SHARE PURCHASE AGREEMENT
Execution Version
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January
17, 2011
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TABLE
OF CONTENTS
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Page
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Acquisition of the GGP
Shares.
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1
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2.
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Purchase Consideration.
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2
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3.
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Closing, Delivery and
Exchange.
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2
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4.
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Xxxxxxxxx Xxxx’x Representations and
Warranties.
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3
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5.
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Representations and Warranties of
Brookfield.
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7
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6.
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Closing Conditions.
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10
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7.
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Post-Closing Covenants and
Agreements.
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12
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8.
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Mutual Covenant Regarding
Closing.
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15
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9.
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Survival of Representations, Acknowledgements,
Warranties and Covenants.
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15
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10.
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Termination.
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16
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11.
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Reclassification of BAM
Shares.
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16
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12.
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Indemnification.
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16
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13.
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Governing Law.
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17
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14.
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Notices.
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17
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15.
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Publicity.
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19
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16.
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Assignment.
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19
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17.
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Entire Agreement.
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19
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18.
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Expenses.
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20
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19.
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Enurement.
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20
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20.
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Severability.
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20
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21.
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Interpretation.
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20
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22.
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Extended Meanings.
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25
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23.
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Sections and Heading
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25
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24.
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Further Assurances.
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25
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25.
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No Third Party
Beneficiaries.
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25
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26.
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Amendment and Waiver.
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25
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27.
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Counterparts.
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25
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- 1 -
THIS AGREEMENT made as of the
17th
day of January, 0000,
X
X X X X X X:
BROOKFIELD
(US) INVESTMENTS LTD.
a company
incorporated under the laws of Bermuda and an indirect wholly-owned subsidiary
of Brookfield Asset Management Inc.
(hereinafter
called “BermudaCo”),
- and
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BROOKFIELD US
CORPORATION,
a
corporation incorporated under the laws of the State of Delaware and an indirect
wholly-owned subsidiary of Brookfield Asset Management Inc.
(hereinafter
called “BUSC”, and
together with BermudaCo, “Brookfield”),
- and
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THE
XXXXXXXXX XXXX
a series
of Fairholme Funds, Inc., a corporation incorporated under the laws of the State
of Maryland,
(hereinafter
called “Xxxxxxxxx
Xxxx”).
WITNESSES
THAT in consideration of the respective covenants, agreements, acknowledgements,
representations, warranties and indemnities herein contained and for other good
and valuable consideration (the receipt and sufficiency of which are
acknowledged by each party), the parties covenant and agree as
follows:
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1.
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Acquisition
of the GGP Shares.
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Subject
to the terms and conditions hereof, Xxxxxxxxx Xxxx hereby agrees to (i) sell,
assign and transfer to BermudaCo, and BermudaCo hereby agrees to acquire and
purchase from Xxxxxxxxx Xxxx, 39,403,972 shares of common stock,
par value $0.01 per share (the “BermudaCo GGP Shares”), of
General Growth Properties, Inc. (“GGP”), on the Closing Date
(defined below) and (ii) sell, assign and transfer to BUSC, and BUSC hereby
agrees to acquire and purchase from Xxxxxxxxx Xxxx, 73,927,484 shares of common stock,
par value $0.01 per share (the “BUSC GGP Shares”, and together
with the BermudaCo GGP Shares, the “GGP Shares”), of GGP, on the
Closing Date (defined below). The sale of GGP Shares shall be a
taxable transaction for U.S. tax purposes. For the avoidance of doubt,
Brookfield’s acquisition and purchase from Xxxxxxxxx Xxxx of the GGP Shares does
not include the transfer of the right to receive any dividends or other
distributions with a record date prior to the Closing Date regardless of when
such dividend is transferred or paid.
- 2 -
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2.
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Purchase
Consideration.
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The
purchase consideration delivered by BermudaCo to Xxxxxxxxx Xxxx in exchange for
the BermudaCo GGP Shares shall be 18,035,768 Class A Limited Voting Shares of
BAM (the “BermudaCo BAM
Shares”) newly-issued by BAM to Xxxxxxxxx Xxxx.
The
purchase consideration delivered by BUSC to Xxxxxxxxx Xxxx in exchange for the
BUSC GGP Shares shall be (i) 9,464,232 Class A Limited Voting Shares of BAM (the
“BUSC BAM Shares”, and
together with the BermudaCo BAM Shares, the “BAM Shares”) newly-issued by
BAM to Xxxxxxxxx Xxxx and (ii) a cash payment (“Brookfield Cash Payment”) in
immediately available funds denominated in U.S. dollars equal to
804,079,985.60.
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3.
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Closing,
Delivery and Exchange.
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The
delivery of the GGP Shares and the delivery of the BAM Shares and payment of
Brookfield Cash Payment (the “Closing”) shall take place at
the offices of Torys LLP, Suite 3000, TD Centre, 00 Xxxxxxxxxx Xxxxxx Xxxx,
Xxxxxxx, Xxxxxxx, at 10:00 A.M. (Toronto time) on January 25, 2011 or, if later,
the Business Day after the day on which all conditions to Closing have been
either satisfied or waived by the party entitled to waive such condition
(excluding conditions capable of being satisfied only as part of the
Closing). The date and time on which the Closing commences shall be
referred to as the “Closing
Date”.
On the
Closing Date, Xxxxxxxxx Xxxx shall deliver or caused to be delivered to
Brookfield:
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(a)
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the
BermudaCo GGP Shares, delivered electronically to the account specified by
BermudaCo;
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(b)
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the
BUSC GGP Shares, delivered electronically to the account specified by
BUSC; and
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(c)
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certificate
of non-foreign status, dated as of the Closing Date, that complies with
Section 1445 of the Code, executed by Xxxxxxxxx
Xxxx.
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On the
Closing Date, Brookfield shall deliver or cause to be delivered to Xxxxxxxxx
Xxxx:
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(a)
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the
BAM Shares, validly-issued, fully-paid, non-assessable, registered in the
name of Xxxxxxxxx Xxxx and delivered electronically to the account
specified by Xxxxxxxxx Xxxx; and
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(b)
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a
wire transfer of immediately available funds in the amount of the
Brookfield Cash Payment to the account specified by Xxxxxxxxx
Xxxx.
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- 3 -
All of
the actions to be taken pursuant to the Closing shall be deemed to occur
simultaneously and none of the actions to be taken at the Closing pursuant to
this Agreement shall be deemed to have occurred until the Closing is
complete.
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4.
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Xxxxxxxxx
Xxxx’x Representations and
Warranties.
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Xxxxxxxxx
Xxxx represents and warrants to Brookfield as of the date hereof and as of the
Closing Date, and acknowledges that Brookfield is relying upon such
representations and warranties in connection with entering into this Agreement
and the transactions contemplated hereby, including the sale of the BAM Shares
and the acquisition of the GGP Shares, that:
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(a)
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Organization and Good
Standing. Xxxxxxxxx Xxxx is duly established as a series
of Fairholme Funds, Inc., a corporation that is duly incorporated and
validly exists and in good standing under the laws of the State of
Maryland.
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(b)
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Ownership. Xxxxxxxxx
Xxxx is the Beneficial Owner of the GGP
Shares.
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(c)
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Good and Marketable
Title. Xxxxxxxxx Xxxx has the power and authority to
sell, transfer, assign and deliver the GGP Shares, as provided in this
Agreement. Delivery of the GGP Shares by Xxxxxxxxx Xxxx in accordance with
this Agreement will convey to Brookfield good and marketable title to the
GGP Shares, free and clear of any and all Liens.
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(d)
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Securities Law Matters.
