FORM OF LIMITED LIABILITY COMPANY AGREEMENT LIMITED LIABILITY COMPANY AGREEMENT OF A DELAWARE LIMITED LIABILITY COMPANY
Β
Β
EXHIBIT
5
Β
Β
Β
Β
OF
Β
[_________]
Β
A
DELAWARE LIMITED LIABILITY COMPANY
Β
THE
LIMITED LIABILITY COMPANY INTERESTS (βINTERESTSβ) IN [______] LLC HAVE NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
βSECURITIES ACTβ), OR THE SECURITIES LAWS OF ANY STATE.Β Β INTERESTS MAY
NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.Β Β IT IS NOT ANTICIPATED THAT INTERESTS WILL BE REGISTERED
UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS.Β Β IN
ADDITION, TRANSFERS OF INTERESTS ARE SUBJECT TO THE RESTRICTIONS SET FORTH IN
ARTICLE 10 HEREOF.
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Β
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TABLE OF
CONTENTS
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Page
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ARTICLE
1 DEFINITIONS; RULES OF CONSTRUCTION
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2
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1.1
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Definitions
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2
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ARTICLE
2 FORMATION AND PURPOSE
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18
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2.1
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Formation
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18
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2.2
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Name
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18
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2.3
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Registered
Office and Registered Agent; Principal Office
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18
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2.4
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Term
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19
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2.5
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Purpose
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19
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2.6
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Admission
of Members; Classes of Interests
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19
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2.7
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Members
Not Agents
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19
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2.8
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ERISA
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19
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ARTICLE
3 CAPITAL CONTRIBUTIONS
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20
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3.1
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Capital
Contributions
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20
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3.2
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Minimum
Commitment of Brookfield
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24
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3.3
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Subsequent
Closings
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25
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3.4
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Withdrawals
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26
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3.5
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Liability
of Members
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26
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3.6
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Defaulting
Members
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28
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Β | Β | Β |
ARTICLE
4 MANAGEMENT OF THE COMPANY
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30
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4.1
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Management
Generally
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30
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4.2
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Approval
of Actions Pursuant to the Voting Agreement
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31
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4.3
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Composition
of the Board of Directors
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34
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4.4
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Meetings;
Action by the Board of Directors
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36
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4.5
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Executive
Authority of the Managing Member
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37
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4.6
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Removal
of the Managing Member
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39
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4.7
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Transaction
Costs
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41
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4.8
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Segregation
of Funds
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43
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4.9
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Standard
of Care
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43
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4.10
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Non-Managing
Members
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43
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4.11
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Member
Meetings; Voting; Member Approval Rights
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43
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4.12
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Parallel
Investment Vehicles
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46
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4.13
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Transactions
with Affiliates
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48
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ARTICLE
5 INVESTMENT
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48
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5.1
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Investment
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48
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5.2
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Subsequent
GGP Financing
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48
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ARTICLE
6 DISTRIBUTIONS
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50
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6.1
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Distributions
Attributable to Investments
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50
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Β
i
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6.2
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Adjustments to
Distributions
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51
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6.3
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Distributions in Kind
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53
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6.4
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Limitation on Distributions
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53
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6.5
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Reports on Distributions to Managing
Member
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53
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6.6
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Reinvestment
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53
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6.7
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Clawback
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54
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6.8
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DIP Loan Proceeds
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54
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ARTICLE 7
CAPITAL ACCOUNTS AND ALLOCATIONS OF NET INCOME OR
LOSS
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55
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7.1
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Capital Accounts
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55
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7.2
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No Interest Payable on
Accounts
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55
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7.3
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Allocation of Net Income or
Loss
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55
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7.4
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Allocation of Income or Loss for Tax
Purposes
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56
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7.5
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Tax Returns
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56
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7.6
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Guaranteed Payments
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56
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ARTICLE 8
ACCOUNTING AND TAX MATTERS
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57
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8.1
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Books and Records; Reports
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57
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8.2
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Tax Election
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58
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8.3
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Returns
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59
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8.4
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Withholding Tax Payments and
Obligations
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59
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8.5
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Tax Matters Partner; Partnership Status; Certain
Tax Elections
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61
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8.6
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Advice
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61
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ARTICLE 9
EXCULPATION AND INDEMNIFICATION
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61
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9.1
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Exculpation
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61
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9.2
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Indemnification
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62
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ARTICLE 10
TRANSFERS BY NON-MANAGING MEMBERS; WITHDRAWAL OF AND
TRANSFER
BY MANAGING MEMBER; LIQUIDITY
EVENTS
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64
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10.1
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Restrictions on Transfer by Non-Managing
Members
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64
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10.2
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Withdrawal of and Transfer by the Managing
Member
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67
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10.3
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Additional Requirements and
Conditions
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67
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10.4
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Substituted Non-Managing
Member
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69
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10.5
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Incapacity of a Non-Managing
Member
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70
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10.6
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Tag-Along Rights
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70
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10.7
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Syndication
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72
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10.8
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Liquidity Events
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72
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ARTICLE 11
DISSOLUTION AND WINDING UP OF THE COMPANY
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76
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11.1
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Events of Dissolution
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76
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11.2
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Winding Up
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76
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11.3
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Liquidation
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77
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11.4
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Termination of Company
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78
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11.5
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Other Dissolution and Termination
Provisions
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78
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ii
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ARTICLE 12
GENERAL PROVISIONS
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79
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12.1
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Notices
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79
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12.2
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Title to Company Property
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80
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12.3
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Confidentiality
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80
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12.4
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Exclusivity
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82
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12.5
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Relations with Members
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83
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12.6
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Appointment of Managing Member as
Attorney-in-Fact
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83
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12.7
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Managing Member Discretion
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85
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12.8
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Other Instruments and Acts
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85
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12.9
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Binding Agreement
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85
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12.10
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Payments by Members
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85
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12.11
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No Third Party
Beneficiaries
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85
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12.12
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Reliance on Authority of Person Signing
Agreement
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85
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12.13
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Applicable Law; Waiver of Jury
Trial
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85
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12.14
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Arbitration
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86
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12.15
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Submission to Jurisdiction and Service of
Process
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87
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12.16
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Remedies and Waivers
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87
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12.17
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Amendments
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88
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12.18
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Counterparts
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88
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12.19
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Construction; Headings
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88
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12.20
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Severability
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88
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12.21
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Side Letters
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89
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12.22
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Entire Agreement
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89
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12.23
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Anti-Money Laundering and Anti-Terrorist
Laws
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89
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12.24
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Investment by Certain Employee Benefit
Plans
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90
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12.25
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Disclosures and Restrictions Regarding Employee
Benefit Plans
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90
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12.26
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Custodian
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91
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12.27
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Certain Protections
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91
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SCHEDULE
A
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Schedule
of Members and Investors in Parallel Investment
Vehicles
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SCHEDULE
B
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Transaction
Costs
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SCHEDULE
C
|
Initial
Members of Board of Directors
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Β
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EXHIBIT
A
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Form
of Escrow Agreement
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EXHIBIT
B
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Restructuring
Proposal
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EXHIBIT
C
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Redemption
Procedure
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Β
Β
iii
Β
Β
Β
OF
Β
[_________________]
LLC
Β
THIS
LIMITED LIABILITY COMPANY AGREEMENT (this βAgreementβ) of
[_________________] LLC (the βCompanyβ) is made and
entered into October __, 2010, by and among Brookfield Asset Management Private
Institutional Capital Adviser (Canada), L.P., a Manitoba limited partnership, as
the managing member (the βManaging Memberβ) and
those persons who become members of the Company in accordance with the
provisions hereof and whose names are set forth as βMembersβ on the books and
records of the Company.
Β
RECITALS:
Β
WHEREAS,
the Company was formed pursuant to the Delaware Limited Liability Company Act, 6
Del. C. Section 18-101 et
seq., as amended from time to time (the βActβ), by filing a Certificate
of Formation of the Company with the office of the Secretary of State of the
State of Delaware on [____], 2010 (the βCertificateβ);
Β
WHEREAS,
from that date the Company has been governed by a Limited Liability Company
Agreement dated [____], 2010 (the βLLC Agreementβ) and
the Managing Member was admitted to the Company as a member pursuant to the LLC
Agreement;
Β
WHEREAS,
the Investment (as defined below) is one of the investments contemplated by the
Protocol for a Real Estate Turnaround Investment Program (the βProtocolβ) dated June
2009 among BAM and certain institutional investors;
Β
WHEREAS,
pursuant to this Agreement, each Person whose subscription to the Company is
accepted by the Managing Member is admitted to the Company as a non-managing
member of the Company (each, a βNon-Managing Memberβ
and together with the Managing Member, collectively, the βMembersβ);
and
Β
WHEREAS,
the Managing Member wishes to continue the Company and to amend and restate the
LLC Agreement in its entirety as set forth herein.
Β
NOW,
THEREFORE, in consideration of the mutual promises and agreements made herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Members hereby amend and restate the LLC
Agreement in its entirety to read as follows:
Β
Β
ARTICLE
1
DEFINITIONS;
RULES OF CONSTRUCTION
Β
1.1 Definitions.Β Β As
used in this Agreement, the following terms have the meanings set forth
below:
Β
βAcceptance Noticeβ
has the meaning set forth in SectionΒ 10.1(b)(iii)
hereof.
Β
βAcceptance Notice
Periodβ has the meaning set forth in SectionΒ 10.1(b)(iii)
hereof.
Β
βAcquiring Membersβ
has the meaning set forth in SectionΒ 10.8(d)(ii)
hereof.
Β
βAcquisition Noticeβ
has the meaning set forth in SectionΒ 10.8(d)(ii)(C)
hereof.
Β
βActβ has the meaning
set forth in the Recitals hereof.
Β
βAdditional Memberβ
has the meaning set forth in SectionΒ 3.3(a)
hereof.
Β
βAdvisers Actβ means
the Investment Advisers Act of 1940, as amended from time to time.
Β
βAffiliateβ of a
Person means any Person directly or indirectly controlling, controlled by or
under common control with such Person.Β Β For purposes of transactions
between one another, the Company and any Parallel Investment Vehicle shall not
be considered βAffiliatesβ of each other or of Brookfield.
Β
βAffiliate
Transactionβ has the meaning set forth in SectionΒ 4.13
hereof.
Β
βAggregate
Commitmentsβ means the sum of the Commitments of all Members or any
subset of the Members, as the context may require.
Β
βAggregate Consortium
Commitmentsβ means the sum of (i)Β the Aggregate Commitments plus (ii) the
aggregate Commitments of the Parallel Vehicle Members to each of the Parallel
Investment Vehicles.Β Β For avoidance of doubt, each Consortium Memberβs
Commitment within a single subscription agreement shall only be included in
either clause (i) or clause (ii) in the preceding sentence.
Β
βAgreementβ has the
meaning set forth in the introductory paragraph hereof, including all schedules
and exhibits hereto, as subsequently amended or restated from time to time in
accordance with the provisions hereof and the Act.
Β
βAvailable Commitmentβ
means, with respect to any Member as of any date of determination, such Memberβs
Commitment, less the excess of
(i) the aggregate amount of all previously funded Capital Contributions over
(ii) the aggregate amount of any Capital Contributions returned to such Member
pursuant to Section
3.1(e) or 3.3(d)
hereof.
Β
βBAMβ means Brookfield
Asset Management Inc., an Ontario corporation.
Β
2
Β
βBankruptcyβ of a
Person, means:Β Β (a) such Person (i) makes an assignment for the
benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii) is
adjudged a bankrupt or insolvent, or has entered against it an order for relief,
in any bankruptcy or insolvency proceeding; (iv) files a petition or answer
seeking for itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute, law, or
regulation; (v) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any
proceeding of such nature; or (vi) seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of such Person or of all or
any substantial part of its properties; or (b) if one hundred and twenty (120)
days after the commencement of any proceeding against such Person seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation, the
proceeding has not been dismissed, or if within ninety (90) days after the
appointment without such Personβs consent or acquiescence of a trustee,
receiver, or liquidator of such Person or of all or any substantial part of its
properties, the appointment is not vacated or stayed, or within ninety (90) days
after the expiration of any such stay, the appointment is not
vacated.Β Β Without limiting the generality of the foregoing, if a
Person is a partnership, Bankruptcy of such Person shall also include the
Bankruptcy of any general partner of such Person.Β Β The foregoing
definition of βBankruptcyβ is intended to replace and shall supersede and
replace the definition of βBankruptcyβ in Section 18-101(1) and 18-304 of the
Act.
Β
βBeneficial Ownerβ has
the meaning set forth in Section 12.26
hereof.
Β
βBenefit Planβ has the
meaning set forth in Section 12.24
hereof.
Β
βBenefit Plan
Fiduciaryβ has the meaning set forth in Section 12.24
hereof.
Β
βBoard of Directorsβ
has the meaning set forth in Section 4.3
hereof.
Β
βBrookfieldβ means BAM
or any Affiliate thereof, other than the Company and any Parallel Investment
Vehicle.
Β
βBrookfield Minimum
Holdβ means the minimum aggregate Commitments of BAM and its wholly-owned
Subsidiaries (which, for the avoidance of doubt, does not include any account
managed by Brookfield on a discretionary basis unless 100% of the economic and
beneficial interests in such account are owned by BAM or any its wholly-owned
Subsidiaries) to the Company and/or any Parallel Investment Vehicle, which shall
be the lesser of (i) twenty percent (20%) of the Aggregate Consortium
Commitments, (ii) $600 million or (iii) such lesser amount resulting solely from
any permitted Disposition contemplated by SectionΒ 10.8(a)
or 10.8(d)(i)
that reduces the Commitment of BAM and its wholly-owned Subsidiaries (which, for
the avoidance of doubt, does not include any account managed by Brookfield on a
discretionary basis unless 100% of the economic and beneficial interests in such
account are owned by BAM or any its wholly-owned Subsidiaries) below the
applicable thresholds in clauses (i) and (ii).
Β
βBusiness Dayβ means
any day other than a Saturday or Sunday or any other day on which commercial
banks in either New York, New York or Beijing, China are authorized or required
to be closed.
Β
3
Β
βBusiness Hoursβ means
between the hours of 9 a.m. and 5 p.m. on a Business Day at the address of the
recipient for a notice or other communication under Article 12
hereof.
Β
βBusiness Planβ has
the meaning set forth in Section 4.5(a)(iii)
hereof.
Β
βCapital Accountβ
means, with respect to any Member, the capital account in respect of its
Interest maintained for such Member in accordance with SectionΒ 7.1
hereof.
Β
βCapital Call Payment
Dateβ means a date specified in a Funding Notice for the payment of a
Capital Contribution by one (1) or more Members to the Company or any date on
which an Additional Member makes its initial Capital Contribution to the
Company.
Β
βCapital Contributionβ
means, with respect to any Member, the (i) value of any property contributed or
deemed contributed as capital by such Member to the Company and (ii) cash
contributions contributed as capital by such Member to the Company.
Β
βCarried Interestβ
means the distributions actually received or deemed to be received by the Class
B Member in respect of its Class B Interest pursuant to SectionsΒ 6.1(d)
and 6.1(e)
hereof.Β Β For purposes of this Agreement, βdeemedβ Carried Interest
distributions shall refer to distributions deemed made to the Class B Member in
respect of its Class B Interest pursuant to SectionsΒ 8.4 and
11.3
hereof.
Β
βCertificateβ has the
meaning set forth in the Recitals hereof, as originally filed in the office of
the Secretary of State of the State of Delaware, and as subsequently amended
and/or restated from time to time in accordance with the provisions hereof and
the Act.
Β
βChange of Controlβ
means the occurrence of any of the following: (1) any Person or group of related
Persons for purposes of Section 13(d) of the Exchange Act, becomes the
beneficial owner, as defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act, directly or indirectly, of 50% or
more of the total voting power of BAM (on a direct or indirect basis); (2) there
will be consummated any consolidation or merger or amalgamation of BAM in which
BAM is not the continuing or surviving corporation or pursuant to which the
common voting shares of BAM would be converted into cash, securities or other
property, other than a merger or consolidation or amalgamation of BAM in which
the holders of the voting common shares of BAM outstanding immediately prior to
the consolidation or merger or amalgamation hold, directly or indirectly, at
least a majority of the voting common shares or voting interests of the
surviving corporation immediately after such consolidation or merger or
amalgamation; (3) the first day on which a majority of the members of the board
of directors of BAM are not Continuing Directors or (4) the first day that 100%
of the economic and beneficial interests in the Managing Member are not owned
and controlled, directly or indirectly, by BAM.
Β
βChapter 11 Caseβ
means the cases pending as of the Initial Closing Date before the United States
Bankruptcy Court for the Southern District of New York involving GGP and certain
of its Affiliates which are being jointly administered under Case No. 09-11977
(ALG).
Β
βClassβ, βClass A Interestβ,
βClass B Interestβ and βClass C Interestβ each has the meaning set forth in
SectionΒ 2.6(b)
hereof.
Β
4
Β
βClass B Memberβ has
the meaning set forth in SectionΒ 2.6(b)
hereof.
Β
βClass C Memberβ has
the meaning set forth in SectionΒ 2.6(b)
hereof.
Β
βCodeβ means the
Internal Revenue Code of 1986, as amended from time to time.
Β
βCommitmentβ means,
(i) with respect to any Member, such Memberβs obligation to make Capital
Contributions to the Company (or a Parallel Investment Vehicle, to the extent
set forth in such Memberβs Subscription Agreement) in an aggregate amount not to
exceed the amount set forth in such Memberβs Subscription Agreement and opposite
such Memberβs name on Schedule A hereto in
the column entitled βCommitmentβ, as such amount may be reduced or increased, as
applicable, by assignment, transfer, or syndication or otherwise adjusted from
time to time in accordance with this Agreement and (ii) with respect to any
Parallel Vehicle Member, such Parallel Vehicle Memberβs obligation to make
capital contributions to the applicable Parallel Investment Vehicle in
accordance with the terms of the applicable Parallel Vehicle Agreement and the
Parallel Vehicle Memberβs applicable subscription agreement.
Β
βCommitment Accountβ
has the meaning set forth in SectionΒ 3.1(f)
hereof.
Β
βCommitment Account
Drawβ has the meaning set forth in SectionΒ 3.1(f)(i)
hereof.
Β
βCommitment LCβ has
the meaning set forth in SectionΒ 3.1(g)
hereof.
Β
βCommitment LC Drawβ
has the meaning set forth in SectionΒ 3.1(g)(i)
hereof.
Β
βCompanyβ has the
meaning set forth in the introductory paragraph hereof.
Β
βCompany Businessβ has
the meaning set forth in SectionΒ 2.5
hereof.
Β
βCompany Percentage
Interestβ means, with respect to any Member as of any date of
determination, the interest, expressed as a percentage, in the Company held by
such Member, determined by dividing the Invested Capital of such Member by the
aggregate Invested Capital of all Members, or if the Invested Capital of all
Members is zero, determined by dividing the Commitment of such Member by the
Aggregate Commitments.
Β
βConsortiumβ means,
collectively, the Company and all the Parallel Investment Vehicles.
Β
βConsortium Memberβ
means any Member or any Parallel Vehicle Member.
Β
βConsortium Percentage
Interestβ means, (i) with respect to any Consortium Member as of any date
of determination, the interest, expressed as a percentage, in the Consortium
held by such Consortium Member, determined by dividing the Invested Capital of
such Consortium Member by the aggregate Invested Capital of all Consortium
Members, (ii) with respect to the Company as of any date of determination, the
interest, expressed as a percentage, in the Consortium held by the Company,
determined by dividing the Invested Capital of all the Members by the aggregate
Invested Capital of all Consortium Members and (iii) with respect to any
Parallel Investment Vehicle as of any date of determination, the interest,
expressed as a percentage, in the Consortium held by such Parallel Investment
Vehicle, determined by dividing the Invested Capital of all Consortium Members
holding an Interest in such Parallel Investment Vehicle by the aggregate
Invested Capital of all Consortium Members, provided that in each case,
if the Invested Capital of all Consortium Members is zero, the determinations
above shall be based on the Commitment of each Consortium Member and the
Aggregate Consortium Commitments.
Β
5
Β
βConstituent Memberβ
of a specified Person, means any other Person that is an officer, director,
member, partner or shareholder in such specified Person, or any Person that,
indirectly through one or more limited liability companies, partnerships or
other entities, is an officer, director, member, partner or shareholder in such
specified Person.
Β
βContinuing Directorβ
means with respect to BAM, as of any date of determination, any member of the
board of directors of BAM: (i) who was a member of the board of directors of BAM
on the Initial Closing Date; or (ii) whose appointment or election was approved
by the affirmative vote of a majority of the Continuing Directors who were
members of the board of directors of BAM at the time of that director's
nomination or election.
Β
βcontrolβ, βcontrolledβ, and
βcontrollingβ mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting Securities, by contract or
otherwise.
Β
βDaily VWAPβ means,
for any trading day in respect of a Security trading on a national stock
exchange or active over-the-counter market, the per Security volume weighted
average price as displayed on Bloomberg (or its equivalent successor if such
service is not available) in respect of the period from scheduled open of
trading until the scheduled close of trading of the primary trading session on
such trading day on the national stock exchange or active over-the-counter
market for such Security (or if such volume weighted average price is not
reported by Bloomberg, then as reported by another recognized source selected by
the Managing Member; provided, that the selection
is consistent with previous selections made in respect of such Security). The
Daily VWAP will be determined without regard to after-hours trading or any other
trading outside of the regular trading session trading hours.
Β
βDebtβ means any
notes, bonds, evidences of indebtedness or debt of GGP not secured by real
property, including the 3.98% Exchangeable Senior Notes issued by GGP Limited
Partnership, under Rule 144A of the Securities Act, pursuant to an indenture
dated April 16, 2007, five (5) series of public bonds issued by The Xxxxx
Company LP pursuant to an indenture dated February 24, 1995, one (1) series of
bonds in a private placement issued by The Xxxxx Company LP and TRC Co-Issuer,
Inc. pursuant to an indenture dated May 5, 2006, and a term and revolving credit
facility pursuant to the Second Amended and Restated Credit Agreement, dated as
of February 24, 2006, by and among General Growth Properties, Inc., GGP Limited
Partnership and GGPLP, L.L.C., as borrowers, Eurohypo AG, New York Branch, as
administrative agent, and the lenders from time to time party
thereto.
Β
βDefault Amountβ has
the meaning set forth in Section 3.6(a)
hereof.
Β
βDefaulting Memberβ
has the meaning set forth in Section 3.6(a)
hereof.
Β
βDelaware Arbitration
Actβ has the meaning set forth in SectionΒ 12.14
hereof.
Β
6
Β
βDIP Loanβ means that
certain Senior Secured Debtor in Possession Credit, Security and Guaranty
Agreement dated July 23, 2010 among certain lenders, Barclays Capital as the
sole arranger, Barclays Bank PLC, as the administration and collateral agent,
General Growth Properties, Inc. and GGP Limited Partnership, as the borrowers
and the guarantors party thereto.
Β
βDIP Loan
Contributionsβ has the meaning set forth in SectionΒ 3.1(h)(i)
hereof.
Β
βDIP Loan Funding
Memberβ has the meaning set forth in SectionΒ 3.1(h)(i)
hereof.
Β
βDIP Loan Investmentβ
means the lender interests in the DIP Loan held directly or indirectly by the
Company or a Subsidiary thereof.
Β
βDIP Loan Investment
Fundsβ has the meaning set forth in SectionΒ 3.1(h)(i)
hereof.
Β
βDIP Loan Purchase
Priceβ has the meaning set forth in SectionΒ 3.1(h)(i)
hereof.
Β
βDisposing Memberβ has
the meaning set forth in Section 10.8(d)(ii)
hereof.
Β
βDispositionβ means
any transaction or series of transactions whereby the Company sells or otherwise
disposes of all or any portion of its right, title and interest in and to the
Investment or other assets of the Company, including any merger or
consolidation, any distribution in kind of all or any portion of the Investment
or other assets of the Company to any Member, and any deemed sales or other
dispositions pursuant to SectionsΒ 6.1(a)-6.1(d),
8.4, 10.8(d) or 11.3(c)
hereof.Β Β Notwithstanding the foregoing, the sale or disposition of all
or any portion of the Investment in connection with the substitution or exchange
of any part of the Investment in the ordinary course of business under the terms
of the Investment or in connection with or as a result of the Chapter 11 Case
shall not be deemed a Disposition in whole or in part, unless such sale or
disposition is for cash, which cash is not required to be immediately reinvested
in GGP pursuant to the Plan.
Β
βDisposeβ and βDisposed ofβ have
meanings correlative thereto.
Β
βDisputeβ has the
meaning set forth in Section 12.14
hereof.
Β
βDistribution Dateβ
means any date of distribution under Sections 3.3(d),
6.1, 10.8(a), 10.8(b), 10.8(d) or 11.3
hereof.
Β
βDollarsβ or β$β refers to lawful
money of the United States of America.
Β
βElecting Memberβ has
the meaning set forth in Section 5.2(g)
hereof.
Β
βERISAβ means the
Employee Retirement Income Security Act of 1974, the related provisions of the
Code, and the respective rules and regulations promulgated thereunder, in each
case, as amended from time to time, and the judicial and administrative rulings
and interpretations thereof.
Β
βEscrow Agreementβ has
the meaning set forth in Section 3.1(f)
hereof.
Β
7
Β
βExchange Actβ means
the Securities Exchange Act of 1934, as amended from time to time.
Β
βExisting Consortium
Membersβ means, collectively, the Managing Member and any Consortium
Member admitted or deemed admitted to REP prior to September 1,
2010.
Β
βExit Priceβ has the
meaning set forth in Section
10.8(d)(ii)(B) hereof.
Β
βFair Market Valueβ
means on a valuation date:
Β
(a)Β Β Β Β Β Β Β Β Β Β Β with
respect to Securities, (i) if traded on one (1) or more securities exchanges or
the Nasdaq National Market System, the Twenty-One-Day Average VWAP of the
Securities; (ii) if actively traded over-the-counter (other than on the Nasdaq
National Market System), the Twenty-One-Day Average VWAP of such Securities; or
(iii) if there is no active public market, determined based on a valuation as of
such valuation date by an appropriately qualified independent third-party
valuation agent, designated by the Managing Member and approved pursuant to the
Voting Agreement, which such approval shall be based on the approval of a
Super-Majority Vote of Tier One Parallel Investment Vehicles;
Β
(b)Β Β Β Β Β Β Β Β Β Β Β with
respect to Debt (other than Debt that is a Security), (i) the average of three
(3) quotes, or such lesser number of quotes as available, each provided by a
different nationally recognized banking institution that actively trades such
Debt or different market maker for such Debt designated by the Managing Member
as to the amount in cash in immediately available funds that such nationally
recognized banking institution or market maker would be willing to pay to the
Company as of such date to purchase the Debt held on such date by the Company,
or (ii) in the event such quote(s) are unavailable, determined based on a
valuation as of such valuation date by an appropriately qualified independent
third-party valuation agent, designated by the Managing Member and approved
pursuant to the Voting Agreement, which such approval shall be based on the
approval of a Super-Majority Vote of Tier One Parallel Investment Vehicles;
and
Β
(c)Β Β Β Β Β Β Β Β Β Β Β with
respect to any other Company asset or liability, (i) the market value as of the
valuation date as reasonably determined pursuant to the Voting Agreement, which
such determination shall be based on the determination of a Super-Majority Vote
of Tier One Parallel Investment Vehicles, or (ii) in the event under the Voting
Agreement a Super-Majority Vote of Tier One Parallel Investment Vehicles is
unable to agree on such valuation within 30 days of the first consideration by
the Tier One Parallel Investment Vehicles of the need to determine Fair Market
Value, determined based on a valuation made by an appropriately qualified
independent third-party valuation agent, designated by the Managing Member and
approved pursuant to the Voting Agreement, which such approval shall be based on
the approval of a Super-Majority Vote of Tier One Parallel Investment
Vehicles.
Β
βFiscal Yearβ means
the calendar year, unless otherwise determined pursuant to the Voting Agreement,
which such determination shall be based on the determination of a Hyper-Majority
Vote of Tier One Parallel Investment Vehicles.
Β
βFOIAβ has the meaning
set forth in Section
12.3(d) hereof.
Β
8
Β
βFOIA Memberβ has the
meaning set forth in Section 12.3(b)
hereof.
Β
βFunding Dateβ has the
meaning set forth in Section 3.1(c)
hereof.
Β
βFunding Noticeβ has
the meaning set forth in Section 3.1
hereof.
Β
βGAAPβ means the
United States generally accepted accounting principles, applied on a consistent
basis.
Β
βGGPβ means General
Growth Properties, Inc., a Delaware corporation, including its successor(s)
(including, for greater certainty, General Growth Opportunities (as defined in
the Restructuring Proposal)), and its subsidiaries.
Β
βGGP Directorβ has the
meaning set forth in Section 4.2(a)(viii)
hereof.
Β
βGGP Financing Allocation
Percentageβ means, for each GGP Financing Member, an amount, expressed as
a percentage, equal to such GGP Financing Memberβs Consortium Percentage
Interest divided by the aggregate Consortium Percentage Interests of all GGP
Financing Members.
Β
βGGP Financing
Interestsβ has the meaning set forth in Section 5.2(a)
hereof.
Β
βGGP Financing Memberβ
has the meaning set forth in Section 5.2(b)
hereof.
Β
βGGP Financing
Vehicleβ has the meaning set forth in Section 5.2(a)
hereof.
Β
βGGP Holdcoβ means an
entity or entities which directly or indirectly owns and controls all or
substantially all of the business of the entities comprising GGP (including, for
greater certainty, General Growth Opportunities (as defined in the Restructuring
Proposal)) as of the date hereof.
Β
βHyper-Majority Vote of Board
of Directorsβ means the affirmative vote of the members of the Board of
Directors representing Consortium Members who in the aggregate hold Consortium
Percentage Interests of at least eighty-six percent (86%) of all of the
Consortium Percentage Interests of all Consortium Members represented on the
Board of Directors.Β Β For purposes of the preceding sentence, certain
Interests shall not be included as provided in SectionΒ 4.4(c)
hereof.
Β
βHyper-Majority Vote of
Membersβ means (i) with respect to any vote, consent, approval or
determination of only the Members, the affirmative vote, consent, approval or
determination of the Members who in the aggregate hold Company Percentage
Interests of at least eighty-six percent (86%) of all of the Company Percentage
Interests and (ii) with respect to any vote, consent, approval or determination
of the Consortium Members (which the Members agree will include the votes,
consents, approvals and determinations referenced in SectionsΒ 4.6(c),
4.11(f), 10.2, 10.8(c) and 12.17 and such other
votes, consents, approvals and determinations for matters pertaining to all of
the members of the Consortium as set forth in this Agreement) the affirmative
vote, consent, approval or determination of the Consortium Members who in the
aggregate hold Consortium Percentage Interests of at least eighty-six percent
(86%) of all of the Consortium Percentage Interests.Β Β For purposes of
the preceding sentence, certain Interests shall not be included as provided in
SectionΒ 4.11(d)
hereof.
Β
9
Β
βHyper-Majority Vote of Tier
One Parallel Investment Vehiclesβ means the affirmative vote of the Tier
One Parallel Investment Vehicles who in the aggregate hold Consortium Percentage
Interests of at least eighty-six percent (86%) of all of the Consortium
Percentage Interests held by Tier One Parallel Investment
Vehicles.Β Β For purposes of the preceding sentence, certain Interests
shall not be included as provided in the Voting Agreement.
Β
βIFRSβ means the
International Financial Reporting Standards as adopted by the International
Accounting Standards Board.
Β
βIndemnified Partyβ
has the meaning set forth in SectionΒ 9.2(a)
hereof.
Β
βIndemnifying Partyβ
means any Person responsible for making payments of amounts constituting
indemnification pursuant to Article 9
hereof.
Β
βIndependent Accounting
Firmβ means Deloitte & Touche LLP, or any other βBig Fourβ accounting
firm selected by the Managing Member and approved pursuant to the Voting
Agreement, which such approval shall be based on the approval of a
Super-Majority Vote of Tier One Parallel Investment Vehicles.
Β
βInitial Closing Dateβ
means March 31, 2010.
Β
βInitial Membersβ
means, collectively, the Managing Member and any Consortium Member admitted or
deemed admitted to the Company (or REP, if applicable) on the Initial Closing
Date for so long as such Consortium Member maintains a Consortium Percentage
Interest of at least fifteen percent (15%).
Β
βInterestβ means (i)
with respect to any Member, the limited liability company interest of any Class
owned by a Member in the Company at any particular time, including the right of
such Member to any and all benefits to which such Member may be entitled as
provided in this Agreement or applicable law, together, with any and all
obligations of such Member to comply with all terms and provisions of this
Agreement and (ii) with respect to any Parallel Vehicle Member, the limited
liability company, limited partner or other similar interest owned by a Parallel
Vehicle Member in a Parallel Investment Vehicle at any particular time,
including the right of such Parallel Vehicle Member to any and all benefits to
which such Parallel Vehicle Member may be entitled as provided in the applicable
Parallel Vehicle Agreement or applicable law, together, with any and all
obligations of such Parallel Vehicle Member to comply with all terms and
provisions of the applicable Parallel Vehicle Agreement.
Β
βInternal Disputeβ
means any claim in which (a) one or more members of the Board of Directors, the
Managing Member, the Managing Memberβs Affiliates or their respective employees
or managers are suing one or more other members of the Board of Directors, the
Managing Member, the Managing Memberβs Affiliates or their respective employees
or managers and (b) neither the Company nor a Parallel Investment Vehicle is a
plaintiff, defendant or other participant in such claim and/or will (or could
reasonably be expected to) receive any monetary benefit from the outcome of such
claim.
Β
10
Β
βInternal Rate of
Returnβ means, with respect to a Member as of any Distribution Date, the
annual percentage rate, which when utilized to calculate the present value of
all distributions (i.e., cash inflows) received
by such Member from the Company shall cause such present value to equal the
present value of all Capital Contributions (i.e., cash outflows) made by
such Member.Β Β In order for a Member to receive a positive Internal
Rate of Return, a Member must receive an aggregate amount equal to (a) its
aggregate Capital Contributions, plus (b) a return thereon.Β Β The
Internal Rate of Return with respect to a Member, at any Distribution Date,
shall be computed with annual compounding.Β Β For purposes of computing
such Internal Rate of Return, (i) all Capital Contributions of such Member shall
be treated as Capital Contributions made on the applicable Capital Call Payment
Date, (ii) each distribution or payment of cash received by such Member
(including pursuant to SectionsΒ 3.3(d),
6.1, 10.8(a), 10.8(b), 10.8(d) or 11.3 hereof) shall be
treated as a distribution on the date such funds are distributed by the Company,
and (iii) each distribution or payment of non-cash property received by such
Member in kind (including pursuant to SectionsΒ 6.1 or
11.3 hereof)
shall be treated as a distribution on the Distribution Date such non-cash
property is distributed by the Company; provided, however, that with
respect to clause (iii), for purposes of calculating the Internal Rate of Return
with respect to a Member, such Member shall be deemed to have received cash in
an amount equal to the Fair Market Value (determined as of the applicable
Distribution Date) of all non-cash property distributed (or deemed distributed)
to such Member by the Company.
Β
βInvested Capitalβ
means, (i) with respect to any Member as of any date of determination, the sum
of all Capital Contributions made by such Member as of such date reduced by any
Invested Capital returned to such Member pursuant to SectionsΒ 3.1(e)
or 3.3(d)
hereof; provided, that,
except for any Invested Capital returned to a Member pursuant to SectionsΒ 3.1(e)
and 3.3(d)
hereof, the amount of Invested Capital at any time shall not take into account
any return of, or distribution with respect to, such Invested Capital, and (ii)
with respect to any Parallel Vehicle Member as of any date of determination,
such Parallel Vehicle Memberβs βinvested capitalβ as determined in accordance
with the applicable Parallel Vehicle Agreement.
