EXHIBIT 99.4 EXHBIT 4
AGREEMENT REGARDING ARRANGEMENT
Reference is made to (a) the support agreement (the "Support
Agreement") entered into among certain shareholders (each an
"Initiating Shareholder", and collectively the "Initiating
Shareholders") of MI Developments Inc. ("MID") and 445327
Ontario Limited ("445") between December 20, 2010 and December
22, 2010 pursuant to which such parties agreed to cause their
Class A Shares and Class B Shares to be voted in favour of the
Arrangement Resolution, subject to the terms and conditions of
such agreement and (b) the arrangement agreement (the
"Arrangement Agreement") dated the date hereof among MID, 445 and
the Stronach Trust. Capitalized terms used but not otherwise
defined herein shall have the meanings set out in the Arrangement
Agreement.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency
of which are acknowledged, each of the Initiating Shareholders,
MID, 445 and the Stronach Trust agree as follows:
1. Each Initiating Shareholder (in respect of itself
only and based solely on its own review and not on any
representations or advice from any other Initiating Shareholder)
acknowledges and agrees that it has reviewed drafts of the
definitive documents for the Arrangement dated January 29, 2011
(the "Draft Documents") (being the Arrangement Agreement, the
Plan of Arrangement in the form attached to the Arrangement
Agreement, the Transfer Agreement in the form attached to the
Arrangement Agreement and this Agreement) and that it shall not
exercise any right of termination pursuant to sections 5(a) or
5(b) of the Support Agreement provided that the executed versions
of such definitive documents are substantially in the form of the
Draft Documents.
2. On the Effective Date and conditional on the closing
of the Arrangement, MID shall reimburse the Initiating
Shareholders (which for greater certainty excludes 445, whose
fees shall be reimbursed in accordance with section 6.3 of the
Arrangement Agreement) for or, as applicable, pay on their
behalf: (a) their reasonable legal and advisory fees incurred and
to be incurred in connection with the Arrangement (to the extent
that such fees have not already been paid by MID pursuant to the
letter agreement dated January 28, 2011), excluding, for greater
certainty, fees in connection with any enforcement proceedings
taken pursuant to section 7, and (b) their reasonable legal and
advisory fees paid to Xxxxxxxx & Co. LLP ("Xxxxxxxx") and
Thornton Grout Xxxxxxxx LLP prior to the date of the Support
Agreement in connection with their investment in MID up to an
aggregate maximum of US$1,000,000 for all Initiating Shareholders
for all such fees. The Initiating Shareholders, through Xxxxxxxx
or a Designated Person (as defined below), shall provide MID with
the amount of and payment instructions for the fees to be
reimbursed pursuant to this section 2, together with copies of
the applicable invoices, at least three Business Days prior to
the expected Effective Date (and MID shall provide Xxxxxxxx or
the Designated Person, as applicable, with at least seven
Business Days notice of the expected Effective Date). The
payment of the amount of fees to be reimbursed pursuant to this
section 2 by MID in accordance with the payment instructions
provided by Xxxxxxxx or the Designated Person, as applicable,
shall satisfy and fully discharge MID's reimbursement obligations
pursuant to this section 2.
3. MID agrees with the Initiating Shareholders (a) that
it will comply with its obligations under sections 2.1, 2.2, 2.8,
4.3(a) and 4.3(c) of the Arrangement Agreement, (b) not to extend
the Outside Date or the time for the performance of any of the
obligations or other acts of the parties to the Arrangement
Agreement without the prior approval of the Initiating
Shareholders, (c) not to amend the Arrangement Agreement, the
Plan of Arrangement, the Transfer Agreement or the Releases, or
waive compliance with any of the agreements of the parties to the
Arrangement Agreement or with any conditions to its own
obligations, in each case in a manner that is adverse to the
Initiating Shareholders in a material respect, without the prior
approval of the Initiating Shareholders, and (d) not to terminate
the Arrangement Agreement pursuant to section 6.1(a) of the
Arrangement Agreement without the prior approval of the
Initiating Shareholders. MID shall permit Blake, Xxxxxxx &
Xxxxxxx LLP to review and comment on the Circular, all documents
sent with the Circular, all documents filed with the Court in
connection with the Interim Order and the Final Order and any
amendments thereto, recognizing that whether or not such comments
are ultimately included will be determined by MID, acting
reasonably.
4. Each of 445 and the Stronach Trust agrees with the
Initiating Shareholders that it will comply with its obligations
under sections 2.1, 2.8, 4.3(a) and 4.3(c) of the Arrangement
Agreement, as applicable, other than as may be consented to by
the Initiating Shareholders.
5. The parties acknowledge and agree that an award of
money damages would be inadequate for any breach of section 3 or
4 of this Agreement by MID, 445 or the Stronach Trust, as
applicable, and any such breach would cause the Initiating
Shareholders irreparable harm. Accordingly, the parties agree
that, in the event of any breach or threatened breach of sections
3 or 4 of this Agreement by MID, 445 or the Stronach Trust, as
applicable, the Initiating Holders will be entitled, without the
requirement of posting a bond or other security, to remedies of
injunctive relief and specific performance. Such remedies shall
be the exclusive remedies for any breach of sections 3 or 4 of
this Agreement or the Arrangement Agreement by MID, 445 or the
Stronach Trust, as applicable. Notwithstanding the foregoing,
this section 5 shall not preclude the Initiating Shareholders
from bringing any action in the name and on behalf of MID under
section 246 of the Business Corporations Act (Ontario) or any
successor provision to enforce the Arrangement Agreement.