Xxxxxxxxx Xxxx acknowledges that:
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(i)
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the
BAM Shares have not been registered under the United States Securities Act
of 1933, as amended (the “Securities Act”), and
may not be offered or sold in the United States or to U.S. Persons unless
registered for sale under an effective registration statement filed under
the Securities Act or an exemption from the registration requirements of
the Securities Act is available;
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(ii)
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the
certificate(s) representing the BAM Shares will be issued bearing the
following legend due to the U.S. restrictions on the BAM
Shares:
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THE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE
“SECURITIES ACT”) OR
UNDER ANY STATE SECURITIES LAWS (“BLUE SKY”) OR THE SECURITIES
LAWS OF ANY OTHER RELEVANT JURISDICTION. THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR
RESALE. THE SHARES MAY NOT BE SOLD, ASSIGNED, MORTGAGED, PLEDGED,
ENCUMBERED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT (I) IF A
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES IS EFFECTIVE UNDER THE
SECURITIES ACT AND APPLICABLE BLUE SKY LAWS AND THE SECURITIES LAWS OF ANY OTHER
RELEVANT JURISDICTION ARE COMPLIED WITH, (II) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (III)
UNLESS WAIVED BY THE ISSUER, THE ISSUER RECEIVES AN OPINION OF LEGAL COUNSEL, OF
RECOGNIZED STANDING SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT THE PROPOSED
TRANSACTION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR
OTHER APPLICABLE LAWS.
- 4 -
The
certificate(s) evidencing the BAM Shares shall not be required to contain such
legend following certification by Xxxxxxxxx Xxxx to BAM that the BAM Shares (or
any of them) represented by such certificate have been (A) sold pursuant to Rule
144 of the Securities Act (“Rule 144”), (B) sold in
accordance with Rule 904 of Regulation S under the Securities Act,
or following receipt by BAM of a legal opinion of counsel to
Xxxxxxxxx Xxxx that the remaining BAM Shares held by Xxxxxxxxx Xxxx are eligible
for resale without compliance with the volume or other limitations under Rule
144. Following the time at which such legend is no longer required
(as provided above) for certain BAM Shares, Brookfield shall promptly, following
the electronic delivery by Xxxxxxxxx Xxxx to Brookfield of such BAM Shares,
electronically deliver or cause to be electronically delivered to Xxxxxxxxx Xxxx
such number of BAM Shares free from such legend;
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(iii)
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it
has not acquired the BAM Shares as a result of any “general solicitation
or general advertising,” including advertisements, articles,
notices or other communications published in any newspaper, magazine or
similar media, or broadcast over radio or television, or any seminar or
meeting whose attendees have been invited by general solicitation or
general advertising;
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(iv)
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no
Person has acted, directly or indirectly, as a broker, finder or financial
advisor for Xxxxxxxxx Xxxx in connection with the Transaction and no
Person is entitled to any fee or commission or like payment in respect
thereof;
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(v)
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no
securities commission or similar regulatory authority has reviewed or
passed on the merits of the BAM Shares;
and
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(vi)
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there
is no government or other insurance covering the BAM
Shares.
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(e)
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Contracts. There
is no existing option, warrant, call, right or Contract of any character
to which Xxxxxxxxx Xxxx is a party requiring, and there are no securities
outstanding which upon conversion or exchange would require, the sale or
transfer of the GGP Shares. Xxxxxxxxx Xxxx is not a party to
any voting trust or other Contract with respect to the voting, redemption,
sale, transfer or other disposition of the GGP Shares, except for (A) that
certain Standstill Agreement between GGP and Xxxxxxxxx Xxxx, dated
November 9, 2010, (B) that certain Lock-up Agreement among Xxxxxxxxx Xxxx,
Fairholme Focused Income Fund, a series of Fairholme Funds, Inc. (“Fairholme Income”),
Xxxxxxx, Xxxxx & Co. and Deutsche Bank Securities Inc., dated as
November 9, 2010, (C) that certain Amended and Restated Stock Purchase
Agreement, among Xxxxxxxxx Xxxx, Fairholme Income and GGP, effective as of
March 31, 2010 and the agreements and transactions contemplated thereunder
(“GGP SPA”), and
(D) this Agreement.
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(f)
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Due Authorization. (i)
The execution, delivery and performance by Xxxxxxxxx Xxxx of this
Agreement and the consummation of the transactions contemplated hereby are
within its corporate powers and have been duly authorized, and no other
corporate proceedings on the part of Xxxxxxxxx Xxxx are necessary to
authorize the execution, delivery and performance of this Agreement or the
transactions contemplated hereby and (ii) this Agreement has been duly
executed and delivered by Xxxxxxxxx Xxxx and constitutes a legal, valid
and binding agreement of Xxxxxxxxx Xxxx, enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally or by
equitable principles relating to enforceability, regardless of whether
considered in a proceeding in equity or at
law.
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(g)
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Governmental
Authorization. The execution, delivery and performance
by Xxxxxxxxx Xxxx of this Agreement and the consummation by Xxxxxxxxx Xxxx
of the transactions contemplated hereby require no action by or in respect
of, or filing with or approval from, or consent or authorization from any
domestic or foreign federal, provincial, state, municipal or other
governmental department, court, tribunal, commission or commissioner,
bureau, minister or ministry, board or agency, or other regulatory
authority, including any securities regulatory authority, the NYSE and the
TSX (each, a “Governmental
Authority”), other than filings under Applicable Securities
Laws.
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(h)
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Non-Contravention. The
execution, delivery and performance by Xxxxxxxxx Xxxx of this Agreement
and the consummation by Xxxxxxxxx Xxxx of the transactions contemplated
hereby do not and will not (i) contravene, conflict with, or result in any
violation or breach of any provision of its organizational documents or
resolutions of its shareholders, members or directors (or any committee
thereof), (ii) assuming compliance with the matters referred to in Section
4(g) above, contravene, conflict with or result in a violation or breach
of any provision of any applicable law, or (iii) require any consent or
other action by any Person under, or constitute, with or without notice or
lapse of time or both, a breach of any material contract to which it is a
party or by which it or any of its properties or assets may be bound, with
such exceptions, in the case of each of clauses (ii) and (iii) above, as
would not be reasonably expected to adversely affect the ability of
Xxxxxxxxx Xxxx to consummate the transactions contemplated
hereby.
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(i)
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Ownership of Class A Shares and
Securities. Xxxxxxxxx Xxxx is not the Economic Owner of
any Class A Limited Voting Shares in the capital of BAM (“Class A Shares”) or any
other securities or Related Financial Instruments of BAM and has no
agreement, arrangement or understanding with any Person to acquire
Economic Ownership of such Person’s Class A Shares or other securities or
Related Financial Instruments of
BAM.
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- 6 -
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(j)
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Principal. Xxxxxxxxx
Xxxx is acquiring the BAM Shares for its own account and for investment
purposes only, and not with a view to any resale, distribution or other
disposition of the BAM Shares.
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(k)
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Accredited
Investor. Xxxxxxxxx Xxxx is a U.S. Accredited
Investor.
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(l)
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Sophisticated
Investor. Xxxxxxxxx Xxxx is a sophisticated investor and
has such knowledge and experience in financial and business matters and in
making investments of this type that it is capable of evaluating,
negotiating and implementing the transactions contemplated hereby,
including the sale of the GGP Shares in exchange for the consideration
contemplated hereby, and is able to bear the economic risk of its
investment in the BAM Shares (including a complete loss of its
investment).