Β
βInvestmentβ means,
collectively, the Debt and New Equity held by the Company from time to time in
accordance with this Agreement.
Β
βInvestment Company
Actβ means the Investment Company Act of 1940, as amended from time to
time.
Β
βInvestment Proceedsβ
means all cash, other proceeds or Securities available for distribution by the
Company, net of (a) Reserves and (b) amounts necessary to pay Transaction Costs,
liabilities and obligations of the Company then due and owing (to the extent the
Members have not made Capital Contributions in respect of such Transaction
Costs, liabilities and obligations of the Company or such Transaction Costs,
liabilities and obligations of the Company were not otherwise covered by
Reserves).
Β
βLLC Agreementβ has
the meaning set forth in the Recitals hereof.
Β
11
Β
βLong Stop Dateβ
means, except as otherwise agreed in writing by the Initial Members or extended
pursuant to the Voting Agreement, which such extension shall be based on the
consent of a Hyper-Majority Vote of Tier One Parallel Investment Vehicles, the
later of (a) the earlier of (i) the final day of the Standstill Period and
(ii)Β October 31, 2010 and (b) the date the Restructuring Proposal is (I)
terminated or (II) terminable by the Company in accordance with its terms
without default by the Company thereunder.
Β
βMajority Vote of Board of
Directorsβ means the affirmative vote of the members of the Board of
Directors representing Consortium Members who in the aggregate hold Consortium
Percentage Interests greater than fifty percent (50%) of all of the Consortium
Percentage Interests of all Consortium Members represented on the Board of
Directors.Β Β For purposes of the preceding sentence, certain Interests
shall not be included as provided in SectionΒ 4.4(c)
hereof.
Β
βMajority Vote of
Membersβ means (i) with respect to any vote, consent, approval or
determination of only the Members, the affirmative vote, consent, approval or
determination of the Members who in the aggregate hold Company Percentage
Interests representing greater than fifty percent (50%) of all of the Company
Percentage Interests and (ii) with respect to any vote, consent, approval or
determination of the Consortium Members (which the Members agree will include
the votes, consents, approvals and determinations referenced in SectionΒ 4.11(a)
and such other votes, consents, approvals and determinations for matters
pertaining to all of the members of the Consortium as set forth in this
Agreement), the affirmative vote, consent, approval or determination of the
Consortium Members who in the aggregate hold Consortium Percentage Interests
representing greater than fifty percent (50%) of all of the Consortium
Percentage Interests.Β Β For purposes of the preceding sentence, certain
Interests shall not be included as provided in SectionΒ 4.11(d)
hereof.
Β
βMajority Vote of Tier One
Parallel Investment Vehiclesβ means the affirmative vote of the Tier One
Parallel Investment Vehicles who in the aggregate hold Consortium Percentage
Interests representing greater than fifty percent (50%) of all of the Consortium
Percentage Interests held by Tier One Parallel Investment
Vehicles.Β Β For purposes of the preceding sentence, certain Interests
shall not be included as provided in the Voting Agreement.
Β
βManaging Memberβ has
the meaning set forth in the introductory paragraph hereof, or any temporary
replacement managing member from time to time while and for so long as it is a
managing member.
Β
βMembersβ has the
meaning set forth in the Recitals hereof.
Β
βMinimum Conditionβ
means, except as otherwise agreed in writing by the Initial Members, either (a)
the transaction contemplated by the Restructuring Proposal has been consummated,
or (b)(i) the Consortium holds or controls at least twenty-five (25%) of the
common voting equity of GGP Holdco on a fully diluted basis, and (ii) the
Consortium has representation on the board of directors of GGP Holdco (or the
right thereto) (which, in the case of agreement by General Growth Properties
Inc. to the Restructuring Proposal as amended from time to time, shall be
representation by two directors (or the right thereto)), in each case by the
Long Stop Date.
Β
12
βNew Equityβ means
common equity of GGP Holdco, including common shares, preferred shares,
convertible preferred shares or any other type of security instrument or
contract that grants equity-like rights and interests or is convertible or
exchangeable into common equity of GGP Holdco.
Β
βNon-Managing Memberβ
has the meaning set forth in the Recitals hereof until any such Person ceases to
be a non-managing member, and any other Person from time to time while and for
so long as it is a non-managing member.
Β
βNotional Interestβ
has the meaning set forth in SectionΒ 3.3(a)
hereof.
Β
βNotional Principal
Amountβ has the meaning set forth in SectionΒ 3.3(a)
hereof.
Β
βOFAC Listβ means the
list of specially designated nationals and blocked persons subject to financial
sanctions that is maintained by the U.S. Treasury Department, Office of Foreign
Development Assets Control, pursuant to applicable law, including, without
limitation, trade embargo, economic sanctions or other prohibitions imposed by
the executive order of the President of the United States.Β Β As of the
date hereof, the OFAC List is accessible through the internet website
xxx.xxxxx.xxx/xxxx/x00xxx.xxx.
Β
βOffer Noticeβ has the
meaning set forth in SectionΒ 10.1(b)(ii)
hereof.
Β
βOffer Priceβ has the
meaning set forth in SectionΒ 10.1(b)(ii)
hereof.
Β
βOffer Termsβ has the
meaning set forth in SectionΒ 10.1(b)(ii)
hereof.
Β
βOffered Interestβ has
the meaning set forth in SectionΒ 10.1(b)
hereof.
Β
βOfferee Membersβ has
the meaning set forth in SectionΒ 10.1(b)
hereof.
Β
βOperating Expensesβ
has the meaning set forth in Section 4.7(b)
hereof.
Β
βOrganizational
Expensesβ has the meaning set forth in SectionΒ 4.7(a)
hereof.
Β
βParallel Investment
Vehicleβ has the meaning set forth in Section 4.12
hereof.
Β
βParallel Vehicle
Agreementβ means the limited liability company agreement, limited
partnership agreement or similar agreement of a Parallel Investment Vehicle, as
amended from time to time.
Β
βParallel Vehicle
Memberβ has the meaning set forth in Section 4.12
hereof.
Β
βPartially Adjusted Exit
Priceβ has the meaning set forth in Section
10.8(d)(ii)(E).
Β
βParticipating GGP Financing
Membersβ has the meaning set forth in SectionΒ 5.2(c)
hereof.
Β
βPersonβ means any
individual, general partnership, limited partnership, limited liability company,
unlimited liability company, corporation, joint venture, trust, business trust,
statutory trust, cooperative, association, or other entity, and, where the
context so permits, the legal representatives, successors in interest and
permitted assigns of such Person.
Β
13
Β
βPlanβ means GGPβs
plan of reorganization with respect to the Chapter 11 Case.
Β
βPotential Transfer
Noticeβ has the meaning set forth in SectionΒ 10.1(b)(i)
hereof.
Β
βPrime Rateβ means, on
any date of determination, a variable rate per annum equal to the rate of
interest published, from time to time, by The Wall Street Journal
(United States edition) designated therein as the βprime rateβ at large United
States money center banks.
Β
βProceedingβ has the
meaning set forth in Section 1)a)i)(2)
hereof.
Β
βProhibited Personβ
means any Person identified on the OFAC List or any other Person with whom a
U.S. Person (as defined below) may not conduct business or transactions by
prohibition of federal law or executive order of the President of the United
States of America. For the purposes of this definition, the term βU.S. Personβ
means any United States citizen, permanent resident alien, entity organized
under the laws of the United States (including foreign branches), or any person
in the United States.
Β
βProtocolβ has the
meaning set forth in the Recitals hereof.
Β
βProvisional Sale
Noticeβ has the meaning set forth in Section
10.8(d)(ii)(A) hereof.
Β
βRedemption Procedureβ
means the procedure set forth in Exhibit C
hereto.
Β
βRemaining GGP Financing
Percentageβ means, for each Participating GGP Financing Member, an
amount, expressed as a percentage, equal to such Participating GGP Financing
Memberβs Consortium Percentage Interest divided by the aggregate Consortium
Percentage Interests of all Participating GGP Financing Members.
Β
βRemoval Conduct
Eventβ means (a) the occurrence of a Change of Control with respect to
the Managing Member or BAM; (b) the failure of BAM and its wholly-owned
Subsidiaries to comply with the requirements of SectionΒ 3.2
hereof; (c) the failure of the Managing Member or BAM (or any of its
wholly-owned Subsidiaries) to fund any of their respective Commitments; (d) the
Managing Member or BAM (or any of its wholly-owned Subsidiaries that are
Members) being subject to any event of Bankruptcy or (e) the occurrence of a
βRemoval Conduct Eventβ (as defined in each Parallel Vehicle Agreement) under
any Parallel Vehicle Agreement (unless such βRemoval Conduct Eventβ is waived
pursuant to the terms of such Parallel Vehicle Agreement).
Β
βRemoval Liquidating
Trusteeβ means Deloitte & Touche LLP, or any other liquidating
trustee approved pursuant to the Voting Agreement, which such approval shall be
based on the approval of a Super-Majority Vote of Tier One Parallel Investment
Vehicles.
Β
βREPβ means REP
Investments LLC, a Delaware limited liability company.
Β
14
Β
βReplyβ has the
meaning set forth in SectionΒ 10.6(b)
hereof.
Β
βReservesβ means the
amount of cash, other proceeds or Securities that the Managing Member determines
in good faith and in its reasonable discretion, subject to different
instructions in writing by a Hyper-Majority Vote of Members (excluding from both
the numerator and denominator of such percentage the Interests held by the
Managing Member and its Affiliates, including any Person or account the Interest
of which is managed by Brookfield on a discretionary basis), is necessary to be
maintained by the Company for the purpose of paying reasonably anticipated
Transaction Costs, liabilities and obligations of the Company, regardless of
whether such Transaction Costs, liabilities and obligations are actual or
contingent.
Β
βRestructuring
Proposalβ means that certain Amended and Restated Cornerstone Investment
Agreement, effective as of March 31, 2010, by and between GGP and the Company,
in the form as submitted to the Company by the Managing Member prior to the
Initial Closing Date and attached hereto as Exhibit B, as the
same may be amended from time to time in accordance with this
Agreement.
Β
βRestructuring Proposal
Terminationβ has the meaning set forth in SectionΒ 3.1(h)(iv).
Β
βReportsβ has the
meaning set forth in Section 8.3(b)
hereof.
Β
βReturnsβ has the
meaning set forth in Section 8.3(a)
hereof.
Β
βRulesβ has the
meaning set forth in Section 12.14
hereof.
Β
βSale Noticeβ has the
meaning set forth in Section
10.8(d)(ii)(B) hereof.
Β
βSale Offerβ has the
meaning set forth in Section
10.8(d)(ii)(B) hereof.
Β
βSale Recommendationβ
has the meaning set forth in Section 10.8(d)(i)(A)
hereof.
Β
βSale Recommendation
Acceptance Periodβ has the meaning set forth in SectionΒ 10.8(d)(i)(A)
hereof.
Β
βSecuritiesβ means,
for purposes of this Agreement, securities of every kind and nature and rights
and options with respect thereto, including stock, shares, notes, bonds,
evidences of indebtedness, New Equity and other business interests of every
type, including interests in GGP.
Β
βSecurities Actβ means
the Securities Act of 1933, as amended.
Β
βSelling Memberβ has
the meaning set forth in Section 10.1(b)
hereof.
Β
βServices Agreementβ
has the meaning set forth in SectionΒ 4.5(a)
hereof.
Β
βSharing Percentageβ
means, with respect to any Member as of any date of determination, a fraction,
expressed as a percentage, the numerator of which is an amount equal to the
Invested Capital of such Member, and the denominator of which is an aggregate
amount equal to the sum of the Invested Capital of all Members.
Β
15
Β
βStandstill Periodβ
means the period ending on the later of (a) the date the Consortium is required
to continue to hold all or any portion of the Investment under the Restructuring
Proposal, and (b) the period ending on the date ninety (90) calendar days after
the earlier of (i) the date an order confirming the Plan becomes final and no
longer subject to an outstanding appeal or (ii) the date the Plan becomes
effective.
Β
βSubject Interestβ has
the meaning set forth in SectionΒ 10.8(d)(ii)
hereof.
Β
βSubscription
Agreementβ means, with respect to any Non-Managing Member, any
subscription agreement (together with any amendments, supplements or
modifications thereto) entered into between the Company and such Non-Managing
Member pursuant to the terms of which such Non-Managing Member has agreed or
shall agree to purchase an Interest.
Β
βSubsequent Closing
Dateβ has the meaning set forth in SectionΒ 3.3(a)
hereof.
Β
βSubsidiaryβ of a
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares or securities
or other interests having ordinary voting power for the election of directors or
other governing body are at the time beneficially owned, or the management of
which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.
Β
βSuper-Majority Vote of
Membersβ means (i) with respect to any vote, consent, approval or
determination of only the Members, the affirmative vote, consent, approval or
determination of Members who in the aggregate hold Company Percentage Interests
representing at least sixty-six and two-thirds percent (66-2/3%) of all of the
Company Percentage Interests and (ii) with respect to any vote, consent,
approval or determination of the Consortium Members (which the Members agree
will include the votes, consents and approvals referenced in SectionsΒ 4.6(a),
4.11(h), 4.13, and 5.2(a) and such other
votes, consents, approvals and determinations for matters pertaining to all of
the members of the Consortium as set forth in this Agreement), the affirmative
vote, consent, approval or determination of Consortium Members who in the
aggregate hold Consortium Percentage Interests representing at least sixty-six
and two-thirds percent (66-2/3%) of all of the Consortium Percentage
Interests.Β Β For purposes of the preceding sentence, certain Interests
shall not be included as provided in SectionΒ 4.11(d)
hereof.
Β
βSuper-Majority Vote of Tier
One Parallel Investment Vehiclesβ means the affirmative vote of the Tier
One Parallel Investment Vehicles who in the aggregate hold Consortium Percentage
Interests of at least sixty-six and two-thirds percent (66-2/3%) of all of the
Consortium Percentage Interests held by Tier One Parallel Investment
Vehicles.Β Β For purposes of the preceding sentence, certain Interests
shall not be included as provided in the Voting Agreement.
Β
βTag-Along Memberβ has
the meaning set forth in SectionΒ 10.6(a)
hereof.
Β
βTag-Along Noticeβ has
the meaning set forth in SectionΒ 10.6(a)
hereof.
Β
16
Β
βTag-Along Transferβ
has the meaning set forth SectionΒ 10.6(a)
hereof.
Β
βTagging Membersβ has
the meaning set forth in Section 10.6(c)
hereof.
Β
βTax Indemnified
Partyβ has the meaning set forth in Section 8.4(e)
hereof.
Β
βTax Matters Partnerβ
has the meaning set forth in Section 8.5
hereof.
Β
βTemporary
Investmentsβ means any of the following: (a) cash; (b) debt securities
issued or directly or indirectly fully guaranteed or insured by the United
States or any agency or instrumentality thereof and having a maturity of one
year or less; and (c) demand deposits of any commercial bank having capital and
surplus in excess of $10 billion on the date of acquisition thereof and rated A
or better.
Β
βTen-Day Average VWAPβ
means the arithmetic average of the Daily VWAP for each trading day during the
ten (10) trading day period commencing on the tenth (10th) trading day prior to
the valuation date and ending on the valuation date, rounded to two decimal
places.
Β
βTier One Actionβ
means any action by the Company or the Consortium, as applicable, which is
subject to the vote, consent, approval or determination of the Tier One Parallel
Investment Vehicles under this Agreement, which the Members hereby agree shall
include, without limitation, the actions set forth in (i)Β the following
defined terms: Fair Market Value, Fiscal Year, Independent Accounting Firm, Long
Stop Date and Removal Liquidating Trustee and (ii)Β SectionsΒ 3.6,
4.2(a) - 4.2(c), 4.3(a), 4.5, 8.2(a), 9.2(e), 9.2(f), 11.1 and 11.2 and such other
votes, consents, approvals and determinations for matters pertaining to all of
the members of the Consortium as set forth in this Agreement.
Β
βTier One Parallel Investment
Vehiclesβ means each Parallel Investment Vehicle (including for purposes
of this definition, the Company) that, at the time a particular vote, consent,
approval or determination is required under the Voting Agreement, has a
Consortium Percentage Interest of at least ten percent (10%); provided, however, that if any
Consortium Member holding an interest in such Parallel Investment Vehicle has a
Consortium Percentage Interest of at least ten percent (10%), but is a
Defaulting Member (as defined hereunder or the applicable Parallel Investment
Agreement), then either (i)Β if such Defaulting Member is the only
Non-Managing Member in such Parallel Investment Vehicle that has a Consortium
Percentage Interest of at least ten percent (10%), such Parallel Investment
Vehicle shall not be a Tier One Parallel Investment Vehicle and shall be
excluded from both the numerator and denominator of the calculation of the
percentage of such vote, consent, approval or determination hereunder for so
long as such Consortium Member is a Defaulting Member or (ii)Β if such
Defaulting Member is not the only Non-Managing Member in such Parallel
Investment Vehicle that has a Consortium Percentage Interest of at least ten
percent (10%), the Consortium Percentage Interest of such Defaulting Member
shall be excluded for purposes of such Tier One Investment Vehicleβs voting,
consent and approval rights under the Voting Agreement.
Β
βTransaction Costsβ
has the meaning set forth in SectionΒ 4.7
hereof.
Β
βTransaction Distribution
Amountβ has the meaning set forth in SectionΒ 6.1(b)
hereof.
Β
17
Β
βTransferβ means (i)
as a noun, any transfer, sale, pledge, assignment, hypothecation or other
disposition, whether voluntary or involuntary and whether direct or indirect
(including any transfer or other disposition of a direct or indirect ownership
interest in or in an interest held by any Member) and (ii) as a verb, to
transfer, sell, pledge, assign, hypothecate or otherwise dispose of whether
voluntarily or involuntarily and whether directly or indirectly (including to
transfer or otherwise dispose of a direct or indirect ownership interest in or
in an interest held by any Member), except that, Transfer shall not include any
transfer of equity or beneficial interests in a public company listed on a
national exchange or a pension plan. βTransferorβ means a
Person that Transfers or proposes to Transfer; and βTransfereeβ means a
Person to whom a Transfer is made or is proposed to be made.
Β
βTreasury Regulationsβ
means all final and temporary United States federal tax regulations issued under
the Code from time to time.
Β
βTrue Up Memberβ has
the meaning set forth in Section 3.1(h)(ii)
hereof.
Β
βTwenty-One-Day Average
VWAPβ means the arithmetic average of the Daily VWAP for each trading day
during the twenty-one (21) trading day period commencing on the tenth (10th)
trading day prior to the valuation date and ending on the tenth (10th) trading
day after the valuation date, rounded to two decimal places.
Β
βUnsecured Creditors
Committeeβ means the official committee of unsecured creditors of GGP,
appointed under the Chapter 11 Case.
Β
βVoting Agreementβ has
the meaning set forth in SectionΒ 4.1(a)
hereof.
Β
βVoting Memberβ has
the meaning set forth in Section 4.3(a)
hereof.
Β
ARTICLE
2
FORMATION
AND PURPOSE
Β
2.1 Formation.Β Β The
Company has previously been formed as a limited liability company pursuant to
the Act by filing the Certificate in the office of the Secretary of State of the
State of Delaware and such Certificate has not been withdrawn as of the date
hereof.Β Β The rights and liabilities of the Members shall be as
provided for in the Act if not otherwise expressly provided for in this
Agreement.
Β
2.2 Name.Β Β The
name of the Company is [_______] LLC.Β Β The business and affairs of the
Company shall be managed and conducted under such name or under such other names
as the Board of Directors may deem appropriate upon written notice to the
Members.
Β
2.3 Registered Office and
Registered Agent; Principal Office.Β Β The address of the
Companyβs registered office in Delaware is c/o Corporation Service Company, 0000
Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000.Β Β The name and
address of the registered agent in the State of Delaware for service of process
is Corporation Service Company, 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX
00000.Β Β The Board of Directors may change the registered office and
the registered agent of the Company in its discretion.Β Β The initial
principal place of business of the Company shall be located at Xxxxx 00, 000
Xxxx Xxxxxx, Xxxxxx XXX 0000, Xxxxxxxxx.Β Β The Managing Member may
change the location of the principal place of business of the Company to such
other place as the Board of Directors may from time to time designate in
accordance with the Act.Β Β The Managing Member shall provide prompt
written notice to the Non-Managing Members of any change in the Companyβs
principal place of business.
Β
18
Β
2.4 Term.Β Β The
term of the Company commenced upon the date of filing of the Certificate in the
office of the Secretary of State of the State of Delaware pursuant to the Act
and shall continue in full force and effect in perpetuity; provided, that the term of
the Company shall not extend beyond the date of dissolution of the Company as
contemplated by Article 11
hereof.Β Β The existence of the Company as a separate legal entity shall
continue until cancellation of the Certificate as provided in the
Act.
Β
2.5 Purpose.Β Β The
primary purpose of the activities to be conducted by the Company is to make
certain investments in GGP, as part of the Plan and as otherwise contemplated in
this Agreement (the βCompany
Businessβ).Β Β The Companyβs ultimate purpose is to obtain a
significant ownership interest in GGP following the effective date of the
Plan.Β Β The Company shall also deal in all manners and ways as are
customary for an investment vehicle with such purposes, carry on any activities
relating thereto or arising therefrom, and do anything reasonably incidental or
necessary with respect to the foregoing.
Β
2.6 Admission of Members;
Classes of Interests.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Non-Managing Members set forth on Schedule A
heretoΒ are admitted to the Company as members of the Company upon
acceptance of the Subscription Agreements of such Non-Managing Members by the
Managing Member on behalf of the Company and the execution and delivery of
counterparts of this Agreement (whether directly or through a power of attorney)
and the acceptance thereof by the Managing Member, on behalf of the
Company.Β Β Each Member admitted to the Company on any Subsequent
Closing Date shall be admitted to the Company in accordance with Section 3.3
hereof.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Interests
shall be issued in classes (each, a βClassβ), designated
as follows: each Non-Managing Member shall be issued an Interest designated as a
βClass A
Interestβ; a wholly-owned Subsidiary of BAM designated by BAM (the βClass B Memberβ)
shall be issued an Interest designated as a βClass B Interestβ;
and, the Managing Member shall be issued an Interest designated as a βClass C Interestβ
(the Managing Member, in its capacity as holder of the Class C Interest, the
βClass C
Memberβ).Β Β Interests of each Class shall be treated as
Interests with the same rights and obligations of each other Class, except as
expressly provided in this Agreement. Each Memberβs Class shall be set forth on
Schedule
A.
Β
2.7 Members Not
Agents.Β Β Except as specifically provided herein, nothing
contained herein shall be construed to constitute any Member as the agent of any
other Member or the Company.
Β
2.8 ERISA.Β Β The
Managing Member shall use its commercially reasonable efforts to manage the
operations and affairs of the Company such that the assets of the Company are
not, and are not deemed to be, βplan assetsβ within the meaning of ERISA or the
Code.
Β
19
Β
ARTICLE
3
CAPITAL
CONTRIBUTIONS
Β
3.1 Capital
Contributions.
Β
(a)Β Β Β Β Β Β Β Β Β Β Commitment.Β Β The
Commitment of each Member is set forth in such Memberβs Subscription Agreement
and opposite such Memberβs name on Schedule A hereto in
the column entitled βCommitmentβ.
Β
(b)Β Β Β Β Β Β Β Β Β Capital
Contributions.Β Β Subject to the next following sentence and
SectionsΒ 3.1(c)
and 3.1(d),
each Member shall make Capital Contributions to the Company upon notice (a
βFunding
Noticeβ) from the Managing Member and in such amounts and at such times
as the Managing Member shall deem appropriate, as specified in the Funding
Notice; provided, however, no Member shall be
required to make a Capital Contribution (including Capital Contributions
required by SectionΒ 3.6(c)
hereof) to the Company in excess of such Memberβs Available Commitment, except
with respect to such Memberβs obligation to return distributions for the purpose
of meeting such Memberβs indemnity obligations under SectionΒ 3.5
hereof or as otherwise required by the Act.Β Β Such Capital
Contributions may only be called by the Managing Member, (i) to fund (A) the
purchase of the Investment (in accordance with the Business Plan and the
Restructuring Proposal), (B) the payment of Transaction Costs, (C) any shortfall
arising as a result of any default by a Member and (D) the payment of the DIP
Loan Purchase Price pursuant to SectionΒ 3.1(h)(iv),
(ii) except as set forth in SectionsΒ 3.1(h)
or 3.6(c),
pro rata in
accordance with each Memberβs Company Percentage Interest and (iii) if the
Managing Member reasonably expects that such Capital Contributions will be used
for their intended purposes within thirty (30) days.Β Β No interest
shall be paid to any Member on any Capital
Contributions.Β Β Notwithstanding anything to the contrary herein, (x)
no Capital Contributions shall be called by the Managing Member in respect of
any indemnity obligations under this Agreement, (y) the Managing Member shall
not have the right to call capital after the six (6) month anniversary of the
effective date of the Plan, and (z) the Managing Member may, in its discretion,
accept Capital Contributions in kind of New Equity and/or claims against the
Debtors (as defined in the Restructuring Proposal) held directly or indirectly
by a Member and able to be tendered to pay the Purchase Price in accordance with
SectionΒ 1.1(a)
of the Restructuring Proposal rather than in Dollars.Β Β No Member shall
be required to make any loans or Capital Contributions to the Company other than
as provided for in SectionsΒ 3.1 and
3.6(c).
Β
(c)Β Β Β Β Β Β Β Β Β Β Funding
Notice.Β Β The Managing Member shall give a Funding Notice in the
manner specified in SectionΒ 12.1
hereof, and a Funding Notice shall specify:Β Β (i) the date and time at
which such Capital Contribution is to be made, which time shall not be earlier
than 12:00Β p.m., New York, New York time, on the tenth (10th) Business Day
after the deemed receipt of the Funding Notice (such date, the βFunding Dateβ), (ii)
the place in the United States at which such Capital Contribution is to be made,
including, if applicable, the account of the Company to which such Capital
Contribution should be made, (iii) the amount of such Capital Contribution to be
made, (iv) the aggregate amount of Capital Contributions to be made to the
Company, and (v) whether such Capital Contribution shall be used (A) in
connection with the Investment (and, if so, a brief description and the amount
of the proposed Investment), (B) to pay Transaction Costs (and, if so, a brief
description and the amount thereof), (C) to meet any shortfall arising as a
result of any default by a Member (and if so, the amount of such default), or
(D) to fund the payment of the DIP Loan Purchase Price pursuant to SectionΒ 3.1(h)(iv).
Β
20
Β
(d)Β Β Β Β Β Β Β Β Β United States Dollar
Denominated Capital Contributions and Distributions.Β Β The
Managing Member shall call all Capital Contributions (subject to clause (z) of
the penultimate sentence of SectionΒ 3.1(b))
and shall make all cash distributions in Dollars.
Β
(e)Β Β Β Β Β Β Β Β Β Temporary Investment of
Capital Contributions; Return of Capital
Contributions.Β Β Capital Contributions made by a Member to fund
the Investment may be held in Temporary Investments prior to the making of the
Investment.Β Β Capital Contributions made by a Member for the purpose of
funding a portion of the Investment shall be returned (together with any
interest or profits earned thereon) to such Member if such portion of the
Investment is not made within thirty (30) days after the applicable Capital Call
Payment Date.
Β
(f)Β Β Β Β Β Β Β Β Β Β Commitment
Account.Β Β The Managing Member may permit any Member to fund as
of any date an amount up to such Memberβs Available Commitment as of such date
into an escrow account or other separate account of the Company to be held in
respect of such Member separate and apart from any other assets of the Company
(the βCommitment
Accountβ), to be held by the Company until released in accordance with
this SectionΒ 3.1(f).Β Β Each
Member agrees that any Commitment Account held in respect of its Interest shall
be governed by an escrow agreement (the βEscrow Agreementβ)
substantially similar to the Form of Escrow Agreement attached hereto as Exhibit
A.Β Β Any Member may at any time, with two (2) Business Days
prior written notice to the Managing Member, elect to establish a Commitment LC
pursuant to SectionΒ 3.1(g),
and the Managing Member shall thereafter return to such Member all funds
remaining in the related Commitment Account in accordance with clause (vi),
below.
Β
(i)Β Β Β Β Β Β Β Β Β Β Β On
each Capital Call Payment Date, the Managing Member shall transfer from each
Commitment Account to the Companyβs general account an amount equal to the
Capital Contribution specified in the Funding Notice to the related Member (each
such transfer, a βCommitment Account
Drawβ), provided that such funds are available for release from escrow in
accordance with the Escrow Agreement.
Β
(ii)Β Β Β Β Β Β Β Β Β Except
as provided in this SectionΒ 3.1(f),
each Commitment Account Draw shall be subject to all terms and conditions
provided in this Agreement applicable to the obligation of the related Member to
fund any Capital Contribution, including the provisions of SectionΒ 3.1(a)-3.1(e)
hereof, in each case as modified by any applicable side letter or similar
agreement entered into with such Member pursuant to SectionΒ 12.21
hereof.Β Β Each Commitment Account Draw shall be deemed to be a Capital
Contribution and Invested Capital for all purposes of this Agreement; provided, however, that,
notwithstanding anything to the contrary herein, no amount funded by such Member
into the related Commitment Account shall be deemed Invested Capital or a
Capital Contribution with respect to such Member or included in the Capital
Account of such Member until (and to the extent of) a Capital Call Payment Date
and a Commitment Account Draw.
Β
(iii)Β Β Β Β Β Β Β Β Β Amounts
that would otherwise be returned pursuant to SectionΒ 3.1(e)
or 3.3(d)
hereof to a Member, in respect of which the Company holds a Commitment Account,
shall be returned to such Commitment Account.
Β
21
Β
(iv)Β Β Β Β Β Β Β Β Β Funds
in the Commitment Account held by the Company in respect of any Member shall be
invested in Temporary Investments in the discretion of the Managing Member until
transferred as Commitment Account Draws or returned to the related Member, in
each case in accordance with this SectionΒ 3.1(f).Β Β Notwithstanding
the foregoing sentence, such Member may direct the particular Temporary
Investments in which funds in the related Commitment Account may be invested or
that funds in the related Commitment Account be invested in other investments,
provided, in each case, such investments are permitted under the Restructuring
Proposal and reasonably acceptable to the Managing Member.Β Β Any
interest or other returns on such Temporary Investments or other investments
shall be distributed only to the related Member and on a quarterly
basis.
Β
(v)Β Β Β Β Β Β Β Β Β The
Company shall return all funds remaining in each Commitment Account, if any, to
the related Member on the earliest of (A) the date on which a Commitment LC is
established in respect of such Member or such Member requires such funds in
connection with the establishment of such Commitment LC, (B) the date on which
the release conditions have been satisfied in the applicable Escrow Agreement
and (C) the date of dissolution of the Company.
Β
(vi)Β Β Β Β Β Β Β Β Amounts
in the Commitment Account held in respect of any Member shall be solely for the
benefit of such Member.Β Β For the avoidance of doubt, funds in a
Commitment Account shall not be available for any purpose other than to satisfy
Commitment Account Draws on such Capital Call Payment Dates and in the amounts
of such Capital Contributions, as the Company would otherwise determine
applicable to the related Member if no Commitment Account were held in respect
of such Member.
Β
(g)Β Β Β Β Β Β Β Β Β Commitment
LC.Β Β The Managing Member may permit any Member to establish as
of any date a letter of credit for the benefit of the Company in an amount up to
such Memberβs Available Commitment (a βCommitment LCβ),
which shall meet the requirements of an Acceptable LC (as defined in the Form of
Escrow Agreement attached hereto as ExhibitΒ A).Β Β Any
Member may at any time, with two (2) Business Days prior written notice to the
Managing Member, elect to fund a Commitment Account pursuant to SectionΒ 3.1(f)
and require the Company to surrender the Commitment LC to the issuer thereof for
cancellation.
Β
(i)Β Β Β Β Β Β Β Β Β Β Β The
terms of each Commitment LC shall provide in substance that, on each Capital
Call Payment Date, the Managing Member shall be permitted to draw on the
Commitment LC an amount equal to the Capital Contribution specified in the
Funding Notice to the related Member (each such draw, a βCommitment LC Drawβ)
subject to the conditions required of an Acceptable LC (as defined in the Escrow
Agreement).
Β
(ii)Β Β Β Β Β Β Β Β Β Β Except
as provided in this SectionΒ 3.1(g),
each Commitment LC Draw shall be subject to all terms and conditions provided in
this Agreement applicable to the obligation of the related Member to fund any
Capital Contribution, including the provisions of SectionΒ 3.1(a)
and 3.1(b)
hereof, in each case as modified by any applicable side letter or similar
agreement entered into with such Member pursuant to SectionΒ 12.21
hereof. Each Commitment LC Draw shall be deemed to be a Capital Contribution for
all purposes of this Agreement.
Β
22
Β
(iii)Β Β Β Β Β Β Β Β Β Β Β Each
Member, in respect of which the Company is the beneficiary of a Commitment LC,
hereby agrees that to the extent amounts are returned to it pursuant to SectionΒ 3.1(e)
or 3.3(d)
hereof, the Commitment LC shall be promptly amended in order to increase the
face amount of the Commitment LC by an amount equal to the amounts so returned.
Except as provided in the immediately preceding sentence, a Commitment LC shall
not be amended without the prior written consent of the related Member, the
Managing Member and GGP.
Β
(iv)Β Β Β Β Β Β Β Β Β Β Β On
the earlier of (i) the date on which the applicable Member requires funds in
connection with the funding of a Commitment Account, (ii) the date which is two
(2) Business Days (or as otherwise provided in the Restructuring Proposal)
following the date that the agreement between GGP and the Company in respect of
the Restructuring Proposal terminates or expires and (iii) the date of
dissolution of the Company, the Company shall surrender the Commitment LC to the
issuing bank for cancellation.
Β
(v)Β Β Β Β Β Β Β Β Β Β Β For
the avoidance of doubt, the undrawn face amount of a Commitment LC shall not be
available for any purpose other than to satisfy Commitment LC Draws on such
Capital Call Payment Dates and in the amounts of such Capital Contributions, as
the Company would otherwise determine applicable to the related Member in
accordance with this Agreement if no Commitment LC had been established in favor
of the Company in respect of such Member.
Β
(h)Β Β Β Β Β Β Β Β Β Β Β The DIP Loan
Investment.Β Β Notwithstanding anything to the contrary in this
SectionΒ 3.1,
including SectionsΒ 3.1(b)
and 3.1(f), the
Company may fund the DIP Loan Investment indirectly through a Subsidiary (the
shares of which shall be held for the benefit of the DIP Loan Funding Members)
as follows:
Β
(i)Β Β Β Β Β Β Β
Β Β Β Β In connection with the DIP Loan Investment, the Company
and each Member who has funded amounts into a Commitment Account (each, together
with each Parallel Vehicle Member that has funded amounts into a βCommitment
Accountβ with respect to a Parallel Investment Vehicle, a βDIP Loan Funding
Memberβ) shall, pursuant to joint written instructions and to the extent
it has not already done so, direct the Escrow Agent (as defined in the Escrow
Agreement) to transfer to a Subsidiary of the Company from its respective
Commitment Account an amount (the βDIP Loan Investment
Fundsβ) equal to either, at the Managing Memberβs discretion, (A) the
product of (x) the amount necessary to acquire the DIP Loan (provided that it
does not exceed $400 million) (the βDIP Loan Purchase
Priceβ) multiplied by (y) the
ratio, expressed as a percentage, that such DIP Loan Funding Memberβs Commitment
bears to the aggregate Commitments of all DIP Loan Funding Members or (B) an
equal dollar amount from each Commitment Account (i.e., an amount equal to the
DIP Loan Purchase Price divided by the number of Commitment
Accounts).Β Β The amounts transferred by the DIP Loan Funding Members
pursuant to this SectionΒ 3.1(h)(i)
shall be referred to herein as the βDIP Loan
Contributionsβ.Β Β The DIP Loan Contributions shall not be deemed
Invested Capital or a Capital Contribution or be included in the Capital Account
of such DIP Loan Funding Member until (and to the extent of) (x) a Capital Call
Payment Date and a Commitment Account Draw or (y)Β a Restructuring Proposal
Termination.Β Β Unless and until the occurrence of an event described
below in SectionΒ 3.1(h)(iv),
for U.S. federal income tax purposes, the beneficial ownership of such
Subsidiary shall be vested in the DIP Loan Funding Members.
