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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 12, 2008
Alternative Asset Management Acquisition Corp.
(Exact name of registrant as specified in its charter)
Delaware 001-33629 20-8450938
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
590 Madison Avenue, 35th Floor
New York, New York 10022
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(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 409-2434
Not Applicable
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Former name or former address, if changed since last report
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:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|X| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement
Item 3.02. Unregistered Sales of Equity Securities
Item 5.01. Change in Control of Registrant
Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-10.1: PURCHASE AGREEMENT
EX-10.2: FOUNDERS' VOTING AND SUPPORT AGREEMENT
EX-99.1: TERM SHEET FOR HALCYON MANAGEMENT GROUP LLC OPERATING AGREEMENT
EX-99.2: TERM SHEET FOR AAMAC STOCKHOLDERS AGREEMENT
EX-99.3: TERM SHEET FOR EXCHANGE AND SUPPORT AGREEMENT
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INFORMATION TO BE INCLUDED IN THIS REPORT
SIMULTANEOUSLY WITH THE FILING OF THIS REPORT HALCYON ASSET MANAGEMENT,
LLC AND ITS AFFILIATED ENTITIES (COLLECTIVELY, "HALCYON") AND ALTERNATIVE ASSET
MANAGEMENT ACQUISITION CORP. ("AAMAC") ARE HOLDING PRESENTATIONS FOR CERTAIN
CLIENTS OF HALCYON AND STOCKHOLDERS OF AAMAC, AS WELL AS OTHER PERSONS WHO MIGHT
BE INTERESTED IN INVESTING IN AAMAC'S SECURITIES, REGARDING AAMAC'S PROPOSED
ACQUISITION (THE "ACQUISITION") OF HALCYON, AS DESCRIBED IN THIS CURRENT REPORT
ON FORM 8-K. CERTAIN INFORMATION CONTAINED IN THIS CURRENT REPORT ON FORM 8-K
AND THE EXHIBITS HERETO MAY BE DISTRIBUTED TO PARTICIPANTS AT SUCH
PRESENTATIONS.
AAMAC INTENDS TO FILE WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION
(THE "SEC") A PRELIMINARY PROXY STATEMENT IN CONNECTION WITH THE PROPOSED
ACQUISITION AND TO MAIL A DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT
DOCUMENTS TO AAMAC STOCKHOLDERS. STOCKHOLDERS OF AAMAC AND OTHER INTERESTED
PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, AAMAC'S PRELIMINARY PROXY
STATEMENT, AND AMENDMENTS THERETO, AND DEFINITIVE PROXY STATEMENT IN CONNECTION
WITH AAMAC'S SOLICITATION OF PROXIES FOR THE SPECIAL MEETING TO BE HELD TO
APPROVE THE PROPOSED ACQUISITION BECAUSE THESE PROXY STATEMENTS WILL CONTAIN
IMPORTANT INFORMATION ABOUT HALCYON, AAMAC AND THE PROPOSED ACQUISITION. THE
DEFINITIVE PROXY STATEMENT WILL BE MAILED TO STOCKHOLDERS AS OF A RECORD DATE TO
BE ESTABLISHED FOR VOTING ON THE PROPOSED ACQUISITION. STOCKHOLDERS WILL ALSO BE
ABLE TO OBTAIN A COPY OF THE PRELIMINARY AND DEFINITIVE PROXY STATEMENTS,
WITHOUT CHARGE, ONCE AVAILABLE, AT THE SEC'S INTERNET SITE AT http://www.sec.gov
OR BY DIRECTING A REQUEST TO: ALTERNATIVE ASSET MANAGEMENT ACQUISITION CORP.,
590 MADISON AVENUE, 35TH FLOOR, NEW YORK, NEW YORK 10022, TELEPHONE (212)
409-2434.
AAMAC AND ITS DIRECTORS AND OFFICERS MAY BE DEEMED PARTICIPANTS IN THE
SOLICITATION OF PROXIES FROM AAMAC'S STOCKHOLDERS. A LIST OF THE NAMES OF THOSE
DIRECTORS AND OFFICERS AND DESCRIPTIONS OF THEIR INTERESTS IN AAMAC IS CONTAINED
IN AAMAC'S PROSPECTUS DATED AUGUST 1, 2007, WHICH IS FILED WITH THE SEC, AND
WILL ALSO BE CONTAINED IN AAMAC'S PROXY STATEMENT WHEN IT BECOMES AVAILABLE.
