UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of
1934
November 9, 2010
Date of Report (Date of
earliest event reported)
General Growth Properties, Inc.
(f/k/a New GGP, Inc.)
GGP, Inc. (f/k/a General
Growth Properties, Inc.)
(Exact name of registrant as specified in its charter)
Delaware
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1-34948
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27-2963337
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Delaware
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1-11656
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42-1283895
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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110 N. Wacker Drive, Chicago, Illinois
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60606
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(Address of principal executive offices)
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(Zip Code)
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(312) 960-5000
(Registrants telephone
number, including area code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (
see
General
Instruction A.2. below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
As previously disclosed, commencing on April 16,
2009, GGP, Inc. (f/k/a General Growth Properties, Inc.) (Old GGP)
and certain of its domestic subsidiaries (collectively, the Debtors) filed
voluntary petitions for relief under Chapter 11 of Title 11 of the United
States Code (Chapter 11) in the United States Bankruptcy Court for the
Southern District of New York (the Bankruptcy Court). As of October 21, 2010, 126 Debtors,
including Old GGP, remained subject to Chapter 11 proceedings (the TopCo
Debtors).
On
October 21, 2010, the Bankruptcy Court entered an order (the Confirmation
Order) confirming the TopCo Debtors third amended joint plan of
reorganization under Chapter 11, as modified and supplemented (the Plan).
On
November 9, 2010 (the Effective Date), the Plan became effective and the
TopCo Debtors consummated their reorganization under Chapter 11 (the Reorganization)
through a series of transactions contemplated by the Plan and emerged from
Chapter 11.
Pursuant
to the Plan, on the Effective Date and
as further described below, Old GGP transferred certain assets and liabilities
of Old GGP to The Howard Hughes Corporation (THHC) and distributed shares of
common stock of THHC to holders of shares of common stock of Old GGP and common
and preferred units of GGP Limited Partnership (the Separation).
Pursuant
to the Plan, on the Effective Date, Old
GGP also changed its corporate name to GGP, Inc. and, as further described
below, merged (the Merger) with and into GGP Merger Sub, Inc. (Merger
Sub), an indirect wholly-owned subsidiary of a new company with the corporate
name General Growth Properties, Inc. (f/k/a New GGP, Inc.) (New
GGP), with Old GGP surviving the Merger as an indirect, wholly-owned
subsidiary of New GGP. In connection
with the Merger, existing shares of common stock of Old GGP were exchanged for
shares of common stock of New GGP (New GGP Common Stock).
Item 1.01. Entry into
a Material Definitive Agreement.
Merger Agreement
As
stated above, pursuant to the Plan, on the Effective Date, Old GGP, New GGP,
Merger Sub, and GGP Real Estate Holding I, Inc., a wholly-owned subsidiary
of New GGP and the parent of Merger Sub, entered into an Agreement and Plan of
Merger (the Merger Agreement). A
related Certificate of Merger (the Certificate of Merger) was subsequently
filed with the Secretary of State of the State of Delaware and, pursuant to the
Merger Agreement, the Certificate of Merger and the Plan, Old GGP merged with
and into Merger Sub, with Old GGP continuing as the surviving corporation and
an indirect, wholly-owned subsidiary of New GGP. In connection with the Merger, all shares of
common stock of Old GGP issued and outstanding immediately prior to the Merger
were cancelled and converted into the right to receive shares of New GGP Common
Stock as provided in the Plan.
Investment Agreements
As
previously disclosed, in connection with the Reorganization, Old GGP entered
into investment agreements (the Investment Agreements) with (i) Brookfield
Retail Holdings LLC (formerly REP Investments LLC) (Brookfield Investor), (ii) The
Fairholme Fund and Fairholme Focused Income Fund, each a series of Fairholme
Funds, Inc. (collectively, Fairholme), (iii) Pershing
Square
Capital Management, L.P. on behalf of Pershing Square, L.P., Pershing Square
II, L.P., Pershing Square International, Ltd. and Pershing Square
International V, Ltd. (collectively, Pershing Square and, together with
Brookfield Investor and Fairholme, the Plan Sponsors), and (iv) Teacher
Retirement System of Texas (TRS). On
the Effective Date, New GGP issued an aggregate of approximately 644 million
shares of New GGP Common Stock to the Plan Sponsors, TRS and affiliates of
Blackstone Real Estate Partners VI L.P (Blackstone and, together with the
Plan Sponsors and TRS, the Investors), at a price of $10.00 per share for the
Plan Sponsors and Blackstone and $10.25 per share for TRS. Pursuant to the Investment Agreements:
·
For so long as a Plan Sponsor beneficially
owns at least 5% of New GGP Common Stock on a fully-diluted basis, such Plan
Sponsor will have a subscription right, in connection with certain offerings by
New GGP of New GGP Common Stock, to purchase New GGP Common Stock as necessary
to allow it to maintain its respective proportionate New GGP Common Stock
ownership interest on a fully-diluted basis.
·
The board of directors of New GGP (the Board)
will have nine members. Three members of
the Board may be designated by Brookfield Investor, whose right to designate
three directors will continue so long as Brookfield Investor beneficially owns
at least 20% of New GGP Common Stock on a fully-diluted basis, with such right
reducing to two directors if Brookfield Investor beneficially owns between 15%
and 20% of New GGP Common Stock on a fully-diluted basis and one director if
Brookfield Investor beneficially owns between 10% and 15% of New GGP Common
Stock on a fully-diluted basis. Brookfield Investor will have no right to
designate a director if it beneficially owns less than 10% of New GGP Common
Stock on a fully-diluted basis.
·
New GGP will indemnify THHC from and against
93.75% of any and all losses, claims, damages, liabilities and reasonable
expenses to which THHC and its subsidiaries become subject, in each case solely
to the extent directly attributable to MPC Taxes (as defined in the Investment
Agreements) in an amount up to the Indemnity Cap. The Indemnity Cap is calculated as the lesser
of (a) $303,750,000 and (b) the Excess Surplus Amount. The Excess
Surplus Amount is determined using a complex formula described in the
Investment Agreements that includes varying percentages of any Reserve Surplus
Amount, Net Debt Surplus Amount and Offering Premium (as defined in the
Investment Agreements). The Excess Surplus Amount is designed to provide value
to THHC in the form of the tax indemnity (up to a maximum amount of
$303,750,000).
·
New GGP has the right to repurchase within
45 days after the Effective Date up to approximately 135 million
shares of New GGP Common Stock from Fairholme at $10.00 per share, up to
approximately 20 million shares of New GGP Common Stock from Pershing
Square at $10.00 per share and up to approximately 24.4 million shares of
New GGP Common Stock from TRS at $10.25 per share, in each case, with the
proceeds from a public offering of New GGP Common Stock (the clawback rights). In order to repurchase such shares, the price
per share of New GGP Common Stock issued in such offering must be at least
$10.50 per share (net of all underwriting and other discounts, fees and related
consideration). On the Effective Date,
New GGP paid an amount equal to $0.25 per reserved share to Fairholme and
Pershing Square to preserve its clawback rights.
3
Warrant Agreement
On
the Effective Date, New GGP entered into a Warrant Agreement with Mellon
Investor Services LLC, as warrant agent (the Warrant Agreement), and issued
warrants (the Warrants) to purchase, in the aggregate, up to 120,000,000
shares of New GGP Common Stock to the Plan Sponsors and Blackstone, as follows:
(i) Warrants to purchase up to approximately 57.5 million shares of
New GGP Common Stock with an initial exercise price of $10.75 per share to
Brookfield Investor, (ii) Warrants to purchase up to approximately
41.07 million shares of New GGP Common Stock with an initial exercise
price of $10.50 per share to Fairholme, (iii) Warrants to purchase up to
approximately 16.43 million shares of New GGP Common Stock with an initial
exercise price of $10.50 per share to Pershing Square and (iv) Warrants to
purchase up to approximately 5.0 million shares of New GGP Common Stock
with an initial exercise price of $10.50 per share with respect to one-half of
the Warrants and $10.75 per share with respect to the remaining one-half of the
Warrants to Blackstone. The Warrants are
not subject to reduction even if the shares of New GGP Common Stock issued to
Fairholme and Pershing Square are repurchased in accordance with the clawback
rights under the Investment Agreements.
