC” means the Securities and Exchange Commission or any other federal
agency then administering the Exchange Act, the Securities Act and other federal securities
laws.
(bb) “Securities Act” means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the SEC promulgated thereunder,
all as the same may be amended and shall be in effect from time to time.
(cc) “Share Equivalent” means any stock, warrants, rights, calls, options or
other securities exchangeable or exercisable for, or convertible into, shares of Common
Stock.
(dd) “Subsidiary” means, with respect to a Person, any corporation, limited
liability company, partnership, trust or other entity of which such Person owns (either
alone, directly, or indirectly through, or together with, one or more of its Subsidiaries)
50% or more of the equity interests the holder of which is generally entitled to vote for the
election of the board of directors or governing body of such corporation, limited liability
company, partnership, trust or other entity.
(ee) “Transaction Documents” means, individually or collectively, the Investment
Agreement or the Warrant.
(ff) “Transferee” means any proposed transferee of securities pursuant to
Sections 2.2(b)(i) or 2.2(b)(vi).
(gg) “Votes Cast” means the aggregate number of shares of Common Stock that are
properly voted for or against any action to be taken by stockholders, excluding any shares to
the extent the holder of such shares is contractually required to vote in proportion
of the total number of votes cast pursuant to this Agreement or any Transferee Agreement
executed hereunder.
(hh) “Voting Cap” means 30%.
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(ii) “Warrants” means the New Warrants (as defined in the Investment Agreement).
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Notices. All notices and other communications in connection with this
Agreement shall be in writing and shall be considered given if given in the manner, and be deemed
given at times, as follows: (a) on the date delivered, if personally delivered; (b) on the day of
transmission if sent via facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of transmission; or (c) on the next
Business Day after being sent by recognized overnight mail service specifying next business day
delivery, in each case with delivery charges pre-paid and addressed to the following addresses:
If to Investor, to:
[insert name, address and contact details of Investor]
with a copy (which shall not constitute notice) to:
[insert name, address and contact details of cc]
If to Company, to:
General Growth Opportunities, Inc.
[110 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000]
Attention:
Facsimile:
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
SECTION 5.2 Assignment; No Third Party Beneficiaries. Neither this Agreement nor any
of the rights, interests or obligations under this Agreement may be assigned by any party without
the prior written consent of the other party. This Agreement (including the documents and
instruments referred to in this Agreement) is not intended to and does not confer upon any person
other than the parties hereto any rights or remedies under this Agreement.
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SECTION 5.3 Prior Negotiations; Entire Agreement. This Agreement (including the
exhibits hereto and the documents and instruments referred to in this Agreement) constitutes the
entire agreement of the parties hereto and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties hereto with respect to the subject
matter of this Agreement.
SECTION 5.4 Governing Law; Venue. THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION
(WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS AGREEMENT OR
THE NEGOTIATION, EXECUTION OR PERFORMANCE OF THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE. BOTH PARTIES HEREBY IRREVOCABLY SUBMIT
TO THE JURISDICTION OF, AND VENUE IN, DELAWARE AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS.
SECTION 5.5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties hereto, and delivered to the
other party (including via facsimile or other electronic transmission), it being understood that
each party need not sign the same counterpart.
SECTION 5.6 Expenses. Except as otherwise provided in this Agreement, Investor and
the Company shall each bear its own expenses incurred in connection with the negotiation and
execution of this Agreement and each other agreement, document and instrument contemplated by this
Agreement and the consummation of the transactions contemplated hereby and thereby.
SECTION 5.7 Waivers and Amendments. Subject to Section 5.2, this Agreement
may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions
of this Agreement may be waived, only by a written instrument signed by Investor and the Company
(with the approval of a majority of the Disinterested Directors) or, in the case of a waiver, by
the party waiving compliance, and subject, to the extent required, to the approval of the
Bankruptcy Court. No delay on the part of any party in exercising any right, power or privilege
pursuant to this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any right, power or privilege pursuant to this Agreement, nor shall any single or
partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege pursuant to this
Agreement. The rights and remedies provided pursuant to this Agreement are cumulative and are not
exclusive of any rights or remedies which any party otherwise may have at law or in equity.
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SECTION 5.8 Construction.
(a) The headings in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
(b) Unless the context otherwise requires, as used in this Agreement: (i) “or” shall
mean “and/or”; (ii) “including” and its variants mean “including, without limitation” and its
variants; (iii) words defined in the singular have the parallel meaning in the plural and
vice versa; (iv) references to “written” or “in writing” include in visual electronic form;
(v) words of one gender shall be construed to apply to each gender; and (vi) the terms
“Article” and “Section” refer to the specified Article or Section of this Agreement.
SECTION 5.9 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any law or public policy, all other terms or
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties hereto as closely as
possible in an acceptable manner in order that the transactions contemplated hereby are consummated
as originally contemplated to the greatest extent possible.
SECTION 5.10 Equitable Relief. It is hereby acknowledged that irreparable harm would
occur in the event that any of the provisions of this Agreement were not performed fully by the
parties hereto in accordance with the terms specified herein, and that monetary damages are an
inadequate remedy for breach of this Agreement because of the difficulty of ascertaining and
quantifying the amount of damage that will be suffered by the parties hereto relying hereon in the
event that the undertakings and provisions contained in this Agreement were breached or violated.
Accordingly, each party hereto hereby agrees that each other party hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of the undertakings and
provisions hereof and to enforce specifically the undertakings and provisions hereof in any court
of the United States or any state having jurisdiction over the matter; it being understood that
such remedies shall be in addition to, and not in lieu of, any other rights and remedies available
at law or in equity.
SECTION 5.11 Successor Securities. The provisions of this Agreement pertaining to
shares of Common Stock shall apply to all shares of Common Stock Beneficially Owned by any Investor
Party and any voting equity securities of the Company, regardless of class, series, designation or
par value, that are issued as a dividend on or in any other distribution in respect of, or as a
result of a reclassification (including a change in par value) in respect of, shares of Common
Stock or other shares of the Company which, as provided by this section, are considered as shares
of Common Stock for purposes of this Agreement and shall also apply to any voting equity security
issued by any company that succeeds, by merger, consolidation, a share exchange, a reorganization
of the Company or any similar transaction, to all or substantially all the business of the Company,
or to the ownership thereof, if such security was issued in exchange for or otherwise as
consideration for or in respect of shares of Common Stock
(or other shares considered as shares of Common Stock, as provided by this definition) in
connection with such succession transaction.
15
SECTION 5.12 Voting Procedures. If, in connection with any stockholder meeting or
consent solicitation, Investor or the Investor Parties are required under the terms of this
Agreement to vote in proportion to the Unaffiliated Stockholders, then the parties shall cooperate
to determine appropriate procedures and mechanics to facilitate such proportionate voting.
** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed and delivered by
each of them or their respective officers thereunto duly authorized, all as of the date first
written above.
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GENERAL GROWTH OPPORTUNITIES, INC.
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[INSERT NAME OF INVESTOR]
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[Signature Page to Non-Control Agreement]
EXHIBIT N — CERTAIN REIT INVESTORS