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(m)
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Evaluation. Xxxxxxxxx
Xxxx has evaluated the merits and risks of selling the GGP Shares and
acquiring the BAM Shares on the terms set forth in this Agreement on its
own and without reliance upon Brookfield (other than with respect to
Brookfield’s express representations and warranties set forth herein and
BAM’s express representations and warranties set forth in the Guarantee
Agreement). Xxxxxxxxx Xxxx has been given the opportunity to
ask questions of, and receive answers from, Brookfield concerning the
terms and conditions of acquiring the BAM Shares and other matters
pertaining to an investment in the BAM Shares and has been given the
opportunity to obtain from Brookfield all information that it deems
necessary regarding BAM’s business and prospects; provided that
Xxxxxxxxx Xxxx has with BAM’s consent relied upon the representations and
warranties made by Brookfield herein and BAM in the Guarantee
Agreement and no failure by Xxxxxxxxx Xxxx to make any investigation shall
waive, impair or limit in any manner its rights and remedies if such
representations and warranties are not true and correct. In entering into
this Agreement, Xxxxxxxxx Xxxx has not received, been induced by or relied
upon any representations, warranties or statements, whether express or
implied, verbal or written, made by on or behalf of Brookfield or BAM
or any agent, employee or other representative of Brookfield or BAM which
are not expressly set forth in this Agreement or the Guarantee Agreement,
respectively. It is further understood and agreed by Xxxxxxxxx
Xxxx that Brookfield is not making any representations or warranties about
any information provided (or otherwise made available) to Xxxxxxxxx Xxxx
(or any of its representatives or agents) by or on behalf of Brookfield or
any of its Affiliates unless and to the extent subject to a specific
representation in Section 5
of this Agreement.
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(n)
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Confidential
Information. Xxxxxxxxx Xxxx understands that Brookfield
may be in possession of material non-public information and other
confidential information relating to the GGP Shares and GGP, including
through current representation on the board of directors of GGP by certain
Affiliates of Brookfield or other association with GGP, that has not been
communicated to Xxxxxxxxx Xxxx. Xxxxxxxxx Xxxx acknowledges
that it is proceeding with the sale of the GGP Shares to Brookfield
knowingly and voluntarily, without access to or the benefit of such
information. Xxxxxxxxx Xxxx hereby waives any right to rescind
or invalidate the sale of the GGP Shares to Brookfield or to seek any
damages or remuneration from Brookfield based on the possession of any
information regarding GGP by Brookfield or the lack of possession of any
information regarding GGP by Xxxxxxxxx
Xxxx.
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- 7 -
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5.
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Representations
and Warranties of Brookfield.
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Brookfield
represents and warrants to Xxxxxxxxx Xxxx as of the date hereof and as of the
Closing Date, and acknowledges that Xxxxxxxxx Xxxx is relying upon such
representations and warranties in connection with entering into this Agreement
and the transactions contemplated hereby, including the sale of the GGP Shares
and the acquisition of the BAM Shares, that:
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(a)
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Organization and Good
Standing. BermudaCo is a company duly formed and validly
existing under the laws of Bermuda. BUSC is a corporation duly
formed and validly existing under the laws of the State of
Delaware.
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(b)
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Due Authorization. (i)
The execution, delivery and performance by Brookfield of this Agreement
and the transactions contemplated hereby are within its corporate powers
and have been duly authorized, and no other corporate proceedings on the
part of Brookfield are necessary to authorize the execution, delivery and
performance of this Agreement or the transactions contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by Brookfield and
constitutes a legal, valid and binding agreement of Brookfield enforceable
against it in accordance with its terms, except in each case as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally or by equitable principles relating to
enforceability, regardless of whether considered in a proceeding in equity
or at law.
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(c)
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Valid
Issuance. The BAM Shares, at the time of their delivery
to Xxxxxxxxx Xxxx, will be validly issued, fully paid and non-assessable
shares of BAM, free and clear of any and all security interests, pledges,
liens, voting or other agreements, or other encumbrances of any nature
whatsoever, other than restrictions on transfer imposed by the restrictive
legend in this Agreement.
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(d)
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Freely
Tradable. The BAM Shares will not be subject to any
statutory hold period under the Securities Act
(Ontario) and no other documents will be required to be filed,
proceedings taken, or approvals, permits, consents, orders or
authorizations of regulatory authorities required to be obtained by BAM
under the Securities
Act (Ontario) in connection with the first trade of such BAM Shares
in Ontario, provided that
(a) at the time of such first trade, BAM is and has been a reporting
issuer (within the meaning of the Securities Act
(Ontario)) in Ontario for the four months preceding the trade; (b) the
trade is not a “control distribution” as defined under the Canadian
Securities Administrators’ National Instrument 45-102; (c) such first
trade has not been preceded by an unusual effort (by any Person
other than BAM or its Affiliates) to prepare the market or to create a
demand for the securities and no extraordinary commission or consideration
is paid in respect of the trade; and (d) the trade complies with Rule 904
of Regulation S or is otherwise exempt from registration under the
Securities Act and any other applicable United States securities laws.
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- 8 -
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(e)
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Governmental
Authorization. As of the Closing Date, BAM shall have obtained the
approval of the TSX and the NYSE with respect to the listing of the BAM
Shares, and the execution, delivery and performance by Brookfield of this
Agreement and the consummation by Brookfield of the transactions
contemplated hereby require no action by or in respect of, or filing with
or approval from, or consent or authorization from, any Governmental
Authority, other than filings under Applicable Securities
Laws.
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(f)
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Non-Contravention. The
execution, delivery and performance by Brookfield of this Agreement and
the consummation by Brookfield of the transactions contemplated hereby do
not and will not (i) contravene, conflict with, or result in any violation
or breach of any provision of the articles of incorporation, by-laws or
resolutions of the shareholders or directors (or any committee thereof) of
Brookfield, (ii) assuming compliance with the matters referred to in
Section 5(e)
above, contravene, conflict with or result in a violation or breach of any
provision of any applicable law, (iii) require any consent or other action
by any Person under, or constitute, with or without notice or lapse of
time or both, a breach of any material contract to which it is a party or
by which it or any of its properties or assets may be bound, with such
exceptions, in the case of each of clauses (ii) and (iii) above, as would
not be reasonably expected to adversely affect the ability of Brookfield
to consummate the transactions contemplated
hereby.
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(g)
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Sufficient Funds.
Brookfield has available, and will have available on the Closing Date,
sufficient funds or other sources of immediately available funds in cash
to enable it to purchase the GGP Shares on the terms and conditions
contemplated herein.
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(h)
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Investment Company Act
Matters. BAM, in its most recent fiscal year, did not derive more
than fifteen (15) percent of its gross revenues from “securities related
activities” as defined in Rule 12d3-1(d)(1) under the Investment Company
Act of 1940, as amended and the rules and regulations of the SEC
thereunder (the “1940
Act”). BAM is not, and, after the purchase of the GGP Shares
pursuant to this Agreement, shall not be (x) required to register as an
“investment
company” or (y) an entity “controlled” by an “investment company” within
the meaning of the 1940 Act.
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- 9 -
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(i)
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Accuracy of Public
Disclosure. BAM has filed all reports, registration statements,
proxy statements and other materials, together with any amendments
required to be made with respect thereto, that were required to be filed
with the SEC under the Securities Act or the Exchange Act from and after
December 31, 2009 (all such reports and statements are collectively
referred to herein as the “BAM SEC Filings”). The
financial statements included in the BAM SEC Filings, together with the
other financial information presented in the BAM SEC Filings, fairly
present in all material respects, in accordance with GAAP, as in effect on
the date of the applicable BAM SEC Filings, the financial condition and
the results of operations of BAM and its Affiliates as of the dates and
for the periods indicated in such BAM SEC Filings (except as may be
indicated in the notes to such financial statements and, in the case of
unaudited statements, as permitted by the Exchange Act and the rules
promulgated thereunder). As of their respective filing dates or effective
dates, the BAM SEC Filings, including the financial statements contained
therein, complied in all material respects with all of the statutes and
published rules and regulations enforced or promulgated by the regulatory
authority with which the BAM SEC Filings were made, and, except to the
extent the information in any BAM SEC Filings has been revised or
superseded by a later filed BAM SEC Filings, did not and do not as of the
date hereof contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Since September 30, 2010,
except as stated in information disseminated widely by or on behalf of BAM
to the public, including to participants in the markets for BAM’s
securities, there has not been any material adverse change in the
management, business, properties, financial condition, shareholders’
equity or results of operations of BAM and its subsidiaries taken as a
whole.