Each
Warrant has a term of seven years from the Effective Date, expiring at the
close of business on November 9, 2017.
The Warrants held by each of Brookfield Investor and Blackstone are
immediately exercisable, subject to any lockup restrictions, whereas the
Warrants held by each of Fairholme and Pershing Square may only be exercised
upon 90 days prior notice for the first 6.5 years after issuance but
are exercisable without notice at any time thereafter. In addition, the Warrants held by Pershing
Square do not vest and are not exercisable prior to the date that is 210 days
after the Effective Date. The Warrants held by Pershing Square and
Fairholme must be net share settled, meaning that the exercise price for the
Warrants cannot be paid in cash and will instead be netted against the shares
received upon exercise of the Warrants, resulting in fewer shares being issued.
The
Warrants are subject to adjustment in a number of circumstances, including, but
not limited to, upon certain rights offerings, certain tender and exchange
offerings, and certain recapitalizations, reorganizations, reclassifications,
mergers and sales of all or substantially all of New GGPs assets. For instance, if New GGP (i) pays a
dividend in cash or other property or makes a distribution on the New GGP
Common Stock in shares of common stock, (ii) subdivides its outstanding
shares of common stock into a greater number of shares or (iii) combines
or reverse-splits its outstanding shares of New GGP Common Stock into a smaller
number of shares, then the per share warrant price and the number of warrant
shares will be proportionately decreased and increased, respectively, in the
case of a subdivision, distribution or stock dividend, or proportionately
increased and decreased, respectively, in the case of a combination or reverse
stock split. In addition, in certain
circumstances, upon the occurrence of a change of control other than a public
stock merger or mixed consideration merger, each as defined in the Warrant
4
Agreement,
holders of the Warrants have the right to require New GGP to redeem the
Warrants at the fair value of such Warrants in cash as of the date of the
change of control event as determined by an independent financial expert
employing a valuation methodology provided for in the Warrant Agreement. Upon the occurrence of a public stock merger
or a mixed consideration merger, New GGP may elect to redeem the Warrants at
fair value or, to the extent of stock consideration, have the Warrants continue
as warrants on the stock of the acquiring parent company as provided in the
Warrant Agreement.
Standstill Agreements
On
the Effective Date, the Plan Sponsors entered into agreements with New GGP (the
Standstill Agreements) that set forth, among other things (a) the size
of, the minimum number of independent directors on, and the composition of the
nominating and governance committee of, the Board, (b) voting for
directors and certain other matters, (c) required approvals for (1) certain
change in control transactions and related-party transactions involving the
applicable Plan Sponsor and (2) the applicable Plan Sponsor to increase
its percentage ownership in New GGP above an agreed cap, and (d) transfers
of shares of New GGP by the Plan Sponsor. Specifically, the Standstill
Agreements contemplate the following:
·
so long as a Plan Sponsor beneficially owns
more than 10% of the outstanding New GGP Common Stock, such Plan Sponsor will
support the following principles: the Board will have a majority of independent
directors, the nominating committee will consist of a majority of members not
affiliated with or nominated by the Plan Sponsors, and the Board will have nine
members not to be increased or reduced, unless approved by 75% of the Board;
·
with respect to voting,
·
affiliate transactions
require approval of a majority of disinterested directors;
·
certain change of control
transactions involving a stockholder that owns more than 10% of the New GGP
Common Stock on a fully-diluted basis require approval of a majority of
disinterested directors and a majority of voting power of the stockholders
(other than such 10% or greater stockholder);
·
for Brookfield Investor and
Pershing Square in connection with a vote for the election of directors and for
Fairholme, in connection with any vote, (a) Brookfield Investor may vote
all of its shares as it wishes with respect to its designees and, with respect
to other nominees, may vote 10% of the outstanding New GGP Common Stock as it
wishes, but must vote the rest of its shares in proportion to the other
stockholders, and (b) Fairholme and Pershing Square may each vote 10% of
the outstanding New GGP Common Stock as it wishes, but each must vote the rest
of its shares in proportion to the votes cast by the other stockholders;
·
in connection with any stockholder vote, if
the Board recommends that stockholders approve the matter, Brookfield Investor
may vote against or in favor of such matter in its sole discretion, and, if the
Board recommends that the stockholders not approve the matter, Brookfield
Investor may vote (a) against the matter, or (b) in favor of the
matter, provided that if Brookfield Investor owns more than 30% of the
outstanding New GGP Common Stock, Brookfield Investor must vote its shares in
excess of 30% in proportion to the votes cast by the other stockholders;
5
·
subject to certain exceptions, the Plan
Sponsors may not acquire beneficial ownership of or an economic interest in New
GGP Common Stock that is greater than:
·
in the case of Brookfield Investor, 45% of
the outstanding New GGP Common Stock;
·
in the case of Pershing Square, the lesser of
(a) 25% of the outstanding New GGP Common Stock and (b) the sum of 5%
and the percentage of the outstanding New GGP Common Stock owned by Pershing
Square as of the Effective Date; and
·
in the case of Fairholme, the lesser of (a) 30%
of the outstanding New GGP Common Stock and (b) the sum of 5% and the
percentage of the outstanding New GGP Common Stock owned by Fairholme as of the
Effective Date; and
·
unless approved by a majority of independent
directors, none of the Plan Sponsors may sell or otherwise transfer New GGP
Common Stock if the transferee would beneficially own more than 10% of New GGP
Common Stock then outstanding, except for (a) transfers to affiliates or
third parties that agree to ownership and voting restrictions, (b) registered
offerings that are widely distributed, (c) Rule 144 sales, (d) mergers
or other transactions approved by the Board and a majority of all stockholders
and (e) tender offers in which all other stockholders are allowed to sell
on the same terms.
A
Standstill Agreement will terminate (a) upon mutual agreement, if approved
by a majority of the disinterested directors, (b) if stockholders other
than the Plan Sponsors own more than 70% of the shares of New GGP Common Stock
then outstanding and the applicable Plan Sponsor owns less than 15% of the
shares of New GGP Common Stock then outstanding, (c) if the applicable
Plan Sponsor owns less than 10% of the shares of New GGP Common Stock then
outstanding, (d) upon a change of control not involving the applicable
Plan Sponsor, or (e) upon the sale of all or substantially all of the
assets or voting securities of New GGP.
Registration Rights Agreements
On
the Effective Date, New GGP entered into a Registration Rights Agreement with
each of the Investors (collectively, the Registration Rights Agreements),
granting such persons (and their permitted assignees) certain registration
rights, including demand registration rights and piggyback registration
rights. The registration rights granted
in the Registration Rights Agreements are subject to customary indemnification
and contribution provisions, as well as customary restrictions such as
minimums, blackout periods and other limitations.
6
*****
The
foregoing description of the agreements to which New GGP is a party does not
purport to be complete and is qualified in its entirety by reference to the
full text of such agreements, which are exhibits hereto and are incorporated
herein by reference. The forgoing
descriptions of these documents and the copies of these documents included as
exhibits hereto have been included to provide investors with information
regarding the terms of these documents. These documents contain
representations and warranties made by and to the parties thereto as of
specific dates. The representations and warranties of each party set forth
in each document have been made solely for the benefit of the other party to
such document. In addition, such representations and warranties
(1) may have been qualified by confidential disclosures made to the other
party in connection with such document, (2) may be subject to a
materiality standard which may differ from what may be viewed as material by
investors, (3) were made only as of the date of such documents or such
other date as is specified therein and (4) may have been included in such
documents for the purpose of allocating risk between or among the parties
thereto rather than establishing matters as facts. Accordingly, these
documents are included herewith only to provide investors with information
regarding the terms thereof, and not to provide investors with any other
factual information regarding the parties or their respective businesses.
Item
2.01. Completion of Acquisition or
Disposition of Assets.
On the Effective Date,
pursuant to the Plan, the Separation of THHC from Old GGP was completed. THHC is now an independent public company
trading under the symbol HHC on the New York Stock Exchange. On November 9, 2010, shareholders of
record of Old GGP as of November 1, 2010 (the Record Date) received
0.098344 shares of THHC common stock for each share of Old GGP common stock
held as of the Record Date. No fractional
shares of THHC common stock were issued in the Separation.