Β
23
Β
(ii)Β Β Β Β Β Β
Β Β Β Β Β The Company shall utilize the DIP Loan Investment
Funds to acquire the DIP Loan.Β Β In the event that the DIP Loan is not
acquired within a reasonable period of time or to the extent the DIP Loan
Investment Funds exceed the DIP Loan Purchase Price, the Company and the
Existing Consortium Members shall use all reasonable endeavors to return or
procure that the relevant Subsidiary returns such amounts to the relevant
Commitment Accounts.Β Β Subject to SectionΒ 3.1(h)(iv),
any Existing Consortium Member that did not previously fund any amounts into a
Commitment Account (each, a βTrue-Up Memberβ)
shall not be required to make a DIP Loan Contribution in connection with the
acquisition of the DIP Loan Investment.
Β
(iii)Β Β Β Β Β Β Β Β Β Β Β The
Capital Contributions required to be made by the DIP Loan Funding Members upon a
closing under the Restructuring Proposal to fund the purchase of the Investment
(in accordance with the Business Plan and the Restructuring Proposal) may be
partially satisfied by an in-kind contribution of their respective direct or
indirect share of the DIP Loan Investment.
Β
(iv)Β Β Β Β Β Β Β Β Β Β Β On
the earlier to occur of (A) the Termination Date (as defined in the
Restructuring Proposal) without repayment of the DIP Loan and (B) the
termination of the Restructuring Proposal for any reason (in either case, a
βRestructuring
Proposal Terminationβ), the Managing Member shall issue a Funding Notice
to each Existing Consortium Member pursuant to which each Existing Consortium
Member shall be required to make a Capital Contribution in an amount equal to
such Existing Consortium Memberβs Company Percentage Interest of the DIP Loan
Purchase Price, which shall be satisfied as an in-kind Capital Contribution by
each DIP Loan Funding Member and a cash Capital Contribution by each True-Up
Member.Β Β The Capital Contributions made by the True-Up Members shall
be distributed to the DIP Loan Funding Members (pursuant to this SectionΒ 3.1(h)(iv)
and not pursuant to Article 6) in an
amount necessary such that once received each such DIP Loan Funding Member will
have only funded an amount equal to its pro rata share (based
on its Company Percentage Interest) of the DIP Loan Purchase Price (such funded
amount to be calculated disregarding any amounts distributed to the DIP Loan
Funding Member under SectionΒ 6.8
prior to the Restructuring Proposal Termination).Β Β For purposes of
calculating the Company Percentage Interest of each Member under this SectionΒ 3.1(h)(iv),
the Invested Capital of all Members shall be deemed to be zero, such that the
calculations shall be based upon the Membersβ Commitments.Β Β As of the
Funding Date, the Capital Contributions made by the DIP Loan Funding Members and
the True-Up Members in accordance with this SectionΒ 3.1(h)(iv)
shall be deemed Invested Capital and a Capital Contribution and included in the
Capital Account of such DIP Loan Funding Member or True-Up Member.
Β
(v)Β Β Β Β Β Β Β Β Β Β Β Following
(but not before) a Restructuring Proposal Termination, the DIP Loan Investment
shall be deemed to be an βInvestmentβ under and subject to the terms of this
Agreement.
Β
3.2 Minimum Commitment of
Brookfield.Β Β The aggregate Commitment of BAM and its
wholly-owned Subsidiaries shall not be less than the Brookfield Minimum Hold;
provided, that, to the
extent that the aggregate Commitments of such Persons exceeds the Brookfield
Minimum Hold, BAM or any its wholly-owned Affiliates may exercise their partial
syndication and/or additional rights as provided in SectionΒ 10.7
hereof, and thereby reduce the aggregate Commitment of BAM and its wholly-owned
Subsidiaries to an amount not less than the Brookfield Minimum
Hold.Β Β In the event the rights under SectionΒ 10.7
hereof are exercised, the Managing Member shall update Schedule A
accordingly.
Β
24
Β
3.3 Subsequent
Closings.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Additional
Members.Β Β The Managing Member, in its discretion, may admit
additional members to the Company at any time up to the earlier of (I) six (6)
months following the effective date of the Plan and (II) the first (1st)
anniversary of the Initial Closing Date (each, an βAdditional Memberβ)
(each date upon which an Additional Member is admitted to the Company, a βSubsequent Closing
Dateβ).Β Β Each such Additional Member shall be required to
inform the Managing Member of the Commitment such Additional Member wishes to
acquire and to make a payment to the Company, on the relevant Subsequent Closing
Date, in an aggregate amount equal to the sum of (i) the Capital Contributions
such Additional Member would have made had all Members been admitted to the
Company at the Initial Closing Date (the βNotional Principal
Amountβ), less (ii) such Additional Memberβs pro rata share of any
Investment Proceeds (other than Invested Capital returned pursuant to SectionsΒ 3.1(e)
and 3.3(d)
hereof) distributed to the Members admitted on any prior Subsequent Closing
Dates and the Initial Closing Date, plus (iii) notional interest on the average
daily balance of the Notional Principal Amount from the date such Capital
Contribution would have been funded if such Additional Member had been a Member
on the Initial Closing Date until the relevant Subsequent Closing Date at an
effective annual rate equal to eight percent (8%) compounding annually (such
notional interest, βNotional
Interestβ).Β Β For the avoidance of doubt, any payments made by
an Additional Member in respect of Notional Interest shall not be deemed a
Capital Contribution for the purposes hereof and shall not reduce the Available
Commitment of such Additional Member.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Increases in
Commitment.Β Β The Managing Member may, in its discretion,
subject to the terms and conditions of SectionΒ 3.3(a)
hereof, allow any Non-Managing Member to increase its Commitment in connection
with a Subsequent Closing Date.Β Β For purposes of this SectionΒ 3.3, a
Non-Managing Member that increases its Commitment shall be treated as an
Additional Member with respect to the amount by which its Commitment is
increased (and shall be required to make such payments as would be required of
an Additional Member under SectionΒ 3.3(a)),
except that for the purposes of determining under SectionΒ 3.3(e)
hereof whether the Commitment of a Member is equal to or in excess of $400
million, the existing Commitment of such Member and any increase in its
Commitment shall be aggregated.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Execution of
Documents.Β Β Each Additional Member shall be required to execute
(directly or through a power of attorney) and deliver a written instrument
satisfactory to the Managing Member in its discretion, whereby such Additional
Member becomes a party to this Agreement, as well as any other documents
(including a Subscription Agreement) required by the Managing
Member.Β Β Upon such execution and delivery of such instrument and such
other documents, and acceptance thereof by the Managing Member on behalf of the
Company, such Person shall be admitted as a Non-Managing Member.Β Β Each
such Additional Member shall thereafter be entitled to all the rights and
subject to all the obligations of Non-Managing Members as set forth
herein.
Β
25
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Use of
Proceeds.Β Β Proceeds from payments made to the Company pursuant
to this SectionΒ 3.3
shall be distributed on the applicable Subsequent Closing Date to the Members
that participated in prior closings, pro rata, in
accordance with their respective Sharing Percentages (determined immediately
prior to the Capital Contributions made by the Additional Member being admitted
to the Company on such Subsequent Closing Date) and the Notional Principal
Amount distributed to a Member shall be added to such Memberβs Available
Commitment and may be redrawn by the Company in accordance with SectionΒ 3.1
hereof.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Certain
Consents.Β Β Notwithstanding anything to the contrary herein, the
consent of each Initial Member shall be required to admit any Additional Member
that (A) seeks to make a Commitment or increase an existing Commitment such that
its aggregate Commitment equals or exceeds $400 million or (B) is not an
institutional investor, in each case other than any Additional Member that is
either (x) a participant in the Protocol or, (y) a Person or account the
Interest of which is managed by Brookfield on a discretionary
basis.Β Β In addition, any increase of the amount of Aggregate
Consortium Commitments in excess of $2.7 billion shall require the consent of
each Initial Member.
Β
3.4 Withdrawals.Β Β Except
as expressly provided elsewhere herein, no Member shall have any right (a) to
withdraw as a Member from the Company, (b) to withdraw from the Company all or
any part of such Memberβs Capital Contributions, (c) to receive property other
than cash in return for such Memberβs Capital Contributions or (d) to receive
any distribution from the Company.
Β
3.5 Liability of
Members.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Except
as otherwise provided by the Act, the debts, obligations and liabilities of the
Company, whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Member shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member of the Company.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β (1)Β Β Β Β Β Β Β Β Β Β Β Except
as required by the Act or other applicable law, no Member, in its capacity as
such, shall be required to repay to the Company, any other Member or any
creditor of the Company all or any part of the distributions made to such Member
pursuant hereto.Β Β Notwithstanding the foregoing and subject to the
limitations set forth in SectionΒ 3.5(c)
hereof, the Managing Member may require a Member to return to the Company
distributions made to such Member in an amount equal to such Memberβs Sharing
Percentage of the Companyβs indemnity obligations under SectionΒ 9.2, to
the extent the Company has insufficient liquid assets (including, for greater
certainty, marketable securities that are freely transferrable) to pay such
indemnity obligations; provided, however, a
Non-Managing Member shall not be required to return distributions pursuant to
this SectionΒ 1)a)i)(1)
(a) if all Members are not required to return their Sharing Percentage of the
Companyβs indemnity obligations under SectionΒ 9.2, or
(b) to the extent that any amount required to be returned to the Company
pursuant to SectionΒ 3.5(b)(iv)
below is not so returned (pro rata based on the
percentage of the amount required to be returned that was not so
returned).
Β
26
Β
(i)Β Β Β Β Β Β Β Β Β Β Β If,
notwithstanding anything to the contrary contained herein, it is determined
under applicable law that any Member has received a distribution which is
required to be returned to or for the account of the Company or Company
creditors, then the obligation under applicable law of any Member to return all
or any part of a distribution made to such Member shall be the obligation of
such Member and not of any other Member.
Β
(ii)Β Β Β Β Β Β Β Β Β Β Β Any
amount returned by a Member pursuant to this SectionΒ 3.5(b)
shall be treated as a contribution of capital to the Company (but not as a
Capital Contribution for purposes hereof) and shall be treated as if such
returned amount was not previously distributed to such Member.
Β
(iii)Β Β Β Β Β Β Β Β Β Β Β For
the avoidance of doubt, the Managing Member shall be required to return at the
same time as Non-Managing Members its Sharing Percentage of any amounts required
to be returned by Non-Managing Members under this SectionΒ 3.5(b).
Β
(iv)Β Β Β Β Β Β Β Β Β Β Β At
any time that the Managing Member requires a Member to return distributions
under this SectionΒ 3.5(b)
for the purpose of meeting such Memberβs pro rata share of
indemnity obligations under SectionΒ 9.2
hereof, the Class B Member and the Class C Member shall return a portion of any
Carried Interest and Transaction Distribution Amount that the Class B Member or
Class C Member, as the case may be, received in respect of such other Member
equal to (A) the amount of such Carried Interest and Transaction Distribution
Amount received by the Class B Member or Class C Member, as the case may be,
less (B) the Carried Interest and Transaction Distribution Amount that the Class
B Member or Class C Member, as the case may be, would have received in respect
of such other Member, if the amounts payable by such other Member under this
SectionΒ 3.5(b)
(but for this SectionΒ 3.5(b)(iv)
had been paid by the Company and not distributed to such other Member and the
Class B Member or Class C Member, as the case may be.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β (2)Β Β Β Β Β Β Β Β Β Β Β The
obligation of a Member to return distributions pursuant to this SectionΒ 3.5
shall survive the termination of the Company and this Agreement; provided, however, that to
the fullest extent permitted by law, no Member shall be required to return a
distribution under this Agreement prior to the date of termination of the
Company or after the second (2nd) anniversary of the date of termination of the
Company; provided,
further, that if at such second (2nd) anniversary, there are any legal
actions, suits or proceedings by or before any court, arbitrator, governmental
body or other agency then pending that were pending, threatened or reasonably
foreseeable on the date of termination of the Company (a βProceedingβ) or any
other liability (whether contingent or otherwise) or claim then outstanding, the
Managing Member shall so notify each Member at or prior to the second (2nd)
anniversary of the date of termination of the Company (which notice shall
include a brief description of each such Proceeding (and of the liabilities
asserted in such Proceeding) or of such liabilities and claims) and the
obligation of each Member to return any distribution for the purpose of meeting
the Companyβs obligations in respect of indemnity obligations under SectionΒ 9.2
hereof shall survive with respect to each such Proceeding, liability and claim
set forth in such notice (or any related Proceeding, liability or claim based
upon the same or a similar claim) until the date that such Proceeding, liability
or claim is ultimately resolved and satisfied.
Β
27
Β
(i)Β Β Β Β Β Β Β Β Β Β Β The
aggregate amount of distributions which a Member may be required to return under
this SectionΒ 3.5(c)
shall, to the fullest extent permitted by law, not exceed the lesser of (a) an
amount equal to ten percent (10%) of the Investment Proceeds distributed to such
Member pursuant to Article 6 hereof and
(b) an amount equal to such Memberβs Consortium Percentage Interest multiplied
by $100 million.
Β
3.6 Defaulting
Members.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β If
at any time a Member shall fail to make a required Capital Contribution to the
Company when due under a Funding Notice (a βDefaulting Memberβ),
a Majority Vote of Tier One Parallel Investment Vehicles, acting under the
Voting Agreement, may subject such Defaulting Member to certain adverse
consequences, including, but not limited to: (i) interest accruing on the amount
of such default and any costs of collection associated therewith commencing on
the date such Capital Contribution was due at the lesser of (A) the rate of
twenty percent (20%) per annum and (B) the maximum rate permitted by applicable
law (such default amount, together with any associated collection costs,
including legal fees and expenses, plus any other liability or obligation
incurred by the Company in connection with such default (but specifically
excluding punitive and consequential damages) plus interest being the βDefault Amountβ); and
(ii) causing distributions that would otherwise be made to the Defaulting Member
to be credited against the Default Amount in a manner to be determined pursuant
to the Voting Agreement (which such determination shall be based on the
determination of a Majority Vote of Tier One Parallel Investment
Vehicles).Β Β In addition, while any of the Default Amount remains
outstanding, the Defaulting Member shall forfeit its right to vote on matters on
which such Defaulting Member or its representative(s) on the Board of Directors
would otherwise be entitled to vote and if the Company is a Tier One Parallel
Investment Vehicle, the Company shall forfeit such portion of its right to vote
under the Voting Agreement attributable to such Defaulting Memberβs Consortium
Percentage Interest.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β If
a Defaulting Member shall fail to make a required Capital Contribution as and
when due and, except in the case of a Capital Contribution called in connection
with the consummation of the transactions contemplated by the Restructuring
Proposal, such failure continues for a period of three (3) Business Days
following notice of such default, the Tier One Parallel Investment Vehicles
(acting in accordance with the Voting Agreement) also shall be entitled, but not
required, to (i) reduce the Defaulting Memberβs Capital Account without taking
into account any increase or decrease in the value of the Company, in an amount
up to fifty percent (50%) of the Capital Account of such Defaulting Member,
which amount (A) shall be allocated to the other non-Defaulting Members pro rata in
accordance with their relative Company Percentage Interests (as determined with
regard to the applicable Funding Notices), and (B) shall increase the amount to
which such non-Defaulting Members are entitled pursuant to SectionΒ 6.1
hereof and upon liquidation of the Company, (ii) reduce all or any portion of
the Defaulting Memberβs Invested Capital and/or Sharing Percentages, as
determined pursuant to the Voting Agreement (which such determination shall be
based on the determination of a Majority Vote of Tier One Parallel Investment
Vehicles), which reduced portion of Invested Capital and/or Sharing Percentages
shall increase the Invested Capital and/or Sharing Percentages of the
non-Defaulting Members pro rata in
accordance with their relative Company Percentage Interests (as determined with
regard to the applicable Funding Notices), (iii) transfer such Defaulting
Memberβs Interest to any Person (which Persons may be third parties, Members or
Parallel Vehicle Members) at a price equal to fifty percent (50%) of such
Defaulting Memberβs Capital Account or such other price determined pursuant to
the Voting Agreement (which such determination shall be based on the
determination of a Majority Vote of Tier One Parallel Investment Vehicles) (with
any cash proceeds payable to the Defaulting Member pursuant to such transfer
being applied pursuant to the decision made under the Voting Agreement (which
such decision shall be based on the decision of a Majority Vote of Tier One
Parallel Investment Vehicles) in full or partial satisfaction of such Defaulting
Memberβs outstanding Default Amount) and/or (iv) reduce all or any portion of
the Defaulting Memberβs Available Commitment, in each case as determined
pursuant to the Voting Agreement (which such determination shall be based on the
determination of a Majority Vote of Tier One Parallel Investment
Vehicles).Β Β If all or any portion of a Defaulting Memberβs Available
Commitment is reduced pursuant to clause (iv) of this SectionΒ 3.6(b),
a Majority Vote of Tier One Parallel Investment Vehicles, acting under the
Voting Agreement, may offer any Person the right (x) to subscribe for such
Defaulting Memberβs reduced Available Commitment and, if such Person is not a
Non-Managing Member, be admitted as a member of the Company in accordance with
SectionsΒ 3.3(a)
and 10.4 hereof
or (y) to subscribe for an amount equal to such Defaulting Memberβs reduced
Available Commitment in a Parallel Investment Vehicle and, if such Person is not
a Parallel Vehicle Member, be admitted as a member of such Parallel Investment
Vehicle in accordance with the terms of the applicable Parallel Vehicle
Agreement.Β Β The Members agree that if a Parallel Vehicle Member elects
to acquire a Defaulting Memberβs Interest in accordance with this SectionΒ 3.6, the
Managing Member may, in its discretion, offer to transfer a portion of the
Investment to the Parallel Vehicle Memberβs respective Parallel Investment
Vehicle in lieu of such Parallel Vehicle Member acquiring an Interest in the
Company.
Β
28
Β
(c)Β Β Β Β Β Β Β Β Β Β Β A
Majority Vote of Tier One Parallel Investment Vehicles, acting under the Voting
Agreement, may require the non-Defaulting Members to make Capital Contributions
to the Company to make up any shortfall in Capital Contributions resulting from
the failure of a Defaulting Member to fund its required amount; provided, however, that no Member shall
be obligated as a result thereof to contribute an amount in excess of such
Memberβs Available Commitment.Β Β If the non-Defaulting Members are
required to make additional Capital Contributions pursuant to this SectionΒ 3.6(c),
the Managing Member shall deliver to such Members an additional Funding Notice
in accordance with SectionΒ 3.1(c)
hereof.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Each
Member hereby consents to the application to it of the remedies provided in this
SectionΒ 3.6 as
specified penalties or consequences permitted by the Act.Β Β No right,
power or remedy conferred upon the Tier One Parallel Investment Vehicles (acting
in accordance with the Voting Agreement) in this SectionΒ 3.6
shall be exclusive, and each such right, power or remedy shall be cumulative and
in addition to every other right, power or remedy whether conferred in this
SectionΒ 3.6 or
now or hereafter available at law or in equity or by statute or otherwise, all
of which are retained.Β Β No course of dealing between the Tier One
Parallel Investment Vehicles or the Managing Member, in each case, acting in
accordance with the Voting Agreement and any Defaulting Member and no delay in
exercising any right, power or remedy conferred in this SectionΒ 3.6 or
now or hereafter existing at law or in equity or by statute or otherwise shall
operate as a waiver or otherwise prejudice any such right, power or remedy. The
provisions of this SectionΒ 3.6 are
not intended to be for the benefit of any creditor or other Person (other than a
Member) to whom any debts, liabilities or obligations are owed by, or who
otherwise has any claim against, the Company or any of the Members; and no such
creditor or other Person shall obtain any right under any such provision or by
reason of any such liability, obligation or otherwise against the Company or any
of the Members.
Β
29
Β
ARTICLE
4
MANAGEMENT
OF THE COMPANY
Β
4.1 Management
Generally.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Except
for such matters as are expressly reserved hereunder or under the Act to the
Members for decision or to the Managing Member hereunder, the management and
control of the business of the Company and the Consortium shall be implemented
by the Managing Member (and the managing member, general partner or manager (or
equivalent) of each Parallel Investment Vehicle) based on the direction of the
Board of Directors (and the board of directors (or equivalent) of each Parallel
Investment Vehicle); provided, that in all events
with respect to Tier One Actions, such matters shall be implemented by the
Managing Member (and the managing member, general partner or manager (or
equivalent) of each Parallel Investment Vehicle) based on the written direction
of the Tier One Parallel Investment Vehicles pursuant to that certain Voting
Agreement, by and among the Parallel Investment Vehicles dated on or about the
date hereof (the βVoting
Agreementβ).Β Β Each Tier One Action shall be subject to a vote,
consent, approval or determination of the Tier One Parallel Investment Vehicles
under the Voting Agreement, and in connection therewith, the Company and each
Parallel Investment Vehicle shall be required to act solely in accordance with
the result of the decision made under the Voting Agreement.Β Β To the
extent an applicable voting percentage is not expressly stated in this Agreement
with respect to any Tier One Action, such Tier One Action shall be determined by
a Majority Vote of Tier One Parallel Investment Vehicles.Β Β Each Tier
One Parallel Investment Vehicle shall act at the direction of its board of
directors, as set forth in further detail in SectionΒ 4.1(c).Β Β
Β
(b)Β Β Β Β Β Β Β Β Β Β Β The
Members hereby agree that the Board of Directors shall direct the Managing
Member to cause the Company to enter into the Voting Agreement on or about the
date hereof and that, notwithstanding anything in this Agreement to the
contrary, the Company shall be bound by the result of any vote, consent,
approval or determination made in accordance with the Voting Agreement,
regardless of whether the Company participated in or was in favor of or against
any such vote, consent, approval or determination, and the Managing Member is
hereby directed to cause the Company to act in accordance
therewith.Β Β Each Parallel Investment Vehicle shall be a party to such
Voting Agreement and be bound to act in accordance with the decisions made
thereunder in the same manner as the Company.Β Β If, for any reason, a
Parallel Investment Vehicle is not a party to the Voting Agreement either
because it was established after the date such Voting Agreement was executed or
for any other reason whatsoever, then the managing member, general partner or
manager (or equivalent) of such Parallel Investment Vehicle (acting at the
direction of the board of directors (or equivalent) of such Parallel Investment
Vehicle) shall cause such Parallel Investment Vehicle to execute a joinder to
the Voting Agreement and thereby be bound to act in accordance with the
decisions made thereunder in the same manner as the Company.
Β
30
Β
(c)Β Β Β Β Β Β Β Β Β Β Β If
and for so long as the Company is a Tier One Parallel Investment Vehicle, the
decision as to how the Managing Member shall cause the Company to act under the
Voting Agreement with respect to any Tier One Action shall be vested exclusively
in the Board of Directors acting in accordance with the Voting
Agreement.Β Β No individual member of the Board of Directors, in its
capacity as such, shall have any authority or power to act for or on behalf of
the Company or to take any action or do any thing that would be binding on the
Company, or to make any expenditures or to incur any indebtedness in the name or
on behalf of the Company.Β Β The powers and responsibilities of the
Board of Directors shall be to direct the Managing Member, including, in the
event the Company is a Tier One Parallel Investment Vehicle, with respect to
voting decisions on Tier One Actions under the Voting Agreement and to supervise
the adherence of the Managing Member to the terms of the Voting Agreement, and
the Managing Member shall be bound, subject to the Voting Agreement, to follow
the direction of the Board of Directors; provided, that the Board of
Directors shall not owe fiduciary or other duties to the Company or to the other
Members except for the implied covenant of good faith and fair dealing as set
forth in Section
4.9 of this Agreement.Β Β Except as otherwise provided in this
Agreement, Non-Managing Members of the Company, in their capacity as such, shall
have no part in the management of the Company, and shall have no authority or
right in their capacity as Non-Managing Members to act on behalf of the Company
in connection with any matter or to bind the Company.Β Β By directing
the managing member, general partner or manager (or equivalent) of its
respective Tier One Parallel Investment Vehicle, the board of directors of each
Tier One Parallel Investment Vehicle shall be responsible for causing such Tier
One Parallel Investment Vehicle to set policy, approve the overall direction of
the Consortium and make all decisions affecting the business and affairs of the
Consortium, which shall be accomplished by causing the Tier One Parallel
Investment Vehicles to, collectively as a group, cause all the Parallel
Investment Vehicles in the Consortium to act in accordance with the decision
made pursuant to the Voting Agreement.Β Β If more than one Consortium
Member is entitled, in accordance with SectionΒ 4.3(a),
to appoint an individual to the board of directors of any Tier One Parallel
Investment Vehicle and to thereby cause such Tier One Parallel Investment
Vehicle to act at its direction under the Voting Agreement, then each such
Consortium Member shall cause the Tier One Parallel Investment Vehicle to act
only with respect to its respective Consortium Percentage
Interest.Β Β For example, if two Consortium Members each hold a fifteen
percent (15%) Consortium Percentage Interest, then the individual appointed to
the Board of Directors by each such Consortium Member shall direct the Tier One
Parallel Investment Vehicle how to vote a fifteen percent (15%) Consortium
Percentage Interest under the Voting Agreement, such that the Tier One Parallel
Investment Vehicle may vote a fifteen percent (15%) Consortium Percentage
Interest in favor of such matter and a fifteen percent (15%) Consortium
Percentage Interest against such matter.
Β
4.2 Approval of Actions Pursuant
to the Voting Agreement.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall not cause the Company or any Subsidiary of the Company to
take or agree to take any of the following actions without first obtaining
approval pursuant to the Voting Agreement, which such approval shall be based on
the approval of a Hyper-Majority Vote of Tier One Parallel Investment
Vehicles:
Β
31
Β
(i)Β Β Β Β Β Β Β Β Β Β Β During
the Chapter 11 Case, amending, modifying or granting any waiver to any material
terms and conditions of the Restructuring Proposal; it being understood that the
Restructuring Proposal attached hereto as Exhibit B is hereby
approved; provided that
an amendment, modification or grant of a waiver of a material term and condition
requiring the approval pursuant to the Voting Agreement (which such approval
shall be based on the approval of a Hyper-Majority Vote of Tier One Parallel
Investment Vehicles) shall include, but not be limited to, any amendment,
modification, grant of a waiver or other agreement or arrangement that has the
effect of: (A) extending the Long Stop Date, Standstill Period or any period
during which the Company is prohibited from transferring all or any portion of
the Investment; (B) increasing the consideration to be paid by the Company
(either in the aggregate or on a per security basis); or (C) decreasing the
percentage ownership of GGP contemplated to be acquired by the Company;
and
Β
(ii)Β Β Β Β Β Β Β Β Β Β Solely
in the event that (1) the Restructuring Proposal has been terminated, or (2) the
transactions contemplated by the Restructuring Proposal have been
consummated:
Β
(A)Β Β Β Β Β Β Β Β Β Β Β Declaring
an event of default, granting any waivers, or exercising any remedies under the
portion of the Investment comprised of Debt, if any;
Β
(B)Β Β Β Β Β Β Β Β Β Β Β Restructuring
the portion of the Investment comprised of Debt, if any, including any exchange
of such Debt for any New Equity (other than common equity of GGP), other Debt or
other property;
Β
(C)Β Β Β Β Β Β Β Β Β Β Β Making
any material amendment or modification to, or the conversion or extension of,
the portion of the Investment comprised of Debt, if any;
Β
(D)Β Β Β Β Β Β Β Β Β Β Β Any
matter that the Company, in its capacity as a holder of any Investment, is
entitled to vote upon; and
Β
(E)Β Β Β Β Β Β Β Β Β Β Β If
applicable, deciding whether to vote for or against the Plan, provided, that if the
approval pursuant to the Voting Agreement (which such approval shall be based on
the approval of a Hyper-Majority Vote of Tier One Parallel Investment Vehicles)
is not obtained, the Investment shall be voted against the Plan;
Β
(iii)Β Β Β Β Β Β Β Β Β Other
than the Investment, making any loans or issuing guaranties of obligations of
any Person;
Β
(iv)Β Β Β Β Β Β Β Β Β Other
than the Investment, acquiring any material assets or forming or acquiring any
Subsidiary of the Company, except wholly-owned Subsidiaries;
Β
(v)Β Β Β
Β Β Β Β Β Β Making any material decision with respect to
any lawsuit, claim, counterclaim or other legal proceeding by or against the
Consortium involving in excess of $20,000,000 (determined in the aggregate on a
Consortium-wide basis), including confessing a judgment against the Consortium,
accepting the settlement, compromise or payment of any claim asserted against
the Consortium (including claims covered by the policies of insurance maintained
by the Consortium) or asserted by the Consortium in respect of the foregoing
(other than settlements, compromises or payments not to exceed the Consortiumβs
expenditure of $20,000,000 (determined in the aggregate on a Consortium-wide
basis), not reimbursed by insurance, and in connection therewith, the Consortium
admits no wrongdoing and agrees to no other non-monetary
penalties);
Β
32
Β
(vi)Β Β Β Β Β Β Β Β Β Incurring
indebtedness for borrowed money or creating any mortgage, lien, charge, security
interest or other form of encumbrance with respect to any of the assets of the
Company;
Β
(vii)Β Β Β Β Β Β Β Β Dispositions
of any material assets, other than in accordance with the Redemption Procedure
or SectionΒ 10.8,
11.2 or 11.3;
Β
(viii)Β Β Β Β Β Β Β Any
matter described in SectionΒ 4.2(c)
that a member of the board of directors of GGP Holdco (a βGGP Directorβ) is
entitled to vote upon;
Β
(ix)Β Β Β Β Β
Β Β Β Β Adopting, or materially modifying, amending or departing
from the Business Plan;
Β
(x)Β Β Β Β Β Β Β
Β Β Β Admitting any Additional Member, other than in accordance with
SectionΒ 3.3(a)
hereof;
Β
(xi)Β Β Β Β Β Β Β Β Β Β Amending
the constituent agreements governing the Company, including this Agreement,
except as expressly provided in SectionΒ 12.17;
Β
(xii)Β Β Β Β Β Β Β Β Β Other
than as approved in the Restructuring Proposal or the Business Plan or as
permitted by SectionΒ 4.13
hereof, the entering into (including the approval of the terms and conditions
of) or any material amendment or modification to, or the granting of, any
material waiver under, or the assignment, extension, termination or cancellation
of any contract, agreement or other arrangement of the Company, in each case
either (A) requiring the expenditure by the Consortium of $2,000,000 (determined
in the aggregate on a Consortium-wide basis and including all automatic or
non-discretionary increases, but excluding any Transaction Costs) or more, (B)
having a term in excess of one (1) year, or (C) requiring the consent of any
party to any direct or indirect Transfer of Interests;
Β
(xiii)Β Β Β Β Β Β Β Upon
the occurrence of any event, or the failure of an event to occur, which gives
rise to the right of the Company to terminate the Restructuring Proposal without
default by the Company in accordance with its terms, the decision not to so
terminate the Restructuring Proposal thereunder; and
Β
(xiv)Β Β Β Β Β Β Β Approving
or taking any action with respect to any other matter in this Agreement
specified as requiring the approval pursuant to the Voting Agreement (which such
approval shall be based on the approval of a Hyper-Majority Vote of Tier One
Parallel Investment Vehicles);
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Except
as otherwise set forth in this Agreement, including without limitation SectionΒ 4.2(a),
all decisions to be made regarding any Tier One Actions pursuant to the Voting
Agreement shall be made by Majority Vote of Tier One Parallel Investment
Vehicles;
Β
33
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Subject
to the fiduciary obligations of a GGP Director, and when possible, a GGP
Director shall not approve any merger, any change in the chief executive officer
of GGP, material change in corporate policy, material corporate financing or
disposition of assets in a single transaction or a series of related
transactions having a net asset value in excess of $1Β billion, if the same
requires a vote by the members of the board of directors of GGP Holdco without
first obtaining the approval pursuant to the Voting Agreement (which such
approval shall be based on the approval of a Hyper-Majority Vote of Tier One
Parallel Investment Vehicles); and
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Any
act, matter or thing in respect of a Subsidiary of the Company shall require the
same majority vote or approval pursuant to the Voting Agreement (which majority
vote or approval shall be based on the majority vote or approval of the Tier One
Parallel Investment Vehicles) as such act, matter or thing would require if such
act, matter or thing were undertaken by the Company, and the Company shall not
permit any such act, matter or thing to be undertaken in respect of a Subsidiary
of the Company without such vote or approval.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained herein, but without limiting SectionΒ 4.2(a)(i)
hereof, each Member hereby acknowledges that such Member has consented to the
entering into of the Restructuring Proposal and that no further consent is
required from such Member to permit the Company to fulfill its obligations
thereunder or consummate the transactions contemplated thereby in accordance
with the terms thereof.Β Β Each Consortium Member further acknowledges
and agrees that in connection with any amendments to the Restructuring Proposal
entered into in accordance with this Agreement, the Managing Member is
authorized to make conforming amendments to this Agreement and any Parallel
Vehicle Agreements, notwithstanding the provisions of SectionΒ 12.17
hereof.
Β
4.3 Composition of the Board of
Directors.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Company shall have a board of directors (the βBoard of Directorsβ)
that consists of at least one (1) individual and no more than three (3)
individuals as contemplated in this Section 4.3, with
such replacements or successors thereto as may be approved in the manner set
forth in this SectionΒ 4.3.Β Β Each
non-Defaulting Member that has a Consortium Percentage Interest of at least ten
percent (10%) shall be entitled to appoint at least one (1) individual and no
more than three (3) individuals to the Board of Directors of the Company for so
long as such non-Defaulting Member has a Consortium Percentage Interest of at
least ten percent (10%); provided, that to the extent
no Member has a Consortium Percentage Interest of at least ten percent (10%),
then the Company shall not be a Tier One Parallel Investment Vehicle entitled to
participate in the decisions to be made under the Voting Agreement, unless and
until such time that a non-Defaulting Member of the Company has a Consortium
Percentage Interest of at least ten percent (10%); and, provided, further, that in the event
the Company is not a Tier One Parallel Investment Vehicle, the Board of
Directors shall be appointed by the Managing Member.Β Β The initial
Board of Directors shall be composed of the individuals listed on Schedule C
hereto.Β Β Except upon a Hyper-Majority Vote of Board of Directors,
there shall be no members of the Board of Directors except those appointed
pursuant to the second preceding sentence.Β Β In addition, each Member
that is entitled to appoint an individual or individuals to the Board of
Directors may by written notice to the Managing Member designate one or more
individuals (and remove or replace such individual or individuals) as alternate
representatives, any one of whom may participate in any activities of the Board
of Directors (including receiving information and voting and exercising any
other power) in the event that such Memberβs member of the Board of Directors
does not (but would be permitted to) participate in such activities as if such
person were a member of the Board of Directors for all purposes including, for
the avoidance of doubt, in determining the rights and obligations of such person
and whether there is a quorum for a meeting of the Board of
Directors.Β Β A Member may give notice to the Managing Member that the
Consortium Percentage Interests of the Member (in such capacity, the βVoting Memberβ) and
its Affiliates and other Members over whose account such Voting Member or any of
its Affiliates has discretionary authority will all be aggregated and treated as
held by such Voting Member for the purposes of appointing members to the Board
of Directors and voting as a member of the Board of Directors for so long as
such Consortium Percentage Interests are not held by a non-Defaulting
Member.Β Β For the avoidance of doubt, the Consortium Percentage
Interests of Brookfield and any other Member to which Brookfield has syndicated
a portion of its Commitment pursuant to SectionΒ 10.7
hereof (other than any Affiliate, or Person or account the Interest of which is
managed by Brookfield on a discretionary basis) shall not be aggregated for the
purposes of appointing representatives to the Board of Directors or
voting.Β Β A member of the Board of Directors may resign his or her
appointment as such at any time upon notice to each of the other members of the
Board of Directors.Β Β In addition, (i)Β any member of the Board of
Directors of a Tier One Parallel Investment Vehicle may be removed if the member
is a representative of a Consortium Member that holds less than ten percent
(10%) of Aggregate Consortium Commitments if such removal is effected in
accordance with the Voting Agreement (based upon a Super-Majority Vote of the
Tier One Parallel Investment Vehicles) and (ii) any member of the Board of
Directors that is the representative of a Member that becomes a Defaulting
Member shall be automatically removed.Β Β Β Any vacancy, whether
caused by the death, disability, resignation or removal of a member of the Board
of Directors shall be filled by appointment of the Member whose appointee
created such vacancy, provided, that it remains
entitled to do so, or, in the case of a non-Tier One Parallel Investment, by the
Managing Member.