AAMAC'S STOCKHOLDERS MAY OBTAIN ADDITIONAL INFORMATION ABOUT THE INTERESTS OF
ITS DIRECTORS AND OFFICERS IN THE PROPOSED ACQUISITION BY READING AAMAC'S PROXY
STATEMENT AND OTHER MATERIALS TO BE FILED WITH THE SEC WHEN SUCH INFORMATION
BECOMES AVAILABLE.
NOTHING IN THIS CURRENT REPORT ON FORM 8-K OR THE EXHIBITS HERETO SHOULD
BE CONSTRUED AS, OR IS INTENDED TO BE, A SOLICITATION FOR OR AN OFFER OF ANY
SECURITIES OR INVESTMENT ADVISORY SERVICES.
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Item 1.01. Entry into a Material Definitive Agreement.
General
On March 12, 2008, Alternative Asset Management Acquisition Corp.
("AAMAC") entered into a purchase agreement pursuant to which it has agreed to
acquire (the "Acquisition") a majority interest in a newly formed entity which
will own all of the management and fee generating entities affiliated with
Halcyon Asset Management, LLC ( the "Halcyon Entities"). The combined company
will be renamed Halcyon Management Inc.
The Purchase Agreement
The following is a summary of the material terms of the purchase
agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on
Form 8-K and incorporated herein by reference.
The parties to the purchase agreement are:
o AAMAC, a Delaware corporation;
o Halcyon Management Group LLC ("Halcyon")
o Halcyon Partners LP (the "Partner Vehicle"); and
o Halcyon Asset Management LLC, Halcyon Offshore Asset Management LLC,
Halcyon Structured Asset Management LP, Halcyon Asset-Backed
Advisors LP and Halcyon Loan Investors LP (together with Halcyon and
the Partner Vehicle the "Halcyon Parties").
At the closing of the Acquisition, AAMAC, as the buyer, will acquire
49,170,000 Class A Units of Halcyon, and Halcyon will continue as an operating
company.
Purchase Price, Recapitalization of Halcyon
At the closing and subject to certain adjustments as described below,
AAMAC will pay the Partner Vehicle for 49,170,000 Class A Units of Halcyon:
o $390 million cash; and
o 46,924,648 shares of Series A Voting Preferred Stock of AAMAC,
$0.0001 par value per share ("Preferred Shares").
In addition, pursuant to an Exchange and Support Agreement (as discussed
below) to be prepared by the parties prior to closing, the 46,924,648 Class B
Units of Halcyon held by the Partner Vehicle will become exchangeable for an
equal number of AAMAC Common Stock, subject to certain vesting and transfer
restrictions.
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Prior to the closing, Halcyon will be recapitalized to own all the
interests in its affiliates (subject to certain exceptions) and in connection
therewith Halcyon will issue to the Partner Vehicle a note with a principal
amount of $115,000,000, payable in five equal annual installments, beginning on
the first anniversary of the closing of the Acquisition, and accruing interest
at 9.0% per year, calculated on the basis of a 365-day year, and payable at the
end of each calendar quarter (the "Halcyon Note").
The purchase price paid to the Partner Vehicle will be subject to possible
closing and post-closing adjustments, including the issuance of additional
Preferred Shares and Class B Units of Halcyon to the Partner Vehicle upon the
achievement of certain price per share targets within five years of closing. In
addition, in the event of a shortfall in the amount of cash available to AAMAC
at the time of the closing, the Partner Vehicle has the option to either
increase the amount of the Halcyon Note to up to $150,000,000 or receive
additional Preferred Shares and Class B Units of Halcyon.
Closing
The closing of the Acquisition will take place no later than the third
business day following the satisfaction or waiver of all closing conditions, or
such other date as the Partner Vehicle and AAMAC may agree. It is expected that
the closing will take place late in the third calendar quarter of 2008.
Representations and Warranties
The purchase agreement contains customary representations and warranties
of each of AAMAC and the Halcyon Parties relating to, among other things: (a)
proper organization and similar corporate matters; (b) the authorization,
performance and enforceability of the purchase agreement and related
transactions; (c) absence of any conflicts relating to purchase agreement and
the related transactions; (d) brokers; (e) governmental approvals; (f) capital
structure of each related entity; (g) absence of certain events; (h) financial
information and absence of undisclosed liabilities; (i) taxes; (j) title to
assets and properties; (k) contracts and commitments; (l) litigation; (m)
environmental matters; (n) compliance with laws; (o) employee matters; (p)
insurance; (q) proprietary matters; (r) compliance with applicable securities
laws and (s) affiliate transactions.