In
connection with the Separation, GGP entered into certain agreements to govern
the terms of the Separation and to define the ongoing relationship between GGP
and the THHC following the Separation, allocating responsibility for
obligations arising before and after the Separation, including obligations
relating to taxes, employees, liabilities and certain transition services.
The Separation Agreement
On the Effective Date, GGP and THHC entered
into a separation agreement (the Separation Agreement). The Separation Agreement sets forth, among
other things, GGP and THHCs agreements regarding the principal transactions
necessary to effect the Separation.
7
Transfer of Assets and Assumption of Liabilities
The Separation Agreement identifies assets to
be transferred, liabilities to be assumed and contracts to be performed by each
of GGP and THHC as part of the Separation, and it provides for when and how
these transfers, assumptions and assignments occurred. In particular, the Separation Agreement
provides, among other things, that, subject to the terms and conditions
contained therein:
·
certain assets (the THHC Assets) were transferred by GGP to THHC;
·
certain liabilities (whether accrued, contingent or otherwise) arising out of
or resulting from the THHC Assets, and other liabilities related to THHC
business and operations (the THHC Liabilities) were transferred to THHC;
·
all of the assets and liabilities (whether accrued, contingent or otherwise)
other than the THHC Assets and the THHC Liabilities (such assets and
liabilities, other than the THHC Assets and the THHC Liabilities, are referred
to as the Excluded Assets and Excluded Liabilities, respectively) were
retained by or transferred to GGP or one of its subsidiaries;
·
except as otherwise provided in the Separation Agreement or any other
transaction agreements, GGP is responsible for any costs or expenses incurred
prior to the Effective Date in connection with the Separation and the costs and
expenses relating to legal counsel, financial advisors and accounting advisory
work related to the Separation, and such costs and expenses will be treated in
accordance with the terms of the Plan; and
·
except as otherwise provided in the Separation Agreement or other transaction
agreements, the corporate costs and expenses incurred after the Effective Date
relating to the Separation will be borne by the party incurring such expenses.
The THHC Assets and the THHC Liabilities were
transferred as of the Effective Date without pro-ration and regardless of
whether they related to the period before or after the Effective Date. Except as may expressly be set forth in the
Separation Agreement or any other transaction agreements, all assets were
transferred on an as is, where is basis and the respective transferees
will bear the economic and legal risks associated with the use of such
respective assets following the Separation, including, but not limited to,
where any conveyance will prove to be insufficient to vest in the transferee
good title, free and clear of any security interest, and any necessary
notifications are not made, necessary approvals are not obtained or any
requirements of laws or judgments are not complied with.
Claims
In general, each party to the Separation
Agreement assumes liability for all pending, threatened and unasserted legal
matters related to its own business or its assumed or retained liabilities and
will indemnify the other party for any liability to the extent arising out of
or resulting from such assumed or retained legal matters.
Releases
Except as otherwise provided in the Separation
Agreement or any other transaction agreements, each party released and forever
discharged the other party and its respective subsidiaries and any person who
was at any time prior to the Effective Date a shareholder, director, officer,
agent or
8
employee of a member of the other party or one
of its subsidiaries from all liabilities existing or arising from any acts or
events occurring or failing to occur or alleged to have occurred or to have
failed to occur or any conditions existing or alleged to have existed on or
before the Separation. The releases do
not extend to (a) obligations or liabilities under any agreements between
the parties that remain in effect following the Separation pursuant to the
Separation Agreement or any ancillary agreement, which include, but are not limited
to, the Separation Agreement, the Transition Services Agreement, the Tax
Matters Agreement, certain commercial agreements and the transfer documents in
connection with the Separation, (b) liabilities specifically set forth in
the Plan, (c) liabilities retained or assumed by or transferred to a party
pursuant to the Separation Agreement or any ancillary agreement, or (d) ordinary
course trade payables and receivables.
Indemnification
The Separation Agreement provides for
cross-indemnification principally designed to place financial responsibility
for the obligations and liabilities of THHCs business with THHC and financial
responsibility for the obligations and liabilities of GGPs business with
GGP. Specifically, each party will, and
will cause its subsidiaries to, indemnify, defend and hold harmless the other
party and its subsidiaries and each of their respective officers, directors and
employees for any losses arising out of or otherwise in connection with:
·
the liabilities that each such party assumed or retained pursuant to the
Separation Agreement (which, in the case of THHC, would include the THHC
Liabilities and, in the case of GGP, would include the Excluded Liabilities)
and the other transaction agreements;
·
any liability (whether arising before or after the Effective Date) for a
misstatement or omission or alleged misstatement or omission of a material fact
contained in any registration statement filed with the SEC by such party or its
subsidiaries as registrant and any related, prospectus, offering memorandum,
offering circular or similar disclosure document; and
·
any breach by such party of the Separation Agreement, the ancillary agreements
or any agreements between the parties specifically contemplated by the
Separation Agreement or any ancillary agreement to remain in effect following
the Separation.
Transition Services Agreement
On the Effective Date, THHC and GGP entered
into a transition services agreement in connection with the Separation (the Transition
Services Agreement) whereby GGP or its subsidiaries will provide to THHC, on
a transitional basis, certain specified services on an interim basis for
various terms not exceeding 24 months following the Separation. The services that GGP will provide to THHC
include, among others, payroll, human resources and employee benefits,
financial systems management, treasury and cash management, accounts payable
services, telecommunications services, information technology services,
property management services, legal and accounting services and various other
corporate services. The charges for the
transition services generally are intended to allow GGP to fully recover the
costs directly associated with providing the services, plus a level of profit
consistent with an arms length transaction together with all out-of-pocket
costs and expenses. The charges of each of the transition services will
generally be based on an hourly fee arrangement and pass-through out-of-pocket
costs.
9
Tax Matters Agreement
On the Effective Date, GGP and THHC entered
into a tax matters agreement that will govern the parties respective rights,
responsibilities and obligations with respect to taxes, tax attributes, the preparation
and filing of tax returns, the control of audits and other tax proceedings and
assistance and cooperation in respect of tax matters (the Tax Matters
Agreement). Taxes relating to or
arising out of the failure of certain of the transactions described in the
private letter ruling request to qualify as a tax-free transaction for U.S.
federal income tax purposes will be borne by THHC and GGP based on certain
percentages to be determined in accordance with the relative market
capitalization of the two companies, except if such failure is attributable to
THHCs action or inaction or GGPs action or inaction, as the case may be, or
any event (or series of events) involving THHC assets or stock or the assets or
stock of GGP, as the case may be, in which case the resulting liability will be
borne in full by THHC or GGP, respectively.
The Tax Matters Agreement will also restrict THHCs ability (and the
ability of any member of the THHC group) to take actions that could cause the
Separation to fail to qualify as a tax-free reorganization for U.S. federal
income tax purposes.
*****
The
foregoing description of the agreements relating to the Separation does not
purport to be complete and is qualified in its entirety by reference to the
full text of such agreements, which are exhibits hereto and are incorporated
herein by reference. The forgoing
descriptions of these documents and the copies of these documents included as
exhibits hereto have been included to provide investors with information
regarding the terms of these documents. These documents contain
representations and warranties made by and to the parties thereto as of
specific dates. The representations and warranties of each party set
forth in each document have been made solely for the benefit of the other party
to such document. In addition, such representations and warranties
(1) may have been qualified by confidential disclosures made to the other
party in connection with such document, (2) may be subject to a materiality
standard which may differ from what may be viewed as material by investors,
(3) were made only as of the date of such documents or such other date as
is specified therein and (4) may have been included in such documents for
the purpose of allocating risk between or among the parties thereto rather than
establishing matters as facts. Accordingly, these documents are included
herewith only to provide investors with information regarding the terms
thereof, and not to provide investors with any other factual information
regarding the parties or their respective businesses.
Item
3.02. Unregistered Sales of
Equity Securities.
As
described in Item 1.01, on the Effective Date, New GGP issued (i) approximately
318 million shares of New GGP Common Stock to holders of common stock of Old
GGP and convertible equity interests of its affiliates; (ii) 643,780,488
shares of New GGP Common Stock to the Investors; and (iii) 120,000,000
Warrants to the Plan Sponsors and Blackstone.
The information set forth in Item 1.01 under the heading Investment
Agreements is incorporated in this Item 3.02 by reference.