6. In taking any actions to provide their consent under
section 3 or 4 of this Agreement, the Initiating Shareholders
shall act solely through a person designated by Initiating
Shareholders holding more than 50% of the aggregate Class A
Shares held by the Initiating Shareholders (the "Designated
Person"). In respect of any consent of the Initiating
Shareholders requested pursuant to section 3 or 4, the Designated
Person shall not provide such consent without obtaining the
approval or consent of Initiating Shareholders holding more than
50% of the aggregate Class A Shares held by the Initiating
Shareholders, and MID, 445 and the Stronach Trust shall be
permitted to rely on any consent provided by the Designated
Person and shall not be obligated to deal with a multiplicity of
Initiating Shareholders. Any consent provided by the Designated
Person shall be binding upon all Initiating Shareholders as if
made by each of them directly. If a Designated Person does not
respond to a request for approval or consent on behalf of the
Initiating Shareholders within seven days of the request, the
approval or consent of the Initiating Shareholders for the
applicable matter shall be deemed to have been given.
7. No Initiating Shareholder may seek to enforce
section 3 or 4 of this Agreement unless such enforcement has been
approved by Initiating Shareholders holding more than 50% of the
aggregate Class A Shares held by the Initiating Shareholders.
8. Notwithstanding Section 3(b) of Schedule B to the
Support Agreement, 445's voting of its Class B Shares of MID on
the resolution for the election of the persons nominated by the
Initiating Shareholders to be directors of MID shall be governed
by this Agreement and not by Section 3(b) of Schedule B to the
Support Agreement. 445 may vote its Class B Shares of MID on the
resolution for the election of the persons nominated by the
Initiating Shareholders to become directors of MID at the
Effective Time (which shall be a separate resolution from the
resolution to approve the Plan of Arrangement) and 445 shall not,
directly or indirectly, nominate or vote for the election of any
other persons to become directors of MID at the Effective Time.
9. MID represents and warrants to and in favour of each
of the Initiating Shareholders as follows and acknowledges that
each of the Initiating Shareholders is relying on such
representations and warranties in entering into this Agreement:
(a) MID has tiled with all applicable Governmental Entities
true and complete copies of all documents that MID is required by
applicable Securities Laws to file therewith. Such documents,
taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. Each such document at the time filed complied in all
material respects with the requirements of applicable Securities
Laws.
(b) Since September 30, 2010, there have been no amendments to
the Magna Leases (excluding any Magna Leases identified in the
disclosure letter dated the date hereof) outside of the ordinary
course of business that would result in a material adverse change
to the income or value of the Real Estate Business. "Magna
Leases" means the real property leases between MID or any of its
Subsidiaries, on the one hand, and Magna International Inc. or
any of its Subsidiaries, on the other hand.
(c) Since December 22, 2010, MID and its Subsidiaries have not
entered into any transaction or series of related transactions
with 445, the Trust, the directors or officers of MID or of any
of its Subsidiaries, or any of their Affiliates or immediate
family members, with a value in excess of $2 million, other than
(1) as publicly disclosed prior to the date hereof or as
disclosed in the disclosure letter dated the date hereof, (ii)
pursuant to the Pre-Arrangement Reorganization or the Arrangement
Agreement, (iii) transactions solely between MID and any of its
Subsidiaries or solely between Subsidiaries of MID, or (iv)
transactions in respect of the Racing and Gaming Business or the
Development Properties (for greater certainty, any funding by MID
or its Subsidiaries (other than Raceco and its Subsidiaries or
the Development Property Companies) of the Racing and Gaming
Business or the Development Properties shall be subject to
section 4.1 of the Arrangement Agreement).
10. MID shall give prompt notice to Blake, Xxxxxxx &
Xxxxxxx LLP of the occurrence of any event which would cause any
representation or warranty in section 9 of this Agreement to be
untrue or inaccurate in any material respect at the Effective
Time. If any of the representations and warranties in section 9
of this Agreement shall not be true and correct in all material
respects at the Effective Time with the same force and effect as
if such representations and warranties were made at and as of
such time, or a certificate dated the Effective Date to that
effect shall not have been delivered by MID, the Designated
Person may elect to require MID, 445 and the Trust to not close
the Arrangement and to terminate the Arrangement Agreement. No
such election may be made if (a) Initiating Shareholders holding
10% or more of the aggregate Class A Shares held by the
Initiating Shareholders had knowledge of the applicable breach or
inaccuracy of the representation or warranty on the date hereof,
(b) the Initiating Shareholders had previously consented (in the
manner contemplated by section 6) to the matter giving rise to
such breach or inaccuracy or (c) in the case of a breach or
inaccuracy of the representation and warranty in section 9(c) of
this Agreement, such breach has been cured by 445 or the Trust.
