Exhibit 10.1

 

WARRANT PURCHASE AGREEMENT

 

This Warrant Purchase Agreement dated as of November 9, 2012 (this “Agreement”),
is made by and among the parties listed on Schedule I attached hereto (each, a
“Brookfield Investor” and collectively, the “Brookfield Investors”) and The
Howard Hughes Corporation, a Delaware corporation (the “Company”).

 

RECITALS

 

WHEREAS, upon consummation of the Company’s predecessors’ plan of
reorganization, the Company issued to the Brookfield Investors warrants (the
“Initial Warrants”) to purchase up to an aggregate of 3,833,333 shares of the
Company’s common stock, par value $0.01 per share (“Common Stock”);

 

WHEREAS, the Brookfield Investors desire to exercise, in accordance with the
Warrant Agreement, dated as of November 9, 2010 (the “Warrant Agreement”), by
and between the Company and Mellon Investor Services LLC, a New Jersey limited
liability company (the “Warrant Agent”), 1,525,272 of the Initials Warrants
(with each Brookfield Investor exercising the number of Initial Warrants set
forth opposite such Brookfield Investor’s name on Schedule I hereto) to purchase
an aggregate amount of 1,525,272 shares of Common Stock (the “Exercise Shares”)
at an exercise price of $50.00 per Initial Warrant and SEVENTY-SIX MILLION TWO
HUNDRED AND SIXTY-THREE THOUSAND SIX HUNDRED AND 00/100 DOLLARS ($76,263,600.00)
in the aggregate (the “Warrant Exercise Price”); and

 

WHEREAS, the Company desires to purchase the remaining 2,308,061 Initial
Warrants (the “Residual Warrants”) from the Brookfield Investors, and the
Brookfield Investors desire to sell the Residual Warrants to the Company, upon
the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual promises
contained herein and intending to be legally bound hereby, the Company and the
Brookfield Investors hereby agree as follows:

 

1.              Exercise of Certain Initial Warrants. Each Brookfield Investor
hereby agrees to exercise the number of Initial Warrants set forth opposite
their respective names on Schedule I hereto for their respective portion of the
Exercise Shares contemporaneously with the Closing.

 

2.              Purchase and Sale of Residual Warrants. At the Closing, the
Company agrees to purchase the Residual Warrants from the Brookfield Investors,
and each Brookfield Investor agrees to sell, transfer, assign and deliver the
Residual Warrants set forth opposite their respective names on Schedule I hereto
to the Company, free and clear of any liens, security interests, encumbrances,
claims, liabilities, restrictions or third party rights (each, a “Lien”).
Subject to Section 3 below, the aggregate consideration paid to the Brookfield
Investors by the Company for the Residual Warrants shall be an amount of cash
equal to EIGHTY-NINE MILLION THREE HUNDRED

 

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AND ELEVEN THOUSAND SIX HUNDRED AND 00/100 DOLLARS ($89,311,600.00) (the “Cash
Consideration”).

 

3.              Closing. The Brookfield Investors and the Company agree that the
Cash Consideration shall be netted against the Warrant Exercise Price, such that
the Company shall only be required to make a payment of THIRTEEN MILLION
FORTY-EIGHT THOUSAND AND 00/100 DOLLARS ($13,048,000.00) (the “Net Cash
Consideration”) to the Brookfield Investors in exchange for the Residual
Warrants and in full satisfaction of the Brookfield Investors’ obligation to pay
the Warrant Exercise Price and the Company’s obligation to pay the Cash
Consideration. The closing of the purchase and sale of the Initial Warrants (the
“Closing”) shall take place on November 9, 2012 (or on such other date as the
parties shall agree). At the Closing: (i) each Brookfield Investor shall deliver
to the Company its warrant certificate evidencing the Residual Warrants duly
endorsed in blank; and (ii) the Company shall cause the Exercise Shares to be
issued in book-entry form with the Company’s transfer agent and each Brookfield
Investor’s portion of the Net Cash Consideration set forth opposite such
Brookfield Investor’s name on Schedule I in immediately available funds by wire
transfer to one or more bank accounts of the applicable Brookfield Investor
designated by such Brookfield Investor.