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(j)
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Canadian Securities Laws
Matters. BAM is a “reporting issuer” in Ontario and is not in
default of any requirement under Canadian Securities Laws. From
and after December 31, 2009, BAM has duly filed or delivered all financial
statements, reports, filings, disclosures, releases and other materials
required to be filed with or delivered to the Ontario Securities
Commission (including, periodic timely disclosure filings and other
materials required to be filed by a reporting issuer under Canadian
Securities Laws). All such financial statements, reports, filings,
disclosures, releases or other materials were prepared, in all material
respects, in accordance with Canadian Securities Laws and, as of the date
of the filing or delivery thereof, none of such financial statements,
reports, filings, disclosures, releases or other materials contained any
Misrepresentation. Since September 30, 2010, there has been no
Material Change of BAM which has not been generally
disclosed. Since September 30, 2010, BAM has not received nor
is it aware of any notice, letter, inquiry or other communication from the
Ontario Securities Commission, the TSX, the NYSE or any other securities
regulatory authority with respect to any inquiry, investigation, review,
continuous disclosure review or like proceeding relating to BAM, any
director, officer or insider of BAM or their respective activities or
BAM’s public disclosures, which have not been generally
disclosed.
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- 10 -
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(k)
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Issued and Outstanding
Shares. BAM is authorized to issue an unlimited number
of Class A Shares, 85,120 Class B Limited Voting Shares (the “Class B Shares”), an
unlimited number of Class A Preference Shares and an unlimited number of
Class AA Preference Shares. On the date hereof, the only classes of shares
entitled to voting rights are the Class A Shares, the Class B Shares and
the Class A Preference Shares, Series 19 (the “Series 19 Shares”), of
which 577,782,761 Class A Shares, 85,120 Class B Shares and 13,700,000
Series 19 Shares are issued and
outstanding.
|
|
6.
|
Closing
Conditions.
|
Conditions to Xxxxxxxxx Xxxx’x
Obligations under Section 3. Xxxxxxxxx Xxxx’x obligations
under Section 3 of this Agreement are subject to the satisfaction, at or prior
to the Closing Date, of the following conditions, any of which may be waived in
whole or in part by Xxxxxxxxx Xxxx:
|
|
(i)
|
Representations and
Warranties. The representations and warranties of
Brookfield in Sections 5(a), 5(b), 5(c), 5(d), 5(h), 5(i) and 5(j) of this
Agreement shall be true and correct as of the Closing Date as if made on
such date (except that any representation or warranty that by its terms is
made as of a specific date needs only to be true and correct as of such
date) in all respects. All other representations and warranties
of Brookfield in this Agreement shall be true and correct as of the
Closing Date as if made on such date (except that any representation or
warranty that by its terms is made as of a specific date needs only to be
true and correct as of such date) in all material
respects.
|
|
|
(ii)
|
Performance of
Obligations. Brookfield shall have materially performed and
complied with all agreements, obligations, covenants and conditions in
this Agreement required to be performed or complied with by Brookfield on
or prior to the Closing Date.
|
|
|
(iii)
|
Closing Certificate.
Brookfield shall have delivered to Xxxxxxxxx Xxxx a certificate, dated as
of the Closing Date and signed by a senior executive officer of
Brookfield, as to the fulfillment of the conditions set forth in
Section 6(a)(i)
and 6(a)(ii).
|
|
|
(iv)
|
Governmental Order. No
Governmental Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law (whether temporary,
preliminary or permanent) that is in effect and restrains, enjoins or
otherwise prohibits consummation of the transactions contemplated by this
Agreement (collectively, an “Order”), and no
Governmental Authority shall have instituted any proceeding that is
pending seeking any such Order.
|
- 11 -
|
|
(v)
|
Legal
Opinions. Xxxxxxxxx Xxxx shall have received a legal
opinion dated as of the Closing Date from legal counsel for Brookfield, in
the form attached hereto as Schedule
A.
|
|
|
(vi)
|
BAM
Guarantee. BAM shall have performed all obligations
required to be performed by it on or before the Closing Date under that
certain guarantee, dated as of the date hereof, between BAM and Xxxxxxxxx
Xxxx (the “BAM
Guarantee”). A copy of the BAM Guarantee is attached
hereto as Schedule
B.
|
|
|
(vii)
|
Free Transferability.
Xxxxxxxxx Xxxx shall be satisfied, in its reasonable discretion, that the
BAM Shares shall be freely
transferable in transactions on the TSX on an
ordinary “T+3” settlement cycle, subject to the restrictions provided in
Section 7(a) and subject to the satisfaction of the requirements
of Rule 904 of Regulation S under the Securities Act; provided, however, the
parties hereto acknowledge and agree that such condition shall be deemed
satisfied by the execution and delivery by BAM to the transfer agent of
the BAM Shares of the direction in the form set out in Schedule C
hereto, and by the written confirmation of the transfer agent of the BAM
Shares that it will comply with such direction.
|
| (viii) |
TSX and
NYSE Listing. The BAM Shares issuable to Xxxxxxxxx Xxxx pursuant to
this Agreement shall have been authorized for listing on the TSX and NYSE
upon official notice of issuance.
|
Conditions to each of Brookfield’s
Obligations under Section 3.Brookfield’s obligations
under Section 3 of this Agreement are subject to the satisfaction, at or prior
to the Closing Date, of the following conditions, any of which may be waived in
whole or in part by Brookfield:
|
|
(ix)
|
Representations and
Warranties. The representations and warranties of
Xxxxxxxxx Xxxx in Sections 4(a), 4(b), 4(c), 4(d), 4(i), 4(j), 4(k), 4(l),
4(m), and 4(n) of this Agreement shall be true and correct as of the
Closing Date as if made on such date (except that any representation or
warranty that by its terms is made as of a specific date needs only to be
true and correct as of such date) in all respects. All other
representations and warranties of Xxxxxxxxx Xxxx in this Agreement shall
be true and correct as of the Closing Date as if made on such date (except
that any representation or warranty that by its terms is made as of a
specific date needs only to be true and correct as of such date) in all
material respects.
|
- 12 -
|
|
(x)
|
Performance of
Obligations. Xxxxxxxxx Xxxx shall have materially
performed and complied with all agreements, obligations, covenants and
conditions in this Agreement required to be performed or complied with by
Xxxxxxxxx Xxxx on or prior to the Closing
Date.
|
|
|
(xi)
|
Closing Certificate.
Xxxxxxxxx Xxxx shall have delivered to Brookfield a certificate, dated as
of the Closing Date and signed by a senior executive officer, as to the
fulfillment of the conditions set forth in
Section 6(b)(i).
|
|
|
(xii)
|
Governmental Order. No
Governmental Authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Order, and no Governmental
Authority shall have instituted any proceeding that is pending seeking any
such Order.
|
| (xiii) |
TSX and
NYSE Listing. The BAM Shares issuable to Xxxxxxxxx Xxxx pursuant to
this Agreement shall have been authorized for listing on the TSX and NYSE
upon official notice of issuance.
|
|
7.
|
Post-Closing
Covenants and Agreements.