Covenants
Each party to the purchase agreement has agreed to perform customary
covenants in the purchase agreement. The principal covenants are as follows:
Conduct of Business. For the period prior to completion of the Acquisition
or termination of the purchase agreement and except as expressly permitted by
the purchase agreement, (1) the Halcyon Entities will conduct their business in
the ordinary course and (2) the Halcyon Entities and AAMAC will not undertake
certain kinds of transactions.
AAMAC Proxy Statement and Stockholders' Meeting. AAMAC has agreed to
recommend the Acquisition to its stockholders, to prepare and file a proxy
statement with the U.S. Securities and Exchange Commission and any other filing
required under the securities laws or any other federal, foreign or blue sky
laws, and to call and hold a meeting of its stockholders
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for the purpose of seeking the approval of the Acquisition by its stockholders.
The Halcyon Representative (as defined in the purchase agreement) has agreed to
provide information with respect to the Halcyon Parties in the proxy statement.
Directors and Officers of AAMAC After Closing. AAMAC and the Halcyon
Representative will take all necessary actions to appoint and elect certain
officers and directors, including those designated by the Halcyon Representative
and those proposed by the Halcyon Representative subject to AAMAC's consent, of
AAMAC to serve in such positions immediately after the closing.
Confidentiality. Each party shall protect confidential information and
maintain the confidentiality of the other's proprietary information.
Trust Waiver. The Halcyon Parties and any affiliated entities have agreed
to waive any rights to make claims against the trust account established for the
benefit of AAMAC, certain of its stockholders and the underwriters of the
initial public offering for any monies in the trust account as a result of any
claims against AAMAC or otherwise arising from the purchase agreement or
otherwise.
No-Shop. Neither party may solicit alternative acquisition proposals or
enter into any negotiation or agreement with respect to alternative proposals.
Conditions to the Completion of the Acquisition
The obligations of the Halcyon Parties and AAMAC to complete the
Acquisition are subject to the satisfaction or waiver by the other party at or
prior to the closing date of various customary conditions, including the (i)
receipt of all required regulatory approvals and consents (ii) the approval of
the Acquisition by AAMAC's stockholders, (iii) subject to certain exceptions and
materiality thresholds, the accuracy of the representations and warranties of
the other party and (iv) compliance of the other party with its covenants,
subject to specified materiality thresholds.
Termination
The purchase agreement may be terminated and the Acquisition abandoned at
any time prior to the closing of the Acquisition:
o by mutual written agreement of both parties;
o by either party, if the closing has not occurred before the
termination date of March 12, 2009, unless the failure to close the
Acquisition is due to the requesting party's breach or violation of
any representation, warranty or covenant contained in the purchase
agreement;
o by either party, if there is any law or court or governmental order,
which is not subject to appeal or has become final, that makes
consummation of the Acquisition illegal or otherwise prohibited;
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o by either party, if there has been a breach of any representation,
warranty, covenant or agreement by the other party that would cause
(1) a representation or warranty to not be true and correct as of
the closing, subject to certain materiality standards or (2) a
required covenant or agreement not to be performed, unless such
breach is curable and the party continues to exercise reasonable
best efforts to cure it;
o by the Halcyon Representative if AAMAC's board of directors changes
its recommendation to its stockholders regarding the Acquisition; or
o by either party, if the required approvals of AAMAC's stockholders
related to the Acquisition are not obtained.
In the event of termination of the purchase agreement, the purchase
agreement will become void and have no effect, without any liability on the part
of either party or its affiliates or representatives, except that each party
will still be liable for any willful and material breach of the purchase
agreement. If the agreement shall terminate in certain circumstances as a result
of a willful breach by AAMAC, then the AAMAC Founders (as defined in the
purchase agreement) shall transfer 50% of the shares of AAMAC common stock they
acquired prior to AAMAC's initial public offering to the Partner Vehicle,
effective when and to the extent such shares are released from escrow to the
AAMAC Founders.
Survival
All representations, warranties, covenants and obligations in the purchase
agreement or the transaction documents will terminate at the closing, except
that any covenant that requires performance at or after the closing will survive
the closing.