 

4.              Representation and Warranties of the Brookfield Investors. Each
Brookfield Investor hereby jointly and severally represents and warrants to the
Company as follows:

 

(a)         each Brookfield Investor has full power, capacity and right to
execute and deliver this Agreement and to perform its obligations hereunder;

 

(b)         this Agreement has been duly executed and delivered by the
Brookfield Investors and constitutes the valid and binding agreement of the
Brookfield Investors enforceable against the Brookfield Investors in accordance
with its terms;

 

(c)          each Brookfield Investor is the beneficial owner of the Initial
Warrants set forth opposite the name of such Brookfield Investor on Schedule I.
Each such Brookfield Investor holds its Initial Warrants free and clear of any
Liens and, at the Closing, the Brookfield Investor will transfer and deliver to
the Company good and valid title to its Residual Warrants free and clear of any
Lien. Schedule I sets forth the record owner of the Initial Warrants;

 

(d)         no approval, authorization, consent or filing with any governmental
entity having jurisdiction over any Brookfield Investor is required by the
Brookfield Investor in connection with the execution, delivery and performance
of this Agreement by the Brookfield Investor, except as may be required under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”);

 

(e)          the execution, delivery and performance of this Agreement by the
Brookfield Investors does not contravene or conflict with any material
agreement, contract or other instrument, or any law, rule, regulation, order or
decree, binding upon or applicable to the Brookfield Investor except for such
contraventions or conflicts as would not reasonably be expected have a

 

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material adverse effect on the ability of the Brookfield Investors to consummate
the transactions contemplated by this Agreement;

 

(f)           each Brookfield Investor is a sophisticated investor (as described
in Rule 506 of Regulation D) and an accredited investor (as defined in Rule 501
of Regulation D), and each Brookfield Investor has such experience in business
and financial matters that it is capable of evaluating the merits and risk of an
investment in the Common Stock;

 

(g)          each Brookfield Investor has performed all due diligence it deems
necessary and has not relied on any representations or other statements made or
information provided by the Company in connection with the consummation of the
transactions contemplated herein other than as expressly set forth in this
Agreement;

 

(h)         no Brookfield Investor is party to any contract, agreement or
understanding with any person that would give rise to a valid claim against the
Company for an investment banking fee, commission, finder’s fee or like payment
in connection with the transactions contemplated by this Agreement; and

 

(i)             the Brookfield Investors: (i) acknowledge that the Company
possesses material non-public information not known to the Brookfield Investors
that may impact the value of the Initial Warrants and Exercise Shares; and
(ii) irrevocably waive any claim that they may have based on the failure of the
Company to disclose such information.

 

5.              Representations and Warranties of the Company. The Company
hereby represents and warrants to the Brookfield Investor as follows:

 

(a)         the Company has full power, capacity, authority and right to execute
and deliver this Agreement and to perform its obligations hereunder;

 

(b)         this Agreement has been duly authorized by all necessary action and
constitutes the valid and binding agreement of the Company enforceable against
the Company in accordance with its terms;

 

(c)          no approval, authorization, consent or filing is required in
connection with the execution, delivery and performance of this Agreement by the
Company, except as may be required under the Exchange Act;

 

(d)         upon issuance at Closing, the Exercise Shares will be duly
authorized, validly issued and nonassessable;

 

(e)          at Closing, the Exercise Shares issuable to the Brookfield
Investors pursuant to this Agreement shall have been authorized for listing on
the NYSE upon issuance of the Exercise Shares;

 

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(f)           37,973,640 shares of Common Stock are issued and outstanding.
Following the Closing and after giving effect to the issuance of the Exercise
Shares, 39,498,912 shares of Common Stock will be issued and outstanding;

 

(g)          the execution, delivery and performance of this Agreement by the
Company does not contravene or conflict with: (i) the certificate of
incorporation or bylaws of the Company; or (ii) with any material agreement,
contract or other instrument, or any law, rule, regulation, order or decree,
binding upon or applicable to the Company, except, with respect to clause (ii),
for such contraventions or conflicts as would not reasonably be expected have a
material adverse effect on the ability of the Company Investors to consummate
the transactions contemplated by this Agreement; and

 

(h)         the Company is not party to any contract, agreement or understanding
with any person that would give rise to a valid claim against any Brookfield
Investor for an investment banking fee, commission, finder’s fee or like payment
in connection with the transactions contemplated by this Agreement.