10
The
shares of New GGP Common Stock and Warrants described above were exempt from
registration under the Securities Act of 1933, as amended (the Securities Act),
pursuant to (i) Section 1145 of the Bankruptcy Code, which generally
exempts from such registration requirements the issuance of securities under a
plan of reorganization, and/or (ii) Section 4(2) of the
Securities Act because the issuance did not involve any public offering.
Item
3.03. Material Modifications to Rights
of Security Holders.
The
information set forth in Item 1.01 and Item 5.03 is incorporated in this Item
3.03 by reference.
Item
5.02. Departure of Directors or Certain
Officers, Election of Directors, Appointment of Certain Officers, Compensatory
Arrangements of Certain Officers.
Board of Directors
Pursuant
to the Plan, as of the Effective Date, the Board consists of: Richard B. Clark, Mary Lou Fiala, Bruce J.
Flatt, John K. Haley, Cyrus Madon, Adam S. Metz, David J. Neithercut, Sheli Z.
Rosenberg and John G. Schreiber.
Mr. Flatt will serve as the Chairman of the Board. Messrs. Clark, Flatt, Madon and Schreiber
were designated to the Board pursuant to the Investment Agreements.
Committees of the Board of Directors
The Committees of the
Board consist of an Audit
Committee, a Compensation Committee and a Nominating and Governance Committee.
The
following directors have been appointed to serve as members of the Audit
Committee of the Board: Mary Lou Fiala, John K. Haley (Chairperson) and David
J. Neithercut.
The
following directors have been appointed to serve as members of the Compensation
Committee of the Board: Cyrus Madon, Sheli Z. Rosenberg and John G. Schreiber
(Chairperson).
The
following directors have been appointed to serve as members of the Nominating
and Governance Committee of the Board: Richard B. Clark, John K. Haley and
Sheli Z. Rosenberg (Chairperson).
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
In
accordance with the Plan, New GGPs certificate of incorporation and bylaws
were amended and restated in their entirety.
New GGPs Amended and Restated Certificate of Incorporation (the Charter)
and Amended and Restated Bylaws (the Bylaws) became effective on the
Effective Date.
The
following is a summary description of certain provisions of the Charter, the
Bylaws, and certain other items. This
summary does not purport to be complete and is qualified in its entirety by
reference to the actual terms and provisions of the documents which are
exhibits hereto, each of which is incorporated by reference herein.
11
Board of Directors.
Prior
to the Emergence Date, Old GGP had a classified board of directors, meaning
that the board of directors was divided into three classes of directors serving
staggered three-year terms. New GGP does
not have a classified board of directors.
The Board as of the date of this Report on Form 8-K is constituted
as contemplated by the Plan and as described in Item 5.02 above. Going forward, the Bylaws provide that,
except as provided in the Bylaws with respect to the filling of vacancies on
the Board and except as may otherwise be provided pursuant to the Charter,
directors shall be elected by a majority of votes cast by the shares
represented at a meeting of stockholders and entitled to vote thereon, a quorum
being present at such meeting, unless the election is contested, in which case
directors shall be elected by a plurality of votes cast by the shares
represented at such meeting. A majority
of votes cast means that the number of votes cast for the election of the
nominee exceeds 50% of the total number of votes cast for and against the
election of that nominee. Stockholders
shall also be provided the opportunity to abstain from voting with respect to
the election of a director. In voting on
the election of directors, abstentions, votes designated to be withheld from
the election of a director and shares present but not voted in respect of the
election of a director shall not be considered as votes cast. An election shall be considered contested
if the number of nominees for election is greater than the number of directors
to be elected.
If
a nominee for director who is an incumbent director is not elected and no
successor has been elected at such meeting, the director shall promptly tender
such directors resignation to the Board.
The Nominating and Governance Committee of the Board (NGC) shall make
a recommendation to the Board as to whether to accept or reject the tendered
resignation, or whether other action should be taken. The Board shall act on the tendered
resignation, taking into account the NGCs recommendation, and publicly disclose
its decision regarding the tendered resignation and the rationale behind the
decision within 90 days from the date of the certification of the election
results. The NGC in making its
recommendation, and the Board in making its decision, may each consider any
factors or other information that it considers appropriate and relevant.
Subject
to the rights of the holders of any series of preferred stock, if any
outstanding, with respect to the election of directors under specified
circumstances, any director may be removed from office, but only for cause and
only by the affirmative vote of the holders of a majority of the voting power
of the capital stock of New GGP entitled to vote generally in the election of
directors, voting together as a single class;
provided,
that each director shall serve until such directors successor is duly elected
and qualified or until such directors death, resignation or removal. No change in the number of directors
constituting the Board shall shorten or increase the term of any incumbent
director.
Pursuant
to the Investment Agreements, the company has agreed to nominate as part of its
slate of directors, and use reasonable best efforts to have elected to the
board of directors, persons designated by the Brookfield Investor, as described
under Item 1.01 - Investment Agreements.
Capital Stock.
New
GGP is authorized to issue 11,000,000,000 shares of common stock, par value
$0.01 per share, and 500,000,000 shares of preferred stock, par value $0.01 per
share.
12
The
Board is authorized to provide for the issuance of shares of preferred stock in
one or more series and, by filing a certificate of designations pursuant to the
applicable law of the State of Delaware, to establish from time to time for
each such series the number of shares to be included in each such series and to
fix the designations, powers, rights and preferences of the shares of each such
series, and the qualifications, limitations and restrictions thereof.
Under
the Charter, the holders of outstanding shares of New GGP Common Stock shall
have the right to vote on all questions to the exclusion of all other
stockholders, with each holder of record of New GGP Common Stock being entitled
to one vote for each share of common stock standing in the name of the
stockholder on the books of New GGP Common Stock, except as otherwise required
by law, provided in the Charter (as it may be amended from time to time), or
provided in a certificate of designations and any resolution adopted by the
Board with respect to any series of capital stock subsequently established.
Subject
to the rights of the holders of any series of preferred stock as set forth in a
certificate of designations, any action required or permitted to be taken by
the stockholders of New GGP must be effected at a duly called annual or special
meeting of stockholders of New GGP may not be effected by any consent in
writing of such stockholders.
Under
the Charter and the Bylaws, the affirmative vote of at least 66 2/3% of the
voting power of the then outstanding capital stock of New GGP entitled to vote
generally in the election of directors, voting together as a single class,
shall be required to amend, modify or repeal (or adopt any new or additional
provision in a manner inconsistent with) certain provisions of the Charter and
the Bylaws.
The
Charter does not provide stockholders with preemptive rights in connection with
issuances of stock. However, as
described under Item 1.01 - Investment Agreements, pursuant to the Investment
Agreements each of the Plan Sponsors has certain subscription rights in
connection with certain stock offerings by New GGP, as necessary to allow such
Plan Sponsor to maintain its proportional New GGP Common Stock ownership
interest in New GGP on a fully-diluted basis.
13
Pursuant
to the Investment Agreements, the Plan Sponsors and Blackstone were issued
7-year warrants to purchase up to 120,000,000 shares of common stock in the
aggregate at an initial exercise price of $10.50 - $10.75 per share, subject to
adjustment, as described under Item 1.01 - Warrant Agreement.
Certain
holders of GGPLP common units may continue to have certain redemption,
conversion or registration rights in respect of the common units. Any such exchange or conversion rights will
be satisfied with the New GGP Common Stock rather than the common stock of Old
GGP, and any such registration rights will apply to the New GGP Common Stock
rather than to the common stock of Old GGP.
Certain Restrictions on Ownership and Transfer.
New
GGP has agreed to elect to be treated as a real estate investment trust, or REIT,
for U.S. federal income tax purposes in connection with the filing of its tax
return for 2010, subject to satisfying the REIT qualification requirements at
such time. Generally, for New GGP to
qualify as a REIT under the Internal Revenue Code of 1986, as amended (the Code)
for a taxable year, the following conditions (among others) must be satisfied: (1) not
more than 50% in value of New GGPs outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals, as defined in the Code to
include certain entities, at any time during the last half of a taxable year; (2) New
GGPs capital stock must be beneficially owned, without regard to any rules of
attribution of ownership, by 100 or more persons during at least 335 days
of a taxable year of 12 months or during a proportionate part of a shorter
taxable year; and (3) certain percentages of New GGPs gross income and
assets must be from particular activities and types of assets. Accordingly, the Charter contains provisions
which limit the value of New GGPs outstanding capital stock that may be owned
by any stockholder. We refer to this
limit as the Ownership Limit.