Β
34
Β
(b)Β Β Β Β Β Β Β Β Β Β Β If
Brookfield is entitled to appoint a member or members to the Board of Directors
under SectionΒ 4.3(a),
then Brookfield shall have the right to appoint one (1) representative from
among the representatives of Brookfield appointed under SectionΒ 4.3(a)
to serve as the chairman of the Board of Directors for so long as Brookfield is
the Managing Member.Β Β In all other cases, the chairman shall be
selected by a Majority Vote of Board of Directors.Β Β For the avoidance
of doubt, in no event shall the chairman have a second casting vote, or any
other special powers.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Except
as provided in SectionΒ 4.7(c)(vi)
hereof, no member of the Board of Directors (including the chairman thereof)
shall be entitled to any fees with respect to its membership on the Board of
Directors.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Any
member of the Board of Directors shall be permitted to disclose information
obtained by such member in his or her capacity as a member of the Board of
Directors to the Member which appointed such member to the Board of Directors
and such Member may require such information to be given to it.
Β
35
Β
4.4 Meetings; Action by the
Board of Directors.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Meetings.Β Β Meetings
of the Board of Directors shall be held pursuant to this SectionΒ 4.4,
provided, that the
Managing Member agrees that the meetings of the Board of Directors for each Tier
One Parallel Investment Vehicle in the Consortium shall be noticed, called and
held simultaneously when any Tier One Actions are being considered, provided, however, that notwithstanding
the foregoing, due regard will be given to the separateness of the Company and
the Parallel Investment Vehicles and their respective boards of directors and
the meetings shall be recorded as such.Β Β Meetings of the Board of
Directors shall be held at least quarterly during each Fiscal Year and whenever
else called by the chairman thereof or any two (2) members of the Board of
Directors at any time (but whenever possible on the same date as a meeting of
participants in the Protocol), upon not less than three (3) Business Daysβ
advance written notice by the chairman of the Board of Directors (or the members
of the Board of Directors calling such meeting, as the case may be) to the other
members of the Board of Directors.Β Β Meetings of the Board of Directors
shall take place outside the United States and Canada.Β Β Attendance at
any meeting of the Board of Directors shall constitute waiver of notice of such
meeting.Β Β Any member of the Board of Directors may also provide
written waiver of notice of a meeting, or consent to short notice, either before
or after such meeting.Β Β Members of the Board of Directors may
participate in any meeting of the Board of Directors in person or by conference
telephone facilities or similar communications equipment by means of which all
persons participating in the meeting can hear and be heard by each
other.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Quorum.
Β
(i)Β Β Β Β Β Β Β Β Β Β Β With
respect to matters other than Tier One Actions, the quorum for a meeting of the
Board of Directors shall be no less thanΒ all members of the Board of
Directors (x) appointed by the Managing Member in the event the Company is not a
Tier One Parallel Investment Vehicle or (y) appointed by Members who hold at
least fifteen percent (15%) of the Aggregate Commitments at the time of such
meeting, if any, in the event the Company is a Tier One Parallel Investment
Vehicle.
Β
(ii)Β Β Β Β Β Β Β Β Β Β Β With
respect to Tier One Actions, the quorum for a meeting of the Board of Directors
shall be no less thanΒ all members of the Board of Directors plus the
members of the board of directors for all the Tier One Parallel Investment
Vehicles who constitute, as a group, at least fifty percent (50%) of Aggregate
Consortium Commitments at the time of such meeting; provided, however, that the
presence of at least one (1) member of the Board of Directors and the board of
directors of the Tier One Parallel Investment Vehicles other than a member
appointed by Brookfield (or any Person or account the Interest of which is
managed by Brookfield on a discretionary basis) shall be required for a quorum;
provided, further, that
the presence of any such member of the Board of Directors or of any such member
of a board of directors for a Tier One Parallel Investment Vehicle shall not be
necessary to constitute a quorum at any meeting called under this SectionΒ 4.4 if
the member failed to attend the two (2) most recent prior meetings properly
called under this SectionΒ 4.4 and
for the same purpose.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Voting.Β Β For
all purposes of voting, consent or approval rights of the Board of Directors or
any members thereof, in determining whether the requisite percentage or majority
has been obtained, the following Interests shall be excluded from both the
numerator and denominator of the relevant percentage: (i) Interests of
Defaulting Members; and (ii) Interests that this Agreement provides shall not be
included with respect to the relevant matter.Β Β Except as expressly
provided herein, the Board of Directors shall conduct its business in such
manner and by such procedures as a Majority Vote of Board of Directors deems
appropriate; provided,
that the procedures of the Board of Directors shall be substantially similar to
the procedures of the board of directors for each Parallel Investment Vehicle in
relation to any Tier One Action.
Β
36
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Action By Written
Consent.Β Β The Board of Directors may also take action without
any meeting of the members of the Board of Directors by unanimous written
consent setting forth the action to be approved.
Β
4.5 Executive Authority of the
Managing Member.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member has the right and is hereby empowered and authorized to perform
the following acts and services, subject to any express consent or approval
under the Voting Agreement or of the Board of Directors required by the terms of
this Agreement (and in the case of the acts and services referred to in clauses
(ii), (iii), (x) and (xi) below, such acts and services shall constitute
obligations of the Managing Member):
Β
(i)Β Β Β Β Β Β Β Β Β Β Β To
take a primary role in structuring the manner and strategy in making the
Investment;
Β
(ii)Β Β Β Β Β Β Β Β Β Β To
prepare, before the Initial Closing Date, the Restructuring
Proposal;
Β
(iii)Β Β Β Β Β Β Β Β Β To
prepare, after the effective date of the Plan, a business plan relating to the
operations of the Company and the Investment, which, subject to SectionΒ 4.2(a),Β Β shall
be updated on an annual basis or on a more frequent basis as determined by the
Managing Member (the βBusiness
Planβ);
Β
(iv)Β Β Β Β Β Β Β Β Β To
represent the Company in all discussions and negotiations with GGP, its agents
and advisers, the Unsecured Creditors Committee, the principal stakeholders in
GGP and each of their agents and advisors, and all other stakeholders and
constituents in connection with the Plan;
Β
(v)Β Β Β Β
Β Β Β Β Β To communicate and coordinate with
Members;
Β
(vi)Β Β Β Β Β Β Β Β Β To
coordinate due diligence and generally take all other steps in connection with
the making of the Investment;
Β
(vii)Β Β Β
Β Β Β Β To make recommendations regarding the appointment and
compensation of senior officers of the Company and generally monitor
managementβs adherence to the Business Plan;
Β
(viii)Β Β Β Β Β Β Β To
provide advice and assistance with respect to any future borrowings, financings
or re-financings;
Β
(ix)Β Β Β Β Β Β Β Β Β To
generally seek to ensure that the Investment meets the investment objectives and
generates the expected returns;
Β
37
Β
(x)Β Β Β Β Β Β Β Β Β Β To
use reasonable efforts to ensure that the Board of Directors is promptly
informed of material changes affecting the Company;
Β
(xi)Β Β Β Β Β Β Β Β Β Β To
advise with respect to an exit plan with respect to the Investment;
Β
(xii)Β Β Β Β Β Β Β Β To
form Subsidiaries in connection with the Company Business;
Β
(xiii)Β Β Β Β Β Β
To form Parallel Investment Vehicles pursuant to SectionΒ 4.12
hereof;
Β
(xiv)Β Β Β Β Β Β Β To
enter into any kind of activity and to enter into, perform and carry out
contracts of any kind necessary, in connection with, or incidental to the
accomplishment of the purposes of the Company, including, without limitation,
any Subscription Agreements, side letters or similar agreements, subject to the
terms of this Agreement;
Β
(xv)Β Β Β Β Β Β Β Β To
open, maintain and close bank accounts and draw checks or other orders for the
payment of money and open, maintain and close brokerage, money market fund and
similar accounts;
Β
(xvi)Β Β Β Β Β Β Β To
hire, for usual and customary payments and expenses, consultants, brokers,
attorneys, accountants and such other agents for the Company as it may deem
necessary or advisable, and authorize any such agent to act for and on behalf of
the Company, subject to SectionΒ 4.13
hereof;
Β
(xvii)Β Β Β Β Β Β To
purchase insurance policies on behalf of the Managing Member and the Company,
including for director and officer liability and other liabilities of the
Managing Member and the Company;
Β
(xviii)Β Β Β Β Β To
pay all Transaction Costs of the Company and the Managing Member in accordance
with SectionΒ 4.7
hereof; and
Β
(xix)Β Β Β Β Β Β Β Β To
take any and all other actions which are determined by the Managing Member to be
necessary, convenient or incidental to the conduct of the Company
Business.
Β
In
addition, notwithstanding anything to the contrary contained herein, the
Managing Member has the right and is hereby empowered and authorized to delegate
certain of its duties and responsibilities under this Agreement pursuant to that
certain Amended and Restated Advisory Services Agreement, entered into on or
about the date hereof by and among the Company and BAM and the Parallel
Investment Vehicles (as may be amended from time to time, the βServices
Agreementβ).Β Β The Company shall not amend, terminate or waive,
or consent to any amendment to or termination or waiver of, any material
provision of the Services Agreement without the consent required pursuant to the
Voting Agreement (which such approval shall be based on the approval of a
Hyper-Majority Vote of Tier One Parallel Investment Vehicles (other than Tier
One Parallel Investment Vehicles acting at the direction of representatives of
the Managing Member and its Affiliates, including any Person or account the
Interest of which is managed by Brookfield on a discretionary
basis)).
Β
38
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Each
Non-Managing Member agrees that if any transaction, including any transaction
effected between the Company, the Managing Member or any of its Affiliates,
shall be subject to the disclosure and consent requirements of Section 206(3) of
the Advisers Act, such requirements shall be satisfied with respect to the
Company and all Non-Managing Members if disclosure shall be given to the Board
of Directors, and consent obtained pursuant to the Voting Agreement by a
Majority Vote of Tier One Parallel Investment Vehicles (other than Tier One
Parallel Investment Vehicles acting at the direction of representatives of the
Managing Member and its Affiliates, including any Person or account the Interest
of which is managed by Brookfield on a discretionary basis).
Β
(c)Β Β Β Β Β Β Β Β Β Β Β The
Company, by or through the Managing Member on behalf of the Company, may enter
into and perform the (i) the Services Agreement, (ii) any Subscription
Agreement, (iii) the Voting Agreement, (iv) the Amendment No. 1 to the Guarantee
entered into on or about the date hereof by BAM for the benefit of the Company
and the Parallel Investment Vehicles, (v) the Purchase Agreement entered into on
or about the date hereof between the Company and certain of the Parallel
Investment Vehicles and (vi) all documents, agreements, certificates, or
financing statements contemplated thereby or related thereto, all without any
further act, vote or approval of any other Person, subject to any other
provision of this Agreement, the Act or applicable law, rule or
regulation.Β Β The foregoing authorization shall not be deemed a
restriction on the powers of the Company or the Managing Member to enter into
other agreements on behalf of the Company.
Β
4.6 Removal of the Managing
Member.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member may be removed as the managing member of the Company within
sixty (60) days after notice pursuant to SectionΒ 4.6(a)
of a Removal Conduct Event (or the discovery by the Members of the failure to
give such notice whichever is later) and upon a Super-Majority Vote of Members
(other than the Managing Member and its Affiliates, including any Person or
account the Interest of which is managed by Brookfield on a discretionary
basis), at which time the Removal Liquidating Trustee shall be appointed to wind
up and liquidate the assets of the Company in accordance with SectionΒ 11.3
hereof (except that if the Managing Member is removed prior to the end of the
Standstill Period, the assets of the Company shall not be liquidated until the
end of the Standstill Period, except to the extent permitted by the
Restructuring Proposal).
Β
(b)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall provide prompt (and in any event within two (2) Business
Days) written notice to the Non-Managing Members if and when any of the events
described in the definition of βRemoval Conduct
Eventβ occurs.
Β
39
Β
(c)Β Β Β Β Β Β Β Β Β Β Β In
addition to the foregoing, the Managing Member shall be suspended and
temporarily replaced as managing member of the Company by Hyper-Majority Vote of
Members (other than the Managing Member and its Affiliates, including any Person
or account the Interest of which is managed by Brookfield on a discretionary
basis) if a Hyper-Majority Vote of Members claims that the Managing Member has
committed fraud, gross negligence, willful misconduct or willful and knowing
breach of this Agreement or willful violation of law in the management of the
affairs of the Company and/or GGP (including misappropriation of funds), which
has a material adverse effect on the Company or GGP.Β Β The Managing
Member may, in its sole discretion, dispute any such claim made against it by
bringing such matter to arbitration pursuant to SectionΒ 12.14
hereof within thirty (30) days of such suspension and temporary
replacement.Β Β If the Managing Member does not dispute any such claim
made against it within thirty (30) days of such suspension and temporary
replacement or if by final determination of such arbitration process it has been
determined that the Managing Member has committed such an act (whether as
claimed or otherwise), the Managing Member shall be removed as the managing
member of the Company, at which time the Removal Liquidating Trustee shall be
appointed to wind up and liquidate the assets of the Company in accordance with
SectionΒ 11.3
hereof (except that if the Managing Member is removed prior to the end of the
Standstill Period, the assets of the Company shall not be liquidated until the
end of the Standstill Period, except to the extent permitted by the
Restructuring Proposal); provided, that if it is
determined in such arbitration process that the Managing Member committed an act
constituting grounds for the removal of the Managing Member, but such act is not
the same act that was claimed, the Managing Member shall not be removed as the
managing member of the Company unless such removal is approved by a
Hyper-Majority Vote of Members (other than the Managing Member and its
Affiliates, including any Person or account the Interest of which is managed by
Brookfield on a discretionary basis).Β Β If by final determination of
such arbitration process it is determined that the Managing Member has not
committed such an act (whether as claimed or otherwise), the Managing Member
shall be reinstated as managing member of the Company.Β Β For greater
certainty, any reduction in the Transaction Distribution Amount and the Carried
Interest pursuant to SectionΒ 6.2(a)
hereof shall not take effect unless and until the Managing Member has been
finally removed as managing member of the Company in accordance with the
foregoing; provided,
that, during the period the Managing Member is suspended pursuant to this SectionΒ 4.6(c),
any Transaction Distribution Amount or Carried Interest otherwise payable shall
be withheld from the Managing Member and the Class B Member, respectively, and
held in escrow and paid immediately to the Managing Member and the Class B
Member, respectively, if and when the Managing Member is reinstated as managing
member.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β In
the event the Managing Member is removed or temporarily replaced in accordance
with SectionsΒ 4.6(a)
or 4.6(c)
hereof, the removed or temporarily replaced Managing Member shall, until the
Company is dissolved and wound up or the temporarily replaced Managing Member is
reinstated:
Β
(i)Β Β Β Β Β Β Β Β Β Β Β become,
without any further action being required of any Person, a Non-Managing Member
and shall cease being the managing member of the Company;
Β
(ii)Β Β Β Β Β Β Β Β Β Β subject
to SectionΒ 6.2(a)
hereof, be entitled to receive (in its capacity as a Non-Managing Member) all
distributions that otherwise would have been distributable to it pursuant to
Article 6
hereof as if it had not been removed as the managing member of the Company;
and
Β
(iii)Β Β Β Β Β Β Β Β Β together
with its Affiliates, continue to be Indemnified Parties and be entitled to
indemnification in accordance with SectionΒ 9.2
hereof in respect of conduct prior to such removal or temporary
replacement.
Β
40
Β
4.7 Transaction
Costs.Β Β Except as otherwise provided herein (including, without
limitation, SectionΒ 4.12
hereof), the Company, in the discretion of the Managing Member, shall pay or
reimburse the Managing Member and its Affiliates and each of their respective
employees, agents, advisors, managers and Constituent Members for any and all
third-party expenses, costs and liabilities reasonably and properly incurred by
them in the furtherance of the Company Business including in connection with the
Investment, the other transactions contemplated in this Agreement and the
conduct of the business of the Managing Member (in that capacity and with
respect to the Company) and the Company in accordance with the provisions hereof
(βTransaction
Costsβ), including by way of example and without
limitation:
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Organizational
Expenses.Β Β Expenses, costs and liabilities incurred in
connection with (i) the structuring and formation of the Company and any
Parallel Investment Vehicle, (ii) the offering and sale of the Interests and
interests in any Parallel Investment Vehicle, and (iii) the negotiation,
execution and delivery of this Agreement, any Parallel Vehicle Agreement, any
agreement with or among the Members and any related or similar documents,
including, without limitation, any related legal and accounting fees and
expenses, travel expenses and filing fees (βOrganizational
Expensesβ).
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Operating
Expenses.Β Β Expenses, costs and liabilities incurred in
connection with the operation of the Company and the Investment and the
performance by the Managing Member, the Company and their respective Affiliates
of their respective obligations under this Agreement, including, without
limitation, (i) all expenses, costs and liabilities incurred in connection with
the identification, structuring, negotiation, making, monitoring, ownership,
operation, administration, management, financing, sale, proposed sale,
enforcement, other disposition or valuation of the Investment and Temporary
Investments or the Investment and Temporary Investments considered for the
Company (including due diligence in connection therewith), whether or not
consummated, (ii) costs and liabilities incurred in connection with litigation
or other extraordinary events, directors and officers liability and other
insurance expenses, (iii) all taxes, fees and other governmental charges payable
by the Company, and all expenses incidental to the transfer, servicing and
accounting for the Companyβs cash and Securities, including all charges of
depositories and custodians, (iv) communications expenses, (v) all expenses and
costs associated with meetings of the Members, (vi) all reasonable expenses and
costs of the Board of Directors, (vii) brokerage commissions, custodial
expenses, appraisal fees and other investment costs actually incurred in
connection with the Investment and Temporary Investments, (viii) expenses of
liquidating the Company and its Subsidiaries, (ix) expenses incurred in
connection with the maintenance of the Companyβs books of account and the
preparation of audited or unaudited financial statements required to implement
the provisions of this Agreement or by any governmental authority with
jurisdiction over the Company (including, without limitation, fees and expenses
of independent auditors, accountants and counsel, the costs and expenses of
preparing and circulating the reports called for by SectionΒ 8.1
hereof and any fees or imposts of a governmental authority imposed in connection
with such books and records and statements) and other routine administrative
expenses of the Company or its Subsidiaries, including, but not limited to, the
cost of the preparation of Returns, cash management expenses and insurance and
legal expenses, (x) all expenses incurred in connection with any indebtedness of
the Company or other credit arrangement (including any line of credit, loan
commitment or letter of credit for the Company or related to the Investment (or
any underlying asset)), (xi) all legal, accounting, investment banking, real
estate, tax, financial or other consulting, audit, appraisal and other expenses
(to the extent not subject to reimbursement) incurred by the Company or any
Parallel Investment Vehicle in respect of its operation and affairs, (xii) all
expenses and costs associated with the acquisition of the Investment and (xiii)
all expenses and costs associated with the administration and enforcement of the
portion of the Investment comprised of the Debt (including if such Debt remains
outstanding following the effective date of the Plan and the appointment of a
receiver, if necessary) (βOperating
Expensesβ).
Β
41
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
the foregoing, the following shall not constitute Transaction Costs and the
Company shall not be responsible for payment of the following expenses, and such
payment shall not be borne by or reimbursed by the Company:
Β
(i)Β Β Β Β Β Β Β Β Β Β Β ordinary
operating expenses of the Managing Member or its Affiliates;
Β
(ii)Β Β Β Β Β Β Β Β Β Β lease
or other payments for the Managing Memberβs or its Affiliatesβ office space,
utilities and office equipment;
Β
(iii)Β Β Β Β Β
Β Β Β salaries and benefits of employees of the Managing Member or
its Affiliates;
Β
(iv)Β Β Β Β Β Β Β
Β placement agent fees, if any, incurred in connection with the offering of
the Interests;
Β
(v)Β Β Β Β Β Β Β Β Β costs
and expenses of any third-party advisors retained by any Member, including BAM,
for its own advice; provided, that the costs and
expenses of Sidley Austin LLP and Xxxxxxx Procter LLP incurred in connection
with the organization, formation and operation of the Company and the Parallel
Investment Vehicles, including, without limitation, the drafting of this
Agreement, the Subscription Agreement and other related documentation, shall be
included in Transaction Costs;
Β
(vi)Β Β Β Β Β Β Β Β except
as set forth in clause (v) above, costs and expenses of the Managing Member or
its Affiliates, in their capacity as a Member, to the extent similar costs and
expenses incurred by any Non-Managing Member are not paid or reimbursed by the
Company to such Non-Managing Member; and
Β
(vii)Β Β Β Β Β Β Β Β costs
and expenses incurred in connection with providing any services to the Company,
GGP or any of their Affiliates pursuant to any Affiliate Transaction approved in
accordance with this Agreement (except, that such costs and
expenses may be paid or reimbursed if provided for pursuant to the terms of any
such Affiliate Transaction approved in accordance with this
Agreement).
Β
Schedule B hereto
sets forth an estimate of the Transaction Costs incurred by the Managing Member
and the Company prior to October 15, 2010.Β Β Notwithstanding the
foregoing, the Transaction Costs to be borne or reimbursed by the Company in
respect of the period up to and including the October 15, 2010 shall not exceed
the amount set out in Schedule B.Β Β Notwithstanding the foregoing, the
Transaction Costs to be borne or reimbursed by the Company shall not include any
Transaction Costs resulting from acts or omissions by the Managing Member or its
Affiliates or any of their respective employees, agents, advisors, managers or
Constituent Members with respect to which an arbitration panel, in accordance
with SectionΒ 12.14
hereof, has issued a final decision, judgment or order that such Person was
grossly negligent or engaged in fraud, willful misconduct, a willful and knowing
material breach of this Agreement or willful violation of law in the management
of the Company.
Β
42
Β
4.8 Segregation of
Funds.Β Β Funds of the Company shall be kept exclusively in one
(1) or more bank or brokerage accounts in the name of the Company or its
designee.
Β
4.9 Standard of
Care.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Members and Directors
Generally.Β Β Except as expressly provided to the contrary in
this SectionΒ 4.9 and
except for the implied contractual covenant of good faith and fair dealing, the
Members hereby agree and acknowledge that all fiduciary obligations of the
Members and any member of the Board of Directors designated by a Member (or any
member of a board of directors of a Parallel Investment Vehicle designated by a
Consortium Member) to one another, the Company or the Consortium (as set forth
in the Voting Agreement), in their capacity as Members or members of the Board
of Directors or a board of directors of a Parallel Investment Vehicle, are
hereby eliminated to the maximum extent permissible under Section 18-1101 of the
Act.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Managing
Member.Β Β The Managing Member, in its capacity as such, shall
owe to the Company and to the other Members such duties as are owed by the
officers of a Delaware business corporation to the corporation and its
stockholders.
Β
4.10 Non-Managing
Members.Β Β No Non-Managing Member, in his, her or its capacity
as such, has the authority or power to act for or on behalf of the Company or to
take any action or do any thing that would be binding on the Company, or to make
any expenditures or incur any indebtedness in the name or on behalf of the
Company.Β Β The Non-Managing Members (or any class, designation or other
subset of the Non-Managing Members) shall have only such rights of consent or
approval as are expressly reserved for them by this Agreement or the
Act.
Β
4.11 Member Meetings; Voting;
Member Approval Rights.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Meetings.Β Β The
Company and the Parallel Investment Vehicles shall hold an annual meeting of the
Consortium Members, and may hold special meetings of the Consortium Members from
time to time (but whenever possible on the same date as a meeting of
participants in the Protocol) at such place as the Managing Member may
determine, or may at any time call for a vote without a meeting of the
Consortium Members on matters on which they are entitled to vote.Β Β In
addition, a meeting of Consortium Members may be called by a Majority Vote of
Members to discuss any matter put forward by the Consortium Members calling the
meeting and for any other purpose reasonably related to their interests as
Consortium Members and to vote on any matters on which Consortium Members are
entitled to vote pursuant to the terms of this Agreement.
Β
(b)Β Β Β Β Β Β Β Β Β Notice;
Attendance.Β Β Written notice of any meeting or vote shall be
given to the Consortium Members not less than thirty (30) days before the date
of the meeting or vote.Β Β Each notice of meeting or vote, if any, shall
contain a description of any resolution to be adopted by the Consortium
Members.Β Β Any Consortium Member may provide written waiver of notice
of a meeting or vote, or consent to short notice of the meeting or vote, either
before or after such meeting or vote and attendance at any meeting shall be
deemed conclusive evidence that notice of such meeting was properly
given.Β Β Consortium Members may participate in any meeting of
Consortium Members by conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear and be heard
by each other.Β Β Attendance at any meeting of Consortium Members may
also be by proxy or delegate.
Β
43
Β
(c)Β Β Β Β Β Β Β Β Β
Quorum.Β Β The
quorum for a meeting of the Consortium Members shall be no less than each
Consortium Member who individually holds at least fifteen percent (15%) of the
Aggregate Consortium Commitments at the time of such meeting; provided, however, that the
presence of at least one Consortium Member other than Brookfield (or any Person
or account the Interest of which is managed by Brookfield on a discretionary
basis) shall be required for a quorum; provided, further, that the
presence of any such Member shall not be necessary to constitute a quorum at any
meeting of the Consortium Members if such member failed to attend the two (2)
most recent prior meetings of the Consortium Members properly called and for the
same purpose.
Β
(d)Β Β Β Β Β Β Β Β Β Voting.Β Β For
all purposes of voting, consent or approval rights of the Consortium Members,
each Consortium Member shall be entitled to cast a number of votes corresponding
to such Consortium Memberβs Consortium Percentage Interest.Β Β However,
in determining whether the requisite percentage or majority has been obtained,
the following Interests shall be excluded from both the numerator and
denominator of such percentage:Β Β (i) Interests of Defaulting Members
and any defaulting Parallel Vehicle Member; and (ii) Interests that this
Agreement provides shall not be included with respect of the relevant
matter.Β Β A Voting Member may give notice to the Managing Member that
the Consortium Percentage Interests of such Voting Member and its Affiliates and
other Consortium Members over whose account such Voting Member or any of its
Affiliates has discretionary authority will all be aggregated and treated as
held by such Voting Member for the purposes of appointing representatives to the
Board of Directors and voting as a Consortium Member for so long as such
Consortium Percentage Interests are held by a non-Defaulting Member or a
non-defaulting Parallel Vehicle Member.Β Β A Consortium Member shall be
entitled to vote at a meeting in person or by written proxy delivered to the
Managing Member prior to the meeting.Β Β When voting with respect to
matters arising under this Agreement or the Act, all such Consortium Members
shall be considered one class.Β Β The individual votes of each of the
Consortium Members cast at any meeting shall be recorded by the Managing Member
in the minutes of the meeting, which shall be filed in the Companyβs and each
Parallel Investment Vehicleβs books and records and available for inspection by
each Consortium Member.
Β
(e)Β Β Β Β Β Β Β Β Β Company Member
Meetings.Β Β In accordance with SectionΒ 4.12(d),
the Managing Member and the managing member, general partner or manager (or
equivalent) of each such Parallel Investment Vehicle may determine (acting
reasonably) that the subject matter of such vote or consent is such that an
aggregate vote or aggregate consent of the Consortium Members is inappropriate,
for example with respect to matters which relate solely to the Company and do
not also apply to or affect the other members of the Consortium, in which case
the Members or the applicable Parallel Vehicle Members shall be the only
Consortium Members to vote or consent to such action.Β Β The procedures
set forth in this SectionΒ 4.11
shall be applicable, provided that all references to βConsortium Memberβ shall
be replaced with βMemberβ and references to βConsortium Percentage Interestβ
shall be replaced with βCompany Percentage Interest.β
Β
44
Β
(f)Β Β Β Β Β Β Β Β Β
Actions Requiring Member
Approval.Β Β The Managing Member shall not cause the Company or
any Subsidiary of the Company to take or agree to take any of the following
actions without first obtaining approval of a Hyper-Majority Vote of
Members:
Β
(i)Β Β Β Β Β Β Β Β Β Β Β Purchasing
or redeeming any Interests, other than in accordance with Article 10
hereof;
Β
(ii)Β Β Β Β Β Β Β Β Β Β Modifying
or amending the distribution provisions set forth in Article 6 hereof, or
making any distribution or Disposition other than as set forth in this
Agreement;
Β
(iii)Β Β Β Β Β Β Β Β Β Conducting
an initial public offering, merging or consolidating with or into any Person, or
selling all or substantially all of the assets of the Company or any of its
Subsidiaries, other than as set forth in SectionΒ 10.8 and
Article 11
hereof;
Β
(iv)Β Β Β Β Β Β Β Β Β Dissolution,
liquidation, winding-up or voluntary Bankruptcy of the Company or any of its
Subsidiaries, except as otherwise provided in SectionsΒ 4.6 and
10.8 and Article 11
hereof;
Β
(v)Β Β Β Β
Β Β Β Β Β Approving or taking any action with respect to any
other matter in this Agreement specified as requiring the approval of a
Hyper-Majority Vote of Members of the Company or with respect to the Consortium,
as applicable; and
Β
(vi)Β Β Β Β Β Β Β Β Β Approving
any en bloc sale or other orderly disposition of the Investment and other assets
of the Company in accordance with SectionΒ 10.8, to
the extent provided therein.
Β
(g)Β Β Β Β Β Β Β Β Β Β Β With
the requisite vote of the Members as contemplated by the provisions hereof, the
Members may also take action without any meeting of the Members (and without any
prior notice from the Managing Member) by written consent setting forth the
action to be approved.
Β
(h)Β Β Β Β Β Β Β Β Β Β Β In
conjunction with or following the effective date of the Plan, the Company shall
seek to use its voting power and other rights held pursuant to the Investment
with GGP to nominate and elect one (1) or more GGP Directors.Β Β Such
nominee(s) will be approved or, subject to the cooperation or consent of GGP
where required, removed by a Super-Majority Vote of Members, subject to the
following: (i) so long as Brookfield is the Managing Member, Brookfield shall
have the right to appoint the first nominee (provided, that if by a
Super-Majority Vote of Members, the Members vote to remove such person as a
director of GGP Holdco, or such person otherwise ceases to be a GGP Director,
Brookfield shall have the right to appoint a replacement nominee); (ii) the
second nominee shall be selected from a list of candidates identified by any
Member other than Brookfield (or any Person or account the Interest of which is
managed by Brookfield on a discretionary basis) (provided, that, for greater
certainty, Brookfield (and any Person or account the Interest of which is
managed by Brookfield on a discretionary basis) shall be included in any vote to
approve or remove such nominee); and (iii) each additional nominee shall be
selected from a list of candidates identified by Brookfield and any other
Member.
Β
45
Β
4.12 Parallel Investment
Vehicles.Β Β The Managing Member may, in its discretion,
establish one (1) or more additional limited liability companies, limited
partnerships or similar investment vehicles to facilitate the ability of certain
investors to invest with the Company generally on a side-by-side basis (each, a
βParallel Investment
Vehicleβ and collectively, the βParallel Investment
Vehiclesβ).Β Β The following provisions, to the extent
practicable, subject to legal, regulatory, tax or other considerations
particular to one or more of the Company and any Parallel Investment Vehicle and
their respective investors or other beneficial owners (each, a βParallel Vehicle
Memberβ and collectively, the βParallel Vehicle
Membersβ), shall apply with respect to the operation of the Company and
any Parallel Investment Vehicle:
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member and the managing member, general partner or manager (or
equivalent) of each Parallel Investment Vehicle shall at all times be the same
Person and the governing documents of a Parallel Investment Vehicle shall be on
substantially the same terms as for the Company.
Β
(b)Β Β Β Β Β Β Β Β Β Each
Parallel Investment Vehicle shall make an investment in GGP in the same class or
type as the Investment made by the Company in GGP.Β Β Subject to the
preceding sentence and SectionsΒ 3.1(f),
3.1(g) and
3.1(h), all
transactions in respect of the Investment, any Temporary Investment or otherwise
by the Company and any Parallel Investment Vehicle shall be made, to the extent
feasible, at the same time, on the same terms and pro rata based on the
Companyβs and each Parallel Investment Vehicleβs Consortium Percentage
Interest.
Β
(c)Β Β Β Β Β Β Β Β Β Except
to the extent borne directly by the Company or a Parallel Investment Vehicle
pursuant to the second sentence of this SectionΒ 4.12(c),
the Company and each Parallel Investment Vehicle shall share, pro rata, on the
basis of the Companyβs and each Parallel Investment Vehicleβs Consortium
Percentage Interest to the extent feasible, all Transaction Costs, including
Organizational Expenses (and any organizational expenses incurred in connection
with the formation of the Company or any Parallel Investment Vehicle), Operating
Expenses which relate to the Company or any Parallel Investment Vehicle and are
payable by such entities rather than their respective managing members, general
partners or managers (or equivalent) and any fees and expenses relating,
directly or indirectly, to the transactions in respect of the Investment, any
Temporary Investment or otherwise, which are undertaken by the Company and any
Parallel Investment Vehicle together.Β Β Notwithstanding the above or
SectionΒ 10.8(d)(i)
to the contrary, the Company and each Parallel Investment Vehicle shall bear and
be responsible for its taxes and any Operating Expenses (including
indemnification obligations or liabilities to third parties) that are
attributable solely to or from actions solely of the Company or such Parallel
Investment Vehicle, as applicable.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Any
vote or consent by a specified percentage in interest of the Members or the
Parallel Vehicle Members shall, unless the Managing Member and the managing
member, general partner or manager (or equivalent) of each such Parallel
Investment Vehicle determine (acting reasonably) that the subject matter of such
vote or consent is such that an aggregate vote or aggregate consent of the
Members and the Parallel Vehicle Members is inappropriate, for example with
respect to matters which relate solely to the Company and do not also apply to
or affect the other members of the Consortium, be deemed to require the
aggregate vote or aggregate consent of the Members and the Parallel Vehicle
Members and subject to quorum requirements as if each commitment of any Parallel
Vehicle Member in respect of each Parallel Investment Vehicle comprised part of
the Aggregate Commitments, and such action shall be deemed to be valid if taken
upon the aggregate written vote or aggregate written consent by those Members
Parallel Vehicle Members who represent the specified percentage in interest of
all Non-Managing Members and non-managing Parallel Vehicle Members at the time
voting as a single class.