The purchase agreement and related term sheets describing the transaction
have been included to provide investors and security holders with information
regarding their terms. They are not intended to provide any factual information
about AAMAC or the Halcyon Entities. The representations, warranties and
covenants contained in the purchase agreement and the transaction documents were
made only for purposes of such agreements and as of the specific dates set forth
therein, were solely for the benefit of the parties to the purchase agreement
and the transaction documents, and may be subject to limitations agreed upon by
the contracting parties, including being qualified by confidential disclosures
made for the purposes of allocating contractual risk between the parties to the
purchase agreement and transaction documents, instead of establishing these
matters as facts, and may be subject to standards of materiality applicable to
the contracting parties that differ from those applicable to investors.
Investors and security holders are not third party beneficiaries under the
purchase agreement and transaction documents, and should not rely on the
representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or conditions of AAMAC or the
Halcyon Entities. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the purchase
agreement and transaction documents, which subsequent information may or may not
be fully reflected in AAMAC's public disclosure.
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Founders' Voting and Support Agreement
Pursuant to a Founders' Voting and Support Agreement (the "Voting
Agreement"), executed simultaneously with the purchase agreement, the AAMAC
Founders have agreed to vote their shares of AAMAC Common Stock (i) in favor of
the Acquisition and related matters and (ii) against any action that would
reasonably be expected to adversely affect or delay the Acquisition, subject to
AAMAC Founders' existing obligations to vote certain of their shares in
proportion to the vote of the AAMAC public stockholders with respect to certain
matters.
Also pursuant to the Voting Agreement, the AAMAC Founders have agreed to
forfeit 25% of their AAMAC Founders Shares (as defined in the purchase
agreement) at the closing. The purchase agreement provides that the AAMAC
Founders shall receive at closing warrants to purchase AAMAC Common Stock
equivalent to the number of forfeited shares, exercisable when the AAMAC Common
Stock achieves certain price per share targets.
A copy of the Voting Agreement is attached as Exhibit 10.2 to this Current
Report on Form 8-K and incorporated herein by reference.
Halcyon Management Group LLC Operating Agreement
In connection with the purchase agreement, AAMAC, Halcyon, the Partner
Vehicle and the Employee Vehicle have agreed to enter into an Operating
Agreement at closing relating to their holdings of Class A, Class B and Class C
interests of Halcyon, respectively. The Operating Agreement will provide for
allocations and distributions for the different interests, as well as for the
governance of Halcyon. A copy of the term sheet for the Operating Agreement is
attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Stockholders Agreement
In connection with the purchase agreement, AAMAC, the AAMAC Founders, and
the Partner Vehicle have agreed to enter into a Stockholders Agreement at
closing, pursuant to which (i) the AAMAC Founders will accept certain transfer
restrictions on their shares of AAMAC Founders' Stock, (ii) the Partner Vehicle
will include in its organizational documents certain transfer and individual
vesting requirements for its partners, (iii) the Partner Vehicle will require
its partners to maintain certain reinvestment thresholds of cash proceeds of the
Acquisition in Halcyon funds, (iv) the Founders and the Partner Vehicle will
receive certain registration rights for their shares of AAMAC Common Stock and
AAMAC Warrants and (v) the Partner Vehicle will receive governance protections
with respect to its minority interest in AAMAC. A copy of the term sheet for the
Stockholders Agreement is attached as Exhibit 99.2 to this Current Report on
Form 8-K and incorporated herein by reference.
Exchange and Support Agreement
In connection with the purchase agreement, AAMAC, Halcyon and the Partner
Vehicle have agreed to enter into an Exchange Agreement at closing, which will
specify the procedure by which the Partner Vehicle may redeem its Series A
Voting Preferred Stock of AAMAC and exchange its Class B Units of Halcyon for
shares of AAMAC Common Stock. The Exchange Agreement will also provide for
certain limitations on AAMAC and anti-dilution adjustments
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designed to preserve the economic interests of the holders of the Class B Units
of Halcyon. A copy of the term sheet for the Exchange and Support Agreement is
attached as Exhibit 99.3 to this Current Report on Form 8-K and incorporated
herein by reference.
Non-Compete Arrangements
Halcyon's principals, John Bader, Kevah Konner, Steven Mandis and Thomas
Hirschfeld have agreed to enter into agreements not to compete with the combined
company for a period of five years following the closing of the Acquisition
subject to a shorter period in certain circumstances.
Item 3.02. Unregistered Sales of Equity Securities
At closing, AAMAC will issue to the Partner Vehicle, among other
consideration, 46,924,648 Preferred Shares, the holders of which will be
permitted to vote with the holders of AAMAC common stock, as a single class, on
any matter submitted to the stockholders of AAMAC, and will have nominal
economic rights.