|
Xxxxxxxxx
Xxxx agrees that:
|
|
(a)
|
Disposition. It
shall not, and shall not permit any of its controlled Affiliates to,
knowingly Transfer (directly or indirectly, or pursuant to any series of
related transactions intentionally structured to circumvent the provisions
of this Section 7(a)), any Class A Shares (except if such Transfer is (A)
to BAM or to any Person approved by the Board of Directors of BAM or (B)
pursuant to a bona fide underwritten public offering, or (C)(i) through
the facilities of a recognized securities exchange and (ii) is not a block
trade of two percent (2%) or more of the outstanding Class A Shares)
unless the proposed transferor first sends written notice to Brookfield
(the “ROFO
Notice”) indicating its desire to Transfer, and making a
binding offer of, such number of Class A Shares at the price specified in
the ROFO Notice. At any time within five (5) trading days after
the receipt of the ROFO Notice, Brookfield (or an alternate purchaser
designated by Brookfield) may accept such offer to purchase in
respect of any number of the Class A Shares specified in the ROFO
Notice for cash in immediately available funds at such price,
following which the purchaser and the proposed transferor shall have a
binding agreement (the “ROFO Agreement”) and the
purchaser shall be obligated to complete the purchase within thirty (30)
days after receipt of the ROFO Notice. Any Class A Shares sold
pursuant to the ROFO Agreement shall be sold without recourse or
representation, other than customary assurances as to title to the Class A
Shares as delivered. If Brookfield does not accept the offer in
the ROFO Notice in whole, the transferor may freely Transfer the remaining
Class A Shares described in the ROFO Notice, in whole or in part, to any
Person without any restriction under this Section 7(a) during the 60-day
period following the ROFO Notice, provided that the
transferor shall not so Transfer any Class A Shares unless the fair market
value of the consideration received by the transferor is, in its
reasonable judgment, more valuable on a per share basis than the cash
price set forth in the ROFO Notice.
|
- 13 -
|
|
(b)
|
Standstill. It
shall not, and shall not permit any of its controlled Affiliates, directly
or indirectly and whether alone or by acting jointly or in concert with
any other Person, in any manner: (i) acquire or offer to
acquire (whether publicly or otherwise) by any means whatsoever (whether
directly or indirectly, by purchase, tender or exchange offer) Economic
Ownership of any securities or Related Financial Instruments that would
result in Xxxxxxxxx Xxxx and its controlled Affiliates in the aggregate
having Economic Ownership of greater than seven and a half percent (7.5%)
of the Class A Shares, (ii) propose or seek to effect (whether publicly or
otherwise) any merger, business combination, tender offer, exchange offer,
take-over bid, statutory arrangement, material asset purchase transaction
or other change of control, business combination or business disposition
transaction involving BAM, its shareholders (in their capacity as
shareholders of BAM) or its securities, (iii) call, or seek to call, a
meeting of BAM’s stockholders or initiate any stockholder proposal for
action by stockholders of BAM, (iv) effect, conduct or participate in
any solicitation of proxies with respect to any securities of BAM (other
than any solicitation of proxies conducted by management of BAM), (v)
otherwise attempt to control or influence the management or board of
directors of BAM or policies of BAM, (vi) make, or cause BAM to make, any
public announcement or disclosure regarding an intention to do any action
restricted by any of the foregoing, or (vii) advise, assist, encourage or
act as a financing source for or otherwise enter into any arrangement,
understanding, agreement (whether written or oral) with any Person or join
with or invest in any other Person in connection with any action
restricted by any of the foregoing, in each case without the prior written
consent of Brookfield.
|
|
|
(c)
|
Exceptions to Sections 7(a) and
7(b). The restrictions in Sections 7(a) and 7(b) shall
not prohibit or restrict Xxxxxxxxx Xxxx
from:
|
|
|
(i)
|
disposing
of Class A Shares by operation of a statutory amalgamation, statutory
arrangement or other statutory procedure involving
BAM;
|
|
|
(ii)
|
disposing
of Class A Shares in a sale in the public market, in accordance with Rule
144, including the volume and manner of sale limitations set forth
therein;
|
|
|
(iii)
|
transferring
Class A Shares in connection with a tender or exchange offer that (A) is
not solicited by Xxxxxxxxx Xxxx and in which all holders of Class A Shares
are offered the opportunity to sell shares of Class A Shares and (B)
complies with Applicable Securities Laws, including Rule 14d-10
promulgated under the Exchange Act;
|
- 14 -
|
|
(iv)
|
transferring
Class A Shares in connection with any bona fide mortgage, encumbrance,
pledge or hypothecation of capital stock to a financial institution in
connection with any bona fide loan or transfers in connection with
collateral arrangements in the ordinary course of its investment
operations;
|
|
|
(v)
|
acquiring,
holding, exchanging, converting or disposing of any securities of BAM
received by Xxxxxxxxx Xxxx on account of warrants or other securities of
GGP held by Xxxxxxxxx Xxxx from time to time;
and
|
|
|
(vi)
|
engaging
in hedging activities involving index-linked instruments, provided that
securities of BAM represent not more than 5% of the underlying
index.
|
In
addition, notwithstanding the foregoing provisions of this Section 7(c),
transfers of Class A Shares that would otherwise violate Section 7(a) shall be
permitted without restriction to any Affiliates of Xxxxxxxxx Xxxx, provided that any
such Affiliate shall, prior to any such transfer, agree to be bound by and
comply with the provisions of this Agreement, and shall deliver to Brookfield a
duly executed undertaking to such effect in form and substance satisfactory to
Brookfield, acting reasonably.
|
|
(d)
|
GGP Interests. It shall
not, and shall not permit any of its controlled Affiliates to, knowingly
Transfer (directly or indirectly, or pursuant to any series of related
transactions intentionally structured to circumvent the provisions of this
Section 7(d),
any of the warrants issued to it pursuant to the GGP SPA and owned by it
on the date hereof and any shares of common stock of GGP owned by it upon
the exercise of such warrants (the “GGP Interests”) unless
the proposed transferor first sends written notice to Brookfield (the
“GGP ROFO Notice”)
indicating its desire to Transfer, and making a binding offer of, such
number of GGP Interests at the price specified in the GGP ROFO
Notice. At any time within five (5) trading days after the
receipt of the GGP ROFO Notice, Brookfield (or an alternate purchaser
designated by Brookfield) may accept such offer to purchase in respect of
any number of the GGP Interests specified in the GGP ROFO Notice for cash
in immediately available funds at such price, following which the
purchaser and the proposed transferor shall have a binding agreement (the
“GGP ROFO Agreement”) and the
purchaser shall be obligated to complete the purchase on a date agreed
between the parties and no later than five (5) days from the date of
acceptance. Any GGP Interests sold pursuant to the GGP ROFO
Agreement shall be sold without recourse or representation, other than
customary assurances as to title to the GGP Interests as
delivered. If Brookfield does not accept the offer in the GGP
ROFO Notice in whole, the transferor may freely Transfer the remaining GGP
Interests described in the GGP ROFO Notice, in whole or in part, to any
Person without any restriction under this Section 7(d)
during the 60-day period following the ROFO Notice, provided that the
transferor shall not so Transfer any GGP Interests unless the fair market
value of the consideration received by the transferor is, in its
reasonable judgment, more valuable on a per share basis than the cash
price set forth in the GGP ROFO Notice. In addition,
notwithstanding the foregoing provisions of this Section 7(d), transfers
of GGP Interests shall be permitted without restriction to any Affiliates
of Xxxxxxxxx Xxxx, provided that
any such Affiliate shall, prior to any such transfer, agree to be bound by
and comply with the provisions of this Section 7(d), and shall deliver to
Brookfield a duly executed undertaking to such effect in form and
substance satisfactory to Brookfield, acting
reasonably.
|
- 15 -
|
|
(e)
|
|
8.
|
Mutual
Covenant Regarding Closing.
|
Subject
to the terms and conditions of this Agreement, Xxxxxxxxx Xxxx and Brookfield
shall use their reasonable commercial efforts, on a cooperative basis, to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws to consummate the
Transaction as soon as practicable.
|
9.
|
Survival
of Representations, Acknowledgements, Warranties and
Covenants.
|
The
parties agree that the acknowledgements, representations and warranties made by
each of them in this Agreement, including pursuant to Sections 4 and 5 of this
Agreement, and in any certificate delivered pursuant hereto, shall survive until
the end of the second anniversary of the date hereof; provided, however, that the
acknowledgements, representations and warranties set forth in (i)
Sections 5(i)
and 5(j)
shall survive until the end of eighteen (18) months from the date hereof and
(ii) 4(a), 4(b), 4(c), 4(d), 4(i), 4(j), 4(k), 4(l), 4(m), 4(n), 5(a), 5(b),
5(c), 5(d) and 5(h) shall survive indefinitely.