Β
46
Β
(e)Β Β Β Β Β Β Β Β Β Β Β The
Carried Interest and the carried interest in respect of a Parallel Investment
Vehicle (and adjustments) shall, in the case of a Member which is also a
Parallel Vehicle Member, be calculated taking into account the interests of the
Member in respect of both the Company and the Parallel Investment Vehicle
including by calculating the distributions to be apportioned between the Member
(on one hand) and the Class B Member and the Person entitled to carried interest
in respect of such Parallel Investment Vehicle (on the other hand) as if all
cumulative distributions to such Member from the Company and the Parallel
Investment Vehicle were aggregated, the cumulative distributions to the Class B
Member in respect of such Member from the Company and to such other Person in
respect of such Member from the Parallel Investment Vehicle were aggregated, all
Invested Capital of such Member and invested capital of such Member in its
capacity as a Parallel Vehicle Member were aggregated, the Commitment of the
Member and the commitment of such Member in its capacity as a Parallel Vehicle
Member were aggregated and the Internal Rate of Return were calculated taking
into account the interests of the Member in respect of both the Company and the
Parallel Investment Vehicle.
Β
(f)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall have discretion to and shall take such actions as are
necessary or the Managing Member deems advisable in order to carry out the
intent of this SectionΒ 4.12,
including, if necessary, allocating the Investment among the Company and any
Parallel Investment Vehicle and making transfers related thereto in order to
effect a pro
rata allocation.Β Β At the request of any Member, the Managing
Member shall deliver a certificate to such Member certifying that any Parallel
Investment Vehicle established by the Managing Member complies with the
requirements of this Agreement.
Β
(g)Β Β Β Β Β Β Β Β Β Β Β For
the avoidance of doubt, for the purposes of (i) determining whether the Minimum
Condition has been satisfied, any common voting equity of GGP Holdco held or
controlled by the Company and any common voting equity of GGP Holdco held or
controlled by any Parallel Investment Vehicle shall be aggregated and any
representation on the board of GGP Holdco (or rights thereto) of the Company and
any Parallel Investment Vehicle shall be aggregated, (ii) determining whether a
Removal Conduct Event has occurred, references to the Managing Member shall
include the managing member, general partner or manager (or equivalent) of any
Parallel Investment Vehicle (if such entity is not the Managing Member),
references to SectionΒ 3.3
hereof shall include the corresponding provisions of the governing documents of
a Parallel Investment Vehicle and references to a failure to fund any Commitment
shall include any failure to fund a commitment to a Parallel Investment Vehicle,
(iii) SectionΒ 4.6, any
references to the removal, conduct or reinstatement of the Managing Member or an
effect on the Company shall include and result in the corresponding removal,
conduct or reinstatement of the managing member, general partner or manager (or
equivalent) of any Parallel Investment Vehicle (if such entity is not the
Managing Member) or effect in respect of any Parallel Investment Vehicle, and
(iv) SectionΒ 10.1(b),
SectionΒ 10.6 and
SectionΒ 10.8(d)(ii),
the Company and any Parallel Investment Vehicle shall be treated as a single
entity.
Β
47
Β
4.13 Transactions with
Affiliates.Β Β The Managing Member or its Affiliates may provide
services (other than those set forth in SectionΒ 4.5(a)
hereof) to the Company or GGP, including, asset management, consulting,
operational, financial and advisory services (the provision of any such
services, an βAffiliate
Transactionβ), subject, in each case, to approval of such Affiliate
Transaction by a Super-Majority Vote of Members on a Consortium-wide basis
(other than the Managing Member and its Affiliates, including any Person or
account the Interest of which is managed by Brookfield on a discretionary
basis).Β Β The terms on which Affiliate Transactions relating to the
Company are entered into must be on terms no less favorable to the Company than
would reasonably be expected to be obtained in an armβs length negotiation
between unaffiliated parties (including, but not limited to, fees, termination
rights, required service levels and default provisions).Β Β The terms on
which Affiliate Transactions relating to GGP are entered into must be on terms
no less favorable to GGP than would reasonably be expected to be obtained in an
armβs length negotiation between unaffiliated parties as to fees and otherwise
consistent with industry standards.Β Β In either case, any such fees
will be disclosed to the Members of the Consortium on a quarterly
basis.Β Β For the avoidance of doubt, any fees paid to the Managing
Member or its Affiliates in respect of an Affiliate Transaction will not be
applied to reduce the amounts payable to the Managing Member under SectionΒ 6.1
hereof.
Β
ARTICLE
5
INVESTMENT
Β
5.1 Investment.Β Β Except
as otherwise provided in this Agreement, the Managing Member shall have the
authority to make the Investment and Temporary Investments on behalf of the
Company as contemplated by the Business Plan and the Restructuring
Proposal.
Β
5.2 Subsequent GGP
Financing.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β If
GGP conducts any financing, including any rights offering, at any time (i) when
the Managing Member is not permitted to call Capital Contributions pursuant to
SectionΒ 3.1(b)
or (ii) after the effective date of the Plan, in each case, upon the approval of
a Super-Majority Vote of Members, the Managing Member shall establish one or
more vehicles to raise additional capital to participate in such GGP financing
(collectively, a βGGP
Financing Vehicleβ) by selling interests therein (the βGGP Financing
Interestsβ) pursuant to the terms on this SectionΒ 5.2.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β If
the Managing Member has established a GGP Financing Vehicle, each Consortium
Member shall have the right (but not the obligation) to purchase, on the same
terms and conditions as all other equity owners of the GGP Financing Vehicle, up
to a percentage of the GGP Financing Interests equal to such GGP Financing
Memberβs GGP Financing Allocation Percentage (each such Consortium Member that
exercises such right, a βGGP Financing
Memberβ).Β Β The GGP Financing Vehicle shall be on such terms and
conditions as the GGP Financing Members shall agree in good faith, but for the
avoidance of doubt, shall not provide for any Carried Interest or Transaction
Distribution Amount or similar fees or payments.
Β
48
(c)Β Β Β Β Β Β Β Β Β Β Β If,
after the sale (if any) of GGP Financing Interests pursuant to SectionΒ 5.2(b)
hereof, less than 100% of the GGP Financing Interests have been purchased by GGP
Financing Members, each GGP Financing Member purchasing GGP Financing Interests
pursuant to SectionΒ 5.2(b)
hereof (the βParticipating GGP Financing
Membersβ) shall have the right (but not the obligation) to purchase up to
a percentage of any GGP Financing Interests not sold to Participating GGP
Financing Members equal to such Participating GGP Financing Memberβs Remaining
GGP Financing Percentage.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β If,
after the sale (if any) of GGP Financing Interests pursuant to SectionΒ 5.2(c)
hereof, less than 100% of the GGP Financing Interests have been purchased by GGP
Financing Members, the GGP Financing Vehicle shall have the right (but not the
obligation) to sell any remaining GGP Financing Interests to any
Person.Β Β Notwithstanding the foregoing, no GGP Financing Interests
sold pursuant to this SectionΒ 5.2(d)
may be sold for an amount less than the price at which such GGP Financing
Interests were offered to the GGP Financing Members pursuant to SectionΒ 5.2(b)
or 5.2(c)
hereof.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary in this SectionΒ 5.2, no
Member shall have any obligation to purchase any GGP Financing Interests and no
such purchase shall provide any such Member with any rights pursuant to this
Agreement.
Β
(f)Β Β Β Β Β Β Β Β Β Β Β If
(i) approval by a Super-Majority Vote of Members is not obtained pursuant to
SectionΒ 5.2(a)
hereof, (ii) the Company or any Parallel Investment Vehicle holds pre-emptive
rights in respect of the applicable GGP financing or such financing is pursuant
to a rights offering and (iii) such pre-emptive rights or rights are
transferable, the Company or such Parallel Investment Vehicle shall distribute
or cause to be transferred such pre-emptive rights or rights to each Consortium
Member that elects to receive such pre-emptive rights or rights in an amount
commensurate with such Consortium Memberβs pro rata share
(determined based on such Consortium Memberβs Invested Capital as a proportion
of the aggregate Invested Capital of all Consortium Members that elect to
receive such pre-emptive rights or rights) and such Consortium Member shall be
entitled to exercise such pre-emptive rights or rights. Notwithstanding anything
contained in this Agreement to the contrary, such pre-emptive rights or rights
shall not constitute Investment Proceeds and shall not be distributed in
accordance with Article 6
hereof.
Β
Β
49
Β
(g)Β Β Β Β Β Β Β Β Β Β Β If
(i) approval by a Super-Majority Vote of Members is not obtained pursuant to
SectionΒ 5.2(a)
hereof, (ii) the Company or any Parallel Investment Vehicle holds pre-emptive
rights in respect of the applicable GGP financing or such financing is pursuant
to a rights offering and (iii) such pre-emptive rights or rights are
non-transferable, within five (5) Business Days following the date the vote was
held pursuant to SectionΒ 5.2(a)
hereof, each Consortium Member that elected to receive such non-transferable
pre-emptive rights or rights (each, an βElecting Memberβ) may
notify the Managing Member of the portion of such pre-emptive rights or rights
that such Electing Member desires the Company or such Parallel Investment
Vehicle to exercise on its behalf.Β Β If a Consortium Member fails to so
notify the Managing Member within such period, such Consortium Member shall be
deemed to have irrevocably waived such Consortium Memberβs rights under this
SectionΒ 5.2(g).
If the aggregate pre-emptive rights or rights that all Electing Members have
requested that the Company or such Parallel Investment Vehicle exercise on their
behalf exceeds the aggregate pre-emptive rights or rights available to be
exercised, the pre-emptive rights or rights to be exercised by the Company or
such Parallel Investment Vehicle on behalf of the Electing Members shall be
allocated among the Electing Members as follows: (1) first, to each Electing
Member the lesser of (A) the portion of such pre-emptive rights or rights that
such Electing Member desires the Company or such Parallel Investment Vehicle to
exercise on its behalf to the extent it has not been allocated to such Electing
Member on a previous application of this SectionΒ 5.2(g)(1)
and (B) its pro
rata share (determined based on such Electing Memberβs Invested Capital
as a proportion of the aggregate Invested Capital of all Electing Members) of
the pre-emptive rights or rights which have not been allocated on a previous
application of this SectionΒ 5.2(g)(1);
and (2) second, by repeating the allocation process in SectionΒ 5.2(g)(1)
until all of the pre-emptive rights or rights to be exercised by the Company or
such Parallel Investment Vehicle on behalf of the Electing Members have been
allocated. Promptly following allocation of the pre-emptive rights or rights
among the Electing Members, the Managing Member shall by written notice to each
Electing Member call a special capital contribution (which shall not constitute
a Capital Contribution for the purposes of this Agreement or the Parallel
Vehicle Agreements) from each Electing Member in an amount required to exercise
such Electing Memberβs pro rata share
(determined based on such Electing Memberβs Invested Capital as a proportion of
the aggregate Invested Capital of all Electing Members) of the pre-emptive
rights or rights and all costs and expenses related thereto. Promptly following
receipt of such special capital contribution, the Managing Member, on behalf of
the Electing Members (and not on behalf of all Consortium Members), shall
exercise the pre-emptive rights or rights and shall promptly distribute the
interests in GGP acquired through the exercise of such pre-emptive rights or
rights to each Electing Member in accordance with its pro rata share
(determined based on such Electing Memberβs Invested Capital as a proportion of
the aggregate Invested Capital of all Electing Members). Notwithstanding
anything contained in this Agreement to the contrary, such interests in GGP
shall not constitute Investment Proceeds and shall not be distributed in
accordance with Article 6
hereof.
Β
(h)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything in this SectionΒ 5.2, the
participation by the Company, any Parallel Investment Vehicle and any Consortium
Members in any financing, including any rights offering, conducted by GGP shall
be structured in such a manner as to prevent liability under Section 16(b) of
the Exchange Act with respect to any Consortium Member and the Consortium
Members agree to work together in good faith to prevent such
liability.Β Β In furtherance of the foregoing, no Consortium Member
shall, without its consent, (i)Β receive any allocation of the Companyβs or
any Parallel Investment Vehicleβs participation rights in such financing in
excess of such Consortium Memberβs Consortium Percentage Interest, or (ii) have
the portion of the Companyβs or any Parallel Investment Vehicleβs participation
rights in such financing attributable to such Consortium Memberβs Consortium
Percentage Interest reallocated or sold to any other Person.
Β
ARTICLE
6
DISTRIBUTIONS
Β
6.1 Distributions Attributable
to Investments.Β Β Investment Proceeds shall be distributed by
the Managing Member in cash (except as otherwise herein expressly provided) at
least quarterly, and in no event later than thirty (30) days after the
availability of such Investment Proceeds for distribution by the
Company.Β Β Subject to SectionsΒ 6.2,
6.3, 6.4 and 6.8 hereof,
Investments Proceeds shall initially be apportioned among the Members, including
the Managing Member, in proportion to their Sharing Percentages at such
time.Β Β Except as otherwise provided herein, the amount apportioned to
the Managing Member shall be distributed to the Managing Member, and the amount
apportioned to each Member shall be distributed as follows:
Β
Β
50
Β
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Return of
Capital.Β Β First, 100% to such Member until the cumulative
amount distributed to such Member (taking into account all prior distributions
made or deemed made to such Member pursuant to this SectionΒ 6.1(a))
is equal to the aggregate amount of Invested Capital of such
Member;
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Transaction Distribution
Amount.Β Β Second, 100% as a transaction distribution (the βTransaction Distribution
Amountβ) to the Managing Member in respect of its Class C Interest, until
the cumulative amount distributed to the Managing Member in respect of its Class
C Interest (taking into account all prior distributions made or deemed made to
the Managing Member in respect of its Class C Interest pursuant to this SectionΒ 6.1(b))
is equal to 3.75% of such Memberβs Invested Capital; except, that if the Minimum
Condition has not been satisfied by the Long Stop Date, the Transaction
Distribution Amount distributable pursuant to this SectionΒ 6.1(b)
shall be reduced to an amount equal to 1.25% of such Memberβs Invested
Capital;
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Return.Β Β Third,
100% to such Member until the cumulative amount distributed to such Member
(taking into account all prior distributions made or deemed made to such Member
pursuant to this SectionΒ 6.1(c)
and SectionΒ 6.1(a)
hereof) would provide such Member an Internal Rate of Return of twelve percent
(12%);
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Catch
Up.Β Β Fourth, 60% to the Class B Member in respect of its Class
B Interests and 40% to such Member until the cumulative amount distributed (or
deemed distributed) to the Class B Member in respect of its Class B Interest
pursuant to this SectionΒ 6.1(d)
is equal to twenty percent (20%) of the sum of (A) the cumulative amounts
distributed to such Member pursuant to SectionΒ 6.1(c)
hereof and (B) the cumulative amounts distributed to the Class B Member in
respect of its Class B Interest and such Member pursuant to this SectionΒ 6.1(d);
and
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Residual
Amounts.Β Β Thereafter, eighty percent (80%) to such Member and
twenty percent (20%) to the Class B Member in respect of its Class B
Interest.
Β
Notwithstanding
anything to the contrary contained herein, (i) the Managing Member may, in its
sole discretion, waive any Transaction Distribution Amount distributable to the
Managing Member on account of Interests held by Affiliates of the Managing
Member and any amount so waived shall be distributed to the applicable Affiliate
of the Managing Member and (ii) the Class B Member may, in its sole discretion,
waive any Carried Interest distributable to the Class B Member on account of
Interests held by Affiliates of the Class B Member and any amount so waived
shall be distributed to the applicable Affiliate of the Class B
Member.
Β
6.2 Adjustments to
Distributions.Β Β Notwithstanding anything to the contrary in
SectionΒ 6.1
hereof:
Β
Β
51
Β
(a)Β Β Β Β Β Β Β Β Β Β Β If
the Managing Member is removed as managing member as a result of any of the
events described in clauses (b) or (c) of the definition of βRemoval Conduct
Eventβ having occurred, or in accordance with SectionΒ 4.6(a)
hereof, notwithstanding SectionΒ 6.1
hereof the Managing Member shall only be entitled to receive fifty percent (50%)
of the Transaction Distribution Amount vested as of the date of its removal, and
the Class B Member shall only be entitled to receive fifty percent (50%) of the
Carried Interest to be received, in each case, based for valuation purposes on
the winding up and liquidation of the assets of the Company in accordance with
Article 11
hereof as of the date of such Removal Conduct Event, and if such reduced
Transaction Distribution Amount and Carried Interest, if any, is distributed in
kind, the same shall be held by a trustee in trust for the benefit of the
Managing Member and the Class B Member, respectively, until the date which is
six (6) months following the date of removal of the Managing Member as managing
member.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β On
any relevant Distribution Date, the Transaction Distribution Amount and the
Carried Interest, if any, shall be paid in cash, to the extent the relevant
distribution is in cash, or in kind, to the extent the relevant distribution is
in kind.Β Β In the event a Member does not accept the Managing Memberβs
recommendation of sale of its pro rata share of the
Investment in accordance with clause (i) of SectionΒ 10.8(d)
hereof, any Transaction Distribution Amount and Carried Interest with respect to
such Member shall be paid in kind, and such Carried Interest shall be required
to be held by the Class B Member until the earlier of (i) the date that is five
(5) years from the date such payment in kind was made, (ii) the date such Member
ceases to be a Member of the Company, (iii) the date none of the Managing Member
or any of its Affiliates is the managing member of the Company, and (iv) the
date that is ten years from the Initial Closing Date.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β If,
pursuant to SectionsΒ 10.1(c)
or 10.8(c)
hereof, the Company Disposes of a Memberβs pro rata share of the
Investment and other assets of the Company, but does not Dispose of the entire
Investment and other assets of the Company, the proceeds of such Disposition
shall be apportioned in their entirety to such Member (and not among all Members
in proportion to their Sharing Percentages as provided in the first paragraph of
SectionΒ 6.1
hereof).
Β
(d)Β Β Β Β Β Β Β Β Β Β Β For
the avoidance of doubt, if (i) a Member has Transferred its entire Interest or
(ii) a Memberβs pro
rata share of the Investment and other assets of the Company have been
Disposed of by the Company and the Investment Proceeds related thereto have been
distributed in accordance with this Article 6, in each
case such Member (but, for greater certainty, not its Transferee in the case of
clause (i) above) shall have no further right to any distributions under this
Article
6.
Β
Β
52
Β
Β
6.3 Distributions in
Kind.Β Β In the event of any distribution in kind, the Managing
Member shall provide written notice to each Member of such distribution which
notice shall set forth the date on which the Managing Member has determined to
cause such distribution to be made and shall offer to each Member the right to
elect not to receive such in kind distribution.Β Β If the Managing
Member receives written notice from any Non-Managing Member within five (5)
Business Days following receipt of the Managing Memberβs notice of an in kind
distribution of assets of the Company, that, in lieu of receiving such in kind
distribution, such Non-Managing Member desires that the Managing Member Dispose
of such Non-Managing Memberβs share of the assets of the Company to be
distributed in kind and distribute the cash proceeds, net of all Disposition
commissions and expenses, to such Non-Managing Member, the Managing Member shall
use its commercially reasonable efforts to Dispose of such Non-Managing Memberβs
share of the assets of the Company to be distributed in kind; provided, however, that, for
the purposes of this Agreement, such Non-Managing Memberβs share of the assets
of the Company to be distributed in kind shall be deemed to have been Disposed
of for their Fair Market Value as of the date of the in-kind distribution of
such assets of the Company to the Non-Managing Members who did not provide such
notice.Β Β In the event the Managing Member is unable to Dispose of such
Non-Managing Memberβs share of the assets of the Company within two (2) weeks,
such Non-Managing Member may deliver a written notice to the Managing Member
requesting that the Managing Member distribute such Non-Managing Memberβs share
of the assets of the Company in kind to such Non-Managing Member and the
Managing Member shall promptly do so.Β Β If the Managing Member does not
receive a written notice of the type referred to in the immediately preceding
sentence from such Non-Managing Member, the Managing Member shall continue its
efforts to sell such Non-Managing Memberβs share of the assets of the Company
for an additional period of one (1) week and if the Managing Member is not
successful in selling such Non-Managing Memberβs share of the assets of the
Company to be distributed in kind during such period, at the end of such
one-week period the Managing Member shall distribute such Non-Managing Memberβs
share of the assets of the Company in kind to such Member.Β Β The
Company shall use commercially reasonable efforts to seek that any shares of GGP
that are distributed in kind pursuant to this SectionΒ 6.3 be
freely tradeable under applicable securities laws, it being acknowledged by each
of the Members that, to the extent the Company is then a minority shareholder of
GGP, the Company may be significantly limited in its ability to control the free
tradeability of such shares.
Β
6.4 Limitation on
Distributions.Β Β Notwithstanding anything to the contrary
contained herein, the Company and the Managing Member on behalf of the Company,
shall not make a distribution to any Member on account of its Interest if such
distribution would violate the Act or other applicable law.
Β
6.5 Reports on Distributions to
Managing Member.Β Β The Managing Member shall, for each Fiscal
Year and each fiscal quarter, provide to each Member within sixty (60) days
after the end of each Fiscal Year or fiscal quarter, as applicable, a written
report setting out the amount of distributions payable to the Class B Member and
the Class C Member, during such Fiscal Year or fiscal quarter, as applicable,
and the basis for calculation of such distributions for the relevant period,
including any offsets. The Managing Member shall also provide such reports to
each former Member to the extent relating to the period during which such former
Member was a Member.
Β
6.6 Reinvestment.Β Β The
Company may not reinvest any Investment Proceeds; provided, that for the
avoidance of doubt, such prohibition shall not apply to the conversion of the
portion of the Investment comprised of Debt to common equity in GGP Holdco;
provided, further, that proceeds
received on account of payments in respect of the portion of the Investment
comprised of Debt under the Plan may be retained by the Company and invested as
part of an equity investment in GGP Holdco by the Company, to the extent
provided for in the Restructuring Proposal or Business Plan; provided, further, that
proceeds received on account of payments in respect of the DIP Loan may be
retained by the Company and invested as part of an equity investment in GGP
Holdco by the Company or transferred into the relevant Commitment Account; provided, further, that
Investment Proceeds from Temporary Investments may be reinvested to Temporary
Investments and/or in the Investment.
Β
Β
53
Β
Β
6.7 Clawback.Β Β If
a Member is required to make a Capital Contribution to the Company on a Capital
Call Payment Date at a time after the Class C Member has received Transaction
Distribution Amount or the Class B Member has received Carried Interest, the
Class C Member or the Class B Member, as applicable, shall return funds to the
Company on such Capital Call Payment Date equal to the difference between (a)
the aggregate amount of Transaction Distribution Amount or Carried Interest, as
applicable, actually received by such Member, and (b) the aggregate amount of
Transaction Distribution Amount or Carried Interest, as applicable, that such
Member would have received if such additional Capital Contributions had been
made immediately prior to the receipt of Transaction Distribution Amount or
Carried Interest by the Class C Member or the Class B Member, as applicable,
(and such difference shall be reduced by (i) all taxes that the Managing Member
reasonably determines have been or may be imposed on the Class C Member or the
Class B Member, as applicable, or their respective direct or indirect owners in
respect of the portion of Transaction Distribution Amount or the Carried
Interest, as applicable, to be returned to the Company, and increased by (ii)
the tax benefit that the Managing Member reasonably determines would be realized
by the Class C Member or the Class B Member, as applicable, or their respective
direct or indirect owners due to the return of such portion if such payment was
deductible at the same rates the Managing Member utilized in calculating the
amounts in clause (i) above).Β Β In making the determination of taxes
and tax benefits under this SectionΒ 6.7, the
Managing Member may take into account the maximum combined federal, provincial,
state and city tax rate applicable to individuals or corporations (whichever is
higher) on ordinary income and capital gain (taking into account the applicable
holding period), as the case may be, the amounts of ordinary income and capital
gain allocated to the Class C Member or the Class B Member, as applicable,
pursuant to this Agreement, and otherwise based on such reasonable assumptions
as the Managing Member determines in good faith to be appropriate.
Β
6.8 DIP Loan
Proceeds.Β Β Subject to the next sentence, any proceeds received
by the Company or any Parallel Investment Vehicle (directly or through a
distribution from a Subsidiary) in respect of the DIP Loan Investment shall,
from time to time in the discretion of the Managing Member and the managing
member, general partner or manager (or equivalent) of the applicable Parallel
Investment Vehicle, be distributed by the Company and/or the applicable Parallel
Investment Vehicle to the DIP Loan Funding Members in proportion to their DIP
Loan Contributions and any repayment of principal in respect of the DIP Loan
Investment prior to any closing under the Restructuring Proposal shall be
transferred to the applicable Commitment Account of such DIP Loan Funding
Member.Β Β In the event of a Restructuring Proposal Termination, (i) any
interest income or repayments of principal received by the Company or any
Parallel Investment Vehicle (directly or through a distribution from a
Subsidiary) in respect of the DIP Loan Investment (x) prior to the payment of
the Capital Contributions by the True-Up Members in accordance with SectionΒ 3.1(h)(iv),
shall be distributed by the Company and/or the applicable Parallel Investment
Vehicle to the DIP Loan Funding Members in accordance with SectionΒ 3.1(h)(iv)
and not pursuant to the other provisions of this Article 6 or the
corresponding provisions of the applicable Parallel Vehicle Agreements and (y)
after the payment of the Capital Contributions by the True-Up Members in
accordance with SectionΒ 3.1(h)(iv),
shall be distributed by the Company and/or the applicable Parallel Investment
Vehicle to all Consortium Members pursuant to the other provisions of this Article 6 and/or the
corresponding provisions of the applicable Parallel Vehicle
Agreements.
Β
Β
54
Β
ARTICLE
7
CAPITAL
ACCOUNTS AND ALLOCATIONS OF NET INCOME OR LOSS
Β
7.1 Capital
Accounts.Β Β The Managing Member shall maintain a separate
Capital Account for each Member and shall, on receipt of a Capital Contribution
from a Member, credit the Capital Account of such Member with such
amount.Β Β The Managing Member shall also credit to the Capital Account
of each Member the amount of all income and gains of the Company allocated to
such Member and shall debit the Capital Account of each Member with the amount
of all losses and expenses of the Company allocated to such Member and the
amount of any cash and Fair Market Value of any property distributed, or deemed
distributed, from time to time by the Company to such
Member.Β Β Notwithstanding the foregoing, the Managing Member shall have
the authority to make other Capital Account allocations, in its discretion, to
reflect the intended economics of the Company.Β Β Where allocations are
made more often than annually, the relevant item of income, expense, gain, loss,
credit and deduction being allocated shall be estimated and, if subsequent
year-end or other adjustments affect allocations previously made, such
adjustments shall be recorded when determined.Β Β The Interest of a
Member shall not terminate by reason of there being a negative or nil balance in
the Memberβs Capital Account, nor shall any Member have any obligation to
restore any negative balance in such Memberβs Capital Account.Β Β If all
or any portion of an Interest is Transferred in accordance with the terms of
this Agreement, the Transferee shall succeed to the Capital Account of the
Transferor to the extent it relates to the Transferred Interest.Β Β No
Member shall be responsible for any losses or expenses of any other Member, nor
share in the income or gain or, if applicable, allocation of tax deductible
expenses attributable to any other Member.Β Β To the extent not provided
for in this Article
7, the Capital Accounts of the Members shall be adjusted and maintained
in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv),
as the same may be amended or revised; provided, that such
adjustment and maintenance does not have a material adverse effect on the
economic interests of the Members.Β Β Subject to the foregoing sentence,
in maintaining Capital Accounts, the Managing Member may make such adjustments
as it deems reasonably necessary to give effect to the provisions of this
Agreement taking into account such facts and circumstances as the Managing
Member deems reasonably necessary or appropriate for this purpose.
Β
7.2 No Interest Payable on
Accounts.Β Β No interest shall be paid to any Member on any
amount that it has contributed to the Company or on any balance in its Capital
Account, except as expressly provided in this Agreement.
Β
7.3 Allocation of Net Income or
Loss.Β Β Items of income, gain, loss or deduction of the Company
for a Fiscal Year shall be allocated among the Members in a manner that is
consistent with the interests of the Members in the Company determined under
Treasury Regulations Section 1.704-1(b)(3), it being intended that such
allocations of income, gain, loss and deduction will be reflected in the Capital
Accounts that are maintained under SectionΒ 7.1
hereof and will result in Capital Account balances that are, as nearly as
possible, equal (proportionately) to the amounts that would be distributed to
each Member if (a) the Company were to sell its assets for their book values as
maintained for purposes of Code Section 704(b), (b) all Company liabilities were
satisfied (limited with respect to each nonrecourse liability to the book value
of the assets securing such liability), (c) the Company were to distribute the
proceeds of the sale pursuant to SectionΒ 6.1
hereof, and (d) the Company were to dissolve, minus any minimum gain and Member
minimum gain (as defined in Treasury Regulations Section 1.704-2) and the
amount, if any, that such Member is obligated (or deemed obligated) to
contribute to the Company.Β Β It is the intention of the parties that,
to the extent possible and consistent with the economics of this Agreement, the
foregoing allocations be respected for U.S. federal income tax purposes and, in
furtherance of that intention, a βqualified income offsetβ provision, a βminimum
gain chargebackβ provision, and any other such provision described in applicable
regulations and deemed desirable by the Managing Member shall be incorporated by
reference into this Agreement.Β Β Notwithstanding anything to the
contrary herein, the Managing Member may make such allocations as it deems
reasonably necessary to give economic effect to the provisions of this Agreement
taking into account such facts and circumstances as the Managing Member deems
reasonably necessary or appropriate for this purpose.
Β
Β
55
Β
Β
7.4 Allocation of Income or Loss
for Tax Purposes.Β Β Subject to the following sentence, items of
income, gain, loss or deduction of the Company for tax purposes for a Fiscal
Year, and its items of income, gain, loss or deduction from a particular source
or a source in a particular place, capital gains and capital losses, shall be
allocated to the Members in the same proportions as amounts are allocated to the
Members pursuant to SectionΒ 7.3
hereof; provided, that
in the case of any Company asset the Fair Market Value of which differs from its
adjusted tax basis for United States federal income tax purposes, income, gain,
loss and deduction with respect to such asset shall be allocated solely for
income tax purposes in accordance with the principles of Sections 704(b) and (c)
of the Code (and the Treasury Regulations promulgated thereunder) (in any manner
determined by the Managing Member) so as to take account of the difference
between the Fair Market Value and adjusted tax basis of such
asset.Β Β Subject to the prior sentence, amounts recognized as income,
expenses, gains, losses, deductions or credits of the Company for income tax
purposes in a fiscal period but not taken into account in SectionΒ 7.3
hereof in such fiscal period shall be allocated for income tax purposes among
the Members on the basis on which they would be allocated pursuant to SectionΒ 7.3
hereof if such amounts were taken into account in computing net income or loss
of the Company, and the allocation of income, loss, capital gains and capital
losses for income tax purposes in subsequent Fiscal Years shall be made taking
such prior allocations into account.
Β
7.5 Tax
Returns.Β Β Each Member shall prepare and file such documents as
may be required to be prepared and filed under the Code (and the Treasury
Regulations promulgated thereunder) and other similar legislation to which such
Member may be subject and shall include in its computation of income the income
or loss of the Company.
Β
7.6 Guaranteed
Payments.Β Β Notwithstanding any other provisions of this
Agreement, the Company and the Members agree to treat and report any
distributions made to the holders of the Class C Interest pursuant to SectionΒ 6.1(b)
hereof as determined without regard to the income of the Company and as
βguaranteed paymentsβ for U.S. federal income tax purposes within the meaning of
Section 707(c) of the Code, and the provisions of this Agreement shall be
interpreted consistently with such treatment.
Β
Β
56
Β
ARTICLE
8
ACCOUNTING
AND TAX MATTERS
Β
8.1 Books and Records;
Reports.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall keep or cause to be kept books and records reflecting all
of the Companyβs activities and transactions and all other information required
by law. The books and records shall be kept at the principal place of business
of the Company or of Brookfield. Subject to SectionΒ 12.3,
each Non-Managing Member and its respective agents and representatives shall be
afforded access to the Companyβs register of Members and the Companyβs books and
records for inspection and copying and any other purpose reasonably related to
such Non-Managing Memberβs interest as a non-managing member of the Company, at
any reasonable time during regular business hours upon five (5) Business Daysβ
notice to the Managing Member; provided, however, that any
expenses incurred in connection with any such access to the Companyβs register
of Members and the Companyβs books and records shall be expenses of such
Non-Managing Member and not of the Company.Β Β Each former Non-Managing
Member shall also be afforded access to the Companyβs register of Members and
the Companyβs books and records on the same terms to the extent relating to the
period during which such former Non-Managing Member was a Non-Managing Member.
The Managing Member shall preserve the register of Members and all books and
records that it keeps pursuant to this SectionΒ 8.1(a)
for a period of seven (7) years after the date of termination of the
Company.Β Β The Company books and records and all original copies of
agreements entered into by the Company shall be the property of the
Company.
Β
(b)Β Β Β Β Β Β Β Β Β Β The
Managing Member shall use its commercially reasonable efforts to furnish or
cause to be furnished the following reports to each Non-Managing Member (and to
each former Non-Managing Member to the extent relating to the period during
which such former Non-Managing Member was a Non-Managing Member):
Β
(i)Β Β Β Β Β Β Β Β Β Β Β as
soon as practicable (but in no event later than ninety (90) days) following the
end of each Fiscal Year, a balance sheet of the Company as of the end of such
Fiscal Year and statements of operations, changes in Membersβ capital and a
statement of cash flows of the Company for such Fiscal Year, accompanied by an
audited report from an Independent Accounting Firm containing an opinion of such
accountants.Β Β All such reports shall be prepared in accordance with
GAAP;
Β
(ii)Β Β Β Β Β Β Β Β Β Β Β as
soon as practicable (but in no event later than sixty (60) days following the
end of each of the first three (3) quarters of each Fiscal Year, a report which
shall contain unaudited financial statements with respect to the
Company.Β Β All such reports shall be prepared in accordance with GAAP
(except for the absence of notes to the financial statements and typical
year-end adjustments); and
Β
(iii)Β Β Β Β Β Β Β Β Β Β Β as
soon as practicable (but in no event later than ninety (90) days) following the
end of each Fiscal Year, (A) in the case of the Investment, a statement of the
Fair Market Value (provided, that with respect
to any Securities referred to in clauses (a)(i) or (a)(ii) of the definition of
βFair Market Valueβ, the Fair Market Value thereof shall be determined using the
closing price on the last day of the Fiscal Year, or if such day is not a
Business Day, the immediately preceding Business Day (rather than the
Twenty-One-Day Average VWAP)) of the Investment determined as of the last
Business Day of such Fiscal Year, and (B) in the case of any property (other
than the Investment) held by the Company during such Fiscal Year, an
appropriately qualified third-party independent expert valuation of such
property (it being understood valuations of property (other than the Investment)
shall be updated only on a triennial basis).
Β
Β
57
Β
Β
Notwithstanding
anything to the contrary in this SectionΒ 8.1(b),
the Managing Member shall have the right to transition the Companyβs financial
reporting from reporting in accordance with GAAP to reporting in accordance with
IFRS.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall use commercially reasonable efforts to send, as soon as
possible after the end of each Fiscal Year, but by no later than April 1st of
each Fiscal Year, to each Non-Managing Member (or a former Member with respect
to the period during which such former Member was a Member) a schedule K-1 and
such other information and documents as are necessary to make appropriate tax
filings with respect to such Fiscal Year, as requested in writing by the
Non-Managing Member or former Non-Managing Member acting
reasonably.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β If
requested by a Member (or a former member with respect to the period during
which such former member was a Member) in writing, the Managing Member shall use
commercially reasonable efforts to provide such Person with such information as
such Person may reasonably require for the purpose of discharging its taxation
obligations or the taxation obligations of its Affiliates (in any country or
jurisdiction) arising out of its investment (or former investment) in the
Company. Further, the Managing Member shall use commercially reasonable efforts
to obtain the requested information and to provide such information to such
Person on a timely basis. The costs incurred by the Company in obtaining and
providing such information shall be borne by the Company unless the information
is not readily available to the Company from its own records or such Person (in
its absolute discretion) agrees otherwise. In the event the costs of obtaining
and providing such information are to be borne by the Person requesting the
same, the Managing Member shall provide to such Person with a written estimate
of the costs to be incurred by the Company to obtain the requested information
before commencing to obtain such information.