Item 5.01. Change in Control of Registrant
Immediately after the closing of the Acquisition, assuming no cash
shortfall, the Partner Vehicle is expected to beneficially own, directly or
indirectly, approximately 43.6% of the outstanding voting securities of AAMAC on
a fully diluted basis (assuming no conversion of shares by AAMAC public
stockholders). In addition, the composition of the company's board of directors
will be changed such that its members will include 4 individuals designated by
the Partner Vehicle and 5 additional directors.
Immediately after closing of the Acquisition, the combined company's
management will include John Bader, Kevah Konner, Steven Mandis and Thomas
Hirschfeld.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
10.1 Purchase Agreement, dated as of March 12, 2008, by and among
Alternative Asset Management Acquisition Corp., Halcyon Management
Group LLC, Halcyon Partner Vehicle, Halcyon Asset Management LLC,
Halcyon Offshore Asset Management LLC, Halcyon Structured Asset
Management LP, Halcyon Asset-Backed Advisors LP and Halcyon Loan
Investors LP.
10.2 Founders' Voting and Support Agreement, dated as of March 12, 2008,
by and among Alternative Asset Management Acquisition Corp., Halcyon
Employees LP, solely in its capacity as Halcyon Representative,
Hanover Overseas Limited, STC Investment Holdings LLC, Solar
Capital, LLC, Jakal Investments, LLC, Mark D. Klein, David Hawkins,
Steven A. Shenfeld, Bradford R. Peck and Frederick Kraegel.
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99.1 Term Sheet for the Operating Agreement, by and among Halcyon
Management Group LLC, Alternative Asset Management Acquisition
Corp., Halcyon Partners LP and Halcyon Employees LP.
99.2 Term Sheet for the Stockholders Agreement, by and among Halcyon
Management Inc. (as successor to Alternative Asset Management
Acquisition Corp.), Halcyon Partners LP, Hanover Overseas Limited,
STC Investment Holdings LLC, Solar Capital, LLC, Jakal Investments,
LLC, Mark D. Klein, David Hawkins, Steven A. Shenfeld, Bradford R.
Peck and Frederick Kraegel.
99.3 Term Sheet for the Exchange and Support Agreement, by and among
Alternative Asset Management Acquisition Corp., Halcyon Management
Group LLC and Halcyon Partners LP.
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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.
ALTERNATIVE ASSET MANAGEMENT ACQUISITION CORP.
By: /s/ Paul D. Lapping
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Paul D. Lapping
Chief Financial Officer
and Secretary
Date: March 17, 2008
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EXHIBIT INDEX
Exhibit
Number Description
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10.1 Purchase Agreement, dated as of March 12, 2008, by and among Alternative
Asset Management Acquisition Corp., Halcyon Management Group LLC,
Halcyon Partner Vehicle, Halcyon Asset Management LLC, Halcyon Offshore
Asset Management LLC, Halcyon Structured Asset Management LP, Halcyon
Asset-Backed Advisors LP and Halcyon Loan Investors LP.
10.2 Founders' Voting and Support Agreement, dated as of March 12, 2008, by
and among Alternative Asset Management Acquisition Corp., Halcyon
Employees LP, solely in its capacity as Halcyon Representative, Hanover
Overseas Limited, STC Investment Holdings LLC, Solar Capital, LLC, Jakal
Investments, LLC, Mark D. Klein, David Hawkins, Steven A. Shenfeld,
Bradford R. Peck and Frederick Kraegel.
99.1 Term Sheet for the Operating Agreement, by and among Halcyon Management
Group LLC, Alternative Asset Management Acquisition Corp., Halcyon
Partners LP and Halcyon Employees LP.
99.2 Term Sheet for the Stockholders Agreement, by and among Halcyon
Management Inc. (as successor to Alternative Asset Management
Acquisition Corp.), Halcyon Partners LP, Hanover Overseas Limited, STC
Investment Holdings LLC, Solar Capital, LLC, Jakal Investments, LLC,
Mark D. Klein, David Hawkins, Steven A. Shenfeld, Bradford R. Peck and
Frederick Kraegel.
99.3 Term Sheet for the Exchange and Support Agreement, by and among
Alternative Asset Management Acquisition Corp., Halcyon Management Group
LLC and Halcyon Partners LP.
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