 

6.              Company Redemptions, Repurchases, Acquisitions of Common Stock.
Following the Closing, in connection with any redemption, repurchase or
acquisition by the Company of any shares of Common Stock from any holder of
Common Stock which would cause the Brookfield Investors to beneficially own (for
purposes of Rule 13d-3 adopted under the Exchange Act) 10% or more of the
outstanding shares of Common Stock, (i) at least five Business Days prior to any
such redemption, repurchase or acquisition, the Company shall offer, in writing,
to redeem, repurchase or acquire from the Brookfield Investors on the same terms
as such redemptions, repurchases or other acquisitions, up to such number of
shares of Common Stock beneficially owned by the Brookfield Investors as
necessary so that, immediately after such redemption, repurchase or acquisition,
the Brookfield Investors will beneficially own (for purposes of Rule 13d-3
adopted under the Exchange Act) less than 10% of the outstanding shares of
Common Stock and (ii) simultaneously with such redemption, repurchase or
acquisition, the Company shall redeem, repurchase or acquire from the Brookfield
Investors the number of shares of Common Stock described in clause (i).

 

7.              Stockholder Letter Agreement. The Brookfield Investor and the
Company agree to delete it in its entirety Section 2 of the Stockholder Letter
dated as of November 9, 2010, by and between Brookfield Retail Holdings LLC and
the Company, and the Brookfield Investor irrevocably waives its right to
designate or nominate a member for the Board of Directors of the Company.

 

8.              Miscellaneous.

 

(a)         The Brookfield Investor and the Company agree to cooperate with each
other in executing and delivering all further documents necessary to effect the
purchase and sale of the Residual Warrants and agree to cooperate with each
other for purposes of effecting the other terms of this Agreement.

 

(b)         All representations, warranties, covenants and obligations on this
Agreement will survive the Closing.

 

(c)          Any provision of this Agreement may be amended or waived, if, but
only if, such amendment or waiver is in writing and executed by the Brookfield
Investors and the Company.

 

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(d)         This Agreement shall be binding upon and inure to the benefit of
each of the Brookfield Investors and the Company and their respective heirs,
administrators, successors, assigns and legal representatives.

 

(e)          This Agreement shall be construed in accordance in accordance and
governed by the laws of the State of New York applicable to contracts made and
to be performed entirely within the State of New York without regard to
conflicts of law principles.

 

(f)           This Agreement contains the entire agreement for the parties
hereto with respect to the purchase of the Residual Warrants and the other
transactions contemplated herein, and supersedes all prior understanding and
agreements of the Brookfield Investor and the Company with respect to the
subject matter hereof.

 

(g)          This Agreement may be executed in counterparts each of which shall
be and original with the same effect as if the signatures thereto and hereto
were upon the same instrument. No provision of this Agreement is intended to
confer upon any person other than the Brookfield Investors and the Company any
rights or remedies hereunder.

 

(h)         If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such a determination, the Brookfield
Investors and the Company shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the Brookfield Investors and the Company
as closely as possible in an acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.

 

(i)             Notices. All communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by overnight
courier:

 

(1)         if to the Company, to:

 

The Howard Hughes Corporation

13355 Noel Road, 22nd Floor

Dallas, Texas 75240

Attention: General Counsel

Facsimile: (214) 741-3021

 

(2)         if to the Brookfield Investors, to

 

c/o Brookfield Asset Management Inc.

Brookfield Place, Suite 300

181 Bay Street

P.O. Box 762

Toronto, Ontario M5J 2T3 Canada

Attention:     Joseph Freedman

Facsimile:     (416) 365-9642

 

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with a copy to:

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Attention: Gregory B. Astrachan, Esq.