Β
8.2 Tax
Election.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Elections by
Company.Β Β The Managing Member may, but shall not be obligated
to make, in its discretion, any tax election provided under the Code (and the
Treasury Regulations promulgated thereunder), or any provision of state, local
or foreign tax law, and the Managing Member shall, to the fullest extent
permitted by law, be absolved from all liability for any and all consequences to
any previously admitted or subsequently admitted Members resulting from its
making or failing to make any such election; provided, however, the
Managing Member shall consult with the Tier One Parallel Investment Vehicles (in
accordance with the Voting Agreement) regarding any material tax election under
the Code or any provision of state, local or foreign tax law.Β Β All
decisions and other matters concerning the computation and allocation of items
of income, expense, gain, loss, credit and deduction among the Members, and
accounting procedures not specifically and expressly provided for by the terms
of this Agreement shall be determined by the Managing Member in its discretion
(acting reasonably).Β Β Any determination made pursuant to this SectionΒ 8.2 by
the Managing Member shall be conclusive and binding on all Members.
Β
Β
58
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Elections by
Members.Β Β If any Member makes any tax election that requires
the Company to furnish information to such Member to enable such Member to
compute its own tax liability, or requires the Company to file any tax return or
report with any tax authority, in either case that would not be required in the
absence of such election made by such Member, the Managing Member may, as a
condition to furnishing such information or filing such return or report,
require such Member to pay to the Company any incremental expenses incurred in
connection therewith.
Β
8.3 Returns.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall prepare or cause to be prepared all United States federal,
state and local tax and information returns of the Company (the βReturnsβ) for each
year for which such Returns are required to be filed.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall prepare or cause to be prepared all Exchange Act reports
of the Company (including, without limitation, Schedule 13D and Forms 3, 4 and
5) (the βReportsβ) at such
times and for such periods for which such Reports are required to be filed and
provide copies of those Reports to each Non-Managing Member within two (2)
Business Days after filing, provided, however, that each
Non-Managing Member shall cooperate and provide any and all documentation or
information necessary in connection with such Reports to the Managing Member
promptly (taking into account the filing period requirements) upon the request
of the Managing Member.
Β
8.4 Withholding Tax Payments and
Obligations.Β Β If withholding taxes are paid or required to be
paid in respect of payments made to or by the Company, such payments or
obligations shall be treated as follows:
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Payments to the
Company.Β Β If the Company receives proceeds in respect of which
a tax has been withheld, the Company shall be treated as having received cash in
an amount equal to the amount of such withheld tax, and, for all purposes of
this Agreement, each Member shall be treated as having received a distribution
pursuant to SectionΒ 6.1
hereof equal to the portion of the withholding tax allocable to such Member, as
determined by the Managing Member in its reasonable discretion.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Payments by the Company and
Others.Β Β The Company is authorized to withhold from any payment
made to, or any distributive share of, a Member any taxes that are, in the
Managing Memberβs reasonable determination, required by law to be
withheld.Β Β If, and to the extent, the Company is required to make any
such tax payments with respect to any distributive share of income or gain of a
Member, the Managing Member shall, except in the case of any such tax payments
which are required by applicable law to be made sooner, give written notice to
the Member and give such Member five (5) Business Days to elect that either (i)
such Memberβs proportionate share of such distribution shall be reduced by the
amount of such tax payments (which tax payments shall be treated as a
distribution to such Member pursuant to SectionΒ 6.1
hereof), or (ii) such Member shall pay to the Company prior to such distribution
an amount of cash equal to such tax payments (which payment of cash shall not be
deemed a Capital Contribution for purposes hereof and shall not reduce the
Available Commitment of such Member) and the Member shall receive such
distribution without reduction so long as the Company has received the full
amount of such cash payment prior to such distribution.Β Β In the event
a portion of a distribution in kind is retained by the Company pursuant to
clause (i) above, such retained in kind amounts may, in the discretion of the
Managing Member, either (A) be distributed to the other Members, or (B) the
Managing Member as agent on behalf of such Member may sell such retained in kind
amounts for the account of such Member, with the Managing Member retaining the
amounts necessary to satisfy such tax payments and remitting any excess amount
to such Member.
Β
Β
59
Β
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Overwithholding.Β Β None
of the Company or the Managing Member shall be liable for any excess taxes
withheld and remitted in respect of any Non-Managing Memberβs Interest, and, in
the event of overwithholding, a Non-Managing Memberβs sole recourse shall be to
apply for a refund from the appropriate governmental authority.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Certain Withheld Taxes
Treated as Demand Loans.Β Β Any taxes withheld pursuant to SectionΒ 8.4(a)
or 8.4(b)
hereof shall be treated as if distributed to the relevant Member to the extent
an amount equal to such withheld taxes would then be distributable to such
Member, and, to the extent in excess of such distributable amounts, as a demand
loan payable by the Member to the Company with interest at the Prime Rate in
effect from time to time plus two percent (2%), compounded annually, such
interest to accrue from and after the date the Managing Member is deemed to have
given notice to the Member hereunder. The Managing Member may, in its
discretion, either demand payment of the principal and accrued interest on such
demand loan at any time, and enforce payment thereof by legal process, or may
withhold from one (1) or more distributions to a Member amounts sufficient to
satisfy such Memberβs obligations under any such demand loan. The Member may at
any time voluntarily repay any outstanding amounts in respect of a demand loan
in whole or part.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Tax
Indemnity.Β Β If the Company, the Managing Member, or any of
their respective Affiliates, or any of their respective shareholders, partners,
members, officers, directors, employees, managers and, as determined by the
Managing Member in its discretion, consultants or agents (each a βTax Indemnified
Partyβ, each of which is a third-party beneficiary of this Agreement
solely for purposes of this SectionΒ 8.4(e)),
becomes liable as a result of a failure to withhold and remit taxes in respect
of any Member (other than a failure to remit amounts withheld or that have been
paid to the Company by the Member in cash pursuant to SectionΒ 8.4(b)
hereof), then, in addition to, and without limiting, any indemnities for which
such Member may be liable under Article 9 hereof,
such Member shall, to the fullest extent permitted by law, indemnify and hold
harmless each Tax Indemnified Party, in respect of all taxes, including interest
and penalties, and any expenses incurred in any examination, determination,
resolution and payment of such liability incurred by such Tax Indemnified Party,
except any such amount arising as a result of any act or omission with respect
to which an arbitration panel, in accordance with SectionΒ 12.14
hereof, has issued a final decision, judgment or order that such Tax Indemnified
Party was grossly negligent or engaged in fraud, willful misconduct, a willful
and knowing material breach of this Agreement or willful violation of
law.Β Β The provisions contained in this SectionΒ 8.4(e)
shall survive the termination of the Company, the termination of this Agreement
and the Transfer of any Interest.
Β
Β
60
Β
Β
(f)Β Β Β Β Β Β Β Β Β Β Β Refunds of Withholding
Taxes.Β Β In the event that the Company receives a refund of
taxes previously withheld by a third party from one (1) or more payments to the
Company, the economic benefit of such refund shall be apportioned among the
Members in a manner reasonably determined by the Managing Member to offset the
prior operation of this SectionΒ 8.4 in
respect of such withheld taxes.
Β
8.5 Tax Matters Partner;
Partnership Status; Certain Tax Elections.Β Β The Managing Member
is designated as the βTax Matters Partnerβ for all purposes pursuant to Sections
6221 β 6231 of the Code (and the Treasury Regulations promulgated
thereunder).Β Β The Tax Matters Partner shall have the right to retain
professional assistance in respect of any audit of the Company and all expenses
and fees reasonably and properly incurred by the Tax Matters Partner on behalf
of the Company as Tax Matters Partner shall be reimbursed by the
Company.Β Β The Company shall not file an election under Section 7701 of
the Code (or any similar provision of state law) to be classified as a
corporation.Β Β No election shall be made by the Company to be excluded
from the provisions of Subchapter K, Chapter 1 of Subtitle A of the Code or from
any similar provision of any state tax law.Β Β The Managing Member may,
in its sole discretion, make a Section 754 of the Code election or an election
to have the Company treated as an βelecting investment partnershipβ for purposes
of Section 743 of the Code.
Β
8.6 Advice.Β Β A
Member may, by written notice to the Managing Member, request that the Managing
Member provide a copy of any written taxation advice the Managing Member has
obtained from external taxation and other advisers, and the Managing Member
shall provide such copy to the Member (with a copy being provided to all other
Members within a reasonable period of time).Β Β Notwithstanding the
foregoing, (a) a Member shall not be entitled to a copy of any written taxation
advice unless such Member shall have executed and delivered to the taxation or
other advisor that provided such written tax advice, such waiver of reliance and
release from liability in respect of such advice as may be requested by such
taxation or other advisor, in form and substance reasonably satisfactory to such
tax advisor (provided,
that no Member shall be required to sign any such waiver or release if the
effect thereof would be to prevent the Persons entitled to rely on such advice
from being able to exercise all rights available to such Persons in respect of
such advice), and (b) the Managing Member may impose such reasonable
restrictions and conditions in respect of such written tax advice as the
Managing Member determines are necessary or appropriate to preserve any
privilege which exists with respect to such advice.
Β
ARTICLE
9
EXCULPATION
AND INDEMNIFICATION
Β
9.1 Exculpation.Β Β To
the fullest extent permitted by applicable law, no Indemnified Party shall be
liable, in damages or otherwise, to the Company, the Members or any of their
Affiliates for any act or omission performed or omitted by any of them
(including, without limitation, any act or omission performed or omitted by any
of them in good faith reliance upon and in accordance with the provisions of
this Agreement or in reasonable reliance upon and in accordance with the opinion
or advice of experts, including, without limitation, of legal counsel as to
matters of law, of accountants as to matters of accounting, or of investment
bankers or appraisers as to matters of valuation), except with respect to, in
the case of any Indemnified Party other than any member of the Board of
Directors (including any Non-Managing Member represented by any member of the
Board of Directors in respect of acts or omissions by such Person as a member
thereof), any act or omission with respect to which an arbitration panel, in
accordance with SectionΒ 12.14
hereof, has issued a final decision, judgment or order that such Indemnified
Party was grossly negligent or engaged in fraud, willful misconduct, a willful
and knowing material breach of this Agreement or willful violation of law in the
management of the Company.Β Β The provisions of this Agreement, to the
extent that they expressly eliminate or restrict the duties (including fiduciary
duties) and liabilities of an Indemnified Party otherwise existing at law or in
equity, are agreed by the Members to replace such other duties and liabilities
of such Indemnified Party.
Β
Β
61
Β
Β
9.2 Indemnification.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β To
the fullest extent permitted by applicable law, the Company shall and does
hereby agree to indemnify and hold harmless the Managing Member, any Affiliate
thereof, the members of the Board of Directors (including any Non-Managing
Member represented by any member of the Board of Directors in respect of the
actions by such Person as a member thereof), any officer of the Company and
their respective Constituent Members, representatives, employees, managers,
consultants or agents (each, an βIndemnified Partyβ,
each of which shall be a third-party beneficiary of this Agreement solely for
purposes of this SectionΒ 9.2),
from and against any loss or damage incurred by them or by the Company for any
act or omission taken or suffered by each Indemnified Party (including, without
limitation, any act or omission performed or omitted by any of them in
reasonable reliance upon and in accordance with the opinion or advice of
experts, including, without limitation, of legal counsel as to matters of law,
of accountants as to matters of accounting, or of investment bankers or
appraisers as to matters of valuation) in connection with the Company Business
(including, without limitation, acting as a director, officer, manager or member
of GGP), and to pay all judgments and claims against such Indemnified Party
including costs and reasonable attorneysβ fees and any amount expended in the
settlement of any claims (to the extent permitted by SectionΒ 9.2(e)
below) or loss or damage, except that no amount shall be paid under this SectionΒ 9.2 with
respect to (i) in the case of any Indemnified Party other than any member of the
Board of Directors (including any Non-Managing Member represented by any member
of the Board of Directors in respect of acts or omissions by such Person as a
member thereof) any act or omission with respect to which an arbitration panel,
in accordance with SectionΒ 12.14
hereof, has issued a final decision, judgment or order that such Indemnified
Party was grossly negligent or engaged in fraud, willful misconduct, a willful
and knowing material breach of this Agreement or willful violation of law in the
management of the Company and (ii) in the case of any Indemnified Party who is a
member of the Board of Directors (other than the Managing Member) (including any
Non-Managing Member represented by any member of the Board of Directors in
respect of acts or omissions by such Person as a member thereof), any act or
omission which was taken by such Indemnified Party in bad faith. Notwithstanding
anything to the contrary contained in this SectionΒ 9.2, (A)
no Indemnified Party shall be entitled to indemnification in its capacity or in
respect of its obligations as a Non-Managing Member, (B) neither a member of the
Board of Directors, the Managing Member, any of its Affiliates nor their
respective Constituent Members, employees, managers, consultants or agents shall
be entitled to indemnification by the Company in respect of any Internal Dispute
and (C) no Person shall be entitled to indemnification for costs or expenses
incurred by such Person in a litigation in which such Person is a plaintiff and
is not acting on behalf of the Company, the Managing Member, GGP or any of their
respective Affiliates, other than with respect to costs or expenses incurred by
such Person to establish and/or enforce such Personβs right to indemnification
or exculpation as an Indemnified Party pursuant to this
Agreement.Β Β The provisions set forth in this SectionΒ 9.2
shall survive the termination of the Company and this Agreement.
Β
Β
62
Β
Β
(b)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall, at the Companyβs expense, maintain directors and officers
insurance for the benefit of the members of the Board of Directors and officers
of the Company on terms customary with industry practice and the Managing Member
shall promptly provide the Members with written notice if there is a material
adverse change in the type of, or a reduction in the level of coverage under,
the directors and officers insurance or any other insurance policy disclosed by
the Managing Member to a Member prior to the Initial Closing
Date.Β Β Prior to any Indemnified Party seeking indemnification from the
Company pursuant to SectionΒ 9.2(a)
hereof, such Indemnified Party shall seek payment, to the extent available,
under the directors and officers insurance policy of the Company.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member shall have the right and authority to require to be included in
any and all Company contracts that it and the Non-Managing Members shall not be
personally liable thereon and that the Person contracting with the Company shall
look solely to the Company and its assets for satisfaction.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Except
as otherwise provided herein, the satisfaction of any indemnification obligation
pursuant to SectionΒ 9.2(a)
hereof shall be from and limited to Company assets.Β Β No Member shall
have any obligation to make Capital Contributions to fund its share of any
indemnification obligations hereunder; provided, however, that each
Member shall be obligated to return amounts distributed to it in order to fund
any deficiency in the Companyβs indemnity obligations hereunder to the extent
provided in SectionΒ 3.5
hereof.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β An
Indemnified Party shall not be entitled to receive any payments under SectionΒ 9.2(a)
hereof for amounts in connection with the settlement of any claim involving
potential losses in excess of $2,000,000 (determined, in the aggregate, on a
Consortium-wide basis) without such settlement having been approved pursuant to
the Voting Agreement, which such approval shall be based on the approval of a
Hyper-Majority Vote of Tier One Parallel Investment Vehicles.
Β
(f)Β Β Β Β Β Β Β Β Β Β Β Expenses
reasonably incurred by an Indemnified Party in defense or settlement of any
claim that may be subject to a right of indemnification hereunder shall be
advanced by the Company prior to the final disposition thereof upon receipt of
an undertaking by or on behalf of such Indemnified Party to repay such amount to
the extent that it shall be determined upon final decision, judgment or order
that such Indemnified Party is not entitled to be indemnified hereunder; provided, that the Company
shall not advance such expenses if the Managing Member believes (acting
reasonably) that such Indemnified Party is not entitled to be indemnified
hereunder or there is a reasonable possibility that such Indemnified Party is
not entitled and that the Indemnified Party may be unable to repay such amount;
provided, further, that
if the Indemnified Party seeking the advance of such expenses is the Managing
Member or an Affiliate of the Managing Member, such determination shall be made
pursuant to the Voting Agreement, which such determination shall be based on the
determination of a Hyper-Majority Vote of Tier One Parallel Investment Vehicles
(excluding from both the numerator and denominator of such percentage the
Consortium Percentage Interests voted at the direction of any board of directors
of any Tier One Parallel Investment Vehicle consisting only of the Managing
Member and its Affiliates, including any Person or account the Interest of which
is managed by Brookfield on a discretionary basis).Β Β No advances shall
be made by the Company under this SectionΒ 9.2(f)
without the prior written approval of the Managing Member.
Β
Β
63
Β
Β
(g)Β Β Β Β Β Β Β Β Β Β Β Any
repeal or modification of this Article 9 shall not
adversely affect any rights of any Indemnified Party pursuant to this Article 9, including
the right to indemnification and to the advancement of expenses of a Indemnified
Party existing at the time of such repeal or modification with respect to any
acts or omissions occurring prior to such repeal or modification.
Β
ARTICLE
10
TRANSFERS
BY NON-MANAGING MEMBERS; WITHDRAWAL OF AND
TRANSFER BY MANAGING MEMBER; LIQUIDITY EVENTS
TRANSFER BY MANAGING MEMBER; LIQUIDITY EVENTS
Β
10.1 Restrictions on Transfer by
Non-Managing Members.
Β
(a)Β Β Β Β Β Β Β Β Β Β General.
Β
(i)Β Β Β Β Β Β Β Β Β Β Β During the Standstill
Period.Β Β During the time period through the date the Standstill
Period expires, except in accordance with SectionsΒ 10.1(a)(iii),
10.6 and 10.8, no Non-Managing
Member may Transfer, and each Non-Managing Member shall ensure that no Transfer
by any other Person occurs in respect of, all or any portion of its Interest
(including by way of Transfer of an interest in or in an interest held by such
Member).
Β
(ii)Β Β Β Β Β Β Β Β Β Β Β Following the Standstill
Period.Β Β Following the date the Standstill Period expires,
except in accordance with SectionsΒ 10.1(a)(iii),
10.6 and 10.8 and subject to
compliance with the requirements set forth in SectionΒ 10.1(b)
(as applicable), no Non-Managing Member may Transfer, and each Non-Managing
Member shall ensure that no Transfer by any other Person occurs in respect of,
all or any portion of its Interest (including by way of Transfer of an interest
in or in an interest held by such Member) without the prior written consent of
the Managing Member, which consent shall not be unreasonably
withheld.
Β
(iii)Β Β Β Β Β Β Β Β Β Β Β Affiliate
Transfers.Β Β Notwithstanding SectionsΒ 10.1(a)(i)
and 10.1(a)(ii)
(but in any event subject to SectionsΒ 10.3
and 10.4), at
any time during or following the expiration of the Standstill Period, any
Non-Managing Member may Transfer all or any portion of its Interest (including
by way of Transfer of an interest in or in an interest held by such Member) to
an Affiliate of such Non-Managing Member without the prior written consent of
the Managing Member (it being understood that a Non-Managing Member effecting
such a Transfer shall thereafter remain liable for its Available Commitment,
unless released therefrom by the Managing Member in its sole and absolute
discretion).
Β
(iv)Β Β Β Β Β Β Β Β Β Β Β Consequences of Prohibited
Transfers.Β Β Any purported Transfer of or in respect of all or
any part of the Interest of any Non-Managing Member (whether by way of a
Transfer by any Non-Managing Member of its Interest or by way of a Transfer by
any other Person in respect such Interest or of an interest in such Non-Managing
Member) not made in accordance with the provisions of this SectionΒ 10.1(a)
or without satisfaction of the other requirements of SectionsΒ 10.1,
10.3 or 10.4 hereof shall, to
the fullest extent permitted by law, be null and void and of no force or effect
and the Managing Member shall, to the fullest extent permitted by law, be
entitled to cause the Transfer or re-Transfer thereof to another Person for an
amount equal to the relevant portion of the Capital Account associated with such
Non-Managing Memberβs Interest at the time of Transfer or re-Transfer (or, in
the case of a purported Transfer by any other Person in respect of all or any
portion of such Non-Managing Memberβs Interest including by way of Transfer of
an interest in or in an interest held by a Member, the Transfer of all or any
portion of such Non-Managing Memberβs Interest for an amount equal to the
relevant portion of the Capital Account associated with such Non-Managing
Memberβs Interest at the time of such Transfer).Β Β Further, in the
event of any Transfer of or in respect of all or any part of the Interest of any
Non-Managing Member (whether by way of a Transfer by any Non-Managing Member of
its Interest or by way of a Transfer by any other Person in respect such
Interest) without satisfaction of the requirements of SectionΒ 10.1(b),
such Non-Managing Member shall be deemed to be a βDefaulting Memberβ for the
purposes of SectionΒ 3.6(b)
hereof and for the purposes of such Memberβs voting rights under this
Agreement.
Β
Β
64
Β
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Right of First
Offer.Β Β Notwithstanding anything to the contrary contained
herein (but still subject to SectionΒ 10.3(c),
(d) and (e) hereof), at any
time after the Standstill Period, a Member may Transfer all or any portion of
its Interest, subject to compliance by such Member with the requirements of this
SectionΒ 10.1(b);
provided, that such
Member shall not be required to comply with the requirements of the next
following sentence, including clauses (i) through (vi) thereof, in connection
with a Transfer to an Affiliate of such Member.Β Β Such Member (the
βSelling
Memberβ) must first offer such Interest (the βOffered Interestβ) to
the remaining Consortium Members (the βOfferee Membersβ)
pursuant to the following procedures:
Β
(i)Β Β Β Β Β Β Β Β Β Β Β the
Selling Member shall provide notice to the Company, the Managing Member and the
Offeree Members of its desire to potentially sell, assign or transfer its
Interest (the βPotential Transfer
Noticeβ);
Β
(ii)Β Β Β Β Β Β
Β Β Β at any time during the ten (10) day period beginning thirty
(30) days following the date of deemed receipt of the Potential Transfer Notice,
the Selling Member may give notice (the βOffer Noticeβ) to the
Company, the Managing Member and the Offeree Members of its offer to sell,
assign or transfer the Offered Interest and the price (the βOffer Priceβ) and
terms under which it is prepared to do so (the βOffer
Termsβ);
Β
(iii)Β Β Β Β Β Β Β Β Β each
Offeree Member shall have fifteen (15) days from the date of deemed receipt of
the Offer Notice (such period, the βAcceptance Notice
Periodβ) to elect to purchase all or any portion of the Offered Interest
at the Offer Price and under the Offer Terms by providing notice to the Company,
the Managing Member and the Selling Member (the βAcceptance
Noticeβ);
Β
(iv)Β Β Β Β Β Β Β Β Β the
purchase by any Offeree Member of the Offered Interest or any portion thereof
shall take place within five (5) Business Days of the date of deemed receipt of
the Acceptance Notice;
Β
(v)Β Β Β Β Β Β Β Β Β Β if
the aggregate amount of Interests that the Offeree Members elect to purchase
under the Acceptance Notices is in excess of the Offered Interest, the portion
of the Offered Interest which each Offeree Member providing an Acceptance Notice
shall acquire shall be determined by allocating the Offered Interest among the
Offeree Members as follows: (1) first, to each Offeree Member the lesser of (A)
the portion of the Offered Interest indicated in its Acceptance Notice to the
extent it has not been allocated to such Offeree Member on a previous
application of this SectionΒ 10.1(b)(v)(1)
and (B) its pro
rata share (determined based on such Offeree Memberβs Commitment as a
proportion of the aggregate Commitments of all Offeree Members providing an
Acceptance Notice) of the Offered Interest which has not been allocated on a
previous application of this SectionΒ 10.1(b)(v)(1);
and (2) second, by repeating the allocation process in SectionΒ 10.1(b)(v)(1)
until all of the Offered Interest has been allocated;
Β
Β
65
Β
Β
(vi)Β Β Β Β Β Β Β Β Β if
the aggregate amount of Interests under the Acceptance Notices is less than the
Offered Interest, the Selling Member may, in its discretion, for a period of 90
days following the end of the Acceptance Notice Period, sell, assign or transfer
all or any portion of the Offered Interest (including such portion as the
Offeree Members may have elected to purchase pursuant to SectionΒ 10.1(b)(iii)
hereof) to a third party at a price that equals or exceeds the Offer Price and
otherwise on substantially no more favorable terms to such third party than the
Offer Terms; and
Β
(vii)Β Β Β Β Β Β Β Β for
the avoidance of doubt, this SectionΒ 10.1(b)
shall not be applicable to a sale, assignment or transfer of Interests by BAM or
its wholly-owned Affiliates in accordance with SectionΒ 10.7
hereof or by a Member in accordance with SectionΒ 10.8.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β If
any Member is unable, despite good faith efforts, to transfer its Interests in
accordance with the procedures set forth in this SectionΒ 10.1(b)
hereof for a period of six (6) months, upon notice to all other Members, such
Member may require that the Company Dispose of all, but not less than all, of
such Memberβs pro
rata share of the Investment and other assets of the Company, the
proceeds of which shall be subject to reduction by a reasonable estimate of the
Disposing Memberβs proportionate share of all of the Companyβs liabilities and
the costs reasonably expected to be incurred in connection with a Disposition of
the Investment and the other assets of the Company, in each case as determined
by the Independent Accounting Firm.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β With
respect to any sale, assignment or transfer contemplated by SectionΒ 10.1(b)
hereof, the Company and the Managing Member shall cooperate and provide such
assistance as may be reasonably requested by a Selling Member to enable such
Selling Member to gather and disclose such information as may be reasonably
necessary or desirable to facilitate a sale, assignment or transfer of its
Interest to a third party (subject to commercially reasonable confidentiality
undertakings having regard to market practice as determined by the Managing
Member (acting reasonably)); provided, that all costs
incurred in connection with any such sale, assignment or transfer shall be for
the account of such Selling Member.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained in this Agreement, if elected in writing by a
Selling Member or an Offeree Member to the Company and the Managing Member, in
lieu of a direct sale, assignment or transfer of the Offered Interest to the
purchaser(s) thereof as contemplated by SectionΒ 10.1(b),
such Selling Member or Offeree Member may comply with the Redemption Procedure,
such that in the event of such an election by a Selling Member or an Offeree
Member, the Selling Memberβs pro rata share
(determined in accordance with its Consortium Percentage Interest) of the
Investment shall be sold, assigned and transferred by the Company to the Offeree
Memberβs respective Parallel Investment Vehicle.
Β
Β
66
Β
Β
10.2 Withdrawal of and Transfer
by the Managing Member.Β Β Neither the Managing Member nor the
Class B Member may voluntarily withdraw from the Company or Transfer its
Interest prior to the tenth (10th) anniversary of the Initial Closing Date,
unless such withdrawal or Transfer has been approved by a Hyper-Majority Vote of
Members (not including the Managing Member or its Affiliates, including any
Person or account the Interest of which is managed by Brookfield on a
discretionary basis); provided, however, that the
Managing Member or the Class B Member may, at its expense, without the consent
of any Non-Managing Member, (i) be reconstituted as or converted into a
corporation or other form of entity (any such reconstituted or converted entity
being deemed to be the Managing Member or the Class B Member, as applicable, for
all purposes hereof) by merger, consolidation, amalgamation, plan of arrangement
or otherwise, so long as such transaction does not result in a Change of
Control, or (ii) (A) in the case of the Managing Member, Transfer its Class C
Interest (or any portion thereof) or (B) in the case of the Class B Member,
Transfer its Class B Interest (or any portion thereof), in each case to one (1)
or more wholly-owned Subsidiaries of BAM so long as such other entity shall have
assumed in writing the obligations of the Managing Member or the Class B Member,
as applicable, with respect to such Transferred Interest under this Agreement,
the Subscription Agreements and any other related agreements of the Managing
Member, or the Class B Member, as applicable, including any obligations under
SectionsΒ 3.5(b)(iii)
and 6.7 hereof
in respect of distributions of Carried Interest received by the Class B
Member.Β Β In the event of a Transfer of all of its Interest as a
managing member of the Company in accordance with this SectionΒ 10.2,
its Transferee shall be substituted in its place and admitted to the Company as
managing member of the Company upon its execution of a counterpart of this
Agreement, and immediately thereafter, the former managing member shall cease to
be a managing member of the Company, and such substituted managing member is
hereby authorized to, and shall, continue the business of the Company without
dissolution as the Managing Member.
Β
10.3 Additional Requirements and
Conditions.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β In
addition to the requirements and conditions set forth in SectionΒ 10.1
hereof, any Transfer, in whole or in part, of a Non-Managing Memberβs Interest
(including any Transfer structured to comply with the Redemption Procedure) must
be documented in writing and such documentation must (i) be in a form acceptable
to the Managing Member (determined in the reasonable discretion of the Managing
Member), (ii) have terms that are not in contravention of any of the provisions
of this Agreement or of applicable law and (iii) be duly executed by the
Transferor and Transferee of such Interest.Β Β For greater certainty,
the documentation referred to in the immediately preceding sentence may, in the
discretion of the Managing Member, include a subscription agreement in the form
of the Subscription Agreement.Β Β Each Transferor agrees that it shall
pay all reasonable expenses, including legal fees, incurred by the Company or
the Managing Member in connection with a Transfer of its Interest, except to the
extent that the Transferee thereof agrees to bear such expenses.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained herein, the Company and the Managing Member
shall be entitled to treat the Transferor of a Non-Managing Memberβs Interest as
the absolute owner thereof in all respects, and the Company shall incur no
liability for allocations of income, losses, other items or distributions, or
transmittal of reports and notices required to be given to Non-Managing Members
hereunder which are made in good faith to such Transferor until (i) such time as
the written instrument of the Transfer has been physically received by the
Company; (ii) compliance with SectionsΒ 10.1,
10.3, 10.4 and 10.5 hereof has taken
place; (iii) the documentation in the form required by SectionΒ 10.3(a)
hereof has been recorded on the Company books (which the Managing Member must do
as soon as practicable) and (iv) the effective date of such Transfer has
passed.Β Β The effective date of the Transfer of an Interest shall be
the first day of the month following the day on which the last of clauses (i)
through (iv) of this SectionΒ 10.3(b)
occurs or at such earlier time as the Managing Member determines in its
discretion, being a time no earlier than the time at which the last of clauses
(i) through (iv) of this SectionΒ 10.3(b)
occurs.
Β
Β
67
Β
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained herein, no Transfer of any Non-Managing
Memberβs Interest (including any Transfer structured to comply with the
Redemption Procedure) may be made unless the Managing Member, (i) if so
requested of the Transferor by the Managing Member, shall have received from the
Transferor an opinion of counsel reasonably satisfactory to the Managing Member
(or waived such requirement) that such Transfer would not reasonably be expected
to (A) result in a violation of, or require the Company or the Managing Member
to register as an investment company, investment advisor or similar registration
requirement under, any United States federal or state securities laws or cause
the assets of the Company to be or to be deemed to be βplan assetsβ within the
meaning of ERISA or the Code, (B) result in a termination of the Companyβs
status as a partnership for tax purposes, (C) result in a violation of any law,
rule or regulation by the Transferor, the Transferee, the Company or the
Managing Member, (D) result in (I) the Company being treated as a βpublicly
traded partnershipβ within the meaning of Section 7704 of the Code (and the
Treasury Regulations promulgated thereunder), or (II) a termination of the
Company pursuant to Section 708 of the Code (and the Treasury Regulations
promulgated thereunder) (provided, however, that the
Managing Member may waive the restrictions in subclause (II) in its discretion),
(ii) shall have determinedΒ Β that the effect of such Transfer would not
likely result in a material adverse effect on the Company or any of its
Affiliates, or any portion of the Investment (including, without limitation,
that the Company would, as a result of such Transfer, be required to register as
an βinvestment companyβ under the Investment Company Act or that the Company or
any Member would, as a result of such Transfer, be subject to any liability
under SectionΒ 16(b) of the Exchange Act), and (iii) received a guaranty in
favor of the Company, in form and substance reasonably satisfactory to the
Managing Member, of the obligations of such Transferee under this Agreement or
evidence satisfactory to the Managing Member that such Transferee is of good
standing and has financial capabilities adequate to fund the Transferred
Commitment; provided,
that no such guaranty shall be required after all of the Transferorβs Commitment
has been drawn or is no longer available to be drawn. The Managing Member agrees
to promptly provide any Non-Managing Member seeking to Transfer its Interest in
accordance with this SectionΒ 10.3
with such information as such Non-Managing Member may reasonably request to
enable it to satisfy the requirements of this SectionΒ 10.3(c).Β Β In
addition, no Transfer of any Non-Managing Memberβs Interest shall be made to a
Prohibited Person or, except as provided in SectionΒ 3.3(e),
any Person that is not an institutional investor.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
the foregoing, (i) the requirements and conditions set forth in SectionΒ 10.3(c)(ii)
shall apply to any Transfer, in whole or in part, of the Managing Memberβs or
the Class B Memberβs Interest pursuant to SectionΒ 10.2,
and (ii) no Transfer of the Managing Memberβs or the Class B Memberβs Interest
shall be made to a Prohibited Person.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained herein, no Transfer of (i) any Memberβs
Interest or (ii) any portion of any Memberβs pro rata share of the
Investment following an in-kind distribution thereof to such Member, may, in
each case, be made hereunder or otherwise if such Transfer would cause the
Company to breach any transfer restrictions applicable to the Company under the
Restructuring Proposal.
Β
Β
68
Β
Β
10.4 Substituted Non-Managing
Member.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained herein, no Transferee of a Non-Managing
Member shall have the right to become a substituted Non-Managing Member unless
(i) the Managing Member shall have consented thereto, which consent may be
granted or withheld in the discretion of the Managing Member, (ii) the
Transferee shall have executed such documentation as the Managing Member may
reasonably require to acknowledge the obligation of the Transferee to contribute
the amount of the Available Commitment of the Transferor pursuant to Article 3 hereof and
all such other instruments as shall be reasonably required by the Managing
Member to signify such Transfereeβs agreement to be bound by all provisions of
this Agreement and all other documents reasonably required by the Managing
Member to effect the admission of the Transferee as a Non-Managing Member and
(iii) the Transferee or Transferor shall have paid to the Company the estimated
costs and expenses (including legal fees and filing costs and other
out-of-pocket expenses incurred by the Company) incurred in effecting the
Transfer and substitution.Β Β For the avoidance of doubt, any payment
made pursuant to clause (iii) in the immediately preceding sentence shall not be
considered a Capital Contribution.Β Β Such substituted Non-Managing
Member shall reimburse the Company for any excess of the actual costs and
expenses so incurred over the amount of such estimate.Β Β A Transferee
shall be deemed admitted as a substituted Non-Managing Member with respect to
the Interest Transferred upon its execution and delivery of a counterpart of
this Agreement (but not earlier than the effective date of the
Transfer).Β Β By execution of this Agreement or a counterpart hereof, or
by authorizing such execution on its behalf, each Non-Managing Member consents
and agrees that any Transferee may be admitted as a substituted Non-Managing
Member and this Agreement may be amended accordingly by the Managing Member
through the exercise of the power of attorney granted under SectionΒ 12.6
hereof, without the necessity of any further action by, or consent of, the
Non-Managing Members.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Upon
the admission of a Transferee as a substituted Non-Managing Member, Schedule A
shall be amended accordingly to reflect the name and address of such Transferee,
Class of Interests held by such Transferee, and Commitment, Company Percentage
Interest and Consortium Percentage Interest of such Transferee, in each case as
a substituted Non-Managing Member.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β A
Transferee of a Non-Managing Memberβs Interest who is not admitted as a
substituted Non-Managing Member pursuant to SectionΒ 10.4(a)
hereof shall be entitled only to allocations and distributions with respect to
the Interest of such Non-Managing Member in accordance with this Agreement, and
shall have no right to vote on any Company matters or, to the fullest extent
permitted by law, to any information or accounting of the affairs of the
Company, shall not be entitled to inspect the books or records of the Company
and shall, to the fullest extent permitted by law, have none of the rights of a
Member under the Act or this Agreement.