Subject
to certain exceptions, the Ownership Limit provides that no stockholder may
own, or be deemed to own by virtue of the applicable attribution provisions of
the Code, more than the Ownership Limit.
The Ownership Limit is set at 9.9% of the value of the outstanding
capital stock. The Board may waive the
9.9% Ownership Limit in certain circumstances, including pursuant to the
Investment Agreements, which provides that the Board may waive such restriction
subject to the applicable Plan Sponsor making certain representations and
covenants.
The
Board may waive the Ownership Limit if presented with satisfactory evidence
that such ownership will not jeopardize New GGPs status as a REIT. As a condition of such waiver, the Board may
require opinions of counsel satisfactory to it and/or an undertaking from the
applicant with respect to preserving REIT status. The Ownership Limit will not apply if the
Board and the holders of capital stock determine that it is no longer in New
GGPs best interests to attempt to qualify, or to continue to qualify, as a
REIT. If shares of capital stock in
excess of the Ownership Limit, or shares which would cause New GGP to be
beneficially owned by fewer than 100 persons, are issued or transferred to any
person, such issuance or transfer shall be null and void and the intended
transferee will acquire no rights to such shares.
The
Charter further provides that upon a transfer or other event that results in a
person owning (either directly or by virtue of the applicable attribution
rules) capital stock in excess of the applicable Ownership Limit (Excess
Shares), such person (Prohibited Owner) will not acquire or retain any
rights or beneficial economic interest in such Excess Shares. Rather, the
14
Excess
Shares will be automatically transferred to a person or entity unaffiliated with
and designated by New GGP to serve as trustee of a trust for the exclusive
benefit of a charitable beneficiary to be designated by New GGP within five
days after the discovery of the transaction which created the Excess Shares. The trustee shall have the exclusive right to
designate a person who may acquire the Excess Shares without violating the
applicable ownership restrictions (Permitted Transferee) to acquire any and
all of the shares held by the trust. The
Permitted Transferee must pay the trustee valuable consideration (whether in a
public or private sale) for the Excess Shares.
The trustee shall pay to the Prohibited Owner the lesser of (a) the
value of the shares at the time they became Excess Shares and (b) the
price received by the trustee from the sale of the Excess Shares to the
Permitted Transferee. The beneficiary will receive the excess of (x) the
sale proceeds from the transfer to the Permitted Transferee over (y) the
amount paid to the Prohibited Owner, if any, in addition to any dividends paid
with respect to the Excess Shares.
All
shares of capital stock issued by New GGP will be subject to legends and
stop-transfer restrictions as described above.
The
Ownership Limit will not be automatically removed even if the REIT provisions
of the Code are changed so as to no longer contain any ownership concentration
limitation or if the ownership concentration limitation is increased. Except as otherwise described above, any
change in the Ownership Limit would require an amendment to the Charter.
Indemnification.
The
Charter and Bylaws provide for New GGP, to the fullest extent permitted by the
General Corporation Law of the State of Delaware (the DGCL), as the same
exists or may hereafter be amended, to indemnify and hold harmless officers and
directors, and to advance to officers and directors related expenses (subject
to reimbursement if it is ultimately determined that the individual is not
entitled to be indemnified by New GGP).
In addition, New GGP has entered into indemnification agreements with
its directors.
Forum.
The
Charter provides that the Court of Chancery of the State of Delaware shall be
the sole and exclusive forum for (i) any derivative action or proceeding
brought on behalf of New GGP, (ii) any action asserting a claim of breach
of fiduciary duty owed by any director or officer of New GGP to New GGP or its
stockholders, (iii) any action asserting a claim against New GGP arising
pursuant to any provision of the DGCL or the Charter or Bylaws or (iv) any
action asserting a claim against New GGP governed by the internal affairs
doctrine.
15
Advance Notice and Other Procedures for Stockholder
Nominations and Other Business.
The advance notice and
other provisions of the Bylaws set forth how and when a stockholder may
nominate persons for election to the Board or propose other business to be
considered by the stockholders. Among
other things, these provisions set forth the following:
(a) (1) Nominations
of persons for election to the Board and the proposal of other business to be
considered by the stockholders may be made at an annual meeting of stockholders
only (A) pursuant to New GGPs notice of meeting (or any supplement
thereto), (B) by or at the direction of the Board, or (C) by any
stockholder of New GGP who (i) was a stockholder of record of New GGP at
the time the notice provided for pursuant to the Bylaws is delivered to the
Secretary of New GGP and at the time of the annual meeting, (ii) is
entitled to vote at the meeting, and (iii) complies with the notice
procedures set forth in the Bylaws as to such business or nomination. Clause (C) of the preceding
sentence shall be the exclusive means for a stockholder to make nominations or
submit other business (other than matters or nominations properly brought under
Rule 14a-8 or Rule 14a-11 under the Securities Exchange Act of 1934,
as amended (including the rules and regulations promulgated thereunder,
the Exchange Act) and included in New GGPs proxy statement) at an annual
meeting of stockholders.
(2) Without qualification or limitation
of any other requirement, for any nominations or any other business to be
properly brought before an annual meeting by a stockholder pursuant to clause
(C) of the preceding paragraph, the stockholder must have given timely
notice thereof in writing to the Secretary of New GGP and any such proposed
business other than the nominations of persons for election to the Board must
constitute a proper matter for stockholder action. To be timely, a
stockholders notice shall be delivered to the Secretary at the principal
executive offices of New GGP not earlier than the close of business on the
120th day nor later than the close of business on the 90th day prior to the
first anniversary of the preceding years annual meeting (
provided,
however
, that in the event that the date of the annual meeting is
more than 30 days before or more than 70 days after such anniversary date,
notice by the stockholder must be so delivered not earlier than the close of
business on the one 120th day prior to such annual meeting and not later than
the close of business on the later of the 90th day prior to such annual meeting
or, if the first public announcement of the date of such annual meeting is less
than 100 days prior to the date of such annual meeting, not later than the 10th
day following the day on which public announcement of the date of such meeting
is first made by New GGP). In no event shall the public announcement of an
adjournment or postponement of an annual meeting commence a new time period (or
extend any time period) for the giving of a stockholders notice as described
above.