Facsimile: (212) 728-8111

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.

 

 

THE HOWARD HUGHES CORPORATION

 

 

By:

/s/ David R. Weinreb

 

 

David R. Weinreb

 

Chief Executive Officer

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS HHC LLC

 

 

 

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P.,

its Managing Member

 

 

 

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

 

 

 

 

 

By;

/s/ Jay Sheth

 

 

Name: Jay Sheth

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS II LLC

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P.,

its Managing Member

 

 

 

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

 

 

 

 

 

By:

/s/ Jay Sheth

 

 

Name: Jay Sheth

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS III LLC

 

 

 

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P., its Managing Member

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

 

 

 

 

 

By:

/s/ Jay Sheth

 

 

Name: Jay Sheth

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS IV-A LLC

 

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P.,

 

 

its Managing Member

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS IV-B LLC

 

 

 

 

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P.,

 

 

its Managing Member

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS IV-C LLC

 

 

 

 

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P.,

 

 

its Managing Member

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS IV-D LLC

 

 

 

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P., its Managing Member

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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BROOKFIELD RETAIL HOLDINGS V LP

 

 

 

 

By:

Brookfield Asset Management Private Institutional

 

 

 

 

 

Capital Adviser (Canada), L.P., its General Partner

 

 

 

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

 

Name: Karen Ayre

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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Solely for the purposes of Section 6 of this Agreement:

 

BROOKFIELD RETAIL HOLDINGS LLC

 

 

 

 

By:

Brookfield Asset Management Private Institutional Capital Adviser (Canada),
L.P., its Managing Member

 

 

 

 

 

 

 

By:

Brookfield Private Funds Holdings Inc.,

 

 

its general partner

 

 

 

 

 

 

 

By:

/s/ Karen Ayre

 

Name:

Karen Ayre

 

Title:

Vice President

 

 

 

 

 

 

 

By:

/s/ Jay Sheth

 

 

Name: Jay Sheth

 

 

Title: Vice President

 

 

Signature Page to Warrant Purchase Agreement

 

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SCHEDULE I

 

THE BROOKFIELD INVESTORS

 

Brookfield Investor

 

Initial Warrants
to be Exercised

 

Exercise
Shares

 

Residual Warrants
to be Sold

 

Portion of Cash
Consideration

 

Portion of Net Cash
Consideration

 

Brookfield Retail Holdings HHC LLC, a Delaware limited liability company

 

496,434

 

496,434

 

751,209

 

$

29,068,416.18

 

$

4,246,716.18

 

Brookfield Retail Holdings II LLC, a Delaware limited liability company

 

340,653

 

340,653

 

515,481

 

$

19,946,800.75

 

2,914,150.75

 

Brookfield Retail Holdings III LLC, a Delaware limited liability company

 

390,749

 

390,749

 

591,287

 

$

22,880,152.66

 

3,342,702.66

 

Brookfield Retail Holdings IV-A LLC, a Delaware limited liability company

 

45,178

 

45,178

 

68,363

 

$

2,645,341.23

 

386,441.23

 

Brookfield Retail Holdings IV-B LLC, a Delaware limited liability company

 

90,173

*

90,173

 

136,452

*

$

5,280,079.88

 

771,429.88

 

Brookfield Retail Holdings IV-C LLC, a Delaware limited liability company

 

30,210

*

30,210

 

45,714

*

$

1,768,926.59

 

258,426.59

 

Brookfield Retail Holdings IV-D LLC, a Delaware limited liability company

 

30,210

 

30,210

 

45,714

 

$

1,768,926.59

 

258,426.59

 

Brookfield Retail Holdings V LP, a Delaware limited partnership

 

101,665

 

101,665

 

153,841

 

$

5,952,956.12

 

869,706.12

 

Total:

 

1,525,272

 

1,525,272

 

2,308,061

 

$

89,311,600.00

 

$

13,048,000.00

 

 

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*Brookfield US Retail Holdings LLC is the record owner of such Initial Warrants.

 

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