Β
Β
69
Β
Β
10.5 Incapacity of a Non-Managing
Member.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
any other provision of this Agreement, the death, Bankruptcy, dissolution or
incompetence of a Non-Managing Member shall not, in and of itself, cause a
dissolution of the Company, and upon the occurrence of such an event, the
Company shall continue without dissolution.Β Β If any such event shall
occur with respect to a Non-Managing Member, the trustee, successors or assigns
of such Non-Managing Member shall succeed only to the economic interest of such
Non-Managing Member herein, but no such trustee, successor or assignee shall
become a substituted Non-Managing Member unless and until the requirements of
SectionsΒ 10.1,
10.3, 10.4 and 10.5 hereof with
respect thereto have been satisfied.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
any other provision of this Agreement, the Bankruptcy of a Member shall not
cause the Member to cease to be a member of the Company, and, upon the
occurrence of such an event, the Company shall continue without dissolution,
except to the extent provided in SectionΒ 4.6
hereof.
Β
10.6 Tag-Along
Rights.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β In
the event that (i) any Member or Members, acting together or at the same or
substantially the same time in a single transaction or a series of related
transactions, receives a bona fide offer from any potential Transferee(s) to
Transfer to such Transferee(s) more than fifty percent (50%) of the Interests of
the Consortium or (ii) Brookfield receives a bona fide offer from any potential
Transferee(s) to Transfer to such Transferee(s) its Interests such that BAM and
its wholly-owned Affiliates would own less than the Brookfield Minimum Hold (any
Member which is the recipient of any such offer, a βTag-Along Memberβ and
any such Transfer, a βTag-Along Transferβ),
such Tag-Along Member(s) shall comply with the requirements of SectionΒ 10.1(b)
and if the Offeree Members do not elect to purchase the entire Offered Interest
of such Tag-Along Member(s), then such Tag-Along Member(s) may proceed to enter
into a definitive agreement to consummate such Tag-Along Transfer and as
promptly as reasonably practicable after entering into any such definitive
agreement, then such Tag-Along Member(s) shall notify each other Member of such
Tag-Along Transfer in accordance with Article 12 hereof,
such notice to contain a copy of the definitive agreement and state in
reasonable detail the material terms of such agreement including the Transfer
price and, in the case of a Tag-Along Transfer comprising multiple transactions
or at multiple prices, such Transfer price shall for the purposes of this SectionΒ 10.6 be
the volume weighted average price (each, a βTag-Along
Noticeβ).
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Each
Member who receives a Tag-Along Notice shall deliver to the Tag-Along Member or
the Managing Member, as applicable, not more than fifteen (15) Business Days
after the Tag-Along Notice, a written reply stating whether or not such Member
intends to exercise such Memberβs rights under SectionΒ 10.6(c)
hereof with respect to such Tag-Along Transfer (each, a βReplyβ).Β Β If
a Member receives a Tag-Along Notice but fails to deliver a Reply to a Tag-Along
Notice within such fifteen (15) Business Day period, such Member shall be deemed
to have irrevocably waived such Memberβs rights under this SectionΒ 10.6
with respect to the subject Tag-Along Transfer.
Β
Β
70
Β
(c)Β Β Β Β Β Β Β Β Β Β Β With
respect to any Tag-Along Transfer, each Member may, but is under no obligation
to, elect to sell, assign or transfer to the Transferee(s), on substantially the
same terms as the relevant Tag-Along Member, a portion of such Memberβs
Interests not to exceed one hundred percent (100%) of such Memberβs Interests
(the βTagging
Membersβ).Β Β The Tag-Along Member shall negotiate in good faith
with the Transferee(s) with the objective of consummating a Tag-Along Transfer
involving the sale, assignment or transfer of Interests in an aggregate amount
equal to the aggregate Interests desired to be sold, assigned or transferred by
the Tag-Along Member and each of the Tagging Members.Β Β In the event
the Tag-Along Member is successful in negotiating a Tag-Along Transfer involving
the sale, assignment or transfer of such Interests on substantially the terms in
the Tag-Along Notice, all such Interests shall be sold, assigned and transferred
to the Transferee(s) in connection with the Tag-Along Transfer.Β Β In
the event the Tag-Along Member is only successful in negotiating a Tag-Along
Transfer involving the sale, assignment or transfer of some of such Interests on
substantially the terms in the Tag-Along Notice, the Interests which the
Tag-Along Member and each Tagging Member shall sell, assign and transfer in
connection with such Tag-Along Transfer shall be determined by allocating the
Interests among the Tag-Along Members and Tagging Members as follows: (1) first,
to each such Member the lesser of (A) the portion of such Interests that such
Member desires to sell, assign or transfer to the extent it has not been
allocated to such Member on a previous application of this SectionΒ 10.6(c)(1)
and (B) its pro
rata share (determined based on such Memberβs Commitment as a proportion
of the aggregate Commitments of all Tag-Along Members and Tagging Members) of
the Interests which have not been allocated on a previous application of this
SectionΒ 10.6(c)(1)
and (2) second, by repeating the allocation process in SectionΒ 10.6(c)(1)
until all of the Interests have been allocated. The aggregate amount of
consideration from the Transferee(s) for the Interests being sold, assigned and
transferred in connection with the Tag-Along Transfer shall be divided among the
Tag-Along Member and the Tagging Members pro rata in
proportion to the Interests being sold, assigned and transferred by each of them
in connection with such Tag-Along Transfer.Β Β If such consideration is
in more than one form, the aggregate amount of the consideration of each form
shall be apportioned among the Tag-Along Member and the Tagging Members pro rata in
proportion to the Interests being transferred by each of them in connection with
such Tag-Along Transfer.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Each
sale, assignment or transfer in connection with a Tag-Along Transfer shall be
effectuated as promptly as practicable but in no event more than fifteen (15)
Business Days after the expiration of the fifteen (15) Business Day period set
forth in SectionΒ 10.6(b)
hereof or the earlier date on which the Tag-Along Member has received a Reply
from each Member to the relevant Tag-Along Notice.Β Β Each sale,
assignment or transfer to be made in connection with a Tag-Along Transfer shall
be effectuated simultaneously on substantially the terms in the Tag-Along Notice
and no Tagging Member or Tag-Along Member shall consummate any sale, assignment
or transfer in connection with a Tag-Along Transfer unless the Tag-Along Member
and each Tagging Member are permitted to consummate all such sales, assignments
and transfers.Β Β At the time such Transfers are consummated, the
Tag-Along Member shall require that the Transferee remit directly to the
Tag-Along Member and the Tagging Members that portion of the consideration to
which each of them is entitled.Β Β In the event that any Tag-Along
Transfer and its related sales, assignments and transfers are not consummated
prior to the expiration of the fifteen (15) Business Day period set forth in
this SectionΒ 10.6(d)
or the Transferee fails timely to remit any portion of the consideration, such
Tag-Along Transfer shall be deemed to be in violation of this SectionΒ 10.6
unless a new Tag-Along Notice is delivered and the procedures set forth in this
SectionΒ 10.6 are
repeated.
Β
Β
71
Β
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained in this Agreement, if requested in writing by
any Tag-Along Member or any Tagging Member to the Company and the Managing
Member, in lieu of a direct sale, assignment or transfer of such Memberβs
Interest to the Transferee as contemplated by this SectionΒ 10.6,
such Member may comply with the Redemption Procedure.
Β
10.7 Syndication.Β Β Notwithstanding
anything contained in this Article 10 to the
contrary (but subject to SectionΒ 10.3(c)
hereof), so long as the aggregate Commitments of BAM and its wholly-owned
Affiliates represent more than the Brookfield Minimum Hold, then, for a period
ending six (6) months following the effective date of the Plan, Brookfield shall
have the right, at its sole cost and expense, at any time and from time to time,
to syndicate its Commitment to one or more third parties and/or one or more
investment vehicles managed by Brookfield; provided, that BAM and its
wholly-owned Affiliates shall, in the aggregate, maintain Commitments of no less
than the Brookfield Minimum Hold.
Β
10.8 Liquidity
Events.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Failure to Satisfy Minimum
Condition.Β Β If the Minimum Condition has not been satisfied by
the Long Stop Date, the Managing Member shall attempt to Dispose of the
Investment and other assets of the Consortium through an en bloc sale or other
orderly disposition to maximize value; provided, that if such sale
is not completed within three (3) weeks following the Long Stop Date, the
Investment shall be Disposed of through an in-kind distribution to the
Consortium Members in accordance with Article 6 (and the
corresponding provision of each Parallel Investment Vehicle) and the Fair Market
Value thereof shall be determined at the date of such distribution.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Managing Member
Removal.Β Β Upon the removal of the Managing Member as the
managing member of the Company in accordance with SectionΒ 4.6
hereof, the Company will be wound up and the assets of the Company liquidated in
accordance with SectionΒ 11.3.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Hyper-Majority Vote of
Members.Β Β Upon the approval of a Hyper-Majority Vote of
Members, the Managing Member shall make a Disposition of the Investment and
other assets of the Company through an en bloc sale or other orderly disposition
to maximize value.Β Β For greater certainty, subject to SectionΒ 4.5, no
Member shall be entitled to, or be restricted from, acquiring the Investment
from the Company at such time; provided that any acquisition
of all or any part of the Investment by the Managing Member or its Affiliates
shall require the Hyper-Majority Vote of Members (other than the Managing Member
and its Affiliates, including any Person or account the Interest of which is
managed by Brookfield on a discretionary basis).
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Rights Following the Third
Anniversary. At any time following the third (3rd) anniversary of the
effective date of the Plan, Managing Member or any Member, as applicable, may
exercise on the following liquidity rights:
Β
(i)Β Β Β Β Β Β Β Β Β Β Β Managing Member Sale
Recommendation.
Β
Β
72
Β
Β
(A)Β Β Β Β Β Β Β Β Β Β Β The
Managing Member may recommend (a βSale Recommendationβ)
that the Investment and all other assets of the Consortium be sold, which
recommendation, if any, shall include reasonable details relating to the
intended strategy or exit plan to be pursued and such other information as the
Managing Member determines may be relevant to Members in deciding whether to
accept such recommendation. Any Member may accept such Sale Recommendation
within the ten (10) Business Day period following the date of such
recommendation (the βSale Recommendation
Acceptance Periodβ). If one or more Members accepts such Sale
Recommendation, the Managing Member in its discretion shall Dispose of such
Membersβ Consortium Percentage Interests of the Investment and other assets of
the Consortium in the manner set forth in the Sale Recommendation or by such
other means of maximizing value as the Managing Member may determine, including,
without limitation, through an en bloc sale or other orderly disposition (it
being understood that the proceeds from such sale distributable to each such
Member shall be reduced by such Memberβs Consortium Percentage Interest of the
liabilities of the Consortium, such Memberβs Company Percentage Interest of any
Company-specific liabilities (as determined in accordance with SectionΒ 4.12(c))
and the Memberβs proportionate share (determined by dividing such Memberβs
Invested Capital by the aggregate sum of the Invested Capital of all the
Consortium Members participating in the Sale Recommendation) of the costs
incurred in connection with the Disposition of such portion of the Investment
and other assets of the Consortium, as determined by the Independent Accounting
Firm as of the date such portion of the Investment and other assets of the
Consortium are sold). At any time following the Sale Recommendation Acceptance
Period, a Member that did not accept the Sale Recommendation may nonetheless
request that its pro
rata share (determined in accordance with its Consortium Percentage
Interest) of the Investment and other assets of the Consortium be sold by the
Consortium and the proceeds distributed (it being understood that the proceeds
from such sale distributable to each such Member shall be reduced by such
Memberβs Consortium Percentage Interest of the liabilities of the Consortium,
such Memberβs Company Percentage Interest of any Company-specific liabilities
(as determined in accordance with SectionΒ 4.12(c))
and the Memberβs proportionate share (determined by dividing such Memberβs
Invested Capital by the aggregate sum of the Invested Capital of all the
Consortium Members participating in the Sale Recommendation) of the costs
incurred in connection with the Disposition of such portion of the Investment
and other assets of the Consortium, as determined by the Independent Accounting
Firm as of the date such portion of the Investment and other assets of the
Consortium are sold). In the event that such request is made prior to completion
of the Disposition being made pursuant to the Sale Recommendation, the Managing
Member will endeavor to cause such pro rata share to be
included in the en bloc sale being made pursuant to the Sale Recommendation, and
otherwise will seek to sell such pro rata share of the
Investment and other assets of the Consortium in the market or otherwise in a
manner that seeks to maximize value.
Β
Β
73
Β
(B)Β Β Β Β Β Β Β Β Β Β Β In
connection with any Sale Recommendation, and solely for the purpose of SectionsΒ 6.1(b),
6.1(d) and
6.1(e) hereof,
the entire Investment and other assets of the Consortium will be deemed to be
Disposed of and the proceeds distributed as follows: (x) in the event any Member
accepts the Sale Recommendation within the Sale Recommendation Acceptance
Period, such distribution shall be based on the price received under such
Disposition and taking into account the liabilities of the Consortium, such
Memberβs Company Percentage Interest of any Company-specific liabilities (as
determined in accordance with SectionΒ 4.12(c))
and the costs reasonably expected to be incurred on a Disposition of the
Investment and other assets of the Consortium, in each case as determined by the
Independent Accounting Firm, and (y) in the event the Sale Recommendation is not
accepted by any Member within the Sale Recommendation Acceptance Period, such
distribution shall be based on the deemed Disposition of the Investment and
other assets of the Consortium at the then-current Fair Market Value, taking
into account the liabilities of the Consortium, such Memberβs Company Percentage
Interest of any Company-specific liabilities (as determined in accordance with
SectionΒ 4.12(c))
and the costs reasonably expected to be incurred in connection with a
Disposition of the Investment and other assets of the Consortium, in each case
as determined by the Independent Accounting Firm.
Β
(ii)Β Β Β Β Β Β Β Β Β Β Β Single Member
Sale.Β Β If the Managing Member has not made a recommendation as
provided in clause (ii) above, any Member (other than the Managing Member) (the
βDisposing
Memberβ) may seek to sell its Interests (the βSubject Interestβ) to
the other Consortium Members (the βAcquiring Membersβ)
pursuant to the following procedures:
Β
(A)Β Β Β Β Β Β Β Β Β Β Β the
Disposing Member shall provide notice to the Company and the Acquiring Members
of its desire to potentially sell its Interest (the βProvisional Sale
Noticeβ);
Β
(B)Β Β Β Β Β Β Β Β Β Β Β at
any time during the ten (10) day period beginning thirty (30) days following the
date of deemed receipt of the Provisional Sale Notice, the Disposing Member may
give notice (the βSale
Noticeβ) to the Company and the Acquiring Members of its offer to sell
its Interests (the βSale Offerβ) and the
price (the βExit
Priceβ) under which it is prepared to do so;
Β
(C)Β Β Β Β Β Β Β Β Β Β Β within
seven (7) days of the date of deemed receipt of the Sale Notice, each Acquiring
Member may elect by notice to the Company and the Disposing Member (the βAcquisition Noticeβ)
to acquire all or any portion of the Subject Interest (expressed as a percentage
of the Subject Interests) at the Exit Price; provided, however that at any time
during such seven-day period, the Disposing Member may, in its sole discretion,
elect to withdraw the Sale Offer and to reject the sale of any portion of the
Subject Interest to any Acquiring Member and, if the Sale Offer is so withdrawn
and any sale is so rejected, the Disposing Member shall give prompt written
notice thereof to the Acquiring Members; provided, further, that if the
Disposing Member elects to withdraw its Sale Offer and to reject the sale of any
portion of the Subject Interest, the Disposing Member may, in its sole
discretion, elect to re-offer the Subject Interest for sale in accordance with
the procedures set forth in SectionΒ 10.8(d)(ii)(E);
Β
(D)Β Β Β Β Β Β Β Β Β Β Β the
closing of any acquisition by the Acquiring Members shall take place within five
(5) Business Days of the date of deemed receipt of the Acquisition
Notice;
Β
Β
74
Β
Β
(E)Β Β Β Β Β Β Β Β Β Β Β the
Exit Price with respect to any portion of the Subject Interest to be acquired by
any Acquiring Member shall be an amount equal to the sum of (I) the product of
(x) a fraction, the numerator of which is such portion of the Subject Interest,
and the denominator of which is all Interests, and (y) an amount equal to the
sale proceeds that would have been obtained if all assets of the Company had
been sold at Fair Market Value on the date of the Sale Notice (provided, that (i) with
respect to any Securities referred to in clauses (a)(i) or (a)(ii) of the
definition of βFair Market Valueβ, the Fair Market Value thereof shall be
determined using the Ten-Day Average VWAP (rather than the Twenty-One-Day
Average VWAP) and (ii) with respect to any assets of the Company the Fair Market
Value of which is required to be determined based on a valuation made by an
appropriately qualified independent third-party valuation agent, such valuation
shall have been completed within three (3) months prior to the date of the Sale
Notice, and if no such valuation is available, the Company shall obtain a
valuation by an appropriately qualified independent third-party valuation agent
prior to the date the Acquisition Notice is required to be given), less
(II)Β Β (x) a reasonable estimate of the proportionate share of all of
the Companyβs liabilities attributable to such portion of the Subject Interest
determined by the Independent Accounting Firm (the sum of clause (I) and clause
(II)(x), βPartially
Adjusted Exit Priceβ) and (y) the Transaction Distribution Amount and the
Carried Interest attributable to such portion of the Subject Interest determined
based on the Partially Adjusted Exit Price (it being understood that the
acquisition of the Subject Interest by the Acquiring Members shall have no
effect on the Transaction Distribution Amount and the Carried Interest, if any,
distributable to the Managing Member and the Class B Member, respectively, in
respect the Subject Interest after the date of acquisition thereof by the
Acquiring Members), in each case determined by the Independent Accounting
Firm;
Β
(F)Β Β Β Β Β Β Β Β Β Β Β if
the aggregate amount of Interests under the Acquisition Notices is in excess of
the Subject Interest, the Subject Interest which each Acquiring Member providing
an Acquisition Notice shall acquire shall be determined by allocating the
Subject Interest among the Acquiring Members as follows: (1) first, to each
Acquiring Member the lesser of (A) the portion of the Subject Interests
indicated in its Acquisition Notice to the extent it has not been allocated to
such Acquiring Member on a previous application of this SectionΒ 10.8(d)(ii)(F)(1) and (B) its
pro rata share
(determined based on such Acquiring Memberβs Commitment as a proportion of the
aggregate Commitments of all Acquiring Members providing an Acquisition Notice)
of the Subject Interest which has not been allocated on a previous application
of this SectionΒ 10.8(d)(ii)(F)(1); and (2)
second, by repeating the allocation process in SectionΒ 10.8(d)(ii)(F)(1) until all of
the Subject Interest has been allocated; and
Β
(G)Β Β Β Β Β Β Β Β Β Β Β if
the aggregate amount of Interests under the Acquisition Notices is less than the
entire Subject Interest, then the Disposing Member may elect to withdraw the
Sale Offer or elect to have the Company Dispose of the Disposing Memberβs
remaining share of the Investment and other assets of the Company, the proceeds
of which shall be subject to reduction by a reasonable estimate of the Disposing
Memberβs remaining share of all of the Companyβs liabilities and the costs
incurred in connection with the Disposition of such remaining share of the
Investment and other assets of the Company, in each case as determined by the
Independent Accounting Firm.
Β
Β
75
Β
Β
(H)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary contained in this Agreement, if requested in writing by
any Disposing Member to the Company and the Managing Member, in lieu of a direct
sale of the Subject Interest to the Acquiring Members as contemplated by this
SectionΒ 10.8(d)(ii), such
Disposing Member may comply with the Redemption Procedure.
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
anything to the contrary herein, Dispositions made pursuant to this SectionΒ 10.8 shall be
structured solely in a manner as to prevent any liability under Section 16(b) of
the Exchange Act with respect to any Consortium Member or any entity within the
Consortium.
Β
ARTICLE 11
DISSOLUTION
AND WINDING
UP
OF THE COMPANY
Β
11.1 Events of
Dissolution.Β Β The Company shall dissolve upon the happening of
any of the following events:
Β
(a)Β Β Β Β Β Β Β Β Β Β Β the
decision of the Managing Member to dissolve the Company with the consent
pursuant to the Voting Agreement, which such consent shall be based on the
approval of a Hyper-Majority Vote of Tier One Parallel Investment
Vehicles;
Β
(b)Β Β Β Β Β Β Β Β Β Β Β the
occurrence of any event that results in the Managing Member ceasing to be a
managing member of the Company pursuant to SectionΒ 4.6 hereof or under
the Act (other than in connection with a Transfer of its entire Interest in
accordance with this Agreement or if it has only been temporarily replaced);
provided, however, that
the Company shall not be dissolved and required to be wound up in connection
with any such event if the Company is continued without dissolution in a manner
permitted by this Agreement;
Β
(c)Β Β Β Β Β Β Β Β Β Β Β a
judicial decree of dissolution has been obtained; or
Β
(d)Β Β Β Β Β Β Β Β Β Β Β at
any time there are no Non-Managing Members, unless the business of the Company
is continued without dissolution in accordance with the Act.
Β
11.2 Winding
Up.Β Β Upon a dissolution of the Company, the Company shall not
terminate, but shall cease to engage in further business, except to the extent
necessary to perform existing contracts and preserve the value of its assets,
and subject to SectionΒ 4.6 the Managing
Member, or if there is no managing member of the Company, a liquidating trustee
selected by a Majority Vote of the Tier One Parallel Investment Vehicles (in
accordance with the Voting Agreement), shall act as liquidator to wind up the
Companyβs affairs and liquidate its assets (including, if applicable, by means
of the distribution in kind of any assets of the Company, in accordance with
SectionΒ 11.3(c)
hereof).Β Β During the course of the winding up and liquidation of the
Company, all of the provisions of this Agreement shall continue to bind the
parties and apply to the activities of the Company (including, without
limitation, the distribution provisions of Article 6 hereof),
except as specifically provided herein to the contrary. As promptly as possible
following dissolution of the Company, the Managing Member (or other liquidating
trustee if applicable) shall cause to be prepared a statement setting forth the
assets and liabilities of the Company and its Subsidiaries as of the date of
dissolution, a copy of which statement shall be furnished to all of the
Members.
Β
Β
76
Β
Β
11.3 Liquidation.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β As
soon as practicable following the effective date of dissolution, the proceeds
from liquidation shall be applied and distributed as follows:
Β
(i)Β Β Β Β Β Β Β Β Β Β Β First,
to the satisfaction (whether by payment or the reasonable provision for payment)
of the obligations of the Company to creditors in the order of priority
established by the instruments creating or governing such obligations and to the
extent otherwise permitted by law, including to establish of any reserves which
the Managing Member or other liquidating trustee as may be selected considers
necessary for any anticipated contingent, conditional or unmatured liabilities
or obligations of the Company and to satisfy all applicable formalities in such
circumstances as may be prescribed by applicable law.Β Β All such
reserves shall be paid over to a national bank selected by the Managing Member
(or other liquidating trustee if applicable) and authorized to conduct business
as an escrowee to be held by such bank as escrowee for the purpose of disbursing
such reserves in payment in respect of any of the aforementioned liabilities or
obligations.Β Β At the expiration of such period as the Managing Member
(or other liquidating trustee, if applicable) shall deem advisable, any balance
of any such reserves not required to discharge such liabilities or obligations
shall be distributed as provided in subsection (ii) below; and
Β
(ii)Β Β Β Β Β Β Β Β Β Β Β Second,
to the Members in accordance with Article 6
hereof.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Each
Member shall look solely to the assets of the Company for all distributions with
respect to the Company and shall have no recourse therefor, upon dissolution or
otherwise, against the Managing Member or a Non-Managing
Member.Β Β Subject to SectionΒ 11.3(c) hereof, no
Member shall have any right to demand or receive property other than cash upon
dissolution of the Company.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β If
upon the winding up and liquidation of the Company there shall be any assets of
the Company to be distributed in kind, the Managing Member shall provide written
notice to each Member of such distribution which notice shall set forth the date
on which the Managing Member has determined to cause such distribution to be
made and shall offer to each Member the right to elect not to receive such in
kind distribution.Β Β If the Managing Member receives written notice
from any Non-Managing Member within five (5) Business Days following receipt of
the Managing Memberβs notice of an in kind distribution of assets of the
Company, that, in lieu of receiving such in kind distribution, such Non-Managing
Member desires that the Managing Member dispose of such Non-Managing Memberβs
share of the assets of the Company to be distributed in kind and distribute the
cash proceeds, net of all Disposition commissions and expenses, to such
Non-Managing Member, the Managing Member shall use its commercially reasonable
efforts to Dispose of such Non-Managing Memberβs share of the assets of the
Company to be distributed in kind; provided, however, that, for
the purposes of this Agreement, such Non-Managing Memberβs share of the assets
of the Company to be distributed in kind shall be deemed to have been Disposed
of for their Fair Market Value as of the date of the in-kind distribution of
such assets of the Company to the Non-Managing Members who did not provide such
notice.Β Β In the event the Managing Member is unable to dispose of such
Non-Managing Memberβs share of the assets of the Company within two (2) weeks,
such Non-Managing Member may deliver a written notice to the Managing Member
requesting that the Managing Member distribute such Non-Managing Memberβs share
of the assets of the Company in kind to such Non-Managing Member and the
Managing Member shall promptly do so.Β Β If the Managing Member does not
receive a written notice of the type referred to in the immediately preceding
sentence from such Non-Managing Member, the Managing Member shall continue its
efforts to sell such Non-Managing Memberβs share of the assets of the Company to
be distributed in kind for an additional period of one (1) week and if the
Managing Member is not successful in selling such Non-Managing Memberβs share of
the assets of the Company to be distributed in kind during such period, at the
end of such one-week period the Managing Member shall distribute such
Non-Managing Memberβs share of the assets of the Company in kind to such
Member.Β Β The Company shall use commercially reasonable efforts to seek
that any shares of GGP that are distributed in kind pursuant to this SectionΒ 11.3(c) be freely
tradeable under applicable securities laws, it being acknowledged by each of the
Members that, to the extent the Company is then a minority shareholder of GGP,
the Company may be significantly limited in its ability to control the free
tradeability of such shares.
Β Β
77
Β
Β
11.4 Termination of
Company.Β Β Upon the application and distribution of the proceeds
of liquidation and the assets of the Company as provided in SectionΒ 11.3 hereof, the
Company shall file its certificate of cancellation of the Certificate in
accordance with the Act, whereupon the Company shall terminate.Β Β Upon
cancellation of the Certificate in accordance with the Act, this Agreement shall
terminate (other than the rights and obligations under SectionsΒ 3.5(b), 3.5(c), 6.5, 6.7, 8.1, 8.4(e), 9.2, 12.1, 12.3, 12.11 and 12.13 to 12.23).
Β
11.5 Other Dissolution and
Termination Provisions.Β Β Subject to SectionΒ 11.1 hereof, none of
the following shall automatically affect the existence of, dissolve or terminate
the Company:
Β
(a)Β Β Β Β Β Β Β Β Β Β the
substitution, death, incompetency, (voluntary or involuntary) dissolution,
winding up, liquidation, insolvency, Bankruptcy or other disability or the
withdrawal of a Non-Managing Member;
Β
(b)Β Β Β Β Β Β Β Β Β Β Β the
amalgamation, reorganization, recapitalization, consolidation, merger, sale of
all or substantially all of the securities or assets of, or other change in the
ownership or nature of the Managing Member;
Β
(c)Β Β Β Β Β Β Β Β Β Β Β the
substitution, death, incompetency, (voluntary or involuntary) dissolution,
winding up, liquidation, insolvency, Bankruptcy or other disability or the
withdrawal of the Managing Member or of any direct or indirect shareholder in
the Managing Member;
Β
(d)Β Β Β Β Β Β Β Β Β Β the
admission of any additional shareholder in the Managing Member;
Β
(e)Β Β Β Β Β Β Β Β Β Β Β the
admission of any additional Member to the Company or the transfer of any
Interest; or
Β
(f)Β Β Β Β Β Β Β Β Β the
pledge, mortgage, grant of a security interest in or other encumbrance of any
Interest by a Member.
Β
Β
78
Β
Β
ARTICLE 12
GENERAL
PROVISIONS
Β
12.1 Notices.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β All
notices or other communications to be given hereunder to a Member shall be in
writing and shall be sent by delivery in person, by courier service, by
electronic mail transmission or telecopy addressed as follows or such other
address as may be substituted by notice as herein provided:
Β
(i)Β Β Β Β Β Β Β Β Β Β Β If
to the Company:
Β
[____]
LLC
c/o
Brookfield Asset Management Inc.
Xxxxxxxxxx
Xxxxx, Xxxxx 000
000 Xxx
Xxxxxx, X.X. Xxx 000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:Β Β Xxxxxx
X. Xxxxxxxx
Telephone:Β Β (000)
000-0000
Electronic
Mail:Β Β xxxxxxxxx@xxxxxxxxxx.xxx
Β
(ii)Β Β Β Β Β Β Β Β Β Β Β If
to the Managing Member:
Β
Brookfield
Asset Management Private
Institutional
Capital Adviser (Canada), L.P.
c/o
Brookfield Asset Management Inc.
Xxxxxxxxxx
Xxxxx, Xxxxx 000
000 Xxx
Xxxxxx, X.X. Xxx 000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:Β Β Xxxxxx
X. Xxxxxxxx
Telephone:Β Β (000)
000-0000
Electronic
Mail:Β Β xxxxxxxxx@xxxxxxxxxx.xxx
Β
(iii)Β Β Β Β Β Β Β Β Β Β If
to the Non-Managing Members, at the addresses set forth in their respective
Subscription Agreement.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Any
notice given hereunder shall be deemed to have been given upon the earliest of,
in the case of notices to and from parties within the same country: (i) if
delivered by hand during Business Hours, on the date of delivery and (ii) one
(1) day after being sent by any recognized overnight delivery service, return
receipt requested.Β Β In the case of notices to and from parties in one
country to any other country, such notices shall be deemed to have been given
upon the earlier of (A) receipt during Business Hours, and (B) five (5) days
after being sent by any internationally recognized courier service, return
receipt requested.Β Β In the case of notices sent by electronic mail
transmission, telecopy or by posting to IntraLinks (or similar online service),
such notices shall be deemed to have been given upon receipt during Business
Hours; provided,
however, that any notice sent by electronic mail transmission or by
posting to IntraLinks (or similar online service) shall only be effective upon
confirmation (by telephone,Β Β telecopy or electronic confirmation of
receipt (other than a confirmation generated automatically) or access
notification, as applicable) from the Member to whom such notice was
sent.
Β
Β
79
Β
Β
12.2 Title to Company
Property.Β Β Legal title to Company property shall at all times
be held by and in the name of the Company or its nominee or custodian, other
than securities held in βstreet nameβ by a broker or dealer for the benefit of
the Company.
Β
12.3 Confidentiality.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Except
with the consent of the Managing Member or as otherwise provided in this
Agreement, no Non-Managing Member shall disclose to any Person any information
related to the Managing Member, the Company, any Parallel Investment Vehicle,
the Board of Directors (or the board of directors of any Parallel Investment
Vehicle), GGP, or any of their respective Affiliates, in each case, that is not
publicly available (or that is publicly available only as a result of a
disclosure by such Non-Managing Member or any director, employee, officer,
legal, financial or tax advisor or auditor of such Non-Managing Member or its
Affiliates in violation of this SectionΒ 12.3); provided, however, that nothing
contained herein shall prevent any Non-Managing Member from furnishing (i) any
required information to any governmental regulatory agency or self-regulating
body or in connection with any judicial, governmental or other regulatory
proceeding or as otherwise required by law (provided, that any disclosure
that is either (A) not to a governmental regulatory agency or (B) not on a
confidential basis, shall require prior written notice thereof to the Managing
Member to the extent allowed by law) or (ii) any information, so long as such
disclosure is for a bona fide business purpose of such Non-Managing Member in
respect of its Interest, to directors, officers, employees, legal, financial and
tax advisors or auditors of such Non-Managing Member or its Affiliates who are
informed of the confidential nature of the information and who agree to be bound
by the provisions of this SectionΒ 12.3, and each
Non-Managing Member agrees to be bound hereby.Β Β Without limitation of
the foregoing, each Non-Managing Member acknowledges that notices and reports to
such Non-Managing Member hereunder may contain material non-public information
concerning, among other things, GGP and the Investment, and agrees not to use
such information other than in connection with monitoring its investment in the
Company and agrees, in that regard, not to trade in any Securities (other than
its Interest as permitted hereunder), Debt, New Equity or any other interests in
GGP or any other investment likely to effect the value thereof on the basis of
any such information. The Managing Member agrees that it shall use information
required to be kept confidential by this SectionΒ 12.3 only in
connection with the performance of its duties under this Agreement.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Except
as otherwise agreed by the Managing Member or as otherwise provided in this
Agreement, in order to preserve the confidentiality of certain information
disseminated by the Managing Member or the Company under this Agreement that a
Non-Managing Member that is subject to FOIA or any Non-Managing Member that has
one or more equity owners that are subject to FOIA (any such Non-Managing Member
a βFOIA
Memberβ) is entitled to receive pursuant to the provisions of this
Agreement, including, without limitation, quarterly, annual and other reports
(other than such information necessary to file such Non-Managing Memberβs tax
and information returns), information provided to the Board of Directors and any
information provided at meetings of the Non-Managing Members, the Managing
Member may (i) provide to such FOIA Member access to such information only on
the Companyβs (or Managing Memberβs) website in password protected,
non-downloadable, non-printable format or (ii) require such FOIA Member to
return any copies of information provided to it by the Managing Member or the
Company (including any subsequent copies made by such Non-Managing
Member).
Β
Β
80
Β
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Notwithstanding
the provisions of SectionΒ 12.3(a) hereof, the
Managing Member agrees that each Member that (i) is a private fund of funds (or
other similar private collective investment vehicle) having reporting
obligations to its investors and (ii) has, prior to the date on which such
Member was admitted to the Company, notified the Managing Member in writing that
it is electing the benefits of this SectionΒ 12.3(c) may, in order
to satisfy such reporting obligations, provide the following information to its
investors (but only to the extent that such investors are informed of the
confidential nature of the information and either agree to be bound by the
provisions of this SectionΒ 12.3 or are otherwise
bound by substantially similar obligations of confidentiality):Β Β (A)
the name and address of the Company; (B) the fact that such Member is a member
of the Company; (C) the identity of the Managing Member; (D) the date the Member
was admitted as a Member; (E) the amount of such Memberβs Commitment; (F) the
aggregate amount of such Memberβs Capital Contributions; (G) the aggregate
amount of distributions received by such Member from the Company; (H) the
reported value of such Memberβs Interest (as set forth in the reports furnished
by the Managing Member to such Non-Managing Member pursuant to SectionsΒ 8.1(b)(i) and 8.1(b)(ii) hereof);
(I) a total of the amounts set forth in clauses (G) and (H) above; (J) such
Memberβs net internal rate of return with respect to the Companyβs performance
as a whole as prepared by such Member; (K) the name of GGP, a description of the
business of GGP and information regarding the industry and geographic location
of GGP and (L) and any other information that can be derived from the
information referred to in clauses (A) through (K) above (with or without any
other publicly available information).Β Β With respect to any disclosure
referred to in clauses (A) through (L) above, each Non-Managing Member shall
indicate that such disclosure was not prepared, reviewed or approved, by the
Managing Member or the Company.