(3) To be in proper form, a stockholders
notice must set forth: (A) as to each person, if any, whom the stockholder
proposes to nominate for election or reelection as a director (i) all
information relating to such person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors in contested election, or is
otherwise required, in each case pursuant to and in accordance with Regulation
14A under the Exchange Act, (ii) such persons written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected and (iii) a description of all direct and indirect compensation
and other material monetary agreements, arrangements and understandings during
the past three years, and any other material
16
relationships, between or among such
stockholder and, if applicable, the beneficial owner of the shares held of
record by such stockholder (the Beneficial Owner), if any, and their
respective affiliates, or others acting in concert therewith, on the one hand,
and each proposed nominee, and such persons respective affiliates, or others
acting in concert therewith, on the other hand, including, without limitation
all information that would be required to be disclosed pursuant to Item 404
promulgated under Regulation S-K if the stockholder making the nomination and
any Beneficial Owner, if any, or any affiliate thereof or person acting in
concert therewith, were the registrant for purposes of such rule and the
nominee were a director or executive officer of such registrant; (B) if
the notice relates to any business other than a nomination of a director or
directors that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the text
of the proposal or business (including the text of any resolutions proposed for
consideration and in the event that such business includes a proposal to amend
the Bylaws, the language of the proposed amendment), the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the Beneficial Owner, if any, on whose behalf the proposal is
made, and a description of all agreements, arrangements and understandings
between such stockholder and Beneficial Owner, if any, (including their names)
in connection with the proposal of such business by such stockholder; and
(C) as to the stockholder giving the notice and the Beneficial Owner, if
any, (i) the name and address of such stockholder, as they appear on New
GGPs books, and of such Beneficial Owner, if any, (ii) (a) the class
or series and number of shares of capital stock of New GGP which are, directly
or indirectly, owned beneficially and of record by such stockholder and such
Beneficial Owner, (b) any proxy, contract, arrangement, understanding, or
relationship pursuant to which such stockholder has a right to vote any shares
of any security of New GGP, (c) any short interest in any security of New
GGP (for purposes of the Bylaws a person shall be deemed have a short interest
of such stockholders and Beneficial Owner, if any, in a security if such person
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has the opportunity to profit or share in any profit
derived from any decrease in the value of the subject security), (d) any
rights to dividends on the shares of New GGP owned beneficially by such
stockholder and Beneficial Owner, if any, that are separated or separable from
the underlying shares of New GGP and (e) any proportionate interest in
shares of New GGP held, directly or indirectly, by a general or limited
partnership in which such stockholder is a general partner or, directly or
indirectly, beneficially owns an interest in a general partner, (iii) a
description of any agreement, arrangement or understanding with respect to the
nomination or proposal between or among such stockholder and such Beneficial
Owner, if any, any of their respective affiliates, and any others acting in
concert with any of the foregoing with respect to such nomination or proposal,
(iv) a representation that the stockholder is a holder of record of stock
of New GGP entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to propose such business or nomination, (v) a
representation whether the stockholder or the Beneficial Owner, if any, intends
to be or is part of a group which intends (a) to deliver a proxy statement
and/or form of proxy to holders of at least the percentage of the voting power
of New GGPs outstanding voting stock required to approve or adopt the proposal
or elect the nominee or (b) otherwise to solicit proxies from stockholders
in support of such proposal or nomination, and (vi) any other information
relating to such stockholder and Beneficial Owner, if any, that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for, as applicable, the
proposal and/or for the election of directors in a
17
contested election pursuant to
Section 14 of the Exchange Act. In
addition, the stockholders notice with respect to the election of directors
must include, with respect to each nominee for election or reelection to the
Board, the completed and signed questionnaire, representation and agreement
required by Section 9 of Article I of the Bylaws. New GGP may require
any proposed nominee to furnish such other information as it may reasonably
require to determine the eligibility of such proposed nominee to serve as an
independent director of New GGP or that could be material to a reasonable
stockholders understanding of the independence, or lack thereof, of such
nominee. Notwithstanding the foregoing, the information required by clauses
(C)(ii) and (C)(iii) of this paragraph shall be updated by such
stockholder and Beneficial Owner, if any, not later than 10 days after the
record date for the meeting to disclose such information as of the record date.
(4) Notwithstanding anything in the
second sentence of paragraph (2) above to the contrary, in the event that
the number of directors to be elected to the Board at an annual meeting is
increased and there is no public announcement by New GGP naming all of the
nominees for director or specifying the size of the increased Board at least
100 days prior to the first anniversary of the preceding years annual meeting,
a stockholders notice required by the Bylaws shall also be considered timely,
but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of New GGP not later than the close of business on the 10th day
following the day on which such public announcement is first made by New GGP.
(b) Only such business shall be conducted
at a special meeting of stockholders as shall have been brought before the
meeting pursuant to New GGPs notice of meeting. Nominations of persons for election to the
Board may be made at a special meeting of stockholders at which directors are
to be elected pursuant to New GGPs notice of meeting (1) by or at the
direction of the Board or a committee thereof, or (2)
provided
,
that the Board, such committee or stockholder(s) pursuant to Section 1(b) of
the Bylaws (which provides that a special meeting of the stockholders for any
purpose or purposes may be called by the Board; and that a special meeting of
stockholders shall be called by the Secretary promptly upon and in accordance
with the written request, stating the purpose, date, time and place within or
without the State of Delaware of the meeting, of stockholders of record who
together hold
15%
or more of the voting power of the issued
and outstanding shares of the capital stock of New GGP entitled to vote
generally in the election of directors) have determined that a purpose of the
meeting is to elect directors, by any stockholder of New GGP who (i) is a
stockholder of record of New GGP at the time the notice provided for above is
delivered to the Secretary of New GGP and at the time of the special meeting,
(ii) is entitled to vote at the meeting and upon such election, and
(iii) complies with the notice procedures set forth above as to such
nomination. In the event New GGP calls a
special meeting of stockholders for the purpose of electing one or more
directors to the Board, any such stockholder may nominate a person or persons
(as the case may be) for election to such position(s) as specified in New
GGPs notice of meeting, if the stockholders notice required by paragraph
(a)(3) above with respect to any nomination (including the completed and
signed questionnaire, representation and agreement required by the Bylaws)
shall be delivered to the Secretary at the principal executive offices of New
GGP not earlier than the close of business on the 120th day prior to such
special meeting and not later than the close of business on the later of the
90th day prior to such special meeting or, if the first
18
public announcement of the date of such
special meeting is less than 100 days prior to the date of such special
meeting, the 10th day following the day on which public announcement is first
made of the date of the special meeting and of the nominees proposed by the
Board to be elected at such meeting. In
no event shall the public announcement of an adjournment or postponement of a
special meeting commence a new time period (or extend any time period) for the
giving of a stockholders notice as described above.
(c) Notwithstanding
the foregoing, if the stockholder (or a qualified representative of the
stockholder) does not appear at the annual or special meeting of stockholders
of New GGP to present a nomination or other business, such nomination shall be
disregarded and such proposed other business shall not be transacted,
notwithstanding that proxies in respect of such vote may have been received by
New GGP.
Item
8.01. Other Events.
Successor Issuer
Upon
completion of the Reorganization, in accordance with Rule 12g-3(a) under
the Exchange Act the common stock of New GGP, as successor issuer to Old GGP,
is deemed to be registered under Section 12(b) of the Exchange Act.
Press Release
On
November 9, 2010, New GGP announced that it had consummated the Plan. A
copy of the press release is attached as an exhibit hereto and is incorporated
herein by reference.
Pershing Square Bridge Note
On
the Effective Date, Pershing Square paid $350 million to New GGP in exchange
for an unsecured note issued by New GGP to an affiliate of Pershing Square,
which note is payable 210 days after the Effective Date (the Pershing Square
Bridge Note). The Pershing Square Bridge Note bears interest at a rate of 6%
per annum and is prepayable by New GGP at any time without premium or penalty.
19
Credit Facility
On
the Effective Date, a revolving credit facility, providing for revolving loans
of up to $300 million, was entered into with Deutsche Bank Trust Company
Americas, as administrative agent and collateral agent, various lenders, and
Deutsche Bank Securities Inc., Wells Fargo Securities, LLC and RBC
Capital Markets, LLC as Joint Lead Arrangers.
The
revolving credit facility will mature three years from the Effective Date. The
revolving credit facility is a senior secured obligation of New GGP, as a
guarantor, and the two operating entities through which New GGP conducts
substantially all of its business (GGPLP and GGPLP L.L.C.) and three holding
company subsidiaries through which New GGP holds its interest in certain of its
property-level subsidiaries (GGPLP Real Estate 2010 Loan Pledgor Holding, LLC,
GGPLPLLC
2010 Loan Pledgor Holding, LLC, and GGPLP 2010 Loan Pledgor Holding, LLC), as
co-borrowers. In addition, the revolving credit facility is guaranteed by
certain of New GGPs subsidiaries and secured by (i) first-lien mortgages
on certain properties, (ii) first-lien pledges of equity interests in certain
of New GGPs subsidiaries which directly or indirectly own properties that are
encumbered by existing third-party mortgage debt and (iii) various
additional collateral.
Borrowings
under the revolving credit facility will bear interest at a floating rate,
which can be either a Eurodollar rate plus an applicable margin or, at the
borrowers option, an alternative base rate (defined as the higher of
(x) the Deutsche Bank Trust Company Americas prime rate and (y) the
federal funds effective rate, plus one half percent (.50%) per annum. The
interest rate payable in respect of any overdue principal and interest under
the revolving credit facility will increase by 2.00% per annum during the
continuance of any payment event of default with respect to such principal or
interest.
For
Eurodollar loans, New GGP may select interest periods of one, two, three, six
months or, with the consent of all lenders, nine months. Interest will be
payable at the end of the selected interest period, but no less frequently than
every three months within the selected interest period.
The
revolving credit facility also requires payment of a commitment fee on the
difference between committed amounts and amounts actually borrowed under the
revolving credit facility and customary letter of credit fees. Prior to the
maturity date of the revolving credit facility, funds borrowed under the
revolving credit facility may be borrowed, repaid and reborrowed, without
premium or penalty.