In making the election pursuant to this section 10, the
Initiating Shareholders shall act solely through the Designated
Person. The Designated Person shall not make such election
without first obtaining the written approval of (a) Initiating
Shareholders holding in excess of 50% of the Class A Shares held
by the Initiating Shareholders and (b) holders of Class A Shares
holding more than 33-1/3% of the outstanding Class A Shares
immediately prior to making such election, and MID shall be
permitted to rely on any election provided by the Designated
Person and shall not be obligated to deal with a multiplicity of
Initiating Shareholders. Any election made by the Designated
Person with such prior written approval shall be binding upon all
Initiating Shareholders as if made by each of them directly. The
election contemplated by this section shall be the Initiating
Shareholders' sole remedy arising under this Agreement for any
breach or inaccuracy of the representations and warranties in
section 9 of this Agreement.
11. As soon as reasonably available, MID shall provide
to Blake, Xxxxxxx & Xxxxxxx LLP statements disclosing (a) the
cash position of MID, (b) indebtedness of MID for borrowed money
and (c) the rental revenue from the Real Estate Business, in each
case as at and for the year ended December 31, 2010, the three-
months ended March 31, 2011 and for each calendar month
thereafter until the Effective Date. Such statements shall be
reviewed by the auditors of MID prior to delivery to Blake,
Xxxxxxx & Xxxxxxx LLP.
12. MID shall provide Blake, Xxxxxxx & Xxxxxxx LLP with
a copy of (a) all notices provided or received by it pursuant to
the Arrangement Agreement, (b) all amendments to the Arrangement
Agreement and (c) all waivers provided or received by it pursuant
to the Arrangement Agreement.
13. Each Initiating Shareholder covenants in favour of
445 that it will not at any time on or after the date of this
Agreement and before 180 days after the Effective Time enter into
any agreement or arrangement (other than this Agreement) with any
other shareholder of MID relating in any way to the manner in
which it will exercise or not exercise its voting rights
respecting shares of MID (otherwise than in favour of the Plan of
Arrangement) unless such agreement or arrangement is entered into
in response to an event, action or matter that arises after the
Effective Time and was not contemplated or anticipated by the
Initiating Shareholders before the Effective Time.
14. If any Initiating Shareholder, alone or together
with one or more persons with whom such Initiating Shareholder
does not deal at arm's length for the purposes of the Income Tax
Act (Canada), is, or prior to the Effective Time becomes, the
beneficial owner of 10% or more of the issued and outstanding
Class A Shares or 10% or more of the issued and outstanding Class
B Shares, then such Initiating Shareholder shall not dispose of
any of its shares of MID before the Effective Time to a person
who is not related to such Initiating Shareholder for the
purposes of the Income Tax Act (Canada) or to a partnership.
15. MacKenzie Financial Corporation ("MFC"), being one
of the Initiating Shareholders, shall cause those of its funds on
behalf of which MFC signed the Support Agreement which are
corporations not to acquire any additional Class A Shares and
Class B Shares before the Effective Date either directly or
indirectly by way of options, swaps, future or forward contracts,
hedging contracts or similar transactions.
16. This Agreement is an agreement between each
Initiating Shareholder and MID, 445 and the Stronach Trust, and
no Initiating Shareholder has an agreement with any other
Initiating Shareholder and no Initiating Shareholder may enforce
this Agreement against any other Initiating Shareholder. Only
MID, 445 or the Stronach Trust may enforce this Agreement against
an Initiating Shareholder. Each Initiating Shareholder confirms
that in negotiating and executing this Agreement it did not
intend and did not become a "group" (as defined in Rule 13d of
the United States Securities Exchange Act of 1934) with any other
Initiating Shareholder with respect to the matters contemplated
herein. This Agreement may not be amended without the written
consent of holders of a majority of the Class A Shares held by
all Initiating Shareholders. This Agreement is not intended to
confer on any person other than the parties any rights or
remedies.
17. Each Initiating Shareholder and 445 confirms and
agrees that the Support Agreement remains in full force and
effect, subject to this Agreement.
18. This Agreement shall be governed by the laws of the
Province of Ontario and shall take effect upon the execution and
delivery of this Agreement or a counterpart hereof by each of the
Initiating Shareholders. For purposes of the enforcement of this
Agreement and the Arrangement Agreement, the parties hereby
irrevocably attorn to the exclusive jurisdiction of the courts of
the Province of Ontario.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]
Dated the 31st day of January, 2011.
MI DEVELOPMENTS INC.
By: /s/ Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: Chief Operating Officer
/s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Executive Vice-President
and Chief Financial Officer
445327 ONTARIO LIMITED
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: President
THE STRONACH TRUST
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Trustee
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Trustee
Hotchkis and Wiley Capital Management, LLC
(Print Name of Initiating Shareholder)
/s/ Xxxx Xxxxx Xxxxx
(Signature of Initiating Shareholder or
Autorized Signatory)
Xxxx Xxxxx Xxxxx, Chief Operating Officer
(Print Name and Title)