Β
(d)Β Β Β Β Β Β Β Β Β Β Β Except
as otherwise agreed by the Managing Member or as otherwise provided in this
Agreement, each Non-Managing Member shall promptly notify the Managing Member if
at any time such Non-Managing Member is or becomes subject to any public
disclosure law, rule or regulation of any governmental or non-governmental
entity that could require similar or broader public disclosure of confidential
information provided to such Non-Managing Member (collectively such laws, rules
or regulations, βFOIAβ).Β Β To
the extent that any such Non-Managing Member receives a request for public
disclosure of any confidential Company information provided to it, such
Non-Managing Member agrees that:Β Β (i) it shall use its commercially
reasonable efforts to (A) promptly notify the Managing Member of such disclosure
request and promptly provide the Managing Member with a copy of such disclosure
request or a detailed summary of the information being requested, (B) inform the
Managing Member of the timing for responding to such disclosure request, and (C)
consult with the Managing Member regarding the response to such disclosure
request; (ii) it shall use commercially reasonable efforts to oppose and prevent
the requested disclosure unless (A) such Non-Managing Member is advised by
counsel that there exists no reasonable basis on which to oppose such disclosure
or (B) such disclosure relates solely to the information contained in clauses
(A) through (L) of SectionΒ 12.3(c) hereof (and
does not include any information relating to GGP or the Investment (except as it
relates to such Non-Managing Memberβs Interest) and/or copies of this Agreement
or related documents); and (iii) notwithstanding any other provision of this
Agreement, the Managing Member may, in order to prevent any such potential
disclosure that the Managing Member determines in good faith is likely to occur,
withhold all or any part of the information otherwise to be provided to such
Non-Managing Member; provided,
however, that the Managing Member shall not withhold any such information
if such Non-Managing Member confirms in writing to the Managing Member, based
upon advice of counsel, that compliance with the procedures in SectionΒ 12.3(b) hereof is
legally sufficient to prevent such potential disclosure.
Β
Β
81
Β
Β
(e)Β Β Β Β Β Β Β Β Β Β Β Each
Member agrees not to, and shall ensure that each of their respective Affiliates
does not, make any press release or other announcement or other marketing
disclosure about any other Memberβs investment in the Company (or any indirect
investment in the Company by any other Person) without such other Memberβs prior
written approval; provided, however, that the
Managing Member and its Affiliates may indicate that a Member has invested in
the Company (or any other Person has invested indirectly); provided, further, that prior
written notice has been given to the Member of any indication in a public forum
(e.g., on a
website)).
Β
(f)Β Β Β Β Β Β Β Β Β Β Β The
obligations and undertakings of each Non-Managing Member under this SectionΒ 12.3 shall be
continuing and shall survive termination of the Company and this
Agreement.Β Β Any restriction or obligation imposed on a Non-Managing
Member pursuant to this SectionΒ 12.3 may be waived by
the Managing Member in its discretion.Β Β Any such waiver or
modification by the Managing Member shall not constitute a breach of this
Agreement or, to the fullest extent permitted by law, of any duty stated or
implied in law or in equity to any Non-Managing Member, regardless of whether
different agreements are reached with different Non-Managing
Members.
Β
(g)Β Β Β Β Β Β Β Β Β Β Β The
parties hereto agree that irreparable damage would occur if the provisions of
this SectionΒ 12.3 were
breached.Β Β It is accordingly agreed that the parties hereto shall, to
the fullest extent permitted by law, be entitled to an injunction or injunctions
to prevent breaches of this SectionΒ 12.3 as modified or
waived and to enforce specifically the terms and provisions hereof as modified
or waived in any court having jurisdiction, in addition to any other remedy to
which they are entitled at law or in equity.
Β
12.4 Exclusivity.Β Β Until
the winding up and dissolution of the Company in accordance with Article 11 hereof
(or, if earlier, the Disposition of the entire Investment and the distribution
of the proceeds therefrom in accordance with Article 6 hereof),
each Member agrees to work exclusively with the Company in connection
with:Β Β (a) any potential plan of reorganization of GGP or any of its
Affiliates; (b) any proposal for, and the provision of, financing to GGP or any
of its Affiliates; or (c) any acquisition, merger, consolidation, tender or
exchange offer, leveraged buy-out, share, asset, debt, claim or security
purchase, exchange of capital stock or assets, joint venture, liquidation,
dissolution or business combination involving GGP, its Affiliates or any of
their assets during the term of the Chapter 11 Case or in connection with the
effectiveness of the Plan (other than pursuant to investments in mutual funds,
hedge funds and other investment vehicles or accounts over which such person has
no direct or indirect investment discretion and to which neither it nor any of
its representatives has conveyed any confidential information in breach of this
Agreement), and agrees not to, directly or indirectly, make, be involved in,
promote, discuss, encourage or finance, either independently or with any other
person, any of the events or actions under clauses (a), (b) or (c) hereof to
GGP, its Affiliates or any representative of GGP; provided, that if a
Super-Majority Vote of Members approving the establishment of a GGP Financing
Vehicle in accordance with SectionΒ 5.2 hereof is not
obtained, any Member that desires to participate in such financing and is
permitted to do so under SectionΒ 5.2(f) or (g) hereof shall be
exempted from the exclusivity requirements of this SectionΒ 12.4 solely to the
extent necessary to permit such Member to participate in such
financing.Β Β The Managing Member shall be entitled to exercise the
Companyβs rights to enforce this SectionΒ 12.4 and SectionΒ 12.3 hereof on behalf
of the Company.Β Β For the avoidance of doubt, the provisions of this
SectionΒ 12.4 shall not
restrict any Member (either independently or with any other Person) from
pursuing or entering into any property or asset-level investments with GGP
following the effective date of the Plan.
Β
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12.5 Relations with
Members.Β Β Unless named in this Agreement as a Member, or unless
admitted to the Company as a substituted Non-Managing Member, an Additional
Member or a substituted or temporary replacement managing member of the Company,
as provided in this Agreement, no Person shall be considered a
Member.Β Β Subject to Article 10 hereof,
the Company and Managing Member need deal only with Persons so named or admitted
as Members.
Β
12.6 Appointment of Managing
Member as Attorney-in-Fact.Β Β Subject to the receipt of any
required approval under the Voting Agreement or of the Board of Directors or the
Members with respect to any matter as required under the Voting Agreement, this
Agreement or applicable law, each Non-Managing Member (including any substituted
Non-Managing Member or Additional Member) hereby irrevocably makes, constitutes
and appoints the Managing Member and each of its duly authorized officers,
managers, successors and assignees, with full power of substitution and
resubstitution, as its true and lawful attorney-in-fact, in its name, place and
stead and for its use and benefit, to execute, certify, acknowledge, file,
record and swear to all instruments, agreements and documents necessary or
advisable to carrying out the following:
Β
(a)Β Β Β Β Β Β Β Β Β Β Β any
and all amendments to this Agreement that may be authorized, permitted or
required by this Agreement or the Act, including, without limitation, amendments
required to effect the admission of Additional Members or substituted
Non-Managing Members pursuant to and as permitted by this Agreement or to revoke
any admission of a Non-Managing Member which is prohibited by this
Agreement;
Β
(b)Β Β Β Β Β Β Β Β Β Β any
amendment to the Certificate and all certificates and other instruments
necessary or appropriate to qualify or to continue the qualification of the
Company as a limited liability company under the laws of the State of Delaware
and in each other jurisdiction where the Company may conduct its activities or
where such qualification is necessary or desirable to maintain limited liability
of Non-Managing Members in that jurisdiction;
Β
(c)Β Β Β Β Β Β Β Β Β Β Β all
instruments and certificates and any amendment to the Certificate necessary or
appropriate to reflect any amendment, change or modification of this Agreement,
subject to the terms and restrictions of this Agreement;
Β
(d)Β Β Β Β Β Β Β Β Β all
conveyances and other instruments and documents necessary to reflect the
dissolution and liquidation of the Company, subject to the terms and
restrictions of this Agreement;
Β
Β
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Β
Β
(e)Β Β Β Β Β Β Β Β Β Β Β all
elections, determinations or designations under the Code (and the Treasury
Regulations promulgated thereunder) or any other taxation or other legislation
or laws of like import of the United States or of any states, provinces or
jurisdictions in respect of the affairs of the Company, subject to the terms and
restrictions of this Agreement;
Β
(f)Β Β Β Β Β Β Β Β Β Β Β any
business certificate, certificate of limited liability company, amendment
thereto, or other instrument or document of any kind necessary to accomplish the
Company Business, subject to the terms and restrictions of this Agreement;
and
Β
(g)Β Β Β Β Β Β Β Β Β Β Β all
other instruments that may be required or permitted by law to be filed on behalf
of the Company and that are not inconsistent with this Agreement.
Β
Each
Non-Managing Member authorizes such attorney-in-fact to take any further action
which such attorney-in-fact shall consider necessary or advisable in connection
with any of the foregoing, hereby giving such attorney-in-fact full power and
authority to do and perform each and every act or thing whatsoever necessary or
advisable to be done in and about the foregoing as fully as such Non-Managing
Member might or could do if personally present, and hereby ratifying and
confirming all that such attorney-in-fact shall lawfully do or cause to be done
by virtue hereof.Β Β The appointment by each Non-Managing Member of the
Managing Member and each of its duly authorized officers, managers, successors
and assigns with full power of substitution and resubstitution, as aforesaid, as
attorneys in fact is a power coupled with an interest, shall be irrevocable and
shall survive and not be affected by the dissolution, Bankruptcy, incapacity,
disability or death of any Non-Managing Member, in recognition of the fact that
each of the Non-Managing Members under this Agreement shall be relying upon the
power of the Managing Member and such officers, managers, successors and assigns
to act as contemplated by this Agreement in such filing and other action by it
on behalf of the Company.Β Β The foregoing power of attorney shall
survive the Transfer by any Non-Managing Member of the whole or any part of its
Interest hereunder, except that if any assignee of such Non-Managing Member has
been approved for admission to the Company as a substitute Non-Managing Member,
the power of attorney granted hereby shall survive the delivery of the
assignment for the sole purpose of (a) enabling the Managing Member to execute,
acknowledge and file any instrument necessary to effect the substitution and (b)
approving any actions that relate to the period of time prior to such
substitution.Β Β With respect to each Non-Managing Member, the granting
of this power of attorney shall not terminate any continuing power of attorney
previously granted by such Non-Managing Member and shall not be terminated by
such Non-Managing Member on the execution of a continuing power of attorney in
the future, and such Non-Managing Member hereby agrees not to take any action in
the future which results in the termination of this power of
attorney.Β Β The power of attorney granted herein shall
not:Β Β (x) entitle the Managing Member to vote on any matter or to
consent to any written resolution of the Non-Managing Members on behalf of the
Non-Managing Members; (y) be deemed to constitute a written consent of any
Non-Managing Member for purposes of this Agreement; or (z) be exercised in
contravention of this Agreement.
Β
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Β
12.7 Managing Member
Discretion.Β Β To the fullest extent permitted by law, except
where expressly provided otherwise in this Agreement, whenever in this Agreement
the Managing Member is permitted or required to make a decision (a) in its
βdiscretion,β or under a grant of similar authority or latitude, the Managing
Member shall be entitled to act βin its sole and absolute discretionβ and to
consider only such interests and factors as it desires and, to the fullest
extent permitted by law, shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Company, the Members
or any other Person, so long as such action does not constitute gross negligence
or an engagement in fraud, willful misconduct, a willful and knowing material
breach of this Agreement or willful violation of law in the management of the
Company or (b) in its βgood faithβ, βreasonablyβ or under another express
standard, the Managing Member shall act under such express standard and shall
not be subject to any other or different standard.
Β
12.8 Other Instruments and
Acts.Β Β The Members agree to execute any other instruments or
perform any other acts that are or may be necessary to effectuate and carry on
the Company created by this Agreement.
Β
12.9 Binding
Agreement.Β Β This Agreement shall be binding upon the
transferees, successors, permitted assigns, and legal representatives of the
Members.
Β
12.10 Payments by
Members.Β Β Any amount payable by any Member to the Company in
respect of such Memberβs Commitment shall be paid to the bank account of the
Company designated by the Managing Member prior to the Initial Closing Date or
such other bank account of the Company as the Managing Member may designate by
written notice to such Member not less than five (5) Business Days prior to the
earliest date on which such Member is required or entitled to make a payment to
the Company in respect of its Commitment.
Β
12.11 No Third Party
Beneficiaries.Β Β It is understood and agreed among the parties
that this Agreement and the covenants made herein are made expressly and solely
for the benefit of the parties hereto (and their respective transferees,
successors and permitted assigns), and that no other Person, other than a Tax
Indemnified Party pursuant to SectionΒ 8.4(e) hereof or an
Indemnified Party pursuant to SectionΒ 9.2 hereof, shall be
entitled or be deemed to be entitled to any benefits or rights hereunder, nor be
authorized or entitled to enforce any rights, claims or remedies hereunder or by
reason hereof.
Β
12.12 Reliance on Authority of
Person Signing Agreement.Β Β If a Member is not a natural Person,
neither the Company nor any Member shall (a) be required to determine the
authority of the individual signing this Agreement to make any commitment or
undertaking on behalf of such entity or to determine any fact or circumstance
bearing upon the existence of the authority of such individual or (b) be
responsible for the application or distribution of proceeds paid or credited to
individuals signing this Agreement on behalf of such entity.
Β
12.13 Applicable Law; Waiver of
Jury Trial.Β Β This Agreement shall be construed, interpreted and
enforced in accordance with, and the respective rights and obligations of the
parties shall be governed by, the laws of the State of Delaware.Β Β TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH MEMBER WAIVES, AND
COVENANTS THAT SUCH MEMBER WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF
OR IN ANY WAY CONNECTED WITH THE DEALINGS OF ANY MEMBER OR THE COMPANY IN
CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE.Β Β THE COMPANY OR
ANY MEMBER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTIONΒ 12.13 HEREOF WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE MEMBERS TO THE WAIVER OF THEIR
RIGHTS TO TRIAL BY JURY.
Β
Β
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Β
12.14 Arbitration.Β Β Any
dispute, controversy or claim (βDisputeβ) arising out
of, relating to or in connection with this Agreement, including any question
regarding its existence, validity or termination, or regarding a breach hereof
which cannot be resolved by good faith discussions between the relevant parties
within ninety (90) days of the date on which the Dispute is deemed to arise in
accordance with this SectionΒ 12.14 shall be
referred by any such party to, and shall be finally settled by, arbitration
under and in accordance with the Rules of Arbitration of the International
Chamber of Commerce (the βRulesβ).Β Β A
Dispute shall be deemed to have arisen when a relevant party (or parties) gives
notice to the other to that effect, pursuant to SectionΒ 12.1
hereof.Β Β The place of arbitration shall be London, United Kingdom, and
shall be conducted in the English language.Β Β The decision or award of
three (3) arbitrators, appointed in accordance with the Rules and in accordance
with the requirements following in this SectionΒ 12.14, shall be in
writing and is final and binding on the relevant parties.Β Β Each of the
three (3) arbitrators shall be an attorney with at least ten (10) years of
practice (at least five (5) of which must be predominately in the areas of
corporate law) and who has served as an arbitrator in at least five (5)
International Chamber of Commerce arbitrations.Β Β The arbitration panel
shall award the prevailing party (or parties) its attorneysβ fees and costs,
arbitration administrative fees, panel member fees and costs, and any other
costs associated with the arbitration, proceedings for the recognition and
enforcement of any arbitral award and the costs and attorneyβs fees involved in
the recognition and enforcement proceedings.Β Β The parties further
agree that (i) attorneyβs fees and costs associated with the successful
recognition and enforcement of an arbitral award shall always be paid by the
non-enforcing party (or parties) and (ii) notwithstanding anything in this SectionΒ 12.14 to the contrary
and without inconsistency with this arbitration provision, the parties consent
to the non-exclusive jurisdiction of any court identified in SectionΒ 12.15 hereof for the
purpose of any proceeding for recognition and enforcement of both the arbitral
award and the partiesβ agreement as to costs of that proceeding in accordance
with this SectionΒ 12.14.Β Β The
arbitration panel may only award damages as provided for under the terms of this
Agreement and in no event may punitive, consequential and special damages be
awarded.Β Β In the event of any conflict between the Rules and any
provision of this Agreement, this Agreement shall
govern.Β Β Notwithstanding anything in this SectionΒ 12.14 to the
contrary, any party may, without inconsistency with this arbitration provision,
apply to any court identified in SectionΒ 12.15 hereof to seek
interim provisional or injunctive relief until the arbitration award is rendered
or the controversy is otherwise resolved or to enforce an arbitration decision
or award.
Β
Notwithstanding
any provision of this Agreement to the contrary, this SectionΒ 12.14 shall be
construed to the maximum extent possible to comply with the laws of the State of
Delaware, including the Uniform Arbitration Act (10 Del. C. § 5701 etΒ seq.) (the βDelaware Arbitration
Actβ).Β Β If, nevertheless, it shall be determined by a court of
competent jurisdiction that any provision or wording of this SectionΒ 12.14, including the
Rules, shall be invalid or unenforceable under the Delaware Arbitration Act, or
other applicable law, such invalidity shall not invalidate all of this SectionΒ 12.14.Β Β In
that case, this SectionΒ 12.14 shall be
construed so as to limit any term or provision so as to make it valid or
enforceable within the requirements of the Delaware Arbitration Act or other
applicable law, and, in the event such term or provision cannot be so limited,
this SectionΒ 12.14 shall be
construed to omit such invalid or unenforceable provision, but for the avoidance
of doubt, the parties have no desire to have the Delaware Arbitration Act apply
to this Agreement.
Β
Β
86
Β
Β
12.15 Submission to Jurisdiction
and Service of Process.
Β
(a)Β Β Β Β Β Β Β Β Β Β Β Each
of the parties hereby irrevocably consents and agrees that any action, suit or
proceeding with respect to or relating in any way to the enforcement of the
arbitration provisions contained in this Agreement, the enforcement of an
arbitration decision or award, or any matter permitted by the terms of SectionΒ 12.14 hereof to be
brought in a court in the first instance, may be brought in the United States
District Court for the District of Delaware (or if jurisdiction is not available
in such court, then in the state court of Delaware sitting in Wilmington) and
each of the parties hereby irrevocably accepts and submits, for itself and in
respect of its properties, to the non-exclusive jurisdiction of such court in personam, generally and
unconditionally, with respect to any such action, suit or
proceeding.
Β
(b)Β Β Β Β Β Β Β Β Β Β Β Each
of the parties hereby irrevocably consents to the service of process in any such
action, suit or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to another party at the address specified in
this Agreement for notices to such other party.Β Β In addition to or in
lieu of any such service, service of process may also be made in any other
manner permitted by applicable law.
Β
(c)Β Β Β Β Β Β Β Β Β Β Β Each
of the Members hereby irrevocably and unconditionally waives any objection or
defense which it may now or hereafter have to the laying of venue to any such
action, suit or proceeding in the United States District Court for the District
of Delaware (or if jurisdiction is not available in such court, then in the
state court of Delaware sitting in Wilmington) and hereby irrevocably and
unconditionally waives and agrees not to plead or claim that any such action,
suit or proceeding brought in such court has been brought in an inconvenient
forum.
Β
12.16 Remedies and
Waivers.Β Β No delay or omission on the part of any party to this
Agreement in exercising any right, power or remedy provided by law or provided
hereunder shall impair such right, power or remedy or operate as a waiver
thereof.Β Β The single or partial exercise of any right, power or remedy
provided by law or provided hereunder shall not preclude any other or further
exercise of any other right, power or remedy.Β Β The rights, powers and
remedies provided hereunder are cumulative and are not exclusive of any rights,
powers and remedies provided by law.
Β
Β
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Β
Β
12.17 Amendments.Β Β Subject
to SectionΒ 4.2(e), this
Agreement may not be amended and no provision hereof may be waived without the
consent of a Hyper-Majority Vote of Members; provided, however, that amendments
made (a) to reflect the admission of one (1) or more Additional Members or
Transfers of Interests of Non-Managing Members or permitted withdrawals of
Non-Managing Members, (b) to change the name of the Company, to clarify any
inaccuracy or ambiguity herein or to reconcile any inconsistent provision herein
or (c) that have no material adverse effect on any Non-Managing Member or
benefit all Non-Managing Members in substantially the same way, may be made by
the Managing Member unilaterally without the consent of any other
Member.Β Β Notwithstanding anything to the contrary contained in this
SectionΒ 12.17 (other than
clauses (a), (b) and (c) which shall be controlling and except where approval of
the Members is specifically provided for elsewhere in this Agreement), without
the approval or written consent of each of the Members affected thereby, no
amendment shall (A) materially and adversely affect a Member in a different
manner than all of the other Members (including any change to the ownership
structure of the Company that could have a material and adverse effect on a
Memberβs tax position, as notified in writing by such Member to the Company),
(B) modify the limited liability of any Member or increase any Memberβs
Commitment, or (C) dilute the Sharing Percentage, Company Percentage Interest or
Consortium Percentage Interest of any Member, except as a result of the
admission of an Additional Member, increases in Commitments, defaults,
withdrawals or Transfers, in each case in accordance with this
Agreement.Β Β No amendment shall alter in a materially adverse manner
any provision hereof that requires approval or consent of any specified
percentage of Interests of Members, of the Board of Directors or of the Tier One
Parallel Investment Vehicles without the approval or written consent of Members
holding such specified percentage of Interests, such specified percentage of the
Board of Directors or such specified percentage of the Tier One Parallel
Investment Vehicles.Β Β If the Voting Agreement is amended by the terms
thereof and the provision so amended is also reflected in this Agreement, the
Managing Member shall cause this Agreement to be so amended.Β Β The
Managing Member shall give written notice to all Members promptly after any
amendment has become effective, other than amendments solely for the purpose of
the admission of Additional Members or substitute Non-Managing Members to the
Company.
Β
12.18 Counterparts.Β Β This
Agreement may be executed in counterparts, each one of which shall be deemed an
original and all of which together shall constitute one and the same
Agreement.
Β
12.19 Construction;
Headings.Β Β Whenever the feminine, masculine, neuter, singular
or plural shall be used in this Agreement, such construction shall be given to
such words or phrases as shall impart to this Agreement a construction
consistent with the interest of the Members entering into this
Agreement.Β Β As used herein, βincludingβ, βincludesβ or βincludeβ shall
mean, in each case, βincluding without limitation.βΒ Β Reference to any
agreement or other instrument in writing means such agreement or other
instrument in writing as amended, modified, replaced or supplemented from time
to time.Β Β Unless otherwise indicated, time periods within which a
payment is to be made or any other action is to be taken hereunder shall be
calculated excluding the day on which the period commences and including the day
on which the period ends.Β Β Whenever any payment to be made or action
to be taken hereunder is required to be made or taken on a day other than a
Business Day, such payment shall be made or action taken on the next following
Business Day.Β Β The headings and captions herein are inserted for
convenience of reference only and are not intended to govern, limit or aid in
the construction of any term or provision hereof.Β Β It is the intention
of the parties that every covenant, term, and provision of this Agreement shall
be construed simply according to its fair meaning, to the fullest extent
permitted by law, and not strictly for or against any party (notwithstanding any
rule of law requiring an Agreement to be strictly construed against the drafting
party), it being understood that the parties to this Agreement are sophisticated
and have had adequate opportunity and means to retain counsel to represent their
interests and to otherwise negotiate the provisions of this
Agreement.
Β
12.20 Severability.Β Β If
any term or provision of this Agreement or the application thereof to any Person
or circumstances shall be held invalid or unenforceable, the remaining terms and
provisions hereof and the application of such term or provision to Persons or
circumstances other than those to which it is held invalid or unenforceable
shall not be affected thereby.
Β
Β
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Β
Β
12.21 Side
Letters.Β Β Notwithstanding anything to the contrary contained
herein (including, without limitation, SectionΒ 12.17 hereof) or the
provisions of any Subscription Agreement, it is hereby acknowledged and agreed
that the Managing Member, on its own behalf or on behalf of the Company, and
without the approval of any Non-Managing Member or any other Person, may enter
into a side letter or similar agreement to or with a Non-Managing Member or
Non-Managing Members which has the effect of establishing rights thereunder, or
altering or supplementing the terms hereof (including, but not limited to, any
Transfer to an Affiliate or similar Person) or any Subscription Agreement with
respect to any such Non-Managing Member entering into a side letter or similar
agreement.Β Β The parties hereto agree that any terms contained in a
side letter or similar agreement to or with a Non-Managing Member shall govern
with respect to such Non-Managing Member, and to the extent disclosed to a
Person other than such Non-Managing Member prior to such Personβs admission to
the Company as a Member, may affect rights or obligations of such Person,
notwithstanding anything to the contrary contained herein (including, without
limitation, SectionΒ 12.17 hereof) or the
provisions of any Subscription Agreement, and each Non-Managing Member
acknowledges and agrees that it shall have no rights and shall make no claims
under this Agreement with respect to another Non-Managing Member that are
inconsistent with the terms of any such side letter or similar agreement with
such other Non-Managing Member.Β Β The admission of a Person as a Member
is subject to and conditional upon the Managing Member having disclosed to such
Person prior to such Personβs admission as a Member any terms contained in a
side letter or similar agreement to or with a Non-Managing Member that, under
this SectionΒ 12.21, affects rights
or obligations of such Person if disclosed to such Person.
Β
12.22 Entire
Agreement.Β Β This Agreement, each Subscription Agreement, the
Voting Agreement and any side letters constitute the entire agreement among the
Members with respect to the subject matter hereof and supersede any prior
agreement or understanding among or between them with respect to such subject
matter.Β Β The representations and warranties of the Non-Managing
Members in, and the other provisions of, the Subscription Agreements shall
survive the execution and delivery of this Agreement.
Β
12.23 Anti-Money Laundering and
Anti-Terrorist Laws.Β Β Notwithstanding anything to the contrary
contained in this Agreement, the Managing Member, in its own name and on behalf
of the Company, shall be authorized without the consent of any Person, including
any other Member, to take such action as it determines in its discretion to be
necessary or advisable to comply with any anti-money laundering or
anti-terrorist laws, rules, regulations, directives or special measures,
including the actions contemplated in any Subscription
Agreement.
Β Β
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Β
Β
12.24 Investment by Certain
Employee Benefit Plans.Β Β Each Member that is, or is investing
assets on behalf of, an βemployee benefit plan,β as defined in and subject to
ERISA, or a βplan,β as defined in and subject to Section 4975 of the Code (each
such employee benefit plan and plan, a βBenefit Planβ), and
each fiduciary thereof who has caused the Benefit Plan to become a Member (a
βBenefit Plan
Fiduciaryβ), represents and warrants that (a) the Benefit Plan Fiduciary
has considered an investment in the Company for such Benefit Plan in light of
the risks relating thereto; (b) the Benefit Plan Fiduciary has determined that,
in view of such considerations, the investment in the Company for such Benefit
Plan is consistent with the Benefit Plan Fiduciaryβs responsibilities under
ERISA; (c) the investment in the Company by the Benefit Plan does not violate
and is not otherwise inconsistent with the terms of any legal document
constituting the Benefit Plan or any trust agreement thereunder; (d) the Benefit
Planβs investment in the Company has been duly authorized and approved by all
necessary parties; (e) none of the Managing Member, any broker-dealer that sells
Interests, any of their respective affiliates or any of their respective agents
or employees:Β Β (i) has investment discretion with respect to the
investment of assets of the Benefit Plan used to purchase the Interest; (ii) has
authority or responsibility to or regularly gives investment advice with respect
to the assets of the Benefit Plan used to purchase the Interest for a fee and
pursuant to an agreement or understanding that such advice will serve as a
primary basis for investment decisions with respect to the Benefit Plan and that
such advice will be based on the particular investment needs of the Benefit
Plan; or (iii) is an employer maintaining or contributing to the Benefit Plan;
and (f) the Benefit Plan Fiduciary (i) is authorized to make, and is responsible
for, the decision for the Benefit Plan to invest in the Company, including the
determination that such investment is consistent with the requirement imposed by
Section 404 of ERISA that Benefit Plan investments be diversified so as to
minimize the risks of large losses; (ii) is independent of the Managing Member,
each broker-dealer that sells Interests and each of their respective affiliates,
and (iii) is qualified to make such investment decision.
Β
12.25 Disclosures and Restrictions
Regarding Employee Benefit Plans.Β Β Each Member that is a
βbenefit plan investorβ (defined as any Benefit Plan, any other employee benefit
plan or plan as defined in but not subject to either ERISA or Section 4975 of
the Code and any entity deemed for any purpose of ERISA or Section 4975 of the
Code to hold assets of any employee benefit plan or plan) represents that the
individual signing the Subscription Agreement has disclosed such Memberβs status
as a benefit plan investor by checking the appropriate box in the Subscription
Agreement.Β Β Each Member that is not a βbenefit plan investorβ
represents and agrees that if at a later date such Member becomes a benefit plan
investor, such Member will immediately notify the Managing Member of such change
of status.Β Β Notwithstanding anything herein to the contrary, the
Managing Member, on behalf of the Company, may take any and all action
including, but not limited to, refusing to admit persons as Members or refusing
to accept additional subscriptions, and requiring the Transfer of some or all of
the Interests of any Member, as may be necessary or desirable to assure that at
all times the aggregate investment by all benefit plan investors with respect to
each class of equity interests in the Company as determined pursuant to United
States Department of Labor Regulation Section 2510.3-101 (as modified by Section
3(42) of ERISA) do not amount to or exceed twenty-five percent (25%) of the
total value of such class of equity interests of all Members (not including the
investments of the Managing Member or any Person (other than a benefit plan
investor) who provides investment advice for a fee (direct or indirect) with
respect to the assets of the Company, who has discretionary authority or control
with respect to the assets of the Company, or who is an βaffiliate,β as such
term is defined in the applicable regulation promulgated under ERISA, of any
such Person) or to otherwise prevent the Company from holding βplan assetsβ
under ERISA or the Code with respect to any Benefit Plan.
Β Β
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12.26 Custodian.Β Β It
is understood and agreed by each of the parties hereto that (a) this Agreement,
the Subscription Agreement and any side letter or similar agreement that is
executed and delivered by a Member that is a custodian or a nominee for any
other Person (such other Person, a βBeneficial Ownerβ)
are executed and delivered only in such Memberβs capacity as custodian or
nominee and (b) the Managing Member may, on behalf of the Company, pursuant to
SectionΒ 12.21 hereof, agree
that such Member is liable under this Agreement, such Subscription Agreement and
any such side letter or similar agreement solely to the extent that it is
actually indemnified by the Beneficial Owner in respect of which it acts as
custodian or nominee; provided, that such Memberβs
liability under this Agreement, such Subscription Agreement and any such side
letter or similar agreement shall be reduced only to the extent that the
Beneficial Owner enters into a side letter or similar agreement for the benefit
of each Person in respect of which such Member owes obligations under this
Agreement, such Subscription Agreement and any side letter or similar agreement
to which such Member is a party pursuant to which the Beneficial Owner agrees to
be directly responsible and liable for any obligations of such Member and to pay
or cause to be paid any amounts owing by, or any other liabilities of, such
Member to the extent such Member is relieved of liability therefor by this SectionΒ 12.26.
Β
12.27 Certain
Protections.Β Β The Managing Member acknowledges and agrees that
the letter agreement, dated FebruaryΒ 24, 2010, among BAM, Pershing Square,
LP and certain affiliates of Pershing Square, LP that provides for certain bid
protections is being held by BAM for the benefit of the Consortium. The Managing
Member agrees to pay, or to cause to be paid, to the Consortium, any amounts
payable to BAM under such letter agreement.
Β
[Signature
Pages Follow]
Β
91
Β
Β
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
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COMPANY:
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[_________________]
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Title:
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MANAGING MEMBER:
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Brookfield
Asset Management Private Institutional
Capital
Adviser (Canada), L.P.
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Β |
By:
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Brookfield
Private Funds Holdings Inc.,
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Β | Β |
its
general partner
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By:
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Β |
Β | Β |
Name:
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Β | Β |
Title:
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Β | Β | Β |
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By:
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Β | Β |
Name:
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Title:
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SIGNATURE
PAGE TO LIMITED LIABILITY COMPANY AGREEMENT
Β Β
Β
Β
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NON-MANAGING
MEMBERS:
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Β | Β |
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[_________________]
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SIGNATURE
PAGE TO LIMITED LIABILITY COMPANY AGREEMENT
Β Β
Β
Β
SCHEDULE
A
SCHEDULE OF MEMBERS
AND
INVESTORS IN PARALLEL
INVESTMENT VEHICLES
Β
Β
Schedule A-1
Β
Β
SCHEDULE
B
TRANSACTION
COSTS
Β
Schedule
B-1
Β
Β
SCHEDULE
C
INITIAL MEMBERS OF BOARD OF
DIRECTORS
Β
Β
Schedule C-1
Β
Β
EXHIBIT
A
FORM OF ESCROW
AGREEMENT
Β
Exhibit A-1
Β
Β
EXHIBIT
B
RESTRUCTURING
PROPOSAL
Β
Β
Exhibit B-1
Β
Β
EXHIBIT
C
REDEMPTION
PROCEDURE
Β
1.Β Β Β Β Β Β Β Β Β Β Β Defined
Terms.
Β
As used
in this ExhibitΒ C, the
following terms have the meanings set forth below:
Β
βApplicable Interestβ
means (i) the Offered Interest, (ii) the Interests (or portion thereof) of any
Tag-Along Member or Tagging Member to be transferred in any Tag-Along Transfer
or (iii) the Subject Interest, as applicable.
Β
βContributing Partyβ
means (i) any Offeree Member or any third-party purchaser under Section
10.1(b)(vi) of the Agreement, (ii) any Transferee under Section 10.6 of the
Agreement or (iii) any Acquiring Member, as applicable, or any group of any of
the foregoing.
Β
βRedeeming Partyβ
means (i) any Selling Member, (ii) Tag-Along Member or Tagging Member or (iii)
Disposing Member, as applicable.
Β
βRedemption Priceβ
means an amount in Dollars equal to the purchase price to be paid for the
Applicable Interest.
Β
2.Β Β Β Β Β Β Β Β Β Β Β Redemption
Procedure.
Β
A
Redeeming Party may have its Applicable Interest redeemed by the Company in
accordance with the following procedures:
Β
(t)Β Β Β Β Β Β Β Β Β Β Β The
Redeeming Party shall designate a Contributing Party, the Managing Member shall
establish a Parallel Investment Vehicle, and the Contributing Party shall make a
contribution to such Parallel Investment Vehicle equal to the Redemption
Price.
Β
(u)Β Β Β Β Β Β Β Β Β Β Β The
Company shall sell, assign and transfer the Redeeming Partyβs pro rata share
(determined in accordance with its Consortium Percentage Interest) of the
Investment corresponding to the Applicable Interest to such Parallel Investment
Vehicle in exchange for the Redemption Price.
Β
(v)Β Β Β Β Β Β Β Β Β Β Β The
Company shall redeem the Applicable Interest and distribute to the Redeeming
Party an amount in Dollars equal to the Redemption Price (it being understood
that such distribution shall not constitute Investment Proceeds and shall not be
distributed in accordance with Article 6 of the
Agreement). If the Applicable Interest is the entire Interest of the Redeeming
Party, the Redeeming Party shall cease to be a Member upon receipt of such
distribution.
Β
(w)Β Β Β Β Β Β Β Β Β Β Β As
a condition to the admission of the Contributing Party as an investor in the
Parallel Investment Vehicle, the Contributing Party shall agree that the
interest to be issued by the Parallel Investment Vehicle shall have the same
rights, privileges and obligations as the portion of the Applicable Interest
redeemed pursuant to Section 2(c) hereof (it being understood that such
Contributing Party shall be liable for its pro rata portion of
the liabilities of the Redeeming Party in respect of the Applicable Interest
which would otherwise have been directly sold, assigned or transferred,
including, without limitation, liability for Transaction Distribution Amount and
Carried Interest).
Β
Β
Exhibit
C-1
Β
Β
Notwithstanding
anything to the contrary contained in this Section 2, any Parallel Investment
Vehicle established by the Managing Member pursuant to Section 2(b) hereof shall
not (i) be merged with or otherwise consolidated into the Company or (ii) be
dissolved, in each case for a period of two (2) years following the date the
sale, assignment and transfer of the relevant portion of the Investment to such
Parallel Investment Vehicle is completed.
Β
Β
Exhibit
C-2
Β