Voluntary
prepayments of principal amounts outstanding under the revolving credit
facility will be permitted at any time; however, if a prepayment of principal
is made with respect to a Eurodollar loan on a date other than the last day of
the applicable interest period, the lenders will require compensation for any
funding losses and expenses incurred as a result of the prepayment.
The
revolving credit facility contains certain restrictive covenants applicable to
New GGP and its subsidiaries which will, among other things, limit material
changes in nature of business conducted, amalgamations, mergers,
consolidations, dissolutions or liquidations, dispositions of assets, liens,
incurrence of additional indebtedness, investments and acquisitions, dividends,
amendments to organizational documents, hedging for speculative purposes,
transactions with affiliates, prepayment of subordinated debt, negative
pledges, changes in fiscal periods and limitations on subsidiary distributions.
In addition, New GGP is required to maintain a maximum net debt to value ratio,
a maximum leverage ratio and a minimum net cast interest coverage ratio.
The
revolving credit facility contains customary events of default, including
without limitation, payment defaults, breaches of representations and
warranties, covenant defaults, cross-defaults to certain other indebtedness in
excess of specified amounts, certain events of bankruptcy and insolvency,
judgment defaults in excess of specified amounts, failure of any material
provision of any guaranty or security document supporting the revolving credit
facility to be in full force and effect, failure to maintain REIT status and a
change of control.
New Rouse Indenture
Overview
. On the Effective Date, a subsidiary of New
GGP, The Rouse Company LLC, formerly known as The Rouse Company LP (Rouse),
issued $608,688,000 aggregate principal amount of
20
6.75%
Senior Notes due 2015 (the Senior Notes) pursuant to an indenture (the
Indenture) between Rouse and Wilmington Trust FSB, as trustee (the
Trustee). The Senior Notes were issued
to holders in exchange for $608,688,000 aggregate principal amount of certain
notes previously issued by Rouse (the Old Rouse Notes) that elected to
received Senior Notes in exchange for their claims related to the Old Rouse
Notes pursuant to the Plan at an exchange rate of $1,000 in principal amounts
of Senior Notes for each $1,000 principal amount of Old Rouse Notes. Rouse did not receive any proceeds from the
issuance of the Senior Notes.
The
Senior Notes will mature on November 9, 2015. Rouse will pay cash interest on the Senior
Notes on May 1 and November 1 of each year, commencing May 1,
2011. Interest will accrue at a rate of
6.75% per annum.
Guarantees
. The Senior Notes are not guaranteed.
Ranking
. The Senior Notes are the senior unsecured
obligations of Rouse and:
·
are equal and ratable in right of payment to
all of Rouses existing and future unsecured debt that is not, by its terms,
expressly subordinated in right of payment to the Senior Notes;
·
rank senior in right of payment to any future
debt of Rouse that is, by its terms, expressly subordinated in right of payment
to the Senior Notes;
·
will be effectively subordinated to all
existing and future secured debt of Rouse to the extent of the assets securing
such debt; and
·
will be effectively subordinated to all
existing and future debt and other liabilities of any subsidiaries of Rouse.
Redemption
. Rouse may redeem some or all of the Senior
Notes at any time prior to May 1, 2013 at a price equal to 100% of the
principal amount of the Senior Notes redeemed and the sum of the present value
of the remaining scheduled payments of interest thereon (not including any
portion of such payments of interest accrued as of the redemption date) discounted
to the redemption date on a semi-annual basis at the rate per annum equal to
the semi-annual yield to maturity of the comparable treasury issue on the
redemption date plus 50 basis points. In
addition, on or after May 1, 2013, Rouse may redeem the Senior Notes at a
redemption price of 103.375% of the principal amount redeemed and on or after
May 1, 2014 at a redemption price of 100% of the principal amount
redeemed.
Covenants
. The Indenture contains certain covenants
limiting:
·
the ability of Rouse and its subsidiaries to
incur debt;
·
the ability of Rouse and certain of its
subsidiaries to enter into sale/leaseback transactions; and
·
Rouses ability to consolidate or merge with,
or to sell, convey or lease all or substantially all of its assets to any other
entity.
Events
of Defaults
. Each of the
following would be an event of default with respect to the Senior Notes:
·
failure to pay principal of or premium, if
any, on the notes when due;
·
failure to pay any interest on the notes when
due, continued for 30 days;
·
failure to perform any other covenant in the
respective indentures, continued for 60 days after written notice as provided
in such indenture;
·
certain events of bankruptcy, insolvency or
reorganization; and
·
defaults by Rouse (or a subsidiary of Rouse
if Rouse is a guarantor under such debt) on any debt for borrowed money
aggregating $10.0 million or more that results in acceleration.
No
Registration Rights
. Holders of
the Senior Notes will not have the benefit of any exchange or registration
rights.
*****
The
foregoing description of certain agreements to which New GGP is a party does
not purport to be complete and is qualified in its entirety by reference to the
full text of such agreements, which are exhibits hereto and are incorporated
herein by reference. The forgoing
descriptions of these documents and the copies of these documents included as
exhibits hereto have been included to provide investors with information
regarding the terms of these documents. These documents contain
representations and warranties made by and to the parties thereto as of
specific dates. The representations and warranties of each party set
forth in each document have been made solely for the benefit of the other party
to such document. In addition, such representations and warranties
(1) may have been qualified by confidential disclosures made to the other
party in connection with such document, (2) may be subject to a
materiality standard which may differ from what may be viewed as material by investors,
(3) were made only as of the date of such documents or such other date as
is specified therein and (4) may have been included in such documents for
the purpose of allocating risk between or among the parties thereto rather than
establishing matters as facts. Accordingly, these documents are included
herewith only to provide investors with information regarding the terms
thereof, and not to provide investors with any other factual information
regarding the parties or their respective businesses.
21
Item 9.01. Financial Statement and Exhibits.
(d) Exhibits.
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of New GGP, Inc.
(now called General Growth Properties, Inc.)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of General Growth
Properties, Inc.
|
|
|
|
4.1
|
|
Warrant Agreement, dated as of
November 9, 2010, between General Growth Properties, Inc. and
Mellon Investor Services LLC
|
|
|
|
4.2
|
|
The Rouse Company and Wilmington Trust FSB
(Trustee) Indenture, dated November 9, 2010
|
|
|
|
10.1
|
|
Amended and Restated Cornerstone Investment
Agreement, effective as of March 31, 2010, between Brookfield Retail
Holdings LLC (formerly REP Investments LLC) and General Growth
Properties, Inc.
|
|
|
|
10.2
|
|
Amended and Restated Stock Purchase
Agreement, effective as of March 31, 2010, between The Fairholme Fund
and Fairholme Focused Income Fund and General Growth Properties, Inc.
|
|
|
|
10.3
|
|
Amended and Restated Stock Purchase
Agreement, effective as of March 31, 2010, between Pershing Square
Capital Management, L.P., on behalf of Pershing Square, L.P., Pershing Square
II, L.P., Pershing Square International, Ltd. and Pershing Square
International V, Ltd. and General Growth Properties, Inc.
|
|
|
|
10.4
|
|
Standstill Agreement, dated as of
November 9, 2010, between Brookfield Retail Holdings LLC, Brookfield
Retail Holdings II LLC, Brookfield Retail Holdings III LLC, Brookfield Retail
Holdings IV-A LLC, Brookfield Retail Holdings IV-B LLC, Brookfield Retail
Holdings IV-C LLC, Brookfield Retail Holdings IV-D LLC and Brookfield Retail
Holdings V LP and General Growth Properties, Inc.
|
|
|
|
10.5
|
|
Standstill Agreement, dated as of
November 9, 2010, between The Fairholme Fund and General Growth
Properties, Inc.
|
|
|
|
10.6
|
|
Standstill Agreement, dated as of
November 9, 2010, between Pershing Square II, L.P., Pershing Square
International, Ltd. and Pershing Square International V, Ltd. and
General Growth Properties, Inc.