The
parties agree that unless required to be performed on or prior to the date
hereof or unless otherwise expressly set forth herein, the covenants and
agreements made pursuant hereto shall survive indefinitely. For
greater certainty, the parties each acknowledge and agree that in the event of a
breach or threatened breach of its covenants hereunder, the harm suffered would
not be compensable by monetary damages alone and, accordingly, in addition to
other available legal or equitable remedies, each non-breaching party shall be
entitled to apply for an injunction or specific performance with respect to such
breach or threatened breach, without proof of actual damages (and without the
requirement of posting a bond, undertaking or other security), and each of the
parties agrees not to plead sufficiency of damages as a defence in such
circumstances.
- 16 -
|
10.
|
Termination.
|
|
|
(a)
|
This
Agreement may be terminated at any time prior to
Closing:
|
|
|
(i)
|
by
written agreement of the parties to the
Agreement;
|
|
|
(ii)
|
by
each party by giving written notice of such termination to each other
party, without liability to the terminating party on account of such
termination if (i) the Closing has not occurred on or prior to January 31,
2011 and (ii) the terminating party is not in material breach of its
obligations under this Agreement;
or
|
|
|
(iii)
|
by
each party if there shall be in effect any Law that prohibits the
consummation of the Closing or if consummation of the Closing would
violate any non-appealable final order, decree or judgment of any
Governmental Authority having competent jurisdiction (“Final Order”); provided, however, that
the right to terminate this Agreement pursuant to this Section 10(a)(iii)
shall not be available to any party that has failed to fully comply with
its obligations under this Agreement in any manner that shall have
proximately contributed to the occurrence of such Final
Order.
|
|
|
(b)
|
The
parties agree that (i) the provisions of Sections 7(a),
7(b)
and 7(c)
shall terminate if Xxxxxxxxx Xxxx has Economic Ownership of less than two
and a half percent (2.5%) of the outstanding Class A Shares, (ii) Section
7(d) shall terminate at the end of two (2) years from the date hereof, and
(iii) all of the provisions of Section 7 shall terminate if there is a
Change of Control.
|
|
11.
|
Reclassification of BAM
Shares.
|
Except as
provided in Section 10(b), in the event of any merger, consolidation, share
exchange, reorganization or any similar transaction of BAM or to which BAM is a
party pursuant to which the Class A Shares are reclassified as, exchanged into
or converted into, other securities of BAM or any company that succeeds by
merger, consolidation, share exchange, reorganization or any similar transaction
to all or substantially all of the business of BAM or the ownership of the Class
A Shares held by Xxxxxxxxx Xxxx, the restrictions set forth in Section 7 shall
continue to govern with respect to such new securities.
|
12.
|
Indemnification.
|
|
|
(a)
|
Without
prejudice to any other remedies available at law or equity, each party
(the “Indemnifying
Party”) hereby agrees that it shall indemnify, defend and hold
harmless the other party, its Affiliates and, if applicable, their
respective directors, officers and employees (the “Indemnified Parties”)
from, against and in respect of any damages, claims, losses, charges,
actions, suits, penalties and reasonable costs and expenses (including
reasonable attorney’s fees and expenses in connection with any
investigations or defense of any claim) (“Losses”) imposed on,
sustained, incurred or suffered by or asserted against any of the
Indemnified Parties relating to or arising out of (i) any breach of any
representation or warranty made by the Indemnifying Party or its
Affiliates contained in this Agreement or (ii) the breach of any covenant
or agreement of the Indemnifying Party or its Affiliates contained in this
Agreement.
|
- 17 -
|
|
(b)
|
The
parties agree to treat any amounts payable pursuant to this Section 12 as
adjustments to the purchase price paid for the GGP Shares for all
purposes, except to the extent any applicable Law otherwise
requires.
|
|
13.
|
Governing
Law.
|
Brookfield
and Xxxxxxxxx Xxxx agree that this Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the Province of Ontario
and the federal laws of Canada applicable therein. Each of the
parties irrevocably attorns and submits to the non-exclusive jurisdiction of the
Ontario courts situated in the City of Toronto, and waives objection to the
venue of any proceeding in such court or that such court provides an
inconvenient forum.
|
14.
|
Notices.
|
Any
notice, direction or other communication given pursuant to this Agreement (each
a “Notice”) must be in
writing, sent by personal delivery, courier, or facsimile and
addressed:
|
if
to Xxxxxxxxx Xxxx:
|
Fairholme
Capital Management, L.L.C.
0000
Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxx,
Xxxxxxx 00000
|
||
| Attention: | Xxxxx
X. Xxxxxxxxx
Xxxxxxx
X. Xxxxxxxxx
|
||
| Fax: | (000) 000-0000 | ||
|
-
and -
|
|||
|
with
a copy (which shall not constitute notice) to:
|
Xxxxxxxx
& Xxxxxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
||
|
Attention:
|
Xxxxxx
X. Xxxxxxxx, Esq.
Xxxxxx
X. Xxxxxxxxxx, Esq.
|
||
|
Fax:
|
(000)
000-0000
|
||
|
if
to Brookfield US Corporation:
|
Brookfield
US Corporation
Three
World Financial Centre
000
Xxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, XX
00000-0000
X.X.X.
|
||
|
Attention:
|
President
|
||
|
Fax:
|
(000) 000-0000 | ||
- 18 -
|
with
a copy (which shall not constitute notice) to:
|
Torys
LLP
00
Xxxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxx
000, XX Xxxxxx
Xxxxxxx,
XX X0X 0X0
Xxxxxx
|
|
|
Attention:
Email:
|
Karrin
Powys-Lybbe
xxxxxx-xxxxx@xxxxx.xxx
|
|
|
Fax:
|
(000)
000-0000
|
|
|
with
a copy (which shall not constitute notice) to:
|
Xxxxxxx
Xxxx & Xxxxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX
00000
X.X.X.
|
|
|
Attention:
Email:
|
Xxxxxxx
X. Xxxxxxxxx
xxxxxxxxxx@xxxxxxx.xxx
|
|
|
Fax:
|
(000)
000-0000
|
|
|
if
to Brookfield US Investments Ltd.:
|
Brookfield
(US) Investments Ltd.
Canon's
Court
00
Xxxxxxxx Xxxxxx
Xxxxxxxx
XX 00 Xxxxxxx
|
|
|
Xxxxxxxxx:
Fax:
|
President
(000)
000-0000
|
|
|
with
a copy (which shall not constitute notice) to:
|
Torys
LLP
00
Xxxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxx
000, XX Xxxxxx
Xxxxxxx,
XX X0X 0X0
Xxxxxx
|
|
|
Attention:
Email:
Fax:
|
Karrin
Powys-Lybbe
xxxxxx-xxxxx@xxxxx.xxx
(000)
000-0000
|
|
|
with
a copy (which shall not constitute notice) to:
|
Xxxxxxx
Xxxx & Xxxxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, XX
00000
X.X.X.
|
|
|
Attention:
Email:
Fax:
|
Xxxxxxx
X. Xxxxxxxxx
xxxxxxxxxx@xxxxxxx.xxx
(000)
000-0000
|
|
- 19 -
Any
Notice, if personally delivered, shall be deemed to have been validly and
effectively given and received on the date of such delivery, if delivered before
5:00 p.m. on a Business Day in the place of delivery, or the next Business Day
in the place of delivery, if not delivered on a Business Day or if sent after
5:00 p.m., and if sent by facsimile or other electronic communication with
confirmation of transmission, shall be deemed to have been validly and
effectively been given and received on the Business Day in the place of delivery
next following the day it was transmitted. Any party may at any time change its
address for service from time to time by giving notice to the other parties in
accordance with this Section 14.
|
15.
|
Publicity.
|
Whenever
any party to this Agreement determines, based upon the advice of such party’s
counsel, that a public announcement or other disclosure of this Agreement is
required by or advisable with respect to any applicable Law or the rules of the
TSX or NYSE, the parties shall use reasonable efforts to consult with each other
before issuing any press release or making any other public announcement with
respect to this Agreement or the Transaction. Except as required by
any applicable Law or requirements of the TSX or NYSE, the parties will not
issue any press release or make any such public announcement prior to such
consultation and will use reasonable efforts not to issue any press releases or
other public announcements inconsistent with the results of such
consultation.
|
16.
|
Assignment.
|
Except as
otherwise contemplated herein, the parties agree that neither Xxxxxxxxx Xxxx nor
Brookfield may assign or transfer this Agreement or any of the rights or
obligations under it without the prior written consent of the other
party. Notwithstanding the foregoing, either party shall be entitled
to assign its rights and obligations under this Agreement without the consent of
the other party to any of its Affiliates who agrees to be bound by all of the
covenants of the transferring party contained herein and comply with the
provisions of this Agreement and delivers to the other party a duly executed
undertaking to such effect in form and substance satisfactory to such other
party, acting reasonably, and provided that any such assignment shall not
relieve the transferring party of its obligations hereunder.
|
17.
|
Entire
Agreement.
|
The
parties agree that this Agreement contains, for good and valuable consideration,
the entire agreement of the parties relating to the subject matter hereof and
there are no representations, covenants or other agreements relating to the
subject matter hereof except as stated or referred to herein. This Agreement may
not be amended or modified in any respect except by written instrument executed
by each of the parties.
|
18.
|
Expenses.
|
The
parties agree that all costs and expenses (including the fees and disbursements
of legal counsel and other professional advisors) incurred in connection with
this Agreement and the transactions contemplated herein shall be paid by the
party incurring such expenses.
- 20 -
|
19.
|
Enurement.
|
The
parties agree that this Agreement is binding upon and enures to the benefit of
the parties and their respective successors and assigns.
|
20.
|
Severability.
|
The
parties agree that if any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such determination shall not impair or affect the validity, legality or
enforceability of the remaining provisions hereof, and each provision is hereby
declared to be separate, severable and distinct.
|
21.
|
Interpretation.
|
For the
purpose of this Agreement, unless the context otherwise requires, the following
terms shall have the respective meanings set out below and grammatical
variations of such terms shall have corresponding meanings:
|
|
(a)
|
“1940 Act” means the
Investment Company Act of 1940, as amended and the rules and regulations
of the SEC thereunder;
|
|
|
(b)
|
“Affiliate” of any Person
means any other Person controlling, controlled by, or under common control
with such particular Person. For purposes of this Agreement,
“control” means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the
ownership of voting securities, contract or otherwise. For the avoidance
of doubt, (i) Brookfield is an “Affiliate” of BAM and (ii) with respect to
Xxxxxxxxx Xxxx, an “Affiliate” shall include any investment fund or other
entity controlled or managed by Fairholme Capital Management,
L.L.C.;
|
|
|
(c)
|
“Agreement” means this
Share Purchase Agreement;
|
|
|
(d)
|
“Applicable Securities
Laws” means (i) Canadian Securities Law and (ii) the Exchange Act
and the rules and regulation of the Securities and Exchange Commission
thereunder;
|
|
|
(e)
|
“BAM” means Brookfield
Asset Management Inc., or any successor
thereto;
|
|
|
(f)
|
“BAM Guarantee” has the
meaning ascribed thereto in Section 6(a)(vi);
|
|
|
(g)
|
“BAM SEC Filings” has the
meaning ascribed thereto in Section 5(i);
|
|
|
(h)
|
“BAM Shares” has the
meaning ascribed thereto in Section 2;
|
|
|
(i)
|
“Beneficial Ownership” by
a Person of any securities means “beneficial ownership” as used for
purposes of Rule 13d-3 adopted by the SEC under the Exchange Act. The
terms “Beneficially
Own” and “Beneficial
Owner” shall have a correlative
meaning;
|
- 21 -
|
|
(j)
|
“BermudaCo” has the
meaning ascribed thereto in the
preamble;
|
|
|
(k)
|
“BermudaCo BAM Shares”
has the meaning ascribed thereto in Section 2;
|
|
|
(l)
|
“BermudaCo GGP Shares” has the meaning
ascribed thereto in Section 1;
|
|
|
(m)
|
“Brookfield” has the
meaning ascribed thereto in the
preamble;
|
|
|
(n)
|
“Brookfield Cash Payment”
has the meaning ascribed thereto in Section 2;
|
|
|
(o)
|
“BUSC” has the meaning
ascribed thereto in the preamble;
|
|
|
(p)
|
“BUSC BAM Shares” has the
meaning ascribed thereto in Section 2;
|
|
|
(q)
|
“BUSC GGP Shares” has the
meaning ascribed thereto in Section 1;
|
|
|
(r)
|
“Business Day” means any day
other than a Saturday, Sunday or any day on which banks are generally not
open for business in the City of Toronto or New York, New
York. In the event that any action is required or permitted to
be taken under this Agreement on or by a date that is not a Business Day,
such action may be taken on or by the Business Day immediately following
such date;
|
|
|
(s)
|
“Canadian Securities Law”
means the securities laws, rules, regulations, instruments and orders
applicable in the Province of Ontario as interpreted and applied by the
Ontario Securities Commission;
|
|
|
(t)
|
“Change of Control” means
the consummation of any transaction including, any merger, amalgamation,
arrangement or consolidation the result of which is that any person or
group of related persons, other than the Company, its Affiliates, its or
such Affiliates’ employee benefit plans, or Management and/or any entity
or group of entities controlled by Management (provided that upon the
consummation of a transaction by Management and/or an entity or group of
entities controlled by Management, the Class A Shares or other voting
shares into which its Class A Shares are reclassified, consolidated,
exchanged or changed continue to be listed and posted for trading on a
national securities exchange in the United States, Canada or Europe),
becomes the Beneficial Owner, directly or indirectly, of (i) more than 50%
of the voting power of each class of BAM’s voting shares or other voting
shares into which the BAM's voting shares are reclassified, consolidated,
exchanged or changed measured by voting power rather than number of shares
or (ii) voting stock sufficient to enable it to elect a majority of the
members of BAM’s board of directors. For the purposes of this section,
“person” and “group” have the meanings attributed to them in Sections
13(d) and 14(d) of the Exchange Act. For the purposes of this
Agreement, an entity will be deemed to be controlled by Management if the
individuals comprising Management are the beneficial owners, directly or
indirectly, of, in aggregate, (i) more than 50% of the voting power of
such entity's voting stock measured by voting power rather than number of
shares or (ii) such entity's voting stock sufficient to enable them to
elect a majority of the such entity's board of directors (or similar
body);
|
- 22 -
|
|
(u)
|
“Class A Shares” means
Class A Limited Voting Shares in the capital of
BAM;
|
|
|
(v)
|
“Class B Shares” means
the Class B Limited Voting Shares in the capital of
BAM;
|
|
|
(w)
|
“Closing” means the
consummation of the transactions contemplated
hereunder;
|
|
|
(x)
|
“Closing Date” means the
date on which the transactions contemplated hereunder are
consummated;
|
|
|
(y)
|
“Code” means the Internal
Revenue Code of 1986, as amended, and the Treasury Regulations promulgated
thereunder;
|
|
|
(z)
|
“Contract” means any
agreement, obligation, contract, license, understanding, commitment,
indenture or instrument, whether written or
oral;
|
|
|
(aa)
|
“Economic Ownership” by a