|
|
|
|
10.7
|
|
Registration Rights Agreement, dated as of
November 9, 2010, between Brookfield Retail Holdings LLC, Brookfield
Retail Holdings II LLC, Brookfield Retail Holdings III LLC, Brookfield Retail
Holdings IV-A LLC, Brookfield Retail Holdings IV-B LLC, Brookfield Retail
Holdings IV-C LLC, Brookfield Retail Holdings IV-D LLC, Brookfield Retail
Holdings V LP and Brookfield US Retail Holdings LLC, and General Growth
Properties, Inc.
|
22
10.8
|
|
Registration Rights Agreement, dated as of
November 9, 2010, between The Fairholme Fund, Fairholme Focused Income
Fund and General Growth Properties, Inc.
|
|
|
|
10.9
|
|
Registration Rights Agreement, dated as of
November 9, 2010, between Pershing Square, L.P., Pershing Square II,
L.P., Pershing Square International, Ltd., Pershing Square International
V, Ltd., Blackstone Real Estate Partners VI L.P. and its permitted
assigns and General Growth Properties, Inc.
|
|
|
|
10.10
|
|
Registration Rights Agreement, dated as of November 9,
2010, between Teacher Retirement System of Texas and General Growth
Properties, Inc.
|
|
|
|
10.11
|
|
Agreement and Plan of Merger, dated as of
November 9, 2010, by and among GGP, Inc., General Growth
Properties, Inc., GGP Real Estate Holding I, Inc., and GGP Merger
Sub, Inc.
|
|
|
|
99.1
|
|
Press release, dated November 9, 2010,
titled General Growth Properties Completes Financial Restructuring and
Emerges From Chapter 11
|
|
|
|
99.2
|
|
Separation Agreement, dated as of
November 9, 2010, between The Howard Hughes Corporation and General
Growth Properties, Inc.
|
|
|
|
99.3
|
|
Transition Services Agreement, dated as of
November 9, 2010, between The Howard Hughes Corporation and General
Growth Properties, Inc.
|
|
|
|
99.4
|
|
Tax Matters Agreement, dated as of November 9,
2010, between The Howard Hughes Corporation and General Growth
Properties, Inc.
|
|
|
|
99.5
|
|
Relationship Agreement, dated as of
November 9, 2010, between Brookfield Asset Management, Inc. and
General Growth Properties, Inc.
|
|
|
|
99.6
|
|
Credit and Guaranty Agreement, dated as of
November 9, 2010, among Deutsche Bank Trust Company Americas, as
administrative agent and collateral agent, various lenders, and Deutsche Bank
Securities Inc., Wells Fargo Securities, LLC and RBC Capital Markets, LLC as
Joint Lead Arrangers and General Growth Properties, Inc.
|
|
|
|
99.7
|
|
6% Promissory Note, dated November 9,
2010, issued by General Growth Properties, Inc. to PSRH, Inc.
|
23
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
GENERAL
GROWTH PROPERTIES, INC.
|
|
|
|
|
|
/s/
Edmund Hoyt
|
|
Name:
Edmund Hoyt
|
|
Title:
Senior Vice President and Chief Accounting Officer
|
Date:
November 12, 2010
|
|
|
|
|
|
|
GGP, INC.
|
|
|
|
|
|
/s/
Edmund Hoyt
|
|
Name:
Edmund Hoyt
|
|
Title:
Senior Vice President and Chief Accounting Officer
|
Date:
November 12, 2010
|
|
24
EXHIBIT INDEX
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Certificate of
Incorporation of New GGP, Inc. (now called General Growth
Properties, Inc.)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of General Growth
Properties, Inc.
|
|
|
|
4.1
|
|
Warrant Agreement, dated as of
November 9, 2010, between General Growth Properties, Inc. and
Mellon Investor Services LLC
|
|
|
|
4.2
|
|
The Rouse Company and Wilmington Trust FSB (Trustee)
Indenture, dated November 9, 2010
|
|
|
|
10.1
|
|
Amended and Restated Cornerstone Investment
Agreement, effective as of March 31, 2010, between Brookfield Retail
Holdings LLC (formerly REP Investments LLC) and General Growth
Properties, Inc.
|
|
|
|
10.2
|
|
Amended and Restated Stock Purchase
Agreement, effective as of March 31, 2010, between the Fairholme Fund
and Fairholme Focused Income Fund and General Growth Properties, Inc.
|
|
|
|
10.3
|
|
Amended and Restated Stock Purchase
Agreement, effective as of March 31, 2010, between Pershing Square
Capital Management, L.P., on behalf of Pershing Square, L.P., Pershing Square
II, L.P., Pershing Square International, Ltd. and Pershing Square
International V, Ltd. and General Growth Properties, Inc.
|
|
|
|
10.4
|
|
Standstill Agreement, dated as of
November 9, 2010, between Brookfield Retail Holdings LLC, Brookfield
Retail Holdings II LLC, Brookfield Retail Holdings III LLC, Brookfield Retail
Holdings IV-A LLC, Brookfield Retail Holdings IV-B LLC, Brookfield Retail
Holdings IV-C LLC, Brookfield Retail Holdings IV-D LLC and Brookfield Retail
Holdings V LP and General Growth Properties, Inc.
|
|
|
|
10.5
|
|
Standstill Agreement, dated as of November 9,
2010, between The Fairholme Fund and General Growth Properties, Inc.
|
|
|
|
10.6
|
|
Standstill Agreement, dated as of
November 9, 2010, between Pershing Square II, L.P., Pershing Square
International, Ltd. and Pershing Square International V, Ltd. and General
Growth Properties, Inc.
|
|
|
|
10.7
|
|
Registration Rights Agreement, dated as of
November 9, 2010, between Brookfield Retail Holdings LLC, Brookfield
Retail Holdings II LLC, Brookfield Retail Holdings III LLC, Brookfield Retail
Holdings IV-A LLC, Brookfield Retail Holdings IV-B LLC, Brookfield Retail
Holdings IV-C LLC, Brookfield Retail Holdings IV-D LLC, Brookfield Retail
Holdings V LP and Brookfield US Retail Holdings LLC, and General Growth
Properties, Inc.
|
|
|
|
10.8
|
|
Registration Rights Agreement, dated as of
November 9, 2010, between The Fairholme Fund, Fairholme Focused Income
Fund and General Growth Properties, Inc.
|
25
10.9
|
|
Registration Rights Agreement, dated as of
November 9, 2010, between Pershing Square, L.P., Pershing Square II,
L.P., Pershing Square International, Ltd., Pershing Square International
V, Ltd., Blackstone Real Estate Partners VI L.P. and its permitted
assigns and General Growth Properties, Inc.
|
|
|
|
10.10
|
|
Registration Rights Agreement, dated as of
November 9, 2010, between Teacher Retirement System of Texas and General
Growth Properties, Inc.
|
|
|
|
10.11
|
|
Agreement and Plan of Merger, dated as of
November 9, 2010, by and among GGP, Inc., General Growth
Properties, Inc., GGP Real Estate Holding I, Inc., and GGP Merger
Sub, Inc.
|
|
|
|
99.1
|
|
Press release, dated November 9, 2010,
titled General Growth Properties Completes Financial Restructuring and
Emerges From Chapter 11
|
|
|
|
99.2
|
|
Separation Agreement, dated as of
November 9, 2010, between The Howard Hughes Corporation and General
Growth Properties, Inc.
|
|
|
|
99.3
|
|
Transition Services Agreement, dated as of
November 9, 2010, between The Howard Hughes Corporation and General
Growth Properties, Inc.
|
|
|
|
99.4
|
|
Tax Matters Agreement, dated as of
November 9, 2010, between The Howard Hughes Corporation and General
Growth Properties, Inc.
|
|
|
|
99.5
|
|
Relationship Agreement, dated as of
November 9, 2010, between Brookfield Asset Management, Inc. and
General Growth Properties, Inc.
|
|
|
|
99.6
|
|
Credit and Guaranty Agreement, dated as of
November 9, 2010, among Deutsche Bank Trust Company Americas, as
administrative agent and collateral agent, various lenders, and Deutsche Bank
Securities Inc., Wells Fargo Securities, LLC and RBC Capital Markets, LLC as
Joint Lead Arrangers and General Growth Properties, Inc.
|
|
|
|
99.7
|
|
6% Promissory Note, dated November 9,
2010, issued by General Growth Properties, Inc. to PSRH, Inc.
|
26
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