Person of any securities includes ownership by any Person who, directly or
indirectly, through any Contract, arrangement, understanding, relationship
or otherwise, has (i) Beneficial Ownership or (ii) an economic interest in
such security as a result of any cash-settled total return swap
transaction or any other swap, other derivative or “synthetic” ownership
arrangement (in which case the number of securities with respect to which
such Person has Economic Ownership shall be determined by Brookfield in
its reasonable judgment based on such Person’s equivalent net long
position); provided, however, that
for purposes of determining Economic Ownership, a Person shall be deemed
to be the Economic Owner of any securities which may be acquired by such
Person pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or options, or
otherwise (irrespective of whether the right to acquire such securities is
exercisable immediately or only after the giving of notice or the passage
of time, including the giving of notice or the passage of time in excess
of sixty (60) days, the satisfaction of any conditions, the occurrence of
any event or any combination of the foregoing), in each case, without
duplication of any securities included pursuant to sub-clauses (i) or (ii)
above. For purposes of this Agreement, a Person shall be deemed
to be the Economic Owner of any securities Economically Owned by any Group
(as defined in Section 13(d)(3) of the Exchange Act and Rule 13d-5
thereunder) of which such Person is or becomes a member. The
term “Economically
Own” shall have a correlative
meaning;
|
- 23 -
|
|
(bb)
|
“Exchange Act” means the
United States Securities Exchange Act of 1934, as
amended;
|
|
|
(cc)
|
“Xxxxxxxxx Xxxx” has the
meaning ascribed thereto in the
preamble;
|
|
|
(dd)
|
“Fairholme Income” has
the meaning ascribed thereto in Section 4(e);
|
|
|
(ee)
|
“Final Order” has the
meaning ascribed thereto in Section 10(a)(iii);
|
|
|
(ff)
|
“GAAP” means, for the
periods ending on or before December 31, 2009, Canadian generally accepted
accounting principles, consistently applied, and for the periods ending on
or after January 1, 2010, International Financial Reporting Standards,
consistently applied;
|
|
|
(gg)
|
“GGP” has the meaning
ascribed thereto in Section 1;
|
|
|
(hh)
|
“GGP Interests” has the
meaning ascribed thereto in Section 7(d);
|
|
|
(ii)
|
“GGP ROFO Agreement” has
the meaning ascribed thereto in Section 7(d);
|
|
|
(jj)
|
“GGP ROFO Notice” has the
meaning ascribed thereto in Section 7(d);
|
|
|
(kk)
|
“GGP Shares” has the
meaning ascribed thereto in Section 1;
|
|
|
(ll)
|
“GGP SPA” has the meaning
ascribed thereto in Section 4(e);
|
|
(mm)
|
“Governmental Authority”
has the meaning ascribed thereto in Section 4(g);
|
|
|
(nn)
|
“Guarantee Agreement”
means that certain Guarantee Agreement between BAM and Xxxxxxxxx Xxxx
dated as of the date hereof;
|
|
|
(oo)
|
“Indemnified Parties” has
the meaning ascribed thereto in Section
12;
|
|
|
(pp)
|
“Indemnifying Party” has
the meaning ascribed thereto in Section
12;
|
|
|
(qq)
|
“Law(s)” means any
federal, state or local law, statute, ordinance, rule, regulation,
judgment, order, injunction, decree, declaration, arbitration award,
agency requirement, license or permit of any Governmental
Authority;
|
|
|
(rr)
|
“Liens” means all
charges, claims, mortgages, liens, pledges, security interests or
encumbrances of any nature;
|
|
|
(ss)
|
“Losses” has the meaning
ascribed thereto in Section 12;
|
- 24 -
|
|
(tt)
|
“Management” means BAM’s
directors, officers or employees (or directors, officers or employees of
its Affiliates) immediately prior to the consummation of any transaction,
acting individually or together;
|
|
|
(uu)
|
“Material Change” and
“Misrepresentation” have
the respective meanings ascribed to such terms in the Securities Act
(Ontario);
|
|
|
(vv)
|
“Notice” has the meaning
ascribed thereto in Section 14;
|
|
(ww)
|
“NYSE” means the New York
Stock Exchange;
|
|
|
(xx)
|
“Order” has the meaning
ascribed thereto in Section 6(a)(iv);
|
|
|
(yy)
|
“Person” means an
individual, group (including a “group” under Section 13(d) of the Exchange
Act), a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a Governmental Authority of any
department, agency or political subdivision
thereof;
|
|
|
(zz)
|
“Related Financial
Instrument” means (i) an instrument, agreement or security the
value, market price or payment obligations of which are derived from,
referenced to or based on the value, market price or payment obligations
of a security, or (ii) any other instrument, agreement, or understanding
that affects, directly or indirectly, a Person’s Economic Ownership in a
security;
|
|
(aaa)
|
“ROFO Agreement” has the
meaning ascribed thereto in Section 7(a);
|
|
|
(bbb)
|
“ROFO Notice” has the
meaning ascribed thereto in Section 7(a);
|
|
|
(ccc)
|
“Rule 144” shall have the
meaning ascribed thereto in Section 4(d)(ii);
|
|
|
(ddd)
|
“SEC” means the United
States Securities and Exchange Commission;
|
|
|
(eee)
|
“Securities Act” means
the United States Securities Act of 1933, as
amended;
|
|
|
(fff)
|
“Series 19 Shares” has
the meaning ascribed thereto in Section 5(k);
|
| (ggg) |
“Transfer” means
to sell, assign, pledge, transfer or otherwise dispose or encumber, sever
or alienate any ownership percentage (including through the creation of
any derivative or synthetic interest) or agree to take any of the
foregoing actions;
|
|
|
(hhh)
|
“TSX” means the Toronto
Stock Exchange;
|
|
|
(iii)
|
“Transaction” means the
transactions contemplated hereunder;
and
|
|
|
(jjj)
|
“U.S. Accredited
Investor” means an “accredited investor” under Rule 501 of
Regulation D and as amended by the Xxxx-Xxxxx Xxxx Street Reform and
Consumer Protection Act.
|
- 25 -
|
22.
|
Extended
Meanings.
|
Unless
the context otherwise requires, words importing the singular include the plural
and vice versa and words importing gender include all genders. The
terms “including” or “include” shall mean “including without limitation” and
“include without limitation”, respectively.
|
23.
|
Sections
and Heading
|
The
division of this Agreement into sections and the insertion of headings are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
|
24.
|
Further
Assurances.
|
Each of
the parties upon the request of the other, whether before or after the date
hereof shall do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered all such further acts, deeds, documents, assignments,
transfers, conveyances, powers of attorney and assurances as may reasonably be
necessary or desirable to complete the transactions contemplated herein. Each
party to this Agreement shall use its respective reasonable efforts (including
the fulfillment of the Closing conditions in this Agreement to be performed by
it) to have the transactions consummated on or prior to January 25,
2011.
|
25.
|
No
Third Party Beneficiaries.
|
Nothing
in this Agreement will confer any rights upon any Person that is not a party or
a successor or permitted assignee of a party to this Agreement.
|
26.
|
Amendment
and Waiver.
|
Any
provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the parties to this Agreement, or, in the case of a waiver, by the party against
whom the waiver is to be effective. No failure or delay by any party
in exercising any right, power or privilege under this Agreement shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.
|
27.
|
Counterparts.
|
The
parties agree that this Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which taken together
shall be deemed to constitute one and the same instrument. Counterparts may be
executed either in original or electronic form and the parties may rely on
delivery by electronic delivery of an executed copy of this
Agreement.
[Signature Page
Follows]
- 1 -
|
BROOKFIELD
(US) INVESTMENTS LTD.
|
|||
|
|
by
|
/s/ G.A. Gleadall | |
| Name: G. A. Gleadall | |||
| Title: Director | |||
|
BROOKFIELD
(US) CORPORATION
|
|||
|
by
|
/s/ Xxxxx Xxx | ||
| Name: Xxxxx Xxx | |||
|
Title:
Director
|
|||
|
FAIRHOLME
FUNDS, INC.
on
behalf of its series, The Xxxxxxxxx Xxxx
|
|||
|
by
|
/s/ Xxxxx X. Xxxxxxxxx | ||
|
Name:
Xxxxx X. Xxxxxxxxx
|
|||
| Title: President | |||
- 1 -
Schedule
A
- 1 -
Schedule
B
- 1 -
Schedule
C
